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and four times the minimum wage can't afford child care, imagine what the poorest of our families face.

H.R. 1720, the Family Welfare Reform Act, takes the first step toward offering these families some support. But it's only one step. H.R. 1720 will create a new work, education and. training program for families on welfare that will give them the competitive edge they have lost, or never had.

If it works, in a few short years thousands of welfare recipients will be ready to enter the labor force. They will be educated, trained and ready to begin working for a paycheck. Without some help with their child care expenses, however, all this effort will have been pointless.

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Why? The deck is stacked against the working single mother. Working full-time at the minimum wage or even slightly better she cannot hope to earn her way out of poverty today. If her child care expenses deplete her earnings, the family's escape from poverty is even further away. The sad fact is many children need two earners to escape poverty. According to the Congressional Research Service, one-fourth of children in married couple families would be poor if their only income were their father's earnings.

Let's look more closely at the budget of this family of three leaving welfare to go to work. If Mom takes a job working full-time at the minimum wage she will earn roughly $581 per month, nearly $7,000 per year. Assume she pays $25 per week for child care for each of her two children, an amount well below the average reported by the Census Bureau. Child care amounts to a hefty 34 percent of her earnings, leaving the family with $381 each month to pay the rent, buy clothes and eat. If Mom refuses to accept any government help, she and her children will be living at half the poverty rate. She won't be welfare dependent but she will still be poor.

The challenge of H.R. 1720 is to help this parent find work at a wage that can support her family. If she can't earn well above the minimum wage, she will need support some combination of cash supplements, day care subsidies, and health insurance. All three of these items are provided, with varying degrees of emphasis, in the House and Senate welfare reform bills. The challenge in conference on these bills will be to retain the best of both.

But whatever we do in welfare reform probably won't be enough. The child care subsidies are likely to be time limited and the limit won't be purely a function of the family's earnings. When the child care subsidies in H.R. 1720 run out, the need will remain as it exists now for working families who are poor, but not poor enough to qualify for welfare benefits.

Only 11 percent of America's employers provide some help to

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workers who need child care. The Federal government has become an important source of child care subsidies. Annually, the dependent care tax credit subsidizes over $3 billion in taxpayer's child care expenses. For poor families, the AFDC program and the social services block grant are another source. Head Start, the community services block grant, JTPA, and Federal nutrition programs also provide some help.

The demand for and cost of child care grows larger each year, despite these Federal commitments. As we debate child care issues, we will consider whether to use the tax system, existing Federal programs, or a new one to deliver child care subsidies. As part of that debate, we must consider how to best target any additional child care funds to those who need our help the most and we must consider how to assure that children in child care are in safe and healthy environments. That is a tall order and one

that can be controversial. But these are our children. We can either pay now or pay later.

Senator DODD. Thank you very much, Congressman.

I know you've got that important Ways and Means Committee mark-up in the House. But again, let me commend you. You really led the way in welfare reform. It was no easy task to get that bill through the House, 435 Members. To move a welfare reform package at any time is difficult, but in this particular climate, I think it is particularly hard. So we all thank you for doing that and commend you for having a child care component to it, and Senator Moynihan, as well. As you point out, it deals with the training phase, I think, and I hope that stays in the legislation-I think it will-but it would be a cruel hoax, in a sense, to provide training to someone, provide child care for them during that phase, and then say, "Now, go to work, but we're sorry, there is no more child care." There is a word for that-I don't want to use it in hearing

Mr. DOWNEY. Yes.

public

Senator DODD [continuing]. But it would be ridiculous, to put it mildly.

Mr. DOWNEY. Senator Dodd, seated to my left and your right, the gentleman from Massachusetts will point out to you that the ET Program would not have worked if there wasn't a component of child care. It is the program in Massachusetts that we modeled most of our efforts on.

You had two extraordinary Governors come here, one a Republican from a Northeastern State, and another a Democrat from a rural State. The moon is in the seventh house, Senator Dodd, and Jupiter is aligned with Mars, if we can use a celestial metaphor, for these matters to be resolved, and it would be criminal negligence of us not to do it this year.

Senator DODD. I hope you are right.

Thank you very much, Congressman.

I am going to ask that we take a five-minute recess. We have another vote on. We will come right back. And I do apologize to the witnesses. This is one of the problems with having a hearing during a legislative session. I will be pulled away from time to time, but I'll come right back, and we'll go to you, Ms. Henricques, and then you, Mr. Johnston, and Ms. Hogan.

Thank you. The Committee will stand in recess for five minutes. [Short recess.]

Senator DODD. First of all, let me tell all of the witnesses their statements will be included in the record as if read, but proceed however you are most comfortable.

Ms. Henricques.

MS. HENRICQUES. Good afternoon, and thank you, Senator, for this opportunity to testify on behalf of the ABC bill.

I'd like to begin by telling you a little bit about my background. I am a single parent of two children. I come from a middle-income family. My parents have always worked and are still working, even though they are both far beyond the age of retirement.

I share this with you because my background in this instance is not much different than other people and because I think it is important to emphasize that not all parents needing subsidized child care come from a history of broken homes or welfare rolls.

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However, when those families who have to depend on their Government for financial support attempt to collect themselves and join or rejoin the work force, they should not be deterred or frustrated by the lack of affordable quality child care.

I have experienced that frustration. When I attempted to return to work after my first child was born, my first plan was asking a friend to care for my son. She became pregnant with her fifth child and began to experience family problems. So ended my first arrangement. She did, however, suggest a friend of her sister's who was willing to come to my house and care for my son. I conducted an informal interview, and my second arrangement began. Unfortunately, it ended all too soon when I came home to find my eightmonth-old crawling about and my babysitter sound asleep, with the smell of alcohol on her breath.

I was determined to work. I was a paraprofessional in the public school system, and I had plans to further my education through a special education offered by the Board of Education.

My final arrangement was with a woman who was recommended by one of my coworkers. She didn't drink, was older, and had been in the business for several years. I have no real concrete evidence of exactly what went on in that household. I only remember arriving to pick up my child with him practically leaping out of the crib for me and trembling with fear. Needless to say, another arrangement ended, and with it, my plans for a better future.

I realized then and am certain of it now that as a parent, nothing is as important as the well-being and safety of my children. This was my responsibility as a parent. So I resigned my job and turned to Aid for Families with Dependent Children. I had no other recourse.

Public assistance was helpful, but just barely, and definitely not what I was accustomed to. One and one-half years later, I accidentally found a Head Start Program. I enrolled my son. Head Start is a half-day program for low-income families; I qualified. My son graduated from Head Start. It was a rewarding experience for both of us. But I was ready to return to work.

Before I could work, my son needed longer hours of care. I inquired of the few schools I knew about in my area. My hopes began to sink when they quoted fees of $3,000 to $4,000 per year for tuition-certainly nothing that I could afford.

I spoke to the family worker at the Head Start Program, and she told me about "day care centers"; they were centers whose fees were based on the family's income. I followed her instructions and applied to the Agency for Child Development, which is New York City's subsidizing agency.

I enrolled my son and also found employment at the same day care center. I was back in the work force, but also feeling very at ease and confident that my child was receiving quality education and care at an affordable cost to me.

With my second child, I knew where to go and what to do, but I did discover a new form of subsidized care, which was family day care. Family day care is care in someone's home who is licensed to care for children from two months to twelve years old. I had an excellent provider and returned to work in the field where I am

presently employed-resource and referral. I assist parents who are looking for child care with evaluating their options.

As many of you know, the Bureau of Labor Statistics cites that over half the women in the work force have children under six years old and that almost half of those women have children under the age of two.

In New York City, there are approximately 72,000 children under the age of two whose families are eligible for publicly-funded child care, and there are only approximately 4,422 subsidized family day care slots available.

Full-time, private, nonsubsidized family day care in New York City can cost as much as $600 per month, and private full-time day care ranges as high as $800 per month. These costs equal what some people are paying in housing cost.

I consider myself fortunate for having found subsidized care when I did. I have also come to realize that it is not only necessary to increase the number of regulated subsidized care; it is imperative. We cannot offer parents training, education, employment, or any welfare to work programs without having regulated, affordable child care sufficiently available to them. To do otherwise is certainly putting the cart before the horse, and would not realistically address the needs of those families who cannot afford the rising cost of child care.

Thank you for your attention.

Senator DODD. Thank you very much, Ms. Henricques. We appreciate your being here today and testifying before the Committee. Mr. Johnston, thank you for waiting. Your testimony is welcomed, obviously, in its entirety. We are particularly anxious to hear about the Massachusetts experience, those of us who are familiar with the ET Program. You really have been the pace-setters in many ways, and we commend you for that and are anxious to hear your suggestions and recommendations, because you already have the hands-on experience.

We thank you for being here this morning.

Mr. JOHNSTON. Thank you, Mr. Chairman, and thank you and the Members of the Committee for inviting me to testify before you this morning. And particular thanks to Senator Kennedy, who was here, and graciously said some nice things about me and my boss, Governor Dukakis; and Senator Harkin, who has been so active in this as well.

But in particular, Mr. Chairman, on behalf of all of us who have been involved in this issue in our State, beginning with the Governor, but involving literally thousands of people in the child care community, the day care world in particular, I want to commend you for your active work in this area and particularly for your sponsorship of the Act for Better Child Care. Your efforts and the efforts of the Subcommittee will help to focus national attention on the critical need for affordable, quality child care.

Welfare reform, as has been pointed out several times this morning, will transform our current AFDC program into a vehicle for education, training and work. Our AFDC system, which was created under Franklin Roosevelt in 1935 as a program to enable widowed mothers to stay at home and care for their children, might