Testimony to the Georgia House of Representatives Welfare Fraud Study Committee

Published October 14, 2015

Testimony by Logan Elizabeth Pike
State Government Relations Manager
The Heartland Institute

Before the Georgia House Study Committee on Welfare Fraud

Wednesday, October 14, 2015

Good afternoon Chairman Clark and members of the committee. I thank you for the opportunity to speak today. My name is Logan Pike, and I am a state government relations manager at The Heartland Institute, a 31-year-old national nonprofit research organization dedicated to discovering, developing, and promoting free-market solutions that empower people. 

One of the main issues Heartland’s experts have focused on in the past decade is welfare reform. In 2008, in partnership with Gary MacDougal, a nationally recognized author and expert on welfare reform, The Heartland Institute published Welfare Reform After Ten Years, an in-depth study that assigned grades to the 50 states and the District of Columbia based on how they implemented the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA). In March 2014, we released an updated version of our report card.  

The Personal Responsibility and Work Opportunity Reconciliation Act, or “welfare reform,” implemented in 1996, granted states the flexibility needed to reform their welfare systems. More than 15 years after the 1996 welfare reform law was first enacted, many governors and legislators have seized the opportunities offered by the law, developing thoughtful policies and integrating services needed to help recipients move into the workplace. However, the current conglomeration of welfare and anti-poverty programs in many states is acting as a disincentive for work, thereby trapping welfare recipients into a cycle of long-term poverty.  

In both of our report cards, Georgia scored in the bottom half of states, ranking 44th worst in terms of welfare policies in our most recent report. 

While Georgia has had some success reducing its number of Temporary Assistance for Needy Families (TANF) recipients since 1996, its overall poverty rate has continued to increase. According to the U.S. Census Bureau’s Small Area Income and Poverty Estimates (SAIPE) data and information from the Annie E. Casey Foundation, Georgia’s poverty rate increased by 24.2 percent from 1996 to 2013.  

In its 2015 report card, Heartland looked at five important policies in order to grade states. I’ll briefly run through an explanation of each and let you know where Georgia sits. 

The first policy we examined was whether or not states have work requirements for TANF in place. These are rules requiring a person engage in work or work-related activities before being eligible for aid or to remain eligible for aid. Forty-one states have been successful at requiring states to be engaged in a work-related program before being accepted to the TANF program. The federal government considers 12 different programs “work-related activities,” including actually being employed in a part- or full-time job, participating in a vocational training program, working towards a GED, volunteering in a community service role, and many others.  Georgia currently allows a three-month period where recipients do not have to be engaged in a work-related activity. This three-month period is wasted time that Georgia TANF recipients could be using to gain the skills and knowledge they need to create a self-sustaining life for themselves and their family.

The next policy Heartland examined is a cash diversion program. This is a policy that allows case workers to give applicants a lump-sum cash payment to meet short-term needs. I use the example of a single mother whose car breaks down on her way to work and she can’t afford to fix it. With the cash diversion program, she could essentially be given a lump sum to help fix her car and get back on her feet to provide for her family. Cash diversion can also cover a short-term financial gap, when a family’s earned income temporarily stops or is suddenly reduced. The intention of cash diversion is to “divert” the family from the immediate crisis and the need for ongoing TANF benefits. Thirty-three states have this program in place. Georgia is unfortunately not one of them. Without an effective diversion program, a state is needlessly creating dependency for recipients who may just need short-term assistance and may not need to be placed on TANF rolls. 

The third policy we look at is the lifetime limits on eligibility for aid. The federal requirement on lifetime limits in 60 months, or five years, although states may exempt up to 20 percent of their caseload from the limit. Georgia currently has reduced their limits to 48 months, so they have taken steps in the right direction already. Some states have adopted even shorter lifetime limits, such as 36 months, helping to create an even stronger incentive for TANF recipients to prepare for work and accept job opportunities when available. Last session, Arizona reduced its lifetime limits to 12 months. States as diverse as Arkansas, Connecticut, Idaho, and Indiana all have lifetime limits under 30 months. It’s important to keep in mind the “T” in TANF stands for “temporary.” The law is designed to help people in need, but not create incentives to be idle. Shorter limits prevent welfare traps. 

The fourth policy examined is the strictness of the sanctions states have in place for TANF recipients. Cash payments through TANF are intended to reward and act as a support system for people who are actively trying to move from dependency to self-sufficiency, and the cash payments should be reduced or eliminated if the recipient fails to do his or her part. Studies have found, being sanctioned increases the likelihood of transition off TANF cash assistance, and this effect increases with the duration of the sanction. Currently, Georgia employs partial sanctioning, where only the adult portion of the TANF check is withheld, even after repeated infractions. This allows recipients to retain the bulk of their TANF benefits.  

Stronger sanctions, such as a full family sanction, will encourage workforce participation and self-sufficiency directly, by giving noncompliant recipients little choice but to enter the workforce in order to receive aid, and also indirectly by preparing people for the real-world consequences of their choices. Some states require TANF enrollees to sign an agreement jointly designed with the department that clearly states what is expected of the enrollee and explains under what circumstances they would be sanctioned and what the penalty would be. 

Years before our report card was released, one of our co-authors, Gary MacDougal, released a book called Make a Difference. In his book, Gary discusses an experiment that was carried out by the Institute of Educational Leadership (IEL). IEL uses the fictional Hernandez family, a typical family in poverty. The experiment examined the more than 20 federal, state, and local programs that could be helpful to them in their struggle to escape poverty. During the experiment, members of Congress, policymakers, and journalists played the part of the family, learning the hurdles they had to surmount to get help and the various intricacies of welfare programs. The participants found themselves cutting corners and selectively giving information to the array of program representatives present. They found out the 13 most important programs for the Hernandez family were generated by five committees and six subcommittees in the House; four committees and three subcommittee in the Senate; and six sub departments, one independent agency, and seven agencies in the executive branch.  

This brings me to the last policy we surveyed—the idea of “service integration.” Service integration involves organizing state human services in order to allow for coordinated, holistic, “one-stop” delivery of services that can then be connected to the local community and employers. In addition to cash assistance, welfare recipients are usually in need of other services to enable them to overcome barriers to employment and self-sufficiency. Rather than making TANF-eligible persons go to three different offices for alcohol and substance abuse treatment, childcare, and job training, for example, service integration would connect all three services organizationally, often with a single caseworker or “self-sufficiency coach,” and ideally (as most welfare recipients don’t have cars) in the same location. 

Service integration should be of keen interest to state policymakers. Unfortunately, federal government programs are notoriously fragmented and states must work hard to connect them effectively. Billions of public dollars pour into low-income communities through so many different programs, run by so many different bureaucracies, that a special analysis is needed to determine exactly how much is being spent in each community overall or to determine who is receiving what types of aid. Service integration is an extremely promising route to improving efficiency and accountability in a part of government that has long resisted both. 

I would be remised if I didn’t mention what was accomplished in Missouri this past year on welfare reform. On Heartland’s 2015 Welfare Reform Report Card, Missouri ranked dead last. They introduced a bill that implemented immediate work requirements, reduced time limits to 40 months, enacted full family sanctions, and created a cash diversion program. The Strengthening Missouri Families Act was vetoed by the governor, but the state legislature successfully overrode him. These changes to Missouri’s TANF program would move Missouri from an F to an A grade on Heartland’s report card.  

Most of the reforms I have mentioned today would help curb TANF fraud in Georgia, but more importantly, they will put in place the proper incentives and policies to help move tens of thousands of people from government dependency to self-sufficiency. 

Thank you for allowing me to testify today. I am happy to answer any questions the committee may have. 


For more information about The Heartland Institute’s work, please visit our website at www.heartland.org or http:/news.heartland.org, or call John Nothdurft at 312/377-4000 or reach him by email at [email protected]


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