Who is certifying that they are eligible, who is paying him? It all relates back to this local coordination. That is why we suggest it is an issue that should not be taken, if you will, sort of at face value but does deserve careful consideration as the Congress designs the various delivery systems in order to implement welfare reform.

Mr. GOODLING. One other quick question, which was asked before of people appearing before you. How much input have you had, or your organization, to this whole program?

Mr. EMMRICH. I guess my answer to you, sir, is not as much as we would have liked, not a whole lot.

Mr. GOODLING. Thank you.

Mr. CORMAN. Let me ask one thing.

It looks to me that we are going to wind up with people on welfare whom we expect to work. The dilemma is how do we monitor that so we have some degree of public confidence in it? You have done that and with some degree of success for unemployment compensation beneficiaries. Suppose we gave you the additional duty of monitoring those who are expected to work; could you cope with it and would you have to expand your personnel very much to do it?

Mr. EMMRICH. Mr. Chairman, to a degree that really relates back to that cash assistance mechanism, as we would monitor those who are expected to work. My answer to you is, I think we could cope with it. In all candor, I cannot tell you what it would require in the form of additional resources.

I would say it would require some additional resources, but how significant we do not know. That is one of the things we are studying. We are saying, how many people are we talking about? What is exactly involved in monitoring them? If you will, as we say on_unemployment insurance, providing a work test.

So my answer to you would be yes, sir, we could do it, but I cannot answer the second part of your question with any accuracy. Mr. CORMAN. Thank you very much.

Mr. EMMRICH. Thank you, sir.

Mr. CORMAN. Our next witness is Miles Wangensteen, chairperson, National Council of Local Public Welfare Administrators, accompanied by Harriet Herrman and Robert J. Fersh.

We welcome you to the subcommittee. If you have a prepared statement Mr. Wangensteen, you may summarize or read it.

STATEMENT OF MILES J. WANGENSTEEN, DIRECTOR, ST. LOUIS COUNTY SOCIAL SERVICE DEPARTMENT, MINNESOTA, AND CHAIRMAN, NATIONAL COUNCIL OF LOCAL PUBLIC WELFARE ADMINISTRATORS, ACCOMPANIED BY HARRIET HERRMAN, COUNCIL VICE CHAIRPERSON AND DIRECTOR, DEPARTMENT OF SOCIAL SERVICES, MONTGOMERY COUNTY, MD., AND ROBERT J. FERSH, COUNSEL

Mr. WANGENSTEEN. Mr. Chairman and members of the subcommittee, the National Council of Local Public Welfare Administrators greatly appreciates this opportunity to testify on the Carter administration's welfare reform proposal.

My name is Miles J. Wangensteen and I am the director of the St. Louis County Social Service Department in Minnesota. Today I have the privilege to appear before you in my capcity as chairperson of this council. Accompanying me are Harriet Herrman, council vice-chairperson and director, Department of Social Services, Montgomery County, Md., and Robert J. Fersh, who is counsel to our parent organization, the American Public Welfare Association.

Reforming this Nation's welfare system is a vital concern of the National Council of Local Public Welfare Administrators, as it is to the many other groups and individuals testifying here. Our particular interest stems from the fact that we are the administrators and staff who work in counties, municipalities, and other local jurisdictions responsible for the actual provision of welfare assistance. It is our job to assure that the assistance available from programs like aid to families with dependent children and food stamps is delivered quickly and effectively to those who are eligible for it.

The experience of local governments in performing this task is considerable and time-honored, and I think of value to the deliberations of this important subcommittee. From the earliest days of this country, local public agencies, being in a position to know and respond to the needs of the people in their communities, have been providing help of one kind or another to the poor. Since the enactment of the Social Security Act in 1935, the administrators of these local agencies have become the frontline managers of a large and complex welfare system. It is from our first-hand knowledge of the workings of this Federal/State/local system and of the people whom it serves that I offer to you today our views on H.R. 9030, the President's welfare reform proposal.

Our organization recognizes the better jobs and income program as the outcome of several months of hard work and dedication to the task of welfare reform, an effort for which the administration is to be commended. It is no doubt a carefully crafted proposal in which economic and political realities played no small part. Many of its general features comport well with views long held by local public welfare administrators.

In particular we support the establishment of a minimum national benefit level in order to reduce the broad disparities in payment levels that currently exist among the States and which, if enacted, will begin to assure all recipients some degree of adequacy in the cash assistance available to them.

The plan to have universal coverage, with eligibility based only on financial need, and which will bring into the program groups that are now excluded in whole or in part from Federal financial assistance.

The consolidation of aid to families with dependent children, supplemental security income, and food stamps into one programa significant step toward simplifying administration, which at the local level is one of our most important problems.

Not the least important, the creation of an enlarged jobs program in order to provide many recipients with employment opportunities they presently do not have.

Taken together, these basic measures form the outlines of a constructive welfare reform and, we believe, can serve as a useful vehicle in developing a program that is administratively, politically, and financially feasible. I hope you share our optimism.

While we are enthusiastic about the prospects of reform, this should not be mistaken for full support of the administration's proposal. We find many aspects of it open to question and others we would like to see changed. In the time remaining, I will try to identify some of the more critical of those aspects as we see them and to articulate for the subcommittee some of the ways we see the proposal being improved.

BENEFIT LEVELS

One of the greatest sources of complexity and inequity in the present public welfare system results from the different funding arrangements that exist for programs of public assistance. Federal funds are only available to help poor persons who fall into a particular category, that is, besides being poor, the individual needing help must be aged, blind, disabled, or a dependent child. State and local governments wishing to help poor persons who do not fall into one of these categories must do so from their own resources. Not surprisingly, this results in great differences in what kinds of help people get from State to State and within a State, depending on whether they are eligible for a federally matched program or one supported entirely by State and local funds.

The Carter welfare reform proposal eliminates one set of categories but creates a new one.

As proposed in H.R. 9030 the Carter plan recommends universal coverage; that is, a minimum Federal benefit for all needy persons who qualify. However, in their desire to distinguish between the person who is expected to work and the person who is not expected to work, while at the same time making certain there is a work incentive, the welfare reform planners have created two levels of benefits which may apply to people in different times and under different circumstances. Single individuals and childless couples who are not aged, blind, or disabled will now be eligible but they are limited to receiving a lower level of benefit than other groups, presumably to preserve their incentive to work.

If I may say, in our particular county, St. Louis County, Minn., the largest increase in numbers of people applying for assistance are among singles and childless couples. We have had a tremendous increase in teenagers and in people in their twenties.

This same applies to two-parent families, except that after a 5week job search and a 3-week effort to obtain public service employment, they will, presumably, become eligible for the higher level of benefit. Under this plan the aged, blind, or disabled individual will receive more than twice the benefit available to other single individuals. Such disparities will compel many States and local jurisdictions to supplement the basic Federal benefit for some recipients, perhaps at different time intervals, in order to maintain a semblance of equity across their assistance populations.

When the SSI program began, we initially expected to have a large saving in our funding of the local program. Actually, to

supplement these cases at the same level they were receiving, it cost our county more in local dollars, more than it was when we had the old age assistance program, aid to the disabled and aid to the blind.

The perpetuation of different funding levels and different Federal matching formulas will undoubtedly lead to administrative difficulties and may ultimately defeat the purpose of designing a welfare system that is understandable to both the recipients who depend on it and the public which supports it.

We believe the Carter proposal would be considerably strengthened by the incorporation of a uniform benefit schedule, with benefits varied only for family size. Lower benefits should be paid only to families in which an employable person refuses to comply with the plan's work requirements. In our experience, the best work incentive is a meaningful work opportunity.

Again speaking from the level where the programs are actually administered, I have been in business 30 years and know of very few clients who will not accept a job when there is a job available.

EMERGENCY NEEDS

The better jobs and income program calls for the provision of $600 million to States for the purpose of meeting emergency needs. Our organization seriously questions the adequacy of this amount given certain features of the program. Substantial demand for emergency assistance is likely to be created by:

(1) retrospective accounting requirements, which will temporarily deny Federal benefits to many needy families and individuals;

(2) time lags in making payments to eligible persons with immediate needs;

(3) insufficient lower tier benefits during the job search period for two-parent families; and

(4) the elimination of the special needs program currently in AFDC.

Who will bear the cost of emergency assistance above the $600 million? The very State and local governments that have been promised significant fiscal relief under the administration's proposal. If no changes are made in the design of the proposal to minimize the role of emergency assistance, the amount of money available for this purpose must be kept open-ended for at least the first 2 years of the program. This move would allow ample time to determine through actual experience how emergency assistance should be conducted in a new welfare system.

We are also concerned about the tie between emergency assistance and title XX. The planning requirements being proposed are unrealistic for a program designed to deal with emergencies that cannot be predicted. More importantly, it would be inappropriate to confuse the income support function of emergency assistance with the social service functions of title XX.

The basic purpose in adopting title XX just a few years ago was to strengthen the identity of public social services as distinct from welfare programs. We urge that blurring of this identity not be

permitted and that emergency assistance under the better jobs and income program be completely disengaged from title XX.

COORDINATION WITH MEDICAID AND SOCIAL SERVICES

One of the greatest difficulties in bringing about welfare reform is the interrelationships of income assistance with other public welfare programs. In our view, the two most significant of these programs are medicaid and social services. Unfortunately, the President's plan does not give adequate attention to either program. Troublesome questions about medicaid eligibility remain. The administration has based its handling of this issue on the fanciful assumption that national health insurance will be in place, by the time welfare reform is implemented. Lacking national health insurance, eligibility for medicaid will continue according to the guidelines currently in effect. The consequences of this are troubling. First of all, medicaid eligibility will have to be determined according to the complex guidelines of outdated cash assistance programs. States and localities will have to keep their administrative structures intact simply to run the medicaid program and, in all likelihood, will spend more to administer medicaid than before. While the Federal Government has tried to protect States from additional costs by not requiring them to cover the new groups of people made eligible for cash assistance, there will be additional medicaid costs as a result of the higher rate of participation of eligible persons expected in the new program. In my particular county, 40 or 50 percent of the budget goes to medicaid. The additional burden generated by the reformed welfare system will further endanger the fiscal situation of many States and localities. We therefore recommend that, at a minimum, States be protected against any increases in the cost of medicaid attributable to a rise in demand for its services.

In a similar vein, we believe the new welfare program would spur the demand for social services. Yet, as far as we can tell, there is no additional funding for this purpose. If the jobs program is to be at all successful, support services, such as child care, must be made available. The provision of these services should not be permitted, however, to jeopardize the other valuable and essential social services States and localities provide. For example, the $22 billion ceiling placed on title XX a few years ago has not been increased and because of inflation, has now sunk in terms of purchasing power to approximately $1.7 billion. Many jurisdictions cannot meet the existing demand for social services because of this ceiling. Clearly, more money is needed to pay for the social services likely to be demanded by the greater number of assistance recipients.

ADMINISTRATIVE FEATURES

The administration of the better jobs and income program seriously concerns the council. Some of the broader issues regarding the locus of administrative responsibility have been discussed with this body already by the American Public Welfare Association and the National Council of State Public Welfare Administrators and I will not go into them here. I would like to address at this point a couple of the more specific administrative features of the plan.