Mr. RANGEL. Has this been referred to our Attorney General? We have a monopoly in New York City, Con Ed, and you cannot go to any other utility.

It bothers me if you are telling me that Con Edison is insisting that our welfare department pay that before they even determine who is asking for the service merely because that person is on welfare.

Mr. Tota. Let me restate, Mr. Rangel, they have demanded. We have not acquiesced. They have asked in each instance where they know the recipient is a welfare recipient that they be on the two-party list. Mr. RANGEL. But you are asking this committee to consider expanding vendor payments without looking into evidence of mismanagement, our State's ability to pay anybody, any vendor, who refuses service to a welfare recipient?

Mr. TOIA. What I am asking is that the committee consider allowing the State to introduce State plan material which identified those instances where the State could exceed the 10 percent limitation. I would assume, and I would make sure, guarantee, that no individual would be placed, no Federal funds participating, none of those families would be placed without an assessment made as to their ability to manage their funds. We would not arbitrarily two-party pay every recipient. There would have to be a demonstration that they have mismanaged.

Mr. RANGEL. Then why do you volunteer the demand made by the utility companies that the welfare department pay them directly?

Mr. TOLA. Why do I volunteer the statement? When they have gotten below 10 percent, we have found evidence that the city has been twoparty paying checks. We have been going back and asking for documentation that the case work services and the social services be provided as far as money management.

Mr. RANGEL. I would not have any problems at all here. Commissioner, but somehow I get the impression that we are going to— that you are asking us in the first instance to give in to the demands made by Con Edison that they be paid directly, or they will not provide services. I would think a matter like this would be turned over to the Attorney General. From what I read in the papers, you may be our ex-Secretary of State

Mr. TOIA. Or whatever.

Mr. CORMAN. Would you yield?
Mr. RANGEL. Yes.

Mr. CORMAN. In the very severe part of the winter what would the utility bills be for a typical family of four, and what would their cash payment be?

Mr. TOLA. Depending on the part of the State.

Mr. CORMAN. Take the worst part.

Mr. Toa. In the worst part of the State, a family living in a detached house, their utility bill could very well have been for the month of January $110. Their cash grant coud have been $258, or something like $340 a month.

Mr. CORMAN. So we are talking about setting aside a third of it for Con Ed.

Mr. ToIA. In that particular case, we would probably, had it gone on for 2 months, we would have considered an emergency payment, and

the State probably would have paid a disproportionate share, or a larger share to take care of that need. But in some cases, the utility bill has been at least one-third of the total monthly grant.

Mr. CORMAN. One-third to the utility and two-thirds to the landlord?

Mr. TOIA. In a case like that, the rent would have been, in that particular portion of the State, something like $135 a month. We have a variable rent schedule which changes with each county.

Mr. CORMAN. Mr. Rangel?

Mr. RANGEL. Thank you.
Mr. CORMAN. Mr. Brodhead?
Mr. BRODHEAD. No questions.
Mr. CORMAN. Counsel?

Mr. JENSEN. No questions.

Mr. CORMAN. Go ahead, Mr. Jensen.
Mr. ToIA. Am I excused?

Mr. CORMAN. Not quite.

Mr. JENSEN. Mr. Toia, the matter of child welfare services and foster care, which has also been the subject of these hearings, in the most recent figures available to us, they indicate that of the 109,000 children receiving AFDC foster care, 18,000 of them are in the State of New York.

Of those, 9,000 were at child care institutions, which is over half of the foster care children in the country in child care institutions under the foster care program.

Can you tell me the reason for that number, and what kinds of financial incentive and leeway does New York need in order to move toward reduction of that, including such things as adoption?

Mr. TOIA. Yes. New York State, as you know, Mr. Jensen, has had a very long, rich tradition of caring for children in need, and many years ago

Mr. CORMAN. If the witness will excuse me, we have to interrupt this as there is a vote on the floor. I think for the record, you can answer right now. It is skating close to impropriety, but nothing as close as New York State did on two-party payments a few years ago. Since there are no other members to want to question the witness, he may leave after counsel's question is answered.

Mr. TOIA. Thank you.

I hope you are as successful as we are, Mr. Chairman.
Should I go on?

Mr. JENSEN. Yes.

Mr. TOIA. The State expressed that need several years ago, well over 50 to 60 years ago, through the establishment of several child care institutions. Those child care institutions in the States primarily ran under auspices that were private, in many cases private, sectarian auspices.

We at this time probably have over 20,000 children in various types of institutional foster care through our Department's offices at the present time, only 9,000 of which are AFDC, to my regret. I only wish all 24,000 would be.

We are, however, moving toward reducing that institutional population. You recall when title XX came into being and there was a

ceiling placed on our expenditures, many of those children would have been cared for and paid for under the old 4-A program. But the changes that were brought about in the severe restrictions on our ceiling, we certainly had to look elsewhere to support that program, which is a worthwhile program. We were able to determine eligibility for ADC and therefore, we had a dramatic growth in ADC foster care.

We have been for the past 2 years working with the major institutions and the major agencies which sponsor those institutions to reduce and shrink drastically both the size and the program that those institutions offer. We need help.

We have stressed adoption and adoption subsidies in our State, and we have some skeptics among the prospective adoptive parties as to the life of the subsidy, whether or not we can continue paying adoption subsidies, and the fiscal crisis of the past 2 years did not generate tremendous support for that program.

Things have changed, however; that program is starting to grow. I think I could safely say that we could move as far as the institutional foster care population and those agencies that sponsor those program pretty far down the road toward change. A greater movement toward family foster care, a greater movement toward adoption and less of a movement at the front end of placing children into institutions.

The characteristics of the children in the institutions have also changed. We are finding older children, more aggressive children, more acting-out children, many who have come there because of court and police department involvement. We have more children with criminal involvement now than dependent and neglected children.

The answer would be how to support at the front end again, how to develop the infrastructure both in the communities and in the government to prepare for moving children from the institutions back into the community.

One way would be adoption subsidies. Another way would be to increase the focus on family foster care, and another way would be to develop better group homes and smaller living arrangements. Obviously, the best way is to prevent family breakdown in the first instance, and we are working on preventive programs.

If we had flexible funding that would allow us to build expanded family foster care and adoption subsidies, it would go far toward moving the large numbers you have in your report downward. Is that responsive to your question?

Mr. JENSEN. Thank you very much.

Mr. TOIA. Thank you.

[Brief recess.]

Mr. BRODHEAD [presiding]. The next witness is a joint appearance with Mrs. Dee Everitt of the National Association for Retarded Citizens, and Thomas A. Coughlin, deputy commissioner, New York Department of Mental Hygiene, appearing on behalf of the National Association of Coordinators of State Programs for the Mentally Retarded.

STATEMENTS OF DEE EVERITT, MEMBER, GOVERNMENTAL AFFAIRS COMMITTEE, NATIONAL ASSOCIATION FOR RETARDED CITIZENS; AND THOMAS A. COUGHLIN, DEPUTY COMMISSIONER, NEW YORK DEPARTMENT OF MENTAL HYGIENE, ON BEHALF OF THE NATIONAL ASSOCIATION OF COORDINATORS FOR STATE PROGRAMS FOR THE MENTALLY RETARDED, ACCOMPANIED BY SUSAN MANES AND ROBERT NORRIS

Mr. BRODHEAD. You have an associate with you?

Mrs. EVERITT. Yes, I have Susan Manes, assistant director of the NARC government affairs office.

Mr. BRODHEAD. Mr. Coughlin?

Mr. COUGHLIN. Yes, I have Mr. Robert Norris from my staff with me. Mr. BRODHEAD. Who wants to begin?

STATEMENT OF DEE EVERITT

Mrs. EVERITT. Mr. Chairman and members of the Subcommittee on Public Assistance, I am pleased to have this opportunity to testify before you on behalf of the National Association for Retarded Citizens regarding the recommendations made by the Ways and Means Committee in its March 15 report to the Budget Committee. I intend to summarize my remarks and request permission for the full text of my written statement to be entered into the record. Mr. BRODHEAD. Without objection, so ordered.

Mrs. EVERITT. NARC is pleased that the committee has recommended continued funding for the title XX program in fiscal year 1978 at the level of $2.7 billion.

We urge that the additional $200 million added in fiscal year 1977 and recommended for fiscal year 1978 become a permanent increase to the existing ceiling on Federal social services expenditures.

We further suggest that a built-in cost-of-living escalator be added to the title XX funding structure. States, social service providors and recipients need to know that inflation will not be allowed. to diminish social services programs in the future.

We also strongly recommend that this $200 million not be earmarked in anyway for day care or any other service. It must be stressed that the title XX program is designed to meet the needs of a broad diversity of deserving persons and groups, no one of whom should be singled out at the Federal level for preferential treatment. We are very pleased to note that H.R. 6124, incorporating many of the SSI amendments passed last year by the House in H.R. 8911, has been introduced.

Last year we worked vigorously for the passage of these amendments. This year they again have our wholehearted support.

I would like to concentrate my remarks on the committee's recommendations in its March 15 report to the House Budget Committee to revise and expand the title IV-B child welfare services program.

NARC supports the committee's recommendation to increase title IV-B funding from the current level of $56.5 million to the fully authorized level of $266 million.

We also support the conversion of the present funding structure for title IV-B to that of an entitlement program.

The social and economic pressures which disrupt and sometimes destroy families are often compounded by the presence of a handicapped child.

That families of such children are often unable or unwilling any longer to cope is manifest by the continuing demand for institutional care for young disabled children.

Many, if not most, of these institutional placements could be. avoided if ongoing supportive services were available to families to supplement their abilities to care for their disabled child at home, and if carefully recruited and trained foster parents were available to substitute their nurturing for that of the incapacitated natural family.

The proposed expansion in Federal funding for the child welfare services program, if it is accompanied by a restructuring and redirection of Title IV-B, will make it possible to begin to address these needs on a more systematic basis than is currently the case.

To a large extent, the current foster care system has failed the retarded child.

Foster care parents of retarded children are often untrained, unable to recognize or begin to meet their special needs.

Such children too often do not receive the educational, rehabilitative, health, and social services which they require if they are to mature to an independent and productive adulthood.

For these children, foster care is a dead end, leading only to continuing dependency.

But for most mentally retarded children, the failure of the foster care system is of a far more fundamental nature, a failure to make foster care available to retarded children in the first place.

When an average family is damaged or broken by illness, marital crisis, or an abusing or neglectful parent, the children of that family are placed with a foster family.

But for mentally retarded children whose families are unable to care for them, and particularly for those mentally retarded children who are most severely disabled, foster family care is an option rarely considered.

Instead, the severely retarded child is almost routinely referred to a State institution for the mentally retarded.

Institutions should be the last, not the first, resort. We all know that the institutions are overcrowded and often shamefully inadequate. They are no place for a child to grow up. Yet there are pitifully few alternatives.

A properly designed foster care system could begin to fill this gap. Indeed, foster family placement is probably the single most appropriate alternative to institutional care for most young disabled children.

A number of States have begun to move in this direction. It requires careful recruitment and specialized training of foster parents so that they are equipped to provide their foster children with the special services they need beyond room, board, supervision, and care. It is our view that the current title IV-B program ignores, to a large degree, the needs of severely disabled children, in both their natural homes and in foster family settings.