View Header


                     Office of the Press Secretary
                          (Chicago, Illinois)
For Immediate Release                                     August 3, 1999     
                           PRESS BRIEFING BY 
                     ASSISTANT TO THE PRESIDENT AND 
                        Navy Pier Festival Hall
                          Chicago, Illinois             

1:25 P.M. CDT

MR. REED: I'm Bruce Reed. I'm the President's Domestic Policy Advisor. And I thought I'd take a few minutes to answer any questions you may have about today's event. I think that today's event proved what the President had hoped for, which is that businesses and states and people on welfare are more eager to abandon the old welfare system than anyone could have imagined three years ago.

Today there are half as many people on welfare as there were when the President took office, and of the people still on the rolls, they are four times more likely to be working. Every state is meeting the work requirements set out in the law, which were 30 percent for the past year -- the national average was 35 percent. And there are some interesting studies that have come out in recent weeks, including an Urban Institute study that was released yesterday, which tell us more about what's going on in the lives of people who have made the transition from welfare to work.

The Urban Institute study surveyed people who have left welfare, found 2.1 million people who have moved from welfare to work from 1995 to '97. Of those people who left welfare, 61 percent were working at the time of the survey. And though the transition from welfare to work is a struggle, as we heard about today, the people who are in the process of moving from welfare to work are making a good transition and, according to the Urban Institute study, on average are earning more than other low-income moms, and seem to be resembling the working poor population in most other respects.

According to the Urban Institute, 69 percent of those surveyed left the welfare rolls for work. Only one percent left because of time limits under the law. And I think one of the most encouraging common themes we heard today is what tremendous workers people leaving welfare have turned out to be.

The employers raved, understandably, about the kind of retention rates they've been able to achieve. The federal government, which has hired 14,000 people off welfare in the last couple of years, has had a 69 percent retention rate with former welfare recipients, compared to a 37 percent retention rate for the non-welfare hires. Some of the employers who spoke here today had even more remarkable records -- I think T.J. Maxx had a 90 percent retention rate for new welfare hires, the Bank of America had 92 percent.

That's happening, in part, because those companies are investing in their workers, and paying the kind of attention to them that we had hoped all employers would do. It's not enough just to move from welfare to work; there are real challenges once you get into the workplace. And clearly employers are taking that responsibility seriously.

I think the most important message to come out of today's event is, our job's not done. The job of welfare reform will not be done until we've moved everyone who's willing to work to work, and I think we can take a great deal of encouragement from what businesses and states and former welfare recipients are doing around the country. However, we should look with alarm at what Congress is contemplating. This is not a time to punish success, as Mayor Webb put it. We shouldn't be pulling the rug out from under welfare reform by taking back money that was promised to the states in 1996.

There are some in Congress who want to spend in Washington $4 billion in unobligated balances that states have put in reserve to save for a rainy day or to take additional efforts to move people from welfare to work. Some in Congress want to use that for a tax cut. As the President said today, that money would be far better spent moving the next round of people from welfare to work. With $4 billion to $6 billion, which is what some Republicans have been talking about, that would be enough money for states to move another million people from welfare to work, and we think that's the way it ought to be spent.

It's not that big a cushion in the scheme of things. States have unobligated balances of only 10 percent of the amount of money they have received. So that money is better reserved for a rainy day fund or for additional welfare to work efforts. And as the President pointed out, there's a lot more that we need to do to help people move from welfare to work and to help low-income families generally with the challenges of balancing work and family.

We've called on Congress to set aside more money for child care because current child care programs are only meeting about one-tenth of the demand. We want to reauthorize our welfare to work program, which has helped many cities to move the hardest to place to work. There are some in Congress who are stubbornly attempting to zero out the very successful housing voucher program that the President talked about, and under-fund the Department of Transportation's welfare to work transportation efforts. As we heard from some of the former recipients today, one of the greatest challenges of moving people from welfare to work is getting people from home to work.

So we've got a lot of work left to do. This was a good chance to take stock of the progress so far, but our job is not done.

Q The $4 billion, is that sitting in state treasuries right now, or sitting in the federal treasury with claims on it by states?

MR. REED: It's $4.2 billion in unobligated balances that is owed to the states, but they haven't written checks for it yet. So it's still sitting in the Treasury Department.

Q Because their own welfare rolls have gone down so they're not spending the money?

MR. REED: In some cases, they're setting aside the money for future use on the chance that their rolls might increase again. In some cases, they're early in the process of putting their welfare to work efforts in place, so they haven't figured out how to spend it all yet. And as I said, it represents just a little more than 10 percent of the total amount that states have been due to receive under the program over the past two and a half years.

So states are doing a pretty good job of investing this money and it would certainly send a terrible signal to try to yank that away from them.

Q They have to spend it on welfare-related things, right?

MR. REED: That's right. They can't divert it to other purposes.

Come on, Laura.

Q I can ask you some pesky little question --

MR. REED: No, no pesky questions. Back there, a hand?

Q Bruce, is there a danger that in the zeal for moving people from welfare to work, that people who can't move from welfare to work are going to be forgotten?

MR. REED: Well, I think one of the points that we wanted to make today was that this is not the time to wash our hands of this problem. For every struggle we heard about today, there's another struggle still out there. And I think one benefit of the block grant that the states have is that as their caseloads shrink, that enables them to invest more in the remaining cases -- which in some instances are going to be harder, and going to cost more.

So I think we still don't know when we will reach the hardest-to-place portion of the caseload. Caseload reduction has gone faster than anyone anticipated, and welfare recipients have proved both more eager to move to work and, to this point, better able to remain in work than some anticipated. There is definitely a portion of the caseload -- with the least training and no work history, and in impoverished areas -- who are going to have the hardest time.

But I think, as the President pointed out today, another challenge that we need to take up is to build on the success of the welfare-to-work partnership and enlist more companies not only in moving people from welfare to work, but in tapping the untapped markets that the President talked about on his new markets tour. And I think that what Eli Segal and the entrepreneurs here have been able to pull off is a good sign of what government will be capable of working in partnership with business in a way that's good for the company's bottom line and good for the country's bottom line.

Q On the Urban Institute study -- I was told that during the period they looked at, that of the people who left welfare, about 29 percent wound up going back on welfare.

MR. REED: As was talked about today, retention is an extraordinarily important issue and it's not enough to just place people in jobs. It's essential to run the kind of post-placement programs that many of these companies do -- follow up with people, make sure -- the kinds of struggles that a person encounters in moving from welfare to work are innumerable; they need to show up for child support hearings, they're not used to being in a workplace in the first place, and so on.

Under the old system it was commonplace for about half -- I think the cycling was about 50 percent, cycling back on to the rolls. It's lower now. But for some people it's going to take them more than one try to make it in the work force.

Q Do you consider a 29-30 percent actually a good figure -- well, it's a better figure than it had been? Is that what you're saying?

MR. REED: Yes, much lower than it had been.

Okay, I gather that the President is about to speak, so I will stop. Thank you.

END 1:40 P.M. CDT