Provide Greater Job Opportunies for Low-Income Families Through Car Ownership
PROVIDE GREATER JOB OPPORTUNITIES FOR LOW-INCOME FAMILIES THROUGH CAR OWNERSHIP -- (Extensions of Remarks - May 13, 2005)
SPEECH OF
HON. GWEN MOORE
OF WISCONSIN
IN THE HOUSE OF REPRESENTATIVES
THURSDAY, MAY 12, 2005
Ms. MOORE of Wisconsin. Mr. Speaker, for many low-income families, getting to a job can be even harder than getting hired in the first place. Research shows that lack of affordable and reliable transportation is a significant barrier to employment. If we want more people to work, we need to help make sure that they can get to work. Unfortunately, travel to and from a specific workplace on our cities' public transportation systems can be time-consuming and even practically impossible-especially for those struggling to leave welfare.
Public transit is designed to accommodate 9-to-5 commuters who need to get from one city destination to another during the normal workweek. But the entry level jobs of low-income workers are increasingly found in the faraway plants, warehouses, strip malls, and office parks of suburbia. The work schedules of these new hires may include "off-hour" shifts when public transit is unavailable or too unreliable. Low-income parents also need to go to job training classes, the supermarket, the doctor's office, or to day care to drop off their children. These destinations may not be located along public bus or train lines.
Studies show that people are more likely to find steady employment and earn a decent wage when they have access to a car. But all too often, buying and maintaining a reliable automobile is too expensive for families struggling to make ends meet. A recent report by the Annie E. Casey Foundation found that one-fourth of families earning $25,000 or less have no cars.
In recent years, a number of states and non-profit organizations have developed programs to assist the working poor with the purchase of a car. Most of these programs receive vehicles donated by the public or purchase them wholesale from dealerships. The used cars are repaired to good working order and then leased or sold to low-income workers and job seekers, usually at a subsidized purchase price. In many cases, program operators work with local lending institutions to obtain loans for the car purchase while also providing financial education to the new owner. In addition to improving access to jobs in far reaching suburbs or rural areas, some low-income car ownership initiatives can bolster the family's credit for future purchases, such as a home, as well as connect these families to a savings institution.
In order to help develop and expand these low-income car ownership efforts, I am introducing the Creating Access to Rides (CAR) Act. This legislation would establish a 5-year, $50 million grant program through which states, localities, and nonprofits could apply for funding to strengthen existing low-income car ownership programs or create new ones.
The bill would also facilitate car ownership through the use of Individual Development Accounts (IDAs). IDAs are special savings accounts for very low-income individuals through which, as an incentive to save, a person's contributions to the account are matched by public and private funding. States can use funds authorized by a little-known law called the Assets for Independence Act (AFIA) to match participant contributions to IDAs. However, when IDA contributions are matched using AFIA funds, withdrawals may be used for only three qualified expenses: homeownership, post-secondary education, and starting a business. This bill would expand permissible IDA uses under AFIA matching rules to include the purchase of a car.
In addition to AFIA dollars, states can use their Temporary Assistance for Needy Families (TANF) funds to match IDA contributions. While the purchase of a car is not included in the underlying TANF statute as a qualifying IDA expense, the Department of Health and Human Services has clarified that states can elect to permit withdrawals for car purchases when the participant's IDA is matched with federal TANF dollars. However, some states have found that, as a result of choosing this option, the IDA can be considered an asset when determining the participant's eligibility for other programs such as food stamps.
This legislation would remove this barrier and allow states to use TANF dollars to match IDA savings for a car without the account's assets being counted against the participant's eligibility for other important programs.
Mr. Speaker, vehicle ownership is critical to matching the available workforce with available jobs. I urge my colleagues to support this legislation and enact it in a timely manner so that low-income Americans can get behind the wheel, improve their job prospects, and gain greater opportunities to provide for their families.
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