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Office of the Press Secretary

For Immediate Release August 4, 1998
                           PRESS BRIEFING BY 
                              BRUCE REED

The Briefing Room

1:20 P.M. EDT

MR. LOCKHART: Hello. In my jetlagged state, Barry gave me a task I could handle, and this is about it -- to introduce our special guests today. As we talked about this morning, the President will be celebrating the second year anniversary of the passage of the Welfare Reform Act and will be updating us on the progress as well as making a series of announcements that the President's Chief Domestic Advisor Bruce Reed, and the Secretary of Labor Alexis Herman are here to talk about today.

MR. REED: Today the President will, as Joe said, give a progress report on the welfare law which was signed about two years ago this month, and take another historic step to end welfare as we know it by eliminating one of the last vestiges of the old welfare system, which is an anti-work, anti-family regulation called the 100 hour rule, which I'll explain in a moment.

But, first, in the last couple of years, we've seen a real revolution in the welfare system and an explosion of work and responsibility around the country. And today HHS is releasing its first annual report on the welfare law to Congress. And the report finds that, as the President has pointed out before, welfare caseloads have dropped by over 3 million since the welfare law was signed -- a 27 percent drop. We now have 8.9 million people on welfare, which is the lowest percentage of Americans on welfare since 1969.

And the HHS report includes the best evidence yet that people aren't just leaving welfare, they're leaving welfare for work. It cites new Census Bureau data showing that the rate of individuals on welfare who are working in the following year increased by nearly 30 percent between 1996 and 1997. That translates to 1.7 million adults who were on welfare in 1996 who were then working in 1997.

We've also found that contrary to what critics said at the time the law was signed, we've seen not a race to the bottom in states around the country, but a race to independence. States are actually spending more per person on welfare-to-work efforts than they were before the welfare law was passed. And these findings are consistent with a recent NGA report that found that states are spending more than half on child care -- 50 percent more on child care than they were before the law was passed, and spending about a third more on helping recipients move to work.

But as the President has said time and again, our work is not done. And today, Secretary Herman is going to announce more welfare-to-work grants, which are a follow-on to the balanced budget law that was passed and signed a year ago. We're also announcing today the Vice President has updated his report to the President on federal hiring; the federal government has hired 5,700 people off of welfare, which is more than halfway to our goal of 10,000 by the year 2000.

And today we are issuing a regulation that does away with the so-called 100 hour rule. Let me try to explain that for you. For the last 30 years, the old welfare system has said that two-parent families on welfare would lose Medicaid coverage if they worked more than 100 hours in a given month. And this rule only applied to two-parent families. So, for example, a two-parent family that wasn't working at all would get Medicaid coverage; but a two-parent family that worked 25 hours a week would lose that health coverage. This rule was anti-work, it was anti-family, anti-marriage. It said that if you want health care you have two choices: you can either not go to work or not get married. And it said to a father that his children would essentially be better off if he stayed home or walked out than if he went to work.

Now, in recent years, a number of states have gotten waivers to get around this rule. But in order to protect the Medicaid guarantee for poor children, which was one of the most important battles we had with the Congress in 1996 in securing the welfare law, the 1996 welfare law locked in the Medicaid eligibility rules that were in place at the time. So, in other words, anyone on welfare today is eligible for Medicaid if they would have been eligible in July 1996. But that had the effect of making impossible for states to apply for waivers of this so-called hundred hour rule.

So today we're putting forward a regulation that puts the 100 hour rule to rest for good. It enables any state to set its own rules for Medicaid coverage of two-parent families. And we anticipate that at least 130,000 people will get Medicaid coverage as a result. And perhaps just as important it sends, for the first time, the signal that the new welfare system no longer undermines work and family, but supports marriage and is helping people go to work.

And with that, Alexis.

Q Was our briefer right this morning, it affects 20 states and the District of Columbia?

MR. REED: Thirty-two states currently have waivers; 18 states will be -- it will affect 18 states and the District of Columbia.

SECRETARY HERMAN: Thank you very, very much, Bruce. Let me just say that the Department of Labor has been extraordinarily pleased to have been a part of the successful effort of the President to reform welfare as we know it. And our role has been principally one of helping to move individuals today from the welfare rolls literally to the payrolls.

I believe the statistics that Bruce has just given you, indicating in the past year the number of individuals who have made that transition, is a testament to the hard work that has gone on clearly at the state level and in local communities really to think really outside of the box and to get from inside of the Beltway in meeting many of the challenges today that states and local municipalities face.

The Department of Labor specifically had the responsibility for the $3 billion that was appropriated by Congress last year. That $3 billion was to be utilized over a two-year period. Seventy-five percent of those funds was to go on a formula basis to states to help them meet their challenge of moving individuals from welfare to work. An additional 25 percent or approximately $700 million of those funds was to be used on a competitive basis.

Today, the President will announce that an additional six states will come in for formula grants to the tune of $60 million. Those states include New Hampshire, New Mexico, Maryland, and Maine, Virginia, West Virginia, and Guam. These states will now bring the total to 38 states that have actually received welfare-to-work grants from the administration. All total, we have actually received 47 plans from states to date, but the announcement by the President to date will actually bring the total of states receiving funds to 38. I should point out that only six states thus far will not be coming in for these competitive and formula-based monies.

Q Why not?

SECRETARY HERMAN: Well, when we look specifically, Sam, at the states that are not coming in for the grants, they include states like Idaho and Utah -- those states that actually have small welfare-to-work issues if you will in terms of the populations that they are attempting to serve. There are only two other states in that mix -- Ohio and Mississippi -- that the governors actually chose not to accept these funds. But, otherwise, the other four states, which includes -- I think I have a list here -- South Dakota, Wyoming, Utah, and Idaho -- basically are meeting challenges within the TANF funds that they already have available, and their caseloads are not as significant to manage otherwise.

I should point that as a part of my overall work as Secretary of Labor that I have spent at the President's request a great deal of time traveling to many of our work sites; meeting with employers; meeting with individuals who are making the transition; talking with governors; talking with mayors. And as we conclude this one year anniversary, I believe that there are three unique challenges that we certainly face in the future.

First, a recognition that the hardest challenge really remains because the hardest to serve still remain on the welfare rolls. And as we attempt to meet those challenges for those who have multiple barriers to employment, these funds that the Congress has appropriated and that the President requested I believe is going to make that transition easier as we go into the future months ahead, and, as we have heard the report today that the President will be announcing, that we will see even a further decrease in those who are actually leaving the welfare rolls and joining the ranks of the unemployed.

Secondly, I think it's also important to point out that, historically, the emphasis really has been on getting the job, but today the emphasis really is on keeping the job. In this economy that is performing certainly extraordinarily, the emphasis really is not as much on getting that job, but what we can do to eliminate barriers today to help individuals be successful once they are employed. So issues like child care and transportation become very critical in terms of helping individuals to be successful at work.

I think also the President's request for the housing vouchers, to make sure that individuals can locate where those jobs are is also going to be increasingly important because we know that three out of four jobs today that are being created are actually in the suburban communities and not in the central areas where oftentimes the individuals who are on welfare are, in fact, concentrated.

And the third point that I would point out is the fact that today, employers really see this pool of new workers as just that, I think, a talent pool of new workers, and that they are more willing to make the investment to hire these individuals and to see it as a real and significant contribution to their overall bottom line.

We've had study after study after study of employers who have repeatedly said that they are experiencing enormous success with the individuals that they are hiring; oftentimes their retention rates are exceeding those of those who comprise their normative population of their own employees, and they state that they would hire these individuals again if given the opportunity.

Overall, I think the future for welfare to work and for us seeing people get off the long road of adversity and certainly the trap that they have been in for these many years being on welfare, we're seeing those barriers fall; we're seeing these programs make a difference; we're seeing creative and innovative ideas that are taking place at the state and local level. And I think, in the end, we will be able to say that this program was a success.

With that, we'll take any questions you have.

Q Madam Secretary, are you concerned with the slowing or the slowdown in the economy that the job creation is going to stop and the chances of moving people are going to be drying up?

SECRETARY HERMAN: No, I'm not concerned, because if you look overall at what is happening in the labor market today, the low unemployment rates that we are experiencing -- you still hear employers talking about skill shortages. They're still looking for employees that they can make real investments in. And I believe that these individuals do represent a new pool of workers today for employers.

Q Secretary Herman, do you really think that -- first of all, for so many years you've heard a lot of welfare recipients, especially welfare mothers, say that, I cannot have a man in my home because the system was against me. And for so many years this has gone on and you've set a precedent, the federal government set a precedent with this. Do you think that the changing of this 100 hour rule will really make a difference to get a man back into the family, to have two-parent families, to actually help ease the welfare rolls?

SECRETARY HERMAN: Oh, I think it will definitely make a difference. As a part of my own travels, not only have I heard many stories like this, but I think that other reality is that even with our own guidelines, with the grants that we are awarding from the Department of Labor, we've put a special emphasis on noncustodial parents to encourage fathers in particular to take responsibility for the raising of their children, to engage them in parenting skills and to try and reunite them with family environment, so to speak.

So, yes, I think it will make a difference. And I think everything we can do in this regard to bring families together is what we have to do in terms of examining our own policies and regulations.

Q To follow on that question, the 135,000 figure seems low, based on all the anecdotal incidents you hear about. I mean, do you think there might be many more people nationally affected by this rule than the 135,000? What is that based on?

MR. REED: That's based on our estimate -- 32 states already have waivers that allow them to do this, so this is an estimate based on the remaining 18 states. It could be more than 130,000 -- I think it could be perhaps twice that if every state took the option, but this is our best estimate of what we anticipate.

Q What you and the President then are telling us today is that people who oppose this program like Governor Cuomo, Senator Kennedy, Reverend Jackson, were dead wrong?

SECRETARY HERMAN: I am saying today -- and certainly I am not going to stand here, Sam, and say that they were dead wrong --

Q They said to the President, don't sign this bill --

SECRETARY HERMAN: They said, don't sign the bill. And I would say that based on the evidence that we have to date -- and this is work in progress -- but based on this work in progress, that to date, we are successful in what it is we are attempting to do -- and that is to concretely move individuals from the welfare rolls to the pay rolls, to give them the infrastructure that they will need to be successful once they're on those jobs, and to engage in innovative strategies to reach out to, for instance, missing fathers, to try and come up with creative policies to help reunite families.

Q They said children would be hurt by taking parents off the welfare rolls, by forcing them off, the children would suffer. Have you found that to be the case?

SECRETARY HERMAN: I have found in my travels and the individuals that I have talked with that the largest issues as it relates to children in particular being impacted are challenges that clearly we face in the child care arena. There's more that we have to do to ensure that we have affordable, accessible, and available child care so that these mothers in particular -- and I'm speaking largely of mothers -- will have the opportunity to go out, get the jobs, get the training that they need, and to know that the children are going to be taken care of. But that is the biggest challenge that I have encountered on the road. It is the question of child care for our children, and we need to do more in that area, in particular.

Q How much is it attributable to the good economy and to the law itself?

SECRETARY HERMAN: Clearly, I think it's a combination. I believe that the fact that we do have a good economy today and that employers are looking for new workers certainly enables us to see the success that we're seeing today, particularly with welfare recipients who are making that transition.

But I also believe that much of what you're seeing is the fact that you have a lot of governors and mayors and local county officials who really are thinking outside of the box, who are looking at innovative and creative ways to help us reform welfare as we traditionally knew it.

Q Madam Secretary, on a slightly different topic, the Speaker of the House has accused the White House and the Clinton administration of being in support of a shutdown strategy over the budget and the budget battles that are brewing. How do you respond to that?

SECRETARY HERMAN: Well, I'm not here to comment on the budget per se, and I'm not aware of exactly what the Speaker has said. I would only say, however, in response to the question that I don't think that there is anyone in this administration who wants to see the government shut down over the budget. I believe the issue here -- what are the priorities in terms of what we're going to fund in terms of the President's priorities and what we're asking for in the budget.

Q Bruce, can you respond to that also, please?

MR. REED: I think I'd say the same thing. We're not interested in shutting the government down, we want to keep the country going. And the President has laid out clear priorities for what we need to do in education, in other areas. And we hope to work with Congress to make progress and get appropriations bills he can sign.

Q On the federal government's goal for hiring by the year 2000, can you explain the wide discrepancy between, say, the Commerce Department, which so far has only met 15 percent of its goal, versus Treasury, which has met 232 percent -- why is there such a big difference in the success rate?

MR. REED: I believe in the particular case of the Commerce Department, much of their commitment to hire people off welfare is tied to the census. So many of the people that they're going to bring on line will be coming later in the process.

But we're working closely with all the agencies, and the Vice President gives them a nudge every now and then to keep them on track. And we're confident that we're going to be able to meet and exceed that goal.

Q Do you know why the State Department is only 20 percent?

MR. REED: I don't. Happy to look into it for you, but I don't know off the top of my head.

Q Secretary Herman, on the housing vouchers issue, I know it's a controversial issue in several communities throughout the country, especially in Baltimore City. How do you tell the average American who lives -- well, middle class American that lives in a middle class neighborhood that doesn't have poverty in its neighborhood, we'll accept someone from the inner-city, low income housing developments move here so that they could get closer to work? And, I mean, a lot of persons are very upset about having low-income welfare recipients live next to them just for the sake of saying better education and getting to their job. What do you say to that average American who is fighting that?

SECRETARY HERMAN: April, as I look at the principles of the housing voucher program and what we are trying to do here, it really is to give individuals a leg up, if you will, to help solidify them on the road to success. And my experience has been, in talking with many mayors who have the responsibility for implementing these kinds of programs, that they have been very successful in integrating, in mainstreaming, if you will, the voucher process. Faith-based communities, in particular, have been particularly helpful, I think, in meeting the neighborhood challenges of helping individual families make those transitions into key neighborhoods and communities.

I have personally not met in the main of my own travels and discussions individuals who are adverse, if you will, to the concept or to the proposal. I think when people understand that individuals really are trying to do something for themselves and for their families that they are taking responsibility, that they want to make a difference, I find support is there. And I'm finding that increasingly, particularly in small towns and communities that I travel to.

Q Madam Secretary, are you keeping any figures on the people who are falling out of the welfare program losing their benefits, but not going to jobs? What are the figures on that, and what alternatives do they have as they're moving from the private sector to fill the gap as the government proceeds with this? Are you following this at all?

SECRETARY HERMAN: Yes. The Department of Health and Human Services has the responsibility for the overall evaluation of the effort itself, and as a part of the evaluation process we are tracking those individuals that we're not necessarily able to place in employment or that are having issues, if you will, in terms of a repeat employment experiences and not able to successfully maintain a job. We're trying to examine what are the factors that are contributing to those particular situations and what, if anything, we should do differently in following through on those particular individuals.

Q Do you think the President is going to change his story about Monica Lewinsky?

SECRETARY HERMAN: That is something I am not going to comment on, Sam.

Q What are the numbers again -- the total number of people who have gone from welfare to work?

MR. REED: When we took office there were 14.1 million people on welfare. At the time the welfare law was signed there were 12.2 million, and there are now 8.9 million. So it's a 3.3 million drop since August of '96.

Q Thank you.

END 1:45 P.M. EDT