[House Hearing, 105 Congress]
[From the U.S. Government Publishing Office]
MODIFYING CHILD SUPPORT PENALTIES FOR AUTOMATIC DATA PROCESSING
=======================================================================
HEARING
before the
SUBCOMMITTEE ON HUMAN RESOURCES
OF THE
COMMITTEE ON WAYS AND MEANS
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTH CONGRESS
SECOND SESSION
__________
JANUARY 29, 1998
__________
Serial No. 105-88
__________
Printed for the use of the Committee on Ways and Means
U.S. GOVERNMENT PRINTING OFFICE
60-882 WASHINGTON : 1999
COMMITTEE ON WAYS AND MEANS
BILL ARCHER, Texas, Chairman
PHILIP M. CRANE, Illinois CHARLES B. RANGEL, New York
BILL THOMAS, California FORTNEY PETE STARK, California
E. CLAY SHAW, Jr., Florida ROBERT T. MATSUI, California
NANCY L. JOHNSON, Connecticut BARBARA B. KENNELLY, Connecticut
JIM BUNNING, Kentucky WILLIAM J. COYNE, Pennsylvania
AMO HOUGHTON, New York SANDER M. LEVIN, Michigan
WALLY HERGER, California BENJAMIN L. CARDIN, Maryland
JIM McCRERY, Louisiana JIM McDERMOTT, Washington
DAVE CAMP, Michigan GERALD D. KLECZKA, Wisconsin
JIM RAMSTAD, Minnesota JOHN LEWIS, Georgia
JIM NUSSLE, Iowa RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas MICHAEL R. McNULTY, New York
JENNIFER DUNN, Washington WILLIAM J. JEFFERSON, Louisiana
MAC COLLINS, Georgia JOHN S. TANNER, Tennessee
ROB PORTMAN, Ohio XAVIER BECERRA, California
PHILIP S. ENGLISH, Pennsylvania KAREN L. THURMAN, Florida
JOHN ENSIGN, Nevada
JON CHRISTENSEN, Nebraska
WES WATKINS, Oklahoma
J.D. HAYWORTH, Arizona
JERRY WELLER, Illinois
KENNY HULSHOF, Missouri
A.L. Singleton, Chief of Staff
Janice Mays, Minority Chief Counsel
------
Subcommittee on Human Resources
E. CLAY SHAW, Jr. Florida, Chairman
DAVE CAMP, Michigan SANDER M. LEVIN, Michigan
JIM McCRERY, Louisiana FORTNEY PETE STARK, California
MAC COLLINS, Georgia ROBERT T. MATSUI, California
PHILIP S. ENGLISH, Pennsylvania WILLIAM J. COYNE, Pennsylvania
JOHN ENSIGN, Nevada WILLIAM J. JEFFERSON, Louisiana
J.D. HAYWORTH, Arizona
WES WATKINS, Oklahoma
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
hearing records of the Committee on Ways and Means are also published
in electronic form. The printed hearing record remains the official
version. Because electronic submissions are used to prepare both
printed and electronic versions of the hearing record, the process of
converting between various electronic formats may introduce
unintentional errors or omissions. Such occurrences are inherent in the
current publication process and should diminish as the process is
further refined.
C O N T E N T S
----------
Page
Advisory of January 16, 1998, announcing the hearing............. 2
WITNESSES
U.S. Department of Health and Human Services, John Monahan,
Principal Deputy Assistant Secretary, Administration for
Children and Families.......................................... 29
----------
Association for Children for Enforcement of Support, Inc.,
Geraldine Jensen............................................... 104
California Department of Social Services, Leslie L. Frye......... 59
Cardin, Hon. Benjamin L., a Representative in Congress from the
State of Maryland.............................................. 129
Center for Law and Social Policy, Vicki Turetsky................. 94
Center on Budget and Policy Priorities, Wendell E. Primus........ 80
Children's Rights Council, Ronald K. Henry....................... 116
Feinstein, Hon. Dianne, a United States Senator from the State of
California..................................................... 11
Michigan Family Independence Agency, Wallace N. Dutkowski........ 67
New York State Office of Child Support Enforcement, and New York
State Office of Temporary and Disability Assistance, Robert
Doar........................................................... 46
SUBMISSIONS FOR THE RECORD
Alameda County District Attorney's Office, Oakland CA, statement. 134
Thomas, Hon. William M., a Representative in Congress from the
State of California, statement and attachments................. 136
THE AUTOMATIC DATA PROCESSING REQUIREMENTS OF THE 1988 FAMILY SUPPORT
ACT AND THE 1996 WELFARE REFORM LEGISLATION
----------
THURSDAY, JANUARY 29, 1998
House of Representatives,
Committee on Ways and Means,
Subcommittee on Human Resources,
Washington, DC.
The subcommittee met, pursuant to notice, at 9:03 a.m., in
room B318, Rayburn House Office Building, Hon. E. Clay Shaw,
Jr. (Chairman of the Subcommittee) presiding.
[The advisory announcing the hearing follows:]
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Chairman Shaw. I have been told that Mr. Levin is on his
way down, and I will go ahead and proceed with my opening
statement and then yield to whomever on the Democrat side who
might want to make a statement. Mr. Levin can read mine if he
wishes.
This morning we are going to conduct our final hearing on
the penalties imposed on States that fail to meet the automatic
data processing requirements of the 1988 Family Support Act or
the 1996 welfare reform legislation. Mr. Levin and I have
introduced legislation to address the penalty issue as well as
the issue of child support incentive payments, and we have
asked our witnesses today to give us their reactions to the
introduced bill.
Getting these penalty provisions right may not be very
exciting, but I believe that the task is very important. The
Federal Government is spending lots of money on child support
in general and on computer systems in particular. I think that
it's fair to say that nearly everyone believes that good
computer capabilities is at the heart of child support
enforcement. Even more important, we have a major obligation to
ensure that our children receive the child support that they
are due. Thus, once we agree on requirements for States, we
must have credible penalties, swift and certain penalties.
Otherwise, we will only have Federal suggestions, not Federal
requirements.
Both the penalty provisions and the incentive provisions of
this bill were developed on a bipartisan basis between me and
Mr. Levin. We have met with State officials, child and family
advocates, and parents. In addition, we have circulated draft
copies of the legislation widely and have responded to several
suggestions for improvements in the bill. Equally important,
the groups that made the drafting decisions about the bill
included Democrats and Republicans from the Committee on Ways
and Means in the House and the Committee on Finance in the
Senate as well as representatives from the Clinton
Administration. I might say also, representatives from the
California delegation and other States that were affected. We
have also enjoyed excellent support from the Congressional
Budget Office, the Congressional Research Service, and the
General Accounting Office.
The result of this work is a bill which I believe achieves
balance between the various competing interests. At least 16
States that missed that October 1, 1997, deadline will be
penalized. On the other hand, rather than the nuclear-type
penalty of losing all their Federal child support money and all
the TANF block grant money, these States will lose 4 percent of
their child support administrative money. Moreover, if
penalized States can achieve certification before October 1 of
this year, they will have 75 percent of the penalty refunded to
them. If States do not complete their computer systems, the
penalty increases because States that are not certified after
more than a year are substantially out of compliance with
Federal requirements that have been in place since 1988. But
States can always receive a 75 percent refund in the year that
they achieve certification.
For the States that are still having difficulty building a
single statewide system, we have included a provision that
would allow alternative systems configurations. These
alternative systems, however, must be capable of meeting the
goals of the child support program with the same speed,
effectiveness, and efficiency as a single State-wide system. If
they do not, the Secretary may not approve the waiver request.
I think that we have found just about the right compromise
and balance in this bill. Even so, I know that not everybody is
going to be completely satisfied. For this reason, I plan to
listen carefully to the testimony today and then discuss that
with Mr. Levin and others and decide whether we should make
further changes in the bill.
[The opening statement follows:]
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Sandy, first let me thank you for all the help on this
bill. Given all the cooperation you and I have demonstrated
lately, I'm not looking around for something to be partisan
about, but I'm sure we will find it or it will find us. Would
you like to make an opening statement?
Mr. Levin. Thank you, Mr. Chairman, and to my colleagues
and everybody here. Actually the statement that you read could
have been read for both of us. I have an opening statement, but
because we have witnesses here who have other things to do, I'm
going to ask that my statement be placed in the record and
simply say a few things. Just a very few, because again, Mr.
Chairman, your statement, I think, hits the nail on the head.
Our staffs have worked together. We have worked with the
administration. We have tried to tap into the information and
the knowledge of the various States.
We have made progress in this area, and we can be proud of
it. There has been a substantial increase in collections in
recent years. But I'm not even sure that the issue is if the
glass is half full or half empty. I don't think that we are
probably halfway there yet. And moving further ahead is
critical for the children of this country. It is also critical
for the implementation of welfare reform that we worked so hard
on.
We now have the methodology to attack this issue much more
effectively than was true a decade ago. Some years ago we said
to the States, ``Use this technology and we'll help fund the
most of it.'' It did not work as well as we'd hoped. There is a
lot of blame, as I say in my statement, to go around. And I
don't think that we need to dwell on it, but we need to
essentially face the future.
And so our task is to make sure that we have a system that
not only is in place but is implemented. And yesterday, Mr.
Chairman, you and I introduced a bill to carry that out. You
made a pledge in October or November, I think it was, that we
were going to do this, and we're meeting this pledge right now.
I think there have to be penalties that are meaningful. We have
to remember that these problems cut across State lines, and we
simply have to have a system that is a system of effectiveness
in every State. And as you indicated, Mr. Chairman, we not only
have graduated them, but with teeth, so that there are
penalties if they are not met, but we've provided an
alternative option, a waiver availability to the Secretary when
a State can indicate and can show that they can integrate
components that are effectively operating into a single-State
system.
So, like you, I look forward to the testimony. We're
willing to listen to suggestions for changes, but I must alert
everybody, a lot of work has been done on this. We're behind
the curve. It's children's lives that are at stake. And I think
the burden, if I might say so, of people who propose changes to
this bill we've worked so hard on, the burden is on those who
suggest changes.
Chairman Shaw. Thank you, Sandy. Without objection, your
full statement will be placed in the record.
[The opening statement follows:]
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Chairman Shaw. Do any other members wish to make any
opening statement at this time? If not, I'll call our first
panel.
Senator Feinstein, it's nice to have you with us. We also
are looking forward to hearing from our colleague, Mr. Cardin.
He has advised us that he is going to be late, so we will fit
him in at the proper time.
We have the written statements of all the witnesses. We
would, of course, include that in the record. We would
appreciate it if all the witnesses could limit their statements
to five minutes.
Senator, proceed as you wish. And welcome.
STATEMENT OF THE HONORABLE DIANNE FEINSTEIN, A U.S. SENATOR
FROM THE STATE OF CALIFORNIA
Senator Feinstein. Thank you very much, Mr. Chairman. Mr.
Levin and Members of the Subcommittee, I thank you very much.
Chairman Shaw. We start Senators with a yellow light.
Senator Feinstein. Well--[Laughter.]
Mr. Levin. Senators do not see any light. [Laughter.]
Senator Feinstein. Actually, you have a point.
Mr. Levin. I say that in a very friendly way.[Laughter.]
Senator Feinstein. Thank you.
Mr. Levin. In fact, we don't see any light.
Chairman Shaw. It's called, ``Family Feud'' in his case.
Senator Feinstein. I want to thank you, Mr. Shaw, for being
available and for recognizing the concerns of California.
California isn't alone. I believe that there are about 14
other States that aren't going to meet the deadline. And I very
much appreciate the moratorium that you and the committee have
agreed to accept.
I would like my statement to go into the record and
justinformally talk.
I think the problem is, with the legislation, that it's not
going to have enough flexibility and, very candidly, that the
penalties are going to be too high. We have here today Mr.
Lawrence Silverman who is the special assistant in the
legislative and policy development area of the Bureau of Family
Support Operations of the County of Los Angeles, and also the
chief of the Department of Social Services, the Office of Child
Support in the State of California, Leslie Frye. And I
understand that they are both going to make a statement, or I
hope that they are. And let me see if I can summarize the
problem.
The big States have had problems. And it is my
understanding that the loss of the AFDC and child support funds
from the 14 States that aren't going to make the March deadline
is going to be some $8 billion a year. California will lose
$4.3 billion; Illinois, $654 million; Michigan, $857 million,
and Pennsylvania, $794 million. Now, since 30 percent of all of
the child support cases cross State lines, the consequence of
the penalties are going to be serious, and children in Kansas
or Georgia are going to be clearly affected by the
unavailability of child support from parents in California, in
Pennsylvania, or any other of the 14 States who face the
penalties.
So I am here to ask, and you have been very gracious
already, for some additional legislative flexibility. I would
like to ask this committee if they would change the penalties
from your 4, 8, 16, 20 percent penalties to 2, 4, 6, and 8
percent penalties over four years.
California alone, under your legislation, would face
penalties of $12 million in the first year and $60 million in
the fourth year. So the bottom line is that the 2.36 million
families in California that are affected by this--2.36 million
families are affected by it--aren't going to help children in
other States. It's my understanding that Illinois has
approximately 730,000 families with children who won't get
their child support because the State will face $2.7 million in
penalties in the first year and up to $13 million in the fourth
year. In Michigan, it is my understanding, 1.5 million families
with children may not get their child support because the State
faces $3.27 million in penalties during the first year and
$16.3 million in the fourth year.
Now I know, and I talked to the organizations that argue
that the cuts are necessary, that you have to punish people for
not having a seamless system. And respectfully, I must disagree
with that. I don't think that legislation that punishes
families is really the way to accomplish this. The States
aren't penalized. The bureaucrats that may or may not do the
right thing aren't penalized, but the families are penalized.
And it's my understanding--first of all, let's take the County
of Los Angeles. I would like to enter into the record a
memorandum of understanding that was developed in 1989 between
HHS and the County of Los Angeles. I could be wrong, but it is
my understanding that this memorandum was entered into at the
request of HHS. And in fact, HHS provided approximately $50
million for a separate Los Angeles county system. And LA County
serves 550,000 families. It is 25 percent of the California
caseload. And it is a huge system with its own systems. In some
respects it is equal to the system of another State. And I
would hope that there should be--could be some accommodation in
this legislation for Los Angeles County.
Clearly, as you know, California isn't going to meet the
deadline. It has canceled the contract with the existing
purveyor who was not able, I gather, to meet the contract
criteria, and it will have to develop a new State-wide
contractor. But in the meantime, it is my understanding--and
Mr. Silverman is here--that LA County anticipates that its
system can be fully capable within the time deadline.
So essentially, Mr. Chairman, I am asking for two things.
The second is some flexibility in the penalties. Specifically,
a four-year system of 2, 4, 6, and 8 percent. That will be bad
enough if California isn't able to meet this six-month
moratorium. I believe that within two years it will be
possible, but not within the six-month period.
So that is the thrust. It is my intention to introduce a
bill in the Senate that would have the 2, 4, 6, and 8 percent
penalties and to try to provide some form of flexibility in the
legislation so that we meet this problem, this enormous problem
of Los Angeles.
If there are specific questions, I think that the people
best able to answer them, Mr. Chairman, are Ms. Frye and Mr.
Silverman. Ms. Frye from the State and Mr. Silverman from the
County of LA.
[The prepared statement and attachments follow:]
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Chairman Shaw. Thank you, Senator. I don't see Mr.
Silverman on our list, but I see Ms. Frye on our list, and I
assume that she can answer the questions that we are talking
about.
I don't have any questions. I just want to point out one
thing which I think is quite important. Most of the States will
have--and I'm sure that California will be one of them, and I
know that Michigan will certainly be one of them--will be
experiencing some savings from TANF because of the tremendous
success of welfare reform and the fact that the TANF funds have
been block granted. In those situations, some of those savings,
particularly as it applies to low-income recipients of child
support, can be transferred over to take care of any shortfall
that might be experienced. So that the question of pulling back
funds that would be available should not happen if the surplus
within the TANF continues.
Mr. McCrery.
Mr. McCrery. Thank you, Mr. Chairman.
Ms. Feinstein, California is not the only State that has
had trouble implementing the data processing requirements, but
we're curious as to why the State of California has had so much
trouble coming up to speed on these requirements. Can you shed
any light or is there anybody with you that could shed some
light on the troubles that have been encountered?
Senator Feinstein. Perhaps the Chief of the Child Support
Division of the State, if you would have no objections, Mr.
McCrery, could answer that question.
Mr. McCrery. If the chairman has no objection.
Chairman Shaw. And you are?
Ms. Frye. I'm Leslie Frye.
Chairman Shaw. If we might hold the question, because Ms.
Frye will be a witness on the third panel.
Ms. Frye. Sure, I'd be happy to do it then. Thank you.
Mr. McCrery. That's all I have, Mr. Chairman.
Mr. Levin. Welcome.
Senator Feinstein. Thank you.
Mr. Levin. Let me just mention briefly, because we're going
to take a hard look at this, the reference to billions of
dollars that would be lost is, I think, is a reference to what
would happen if the States were not making a good-faith effort
to implement the law. If they were, there would be a far lesser
set of penalties. And I would assume that every State would be
making a good-faith effort. So what we would be talking about
primarily is the legitimacy and the efficacy of the lesser set
of penalties if they did not meet the timetable. And I've
talked this over with the State of Michigan, and if it is
likely that there would be a loss of several million if they
did not meet the first stage--the problem with it is this: if
we don't have even this, I think, relatively modest set of
penalties, what is the assurance that we are going to have,
that there will be implementation of a system that is federally
subsidized to a certain extent and is essentially a national
problem for the very reason that you stated--that is a third,
more or less, of the child-support orders in a State relate to
people who are no longer in the State. And if every State isn't
pulling its load, then no matter how effectively California or
Michigan or Florida or Louisiana or any State is trying to
carry out its plan, there is a one-third hole that can't be
filled.
So the large amount that you mention is most unlikely to
occur. What may well happen is that the smaller sums will be
imposed--a small fraction of the amount of Federal money that
is being received by each State to implement the plan. I don't
have the exact--it's less than 10 percent, I think,
considerably less than that in the State of Michigan. And we
want our States, with our help, to bring their programs up to
speed. So we'll look at this issue. And we know that whatever
goes through here has to go through the Senate, so we're
anxious, very much, to work together. But I hope that we can do
so realizing, as Mr. Shaw stated in October or November, we'll
have a moratorium, but only to allow implementation of a new
system that is so realistic that it will indeed be implemented.
Senator Feinstein. May I just briefly respond to that?
Mr. Levin. Yes.
Senator Feinstein. First of all, I agree with what you are
saying. I don't pretend to know the ins and outs of this. I
intend to learn and try to learn.
What I've been told is that California is so big and all
these counties have different systems and the contractor just
couldn't put the thing together. Now where exactly the State is
right now, I don't know. I intend to find out. I agree that
there has to be this more seamless, interdigitating system. I'm
really concerned by--I'll be candid with you--by the welfare
bill and its impact on California because the bill is kind of
backloaded as the penalties come on. And down line--at one
point when I was entertaining the possibility of running for
Governor, I was very concerned because I thought that most of
this bill is going to come down to land on California around
the year 2000. The State is huge in the sense of what it has to
do to be able to meet the strictures of that bill. I don't have
to worry about that now as a chief executive officer----
Mr. Levin. I hope that wasn't the reason that you didn't
run----
Senator Feinstein. But I intend to get much more familiar
with it. I do want to work in a bipartisan way. Ido understand
what you are trying to do. I agree with it. It's just with this vast
sprawling entity of all of these different systems, whether they really
can be brought together in time, I don't know. So what I would like to
offer to do is meet with Mr. Silverman and Ms. Frye as soon as you are
finished and get more involved and try to see what I might be able to
do to be helpful.
Mr. Levin. We'll welcome that. I think that States need to
remember--and I'll finish with this--that other larger States
have made very considerable progress. And my own State isn't
100 percent there, but it has made some very considerable
progress, as New York and most other States have, and I think
that there is a very particular set of issues relating to
California that may not only have to do with size. I think that
you have done your job, if I might say so, as a legislator. I'm
not sure why there has been a failing on the part of the State
of California to be much further along when it has so many of
these children in need.
So we look forward to working with you and trying to have a
bill out of the Congress and on the President's desk by the
spring.
Senator Feinstein. Thanks very much.
Chairman Shaw. Mr. Collins.
Mr. Collins. I'll pass.
Chairman Shaw. Mr. Coyne.
Mr. Coyne. No questions.
Chairman Shaw. Senator, thanks very much for being with us.
Senator Feinstein. Thank you, Chairman Shaw. I appreciate
it.
Chairman Shaw. You put forth a very forceful case.
Our next witness, who is the principal Deputy Assistant
Secretary of the Administration for Children and Families of
the United States Department of Health and Human Services, John
Monahan. Welcome. Proceed as you may. We have your full
statement which is going to be made part of the record.
STATEMENT OF JOHN MONAHAN, PRINCIPAL DEPUTY ASSISTANT
SECRETARY, ADMINISTRATION FOR CHILDREN AND FAMILIES, U.S.
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Mr. Monahan. Thank you very much.
Mr. Chairman and members of the subcommittee, thank you for
providing me with the opportunity to testify today on child-
support systems penalties. As the Principal Deputy Assistant
Secretary for Children and Families, I appreciate the
leadership of the committee in fashioning a bipartisan solution
to this important issue.
Let me thank, in particular, the chairman and the ranking
member for introducing the bill that you introduced yesterday.
We believe that child support is a critical part of welfare
reform. And the President--President Clinton has made improving
enforcement and increasing child-support collections a top
priority. We are proud of this administration's record on
child-support enforcement, but as the President said in his
State of the Union on Tuesday night, ``We must do more.''
He has set a goal of increasing collections to $20 billion
a year by the year 2000 through the implementation of tough new
measures enacted in the 1996 welfare reform laws. However,
these new rules can only be implemented if every State is fully
automated. When Child Support Deputy Director, David Ross,
testified before you in September, 16 States were certified as
having operational child support enforcement systems. As of
today, 36 States and two territories have informed us that they
have State-wide operational child-support systems that meet the
functional requirements set forth in the 1988 act. We have
certified 22 of these jurisdictions and are in the process of
conducting reviews or writing certifications review reports for
the remaining 16. And many other systems are very close to
completion. And while the focus of today's hearings is how to
address State systems which have not been certified, I would
like to acknowledge the States which have worked diligently to
meet the October 1, 1997 deadline and succeeded. Those States
deserve our sincere congratulations.
However, continued efforts to meet the certification
requirements are crucial. Any State without a certified system
in place has been notified that we intend to disapprove its
State plan and informed of its appeal rights. The financial
consequences for failure to meet the statutory deadline are,
after appropriate due process, the cessation all Federal child-
support funding. If the State is not operating a child-support
enforcement program under an approved State plan, its TANF
funds are also in jeopardy.
The statute provides the Secretary no latitude on
thisissue. Accordingly, we issued letters to 14 States, the District of
Columbia, and the Virgin Islands providing notice of our intent to
disapprove their child-support enforcement plans.
This is clearly not a situation that anybody favors.
Eliminating all Federal child-support enforcement funds would
unfairly penalize children who rely on a State's child-support
system. At the same time, though, because the State's failure
to automate is unacceptable and has repercussions which reach
beyond its borders, it is essential that States which have not
complied be held accountable.
We believe the proposal in the bill under consideration
incorporates this need for balance. The proposal creates an
additional penalty which the Secretary may impose in lieu of a
full sanction in a case of a State that has made a good-faith
effort to meet the automation requirements and that enters into
an approved corrective-compliance plan for completion of its
system. Such States would be subject to an automatic penalty
equal to 4 percent of their Federal reimbursement for Fiscal
Year 1997 administrative costs. The penalty would grow annually
up to a maximum of 20 percent of Federal IV-D funding for
failure to have a certified system. These automatic, escalating
penalties would give States a strong incentive to complete
their child-support systems quickly.
We believe that the approach in this bill is tough, but
fair. However, we have serious concerns with the provision in
this bill that permits States to link local computer systems
instead of creating functioning State-wide systems. The
proposal requires that States with linked systems have the same
functionality of the State-wide system and take no more time
nor cost more money to the Federal Government to develop,
operate, and maintain. And we very much appreciate the
committee's efforts to put these elements in the bill.
Experience shows, however, that meeting these elements will
be difficult for most States. Developing separate systems and
linking them together represents a major technological task
more complicated than a single system. Further, with this new
authority, some States may use precious time and resources to
demonstrate that they can develop an approvable link system
rather than move forward on a single State-wide system. In
short, we are very concerned that the concept of a link system
is unproven and thus poses an unnecessary risk of failure.
In conclusion, Mr. Chairman and members of the committee,
while we have reservations about the feasibility of the
alternative systems aspects of the bill, we nonetheless
appreciate the swift, open, bipartisan and balanced approach
this subcommittee has taken to examining child-support systems
compliance and penalties. We anxiously await enactment of this
proposal. On our part we will continue, in the meantime, to
work closely with the States and provide them any technical
assistance necessary to help them in completing their
implementation efforts.
Thank you.
[The prepared statement follows:]
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Chairman Shaw. Thank you, Mr. Monahan.
I would like to say that the administration has been
tremendously helpful, and it has been a pleasure to work with
you on this particular matter.
Mr. McCrery.
Mr. McCrery. Thank you, Mr. Chairman.
Mr. Monahan, as I think you know, Louisiana has perhaps a
unique problem in trying to comply with the law. And it is
ironic that their system is causing problems because they
implemented this system in good faith and in a way that allowed
them to develop an expedited procedure for processing child-
support claims in a very efficient manner. And they have done
very well with their system. But because of the requirement for
a single form of collection, they have had some problem in
complying with the new law.
Recently, in an attempt to comply, the Supreme Court of
Louisiana agreed to be the single collection point. And for
some reason, State officials were advised that that would not
be in compliance with the law. And I'm just wondering--in my
reading of a black-letter law, there doesn't seem to be any
requirements that it be the IV-D agency that is the single
collection point, and yet, State officials have been told that
that is a requirement. Can you shed some light on that?
Mr. Monahan. Sure, Mr. McCrery.
I think two things. One is Louisiana is to be congratulated
because it has a certified computer system in place.
The second thing is, on the point that you raise, it is
true that the welfare reform law in 1996 required all States to
have a single State dispersement unit for collecting checks and
for making sure that payments get to families. And it is up to
each State to decide to choose to be that single dispersement
unit. And a court can serve in that role. And so if State
officials feel like they got the message that a court couldn't
serve in that role, that is not true. I think that your reading
of the law is accurate in that regard.
I will mention, though, that I know that Judge Ross and
other members of the child support enforcement staff have been
to Louisiana to meet with justices and other members of the
court systems, and there are a number of complicated issues
here. While the court can serve in that role, we certainly
intend--and I think the judge made clear when he was down
there, but you certainly have my commitment--that we would try
to work with those officials to find a solution to the problem
they face consistent with the law as it is currently written.
Mr. McCrery. Well, I appreciate that. It would be a shame
for Louisiana to have to dismantle a very efficient system and
in effect defeat the purpose of the law that weimposed. So I
hope that you will work with them. I'm not quite sure that I understand
your answer because State officials advised me that they were told
unequivocally that their proposal was not acceptable, and I seem to
hear you saying that it is not clearly unacceptable, we're going to
work with them. So can you clarify that?
Mr. Monahan. Sure. I think that--as I understood in your
question, State officials had heard that the State Supreme
Court couldn't serve as the State dispersement unit----
Mr. McCrery. Well, as I understand the proposal, the State
Supreme Court would be the single collection point, and then
they would transfer the funds to the State IV-D agency for
dispersement.
Mr. Monahan. And I think that that's where--the
complication was that the proposal that the courts have
raised--when our staff was in Louisiana--is something--because
it involves two units of the State government, it was something
that doesn't comply with the provisions of the welfare reform
law of 1996.
Mr. McCrery. But the black letter law doesn't say anything
about dispersement. It says, ``In addition, employers shall be
given one location to which income withholding is sent.''
Mr. Monahan. And that requirement is clear in the law that
it has to have one point at which employers have to send their
checks. But I believe that there is also a requirement that the
State establish a single unit for doing the collection and
dispersement. And I think that the complication is that at
least in the initial proposal that the State had brought forth
to us is that we couldn't--we weren't able to determine that
aspect of the requirement.
So I guess that what I'd like to do, if it is all right
with you, is consult with our staff, look at what our most
recent discussions have been with Louisiana officials and
report back to you, if I could on the status of this----
Mr. McCrery [continuing]. Yes, that would be great. It
would really be nice for you all to be able to work out
something with a State that has tried not only to comply, but
go further than required in an effort to make their system
efficient and effective----
Mr. Monahan. Absolutely.
Mr. McCrery [continuing]. Rather than have us have to go
back and re-engineer the welfare law to try to accommodate one
State that has gone over and above what is required. So I
appreciate your willingness to work with the State. Thanks.
Mr. Monahan. Thank you, sir.
Chairman Shaw. Mr. Levin?
Mr. Levin. Thank you very much, Mr. Chairman.
Just briefly on the waiver proposal. We've had a lot of
discussion about it, and I think it has been very carefully
drafted and I think it is an important part of this
legislation, and I just want you to know--I want to reiterate
that I very much agree with your statements and the
administration's statements on page nine that the
administration will set a rigorous standard of proof and also
that the burden of proof will be on the State. I think that
strikes the right balance.
Thank you, Mr. Chairman.
Chairman Shaw. Mr. Collins. Mr. Coyne.
Mr. Coyne. Thank you, Mr. Chairman.
Mr. Monahan, thank you for your testimony. I appreciate it.
Several States have said that late regulations and changing
system requirements and lack of technical support are part of
the reason that they have not completed their systems. I wonder
how you would respond to that?
Mr. Monahan. Well, I think from the standpoint of the
Federal Government it is true that initial regulations to
implement the computer-system requirements we're talking about
here that were in the 1988 law took several years--I think took
four years before they were issued in 1992. And it is true that
in response to State concerns, the transfer policy that you
alluded to was changed to not require States that transfer in
systems that have been certified in other States.
But I would also say that I've been confident that for more
than five years now at least States have been clear about what
has been required of them. And we have tried our best with the
resources that we have available to provide technical
assistance and guidance for the States.
Mr. Coyne. Well, I know that Congress has extended the
deadline for finishing the system several times, partially
because we acknowledge that changing requirements created
problems for the States.
What steps, if any, has HHS taken to compensate for the
fact that the regulations for State-computer systems have
sometimes been issued late or have been very unclear and that
technical support has not always been available to them?
Mr. Monahan. Well, sir, I think the first thing is, I think
that you are right. I think that Congress has compensated. The
deadline here has been extended by two years. I think that five
years is a long period of time for States to be aware of what
the requirements are. I think that we have actually been fairly
clear on what has been expected in terms of having a certified
system.
In terms of technical support, we have tried to have staff
available for States to identify what the requirements are, to
be very specific about what the review standards are, so when a
State is developing a system it knows what toexpect on the
front end and can adequately procure the right system.
I can tell you that we have our staff working as hard as we
can to provide that kind of support but obviously we were
limited by resources, but we are trying to do as much as we
can.
Mr. Coyne. Mr. Dutkowski of Michigan's Child Support
Center, in his prepared testimony, suggested that the penalties
for States be administered quarterly with States having a
higher percentage of the penalty forgiven if they complete
their systems earlier in the year. How would such a penalty
structure change the difficulty of administering the penalties
for your department, for HHS, and do you think it would
encourage States to comply faster?
Mr. Monahan. Obviously, we would administer whatever
penalty that Congress passes in the best way that we could. I
think that one of the advantages of the committee's--
subcommittee's proposal is that an annual penalty is somewhat
clearer and easier to fix than having to fix one four times a
year. I think it is also easier--the provision that permits
States to earn back a portion of that penalty is easier to
administer on an annual basis. But I think--I also think that
there are--that clarity and simplicity have some real
advantages here, too, in terms of--and I think when you have a
penalty every quarter it can become more complicated.
Chairman Shaw. Would the gentleman yield on that?
The legislation does have up to a 75-percent refund. It
doesn't exactly track what you're talking about for early
compliance within the year. But the mechanism is in there so
that we don't impose a full penalty if in the first few months
they comply or the first three-quarters they can get some of
that penalty back. So we have addressed that, but not exactly
the way--and I know the gentleman is talking about
Pennsylvania's particular request. It doesn't do all of that,
but it does go in that direction.
I thank you for yielding to me.
I do have a question and it follows on the track of what
Mr. Coyne was talking to you about in one of your answers with
regard to helping the States to plan. And my question focuses
on the $400 million that was funded for the 1996 processing
requirement. When does the Secretary plan to let the Congress
and the States know how these funds will be distributed and can
you give us an idea of how far along you are in making that
decision if indeed the decision has not already been made and
when we might expect a decision in this regard?
Mr. Monahan. Well, we hope to have a proposed rule out very
soon, Mr. Chairman, but we haven't issued it yet. As you know,
the 1996 law did provide this $400 million fund, and in August
of last year, the Congress changed it by adding an additional
jurisdiction to be eligible for the $400 million fund. And I
regret the fact that we haven't been able to get the proposed
rule more quickly, but we are certainly--we are working hard
with every administration to try to get it out as soon as
possible.
Chairman Shaw. Without asking you to divulge exactly what
that is going to say, if you could tell us when we might expect
to have that, it might be helpful to us.
Mr. Monahan. I think very soon, sir, and we'll certainly--
we will try to communicate with you----
Chairman Shaw. Is April very soon? Is August very soon?
Mr. Monahan. I hesitate to give you a date because I--there
are--it's--I can assure you that it's getting a thorough review
by all the different aspects of the administration--but I
can't--I hesitate to give you a date, sir.
Chairman Shaw. If the Secretary could advise us as to when
we might expect that, it would be helpful to us, and it would
be helpful to the States.
Mr. Monahan. I would be pleased to do so.
Chairman Shaw. Mr. Collins had an additional question.
Mr. Collins. Thank you, Mr. Chairman.
Mr. Monahan, the subcommittee is considering a request from
the American Association of Motor Vehicle Administrators
dealing with social security numbers and drivers' licenses.
They want us to change the date--and I want to know if you see
any problem from their request to change the date when States
must begin to collect these social security numbers from
January 1, 1998 to October 1, 2000.
Mr. Monahan. I haven't had a chance to look at a specific
legislative proposal, but I do know of the issue that they have
raised, and we have--at least based on our initial review where
we understand and appreciate the concern that they are raising
which is that we might as well make a requirement for social
security numbers consistent this law and the immigration bill
that had passed last year. And so I think that we would support
that in concept, but I would like to take a look at the
specific language that might be proposed.
Mr. Collins. Well, basically you don't see any problem with
this?
Mr. Monahan. Not at this point, but we would love to take a
little bit of a closer look at it as well.
Mr. Collins. Very good. Thank you.
Chairman Shaw. Thank you, Mr. Monahan. We appreciate it.
The next panel of witnesses. If they would come to the
table. We have Robert Doar as the Director of the Office of
Child Support, Department of Social Services from Albany, New
York. We have the much talked about Leslie Frye, Chief of the
Office of Child Support, Department of Social Services from
Sacramento, California. And we have Wallace Dutkowski--am I
getting that correct? Thank you. He is the Director of the
Office of Child Support, Department of Social Services from
Lansing, Michigan.
We thank you for being here. Your full statement is being
made a part of the record. We would appreciate it if you could
summarize for us.
Mr. Doar.
STATEMENT OF ROBERT DOAR, DIRECTOR, OFFICE OF CHILD SUPPORT,
DEPARTMENT OF SOCIAL SERVICES, ALBANY, NY
Mr. Doar. Thank you, Mr. Chairman. On behalf of Governor
George Pataki and the New York State Office of Temporary and
Disability Assistance, thank you for giving me this opportunity
to testify.
My name is Robert Doar, and I am the Director at the New
York State Office of Child Support Enforcement.
I also want to thank you, Mr. Chairman and the members of
this committee, for introducing the bill that you have. It
represents great progress in where we were only six months ago.
It seems to me that the approach that you have taken,
Chairman Shaw, in conducting these hearings and all you have
done on welfare reform has been to focus on two primary
objectives: outcomes for people and accountability to
taxpayers. Both of the issues that we are discussing here
today, penalties for States that fail to receive Federal-
certification requirements and the appropriate structure and
formula for child support incentive funding are very much tied
to those objectives. In New York, focusing on outcomes while
remaining accountable to taxpayers has been our first priority.
By modifying our existing State-wide system, we were able to
achieve certification by HHS at a reasonable cost. But more
importantly, we have a State-wide automated system that allows
us to help the families that we serve.
Unfortunately, many aspects of the certification process
had very little to do with outcomes for children. Instead it
was concerned with ensuring that States conform to a rigid,
federally-mandated prescription for how the task should be
accomplished. This emphasis on uniformity of process has far
outweighed a proper emphasis on results. Thus, scarce resources
which should have been directed to program improvement and to
helping children have instead been expended on system
modifications. What is ironic about all these problems is that
despite them great strides have been made in improving the
program in all States, including the States that have not met
the certification requirement. This disconnect between the
failure on systems and improvements in the program shows that
certification does not equal results.
The bill under consideration today is a strong step forward
to resolving the question of how to deal with States that have
failed the certification test. New York is grateful for being
given the opportunity to express support for an approach which
allows States which meet milestones set out in mutually agreed
to corrective-action plans to be granted a 75 percent refund.
And permits waiver of the penalty entirely to States that are
certified by June 1, 1998.
That brings me to outcomes and why we in New York believe
that the proposed incentive-funding formula is so important.
The new formula will result in focused attention being placed
on the right outcomes. It will also provide the proper
accountability to taxpayers. Under Governor Pataki's direction,
New York social services agencies have been strong proponents
of managing through monitoring of key outcomes. He has
challenged all of us at human services to determine appropriate
outcomes and to develop ways to measure progress toward goals.
For the past three years we have aggressively used numbers to
manage our program and would like to see the implementation of
an incentive structure for child support which supports us in
that endeavor.
We need that support because in New York we must bring this
focus on outcomes to the county level. In my testimony I have
provided sample charts showing county-specific performance on
the measurements required by the proposed incentive package.
These charts show a county's performance on percentage of cases
with orders, attorney-establishment percentage and the other
key measurements in the incentive-funding formula.
We have distributed these charts to all the county child
support offices in New York State. Everyone in the child
support enforcement program needs to be aware of their
performance in critical areas and where they stand in relation
to past performance and in relation to colleagues in other
geographic areas.
We also believe that the proposed incentive formula
provides a rational solution to the problem posed by States
failing to meet the certification deadline. By setting goals
and providing for fiscal incentives, States will be forced to
make the necessary changes, including changes to their systems,
needed to improve performance. Though New York has been
certified, we are uncomfortable with the imposition of fiscal
penalties on States that have not. We believe that a
thoughtfully constructed incentive funding formula will provide
the accountability necessary to ensure that States move their
programs in the right direction.
Also, from a purely selfish standpoint, we feel that any
penalty which cripples another State's program or unwisely
diverts resources to a system project, will lead to a poorer
and not better performance for the interstate case in which we
have a direct self interest.
I am attaching to my testimony two American Public Welfare
Association resolutions which New York urges you to consider.
The first concerns the proper response to States which have
failed to achieve certification.
The second, and perhaps more important one, makes the
argument for significant change in the development and funding
of all automated information systems. If we do not tackle that
bigger problem--and now may not be the time--I think that we
will be back here again in two years talking about penalties
again.
Thank you, Mr. Chairman.
[The prepared statement follows:]
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Chairman Shaw. Thank you, Mr. Doar.
Ms. Frye.
STATEMENT OF LESLIE FRYE, CHIEF, OFFICE OF CHILD SUPPORT,
DEPARTMENT OF SOCIAL SERVICES, SACRAMENTO, CA
Ms. Frye. Good morning, Mr. Chairman and distinguished
members of the subcommittee.
My name is Leslie Frye, and as you have heard, I am the
Chief of California's Office Child Support. I really appreciate
the interest of the committee in this complicated and somewhat
technical area and the leadership that you have shown in making
important changes in child support and welfare.
I do appreciate the concern shown by many Members of
Congress, the administration and the advocate community who
realize that the penalties in current law would eliminate
essential services to families and who are now willing to
discuss changing those penalties. The question we are all
struggling with is finding the appropriate punishment for the
crime of failing to meet deadlines which does not also cause
irreparable damage to States's programs. It is widely accepted
and well documented that the failure of the Family Support Act
systems--of the delay of them--are many and that many entities,
including States, Federal oversight agencies, and private-
sector vendors contributed to the widespread non-compliance
with the original and extended deadlines.
As we look forward to the next round of systems development
required by welfare reform, any difficulties in meeting those
deadlines will likely result from similar factors and players.
We read daily that the year 2000 crisis is gobbling up scarce
programming resources and driving up the price of software
development.
States are still waiting for directions from OCSE before
they can proceed with some of the key changes. As you
mentioned, the funds that Congress appropriated for--to pay for
these changes have still not been allocated and the hoped for
reform and procurement and approval processes have yet to
materialize.
Yet it seems to be a fait accompli that penalties will
ensue for the States who are struggling to meet the Family
Support Act expectations. Why should States alone shoulder the
blame when no other contributor to the problems of the past and
likely problems of the future must do so? Why the
accountability here by virtue expected uniquely of States?
As a practical matter, I strongly support the bipartisan
bill that is before the subcommittee. I would make several
suggestions that we would like to see for improvements in it.
First, the annual penalty should be--the forgiveness of the
annual penalty should be available to States which are
continuing development of their systems under structured
corrective-action plans and meet those milestones. DHHS has had
a lot of experience monitoring State's corrective-action plans
as they relate to audit findings and would be able to determine
if measurable milestones are met.
Between 1984 and 1994 OCSE conducted 154 program audits and
required corrective action for 115 times. For nine States, they
failed OSCE's first followup review and a sanction was
assessed. Seven States failed the second followup review and a
bigger sanction was assessed. And only one State failed the
third follow-up review. This process can work. The corrective-
action process is widely used by DHHS in its oversight of many
social service programs as well as by the USDA in its oversight
of the food stamp program.
Second, we would recommend that the penalty structure
overall should be reduced to 2 percent initially with two
percentage points increments as Senator Feinstein indicated.
The objective of the sanction is to create the motivation for
States to complete their projects quickly. There must be a
balance between this goal and damaging programs to the point
that they cannot provide services.
The penalty structure in the subcommittee's bill would cost
California about $12 million a year in the first year. That is
about $33,000 a day, or one case worker.
Many players, as I said before, contributed to this
problem. Yet only States must pay the penalties. We believe
that a lower overall structure meets the goal of underscoring
the importance of project completion without making it
impossible for States to succeed.
Last, we would like to see a reinvestment provision whereby
States could choose to put the penalty dollars out of their
general fund into the child support program rather than sending
those dollars or having the Federal Government retain those
dollars with no assurance that those dollars will improve the
program in the State in question or anywhere in the country.
I thank you very much for the opportunity to testify, and I
would be happy to answer any questions that you have.
[The prepared statement follows:]
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Chairman Shaw. Thank you, Ms. Frye.
Mr. Dutkowski.
STATEMENT OF WALLACE DUTKOWSKI, DIRECTOR, OFFICE OF CHILD
SUPPORT, FAMILY INDEPENDENCE AGENCY, LANSING, MI
Mr. Dutkowski. Thank you, Mr. Chairman and members of the
subcommittee, for the opportunity to testify today. The State
of Michigan would like to extend its thanks to the chairman,
Mr. Clay Shaw, and members of the subcommittee for the
leadership they have displayed by introducing this bill. I
would also like to thank both Michigan members of this
subcommittee, Representative Dave Camp and Representative
Sandua Levin, for their work in this important bill.
Today I would like to present Michigan's perspective
regarding this legislation, but I urge you to review Michigan's
written testimony for more in-depth information about key
issues regarding the Title IV-D systems specifically and about
all of human services automated systems in general.
Today in Michigan, every child support enforcement office
is automated. Forty-five enforcement offices are using the
State-developed child support enforcement system, or CSES.
Nineteen are using county-developed systems.
How well does Michigan do? In the Federal Child Support
Enforcement's twentieth annual report to Congress, the most
recent data publicly available, Michigan ranks number one in
total distributed collections, number two in support
collections for dollar expended and is one of only seven States
reporting program savings in Title IV-D. Michigan's child
support program accomplished this in spite of not having a
federally certified system. Could we do better with an approved
system? Yes we could, and we will.
To complete our system, we must be allowed to link some
existing local systems with the current State-developed system.
I am here today to thank the subcommittee for the language
included in the Shaw-Levin bill which supports the ability of
States to select an alternative system design. By utilizing an
alternate system strategy, large counties in Michigan will not
have to surrender additional functionality already built into
their systems. At the same time, Michigan will be able to
perform all the mandated functions required of a federally-
certified system.
It is important to note that Michigan did not get into this
position all by itself. Both my State and HHS must share
responsibility for our lack of certification. We began
development of our system, we asked HHS for approval to build a
system based on linking existing local systems. Our proposed
design was denied. To better explain what we were requesting
then and what we are requesting again now, I brought with me
today two graphics which are on my left on the easel and are
also at the end of each of your packets.
[Displays graphics.]
The first graphic depicts the Federal single State-wide
system design; the second provides a graphic depiction of
Michigan's proposed alternate system. I would like to draw your
attention to how similar these two designs are. Please notice
there is a single point of access for all users of the system.
So to users and to the external world our design looks and
feels like a single State-wide system. I would also like to add
here that in Mr. Monahan's testimony--written testimony--he
identified a number of functionality requirements--a number of
things that these systems must do. I want you to know that
those things already exist in Michigan's system today. We
expect our system to do much more than that when it is
completed.
Is such a system possible? Absolutely. By using existing
technology similar to that used with the Internet, all of our
users can be linked to interact with each via a single,
central-processing center. Using this linked system design,
counties will not have to give up functionality. They now just
have to participate in our State-wide system.
We are also pleased that this subcommittee is recommending
a change to the current fiscal penalty for not meeting the FSA
1988 systems deadline. The current penalty would effectively
result in the elimination of Michigan's child support program.
Even the proposed penalty will have a detrimental effect on
Michigan. A productivity loss of 4 percent due to the 4 percent
fiscal penalty would result in a $43 million loss in support
payments for families, 706 fewer paternities established, and
nearly 11,300 child-support cases not being enforced.
The key question that needs to be addressed is what do you
want from a penalty? If it is to encourage States to complete
their systems then a modification to the proposed penalty
language is necessary. We recommend that the subcommittee add a
corrective-action plan process, as Ms. Frye has identified, as
an additional tool for addressing the systems-deadline issue.
The corrective-action plan would require each State not yet
certified to develop a plan that contains specific deliverables
with associated timeframes. The penalty forgiveness provisions
of this bill should also apply for States not certified if they
complete all the requirements of their corrective-action plan.
If States do not complete their corrective-action plan, the
full penalty would and should be applied.
Michigan achieved the results I mentioned earlier, even
though we have lost approximately $20 million in Federal child
support incentive payments since Fiscal Year 1992. These
payments were lost due to the dramatic reduction in the
caseload brought about because of our successful welfare reform
effort To Strengthen Michigan Families. Under welfare reform,
the current child support incentive formula has actually become
a disincentive for States. Moving people offwelfare actually
reduces resources for the child support program.
We want to thank the members of this committee for
including the modified incentive language in this bill. It is
critical that the incentives and the entire Title IV-D program
begin to reward States for results that they produce not the
activities they perform. The proposed new incentive structure
does just that.
In closing, Mr. Chairman, Michigan's performance reflects
its commitment to the child support program. We are making
these recommendations so that we have the flexibility that we
need to continue our excellent performance.
We look forward to working with you on these support issues
and hope that our comments today have been helpful.
Thank you again for the opportunity to testify, and I will
be happy to answer any questions that you may have.
[The prepared statement follows:]
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Chairman Shaw. Thank you.
Mr. Levin?
Mr. Levin. Thank you, Mr. Chairman, and thanks to each of
you for your testimony.
Mr. Dutkowski, it has been a pleasure working with you. I
know that Mr. Camp feels the same way. And I think that
everybody should know that the development of the waiver
language occurred only after we became assured that it could be
applied in a way that would enhance child support collections
not undermine them. And that is why I referred to the language
from the administration that they were going to be rigorous in
its application and that really the burden of proof would be on
the State.
We do not need to have one made in Washington structure,
however we have to have an assurance of a system that is State-
wide and that will work. And if there is an adaptation that a
State can introduce, fine. But it is going to have to meet it.
And this gets to the penalty issue which some of us have
discussed. The problem of leaving it to the discretion of HHS
is that they don't believe that they should have that
discretion. They think that there has to be some penalties with
some teeth in it. And it isn't going to be a very substantial
portion of what's received in the administrative funding. It
won't be meaningless otherwise it isn't an incentive. But I
think that if you look at the amount of monies that the States
have received for administrative purposes over the years,
forgetting for a moment, just for a moment, Mr. Shaw's point
about the gangs from TANF, just in terms of administrative
funding, I think that States, in some cases have made money.
They have received more money than they have spent. And to
simply--to say to the States that they can, instead of paying a
penalty, reinvest it, I'm afraid takes the balance here that
has a bit of meaningful stringency to it. And every State has
to act because when one doesn't it penalizes every single other
State.
So, we'll look at that. But I think again the burden is to
show how we're going to achieve the result if we ease the
penalties even further. Or if we leave it open-ended and let
them reinvest--we're reasonable people, but we're tough
reasonable people. And I'm proud to have worked with Mr. Shaw
and with our colleagues on this bill and will continue to work
with you and take your ideas.
And Ms. Frye, I very much appreciate the spirit of your
testimony. You are not coming in here and saying, ``Forget it.
Leave us on our own.'' We need a system. You basically support
this kind of a structure. You would like some amelioration. But
it's been a long time for the State of California to bring
itself up to speed hasn't it?
Ms. Frye. I appreciate that, Mr. Levin, and I would like an
opportunity, if I might, to respond to Mr. McCrery's question
earlier. Is that okay if I do that?
Mr. Levin. Sure.
Ms. Frye. He had asked me why was the State of California
having such a difficult time meeting the requirements of the
Family Support Act, and I think that many States face the
issues that have been raised: the transfer system, the delay in
the change of Federal guidance, the resources and so on across
the country. Those did affect California.
But I did want to say one thing about why--a reason that
did not cause our system to fail. And that is that the State of
California, unlike Michigan, never pursued an alternative-
system configuration until it became clear that the product
that our contractor was delivering to us was not working. And
the counties--you did not see the counties here asking for
alternative-system configuration support until we rolled this
system out in the counties and found that because it was a
transfer system built on small States and all these systems
were small State transfer systems, it could not work as
developed by our contractor in California. And it was only as a
measure of attempting to continue to deliver services as a
survival mechanism that we came around to saying that the best,
fastest, easiest, cheapest way for us to meet these
requirements and to provide the services is to look at the
alternative-system configuration. It was not theother way
around which is, I think, held to be believed to be the truth.
Mr. Levin. Thank you.
Chairman Shaw. Mr. Collins.
Mr. Collins. I'll pass.
Chairman Shaw. Mr. Coyne.
Well, I want to thank these witnesses. I think that it's
important to realize--and Sandy--I was noticing in his line of
questioning and in his statement that he was sounding very much
like a hard-hearted Republican----
[Laughter.]
Mean spirited is the word.
I think it's important to realize here that this is--and I
don't want to appear that we're having a hearing and that we're
all closed-minded--even though that point could be argued.
There has been a great deal of compromise and give and take
between these witnesses and our staff and the staff over on the
Senate side to get to where we are. And if you look at where we
are now and the direction we're going, the penalties are going
from a--as I mentioned in my opening statement--to a nuclear-
type penalty, to a slap on the wrist even though--I mean we're
still talking about a great deal of money, but when you're
talking about four percent as compared to 100 percent and
including in that 100 percent the TANF, this is just a
different--it's not a different world, it's a different
universe that we've already travelled to. So I don't want to
appear that we are being stubborn or that we're not going to
compromise because I think that we've already shown compassion
for the problem that some of the States are going through. And
we do certainly recognize that--all this welfare reform--I feel
awkward here in talking about penalties for some of the States
that really have led the way and shown us the way as to welfare
reform in general. But these are not punishments. Ms. Frye, it
is not a crime we're looking at, it's a question of just trying
to work it out and be sure that incentives are still in place
to move forward and to reaching the objective that all of us
would like to reach.
And I would also like to mention that my own State of
Florida--and I think that this would apply to Michigan's
situation--they have testified before this committee that in
order to come into compliance they had to renovate a Model T
rather than going ahead. So there are some problems that we
have created also for the States that have found that they had
to rush to compliance in order to meet the deadline and avoid
the nuclear penalty that is in existing legislation.
I thank this panel very much for your very fine testimony
and also congratulate you for the work that you are doing.
Our final panel. It is my pleasure to welcome back Wendell
Primus the--formerly of this committee--consultant for the
Center on Budget and Policy Priorities here in Washington, D.C.
Vicki--I am known for slaughtering names----
Ms. Turetsky. Turetsky.
Chairman Shaw. Thank you. The senior staff attorney at the
Center for Law and Social Policy here in Washington. Geraldine
Jensen, president of the Association for Children for
Enforcement of Support of Toledo, Ohio. And Ronald K. Henry who
is a partner of Kaye, Sholer, Fierman, Hays and Handler on
behalf of the Children's Rights Council here in Washington,
D.C.
As with other panels, we have your full statements which
become part of the record. I welcome you and thank you for
being with us. And Wendell, if you could head off.
STATEMENT OF WENDELL PRIMUS, CONSULTANT, CENTER ON BUDGET AND
POLICY PRIORITIES, WASHINGTON, DC
Mr. Primus. Mr. Chairman and members of the subcommittee,
it is good to be back, and I very much appreciate your
invitation to testify.
My name is Wendell Primus, and I am director of Income
Security at the Center on Budget and Policy Priorities.
The center strongly endorses the basic approach outlined in
your bill on child-support penalties. Withdrawing full Federal
funding for both the TANF and the child-support programs would
seriously jeopardize assisting needy families and collecting
child support.
On the other hand, it is also inappropriate to grant
another one or two-year extension of the deadline without any
serious consequences. It sets a bad precedent.
The approach adopted in the bill is correct. It sends a
very strong message that States should get their systems
certified as quickly as possible and that the longer they delay
the greater penalty they will face. Yet it also sets reasonable
penalties that will not jeopardize States' abilities to assist
families and collect child support.
If anything, Mr. Chairman, I would urge that the penalties
be increased and that at a minimum, as the bill proceeds
through the legislative process, that you resist efforts to
lower these penalties. I say this--what happened to the chart?
Oh. [Laughter.]
I say this not because I want States to pay penalties to
the Federal Government, but so that appropriate attention,
energy, and effort are focused at the State level on getting
their computer systems completed and certified as soon as
possible.
To bolster the argument for increased penalties, see that
table.
[Chart.]
It compares the TANF work penalties to the computer
penalties in the draft bill. The work penalty amounts are the
maximum allowed under the TANF statute and assume no corrective
compliance plans or reduction in the penalty due to reasonable
cause or some degree of compliance. They are hypothetical
because most States will meet the work requirements in TANF and
several of the States identified with an asterisk have already
developed a certified computer system.
But as you can see, the penalty for failing the work
requirement is much more severe than the penalty for not having
the computer system certified. These penalties should not be so
disparate. Not having the child-support system fully automated
and consequently allowing some parents toescape paying child
support in a timely manner is as serious as not having sufficient
custodial parents engaged in work activities.
The relationship of those penalties is obviously a value
judgment. But using the TANF penalties as the guideline, I
would argue that the penalties in this bill are not severe, and
as a result, I would argue for increasing for increasing them
somewhat and continuing to escalate them each year instead of
capping the penalty at the end of the fourth year.
Another reason to increase penalties is that many States
are making a profit off of the child-support system. The
penalties you authorize in this bill are not really increasing
State costs, rather they are lowering the amount of monies the
States make off the child support enforcement system.
Some States affected by this legislation would have you
believe that imposing this penalty would cause States to reduce
the amount of resources flowing into the program. However, most
States have budget surpluses thanks to a strong economy.
Obviously States can choose to reduce resources. But it is a
choice and not an outcome that this bill forces or mandates.
As your bill is formulated--which I strongly support--you
would not forgive any further penalties until the year the
computer system is actually completed. It is too difficult for
HHS to administer and determine whether progress is being made
each year in accordance with a compliance plan. It also dilutes
significantly the incentive to get the computer system
certified if they ultimately know that there will be no
consequences.
The center has one overriding concern about mandating a
waiver of the requirement of the single State-wide system if
certain conditions are met. We feel that it will cause further
delay. Moreover, the authority to waive this requirement
already exists. Placing the authority in statute runs the real
risk, by the time the bill is enacted, regulations are
promulgated, the States and computer vendors understand it, the
bidding process goes through--it will be a very long time. And
I think that you run the real risk that we will delay State
implementation of computer systems longer--a result we are all
trying to avoid.
That the new child-support incentive systems reward
positive outcomes is an important step which we strongly
endorse. I have one major concern with the bill as currently
drafted. The section entitled ``reinvestments'' states that the
incentive payments must be used on the child support system or
activities approved by the Secretary. Because money is
fungible, the purpose of this language is not achieved. In my
written testimony it outlines, I think, a suggestion, on how
that section could be tightened.
I would make two further suggestions. Aggressive
enforcement of medical support could be enhanced by adding to
the base of collections any medical support for any Medicaid
child that reduces the cost of Medicaid. And I think that
giving States incentive for collecting for noncustodial parents
with lower incomes could be more readily achieved by rewarding
payments from noncustodial parents with low awards with a
higher rate than payments from noncustodial parents with high
child-support awards.
In closing, Mr. Chairman, I want to compliment you and your
staff on the processes you have gone through in developing this
legislation. I look forward to working with this subcommittee
in the future as it continues to strengthen the child-support
enforcement program and focuses on the contribution that non-
custodial parents can make to the well being of their children.
Thank you.
[The prepared statement follows:]
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Chairman Shaw. I'll try it again. Ms. Turetsky. How did I
do?
STATEMENT OF VICKI TURETSKY, SENIOR STAFF ATTORNEY, CENTER FOR
LAW AND SOCIAL POLICY, WASHINGTON, DC
Ms. Turetsky. Very well, thank you.
Mr. Chairman and Members of the Subcommittee, I appreciate
the opportunity to testify today.
When Congress passed the requirements that States implement
one statewide system in 1988, it passed a solid, workable piece
of legislation. The idea was that States could improve program
productivity not only by automating but by streamlining and
standardizing routine child support activities. Congress should
not change the single Statewide requirement or the waiver
process currently administered by HHS. There are two reasons
why.
First, most States say that the requirement has helped them
operate better child support programs. Recently, CLASP surveyed
State child support directors to ask them directly to describe
the benefits and drawbacks of the single statewide requirement
in Federal law. So far, three-fourths of the States have
responded, and while the survey results are preliminary, States
mostly reported benefits rather than drawbacks. At the top of
the list were program standardization throughout the State, the
ability to pull up cases anywhere in the State and simplified
computer development and upgrades.
What was particularly striking about the survey responses
was that nearly every State with a county-based program
reported that it was harder and more costly to implement the
statewide computer. Three-quarters of these States with county-
based programs reported additional problems with their program.
The problems were with the program structure rather than with
the Federal requirement for a single statewide computer. They
said that the decentralized structure of their program hampered
performance, decreased program accountability and made it
harder to maintain reliable data.
Second--and let me emphasize the importance of this, as
Wendell has--there is a serious risk of further delay if State
planning and implementation of the system are diverted by the
waiver process. If Congress sends an unequivocal message that
it's not going to change the law on this--my understanding is
that California, for example, could finish by expanding one of
its county systems. However, so long as the waiver legislation
is pending, State planning efforts may stall. If the waiver
door is widened, it is likely that States will feel pressures
from some of its counties to pursue a waiver.
The legislative process in Congress could take several
months. The waiver process will take several months. Yet there
is no assurance that in the end the result will be a more
effective system if the State pursues a waiver or that the
system will be approved.
Other States that are well on their way to certification
may well decide to switch tracks to pursue a multiple system
strategy because of internal political pressures.
If the legislation includes waiver language, Congress must
preserve the key benefits of the single statewide system:
program standardization, access to cases throughout the State
and simplified computer upgrades. The subcommittee should make
clear its intent that a State must implement an integrated
system.
Let me explain what I mean by an integrated system. I've
heard States actually discuss two visions of multiply-linked
systems. The first vision focuses on technological flexibility,
and the second vision focuses on local program control.
The first vision is a Wide Area Network or similar kind of
technological system. Although there are multiple computers,
they operate together. They operate as though they are one
system through shared software. A case is entered in one
location and can be pulled up in another. Data is only entered
once. Program procedures are standardized throughout the State.
System software is developed and updated statewide and
installed on all computers at the same time.
The second vision is of county systems that interface for
some but not all purposes. Local programs develop and run
separate programs and separate software that incorporates local
policies and procedures. Each county system separately meets
functional requirements and counties upgrade their own
computers. Some functions are performed at the State level and
there is shared data, reporting data, shared at the State
level.
The practical implications are very different for these two
visions. For example, consider how a State's linked multiple
system would respond to a custodial parent who moves from
County A to County B. Can the worker in County A electronically
transfer the case to County B or will County A close out the
case and ship the file to County B? When the person walks into
County B's office, is she told that County B is already working
on her case or is she told to start over again and file a new
application? Can the worker in County B go to the computer and
find her case anywhere in the system?
In addition, States should show the linked multiple systems
are cost effective and this should apply not only to initial
implementation but to upgrades and replacements, and to
maintenance.
Let me turn to penalties briefly. The proposed penalty
structure is a balanced approach designed to encourage States
to finish sooner rather than later, and CLASP strongly endorses
the subcommittee's basic approach and commends it for its work
in this area. However the penalties are on the low side. The
point is to convince the State legislature and local players
that they cannot afford further delay. The subcommittee should
consider increasing the third year penalty to 20 percent
particularly if it adopts a waiver provision so that States
will think very carefully before pursuing a waiver.
Mr. Chairman, because there is forgiveness in the year of
completion, our hope is that no State will end up paying 20
percent. Forgiveness, however, should only be in the year of
completion.
Members of the subcommittee and Mr. Chairman, I refer you
to my testimony for incentive payments recommendations I make.
Thank you very much for the opportunity to testify.
[The prepared statement follows:]
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STATEMENT OF GERALDINE JENSEN, PRESIDENT, ASSOCIATION FOR
CHILDREN FOR ENFORCEMENT OF SUPPORT, INC., TOLEDO, OH
Ms. Jensen. Good morning, Mr. Chairman and members of the
committee. Thank you for this opportunity.
I am here today to represent the 35,000 ACES members across
the country who are families whose children are owed child
support. There are now 39 million children owed $41 billion.
The average ACES member is a single mother. She earns $12,000 a
year. She has two children, and she has been waiting for over
two years for the State government to act on her case.
Today we view the decisions you make as the first test
about how serious Congress is of welfare reform. Are you truly
serious about helping us move from welfare dependency to self
sufficiency? Eighty-seven percent of the families on welfare
are there because they are owed child support.
We ask you to say no to the States as they ask for county
and regional-based computer systems. Single parent families
need a single State system. It is more expensive for States to
put in computers in the counties because it costs more for the
hardware. It is more expensive because it costs more for the
software. It is more expensive because you have to upgrade each
individual system instead of being able to upgrade one single
State system.
Yes the technology exists today to have an Apple computer
talk to an IBM, but often the results are jumbled and
ineffective. And just because we have the technology does not
mean that we should use it. Just because we can clone a human
does not mean that we should do so.
California is a perfect example of this problem.
California's welfare computer system consists of four systems
linked together. It takes one-and-a-half years to transfer a
welfare case between counties in California. On the other hand,
their MediCal system, which is a single State-wide system,
handles millions of transactions every day efficiently and
effectively--at least as many as a child-support system will.
Asking or allowing HHS to determine if the multi-system
will meet the requirements, to us, is very worrisome since they
are the group that just monitored the States that spent $2.6
billion on broken and non-existent systems. They are the same
group that didn't issue the regulations in a timely fashion in
the past. We do not believe that they will be capable of
determining if these proposed multi-systems will actually work.
Families also ask you why shouldn't States be penalized for
failure to comply with the Personal Responsibility Act. Mothers
who are required to cooperate to establish paternity, they lose
25 percent of their Federal funding if they don't follow the
law. Mothers who don't find a job within two years could lose
all their Federal funding, their TANF benefits, if they don't
follow the law. It's seems to us that if it is required for the
people to follow the law, so should the government. And it
seems very far away from the Bill of Rights concepts of ``for
the people'' and ``by the people'' when the government is
exempt.
Mothers might try to get out of losing the TANF benefits by
saying to their case worker, ``Well, the babysitter didn't show
up.'' or ``The car wouldn't start, or I couldn't get to my
job.'' They will still lose their Federal funding.
States use excuses of, ``We had to transfer a system. The
regulations were slow in coming out. The vendors ripped us
off.'' These excuses are just as unacceptable and should not be
allowed and States should be punished.
We do not support taking TANF funds or taking Federal
Financial Participating Funds or any operating funds. We do
support, however, that you withhold their incentive and bonus
payments until their computers are in place and working. Most
States, in the past, have put those incentive payments into
their general fund and have used it for other State programs
such as paving roads and maybe other social service programs.
We feel that they are more likely to respond quickly if they
lose their incentive money.
We also believe that it is time for Congress to consider
looking at completely reshaping the child-support system. It is
like we built a one-bedroom home in 1975 when you passed the
initial child-support laws. We added on a room in 1984 when you
passed the Child-Support Amendments. We added on another room
in 1988 as the number of children began to grow in the family
when you passed the 1988 Family Support Act. Last year, 1996,
we built a whole new wing when you added the Personal
Responsibility Act.
When we first built the house, we had a small furnace to
heat all the rooms. As we began to grow, we put these space
heaters in all these rooms to heat them. But we found several
things happened. They don't work very well. The utility bills
are higher. Heat certainly isn't even throughout the house, and
there's definitely not enough heat getting in the children's
bedrooms.
We're asking you to consider having hearings on H.R. 2189,
a bill sponsored by Congressman Henry Hyde and Lynn Woolsey, to
look at setting up a new State and Federal partnership. Not the
current one where the Federal Government provides all the money
and the States do what they want, but a partnership where
States would establish orders, establish paternity and modify
orders, and the Federal Government would participate by
payroll-deducting support from all workers just like we do
social security tax, collecting child support from the self-
employed through the Social Security quarterly self-employment
tax. And the Social Security Department, then, would distribute
payments to families just like they do Social Security checks.
In a country that has a Social Security system that
guarantees a child who has a dead or disabled parent support,
isn't it time that we have a system that ensures children with
living and working parents regular and adequate child-support
payments?
Thank you.
[The prepared statement follows:]
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Chairman Shaw. Thank you, Ms. Jensen.
I'd like to say to the people that are standing in the back
of the room, there are a few seats here that are reserved that
are no longer reserved if you care to come up and sit down.
Mr. Henry.
STATEMENT OF RONALD K. HENRY, PARTNER, KAYE, SCHOLER, FIERMAN,
HAYS AND HANDLER, REPRESENTING THE CHILDREN'S RIGHTS COUNCIL,
WASHINGTON, DC
Mr. Henry. Thank you, Mr. Chairman and Committee Members.
The Children's Rights Council appreciates the opportunity to
speak to you today.
The Children's Rights Council is a non-profit, educational
organization, whose sole purposes are to encourage family
formation, family preservation, and what we like to call the
demilitarization of divorce to keep both parents actively
involved in the child's life even if the parents aren't under
the same roof any longer.
We've attended the group meetings that were scheduled by
staff. We've listened to the testimony here today. And we
believe, quite simply, that the staff has struck the right
balance on the incentive-formula-penalty issue and urge you to
move forward with the legislation that is under your
consideration. Accordingly, what I would like to do in the few
moments that I have is focus on another aspect of the
legislation that I don't believe has gotten any attention yet
this morning.
You will recall that last fall the House acted upon
revisions to the child support incentive formula, but no action
was taken by the Senate. The goal, of course, was to remove
some of the unintended consequences that had existed in the old
incentive formula where the States were basically being paid to
focus on the wrong thing. You are trying to redirect their
energies by redirecting the incentive formula. We agree that
this needs to be done and that it needs to be done in a way
that is consistent with the underlying congressional goals that
have been set forth in TANF. We want to make sure that the new
incentive formula does not inadvertently create some new
unintended consequences or preserve the prior unintended
consequences, and assure that, in fact, we do achieve the TANF
goals. Now, of course, one of the core TANF goals was the
encouragement of marriage as a vehicle for reducing welfare
dependency. We recognized in Congress over the last several
years that marriage is the single most powerful vehicle for
reducing and preventing welfare dependency.
With that in mind, when you restructure the child-support
incentive formula, we'd urge you to look at a couple of
specific items because the way that the incentive formula
language has been drafted to date does not operate in a way
that is consistent with the TANF goal. Look, for example, at
the paternity-establishment subfactor. As currently written,
the paternity-establishment subfactor looks only at unwed
births. It doesn't look at children who are born into marriage
or marriages which occur after birth.
Now take, for example, a case worker who is counseling a
young couple before the birth of their child. That case worker
looks at the language of the incentive formula and knows that
if they get a child-support order in place, if they get a
voluntary acknowledgement of paternity, they will score a point
and get credit under the incentive formula. If the caseworker
encourages that young couple to get married, the way the
formula is written right now, they don't get credit. Now that
is an oddity, and it really shouldn't exist. We should
recognize in the Federal Government and in our incentives to
the States that getting that couple married is every bit as
beneficial to the child, and is, in fact, as we all know, much
better for the child than getting a support order or a
voluntary acknowledgement of paternity. If you're going to
write a formula which gives the States credit for establishing
paternity, we ought to write that formula in a way that
recognizes a marriage license as being every bit as important
to the child as a voluntary acknowledgement of paternity.
You will find the same problem under the subfactor that
talks about the establishment of support orders. If a young
couple gets married, they don't need a support order. They
don't need to establish paternity. They don't need to enforce a
support order. That childis supported under the life and
opportunity that it has within the marital unit. The incentive should
be written, very simply, to give credit for children in a State who are
given their support through marriage, not just children who are given
their support through a support order.
I think that this is important from the standpoint of
equity to the States as well because all children, of course,
are born with a biological father even though there are
variations in rates of illegitimacy among the States. So if you
want to treat the States equitably, if you want to increase the
number of children who are supported, if you want to be
consistent with the TANF goal of encouraging marriage, let's
give the States credit in the incentive formula for children
who are supported through marriage as well as children who are
supported through a judicial order.
The third factor in the incentive formula is the question
of current payments. Now this was rewritten specifically
because there was a problem in the old incentive formula in
that the States were just encouraged to look at the big money
cases and they were looking at gross dollars rather than
looking at the number of children supported. That problem has
not been cured with the language that exists right now.
Take, for example, a caseworker who has got, say, ten cases
at $200 per month per child and one case at $2,000 per month
per child. The way the incentive formula is written right now
in the proposed legislation, that caseworker gets as much
credit for taking care of the one $2,000-a-month child as she
would for getting the support required for all ten of the $200-
a-month children. If you revise the incentive formula to say
that we are going to look at the percentage of cases which are
in compliance with their order rather than simply the
percentage of gross dollars that are collected, you will be
focused on children and you will remove the incentive for the
caseworkers to only work on the handful of big cases that they
view as easier.
Finally, with respect to the arrearage payments, when you
look at that issue, you need to look at its interaction with
what is known as the Bradley Amendment. If you take, for
example, a worker whose only offense is that he was downsized
out of a job, is no longer employed, no longer bringing in a
paycheck, you don't want to turn that person into a deadbeat.
You want to have a system which encourages modifications to the
support order, encourages people to be able to get new work.
Right now, the way the Bradley Amendment is written, that
worker, on the day he loses his job, he automatically becomes a
deadbeat because the Bradley Amendment currently is structured
to make unmodifiable any arrearages which accrue beginning the
first day of unemployment.
Now this is bad for the States also because the way the
Bradley Amendment currently works forces the States to spend
their resources chasing after people who simply don't have the
money. I brought one example. This is the ``Most Wanted'' list
from the State of Virginia's Bureau of Child Support
Enforcement. You will see that it's got a gentleman listed
named Willie Bibbins who owes $42,000 and you think, ``Well,
that is probably some plastic surgeon running around with a
trophy wife in a Mercedes.'' until you look and you see that
Mr. Bibbins' occupation is ``poultry catcher.'' Now you don't
know and I can't tell you whether Mr. Bibbins is a good person
or a bad person, but I can assure you that a poultry catcher is
never going to have the $42,000 that Virginia is being asked to
collect from him.
We need to look at how the pieces of the system fit
together and the ways in which some of our impositions, such as
the Bradley Amendment, may have created deadbeats. Not all
deadbeats are born. Some of them are made by restrictions and
lack of flexibility in our system. I would ask you to look at
how the pieces of the system fit together.
Mr. Chairman, in closing, as you work to improve child
support collection, let's make sure that we come up with an
incentive formula that doesn't simply replace one group of
unintended consequences with another. Let's look specifically
at how we can incentivize the bureaucratic workers within each
State to make sure that they are working to achieve the goals
that Congress has set for them.
Thank you.
[The prepared statement follows:]
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Chairman Shaw. Mr. Collins.
Mr. Collins. Mr. Henry, your story about the collection
reminds me of the Hee Haw program when Buck Owens wanted to
rent a room from Roy Clark and he asked if he had a room
available at the Empty Hearts Hotel, and he said that he did.
So he said, ``How much is it a night?'' And he said ``A million
dollars.'' And he said, ``Well, you don't rent many, do you?''
And he said, ``We only have but one.'' It's kind of like your
collections, you know.
Mr. Henry. Right.
Mr. Collins. I want to ask the same question that we asked
earlier to the administration about the drivers license and
social security numbers. You probably heard the question. The
American Association of Motor Vehicles wants to change the
effective date of that from January 1, 1998 to October 1, 2000.
Do either of you all have any objection to that date change? Or
do you have an opinion on it?
Ms. Turetsky. Mr. Collins, I would like to look at the
proposal more closely and talk with APWA officials and States
and advocates about the issue. I would be happy to get back to
you, however.
Mr. Collins. Good. If it hasn't raised an antenna by now, I
don't think it is really going to have any negative effect on
anyone.
Chairman Shaw. Would the gentleman yield?
I think that date change brings it into compliance with
something that the Judiciary Committee did with regard to
immigrants. And that's the reason for the change.
Mr. Collins. That's the basis for it.
Mr. Henry. And I would specifically recommend the granting
of a little extra time on that. You may have seen in this
morning's paper the fact that Virginia is facing significant
embarrassment because they threatened license revocation for
over 2,000 people erroneously.
They don't have the databases in place. They don't have the
mechanisms right now to properly enforce the mandates that are
already in place. Part of what you are doing to force them to
get the computer systems in place will help with that. But you
don't want to be in a position where the credibility of the
entire program is undermined by mass errors of this sort.
Mr. Collins. Yes, I'm amazed at our collection process. And
sometimes I wish that when I get my American Express bill that
they did the same thing that we did to child support and I
wouldn't have to worry about sending them a check for a long
time.
I thank each of you for coming.
Chairman Shaw. Mr. Levin.
Mr. Levin. I don't have as good a story as Matt about the
million dollar room, but let me just say briefly, thanks. It's
really interesting testimony. In terms of the waiver provision,
I think it can be safely said that as to its revision, Ms.
Turetsky, it is clearly essentially the first and not the
second. There may be some details that have to be looked at,
and I think that the question is this. If you have a system
that is workable and effective, why require that it be taken
apart and discarded? I have some faith that with some rigor
that HHS can implement it in view of its dedication to making
this child-support system work. And it opposes relaxation of
the penalties, for example. I don't think that there is any
question of the seriousness of the intention of HHS. And I hope
that we not only talk about the benefits of modern technology,
but we let them be utilized.
So I just hope that we will all continue to work together
and work on the problems that are real and not overstate
problems that we really can solve.
Ms. Turetsky. Mr. Levin, I appreciate your comments.
Technology has changed. However, the clearer the language can
be made in the waiver provisions toward the integrated and
cost-effective system, I think the more helpful it will be. And
in addition, I do, again, stress that the problem is delay both
in the inevitable legislative cycle and in any waiver request
process.
Mr. Levin. I don't envision--I don't see why there would be
any delay. I think that the legislation is written clearly, and
if it isn't clear enough, we can write it still more clearly. I
think that the intent is clear, and indeed the intent, I think,
really binds us all together, and I don't think that we should
allow anybody to separate us.
And as to your other suggestions, I hope that we will take
them under advisement--all of your suggestions. And I hope we
will do that very quickly because I believe that the intent is
to mark-up this bill very soon. So we have all worked together
these last months, so let's finish doing that in the next week
or so. Let's get this moving.
Ms. Turetsky. Thank you, Mr. Levin.
Chairman Shaw. Ms. Turetsky, the bill that is before us
lists specific and detailed requirements that States must
demonstrate to the Secretary in order to be granted a waiver
for an alternative-system configuration. Is there anything that
you see that is missing from this list? And in that regard, I
would say to you and to all the witnesses and people that are
here this morning that anything--any suggestions that they
might have, we are open to suggestions in this area, and we
would be glad to include them in the bill if we agree as to the
wisdom of them. Do you have anything that you would like to add
at this point?
Ms. Turetsky. Chairman Shaw, we did send some comments over
to Mr. Haskins for your review. I think that there are
threeambiguities in the language.
The first ambiguity is the question of, what role do these
factors play with respect to the rest of certification
requirements? The problem there is the word ``functional.'' The
word ``functional'' applies to most of the requirements in the
certification guide, but not all of the requirements. Computers
are required to be able to enforce support and send out notices
and interface with other agencies. Those are all functional
requirements. But in addition, the system is required to be
cost effective and cost beneficial for the program, and the
system is required to be integrated meaning shared software,
seamless linkages, no-one-can-tell kind of integration. And so
I would suggest removing the word functional to refer back to
the body of the certification guide.
I would also make the list one of structurally including
but not limited to these factors. I understand that the factors
hit some of the highlights that the administration may be
concerned about with the multiple system, but they are not
inclusive.
And I would explicitly make a cost-effective standard,
which is in the statute but which gets muddied by the issue of
functionality. I would make it explicit that it be cost
effective and refer back to the statute.
There are some other wording changes that I would make with
respect to integration and with respect to the ability to pull
down cases from anywhere in the State. But those are the big
areas.
Chairman Shaw. Mr. Henry, you brought up the point that we
should be scoring marriage along with support, and you also
brought up another interesting point as to percentage of
collections as opposed to the dollar amount which I think is
something that we ought to look at.
How would you, however, go through and score or be able to
detect the marriages that are brought about by way of
counseling by the State?
Mr. Henry. Well, it is actually quite simple, Mr. Chairman.
The States have data on the number of births in each State.
You have the hospital records. You have all the information
that comes forward under the existing child support data
reporting requirements.
Chairman Shaw. They tie in the date of marriage?
Mr. Henry. Yes. And----
Chairman Shaw. Well, how would you know that the State had
anything to do with that?
Mr. Henry. Well, I'm not necessarily saying that the State
has to claim credit for any particular marriage. I'm simply
saying that you know in a State that there are a given number
of births each year. From the Federal Government's standpoint,
it is every bit as good for that child to be born into and
supported by marriage as it is for that child to subsequently
get a voluntary paternity acknowledgement or a child-support
order. I'm simply saying that the calculation can be done on
quite an easy basis.
You take the total number of children, both marital and
non-marital, and that becomes your denominator. Your numerator
is the number of children for whom there is either marriage or
a support order established or a voluntary paternity
acknowledgement so that you are capturing the State's effort,
if you will, and looking at it more broadly as to how that
State stacks up in encouraging marriage and in encouraging that
child to be supported by two parents.
All we are really doing is looking at all of the children
in the State rather than simply the subset who are born
illegitimately. What you find when you do that is that it sends
the message to the States and to the bureaucracy that marriage
is favored by this government. Marriage is, in fact, not to be
discouraged by the State worker.
The problem that we have right now is that the message that
goes out to the worker is that marriage is just kind of
irrelevant. It doesn't enter into their thinking at all. They
think that they are only dealing with illegitimacy, and their
only mission in life is to get that voluntary paternity
acknowledgement. I want to send to them the message that
encouraging marriage is a good thing for them, and not only in
terms of the incentive formula, but also throughout the entire
TANF program because we know that marriage reduces welfare
dependency, length of time, even the likelihood that they will
go into welfare.
Chairman Shaw. Okay, it is in TANF.
Mr. Henry. Yes.
Chairman Shaw. We are waiting for some regulations to come
down because there is something in the welfare bill that
rewards States. Yes ma'am?
Ms. Jensen. There is one aspect that might be helpful.
Families who do subsequently, after a paternity has been
established and an order has been established, end up in a
situation where the father's paycheck may continue to be
attached for the child support even though they are married
because she was on welfare during the time period before they
got married. So it would be good if there would be a waiver and
that the welfare debt would not have to be paid off since the
mother and the father are living there and taking care of the
children and it is very difficult for them to do that plus pay
the State.
Chairman Shaw. Thank you.
And Wendell, just a quick comment. The part of your
testimony contained on page 5 with regard to the medical
payments, that is something that, as I'm sure you know, that
our committee does have interest in and that we will be
addressing probably somewhere down the line. But it is a point
well made, and I don't want to look like we are glossing over
it.
Mr. Primus. Thank you, Mr. Chairman.
Chairman Shaw. Thank you. I would like to thank this entire
panel for being with us this morning.
Mr. Cardin, wherever you are comfortable, sir.
Our next witness is Mr. Cardin from the State of Maryland,
a--not a member of this subcommittee but a member of the Ways
and Means Committee.
Ben, we have your complete statement which will be made a
part of the record, and you may proceed as you wish.
STATEMENT OF THE HONORABLE, BEN CARDIN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MARYLAND
Mr. Cardin. Thank you, Mr. Chairman.
First, let me thank you for allowing me to testify out of
order. I very much appreciate the legislation that you are
considering. It is important for my State as one State that is
impacted by it, and I think that the way that you have modified
the penalty proposals for the States is commendable. I would
hope that this legislation could move quickly.
I would like to comment on a provision that I hope you will
consider adding to the bill that deals with child-support
enforcement, H.R. 2985. It would cover foreign nationals, and
Mr. Chairman, I appreciate your interest in this matter and
encouragement.
For foreign nationals who are $5,000 or more behind in
their child support amounts, H.R. 2985 would deny these
individuals visas to come into the United States residency
status here, or the ability to proceed with naturalization in
our country. It tries to put establish parity for foreign
nationals with the way we treat our own citizens. Americans who
are behind in child support are denied passports. I think that
it is only appropriate that we take a very tough position in
regards to foreign nationals.
This matter was brought to my attention by a person who
lives in my district. The noncustodial parent of this
constituent's child was coming back and forth to this country
regularly and owed significant amounts of money in child
support. This irresponsible parent was taking advantage of the
economics of our Nation and yet not paying for the child
support of his child.
The bill also would add a provision that has been suggested
by the administration that would allow subpoenas, court orders
and other legal procedures to be served at the border. This
proposal was shaped with a great deal of input from the
interagency group that deals with international child-support
enforcement issues within the administration, and I would hope
that you would be able to add this improvement in child support
to the legislation as it moves forward.
Thank you, Mr. Chairman.
[The prepared statement follows:]
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Chairman Shaw. Thank you, Mr. Cardin.
Does anyone have any questions for Mr. Cardin?
Ben I've looked over the legislation. I think that it is
very well thought out, and as I mentioned to you, we are
considering supporting you as an addition to the bill, although
the decision has not been made.
Mr. Cardin. Thank you.
Chairman Shaw. Thank you, sir.
That concludes today's hearing. I thank you all for being
here. As I'm sure that most of you know, the House is not in
session today. Many of our members have gone back to their home
districts and that is the reason why we have had a low
attendance. I think that our committee is singularly good in
the attendance and their interest with regard to this
legislation and other legislation within our jurisdiction.
We stand adjourned.
[Whereupon, at 10:54 a.m., the hearing adjourned subject to
the call of the Chair.]
[Submissions for the record follow:]
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