[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]
CHILD SUPPORT ENFORCEMENT
=======================================================================
HEARING
before the
SUBCOMMITTEE ON HUMAN RESOURCES
of the
COMMITTEE ON WAYS AND MEANS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
__________
MAY 18, 2000
__________
Serial 106-82
__________
Printed for the use of the Committee on Ways and Means
__________
U.S. GOVERNMENT PRINTING OFFICE
66-898 WASHINGTON : 2000
_______________________________________________________________________
For sale by the U.S. Government Printing Office,
Superintendent of Documents, Congressional Sales Office, Washington, DC
20402
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 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
WES WATKINS, Oklahoma LLOYD DOGGETT, Texas
J.D. HAYWORTH, Arizona
JERRY WELLER, Illinois
KENNY HULSHOF, Missouri
SCOTT McINNIS, Colorado
RON LEWIS, Kentucky
MARK FOLEY, Florida
A.L. Singleton, Chief of Staff
Janice Mays, Minority Chief Counsel
______
Subcommittee on Human Resources
NANCY L. JOHNSON, Connecticut, Chairman
PHILIP S. ENGLISH, Pennsylvania BENJAMIN L. CARDIN, Maryland
WES WATKINS, Oklahoma FORTNEY PETE STARK, California
RON LEWIS, Kentucky ROBERT T. MATSUI, California
MARK FOLEY, Florida WILLIAM J. COYNE, Pennsylvania
SCOTT McINNIS, Colorado WILLIAM J. JEFFERSON, Louisiana
JIM McCRERY, Louisiana
DAVE CAMP, Michigan
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
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C O N T E N T S
__________
Page
Advisory of May 11, 2000, announcing the hearing................. 2
WITNESSES
U.S. Department of Health and Human Services, Hon. Olivia A.
Golden, Ph.D., Assistant Secretary for Children and Families... 16
______
Castle, Hon. Michael N., a Representative in Congress from the
State of Delaware.............................................. 9
Center for Law and Social Policy, Vicki Turetsky................. 56
Center on Budget and Policy Priorities, Wendell Primus........... 30
Cox, Hon. Christopher, a Representative in Congress from the
State of California............................................ 13
Dads Against Discrimination, Victor Smith........................ 95
Harris County, Texas, Office of the District Clerk, Charles
Bacarisse...................................................... 106
Massachusetts Department of Revenue, and Massachusetts Commission
on Responsible Fatherhood and Family Support, Marilyn Ray Smith 47
Minnesota Department of Human Services, Laura Kadwell............ 87
National Child Support Enforcement Association, Dianna Durham-
McCloud........................................................ 42
National Women's Law Center, Joan Entmacher...................... 79
Supportkids.com, Vanessa Diaz.................................... 100
Texas Child Support Division, Howard G. Baldwin, Jr.............. 66
SUBMISSIONS FOR THE RECORD
Association for Children for Enforcement of Support, Inc.,
Toledo, OH, Geraldine Jensen, statement........................ 117
Children's Defense Fund, Deborah Weinstein, statement............ 123
Children's Rights Council, David L. Levy, statement.............. 125
Cooperative Parenting for Divided Families, Pittsburgh, PA,
Denise Simpson, letter and attachments......................... 126
Fathers are Parents, Too, Lilburn, GA, John Haeger, statement.... 129
Hatfield, Malcolm, Racine, WI, letter and attachments............ 132
Jeanes, Hon. Michael K., Clerk of the Superior Court, Maricopa
County, AZ, statement and attachment........................... 134
Men's Defense Association, Forest Lake, MN, Richard F. Doyle,
statement...................................................... 137
NOW Legal Defense and Education Fund, New York, NY, Martha Davis,
statement...................................................... 139
Policy Studies Inc., Denver, CO, Robert G. Williams, statement... 141
Women for Fatherhood, Honeoye, NY, Becky Kiely, statement........ 143
CHILD SUPPORT ENFORCEMENT
----------
THURSDAY, MAY 18, 2000
House of Representatives,
Committee on Ways and Means,
Subcommittee on Human Resources,
Washington, DC.
The Subcommittee met, pursuant to call, at 10:02 a.m. in
room B-318, Rayburn House Office Building, Hon. Nancy L.
Johnson (Chairman of the Subcommittee) presiding.
ADVISORY
FROM THE COMMITTEE ON WAYS AND MEANS
SUBCOMMITTEE ON HUMAN RESOURCES
CONTACT: (202) 225-1025
FOR IMMEDIATE RELEASE
May 11, 2000
No. HR-21
Johnson Announces Hearing on Child Support Enforcement
Congresswoman Nancy L. Johnson (R-CT), Chairman, Subcommittee on
Human Resources of the Committee on Ways and Means, today announced
that the Subcommittee will hold a hearing on child support enforcement. The hearing will take place on Thursday, May 18 , 2000, in room B-318
Rayburn House Office Building, beginning at 10:00 a.m.
Oral testimony at this hearing will be from invited witnesses only.
Witnesses will include Members of Congress, an official
from the U.S. Department of Health and Human Services, State child
support administrators, representatives of advocacy groups, and
advocates for local government and private child support entities.
However, any individual or organization not scheduled for an oral
appearance may submit a written statement for consideration by the
Committee and for inclusion in the printed record of the hearing.
BACKGROUND:
The Child Support Enforcement (CSE) program, created in 1975 and
authorized under Title IV-D of the Social Security Act, is a State-
Federal partnership developed to collect child support payments from
parents who do not live with their children. In 1998, the most recent
year for which data are available, the program collected nearly $14.4
billion in child support payments for single parents and their
children, located 6.5 million noncustodial parents, established 848,000
paternities, and established 1.1 million child support orders.
Collections by the CSE program have increased more than 60 percent
since 1993.
The 1996 welfare reform law (P.L. 104-193) reformed and improved
the CSE program by providing: immediate reporting of employer address
and wages for every person hired in the United States, strong paternity
establishment requirements, new mechanisms to collect child support
payments such as revocation of hunting, fishing, and drivers licenses,
and greater automation of the child support system. These provisions
are widely believed to be the major reasons child support collections
have improved so much in recent years. However, as the States work
toward even more effective implementation of the welfare reform
provisions, there are several issues that were not fully addressed by
the 1996 legislation.
The most important is the question of whether the family or Federal
and State Governments get to keep collections on past-due child
support. When families are on welfare, Federal and State Governments
keep all child support collections. Once families leave welfare, the
Federal and State Governments are allowed to keep up to half of the
money collected on past-due child support. A series of hearings by the
Subcommittee showed that many observers, including State child support
enforcement officials, believe most or all of this money should go to
mothers and children.
Another issue is that a large number of local child support
enforcement agencies and private entities are involved in collecting
child support. Current Federal laws restrict the amount of government
information and the child support collection methods to which these
entities have access. It might be possible to improve child support
collections if more information and enforcement methods from the
Federal-State program were shared with these other child support
entities.
In announcing the hearing, Chairman Johnson stated: ``Despite the success of recent bipartisan efforts to improve
child support collections, a significant amount of child support goes
uncollected. We must use all the tools available to get the child
support owed and hold noncustodial parents accountable. Even then we
must take the necessary steps to make sure mothers leaving welfare get
all the child support they are due.''
FOCUS OF THE HEARING:
The hearing will focus on child support enforcement issues and
proposals to improve the CSE program, including proposals by Chairman
Johnson and Rep. Ben Cardin (D-MD), to increase the amount of child
support money going to custodial parents and children.
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Chairman Johnson of Connecticut. The hearing will come to
order.
I have been looking forward to today's hearing. Ben Cardin
and I both introduced legislation that would result in poor and
low-income families and their children getting a lot more money
from child support. I have fought for this provision since
1995, and know that, working together and with the support of
the administration, we should be able to pass a good bill this
year.
Here is how important it is: As compared to 5 years ago, we
now have at least a million additional former welfare mothers
working to support their children. This is an immense
achievement, not just for public policy but for these women and
their children, themselves. But they are in jeopardy of having
so low incomes, or even of being forced to go back on welfare,
that they cannot survive, so we want to get them as much money
as we can, especially when the money was paid by the children's
father.
When fully implemented, my bill would provide these mothers
and children with an additional $3.5 billion over 5 years after
they leave welfare. I doubt that the Congress will do anything
more important than that this year.
There are some points of difference between Ben's and my
bill. They are significant and they are worth talking about.
One of them provides, through Ben's bill, a lot more money to
women on welfare and doesn't allow the States to count that
toward their welfare eligibility. My bill does not do that. One
of the things that I think has been successful about welfare
reform is that it gives the States great latitude over how they
phase out welfare payments as a woman moves into the work
force, and the child support money is just one piece of all
that money they use to provide benefits and to adjust benefits
as earnings rise. That is something we will discuss at greater
length and think about more deeply throughout this process. It
is an important difference, but not one I think that should be
allowed to hold up this bill.
There is a second issue that divides us, and this is the
concern in some quarters about provisions in my bill that allow
the private sector to help mothers establish and enforce child
support orders. In fact, I used to think that no force known to
God or man could bring together the mothers' groups and the
fathers' groups lobbying child support issues, but I have found
it.
[Laughter.]
The limited provision that I have put in my bill seems
reasonable to me, because it is another way to get dollars to
mothers and children.
First, according to our calculations--well, the
calculations of the Congressional Research Service--there is
about $40 billion in past due support. In fact, we now make
collections in only 14 percent of welfare cases and less than
25 percent of non-welfare cases.
I find it hard to believe and think of all the States that
have surpluses and what are happening to those surplus dollars,
of what is happening to the Federal surplus dollars--I find it
very hard to believe that we are going to put up the additional
Federal or State dollars that would be required to greatly
improve this collection record. It is not my judgment that the
States are inefficient; it is my judgment they are working
hard. And if you are only collecting 14 percent of welfare
cases and 25 percent of non-welfare cases, you had better start
asking yourself: What is our obligation to the majority of
American women who need child support and are not getting any
help?
We need all the help we can get in collecting this money,
and desperate mothers need choices. Furthermore, my provision
involving the private sector puts that involvement completely
under the control of State government and has a 2-year delay in
implementation following guidance issued by the Secretary of
HHS and requires a signed contract by private companies, in
which they agree to observe all the due process, privacy, and
data security issues that the regular Federal and State program
must follow.
I cannot imagine, I simply cannot imagine that any State
would make contracts with private collection agencies and allow
them to tithe 30 percent of the child support payment, but they
have total control over that. They can say, ``Your charge can't
be more than 5 percent.'' They can say whatever they want.
One benefit of where we are now is that we have some
excellent private agencies at work and we have some terrible
private agencies at work. We are doing a scandalous job of
ripping off mothers who are truly desperate. And from that
information and evidence I see absolutely no reason why any
State in their right mind can't utilize private agencies to
expand the power to collect child support for women and
children without allowing that women and children could be
exploited. That is why I left the control completely with the
States and gave HHS the opportunity to write guidance.
Now, I see no danger in this, but, as I always do--
remember, this is one of the few Committees that develops a
legislative proposal and actually puts it out for hearing
before we go to the floor. As I have in the past, I will
certainly listen carefully to the testimony and think over the
points that you have raised. But I ask only that you think over
the details of how my bill is written, because it is clear from
some of the comments that there was no attention to that.
My legislation is not a wide-open, carte blanche
opportunity for private firms to get in there and help collect
child support, but you know and I know that we have used
private collection agencies in every other aspect in the public
and private sector. While we have used them in partnership with
the private sector, we have always governed those relationships
very carefully because they are a public concern.
I ask for not only your input today; I ask for your follow
on input to think of that issue of governance. Regardless of
these two provisions, I hope that we can get a bill passed this
session that will, when fully implemented, put $3.5 billion
more in the hands of mothers needing welfare.
I have requested a reaction to Representative Cox's
proposal from the Department of the Treasury and will include
their reponse in the record when we receive it.
[The information was subsequently received:]
Department of the Treasury
Washington, DC 20220
May 23, 2000
The Honorable Nancy L. Johnson
Chairperson, Subcommittee on Human Resources
Committee on Ways and Means
U.S. House of Representatives
Washington, DC 20515
Dear Madam Chairperson:
Secretary summers asked me to respond to your letter of May 10,
2000, in which you request the views of Treasury on H.R. 816, the Child
Support Enforcement Act (the ``Act''). The Act would require
individuals who fail to make their child support payments to include
the unpaid amounts in their gross income and would allow custodial
parents to claim a deduction for unpaid child support payments.
As you are aware, the Administration has made child support
enforcement a critical priority. The Federal and state Child Support
Enforcement program broke new records in nationwide collections in FY
1999, reaching an estimated $15.5 billion, nearly twice the amount
collected in 1992. This Spring, the Administration submitted to the
Congress a comprehensive child support bill that proposed incentives
for states to direct more child support payments to families, as well
as new child support enforcement tools. Although we share the goal of
ensuring that families get the child support they need and deserve, and
look forward to working with the Congress and the Committee on
developing an effective approach, Treasury cannot support the Act.
The Act generally may not be effective in increasing child support
payments. In certain circumstances, the Act could actually discourage
the payment of child support by imposing a higher tax bill on a
delinquent parent, just when he or she might be attempting to marshal
resources to pay child support. By providing custodial parents a tax
benefit for unpaid child support payments, the Act might also
discourage custodial parents from enforcing their rights to receive
such payments.
The Act also raises significant tax policy concerns. Under present
law, an unpaid debt generally is included in the income of the debtor
and deducted by the creditor when it is certain that the debt will not
be paid. The Act would prematurely treat unpaid support obligations as
if they were certain not to be paid. This premature treatment would
require offsetting adjustments if the obligation were paid in the
future. By determining the tax treatment of unpaid support obligations
before it is certain whether or not they will be paid, the Act would
create complexity and be difficult to administer. The Act would also
impose administrative burdens on custodial parents by requiring them to
provide identifying information on their returns and to send notices to
delinquent parents. In addition, the Act as drafted would be extremely
complex and difficult to administer.
We thank you for inviting us to share our views with you, and look
forward to working with you to continue to develop effective child
support enforcement strategies.
OMB has advised that there is no objection to the presentation of
this report from the standpoint of the Administration's program.
Sincerely,
Jonathan Talisman
Deputy Assistant Secretary (Tax Policy)
I look forward to working with all of you and to working
with Ben Cardin in this matter.
Ben.
Mr. Cardin. Thank you, Madam Chair. I, too, look forward to
this hearing and I thank you very much for holding this
hearing.
You observed correctly that we don't normally get the
groups representing the custodial mothers and the noncustodial
fathers together on an issue, but we also have the State
agencies in agreement with the Federal Government here as to
what the policy should be, so we have the four major
stakeholders all in agreement that we need to do one thing, and
that is to get more of the child support to the families.
Second, Madam Chair, they agree on a second point, and that
is that we should not provide child support private agencies
with more of the power that we have here in government.
Let me cover that second point first, and then I will come
back to the area of child support.
I think there is very serious problems with extending the
authorities that we have to private collection agencies. You
mentioned that we allow the States to regulate. Well, the
States should regulate first. We should have a system in place
first before we extend the powers that we have at the Federal
level for the collection of child support.
There are serious problems there now. The witnesses that
are going to be testifying later will testify as to fraud and
abuse among collection agencies. We know that an awful lot of
the moneys that are collected through the agencies, when they
use private agency, they take credit for money that has already
been collected through the government. We also know it is very
expensive--a one-third fee is customary--so less money gets to
the families, themselves.
These are all issues that I think need to be addressed
first, before we look at expanding and extending the power of
government in collection to private agencies.
Madam Chair, it is very interesting to refer to an article
that appeared in the ``Washington Post'' today that documents
many of these cases, that points out that private companies
frequently charge for child support payments they had no role
in collecting. I think we need to deal with these issues first,
before we extend the power.
In regards to the pass-through of the child support, you
observed that I have filed H.R. 3824, along with my democratic
colleagues on the Subcommittee, and it is true that this bill
would allow for more of the pass-through of child support to
the families. I want to make it clear, it maintains the States'
flexibility in determining eligibility. We have not affected
that. The States can still determine eligibility based upon the
income.
Let me also point out that I appreciate the fact that you
have filed legislation, and I would hope that you will keep an
open mind, and I promise that I will keep an open mind, because
one of the things that has been the hallmark of this
Subcommittee's work is that we have been able to work in a
bipartisan manner to bring forward some very important
legislation.
I think there is a problem out there with the pass-through
of child support. I think it is affecting noncustodial parents'
willingness to cooperate with the system because they do not
believe the money is going to the family, and that if we had a
better pass-through policy we would have more child support
compliance and more money going to help families and more
connection between noncustodial parents and the rearing of
their child. So I would hope that the two of us will find a way
that we can bridge the gap on the pass-through of child support
so that we can agree on bipartisan legislation in this
Congress, have it moving so that we can continue the record
that this Subcommittee has made in helping children and
families.
Thank you, Madam Chair.
[The opening statement follows:]
Opening Statement of Hon. Benjamin Cardin, a Representative in Congress
from the State of Maryland
Madame Chairwoman, during past debates on child support,
there has rarely been consensus between the groups representing
custodial mothers and those representing non-custodial fathers
and between the Federal Department of Health and Human Services
and the State Child Support Agencies.
Today, however, we have two issues before us that unite all
four of these stakeholders in our Nation's child support
enforcement system.
First, all of them support sending more collected child
support to the families for whom it was intended. And second,
all of them oppose providing private child support collection
agencies with more government information and collection tools.
I therefore hope we can move forward on sending more child
support to families, rather than getting mired in a debate
about greater authority for private collectors. Our focus
should be on increasing resources for children, not on raising
profits for collection agencies.
Along with my Democratic colleagues on this Subcommittee, I
recently introduced the Child Support for Children Act, HR
3824, which would require all current support be given to
families, regardless of their welfare status. This is known as
``passing through'' child support.
States would then be permitted to determine how much of
this income should be disregarded for TANF eligibility and
payment purposes. However, unlike current law, my bill would
require the Federal government to split the cost with the
States of passing through and disregarding child support to
welfare families.
In addition to requiring a pass-through of current child
support, my legislation would simplify the distribution of
past-due support. In short, the legislation would require that
all arrears that accrue when a family is not on TANF be
directed to the family.
For arrears that accrue while the family is on welfare,
States would have a choice to send that money to the family or
retain it. Finally, all debts owed to families must be repaid
before any debts owed to the State.
Madame Chairwoman, I want to commend you for introducing a
proposal to address this second issue, namely sending more
child support arrears to families that have left welfare.
I hope you will keep an open mind about expanding this
distribution scheme to families on public assistance,
especially since such a policy would provide increased
simplification for the States, more resources for low-income
families, and a greater incentive for non-custodial parents to
pay child support. Furthermore, I do not think we can defend a
system that gives non-custodial fathers with families on TANF
the following choice--you can obey the law, or you can provide
more resources for your children--but you can't do both.
Finally, I want to express my concern about opening up
personal financial information and government collection tools
to private collection agencies. I have three basic concerns.
First, providing collection agencies with increased access
to the wage and bank data of every American is surely going to
raise serious privacy issues. Even if private collectors are
required to adhere to certain privacy standards, it is not all
clear that State child support agencies could monitor and
enforce those requirements. Ultimately, abuse in this area
could jeopardize the same tools and data bases to which private
collectors are seeking access.
Second, providing private collection agencies with access
to certain governmental collection tools, such as the tax
refund offset, will lead to a system of private profit at
public expense. In short, the government agencies will do all
the work, the private companies will reap all of the rewards,
and the family will receive one-third less than if they got
that exact same service directly from the public agency. What
public interest could possibly be served in such a system.
Finally, this committee will hear testimony from several
witnesses about cases of deception and fraud perpetrated by
private collection agencies on both custodial and non-custodial
parents. Some of this abuse may result from the fact that child
support collection agencies are exempt from the Federal Debt
Collection Practices Act, which prevents deception and
harassment. When Members hear some of these stories, they may
want to reduce the authority of private child support
collectors, rather than increase their power.
I look forward to hearing our distinguished guests explain
their views on this issue.
Thank you.
Chairman Johnson of Connecticut. Now I would like to
recognize my colleague, Mr. Castle, from the State of Delaware.
It is a pleasure to have you before us.
STATEMENT OF HON. MICHAEL N. CASTLE, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF DELAWARE
Mr. Castle. Thank you very much, Madam Chairwoman and Mr.
Cardin, Mr. Cox, and Mr. Jefferson. I am delighted to be here
to discuss a certain portion of child support that concerns me.
This is a fundamental principle. It is one that a lot of men,
in particular, have trouble understanding, but it is a
fundamental principle that a parent who brings a child into
this world is responsible for providing for that child's
physical needs, regardless of any conflicts of the child's
custodial parents.
I say some people have trouble understanding it because,
due to lack of visitation, they feel they don't have to pay the
support, but support, indeed, does have to be paid. As a result
of that, we often get backlogs in child support and uncollected
child support, which is a tremendous problem for many
supportive parents who actually have the children in custody.
I want to take a few moments to discuss the Child Support
Fairness and Federal Tax Refund Interception Act of 2000. I
recently introduced this bill to remove a legal barrier that is
preventing the Federal tax refund offset program from more
effectively ensuring that child support is paid to all those
children who deserve it. This bill has been incorporated into
the Committee's bipartisan Child Support Distribution Act of
2000, section 403, which I greatly appreciate.
As most of us know, under current law the Federal tax
refunds of parents who owe back child support can be
intercepted and used to reduce that debt. After garnishing
wages, this program is the most effective means of recovering
back child support.
This statistic surprised me when I learned it, but the back
taxes actually account for one-third of all back child support
collected.
However, unlike garnishing wages and many other child
support enforcement tools, eligibility for the program is
restricted by the age of the child. Eligibility for the program
is limited to cases where the child is still a minor, the
parent is receiving public assistance, or the child is a
disabled adult. This fails to protect non-disabled, college-
aged children and their custodial parents, even if a child
support deficit accrued while the child was a minor.
The unintended effect of the program is that it rewards
noncustodial parents who are successful in avoiding their child
support obligations while their children were minors--and,
believe me, there are many individuals who do attempt to avoid
that responsibility.
The age limit removes the threat of one of the most
effective child support enforcement tools, the tax refund
intercept.
Rather than recount the legislative history behind this
program, I think we should just ask ourselves whether there is
any good reason why we should allow delinquent parents to
collect Federal tax refunds to use for their enjoyment while
custodial parents struggle to recover from years of raising
their children alone on one income.
There are no statistics kept that tell us exactly how many
Federal tax refunds cannot be intercepted due to this age
limitation, but there is at least one person in my home State
of Delaware who is adversely affected by this limitation. Last
summer, Lisa McCave, who is with us today, sitting right here
behind me, and who is from Wilmington, Delaware, where I am
from, had to stand by and watch a $2,426 Federal tax refund go
to her husband in Georgia, even though he owed her nearly
$7,000 in back child support.
This frustration prompted her to write me a letter that I
would ask unanimous consent to place into the record. It
describes how, since her son was three, she has raised him
alone. During that time, she often had to work two jobs to
compensate for child support installments that were never paid.
She has spent the better part of her time away from work
tracking down her former husband, who has often quit his job as
soon as his wages were garnished to repay this debt. Obviously,
she could have used the $2,426 tax refund to help pay down the
$55,000 in parent loans she incurred to send her sons to
college. In fact, I thought I would read a portion of the
letter, if I could.
``If we single parents can gain moneys from other sources
from the noncustodial parent, such as property income and
access their bank records for arrearage, why is the Federal
income tax refund exempt? It should not be.
``I am writing to say that, on behalf of all struggling
single parents, this law must be changed. We must be able to
get all moneys available toward paying child supports in
arrearage, no matter if the child has become an adult when the
arrearage is being paid. We should not have to make our
children do without necessaries, nor should we have to work two
and three jobs to make up for an irresponsible, non-
contributing parent.''
I want to thank Lisa McCave for bringing this issue to my
attention. I hope that Congress can alleviate the tremendous
burden on single parents--and I congratulate all of you who are
working on this, by the way--who have to work even harder to
provide for their children.
To me, an artificial barrier such as the age limit on the
Federal tax refund offset program should be torn down, the
sooner the better. A noncustodial parent should not be able to
escape their child support responsibilities by playing a
waiting and avoidance game until their child is 18 years of
age.
The Federal tax refund offset program is responsible for
retrieving, as I already indicated, about one-third of these
funds, and I think it should be used after the child has become
of age, but that incurred while the child was still a minor.
I would urge my colleagues to support this legislation and
section 403, and I really appreciate the opportunity of being
here--and I am sure Lisa does, too--to present what I think is
an injustice that hopefully we can correct as soon as possible
in this Congress.
Chairman Johnson of Connecticut. Thank you very much,
Congressman Castle. And thank you for being here, Lisa, and for
your letter. We appreciate having that.
Mr. Castle. Thank you.
[The prepared statement and attachment follow:]
Statement of Hon. Michael N. Castle, a Representative in Congress from
the State of Delaware
Chairman Johnson, ranking member Cardin, members of the
subcommittee, I want to thank you for giving me this
opportunity to testify on the important subject of child
support.
It is a fundamental principle that a parent who brings a
child into this world is responsible for providing for that
child's physical needs regardless of any conflicts with the
child's custodial parent. It is rewarding for me to join you
here today to discuss how we can improve the laws of this
country to enforce that principle.
I want to take a few moments to discuss the ``child support
fairness and federal tax refund interception act of 2000.'' I
recently introduced this bill to remove a legal barrier that is
preventing the federal tax refund offset program from more
effectively ensuring that child support is paid to all those
children who deserve it. This bill has been incorporated into
the committee's bipartisan ``child support distribution act of
2000'' as section 403.
As you know, under current law, the federal tax refunds of
parents who owe back child support can be intercepted and used
to reduce that debt. After garnishing wages, this program is
the most effective means of recovering back child support. It
accounts for one-third of all back child support collected.
However, unlike garnishing wages and many other child
support enforcement tools, eligibility for this program is
restricted by the age of the child. Eligibility for the program
is limited to cases where the child is still a minor, the
parent is receiving public assistance or the child is a
disabled adult. This fails to protect Non disabled, college-age
children and their custodial parents, even if the child support
deficit accrued while the child was a minor. The unintended
effect of the program is that it rewards noncustodial parents
who are successful in avoiding their child support obligations
while their children were minors. The age limit removes the
threat of one of the most effective child support enforcement
tools the tax refund intercept.
Rather than recount the legislative history behind this
program, I think we should just ask ourselves whether there is
any good reason why we should allow delinquent parents to
collect federal tax refunds to use for their enjoyment, while
custodial parents struggle to recover from years of raising
their children alone on one income.
There are no statistics kept that tell us exactly how many
federal tax refunds cannot be intercepted due to this age
limitation, but there is at least one person in my home state
of Delaware who was adversely affected by this limitation. Last
summer, Lisa McCave, who is with us today from Wilmington,
Delaware, had to stand by and watch a $2,426 federal tax refund
go to her husband in Georgia even though he owed her nearly
$7,000 in back child support.
This frustration prompted her to write me a letter that I
would like to place into the record. It describes how since her
son was three, she has raised him alone. During that time, she
often had to work two jobs to compensate for child support
installments that were never paid. She has spent the better
part of her time away from work tracking down her former
husband, who has often quit his job as soon as his wages were
garnished to repay this debt. She could have used that $2,426
tax refund her exhusband received to help pay down the $55,000
in parent loans she incurred to send her son to college.
I want to read a section from her letter:
``If we single parents can gain monies from other sources
from the noncustodial parent, such as property income, and
access their bank records for arrearage, why is the federal
income tax refund exempt? It should not be. . . . I am writing
to say that on behalf of all struggling single parents, this
law must be changed. We must be able to get all monies
available toward paying child support and arrearage-no matter
if the child has become an adult when the arrearage is being
paid. We should not have to make our children do without
necessaries, nor should we have to work two and three jobs to
make up for an irresponsible, non-contributing parent.''
I want to thank Lisa McCave for bringing this issue to my
attention. I hope that congress can help alleviate the
tremendous burden on single parents who have to work even
harder to provide for their children. Artificial barriers, such
as the age limit on the federal tax refund offset program,
should be torn down. A noncustodial parent should not be able
to escape their child support responsibilities by playing a
waiting game until their child is eighteen. The federal tax
refund offset program is responsible for retrieving nearly one-
third of all back child support collected. The time has come to
make it a greater success by helping all children who deserve
support. I urge my colleagues to support this legislation and
section 403.
Thank you, Chairman Johnson for your commitment to this
important issue. I look forward to working with you to move
this bill to the full house in the near future.
Lisa K. McCave
Wilmington, DE 19803
July 17, 1999
The Honorable Michael Castle
The House of Representatives
Washington, DC 20510
Dear Congressman Castle:
Senator William V. Roth, Jr. (R-Del) is currently presenting a tax
package before the Senate, House and White House. As part of the
proposed changes, I urge you to consider another critical change which
is of great urgency to single parents. It is a change to the current
Federal Tax Refund Offset Program for Child Support monies.
The Law (section 2331, P.L. 97-35) states in Section #2 under Non-
AFDC Cases that, ``Non-AFDC referrals on behalf of an individual who is
no longer a minor even if the arrearage accrued while the person was a
minor child may not be submitted for offset.'' In other words, the
child must be a minor as of December 31 of the year in which that case
is submitted to OCSE for offset to be eligible to receive the Federal
income tax refund.
The Law affects me adversely in this way. It means that in spite of
a court order against my ex-husband, William David Wilson (who lives in
Albany, Georgia), to collect more than $19,000 in back child support
over the last nine years, I cannot collect any money from his Federal
income tax refund now because it is arrearage, and my child is an
adult. I consider this law outrageous and stupid. It makes no sense.
When my son was seven years old in 1982, my ex-husband ceased to
pay child support. When I initiated proceedings against him seven years
later, the amount of money he owed in back support was $19,000! He was
ordered to continue paying child support until my son was 18 years old,
and then the $19,000 arrearage was to be paid at the rate of $200 per
month. During the last five years, my ex-husband has been late many
times and stopped paying in 1994, 1995 and 1998, each time being
summoned to appear in a Georgia court. In spite of the Agreement
between Delaware and Georgia, which states that failing to make a
payment will result in the full amount being due, the judge just
slapped my ex-husband on the wrist each time, and re-instituted the
$200/month payment. Again in June 1999, he did not make a payment. And
again, his wages will be garnished, which will only be effective until
he quits his job, which he has done in the past.
On July 7, 1999, I called my caseworker with the Delaware Child
Support Office to inquire about my late June check. She informed me
that a Federal Income Tax refund check in the amount of $2,426 had come
from the State of Georgia and would be mailed to me. As an aside, I
receive a notice twice a year from the Delaware Division of Child
Support notifying me that if a Federal Income Tax refund check is due
my ex-husband, it will be sent to me.
On July 12, she informed me that because of this Federal Law in the
Refund Offset Program, the check will be returned to my ex-husband
because my son is no longer a minor! I was incredulous. If we single
parents can gain monies from other sources from the non-custodial
parent, such as property income, and access their bank records for
arrearage, why is a Federal Income Tax refund exempt? It should not be.
I am absolutely furious! And this Law--is ridiculous! This Law must
be changed. The fact that my son is 23 years old and an adult has
NOTHING to do with the fact that I am collecting back child support
now. It should not affect this Law. If my ex-husband had paid the child
support from the time my son was seven until he was fourteen, as he
should, he would not have accumulated an arrearage of $19,000! But
since he still owes child support, this Federal Income Tax refund check
should be applied to satisfy the arrearage of child support he owes.
This is money that is coming to me--not my son. I paid the total
support of my son for seven years when his father did not, and that
money belongs to me. The fact that my son is an adult should have no
bearing. That should not be a stipulation of the Federal Tax Refund
Offset Program Law.
From the time my son was three years old, I raised him alone. I
have had to work a second job to supplement my income when I did not
receive child support, and to pay for my son's college education. I am
paying more than $55,000 in parent loans for the Purdue University
education my son received. David Wilson did not contribute any money
toward his son's education--he barely pays the child support. He
continues to avoid his responsibility and will continue to do so
because he is irresponsible and manipulates the child support system.
And the Law continues to give him opportunities to escape his
responsibilities by failing to enforce the Delaware/Georgia Agreement,
and with loopholes like this Refund Offset Program Federal Tax Law.
Without the $2,426 refund I should have received, I will probably
continue to deal with stretches of missed payments in the future. And
there will be delays for court appearances caused by my ex-husband as
he finds ways to avoid paying the remaining $6,900 in child support
arrearage he owes.
I am writing to say that on behalf of all struggling single
parents, this Law must be changed. We must be able to get all monies
available toward paying child support and arrearage--no matter if the
child has become an adult when the arrearage is being paid. We should
not have to make our children do without necessaries, nor should we
have to work two and three jobs to make up for an irresponsible, non-
contributing parent.
We are constantly seeing media attention given to the struggles of
single parents. Some laws have begun to give more exposure to the issue
of child support issues. But every avenue for pursuing all financial
resources must be explored. Laws must be fairly and sensibly enforced.
Please vote to change this Law as you study the tax package. Thank you
for considering my request.
Sincerely,
Lisa K. McCave
cc: All United States Senators
All United States Representatives
The White House
Chairman Johnson of Connecticut. We have a long string of
votes at 10:45, so it is my intention to forego questions to my
colleagues, if that is acceptable to Ben Cardin, so we can get
on to hear the Deputy Secretary and have a little time to
question her.
Mr. Cox.
STATEMENT OF HON. CHRISTOPHER COX, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF CALIFORNIA
Mr. Cox. Thank you, Madam Chairman, Mr. Cardin, Mr. Castle,
and the professional staff that are here, for holding your
third hearing on this topic. This Subcommittee has done a great
deal of work in this area, and I think there are a lot of happy
Americans on account of that. The progress that we are making,
the focus that we are putting on these important issues is good
news, indeed.
In recent years, Congress has done a great deal to improve
our Nation's welfare system. The welfare reform law, as
President Clinton points out, as the leaders in Congress often
point out, is galvanizing a series of new enforcement
mechanisms to help States improve child support collections.
That is one of the dividends of our welfare reform. But,
despite the gains that we are making, a lot more needs to be
done.
It is still true that almost 12 million custodial parents
won't receive even a nickel in child support payments over the
next year. Only one in five dollars in child support
obligations are collected by the child support enforcement
program. Of child support obligations, $47 billion went unpaid
in the most recent year for which we have complete statistics.
That is an extraordinary amount of money. It is a staggering
figure. Of child support arrears, 92 percent remain
outstanding.
With such a disproportionate share of child support in
arrears--92 percent--we have to give delinquent parents a
strong financial incentive to pay, and we have to give relief,
even more importantly, to the custodial parents who aren't
getting the help they need to raise their kids.
I have introduced legislation titled ``The Child Support
Enforcement Act'' to help accomplish these goals, and I am
pleased that this important legislation has received, from the
get-go, bipartisan support, including sponsorship by
Representative Carolyn Maloney and Representative Patsy Mink,
active members of the Women's Caucus. It has also been endorsed
by a variety of organizations, including the Association for
Children for Enforcement of Support and Child Help USA, which
I, like a number of Members, have been associated with for many
years.
Under current law, custodial parents receive no tax relief
when a noncustodial parent fails to meet his or her legal and
moral obligations to pay child support in full and on time. I
have a very interesting law review article from the ``NYU Tax
Law Review'' that chronicles the court decisions in this area
that, in the estimation of the writer--and perhaps to many
objective observers--fly in the teeth of what Congress had in
mind when it wrote section 61-A-12. That section of the Tax
Code makes it very plain that a taxpayer is supposed to
recognize income from the discharge of indebtedness. And the
mirror provision, the bad debt provision, seemingly also ought
to apply for treating parents involved in disputes about paying
the money, the same as every other taxpayer, but we don't.
If we did, two good things would happen. First of all, we
would be giving tax relief to the parents who need it because
they are not getting the money that legally they are owed.
Second, we would be imposing an appropriate economic penalty on
people who aren't paying their debts, just as we do for all
other debts in society.
Third, according to the scorers of this legislation, we
will actually raise $394 million in revenue over 10 years. The
only reason for that is because we are treating both the income
from cancellation of one joint obligation and the bad debt as
mirror images and equally, is that statistically the
noncustodial parents--the people who owe the child support--
typically are in higher tax brackets than the custodial
parents, who aren't working as much because they have got
child-rearing responsibilities. That mismatch in tax brackets
is the reason that, even though we had an even-handed treatment
of both sides of the debt, that it actually raises money--a
modest amount $394 million over 10 years--but the point is that
this is something big that we can do without a charge to the
Treasury.
There have been a few questions raised about the
legislation. First is whether or not we intend to give the IRS
additional power. The legislation gives the IRS no additional
power. In my view, that isn't necessary. Other legislation has
done that.
Congress, in 1998, passed the Dead Beat Parents Punishment
Act and made it a Federal penalty to willfully fail to pay
child support, and so on. There are no criminal provisions of
this bill, and I don't think we need any. We have already taken
care of that elsewhere. This is just a tax provision, an
explanation of what section 61-A-12, for example, is all
about--nothing more, nothing less. Enforcement of the Tax Code
is left to the rest of--the provision would be treated the same
as any other provision of the Tax Code.
Another question that has been raised about it is what
happens in subsequent tax years if the child support is then
paid. I would certainly favorably consider any proposal by the
Subcommittee to amend the legislation to simply say that
nothing happens. Given these statistics, so much of child
support is being never paid, in any case. The simplicity that
that would afford and the fairness that that would afford to
the custodial parent I think would make it worth the effort,
because right now, of course, child support payments are not
included in income, in any case.
That is the entirety of my presentation. I tried to
anticipate the questions that you are not asking, Madam
Chairman. [Laughter.]
Mr. Cox. So I both delivered testimony and answered
questions.
Mr. Cardin. If I might just quickly, Madam Chair.
Chairman Johnson of Connecticut. Yes.
Mr. Cardin. First, to Governor Castle, let me say thank you
very much for your testimony. I would hope that we could move
that as quickly as we could, because it seems like a common-
sense correction to our Tax Code.
To Representative Cox, let me just put on the record--and
we will come back to it--there have been some concerns raised
about the complexity in enforcement of the provision. We all
support what you are trying to do, as far as offering financial
incentives for individuals to pay child support. That is what
you are trying to do, and we want to do that. We will talk
about this at a later point.
But the concern is how would IRS be able to monitor
whether, in fact, the right child support was paid or not paid
and written off, and whether there is consistency between the
noncustodial and custodial parents' tax returns.
We need, as you point out, to make sure that the proposal
is enforceable, it doesn't add additional complexity to the Tax
Code, and it accomplishes the purpose for which you are
seeking. We need to talk a little bit more about that.
Mr. Cox. Yes. I have taken to heart the expressions of
interest and concern in that area. I think that simplification
is the answer, that we simply ought not to impose any new
administrative burdens. We ought to treat this precisely the
same as we would treat any other income and any other
deduction, and we ought to put in the hands of the taxpayer
most motivated to help us out here any administrative
responsibility, and that administrative responsibility could be
as simple as sending a 1099. There is already a Form 1099C for
cancellation of indebtedness, and the parent who is owed the
money and doesn't get it could send that 1099 off to his or her
spouse or former spouse and the IRS already knows how to handle
1099s. It would be no more complex than that.
Chairman Johnson of Connecticut. Thank you very much for
your testimony. It is a very big idea and one we need to work
through. I am concerned about complexity from the IRS' point of
view, but we do need to look at that, because it is an idea
that would be very powerful.
Mr. Cox. Yes. The answer, by the way, that I just gave is a
supplement to and a change in the legislation I have
introduced, so the question was fairly put. The way the
legislation is written, I think the problem is easily answered,
as I just answered it.
Thanks.
Chairman Johnson of Connecticut. And Mr. Castle's proposal
is included in my underlying bill, much simpler and very fair.
But thank you for your powerful presentation on behalf of your
ideas, and also thank you for the quality of your ideas, both
of you. We appreciate it.
It is my pleasure to invite now Olivia Golden, the
Assistant Secretary for Children and Families, to testify. As I
say, we will then have a series of votes, so the next panel
probably won't be called before 11:30, if any of you have
things that you need to do, and then we will have to try to
keep it fairly tight in the questioning of the other two
panels.
Welcome, Secretary Golden.
STATEMENT OF HON. OLIVIA A. GOLDEN, PH.D., ASSISTANT SECRETARY
FOR CHILDREN AND FAMILIES, U.S. DEPARTMENT OF HEALTH AND HUMAN
SERVICES
Ms. Golden. Thank you.
Madam Chairman and Members of the Subcommittee, thank you
for the opportunity to testify on important changes, to the
child support enforcement program. We are very pleased that
several provisions from the President's child support
initiative are included in the bill as proposed by Chairman
Johnson and Representative Cardin and are the subject of
today's hearing.
Through enactment of the Personal Responsibility and Work
Opportunity Reconciliation Act, President Clinton and Congress
provided the necessary tools to the child support enforcement
program to secure for our Nation's children the emotional and
financial support they need and deserve.
In fiscal year 1999, a record of nearly $16 billion in
child support was collected, or double the amount collected in
1992. We are excited about these dramatic achievements and we
believe the next step, as both of you said in opening
statements, is to ensure that working families truly benefit
from the progress we have made.
Simplified distribution is a common thread in all of our
proposals to ensure that families receive more of the child
support collected on their behalf. Additional support can make
a critical difference in a child's well-being, and receipt of
child support can play an important role in ensuring that
families who leave welfare do not end up back on the welfare
roles. This is underscored by a study which found that women
who did not receive child support had a 31 percent chance of
returning to welfare after only 6 months off the rolls. In
contrast, women who received as little as $1 in support had
only a 9 percent chance of returning to welfare.
The President and Congress took an important step in
welfare reform to move toward family first distribution, but
the changes introduced administrative complexity and did not go
far enough. The Administration's proposal for the next step is
very simple: When a family is on welfare, the State retains the
child support collections, not including any amount the State
passes through. When the family leaves welfare, the State has
the option of distributing all child support collections to the
family. We are very pleased that both Chairman Johnson and
Representative Cardin have included in their bills distribution
provisions that increase the amount of child support going to
families.
A second strategy--passthrough and disregard of child
support to families receiving assistance--is also important if
we are to get more child support into the hands of children and
support families as they move from welfare to self-sufficiency.
These families may well be working, like one-quarter of all
welfare families.
An ongoing link between child support and family income is
crucial in stabilizing the lives of these families and
preparing for their self-sufficiency. These payments are also
important in creating a clear connection between the child and
the noncustodial parent and act as an incentive for custodial
and noncustodial parents in cooperating with the Child Support
Enforcement Agency.
The Administration's proposal is to provide Federal
matching funds for new State efforts to passthrough and
disregard child support to TANF families. We are very pleased
that Representative Cardin has included a passthrough provision
in his bill, and look forward to working with the Committee to
ensure this provision is included in the legislation you
advance.
We applaud the overall direction of the child support
measures being considered by the Subcommittee, including
additional proposals that are discussed in my written testimony
for review and adjustment of child support orders and expanded
use of passport denial.
However, we do have serious concerns about the proposal to
provide access to public non-IV-D child support enforcement
agencies, and especially to private collection agencies.
Congress has given the IV-D program access to a wide variety of
information sources, along with detailed privacy requirements.
Even with the best of intentions, sensitive data could be
compromised if State IV-D agencies with the responsibility to
protect the confidentiality of data do not have adequate
safeguards once the data leaves the agency. Further, delivering
the same services available through the IV-D program through
another entity may prove not only inefficient but also costly.
Given these concerns, we urge caution in providing access to
public non-IV-D agencies.
Extending the measure to allow access to IV-D child support
information and tools by private collection agencies is an even
more serious concern. Private child support collection agencies
are unregulated, and, as a result, there is little ability to
oversee their activities or use of information. The potential
implications for abusing information are troublesome. The
current proposal could potentially give tens of thousands of
individuals and private agencies access to sensitive and
confidential information. Given the privacy and security
concerns and policy implications, we cannot support a proposal
to give private collection entities access to IV-D information
and enforcement tools.
Finally, I want to recognize the importance of promoting
responsible fatherhood in the administration's and the
Subcommittee's efforts to strengthen families. The
Administration has worked throughout its tenure to strengthen
the role of fathers and families, and we commend Chairman
Johnson and Representative Cardin for their leadership in
focusing attention on fatherhood.
In closing, let me say that it is only through our
partnership with the Congress and the States that we have been
so successful in strengthening child support enforcement. We
can improve on existing efforts and get more money to families
through the addition of some new enforcement tools, simplified
distribution, and expanded passthrough and disregard.
We look forward with enthusiasm to working with you on this
important legislation.
Thank you.
Chairman Johnson of Connecticut. Thank you very much, Madam
Secretary.
[The prepared statement follows:]
Statement of Hon. Olivia A. Golden, Ph.D., Assistant Secretary for
Children and Families, U.S. Department of Health and Human Services
Madam Chairman and distinguished Members of the
Subcommittee, thank you for giving me the opportunity to
testify on important changes to the child support enforcement
program being considered by the Subcommittee. Enhancements to
this Nation's child support enforcement efforts were one of the
cornerstones of the President's budget request this year and we
are very pleased that a number of those measures are included
in the two bills proposed by Chairman Johnson and
Representative Cardin, in addition to being the topic of
today's hearing. A common thread in all of our proposals is
ensuring that families receive more of the child support
collected on their behalf and given our successful track record
in working together, I am confident that we can make this
happen.
In September I testified before this Committee on the
progress we have made in child support collections and
paternity establishment. A new record announced since then
confirms this progress. In FY 1999, a record of nearly $16
billion in child support was collected or double the amount
collected in 1992. In addition, as I reported in September but
I believe worth repeating, the number of paternities
established or acknowledged has reached a record 1.5 million,
almost tripling the 1992 figure of 512,000. Of these, over
614,000 paternities were established through in-hospital
acknowledgement programs.
Through enactment of the Personal Responsibility and Work
Opportunity Reconciliation Act (PRWORA), President Clinton and
Congress provided the necessary tools to the Child Support
Enforcement program to secure for many of our nation's children
the emotional and financial support that they need and deserve.
Tools such as the expanded Federal Parent Locator Services
(including the National Directory of New Hires and Federal Case
Registry), the passport denial program, financial institution
data match program, and license revocation programs have made a
tremendous difference in improving our ability to collect child
support. State Disbursement Units (SDUs) and central state
registries of child support orders have paved the way for state
child support agencies to operate more efficiently and for
families to receive the support collected on their behalf more
quickly.
We are excited about these dramatic achievements, and are
convinced that the Child Support Enforcement program is on the
right path. The next step is to ensure that working families
truly benefit from the progress we have made. Today as
requested by the Committee, I will focus my testimony on child
support distribution and broadened access to organizations that
can participate in the child support program. I would also like
to take this opportunity to highlight other important
provisions in Chairman Johnson's bill and Representative
Cardin's bill. In addition, as the Administration continues to
review other provisions of the bills, we may have further
comments.
Simplified Distribution
I would like to focus first on the rules governing
distribution of child support. As I mentioned at the outset, we
are in agreement that child support distribution rules need to
be changed to provide more child support to families who have
left welfare. These families should be the first recipients of
child support paid by non-custodial parents, rather than the
government. Research shows that the receipt of child support
can play an important role in ensuring that families who leave
welfare do not end up back on the welfare rolls. It also
creates a clearer connection between what the non-custodial
parent pays and what the child receives.
The importance of child support to families leaving TANF is
underscored by a recent study that found that women who did not
receive child support had a 31 percent chance of returning to
welfare after only six months off the rolls. In contrast, women
who received as little as one dollar to one hundred dollars a
month in support had only a 9 percent chance of returning to
welfare.
The President and Congress took an important step in the
passage of PRWORA in 1996 which provided for ``Family First''
distribution. This meant that families that left welfare would
be first in priority for receipt of payment on past-due
support. It was a huge step in the right direction. However,
due to complexities caused by related assignment provisions and
an exception for the tax refund intercept collections, the
changes introduced an added measure of administrative
complexity and did not go far enough in directing support to
working families. Decisions on distributing collections to the
Federal or state governments or the family now vary by the
method of enforcement and the period of the child support
assignment. This makes it burdensome for states to administer
and difficult for families to understand.
Thus, in addition to making working families better off,
simplifying distribution rules would make the program easier to
administer for state child support agencies, allowing them to
devote more attention to collecting support, rather than using
resources to administer a complex set of rules that custodial
and non-custodial parents do not understand.
So what does this mean in the real world of families
struggling to meet their children's basic needs? It can mean
the difference in the housing and food and other necessities
available to a growing child and it can make a critical
difference in a child's well being. According to a recent Urban
Institute study, for the average poor child with a nonresident
parent, and whose family received child support, the child
support received amounted to over one-quarter (26 percent) of
their family income. Findings from the report indicate that
receipt of child support reduces low-income families'
dependence on welfare, reduces the poverty gap for poor
children and reduces the income disparity between rich and poor
children.
There is clearly a compelling case for directing more
support to working families. The Administration's proposal for
this is very simple: when a family is on welfare, the state
retains the child support collections (not including any amount
that the state passes through); when the family leaves welfare,
the state has the option of distributing all child support
collections to the family. The President's proposal would be a
state option, maximizing state flexibility and, for a state
that takes the option, it would be a Federal-state partnership
in which both the Federal government and the state share the
cost of the policy. We believe the Administration's bill
strikes the right balance supporting state efforts that get
more child support to families, and distributing the cost
fairly between States and the Federal government.
We are very pleased that both Chairman Johnson and
Representative Cardin have provided leadership in supporting
simplified distribution. Both bills include distribution
provisions which, like the Administration's proposal, increase
the amount of child support going to families. We commend
Chairman Johnson, Representative Cardin, and Subcommittee staff
for their work on this important issue for children and
families and we look forward to continuing to work with this
Committee on remaining differences.
Passthrough
The Administration is convinced that a second strategy is
also important if we are to get more child support into the
hands of children and support families as they move from
welfare assistance to self-sufficiency. This second strategy is
passthrough and disregard of child support to families
receiving assistance--who may well, like one quarter of all
welfare families, be working at the same time. The face of
welfare is changing and more families receiving assistance are
working and the assistance they receive is more temporary in
nature. An ongoing and continued link between child support and
family income is crucial in stabilizing their lives and
preparing for self-sufficiency. In my travels around the
country, I am hearing from more and more families on the
importance of child support in ensuring their children's future
success. For example, when I participated in a recent focus
group in Michigan on child care, a number of mothers also
wanted to share their experiences with child support
enforcement and their thoughts on the importance of a strong
and effective child support program in stabilizing their lives
as they move forward in transitioning from welfare.
Child support passthrough and disregard policies are
important to these families by allowing some portion of support
paid on a family's behalf to be passed through to the family
and disregarded for purposes of calculating assistance
benefits. These payments are also important in creating a
clearer connection between the child and the noncustodial
parent and act as an incentive for custodial and non-custodial
parents in cooperating with the child support enforcement
agency. The President's child support package includes a
proposal for sharing in the costs of providing passthrough
payments for states choosing to begin making these payments or
increasing current levels of passthrough payments.
Current welfare rules require that when someone applies for
welfare (TANF), they must assign their right to child support
payments to the state and cooperate with child support
enforcement efforts. This is to help reimburse the government
for the cash assistance provided to the family. The Federal
government and the states each retain a share of the child
support collected. Nineteen states ``passthrough'' to the
welfare recipient some part of the state's share of retained
child support (usually $50) and disregard it for purposes of
determining the level of the benefit payment. Prior to the 1996
welfare reform law, a $50 passthrough was required and the
Federal government shared in the cost with states.
In addition to stabilizing the income of families working
to leave welfare, there are other benefits for the passthrough
of child support to welfare recipients. First, the passthrough
and disregard of child support may serve as an incentive for
non-custodial parents, particularly low-income non-custodial
parents, to pay child support. Organizations that work with
low-income fathers report that fathers currently feel they have
no incentive to pay child support to a mother on welfare
because the money goes to the state and does not benefit the
child. Second, the passthrough of child support also provides
an incentive for mothers to cooperate actively and fully in
child support collection efforts. This is especially critical
now that welfare is temporary and parents are moving rapidly
into the workforce. Like Medicaid and child care, regular child
support can be a key part of moving into stable work for a
single-parent family. As one of the studies cited earlier
shows, having child support securely in place helps in a
successful transition from welfare. Finally, TANF parents who
receive support directly in the form of a passthrough are
likely to be more familiar with the child support system than
parents who do not receive a passthrough. For parents in the
latter category, child support enforcement actions are
invisible. Familiarity with and confidence in the child support
system is critical for parents leaving welfare, who will often
be relying heavily on child support to make ends meet and will
need to act quickly if, for example, support payments are
disrupted in the transition from assistance to work.
The Administration's proposal is to provide Federal
matching funds for new state efforts to pass-through and
disregard child support to TANF families. The Federal
government would share in the cost of amounts above a state's
current passthrough and disregard policy, up to the greater of
$100 per month or $50 over current state efforts. We believe
that sharing in the costs of pass-through and disregard
payments will encourage additional states to opt for
passthrough policies and encourage states currently providing
passthrough payments to increase the amounts they passthrough
and disregard.
We are very pleased that Representative Cardin has included
a passthrough provision in his bill and look forward to working
with the Committee to ensure this provision is included in the
legislation you advance.
I would like to turn now to two provisions included in the
Chairman's bill that were also included the President's
proposal and that we think will make a significant difference
to children: review and adjustment of child support orders and
expanded use of passport denial for failure to pay support.
Review and Adjustment of Child Support Orders
An additional proposal that would ensure that families
obtain more child support is to review and adjust child support
orders periodically. Typically, the ability of obligors to pay
child support increases over time. So generally, periodically
reviewing and adjusting child support awards to reflect the
current income of the obligor increases the amount of the
support and the economic security of single parent families. It
is especially important that TANF families have an updated
award when they leave welfare.
We want to maximize the amount of child support available
to a family leaving welfare in order to ensure that they have
every opportunity to become self-sufficient. Let me offer an
example: A mother goes on welfare at the birth of a child born
out-of-wedlock. The putative father is found, a paternity
action is brought, and he is found to be the father and ordered
to pay child support. However, the father is employed only part
time so the child support award is only $100 per month. Three
years later, the mother leaves welfare. The father now has
found a full time job, so that if the award is reviewed and
adjusted he would pay $300 per month in support. That
additional $200 per month can make a big difference in the
financial security of the mother and the child and perhaps
enable her to stay off welfare long term when combined with
earnings of her own. Indeed, a recent report by the Health and
Human Services Office of Inspector General concluded that,
``Reviews conducted as parents exit from TANF would likely
benefit the government through reduced welfare recidivism and
avoidance of the costs associated with receipt of other public
benefits.''
There are also legitimate reasons to reduce an existing
award, for instance, if the obligor has lost his job or
suffered a major decline of income. In those cases, periodic
review and adjustment means that the award amount is fair and
that the child support agency is not wasting its efforts on
pursuing a low-income father who does not have the current
ability to pay support, and the father avoids building up a
large and unmanageable arrearage. Research has shown that
regular receipt of current support has a greater impact on
reducing recidivism back to welfare than a larger monthly award
that is only sporadically paid.
We commend Chairman Johnson for including periodic review
and modification in the bill. This is an important provision
that will help families and promote the success of welfare
reform efforts.
Expanded Use of Passport Denial
The Administration's child support package also includes
initiatives to collect more child support. I urge you to look
at the legislative language we sent to Congress earlier this
year for the details on each of these provisions but I would
like to take this opportunity to mention one in particular that
was included in Chairman Johnson's bill, expanded use of
passport denial.
PRWORA provided for the denial of passports for delinquent
obligors. The passport denial program, run jointly by HHS and
the Department of State, currently works to deny passports to
delinquent parents owing more than $5,000 in past due support.
The Passport Denial Program has collected more than $4 million
in lump sum child support payments since its inception and is
currently denying 30 to 40 passports to delinquent parents per
day. Let me cite some examples: an obligor flew to Florida and
paid $24,000 in cash toward a child support arrearage so he
could play baseball overseas; an obligor from Missouri paid
$36,000 in child support so he could travel to see his mother
and to work in Pakistan; and an obligor from Maryland and
Virginia paid $16,000 of child support arrears so that he could
travel to England for an interview to attend college to obtain
a Ph.D. All told, about 14,000 delinquent parents have had
passport applications denied until they pay their child
support. This year the Administration has proposed reducing the
threshold for passport denial from $5,000 to $2,500. This will
allow the program to be even more effective while providing a
reasonable threshold for administrative efficiency. We are
pleased that the Chairman's bill includes this provision and
hopeful that it will be part of the bill reported by the
Committee
Access to Child Support Information and Tools by Public Non-IV-D Child
Support Enforcement Agencies
While we applaud the overall direction of the child support
measures being considered by the Subcommittee, we have serious
concerns about the recent proposal to provide access to public
non-IV-D child support enforcement agencies and especially to
private collection agencies. Let me first address our concerns
with providing access to public non-IV-D child support
enforcement agencies.
Congress has given specific statutory authority for the IV-
D program to have access to a wide variety of information
sources for purposes of enforcing child support obligations.
Congress has also specified, in detail, the privacy
requirements that come with this access and prohibited the
unauthorized disclosure of child support data. The Office of
Child Support Enforcement (OCSE) takes this responsibility very
seriously. Because of the sensitive nature of the data needed
to process and enforce child support cases, we are committed to
ensuring that all uses and disclosures of state and Federal
data sources on individuals comply with the highest standards
for security and confidentiality.
While extending access to non-IV-D agencies would expand
the program's outreach to families needing service, there are
practical issues to be addressed. For example, providing access
to information in Federal databases to public agencies that are
not part of the IV-D program, whether these outside agencies
are clerks of court or other entities, raises serious concerns
regarding the safeguarding of the data. Even with the best of
intentions, sensitive data could be compromised if state IV-D
agencies with the responsibility to protect the confidentiality
of data do not have adequate safeguards once the data leaves
the IV-D agency. The public non-IV-D agencies are not subject
to the full range of IV-D security and other requirements
specified by Congress. In addition, there is also a Federal
oversight role in protecting confidential information that is
not addressed in the proposal. The Federal government needs the
authority to regulate access to confidential information in
order to ensure the proper safeguarding of this information.
Moreover, all of the services to which public non-IV-D
agencies would be given access are available to custodial
parents directly from the State IV-D agency. In these cases,
delivering the same services through another entity may prove
not only inefficient but also costly to the Federal government
and to state IV-D agencies. Providing access would require
building an interface between each participating public non-IV-
D agency and the IV-D certified computer system, resulting in
additional reprogramming and other systems staff costs for the
IV-D agency, in addition to the cost of monitoring use of the
information and enforcement tools by outside agencies.
Given these concerns, we urge caution in providing access
to public non-IV-D agencies and we would be happy to work with
the Subcommittee to see if our concerns can be addressed.
Access to Child Support Information and Tools by Private Collection
Agencies
A related measure being considered by the Subcommittee is
to allow access to IV-D child support information and tools by
private collection agencies. This proposal raises some very
serious concerns, particularly regarding confidentiality of
data, and consequently we must oppose it.
Private child support collection agencies are unregulated
and as a result there is little ability to oversee their
activities or use of information. The potential implications
for abusing information are troublesome. For example, without
tight control over the use of information, the location of
domestic violence victims could be compromised. The current
proposal opens up access to ``an individual, a person, or any
other non-public entity which seeks to establish and enforce an
obligation to pay child support'' which could give tens of
thousands of individuals and private agencies access to
sensitive and confidential information.
In addition, this provision would result in further
extensive and expensive revisions to IV-D computer systems than
would the public non-IV-D agency access, due to the greater
number and diversity of private collection entities.
Under the proposal, the private entities could send their
cases to the IV-D agency for enforcement activities. The IV-D
agency would have no way to verify if the amount sought to be
collected is correct and whether there was appropriate due
process extended to the non-custodial parent. The IV-D agency
would then be required to locate the parent, the Internal
Revenue Service would be required to withhold the tax refund,
the State Department would deny the passport, etc. And the IV-D
program would be required to send the collection to the private
agency, which could take its own fee off the top, often 30
percent or even more of each payment. If the services were
provided to these families directly by the IV-D agency, the
family would receive the full amount collected (except in some
former TANF cases as discussed above). While families should
theoretically be able to choose between public and private
collection agencies, many custodial parents who have not had
contact with the TANF program may not be aware of IV-D program
services.
Given the privacy and security concerns and policy
implications, we cannot support a proposal to give private
collection entities access to IV-D information and enforcement
tools.
Fatherhood Programs
Finally, I want to recognize the importance of promoting
responsible fatherhood in the Administration's and this
Subcommittee's efforts to strengthen families. With the
President and the Vice-President's leadership, the
Administration has worked throughout its tenure to strengthen
the role of fathers in families. For example, we have funded
eight child support enforcement responsible fatherhood
demonstration projects that will help bolster fathers financial
and emotional involvement with their children. The Office of
Child Support Enforcement has provided over $1.5 million to the
National Center for Strategic Nonprofit Planning and Community
Leadership (NPCL) to work with grassroots fathers organizations
to help unemployed and underemployed fathers become responsible
parents. In addition, Secretary Shalala and the Vice President
recently announced the approval of ten state waivers for the
Partners for Fragile Families, a set of projects to improve the
opportunities of young, unmarried fathers to support their
children both financially and emotionally.
We commend Chairman Johnson and Representative Cardin for
their leadership in focusing attention on responsible
fatherhood. The Fathers Count Act of 1999, passed by the House
last fall and included in this bill, is an important step in
helping more fathers of low income children work and honor
their commitments to their children. The President has proposed
a ``Fathers Work/FamiliesWin'' initiative that shares many of
the same goals as the legislation proposed by this
Subcommittee. The Administration's FY 2001 proposal would
provide $255 million for the first year of this new initiative
to help low-income non-custodial parents and low-income working
families work and support their children. Of this amount, $125
million would provide grants to help approximately 40,000 low-
income non-custodial parents (mainly fathers) work, pay child
support, and reconnect with their children. One hundred thirty
million dollars would provide new grants to help hard-pressed
working families--including mothers and fathers in single and
two-parent families--get the supports and skills they need to
succeed on the job and avoid welfare. This new initiative
builds on the approximately $350 million in innovative local
responsible parenthood projects funded through the Department
of Labor Welfare-to-Work Grant program. These proposals are an
important next step in welfare reform, and would build upon the
Administration's efforts to help low-income families succeed in
the workforce and help even more long-term welfare recipients
go to work.
Conclusion
In closing, let me say that it is only through our
partnership with the Congress and the states that we have been
so successful in strengthening the Child Support Enforcement
program. The many new tools provided by the Personal
Responsibility and Work Opportunity Reconciliation Act are
helping to improve the lives of our nation's children. We can
improve on existing efforts and get more money to families
through the addition of some new enforcement tools, simplified
distribution, and expanded passthrough and disregard. These
measures move the program in the right direction and
ultimately, help families remain self-sufficient and we look
forward to working with you on this important legislation.
Thank you. I would be pleased to answer any questions you
may have.
Chairman Johnson of Connecticut. On the issue of pass-
throughs, we do, in our bill, fund the pass-through of the
Federal amount to families that have left--that are leaving
welfare. We do, after 5 years, compel the States to passthrough
their amount. In our first draft we did that immediately. They
are very concerned about the resources they have for child
support enforcement, and we figure over 5 years they can figure
out how to do this. That is a very expensive provision.
I think, if you force pass-through immediately and don't do
what Ben does in his bill, which is prohibit disregard, you
won't make a substantial change in the current situation, so my
bill concentrates on pass-throughs when you leave, and that
difference between legislating that people on welfare would get
their child support plus the welfare benefit has, for me, some
very troubling aspects.
You will have people on welfare getting a welfare benefit
earning more than their neighbor, if the two are combined--
child support and the welfare benefit. I think that is going to
cause a lot of problems and begin to re-ignite some of the old
feelings about welfare and fairness.
Ms. Golden. I appreciate your extraordinary leadership on
ensuring that we focus on distributing child support dollars to
families after they have left the welfare rolls. The
administration also believes it is important to provide a
Federal incentive with some cost-sharing, for passthrough while
families are on the rolls but not a mandate an incentive. With
the progress of welfare reform, these are the very same
families a couple of months apart. Four times the percentage of
families on welfare are working now than were a few years ago.
I have been talking to a lot of those parents, and I really
believe that it is enormously important both that they have the
stability of regular child support and that they become
connected to the child support system in order to have
stability as they move off welfare.
I also believe--and these are similar points that Mr.
Cardin made earlier--that there is some evidence that providing
that direct link to child support encourages the payment of
more child support and more active cooperation.
On the technical questions of the different approaches, the
administration's approach to the passthrough while parents are
on welfare is an approach which provides a Federal share as
States expand their use of passthrough and disregard. As you
know, some States do it now, but we would provide an incentive
for States to do more in this important area. Mr. Cardin's
approach is technically slightly different, but our view is
that on both distribution and passthrough the similarities are
the important thing, and we are very eager to work with the
Committee on any of the technical issues.
Chairman Johnson of Connecticut. I am very interested in
the child support flowing directly to the family while on
welfare so that that connection is made between the supporting
parent and the custodial parent, but to prohibit the States
from counting that income and eligibility I think is going to
create some very serious fairness issues. Some States are not
counting it. Connecticut doesn't count it.
Ms. Golden. Right.
Chairman Johnson of Connecticut. They have chosen not to
count it. But, you see, they coordinate that.
Ms. Golden. Right.
Chairman Johnson of Connecticut. They also have the
shortest length of stay on welfare.
Ms. Golden. Correct.
Chairman Johnson of Connecticut. So they have designed a
system that maximizes income, but after 21 months you are into
the extent you have to prove you are eligible for an extension.
I think that is one of the good things about the current
system is that the States are showing a lot of variation in how
they are managing this issue of incentives and supports. And I
think for us to go back to the old system of saying, ``This is
how you should do it,'' is unfortunate.
I would not be opposed at all to us requiring them to
passthrough the original check for child support to the mother,
because I think that connection is very important.
There are some that say this would be extremely complicated
for the States to do, but I do believe the concept is so sound
that we ought to be doing it.
Ms. Golden. The key part of the administration's proposal
is to make sure that States aren't at a fiscal disadvantage if
they choose to do what Connecticut is doing. In other words, we
are trying to make sure that there is not a discouragement for
States to disregard, as well as passthrough, because I think
you are right--there is one set of advantages that come from
connecting a mother to the system, there is a second set of
advantages that come from stabilizing the income as she is
moving through that transition. So it is an incentive approach,
a cost-sharing approach with the State that we have taken to
passthrough.
Chairman Johnson of Connecticut. By funding the Federal
share, we do encourage--I mean, we could actually pass the
child support and the Federal share directly, but, since we
don't mandate payment for the State share, I don't feel that we
can do that.
I think there are some ways we can improve the system so
that the custodial parent understands where the money is coming
from and who is helping them, but I am very troubled by the
proposal that we would go back to saying that then States could
not disregard this. I think the question of disregard is so
integral to the total structure of their welfare-to-work
programs.
Ms. Golden. I am not sure in which proposal you are seeing
a requirement that the State could not disregard the
passthrough. There are certainly provisions about incentives.
There certainly are proposals linking the extra dollars to
their choosing to do it that way. But I don't think there are
any prohibitions on disregarding the passthrough in any of the
proposals.
Chairman Johnson of Connecticut. We will get into the
details of more of this, because actually I did read your bill
as mandating that. I am sorry.
Thank you.
Ms. Golden. OK.
Mr. Cardin. Madam Chair, thank you very much. One of the
purposes for a hearing is to see whether we can't bridge some
of the gaps.
Chairman Johnson of Connecticut. Yes.
Mr. Cardin. I agree with the Chair's comments about making
sure we do not take away from the States the flexibility of
being able to determine eligibility.
There are two parts to the passthrough proposals. One deals
with arrearages. We make it clear in our legislation that the
arrearages that are as a result when the person was not on
welfare goes to the family, and the arrearages from when they
were on welfare we simply the distribution. But for a family
that is currently receiving TANF benefits, my legislation would
require those funds to go to the family, but then allow the
States the ability to determine eligibility--how much of that
income would be used for eligibility. And, of course, we share
the cost with the States.
Let me just make one other observation, because the Chair
mentioned the fact that two families in the same economic
circumstance might be treated differently, and that is true
under current TANF rules because a family might be receiving
some income from work, which is permitted under certain
circumstances, so we could have two families in a similar
situation receiving different income because of the
circumstance of one family versus the other.
My question to you is: As far as passing through child
support or a family receiving welfare, I wanted you to comment
at least on two aspects of this. First, what impact, if any,
does that have on encouraging the person to leave welfare, to
become self-sufficient? Second, do we have any information
about how many noncustodial parents are paying support under
the table so that they can get the money to the family rather
than paying it through the welfare agency where they know the
money will not get to the family.
Ms. Golden. I think they are both areas that deserve much
more systematic research, because the quality of the
information is not as extensive as I hope it will be soon.
On the first question, in terms of as an incentive to leave
welfare, I very much believe, from the parents that I have been
talking to, that right now many parents who are on welfare, as
the chairman said about Connecticut, are there for a relatively
brief period of time. They are either preparing to work or they
are working, and they are in the process of putting together
pieces of the puzzle to get off welfare and achieve self
sufficiency. I really believe that child support, like health
care, is one of the key pieces that contributes to economic
stability. I believe that it can be a key part of a transition
off of welfare.
The statistics I offer in my testimony focus on reducing
return to welfare. I don't know that we have very specific
statistics on speeding up departure, but from what we know, I
believe that having stable and regular child support very is
really important in contributing to the ability of a custodial
parent to maintain her children, understanding that work may be
pretty insecure as low-wage jobs usually have varied hours
producing fluctuating income from week to week.
Mr. Cardin. Before you get on to the second point, what you
are suggesting is that here you have a person who is trying to
go through a transition to being self-sufficient.
Ms. Golden. Yes.
Mr. Cardin. That individual who receives regular child
support knows that that is part of what the family has as
income. They are ready to start planning how to make it without
necessarily a cash payment through TANF. That is in place.
Ms. Golden. Exactly.
Mr. Cardin. It makes it easier for the person to get to the
next step.
Ms. Golden. Exactly. It is not such a leap into the
unknown. It is not the sense of ``anything could change week to
week.'' I have heard that from many parents.
On the second question about noncustodial parents, again we
are in the process of doing some research to help us know the
answers more systematically, but there is widespread belief
that one of the difficulties in persuading noncustodial parents
to fully cooperate as fully as possible is that they can't see
how the dollars get to their children.
Again, I hear mothers being satisfied with way too little
in the sense of, ``He's buying Pampers, and I know that that's
all he can do,'' when, if there were even modest support
payments it could lay the basis for a regular child support
payment as the parents' income goes up. Note this also is the
argument for another provision in Chairman Johnson's bill on
reviewing adjustments--that if you can get started, you then
can have secure, regular payments that increase as income
increases.
Mr. Cardin. So, again, just trying to summarize what you
are saying, if there were child support going directly to the
family on TANF assistance, it is more likely that the dollar
amount would be more realistic? Is that what you are saying?
Ms. Golden. A more regular payment process would get those
dollars to the people.
Mr. Cardin. Because today many cases the custodial parent
is taking lower expectation because the person is not receiving
the funds.
Ms. Golden. That is right.
Mr. Cardin. Thank you, Madam Chair.
Chairman Johnson of Connecticut. There is a little problem
with your last exchange. In talking with fathers and fatherhood
groups, it was very clear that they want to provide things for
their children and they want their children to know.
Ms. Golden. Yes.
Chairman Johnson of Connecticut. And they need to know that
the parent is getting the check, too.
Ms. Golden. I agree.
Chairman Johnson of Connecticut. They also need to have a
little disposable income so, in addition, they can buy Pampers
or something.
Ms. Golden. Yes. I agree with that.
Mr. Cardin. I didn't mean to imply--my concern is, and I
think what Secretary Golden was referring to, is that you get a
circumstance where the money is not going directly to the
family. The noncustodial parent and the custodial parent are
going to be less likely to develop a realistic level to make a
regular payment.
Chairman Johnson of Connecticut. I appreciate that. I am
concerned that sometimes support orders so strap particularly
low-income fathers that really the transaction between that
low-income father and the mother, while the support might be
his check, isn't present. I think we need to really think this
through. How can we get not only the support directly to the
mother, but the supporting noncustodial parent to be a part of
that moment, because what we are trying to build here are human
relations, not monetary relations. Monetary relations are
important, but in the end what is going to support this kid is
love.
So I think we need to begin thinking about what are the
transaction circumstances that we could encourage so that that
money not only flowed directly but flowed through the father
being present.
Ms. Golden. I think we have, in what we have all
accomplished together and what we hope to accomplish, some
examples of how to move forward in that arena. We have tripled
paternity establishments since 1992.
Chairman Johnson of Connecticut. Right.
Ms. Golden. That is about fathers saying they want to be
part of their children's lives.
Chairman Johnson of Connecticut. Right.
Ms. Golden. I think that has huge potential.
Chairman Johnson of Connecticut. I think it is.
I want to give Mr. Jefferson a chance and I will come back
to this.
Mr. Jefferson.
Mr. Jefferson. Thank you, Madam Chair.
I don't have a question. I just want to make a brief
observation.
The welfare system operated for many years on the
assumption it was better for families to have a parent at home
with young children and all the rest of it, and States
determining eligibility and the Federal entitlement system. We
have gone from that to one where flexibility is a hallmark of
our discussion, and different States have room to shape how
they are to determine aid to these families.
This is still an experimental effort. No one knows how well
over time it is going to do. I have seen some signs of progress
and some signs of stress in this whole system.
I think what is important is, if we can find things that
are worthy of replication, that we don't, in the name of
flexibility, disregard them, so that we can make things work
for families right now, rather than 10 years from now when the
child is already grown.
I think that one of these things that has been talked about
is this whole issue of connecting fathers with families with
children, and the issue of passing through and distribution.
You know, a lot of folks right now who are going back on
welfare have gone to work, and they are largely unskilled and
still trying to figure this whole thing out.
In the midst of all this turbulence, there is a need to try
to find something that can be stable, and I think that the idea
of connecting, as both Mr. Cardin and Ms. Johnson talk about,
are important, but I also think, if we are of a mind that it is
important to have passthrough and distribution provisions,
particularly the passthrough one we are talking about now, I
would hope that we would not abandon it in the name of
flexibility when we can, on our end of it, adjust these issues
that may be a problem among States, and how States treat
eligibility issues from our end of it a little bit better.
I just say that I hope we will keep an open mind on these
questions, rather than to give in to the notion that what is
the ultimate goal here is State flexibility, when the ultimate
goal really ought to be how do we find things that work for
families, and, when we do, how do we fix on those things to
make sure that it is happening for every child across the
country and every State, no matter where the child lives.
Ms. Golden. A couple of brief comments.
The first is that I completely agree with your description
of needing peace and stability as things are changing for a
family. The very first parent I talked to after welfare reform
who had begun working in the State of New Hampshire talked to
me about having a stable child support check. This helped her
make all those changes, so I think you are right.
In terms of the flexibility, I would say for us it is very
important for families to move forward on families first
distribution policies. We believe that passthrough and
disregard are also very important for families. We are prepared
to work with the Committee on all of the technical issues in
whatever way we can be helpful, in the hope that those
provisions will be included as you move forward.
Chairman Johnson of Connecticut. We only have four or 5
minutes, so I won't be able to go into much detail, but I do
want to put a couple of things on the table.
Ms. Golden. OK.
Chairman Johnson of Connecticut. On your comments on
private agencies, this is in a totally unregulated sector of
economic activity, and that concerns me, in and of itself.
Ms. Golden. Yes.
Chairman Johnson of Connecticut. Now, it is an area of
State law, and they will have to come to their senses. Maybe
they will and maybe they won't. But I do regret--I say this
with all due respect, Madam Secretary. You certainly are not a
defeatist person, but I find your comments on that issue sort
of defeatist. I mean, why shouldn't we begin to look at how do
we protect privacy, how do we deal with the data issues, and
yet how do we partner, because no matter how much better we are
doing--and we are doing a lot better--I think what the
statistics show us is that we are doing a lot better with cases
that are coming into the system, and if you have any way to get
the data about this I would be interested. But my belief is--
and I can't remember whether it comes from data or whether it
doesn't--that we are doing better with cases coming in, but we
still don't have the sufficient resources to deal with the
volume of current cases, and that we have a terrible problem
with backlog, some of which is real and some of which is
apparent.
I would like you to think about it.
Ms. Golden. Sure.
Chairman Johnson of Connecticut. If you think the language
in the bill doesn't require the States to govern the right
issues in developing these relationships, it doesn't restrict
them from addressing other issues, like percentage, and other
things.
I think today's article in the ``Washington Post''
demonstrates the need to get control of this sector and protect
women against what are basically shyster operations.
Ms. Golden. Right.
Chairman Johnson of Connecticut. The very fact that they
are getting paid for cases that they didn't even collect on--
and we have had this in some other areas of Social Security
law. I think this is a case to support why we ought to be
taking up my option.
Now, that much said, there is one other issue that has
really come to my attention since the first time we passed our
fatherhood bill. In talking to people who run the homeless
shelter in my own hometown of New Britain, and also to people
who are really in the know about Hartford, they say there are
hundreds of fathers that cannot work legally because their
arrearages are so great, and that the longer we delay in having
some system--we let teachers who will work in cities earn
credit toward their student loan. We let physicians who have
loads of debt, if they work in certain areas, relieve that
debt.
We have got to come to terms with the fact that we have a
lot of men out there who care about their families, they are
unskilled, they will never earn much. I talked to a guy earning
$6.45 an hour. He was separated from his wife for a couple of
years during her third pregnancy. They are now back together.
He is supporting the family. He is still paying off arrearages.
You often have no way to look back, and even the IRS has a
way to look back and say what is owed in child support here, we
must say to this father: ``If you adopt this payment schedule,
we will forgive some on all of your arrearages.''
So we will not bring non-supporting fathers into the system
and into the employment system that offers them their only hope
of a career, a higher salary, and health benefits if we aren't
honest about the extraordinary burden, particularly for people
who got into this when they were in high school, into this
arrearage problem.
If you can develop any data--see, nobody knows about this.
They say this is all underground, and I think it is, because
they won't work in the upper ground.
I ask you to help me think about that data--
Ms. Golden. Sure.
Chairman Johnson of Connecticut.--see what we can do, and
maybe this time around in the fatherhood bill we can do better.
I must excuse myself. We will reconvene at 10:30. Thanks
for coming.
Ms. Golden. Thank you.
[Recess.]
Chairman Johnson of Connecticut. So much for my best
estimates. Sorry to keep you all waiting.
Now we will turn immediately to the first panel, and I
think we will just start right in. Mr. Primus from the Center
on Budget and Policy Priorities.
STATEMENT OF WENDELL PRIMUS, DIRECTOR OF INCOME SECURITY,
CENTER ON BUDGET AND POLICY PRIORITIES
Mr. Primus. Madam Chairman and Members of the Subcommittee,
I thank you for the opportunity to testify today on both H.R.
4469 and H.R. 3824. The center supports the basic goals of both
of these bills. We believe that the complex rules for
distributing child support to families that are current or
former recipients of TANF needs to be simplified, and that
these recipients should benefit more from child support paid on
their behalf. These two bills represent a major step toward
meeting these goals. We strongly support the changes H.R. 4469
makes in child support assignment and distribution rules.
Under the proposed legislation, the State could not claim
rights to arrearages accrued before or after the family
received welfare assistance. Limiting the amount of support
that the States may claim means that, once families leave cash
assistance, children in custodial families would benefit from
more of the child support that is collected on their behalf.
For those families that have left welfare, this bill emphasizes
a true family first policy on arrearage payments by eliminating
the Federal tax intercept exception for those custodial
families who have left welfare.
The proposal requires States to distribute to the custodial
family all arrears that accrued before and after a family went
on welfare before repaying arrearages owed to the State for
periods while the family was receiving welfare.
In the State of Maryland, one-third of the total
collections in the State are arrearage collections, and
nationally, for former welfare families, two-thirds of the
arrearage collections come from the Federal tax intercept. But
I would urge the Subcommittee to go further and add to H.R.
4469 some of the provisions of H.R. 3824. For example,
mandating 100 percent passthrough policy, as in the Cardin
billion, would eliminate many of the administrative problems
that are part of the current system and may also encourage some
of the fathers to pay child support more regularly.
A family first distribution should also apply to all
arrearage collections, regardless of the family's TANF status.
Why should a family that is currently receiving welfare and is
owed an arrearage from the custodial parent while that family
was not on welfare be penalized just because when the IRS
intercept was made the family was back on welfare? The very
fact that the family was on welfare probably means need is
greater.
But, most importantly, include in H.R. 4469 the provision
in H.R. 3824 which would encourage, not mandate, States to
disregard more child support as income in determining TANF
benefits.
Currently, in States without a disregard, when noncustodial
parents pay child support to children in a family receiving
cash welfare assistance, they face 100 percent effective tax
rate.
The majority on this Committee I know prides itself on
reducing tax rates. Earlier this year the Committee and the
Congress passed a bill reducing the perceived tax rate on 65-to
69-year-olds who are earning money and collecting or wanting to
collect Social Security.
In your question to Olivia, you mentioned the inequity of
two mothers on welfare got differing amounts of income. Take a
State that paid a $400 grant. One mother gets a $300 child
support from a former partner, one mother gets zero. I don't
think they would blame welfare for the fact that they would end
up with differing amounts of income. I think the fact that
these two different situations--one mother getting 300, the
other not--end up with the same $400 grant is what is
inequitable.
The other argument that has been levied is we shouldn't
give any more money to mothers on welfare from child support.
There are two answers to that. One is the welfare levels have
been cut in half since the early seventies, but, most
importantly, Madam Chairman, is that this does not change one
iota the work participation requirements, the ability for the
States to sanction mothers who don't participate in work.
In short, if we really believe that these dads should pay,
we should not put 100 percent tax on that activity which every
one of us supports.
I have listened carefully to your comments about the
private access, and I guess what I would say, in summary, is I
think the provisions in your bill have put the cart before the
horse. I am concerned that maybe we have given some of these
firms too much access to data already. I think what ought to be
done, as your bill partially does, is have HHS study it, make
some recommendations, and then require the States to regulate
this industry first, perhaps leaving the details to the State,
maybe setting up a minimum, but I think that has to happen
first, and then decide whether some of these firms should be
given access to more enforcement tools.
I worry that, if we don't do it in this manner, giving
private entities access to additional information could bring
on a privacy backlash that would undermine support for all of
the data that we currently use to enforcement child support
payments.
I am also worried about the competition that we set up
between the private firms and the State-funded agencies. I am
worried that we will not fully fund or State legislators will
find an excuse to not fully fund their State agencies if there
is a lot of competition from these private firms.
Turning for a moment to State financing--
Chairman Johnson of Connecticut. If I may, you must wrap
up, please. We have so many people to hear.
Mr. Primus. I am sorry. I will just be very quick.
I think there is an inadvertent mistake in your bill that
would allow States to supplant more than they currently have.
Chairman Johnson of Connecticut. To do what?
Mr. Primus. To supplant.
Chairman Johnson of Connecticut. OK.
Mr. Primus. Finally, I understand your concern about
holding the States harmless, but I don't think that provision
should continue forever. This is a Federal/State partnership,
and I think you should come to that. The fact that the Federal
Government would pay the entire cost of these distribution
changes should not be something that is grandfathered forever.
And my final concern is about how you close the financing
gap remaining in this bill. I would argue you should move this
bill forward and worry less about closing that financing gap
completely.
Thank you.
Chairman Johnson of Connecticut. Thank you.
[The prepared statement follows:]
Statement of Wendell Primus, Director of Income Security, Center on
Budget and Policy Priorities
Madame Chairman and Members of the Subcommittee on Human
Resources:
Thank you for the opportunity to testify today on child
support legislation, specifically H.R. 4469, ``Child Support
Distribution Act of 2000'' and H.R. 3824, ``Child Support for
Children Act.'' My name is Wendell Primus and I am Director of
Income Security at the Center on Budget and Policy Priorities.
The Center is a nonpartisan, nonprofit policy organization that
conducts research and analysis on a wide range of issues
affecting low-and moderate-income families. We are primarily
funded by foundations and receive no federal funding.
Overview
The Center supports the basic goals of both of these bills.
We believe that the complex rules for distributing child
support to families that are current or former recipients of
TANF need to be simplified. We also believe that children in
families that are current or former TANF recipients should
benefit more from child support paid on their behalf. H.R. 3824
and H.R. 4469 represent a major step toward accomplishing these
goals. Most of our comments relate to H.R. 4469.
The assignment period during which states may
claim a share of child support would be limited to the period
in which a custodial family is receiving TANF assistance.
Under H.R. 4469, states would continue to have the
option to distribute all current child support to families on
TANF, although the proposal offers no further incentives to
pass through and disregard child support in calculating the
welfare benefit level of custodial families.
For those families that have left welfare, the
proposal emphasizes a true ``family first'' policy on arrearage
payments, by eliminating the federal tax intercept exception
for those custodial families who have left welfare.
H.R. 4469 is a positive step in moving the child support
enforcement system away from its historical cost-recovery
mission and toward a program that benefits all custodial
families and children.
We also support the basic goals of the Fatherhood Program
contained in H.R. 4469. Title V of this bill contains several
provisions that would increase employment services to low-
income custodial and noncustodial parents. In addition, funds
are provided on a competitive basis to encourage child support,
TANF, and workforce development organizations to work together
with community-based organizations in the delivery of a variety
of services to noncustodial parents to help them increase their
employment rates, become more involved in the lives of their
children, and meet their parental responsibilities.
We commend you for addressing the issues of fatherhood as
well as for proposing substantial improvements in child support
assignment and distribution, and for sending the message about
the importance of non-custodial parents (primarily fathers)
assuming financial, child-rearing and emotional responsibility
for their children.
Much work remains to be done to improve the child support
enforcement system for low-income families. Both bills make
substantial progress in ensuring that once custodial families
leave cash assistance, more collected child support will reach
them instead of reimbursing federal and state governments. The
policies reflected in this legislation would make the goals of
the child support enforcement system more consistent with the
welfare reform goal of promoting financial self-sufficiency. We
encourage the Subcommittee take up provisions in H.R. 3824 to
provide additional incentives to states to distribute all
current support directly to families that are on public
assistance and to disregard a substantial portion of those
support payments in calculating a family's monthly cash
assistance benefit.
We do, however, have serious reservations about two areas
of H.R. 4469. We are strongly opposed to the provisions in
Title III that extend access to enforcement tools and to
additional personal information to private child support
entities and public non-IV-D agencies. Private child support
enforcement entities currently have access to some private
information through the Federal Parent Locator Service, but
there are not adequate protections guarding private entities'
use of that information. Courts have ruled that the federal
Fair Debt Collection Practices Act does not extend to private
child support collection companies and there is growing
anecdotal evidence that several of these private entities are
taking unfair advantage of both custodial and noncustodial
parents.
Some privacy advocates believe that personal information is
too easily accessible to private child support entities.
Granting these entities access to additional sensitive
information could lead to invasion of privacy and misuse of
information and the further fragmenting of the child support
enforcement system. The Center strongly encourages the
subcommittee to bring private child support entities under
regulatory authority and to require HHS to issue a report on
the amount of access private and public non-IV-D entities
currently have before considering the extension of additional
data and enforcement tools.
In addition, while we support the intent of the hold
harmless provision in Title I of H.R. 4469, which will allow
states to use their federal TANF grant or use MOE funds to help
finance changes in the distribution rules, we are concerned
that the way the provision is currently drafted allows states
to supplant TANF dollars.
Finally, we have concerns about how H.R. 4469 will
ultimately be financed. Currently, the bill is not fully
financed and we have heard several possibilities for how this
financing gap will be closed. Even though many aspects of this
bill are positive, financing it by cutting other programs
benefiting low-income people could jeopardize the support of
ourselves and others for this legislation. For example, we
would oppose cuts in the TANF supplemental grants or in the
EITC for childless workers as potential offsets for this bill.
In general, we find it problematic that at a time when the
budget surplus is substantial, Congress is willing to pass
large tax cut bills that primarily benefit more affluent
individuals without any offsets, while proposals such as this
one that could significantly help low-income families become
economically self-sufficient are subject to an offset
requirement. This seems unbalanced and inequitable.
Assignment and Distribution of Child Support Provisions in H.R. 4469
and H.R. 3824
The Center strongly supports the intentions of Title I of
H.R. 4469, which would simplify the child support assignment
and distribution rules for families receiving Temporary
Assistance for Needy Families (TANF). As both the child support
enforcement system and cash welfare programs have evolved over
the last 25 years, the rules determining assignment of rights
and distribution of support have become highly complex. This
section focuses primarily on H.R. 4469, which would (1)
substantially improve assignment provisions, primarily by
further simplifying the ``on/off'' rule, and (2) substantially
improve distribution rules by ensuring that once families leave
cash assistance, they benefit first from all child support
collected on their behalf.
Assignment
``Assignment'' rules determine who has a legal claim on
child support collections. When a custodial family applies for
welfare, it must assign its legal claim to child support
collections to the state. Under AFDC, families were required to
assign to the state all rights to child support, including
child support debt that accrued before a family started
receiving welfare assistance. Under welfare reform, the child
support assignment rules were amended, and assignment was
determined by an ``on/off rule,'' whereby support payments are
assigned to the state or the family, depending on whether the
family is on or off welfare. These assignment rules were phased
in gradually, and should be fully in effect by October 1, 2000.
However, several major and troubling exceptions to the on/off
rule remain. The assignment provisions in H.R. 4469 are a good
first step in addressing these concerns by simplifying the
``on/off'' rule and limiting assignment to periods of time when
the family is actually receiving cash welfare assistance.
The first exception to the on/off rule under current law is
that states keep arrears that were owed before the family
received assistance if they are collected after the family
starts receiving assistance.\1\ This provision under current
law works against those custodial parents who try to survive
financially without child support payments, but do eventually
turn to cash welfare assistance as a last resort. The current
system punishes these families because they can lose all of the
support owed to them if it is collected after they start
receiving cash welfare assistance. By contrast, families that
start receiving cash assistance immediately after the
noncustodial parent fails to pay child support, and that leave
cash assistance once child support payments are made again,
have fewer arrearages assigned to the state.
---------------------------------------------------------------------------
\1\ See OCSE Action Transmittal 97-17, Case Scenario 5. For
example, a family fails to receive child support regularly; by October,
2000, $500 in child support arrears are owed to the family. The family
starts receiving cash welfare assistance in November, 2000. The family
must temporarily assign the rights to the $500 in arrears to the state
and permanently assign any rights to child support owed while the
family is receiving cash assistance. The custodial family typically
regains rights to the temporarily assigned arrears after leaving
welfare. However, if child support is not fully paid while the
custodial family is receiving cash assistance and the noncustodial
parent owes child support arrears to both the family and the state,
arrearage collections can reduce the amount of the $500 in temporarily
assigned arrearages, which means that once the custodial family leaves
cash welfare assistance, the custodial parent regains a claim to only a
portion of the total arrearages that accrued before the family started
receiving cash assistance.
---------------------------------------------------------------------------
The second exception under current law concerns arrears
accrued during a period that a family was not receiving
welfare, but that were assigned to the state before October 1,
1997 as a condition of the family's subsequent receipt of cash
welfare assistance. These arrearages continue to be permanently
assigned to the state.
H.R. 4469 would address these two problems by limiting the
period of assignment to the state to that time when the family
is receiving TANF assistance. In other words, the state could
not claim rights to arrearages accrued before or after the
family received welfare assistance. States would retain
assignment rights to an amount of support equal to the lesser
of 1) the number of months the family is on assistance times
the monthly amount of current child support due to the
custodial family; or 2) the total amount of cash welfare
assistance provided to the family. Limiting the amount of
support that states may claim means that once families leave
cash assistance, children in custodial families would benefit
from more of the child support that is collected on their
behalf.
Distribution
The Child Support Distribution Act of 2000 also makes
changes to the rules governing the distribution of child
support for families that are former cash welfare recipients.
The proposal make significant improvements to distribution
rules for families that have left welfare, allowing them to
benefit more from child support that is collected on their
behalf. The proposal requires states to distribute to the
custodial family all arrears that accrued before and after a
family went on welfare before repaying arrearages owed to the
state for periods while the family was receiving welfare. Under
current law, including arrearages collected from federal tax
refund intercepts are applied first to the debt owed to
custodial families and then to the debt owed to the state and
federal governments. However, there was one major exception to
that rule. Any collections from intercepting an noncustodial
parent's federal tax refund are applied towards child support
arrears owed to the state before they are applied to child
support arrears owed to the children in the custodial family.
About one-third of all arrears collections occur through the
federal tax refund intercept, but two-thirds of arrears
collections for families on welfare are collected through the
federal tax refund intercept.\2\ Ensuring that this money is
distributed according to the family first rules would improve
the well being of custodial families and simplify the
distribution rules.
---------------------------------------------------------------------------
\2\ OCSE Annual Report and OCSE press release, January 27, 2000.
---------------------------------------------------------------------------
Other Changes in Titles I and II of H.R. 4469
Limit the Recovery of Medicaid Birthing Costs
We strongly support the provision that prevents states from
recovering Medicaid birthing costs from noncustodial parents.
Requiring noncustodial fathers to pay the Medicaid costs of
birth discourages fathers from establishing paternity. It also
can dissuade pregnant women from seeking important prenatal
medical care.
Review and Adjustment of Child Support Orders
We are pleased that H.R. 4469 requires that TANF agency to
contact the IV-D agency when a custodial family leaves welfare
and provide information regarding the change in welfare status.
We support the provision requiring the child support agency to
conduct a review of child support obligations when a family is
about to leave TANF. This review process is important to both
custodial and noncustodial parents. A review of child support
orders at this time helps to ensure that child support orders
reflect NCPs' current income, and to prevent the build-up of
large arrearages. A review of the support order at this time
would be especially helpful to the custodial family if an
upward modification is appropriate. In addition, requiring
communication between the welfare and child support agencies
may help avoid delays of three to six months in child support
receipt that occur when families leave cash assistance. These
delays occur when the child support office is unaware of the
change in status, and continues to retain support checks for
several months. This delay is especially problematic for
families making the transition from welfare to work, a time
when such families are financially vulnerable. This provision
should help ensure that families leaving welfare start
receiving child support sooner once they leave cash assistance.
State Financing Options
H.R. 4469 authorizes states to use TANF funds or MOE credit
to finance changes in assignment and distribution. The Center
believes that the state financing provision allows states to
supplant TANF dollars to finance changes in the distribution
rules.
We support the intent of the provision, which is to hold
states harmless from additional costs associated with
distributing the state's portion of child support collected to
custodial families. Under this proposal, states may use their
federal TANF grant or use TANF MOE funds for the state share of
the amount of support distributed to former recipients.
However, as a result of this proposal, the amount of additional
child support distributed to the custodial family also counts
as a state child support expenditure and could be used to draw
additional federal child support funds. States would receive
credit as a TANF expenditure for the amount of support
distributed (the portion that formerly would have belonged to
the state) and would count this pass-through as a child support
expenditure, thereby drawing down federal matching dollars for
child support at the 66 percent FMAP rate. In effect, states
would be allowed to use federal dollars to draw down other
federal dollars. Allowing the funds to be used in this manner
will result in a significant amount of supplantation of TANF
dollars--an undesirable result.
The Center also believes that states should not receive
this credit indefinitely. After all, the bill is mandating that
custodial families be given what they are owed when child
support is collected from the noncustodial parent. In
principle, states should not continue to be held harmless for
years to come from changes made to distribution rules. These
changes will cost the federal government, and since the child
support enforcement program is a federal/state partnership,
states should ultimately bear some of the cost. The additional
TANF credit for full distribution should be applicable until
2004 to give the states an incentive to implement these changes
in distribution rules as soon as possible.
Further Suggestions for Child Support Changes
In this section, we suggest several additional changes
regarding child support assignment and distribution that would
solidify the role of the child support enforcement agency as an
income support program for low-income children in families,
rather than a system that serves to recover costs associated
with cash welfare payments. A few of our suggestions are
reflected in H.R. 3824.
Mandate a full distribution or a 100 percent pass-
through policy.
H.R. 4469 continues the practice under current law of
allowing states the option to fully pass through child support
to families currently receiving welfare. We believe that a
mandatory full distribution policy, as reflected in H.R. 3824,
would further simplify administration and would benefit both
custodial families and noncustodial parents. A full
distribution policy may also encourage more fathers to pay
child support more regularly because the custodial parent would
know when the NCP (noncustodial parent) paid child support and
how much he paid. We urge the subcommittee to consider
legislation that moves closer to full distribution by
eliminating entirely the on/off rule and allowing all child
support payments to be distributed to the family, regardless of
its TANF status. TANF disregards would remain a state option.
To work properly, the current system requires constant,
immediate, and substantial flows of information in both
directions between the TANF, food stamp, and child support
offices. To determine benefit levels accurately, the TANF and
food stamp offices must know whether the custodial family has
cooperated with the child support enforcement agency (in terms
of establishing paternity and assigning child support rights to
the state), as well as the amount of child support that has
been collected. Substantial anecdotal information and reports
from state non-profit organizations suggest that this system is
not working well because there is a significant delay before
the child support office becomes aware of changes to the
custodial family's TANF status. The result is that families
that leave TANF frequently do not receive the current child
support collections to which they are entitled until 3 to 6
months later.
Under a full distribution policy, there would be no
assignment rights to the state. Communication between child
support and TANF would flow in one direction; the child support
office would keep the TANF office informed of the amount of
child support paid by the noncustodial parent. No information
would have to flow from TANF back to the child support office.
Alleviating the administrative hassles so common under current
law also could potentially result in significant government
savings: when asked to estimate the proportion of
administrative resources that State IV-D agencies expend on
distribution issues (excluding systems development costs), the
answers of four former IV-D directors clustered around 6 to 8
percent, or in the range of $250 million per year.\3\
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\3\ Letter from Bob Williams to Ron Haskins, November 1, 1999.
---------------------------------------------------------------------------
If states are unwilling to forego assignment and to
distribute all child support to families regardless of TANF
status at this time, the next best option is to limit the state
and federal government's assignment rights to those periods of
time when the custodial family is actually receiving
assistance. As noted earlier, the Johnson bill makes
significant progress here.
``Family First'' distribution should apply to all
arrearage collections, regardless of the family's TANF status.
This would mean, for example, that for a family currently
receiving welfare, any arrearage collections would be applied
to arrearages owed to the family before the collections are
applied towards arrearages owed to the state. Depending on the
custodial family's welfare status, current law treats families
in similar situations very differently. For example, assume two
cases where the family is owed $5,000 in arrearages and the
state is owed $2,000. A total of $1,500 in arrearages is
collected through the federal tax refund intercept. If the
family is currently on welfare, the money would go to the
state, but if the family is a former welfare recipient, it
would go to the family.
States could also be given the option of an even simpler
system that would allow the state to eliminate all arrearages
owed to it and to the federal government after a family leaves
cash assistance. While a family is a current welfare recipient,
states could require the family to assign its child support
rights to the state, and could would still have the option of
retaining any current support collected. However, if an
arrearage accrues during the period of time that the family
receives cash welfare assistance, once the family leaves cash
assistance, this debt would be owed only to the custodial
family rather than to the state. This step would dramatically
simplify the accounting that states must do by eliminating the
need to keep track of arrearages owed to the state after a
family has left welfare.
Encourage states to ``disregard'' more child
support as income in determining TANF benefit.
Currently, states determine whether or not to ``disregard''
child support income in determining the size of a family's
monthly cash assistance check. The 1996 federal welfare law
repealed a requirement that states pass-through and disregard
the first $50 per month in child support payments to custodial
parents and their children, rather than retaining the full
amount as reimbursement for cash assistance. To ensure that
custodial families are made better off financially when
noncustodial parents pay child support, states should be
encouraged to disregard child support payments when calculating
the TANF benefit.
In states where the $50 disregard was eliminated, many
noncustodial fathers (and custodial mothers) are discouraged
and frustrated by the fact that child support payments yield no
benefits for their children. In these states, child support
payments are counted dollar for dollar against TANF benefits,
effectively resulting in a 100 percent tax rate on those child
support payments. Under these circumstances, fathers have no
economic incentive to pay child support to their children
because no matter how much they pay, their children are not
better off economically. Of the $2.6 billion dollars of child
support collected on behalf of all children in custodial
families receiving TANF in 1998, only $152 million, or less
than 6 percent, was distributed to TANF families.\4\
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\4\ Office of Child Support Enforcement administrative data
reported in Department of Health and Human Services, Temporary
Assistance to Needy Families (TANF) Program: Second Annual Report to
Congress, August, 1999.
---------------------------------------------------------------------------
States should be encouraged to disregard more child support
that is passed through to the custodial family when calculating
TANF benefits. States have a number of options in structuring
this disregard. The disregard could equal all child support
paid; or equal a fixed amount of child support each month, or
equal a specific percentage of paid child support. For example,
with a 50 percent disregard, every dollar of child support
would reduce welfare payments by 50 cents (rather than by a
dollar), thus ensuring that custodial families are better off
when child support is paid.
We believe the best way to encourage, not mandate, states
to disregard child support payments when calculating TANF
benefits is to relieve states from their obligation to
reimburse the federal government for its share of disregarded
child support. We would suggest two modifications to current
law. The text of H.R. 3824 reflects our first suggestion.
First, we recommend that states no longer be required to
reimburse the federal government for child support that is
distributed to the custodial family. For example, under current
law, if a state collects $400 in current support for a
custodial family that is receiving welfare, and disregards
$200, the state would still be required to send the federal
share of the entire amount of child support collected (a
percentage equal to its Medicaid match rate) to the federal
government. In this case, we assume the match rate is 50
percent: the state would be required to send $200 (50 percent
of the $400 collected), to the federal government. We suggest
that in this situation, the state would only be required to
send a portion of the child support that it retains to the
federal government--in this example, this would equal $100, or
50 percent of the $200 that the state government retained after
distributing and disregarding $200 to the custodial family.
Our second suggestion for creating incentives for states to
disregard a substantial portion of child support collections
would apply to states that disregard at least 80 percent of the
aggregate amount of child support for current cash welfare
recipients. States that could show that they disregarded at
least 80 percent of the aggregate amount of child support
collected for current cash welfare recipients would not have to
send any child support payments to the federal government.
In general, mandating a full pass-through and creating
economic incentives for states to disregard a significant
portion of paid child support disregard would solidify the role
of child support in improving the living conditions of
children, especially children in low-income families. It would
rationalize the message of the child support office, and make
it consistent with that of the welfare program in promoting and
facilitating financial responsibility and self-sufficiency.
Fathers Count
On a previous occasion, I testified in support of the
Fathers Count bill, much of which has been incorporated into
Title V of H.R. 4469. We support the basic goals of the
``Fathers Count'' provision in the bill and believe this
legislation is a good first step in funding services for low-
income noncustodial parents to help them build the capacity to
support their children both financially and emotionally. We
believe the federal government should take more steps to
promote the development of effective strategies for providing
services to low-income noncustodial parents. These services
would include encouraging marriage where appropriate,
strengthening fragile families, and increasing the likelihood
that children will benefit from the financial support as well
as the personal involvement of two parents. Efforts to promote
financial support and personal involvement of noncustodial
parents in the lives of these children are likely to be
successful only if they reflect a comprehensive approach.
Given the lack of financing for broader efforts to promote
fatherhood or assist non-custodial parents in meeting their
parental responsibilities, this bill is helpful, although
considerably more remains to be done. There is much we need to
learn about how government policies should be structured and
coordinated to make them most effective in assisting non-
custodial parents to become self-sufficient and meet their
parental responsibilities. That is why Subtitle A is the right
place to begin. This title funds a series of fatherhood grants
to launch and evaluate pilot programs to improve noncustodial
parents' ability to pay child support, make child support
policies for those parents more responsive and more appropriate
for low-income families, improve the parenting skills of
noncustodial parents, and increase contact and interaction
between these fathers and their children.
We commend the changes to the fatherhood provisions in H.R.
4469 that address domestic violence. These changes provide an
exception to helping fathers arrange and maintain a consistent
visitation schedule with their children in situations where
these visits would be unsafe. The changes also give a funding
preference to entities that cooperate with community-based
domestic violence programs. The prevalence of domestic violence
is high in low-income communities, especially among women who
are current or former recipients of cash welfare assistance. As
policies are put in place to increase noncustodial fathers'
involvement with their children, care must be taken to ensure
the safety and well-being of children and their mothers.
Title V of this proposed legislation also should be
improved by limiting the charitable choice language. Faith-
based organizations should be involved in providing services to
low-income noncustodial parents. However, we have serious
concerns about discrimination in hiring that would be allowed
under this charitable choice provision.
Expanding Child Support Enforcement to Public Non-IV-D Agencies and to
Private Entities
The Center strongly opposes Title III of H.R. 4469, which
would allow states to provide additional information and
enforcement mechanisms to public non-IV-D agencies and to
private child support agencies for the purpose of collecting
child support. Private and Public non-IV-D child support
entities currently have access to some private information by
requesting ``locate only'' data through the Parent Locator
Service. Private child support entities are unregulated and
there is anecdotal evidence that many are engaged in
irresponsible practices that are harmful to consumers--both
custodial and noncustodial parents. Private collection agencies
may already have too much unrestricted access to private
information and ought to be subject to regulations on the use
of the data they currently have. We urge the Subcommittee to
study and to regulate the industry's current level of access
before allowing them additional data and enforcement tools.
Allowing private companies and non-IV-D public agencies access
to new data sources, including the National Directory of New
Hires, could jeopardize families' right to privacy and will
raise concerns about the ability of IV-D agencies to monitor
and regulate private contractors use of the data. Ultimately,
supporting the growth of private child support agencies will
further fragment the child support enforcement system and
potentially divert resources from state agencies.
Extending access to the additional information and
enforcement tools to non-IV-D entities, public or private,
raises serious concerns about privacy. The 1996 welfare reform
law gave child support enforcement agencies access to
additional personal information through the creation of the
National Directory of New Hires. The legislation drew a
carefully constructed line that defined what information IV-D
agencies could collect and access and how that information
could be used. With these new tools, the child support
enforcement system has been successful in significantly
increasing the amount of child support collected. If the data
available through these enforcement tools are made more widely
available, there is a very real danger of a ``privacy
backlash'' that would undermine support for using the data to
enforce child support payment. Advocates of privacy rights have
legitimate concerns about the importance of protecting personal
information. Although this proposal allows child support
entities to require private entities to follow privacy
guidelines set up by the state, we have concerns that state
agencies will be limited in their ability to enforce these
rules. If there is a perception that information in the New
Hire Database is not protected, there will be many who advocate
eliminating the Directory entirely.
Extending the information to outside entities also raises
concerns about the continued efficacy of the National Directory
of New Hires. Although legislation mandates that employers
provide information about new hires to the Directory, employers
comply with this system on an essentially voluntary basis.
There is no strong enforcement mechanism if employers do not
provide data to the New Hire Directory. If New Hire information
is distributed to non-IV-D agencies, and employers become wary
of how the information is used, the progress in child support
collections that the Directory of New Hires has made possible
in the past years in collecting data may be eroded.
Extending enforcement to private entities
There are actually two forms of privatization within the
child support enforcement world. One form of privatization
adopted by many state child support agencies involves an
outside contractor bidding to act as ``an agent of the state''
to carry out parts of the child support enforcement mission.
These contractors, such as Maximus and Lockheed-Martin, are
performing many functions that were once performed by state
child support enforcement agencies. States hold these ``agents
of the state'' accountable to the same rules guarding privacy
and access to information as state agencies themselves.
Subtitle B of Title III of this bill is not concerned with this
type of privatization.
Instead, the Title III option to extend to private child
support enforcement entities the information and tools of the
child support agencies applies to private companies working
outside the child support enforcement system. This provision
gives states the option to require state child support
enforcement agencies to provide any data relevant to seeking or
establishing child support obligations to private entities.
Currently, some custodial parents are willing to pay private
entities for the service of retrieving child support
obligations from noncompliant noncustodial parents. Under
current law, these private entities operate independently of
the child support enforcement system, with no obligation to
follow child support enforcement's regulations, and also
without access to the state Directory of New Hires that
contains sensitive information.
Custodial families that turn to private child support
entities pay a premium for their services. Private child
support entities retain between one-quarter to one-third of the
support they collect. Under this proposal, private entities
would be required to pay a fee to cover the child support
agency's costs associated with obtaining information about
noncustodial parents; however, these private entities would
nevertheless benefit substantially from the work performed by
public child support agencies in issuing wage withholding
orders or intercepting federal tax refunds. This amounts to a
diversion of federal and state resources to help generate
profit for private businesses.
In addition, many of these private child support
collections companies use problematic means to collect child
support. Numerous instances of these companies using harassment
and threats to collect support have been documented. Courts
have ruled that the federal Fair Debt Collection Practices Act
(FDCPA) does not extend to private child support companies, so
clients and debtors do not have the same consumer protections
that cover private collection agencies. Title III would grant
these unregulated private entities access to sensitive
information stored in state databases but would not require
them to follow state agency rules and regulations.
Furthermore, extending information and tools to non-IV-D
entities will undercut the efforts of state child support
enforcement agencies and could fragment the child support
enforcement mission. In the past several years, the child
support enforcement system has made great progress in building
a central state-based system that serves both welfare and non-
welfare families, with central state disbursement units, and a
National Directory of New Hires. A competition between a
private child support agency that can pick and choose which
delinquent fathers to pursue and a public child support agency
that must enforce all court-ordered support is an unfair
competition. If private child support companies out-perform
state agencies by ``creaming'' those debtors whose delinquent
payments are easiest to retrieve, the child support agency will
be left with a considerably more difficult caseload. In an
unfair competition, state agencies' performance may suffer.
Without a full understanding how reliant these private
child support collection entities are on the work of public
agencies, state legislatures may be encouraged to underfund the
publicly-funded child support agency on the rationale that the
services are available through the private sector. Because
private entities do not receive state funding, state
legislators may assume that it is more cost-efficient to allow
private agencies to perform child support enforcement
functions, and thus underfund public agencies. Underfunding
public child support agencies could fragment child support
enforcement so that middle and upper income custodial families
relied more heavily on private collection agencies, where they
paid fees as high as one-third of the amount collected, and
lower-income custodial families relied on the public IV-D
agency. A two-tiered system of child support would be
inefficient and would stigmatize low-income mothers who rely on
state-funded system.
Enforcement Tools
Title IV of H.R. 4469 expands the use of several child
support enforcement tools. Several Administration proposals
have been made to expand child support enforcement tools; this
proposal has selected the best of these proposals:
Lowering the amount of arrearages that must
accumulate before a passport denial is triggered;
Garnishing compensation paid to veterans for
service-connected disabilities to enforce child support
obligations; and
Expanding the use of the tax refund intercept
program to collect child support arrearages on behalf of
children who are not minors.
Lowering the level of arrearages that must have accumulated
before a passport can be denied from $5,000 of arrearages to
$2,500 seems reasonable. We believe it would be helpful to fund
a study that determines why noncustodial parents who apply for
a passport are not being caught earlier in the system. One
assumes that people who apply for passports and can afford
overseas travel are not low-income fathers, but rather middle-
and upper-class fathers with regular employment who should have
been forced to pay regular child support at an earlier date
through other enforcement mechanisms, such as automatic wage-
withholding.
Possible Financing of H.R. 4469
While H.R. 4469 contains commendable provisions on
simplifying assignment and distribution of child support and
expanding services to low-income fathers, the Center is very
concerned about how this bill may be financed. The bill has
several offsets, but they cover only a portion of the costs
associated with the bill. A financing gap still exists. We have
heard of several options for closing this gap, including
cutting the Earned Income Tax Credit (EITC) for childless
workers, and cuts to TANF supplemental grants. The Center
strongly opposes any attempt to finance this proposal using an
offset that cuts the Earned Income Tax Credit for childless
workers or cuts the TANF supplemental grants.
The EITC for childless workers is a tax credit for poor
workers between the ages of 25 and 64 who do not live with
minor children. Only two percent of EITC benefits goes to poor
working individuals and married couples not raising minor
children. Abolishing this small EITC would result in a tax
increase for some of the nation's poorest workers. Single
workers are the only group in the United States who begin to
owe federal income tax before their income reaches the poverty
line. The federal income tax code consequently taxes them
somewhat deeper into poverty. Abolishing the EITC for which
they qualify would make their tax burdens larger and push them
farther below the poverty line.
Moreover, the EITC for poor workers and couples who are not
raising minor children never exceeds 7.65 percent of their
wages, the amount withheld from their paychecks for the
employee share of payroll taxes. Thus, if this small EITC is
abolished, these workers will receive no offset to their
payroll tax burdens. Even for those workers too poor to owe any
federal income tax, abolition of this credit would result in a
tax increase; since none of their payroll taxes would be
offset, their net tax burden would rise.
Eliminating the EITC for poor workers not raising minor
children thus would result in an increase in the tax burdens of
more than three million very poor workers. If such a step were
taken, and some of the tax measures the House and Senate have
passed this year also were enacted, the result would be that
some of the nation's poorest workers would have their taxes
raised at the same time that some of the nation's wealthiest
individuals in the country received substantial tax cuts.
These poor workers already pay an unusually high percentage
of their small incomes in federal taxes. A Congressional Budget
Office analysis showed that between 1980 and 1993, the average
federal tax burden of the poorest fifth of non-elderly
households climbed 38 percent, dwarfing the increase in tax
burdens borne during this period by any other group of
households in any income category. CBO data also show that
today, even with the EITC, the poorest fifth of non-elderly
individuals who live alone is estimated to pay an average of
17.1 percent of income in federal taxes,\5\ a percentage that
far surpasses the percentage of income that poor elderly
individuals and poor families with children pay. In fact, this
percentage is nearly as large as the average tax burden that
the middle fifth of families with children bear. A single
worker with income equal to the poverty line, which is
projected to be $8,884 in 2000, currently pays $1,500 in
federal income and payroll taxes after the EITC is taken into
account.\6\
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\5\ CBO Memorandum, ``Estimates of Federal Tax Liabilities for
Individuals and Families by income Category and Family Type for 1995
and 1999,'' May 1998, pp. 28-9. In accordance with standard economic
analysis, the figures in the CBO analysis, as well as in the CBO data
in Table 2, include both the employer and the employee share of the
payroll tax.
\6\ This includes both the employee and the employer share of the
payroll tax. Most economists believe that both the employee and the
employer shares of the payroll tax are borne by workers in the form of
lower wages.
---------------------------------------------------------------------------
Finally, financing this proposed legislation by eliminating
the EITC for individuals who are not living with their children
would contradict the message and intent of this bill. On one
hand, this proposed legislation aims to help low-income NCPs by
improving the child support system, and providing parenting and
employment services. On the other hand, financing this bill by
cutting the childless worker credit would harm the same
population it intends to serve by eliminating a valuable work
support.
The Center also strongly opposes using cuts in the TANF
supplemental grants as an offset for this proposal. The
Administration has proposed these cuts as a potential offset,
but that does not mean these cuts are a wise idea. Madame
Chairman, you have successfully fought back previous attempts
to cut TANF. We commend you for those efforts and urge you to
not change your position with regard to cuts in the TANF block
grant. The supplemental TANF grants were enacted to provide
additional resources to poor states whose TANF block grants
were small relative to wealthier states with similar
populations. The original formula for calculating TANF block
grants was inadequate because the size of the TANF grant was
based on historical AFDC spending, and the poor states were
spending significantly fewer dollars per poor child under AFDC
than were wealthier states.
The TANF expenditure rates of the 17 states that received a
supplemental grant in 1999 \7\ are comparable to the
expenditure rates of all states: the median state nationwide
has 13 percent of its TANF money unspent (unobligated or
unliquidated). Seven of the 17 states that received a
supplemental grant have a lower percentage unspent. In
addition, the 1999 spending level of five of the states that
received a supplement (Alaska, New Mexico, North Carolina,
Texas, and Utah) exceeds their basic TANF allocation (not
including the supplement). These states would face fiscal
trouble if their supplemental grants were cut.
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\7\ The 17 states that received a supplemental TANF grant include:
Alabama, Alaska, Arizona, Arkansas, Colorado, Florida, Georgia, Idaho,
Louisiana, Mississippi, Montana, Nevada, New Mexico, North Carolina,
Tennessee, Texas, and Utah.
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Clearly no cuts should be made to the supplemental grants
of those states that have been spending down their TANF funds.
Nor should cuts be made to those states that have not yet spent
all of the TANF monies available to them. Cutting the
supplemental TANF block grants would put Congress at the top of
a troubling slippery slope in which the grants to other states
ultimately could be reduced as well.
In considering offsets for H.R. 4469, it should be
remembered that offsets were not required for the tax measures
being passed by Congress this session, some of which would
reduce the taxes of the nation's wealthiest individuals. It is
troubling that Congress would find that such measures need no
offset, while a much less costly measure to support low-income
fathers in meeting their duties to their families does require
an offset.
Conclusion
In sum, we:
Support changes in the assignment and distribution
rules and encourage the Subcommittee to simplify the current
rules even more by mandating a full pass-through of child
support to families on welfare, and encouraging states to
disregard child support payments in calculating custodial
families' TANF benefits;
Support the goals of Fathers Count, which will
encourage low-income noncustodial parents to provide financial
and emotional support to their children, and we commend the
improvements the Subcommittee made in adding domestic violence
language;
Support the expansion of child support enforcement
tools and encourage the funding of a study examining why some
noncustodial parents are not caught until they apply for a
passport;
Oppose allowing states to finance changes in the
distribution rules by supplanting TANF dollars;
Oppose extending enforcement tools to the public
IV-D agencies and private entities, which could jeopardize
privacy data, encourage states to under-fund state child
support agencies, and fragment the child support enforcement
system; and
Oppose using the EITC for childless workers or the
TANF supplemental grants as offsets for this proposal.
Because the H.R. 4469 advances the goals of better child
support enforcement and better opportunities for low-income
fathers, it would be a shame if the provisions of Title III or
the offsets that are chosen prevent the enactment of the rest
of the bill.
Chairman Johnson of Connecticut. Ms. McLoud of the National
Child Support Enforcement Association.
STATEMENT OF DIANNA DURHAM-MCLOUD, PRESIDENT, NATIONAL CHILD
SUPPORT ENFORCEMENT ASSOCIATION
Ms. Durham-McLoud. Good morning, Madam Chairman. Thank you.
I am Dianna Durham-McLoud, and I am testifying this morning on
behalf of the National Child Support Enforcement Association. I
am the former director of the Illinois IV-D program and NCS
current President.
NCS is an association representing over 55,000 child
support professionals from public agencies and private firms
nationwide. Our mission is to ensure that, through education,
training, and advocacy, that children receive the financial and
emotional support they need from both of their parents.
I thank you, Representative Johnson, for inviting me to
share our views on the Child Support Distribution Act of 2000,
and I want to commend you and your Committee for addressing the
complexity of the distribution rules.
NCS, too, has heard the frustrated voices of America's
parents as they move to try to understand these convoluted,
hard-to-explain, difficult-to-administrate provisions that have
even confounded some of our most sophisticated computer
programmers. This distribution simplification should bolster
public confidence in the program. When you cannot explain to an
intelligent constituent who is trying and motivated to
understand what is going on in the distribution because of the
pots or the killer bees or whatever the distribution scheme was
that was in place at the time, they really think you are simply
out to get them.
This act moves us significantly in the right direction in
order to assist people continue to take on more personal
responsibility.
Our recent experience with PRWORA shows that, when we give
appropriate support, people will take on the additional
responsibility that we are asking them to do. So we are also
saying that we should expand IV-D child support priority so
that we are enabling, as well as enforcing, for parents, and
not doing a one-size-fits-all approach. We want to have the
strict enforcement for the deadbeats, but, of course, we want
to have the enablement for the dead broke.
We think that this greater emphasis is in line with the
PRWORA spirit, if you will, but in the interest of time written
testimony has been submitted. Let me just hit a couple of high
points.
One, we believe that there is a need for a new financing
scheme for child support. My learned colleague to my immediate
right said that we need not worry greatly about that, and my
immediate thought was, ``Spoken like someone who has never sat
in the chair, someone who has never had to try to explain to a
State Appropriations Committee why the heck it is this program
that was originally presented as one that would make money for
the State, now here you are talking about you want a $40
million supplement in order to do this. What is up?''
And you say, ``Well, they've changed the rules in
Washington.'' ``Well, no one told us they were getting ready to
change the rules.'' ``Well, you know, sir, here's the law and
this is the mandate.''
I remember, with cold sweat running down my face, standing
on the floor of the Illinois House when we said, if we told
them what to do with their mandate, we wouldn't have the
problems we had in Medicaid now, so maybe we should start in
child support, since we didn't have the nerve to start with the
medical program.
Well, you know, when you are the person trying to get
through the legislation, that is a little bit different. All
right?
We would like for this Committee to seize the opportunity,
modeled on the U.S. Commission on Interstate, to, in fact, have
some U.S. Commission on Financing for the child support
program. Let us stop the patchwork quilt approach. Let us put
it together so that it really works.
You will see more details in the written testimony. We are
opposed to a mandate of a 3-year adjustment. We understand the
rationale; however, that did exist prior to PRWORA. We suggest
that that is not necessarily helpful.
In the interest of time, I will end my remarks by simply
saying that we did not comment to every issue raised in your
legislation. In your opening, Madam Chair, you said that you
had found an issue that brought together the mothers, the
fathers, the Feds, the State, public sector, private sector,
and everyone else on one issue. Ma'am, they all belong to NCS,
and so we represent that broad sense here today.
Thank you for the opportunity. I will be more than happy to
respond to any questions.
Chairman Johnson of Connecticut. Be prepared in the
questions, then, if you represent all those groups, to comment
on the privatization issue.
[The prepared statement follows:]
Statement of Dianna Durham-McLoud, President National Child Support
Enforcement Association
Madame Chair and Distinguished Members of the Subcommittee:
Good Morning. My name is Dianna Durham-McLoud, and I'm
testifying on behalf of the National Child Support Enforcement
Association (NCSEA). I'm a former director of the Illinois IV-D
agency, and the current President of NCSEA--an association
representing over 55,000 child support professionals, from
public agencies and private firms nationwide. Our mission is to
ensure, through education, training and advocacy, that children
receive financial and emotional support from both parents.
I thank you Representative Johnson for inviting me to share
our views on the Child Support Distribution Act of 2000. I want
to commend your efforts to simplify the complexity of the
distribution rules we have today. NCSEA has heard the same
frustrated voices as you have, upset that distribution is. . .
too convoluted to understanda. . . too convoluted to explaina.
. . too convoluted to administera. . . and even too convoluted
for some of our most sophisticated computer programmers!
The distribution simplification reforms in this legislation
should bolster public confidence in the child support program
as a reasonable and just public policy in harmony with the
civic values of our society. It should also ease the often-
strained predicament child support professionals face trying to
explain to parents such peculiar quirks as requiring the state
retain an IRS intercept, while if the same arrears had been
collected by any other means, it would go to the family.
Alignment with PRWORA Values
This bill represents a significant step forward in
synchronizing child support policy with PRWORA's new paradigm.
PRWORA told people on welfare they must take greater personal
responsibility to work towards self-reliance. But PRWORA also
helped them with a plethora of new supports. Our IV-D
priorities must also expand more towards enabling as well as
enforcing parents' responsibility to support their children.
Yes, that means strict enforcement against dead-beats. . . but
it also means helping dead-broke dads who genuinely want to
meet their obligations to cultivate their ability to do so.
Greater emphasis on personal responsibility also means we
must reduce our historic emphasis on welfare cost-recovery.
Increasing families' reliance on parentally-paid child support
in place of publicly-paid welfare support obviously promotes
personal responsibility. But how can we distribute more
parentally-paid support to needy families when many states must
retain those collections to fund the very operations that
collect the support in the first place? This cost-recovery
rationale is still deeply embedded in the financing system for
many states. Thus, we find ourselves fiscally restrained from
promoting the new philosophy of personal responsibility we all
want! So, what can be done?
Your bill, Madam Chair, is a helpful interim solution that
moves closer to NCSEA's general thinking about this issue over
the years:
``Allow States, at their option, to distribute all
child support collections, current and arrears, directly to
families.'' (NCSEA Board Resolution adopted 1/17/95)
It's true that your bill does permit states the option to
pass-through to families on TANF any part of the state share of
what would be assigned (i.e., current child support and the
arrears that accrued while on TANF). This changes the current
rules that require retaining all arrears accrued while on TANF.
But practically, as long as the federal share must be paid,
it's not realistic to expect that states will be able to afford
to do a 100% pass-through (i.e., distribute all child support
collections, current and arrears, directly to families),
because then states would have to pay the federal share out of
the state treasury. Further, that amount would not even qualify
for reimbursement using TANF Maintenance of Effort (MOE) credit
or TANF block grants funds, as your bill permits for the state
share that is distributed.
On the other hand, by no longer assigning pre-assistance
arrears to the state, this bill sends a strong message to TANF
families that the support they should have received before
going on welfare (which might have even prevented that
necessity), will henceforth remain rightfully theirs. So, while
the government has been encouraging these families to be more
reliant on their own resources, it is also now willing to
prioritize that self-sufficiency ahead of the historic emphasis
on welfare cost recovery. This message is similarly echoed by
removing the mandate to pay the federal share from collections
of pre-assistance arrears for families who've left TANF when
those arrears are collected via the federal income tax refund
intercept (but waiving them if collected by any other method).
We all know that policy was born to allay fears that retained
collections would dry up in the wake of the PRWORA revolution.
This new emphasis on promoting self-reliance is further
reflected by your proposal to pay pre-assistance arrears to
``families first'' once they leave TANF. This is obviously when
their struggle to develop self-reliance can be most daunting.
Finally, your bill's new option allowing states to
distribute arrears that accrued while on TANF to families who
have left TANF, represents a further step in emphasizing self-
reliance. When post-TANF families start receiving support
that's always been non-optionally retained as ``the state's
arrears,'' they will get the clear message that their
government believes in personal responsibility strongly enough
to sacrifice this money in order to facilitate families'
transition to self-reliance. However, you should also recognize
that by not also relinquishing the federal share, states will
be less likely use this approach.
To help finance these reforms that will deprive states of
what they formerly retained, your bill permits states to access
TANF block grant funds, or claim TANF Maintenance of Effort
(MOE) credit. We recognize your bill only permits this on
amounts distributed beyond the baseline of what states are (or
will be) doing, in order to prod expanded efforts. But
instituting such a baseline means states will no longer get MOE
credit on the existing extent they've opted (or will have opted
prior to enactment) to distribute to families. Indeed the 2005
enactment date will likely cause states to forestall any
expansion until after 2005 to avoid boosting their baseline.
While NSCEA has not yet formally adopted positions on
whether or how to allow states to use TANF block grants or TANF
MOE credit, we commend you for recognizing the necessity of
reforming the present child support financing system. NCSEA
completely shares this recognition that we desperately need to
forge a new blueprint for financing the child support program
in the 21st Century. During this present transitional period
however, we want to emphasize that ``NCSEA opposes any
reduction in federal, state and local funding to the child
support program, and urges continued partnership to provide
adequate program funding.'' (1/30/99 NCSEA Board Resolution).
We remain concerned about becoming too reliant on TANF sources
of funding, especially in light of the possible repercussions
on the IV-D program that could result from changes made in TANF
funding during PRWORA's upcoming reauthorization.
A New Financing Blueprint is Needed
The new blueprint for financing the child support program
must reflect our Post-PRWORA world. That's why I'd like to
renew our long-standing call, most recently reiterated in a
January 1999 NCSEA Board Resolution, that
``The federal government should create a formal workgroup
that involves all appropriate players. . . [to] identify the
appropriate method for ensuring an increased level of
investment in the program by federal, state, and local
governments in a way that. . . adheres to a set of principles
that properly relate funding approaches to program needs, goals
and performance. . .''
NCSEA believes such a group could devise proposals as
profoundly successful as the 1992 recommendations of the
Congressionally empanelled U.S. Commission on Interstate Child
Support--most of whose suggestions were eventually enshrined in
PRWORA. NCSEA recommends that Congress establish a similar
high-profile group, perhaps called the U.S. Commission on Child
Support Financing, which could explore ways to reinvent a new
balance between the evolving goals of the child support program
and its financing mechanism. This Commission should also
fashion a new federalism formula for equitably and affordably
sharing this responsibility between the federal, state and
local levels of government.
Madam Chair, Congress has asked IV-D agencies to take-on
more and more duties, and we have agreed because they help us
better achieve our mission. But you must also ensure we have
the financial ability to fulfill these added duties. Declining
TANF rolls and growing non-TANF cases invariably mean that our
IV-D financing dilemma will only worsen. Let's start working on
a solution now!
Cost-Benefit Research
In the meantime, the present financing dilemma for many
states will only be aggravated by the welcome but costly
distribution reforms in this bill. Those states that heavily
rely on retained collections to fund their IV-D operations will
now have to persuade their legislatures to substitute new
financing means. For many states, that means lobbying for IV-D
appropriations for the first time ever. These states will be
challenged to change the mind-set of their Governors and
legislatures from viewing child support as cost-recovery
income, as the program was originally framed, to instead see it
as a valuable investment that makes both economic and social
sense.
To help persuade state leaders to make this transition to a
post-recoupment era, we need research documenting the cost-
benefit value of public investments in child support. That's
why NCSEA is recommending that Congress seize the opportunity
with this bill to establish a juried research panel to
orchestrate quality studies on the fiscal and social impact of
child support.
OCSE recently released a research literature review (The
Lewin Group, April, 2000) that surveyed existing findings in
this area. But that comprehensive report concludes, ``The
existing cost avoidance literature as a whole is of limited use
to policymakers'' due to such snags as outdated studies
conducted before PRWORA, small samples, and neglect of the
impact on SSI, WIC, public housing, school lunch, CHIP and
other public assistance programs whose costs are also avoided
when child support is collected. As our Board concluded in the
aforementioned resolution:
``NCSEA believes that a cost avoidance analysis will show
that the payoff from investing financially in the child support
program is greatly underestimated.''
Definitive cost-benefit research would surely build
stronger public and political backing for increased investment
in the child support mission. I personally think the findings
will show there is no better investment we could make in
today's robust economy than to strengthen our child support
program so that all children can enjoy the full financial and
emotionally support from their parents that they're entitled
to.
Fathers Count. . . For Money. . . and Much More
Speaking of children's rights, I want to applaud you, Mrs.
Johnson and Mr. Cardin, for your commitment to fostering the
ties between fathers and their children. NCSEA continues to
support your ``Fathers Count Act'' whose provisions are
included in this legislation. Like you, NCSEA believes that
every child has a right to both parents. As you likely already
know, I'm deeply involved in the responsible fatherhood
movement that happily is gaining ground today. I can tell you
from personal and professional experience, that when kids see
that Dad cares enough to support them, and Dad sees that his
support matters immeasurably, then voluntary compliance
replaces more costly and confrontational enforcement methods.
Unfortunately, and unintentionally, our child support program
has too often ended up as a wedge between dead-broke dads and
their children. These fathers, who honor their responsibility
to support their children, deserve the kind of enabling
supports promised in the Fatherhood Programs contained in Title
V of this bill.
NCSEA supports responsible fatherhood initiatives because
our members are increasingly working with community based
organizations running these programs, and we're seeing results.
More than any other agency in state government, the child
support program is in a position to reach out to fathers
separated from their children. We believe everybody wins--
fathers, children, mother, and society in general--by helping
fathers fulfill their responsibility.
Perhaps just as important as the simplification rationale
is the fact that the expanded distribution to families
contained in this bill will help remove the disincentive
fathers face when they know their payments will end up retained
by the state rather than helping their children. Eliminating
the assignment of pre-assistance arrears, and paying them to
the family first once off TANF, will help reduce this
disincentive appreciably.
In order to determine more scientifically the impact of
these Fatherhood programs and incentives, NCSEA recommends a
strong research and evaluation component, to assess how
participation in fatherhood program affects such desired
outcomes as encouraging regular child support payments,
facilitating fathers' involvement with their children, and
boosting the employment, substance abuse rehabilitation, and
credit rating of these participants.
Don't Mandate 3-Year Review and Adjust
I'd like to turn now to one provision in this bill that
NCSEA opposes--the reinstatement of mandatory review and
adjustment of all TANF child support orders every three years.
There were very good reasons why this was made voluntary back
in 1996--a widespread consensus that it just was not efficient.
Think about it, if doing this is so lucrative, then why do
states need to be mandated to do what would be in their best
financial interest?
That's why NCSEA passed a resolution in 1995 declaring
that:
``All notice provisions related to the review and
adjustment of child support orders, with the exception of a
one-time notice of a right to review and adjustment, should be
eliminated from Federal law and regulations. Any further
noticing should be determined by the state in accordance with
their individual due process or other noticing requirements.''
This is still our position. NCSEA strongly recommends that
the scheduling of any review and adjustment remain at the
request of the parents involved, or the discretion of the IV-D
agency. These parties have a built-in incentive to ensure
orders are appropriately modified when circumstances change.
I understand that this change is being driven by the need
to find money to pay for the costs of expanding distribution to
families. But the budgetary assumptions behind this policy are
based on dated research conducted prior to PRWORA, in a much
different environment that we have today. Also, a recent review
(Lewin, ibid.) of these early 1990s studies pointed out another
flaw: ``support orders with greater potential for an upward
adjustment were selected for review and modification during
these demonstrations.'' Let IV-D agencies similarly select
which cases have the potential to cover the increased costs and
staffing necessary to do these reviews.
The above reasoning is just as germane regarding the bill's
mandating of a review and adjustment for every family who
leaves TANF. Again, sometimes this will be prudent, but not
always. Let's not foist any more unfunded mandates on states.
Let's just let the IV-D agencies decide.
This concludes my statement. Once again thank you Madame
Chair and distinguished Members of this Subcommittee for
allowing me the privilege to testify today.
Chairman Johnson of Connecticut. Ms. Smith?
STATEMENT OF MARILYN RAY SMITH, CHIEF LEGAL COUNSEL, CHILD
SUPPORT ENFORCEMENT DIVISION, MASSACHUSETTS DEPARTMENT OF
REVENUE, AND EXECUTIVE DIRECTOR, MASSACHUSETTS COMMISSION ON
RESPONSIBLE FATHERHOOD AND FAMILY SUPPORT
Ms. Smith. Good afternoon, Madam Chairman, Mr. Cardin,
Members of the Committee. Thank you for the opportunity to
testify on the Child Support Distribution Act of 2000.
My name is Marilyn Ray Smith. I am chief legal counsel for
the child support enforcement division at the Massachusetts
Department of Revenue.
The bill you are considering today has several provisions
of interest. I would like to comment on two provisions. The
first is simplifying the rules for distributing child support
collections, which I strongly support, and the second is
providing access to child support information to certain non-
IV-D public and private entities, which I strongly oppose.
I would like to first commend you, Madam Chairman, for your
leadership and the leadership of the Members of this
Subcommittee for your work on the distribution rules. The
current distribution rules are a failure, by almost any
measure. They are difficult for States to follow, for staff to
explain, for parents to understand, and for computers to
implement. Computers have to keep track of six buckets as
payments move, depending on the source of the payment and when
the person was on public assistance. Their rules are a hold-
over from the days when child support was seen as a cost
recovery program rather than a path to self-sufficiency.
The bill before you completes the changes started by
welfare reform and will initiate a full ``Families First''
policy, including giving families priority in the Federal tax
refund intercept. Families will assign child support rights
only for the period they are on the welfare, while arrears that
accrue before and after the family is on welfare will belong to
the family. If the family is on welfare, the State arrears get
paid first. If the family is not on welfare, the family arrears
get paid first. It is very simple. Instead of six buckets on
the computer, there are only two.
But, more importantly, it will give families an incentive
to go off and stay off welfare, because if they are not on
welfare, they get paid first. And in the long run, I believe
the child support program will collect more money because it
will no longer be wasting valuable time on consuming expensive
computer resources as we try to operate under the existing
incomprehensible rules.
Therefore, I applaud you and the Subcommittee for proposing
simple, clear rules that will help more families obtain self-
sufficiency, and I enthusiastically support this proposal.
Next I would like to address the proposal to give States
the option to release confidential employment and financial
information from the State new hire directory and the Federal
Parent Locator Service to certain non-IV-D public and private
entities that meet the State's criteria for participation.
Over the years, I have had the privilege on several
occasions to appear before this Committee seeking your support
for many positive enhancements to the Nation's child support
program, which this Committee has always graciously received
and often adopted. Therefore, I must regretfully proffer that
this proposal, in my view, is not in the best interest of the
child support program or the children that it serves.
Last October I provided extensive testimony on a similar
proposal, expressing concerns that the ultimate goal of private
collection agencies is to be able to deduct fees ranging from
30 to 40 percent from child support collections made by the IV-
D agency. I have similar concerns about this proposal, ranging
from disclosure of confidential information to entities that
realistically will be difficult to regulate, to the impact that
this proposal will have on employers, banks, and the State
child support enforcement agencies.
I have a number of practical questions about
implementation. How will the IV-D agency be able to monitor
these agencies to ensure that they comply with data security,
privacy protection, and due process requirements? In
Massachusetts, the child support program is housed in the
Department of Revenue, which is a repository not just for tax
and child support information, but also new hire, wage
reporting, and bank account information. We have more data in
our State agency probably than any other agency in the country,
and protecting this confidential data is a top priority for our
commissioner. We receive regular training and we are audited
periodically, both manually, as well as through a computer
program that keeps track of who gets access to what information
for what purpose.
How can confidentiality safeguards realistically be put in
place for the range of diverse entities contemplated in this
proposal? Private child support collection agencies are not
regulated by other Federal or State law, so the brunt of the
monitoring and auditing duties will fall on the IV-D child
support agency. Custodial and noncustodial parents alike may be
mistreated through harassing collection practices or unfair
contracts.
We had one recent case in Massachusetts, where the
collection agency threatened the noncustodial parent that it
would send a public notice with personal information to his
relatives, friends, and neighbors if he did not pay up.
Confused, since his case was already being enforced by the
Massachusetts child support program, he sent a cashier's check
for $9,930 made payable to the Commonwealth of Massachusetts to
the collection agency in California. The agency promptly cashed
the check by endorsing it, ``Child Support Services,'' closed
the bank account, disconnected phones and disappeared. The
mother did not get one cent.
This is not an isolated incident. Other abuses we have
encountered include altering court orders to change the payee
from the Massachusetts child support agency to their company,
and then sending the altered order to the employer with a
demand for payment; using Federal forms to gain unauthorized
access to interstate locate information; threatening employers,
custodial parents, and the Massachusetts child support agency
with a variety of lawsuits based on specious claims; and
misleading unsophisticated custodial parents into thinking they
are dealing with the State child support program by calling
themselves ``CSE of Massachusetts,'' ``Office of Child Support
Enforcement Services,'' or ``Child Support Collections of
Massachusetts.''
Our experience to date has not been positive. We are not
coming at this from a monopolistic attitude, but rather from a
worry of how can we monitor every letter, every form, every
contract to prevent these abuses.
What if one State permits easy access with few controls to
its information and accepts requests from these entities and
sends them to another State? Will other--
Chairman Johnson of Connecticut. I am sorry. I do have to
note that the red light is on, if you want to just wind up.
Ms. Smith. Just one more point.
Chairman Johnson of Connecticut. OK.
Ms. Smith. It is a very important point. What if one State
provides access and then it becomes a gateway to the Federal
parent locator service for all States? The State which doesn't
want to go this way is not able to protect the privacy of its
citizens because the private collection agency can make all the
requests to one state through the parent locator system. They
really only have to have contracts with one State to open up
the system for the entire country.
I think that broad access to confidential data will run the
risk of jeopardizing the entire program.
Chairman Johnson of Connecticut. Thank you. We will discuss
these issues at more length.
Ms. Smith. Thank you.
[The prepared statement follows:]
Statement of Marilyn Ray Smith, Chief Legal Counsel, Child Support
Enforcement Division, Massachusetts Department of Revenue, and
Executive Director, Massachusetts Commission on Responsible Fatherhood
and Family Support
Madam Chairman, distinguished Members of the Human
Resources Subcommittee: good morning, and thank you for the
opportunity to testify on the Child Support Distribution Act of
2000.
My name is Marilyn Ray Smith. I am Chief Legal Counsel for
the Child Support Enforcement Division of the Massachusetts
Department of Revenue. I also serve as Executive Director of
the Massachusetts Commission on Responsible Fatherhood and
Family Support, which is chaired by Governor Paul Cellucci. The
Commission is composed of a broad range of representatives from
state agencies and community-based organizations devoted to
improving the lives of Massachusetts children by promoting
responsible fatherhood initiatives. Before joining the
Department of Revenue in 1987, I practiced family law in
Boston, representing both custodial and noncustodial parents in
divorce, paternity, child support and custody and visitation
matters.
The bill that you are currently considering has several
proposals of interest. The two that I would like to address in
my testimony today are quite disparate: one would simplify the
rules for distributing child support collections by giving more
money to former welfare moms, while the other would give states
the option of turning over confidential data about income and
assets of noncustodial parents to a broad range of public and
private entities that met certain requirements. I
enthusiastically support the former, but I most respectfully
question the wisdom of the latter and suggest that it will
distract us in our mission to help children receive the child
support to which they are entitled.
Simplify the Distribution Rules: More Money for Former Welfare Moms
Madam Chairman, I would like to commend the leadership of
this Subcommittee for your work on the distribution provisions
of this bill. The current rules for distributing child support
collections are far too complex and undermine the effectiveness
of our nation's child support enforcement program. This bill
will simplify the rules for distributing collections, while
providing more money for former welfare families. It also
provides the flexibility that is needed to help states finance
these changes.
The rules for distributing child support collections have
been complex from the program's beginning in 1975. I thank you,
Madam Chairman, for your valiant efforts during the 1995
welfare reform debate to streamline the rules and to put
families first in distributing collections. Despite those
efforts, some states--which were dependent on welfare
reimbursement collections to fund the child support and welfare
programs--successfully pushed for a compromise. The resulting
system, enacted in 1996, was more confusing and unintelligible
than ever. Child support distribution rules make the Railroad
Retirement Act and the Medicaid regulations look like child's
play. No business in America could survive under the kinds of
complex rules that Congress imposes on the nation's child
support program.
Simpler rules would permit states to fully concentrate on
the larger mission of the child support program, such as
supporting former welfare mothers in making the transition off
public assistance and encouraging fathers to pay past-due
support as they see more of their money going to the family
instead of to the state. The proposal before you today includes
the kind of straightforward distribution rules that our
nation's child support program and the families we serve
desperately need. This proposal is remarkably similar to what
the House passed in 1995 as part of H.R. 4. By enacting these
provisions now, Congress can complete the unfinished business
of welfare reform.
The current distribution rules are a failure by almost any
measure. They are difficult for states to follow, for staff to
explain, for parents to understand, for computers to implement.
They create accounting nightmares for customers, litigation
from advocacy groups, headaches for computer programmers, audit
deficiencies for states. Instead of supporting the goals of
welfare reform, the current rules are particularly harsh for
families who leave public assistance or who delay seeking
benefits during hard times.
Two aspects of the current system--the assignment of ``pre-
assistance'' arrears and the treatment of federal tax intercept
collections--lead to the need for complicated distribution
rules. States are required to create six different categories,
or ``buckets,'' of child support arrears. The names alone are
mind-numbing: permanently assigned, temporarily assigned,
conditionally assigned, never assigned, unassigned during
assistance, and unassigned pre-assistance. Child support
payments migrate among these buckets, depending on whether the
family is receiving public assistance, when the arrears accrued
and the source of the collection. The result is a maze of
buckets, rules and exceptions, through which it becomes almost
impossible to track accurately who gets which money when.
These complex rules are holdovers from the days when child
support was seen solely as a cost recovery program for states
to recoup welfare costs. Today, with welfare reform and time-
limited benefits, we have moved to a new paradigm. Child
support has become an integral part of a strategy to promote
self-sufficiency because it gives families additional income to
reduce their need for welfare or avoid public assistance
altogether.
In this new context, the current requirement that families
must assign to the state all child support arrearages that
accrued before they received public assistance is outdated and
counterproductive. Families who suffer a hardship and return to
welfare for just a few months can end up losing thousands of
dollars in arrears that were due for the period that they
struggled to make it on their own. By doing without both child
support and welfare, these families lose the debt owed to them
so that the state can recoup more welfare money. In contrast,
families who turn to welfare right away assign fewer pre-
assistance arrears to the state and get a welfare grant in
return.
Under current law, the assignment rules will change to
become more family friendly on October 1, 2000. The similarly
unfair treatment of federal tax refund intercept collections,
however, will remain unchanged. Under the Personal
Responsibility and Work Opportunity Reconciliation Act
(PRWORA), collections from this highly lucrative enforcement
measure must always be applied first to arrears owed to the
state, even when arrearages are also owed to the former welfare
family. By paying these tax refund collections to government
first, we deprive former welfare families of the child support
they need to remain off public assistance. There is no policy
rationale to explain to a parent why the family gets payments
from a bank levy, insurance settlement lien or even a state tax
refund, while the state keeps the money from a federal tax
refund.
In marked contrast to the intricacies of the current rules,
the distribution rules proposed by this bill are simple and
equitable. Under the legislation before you, families will
assign their rights to support only for the period that they
receive assistance. Child support collections will follow the
status of the case: the family is paid first when the family is
off welfare; the state is paid first when the family receives
assistance. Former welfare families will receive all of their
arrears, no matter how collected, before the state is
reimbursed for welfare costs. The pre-welfare assignment and
the state's priority for federal tax intercept collections are
gone. The six buckets of arrears become two: assigned and
unassigned. These are rules that are easy to explain, easy to
follow and easy to program. More importantly, this policy sends
the message to low-income families that their government is
willing to put families' financial needs first, giving them an
incentive to attain self-sufficiency and the money they need to
remain that way.
Implementing these distribution changes will lead to lower
retained collections, which is a particular concern for states
that fund their child support programs through public
assistance collections. The financing options included in this
bill will give states the flexibility they need to make a
transition to the new distribution scheme. In the long run, the
child support program may well save money because we will no
longer be wasting valuable staff time and consuming expensive
computer resources as we try to operate under incomprehensible
rules.
Again, I applaud this Subcommittee's leadership in slicing
through the Gordian knot of the current distribution rules and
proposing clear rules that will help more families remain
independent of public assistance.
State Option to Expand Information and Remedies to Public and Private
Entities
The Subcommittee is currently considering a proposal that
would give states the option to release confidential employment
and financial information to certain public and private
entities that operate outside the child support enforcement
program mandated by Title IV, Part D, of the Social Security
Act (the IV-D program). The public non-IV-D child support
agencies would include any state or local agency (other than
the IV-D child support agency) which is principally responsible
for the operation of a child support registry or for
establishing or enforcing obligations to pay child support. The
private child support enforcement agencies would include any
individual, person, or other non-public entity which seeks to
establish or enforce an obligation to pay child support. Both
types of entities would have to agree to follow certain
requirements established by the state, including adhering to
the same state and federal requirements relating to data
security, privacy protections, and due process as are
applicable to the state IV-D agency, as well as other
procedures set by the IV-D director.
If the state elected one or both of these options, the IV-D
child support program would provide the public and/or private
entity with all information in the State Directory of New Hires
relating to an individual against whom the entity sought to
establish or enforce a child support obligation, such as name,
address, Social Security number of the individual, and the
name, address, and employer identification number of the
individual's employer, as well as any other information the
State Directory of New Hires collects, such as date of birth,
or health insurance information. In addition, all information
in the Federal Parent Locator Service (FPLS) would be made
available, including date of birth, telephone number, income,
group health insurance coverage and other employment benefits,
and types, status, location and amounts of assets and
liabilities of the noncustodial parent.
The enforcement remedies available for cases being enforced
by public or private non-IV-D entities would include, at state
option, the federal tax refund intercept and passport denial
programs, reporting to credit agencies, and inclusion in
financial institution data match for issuance by the entity of
a levy on any identified account. Under current law these
remedies are available only to cases which are receiving child
support services from the state IV-D child support program.
Over the years I have had the privilege on several
occasions to appear before this distinguished Subcommittee
seeking your support for many positive enhancements to the
nation's child support program, which this Subcommittee has
graciously received and often adopted. Therefore it is with
some reluctance that I must respectfully proffer that this
proposal is not in the best interests of the nation's child
support program or the children it serves.
On October 5, 1999, I provided extensive testimony on a
similar proposal, expressing in detail my concerns about the
ultimate goal of the private collection agencies to deduct fees
ranging from 30 to 40 percent from child support collections
made by the IV-D agency at taxpayer expense. This includes
collecting fees from tax refund intercepts and income
withholding from current support, which require little if any
work on the part of the collection agency to justify such high
fees.
I have similar concerns about this proposal, ranging from
disclosure of confidential information to entities that will
realistically be difficult to regulate, monitor, and audit, to
operational and computer programming costs, to the impact of
this proposal on employers, financial institutions, the
Departments of State and Treasury, the state unemployment
insurance agencies, and the state IV-D child support
enforcement agencies. These questions regarding implementation
include the following:
How many public and private agencies are likely to
participate in this program?
The definition of public non-IV-D child support agency as
currently drafted would appear to cover any court in the United
States having jurisdiction to establish or enforce child
support orders, as well as any entity operating a child support
registry. This could include thousands of local courts,
including those that currently operate child support programs
under cooperative agreements with state IV-D child support
programs. Will these entities set up parallel non-IV-D child
support enforcement programs?
The definition of private non-IV-D child support agency is
even broader, and could include any individual, person, or
entity that met the state's criteria and entered into an
agreement. There are literally tens of thousands of private
attorneys, private investigators, private collection agencies,
and other private individuals and entities that could seek to
get into the child support enforcement business.
If these entities come forward, child support agencies will
be deluged with requests to negotiate agreements, with the
concomitant burden of overseeing implementation and responding
to inquiries from parents, employers, and banks who are trying
to figure out who to deal with, all while sorting out data
matches from new hire reporting, bank match, tax refund
intercept and the FPLS. This will result in a significant
diversion of staff energy and computer resources from core
child support functions.
How will the IV-D child support agency be able to regulate
the non-IV-D public and private entities? What procedures,
staff and training will be necessary and how much will it cost?
While this proposal purports to promote ``privatization'' of
government functions, it would in fact require significant
federal and state taxpayer resources to expand the regulatory
bureaucracy. In Massachusetts, the child support program is
housed in the Department of Revenue. Because the department is
the repository not only for tax and child support data, but
also for new hire reporting, quarterly wage reporting, and
financial institution account information, protecting
confidential data is a high priority for our commissioner.
Employees of the department receive regular training reminding
us that we are entrusted with information that is among the
most sensitive in government, and that any access to, or use
of, confidential information must be only by an authorized
person for an authorized purpose. Computers containing tax and
child support information are monitored by a program that
captures every access to these systems, so that internal
auditing staff may conduct random testing for unauthorized
access. Infractions are investigated and offending employees
are subject to a range of disciplinary actions, including fines
and dismissal. In addition, violation of child support
confidentiality rules is a criminal offense.
It is simply not realistic to expect that similar
safeguards could be put in place for a range of diverse
entities as contemplated by these proposals. Attorneys are
likely to assert attorney-client privilege in response to any
effort to review their files, while private child support
collection agencies in most states are not regulated by other
state or federal law, leaving the brunt of the regulatory,
monitoring and auditing duties on the IV-D agency.
Because they are driven by the profit motive, private
collection agencies are all too likely to take actions for
which state IV-D child support agencies will ultimately pay the
price. Custodial and noncustodial parents alike may be
mistreated through harassing collection strategies or unfair
contracts. It will be up to the state IV-D agency to straighten
out the mess later, when things go wrong. For example, in one
Massachusetts case involving a collection agency with
headquarters in California, the collection agency first
recruited its local Massachusetts sales representative by
inviting her to join other successful entrepreneurs ``who have
tapped into an untouched $70 billion industry .... a lucrative
business opportunity.'' When the noncustodial parent resisted
paying, the agency sent dunning notices to his mother and
letters to him threatening to send a ``public notice''
containing his photograph and personal information to his
relatives, neighbors, friends, co-workers and community if he
did not pay up. Confused since his case was already being
enforced by the Massachusetts IV-D child support agency, the
noncustodial parent sent a cashier's check for $9,930 made
payable to the Commonwealth of Massachusetts to the collection
agency in California. The agency promptly cashed the check in a
California bank by endorsing it as ``Child Support Services--
For Deposit Only,'' closed the bank account, disconnected their
telephones, and disappeared.
Other abuses we have encountered include agencies that:
harass noncustodial parents at home and at work; threaten
employers; alter court orders to change the payee from the
Massachusetts child support agency to their company; issue
illegal withholding orders on their own stationery; use federal
forms to gain unauthorized access to interstate locate
information; falsely represent a special relationship with the
Massachusetts child support program; engage in unauthorized
practice of law by signing court pleadings and appearing in
court; demand that noncustodial parents or employers make
payments directly to the collection agency instead of to the
Massachusetts child support agency, as specified in the court
or administrative order; threaten to sue the Massachusetts
child support program in federal court or state court for
violation of constitutional rights; credit payments to arrears
before current support; threaten to sue custodial parents who
complain about high fees and poor service; and use names that
mislead unsophisticated custodial parents into thinking they
are dealing with the Massachusetts child support program (such
as CSE of Massachusetts, Office of Child Support Enforcement
Services, Child Support Collections of Massachusetts).
Proponents of this proposal will respond that it will be up
to the IV-D agency to prevent these abuses. However, it is
simply unrealistic to think that the IV-D child support agency
can regulate this industry. How can we monitor every letter,
every telephone call, every form, and every copy that is made
of sensitive data? Some may answer that upon discovery of
abuses, an entity's relationship with the IV-D agency could be
terminated. But what of the parents who have already been
harmed? What of the employers and financial institutions who
get pulled into the middle, when all they want to do is follow
the rules?
What if one state permits access to its information and
other states do not? It is unlikely that all states will opt to
permit non-IV-D public and private entities to have access to
employment and financial institution records, or that all
states will have the same standards and procedures for
monitoring the use of any such data that is released. What if
one state permits easy access with few controls, accepts
requests from private collection agencies and forwards those
requests, without identifying their source, to a second state
that maintains strict controls on the release of confidential
data? How would the second state's standards provide protection
for its noncustodial parent citizens? Would the first state in
effect serve as gateway to information in the FPLS and the
National Directory of New Hires for all the states--access that
would be barred if the collection agency went directly to the
other states maintaining the data? Because states transmit new
hire data to the National Directory of New Hires where it
becomes part of the FPLS and because the Federal Office of
Child Support Enforcement operates the Multi-State Financial
Institution Data Match, will one state's acceptance of this
proposal give their collection agencies access to data from all
the other states?
This possible backdoor approach would subvert the whole
purpose of providing a state option. Once one state elects to
allow access to child support information and remedies, the
other states' information would be readily available, with no
ability for the other states to monitor the use or misuse of
data on their citizens. Investigating abuses, breaches of data
security, violations of privacy protection and due process will
be difficult enough in in-state cases, and virtually impossible
in interstate cases. While Massachusetts may not elect these
options, we are very concerned about what goes on in other
states. We have a deep commitment to protecting the privacy of
our citizens, and many of the abuses cited above have come from
agencies based in other states.
What is to prevent confidential information from being used
for other collection activities? The risks that information
will be misused by private collection agencies is particularly
grave, since many engage in other types of collection
activities. The collection agency would learn where the
noncustodial parent works and banks if there is a successful
wage assignment or bank match. It will be virtually impossible
to prevent aggressive collection agencies from using this
information for other purposes. Not only might they use the
information to collect unrelated debts, they could also sell it
for use by anyone, from telemarketers to identity thieves, a
growing threat in the age of technology.
What impact will releasing data to non-IV-D entities have
on the willingness of employers and financial institutions to
cooperate with IV-D child support enforcement agencies? New
hire reporting has been remarkably successful in its relatively
short history, largely because employers voluntarily comply.
State IV-D child support agencies have developed cooperative
relationships with employers, responding to their needs and
inconveniencing them as little as possible. Similarly,
financial institutions for the most part have cooperated in
developing procedures that will work for them and their
customers. But we must be careful not to overload a system that
is not yet fully operational. OCSE currently sends 3.8 million
records to nearly 3000 financial institutions. It takes some of
these institutions three days to process the data. Not only
will more records threaten to choke the system, misuse of this
data by anybody will jeopardize the entire program. All it
takes is one or two well-publicized abuses by overreaching
collection agencies for employers and banks to curtail their
cooperation. We also have worked hard to ensure that employers
and banks need to deal with only one child support agency in
each state. These efficiencies will be at risk if there are
suddenly multiple entities sending wage assignments and bank
levies to the same overloaded payroll departments and bank data
processing centers.
Will the inevitable abuses in one locality jeopardize the
national child support program? As one who worked extensively
with members of Congress in the adoption of the provisions of
PRWORA, I found that the primary concern about the IV-D
program's access to information was privacy protection. In
weighing privacy concerns against the duty to support one's
children, Congress tilted the balance in favor of strong child
support provisions. However, even as these provisions are being
implemented, concerns have been raised in state legislatures,
in the press, and elsewhere about ensuring that appropriate
privacy safeguards are in place and that IV-D agency staff are
trained and monitored to protect confidentiality of personal
data. Regardless of how a problem arises, in this era of mass
media, it will have national repercussions. Already there have
been articles in the New York Times and Washington Post
questioning the scope of information available to the child
support program.
Expanding access to child support data is like sliding down
the proverbial slippery slope. Where should we draw the line?
Child support information is immensely attractive to all sorts
of public and private interests. Every Congressional session
seems to bring forth a new proposal. Once you open the door,
you will be hard pressed to close it again for others who come
forward with a plausible proposal.
Who is going to process the money and keep track of the
records, especially when there are multiple families for the
noncustodial parent and diverse points of collection? What
about cases where the custodial parent goes on and off public
assistance, while using the services of one of these entities?
What if the noncustodial parent exercises his right to apply
for IV-D services in a case in which the public non-IV-D or
private collection agency is providing services to the
custodial parent? Which agency trumps? Since 1975, in response
to consistent and widespread criticism that one of the major
weaknesses in the child support program has been its historic
fragmentation, federal legislation has pushed states to
consolidate child support functions under a single entity in
state government. We have spent years trying to get accurate
pay histories by having child support payments go to one
location in each state, and are now developing registries of
support orders. This proposal will fracture that work, and
encourage development of diverse systems, just as the systems
mandated under PRWORA are beginning to come together.
Is this proposal consistent with our recent work on
responsible fatherhood initiatives? In recent years, largely
inspired by the visionary work of this Subcommittee, child
support programs have been developing ways to be more ``father
friendly,'' identifying and addressing the multiple barriers
which fathers encounter in paying child support. These range
from no or poor job skills, interference with custody and
visitation, orders that are not consistent with ability to pay,
to a bureaucracy that focuses only on collections and is
resistant to responding to legitimate concerns raised by
noncustodial parents. As Executive Director of the
Massachusetts Commission on Responsible Fatherhood, I have
become increasingly aware and responsive to the barriers faced
by fathers--whether ``dead broke'' or ``deadbeat.'' Turning
private collection agencies loose on these noncustodial parents
is hardly consistent with this expanded mission of the child
support program.
Can information relating to victims of domestic violence be
protected under this proposal? The proposal provides for states
to set up certain requirements to ensure that public and
private non-IV-D entities have procedures for protecting
privacy, particularly in cases involving domestic violence.
States and OCSE are still working to fully implement the family
violence indicator required by PRWORA. It is unclear how the
current safeguards, many of them tied to IV-D automated
systems, will translate into requirements for non-IV-D
agencies. For instance, how will private agencies transmit
family violence indicators to the FPLS, or set up procedures
for judicial overrides of the indicator in the appropriate
cases? How will they gather information from their customers
about who needs a family violence indicator? How will the state
verify this information?
Are we prepared to give private entities quasi-law
enforcement powers to seize income and assets? Giving law
enforcement powers to seize income and assets to private
collection agencies raises the specter of private law
enforcement, a concept of questionable constitutionality. Law
enforcement is a public function, not one delegated to private
citizens or private entities. This too presents opportunities
for abuse of power. We have already seen some collection
agencies who ``issue'' income withholding orders on their own
stationery, ordering the employer to withhold child support and
threatening to impose sanctions that can be imposed only by IV-
D agencies or the courts if the employer does not comply.
Should we instead move to eliminate the FPLS ``locate
only'' access that is available to custodial parents under
current law? Instead of expanding access to child support data
to a wide variety of public and private non-IV-D entities,
perhaps the time has come to curtail some of the direct access
granted to custodial parents by current law. The statute that
makes custodial parents and attorneys or agents of a child
``authorized persons'' to seek FPLS information was enacted in
1975, when the information in the FPLS scarcely extended beyond
the local telephone book. By contrast in the age of information
technology, the FPLS encompasses a broad range of databases,
with information on employment, income and child support
obligations of millions--a vast store of sensitive, private
information that cannot be found anywhere else. Just as with
the public and private non-IV-D entities, there is no way the
child support agency can ensure that custodial parents or their
attorneys will not use the data for a purpose other than child
support enforcement, such as alimony, property division in a
divorce, custody and visitation, or even continuation of the
parties' interpersonal struggle. Yet the existence of this
provision is the justification used by private collection
agencies that they should also get direct access to this
information, since ``they can get it anyway from the custodial
parent.'' Perhaps Congress should revisit this provision and
evaluate whether in the era of a more effective IV-D child
support program it is necessary and appropriate to give
custodial parents access to this kind of information about
noncustodial parents.
Would it be simpler to incorporate the non-IV-D court cases
into the IV-D program? Any entity gaining access to IV-D
information and remedies will have to follow the same
procedures relating to data security, privacy protection and
due process that apply to the child support program. As a
practical matter, many states electing this option will simply
require the participating entities to use the notices, forms,
data elements, computer formats, and procedures that the IV-D
agency has already developed. Moreover, many of the objections
relating to data security, privacy protection and due process
are not applicable to courts that may wish to have their cases
benefit from the IV-D information and remedies. Courts after
all have as one of their primary functions to enforce such
requirements on others and already have a culture receptive to
these protections. Rather than ``reinventing the wheel,'' the
most efficient solution is to convert the courts' cases to IV-D
cases through cooperative agreements. This route is already
permitted under current law, and would require no additional
Congressional legislation. The cases could be either eligible
for the full range of IV-D services or designated as ``tax
refund and passport sanction only,'' or ``new hire or financial
institution data match only.'' This approach would give the
courts the information and remedies they seek, while minimizing
any disruption to the IV-D program. It also keeps us on our
twenty-five year path of consolidating child support functions,
rather than fragmenting them.
Conclusion
Passing this controversial issue on to the states and
telling us to figure it out may not be the best course of
action. Even states that do not want to go this route will have
an endless stream of lobbyists for private attorneys and
collection agencies beating down our doors and the doors to our
state legislatures, trying to cash in on the ``lucrative''
child support business. This is not a diversion that we need at
this juncture. We are on the verge of getting the new hire and
bank match systems to work. We are coordinating interstate
cases as never before, working out compatible procedures among
the fifty-four jurisdictions. We are branching out into
responsible fatherhood and access and visitation programs and
addressing domestic violence issues in ways we never
contemplated ten years ago. We have heeded your call throughout
the welfare reform debate to take a broader view of self-
sufficiency, and to address whatever barriers stand in the way
of a better future for the families we serve.
This proposed legislation has much of value in it. It
simplifies the distribution rules while giving more money to
former welfare families, it lowers the threshold for passport
denial, it places a priority on making sure welfare mothers
have an adequate child support order in place before they leave
welfare, and it provides for demonstration grants to promote
responsible fatherhood for low-income fathers, bringing them
into the fold by working with them to get jobs, learn parenting
skills, and form lasting relationships with their children who
so desperately need their responsible involvement. The
provisions opening up child support enforcement to private,
profit-driven entities appear out of place in this otherwise
progressive legislation. Private collection agencies are not
likely to care about these broader goals, and indeed their
efforts may thwart them.
Child support legislation has always enjoyed a special
place in Congress, passed with strong bipartisan support, and
based on broad consensus within the child support professional
and advocacy community. By contrast, this proposal to extend
child support information and remedies to non-IV-D public and
private entities has met widespread and deep opposition from
custodial and noncustodial parent advocacy groups and most IV-D
directors. Our opposition stems not from a desire to maintain a
monopoly, but from our commitment to helping our most
vulnerable families receive the child support they need to stay
off public assistance and remain independent. This proposal
seems inconsistent with the other provisions of this
legislation, which are designed to help mothers and fathers
have the resources and tools to achieve self-sufficiency.
Madam Chairman, thank you for inviting me to comment on
this complex area. I look forward to working with you and other
members of the Subcommittee to come up with practical solutions
to the problem of nonsupport and the goal of achieving self-
sufficiency.
Chairman Johnson of Connecticut. Ms. Turetsky?
STATEMENT OF VICKI TURETSKY, SENIOR STAFF ATTORNEY, CENTER FOR
LAW AND SOCIAL POLICY
Ms. Turetsky. Chairwoman Johnson and Members of the
Subcommittee, my name is Vicki Turetsky, and I am a senior
staff attorney at the Center for Law and Social Policy. I
appreciate the opportunity to testify before you today.
My testimony will focus on the proposed changes in the
child support distribution rules. I am pleased to give my
enthusiastic support both to the distribution proposal that you
have made, Chairwoman Johnson, and Mr. Cardin's bill. I commend
each of you for your efforts to address this very important
area of child support policy, and I also commend the
administration for its efforts.
Welfare reform has had a profound impact on the child
support program. Enforcement tools enacted into PRWORA are
steadily improving the effectiveness of the program. The child
support caseload has shifted dramatically toward low-income
working families who no longer receive welfare benefits or who
never did. In about one-third of the States, declining welfare
collections have destabilized program funding, and there is a
new understanding about the diversity of fathers within the
child support caseload.
Originally set up to recover welfare cost, the child
support program has emerged as one of the largest human
services programs dealing with mothers, fathers, and children.
This program has much potential to help low-income families;
however, it has an albatross around its neck, and the albatross
is the mandate to collect and recover welfare costs. The
program is often seen as a program to make money from, not a
program to help families.
The changes brought about by welfare reform have prompted
the child support community to engage in an earnest and ongoing
discussion about the central role of the child support program
in supporting the goals of welfare reform. In many ways we are
at a crossroads. The program has outgrown its original cost
recovery purpose, yet its cost recovery financing structure
holds it back.
The legislation under consideration by this Subcommittee
would substantially increase the amount of child support going
to families and help set a clear direction for the program.
Mrs. Johnson, your proposed legislation would build on the
1996 distribution changes, but greatly simplify and clarify
distribution rules for former welfare families.
Mr. Cardin, your bill would go further, not only by
simplifying post-TANF distribution, but with passing through
and disregarding child support to families while on TANF.
I believe that down the road all child support should be
paid to the family, regardless of TANF status. Full family
distribution that treats all child support as family income
would be the simplest distribution rule, and the rule that best
complements the family support goals of the Welfare Reform Act.
The best way to get there may be in a couple of steps, with
a clear picture of where we are going at the end.
The main stumbling block is fiscal at both the Federal and
the State level. Because States use their retained welfare
collections to operate their TANF or child support programs,
attention to the fiscal impact, the financing alternatives, and
the implementation flexibility is warranted.
Here I think the bipartisan record of this Committee will
serve us well. I think that the legislation that could be
advanced this year is one that meets in the middle of the two
bills under consideration here--combining simplified post-TANF
distribution with State options to distribute child support to
families while they are on TANF--without making a disregard a
condition of releasing the Federal share of welfare
collections.
There are really two separate policy issues involved with
giving child support to families while they are on welfare. One
is who keeps the money, and that is the distribution question,
whether the State or the family keeps the money. The second
question is how the income is treated under the TANF program
and other assistance programs, and that is the disregard
question.
The option to distribute child support, to give money to
families during TANF, I think should be left to the State. The
State should be given an option in that area. The question
about whether the support should be disregarded also should be
decided by the States separately from the question of whether
to release the Federal share of collections. I think this kind
of in-the-middle proposal would have broad appeal.
Distribution reform is important for several reasons.
First, child support is the next most important income source
to families after the mother's earnings for families that do
get child support. A welfare policy that builds on the earnings
of both parents sends the clearest message about personal
responsibility and avoids welfare costs.
By having child support in place and budgeted for at the
time the family exits TANF, a full distribution policy would
help families transition off of TANF, avoid administrative
delays in getting support to former TANF families, and help
stabilize the families budget.
The other reasons are well known to this Committee for why
to support getting child support to the family, including
father involvement and simplicity.
The proposed legislation is very positive; however, the
expanded access provisions we strongly oppose, and for the very
reasons that have and will be testified to here today.
[The prepared statement follows:]
Statement of Vicki Turetsky, Senior Staff Attorney, Center for Law and
Social Policy
Chairwoman Johnson and Members of the Subcommittee:
I very much appreciate the opportunity to testify before
you today. My name is Vicki Turetsky. I am a Senior Staff
Attorney at the Center for Law and Social Policy. CLASP is a
non-profit organization engaged in research, analysis,
technical assistance and advocacy on issues affecting low-
income families. CLASP has worked on child support issues for
many years. CLASP does not receive government funds.
Most of my testimony today will focus on the proposed
changes in the child support distribution rules. I am pleased
to testify in strong support of the distribution provisions in
the legislation sponsored by Chairwoman Johnson, H.R. 4469.
Mrs. Johnson has worked on this issue for years, putting
``families first'' in distribution rules enacted in the
Personal Responsibility and Work Opportunity Act of 1996 (the
welfare reform law). The proposed legislation would build on
the 1996 changes, but greatly simplify and clarify distribution
for former TANF families.
CLASP also strongly supports the pass-through legislation
sponsored by Mr. Cardin, H.R. 3824, which would not only would
get more support to families when they leave TANF, but would
distribute support to families while they are still on TANF.
There is a growing consensus in the child support community
that all child support should be paid to the family, regardless
of TANF status. Full family distribution would be the simplest
rule. While both bills would move the child support program
toward a full family distribution policy, H.R. 3824 would get
us there faster.
I commend both of you for your efforts in this area, and
hope you will be able to join in bipartisan legislation that
would both simplify post-TANF distribution and allow states to
start paying families their child support while they are still
on TANF.
The proposed changes would advance welfare reform goals.
The child support program originally was set up to
reimburse federal and state welfare costs. As a condition of
receiving cash assistance, welfare families must assign their
rights to child support and to cooperate with the child support
program. These welfare collections are not paid to the
families, but instead kept by states as partial reimbursement
for welfare benefits. The welfare collections are shared with
the federal government and treated as government revenues. The
child support program also serves non-welfare families who have
requested child support services and receive all of the support
collected on their behalf.
At its inception, the child support program almost
exclusively served welfare families. However, the sharp decline
in welfare caseloads, combined with long-term trends, have
dramatically reduced the proportion of welfare cases in the
child support caseload. Today, only about 20 percent of child
support cases involve families who currently receive cash
assistance.
The vast majority of families in the child support caseload
are low-income working families who have left welfare or who
never received it. After the custodial parent's earnings, child
support is the next most important income source for poor
single female-headed families receiving child support. For poor
families who get child support, the child support amounts to
26% of the family's budget, or $2000 per year. When families
headed by single mothers get at least some child support during
the year, their poverty rate drops significantly, from 33% to
22%. The research shows that families who get regular child
support are less likely to return to welfare, thus avoiding
welfare costs.
These families desperately need the child support income to
make ends meet. If low-income single mothers receive child
support, they often can forego a second or third part-time job.
In 1995, over three-fourths of the non-welfare families in the
child support caseload had incomes below 250% of poverty. About
half of the non-welfare families receive other forms of public
assistance, such as Medicaid or Food Stamps.
Just as a job is about more than a paycheck, child support
is about more than money. Child support has a dual quality,
important both as cash income for the family and as a way to
encourage paternal involvement. Establishing regular payment of
child support appears to increase the fathers' involvement in
their children's upbringing and improve child outcomes. It may
also increase the availability of paternal relatives as a back-
up system for child care and family emergencies. Although
domestic violence is a concern to some families, many mothers
report that they encourage their children's emotional
relationship with their father and his family, and try to keep
the father involved in the children's lives when feasible.
However, the current child support assignment and
distribution rules (which determine whether the state or the
family keeps support collected by the state) discourage the
poorest fathers from staying connected to their children. The
current rules treat child support as repayment for welfare
benefits, rather than as a father's financial contribution to
his children. These rules work against poor mothers and fathers
who want to use their own money to support their own children.
Poor fathers and mothers who want to improve their children's
financial circumstances, but can not fully support their
children without some public help, sometimes agree to informal
contributions that by-pass the formal child support system. In
addition, the child support program's welfare cost recovery
focus often results in child support orders inflated by welfare
and Medicaid costs, and uncollectible arrearages that sometimes
drive poor fathers underground.
The goals of welfare reform--to promote work and to
encourage the formation and maintenance of two-parent
families--are best complemented by a child support strategy
that respects child support as the family's own money and as
the father's financial contribution to his children. The
proposed distribution provisions would substantially increase
the amount of child support going to families. These provisions
(especially Mr. Cardin's approach), would help reorient the
child support program toward the goals of welfare reform. The
ban on using the child support system to recover Medicaid costs
(in both bills), the review and adjustment provisions (in the
Johnson bill), and the federal grants program to help support
responsible fatherhood programs (in the Johnson bill) are also
important elements that help reorient the child support program
toward supporting and strengthening working families.
The proposed changes would simplify and rationalize the current system.
The changes proposed by Chairwoman Johnson and Mr. Cardin
would make the child support distribution rules much easier to
understand and administer. Under welfare reform, the
distribution rules were amended to allow families to keep more
of the child support that was owed to the family before going
on welfare. In addition, the rules changed the order of
payment, so that the family's debt is paid before the state
debt.
Although the rules were intended to get more money in the
hands of families who have left welfare, they are the uneasy
result of legislative compromise between contradictory program
goals of recovering welfare costs and helping families become
self-supporting. The current law is based on an ``on-off''
approach. Under an ``on-off'' approach, child support owed
while the family is off of welfare belongs to the family, while
support owed while the family is on welfare belongs to the
state. However, there are several exceptions to the basic on-
off approach in the current law. As a result, the rules are
difficult to understand and costly to administer.
The main exception is that support recouped from federal
tax refunds are kept by the state. This amounts to more than
half of the welfare arrears collected by the state. In
addition, the state keeps arrears that were owed before the
family received assistance if they are collected after the
family starts receiving assistance. This means that families
who tried to hold out the longest before going on welfare can
lose all of the support owed to them if it is collected after
they go on welfare. Finally, there are various phase-in
exceptions for families who received welfare at some time
before 2000.
The current distribution rules require states to keep track
of several different kinds of support payments, depending on
time, type, and collection method--``assigned'' current
support; ``never-assigned'' current support; ``temporarily
assigned'' arrears; ``conditionally assigned'' arrears;
``permanently assigned'' arrears; ``unassigned during
assistance'' arrears; ``unassigned pre-assistance'' arrears;
``never assigned'' arrears.''
States have tried to implement them, but the current
distribution rules are, frankly, unworkable. Parents, state
legislators, and workers do not understand them. They are
snarling up computer programs and delaying system development.
They are leading to accounting, audit and litigation problems.
And they are resulting in less money going to families than
envisioned during welfare reform.
Simplicity, not complexity, must be the basic principle
behind distribution rules. The legislation proposed by
Chairwoman Johnson and Mr. Cardin each reflects a commitment to
simplify post-TANF distribution rules and to greatly increase
the amount of support going to families that have left TANF.
The proposed post-TANF distribution rules are simple and clear,
and go a long way to addressing the problems with the current
rules. However, the Johnson proposal would continue to require
that families assign to the state the support owed to them
while they were receiving welfare.
The simplest distribution rule is to treat all child
support as support for children and income to the family.
Researchers studying the Wisconsin demonstration to pass
through all current support to families receiving W-2
assistance are finding important administrative advantages to a
very simple distribution system. By having child support in
place and budgeted for at the time of TANF exit, the child
support system would help families transition off of TANF.
Distribution rules which depend on states to identify and
change the family's TANF status result in administrative delays
in getting support to former TANF families. Families are
supposed to start getting current support as soon as their TANF
benefits end. However, the child support agency sometimes
retains the support improperly for months after welfare exits,
because of administrative delays in identifying and changing
the family's case status. Instead of stabilizing the family's
income before the family leaves TANF, child support is
interrupted right at the point of exit and for some months
thereafter.
There may be a reluctance to move to a full family
distribution system because of concern about retaining families
on TANF for longer periods if they receive child support
income. However, preliminary results from the Wisconsin
demonstration include findings that families move off of TANF
faster when they receive child support, that fathers pay more
support, and that administrative costs under the waiver are not
increased. Preliminary findings in a similar Vermont
demonstration also include increased child support payments.
It is our position that all of the money should be
distributed to the family, regardless of TANF status. How that
child support income is treated in the TANF program (whether it
reduces the TANF grant or is disregarded) should be left to
states to decide. While there are a number of reasons to
support a disregard policy, the main point of a full-family
distribution policy is simply to treat all of the child support
as family income. A full distribution policy (with or without a
disregard) would help families transition off of welfare. It
would increase family income once off TANF by encouraging
parents to pay through the formal system. It would simplify and
rationalize program administration. And it would help change
the culture of the child support program by eliminating its
cost recovery focus.
The welfare cost recovery mission of the child support program is
obsolete.
State child support administrators, advocates, and other
members of the child support community are increasingly
questioning the fundamental cost recovery premise of the child
support program. This program has much potential to help low-
income families. However, it has an albatross around its neck--
the mandate to recover welfare costs. While welfare cost
recovery seemed like a good deal to states in the beginning,
there is increasing evidence that it has actually weakened the
program's ability to attract adequate resources to the program.
From the start, the program was sold to state legislatures as a
``money maker.'' In some states, the political imperative to
produce state revenues has forced child support to make do with
a too-meager budget and staff.
Its cost recovery role has also undercut the visibility and
status of the child support program within the human services
community. Even though the child support program now serves
several times as many families as the TANF program, closely
fits the goals of welfare reform, and is a key income support
program for low-income working families, the child support
program sometimes has trouble getting a seat at the welfare
reform table. The program is often seen only as a limited
reimbursement program--a program to make money from, not a
program to help families. In order to attract new resources and
realize its potential, the message of the child support program
has to change. For this to happen, state legislators have to
make sense of the program, and the distribution rules make this
hard to do.\1\
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\1\ The answer to the problem of strengthening child support
program capacity is not, as Supportkids.com proposes, to fragment and
weaken the program further by expanding the access of non-IV-D clerks
of court and unregulated private collectors to divert program
resources. The answer is to simplify the message and mission of the
child support program so that state legislators can begin to see this
program as a key program to advance welfare reform goals. Simplifying
distribution will help increase the political standing of the program.
---------------------------------------------------------------------------
The proposed distribution provisions in both the Johnson
and Cardin legislation represent very positive and exciting
steps forward for families and the child support program. State
financing options would help states make this transition. To
move to a full distribution system, however, both federal and
state shares of retained collections should go to families. In
the long run, eliminating the program's reliance on declining
welfare collections and moving the program to a more stable
state appropriations basis will help stabilize and even
increase program funding. In the short run, expanding family
distribution policies mean divesting retained welfare
collections now used by states to help pay for TANF MOE
expenditures or (in a third of states) child support program
costs.
Expanded access is inconsistent with welfare reform and program
improvements.
Expanding access to IV-D data and tools to unregulated, and
often predatory, private child support collection companies
will hurt, not help families who need child support. The
Appendix incorporated into this testimony cites complaints
alleging abusive, deceptive, and unfair practices by private
child support collectors. Unlike private collectors that pursue
consumer debt, these companies are not regulated under the Fair
Debt Collection Practices Act, 15 U.S.C. 1692. Unlike private
companies performing contractual work for IV-D agencies, they
are not subject to state oversight and controls. Yet the
proposed provisions would turn over vast amounts of data and
legal authority to these companies and eviscerate current
confidentiality and due process protections for parents,
contrary to Congressional promises to preserve the
confidentiality of new child support data bases. They would
divert public resources for private profit, allow private
companies to cream the most lucrative cases from the public
system, and claim credit and fees for work performed by the IV-
D system.
Expanding access to IV-D data and tools by clerks of court
raise a somewhat different set of problems. IV-D structural and
work load considerations weigh against expanding this access to
non-IVD public agencies. Over the last several years, many IV-D
programs have successfully consolidated and streamlined their
procedures to improve their performance. Some of these programs
include clerks of court who have entered into cooperative
agreements with the state and perform as IV-D agencies.
However, some states with locally-elected clerks of court
have had difficulty maintaining sufficient political clout to
manage the program, resulting in a fragmented state system,
weakened political support for the IV-D program, and limited
resources committed to the program. Several of these states
have had difficulty implementing a statewide computer system
and state disbursement unit. Whereas the IV-D program mostly
serves low-income families entering through the welfare system,
the clerks of court mostly serves better-off families who have
entered the system through divorce proceedings and often can
afford a private attorney. Given the demographic differences in
the caseloads, we are concerned that limited IV-D resources
would be diverted away from the low-income families who are in
greatest need of public services.
Conclusion
The distribution provisions of the Johnson and Cardin
legislation (and the responsible fatherhood and review
provisions of the Johnson bill) would build on the reforms in
the 1996 law, and set a clear direction for the child support
program. These provisions would put families front and center
of the child support program. They would put families first in
child support distribution. They would help poor fathers to
begin paying monthly support payments and connect with their
children. They would help the child support program become more
parent-friendly and service-oriented. They would help states
further automate and streamline their activities.
However, the expanded access provisions of the Johnson
legislation send an entirely inconsistent message to states and
families, with potentially devastating results. These
provisions would allow the child support program to be used as
a money maker for private collection companies. They would put
the fee claims of private collectors ahead of support payments
to families. They would sanction and extend the abusive
practices used against fathers. They would fragment and distort
IV-D program operations. We strongly oppose the expanded access
provisions and urge you to strike them from otherwise very
positive legislation that builds on welfare reform and helps
families support their children.
Appendix: Complaints About the Practices of Private Collectors
Complaints About Abusive and Unfair Practices
``Recently we began receiving calls from [a private
collection company]. He was leaving messages for one of our
employees. . . . When [our employee] was not able to contact
[the company representative], he started getting rude via the
phone to myself and my clerk. ``He `ordered' me to withhold
from [our employee's] wages. . . . He told my clerk that if I
didn't comply with his order that our business license would be
pulled. When he was told that he must comply with F.D.C.P.A.
not to call again, he stated that there were no laws regulating
what he did.'' Source: Letter from an Arizona concrete company
dated May 20, 1998.
``In the spring of 1994, Lester Brown's neighbors began
receiving `Wanted' posters. These posters referred to Mr. Brown
as a `Dead Beat Parent,' stated how much unpaid child support
he allegedly owed, and claimed that he ``has plenty of money to
spend on himself but has never paid one dime of child
support.'' A few months later a `Wanted' poster with Mr.
Brown's picture was mailed to his home, accompanied by the
threat that the poster would be ``mass mail[ed]'' to his
neighbors if he did not pay off his child support debts.''
Source: Brown v. Child Support Advocates, 878 F. Supp. 1451,
1452 (C.D. Utah 1994).
``The collection agency. . . .has harassed our son. . .
.called his home at 6:00 a.m., called him at work, and
threatened him with jail.'' Source: Letter from a mother of a
Texas noncustodial parent, filed with the Texas Attorney
General's Office and dated Oct. 23, 1998.
``They demanded $11,000.00 or they would put me in jail. I
proposed a payment plan that would allow me to current and pay
all the arrearage payments. They responded with threats,
disgust, and harassment. They called me names and have gone as
far as to boldly state that they want to destroy me personally
and professionally.'' Source: Complaint filed by a Texas
noncustodial parent with the Texas Attorney General's Office,
dated April 10, 1988.
``In March 1998, [a private collection company] called me
and said she was to collect child support. . . .I told my
mother about the phone call and she talked to [the company
representative], which ended in my parents paying her $2,000 on
their credit card. . . .On Aug. 19, 1998, [the company
representative] made a call to my parents in another attempt to
collect back child support. She apparently told my mother that
if [$4,200.00] was not paid by Aug. 21st, that I would be
arrested. . . .She went directly to my parents because she had
gotten money from them before. They are in their 70's and are
being harassed emotionally, verbally over the phone. They are
not physically well right now, due partly to all this. . . .My
parents, without my consent, are charging $3100 today on their
credit card. . . .[The company representative] has used
threatening, abusive, and emotional tactics in order to try and
collect a debt. Since I have refused to pay any thing to a
collection agency, she has gone to my parents and harassed
them, before all this, she called my church and left a message
for my pastor. This has caused a lot of stress to my family, my
parents, and myself.'' Source: Complaint filed by a California
noncustodial parent with the Texas Attorney General's Office,
dated Aug. 31, 1998.
``[My client] again contacted me to discuss the harassing
nature of [the company representative.] At this time I asked
her for his phone number so I could call him to attempt to get
him to cease and desist in his obnoxious and illegal behavior.
I had previously, in my initial conversation with [my client],
instructed her to tell [the company representative] never to
call or contact them again[.] [S]he informed me that she had so
instructed him and he completely ignored her and repeatedly had
continued to harass them over this matter. . . .[The client]
repeatedly asked them to stop harassing them, to no avail. I
then instructed him to never make any telephone or written
communications with [my clients] again on this matter. He told
me. . . .that he would do as he pleased and he hung up on me.
Within five minutes after he terminated our conversation, he
called [my clients] and further harassed them on the phone and
taunted them about how an attorney would do them no good. . . .
Since that date, he has again called and continued to harass
[my clients.]'' Source: Letter from attorney for Ohio
noncustodial parent's wife, filed with the Texas Attorney
General's Office and dated March 16, 1999.
``They obtained information about myself and my company by
not only misrepresenting themselves to a credit agency, but out
and out lying regarding their intentions. . . .But in doing
this, they have damaged my credit report, as I am in the
process of buying a home and the mortgage company keeps getting
these reports of me applying for extension of credit, which I
have not done, and it further delays the progress of my
closing, and interfering with my life.'' Source: Letter from a
wife of a noncustodial parent, filed with the Texas Attorney
General's Office and dated Aug. 26, 1997.
Complaints About False, Deceptive and Misleading
Representations
``Child Support Advocates (CSA), a private child support
collection agency, then employed other harassing techniques
including `numerous harassing telephone calls.' All of this
occurred after Mr. Brown had received a letter `formatted to
give the appearance of a court document' from CSA, causing his
attorney to inform CSA that all further correspondence should
come to his office.'' Source: Brown v. Child Support Advocates,
878 F. Supp. 1451, 1452 (C.D. Utah 1994).
``Please find enclosed a copy of the documents my client
received from ``Child Support Enforcement.'' She believed that
this was an attempt by the State to collect child support and
as you can see from the forms, it appears reasonable that my
client believed this was an official child support collection
case by the State[.] I believe that the collection actions by
the ``Child Support Enforcement'' company are, at the very
least, misleading and lacking in the statutory language to
collect a private debt.'' Source: Letter from an attorney for
an Oklahoma noncustodial parent, filed with the Oklahoma
Attorney General Office and dated Jan. 21, 1999.
``[My client] states that the Division of Child Support
Enforcement of Virginia (DCSE) [the public child support
agency] was not able to collect the monies owed to date and
sought my help. . . .After reviewing her paper work it turns
out that she was not working with DCSE but with a corporation
by the name of Child Support Enforcement located in Austin,
Texas. . . .As you can see the corporation sent her forms
which, to the normal citizen, would appear to make one think
that Child Support Enforcement (CSE) is a government agency.
However, they are charging unconscionable fees for said
collection. The use of this name appears fraudulent and
misleading.'' Source: Letter from attorney for a Virginia
custodial parent, filed with the Texas Attorney General's
Office and dated June 5, 1998.
``The manner in which [the company representative] spoke
was convincing to us, to think she was a governmental agency.''
Source: Letter from a Texas noncustodial parent, filed with the
Texas Attorney General's Office and dated Aug. 31, 1998.
``Her legal question. . . .concerned harassing phone calls
she was repeatedly receiving from [a private collection
company]. Also she was receiving written correspondence from
him of a threatening nature[.] [T]he letterhead is entitled
``Child Support Enforcement Division.'' I believe, based upon
my conversations with [the client] that the [company
representative] was strongly implying, if not outright
representing, that he was an agent of the Child Support
Enforcement Division of the Texas Attorney General's Office.
When I made initial contact with [the client], she was of the
opinion that the Attorney General's office was responsible for
these threatening calls and other communication. . . .I very
strongly inquired of him if he was a private collections form
or if he was a representative of the Child Support Enforcement
Division of the Texas Attorney General's Office. He refused to
answer my question and wanted my Bar card number. . . .He,
although asked repeatedly by me this question, wholly refused
to answer same.'' Source: Letter from attorney for Ohio
noncustodial parent's wife, filed with the Texas Attorney
General's Office and dated March 16, 1999.
Complaints About Contractual Practices and Unreasonable Fees
``The reason for this complaint is that these people keep
50% of the money until the administration is paid off, and then
they keep 33% of the amount each time its received there after,
until when ever they want. . . .This is an outrageous fee that
[the private collection company] receives and for what service
that they don't even provide.'' Source: Complaint filed by
Texas custodial parent with the Texas Attorney General's
Office, dated March 30, 1998.
``I feel that this company is really taking advantage of
people like me. While I realize that I should have made sure I
totally understood the contract, which I thought I did, I
believe they misrepresented themselves. I believe that the
entire agreement is very deceptive. . . .[The private
collection company] is taking 50% of my daughter's child
support. . . .They're stating that they're getting the amount
that's late, but what I want to know is: if they are currently
collecting the late part of what he owes me, what happens to
the portion that he should actually be paying me now[.] I
basically want to say that they are very misleading and are not
being of a service to anyone of than themselves.'' Source:
Complaint filed by Texas custodial parent filed with the Texas
Attorney General's Office, dated May 21, 1997.
``I sent a request to [the private collection company] to
help me try to collect past due child support. . . .When I
asked this agency. . .to represent me and before I signed the
enclosed document sent to child support of Hawaii, I called and
asked [the private company] ``Does this document mean you can
intercept child support they [the public agency] have already
intercepted? I was told no, they were not allowed to take money
from an active court order and lead me to believe they. . .be
would be trying to get unpaid child support from my ex-husband
directly, or at least from his insurance co. Recently [the
private company] began taken the child support that [the public
agency] got from his [paycheck]. Also they may have intercepted
his tax returns plus one small payment he made on his own to
[the public agency.] So far this agency has done me no good
whatsoever. They have only managed to help themselves & pay
themselves for their services with money I would have gotten
without their help, from [the public agency]. I am worse off
financially now with their help. If this is all they are able
to do for me I'd like them to stop helping me & return my
contract. If they continue to take current support paid to [the
public agency] and putting it toward arrears he owes which is
over $11,500.00 at this point he will never catch up and they
[the private company] will continue indefinitely to take my
child support and take out their cut first which they have not
earned at all.'' Source: Complaint filed by Texas custodial
parent with the Texas Attorney Generals' Office, dated July 9,
1997.
``In the 4 year time I was on this contract they collected
$16,000.00 which means they went 3000 over the amount. I would
like to have that money back. Can you help? Please help us.
Please help us. Please Please help us.'' Source: Complaint
filed by Texas custodial parent filed with the Texas Attorney
General's Office and dated Nov. 3, 1998.
``I was contacted by the [private collection company) in
regards to my child support. . . .They explained that payments
to me would be arriving soon and that they alone were
responsible for me getting back support payments. Based on this
information, they further stated that I owed a 35% fee on all
monies paid since they were the ones to collect it. Since at
that time I had a collection agreement with them. . .I did pay
them a 35% fee. . .As it turns out, it was DCSE [Arizona public
agency] that collected the money, not [the private company.]''
Source: Letter sent to Arizona Department of Economic Security,
dated Oct. 29, 1999.
``Signing the [private collection company] contract was a
HUGE mistake. About one month after I signed the. . .contract,
[the public agency] found Brian and began enforcing my support
order. . .I have asked [the private company] to terminate my
contract and they refuse to do so. . . .This particular problem
is just one of many that I am having with [the private
company]. I am in the process of seeking legal counsel in both
the states of Arizona and Texas.'' Source: Letter sent to
Arizona Department of Economic Security, dated June 2, 1999.
``I was amazed that [the private company] had initiated all
this paperwork in a remarkably short amount of time, when in
fact, everything had already been initiated and finalized [by
the public agency]. (The private company] had collected 35% of
my support checks for the past two years. . . .'' Source:
Letter sent to Arizona Department of Economic Security, dated
April 6, 2000.
Complaints About Lack of Verification, Accessibility, and
Accountability
``Plaintiff heard nothing from CSE for three years, except
for an annual letter informing her that no settlement had been
reached on her behalf. Plaintiff told Schultz [disbarred
attorney employed by CSE] that she did not wish to settle her
claim, which by then had reached an aggregate sum of almost
$32,000, for only $10,000. Schultz pressured Plaintiff to
settle. . .Plaintiff called Schultz to inform him that she
would not accept the offer. . .Plaintiff received a check from
CSE in the amount of [$6,700.00]. . .Plaintiff contacted CSE
repeatedly, but was informed by. . .the receptionist that
everyone refused to speak with her.'' Source: Plaintiff's
Petition in McDaniel v. Child Support Enforcement, Inc., Cause
No. 99-05098 in the District Court of the 353rd Judicial
District in Travis County, Texas, filed April 30, 1999.
``The only reason I went to this agency they told me they
worked hand and hand with the Attorney General office, whenever
they need information from them. What I want is for these
people to let me know in full details how much back pay is it
left to pay. And I want a statement from them when its paid. .
. .And after it's paid out I want them to turn my case back
over to the Attorney General's office to the state of Texas. I
want to close out for good with C.S.E. I went to these people
in 1996 and all I have done is lost a lot of money. I am a poor
hardworking divorce mother who's just trying to make ends meet
the best I can. . . .who are these people. . . .'' Source:
Complaint filed by Texas custodial parent with Texas Attorney
General's Office, dated July 18, 1998.
``[The private company] refuses to cancel my contract. . .
.They have not satisfied my repeated requests to furnish info
about my account & how things are handled. They haven't by
feedback from NCP been professional or courteous in the
approach to NPC. . .[They] put me off by telling me I need to
speak with supervisor who is never available.'' Source:
Complaint filed by Texas custodial parent with Texas Attorney
General's Office, dated July 20, 1999.
``They shouldn't be taking my money. They have not done
anything on this case like they said.'' Source: Complaint filed
by Texas custodial parent with Texas Attorney General's Office,
dated May 12, 1997.
``They were not suppose to take any of that money, as a
matter of fact this check should not have been mailed to this
agency from the Attorney General's office. This agency will not
respond to me or the Attorney General's Office by returning our
calls. . . .I do not want their services.'' Source: Complaint
filed by Texas custodial parent with Texas Attorney General's
Office, dated Sept. 30, 1997.
``Also the last check they sent me, I could not cash
because an authorized signature was on it[.] I called about it
and they said we will send you another on the next day. That
did not happen until one month later. That one too was not
authorized to cash.'' Source: Complaint filed by Texas
custodial parent, dated Nov. 3, 1998.
``However, the agency fails to inform the `debtor' that
they are attempting to collect a debt as required by state and
federal consumer law. When asked how they verified that my
client in fact owed any debt, there was no response.'' Source:
Letter from an attorney representing an Oklahoma noncustodial
parent, filed with the Oklahoma and Texas Attorneys General
Offices and dated Jan. 21, 1999.
``Our research revealed that the Missouri employer was
garnishing wages based on the [federal form] issued by a
[private collection company], not the IV-D agency. I have not
been able to determine the basis on which Mr.------'s wages
were subject to attachment. It does not appear that any current
support is due, and any past due support would have been very
minimal. In fact, it is not clear what authority [the private
company] has to issue an order to compel an employer to
withhold[.]'' Source: Letter from Mary Ann Wellbank, Montana
IV-D Administrator to private collection company, dated March
10, 2000.
Confusion Created By Multiple Collectors
``Please help me get this situation straightened out. When
[the private collection company] contacted me, they told me to
stop sending payments to both you and the Clerk of the Court. .
. . At the present time I am having difficulty even making
payments, so finding out that they weren't even being handled
properly really hurts. . . . I will not make any more payments
until I find out who to make payments to, and have some
official, legal documentation from the State of Arizona
clarifying that your office is the correct place to send
payments.'' Source: Letter from noncustodial parent to the
Arizona Department of Economic Security, dated February 21,
1998.
``It is possible there are too many private companies
hoping to cash in on the child support bonanza as we have
gotten complaints and demands from [an attorney] in Texas and
[the attorneys] purporting to represent a phony company calling
themselves Child Support Enforcement Company and the Utah
Department of Human Services representing the enforcement arm
of Utah. . . . In any event we do not owe nor intend to make
payment to you unless and until we have proof of a formal
assignment form from Arizona Welfare and termination of Central
Clearing House.'' Source: Letter from Utah attorney to a
private collection agency, dated March 21, 1997.
``My problem is, I will never know how much money is being
sent from the Attorney General's Office to the independent
organization. I am very concerned about this, because to be
quite honest, I am not sure that I trust this independent
organization. My question to you is, would you please send me a
copy of the monetary transactions that have been made and will
be made in the future from you to the independent organization?
'' Source: Letter from custodial parent, filed with the Texas
Attorney General's Office and dated May 5, 1998.
``In communicating with Plaintiff, Defendant made several
false representation including, but not limited to: 1)
attempting to collect on a debt that is not owed to the alleged
creditor, rather it is a child support arrearage owed to the
State of Michigan; 2) not verifying the validity of the debt;
3) informing Plaintiff that it would be sending an income
withholding order to Plaintiff's place of employment for
collection on this debt, and there is already an income
withholding order in effect from the Friend of the Court in
Wayne County, Michigan.'' Source: Plaintiff's Complaint in
Child Support Network, Inc. v. UAW-GM Legal Services Plan.,
Case No. 60454 (U.S. District Court, ED, filed Nov. 30, 1998).
Chairman Johnson of Connecticut. Mr. Baldwin?
STATEMENT OF HOWARD G. BALDWIN, JR., DEPUTY ATTORNEY GENERAL,
TEXAS CHILD SUPPORT DIVISION
Mr. Baldwin. Madam Chair, Representative Cardin,
distinguished Member, my name is Howard Baldwin. I am the
deputy attorney general for child support for the State of
Texas. Today I am representing myself and Attorney General John
Cornyn, State of Texas.
Although many things in these bills are very positive, I
really want to focus on two aspects--one is the distribution
changes and the second is non-IV-D access.
With regard to the distribution changes, passing through
100 percent of the child support to former TANF families, what
I call ``full family first,'' is very good public policy. Of
our 1.2 million cases and two million children served in Texas,
17 percent are TANF recipients, 50 percent are former TANF
recipients. This change will provide $30 million a year to help
those families reach self-sufficiency, just in the State of
Texas.
This change, however, comes with a cost. The loss of
retained collections impacts program funding. There is a
study--I believe it is last year--from the Office of Child
Support Enforcement, the Lewin Study, that indicates that 16
States fund their program in part or in whole with child
support retained collections. Those States include Texas,
Kentucky, Louisiana, and Oklahoma, which are of interest, I
know, to this Committee, as well.
The bill attempts to deal with that issue in two different
ways. One, it delays mandatory implementation of the bill until
October 1, 2005, to give the States time to prepare. That would
give Texas three legislative sessions--we have biennial
sessions. That helps. The second issue is it allows retained
collections that are lost to be used for TANF maintenance of
effort, to be claimed as that. It also allows TANF to be used
to replace lost retained collections to the extent it is
available.
My concern is that TANF dollars will not be available to
the States that need those dollars; that this will force tough
decisions for State legislatures that have many worthy programs
and waiting lists for certain social services, and that the
choice will be cutting child support program funding. To put it
in perspective, if that funding is cut, that $30 million
becomes $90 million when you lose the Federal match. That cuts
my program, for example, in one half if it is not replaced. And
I understand the State would have some flexibility to replace
it.
What I respectfully recommend is that you study this issue
and deal with it in TANF reauthorization to ensure that this
issue is there and that there is a funding source available to
deal with this issue.
Second, I want to talk about non-IV-D access. First, the
bill provides the mechanism for access by public non-IV-D
agencies. In most States, counties or parishes contract to
provide IV-D child support services and they get access to
every one of these tools. In Texas and some other States we
have non-IV-D public child support agencies that have a long
history--in fact, a longer history--of providing services than
the IV-D program to our citizens. These programs report to
elected officials--to district judges who are elected by the
people or to county commissioners court, the governing body of
the county. They are accountable to the people. They should be
trusted with this information with appropriate safeguards, and
parents should be able to choose to go to their local county
child support office and have the same tools made available to
them.
Today, private attorneys cannot access tools available to
IV-D agencies. All IV-D agencies do not oppose giving this
access. I should state that. There was a statement earlier that
implied that. All do not. But, with appropriate safeguards,
parents choosing to go to a private attorney should be allowed
the same tools that we have paid for with government dollars to
create. Parents should be able to choose a private lawyer if
they want to do so and have the freedom to make a contract.
Admittedly, there are lots of issues that need to be dealt
with. We see giving public and private agencies access, with
appropriate safeguards, to these services to being akin to
putting more troops on the battlefield.
I have 2,500 employees handling 1.2 million cases in the
State of Texas. We need more help, and this is a mechanism to
get it.
Thank you very much.
Chairman Johnson of Connecticut. Thank you very much.
[The prepared statement follows:]
Statement of Howard G. Baldwin, Jr., Deputy Attorney General, Texas
Child Support Division
Chairwoman Johnson, Congressman Cardin, and other
distinguished members of the Subcommittee, I am Howard G.
Baldwin, Jr., Deputy Attorney General of the State of Texas and
Director of the Attorney General's Child Support Division which
administers the Title IV-D program in the State of Texas. I
also serve as a board member of NCSEA, the National Child
Support Enforcement Association.
I want to thank you for the opportunity to offer testimony
today on the legislative proposal the Subcommittee is
considering with respect both to changes in the rules for the
distribution of child support collections and to providing
State Title IV-D agencies the option of allowing public and
private non-IV-D enforcement entities access to certain
enforcement resources and remedies.
First, let me offer some observations about the proposed
changes in the rules for the distribution of child support
collections made by a State Title IV-D agency. There is no
question that many State IV-D agencies have found the
implementation of the distribution rules prescribed by the
Personal Responsibility and Work Opportunity Act of 1996
daunting, at the least. Making requisite changes to automated
systems, training agency staff, explaining the order of
distribution to custodial parents--all these tasks have been
challenging, particularly in the face of the statutory
deadlines within which the 1996 requirements have to be met.
The real problem confronting State IV-D agencies has been,
perhaps, the complex scheme of assignment of support rights
that underlies the 1996 distribution rules. As you know,
families must assign their rights to child support as a
condition for receiving public assistance. This has been true
since the beginning of the Title IV-D program. The 1996 Act
sought to implement the principle of paying the former family
first all of the arrearages owed the family, that had accrued
before and after the family received assistance, before
reimbursing the state and federal governments for the amounts
of assistance paid the family. While this is, unquestionably, a
worthy goal, the actual process of achieving that end has been
fettered by the requirement that State IV-D agencies keep track
of the several categories of arrearages that arise from the
different kinds of assignments that operate under the Act's
provisions.
The legislative proposal before you, which extends the
principle of ``family first'' advanced by PRWORA, constitutes
sound public policy. Any amendment of the assignment/
distribution rules must comport with that principle, to the
extent possible. This proposal would dramatically change the
scheme of assignments and, thereby, greatly simplify the rules
for distributing support in the case of families formerly
receiving public assistance. As you consider this proposal, I
would, however, respectfully ask this Subcommittee to keep in
mind that historically the distribution of support collections
by State IV-D agencies in current and former assistance
families is a matter linked to State funding of the Title IV-D
program. States have looked to their share of collections in
current and former assistance cases--those amounts assigned to
the State for reimbursement of public assistance--as an
important source of funding for their IV-D programs. A recent
study indicates that this continues to be true for
approximately 16 States, including Texas. The complete loss of
these ``retained collections''--including collections made
through the Federal income tax intercept--imposes a difficult
fiscal burden on those States, one that requires the
replacement of the lost funding with State general revenues,
unless some alternative source is available. My concern is that
state legislatures confronted with difficult choices about
which worthy programs to fund may find it necessary to cut
child support program funding, thereby depriving families of
the services they need to achieve self-sufficiency.
While the proposal before you contains an option for states
to use funds appropriated as Temporary Assistance for Needy
Families, TANF, some states, including Texas, are concerned
that TANF may not be available for this purpose at the time
such funding is needed.
Because of the significant fiscal ramifications of the
proposed changes to the distribution rules, as well as because
of other key issues associated with any change in the
distribution process--not the least of which is distribution
when two or more States have assignment claims--I would
respectfully ask the Subcommittee to defer action on changes at
this time. We in Texas share the concern that members of this
Subcommittee and other members of Congress have that there be
an increased flow of collected support to vulnerable, former
assistance families. We want, as do our sister States, to
achieve a far simpler financial accounting system in support
collection and distribution than the current scheme of
assignment and distribution rules allows. We certainly seek to
be able to make the assignment and distribution process more
intelligible to the families we serve. But we believe that any
amendment of the current process requires a more searching
analysis of the complex issues inherent in the process than we
have thus far been able to undertake. Such issues would be
appropriate for consideration during the TANF reauthorization
process.
With respect to extending access to certain enforcement
resources and remedies to public and private non-IV-D
enforcement entities, I am happy to say that we in Texas
support the proposal. Indeed, the organizational
characteristics of the Texas IV-D program, as well as the
structure of Texas Family Law developed by our legislature,
already provides a firm foundation for productive interaction
and cooperation with non-IV-D enforcement agencies in the
State. Let me explain.
Texas has the only Title IV-D child support enforcement
program in the country that reports directly to a statewide
elected official, and it is one of only a few states that does
not place its IV-D program under the umbrella of a human
services agency. That was not always the case. Initially, the
Texas IV-D program was situated in the State's Department of
Human Services, but in 1985, the Texas Legislature acted to
assign the administration of the program to the Attorney
General. That move meant that the Texas IV-D program would be,
as it currently is, a centrally administered, statewide
program, delivering services through local field offices
(currently numbering 68) and using its own staff (currently
numbering 2,524 employees) including its own attorneys
(currently numbering 200) to perform enforcement actions under
the aegis of the Attorney General. Unlike many states that
deliver services by contracting with counties, the Texas
program has only two county-based projects in which, under a
Federal waiver and contracts with the counties, all new child
support orders are processed as Title IV-D cases, unless the
custodial parent declines services.
The 1.2 million child support cases handled by the Title
IV-D agency constitute about one-half of all child support
cases in Texas. The other one-half is handled by county child
support entities, such as domestic relations offices, a
``Friend of the Court'' system, and local court registries, and
by private agencies and private attorneys.
What, I think, is particularly noteworthy about the child
support enterprise in Texas is that the Texas Legislature has
made available to non-IV-D enforcement entities all the
enforcement tools authorized by Congress, as these tools were
developed and to the extent permitted by Federal law. For
example, public and private non-IV-D providers of enforcement
services may--independent of the IV-D agency--use statutorily
prescribed procedures for the imposition of liens or license
sanctions for child support enforcement. This, I know, is not
true in all States, even though there is no restriction under
Federal law with respect to the use of these enforcement
mechanisms outside the IV-D arena. Similarly, the Texas
Legislature has provided under the Texas Family Code access by
non-IV-D public and private enforcement entities to a broad
range of enforcement information available through the Title
IV-D agency--again, subject to any limitations under the
Federal code.
The point I would stress with respect to the provisions you
are considering for allowing State IV-D agencies to extend
certain resources and remedies to non-IV-D enforcement entities
is that Texas law already contains all the statutory mechanisms
for doing that. There would be no need in Texas for further
enabling legislation.
I believe that--at least in Texas--there can never be too
many resources brought to bear on the problem of nonsupport.
The Texas Legislature has known this and has acted to ensure
that, to the extent possible, all available resources in the
State--public and private, IV-D and non-IV-D--are enlisted in
the fight on behalf of our children to secure for them the
financial support they are owed and need.
The legislative proposal before you would enable States to
establish more effective relationships between their IV-D
programs and non-IV-D providers of enforcement services. No
State would be required to extend access of IV-D enforcement
procedures to non-IV-D entities. Instead--as I understand the
proposal--each State could determine the extent to which its
IV-D program entered into a collaborative relationship with a
public or private enforcement agency. The option provided by
the proposal would ensure that a State IV-D agency could pace
itself with respect to its own workload so that, in processing
requests from non-IV-D entities, it did not slight its own
responsibilities. Personally, I do not see that what is being
proposed would bring an excessive or unmanageable increase in
State IV-D agency activity. What I do see is that it would
provide the State IV-D agency with more effective partnership
with the valuable resources outside the agency.
As for any concerns about misuse of information or of
enforcement mechanisms by non-IV-D entities, I should note that
county child support offices report to either elected district
judges, or to the elected governing body of the county, the
Commissioners Court. I believe that these elected officials can
ensure that adequate safeguards are in place to prevent any
inappropriate use of these tools and information. I also note
that the proposal calls for the Secretary of Health and Human
Services, in consultation with appropriate parties, to develop
sets of recommendations, including substantive and procedural
rules, for the extension of enforcement mechanisms and
information to public and private non-IV-D agencies. Moreover,
any non-IV-D public and private enforcement agency seeking use
of information and remedies would have to satisfy standards and
procedures set by the State IV-D agency with respect to data
security and the protection of confidentiality, privacy rights,
and due process. I cannot imagine a more thorough process for
protecting the integrity and appropriate use of the enforcement
information and procedures.
Madam Chairwoman, I would respectfully urge you and your
distinguished colleagues on this Subcommittee and in the
Congress to support this proposal as yet another step we can
take in strengthening the child support effort in our nation.
Parents seeking child support need all the help we can
provide--and their children deserve no less.
Thank you.
Chairman Johnson of Connecticut. I appreciate your
comments, Mr. Baldwin, because I really find it hard to
understand those of you who are just radically opposed to this
proposal.
First of all, I do think there is a difference between non-
IV-D public agencies. Do you see that as a difference? I don't
see why we shouldn't let Texas use its county structure the
same way we let States use their State structure. Now, do I
have objection to that? I am trying to narrow the focus here..
Ms. Turetsky. Madam Chairwoman, I will speak for myself. I
do have concerns about expanding non-IV-D access to public
agencies. There are somewhat different concerns than with the
private agencies, and they have to do with the history of the
child support program and how the fragmentation of the program
has hurt performance and a consolidation of the program has
helped. That is one set of issues. I think it had a lot to do
with the political structure of the State, but also the
political dynamics of the State, and we have seen some concrete
evidence of where a fragmented program has great difficulty
implementing some of the tools enacted by Congress, such as the
statewide system and the State disbursement unit, and it is
because of the fragmentation of authority and the ability of
locally elected officials sometimes to block requirements from
Congress.
Our concerns are structural. Our concerns are the
proliferation of access and a lack of--not of due process, but
of many users using the system, and our concern that it is a
different set of families, and so families being served by the
clerk of the court system are entering the system in a
different way and they tend to be better off. Since we are
advocates for low-income families, we are concerned about
conserving resources for them in the public system.
Chairman Johnson of Connecticut. Ms. Smith, do you have
anything to add to that in terms of non-public agencies?
Ms. Smith. Yes. There are two issues--
Chairman Johnson of Connecticut. I mean non-IV-D.
Ms. Smith. Right, with respect to public non-IV-D. The
first is dealing with employers and financial institutions--
banks, in particular--employers with wage assignments and banks
with levies to collect arrearages. We spent a lot of time
developing relationships with those entities, and they like
having one agency that they can deal with for processing any
wage assignments and levies and any questions they come up
with, so that the process for them is consistent and simple as
possible and it minimizes any inconvenience to them.
Having multiple entities dealing with employers and banks
is going to make it more complicated. We are concerned that it
will erode the great deal of cooperation that we have gotten
from employers and banks so far.
The second issue has to do particularly with noncustodial
parents who have multiple families. One case may be enforced by
one entity, and the other case may be enforced by another
entity, with the result you don't have a coordinated way of
dealing with the enforcement processes that go on.
Chairman Johnson of Connecticut. Say that more clearly.
Ms. Smith. Suppose a noncustodial parent has two families
and one family's case is being enforced by the child support
agency and the other case is being enforced by the local
circuit court--
Chairman Johnson of Connecticut. But is that likely to
happen?
Ms. Smith. It happens all the time.
Chairman Johnson of Connecticut. All right.
Ms. Smith. Yes, it does.
Chairman Johnson of Connecticut. So the problem of multiple
fathers equals multiple enforcement cases.
Ms. Smith. Right. Multiple mothers. A father who has
several families, and we have some--
Chairman Johnson of Connecticut. Often the mother has
several fathers.
Ms. Smith. That is also true. When the money comes in, for
example, if there is enough money to meet all the obligations,
we pro rate it according to the amount of the current support
order. If you have two different entities that are processing
the money, then you don't get the kind of equity to the
different families that we are able to organize by virtue of
the fact that all the money comes to us.
The other issue relates to computer linkages and hookups.
There are a lot of technical details that would have to be
worked out. But I certainly think that courts are much more
aware of and conscientious about privacy protection and due
process than the private sector.
Chairman Johnson of Connecticut. Anyone else want to
comment?
Ms. Durham-McLoud. Simply to say that this is an
exceedingly complex issue and very heartfelt by all of the
participants in this process. I can tell you we have our work
groups in place working on this issue, trying to come to a
consensus, because we believe that if we can form a consensus
it will be better for everyone. But I can tell you that Mr.
Baldwin and Ms. Smith are both active members of the board, and
Ms. Turetsky belongs, as well, so we are not currently in a
position to do a positive position.
Chairman Johnson of Connecticut. Well, you might take note
that if you can't resolve it I might.
Ms. Durham-McLoud. Thank you.
Chairman Johnson of Connecticut. Mr. Primus?
Mr. Primus. I think it goes in the opposite direction of
where we have been headed. In other words, the child support
system has to deal with employers, banks, credit bureaus, and
so forth., and if you have more than one agency in a State
responsible for that, I think it sets up fragmentation.
The fact that we have had fragmented programs and we have
decisionmaking at many different levels in the system, you
know, frankly, has deterred our efforts, for example, getting
all of our automation tools up and running. I mean, I really
think we come to a place now where we stand on the threshold,
because of the new higher database, the child support registry,
the disbursement unit, where we can make substantial advances,
and now, going in the other direction and allowing more
fragmentation, I think is not good.
Chairman Johnson of Connecticut. OK. Mr. Baldwin?
Mr. Baldwin. First, with regard to wage assignments, we
have universal wage withholding in Texas. Private attorney, a
domestic relations office, or the IV-D agency, or the parent
who is owed the support, the obligee, can all serve withholding
on people today. Employers do not have one person, one entity
to deal with in most States.
Second, most programs are county based in this country,
they are not State-administered, State-delivered. We are
unusual in that respect. Because of that, employers and other
folks are used to dealing with a multitude of people--and I am
talking specifically now on the county issue.
With regard to levies, I hear what Ms. Smith says, and we
are concerned enough that we are considering centralizing other
States to come through us to deal with Texas banks and credit
unions when they want to serve a levy on a Texas institution
because they won't know our law, and it is very complex, and we
are thinking about providing that as a service and have,
indeed, applied for a grant from the Federal office to look at
that.
With regard to cases handled in multiple places, it happens
today. I have it within the State with two child support
offices that are both State-administered and try to get them
moved in the same location.
When you have a county-based system--California would be a
good example--you have 57 counties that potentially could all
have a child support case for the same noncustodial parent that
you have to deal with in multiple families, so you have
problems like that.
There is an answer to some of these issues. That is to
require public non-IV-D agencies to come through the State IV-D
agency, to let that State agency control that process.
In the day of computerization with web-based technology, we
are not talking an incredibly difficult process to resolve.
People can enter data on a web application and upload it to the
State. If they are big enough, counties can do a data exchange
with the State.
We don't see those to be insurmountable problems, and the
same thing, frankly, can be done with privates if the will of
the Congress is to extend that remedy to them, as well.
Chairman Johnson of Connecticut. Thank you. You made two
points that I think are important.
First of all, these contracts will be controlled by the
State. They don't have to do them at all if they don't want to,
and there is no reason why they can't say, ``This is the
information you can have if you apply to us on the forms we
tell you to use, and we will give you the information.''
Current law allows the custodial parent or their attorney.
Now, you are forcing them to buy an attorney. You don't have to
be TANF-eligible to not be able to afford an attorney. So yes,
you can allow the custodial parent--it is pretty formidable,
and it says also under current law, ``or their agent,`` to
obtain through a written application process available in the
parent locator service, so they can already do that.
All we are talking about really is an agency that can do
that for them, and aren't you better off with an agency that
can help them, because now it already says their agent. This
just isn't being used much. Why don't you want to get control
of it before it is used much?
They can use the parent locator system to get their Social
Security number, address, employer, and employer's address, and
similar information, and then they can serve the order.
Now, all we do is to say that, by 2001, a report providing
guidance to States on how to implement access to information
and enforcement tools would be--this is not direct access. We
don't say ``direct access will be published by the Secretary of
HHS.'' These recommendations will include substantive and
procedural rules that should be followed with respect to
privacy safeguards, data security, due process rights,
administrative capability with State and Federal automated
systems eligibility requirements, such as registration,
licensing, posting for bonds, for access to information and use
of enforcement tools. Penalties for violations of the rules
will also be recommended.
We do not say that the contracts can cover nothing else. We
just say, at the very least, HHS is going to make some
recommendations about these critical privacy data management
issues.
Now, we do say it is State option, and, with appropriate
protections beginning in 2002, that then States could, at their
option, contract with IV-D public programs and with private
agencies.
Now, second, under enforcement options, this is current
law: ``Private child support agencies--'' I am doing this not
so much for the benefit of you who work in this all of the
time, but I think all of us need to be reminded that under
current law agencies have access to enforcement tools such as
wage withholding, license revocation, and child support liens.
Now, liens are one of the most hostile tools you can
possibly use, in my estimation, because they can cripple the
ability of the non-supporting parent to earn a living. So why
would you want to have access to liens and not have access to--
now, I appreciate we don't want everyone and his brother going
to the bank. And I think Mr. Baldwin's idea that they are going
to think about having everybody come through their State agency
makes a lot of sense.
Current law doesn't prevent you from doing that, right?
Mr. Baldwin. No.
Chairman Johnson of Connecticut. So we don't want to
prevent the development of a system that can honestly deal with
information, but when you professionals sit there and say that
one of the problems with this is that there are going to be
more users, when we were only collecting 22 percent of the
child support, listen to what you are saying. We are doing a
terrible job. We have better tools. They are improving our
effectiveness. We are proud of that. But, in terms of how much
of the total child support non-collected money we are getting,
it is still bad news.
So it is not an excuse that there would be more users. It
is not an excuse that it is a different set of families. In
fact, talk about blood boiling, no, if you are rich and you get
divorced, you have got the money for a lawyer if there is not a
lot of child support. It is the $30,000 families who divorce
and then they each have got 15 or less, I mean, there is no
room for lawyer payments here.
If I were a State child support enforcement person, I would
no more contract with an agency that was going to take 33
percent of the child support than jump over the moon.
Would you, Mr. Baldwin?
Mr. Baldwin. I have to say this--and I want to be fair
about this--there are private contracts between private
individuals. If we did our job, people wouldn't make that
choice.
Chairman Johnson of Connecticut. Right. OK.
Mr. Baldwin. If we were available, they wouldn't make that
choice.
Chairman Johnson of Connecticut. Because, in my estimation,
the States are not going to contract with everybody. They are
going to contract with specific agencies, and there will still
be these other agencies out there. And if, for some reason,
they are desperate enough, or whatever--I don't know what the
circumstances would be that would lead someone to choose that.
I hope in the next panel we will get a little bit better
insight on that.
But I will tell you, I see no hope. You mentioned, Ms.
Turetsky, that the current welfare reform system is depriving
our child support agencies of their level of funding. I guess
you mentioned that too, Ms. McLoud. I see no hope. I mean, the
most we are going to be able to do is somehow get it back up to
hold harmless, but there is no big money out there that is
going to flow into the system for enforcement. And our
enforcement agencies are doing much better, our tools are much
better. Why shouldn't some other agency be able to work through
the State and the State give them the information from the bank
or notify the bank or whatever? Let us work this out. But don't
just tell me we can't do it.
We need to identify the problems, we need to identify the
solutions, and we give ourselves in this bill a whole year to
think about it, then we don't let them in for 2 years. Come on,
kids, let us get courage out here. We are serving a pathetic
number--I mean, we collected 14 percent of TANF cases, 22
percent of non-TANF. Not a record I am proud of.
That is how strongly I feel about this, to give you some
sense of indicator here, and what we need to work on. But I
appreciate your going through your concerns, and I understand
the concern about too many people using the system, but we have
to overcome that. We have to be able to govern the system
better than that.
I am aware of all the abuse that has gone on in this, but
there are also some good actors, so I think--get your board
together. If you can figure it out, you know, how receptive we
are to think that you have figured out for yourselves, so you
have got your work cut out for you.
Mr. Cardin.
Mr. Cardin. Thank you, Madam Chair.
Dr. Primus, did you want to respond to that last point? You
seemed very anxious.
Mr. Primus. Yes, I would, if I could.
I really do appreciate the chairman's intent behind this
provision. I mean, I understand that. I guess the question is:
What do you do first? I think the evidence, as some of my
colleagues in the second panel suggests, that what you ought to
do first is get a hold of this unregulated industry and make
sure--it is not just the access to the information. It is the
charging. It is the advertising practices, and so forth. Then,
again, decide what to do about that and mandate that the States
regulate, and then decide what additional tools they should be
given.
So it is not a question--we are not disagreeing with the
intent here.
Chairman Johnson of Connecticut. Would you yield on that
point though?
Mr. Cardin. I am glad to yield to my chairman.
Chairman Johnson of Connecticut. See, the problem is that,
first, we don't like to mandate. It would be hard to get a bill
through the Congress mandating that States pass laws to
regulate this whole sector when they haven't been regulating
them.
Second, they don't know enough to regulate them, frankly.
If we let States--if we do this, through those contracts we
will see a variety of State solutions, and then we will know
whether there needs to be, and so will the States.
In instance after instance, welfare reform, disability
reform, many instances, it has been the State experimentation
that has led to improved public policy.
I think what you are saying is, ``Wait 3 years while we
mandate this in the States and they do something.'' With this
collection record, Wendell, do you really want to do that?
Mr. Cardin. Let me reclaim my time. I happen to agree with
the Chair on this point. That is, I don't have a great deal of
confidence that this Congress will pass legislation that would
set up the regulatory protection for these types of collection
agencies for the States to act. I also do not have a lot of
confidence that the States have performed very well in this
area.
So, getting back to Mr. Baldwin's point, which I think is
the right point, that the use of these additional tools should
be with appropriate safeguards--quoting your language--
appropriate safeguards. We don't have the appropriate
safeguards. States already have certain options available to
them that they have not used.
Mr. Baldwin, I don't mean to put you on the spot, but you
are the only Attorney General that I have here. Looking at
Texas, we have some--Ms. Turetsky has attached to her exhibit
some rather difficult cases to understand. We don't know how
accurate all the information is on complaints that are filed,
but in one case the parents of a noncustodial parent were
terribly harassed and intimidated to put child support
arrearages on their credit card. In another case, a spouse of a
noncustodial parent's credit was affected by the way that the
private collection agency performed. In another case, abusive
practices were used. All of these are pending, I assume, before
Texas.
I guess my point is that--and it is Dr. Primus' point--it
seems to me that, before you look at expanding and giving this
additional power to non-IV-D parties, we should be assured that
there are appropriate safeguards in place, and the State record
here has not been very good.
The Chair points out--and rightly so--that there is certain
information currently available. That is correct. But what the
legislation would make available is everything we have under
the new hires and under the financial information from the
banks, which is pretty powerful material. This is a new level
of information that would now be available that is very
sensitive on privacy, very sensitive type of information on
which we depend. We have had hearings before our Committees. We
depend upon the good will of the private sector to help us in
getting this information together, because they are interested
in helping us collect child support. They are. But if it is
used to get an elderly couple intimidated the use their charge
accounts, credit cards, more than they should to help a
noncustodial parent who is their son in an inappropriate way,
that is something we need to protect against. That could very
much compromise the credibility of this information that is
currently being made available to collect child support.
I appreciate what everybody is saying here, but I really
don't believe we have the appropriate safeguards in place, and
I don't think this Congress is going to mandate that you put in
the appropriate safeguards.
I will be glad to let you respond to that.
Mr. Baldwin. Thank you.
One, I think that there is a distinction between where we
are now and where we would be with this bill. Where we are now
is, as a IV-D program, I have zero authority to regulate
private collection agencies. It is not a IV-D function. I
couldn't do that today.
The Texas Legislature has considered and passed out of the
Senate but not the House last session a regulation, but--
Mr. Cardin. But the State of Texas could give you that
authority?
Mr. Baldwin. State of Texas could not give me, as the IV-D
agency, but could give an entity of the State that authority.
You would have to authorize--
Mr. Cardin. Couldn't they give the Attorney General the
authority to do it?
Mr. Baldwin. Sure.
Mr. Cardin. So that is--
Mr. Baldwin. Can I make a distinction? I am not trying to
be pedantic here. It is that it is not a IV-D function. It is
not reimbursable from the Federal Government for me to
regulate. It is absolutely an authority that could be granted
to the State Attorney General. We already have a consumer
protection division that investigates these complaints. I do
not. That is the appropriate forum to investigate.
That is just one point.
Under the bill, if it were passed, I could extract some
measure--you could call it regulation or some measure of
control over a private or public entity that wanted access to
this information through the contract, through the agreement,
that I don't have today, because today I have to comply with
the Federal law and regulation and release locate information
to firms with no control other than--
Mr. Cardin. I guess my point would be: Why do you think the
States would perform better under this authority, where they
haven't performed very well under the current authority--that
is, the general authority you have in the States?
And it gets me to the second point that I am a little bit
perturbed about on the finance. I understand that you work from
one budget year to the next and we never really look at the
philosophy on how these things are funded and rationale, but if
all programs were financed by the Federal Government as well as
we finance child support collection administrative costs, the
States wouldn't have to impose any taxes. In fact, they could
do some other things, because the system pays, in some cases,
over 100 percent.
So there is something here about a partnership and there is
something here about trying to develop good policy, and the
Federal Government has a major responsibility as a major
partner in this, but I think it is a little bit unfair to
suggest that, because you--and Mrs. Johnson's bill gives it 5
years before we really implement this, and we do have to give
the States an opportunity to adjust to whatever changes we
make, and I fully agree with the Chair on that point.
But when we look as to what is the right policy here, the
States should be putting more resources into these areas. The
Federal Government has done an extremely effective job and a
very generous job here, and I think it is not fair to say that
the financing here has every--we have got to reimburse the
States for all these additional burdens that we are putting on
here.
Mr. Baldwin. I wouldn't contend you have to reimburse the
States. We have granted to the States TANF dollars to use in
providing services to families to reach self-sufficiency. There
is no better program to help a family reach self-sufficiency
than the child support program.
A University of Texas study shows that the impact of the
child support dollar collected is three times greater than a
dollar of earnings.
There is no question. What I just don't want to see happen
is the legislature is confronted--and I know you know this--
confronted with a tough choice for many worthy programs, that
program funding could be cut in the short term while we are
dealing with this issue.
Mr. Cardin. That is fair enough, just so that we start
getting some support at the State level for recognizing the
fact that the funding here is somewhat out of balance between
the Federal and the State in that regard.
Dr. Primus.
Mr. Primus. Just adding to your point, Congressman, I mean,
if the States spend an additional dollar, they would
automatically get two additional from the Federal, so, I mean,
the control of how much we are actually investing here is very
much at the State legislative level, and there is an open-ended
match.
My concern with the Johnson bill is that, you know, it
grandfathers the fact that the Federal Government is going to
pay 90, 95 percent of the cost of these distribution changes
forever. I think, because it is a Federal/State partnership,
you should look at that and see whether that grandfather should
last in perpetuity.
Mr. Cardin. Ms. McLoud?
Ms. Durham-McLoud. To go back to the call that we made for
a commission to look at the financing, let me say quickly that
it is not simply a matte of trying to get more money for the
program. Anyone who says that they don't want more money for
their program, you probably wouldn't believe anything else they
said, either. But it also, in addition to the dollars, provides
an educational process for the policy-makers who are addressing
that program.
Let me suggest that would work at both the Federal and the
State level, because we bring all of those players to the
table.
The policy issue I think is just as important as where the
dollars will come from. This is a personal Dianna Durham-McLoud
opinion, not necessarily endorsed by anyone I know on or off
the Board, but I don't believe that many of our State
legislators had a real sense of the comprehensive nature of the
child support program until PRWORA passed. It was when the
PRWORA bill showed up in some legislatures that they went,
``Wait a minute. Hold it.'' Now, I am perfectly prepared, as a
former administrator, to say in part that may have been my
fault for not doing a better job of getting that message out,
but I think the attention to the program is just now, in the
last 10 years, starting to be focused there, and you have been
very helpful in making that happen.
Mr. Cardin. Let me just conclude by just focusing, Ms.
Smith, on the last point that you were making, because I am not
sure I fully understood the issue.
That is, if one agency enters into an arrangement, because
these are State options, it affects other States as far as the
information. I didn't fully understand that point, if you
could--
Ms. Smith. The way I read the proposal, if in Texas, for
example, where they seem more receptive to this proposal than
elsewhere, private collection agencies from all over the
country entered into agreements, or an agency in Texas that had
custodial parents from all over the country entered into an
agreement with Texas, they could submit those requests to Texas
and it would go up to the Federal Parent Locator Service, and
they would have access to all of the information that comes
from Massachusetts, where I do come from, which has a culture,
by virtue of being in the tax department, that is very, very
strict about guarding confidential data. I mean, we are as
strict as the IRS, if not stricter, because of the amount of
information that we have.
So we would be very resistant to allowing our citizens,
whose privacy we are committed to protecting, having their
information being submitted to the Federal Parent Locator
Service and people from all over the country could access that
by virtue of going through one State that has elected this
option.
There is a little bit of a Trojan Horse component to this
bill, because it looks like there are lots of options here, but
the way I read it, and my colleagues have read it the same way,
is that if one State goes down this path, the rest of us are
automatically on that path, whether we like it or not.
Chairman Johnson of Connecticut. He is shaking his head. I
just want to make sure--
Mr. Baldwin. I actually believe that she is correct that
under current Federal law--let me just do it that way--anyone
can apply in any State and cannot be denied services, so non-
Texas residents can apply to the Texas IV-D agency or someone
on their behalf, their attorney, can access parent locate today
by going through me. In fact, we have a very sizeable private
parent locate number of requests.
Mr. Cardin. Thank you.
Thank you, Madam Chair.
Chairman Johnson of Connecticut. If the next panel will
come forward, we will be able to hear at least one and maybe
two of them.
Thank you very much for your testimony, for your
thoughtfulness, and for the dialog. Thank you.
We will be hearing first from Ms. Joan Entmacher, vice
president and director, Family Economic Security from the
National Women's Law Center.
Ms. Entmacher.
STATEMENT OF JOAN ENTMACHER, VICE PRESIDENT AND DIRECTOR,
FAMILY ECONOMIC SECURITY, NATIONAL WOMEN'S LAW CENTER
Ms. Entmacher. Chairwoman Johnson and Members of the
Subcommittee, thank you for this opportunity to testify on
behalf of the National Women's Law Center and for the work you
have done to develop the Federal/State child support
enforcement program.
The Center strongly supports the assignment and
distribution changes proposed in the Child Support Distribution
Act, and the even more comprehensive reforms of the Child
Support for Children Act. These proposals would move the
program even further toward the goal of increasing child
support for children.
Unfortunately, the proposal to allow States to increase the
powers of private collection companies and non-IV-D agencies,
Title III of H.R. 4469, would move in exactly the opposite
direction. The Center is concerned that those provisions divert
child support intended for children, and collected by the IV-D
program, to for-profit companies.
Representatives of the private child support collection
industry often justify their high fees--typically one-third of
collections, by saying that two-thirds of something is better
than nothing. But too often, parents pay one-third for nothing
because IV-D has actually collected the money.
Another argument private companies make for increased
powers is that they offer consumers a choice. The complaints in
my testimony highlight complaints from consumers who tried to
cancel the contract and were told they were on the hook
indefinitely paying a portion of their child support.
I appreciate, Madam Chairwoman, your statements recognizing
the seriousness of the problems that exist, so I won't go
through those complaints in my testimony, but I have to
respectfully disagree that H.R. 4469 would help solve the
problems that already exist. I believe that a better approach
would be to study the issues, make sure that effective privacy
and consumer protections are in place nationwide to deal with
the existing issues before any expansion of authority of these
institutions is considered.
I don't want to be defeatist, but I do want to go through
some of the issues that should be considered.
First, giving access to additional IV-D tools, such as the
tax refund intercept, would just expand companies' ability to
take a cut of child support actually collected by IV-D for
children.
Second, the bill leaves it to the States to develop
protections. You have said that one of the advantages of that
approach is that States could experiment with different
approaches. I believe Ms. Smith gave the response to that,
which is that if one State develops weak protections, the
privacy of all Americans would be jeopardized. That is one
reason why the Consumer Federation of America, Consumers Union,
and U.S. PIRG joined together to express concerns about the
privacy implications of this proposal.
The third point is that just verifying that a request is
being made for child support purposes is difficult or
impossible, since there is no all-inclusive Federal registry of
child support orders. The Federal case registry only includes
information on non-IV-D orders entered or modified after
October, 1998, and it doesn't include any payment information
on non-IV-D cases.
Next, the States also will find it difficult to prevent
erroneous or abusive collection practices. Since the Federal
Fair Debt Collection Practices Act has been held not to apply
to child support debts, each State will have to develop its own
legislation to curb the kinds of abuses that are suffered by
noncustodial parents that are highlighted in testimony
submitted by several witnesses. And, verifying arrearages in
non-IV-D cases before sending cases on for such tough tools as
tax refund intercept, passport sanctions, and others will be
difficult because there is no way to match those arrearage
claims against automated records. They don't exist for non-IV-D
cases.
Errors that were made in intercepting tax refunds could
affect citizens in several States who are owed the refund or
who have another claim on those tax refund proceeds.
Finally, the cost of implementing these options would
divert IV-D resources away from providing services to families
and re-fragment the child support system. I fear that this
proposal would reduce rather than help children get child
support.
Thank you.
[The prepared statement follows:]
Statement of Joan Entmacher, Vice President and Director, Family
Economic Security, National Women's Law Center
Chairwoman Johnson and Members of the Human Resources
Subcommittee, thank you for this opportunity to testify on
behalf of the National Women's Law Center. The Center is a
nonprofit organization that has worked since 1972 to advance
and protect women's legal rights. It has been a strong advocate
of improved child support enforcement for more than two
decades. I and other Center staff have presented testimony on
child support issues to this subcommittee on several occasions,
commented on child support regulations of the Department of
Health and Human Services, litigated child support cases and
met with officials in the Administration, Congress and the
states in furtherance of the Center's efforts to improve child
support enforcement. The Center also provides information to
women across the country in English and Spanish on how to
exercise their rights to child support through state child
support offices, and assists low-income women in the District
of Columbia with child support and family law issues.
Since the creation of the child support enforcement program
under Title IV-D of the Social Security Act in 1975 (the ``IV-D
program''), the program has evolved in important ways.
Initially, the primary mission of the program was to recover
welfare costs, though it also provided services to families
that had never received public assistance. Today, the majority
of families served by IV-D have not received public assistance,
but most are low and moderate income.\1\ Since the passage of
the the Personal Responsibility and Work Opportunity
Reconciliation Act (PRWORA) of 1996, the number of families
receiving public assistance has declined sharply. More single
mothers are working, but they are still struggling to make ends
meet. It is time to complete the transformation of the IV-D
program into a program that helps families achieve greater
economic security by securing child support for children.
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\1\ A recent analysis by the Assistant Secretary for Planning and
Evaluation, ``Characteristics of Families Using Title IV-D Services in
1995'' (May 1999), found that 63% of custodial parents eligible for
child support used the IV-D system. Only 23% of custodial parent
families in the IV-D system had family incomes of 250% of poverty or
above (in 1995, 250% of poverty was $30,395). Over half (53%) of the
custodial parent families not using the IV-D system had incomes of 250%
of poverty or greater.
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Some of the proposals the Subcommittee is considering
represent significant steps toward this goal, giving greater
priority to the child support claims of families over
government claims for welfare reimbursement. Unfortunately, the
proposal to allow states to increase the powers of private
collection companies and non-IV-D agencies (Title III of H.R.
4469, the Child Support Distribution Act of 2000) would move in
exactly the opposite direction. Those provisions would increase
the profits of private child support collection companies at
the expense of children and undermine the IV-D child support
enforcement program which members of this subcommittee and
staff have worked hard, on a bipartisan basis, to develop over
the years.
Assignment and Distribution Reforms
The Center strongly supports the assignment and
distribution changes proposed in Title I of H.R. 4469, and H.R.
3824, the Child Support for Children Act. PRWORA gave families
that had left public assistance increased claims to child
support arrearages, but fell short of a true ``Families First''
distribution policy. Under PRWORA, collections made through the
federal tax refund intercept, the single most effective
technique for collecting arrearages, continue to go first to
the state. Even after the PRWORA distribution changes are fully
phased in, families applying for Temporary Assistance to Needy
Families (TANF) still will be required to temporarily assign to
the state their rights to pre-TANF child support arrears. These
and other exceptions to ``Families First'' distribution create
a complex, expensive-to-administer, and virtually inexplicable
distribution system.
The assignment and distribution reforms in Title I of H.R.
4469 would give families that have left TANF more of the child
support paid on their behalf. They also would simplify the
administration of the IV-D program, reducing delays in
distributing funds to families and freeing resources for other
activities. The requirement in Title II that IV-D programs
review the cases of families leaving TANF also would help
families secure the child support they need to achieve self-
sufficiency.
Both custodial and noncustodial parents also would benefit
from the provisions of H.R. 4469 and H.R. 3824 that would limit
the amount of the assignment while a family receives assistance
and direct IV-D agencies not to collect Medicaid birthing
costs. Some states require noncustodial parents to reimburse
the state for birthing costs and past public assistance
expenditures, creating large debts to the state that are
unrelated to and far exceed their ability to pay. These
practices can deter fathers from establishing paternity,
discourage low-income pregnant women from seeking proper health
care, and discourage both parents from working with IV-D. The
proposed changes will make it easier for noncustodial parents
to focus on providing support to their children, not
reimbursing state debt.
H.R. 3824 would provide a more comprehensive reform of
distribution than H.R. 4469. It would require states to pass
through all current child support payments, including payments
for families currently receiving public assistance. This would
ensure that custodial parents know how much child support was
being collected and eliminate the delays in payment that often
occur when families leave welfare. In addition, under H.R.
3824, the federal government would share the cost if a state
chose to disregard some of the child support for TANF purposes.
This would encourage states to allow the child support payments
made by noncustodial parents of children receiving public
assistance to make a direct difference in their children's
lives. This is an important ``fatherhood''--and
``motherhood''--issue.\2\
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\2\ The National Women's Law Center and the Center on Fathers,
Families, and Public Policy in Madison, Wisconsin have collaborated in
the ``Common Ground'' project to bring together practitioners,
advocates, and researchers that work with low-income mothers and
fathers to develop public policy recommendations to increase the
likelihood that children will receive financial and emotional support
from both parents. Participants have emphasized that policies that
direct all of the child support paid by the noncustodial parents of
children receiving public assistance to the state not only deprive poor
children and custodial parents of needed economic resources, but
increase conflict and stress within the family.
---------------------------------------------------------------------------
The Center applauds the bipartisan support for distribution
reform, and hopes that real progress will be made this year.
Proposals to Allow Private Collection Companies and Public Non-
IV-D Agencies Access to IV-D Information and Enforcement Tools
The Center is strongly opposed to Title III of H.R. 4469,
which would allow States to give private child support
collection companies and non-IV-D agencies greater access to
confidential information and IV-D enforcement tools. We
recognize all too well that although the IV-D program has
improved, progress has been painfully slow and uneven. We
appreciate this Subcommittee's commitment to continue to
explore ways of increasing support for children.
We are concerned, however, that Title III would reduce the
child support actually going to children and undermine child
support enforcement by:
diverting much of the child support intended for
children, and actually collected by IV-D agencies, into the
hands of for-profit collection companies;
jeopardizing individuals' privacy;
increasing the risk of erroneous and abusive
collection practices; and
diverting IV-D resources away from providing
services for families and re-fragmenting the child support
program.
Diverting much of the child support intended for children, and
actually collected by IV-D agencies, into the hands of for-
profit collection companies
Given the current, largely unregulated state of the private
child support collection industry, increasing their access to
the information and tools of the IV-D system would expand the
potential for exploitation of custodial parents and children.
Fees in the child support collection industry are high: 25 to
40 percent of collections, often with additional administrative
fees and expenses. Some industry representatives justify these
fees by saying ``two-thirds of something is better than
nothing.'' But what happens all too often is that custodial
parents pay one-third or more of their child support to a for-
profit collection company for nothing--because IV-D has
actually collected the money. For example \3\:
\3\ Examples are taken from complaints on file with State Attorneys
General, collected by Amy Collins and Vicki Turetsky, Center for Law
and Social Policy. For additional examples, see Testimony of Vicki
Turetsky to the Subcommittee on Human Resources, May 18, 2000 and
Testimony of Joan Entmacher to the Subcommittee on Human Resources,
October 5, 1999.
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A mother in Phoenix, Arizona complained that when she signed a
contract with a private collection company, she was not
informed that the State IV-D agency had already located the
absent parent and arranged for the garnishment of his wages.
``[The company] has collected 35% of my support checks for the
past two years for an investigation that was already
finalized."
A mother in Plano, Texas wrote that she had asked a private
collection company for help in collecting past due child
support from her ex-husband. She was already receiving current
support through the IV-D program. She was told that the company
would not intercept those payments, but would make additional
efforts to get unpaid child support. Instead, she complained,
the company simply took its percentage out of payments made to
the IV-D agency. ``They have only managed to help themselves
and pay themselves for their services with money I would have
gotten without their help. . . I am worse off financially now
with their so-called help.''
A Red Oak, Texas mother had an open case with the IV-D agency
when she signed a contract with a private company. She
complained: ``They take the check. They shouldn't be taking my
money. They have not done anything on this case like they
said.''
In the private child support collection industry, the way
to maximize profits is to take a cut of collections while
letting IV-D do the work. Expanding the access of private
collection companies to IV-D information and enforcement tools,
as Title III would do, would only increase the ability of
private companies to profit from the work of IV-D at the
expense of children.
Some may think that while it is unfortunate that consumers
enter into unwise contracts--especially when children owed
support pay the price--the best approach is to let the buyer
beware. But contracts frequently used in this industry are
confusing, even misleading. Even more disturbing, if custodial
parents realize they have made a bad deal, contract provisions
attempt to limit their ability to terminate the contract.
Industry representatives have cited ``consumer choice'' as a
reason to give them access to IV-D systems. But many companies
try to restrict the ability of a custodial parent to choose to
terminate the contract and seek services from IV-D or another
entity.
Some companies emphasize in their advertising that they
help collect ``past due'' support.\4\ However, they then claim
a percentage of current support payments under difficult-to-
understand contract clauses that redefine ``current support''
as ``past due support.'' \5\ By applying current support
payments first to the arrearage, and refusing to allow the
custodial parent to cancel the contract until the arrearage is
paid in full, companies can take their cut of child support
indefinitely, leaving custodial parents with less child support
than if they had written off the arrearage completely.\6\
\4\ See, for example, the website of CSE* Child Support Enforcement
(supportkids.com): ``Founded in 1991, Supportkids.com has achieved
unprecedented success in collecting past-due child support. . ..'' The
CSE contract begins, ``I am asking CSE to enforce and collect ``Past-
Due Support Owed. . ..''
\5\ For example, the standard contract of CSE* Child Support
Enforcement, Co. (supportkids.com), states: `` `Past-Due Support Owed'
also includes any support and interest that become past-due after the
first payment is received by CSE. Regardless of how payments are
designated by NCP, a party making payments on behalf of NCP, court
records, or any other documents, it is specifically agreed that any and
all amounts received by CSE will be first credited to reduce 'Past-Due
Support Owed.' ''
\6\ See, for example, the termination clauses in the standard
contracts of CSE* Child Support Enforcement, Co.
(supportkids.com)(available on-line), NationalChildSupport.com
(available on-line), KIDS, Ltd. (available on-line from their website,
collectchildsupport.com). For an explanation of how such provisions can
leave custodial parents with less child support than they would have
had if they had written off the arrearage completely, see Testimony of
Joan Entmacher to the Subcommittee of Human Resources of the House
Committee on Ways and Means, October 5, 1999.
---------------------------------------------------------------------------
A custodial parent from Fort Worth, Texas told the State
Attorney General she had written the company in an attempt to
terminate her contract: ``It was my understanding that you all
would take 30% of the part that he was in arrears. It was
certainly not my understanding that you would take away what I
was getting currently. This is ridiculous. So cancel the
proceedings.'' They refused. She wrote the Texas Attorney
General, ``I believe that the entire agreement is very
deceptive. . .. They're stating that they're getting the amount
that's late, but what I want to know is: if they are currently
collecting the late part of what he owes me, what happens to
the portion that he should actually be paying me now. . ..? ''
A mother from Seagoville, Texas had sought help from a private
company in collecting $7,130 in child support arrears. She
wrote the Texas Attorney General, ``The contract states. .
.[o]nce total amount owed was collected then I would receive
100%. However that was not done-- In the 4 years time I was on
this contract they collected $16,000, which means they went . .
. over the amount. I would like to have that money back. Can
you help? Please help us. Please help us. Please, Please help
us.''
These common practices also have critics within the
industry. One company representative stated, ``The entire
private child support collection industry needs to admit that
it has been taking unfair advantage of custodial parents.'' He
said his company ``has looked at the fee structure that is in
place throughout the industry and realized that we are charging
parents a sizable amount of money when we are no longer
providing any viable services.'' \7\
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\7\ Michael McCoy, Managing Director, Child Support Intervention,
Press Release dated October 4, 1999 (http://www.deadbeatparent.com/
media/contract--pr.htm). While the CSI contract available on-line
provides for reduced fees after a period of regular payments, it also
restricts the ability of the custodial parent to cancel the agreement.
---------------------------------------------------------------------------
In some cases, custodial parents end up getting none of the
child support payments intercepted by private collection
companies. The Illinois Attorney General sued one company for
retaining all current support payments until its undisclosed
administrative fees were reimbursed.\8\ Other companies
advertise their low percentage rates, failing to call attention
to contract provisions that allow them to claim 100 percent of
collections until administrative or legal fees are reimbursed
in full.\9\
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\8\ Office of Attorney General Jim Ryan, Press Release dated
September 28, 1999.
\9\ For example, the website of KIDS, Ltd. of San Antonio, Texas
(www.collectchildsupport.com) announces, ``Lowest rate and no set up
fees!'' ``We even pay the attorneys' fees for you, in some cases.'' But
paragraph 8 of the ``Exclusive Agency Contract'' available on-line
states, ``That if the AGENCY has made any advanced distribution on
behalf of the APPLICANT for attorney fees, court cost, filing fees, and
or any other cost of enforcement, that said fees will be reimbursed
from the initial proceeds until paid.''
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Finally, private child support collection is being touted
as a hot, new money-making venture, attracting scam artists and
individuals and companies that simply get in over their head.
One company solicited individuals to become licensees:
Imagine, for less than an initial $1,000, you can actually own
and operate your own prestigious business with a ready market
which constantly renews itself and provides an unlimited and
unending earning potential for you. (Emphasis in original) \10\
\10\ Advertisement by Child Support Collection Agency of America,
Inc.
---------------------------------------------------------------------------
Another advertises opportunities to ``Own Your Own Child
Support Collection Agency'';
The private child support collection industry is still growing,
and it is not too late to enter into this industry as an
independent agency. This is still a ground floor opportunity! .
. . Operating a private agency can be a profitable venture that
can begin as a part-time home-based business. As with any
business, the more time and effort that is devoted to the
business, the more it will grow, and the profits will grow
accordingly. Most agencies are reporting growth rates in terms
of revenue in excess of 50% each year. Annual growth of 90% or
better is not uncommon in this industry.\11\
\11\ Collection Solutions, Inc., http://members.aol.com/gocsinow/
private/agencyop.html.
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Better Business Bureau records reflect complaints against
companies that quickly started up and almost as quickly
disappear, leaving behind frustrated custodial and noncustodial
parents and no forwarding address or telephone number.\12\
Custodial parents have complained of money lost to scam artists
who collect application fees then vanish into the night, and to
companies that collect money from the noncustodial parent--and
keep it for themselves.\13\
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\12\ Information from Better Business Bureau files in the National
Information System compiled by Amy Collins and Vicki Turetsky, Center
for Law and Social Policy, 1999.
\13\ Office of Attorney General Jim Ryan, Press Release dated
September 9, 1999; Testimony of Geraldine Jensen, President of
Association for Children For Enforcement of Support, Inc. (ACES) to the
Human Resources Subcommittee, Nov. 7, 1997.
---------------------------------------------------------------------------
Before measures to expand the powers and encourage the
growth of such companies are considered, effective prohibitions
and remedies against unfair and predatory practices by the
private child support collection industry should be put into
effect nationwide.
Jeopardizing individuals' privacy.
Title III of H.R. 4469 also would give States the option of
expanding the access of private collection companies and
public, non-IV-D agencies to confidential information. States
would have the option of giving private collection companies--
indeed, any individual or entity seeking to establish or
collect child support--access to any information available in
the State Directory of New Hires and any information obtained
through data matches with any information in the expanded
Federal Parent Locator Service, including the Federal New Hire
Directory and Federal Case Registry. States also could make
this information available to non-IV-D state and local agencies
for child support activities. Private collection companies and
non-IV-D agencies also could have access, at state option, to
information from private financial institutions--banks, savings
and loan institutions, credit unions, money-market mutual
funds--under the provisions for expanding the financial
institution data match.
Under Title III, states would have to devise their own
methods for protecting privacy. No federal consumer
protections, enforcement mechanisms or rights of action against
private collectors or non-IV-D agencies would be created.
Sections 311 and 321 state that private collection companies
and non-IV-D agencies must ``meet such requirements as the
State may establish'' and enter into a ``binding agreement''
with the state ``to carry out establishment and enforcement
activities with respect to the child support obligation subject
to the same data security, privacy protection, and due process
requirements applicable to the State agency and in accordance
with procedures approved by the head of the State agency.''
Section 301 of H.R. 4469 does call upon HHS to develop
recommendations about how to implement expanded private and
non-IV-D access, in consultation with state IV-D agencies and
public and private companies knowledgeable about involving non-
IV-D entities in support enforcement. However, the consultation
would not consider whether expansion was feasible or
appropriate, nor what consumer protections or rights of action
should be developed. It would not include representatives of
custodial or noncustodial parents, children, or consumers, or
privacy experts. Recommendations concerning access by private
collection companies would not be due until after the effective
date of the provision. Most importantly, states would have no
obligation to adopt the HHS recommendations or something
stronger.
It is difficult to imagine how privacy rights could be
protected effectively. In theory, information would only be
available to private child support collectors and public non-
IV-D agencies about ``an individual with respect to whom [the
entity] is seeking to establish or enforce a child support
obligation.'' In practice, however, it would be virtually
impossible for a state IV-D agency to verify that requests were
for the purpose of establishing or enforcing a child support
obligation. There is no central registry that includes
information about all non-IV-D cases. State Case Registries are
only required to include information about non-IV-D support
orders established or modified on or after October 1, 1998, 42
U.S.C. Sec. 654A(e)(1)(B). Registries do not include
information about non-IV-D cases where orders have not yet been
established. And, as of October 1, 1999, 12 states--including
California, Illinois, New York and Texas--had not provided any
information about non-IV-D cases to the Federal Case
Registry.\14\
---------------------------------------------------------------------------
\14\ HHS, Office of Child Support Enforcement, FY FCR [Federal Case
Registry] Statistics.
---------------------------------------------------------------------------
States confronted by requests for information about
hundreds or thousands of individuals purportedly for the
purpose of establishing or enforcing child support could
respond in different ways. To avoid the cost and burden of
obtaining independent verification for every request, some
states might decide to accept a general statement from the
company that all of the information it requested related to
child support. A decision by just one state to allow easy
access to information would jeopardize the privacy of
individuals across the country, including residents of states
who choose not to expand access to information. State New Hire
Directories contain information about individuals residing in
several states, because they work for an employer located in
the state. The Federal Parent Locator Service is a nation-wide
system. And financial institution data matches are performed
with multistate financial institutions.
Even if the information were sought for a legitimate child
support purpose, protecting against its further dissemination
and use will be difficult. Personal financial information is a
valuable commodity, and many collection agencies seek more than
child support debt; the potential for abuse is great. Apart
from deliberate abuse, assuring the security of information
given to multiple public non-IV-D agencies, and potentially
hundreds of private companies and thousands of private
attorneys and individuals, with diverse computer systems and
staffs with varying degrees of training, will be difficult if
not impossible.
Expanded access to information could jeopardize the safety
of battered women in particular. Title IV-D requires federal
and state IV-D agencies to implement special confidentiality
protections to protect the safety of battered women, some of
whom, despite the dangers, want to seek child support to become
more financially independent. Under the proposal, thousands of
individuals and entities could be authorized to request
information. It will be difficult for state IV-D agencies to
screen all of the requesters and all of the information
requested to ensure that release of information will not
jeopardize domestic violence survivors.
Ultimately, the privacy problems that are likely to result
could undermine all child support enforcement efforts. Over the
years, Congress has worked to increase the effectiveness of
child support enforcement while protecting the privacy of
individuals. In the Family Support Act of 1988 and PRWORA,
Congress required the creation of the automated systems and
databases essential to effective state child support
enforcement, and addressed legitimate privacy concerns by
carefully limiting access to and use of the information. If
access to these databases is expanded, and abuses occur, a
future Congress or state legislatures may conclude that the
only way to protect privacy would be to dismantle these
databases altogether, permanently setting back child support
enforcement.
Increase the risk of erroneous and abusive collection
practices.
Title III of H.R. 4469 would allow states to give private
child support collectors and non-IV-D agencies access to
certain child support enforcement tools now available only to
IV-D agencies. These would include intercepting Federal tax
refunds, credit bureau reporting, passport sanctions, financial
institution data matches, and income withholding from
Unemployment Insurance benefits.
Expanding the powers of private child support collection
companies would open the door to further abuse. The industry is
largely unregulated; courts have ruled that child support
collection activities are not covered by the federal Fair Debt
Collection Practices Act, which prevents harassment or
deception.\15\ Noncustodial parents, employers, IV-D
representatives and others have complained about deception
(e.g., falsely representing oneself as a state IV-D
representative or law enforcement officer; claiming powers not
granted by law; generating or altering wage withholding orders
and presenting them as court orders); harassing collection
practices against the obligor and his family; demands that
noncustodial parents make payments directly to the collection
agency, rather than to the court or IV-D agency, resulting in
the failure of the noncustodial parent to get credit for
payments made; and inability to reach company representatives
to resolve questions or complaints.\16\
---------------------------------------------------------------------------
\15\ See, e.g., Mabe v. G.C. Services Limited Partnership, 32 F.3d
86 (4th Cir. 1994)(child support is not a consumer debt within the
meaning of the Fair Debt Collection Practices Act, 15 U.S.C. 1692-
1692o).
\16\ A summary of such complaints is included in the testimony of
Vicki Turetsky, Center for Law and Social Policy, to the Human
Resources Subcommittee, May 18, 2000.
---------------------------------------------------------------------------
Title V of H.R. 4469 encourages programs applying for
``fatherhood'' grants to work with IV-D agencies to help
fathers reduce the arrearages owed to the state if they
maintain a consistent payment schedule, and to help cooperating
fathers improve their credit rating. But Title III, by
encouraging greater use of private collection companies, would
make it harder to accomplish those goals. Fathers making
regular child support payments under a plan approved by IV-D
could be harassed at work by private collection companies
seeking full payment, or reported to credit bureaus by the
private companies.
State IV-D agencies are subject to constitutional and
statutory due process requirements. For example, before
notifying the Secretary of the Treasury that an individual owes
past-due support and initiating the tax intercept process, IV-D
must notify the individual of the possible withholding, and
instruct the individual on how to contest the determination of
the amount of arrearage and how, in the case of a joint return,
to protect the share of the refund which may be payable to
another person, 42 U.S.C. Sec. 664(a)(3)(A). To initiate
passport sanctions, IV-D must certify that each individual
concerned has been notified of the determination that there is
an arrearage sufficient to initiate the sanction, of the
consequences of that determination, and an opportunity to
contest the determination, 42 U.S.C. Sec. 654(31). Arrearages
may be reported by IV-D to credit bureaus only after the
noncustodial parent has been afforded all due process required
under state law, including notice and a reasonable opportunity
to contest the accuracy of such information, 42 U.S.C.
Sec. 666(a)(7).
Although H.R. 4469 says that to have access to these
remedies, private child support collectors and non-IV-D
agencies must make a ``binding commitment'' to carry out their
activities subject to the same due process requirements and
procedures applicable to the state agency, it is unclear what
this means. ``Due process'' is not a concept that has meaning
against private companies. It is unclear if, or how, IV-D is
supposed to verify arrearage balances or the amounts of
withholding orders submitted by private child support
collectors or public, non-IV-D agencies before forwarding this
information on for federal tax refund intercept, passport
sanctions, unemployment withholding, credit bureau reporting,
or financial institution data match. Verification of arrearages
could require time-consuming, case-by-case investigation.
Federal and state case registries are not required to maintain
payment records for any non-IV-D cases, 42 U.S.C.
Sec. 654A(e)(4).
Under H.R. 4469, it is unclear if the responsibility for
providing notice and a hearing in case of disputes would rest
with IV-D, or with the private company or non-IV-D agency
requesting the enforcement action. It is difficult to see how a
``hearing'' before a representative of a private collection
company could provide meaningful due process protection. And
even if the private company or non-IV-D agency agreed to create
some type of procedure, it is unclear whether IV-D--which would
be transmitting the requests for use of these tools--could
avoid responsibility and liability for their misuse.
An increase in erroneous, unfair or abusive child support
collection practices would hurt noncustodial parents most
directly. But the adverse effects of these practices would be
felt more broadly. They can create increased tensions between
noncustodial and custodial parents, who may be unaware of the
tactics being used or the fact that payments were made. They
also can undermine the whole IV-D system by discrediting child
support enforcement efforts; causing employers to doubt and
refuse to comply with legitimate wage withholding orders;
creating confusion about when child support payments have been
made; and undermining support for tough enforcement tools.
Diverting IV-D Resources Away From Providing Services to Families and
Re-fragmenting the Child Support System
Encouraging the growth of private collection companies and
non-IV-D agencies would increase, not relieve, the burdens on
the IV-D program, making it more difficult for state child
support agencies to provide the enforcement services families
need. As discussed above, any IV-D agency that seriously tried
to prevent privacy abuses or misuse of enforcement tools would
have to devote substantial resources to the task. The potential
burdens posed by the public, non-IV-D provisions would be less
than those posed by the private access provisions, but there
still is no apparent rationale for them. The IV-D system has
developed effective, automated enforcement procedures; there is
no reason to duplicate those systems in non-IV-D agencies.
After struggling to overcome the historic problem of
fragmentation of child support enforcement services, the IV-D
program is finally moving toward the automated, integrated,
nationwide system envisioned by PRWORA. The centralized
computer systems and new databases that make IV-D automated
case processing and data matching work are producing results.
That is why representatives of for-profit companies and non-IV-
D agencies want access to IV-D tools. But allowing the IV-D
system to be used in that way could destroy it, and undermine
child support enforcement efforts now and for years to come.
Chairman Johnson of Connecticut. I guess I had better go
vote. We do have one vote after this, so it will be about 10
minutes, or maybe 15.
[Recess.]
Chairman Johnson of Connecticut. OK. Sorry for that break.
Ms. Kadwell.
STATEMENT OF LAURA KADWELL, DIRECTOR, CHILD SUPPORT ENFORCEMENT
DIVISION, MINNESOTA DEPARTMENT OF HUMAN SERVICES
Ms. Kadwell. Madam Chair and Members, my name is Laura
Kadwell. I am director of the child support program in the
State of Minnesota. I am pleased to be here this morning, and I
thank you for the opportunity to comment on the bills now under
consideration by the Subcommittee.
Since passage of the Personal Responsibility Act, I believe
we have all come to realize that the bill set the stage for a
radical change in the mission of child support. As long as AFDC
provided cash for families, child support functioned largely as
a reimbursement program. After passage of the act, however, we
all began to realize that the end of the entitlement, coupled
with universal access to child support under the 1984
amendments, positioned the program for a mission consistent
with its name, a program supporting children.
I will make three points in my remarks this morning. One,
the Child Support Distribution Act of 2000, your bill, Mrs.
Johnson, takes several solid steps consistent with the new and
evolving mission of the child support program.
Second, the bill responds to taxpayers' legitimate desire
for cost effectiveness and consumer service in the child
support program.
Third, provisions in the act that would allow non-IV-D
access to data and collection tools jeopardize many of the
steps taken for families and taxpayers.
First, the steps taken by the act that will increase
support for children. Under the bill, except for the time when
the family is on assistance, arrears are paid to families
before they are paid to the State, regardless of the source of
payment. We applaud this change in the bill from the current
policy, primarily because it is good for families. Families
leaving welfare, as has been noted many times this morning, are
often in the most precarious financial position. This change
will give them the very best chance of remaining free of
dependency on public assistance, and we applaud this step.
This bill limits assignment to the lesser of unreimbursed
assistance or the amount of support that comes due while a
family is on assistance. In addition to making more money
available to families through this provision, it acknowledges
that noncustodial parents, primarily fathers, usually do not
have unlimited capacity to repay the State for assistance,
another positive families first provision.
By funding fatherhood programs, the bill underscores the
importance of fathers to their children and acknowledges the
relationship between child support and other contributions
responsible fathers make to their children. For too long, the
child support program has acknowledged only one kind of father,
the one who evades his responsibilities if he can. Some fathers
fit this mold. Most, however, pay their support when they can.
In Minnesota, for example, over 70 percent of our collections
come through income withholding. Other fathers may be reluctant
to pay for some reason--may not know their responsibilities or
may be unable to pay. Fatherhood programs will allow States to
work more realistically with these fathers.
We were pleased to see that preference is given in
fatherhood programs to agencies that have agreements with the
IV-D program. This is important, because it will help ensure
that fathers get consistent messages about the importance of
establishing paternity and support.
The act also responds to taxpayers' needs for cost-
effectiveness and good customer service. In addition to helping
families, again, as you have heard this morning, the proposed
distribution changes simplify what is now a complex and
incomprehensible system of distribution child support payments.
We thank you, Madam Chair, for moving the program toward
simplification. This is important because it is more cost
efficient and because it is more customer friendly.
We in Minnesota now spend about 6 percent of our State
administrative costs on maintaining the distribution system.
This will increase as time goes on and we implement the 10/1/
2000 changes. Each bucket has its price. The more complex the
system is, the more time it takes to accomplish a task in the
system. All tasks--adjusting payments, running monthly
processes that calculate interest and arrears, training workers
and community partners--all take longer, cost more, and present
more risk when the system is more complex. If we can simplify
distribution, we will stem the rising cost of maintaining the
infrastructure. We will also be able to provide better customer
service. You have heard about this also this morning, in that
we will be able to explain better to parents where payments are
going.
We would like to see the bill move further by allowing full
distribution of child support to families while they are
receiving assistance. Child support is income and should be
treated as income. It is really that simple. The relationship
between child support and other programs should be reversed.
Other programs can decide how to take into account the income
that families get from child support.
I am troubled, however, by the non-IV-D access provisions.
I know you have spent a lot of time on these provisions this
morning. I will just summarize my concerns.
First, I am concerned about releasing powerful data to
private businesses, not because some will not be able to handle
the data well and do ``what they are supposed to do,'' but
because we will be left with the responsibility of regulating
the use of that data. Ms. Smith referred to this earlier in her
testimony. We spend a lot of energy and effort making sure that
the data that are in our program are carefully guarded and that
the information is used for the purposes for which it is
supposed to be used.
I am very concerned about taking on the role of regulating
private businesses that are using government data, and I am
worried because--and this goes to Mr. Primus' point from
earlier--if the data are not carefully guarded by everyone who
has access to these data, the ultimate result will be a
retrenchment of the program. Policymakers like yourself at the
Federal level and like State legislators will take back the
power that we have to use the data and ultimately hurt the
families that are now in the system getting services.
I am also concerned about what I believe to be some very
basic inconsistencies between allowing non-IV-D access to
information and enforcement tools and other parts of this bill.
In the bill, Congress would prohibit States from keeping
collections that now go to States, but allow States to give
information to private businesses, who then can keep a similar
share of the collections they make using that information. This
does not seem to be consistent public policy.
In the bill, Congress says, ``Families first,'' yet, the
non-IV-D access provisions open the door to all manner of
unregulated arrangements for distributing child support.
Federal law says current support gets paid first. Current
support is not paid first when collected by entities other than
IV-D. I am troubled by these inconsistencies.
I will make just one other short point, and that is: I
would encourage you to look at the non-IV-D access provisions
from the point of view of the noncustodial parent. To the
extent that some States allow access and others don't--and we
had a noncustodial parent, for example, in Minnesota whose bank
account is being attached from another State--He will turn to
us for information, for help, for understanding how this
attachment relates to other cases he has in our system, and we
will not be able to answer his questions to ensure that the
money he pays is handled according to Federal law.
We have been striving for the past couple of years to
consolidate cases, to distribute money across cases, and to
distribute them based on the noncustodial parents' orders. And
if we are now opening the door to an entry into the system that
really is based on custodial parents turning to private
agencies for assistance, I fear that we are going to erode the
progress we have made toward consistency in the child support
system.
Thank you, Madam Chair, for your attention. Again, we
applaud the direction that this bill is taking, and the
distribution changes, especially.
[The prepared statement follows:]
Statement of Laura Kadwell, Director, Child Support Enforcement
Division, Minnesota Department of Human Services
Madame Chair and members of the Subcommittee, my name is
Laura Kadwell. I am the IV-D Director for the state of
Minnesota. I am very pleased to be with you here today to offer
my thoughts on the ``Child Support Distribution Act of 2000''
and thank you for the opportunity to do so. The topics with
which you are grappling are complicated and important to the
families and children of this country. I commend you for
attempting to resolve these difficult issues in a way that will
meet the needs of many stakeholders in the child support
program while remaining focused on the well being of children.
As you are well aware, the child support program is both
increasing in complexity and growing in importance. No longer
simply a cost recovery program, the program is charged with
helping to move families off assistance and keep them self
sufficient in this era of welfare reform. This is a simple
mission with complex ramifications. Those of us who administer
the child support program spend countless hours and many
resources navigating program intricacies in a technically
sophisticated world, with myriad interfaces to other programs
and systems that help us get support to children. The challenge
we are all facing is to honor the importance of the program by
reducing its complexity and increasing its accessibility to
families.
It is in this light of a simple goal, yet complex world,
that I reviewed the bill before the committee. I think there
are several changes in the bill that will help states like
Minnesota continue to use our finite resources wisely and
achieve our mission. At the same time, there are some
provisions of the bill which could divert us from the mission
on which we need to stay highly focused. I will discuss these
in turn.
Distribution Changes are a Step in the Right Direction
I cannot emphasize enough the importance of the changes to
simplify the distribution process as outlined in section 101.
As I mentioned, we have a multitude of factors that add layers
of complexity to our job. We do not need to make the job more
complicated than it needs to be. It seems to me that the
proposal in the bill will make it markedly easier for states to
focus their technical resources where they can be most
productive. More importantly, the program will be more
understandable and beneficial to families.
The current distribution scheme is neither family friendly
nor comprehensible. I know that you have heard from many people
about the problems with the current distribution scheme so I
will not belabor them here. Suffice it to say, we need to
simplify distribution if we are ever to achieve our actual
potential. Expending valuable resources to program, operate and
explain the current distribution is extremely unproductive and
wasteful.
I applaud the committee for eliminating the provisions with
regard to assignment of pre-assistance arrears and for limiting
the amount of the assignment. Also, removing the exception for
the treatment of collections made through the federal tax
intercept will get more money to economically fragile families
and make distribution much easier for families to understand.
Simplifying distribution will help taxpayers as well as
families. In Minnesota, we now spend approximately 6% of our
state administrative costs on distribution. This percentage
will rise with implementation of the 10/1/2000 changes. What it
boils down to is that every bucket of arrears has its costs. To
the extent that we can simplify distribution, we will need less
time to adjust payments; to run monthly processes that
calculate arrears, interest and bills; to explain to parents
how distribution works (whether by notice, automated phone
system or brochures); and to train workers and community
partners who need to understand child support. These are just a
few examples of the costs now incurred by state and federal
governments to maintain the current distribution scheme--costs
that will be ameliorated by the changes in the bill.
Minnesota supports the changes you are contemplating even
though we know it will mean less money recovered by the state.
Some of the lost recoveries will not be actual losses but
rather delays in recovery since the family, and not the state,
will get paid back first from collections. And some of the lost
recoveries will be permanent losses. This bill ameliorates the
financial impact of distribution changes on states by (1)
allowing states to finance the distribution changes with TANF
dollars or MOE credit, at least for the short term, and (2)
delaying the date by which states are required to complete the
changes. This choice is important to states. Some states,
including Minnesota, may choose to implement these changes
earlier than others. Because states vary widely in the way they
finance their child support programs, however, the option to
delay implementation is important to the financial stability--
and, therefore, the continued operation--of the program.
A Full Passthrough of Child Support is the Ultimate Simplified and
Family Friendly Policy
The changes you are making in this bill do facilitate the
transformation from child support as a cost recover program to
child support as a program that supports families and children.
However, while the distribution provisions of the bill are
commendable, I encourage you to go even farther toward making
the program more family friendly. I encourage you to think
about reversing the roles of child support and other family
assistance programs by treating child support as a primary
source of family income, even when the family is receiving
assistance. Because child support has been a cost recovery
program, we have been the ``clean up crew.'' The AFDC program,
for example, paid families a grant and then asked us to help
collect back from the other parent. We should reverse this
order. The first source of support for families should be the
money parents earn--both parents, father and mother. If one of
the parents needs assistance, the assistance program can then
figure out how to treat all income of the family (earned
income, child support, etc.). We have it backwards now.
The child support program should collect child support and
distribute it to families. All families. In all situations--
regardless of their receipt of TANF benefits or medical
benefits or any other kind of public assistance that that
family might be getting. When a family receives child support,
it is up to the other agencies administering the various
assistance programs to figure out how to treat that child
support money. Some of them, like TANF programs, may decide
that they are going to count some or all of the child support
collected as income available to the custodial parent. Others,
like low-income energy assistance programs, might decide they
are not going to count child support income. That is their
responsibility and prerogative.
As things stand now, we are spending resources trying to
figure out what is assistance and what is not assistance--so
that child support can be assigned against assistance payments.
These discussions are vestiges of the outmoded cost-recovery
mission of the program. Child support needs to be in the
business of collecting and distributing money to families, not
in trying to figure out whether certain kinds of support are or
are not assistance. Distributing all child support is the way
to accomplish the true mission of the program.
The bill before you allows states to pass through the state
share of collections for families that are receiving TANF or
for arrears assigned to the state by TANF families. I encourage
you to allow, if not require, states to distribute all child
support to all families. Distributing--or passing through--all
child support is the ultimate distribution simplification; it
will also make the child support program more family friendly
and accessible to noncustodial parents.
This past legislative session, the Governor of Minnesota
sought legislation authorizing the full passthrough of child
support and a 50% disregard of the child support for TANF
purposes. We did this, in part, because of our conviction that
it is the right policy for Minnesota families. The disregard
did not pass the Legislature, but the passthrough did.
Beginning January 1, 2001, we will be distributing all child
support to all families. We will be paying the federal
government its share of collections; so we will be putting in
place the financial and technical infrastructure to support a
``partial passthrough.'' This distribution will help fathers
see how they contribute to the well-being of their children. It
will also prepare families for their exit from TANF by showing
them what income they will have from child support when they
leave assistance.
We are beginning to learn more about the passthrough of
child support through our participation in one of the NPCL
Fragile Families Demonstration Projects. Our project, called
the FATHER (Fostering Action to Help Earning and
Responsibility) Project, assists young, unmarried and un-or
under-employed fathers in gaining employment and getting
involved in the lives of their children. The Project is a
collaborative venture between Minneapolis Way to Grow, the
State of Minnesota IV-D agency, the Hennepin County IV-D
agency, the Minneapolis Neighborhood Employment Network and the
Minneapolis Employment and Training Program. The FATHER Project
director, Mr. Guy Bowling, recently submitted a letter to a
conference committee at the Minnesota legislature that was
contemplating a child support passthrough proposal. He wrote:
``As the FATHER project director, I work each day with fathers
who have difficulty paying their support. In discussions with
these fathers, I hear that they are frustrated by a system
which requires them to pay child support but if their child and
his or her mother is receiving [TANF], the child support is
kept by the state. Passing through child support directly to
these families would help low income fathers feel like they are
really contributing to the support of their child. They feel a
sense of empowerment that motivates them to fulfill their
obligation as a responsible dad.''
In addition to fostering the involvement of noncustodial
parents, full distribution has other tangible benefits to
offer. It will result in administrative simplification that can
not be achieved by a passthrough of the state share alone. Full
distribution will reduce the level of effort to develop,
support and maintain many parts of the existing infrastructure.
Costs for information materials, functional and technical work,
reporting, staffing and training would all be reduced. I need
to note that these savings are available in the long term only.
In the short term, full distribution will require significant
effort, primarily in the costs of design, development and
education. These costs will be incurred in both the child
support and TANF programs.
The bottom line is that children need fathers, and child
support has a role to play in facilitating fathers'
involvement. A full passthrough of child support is one crucial
step. While I appreciate the option to pass through the state
share to the families, the potential of passthrough will not be
attained until and unless the federal government shares in its
cost. There are two reasons for this. The first, mentioned
earlier, is that we cannot achieve full simplification while
still paying the federal share of collections. Second, state
legislators will not be inclined to give up the state share if
the federal government retains its share. Over the past four
months, we have been trying to convince our state legislature
to pass through and disregard the state share while returning
the federal share. One of the common refrains we encountered
was hesitation by state legislators to give up the state share
of collections while still having to pay the federal share of
collections.
Fatherhood Grants Can Play a Significant Role in Child Support
We support the inclusion of money for Fatherhood grant
programs contained in the Child Support Distribution Act.
Fatherhood programs can contribute enormously to the mission of
the child support program by (1) helping us learn what public
policies advance the purposes outlined in the Act, (2) giving
us a positive opportunity to emphasize the importance of
financial and emotional support to children, (3) providing an
excellent means for Child Support Enforcement to communicate
its goals and methods to parents, and (4) allowing us to
communicate the message that we are willing to work with
parents to help them gain the skills they need to support their
children. Through Fatherhood programs, child support gains an
opportunity to eliminate negative perceptions and convey the
positive message that we put children first.
Just within the past few days, I received a letter from a
Minneapolis low-income social services program, commending us
on publishing a booklet of services for fathers. The writer
said, ``I see this as tangible evidence of the changing
atmosphere in Child Support Enforcement (and in all DHS for
that matter) with regards to helping fathers be the parents
their children want and need them to be.'' This is an excellent
example of the strides we can make by partnering with
community-based fatherhood programs.
Some Suggestions for Eligibility for the Fatherhood Grants
We support the basic eligibility criteria outlined in the
draft legislation, especially the fact that a father could
qualify simply by being low-income. We would also support
raising the ceiling to 200% in order to allow fathers to
support themselves after paying child support.
We support the inclusion of a preference in awarding grants
to organizations that obtain written agreements from state IV-D
agencies, although we caution against allowing local IV-D
agencies to enter into agreements without the explicit
agreement of the state agency. It is critical that IV-D
agencies be involved in Fatherhood programs so that all parents
get consistent messages about the importance of establishing
paternity and paying child support. It is also critical that
IV-D agencies be permitted to make such agreements conditional
on continued payment of current support, to consider whether
there are domestic violence concerns in the case, and to avoid
encouraging situations that may be detrimental to the best
interests of children. The IV-D agencies must be allowed to
create agreements that contain appropriate incentives and
penalties for failure to comply with an agreement.
It is important and constructive that the legislation
encourages collaboration among TANF agencies, Welfare to Work
agencies, and IV-D agencies. As I mentioned earlier,
Minnesota's FATHER Project includes several of these partners.
The working relationship we have established has helped us to
target a variety of intensive resources to fathers in an effort
to improve their ability to find a job, keep a job, and/or to
enhance their employability and increase their earnings. The
comprehensive goal of these efforts is to increase the parents'
ability to support their children.
Collaborative efforts like PFF and the FATHER Project are
valuable because they facilitate communication among state
agencies with similar goals and clientele. With each
collaborative effort agencies establish working relationships
that will facilitate future coordinated activities and in the
process are able to deliver comprehensive services to families
in need.
The remaining preference criteria--rapid enrollment,
practical recruitment strategies, assistance with visitation,
improving credit rating--are important elements of a successful
program. We caution against expanding the role of IV-D agencies
to include providing some of these services (visitation, credit
rating). These are appropriate activities for the programs, but
they should be the responsibility of the program sponsors, and
not the IV-D agencies.
Access to IV-D Collection Tools Problematic
While I support many of the provisions of this bill, I
cannot support the sections of the bill that give states an
option to allow access on the part of nonIV-D agencies to
certain IV-D collection tools, namely federal tax refund
intercept, credit bureau reporting, passport sanctions,
financial institution data match, and income withholding for
unemployment insurance benefits. The bill addresses separately
the issues of access for private vendors and access for public
nonIV-D agencies. I believe that is wise because I believe
nonIV-D access raises different issues with regard to private
vendors than it does with regard to other public agencies.
Since the onset of discussions about expanding access to
IV-D enforcement remedies, the committee has been trying to
balance the interests of expanding access while protecting
consumers and safeguarding information. This bill attempts to
reach those goals by creating a state option to expand access
and requiring the Secretary to develop recommendations that
states would use in regulating access. The question is whether
this combination of state option with federal recommendations
will adequately protect consumers and safeguard information. I
believe it will not.
On the surface, state options always have a certain appeal.
As a state administrator, I appreciate having the ability to
set policies and procedures for the program in my state. It
would certainly seem as if states should be able to expand
access to child support services in ways of their choice. The
problem in this instance is that one state's decision can erode
another state's work. In order to be effective, the child
support program must operate efficiently, fairly and, at least
to some extent, uniformly across state lines. State option for
private access jeopardizes this goal.
Here is an example: The State of Wisconsin decides to
contract with a private vendor to collect child support. On
behalf of a custodial parent, the private vendor gets
information from the State of Wisconsin that the noncustodial
parent has a bank account in Minnesota. The private vendor
seizes the bank account. Even under the best of circumstances,
where the private vendor secures all data and follows all due
process laws, the noncustodial parent will expect the Minnesota
child support agency to be able to tell him what is going on.
This is especially true if he has other child support cases in
Minnesota or in other states. He will complain to us if things
don't work out the way they should. He will ask us what due
process protections he can expect. He will turn to our Attorney
General if he has consumer complaints or questions. And the
public will assume that if mistakes are made, we made them.
These issues are especially troubling because the child
support program does not enjoy a sterling reputation in the
eyes of either noncustodial parents or legislators at this
time. As I have indicated earlier, Minnesota, like most other
states, strives daily to change the culture of the child
support program to one that is family friendly, one that works
with fathers, rather than against them. One of the ways we
believe the child support program can be more responsive to
fathers is to honor all the responsibilities fathers have. To
that end, we have all invested technical and customer services
resources in programming computers and explaining to parents
how child support is distributed across cases. When a father
has more than one family, the money we collect is distributed
according to an algorithm developed by the federal government.
If private collectors are allowed to go around the IV-D
program, we will be shortchanging the families we are striving
to serve.
In addition to our concern about fathers who have more than
one child support order, we are concerned about our ability to
retain the powerful tools now at our disposal should these
tools be misused by vendors over which we have no control. This
year in Minnesota, we returned to the Legislature to refine the
seizure laws we use when we find matches with accounts in
financial institutions. Many legislators expressed reluctance
to use the FIDM (financial institution data match) procedures;
and they increased protections for obligors whose accounts are
matched in this process. Across the country, legislators are
already skittish about protecting and using wisely the enormous
amount of data we have in the child support program. It would
be extremely counterproductive to put data in the hands of
private entities not subject to the same controls governing use
of the data by all levels of government.
Legislators in Minnesota are listening to noncustodial
parents who feel as if the child support program already has
too much power and too much information. Most legislators
become comfortable with our authority when they understand the
due process and privacy safeguards that are in place, when they
know who to call with questions, and when they can be assured
that their constituents will be treated fairly. We can give
them no such assurances under the example I described earlier.
Private companies are not held to the same standards as are IV-
D agencies through state and federal laws, rules and
constitutional protections. I am concerned that activities
beyond our control will lead to legislative retrenchment at the
state or federal level, ultimately eroding our ability to do
the job for families in the IV-D program. Legislators are not
shy about challenging our tools if they feel their constituents
are being harmed.
The last concern I want to discuss about private access to
IV-D tools and data is the fees charged by some private
companies. Simply put, I am having trouble reconciling the
distribution mandates on states with expanding private access.
States must distribute money to families first, a direction we
applaud; and we must pay current support before any arrears.
But private companies can pay arrears first (against federal
law for states to do this) and can charge fees that reach 25,
30% or more. Where is the ``families first'' provision for
private companies? I understand why collection companies charge
fees. What is hard to understand is why Congress would allow
this option while so strongly promoting ``families first.''
I would like to share with the committee a perspective I
bring to this issue from my earlier years of practicing law. I
was in private practice and I saw clients who simply could not
afford to bring private actions to set, modify or enforce child
support. I needed to tell them what it would cost for me to do
what they wanted to do and often sent them to the local IV-D
agency for assistance. They could not pay me for the work
needed to establish an order of, for example, $100 a month,
even though that $100 meant everything to that family.
The government provides IV-D services in large part because
that scenario is repeated over and over and over among families
in this country. It is cost-effective for government to provide
child support services that individual families cannot afford.
The difficulty with now providing access to government data for
private companies is that government and families both will be
paying the cost of getting, assembling and distributing the
data needed to enforce the cases.
While access to public nonIV-D agencies is less problematic
because data will be subject to the same protections as in the
IV-D program, the issue with access for these agencies is one
of cost-effectiveness. Does it make sense for a state to fund
two agencies to do the same kind of work?
The Personal Responsibility and Work Opportunity
Reconciliation Act (PRWORA) promotes mass processing of cases,
efficiency of state operations, and consistent handling of
cases statewide and nationwide. These changes are supposed to
benefit taxpayers by producing savings. We are just now
beginning to see the savings promised by PRWORA. In Minnesota,
for example, federal fiscal year 1999 marked the first time
automation produced savings in the child support program. We
went from a net expenditure of $16 million in systems costs to
a net savings of $17 million. Two other facts about automation
may be of interest: (1) Minnesota shows an increase in
collections of over $30 million per year because of six
specific highly automated changes: on-line manual, voice
response system, COLA (automated adjustment of orders),
driver's license suspension, new hire reporting, and locate
enhancement. (2) We are also seeing a dramatic increase in
collections per worker, from $292,583 in fiscal year 1998 to
$348,530 in fiscal year 1999 (19%). It seems to me that
allowing other publicly funded child support programs the use
of IV-D data and collection mechanisms will at best dilute
these efficiencies. At worst, it invites chaos.
I have one strong suggestion regarding the sections on
expanded access to IV-D tools: do nothing now. I know you have
heard this advice before, but I offer it again. It is too early
to reach the conclusion that additional access to child support
services is necessary because we have yet to realize the
promise of PRWORA. At best these changes are premature. At
worst, they will divert state agencies from accomplishing our
mission as set out in PRWORA. Further, if private access does
go forward, conditions must be regulated, not ``recommended''
as in the current bill. Consumers and other states need
safeguards and protection against misuse of data, usurious
fees, and policies that subvert the child support program.
Regulations would need to be developed and in place for a
period of time before states would be allowed to contract with
other entities. The bill now under consideration does not
regulate and does not allow enough time between the date
``recommendations'' are due and the date states are allowed to
begin contracting with private vendors.
I will close by commenting briefly on a few smaller
provisions of the bill. Minnesota will not be impacted by the
change to review and adjust because we have an automated COLA
in our state. We have been using a COLA since the early 1980s
and find it to be both efficient to operate and beneficial for
families. We support the proposal to require a review when
families leave TANF assistance. This is a way of targeting
resources to some of our most fragile families. Implementing
this provision will require a strong interactive partnership
and careful coordination between child support and TANF
agencies. It will take time to develop the kind of relationship
and tools that will make ensure the success of this provision.
We also support the change in section 403 regarding use of
the tax offset program to collect past-due child support on
behalf of children who are not minors. This is a very welcome
change that will result in a meaningful change in child support
collections.
Again, Madame Chair and members of the Subcommittee, I
thank you for the opportunity to testify today--and I commend
you for the work and thought you have put into this bill and
others before the committee. One of the most challenging
aspects of our complex child support program is its financing.
This bill takes a significant step toward serving families
while preserving financing options for states.
Thank you.
Chairman Johnson of Connecticut. Mr. Smith?
STATEMENT OF VICTOR SMITH, PRESIDENT, DADS AGAINST
DISCRIMINATION, PORTLAND, OREGON
Mr. Smith. Thank you, Madam Chair and Mr. Cardin, for
having me here to speak to the Committee.
I represent Dads Against Discrimination, a nonprofit, tax-
exempt charity for fathers who have domestic relations issues
and wish to take charge of their families.
I won't go into the history of DADS necessarily. It is not
important. However, on this particular bill, and especially the
part that has come to the attention of the room and the
Committee who have gathered, the section that deals with
privacy, I know of no one that wants to support that section of
the bill that deals with private agencies collecting child
support.
I would agree with the testimony that has been given at
this table that it is not necessary. There might be a suggested
adding of a performance bill being required by such private
agencies, a contract dispute resolution process provided to the
clients, that there might be an agreement or a requirement that
any employees will pass a criminal background check for such
activity. I think if we could line these particular issues up--
performance, bond being provided, and so on--then maybe private
agencies might be allowed to enter into the system.
That section of the current bill that interests me,
however, I would like to spend a little time on, under title
seven, section 702, deals with an accounting process for moneys
collected but not delivered.
I have often wondered what happens to that money collected
and not delivered. And if we could possibly have moneys
collected and not delivered because perhaps the obligee moved
away, that money should be returned to the obligors, tax free,
because he has paid taxes on it, and with interest.
So if an agency sits on money for more than a year and it
cannot be delivered to the obligee, why not return it the
obligor. The money hasn't reached its intended purpose, which
is for child support. So if it doesn't get to the intended
purpose of child support, then the money should be returned to
the obligor.
The section of the bill that interests me is the fatherhood
section, of course. And we haven't had much discussion about
that, but, of course, any fathers' group would support the
fatherhood section of the bill. We want to promote that section
of the bill. That is very important to fathers.
The other sections that came to my attention were those
sections of the bill that dealt with the veterans' money and
the taking of veterans' money. That is thought to be a bad
idea. Those guys who have veterans' benefit need to be left
alone for that particular purpose.
We have some States--Oregon being one of them--that makes a
provision for disabled veterans and anyone who is on
disability, where their child support on the current basis has
been suspended, so people who are on disability forms don't
have to pay child support on a current basis.
The other sections that are of interest would be the
passport obligation. If this bill is going to reduce the
arrearage amount where you take the passport from $5,000 to
$2,500, we say that is overkill. The reason that is overkill is
that there is already a criminal law on the books, under U.S.
Code 18, section 228, that if an obligor leaves the State he
can be put in jail. So it would seem to me that, if you are
going to take his passport--that means he is leaving the
state--you don't need to do that. You don't need to take his
passport. If he leaves the State, you put him in jail. So that
particular section of the bill, under 401 that deals with
passports, should be deleted.
Now, I would like to get back to DADS for just a moment and
say that we have been in business for some 23 years as a
nonprofit, tax-exempt charity. I have talked with fathers from
coast to coast for years. I can even tell you that fathers out
of the State of Texas don't particularly care about private
agencies going into the child support collection business.
There is a group in Dallas that is very much opposed to that.
We have had a conversation, coincidentally, about that.
Those are some of the things that I have learned. If there
are any questions about DADS or anything else that fathers want
to do--they do want to participate--I am here to answer those
questions.
Thank you.
Chairman Johnson of Connecticut. Thank you.
[The prepared statement follows:]
Statement of Victor Smith, Dads Against Discrimination, Portland,
Oregon
Madam Chair and members of the Subcommittee, thank you for
the opportunity to testify on behalf of DADS AGAINST
DISCRIMINATION, divorced fathers and those fathers who were
never married.
DADS AGAINST DISCRIMINATION, DADS, is a non-profit tax
exempt charity set up to help Fathers who have domestic
relations issues and wish to take charge of their families.
Fathers' problems such as child custody, child support, child
visitation and parenting time were being ignored by the Federal
and State Governments as reflected in the lack of funding
services in the past for Fathers and their families. Fathers
noticed that women had government funded services while Fathers
had none. For example women had government funded telephone
crisis lines programs and shelter homes while Fathers had none.
Women received free information and services about child
support from State agencies while Fathers were threatened with
collection notices , wage garnishments and jail for failure to
pay child support. No one seem to listen as to whether the
fathers were employed or employable, or whether the father was
in the hospital or in jail or part of a labor union strike for
which he no control over but experienced a reduced his income
just the same.
Because it was believed that there should be an organized
effort to assists fathers during the stressful period of
divorce and/or family breakup, DADS was created in 1977 to
address these social imbalances in services for fathers. Now,
after some 23 years of serving fathers by DADS offering a
telephone crisis line to listen to father's concerns and trying
to resolve their issues, providing an attorney referral
service, and paralegal services for those who can not afford an
attorney and has chosen to do it themselves. DADS also offer a
network of ``Fathers Rights'' contacts across the US who
believe that fathers should be involved in their children's
lives with respect to Father Custody or parenting time. DADS
also has a call-in talk television program that focuses on
fathers and their family issues as they see them. DADS also has
a web site that has had more than 60,000 hits in the past year
alone on the front page. DADS receives e-mail questions from
around the world at 10 different sites. We believe that we have
created an opportunity for open minded people to begin to
question many of the false assumptions of the past about
Fathers abilities to raise his own children and other domestic
relations issues.
As a further result of DADS services over the past 23 years
to fathers, DADS has become a focus of some media attention,
and some of which has become a matter of record within DADS web
site, (www.dadsusa.com/ news1.htm). Where DADS has been sought
out and interviewed by the Associated Press wire service, the
Christian Science Monitor, Washington Times, News Week
Magazine, Red Book Magazine, The Wall Street Journal and
Bloomberg wire service. DADS has also been sought out by every
network news broadcast service in the country at one time or
another, including the CBS evening News 20 second interview
during the O. J. Simpson trial dealing with the Marsha Clark's
personal domestic relations issues.
DADS is proud to announce that currently fathers are asking
some real impact questions concerning domestic relations
issues. For example in Portland, Oregon, Dennis Crocker is
asking the State Supreme Court why he should be required to pay
child support to the age of 21, when married parents are not
being so required. Dennis Caron, of Columbus Ohio is asking
both State and Federal Courts why he should be made to pay
child support after divorce when his ex-wife had another man's
child, Ira Teller, in Fort Lauderdale wants to know why the
school teacher does not include him as ``Father'' of his child,
in a ``Parent-Teacher'' conference. and all fathers across the
country want to know (how?) and (why?) a woman can go to the
Courthouse a lie about ``domestic violence'' that did not
happen, and get the man kicked out of his own home, and then
later using this as a tactic to secure child custody and
divorce.
It is with this background, and offices where telephones
are constantly ringing, and fathers stopping by the office some
with appoints and some without appoints, and all of whom are
looking for help and answers to their domestic relations
problems that I come here today from the front lines of the
fight that American Fathers have in becoming fully respected as
a parent able to raise his own children after divorce or family
breakup.
Title I
Sec. 101. Distribution of child support collected by States on
behalf of children receiving certain welfare benefits.
Any and all child support distribution should include
accounting elements that provide for moneys collected by the
agency, and did not get used for it intended purposes, such as
money that was returned by the post office as undeliverable
because the party moved away without leaving a forwarding
address. Such money should be returned to the obligor tax free
and with interest on a yearly basis.
If the obligee is no longer on State assistance, then that
fact should constitute a change of circumstances, and require
that both parties share the repayment of State debt.
As a suggestion new laws should not be proposed by using
language from the old law taken out of context and without
reference as to the purpose and meaning within the old law as
it is very confusing, and there can be no agreement on the
exact out come of the new law.
Title II
Sec. 201. Mandatory review and modification of child support
orders for TANF recipients.
At any time there is a review of child support Orders, then
there should also be a review of the total order including
child custody, in the best interest of the child. The proposed
language in this bill uses excerpted language taken out of
context and causes confusion as to the true meaning and results
of this section of the bill.
Title II
Sec. 301. Establishment and enforcement of child support
obligations by public non-IV-D child support enforcement
agencies.
Since child support is already a regularly occurring event,
it is not dear in this proposed section of the bill what the
real changes might be, because this sections of the bill
continues to use language from the current law excerpted and
taken out of context to apply to a proposed new law.
Sec. 302. Use of certain enforcement mechanisms.
Since current law already provides for the use of the
``certain enforcement mechanisms'' as listed in this section of
the bill, and this section of the bill continues to excerpt
language from the current law, and use it out of context in a
proposed new law, the value of any change is questionable.
Title III Subtitle B
Sec. 311. Establishment and enforcement of child support
obligations by private enforcement agencies.
Private child supper enforcement agencies should be kept
out of the business of collecting and distributing child
support money, and further kept out of the personal and private
financial records of dozens. This is a point that those in the
field of domestic relations can agree upon. The National
Women's Law Cent's Joan Emtmacher gave testimony on this
subject as recent as Oct. 5th, 1999. In addition, because the
DAIS office in Portland, Oregon holds public meetings with the
State office of Child Support Enforcement, we have teamed that
there are some employees of the State agencies that question
the wisdom of allowing private corporations into the area of
child support collections. However, if there exists some law
that suggests that private agencies should be allowed and
inducted in the collection of child support then these private
FOR PROFIT CORPORATIONS should be required to address the
following: (I) Post a performance bond in all States that
business is conducted. (2) By contract be disallowed to trade
and profit from selling personal financial history airy citizen
with a ``non-commercial'' douse. (3) Provide all their clients
with a ``Dispute Resolution Process': and make a provision for
judicial Review by the State in which collection is done. (4)
Sign a State guarantee that all employees have past a criminal
background deck.
Sec. 312. Use of certain enforcement mechanism.
No private child support agency should be allowed to issue
as IRS tax intercept.
Title IV
Sec. 401. Pass Port
Reducing the amount of arrearages from $5000 to $2,500 is
``over kill'' and pointless, because under US Code IS section
228, if an obligor leaves his State and owes $5,000 or more in
back child support, he can go to jail already. It appears that
if he were to use his pass port he weld be committing a crime.
The problem with this section of the bill is that their is
a continued failure of attempting some degree of continuity in
the language of the old law and the objectives in the new
proposed laws that comes abet by excerpting the old laws, and
taking the language out of context far a new proposed law.
Sec. 402. Garnishment of compensation paid to Vets.
Is a very bad idea reflecting hostility towards men in the
military, or were in the military and will have an adverse
affect on getting men to enlist to serve this country's future
needs.
Title IV
Sec. 402. Garnishment of compensation paid to Vet. (continued)
This very bad idea is flawed for many reasons such as: Many
States already allow credit for certain payments paid for child
support paid from the Federal Government. In Oregon there is a
State supplied ``Child Support Calculation'' work sheet where
such money is figured as part of the child support paid.
Furthermore in Oregon Law under ORS 25245, those who are
considered disabled and getting paid by a federal government
program are exempt form paying child support.
A DAD in North Carolina e-mail his concern and complaint
about this section of the bill saying that it would allowed
obligees and the State to ``double dip'' a Veteran who has
already paid his dues to society, and generally' impoverishing
him. He point out the State of Texas as a good example of how
this issue should work.
This section of the bill is an example of an issue with
diminishing returns. It is further an example of agency
thinking in terms of ``the end justifies the means ; and that
kind of thinking is foreign to this country. The agency here
shows that it need a 'brighter staff or ``better concept'' to
follow.
Title V
Sec. 501. Fatherhood Grants
Any and all Fatherhood programs are welcomed and
encouraged, and this should that ``brighter Star'' or ``better
concept'' to follow as referred to in my response to section
402 of this bill above. Our Society should be trying to bring
fathers into the social main stream and not exclude them with
DRACONIAN CHILD SUPPORT COLLECTION EFFORTS.
Four example, if Fathers are behind in child support, there
should be an office to check to see if the Father needs a job
first, rather than first running the father down with a Court
Order to Appear an SHOW CAUSE why he should not be held in
contempt of Court for failure to pay child support. Recognizing
Fathers as part of society and remembering that Fathers play an
important roll in society would be the best attitude for child
support workers to have. An attitude of economic search and
destroy does not make good fathers available in the future, and
same women trying to make a go as a seed wife will lose out,
along with their children in the long run.
Pasted experience with ``Fatherhood'' funding programs is
that States will not forward Federal Grant money to Fathers'
Support Groups. Generally States are staffed so heavily with
men and women so closely related to the child support
collection programs, it becomes impossible for the same staff
to relate to Fathers and their interest for an opportunity of
sots custody of our children after divorce or family breakup.
DADS has found that there are those who will suggest that
Fathers become ``involved.'' but will not say that ``Fathers
should have ``sole Custody'' of their children To marry of us
Fathers using the euphemism of ``involved or involvement'' is
so that we can pay the bills of child support, is misguided.
These are the same people that need to understand that Fathers
are capable of love, not just money, and that Father have the
ability to raise their own children with little to no use of
welfare money from tax payers.
Additionally it should be brought to the subcommittee's
attention that the ``Fatherhood Grant'' section of the bill
should not inducts HIV and AIDS education money because those
issues are ``health'' issues with plenty of funds from existing
sources, of which is generally not shared with Fathers arid
their ``Parenting'' issues.
Title V Subtitle B
Sec. 511. Fatherhood Projects of National Significance
Most Fathers as does DADS would welcome all Fatherhood
Projects without question. It is very important to finally have
the Federal Government focus some attention on Fathers and
their children, so bring on the programs.
Title VI
Sec. 601. Elimination of set-aside of welfare to work hands far
successful bonus.
This is another section of the bill that the proposed
language is excerpted and taken out of context to make a new
law. Because of the style of the author of it is not clear what
the value of any change would be. This section needs to be
clarified.
Title VII
Sec. 701. Change dates for abstinence evaluation.
This is another section of the bill that is proposed by
excerpting language from laws already in effect, taking those
word out of context, and proposing another law, and it is not
possible to make a response from suds information.
Title VII
Sec. 702. Report on undistributed child support payments.
Hurrah ! Finally something that makes sense, however, there
should be language added to this section of the bill to the
effect that such moneys received by the agency, but not
delivered for its intended use of child support within on year
and after all state debt has been paid, then such undelivered
money should be returned tax free with interest to the to the
obligor, and if he is not found then such money will be
``credited'' to his tax account with the IRS for a 1040 credit.
Sec. 703. Use of new hire information to assist administration
of unemployment compensation programs
This is another over kill section of the child support
staff, however, language news to be added in this section that
whenever it is found that the income of the obligor on
unemployment is at or below the US Government's ``Poverty
Level'' then the child support is suspended.
There should be a general rule for the obligor'so allow for
``Family Formation and Stabilization'' and perhaps we have the
makings of a new call an ``Act', herein.
Sec. 704. Immigration provisions.
State agencies should make it clear that is the United
States of America, and lives else where the will terminate.
Sec. 705. Correction of errors in the conforming amendments
welfare to work programs and child support of 1999
No comments.
Title VIII
Sec. 801. Effective date.
No comments.
Chairman Johnson of Connecticut. Ms. Diaz?
STATEMENT OF VANESSA DIAZ, EXECUTIVE, SUPPORTKIDS.COM, AUSTIN,
TEXAS
Ms. Diaz. Madam Chair, Congressman Cardin, thank you for
the opportunity to testify today on the important role of
private child support enforcement agencies.
I am a mom. My name is Vanessa Diaz. I am an employee of
Supportkids, the largest private child support enforcement
agency in the country, and I am very proud to be part of a
company that has made such a difference in the lives of many
families.
I come before you today to tell you my own personal story
about my effort to collect child support. I was divorced in
June, 1986, and my husband was ordered to pay $300 a month for
the support of our two sons.
After several months without support, I decided to seek
help through the government IV-D agency. Initially, I was very
naive about the process. I thought I would at least have money
to spend on my children for Christmas that same year.
Although my ex-husband lived 10 minutes away from me, he
was working, and he saw my children all the time, my support
went unpaid for five Christmases thereafter. My ex-husband
thought there was no need to provide child support, since I was
working. And, although visitation was never an issue, he had no
idea that during those 6 years without support we lived in what
I can only call a ``survival mode.'' I worked two jobs. I was
tired all the time. And I wasted so much energy for waiting and
hoping for a check to come, instead of expending that precious
energy on my children.
I have a 4-year-old daughter now and I find myself feeling
guilty at times. Every time she asks me to read a book or she
wants a new toy, I can't help but think about the times I was
not able to give those things to my boys. It was a constant
battle, and it is very real.
Raising my boys without child support and having to deal
with an overwhelmed government agency, it was a time-consuming
task that left me emotionally drained week after week.
After many years, I finally decided to seek outside help. I
turned to a private attorney. He wanted his retainer fee up
front before he would even listen to me. I could not afford to
give up several weeks of my grocery money, and there went
another door slammed in my face.
At the time I applied for services from Supportkids in
1992, I was in despair, but I really felt I had nothing to lose
and everything to gain. Within 6 weeks, Supportkids recovered
all of my past-due child support and I was finally able to get
closure on my case.
Since then, I have been helping parents in their own effort
to secure child support. I now understand why I was not able to
get my court order enforced more effectively from the IV-D
agency. I see it now as a harsh reality about the way things
are. Instead of feeling personally violated about how my case
was handled, I have a better understanding as to the
constraints in the IV-D agency all over the country.
I have worked with clients for over 8 years who are going
through the same situation as I just described. By listening
and effectively communicating to these parents, I do believe I
am able to help them put some degree of closure on their daily
struggle.
The number one point I want to make today is that every
woman should have the right to choose which agency they want to
collect the child support that is owed them. I find it
disturbing that someone should decide for me which enforcement
option is best for my kids. I believe the same tools and
information should be available to me to get what my children
deserve, whichever enforcement option I may choose.
It would be a monumental step in the right direction if all
private entities could provide effective services using the
same tools and information as are available to the government
agencies.
All too often in my work, I am confronted with turf issues,
and it is troubling to see how easily one can lose sight of the
real issue--taking care of the children. I do believe that
Supportkids, combined with a collaborative effort from the IV-D
agencies, can help change the quality of life for many
children.
Thank you.
Chairman Johnson of Connecticut. Thank you, Ms. Diaz.
[The prepared statement follows:]
Statement of Vanessa Diaz, Executive, Supportkids.com, Austin, Texas
Madame Chairwoman, Congressman Cardin, and other
distinguished members of the Subcommittee: thank you for the
opportunity to testify today on the important role of private
child support enforcement agencies in attacking the problem of
nonsupport in our nation and the need of those agencies for
access to enforcement tools already authorized by Congress, but
now restricted in use to the government Title IV-D child
support program.
My name is Vanessa Diaz. Currently, I am an executive
responsible for improving legal processes at Supportkids.com,
the nation's largest private child support enforcement
organization helping custodial parents collect unpaid child
support. In 1986, however, I was a divorced mother of two
children, holding down two jobs in a struggle to make ends meet
without the benefit of the child support ordered in a divorce
decree. I had wrongly assumed that my former spouse would
respect the court's order that he pay $300 a month in support
of his children and that within 30 days of the decree I would
begin receiving support payments. That did not happen. In spite
of my efforts to ensure that my children would continue to have
a close and loving relationship with their father, he decided
that he owed them nothing by way of material support and that I
could look to my mother and any other willing relatives to help
me provide additional resources for our children.
When my former husband ignored the court's order for child
support, I turned to the government child support enforcement
program by applying for ``free'' services with the state IV-D
agency. What I quickly learned is that ``free'' services mean
little or nothing if, in fact, no services are provided. In
spite of the fact that my former husband lived only 10 minutes
away from my residence and that I was able to provide the IV-D
agency with all the information they could possibly need to
bring enforcement actions against him, the order went
unenforced--and my children went without. But even back then I
was aware that the services the government agency was supposed
to be providing me weren't really ``free'' at all--that, in
fact, I, as a taxpayer, was paying for these services. Indeed,
according to the most recent (FY 1997), available data on the
program, these services are costing over $3.4 billion in
federal and state funds. There is nothing ``free'' about them.
For six years I aggressively pursued the matter with the
IV-D agency, repeatedly visiting the local office and
repeatedly pleading for effective action. Repeatedly my
children's father successfully walked away from contempt orders
and other enforcement efforts of the IV-D agency. What I did
not appreciate at the time--but do now--is because the workload
of IV-D agencies is so great and their resources so limited,
they cannot pursue effective enforcement of child support
obligations in every case, no matter how much information they
have about the delinquent parent. I naively assumed, however,
that my case really mattered to the agency simply because my
children were my number one concern. I did not know, as I do
now, that the thousands of dollars in past-due support owed us
was not even the proverbial drop in the bucket of the tens of
billions of dollars in past-due support that go uncollected,
year after year, in the government program.
For years my children and I lived in what I can only call a
``survival mode.'' Working two jobs, I had no time to
``invest'' in my children's individual lives, and they had to
be manage their own lives, as best they could, as ``latch key
kids.'' My mother did try to help us out with the occasional
bag of groceries, but her means were limited, being a divorced
woman herself who had to raise six children on her own, two of
them physically disabled.
Some friends suggested that I turn to public assistance,
but welfare simply was not an option for me: I could not
imagine relinquishing even the small margin of self-reliance
and financial independence I possessed. Others suggested that I
turn to a private attorney for help in securing the current and
past-due child support owed me. That, too, however, was not an
option because of the retainer fee which the attorney wanted
``up-front' and which I simply could not afford--unless I was
prepared to give up several weeks of family grocery money.
Then, by chance, in 1992 I saw a billboard advertising child
support enforcement services through a private agency--the
company for which I now work--and, although I was skeptical at
first about a private agency's achieving success where the
government agency had failed, I decided to apply for services
from Supportkids.com.
Within 6 weeks, Supportkids.com accomplished what the IV-D
agency could not do within the prior 6 years: namely, recover
nearly $14,000 in past child support. Because of the efforts of
Supportkids.com, I not only received support arrearages due me,
but I now also receive on a regular basis current support
payments. The years of frustration and emotional exhaustion in
the struggle to receive court-ordered child support ended, and
I suddenly found that I was able to put aside funds for my
children's education and that I was able to give my children
the time and emotional energy I had always wanted to give them.
I relate my personal story not because my experience is
unique; it is not. There are hundreds of thousands of custodial
parents who continue to wait for results from the government
child support enforcement program, just as there are tens of
thousands of custodial parents who have received results from
private firms. I tell you my story because I know that the
government agency cannot serve all families equally well and
because I believe that custodial parents ought to have the
choice of turning to private enforcement agencies and, through
them, to have access to all the enforcement resources and
remedies authorized by Congress.
It seems to me inherently unfair that I--or any other
custodial parent--would be denied the use of valuable
enforcement tools provided under federal law and paid for by
taxpayer dollars unless I agreed to have my case worked by an
overburdened government program currently capable of making
collections (usually only partial collections) in only about 1
of every 5 cases in its staggering caseload. It seems to me
that there is an issue of fundamental fairness here with
respect to parents who seek help outside the IV-D program--
particularly when that program has failed them. What possible
justification is there to deny parents useful information
available to the IV-D agency if these parents choose to collect
the support owed their children through public or private non-
IV-D enforcement agencies? After all, non-IV-D custodial
parents are taxpayers who also paid for the development and
operation of databases to which some interest groups would deny
them access for use in helping them obtain their rightful child
support.
I do not understand how anyone with a genuine concern about
the plight of families who suffer from nonsupport would say
that these families should not have viable choices of sources
of enforcement and that they must accept government services if
they want access to all the enforcement tools authorized by
Congress. Unless one is prepared to say that private attorneys,
private agencies, and local government agencies should be
banned from providing child support enforcement services--even
though they provided these services before the IV-D program
existed--then it makes no sense to say that these non-IV-D
providers should not have access to the same resources and
remedies available to the IV-D program. What public policy is
served by creating an incentive for custodial parents to seek
IV-D services at taxpayer expense through the denial of
enforcement tools to these same parents when they freely choose
an alternative enforcement route as a first preference and at
their own expense?
I am aware that there are those who believe that the
government's IV-D program can and should do it all--that it is
only a matter of time before all the new, required automated
systems will kick in and all cases in the burgeoning caseload
will be processed expeditiously and effectively. To these
individuals I can only say that it is, indeed, a matter of
time--a matter of years of waiting, suffering deprivations,
struggling with frustration and emotional exhaustion.
The fact is that child support enforcement--no matter how
sophisticated our automated procedures and enforcement tools
may be or may become--is still fundamentally a human enterprise
when it comes to the employment of those procedures and tools.
The heart of enforcement remains the work of child support
personnel who deal with custodial parents, negotiate
settlements, or perform the work for judicial or administrative
hearings. It is here where the IV-D program is faced with the
greatest probability of inadequate resources to meet the
demands of its overwhelming caseload. Given the shortage of
these human resources in the IV-D program, the need for
effective use of non-IV-D resources is clearly indicated. But
non-IV-D resources can be most effective only if they are
provided with the same tools and information that are provided
the IV-D community.
If, in time, the IV-D program is efficiently able to
provide effective enforcement services to all families needing
those services, the services of non-IV-D providers will not be
the alternative used very much by custodial parents. Today,
however, families like mine seek the assistance of non-IV-D
providers simply because the government program cannot provide
efficient, effective enforcement services to all families
needing them--let alone to all cases currently in its caseload.
If we are to have the kind of competition between the
public and private sector that elected officials and government
and public policy experts have encouraged over the past decade,
then we need a level playing field. The private sector needs to
have access to the same tools the government IV-D possesses.
This legislative proposal would support a degree of fair
competition through the sharing of information and other
resources that are currently available only to the public
agency, although provided through the tax dollars paid by our
clients, as well as by other citizens.
Moreover, just as I was naive in thinking that a support
order and excellent locate information ensured that the
government agency would secure support payments, so these
individuals are, I believe, naive in thinking that there will
ever be enough resources for the government enforcement program
to ``do it all.'' The need is so vast that it exceeds the
ability of the government program to provide effective services
in every case. All available resources--public and private--are
required in the battle against nonsupport, and both the public
and private agencies engaged in this critical battle need all
the tools that Congress can provide--and, indeed, has already
provided.The legislative proposal now before you for your
consideration contains provisions that, as an option--and only
as an option--would enable state IV-D agencies to enter into
partnership with private child support enforcement agencies to
share certain enforcement tools and, thereby, more effectively
to share the work of providing families with enforcement
services. Believe me, there is more than enough work to go
around, and state IV-D agencies would never suffer for lack of
customers were these options provided to them. The only ones
who would be adversely affected by the collaborative efforts of
public and private child support enforcement agencies under
this legislative proposal are the tens of millions of
noncustodial parents who every year successfully escape paying
the support which they owe and which their children urgently
need.
Specifically, the proposed legislation provides that state
IV-D agencies have the option of accepting requests from
private enforcement agencies for information available to a
state IV-D agency that may be useful to a private agency in its
efforts to establish and/or enforce child support obligations.
A private provider making such a request would, however, have
to satisfy the state agency that it is capable of ensuring the
same data security, privacy protections, and due process
requirements applicable to the state agency, in accordance with
procedures approved by the agency's director. No state agency
would allow the wholesale downloading of data to any private
attorney or private agency. The state IV-D agency would have to
be satisfied that there is a genuine need for the information
requested on any particular case. Because this is only an
option, a state IV-D agency would set the procedures and
standards appropriate to its own operations in providing
enforcement information to private providers, as well as to
non-IV-D public agencies.
The proposal would also allow state IV-D agencies to
provide private agencies access to certain enforcement remedies
now restricted in use to IV-D agencies. These remedies include
interception of federal income tax refunds for child support
arrearages, the reporting of arrearages to credit bureaus,
imposition of passport sanctions for past-due support,
financial institution data matches to locate assets of
delinquent obligors, and the garnishment of unemployment
benefits for child support. The use of these remedies would,
again, be controlled by the state IV-D agency, subject to
procedures set by the agency and subject to safeguards
established under federal and state laws.
Not only would the collaboration of a state IV-D agency and
a private provider of support services (including private
attorneys) be at the option of a state IV-D agency, but the
costs of such collaboration would be borne by the private
provider. Quite simply, the intent is that neither the state
nor the federal government would bear additional expenses.
Whatever mode or extent of interaction a state IV-D agency
might choose to have with a private provider would be on a fee-
for-services basis. Moreover, a state IV-D agency would be able
to determine--if not all services--which services to make
available to a private provider. The point here is that a state
IV-D agency would itself judge, in light of its workload, the
extent to which it is able to interact with private enforcement
providers.
I am aware of the objections posed by some members of the
IV-D community--as well as by some special interest groups--to
the sharing of IV-D enforcement resources with private
attorneys and child support enforcement agencies. The notion
seems to be that private providers of enforcement services
would, for some reason, not use these resources responsibly. I
find this bewildering and deeply troubling. It is as ill
founded a notion as the idea--advanced by some special interest
groups--that state IV-D agencies do not take their
responsibilities seriously and for that reason do not serve all
their customers well.
I am proud of the work that I have done over the past 8
years in Supportkids.com. I am proud, as well, of my co-workers
and their dedication to the interests of the clients we serve.
I am proud that Supportkids.com has collected over a quarter of
a million dollars in child support for its employees alone. I
am proud of the fact that people in our company have been able
to leave the welfare rolls to assist other families in their
struggle for financial self-sufficiency. We at Supportkids.com
work hard on all our cases. We most certainly do not get the
``easy'' cases. On the contrary, we get the cases in which the
government program did not provide effective services and made
no collections. If these were the ``easy'' cases, they would
not have come to us; the government agency would have taken
care of them.
My experience, both as a custodial parent and as an
employee of a private agency, is that private child support
enforcement providers are no less responsible in their dealings
with their customers or less caring about achieving effective
results, within the boundaries of the law, than their IV-D
counterparts. Together we share a commitment to the families we
respectively--and often jointly--serve, a respect for the use
of appropriate legal procedures, and a concern about the
welfare of the children for whom we seek support. For those
reasons, we should also be able to share the valuable
enforcement resources and remedies which Congress has
authorized for ensuring that parents fulfill their financial
obligations to their children.
Another, related issue that I have heard expressed about
this legislative proposal is that it would compromise the
privacy rights of individuals about whom information would be
released to private and public non-IV-D enforcement entities.
Quite simply, there is no privacy issue here. Not only would
the state IV-D agency control what information is released, but
also the only information released would be related to the
legitimate purposes of child support enforcement and no other
purposes. In this regard, the proposal is not different from
current federal law that authorizes the disclosure to a
custodial parent of certain otherwise confidential information
concerning a parent available through the Federal Parent
Locator Service for the purposes of establishing and enforcing
child support obligations.
Underlying most of the objections to any proposal for
allowing non-IV-D providers of enforcement services to share
IV-D enforcement resources is, I believe, the concern that
there is something intrinsically wrong about charging fees or
receiving payment for performing child support enforcement
services. This concern seems rooted in the misperception that
the government provides ``free'' services and that charging for
child support services is like taking bread out of the mouths
of children. (Of course, some state IV-D agencies do charge
fees for services, and in 1992 the General Accounting Office
recommended that all IV-D agencies charge fees in their non-
welfare cases to cover administrative costs. How, then, is it
``wrong'' for the non-IV-D enforcement community to charge for
its services, but not ``wrong'' for the IV-D community to do
so?)
I understand the visceral pull of this concern--and I agree
that it is wrong and a cruel injustice for a family to receive
less than the full and timely paid amount of child support owed
it. I agree because I have experienced that injustice and
injury. For 6 long and difficult years I received not a penny
of the support the court had ordered for my children.
Ideally, we taxpayers should not have to bear the costs of
collecting child support from ``deadbeat'' parents, but we do
because we believe that it is imperative that children have the
financial support due them. Ideally, I should not have had to
seek assistance from a private provider to secure the child
support the government agency couldn't secure, but I did
because my children needed the support due them. I suppose one
could say that it is ``wrong'' for a tenant to incur legal
expenses to recover a deposit from a landlord or for a consumer
to recover damages for a defective product. But it is important
not to overlook the simple and obvious fact that the ``wrong''
has been committed by the party who withheld the amount due in
the first place. In the case of child support, the wrong lies
with the parent who fails to provide the support, not with the
enforcement provider who finally secures the support.
No one could reasonably expect the IV-D program to operate
without taxpayer dollars. Similarly, no one could reasonably
expect a private enforcement provider to operate without
compensation or a local government to bear the entire expense
of a child support enforcement program. Therefore, to say that
non-IV-D public and private enforcement providers should not be
compensated for their services is tantamount to saying the non-
IV-D enforcement should not exist. I suspect, however, that
there are special interest groups that do believe just that.
Curiously, these are the same groups which believe that there
should be no restrictions on how a custodial parent chooses to
spend child support payment--presumably of the benefit of the
child for whom the support is paid. Yet these very groups also
oppose the right of a custodial parent to expend their child
support for the purpose of recovering it in the first place, if
the custodial parent enlists the assistance of a private
enforcement agency.
Payment of contingency fees to a private provider of
enforcement services is the most important tool a custodial
parent has to obtain justice when the IV-D agency is unable to
provide effective services. Would anyone risk losing household
money on a 2 in 10 chance of success with the government
agency? Would anyone risk food on the table for such a 2 in 10
chance? An informed custodial parent is a responsible parent
who should be allowed to make an informed, responsible choice
with respect to taking the best course of action to ensure his
or her family's financial well being. The clients we serve are
informed, responsible adults who know the difficulty of the
work that we are prepared to undertake on their behalf to
secure the support they are owed. They know they need the
expertise we can--and do--provide. They know they need an
advocate who has the time and resources to invest in their
case. For them, the payment of contingency fees is the key to
justice being done.
Yes, it is wrong for a child not to receive the benefit of
all the support due. But given the fact that each year millions
of children are so wronged, should custodial parents and their
children not have the right to more alternatives for
enforcement rather than fewer? Is the mother who has failed to
obtain her children's child support through the IV-D program to
be effectively denied the opportunity of recovery through
other, non-IV-D options? And should that mother be denied
access to the enforcement resources available only through the
IV-D agency? I believe that the time has come to move beyond
parochial perspectives to a broader view of the child support
enforcement problem in this country and to engage a new vision
for dealing with that critical problem.
Over the past 25 years, this subcommittee and its parent
committee of the Congress have so often taken the lead in
strengthening child support enforcement in this country through
innovative and visionary legislation. The legislative proposal
now before you offers yet another opportunity to advance the
purposes of child support enforcement. It would provide a much-
needed bridge between the IV-D community and public and private
enforcement agencies. It would open the door to productive
collaboration among all of us and to a working partnership
that, in the last analysis, can only benefit the families who
seek--and need--our help.
Madame Chairwoman, you and your distinguished colleagues on
this subcommittee are, I know, well aware of the desperate
circumstances in which millions of custodial parents in our
country find themselves today because of the unlawful and
immoral failure of noncustodial parents to pay child support.
As someone who has personally and painfully known the plight of
such custodial parents, I do not see how we, as a nation,
cannot but choose to enlist all available resources, public and
private, in fighting nonsupport.
The establishment of the government child support
enforcement under Title IV-D of the Social Security Act 25
years ago was a major achievement for the welfare of our
children. But there is a wealth of resources outside the IV-D
program--locally funded public agencies and private providers--
that need to be brought more fully into the national child
support enforcement effort. Under the provisions of the
legislative proposal now before you, these resources can be
made a more integral component of that effort without
significant--if any--additional federal taxpayer dollars and
without compromising in any manner the safeguards Congress has
wisely provided for the protection of privacy and due process
rights. With respect to private providers, the proposal offers
custodial parents the option of choosing services from these
providers without, however, having to forfeit the enforcement
tools Congress has authorized and their taxpayer dollars are
paying for. It also provides state IV-D agencies with the
option of entering into partnerships with private providers to
bring more resources to bear upon the intractable challenge--
and national scandal--of parental irresponsibility.
I respectfully urge the subcommittee and the Congress to
use this legislative proposal as an opportunity to strengthen
the cause of child support enforcement and, I believe, thereby
to bring us more quickly to a day when a story such as mine
need never be told.
Thank you.
Chairman Johnson of Connecticut. Mr. Bacarisse?
STATEMENT OF CHARLES BACARISSE, HARRIS COUNTY DISTRICT CLERK,
HOUSTON, TEXAS
Mr. Bacarisse. Thank you.
Madam Chair, Congressman Cardin, thank you for your time
today. I am pleased to be here.
I come before you today to lend my total and unequivocal
support to legislation that would give non-title-IV-D
enforcement agencies additional tools so they will be even more
effective in enforcing support.
My name is Charles Bacarisse, and, as district clerk of
Harris County, Houston, Texas, one who oversees a support
registry that moved more than $261 million in payments last
year, I have seen child support enforcement on the national
level fall behind at such a rate that empowering local
assistance outside the title IV-D program is desperately
needed.
By passage of this legislation, the Congress will ensure
that deserving recipients receive their monthly checks. Kids'
lives and futures are at stake.
In Houston, my staff processes more than 5,000 transactions
totaling more than a million dollars each working day. The
average payment is about $150, so we have a registry that
serves all types of socioeconomic classes. In fact, based on
the most recently available Federal data, if Harris County were
a State, it would rank about 33d in the Nation in total
collections--that is IV-D and non-IV-D together. So I appear
before you as someone with firsthand knowledge necessary to
demonstrate how highly critical this situation is.
How serious is the problem being faced by the title IV-D
program nationwide? You are well aware of the numbers.
Basically, what I could add to that is that there is roughly
$50 billion that remains uncollected from prior years in cases
enforced under title IV-D.
Let us just think about that a minute--$50 billion. Jesse
Jones, perhaps one of the best-known Houstonians in history,
ran the Reconstruction Finance Corp. for Franklin Roosevelt in
the thirties and forties. Through the RFC, Mr. Jones spent $50
billion rebuilding the U.S. economy. Think how far $50 billion
in child support would go today toward rebuilding families and
allowing custodial parents to work fewer hours potentially and
spend more time with their children. Yet, the amount of
uncollected child support grows every year.
The reason is simple: The government title IV-D program has
more to do than it can reasonably handle. A successful, full-
scale attack on this problem requires enlisting all available
resources. Those include locally funded, non-title-IV-D
government enforcement entities, members of the private bar
that offer child support services, and responsible private
firms specializing in support collection.
This attack makes sense from a taxpayers' standpoint. Title
IV-D enforcement services cost the taxpayers more than $3
billion annually. Locally funded child support enforcement
agencies such as ours offer services at zero cost to the
Federal taxpayer.
Harris County operates its own child support enforcement
agency. It is the Harris County Domestic Relations Office, and
about a dozen domestic relation offices exist in Texas' largest
counties, and other organizations like these county-funded
operations exist in other States, as well.
The Harris County DRO is funded by fees that are paid by
those who use its child support and visitation enforcement
services and county tax dollars. The user fees are based on the
client's income and ability to pay. Unfortunately, Texas'
domestic relations offices and similar non-IV-D public support
agencies in other States are unable to use some of the
enforcement tools that are currently available to the IV-D
agency, such as locate, for example. That simply adds to the
burden on the IV-D agencies.
A lot of discussion has been brought up this afternoon
about privacy issues. I might mention that currently these non-
IV-D agencies and the private interests have access to data in
the new hire database, but it is through quarterly reports
through the State employment security agencies. So what the
bill asks for is nothing new, but what it will do is automate
that access so that we won't have to wait 3 months to track
down someone that we are looking for.
In order to get help for our challenges, we can get it with
the tools that are outlined in H.R. 4469. Of course, all these
measures would come with the appropriate safeguards on access
to and use of confidential information. Any non-IV-D entity or
private attorney seeking use of specified tools and information
would be required to register with their IV-D agency. That is
important.
I think I would also like to mention, just for a moment, as
I sum up, that a lot has been made of the use of confidential
information. As an officer of the court--and there are
thousands like me across the Nation--I handle confidential
information every day. I handle all the county's juvenile
records. Our State, for example, has passed parental consent
for abortion. All of that data is confidential. We handle that.
We currently also handle all criminal databases that connect
directly into the FBI's NCIC criminal database. So we are used
to, capable of, and certainly understand the importance of
handling confidential information.
I appreciate the opportunity to appear before you today.
Thank you.
Chairman Johnson of Connecticut. Thank you very much.
[The prepared statement follows:]
Statement of Charles Bacarisse, Harris County District Clerk, Houston,
Texas
Madam Chairman and distinguished members of the committee,
I come before you today to lend my total and unequivocal
support to legislation that would give non-Title IV-D
enforcement agencies additional tools so they will be even more
effective in enforcing child support.
My name is Charles Bacarisse. As the District Clerk of
Harris County, Texas, and one who oversees a child support
registry that moved more than $261 million in payments last
year, I have seen child support enforcement on the national
level fall behind at such a rate that empowering local
assistance outside the Title IV-D program is desperately
needed. By passage of this legislation, the Congress will
ensure that deserving recipients receive their monthly checks.
That is a moral obligation: Kids' lives and futures are at
stake.
In Houston, my staff processes more than 5,000 transactions
totaling more than one million dollars each and every working
day. In fact, based on the most recently available federal
data, if Harris County were a state, it would rank about 33rd
in the nation in TOTAL collections (that is, IV-D collections
in both public assistance and non-public assistance cases). My
county would rank 37th among the states in terms of collections
in non-public assistance cases.
So, I appear before you as someone with the first-hand
knowledge necessary to demonstrate how highly critical this
situation is.
How serious is the problem being faced by the Title IV-D
program nationwide? Consider that in FY 1997, $9.5 billion in
child support was collected. However, this $9.5 billion
represented, at best, only 54 percent of current support due
that year. Only about 7 percent of past due support was
collected in FY 1997.
That left $8.1 billion in current child support uncollected
and $41.4 billion in past due support uncollected. Going into
FY 1998, $49.5 billion remained uncollected from prior years in
cases enforced under IV-D.
Nearly $50 billion. That's a huge number. That's a really
significant number to a history buff from Houston like me.
Jesse Jones, perhaps the best-known Houstonian in history, ran
the Reconstruction Finance Corporation for Franklin Roosevelt
in the 1930s and 1940s. Through the RFC, Jesse Jones spent $50
billion rebuilding the U.S. economy.
Think how far $50 billion in child support would go today
in rebuilding families, in allowing custodial parents to work
fewer hours and spend more time with their children. Yet the
amount of uncollected child support grows every year.
The reason for this unconscionable dilemma is simple. The
government Title IV-D program has more to do than it can
reasonably handle in serving both welfare and non-welfare
populations.
You may not be aware that of the more than 19 million cases
currently in the nationwide IV-D caseload, more than 40 percent
lack support orders. In those cases having orders, full or even
just partial collections could be made in fewer than two of
five cases because of the difficulties inherent in enforcement.
While state IV-D agencies struggle to increase
establishments and collections, their caseloads continue to
grow by the hundreds of thousands--and backlogs in
establishments and enforcement actions continue to mount.
While the problem is monstrous by any standard, the
solution is not. A successful, full-scale attack on this
problem requires enlisting all available resources, including
locally funded, non-Title IV-D government enforcement entities,
members of the private bar that offer child support services
and responsible private firms specializing in support
collection.
This attack makes sense from the taxpayers' standpoint.
Title IV-D support enforcement services cost the taxpayers more
than $3 billion annually, at a cost-effectiveness ratio of less
than $4 in collected support for every $1 of administrative
expenditures. By contrast, locally funded child support
enforcement agencies and private attorneys can offer services
at zero--zero--cost to the federal government.
In this crisis, Harris County custodial parents needing
assistance in enforcing child support are more fortunate than
those in some other areas. This is because Harris County
operates its own child support enforcement agency--the Harris
County Domestic Relations Office.
About a dozen DROs exist in Texas' largest counties. The
Harris County DRO is funded by fees paid by those who use its
child support and visitation enforcement services. The user
fees are based on income and ability to pay.
Unfortunately, Texas' domestic relations offices, and
similar non-IV-D public child support enforcement agencies in
other states, are unable to use some enforcement tools
available to the IV-D agencies. The result is that custodial
parents may be forced to go to the IV-D agency for certain
types of service, such as income tax intercept. This simply
adds to the burden on the IV-D agency.
One way to decrease the dependency of custodial parents on
IV-D agencies would be to allow non-IV-D agencies to run their
cases through national databases, such as the federal new hire
database. This enhanced data matching would allow a faster
response to a custodial parent's request, while ensuring the
privacy of those involved has been respected.
As one who deals with this matter daily, my suggestion for
involving capable non-Title IV-D enforcement entities must come
with federal legislation to allow the following five
enforcement tools:
The Equal Use of Income Withholding from Unemployment Benefits:
Current law--42 U.S.C. 503(e)--permits the withholding of
child support from UEB only in cases enforced by a state Title
IV-D agency. Because this law restricts the enforcement of
support in cases being handled by a local government agency or
private attorney, it forces the custodial parent to use the
Title IV-D agency.
Equal Use of Federal and State Tax Refund Intercepts:
Again, current law--42 U.S.C. 664: 666(a)(3)--allows only
the state Title IV-D agency to intercept state and federal
income tax refunds to collect past due child support. This
ability should be given to non-IV-D entities.
Extension of Data Matches with Non-Title IV-D Entities:
Any new law should enable an approved private attorney or
approved local government enforcement agency--upon payment of a
service fee--to request that state IV-D agencies include a non-
IV-D case in the data matches and to require financial
institutions to provide information and respond to notice of
lien or levy in non-IV-D cases as they would in a Title IV-D
situation.
The Ability to Report Child Support Delinquencies to Credit
Bureaus:
Currently, the federal Fair Credit Reporting Act restricts
such reporting to state or local enforcement agencies, or to
amounts that can be verified by local, state or federal
government agencies. Any new legislation should amend the law
to allow a registered private attorney, on behalf of a
custodial parent, to request a state IV-D agency to report to a
credit bureau the name of a non-custodial parent owing past due
support and the amount of the past due support.
The Ability to Revoke Passports:
Any new law should enable an approved local government
enforcement agency to request that the U.S. State Department
revoke a non-custodial parent's passport due to failure to pay
child support. This enforcement tool would only be used when
certain legally established requirements have been met.
Of course, all of these measures would come with
appropriate safeguards on access to, and the use of,
confidential information maintained in government databases.
The legislation should require any non-IV-D entity or private
attorney seeking to use specified tools and information to
register with the Secretary of Health and Human Services. The
use of the specified tools and resources would be solely for
child support enforcement purposes.
My office, which processes both IV-D and non-IV-D child
support payment has worked with both public and private child
support organizations on many occasions. My view is that the
more resources that can be applied to improving the collection
of child support, the better for the children owed the support.
Federal legislation and policies should encourage
participation in child support enforcement by responsible
public and private agencies and attorneys. This subcommittee
can begin that process today by considering the recommendations
I have presented, as well as those of my co-panelists here
today.
Madam Chairman and members of the committee, I hope I have
clearly defined the gravity of this situation and left you with
at least part of the solution. The need for legislation is
great. New laws should be enacted as soon as possible to combat
and curtail this growing problem. Millions of children across
America are depending on you.
Thank you for allowing me to testify before your committee.
Chairman Johnson of Connecticut. Mr. Bacarisse, to your
knowledge, are all the other non-IV-D public agencies
associated with the court?
Mr. Bacarisse. To my knowledge and experience, we are
either clerks of the court or we are associated with the court
through enforcing of the orders, such as my colleague from
Broward County. She is not a clerk, but she operates the
Broward County child support division and she enforces the
orders of the court that way.
Chairman Johnson of Connecticut. And are you aware of any
other non-IV-D public agencies in the country that aren't
associated with the judicial system?
Mr. Bacarisse. That are not in some way?
Chairman Johnson of Connecticut. Yes. I really don't know
this, and you may not know this.
Mr. Bacarisse. No, ma'am. I am not aware of any.
Chairman Johnson of Connecticut. Well, those of you who are
listening, we will look into this, because that certainly makes
a tremendous difference, the fact that you are accustomed to
handling information that is of a private nature, and certainly
getting people like you into the system ought to be a no-
brainer.
Mr. Bacarisse. Thank you.
Chairman Johnson of Connecticut. I want you all to think
about that. There is a difference in these categories out
there. Given the number of people not getting help, we do need
to--it may be methodically opening up to people who are
officers--you know, collection agencies that are associated
with the court, or whatever. But I think we need to think about
this definition.
Ms. Diaz, why, when you could give the IV-D agency your
husband's name and address and where he was working, why
couldn't they get the support order enforced?
Ms. Diaz. Well, that was a question I had many years ago.
Chairman Johnson of Connecticut. As you said in your
testimony, now you see why they couldn't help.
Ms. Diaz. Right.
Chairman Johnson of Connecticut. What is it that you see
now?
Ms. Diaz. The overwhelm. When I was going through it, my
own, personal battle, it was a very personal case. It was
individual. I thought my caseworker, as naive as I was, I
thought my caseworker was helping me, and I thought she had my
interest on her plate. I had no clue that there were thousands
in front of me. I was not on welfare. It wasn't important.
Maybe it was important, but I didn't know it. If they were
working my case, I wasn't being communicated to.
Keep in mind, during this time I wasn't sitting back
waiting for something to happen. I was aggressively pursuing my
own case.
Chairman Johnson of Connecticut. With the agency or with
your former husband?
Ms. Diaz. No. With the agency. My former husband did visit
my children quite often, and that was very--I didn't want to--I
wanted to keep the child support issue between my ex-husband
and myself, and I didn't want to bring the boys into it, so I
didn't use them as leverage, like I hear some parents do.
But I think it was just a matter of being naive then and
not knowing that there were thousands of other clients just
like me in the same boat. I thought it is just a matter of time
and I was in a line.
Chairman Johnson of Connecticut. And what did it cost you
when you decided to go through Supportkids?
Ms. Diaz. One-third, 33 percent.
Chairman Johnson of Connecticut. And since they got it all
apparently in kind of one payment, they took a third of that?
Do they continue to take a third of every support payment that
follows?
Ms. Diaz. No. Actually, my contract was very clear. The
child support arrears at the time was approximately $17,000 or
$18,000, and that is what I understood was going to be worked
to get $18,000. Once that amount is recovered, then, if the
payments continue, I get 100 percent after that, and they
continue to come in.
The 33 percent was taken off of the lump payment that I
received. My ex-husband decided again not to pay me. The
contract ended with Supportkids, and I had the option of--
actually, the way the court order read is that he was going to
be given a free year, and I wanted him to get--what I had
asked, if he could--one of the provisions, I would be willing
to give him a free year to get on his feet to do what he can to
get a good job, and if, in fact, the $300 a month would
continue on the 13th month. That money did not get paid, and
therefore the entire year became back owing to him.
So I did stay with the--in fact, I stayed with the IV-D
agency until 1996, and I had already been a client with
Supportkids since 1992. The only reason I stayed with them was
I thought maybe there was a chance I could get maybe an IRS
intercept or maybe there were some tools there that the IV-D
agency had. I was trying to get the best of both. I wanted any
possible way to get my support, and I would have gladly paid
more than 30, believe me.
Chairman Johnson of Connecticut. So, actually, if
Supportkids had had the authority, they could have collected
for you, charged you a third of that, but put in place a wage
withholding system. Then you would have never had to worry
again?
Ms. Diaz. That is correct.
Chairman Johnson of Connecticut. That is interesting. So,
because they didn't have the authority to do that or the access
to do that, you ended up having to go back in. Did you have to
pay the second time when you went back?
Ms. Diaz. No. In fact, the fee--you know, I hear these
things about the cost and about the fees. I want you to know, I
am a parent and I am the voice of millions of mothers out
there. My case is not unique. It is very typical. I really do
think--you know, when I read some of these testimonies and I
see in here about how the IV-D agency offers free service, why
would any parent in their right mind want to go to an agency
that charges a third? Free service is only, in my opinion, when
you get something out of it. When you get no service, it is not
free.
Mr. Cardin. Would the gentlelady yield for just one moment?
Chairman Johnson of Connecticut. Go ahead.
Mr. Cardin. I am going to have to excuse myself because I
have some appointments I cannot miss.
I just wanted the witnesses to know how much I appreciated
your testimony. It is extremely helpful to us. This is an issue
in which there is disagreement, but, as I said in my opening
statement, I really do hope that we will be able to work out
some legislation, particularly as it relates to the
distribution rules, because that is clearly one which we know
that the current setup just cries out for change.
Let me thank you all and apologize for our delays. It was
not our fault. We can never tell when a vote is going to take
place.
Chairman Johnson of Connecticut. Thank you, Ben. Thank you
for being here through all the testimony, in spite of all the
delays.
Ms. Diaz. Excuse me. I was just going to add that the 6
years was a hefty price that I paid.
Chairman Johnson of Connecticut. Right.
Now, as an employee now of Suportkids, is the general
policy of Supportkids to charge a percent of arrearages and a
percent of payments? Now, in your case they didn't charge a
percent of payments ongoing. Would you talk a little bit more
about what the policy--
Ms. Diaz. Well, the contract is very clear. It is a money
contract. It is not current support, arrears--
Chairman Johnson of Connecticut. Is it the same for
everyone?
Ms. Diaz. Yes. In fact, it just depends. We have several
different services that we offer that are different fee
structures. The third, the 33 percent that you hear about, it
is one-third of the amount, when the parent comes in, of the
arrearages at that time. It is a money contract. When that
amount is paid in full, we go away, the contract is ended, and
the parent continues to get 100 percent of payments thereafter.
It is simply a money contract. It is not separated into current
and arrears and so forth. It is a money contract for the
arrears that are owed at the time.
Chairman Johnson of Connecticut. And does that entitle you
to help any time your support payments stop or you have
problems?
Ms. Diaz. Right. If we are contracted to help a parent--
$10,000 is a good example. Of the noncustodial parents that we
pursue, most of them aren't going to have $10,000 hanging
around in some bank account to go seize, so we do have to go
after their source of income or monthly payments. And yes,
there is sometimes, quite often, a break in those payments, and
we are right on them within--our systems require that within 20
days of a missed payment, we immediately are on it again
looking for that employment and searching for the next payment.
But when that amount is paid, again, be it in a lump sum or
over a course of monthly payments, that is when the contract
ends.
Chairman Johnson of Connecticut. So after the contract
ends, then, if there are problems with the flow of support
payments, the person cannot come back to Supportkids?
Ms. Diaz. Absolutely. Certainly, the ideal situation would
be for the child support to continue. What we have established,
it does continue. The parent gets 100 percent. If at some time
after they have gone through Supportkids their child support
should stop, then, again, their options are there again. If
they are with a IV-D agency, they can continue that route. They
can continue to go through DRO office and county-based child
support services. Or they can go through a private attorney.
Their options are there again.
Chairman Johnson of Connecticut. But if they came back to
Supportkids and only 2 months support had been missed, then
your 33 percent of, say, $600--
Ms. Diaz. No, ma'am. It would go down to 20 percent. We
have different services. If they are owed less than $5,000 and
they know where the employment is, it is a 20 percent service.
Chairman Johnson of Connecticut. And that is 20 percent of
the arrearages?
Ms. Diaz. Yes.
Chairman Johnson of Connecticut. And would you take them if
the arrearages are only 2 months?
Ms. Diaz. Yes, ma'am. We have payment monitoring. If, after
the contract is over, they wish to continue with our services,
it is only 15 percent. It just varies as to what services they
might be looking for.
Chairman Johnson of Connecticut. But they could come back
into the system after 2 months payment missing and get, for 20
percent of those 2 months, help in reinstating the payments?
Ms. Diaz. Right.
Chairman Johnson of Connecticut. So that would cost them
$200 then? That is cheaper than a lawyer and faster than a
State agency.
Ms. Diaz. And cheaper than waiting around in line. Right.
Chairman Johnson of Connecticut. OK.
Ms. Diaz. And keep in mind, we don't deviate from a court
order. These court orders that come in, the parents--in my
case, I was provided with a document, which was a divorce
decree. It was a tool. It wasn't doing me any good because it
wasn't being enforced.
What we do, we take this tool, we find ways to enforce it,
and we get it paid. I really do--in not all cases we were able
to collect, but I really do think that there should be options
more so than what is out there today. I mean, these parents
should not have to be forced to stay in a government agency, in
my opinion.
Many times I am having to encourage parents to keep their
case open just so that they can get the resources that the IV-D
agencies have. It would be really nice to be able to give them
a complete package, regardless of where they go.
Chairman Johnson of Connecticut. Thank you.
Ms. Kadwell, I appreciate your giving us statistics to show
how very costly--and some of the others of you did--this
distribution rule is in terms of administrative expenses. If we
can fix that, you will have more resources to serve more people
in a timely fashion.
I do hope, though, that you, as well as others, will think
about how we might enlarge our tools, because it simply is--I
mean, we only have Ms. Diaz here, but I have heard this story.
One of the reasons I took the lead on the child support bill
when we were in the minority, and then again when we were in
the majority, in spite of the fact that, as you know, it is
very complicated legislation that takes an enormous amount of
staff time and prevents you from doing other things, but I was
just hearing too many situations like Ms. Diaz.
The system isn't serving all the people it should, and
simplification will definitely help, but most of the concerns
you raise are just abusive collection practices. Why can't you
write a contract that prohibits the use of those collection
contracts? We are not throwing the door open to private
agencies. We are just saying to States, ``If you want to
contract with one private agency, write a contract and govern
that agency's actions. If it works, spread it to five, spread
it to ten.''
I really don't, in good conscience, want to write a bill
just about distribution rules, even though I have been fighting
that battle since 1995 and personally was responsible for
getting the changes that were included in the original bill,
but it is not enough. It is not enough. And, as you know, we
can't pass and you don't want us to pass child support
legislation every year, because it is problematic. We get all
kinds of neat ideas that sound good in hearings and we have put
in there. We don't want to do this and churn the system.
So I think not to take this opportunity to set in motion a
process between the Federal and State governments and the
private sector would be, frankly, irresponsible and a neglect
of my duty.
So I am very open to your help, because I like to do my
duty in a way that I feel proud of, and I don't feel
particularly happy when the whole community opposes me, but I
will tell you, the evidence, the basic, gut evidence is so
great that there are too many Ms. Diazes out there. I really
can't go forward with a bill that doesn't begin to reach them.
I think the IV-D agencies--I mean, we tried in the
fatherhood bill. I am glad you mentioned it, Ms. Kadwell. We
want the fatherhood programs to grow within this framework, but
the IV-D agencies don't have the agencies to get in, in a
sense, the social support system, but they have got to be a
part of it.
So if we want more holistic system, why is it we can't do
business with the private sector? Because every week we don't
they are still out there. They are still doing it. So if we end
up in 2 years or 3 years, we have got to stay with contracts
with 10 private agencies. I will tell you, every other private
agency in that State is going to be in a different position
than those that are contracting, and those that are contracting
are going to set best practice standards and it is going to
have ramifications and it will definitely have ramifications in
the State legislature.
So I just am not satisfied that we can do what my friend
Wendell Primus wants us to do--that is, tell the States to do
this. And I am one of them writing them letters and telling
them what I thought they ought to do anyway and have gotten
some good effect from that bully pulpit, but I know how
worrisome this is.
I think you have raised some very good points. There were
some information points you raised, Ms. Entmacher, that I know
you and Ms. Smith from Massachusetts will be able to help us
understand better, that there may not be information in the
system in certain cases.
Also, I am not hung up on direct access. What would be the
fee that you would want to provide information?
So, you know, my message to you is I am still going to be
up here plugging, and I would appreciate your working with me,
and I would hope that we could find some solutions that will
give us all a feeling that we are responsibly looking at the
future.
Thank you very much.
Did you want to comment?
Ms. Entmacher. If I may?
Chairman Johnson of Connecticut. Yes. You have waited all
this time. I can wait a little longer.
Ms. Entmacher. Thank you.
I just want to say that I have been involved in child
support advocacy for 10 years and the National Women's Law
Center has been doing it for 20 years, and we have heard and
met and talked with many mothers in the situation of Ms. Diaz,
which is why we have kept on doing this work.
The problem is that, while it is possible that in some
States you would get the type controls that you are talking
about, it is also possible that some States would have very lax
regulations, and through the Internet companies can advertise
for custodial parents nationwide to contract with them, and it
is precisely because I see the potential for great abuse here
that I think we have to proceed with very great caution.
Chairman Johnson of Connecticut. So ask me to put in the
legislation that HHS has to sign off on the State regulations
or in the State contract that the State agency develops to
govern their relationships with private entities.
All of these are solvable problems. I appreciate what your
concerns are, but honestly, even if we don't make all the tools
available--we don't have to make all the tools available--but
why is it we can't help private agencies much more rapidly find
out who the father is and where he is working and just some
basic things?
You know, I think we have to think about this. I am not
throwing this open.
I had one person at the hearing yesterday on China trade
say, ``Why should we throw America's markets open?'' America's
markets were open. Wait a minute. What are you paying attention
to here?
So I don't want to carry on this debate in the newspapers
about the wrong issue. I am not going to throw the private
sector--give them total access to all the collection tools
without any governance by the government and without any
control. In fact, if we are going to give so much control it
may not work. That is my fear, is that the HHS regulations will
be so cumbersome--this is what happened with Medicare choice
plans. They didn't work. They were supposed to be the private
sector equivalent and the agency came up with 780 pages of
regulations. Well, this is not private sector insurance.
I am offering a lot of protection, in my estimation--so
much so that it may not work, but I am willing to do it because
I want to see what do the people in the real world who work in
this all the time, what kind of contract will they work out.
We have got to collaborate. How do you govern
collaboration? We have no choice but to collaborate. We can't
do it all. We aren't doing it all and we aren't going to be
able to do it all.
The challenge is collaboration, so let us begin. That is
all I am asking.
Mr. Bacarisse.
Mr. Bacarisse. Madam Chair, if I could just add one point
on the collaboration issue--and I think Victor and I were
talking about this before our panel--one thing that the Harris
County Domestic Relations Office focuses on with their
clientele is the visitation issue. This goes to your fatherhood
initiative.
Again, we are talking about money and payments and things
like that, but what we really want to foster is responsibility
and family.
Victor and I were sharing a story. I said, ``Victor, you
know what the biggest point of payments in our child support
registry every year is?'' A lot of people think it is
Christmas. No. It is August, because what has happened is the
kids have been together with the dad for the summer and they
have developed a bond and now dad believes he should start
paying, and it is back to school time.
It is amazing. You can just look down year after year after
year. Our biggest volume of payments come in the month of
August, and it is because we have got the energy at the local
level and the initiatives to push these fatherhood initiatives
and these visitation initiatives that the IV-D program doesn't
have time to do.
Chairman Johnson of Connecticut. That is really a wonderful
issue, because if there is anything I get a lot of complaints
about from fathers, it is, you know, ``I am supposed to pay
this money and I am not allowed to see my child.''
Mr. Bacarisse. Sure.
Chairman Johnson of Connecticut. ``It is not my former
wife. It is her mother that won't let me in the door, even
though I have a court order.''
That is very, very interesting. It reminds you so often
that when you are dealing with human issues you have to get
down to where people can talk to each other.
Let me conclude this hearing by an absolutely fabulous
quote. It happens to be from Dianna Durham-McLoud in the
newspaper. I love it. It sums it all up. ``These are tough
issues. That is because it is all about sex, power, and
money.'' That is true.
Thank you.
[Whereupon, at 2:12 p.m., the hearing was adjourned.]
[Submissions for the record follow:]
Statement of Geraldine Jensen, President, Association for Children for
Enforcement of Support, Inc., Toledo, OH
ACES members are families entitled to child support. ACES
has 45,000 members, and 390 chapters located in 48 states. We
are representative of the families whose 30 million children
are owed $50 billion in unpaid child support. We have banded
together to work for effective and fair child support
enforcement. ACES has surveyed our membership to gather
information from families as they make the transition from
welfare to self-sufficiency. We have asked welfare recipients
about the actions taken or not taken by child support
enforcement agencies that have assisted them to become self
sufficient. Collection of child support when joined with
available earned income allows 88% of our membership to get off
public assistance. Collection of child support enables our low
income working poor members to stay in the job force long
enough to gain promotions and better pay. The collection of
child support means our members can pay the rent and utilities,
buy food, pay for health care, and provide for their children's
educational opportunities. Lack of child support most often
means poverty and welfare dependency.
Private Collection Agencies are not the Answer to Child Support
Problems
Private collection agencies for child support do not work
any better than the government child support agencies. These
agencies do not and should not have access to confidential IRS
information, Federal Parent Locator Service which includes
Social Security Numbers, Credit Bureau Reporting, New Hire
Directories or Financial Institution Data Matches. They should
not have access to state information such as tax records,
employment records, worker's compensation records, or any other
protected government records. The private agencies collecting
child support are currently not regulated. In fact, the U.S.
Supreme Court ruled that these agencies do not fall under the
regulations of the Fair Debt Collection Act. Private collectors
are a bad solution to a hard problem. It is a better investment
to fix the child support enforcement system.
Opening the door to confidential financial, IRS, and Social
Security information to private collectors is a bad idea. This
would make private data readily available to a multitude of
sources. Controlling the appropriate use of this data when it
becomes available to any agency or individual who calls itself
a private collector violates the public trust in the
government. It will create a situation where identity theft,
false reporting, and the holding hostage of financial records
and other private information can become an everyday
occurrence.
Giving private collectors access to report people to the
credit bureau could also be dangerous. There are no adequate
safeguards that can be put in place to ensure that those
reported as ``deadbeats'' owe child support. Those reported by
private collectors may not have an open IV-D case and there
would be no way to verify if they owe child support. Nor would
it be good use of our tax dollars to pay state workers to
verify what private collectors submit for credit bureau
reporting, bank matches, new hire registry matches etc. State
child support workers are already overburdened.
Under the proposed legislation state IV-D agencies can be
forced to report anyone who is identified by a private
collector or public non IV-D agency to the IRS for a tax
intercept. One of the worst scenarios that could occur if this
legislation is passed would be that a private collector could
use this tax intercept process to steal tax refund money from
someone who is due to receive a large tax refund. The private
collector could identify the victim to the IRS as owing an
arrearage. The IRS would then attach the refund and forward it
to the private collector. The private collector could then keep
the money. The people identified by the private collector to
the state IV-D agency might be innocent, and not even owe
support. Since there is liability protection, if the private
collector makes a ``mistake'' nothing can be done to them. With
the information a private collector could obtain just by asking
the IV-D agency to obtain it for them, a crooked private
collector could easily perpetrate an identity theft by
gathering copies of tax returns, bank account information,
passport information or any other information.
There are no standards in the bill requiring the type of
state system that must be used to verify that a private
collector is legitimate. This means that some states could
adopt a non interference system and do little or no
verification on the legitimacy of the private collector. Some
existing private collectors have already used schemes with
``dummy'' corporations to rip off innocent families.
If a private collector had access to data from the New Hire
Directory, they could literally go through the phone book to
gather names and submit them to the state. The state would send
back all the information necessary to identify where the
victims work, their social security numbers, etc. Passports,
credit reports, taxes and banking information could all be held
hostage by the threat of false reporting. Worse, people could
be ruined financially by false reporting. Even if the private
collector is not a true criminal and they are just incompetent,
can you imagine what life would be like if you woke up one day
to discover that your credit was ruined, your taxes
intercepted, and your passport canceled because some private
collector made a false report about you? In the proposed
legislation, collectors get liability immunity, so there is no
recourse for the injured party.
Custodial parents who have used private collection agencies
have encountered many problems. Some of the problems
encountered include:
Private collectors take huge fees on money they
had no part in collecting Private collectors literally get 30-
40% of the children's money for merely mailing a piece of paper
to the state IV-D agency. They have taken no action to collect
the money, they are not involved in selecting the cases to be
submitted--states are required under federal law to submit all
cases with a $500 or more arrearage to the IV-D agency. The
private collectors are not involved in preparing the case for
submission, they are not involved in verifying arrearage,
handing arrearage disputes etc., yet they still get 30% of the
children's money. For example, private collectors get paid by
taking their 30% fee from an IRS refund that the state
government child support agency attached. This type of action
is currently occurring in states like Texas, where the private
collector merely notifies the state IV-D agency that the family
has given them permission to collect the support owed and
requests that all child support collected by the IV-D agency be
sent to the private collector rather than to the family. Then,
after the State IV-D agency prepares the case for submission
for IRS and State offset by verifying the arrearage, name, and
social security numbers, preparing the documents to be sent to
the Federal government, handing any issues that arise from the
non-custodial parent after they receive notice of the
attachment such as a dispute as to the amount of arrears, new
spouse claim,--the state IV-D agency receives the check from
the IRS, processes it, and sends it onto the private collector.
The private collector then takes their fee, usually 30% of the
amount of the check, and sends the remainder to the family.
Here are some examples of problems families have had with
private collectors:
Yvonne Best is the mother of two children, owed
thousands of dollars in back support. She and her children live
in San Francisco. She had an open case with the District
Attorney. To support her children Yvonne was working two jobs.
The childrens' father also worked two jobs. The District
Attorney attached his earnings from his second job but not his
primary job. She was only receiving $30-50 per month from this
wage assignment.
Out of frustration she opened a case with CSE, now known as
Supportkids.com. She paid her application fee, but they did
nothing for months. After seven months, CSE sent her a notice
that they put a wage assignment in place. Yvonne thought she
was getting somewhere. But all that CSE had done was change the
payee to themselves on the wage assignment for $30.00-50.00 per
month. They took their 30% and sent her the rest. After months
of talking to ``case workers'' and supervisors and getting
nowhere, she finally was let out of her contract with CSE.
Burnelle White of Dallas, TX saw an article in the
Dallas Woman's Magazine about Blue Moon Child Support
Enforcement and Collection Agency and what a great job they do.
Burnelle is the grandmother of a 12-year-old girl. Burnelle is
trying to collect from her son-in-law, who lives in Royce, TX.
He owes are about $7,000 in back support. Burnelle received
custody of her granddaughter in 1991 when her daughter died of
breast cancer. Child support payments are set at $180, plus
$210 payment on in arrears. The child's father is paying
support now but never paid regularly except for in 1994 when he
was on probation. He is a self-employed landscaper. In January
of 1994, Burnelle saw the article about Blue Moon and signed
the contract because she hasn't received any help from the
Texas Attorney General's Office. Blue Moon started collecting
the money, but she did not receive the correct amount. When she
contacted Blue Moon Child Support Enforcement and Collection
Agency, they yelled at her and told her that she had to wait,
and that Blue Moon had three weeks to get the money to her.
Burnelle received a letter from Blue Moon (see attached).
She never received all of the child support collected by
Blue Moon collection agency from her son-in-law for support of
his daughter. In June of 1999, Burnelle contacted the Texas
Attorney General's Office, Consumer Division, to file a
complaint and was told that she was one of several
complainants. The Better Business Bureau said told her that
because she had signed a contract and because the private child
support collectors are not regulated there was nothing that
they could do. The Better Business Bureau also told her that
all the collection agency had to do was change names and move
down the street, and even if some action had been taken against
them before, they could be back in business. Blue Moon kept 25%
of the child support collected, plus additional fees that she
wasn't told about. The Texas Attorney General was able to get
the contract canceled with Blue Moon. Burnelle still can't
account for approximately four checks that she never received
from Blue Moon. In July 1999 Blue Moon went out of business and
their phone number was disconnected. Recently Burnelle went
back to court and was able to successfully enforce her court
order.
Vicky Gorman has two children, ages 15(boy), and
12(girl), the childrens' father lives in Kansas. He owes
$48,877.26 which has gone unpaid in the past seven years since
the divorce. She hired a private collection agency, Child
Support Advocates, and signed a contract on May 22, 1996. Child
Support Advocates collected some child support payments.
Vicky's support order was for $550.00 per month. The first
check Vicky received from Child Support Advocates was for
$63.00, even though they had collected $250.00. Child Support
Advocates charged a $250.00 application fee, even though they
told her there were no fees. She had to hire a private attorney
to have the contract terminated in March of 1999. Vicky says
this of her experience with private collectors, ``Private
collectors are not regulated, they only care about what they
should receive, and if you call they tell you that you can't
call and bug them. The contract states that if they collect any
amount of money in the first year that the contract stays in
effect until all is collected, and that part is hidden in the
small print.''
If federal law requires State Disbursement Units to send
child support money collected from wage withholdings
(interstate or local), attachment of unemployment compensation,
attachment of bank account, etc., to private collectors. The
private collectors will profit from the work of the state at
the expense of the children.
If someone has a IV-D case open, federal law requires
automatic submission via the new computers for attachment of
most type of assets upon a 30 day default. The proposal to
require State Disbursement Units to send the child support
checks to private collectors is merely a way for private
collectors to make a windfall profit while doing no or little
work.
If there is a non IV-D case and a family signs up with a
private collector and the private collector does the work of
finding the employer, preparing an income withholding order and
claims, the private collector has a right to be paid for this
service. If private collectors provide a service not part of
the IV-D system, they should be paid but not at the expense of
the child. Instead they should be paid by the non-custodial
parent who failed to meet their obligations and caused the
custodial parent to need to seek services to collect the
support. The non-custodial parent should be required to pay the
fee, usually 30% in addition to the child support. The fee
should only be allowed to be collected after child support due
to the child has been paid.
Some private collection agencies collected
payments from the non-custodial parent but never sent the
payments to the family. This is literally stealing money from
the children. Since private collection agencies are not
required to follow the Fair Debt Collection Act, families have
no recourse in dealing with agencies who act inappropriately.
We have had reports that private collectors laughed at one
custodial parent when she told them that the child's father
said he had paid the money to the collector and she has not
received it. The private collector told her, ``sue us for it!''
Most of the families who turn to private collectors out of
desperation for support payments are in serious financial
distress. They do not have money to hire a private attorney,
they have not received efficient services from the state IV-D
agency, and then they get ripped off by a private collector.
Many give up and eventually end up on welfare, or working two
or three jobs to support their children. The children suffer
financially and emotionally because now they have lost both
parents, the one who has abandoned them financially and
emotionally and the other who cannot be home to nurture them
because they are working all the time!
Roxanne Roderick of Dallas, TX had an experience
with a collection agency that collected the child support but
never gave her the payments. Roxane is divorced and has an
eleven-year-old daughter. The father rarely paid support unless
he was taken to court and moved from Texas to Atlanta and back
to Texas. Roxanne was attracted to DSS collections from
advertizing. When Roxane went to the office, she thought it was
strange that the office was behind locked doors, and talk you
had to talk through an intercom system. When Roxanne questioned
how the office was set up she was assured that it was because
that they sometimes have non-custodial parents get mad when
they go after them for money. There was also an angry woman, in
the office that was pulled aside so no one could find out what
was going on. When Roxanne filled out the collection paperwork
and signed the Power of Attorney paperwork she had no idea she
was signing an agreement giving up her legal rights. At the
same time as Roxanne was starting her paperwork with DSS
collections, her daughter's father got married and moved out of
state. DSS collections told her they could not collect from
anyone out of state.
Roxanne was still in contact with her ex-mother-in-law, who
told Roxanne that she had been making payments to DSS
collections for her son. Roxanne never received these payments.
Roxanne called DSS collections to question them as to where the
money was, and they got angry and told her to look at the
source of her information. DSS sent her several nasty letters.
DSS also refused to give payment information to the Texas
Attorney General, so they had no idea that payments had been
made.
Most states have large amounts of undistributed child
support payments on hand. Thirty-four states responded to our
request for information about undistributed/unidentified funds.
They reported that they are holding almost $200 million. This
is very similar to the problems of private collectors not
sending money onto the family. However, the difference is that
citizens can call for a state auditor to check records of the
state child support agency, and state IV-D agencies can be
required to follow federal regulations about payment
distribution. Neither of these remedies is available for
resolving problems with private collectors. ACES recommends
that language be added to the Fatherhood Initiative legislation
which requires States IV-D agencies to use the Federal Parent
Locator System and New Hire reporting system to find the
addresses of families for whom payments are being held.
Contracts used by some private collectors have
hidden clauses which define all support as back support so that
fees can be collected from current support payments (E.g.,
Supportkids.com) others require families owed support to pay
additional court costs and attorney fees on top of the 30% fee
taken from the child support collected. (E.g., Child Support
Collectors Inc.) Some private collectors require contracts or
power of attorney agreements that are binding for the entire
childhood or are renewable for a full year if even one payment
is received, such as an annual collection through the IRS
Offset program by the State IV-D agency.
Some private agencies have closed down and totally
disappeared after custodial parents have paid application fees
of hundreds of dollars Since there are no state or federal laws
or regulations which govern the practices of private collectors
on child support cases, these problems continue to occur
unanswered.
Some private collectors have violated contracts.
Agreements were made for taking percentage out of arrears;
instead they took a percentage of current support.
Here are some examples of what happened to families using
private collectors:
A mother in Texas has one child that is owed over
$50,000 in unpaid child support. She signed a contract with
Child Support Enforcement (CSE now know as Supportkids.com) in
Texas more than one year ago. Since signing the contract,
Phyllis had to go on Public Assistance. CSE/Supportkids.com did
not close her case when she went on welfare and turn it back
over to the state as they are supposed to do. When she asked
CSE/Supportkid.com if the case should be turned back to the
state, CSE/Supportkids.com told her it did not matter because
this was an interstate case. CSE/Supportkids.com has taken 32%
of the current support but has not collected any money on the
arrearage of $50,000.
A mother in California had a $60,000 arrearage.
She went to a private collection agency. Nothing was done on
her case so she canceled her contract in writing. She came to
ACES and learned how to collect the back support. When she was
due to get the $60,000, the private collector notified her that
she owed them 30% of the arrearage, even though the contract
had been canceled. The private agency even tried to foreclose
on her house to get their portion of the $60,000.
Non IV-D Agencies Having Access to IRS Offset
Many states have several different government child support
agencies. In some communities these are local Clerk of the
Courts offices or court trustees. Before statewide
distribution, many of these offices had a cooperative agreement
with State IV-D agencies for payment processing, income
withholdings, and other services. These agencies were quick to
refer families to State IV-D agencies in the past for services
such as Parent Locator and IRS Offset because the family still
had a case open at their agency and the agency received federal
funding via the cooperative agreement. Now they do not like to
refer cases to IV-D because families chose full IV-D services
rather than using both agencies. Because of the history of
cooperative agreements, local offices hired staff and often
used child support positions as part of the local political
patronage system.
When states moved to using the State Disbursement Units,
these offices began looking for a way to continue to keep their
staff and continue the local patronage system. The newest
method to further this intent is to get access to the IRS
Offset system so that families will keep their case on file
with their office rather than change over to the State IV-D
system. This is good for some families who have had success
with collection by these non IV-D government agencies, such as
those where the mother, father, and child all live in the
community and the non-custodial parent has been making regular
payment on their own through this agency. Since employers now
send all income withholding payments to the State Distribution
Unit so that they have only one government agency to deal with,
since almost 40% of the cases are interstate, and since
contempt and criminal non-support actions are done by attorney
under contract by IV-D at no charge to families in most states,
it no longer makes sense for most cases to be handled by these
local offices.
For the few families continuing to have open cases at local
agencies it does not make sense to create a system where the
local agencies can access enforcement to the IRS Offset. It
does make sense to set up a system where state IV-D agencies
must accept cases referred from these offices and ensure that
the cases are forwarded to the IRS. They can require these
offices to provide the same information that they do of
custodial parents opening cases for IRS Offset. This process
includes forwarding a copy of an arrearage statement certified
by the court or, in affidavit form, the name of the non-
custodial parent, their last known address, and social security
number.
ACES recommends that federal law require State IV-D
agencies to accept and process these cases to ensure services
to these families. This would enable these offices to provide
services to the families who have cases on file where other
collection services are working. If the case on file at the
Clerk of Courts or Trustees' Office is not receiving regular
payments, these offices should be required to notify the
custodial parents in writing that full collection services for
locating absent parents, income withholding, attachment of bank
accounts, unemployment, etc. are available at the state IV-D
agency.
Distributing Child Support Payments and Review for Modifications
ACES would like to see these sections of the bill expanded
to ensure that families receive more child support rather than
having the child support collected being used to pay off
welfare debt.
ACES supports the sections that:
Determine that assignment of child support is only
the amount that accruals under an order while a family receive
TANF
Determine that when the family is off TANF the
amount of support due to the state to pay off a welfare debt is
the amount of support that should have been paid while on TANF
or the amount of TANF given to the family, whichever is less.
Allows States to use TANF funding to make up any
difference that occurs due to implementing this new
distribution system or using the difference to meet the
Maintenance of Effort requirement
ACES encourages states to take advantage of the new
distribution regulations rather than waiting until 2005 to
implement them.
ACES supports IV-A notifying IV-D when families leave TANF
to facilitate establishing and enforcing child support orders
and to obtain modification of orders for reasonable amounts of
support payments.
ACES opposes the section of the bill which requires review
and modification for TANF families. ACES believes parents
should have the right to make the choice of seeking a
modification. Our members state they do no want to jeopardize
often fragile emotional relationships between parents due to
untimely and unwanted modifications.
Fatherhood Programs
ACES support programs which assist fathers to become
employed so that they can meet legal child support obligation.
ACES supports programs which educate fathers about the
importance of regular and adequate child support and emotional
support to their children, foster communication and cooperative
efforts between mothers and fathers, and protect women and
children from domestic violence. We are concerned about the
many groups which present themselves to be advocates for this
but in truth are groups which are merely seeking to lower the
amount of child support non-custodial parents' pay under state
guidelines, or are working to change custody laws so custody is
awarded to the parent with the highest income rather custody
decision being based on best interest of the child.
Current federally funded Access/Visitation Projects fail to
reach families most in need of help in solving visitation
problems. States that have set up mediation/counseling programs
to help families resolve visitation problems set up programs
that are often voluntary and therefore don't reach families
with ongoing disputes. Voluntary projects have successfully
helped families establish visitation orders and custody
agreements at the time child support orders were entered.
Programs such as the Fatherhood Initiative have had minimal
impact. For example, the Los Angeles Fatherhood Initiative told
ACES in July 1999 that they had only 39 fathers enrolled in the
program.
There are 650,000 open child support cases in Los Angeles.
Manpower of New York reviewed the fatherhood program by
establishing a control group of non-custodial parents to
determine the effectiveness of the program. The review showed
that 30% of the fathers participating in the fatherhood
programs paid child support and 30% of the fathers not enrolled
in the program paid child support. The program did successfully
``smoke'' out those who were really working because, after the
court ordered them to attend job training, they began paying
child support to avoid losing their jobs!
ACES recommends that programs be expanded to include more
fathers so that more children benefit. In the past, programs
have spent millions of dollars to serve a few fathers, of whom
only 30% paid child support. Establishment of paternity, if
needed, should be a prerequisite to participation in the
program since the goal is to provide fathers' job and parenting
training needed to successfully financially and emotionally
support their children. Any organization receiving federal
funding for Fatherhood programs should be required to include
services to non-custodial mothers and should have anti-domestic
violence curriculums.
When parents see that the support paid actually benefits
their children, it encourages them to meet legal child support
obligations. Passing child support collected to families on
welfare rather then keeping it to pay off welfare debts helps
children and encourages non-custodial parents to meet child
support obligations. Child support payments passed on to
families should be counted toward TANF eligibility in the same
manner as earned income.
Federal law should encourage states to establish amnesty
programs for parents who owe the states welfare child support
debts. Parents should be allowed to make arrangements to pay
current support obligations based on the state child support
guidelines. These guidelines use actual parental income and
cost of raising children information to determine the amount to
be paid. The non-custodial parent should be allowed to enter
into a legal agreement with the state that sets up a process
which states that if the non-custodial parent meets current
child support obligations and past obligations owed to the
child, the state waives the arrears owed to them. If the parent
violates their agreement, they become liable for the debt owed
to the state.
Reform the Child Support Enforcement System Make Children as Important
as Taxes
In 1995, the U.S. Census study of children growing up in single
parent households showed that 2.7 million children received full
payments, 2 million received partial payments, and 2.2 million who had
support orders received no payments. About 6.8 million children
received no payments because they needed paternity or an order
established. About 32% of the families who do not receive child support
live in poverty. In single parent households, 28% of Caucasian
children, 40% of Black children and 48% of Hispanic children are
impoverished.
There are now 30 million children owed $50 billion in unpaid child
support according to the Federal Office of Child Support Enforcement's
1998 Preliminary Annual Report to Congress. If we are truly serious
about strengthening families and promoting self-sufficiency rather than
welfare dependency by making parents responsible for supporting their
children, it is time to get serious about setting up an effective
national child support enforcement system. Taking care of the children
one brings into the world is a basic personal responsibility and a true
family value.
Preliminary statistical reports from the U.S. Department of Health
and Human Services, Administration of Children and Families, Office of
Child Support Enforcement show that the average state collection rate
for 1998 is 23%.
ACES recommends that congress should enact, H.R. 1488, sponsored by
Representative Henry Hyde (R) IL and Lynn Woosley (D) CA. It sets up a
federal and state partnership to collect child support throughout the
nation even when parents move across state lines. These interstate
cases now make up almost 40% of the caseload and are the most difficult
to enforce. State courts or government agencies, through administrative
hearings, would establish orders within the divorce process or through
establishment of paternity and would determine the amount to be paid
based on parental income, modifying orders as needed. Enforcement would
be done at the federal level by building on the current system where
employers' payroll-deduct child support payments. Instead of the state
government agencies in each state having their own systems to do this,
the new law would have child support payments paid just like federal
income taxes. Withholding would be triggered by completion of a W-4
form, and a verification process. Self-employed parents would pay child
support quarterly just like Social Security taxes. At years' end, if
all child support due was not paid, the obligated parent would be
required to pay it just like unpaid federal taxes, or collection would
be initiated by the IRS.
For low income and unemployed fathers, states could continue to
operate fatherhood programs. Such programs offer fathers, many of whom
are young, an opportunity to develop parenting skills and job skills
that will allow them to financially support their children. About 40%
of the children who live in fatherless households haven't seen their
fathers in at least a year. Census Bureau data shows that fathers who
have visitation and custody arrangements are three times as likely to
meet their child support obligations as those who do not. If collection
of child support were accomplished through the tax collection system,
local Domestic Relations Courts would have more time and resources to
focus on visitation and custody issues.
Statement of Deborah Weinstein, Director, Family Income Division,
Children's Defense Fund
Improvements in the Distribution of Child Support
Collections and Services to Enable Non-Custodial Parents to
Contribute More to their Children
The Children's Defense Fund commends the Subcommittee on
Human Resources for holding this hearing on ways to improve our
nation's system of collecting and distributing child support
and to help fathers to contribute more to their children's
support. We believe that provisions in two bills before the
Subcommittee, H.R. 4699 and H.R. 3824, would make real progress
in increasing the amount of child support actually received by
the custodial family. Making such progress is vital to
improving the well-being of children.
Almost half (46.1 percent) of children in single-mother
families are poor. In 1998, less than one-quarter (23.1
percent) of government child support cases received any
collections. For children receiving TANF or in foster care, the
track record was worse: only 13.9 percent of cases have child
support collections. The average payment for all government
cases with collections was $3,180 in 1998; for TANF or foster
care cases receiving child support, the average payment was
$1,840. When added to earnings and other sources of income,
child support can better enable the family to afford rent and
other necessities, providing some measure of the security and
stability that all children need. These bills will increase the
likelihood that child support is collected and will provide
help to absent parents (usually fathers) so that they can pay
more support and also whenever possible play a greater role in
their children's lives.
We evaluate proposals to improve the child support
collection system by several criteria: (1) collections to the
greatest extent possible should result in a net gain to the
custodial family and should help families in their transition
from welfare to work; (2) simpler administration will lead to
more collections; (3) the system will be strengthened to the
extent that custodial and non-custodial parents respect its
basic fairness, and to the extent that it incorporates basic
protections from violence or unwarranted invasion of privacy;
and (4) low-income parents, custodial and non-custodial, can
increase their contributions to their children's support with
job training and placement help. Many of these principles are
embodied in the two pieces of legislation before the
Subcommittee, but improvements are necessary in order to ensure
that basic protections and fairness are achieved.
Collections to the greatest extent possible should result
in a net gain to the custodial family and should help families
in their transition from welfare to work. Families should
receive support collected on their children's behalf. H.R.
3824, sponsored by Mr.Cardin (with Mr. Jefferson, Mr. Stark,
and Mr. Matsui), is strong in requiring states to pass
collections along to families receiving TANF, and encourages
states to allow families to keep at least some of those dollars
in addition to their TANF benefits, by reducing the amount owed
to the federal government by the state. We strongly favor H.R.
3824's forgiveness of reimbursements due to the federal
government to the extent that child support payments are
disregarded in calculating TANF benefits. H.R. 4469, sponsored
by Mrs. Johnson, allows states the option of distributing all
collections to families, but provides no similar encouragement
to states to provide at least some of the child support in
addition to TANF benefits. There are provisions in H.R. 4469
that allow states to use federal TANF or state maintenance of
effort funds to cover the costs of distributing child support
collections to families. We are hesitant about such use of
funds, since in effect this would allow states to use federal
funds to draw down federal IV-D matching funds. If states are
to be given this very favorable treatment, it should be in
return for disregarding the child support provided to families
in calculating TANF benefits and should not be indefinite, but
should only extend for a limited number of years.
Both bills are helpful in limiting states' claim to the
child support dollars collected to the period during which
families are receiving TANF assistance. It is extremely
important that custodial families receive child support
directly so that children's needs may be better met, and so the
absent parent sees the value of paying support. Further, when
payments are made directly to the family, they continue without
interruption when the family leaves welfare for work. Under
current practice in most states, most or all of child support
is retained by the state for families receiving TANF. When they
leave, current child support is supposed to be paid directly to
them, but frequently there is a three-to six-month lag before
collections are properly directed to the family. If child
support were paid to the family even when they are receiving
TANF, this loss of support during the critically important
transitional period would be avoided.
Seeking recovery for Medicaid childbirth costs from non-
custodial parents is prohibitively burdensome and works against
other helpful provisions in H.R. 3824 and H.R. 4469 that would
result in payments being made to custodial families, not to the
state. At the time when fathers are deciding whether to
acknowledge paternity, it would be far better for their support
payments to result in help for their children. We support the
provisions in Section 7 of H.R. 3824 and Title I of H.R. 4469
to end recovery of childbirth costs.
H.R. 3824 offers an important protection for custodial
families when child support is distributed to the family,
especially when states do not disregard child support income,
and therefore replace TANF with child support dollars. Section
5 requires the state to certify that procedures will be
implemented to ensure that assistance payments will be timely
in the event of delayed child support payments.
Simpler administration will lead to more collections. Many
analysts have concluded that our current child support
distribution rules are so complex that they are almost
impossible to administer. Providing child support directly to
families whether they are receiving TANF or not has the virtue
of simplicity, in addition to its other advantages to families.
We strongly favor simplifying the rules so that child support
owed during the periods before or after a family receives TANF
goes to the custodial family, and not to state and federal
governments. We support the provision in both bills that when
families have left welfare they receive all arrearage payments
owed to them, eliminating the current exception for support
collected through federal tax intercepts (which under current
law remains with the state). When fathers see that their
children benefit from the support they send, it is a natural
incentive to pay.
Strengthening child support through basic fairness and
protections. We oppose giving more information and enforcement
mechanisms to private child support collection agencies, as
provided in Title III of H.R. 4469. These agencies are
unregulated. Courts have ruled that the federal Fair Debt
Collection Practices Act does not extend to private child
support collection agencies, so consumer protections available
under that statute do not apply to these entities. Private
collection entities now have access to ``locate only'' data
through the Parent Locator Service, and there are questions as
to whether this access has resulted in unwarranted invasions of
privacy. Examples of abusive private agency practices are
compellingly related in the testimony of Joan Entmacher of the
National Women's Law Center and in the May 18 Washington Post
story, ``Problems at Child Support Inc.'' They include
instances in which mothers were unable to terminate a contract
with a private collection agency, despite the fact that the
agency was simply taking its cut from current child support
payments generated through the state's IV-D agency.
We are concerned that in the absence of regulation more
abuses would inevitably occur, affecting both custodial and
non-custodial parents. These abuses would undermine support for
child support enforcement generally and might result in the
loss of some of the enforcement tools which are only now
beginning to show positive results in the IV-D system. Until
some form of regulation of these entities is in place, they
should not be given access to such highly sensitive
information.
We are also concerned that custodial parents and children
be protected from domestic violence. We favor proposals that
would require fathers' programs to collaborate with domestic
violence experts or at least to show preference in funding
programs that demonstrate such collaboration under Title V of
H.R. 4469. We also support adding domestic violence expertise
to the qualifications for potential appointees to the panels
that award grants under this title.
Helping low-income parents to work and contribute to their
children's support. We continue to favor providing grants for
fatherhood programs that offer help in assuming the role of
responsible parent, in part through job training and placement
assistance, and also through counseling and mentoring. As noted
above, we believe that some fathers need help to avoid domestic
violence, and that conflict resolution and other relevant
counseling provided by domestic violence experts should be
incorporated in programs receiving these grants. We continue
also to believe that both custodial and non-custodial parents
need access to effective job training and placement services,
since both parents are needed to support their children. We
urge the Subcommittee to include these grants in the proposed
legislation, but also to adjust TANF requirements so that
custodial parents may participate in education and training in
order to enhance their earning capacity.
The costs of H.R. 4469 are not fully offset within the
legislation. We would oppose funding the bill by cuts in other
programs serving low-income people. We have heard that cuts in
TANF supplemental grants or in the Earned Income Tax Credit for
childless workers are being contemplated as offsets, actions we
strongly oppose. With budget surpluses continuing to grow,
there is no possible justification for cutting other programs
that benefit low-income people.
Thank you very much for your attention to this testimony.
The Children's Defense Fund (CDF) is a private, nonprofit
advocacy organization whose mission is to Leave No Child
Behind(TM). We receive no government funds. CDF provides a
strong, effective voice for all the children of America who
cannot vote, lobby, or speak for themselves.
Statement of David L. Levy, President, Children's Rights Council
Hearing on Child Support Enforcement
We are writing to clarify incorrect information submitted
to you regarding Fatherhood Grants. This information was
included in the legislative proposal to changes in rules for
the distribution of child support collections under H.R. 4469.
We agree that fathers and mothers should be included and
supported in the law regarding family issues. We therefore
support the basic goals of the Fatherhood Program. However, our
concern lies with unsupported and incorrect information
presented to you regarding shared parenting. We would like to
set the record straight.
Mr. Victor Smith, from Dads Against Discrimination, asks
``you [to] regard a request of sole custody opportunities as a
fundamental right.'' in his testimony on H.R. 4469. Although
this bill does not affect custody determinations, it is
important that you understand family issues, such as this, when
creating any type of legislation affecting families. Sole
custody, in many cases, damages children. Prior to the 1920's
fathers were almost always granted sole custody of their
children.\1\ After the 1920's, the preference switched to
mothers as the usual recipients of sole custody. Currently
however, shared parenting is preferred by both psychologist and
courts, for children and families. Children need both parents
involved in their lives, in more than just a minimal or
monetary sense. A longitudinal study conducted by noted
researcher Sanford Braver, Ph.D., found that when parents have
no input into how their children are raised and their usual
parenting rights are taken away, they withdraw from the
obligations of parenthood financially and emotionally.\2\
Policies, such as joint custody, that support noncustodial
parents by giving them more control in their children's lives,
increase financial child support compliance and prevent the
occurrence of the problem.\3\
---------------------------------------------------------------------------
\1\ Alexander Hillery II, The Case for Joint Custody, The Best
Parent is Both Parents, David L. Levy, ed. at 29 (1993).
\2\ Sanford L. Braver, Sharlene A. Wolchik, Irwin N. Snadler,
Virgil L. Sheets, Bruce Fogas, and R. Curtis Bay, A Longitudinal Study
of Noncustodial Parents: Parents Without Children, J. of Fam. Psych, 9,
20, v.7, no.1, (1993).
\3\ Id. At 21.
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In addition, shared parenting was described by Mr. Smith as
``a political concept which is rejected by those who know of
the failure rate.'' However, joint custody is neither a
political concept nor has a high failure rate. In fact,
psychologists have been increasingly successful in educating
the courts on why joint custody is beneficial to the child.
Once implemented, shared parenting has been found to be
extremely successful as a positive alternative for continuing
custody disputes. Some examples of this include:
By 1993, forty-eight states and the District of
Columbia had accepted some form of joint custody
Currently, twenty-six states plus D.C. have a
presumption for shared parenting in their laws.
90.2% of parents with joint custody paid their
child support, 79.1% of parents with access paid their child
support, and only 44.5% of parents with neither joint custody
nor access paid their child support, as reported by the Census
Bureau in 1992.
Joint custody is an extension of the drive for
equality that is so important to America today.\4\
---------------------------------------------------------------------------
\4\ Hillery II, supra, note 1 at 51.
---------------------------------------------------------------------------
Sole custody sends a message that only one parent
should have responsibility. Joint custody sends the message
that both do, legally and financially.\5\
---------------------------------------------------------------------------
\5\ Id.
---------------------------------------------------------------------------
Children raised by two parents are more likely
than children raised by only one parent to have higher self-
esteem, higher school achievement, and less involvement in
crime and drugs. Statistically, children with two parents are
at less risk than children with only one parent.\6\
---------------------------------------------------------------------------
\6\ Id. at 52.
---------------------------------------------------------------------------
Section 16 (School Psychology) of the American
Psychological Association similarly found ``favorable
outcomes'' on a variety of measures relating to children when
shared parenting was practiced, including: father involvement,
best interest of the child standard, financial child support,
relitigation and costs to the family, and parental conflict.\7\
---------------------------------------------------------------------------
\7\ See Parenting Our Children: In the Best Interest of the Nation,
Report of the U.S. Commission on Child and Family Welfare, 96 (Sept.
1996).
---------------------------------------------------------------------------
The involvement by both parents in the life of their
child(ren) is not only important but also necessary. Studies
have shown not only do the children fare better, but the
government does not to bear as much of a responsibility for the
support of children.
Thank you for taking the time to create legislation in
support of children and families.
Cooperative Parenting for Divided Families
Pittsburgh, PA 15221
June 1, 2000
A.L. Singleton, Chief of Staff
Committee on Ways and Means
U.S. House of Representatives
1102 Longworth House Office Building
Washington, D.C., 20515
RE: CHILD SUPPORT ENFORCEMENT
Thank you for giving our organizations a chance to present
information on child support.
Cooperative Parenting for Divided Families has, in some ways, been
involved in the concerns of child support since 1984. We are all part
of a larger collaboration of organizations. Some of these are national
and statewide with thousands of members throughout the country. We have
an excellent reputation, dedicated staff, a high quality of helping,
reliability, and offering of free services.
I personally have been a child-first advocate for over 17 years. My
organization believes that every child is entitled to child support and
quality time-sharing from both parents, regardless what that parent
might be like. This is why we provide supervised visitation in order to
prevent harm to any child or parent.
We have many concerns with both child support issues and the access
and visitation problems in our county. We have tried to bring these
concerns to our Pennsylvania Commonwealth Court of Common Pleas of
Allegheny County Family Division. Our efforts have been unsuccessful
because certain individuals in the court say that we are only an
interest group and have chosen not to involve us in helping to improve
the child support and visitation system. I have included our offer to
the court and their response to us.
Our members and those we help are the indigent, the common parents
from low to middle class families, the handicapped, the disabled, those
who cannot get or do not have fair representation in the courts, and
those who feel that they have been given the run-around by the court
system.
What we see here in PA is that the courts do not use every resource
to which they have access regarding local, state, and federal laws. The
agencies do not cooperate with one another, and there is a lot of red
tape and incompetence within family division. The agencies do not
inform one another of the laws and their duty to uphold them. When
people become educated and aware of their legal rights and remedies,
and then go to the court to ask that those rights be enforced, the
court does not follow laws and rules handed down by the government to
better child support and visitation enforcement. The court either
ignores them or does not have a clue to the laws and their
responsibility to follow up on all leads, information, or laws
available to them. One of the things we have learned is that attorneys
get to go in the front door of the court. Organizations like ours,
being non-attorneys, have learned to go in through the back door. Thus
we have more insight into the actual whole picture.
Cases can sit for months on a desk without ever being looked at.
Even when cases meet certain criteria as required by law for action,
they can sit on a desk for months before they are moved to another
department where nothing is done on them for more months. When the
federal government with all its resources goes to family division and
gets no help or respect, it's not surprising when the courts cannot
find a parent not in hiding, let alone a parent who IS hiding. Most
actual deadbeats do not hide at all; they do not worry that the courts
might be looking for them. This is a really big problem in our court
system. Family division does not have an answer to how to fix the
problem, so they say there is no problem at all! Some judges have
stated that they are giving the best services available. Some of the
records and statistics look good, but if you can compare the number of
cases where support is collected against the cases closed (so those
numbers won't interfere with their collection of bonus incentive
monies) you would find a large discrepancy.
Child support enforcement should be removed from the court system
but not put into the hands of profiteers who could also benefit from
the suffering and misery of families in distress. Family court is a
billion-dollar business for everyone but the families who need their
support. It should be separate from family division. CSE has to wait
until family division does its job, then forwards the case; if it's
inefficiently help up in someone's office for weeks and months, CSE
cannot act until they receive it. Harrisburg's answer to the caller is
that they are only here to assist you in getting child support. This
office would do better if removed from the control of the court, or at
least given their own division within family division where the people
can go and talk to a CSE officer themselves instead of relying on FD to
take their case to the enforcement office. In Allegheny Co., the court
is set up so that the people can have no contact whit CSE officers. A
person should be able to leave the court and go to the enforcement
office, or just visit the enforcement office when they have a need, or
when they have new information on a non-custodial, non-compliant
parent.
A case should be followed all the way through, just like the ``by
one judge, one case'' or ``by one case, one counselor"(DRO meaning
Domestic Relations Officer here.) A case should be able to move through
the court the same day and decisions should be made on that case
immediately instead of having clients sit in court while the person
holding the case has no power to make decisions--they make
``suggestions.'' A case should be able to follow the proper channels
straight to a judge or the motion (floating) judge on the same day for
immediate action to be taken. Now the case should go to the correct
department which can take action and make action happen instead of
having that case sit idle for months or (no exaggeration) years.
Because the location of a parent is unknown, there is no justification
for letting a case sit idle. Departments within the government are not
working together. I know an agent at the federal level, locally, that
has five cases, which sat dormant for over a year before being given to
him. On subject was paying, two were dead, and one is incarcerated.
Staff people are pulled from other departments and put into CSE who do
not have a clue as to what to do and where to turn. FD provides no
assistance to them, or no assistance to the public. Our organizations
are able to help and to educate those trying to work their way through
the maze of the court system.
These same courts should make use of legitimate 501 c (3) non-
profit organizations who actually help to improve child support
collection and child access by advocating and working to improve the
community. The 1996 Welfare Reform Law (P.L. 104-193) is only as good
as the enforcement that the courts are willing to provide. Compare the
numbers of cases of child support collected and uncollected with the
number of licenses suspended. PA has the power to revoke licenses but
chooses not to actually enforce this existing law. In the statistics
there is no reflection of an actual increase due to the suspension of
professional licenses. The courts have to use and enforce all the
options they have under the law, do an automatic increase for non-
payment, and attach assets, fines, liens, and jail. There are no
penalties now, and they are too lenient with habitual repeat offenders.
The court allows too many individuals to be in contempt of court and
perjure themselves out. How many times can one person be in contempt
before the court acts? When it does act, it lets them perjure
themselves repeatedly. Why would any parent worry about the
consequences of not supporting their child when the courts themselves
don't take this matter seriously? Some of these people can have four
contempts and show up at court as they choose. Most appear due to a
warrant, then they are released without paying, and they go until the
next warrant is issued. There are no penalties for willfully refusing
to pay your child support, or denying the other parent access to the
child.
Non-custodial parents have learned that they can perjure themselves
out of contempt by paying a little money--just enough to satisfy the
court at that time. The non-custodial parent should not be given such
long times to report to enforcement officers when found in violation of
compliance. They should go before a judge for strict penalties. No
child support, judge, jail! Fines and less support should be imposed
upon custodial parents who with hold visitation from the other parent.
When filing for child support if the 40/60 formula is enforced for
support, then the parent in violation of providing visitation should be
penalized for interfering with parenting time.
Most non-custodial parents that can pay do pay. Those who cannot
should be made to enter programs for job training, education and
parenting classes. It is up to the court to tell the difference between
those who try to pay and the ones who just do not want to pay. The ones
who simply cannot pay still try to spend time with their kids and to
make an effort to pay something. They do not go months and years
without paying or seeing their child--this is a parent trying. With
some help they might try to meet their legal obligations.
A $50 pass through is not much of an incentive for a family to move
from welfare to work. There is no benefit to losing food stamps,
childcare, and medical help if they go to work. Non-custodial parents
do not like paying child support when welfare is getting the bigger
chunk of money while their child receives only $50. Welfare should get
$50 and the custodial parents the rest without penalties such as a cut
in food stamps. Even when the order is written by the judge and it says
that the family gets $200/mo. And welfare $50, anything over the $200
goes to welfare and not the family even when the family is owed
arrears. Harrisburg says PACES can only release the checks after a
certain day and that any money that comes in before or after the
release date goes to welfare. If the order reads child support to be
$200 and $50 to welfare, and $300 comes in that month, welfare gets the
extra $50 and the family gets nothing of the arrears owed to them when
welfare is also due arrears. This is how PACES explained it to me when
money comes in and it is not the family's release date for child
support. It sits there until that release date and any money that comes
in before or after that date is sent to welfare. What ends up happening
is that all the money that was sent in that month went to welfare and
not the family because of some unknown release date. By the time it's
due for the family to receive its support, there is no more money
because it all went to welfare.
They do not hold up money due to welfare just to the needy
families. Families leaving welfare should be entitled to all the money
they are owed.
Personally our organizations have found non-custodial parents
faster than our court system has found them. There are some in hiding
for years who have changed their social security numbers and have
crossed state lines, including custodial parents that are collecting
child support and are hiding the child from the non-custodial parent.
Sometimes the money is going to welfare being paid through PACES and
the court cannot tell the non-custodial parent seeking parenting time
that they know where the child is. We have so many members with horror
stories that have been victimized by the court system. Anything that
you can do to improve this failing system, that is failing our
children, would be greatly appreciated by our entire state!
I have enclosed information on our organization. Please feel free
to contact me for any additional explanation of information/assistance.
I would like to be of further service to you. And, thank you for
providing this opportunity to us, and for your interest in what the
grassroots organizations have to say.
Denise Simpson
President of CPDF
Director/Group Coordinator of CPGI
DDS/dds
CC to all staff
[Attachments are being retained in the Committee files.]
Statement of John Haeger, Treasurer, Fathers are Parents, Too, Lilburn,
GA
H.R. 1488, The ``Hyde-Woolsey'' Child Support Bill
I thank the Honorable Henry Hyde and the Honorable Lynn
Woolsey for this opportunity to contribute written testimony to
this Committee. I am a non-custodial parent of two daughters,
17 and 18 years old. My child support obligation will end in
less than two months, so this Committee, in modifying Federal
child support policy, can offer no help for me or for my
children. I am writing for the benefit of parents and children
still affected by this Federally-encouraged system of child
support awards and enforcement.
Summary:
I urge this Committee to demand compliance with
Congressional intent by HHS' grantees of federal financial
participation in programs of state child support enforcement
administration. When this Subcommittee recommends legislation
to the full Committee, and to the House, and when citizens see
those bills enacted into law, they, and especially those
affected by the legislation, have a reasonable expectation that
Federal funds ostensibly disbursed for a Congressionally-
established purpose will be spent in a manner that reflects
Congressional intent. This is not the case in Georgia since
1989. And, based on HHS claims of lax enforcement standards, it
is likely not to be the case with far too many grantee-states.
This is a request for Congressional inquiry into the
effects of excessive child support guidelines decoupled from
family economic statistics which, in conjunction with lack of
payer self-support reserves can result in awards of support in
excess of certain parents ability to pay and distortion of
collection statistics. This is the case in Georgia. At the
individual level, this combination can have the effect of
increasing reported collection shortfalls. At the national
level, it can contribute to bad national policy. This blood-
from-turnip approach serves only to harass and impoverish low-
income payers while contributing nothing to child support; it
may have the effect of denying child support to recipients from
some marginal payers who could pay an economically-justified
amount. And, more importantly, it may have the effect of
inflating reports of uncollected child support.
This is a request to refrain from changes to Federal child-
support policy based on what is very likely flawed data
resulting from HHS' grantee non-compliance with Congressional
intent as permitted by HHS' exceptionally accommodative 25%
non-compliance standard (and apparent HHS' acceptance of
violations of even that lax standard). If Federal policy is to
be changed, the affected citizens deserve that this
Subcommittee demand accurate data on which to base its
decisions. Georgia's systematic non-compliance, specifically in
the areas of excessive awards and lack of self-support reserve
contribute to inflated Georgia reports of uncollected child
support.
This is a request for Congressional inquiry into selective
use by Federal grantee-states of interstate collection
facilities to emphasize recoupment of state welfare outlays as
compared with collections which flow solely to recipients.
This is a request for inquiry into the ``basis and
purpose'' for HHS' 25% grantee non-compliance standard (in the
Administrative Procedure Act sense) and comparison with
comparable standards of compliance required by other Federal
social-service grantors.
This is a request for Congressional inquiry into the
veracity of claims of compliance with child-support-relevant
Federal Statutes and Regulations by individual grantee States
in their quarterly applications for awards of grants of federal
financial participation in state child support enforcement
administration.
This is a request that this Subcommittee urge the Secretary
of HHS in the strongest possible terms to take qui tam action
to recoup federal funds disbursed to states pursuant to false
claims of compliance with relevant Federal statutes and
regulations in their quarterly grant applications or elsewhere.
Such action would, at the same time, give both grantee-states
and affected citizens an indication that Congress means for
grantees to comply with Congressional intent in expenditure of
Federal funds. It would impress upon grantees the importance of
compliance with the plain text of Congressional and HHS intent
even in the face of excessively accommodative oversight by HHS
program officers.
HHS must be able to rely on the veracity of grant
applications and other submissions by state officers. Absent
greatly increased funding, HHS cannot afford to devote
resources to monitoring state program compliance at the detail
level in every state. Like the IRS, HHS must be able to rely
(in general) on a system of honest self-assessment by state-
grantees. And when that level of honesty (or even mere
reporting accuracy) is lacking, grants can be awarded to non-
compliant grantees, undermining Congressional intent.
Discussion:
HHS' 75% Compliance Standard: In 1998, a letter request was
made to the Secretary of HHS to investigate Georgia's apparent
deviations from Congressional intent. No action was taken. In
response to a Congressional follow-up, a belated HHS response
reported that HHS applies a standard of compliance that permits
grantees a 25% error rate and that Georgia is in compliance
under that standard. Apparently, a violation of Federal
standards in the Federally-mandated quadrennial child support
guideline review that could affect 100% of all Georgia child
support awards only counts as one violation in HHS' compliance-
review methodology. Unless HHS has a special lower compliance
standard for Georgia, Georgia may not be alone in its
systematic failure to comply with Congressional intent.
HHS Compliance Standard May Be Too Permissive: Earlier this
year when a Federally-chartered corporation which grants
Federal funds to a different set of social-service grantees
reviewed grantee compliance, their grantee-compliance standard
was 5%, not 25%.
Request for Basis and Purpose-Compliance Policies and
Procedures: This is a request that this Committee request that
the Secretary of HHS provide the Committee with an existing
statement of basis and purpose for her child-support-
administration-grantee compliance evaluation policies,
procedures, and methodology. Special scrutiny is requested for
the question of how the impact of systematic violations of
Congressional intent within a state program (or, as in Georgia,
without it, since Georgia has never imposed its State Plan for
Child Support Enforcement state-wide) shall be evaluated.
Child-Support Data Not Reflective of Compliance with
Federal Policy: Statutory changes to Federal policy concerning
child support guidelines are being proposed to this
Subcommittee. And HHS' has admitted to an exceptionally
accommodative 25% non-compliance standard in its program of
awards of grants of federal financial participation. As a
result of that lax standard, and Georgia's zeal to take
advantage of HHS' lax oversight, data collected by Georgia (and
quite possibly many other states) may not be not representative
of the results of past (or current) compliance with Federal
child-support policy as enunciated in Federal statutes
(recommended by this Committee) and Federal regulations
promulgated by HHS in implementation of those statutes.
Request to Refrain from Changes Based on Questionable Data:
This is a request to this Committee to refrain from making
Federal policy decisions pending a review of HHS grantee
compliance and an evaluation of the distortions embedded in HHS
data which result from lax HHS compliance standards.
Investigation of compliance by Federal grantees with existing
Federal statutes and regulations and the effects of non-
compliance on data reported by Federal grantees may lead to the
conclusion that non-compliance by participating states has so
distorted child support enforcement reports submitted to HHS as
to make them useless for Federal policy-making purposes.
Closed Avenues-Plea for Enforcement of Congressional
Intent: HHS apparently assumes it is not subject to any form of
oversight in light of the ``absolute discretion'' granted it in
a Supreme Court ruling, Freestone v. Blessing, 117 S.Ct. 1353
(1997), which establishes the principle that child-support
recipients (and, most likely payors, too) are granted no rights
under Federal statutes (recommended by this Committee) to force
the states to comply with Congressional intent as expressed by
those same Federal statutes and as implemented by Federal
regulations implementing those statutes. Recently, the U. S.
Supreme Court closed yet another door to citizen enforcement of
Congressional intent expressed in these Federal statutes in a
qui tam case, Vermont Agency of Natural Resources v. United
States ex rel. Stevens which bars citizen qui tam suits against
states which fail to comply with the terms of their federal
grants. In 1998, a D.C. District Court suit seeking to enjoin
the Secretary of HHS from awarding or disbursing grant funds to
Georgia while she fails to comply with Federal statutes and
regulations was dismissed without consideration of the merits.
Congressional oversight seems to be the last remaining avenue
open to victims of HHS' lax oversight and systematic
overreaching by HHS grantee-states.
Request for Oversight of HHS and Grantee Compliance with
Congressional Intent: This is a request for investigation of
and, in light of HHS's admission of lax oversight practices,
continuing oversight of, HHS' management of its State Child
Support Enforcement Administration grant program. This
Committee would be well within its rights to request of the HHS
Secretary an existing a written statement of basis and purpose
for HHS' lax grantee compliance standards as required by the
Administrative Procedures Act.
Georgia's Failure to Comply with Federal Statutes and
Regulations: Based on the 1993 and 1998 reports of the Georgia
Child Support Commission to the Governor, it appears that
Georgia has intentionally (and both times under the leadership
of a Georgia Supreme Court Justice) failed to comply with
minimal requirements of the Federal statutes and regulations in
its Federally-mandated quadrennial review Georgia's child
support guidelines. In both instances, the Supreme Court
Justice/Chairwoman failed to report that non-compliance to the
Governor within the published report. One would think that a
member of the Georgia Bar who sits on Georgia's Supreme Court
would have an ethical duty to report such a lapse in her
Committee's report to the Governor.
Bloated Georgia Guidelines and Distorted Reports: As
discussed in Mark Rogers' article in the Spring 1999 issue of
the ABA Family Law Journal, Georgia guidelines lead to bloated
awards; in part by both Commissions' failure to ``consider the
cost of raising children;'' in part by Georgia's refusal to
incorporate a self-support reserve (both Federal requirements),
by Georgia's refusal to apply commonly-accepted principles of
family economics to its guidelines, and in other ways.
Grantee Non-Compliance and Distorted Reports: In so doing,
Georgia has so distorted any results of award amounts or
compliance rates that may emanate from this state as to make
Georgia data useless (or worse, misleading) in Federal policy
decisions. As a result of lax HHS oversight policies and
methodologies, this effect may not be limited to Georgia.
Reported child support award and enforcement results may not
reflect the results of grantee compliance with existing Federal
policy in any state.
Importance of Accurate Data to Federal Policy-making:
Federal decisions to modify policy should be based on accurate
data reflective of the results of compliance with existing
Federal policy. Excessive awards (as in Georgia, see Rogers
above) which exceed the ability of low-income (and sometimes
middle-income) payers to pay can distort state reports of
compliance and of the distribution of award amounts. Until this
Committee can be assured of compliance with Congressional
intent by HHS and by HHS grantees, changes to Federal policy
based on flawed data is premature. It would be far better to
investigate grantee compliance and to assure that reported
results are reflective of compliance with Congressional intent
and with Federal policies established in Federal statute and
regulations.
Request for Investigation of Georgia's Grant Award
Application Claims: Georgia has obtained grants since the
inception of this program in 1989 based on claims of compliance
with the Federal statutes and regulations which establish grant
qualifications. HHS has awarded grants to the State of Georgia
obtained based on what appear to be false claims (explicit or
implied) by the State of Georgia in its quarterly applications
for award of grants of Federal financial participation. Many,
if not all, of these quarterly claims of compliance may be
untrue, in some cases on a state-wide basis, in some cases on a
local basis, with most violations extending for periods of
years. I request that this Committee exercise its privilege to
investigate HHS' quarterly awards of Federal financial
participation in Georgia child support enforcement
administration.
Request for Investigation of Other States' Grant Award
Application Claims: HHS grants of federal financial
participation in state child support administration are
ostensibly awarded to states which comply with Federal statutes
(written by this Subcommittee) and Federal regulations
promulgated by HHS pursuant to those statutes. I further
request investigation into the basis and purpose for HHS' pre-
award inquiry procedures upon which basis quarterly awards of
grants of federal financial participation in state child
support enforcement administration are made. In light of HHS'
lax grantee compliance requirements, this is a request that
this Committee inquire into compliance by all states which have
been awarded grants by HHS under this program. An independent
government audit may be in order.
Deprivation of Due Process of Law: Federal Regulations call
for child-support-administration grantees to accord due process
of law in implementing these federally-assisted programs.
Details of systematic deprivations of due process in Georgia
child support enforcement are legion. Only a few salient
violations of Federal statutes and regulations have been
recited here. Georgia's methods arguably include systematic
deprivation of Constitutional rights to equal protection of the
laws as well. These forms of overreaching can be described in
detail to Committee investigators or during this Committee's
inquiry into grantee compliance.
Request for Qui Tam Recoupment of Funds Disbursed to Non-
compliant Grantees: This is a request that this Committee urge
the Secretary of HHS in the strongest possible terms to take
qui tam action to recoup federal funds disbursed to states
pursuant to false claims of compliance with relevant Federal
statutes and regulations in their quarterly grant applications
or elsewhere. Such action would, at the same time, give both
grantee-states and affected citizens an indication that
Congress seriously intends that Federal funds be awarded and
disbursed ONLY to grantees whose state programs comply with
Congressional intent. It would impress upon grantees the
importance of compliance with the plain text of Congressional
and HHS intent even in the face of excessively accommodative
oversight by HHS program officers.
Racine, WI 53402
May 1, 2000
Dear Legislator:
For those legislators who have asked themselves, ``How does a
deadbeat parent accumulate more than $100,000.00 of child support
arrears and what does Wisconsin do about it?'' I can give you an
answer. Child support awards on average far exceed the actual cost of
raising a child. Senate Bill 520 addresses this issue. The current
child support standards in Wisconsin were written in the mid 80's by a
group of women who worked for the Dept of Health and Human Services.
Not one father was involved even though fathers are more than 10 times
likely to pay child support than mothers. The standards were written
with an obvious bias against the non-custodial parent, again, more than
90% of the time, dad. Wis Statute 767.25(1c) states that the child of
divorce has the right to the same standard of living as if the marriage
had remained intact. This is impossible because lifestyles can not be
duplicated on the same income. For this reason, instead of merely
paying for his half of the incremental cost of raising a child, dads
are frequently expected to pay for entire houses, cars, vacations, etc.
This means mommy's lifestyle is subsidized by dad. She is also able to
avoid her financial obligation to the children entirely. Child support
is not based on actual earned income. Wis Statute 767.25(1hs) also
states that support is based on ``earning capacity.'' Judges are
allowed to ``assign'' an income to a father based on evidence produced
to him by mommy for dad's level of training and experience. In
addition, judges can and do ``impute'' income from assets dads own
including but not limited to his home, auto, pension, business, IRA,
etc. There is no cap on child support awards in Wisconsin.
Meantime, mom is under no obligation to allow dad or the child's
paternal relatives to use the items he has provided for. In addition,
she can and does move the children away. Judges typically allow her to
move if dad objects. If dad chooses to move to be with his children,
his ``earning capacity'' and therefore child support is unchanged even
if by necessity he must take a lower paying job. If dad's income drops
for any reason whatsoever, disability, layoffs, injury, etc, child
support arrears accrue at 11% interest (lowered just this year from
18%). Only when dad hires a lawyer and asks for forgiveness can he hope
a judge sides with him. If not, he cannot appeal as child support
awards are at the discretion of the judge. This process takes at least
6 months.
Mom is also free to use the money in whatever fashion she wants
including but not limited to paying experts and attorneys for the
purpose of removing dad from the kids lives entirely. Dads must then
pay an attorney and expert or risk not seeing his kids. There are no
laws whatsoever that require mom to spend the money on the kids. When
dad is allowed to see his kids, all of his expenses and incremental
costs are above and beyond his child support obligation. When the child
says, ``mom buys me anything I want, why don't you buy me anything?''
You quickly learn that to answer honestly will cost you time with your
child. When dads do see their kids, his appearance is used as a
convenient time to have him served with papers or have him incarcerated
in front of the kids so they can see firsthand what a horrible person
he is. This is frequently done by bitter, vengeful moms, and is totally
legal.
Why would Family Court allow this to happen? Three reasons, first
because mommy wants it and asks for it through her attorney. Second
because the county receives one dollar of federal matching funds for
every dollar assessed. This money can be used to pay for police,
firefighters, snow plows, etc. In other words, this money allows
politicians to decrease property taxes. (One segment of society is
victimized for the good of all). Third because there is no such thing
as a domestic abuse shelter where dads are given free counselors,
attorneys, and most importantly, lobbyists. All of this is done, ``in
the best interest of the children".
I believe that both parents are responsible for both the emotional
and financial needs of a child. I am proud to support my child. I thank
God for giving me not only a child, but also an income to support that
child. The question is how much is enough? According to recently
released data from the Dept of Agriculture, (http://www.newsday.com/ap/
washington/ap919.htm) the average cost of raising one child is
$160,140. If you do the math, (160,140 divided by 18 years and 12 month
per year divided by 2) dad's half share comes to $370 per month ($270
and $540 for low and high income parents respectively). Why am I paying
$5123.00 per month for one child? This would assume a father with no
role in the child's life. Obviously, as dad spends more time with the
child, this amount should decrease since dad is assuming these
incremental costs as well. Current support standards force dads to pay
3, 4, 5, even up to 10 times this amount depending on the judge.
Remember, child support is tax free to mom. Dad pays the tax. The
discrepancy increases as income increases.
Irresponsible people are going to be irresponsible no matter how
many laws you pass. As you pass more strict support guidelines, the
more you victimize responsible dads. The solution is to pass equal and
fair laws and then enforce them. I would love to enjoy the privileges,
responsibilities, and joys of raising my own daughter 50% of the time.
The current child support guidelines reward moms for removing dads from
their children's lives. They punish those of us responsible dads who
are ready, willing, and able to be involved in the lives of our
children, yet are forced out, ``in the best interest of the child,''
without due process, representation, or equal protection. The current
child support guidelines should be rewritten with input from
responsible dads. Senate Bill 520 attempts to do this.
Sincerely,
Malcolm Hatfield, MD
Wisconsin Cares about Kids
WI Support Collections Trust Fund
Wisconsin cares for kids by removing them from the only
father they will ever have. Wisconsin law gives moms and
counties tremendous financial incentive for removing children
from their father's lives. To date, my daughter Mary's mother,
Elizabeth Hatfield, MD, has received over $400,000.00 in child
support. This is not spousal or family support. This is child
support for one child. Racine County has received over
$400,000.00 in federal matching funds. This is how politicians
keep property taxes low. Victimizing one segment of society for
the good of all.
I saw my daughter Mary (now 11 years old) a total of 6
hours in the month of March, 2000. How many hours did you spend
with your child? To date, Mary has gone 25 months with no
contact not only from her father, but also from her father's
extended family (cousins, aunts, uncles, grandma, stepmother,
stepsister, etc.) Since 1993, when she was 4 years old, she has
averaged 9 hours of contact per month with not only dad, but
his extended family. This is child abuse at its worst.
Perpetrated by child advocates who act, ``in the best interest
of the child.''
Wisconsin and Judge Richard Kreul have single-handedly
removed Mary from her father. She now lives in Hinsdale,
Illinois. Please stop this child abuse. Please give kids the
father they deserve. Mary's court appointed attorney(GAL),
Michael Phegley, has pocketed over $55,000 to date solely by
keeping Mary from her father and his extended family.
All children deserve a father. Stop removing dads from
their children's lives. Stop giving moms and counties strong
financial incentives to remove a child from her daddy's life.
Please stop all forms of child abuse.
For more information visit my website at http://
www.mydoctor.com/hatfield
Malcolm Hatfield, MD
[GRAPHIC] [TIFF OMITTED] T6898.001
Statement of Hon. Michael K. Jeanes, Clerk of the Superior Court,
Maricopa County, AZ
I am an elected official in Arizona, Clerk of the Superior
Court, serving a constituency of 2.9 million in Maricopa
County, which is the 5th largest county, and the 8th largest
court system in the nation. On behalf of those families not
served by the Title IV-D program, I urge your support of
legislative bill, H.R. 4469.
In addition to my responsibilities as official record
keeper and financial officer for Superior Court, I have
oversight of the Family Support Center, which devotes 100% of
its time and budget to child support related issues, such as
the establishment, modification and enforcement of child
support orders, and enforcement of court-ordered parent-child
access (visitation).
Up to half of the Arizona child support cases have private
or (non Title IV-D) status, with circumstances that merit
gaining access to information and enforcement tools currently
available only to the State IV-D agencies. It is crucial to
those families that these enforcement tools be made available
to public government agencies such as offices of the Clerks of
Superior Court, whose objective is to serve the Non-IV-D child
support population.
In 1994, the Arizona legislature authorized the
establishment of the Child Support Coordinating Council
Subcommittee, co-chaired by members of the State Senate and
House. Council membership includes child support-related
entities such as Family Court judicial officers,
representatives from the Attorney General's office, the Clerks
of the Superior Court, custodial and non-custodial parents, the
employer community, and the State IV-D agency, (Division of
Child Support Enforcement). The Clerks have worked diligently
to support the objectives of the Council and its members,
specifically the State IV-D agency, through collaborative
endeavors, and have addressed any child support issues
requiring legislation or compliance with mandates.
Prior to the recent Federal legislation, PRWORA, which
mandated a statewide centralized child support payment
processing clearinghouse, my office performed child support
payment processing functions for 60% of the state of Arizona
cases, both IV-D and Non-IV-D. Yet, this office was fully
cooperative in assisting the State IV-D agency with its
conversion agenda, and will continue to work in a collaborative
spirit. It is now time to address the crucial needs of the Non-
IV-D population.
The Clerks of Superior Court in Arizona's fifteen counties
recommended to the Child Support Coordinating Council
Subcommittee that ALL cases, both IV-D and Non-IV-D, be placed
on the IV-D agency's Arizona Tracking and Locate Automated
System including those cases prior to January 1994. This
recommendation eliminated the need to create 15 separate and
costly automated systems for receipting and disbursement of
child support payments, in addition to the state-wide system.
It eliminated the need for Arizona employers to continue to
send payments to different locations, depending on the date of
the court order, as well.
Unequivocally, our membership has contributed notable time
and energies to the needs of the IV-D agency in Arizona and we
now ask for its support in obtaining the tools that will help
us serve the Non-IV-D families in Arizona.
In 1988, this office established the Family Support Center,
which includes Expedited Services for the enforcement of court-
ordered child support, spousal maintenance, and parent-child
access, (visitation). Providing a non-adversarial forum for
parties who petition the Court for enforcement of child
support, a mediation-trained para-judicial conference officer,
works with the parties to reach resolution. The process allows
for a 25-day objection period in the event that a party wishes
to request a formal hearing with a judicial officer,
(objections and requests for hearings result in less than 10%
of the cases.) Removing parents from the adversarial nature of
the court room can lead to greater cooperation between the
parents, and ultimately minimize harmful effects that parental
conflict has on the children.
Due to this service, at least 90% of these cases are
resolved, without requiring a substantially encumbered Family
Court to address these matters. However, expanded access to
enforcement tools as outlined in H. R. 4669, would add
immeasurably to our ability to help other families. Enforcement
services are partially supported via a portion of the $61 post-
decree filing fee, and through the County General Fund.
The critical issue of privacy is an ongoing concern
addressed by this office on a daily basis, since the Clerk of
the Superior Court works closely with the Court, holding an
inherent obligation to protect the confidentiality of
information. Additionally, for many years, my office has had
contractual accountability to the State IV-D agency for
provision of a variety of services, requiring strict compliance
with both State and Federal regulations, including
confidentiality.
Legislation should require that Non-IV-D or private
agencies register with the Secretary of Health and Human
Services to ensure that information and enforcement tools are
used within the parameters of legal intent.
Although the State IV-D agencies may struggle admirably to
meet the overwhelming demands of their customers, a significant
number of families remains under-served. As a proponent of
partnership and collaboration, it is my conviction that a
public Non-IV-D agency, such as my office, can bolster the
state agency's ability to serve families.
I have met with John Clayton, Director of the Arizona
Department of Economic Security and his Deputy, Nancy Mendoza,
who heads the IV-D agency, and have attached a letter stating
the provisions of their support for expanding access to public
Non-IV-D entities.
I urge that Federal legislation support the efforts of
responsible public and private agencies to enforce child
support, and that ALL families be given the same opportunities
to benefit from information and tools needed by the vehicle of
enforcement of their choice.
Arizona Department of Economic Security
Phoenix, AZ 85005
May 16, 2000
The Honorable Michael K. Jeanes, Clerk
Superior Court of Arizona
Maricopa County
201 West Jefferson
Phoenix, AZ 85003
Dear Michael:
I want to thank you and Kat Cooper for coming to meet with me last
month to discuss your interest in federal legislation which would
enable public non-IV-D agencies access to IV-D information and
enforcement remedies. It was clear to me that we share a common goal of
ensuring that families receive the financial support they need and to
which they are entitled. It was also apparent from our discussion that
you in no way want to jeopardize the State's IV-D program.
We have several concerns with the proposal for allowing public non-
IV-D entities to participate in IV-D remedies. It is possible that
many, if not all, of our concerns could be addressed through amendments
to the proposed legislation. I understand that Nancy Mendoza, my
Deputy, has spoken with you briefly about our concerns and the need for
amendments. The following is a more detailed discussion of those items.
Loss of Incentive and Exposure to Penalties
First, as you know, States compete for federal incentive funding
which constitutes a significant funding stream for the program as it
can be used to match federal dollars at 66% per cent. Arizona is
already at a competitive disadvantage for receiving these funds due to
demographic factors in our state. In fact, Congressman Hayworth was
successful in obtaining an amendment to the federal legislation
governing incentives to ensure that Arizona's lower than average per
capita income, higher than average mobility patterns and higher than
average out-of-wedlock birth rate could be considered as unique
demographic variables in calculating incentives. In accordance with
Congressman Hayworth's amendment, the federal Office of Child Support
Enforcement must issue a study of these factors later this year and
will hopefully make adjustments accordingly. If the Maricopa and other
Clerks of the Superior Court were to begin offering IV-D type services
in Arizona, the State program could see a further reduction in its
incentives as the cases likely to remain in the State's caseload would
be primarily the harder-to-work public assistance cases. Furthermore,
in addition to a loss of incentives, the State could lose from 1-5% of
its Temporary Assistance to Needy Families (TANF) funding should our
performance on incentives fall below certain thresholds prescribed by
the Department of Health and Human Services.
In order to remedy this shortcoming of the bill, we would suggest
that if the State enters into an agreement with the Clerks of Court to
provide access to IV-D information and remedies, the Clerk of Court
cases should be counted as part of the IV-D caseload for purposes of
incentives.
Impact on Automated Systems and Interface Compatibility
We have come a long way in working together on automation issues.
In fact, because of our joint efforts, DES and the Clerks of the
Superior Court received the Governor's Spirit of Excellence Award last
fall. I am aware that we continue to work on improvements to Central
Payment Processing and the State Case Registry.
It was clear that in order to achieve positive results on these
joint automation projects, significant effort and time had to be
invested. Even with this level of commitment, I am sure that you will
agree that there were ``bumps in the road.''
The legislation proposes access to data bases and enforcement
remedies that are entirely dependent on automated systems. In order to
accommodate Clerk of the Court use of those systems, a significant
investment of time and resources will be required. DES does not have
staff or funding to make an ``up front'' investment of this nature with
the hope of recouping costs through fees as contemplated by the bill.
In order for us to be able to design, test, implement and maintain the
interfaces required in the legislation, it would be essential that the
legislation prescribe that the initial and on-going automation costs be
borne by the public non-IV-D entity and that the interface standards be
set by the State.
Due Process for Obligors and State Liability
Currently, the State IV-D program is required to send notices to
obligors of enforcement remedies. Each remedy has specific notice
requirements, timelines for the obligor to respond and a time frame in
which the agency must resolve the matter. The proposed legislation must
contain a provision to clarify that the duties of affording notice and
processing appeals on public non-IV-D cases are the sole responsibility
of the public non-IV-D entity. Further, while errors in enforcement can
made by either a IV-D or a non-IV-D entity due to incorrect arrearage
balances or other mistakes of fact, the State must be held harmless
from errors in enforcement by the non-IV-D entity.
Oversight of Non-IV-D Public Entities' Adherence to Federal Law
The State IV-D entity is monitored by several agencies to ensure
compliance with federal law.
The monitoring entities include the Internal Revenue Service, the
Regional Office of the Department of Health and Human Services (DHHS),
the Audit Division of the Office of Child Support Enforcement, and the
Office of the Inspector General. The proposed legislation must make it
clear that the State IV-D agency has no responsibility for monitoring
the compliance of the non-IV-D entity with Federal laws and
regulations.
Duplication of Enforcement and Dually Open Cases
The use of IV-D remedies by the non-IV-D entity has the potential
of creating confusion and subjecting obligors to multiple enforcement
actions when parties may be participants in both the IV-D and non-IV-D
systems. For example, an obligor may owe support to more than one
family, with one of the custodial parents using the IV-D system and the
other using the non-IV-D system. If both the IV-D and non-IV-D systems
are attempting to use the same remedies, such as federal tax offset, a
conflict in allocation of collections among the families could result.
Additionally, even an obligor with only one family may be subjected to
multiple enforcement remedies if both the IV-D and non-IV-D public
entity are attempting to enforce at the same time. We have had many
documented examples of ``doubling up'' on an obligor with the private
collection agencies.
A similar problem can occur when a family previously received
public assistance, has assigned arrears owed to the State, but is now
using the non-IV-D system. When a collection is made it will be
necessary to sort out the payment hierarchy.
The proposed legislation must include a mechanism for resolving
these conflicts in enforcement and distribution of collections.
I appreciate your giving me an opportunity to consider these issues
and provide you with our analysis. I recall that you indicated that
Congressman Hayworth's office would be interested in our position in
this matter, so I will be forwarding him a copy of this letter. Please
feel free to contact Nancy to discuss these thoughts in greater detail.
Sincerely,
John L. Clayton
c: Congressman J. D. Hayworth
Statement of Richard F. Doyle, Men's Defense Association,** Forest
Lake, MN
Alimony/Support*
Responsibility for alimony/support payments falls almost
exclusively on one sex, regardless of fault, of who obtains custody, of
ability to pay, or of the other parent's ability to share in lining
costs. A Texas Bar Association study found that ``child support'' is
awarded to 97 percent of custodial mothers, but to only 19 percent of
custodial fathers. The average monthly award to mothers was $170 per
child; to fathers, $11 (This was many years ago, hence the low
figures).
---------------------------------------------------------------------------
* Given only short notice, the Men's Defense Association has not
had time to compile the statistics behind the statements herein, but
most are common knowledge.
** A 15,000 member nationwide organization based in Minnesota.
---------------------------------------------------------------------------
In order to justify increased awards, the Agriculture Dept.
artificially bumped up the costs of raising children by an accounting
trick called proportional accounting. This scheme divides the total
cost of a household by the number of individuals therein. This is
illogical because the adult(s) therein incur most of these costs with
or without the children, who add only marginally to the cost.
Child support aside, former husbands often have a financial
obligation, called alimony, to further subsidize ex-wives, with no
reciprocal obligation. If alimony is reasonable, isn't it as reasonable
to expect ex-wives to cook, clean, and sew for ex-husbands? Alimony is
out now, you say? No, it isn't. It is merely concealed in increased
child support or renamed ``maintenance.'' That is why child support
awards are much larger than the cost of raising children. Divorce court
judges often set support levels 100 to 1,000 percent higher than the
actual costs of raising children, according to welfare department cost
estimates. Some fathers have been ordered to pay 70 to 110 percent of
their net pay in child support. That is also why the Men's Defense
Association refers to ``child support'' as ``alimony/support.''
The worst part of this is that de facto alimony continues-even
after the divorcee remarries-until the children are emancipated. Thus,
the divorced husband is often obligated to support his ex-wife and her
lovers.
Incredibly enough, husbands are ordered to support all children
born to their wives during marriage and separation, even if the husband
is demonstrably not the father and the mother admits as much. One
hapless fellow in Haupage, New York became a ``father'' of four
children in this way while serving a nine-and-a-half year sentence for
robbery.
Child support is regarded as a father's responsibility and a
mother's right. Visitation, in contrast, is regarded as a mother's
responsibility and a father's right. In actual practice, only women's
rights and men's responsibilities are considered. While mothers can
thumb their noses at court-ordered visitation, the full resources of
government, state and federal, come down on non-supporting fathers,
many of whom are using the only means they have left to enforce
visitation. Often they are jailed, regardless of their ability to pay.
We criticized the Soviet Union for the Gulag Archipelago when we have
our own invisible gulag right here.
In effect we have communized the family, and required men to
finance their own family's destruction.
Lenore Weitzman's vastly overrated book, The Divorce Revolution,
alleged that women are much worse off financially than men after
divorce. (Weitzman has subsequently recanted much of her position.)
These assertions have often been disproved. (See, for instance, Jed H.
Abraham, The Divorce Revolution Revisited: A Counterrevolutionary
Critique, Northern Illinois University Law Review, 9:2(1989), 251-298.)
Many other statistics belie the notion that most men make out well from
divorce. For example, divorced husbands commit suicide six times more
often than their ex-wives. The reality of the situation is that very
few people can afford divorce, other than the very rich and the very
poor. If one income cannot be stretched to cover two roofs, perhaps
there should be no divorce or the children should be placed with the
parent most able to support them.
While men are most often cleaned out by divorce, the popular
buzzterm ``feminization of poverty'' elicits considerable sympathy for
unemployed divorcees. Even if a divorcee is poor, we find it difficult
to sympathize with someone who elected not to pursue a career, threw
her husband out, and then pleads poverty. In the modern mentality
regarding divorce, the concept of individual responsibility is applied
to men only.
Torn loose from any pretense of equity, divorce practice is the
single most egregious and overlooked form of government redistribution
in America today. And its scope is rapidly increasing. Like mules need
hay, fathers must have enough left of their paycheck to eat, pay rent,
keep warm, get to work and back, and (Heaven forbid) maybe raise
another family. You say he shouldn't enter another marriage? On what
grounds can you justify one sex being able to remarry, but not the
other?
``Non-support,'' and ``Deadbeat Dad'' have become the ubiquitous
battle-cry of the sanctimonious. Certainly fathers have a
responsibility to support their children; but does this continue to
apply when a father's children have been forcibly taken away and, in
many cases, effectively brainwashed against him? When Big Brother so
completely runs a man's family, shouldn't Big Brother also assume the
man's other obligations?
Draconian alimony and child support collection measures are like
the Maginot line, a mighty fortress with guns pointed in the wrong
direction. The solution is not to persecute men further but to begin
treating them fairly. This would have two desirable results. First,
around half of fathers would have custody. Second, those who didn't,
being treated fairly, would be much more inclined to pay their just
obligations.
Fairness to men is the ONLY measure that hasn't been tried
extensively. Where it has been tried, even in a limited manner as in
shared parenting, support collections have increased dramatically. All
other measures have failed--and will continue to fail. Respectfully
submitted Richard F. Doyle On behalf of the Men's Defense Assoc.
Statement of Martha Davis, Esq., Vice President and Legal Director, NOW
Legal Defense and Education Fund, New York, NY
NOW Legal Defense and Education Fund (``NOW LDEF'') is
pleased to submit this testimony on the Child Support
Distribution Act of 2000. NOW LDEF is a leading national not-
for-profit civil rights organization with a 30 year history of
advocating for women's rights. Among NOW LDEF's major goals are
securing economic justice for all women. Throughout our
history, we have advocated for the rights of poor women,
focusing on issues of child care, violence, employment and
reproductive rights.
Although NOW LDEF believes that child support reform is
needed to help move parents and their children out of poverty,
there are a number of glaring problems with the proposed bill.
If not addressed, these will result in great harm to women and
their families throughout the country.
We focus our comments on Title V of the bill, which deals
with grants to Fatherhood Programs. We believe that this
section of the bill does not deal adequately with the problem
of domestic violence. Indeed as currently written it is likely
to result in federal money supporting programs that will keep
women in dangerous, violent situations and thwart their ability
to leave. As discussed more fully below, we are concerned with
both the failure of the bill to adequately address domestic
violence and the requirement that grantees promote marriage
without recognition that marriage is not the best solution for
all couples. We have proposed specific language at the end of
our testimony to help address these serious concerns.
The need to address domestic violence. Women and their
children make up 90% of the people on welfare and approximately
85% of all low income individuals. Violence against women is
one of the main causes of women's poverty. Domestic violence
makes women poor and keeps them poor. Study after study
demonstrates that a large proportion of the welfare caseload
(consistently between 15% and 25%) consists of current victims
of serious domestic violence. Between half to two thirds of the
welfare caseload has suffered violence or abuse at some time in
their lives. Many battered women are economically dependent on
their abusers. In one study, one third of battered women
reported that they were prohibited from working outside the
home. Those who are permitted to work fare little better. 96%
reported that they had experience problems at work due to
domestic violence, with over 70% having been harassed at work,
50% having lost at least three days of work a month as a result
of the abuse, and 25% having lost at least one job due to the
domestic violence. Thus, battered women are overwhelmingly
either totally economically dependent on the abuser or are
economically unstable due to the abuse. Between 50-90% of
battered women attempt to flee their abusers.
For these women and their children, marriage is not the
solution to poverty. Reunification could instead be a death
sentence and will almost undoubtedly make them economically
dependent on the abuser and unable to escape the abuse. Even
interactions between the batterer and his child could be
dangerous--both for the child and for the mother if she is
forced to have contact with him. Five percent of abusive
fathers threaten to kill their children's mother during
visitation with their children and 25% of abusive fathers
threaten to harm their children during visitation. Moreover,
perpetrators of domestic violence are more than two times as
likely as other fathers to fight for custody of their children
as a means of punishing and maintaining control over the
mother. To protect against this possibility, funding under this
proposed bill should not be used for custody disputes,
litigation, or legislative advocacy.
While we urge you to recognize the danger involved for
these women and the need to include safeguards in this bill, we
also appreciate that not all men nor all non-custodial fathers
are batterers. It is in our collective interest to promote the
end to all poverty (including men's) and to promote men's
ability and willingness to pay child support for their
children, and to have that child support passed through to the
children. Furthermore, we embrace the promotion of men's
increased responsibility for contraception, child care, and
their positive, healthy relationships with their children, as
well as cooperative co-parenting between custodial and non-
custodial parents.
To accomplish these goals without endangering survivors of
domestic violence and their children, we suggest the following:
Strike the promotion of marriage as a goal in and of itself
and add domestic violence language where appropriate. As
explained above, the blind promotion of marriage is extremely
dangerous for victims of domestic violence.\1\ The goal of this
bill should not be to force marriage where it is unwise and
unsafe nor to assume that a two-parent family is automatically
the best thing for children. Rather, the goal should be to
promote loving, healthy relationships between parents and their
children, to encourage cooperative parenting, and to support
couples who want counseling or other services to improve their
relationship.
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\1\ It also sends a message of intolerance and disrespect for gay
and lesbian partners and families who are not able to marry under our
laws. In addition, it sends negative messages to the millions of
single, divorced, re-married and widowed parents and their children
whose families should be accepted and valued and who should be
encouraged to provide loving homes for their children and to cooperate
with the co-parent to raise the child in a loving, healthy environment.
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We urge the Committee to strike all language in the bill
that mandates promotion of marriage and replacement of it with
language with language that reflects support for healthy,
cooperative, equal relationships between parents, which may
include marriage services to couples who desire them. We also
urge you to insert language to ensure that funds are used in a
manner that demonstrates an understanding of domestic violence
and that promotes a non-violent philosophy. This is especially
important given the inclusion of the charitable choice
provision, as many religious organizations favor reconciliation
even where violence is present.
This Congress has consistently recognized that domestic
violence is a serious national problem and has made efforts to
minimize the severe risk to women and children from that
violence. We urge you not to adopt a bill that ignores those
very real risks and devotes precious federal dollars to
programs that may in fact contribute to the problem of violence
against women that this Congress has valiantly tried to
ameliorate.
Specific changes proposed. We suggest the following
specific changes in the bill to help insure that domestic
violence concerns are addressed and that federal money will not
go to promote marriages which will result in harm to women and
children:
I. Marriage
Subtitle A--Fatherhood Grant Program
Eliminate Section 403A(a) (1) (i.e. the promotion
of marriage) in its entirety.
Alternatively, eliminate the requirement in
403A(b)(1)(B) that applications for Fatherhood Grants must
demonstrate how all three purposes listed in Section 403A(a)(1)
will be addressed; and eliminate the restriction in
403A(b)(2)(A)(iii)(I)(3) that the panel ``shall not recommend
that a project be awarded such a grant if the application
describing the project does not attempt to meet the requirement
of paragraph (1)(B).''
In the alternative, we propose that 403A(a)(1) be
modified to state: ``encourage healthy cooperative
relationships between parents, including marriage where
appropriate, through counseling, mentoring, enhancing
relationship skills, teaching how to control aggressive
behavior, teaching mutual respect and other methods. Marriage
will not always be the best way to promote responsible and
positive involvement of both parents in the lives of their
children and should never be promoted where there is danger of
physical or emotional harm.''
If marriage continues to be included as a goal of
this legislation and continues to be included as one of the
goals addressed by applications for grants, Mrs. Johnson must
amend both 403A(a)(1) to include ``where appropriate'' after
``promote marriage,'' and the penalty provision at Section
403A(b)(4)(E) to provide specifically that penalties will not
be applied if a grantee fails to promote marriage in situations
where marriage would not be in the best interests of the
individuals served. (For example where one or both of the
parents has remarried, or where there is a domestic violence
problem).
Amend 403A(b)(6), which governs evaluation, by
eliminating ``effects of the projects on marriage,.''
Subtitle B--Fatherhood Projects of National Significance
Eliminate all references in (c)(1) to the
promotion of marriage and married fatherhood as the ideal.
Replace with language regarding the advantages conferred on
children by the establishment of healthy, respectful
cooperative parenting relationships.
Eliminate (c)(2)(C)
II. Domestic Violence
Insert after 403A(b)(1)(E): 403A(b)(1)(F) A
written commitment by the entity that the entity will have a
meaningful collaborative and cooperative relationship with a
national or state domestic violence coalition or a local
domestic violence shelter or program with recognized expertise
in the dynamics of domestic violence and with considerable
experience working with domestic abuse survivors; and that the
entity will make available to each individual participating in
the project education about and referral to services that
safely provide domestic violence intervention, victim and child
witness counseling, and classes on violence prevention.
Amend 403A(b)(2)(A)(ii)(II) and
403(A)(b)(2)(B)(ii)(II) by inserting ``programs for domestic
violence prevention'' after ``programs for children.''
Insert after 403A(b)(3)(B)(iv): 403A(b)(3)(B)(v)
To the extent that the application includes written agreements
of cooperation with national or state domestic violence
coalitions or a local domestic violence shelters or programs
with recognized expertise in the dynamics of domestic violence
and with considerable experience working with domestic abuse
survivors, which should include a description of the services
each such organization will provide to participants in the
project, such as education and services for domestic violence
intervention, victim and child witness counseling, and classes
on violence prevention.
Insert after 403A(b)(3)(B)(v) (as drafted above):
403A(b)(3)(B)(vi) To the extent that the application describes
a project that will enroll both parents to promote a healthy,
respectful, cooperative-parenting relationship between the
parents.
III. Charitable Choice
Delete 403A(c) Applicability of Charitable Choice
Provisions of Welfare Reform
Thank you for the opportunity to submit testimony on this
bill.
Statement of Robert G. Williams, President, Policy Studies Inc.,
Denver, CO
Chairman Johnson and members of the Human Resources
Subcommittee, thank you for the opportunity to provide written
testimony concerning child support guidelines, particularly the
Income Shares Model, which is now used by 33 States. Under a
grant from the Federal Office of Child Support Enforcement
(OCSE), I served as staff person to the 1984-86 Advisory Panel
on Child Support Guidelines. Charged with making
recommendations to Congress and the States concerning child
support guidelines, the Advisory Panel was appointed by OCSE at
the request of the House Ways and Means Committee in 1984. The
Advisory Panel recommended that States use either the Income
Shares or Delaware Melson formula as the basis for their child
support guidelines.
My testimony explains the Income Shares Model and how its
use is an equitable and effective means for determining child
support orders.
Background Information
Prior to the Child Support Enforcement Amendments of 1984,
which required states to adopt numeric child support
guidelines, child support order amounts were predominately
determined on a case-by-case basis. This method was widely
perceived as being inequitable because order amounts in cases
with similar circumstances resulted in different order amounts.
An additional concern was that orders were set too low. At this
time, child support obligations were estimated to average 80%
of poverty level.\1\
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\1\ Robert G. Williams, Development of Guidelines for Child Support
Orders, Part II, Final Report. Report to U.S. Office of Child Support
Enforcement, Policy Studies Inc. (March 1987) page II-i.
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The Family Support Act of 1988 (FSA) enacted many of the
recommendations of the Advisory Panel including a federal
requirement that states adopt rebuttably presumptive
guidelines. Deviation criteria are at state discretion but must
take into consideration the best interests of the child.\2\ The
FSA also requires States to review their child support
guidelines at least every four years ``to ensure that their
application results in the determination of appropriate child
support amounts.'' As part of the review, States are required
to assess the most recent economic data on child-rearing costs
and conduct a case file review to ensure that deviations from
guidelines are limited.\3\
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\2\ 45 C.F.R. Sec. 302.56 (g)
\3\ 45 C.F.R. Sec. 302.56
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Federal regulations do not specify which guidelines model
States must use. Thirteen states base their guidelines on a
percentage of obligor income; 33 states based their guidelines
on the Income Shares model; three states based their guidelines
on the Melson formula; and two states used a hybrid of the
Income Shares Model.
Principle of the Income Shares Model
The principle underlying the Income Shares Model is that
the child is entitled to the same proportion of parental income
estimated to have been spent if the parents were living
together. For example, if the parents spent an estimated 20% of
their net income on the child when the parents lived together,
the child is still entitled to 20% of the parents' combined net
income when the parents reside in separate households. In turn,
each parent's share of the child-rearing expenditures is
determined by prorating it based on parental income. To
illustrate this, say the noncustodial and custodial parents'
incomes are $3,000 and $1,500 per month, respectively. The
noncustodial parent would be responsible for two-thirds ($3,000
divided by the sum of $3,000 and $1,500) of the child-rearing
expenditures (0.667 X $900 = $600 per month). This is the
amount of the child support order under the Income Shares
Model. The remainder of the child-rearing expenditures is the
responsibility of the custodial parent. It is assumed that the
custodial parent makes these expenditures directly on the
child.
Economic Data Underlying the Income Shares Model
Income Shares States are more likely to base their Child
Support Schedules on economic evidence of child-rearing
expenditures than States relying on other child support
guidelines models. Specifically, most Income Shares States rely
on economic estimates developed by Dr. Thomas Espenshade (1984)
or Dr. David Betson (1990).\4\ Both economists developed their
estimates from national Consumer Expenditure Survey data, but
used data from different years. Early Income Shares Schedules
are based on Espenshade's estimates, Betson's estimates are
generally used in updated Schedules. Betson's study fulfilled a
federal requirement mandating that the U.S. Department of
Health and Human Services (DHHS) conduct a study of patterns of
expenditures on children in 2-parent families and other family
structures.\5\ Betson estimated child-rearing costs using five
different methods. DHHS also funded another study to examine
Betson's results and how they related to child support
guidelines.\6\ Betson is updating his study this summer through
a grant from the Institute of Research on Poverty at the
University of Wisconsin at Madison. Currently, 17 States use
Betson's estimates.
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\4\ Thomas J. Espenshade,T3Investing in Children: New Estimates of
Parental Expenditures (Washington, D.C.: Urban Institute Press, 1984.
David M. Betson, Alternative Estimates of the Cost of Children from the
1980-86 Consumer Expenditure Survey, Report to U.S. Department of
Health and Human Services (Office of the Assistant Secretary for
Planning and Evaluation), University of Wisconsin Institute for
Research on Poverty (September 1990).
\5\ P.L. 100-485, Sec. 128
\6\ Lewin/ICF, Estimates of Expenditures on Children and Child
Support Guidelines, Report to U.S. Department of Health and Human
Services (Office of the Assistant Secretary for Planning and
Evaluation), Lewin/ICF (October 1990).
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Adjustments for Shared Parenting-Time, Low Income and Other Factors
The Income Shares Model can formulaically adjust for
numerous factors that vary significantly between cases (e.g.,
shared-parenting time, actual work-related child care expenses,
out-of-pocket medical expenses for the child, additional
dependents, low income and other factors). Most (about 80
percent) of the State Child Support Guidelines that adjust for
these factors are based on the Income Shares Model. Similarly,
most (83%) of the States that allow low-income parents a self
support reserve rely on the Income Shares Model. In these
situations, the support order is set such that payment of
support does not reduce the noncustodial parent's remaining
income below a subsistence standard of living.
Deviations from the Guidelines
A national study reviewing about 4,000 child support orders
found that the proportion of cases that deviated from the child
support guidelines averaged 17 percent.\7\ The most common
reason for deviation was agreement between the parties. Other
frequently given reasons included shared-parenting time and
additional dependents. Last year, Arizona, an Income Shares
State with a shared-parenting time adjustment, conducted a case
file review.\8\ Arizona found a deviation rate of 16 percent.
It also found an interesting relationship between shared-
parenting time adjustments and mandatory parenting education.
Compliance with the child support order (91% compliance) was
the highest in cases where the noncustodial parent attended
parenting education class and the order included an adjustment
for time sharing. The group with the second highest compliance
(69%) comprised noncustodial parents who attended parenting
education class but did not receive a time-sharing adjustment.
The group with the third highest compliance (57%) comprised
noncustodial parents who did not attend parenting education
class but received a time-sharing adjustment.
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\7\ CSR, Incorporated with the American Bar Association, Evaluation
of Child Support Guidelines: Volume 1: Findings and Conclusions, Report
to the Federal Office of Child Support Enforcement, Washington, D.C.
(March 1996).
\8\ Jane Venohr, Arizona Child Support Guidelines: Findings from a
Case File Review: Report to the Supreme Court of Arizona,
Administrative Office of the Courts, Policy Studies Inc. Denver,
Colorado (1999).
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Conclusions
Most states have completed at least two rounds of
quadrennial guidelines reviews since 1988 when it became a
federal requirement. State-appointed committees comprising
stakeholders (e.g., noncustodial parents, custodial parents,
children's advocates, family law attorneys, representatives
from the Family Courts and State Public Assistance Program,
taxpayers and others) typically conduct the reviews. These
review committees have carefully scrutinized child support
guidelines. Despite these intensive reviews, only one State
changed its guidelines model in the past five years and that
was from the Melson Formula to the Income Shares Model. Most of
the review committees' recommendations focus on updating the
schedule to consider current levels such as changes in price
levels and adopting or refining adjustments for special
factors. Some states are cautious in adopting shared-parenting
time adjustments because they do not want to encourage
bargaining time for money. Partly to alleviate this problem,
states are adopting mandatory attendance in parenting education
classes and/or parenting plans and mediation programs for
parents with access and visitation disputes in tandem with
guidelines adjustments for shared-parenting time. (Arizona and
New Jersey are examples.)
In summary, the fact that most States have used and
continue to use the Income Shares Model for over a decade when
they have had several opportunities to discuss and adopt other
guidelines models suggests that the Income Shares Model yields
fair and economically appropriate results. Furthermore, as more
States adopt mandatory parenting education, parenting plans and
access and visitation programs, parents will better understand
child support and its role in providing for the best interests
of the child.
Statement of Becky Kiely, Executive Director, Women For Fatherhood,
Honeoye, NY
Regarding Child Support Enforcement:
First of all, please allow me to introduce myself. I am
Becky Kiely of Honeoye, NY. I'm the Executive Director of Women
For Fatherhood, a group advocating equality for Non-Custodial
parents and working to improve the image of fatherhood in
general. Further, I am a mother, wife, step mother, tax payer
and voter.
I would ask that the current CSE system be looked at long
and hard. First of all, it is expensive. The latest figures
show that it costs $22 for every dollar of CS collected. Based
on 1998's figures of collections, it cost the US 316.8 billion
dollars to collect 14.4 billion dollars. Does this make sense?
It would be cheaper by over 300 billion dollars for the
Government to pay all CS orders. I am not suggesting that the
government shift parental responsibility, I am only making a
point about how fiscally irresponsible the current system is.
Further, I would ask that you consider the
constitutionality of our current CSE system.
It is my opinion that the current Child Support (CS)
collection laws are unconstitutional. In this regard, in cases
where there is an intact family, with parents married and
residing together, there is no statute for how much these
parents must spend per month on their children. The only
statutes come from Child Abuse laws, in that parents must
provide safe haven, shelter, appropriate clothing for the
weather conditions and food. A non-custodial parent (NCP) is
forced to pay a certain percentage of his or her income to the
custodial parent (CP) each month. For example, in NY, the
percentage is 17% for one child and increases for each other
child. A minimum of $25 must be awarded to the CP, according to
state law. This is a case of one class of citizens being
burdened with circumstances that are not imposed on another. I
am not for a moment saying that there should be no financial
obligation to one's children, but there needs to be equality.
BOTH parents need to be equally responsible for the well being
of their children. Also, CS should not be used to subsidize the
CP's standard of living for their own gain. Child Support is
just that, support of a child, not a child and his/her parent.
And, it must be noted that CS is NOT merely financial support.
All too often, the burden of the support obligation prevents
the NCP from having contact with their children. The laws do a
great injustice to the children by forcing the NCP to be no
more than a wallet. Is it really in their best interests to pad
the CP's checkbook while denying them the love, support and
teaching of the NCP? Is it not in the best interest of the
children to define support as ``financial, emotional, loving
and equally important from both parents''? The current laws
also create a privilege for one class of citizen--the children
of divorced parents--that is not granted to another--the
children of intact families. No child of intact families has
the entire government looking out for their financial welfare
by stating guidelines of how much money a parent must pay for
their support.
Our Constitution presumes all of us innocent until proven
guilty, but the CS laws presume NCP's to be guilty with no
chance to prove their innocence. Is not this presumption
contrary to our Constitution? CS awards are automatically
garnisheed, rather than giving the parent the opportunity to
fulfill his or her obligation with responsibility and dignity.
Instead, their wages are immediately attached and they are
threatened with losses of driver's licenses, professional
licenses, recreational licenses and tax returns for non-
compliance, regardless of the reason for the non-compliance.
Involuntary unemployment and disability are NOT valid reasons
for an adjustment in CS. If a CP loses their job or is on
disability, CS awards can be raised or the CP can apply for
public assistance to help with the children's expenses. Why is
this same benefit not extended to NCP's? Again, a case of a
legal benefit (or burden) that applies to one class of citizen,
yet not to another. And, why is the CP's wage not attached and
an amount deposited into an account solely for the welfare of
the children? Why are they not made to share in the financial
burden of their children?
It is in the best interests of the children to protect the
Constitutional rights of their parents. BOTH their parents.
Equality is in the best interests of the children, not gender
bias, not making the NCP a blank check and nothing more.
The current Child Support laws are in direct conflict with
our Constitution's equal protection clauses and this MUST be
rectified. We cannot go on allowing the Constitutional rights
of any citizen, much less millions of them, to be violated by
our own government!!!!
How does revoking a drivers or professional license
increase child support collections? If a non-custodial parent
is behind in their obligation, how does making it impossible
for them to work help the situation? How does jailing an
obligor pay the debt? Instead of assuming that all non-
custodial parents are Dead Beat Dads, I would suggest the
following:
Take gender out of this. CS obligations are
assessed on men and women of every race, religion and socio-
economic class.
Spend less money on attacking those owing support,
instead spending money on education. Instead of making millions
of parents feel like criminals before they even commit a crime,
fund grants to help them get a better education, so they can
meet their obligation.
Train the CSEU workers to deal with obligors who
contact them. My husband had an error occur in his account and
it was a nightmare trying to get it corrected. He was
consistently treated as someone who was trying to get out of an
obligation, when all he wanted to do was correct an error of
their making.
Actually look at the trend in CS orders. I'm
confident that you will find that the majority of deadbeats are
NOT trying to avoid their obligation, instead, CAN'T fulfill
it. Many awards are based on incorrect paperwork, the possible
future earnings of the obligor and/or the custodial parent's
income. But, instead of the custodial parent's income being
considered so that they would be equally financially
responsible, it is considered as a means to increase the CS
award with imbedded alimony. My husband pays $9000/year in CS
to a woman who refuses to participate fully in the financial
needs of her children, working only when she chooses, to the
tune of her only making $8000 last year. This is fair? A man
pays more than his ex wife, yet is consistently denied any
access to his children. Can you honestly show me that my
husband is not paying imbedded alimony?
Equalize enforcement of Visitation orders. Love is
support, too! CS should not be only financial. Currently, CS
orders are vigorously enforced, as you are well aware.
Enforcing Visitation orders as vigorously will benefit the
children, possibly more than the financial enforcement. Studies
show that fathers who are actively participating in their
children's lives are more willing to comply with CS orders.
States with the enforced presumption of Shared Parenting
collect more support than states that don't. A loving parent
denied access to their children find that supporting them
financially becomes a bitter pill to swallow. Children with
fathers actively participating in their lives are proven to
fare better in adulthood.
Change the current structure of CS awards. The
percentage system is blatantly unconstitutional! I'm sure that
the government has done studies on the cost of raising a child.
Implementing a figure-based structure, as opposed to a
percentage-based stucture, will equalize the playing field,
making both parents responsible for the welfare of their
child(ren). The cost of raising a child should be divided 50/
50, with both parents considered obligors. I assure you, there
are plenty of custodial parents that could be termed dead beat
as far as the financial support of their children is concerned.
The custodial parent's living expenses should NOT be included
in a CS award. With or without children, an adult needs a home,
groceries, utilities, etc. Why should the non custodial parent
be responsible for these expenses?
The combination of restructuring CS awards and of enforcing
visitation orders is what is truly in the best interests of the
children, a phrase that has been used (and abused) to justify
that which is far from being in their best interests. It's time
for this country to stop worrying so much about money and more
about the total support of a child. Each state is given
financial incentives for each dollar of support collected. Does
this enhance the ``best interests'' of the children? No, it
enhances the best interests of the state. Does including
imbedded alimony enhance the ``best interests'' of the
children? No, it enhances the best interest of the custodial
parent.
Regarding states keeping overdue collections finally
recovered: I ask this-why are the states more deserving of this
money than the children it was intended for? If a parent was
collecting welfare in lieu of CS and the support is then
collected, I can see the state recovering their ``loan'' to the
parent. Beyond that, any dollar they keep should be considered
theft.
Private entities should not be a part of CSE. This is NOT a
for-profit endeavor! This is an endeavor for parents to be
responsible. No one should profit except the children.
Our Courts, our government and our media need to get off
the money bandwagon and get on a wagon that is full of the TRUE
best interests of a child, a wagon that includes emotional
support with financial support. To those of you with children,
I pose this question. What do you think your child wants and
needs more-your money or your love and your time?