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Dire Poverty Numbers Fuel Uproar in Senate

WASHINGTON (CN) - Against devastating statistics about U.S. families living in poverty, members of the Senate debated Thursday how to keep federal dollars from patching states' budget holes.

The Senate Finance Committee looked today at the failures of the Temporary Assistance for Needy Families program, a product of welfare reform in the 1990s that promised to move poor families to self-sufficiency.

"It seems to me that the end result is a program that has utterly failed," Sen. Robert Menendez, D-N.J. said.

Since the implementation of TANF in 1996, 3.5 million fewer people receive welfare, yet the poverty rate remains about the same, Sen. Orrin Hatch, R-Utah, said.

Hatch chided the Obama administration for not putting forward a proposal to reauthorize TANF.

Sen. Bob Casey, D-Pa., added, that 3 million more children live in poverty since Congress passed the legislation. That's one in five U.S. children and 47 million Americans currently living in poverty.

Dr. H. Luke Shaefer, a social work and public policy professor at University of Michigan, testified that the number of families living on no more than $2 per day, per family member, has increased by 130 percent over the past 15 years.

The statistics chilled many members of Congress.

"That should be unacceptable to everybody in this building, and the politics that are so corrosive in this place should be utterly unacceptable when we're facing that kind of challenge as a country," Sen. Michael Bennett D-Colo., said.

Funding for the TANF program has remained relatively flat over two decades, at about $16.5 billion per year, despite increased cost of living and inflation.

Indeed a breakdown of TANF spending by the Center on Budget and Policy Priorities found that the program devotes only 28 percent of its funds to providing basic assistance to poor families.

Because the funding comes from a fixed block grant, there are few strings attached to how states spend the money.

Hatch said part of the TANF spending gets reported as "other expenditures," and accounts for 34 percent of total program spending.

"There is no definitive definition of what these other expenditures are, but we do know that nearly $11 billion are spent on them each year," Hatch said.

Shaefer said "states take advantage of the significant flexibility allowed by the TANF block grant to divert dollars to other purposes, in some cases simply replacing existing state expenditures."

Though Shaefer said closing some program loopholes that states exploits to fill their budget gaps would increase the program's efficacy, he added that block-grant structure is in general not a good way to structure social policy.

Right now, only 25 percent of poor families with children get support from the program, Shaefer said.

In addition to reforming the TANF program, which devotes only eight percent of its budget to work-related activities, other witnesses said improving the way its jobs programs treat people would help address some of the factors that keep people mired in poverty.

One witness to address the Senate today was Aretha Jackson, a single mother from Prince George's County, Md., who served 18 years in the U.S. military.

Jackson told the committee she hit rock bottom after flunking out of graduate school, battling depression and post-traumatic stress disorder, and grappling with poverty and homelessness through the years.

Her experience with TANF programs varied across multiple states, but the most discouraging factor was how program examiners treated her.

"The attitude was one of superiority," she said.

That changed for her when the TANF program required her to go to a D.C. employment agency, America Works , to keep receiving assistance, she said.

"They didn't treat you as though you were somebody on welfare, or somebody looking for a handout," Jackson said. "They showed interest in me."

America Works helped Jackson get the services she needed from the Department of Veterans Affairs, where she now works full-time.

Jackson said she had been suicidal, but that the agency helped her to view herself as a productive, valuable person.

"When we're unable to see ourselves as equipped or able, we're stuck in our environment," Jackson told the committee.

In addition to improving jobs programs and equipping people with the skills to find and keep a job, Sen. Bennett said the U.S. must also raise the minimum wage.

"To have a single mother of two kids working for $7.25 still be below the poverty line because we have allowed the minimum wage to collapse over the last 50 years, I think is a disgrace," Bennett said.

Sen. Sherrod Brown, D-Ohio, touted the effectiveness of the earned-income credit, a federal tax credit given to lower-income workers that can boost tax returns.

Bennett said the Senate Finance Committee wants to raise the credit, and make it permanent.

Menendez reminded the committee that Rep. Paul Ryan, a Wisconsin Republican whom the House just elected as its new speaker Thursday, wants to block-grant the Medicaid program.

"That to me is a recipe for disaster," Menendez said. "We have already seen how damaging block grants to states can be for providing basic assistance for those most in need."

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