[House Hearing, 106 Congress]
[From the U.S. Government Printing Office]




           H.R. 1488, THE ``HYDE-WOOLSEY'' CHILD SUPPORT BILL

=======================================================================

                                HEARING

                               before the

                    SUBCOMMITTEE ON HUMAN RESOURCES

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 16, 2000

                               __________

                             Serial 106-107

                               __________

         Printed for the use of the Committee on Ways and Means


                    U.S. GOVERNMENT PRINTING OFFICE
71-291 DTP                  WASHINGTON : 2001

_______________________________________________________________________
            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 
hearing records of the Committee on Ways and Means are also published 
in electronic form. The printed hearing record remains the official 
version. Because electronic submissions are used to prepare both 
printed and electronic versions of the hearing record, the process of 
converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.




                            C O N T E N T S

                               __________

                                                                   Page

Advisory of March 8, 2000, announcing the hearing................     2

                               WITNESSES

Association for Children for Enforcement of Support, Inc., 
  Geraldine Jensen...............................................    18
Everclear, Art Alexakis..........................................    38
Hyde, Hon. Henry J., a Representative in Congress from the State 
  of Illinois....................................................     5
Meijer Stores, James Owens.......................................    67
National Child Support Enforcement Association, and Los Angeles 
  Bureau of Family Supoort Operations, Wyne D. Doss..............    41
Policy Studies, Inc., Victoria Williams..........................    47
Rogers, R. Mark, Federal Reserve Bank of Atlanta.................    76
Vermont Office of Child Support, Jeffrey Cohen...................    63
Virginia Department of Social Services, National Child Support 
  Enforcement Association, Eastern Regional Interstate Child 
  Support Association, and National Council of Child Support 
  Directors, Nick Young..........................................    59
Woolsey, Hon. Lynn, a Representative in Congress from the State 
  of California..................................................    10

                       SUBMISSIONS FOR THE RECORD

Alliance for Non-Custodial Parents' Rights, Burbank, CA, John 
  Smith, statement and attachment................................    89
Center for Law and Social Policy, Paula Roberts, statement.......    90
Children's Rights Council of Alabama, Auburn, AL, Richard Weiss, 
  and Children's Legal Foundation and the Justice Coalition, 
  Charlotte, NC, William Wood, joint statement...................    94
Davis, D. Luke, Tacoma, WA, letter and attachments...............   103
Dutt, Hans R., Columbia, MD, statement...........................   107
Eisenstein, Irwin R. Brooklyn, NY, letter and attachment.........   110
Gay, Roger F., Sweden, statement.................................   113
Lancaster Non-Custodial Parents, Wrightsville, PA, Donald E. 
  Hank, letter...................................................   115

 
           H.R. 1488, THE ``HYDE-WOOLSEY'' CHILD SUPPORT BILL

                              ----------                              


                        THURSDAY, MARCH 16, 2000

                  House of Representatives,
                       Committee on Ways and Means,
                           Subcommittee on Human Resources,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 11:00 a.m., in 
room B-318, Rayburn House Office Building, Hon. Nancy L. 
Johnson (Chairman of the Subcommittee) presiding.
    [The advisory announcing the hearing follows:]

ADVISORY
FROM THE COMMITTEE ON WAYS AND MEANS

                    SUBCOMMITTEE ON HUMAN RESOURCES

                                                CONTACT: (202) 225-1025
FOR IMMEDIATE RELEASE

 March 8, 2000

No. HR-18

                      Johnson Announces Hearing on

           H.R. 1488, the ``Hyde-Woolsey'' Child Support Bill

    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 H.R.1488, often referred 
to as the ``Hyde-Woolsey'' child support bill. The hearing will take 
place on Thursday, March 16, 2000, in room B-318 Rayburn House Office 
Building, beginning at 11:00 a.m.
      
    Oral testimony at this hearing will be from invited witnesses only. 
Witnesses will include Members of Congress, State child support 
administrators, representatives of advocacy groups, business leaders, 
and operators of private child support companies. 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 program, authorized under Title IV-D 
of the Social Security Act, has been criticized for not collecting 
enough child support payments from sufficient numbers of noncustodial 
parents. Created in 1975, the Federal-State program has now grown to 
about 55,000 employees nationwide and an annual budget of around $3.6 
billion. In 1998, the most recent year for which data are available, 
the program collected nearly $14.4 billion in child support payments 
for single mothers and their children, located 6.5 million noncustodial 
parents, established 848,000 paternities, and established 1.1 million 
child support orders. Collections by the child support program have 
increased more than 60 percent since 1993.
      
    Even so, critics believe the program should be more efficient and 
should collect more money for more single parents. Judiciary Committee 
Chairman Henry Hyde (R-IL) and Rep. Lynn Woolsey (D-CA) have introduced 
legislation (H.R. 1488) that would turn responsibility for the program 
over to the Internal Revenue Service (IRS). More specifically, in 
addition to essentially ending the current child support program, the 
bill would require all employers to withhold child support payments and 
send them to the IRS. The IRS would then distribute the withheld amount 
to custodial parents owed child support. The bill would also treat 
child support obligations as taxes for purposes of penalties and 
interest related to failure to have them withheld by employers.
      
    In announcing the hearing, Chairman Johnson stated: ``Congress has 
worked on a bipartisan basis for 25 years to create and improve a 
national child support program. Due in large part to reforms made in 
the 1996 welfare reform law (P.L. 104-193), the child support program 
is good and getting better every year. What is needed now is Federal 
oversight to ensure aggressive implementation by States of the current 
Federal requirements--not an entirely new and untested approach.''

FOCUS OF THE HEARING:

      
    The hearing will focus on the advantages and disadvantages of the 
Hyde-Woolsey legislation. Some of the specific issues to be addressed 
include the appropriateness of IRS becoming more deeply involved in a 
social program, how IRS would locate fathers and establish paternity 
and child support orders, and whether and how IRS would expand its 
customer service operations to provide specialized assistance to 
parents owing child support and parents due child support. The hearing 
will also examine the achievements and recent performance record of the 
current Child Support Enforcement program.
      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
    Any person or organization wishing to submit a written statement 
for the printed record of the hearing should submit six (6) single-
spaced copies of their statement, along with an IBM compatible 3.5-inch 
diskette in WordPerfect or MS Word format, with their name, address, 
and hearing date noted on a label, by the close of business, Thursday, 
March 30, 2000, to 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. If those filing written statements 
wish to have their statements distributed to the press and interested 
public at the hearing, they may deliver 200 additional copies for this 
purpose to the Subcommittee on Human Resources office, room B-317 
Rayburn House Office Building, by close of business the day before the 
hearing.
      

FORMATTING REQUIREMENTS:

      
    Each statement presented for printing to the Committee by a 
witness, any written statement or exhibit submitted for the printed 
record or any written comments in response to a request for written 
comments must conform to the guidelines listed below. Any statement or 
exhibit not in compliance with these guidelines will not be printed, 
but will be maintained in the Committee files for review and use by the 
Committee.
      
    1. All statements and any accompanying exhibits for printing must 
be submitted on an IBM compatible 3.5-inch diskette WordPerfect or MS 
Word format, typed in single space and may not exceed a total of 10 
pages including attachments. Witnesses are advised that the Committee 
will rely on electronic submissions for printing the official hearing 
record.
      
    2. Copies of whole documents submitted as exhibit material will not 
be accepted for printing. Instead, exhibit material should be 
referenced and quoted or paraphrased. All exhibit material not meeting 
these specifications will be maintained in the Committee files for 
review and use by the Committee.
      
    3. A witness appearing at a public hearing, or submitting a 
statement for the record of a public hearing, or submitting written 
comments in response to a published request for comments by the 
Committee, must include on his statement or submission a list of all 
clients, persons, or organizations on whose behalf the witness appears.
      
    4. A supplemental sheet must accompany each statement listing the 
name, company, address, telephone and fax numbers where the witness or 
the designated representative may be reached. This supplemental sheet 
will not be included in the printed record.
      
    The above restrictions and limitations apply only to material being 
submitted for printing. Statements and exhibits or supplementary 
material submitted solely for distribution to the Members, the press, 
and the public during the course of a public hearing may be submitted 
in other forms.
      

    Note: All Committee advisories and news releases are available on 
the World Wide Web at ``http://waysandmeans.house.gov.''
      

    The Committee seeks to make its facilities accessible to persons 
with disabilities. If you are in need of special accommodations, please 
call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four 
business days notice is requested). Questions with regard to special 
accommodation needs in general (including availability of Committee 
materials in alternative formats) may be directed to the Committee as 
noted above.

                                

    Chairman Johnson. As always, I want to extend a warm 
welcome to our guests. Hearings are the major way in which 
Members of Congress educate themselves about the problems our 
constituents elect us to address. Today we have an especially 
stellar and diverse set of witnesses, and I want to thank them 
all for taking time out of their busy lives to educate us on 
the Subcommittee and, in turn, the Congress of the United 
States.
    The issue of child support enforcement has vexed parents, 
child advocates, and Congress for nearly three decades. I want 
to congratulate Mr. Hyde and Ms. Woolsey for the time that they 
have invested in a very thoughtful proposal which develops an 
original and sweeping approach to child support enforcement 
through the Internal Revenue Service.
    While I do not support the Hyde-Woolsey bill, I am very 
sympathetic with your assessment of the current child support 
enforcement program's difficulties and appreciate the thought 
that you have put into this reform proposal to better serve 
kids. We are always interested in the thoughts of our 
colleagues because through them we do gain new insights, and we 
will listen to you today with great attention.
    Further, because the approach of turning child support over 
primarily to the Internal Revenue Service has appeal among a 
number of experienced observers, we look forward to the 
testimony of others and the data and information that you will 
provide.
    Two witnesses, Geraldine Jensen and Art Alexakis, will be 
joined on the first panel by the widely respected support 
director of the Los Angeles County and by the co-owner of a 
private company that provides help to child support programs 
all over the nation. The latter witnesses will present 
testimony showing how the current child support program is 
progressing. And we will also hear testimony from a second 
panel of witnesses who will describe the impacts of the 
sweeping reforms originated by this Subcommittee and passed by 
Congress in 1996.
    We will hear important new evidence today. In my opinion, 
this evidence, combined with evidence from our previous 
hearings and by my own assessments of evidence we receive on a 
regular basis from HHS about program performance, demonstrates 
that the current program is showing steady and significant 
improvement. Wage withholding has been a great innovation and 
is now the leading method of child support collection. 
Similarly, the tax intercept program, now the second leading 
and most rapidly growing method of collecting child support 
payments, has been a terrific innovation.
    We are now beginning to see the results of the 1996 
reforms: the new hire reporting, the financial institution data 
matching, the state disbursement units, and the many new 
collection methods such as suspension of driving, fishing, and 
hunting licenses.
    The upshot is that paternity establishment has skyrocketed 
under Welfare Reform, rising almost 200 percent in the last 5 
years, collections have increased by 80 percent, from $8 
billion to $14.3 billion, and we at last appear to be getting 
effective computer systems in place. These are big achievements 
and if we hold steady on course, the current program will 
produce substantial improvements in the immediate future.
    Against this promise of continued improvement, there are 
many who would like to see the whole program turned over to the 
IRS. I confess that I have many questions about how the new 
program would work, but I have several overriding concerns that 
I will bring up to Chairman Hyde and Ms. Woolsey in the course 
of the hearing.
    First, in recent years, I have developed a much more 
nuanced appreciation for the plight of noncustodial parents. To 
now throw virtually every father who pays child support into 
the hands of the Internal Revenue Service is something I am not 
willing to risk. Over half of divorced fathers pay child 
support and many of them pay on a regular basis. It seems 
particularly unfair to subject them, along with delinquent 
fathers, to the tender mercies of the IRS.
    Second, Chairman Archer and many others on our Committee 
are greatly concerned that the IRS not be given additional 
responsibilities and, indeed, as the Chairman of the 
Subcommittee that oversaw the IRS for a number of years and 
wrote the IRS Reform proposal, I concur that they are barely 
managing their current responsibilities, and so it is of great 
concern to me to propose additional responsibilities. Tax 
collection in any society is difficult, but with our 
extraordinarily complex Tax Code and a very big and diverse 
society and increasingly global economy, this is indeed 
extraordinarily difficult.
    Finally, this Committee originated legislation last year to 
require the IRS to become more customer friendly and more even-
handed in its dealings with citizens about its core business. 
To now throw the Service into the middle of the adversarial 
child support system seems to be a step in the opposite 
direction, and I believe could alienate millions of American 
fathers upon whom the nation depends for the payment of tax 
revenues.
    As I say, I am going to listen carefully to the testimony 
of my colleagues and to those on succeeding panels who support 
them. There are always new ideas that can give you a better 
understanding of what course to follow, so I appreciate their 
being here.
    Now, I would like to yield to my colleague, Mr. Cardin.
    Mr. Cardin. Madam Chair, I overheard Chairman Hyde, I think 
he is in a markup. I would be glad to defer my opening comments 
so that Chairman Hyde could present his testimony before we go 
vote.
    Mr. Hyde. That is very generous of you, if the Chair will 
recognize me.
    Mr. Watkins. I will delay my hour-long speech.
    Mr. Hyde. Gee, I am kind of unwilling to miss it, but, 
Okay.

 STATEMENT OF HON. HENRY J. HYDE, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF ILLINOIS

    Mr. Hyde. Thank you so much for having these hearings, and 
to Lynn Woolsey, who has been so wonderful and so helpful on 
this, I am very grateful, and thank you, Mr. Cardin.
    I especially want to thank my friend, Geraldine Jensen, who 
will be testifying in a little bit. She is President of ACES, 
the Association for Children for Enforcement of Support, and 
she is here to support this legislation that Congresswoman 
Woolsey and I have introduced. Geraldine has been a tireless 
advocate for our Nation's children and her life's story is a 
testament to her cause. Geraldine's advocacy group is a product 
of the failed child support system. After years of 
unsuccessfully working with local authorities to force her ex-
husband to pay up and spending some time on welfare, she gave 
up. In fact, a local county prosecutor challenged her to try 
and do a better job collecting it, since he could not do 
anything to force her ex-husband to pay the $12,000 owed to 
her. So, in 1984, Gerry spent $8 of her last $13 on a newspaper 
advertisement that read ``Not receiving your child support? 
Call Me''. Today, her self-help group, ACES, has 40,000 members 
in 48 states and they are trying to draw attention to the need 
for a system that makes children as important as taxes.
    Too many defenseless children are victimized by ``deadbeat 
parents'', and their irresponsibility imposes a terrible burden 
on children and society. The absence of responsible parents is 
now regarded as one of the primary causes of America's social 
decline. We can't forget the family is a commonwealth upon 
whose integrity the safety of the larger commonwealth depends.
    As you know, the Federal Office of Child Support in its 
preliminary report for 1998 reports that over $50 billion in 
accumulated unpaid child support is due to over 30 million 
children in the United Sates. Unfortunately, state agencies 
only make collections in less than 23 percent of the cases they 
handle. This is not because of a lack of resources or effort, 
but in many cases it is due to an interjurisdictional problem 
with neighboring states. States are largely responsible for 
operating the child support enforcement program, but there is a 
greater Federal involvement in the interstate caseload since 
almost 36 percent of all child support cases are now interstate 
cases. This additional layer of governmental bureaucracy adds 
to the inability of many of the states to communicate with one 
another about child support collection, in addition to taking 
longer periods of time to enforce. No longer should custodial 
parents have to wait years while court systems in two different 
states coordinate their problems.
    In Fiscal Year 1998, the Federal and state governments 
spent a combined total of over $3.6 billion toward child 
support enforcement. I find it difficult to comprehend that 
this amount of money was spent by the taxpayers to get only 23 
percent of the noncustodial parents to live up to their 
responsibilities and support their children. Let us not forget 
the $2.2 billion the Federal Government paid to automate the 
state systems, which still are nit in place, or the additional 
governmental costs for the prosecution of individuals who fail 
to support their children.
    In the meantime, I can only imagine what further burdens 
these deadbeat parents are placing on our society in the form 
of increased health care and welfare expenses. our Nation's 
children, abandoned by their noncustodial parents, are forced 
to turn to the government for assistance. As Welfare Reform 
reduces the options of welfare payments for many, the 
effectiveness of the child support enforcement system is 
critical. Though it is important to remember the child who is 
struggling, it is also important that we remember the taxpayer 
who must pay for the irresponsible actions of others. We must 
continue the culture of responsibility that Welfare Reform 
ushered in.
    It is time to hold deadbeat parents responsible, and to 
help all parents develop the potential of their children. 
Chairwoman Johnson has already taken much needed legislative 
steps in helping parents to learn relationship building, 
parenting, budgeting, and family planning skills. We must 
continue to encourage parents but make sure that those parents 
who close their hearts and their wallets are held accountable.
    As you know, the Department of Justice is charged with the 
responsibility of prosecuting those who willfully fail to pay 
their child support obligations with respect to a child who 
lives in another state or those parents who move across state 
lines in order to evade paying child support. While the number 
of cases filed and convictions obtained have slightly 
increased, I am extremely troubled by the small number of cases 
actually investigated, accepted and prosecuted with regard to 
these matters. In Fiscal Year 1999 alone, only 396 defendants 
were charged. I find this figure dismaying and that more cases 
against deadbeat parents were not prosecuted.
    I have much more to say--my time is up and I don't want to 
impose on anybody. I heard what you said, Ms. Johnson, and I 
understand there are lots of good noncustodial parents, but we 
have tried just about everything--we have--and the states have 
not been up to the task, and meanwhile we have a growing body 
of little children abused economically and socially by being 
abandoned by their fathers who flee to other states. We don't 
have vigorous enforcement of the law, which we need 
desperately.
    Sitting out there is the IRS. I know they are not the most 
popular agency in the world, but they are there, and they are 
run by people, human beings, just like the Department of 
Health, Education and Welfare, Health and Human Services. They 
have the resources. They have the data. They, it seems to me, 
ought to be given the chance at filling this terrible void that 
otherwise will go unfilled.
    So, I just think it is worth a chance, and I thank you for 
letting me ramble and, and listen to our bill. And Lynn and I 
think this is worth a shot, and we hope you will treat it 
kindly.
    [The prepared statement follows:]

Statement of Hon. Henry J. Hyde, a Representative in Congress from the 
State of Illinois

    Madame Chairwoman, Ranking Member Cardin, Members of the 
Subcommittee on Human Resources, I want to thank you for 
granting me the opportunity to testify about the problem of 
child support enforcement and highlight new legislation which 
holds great promise in improving our current system.
    I especially want to thank my friend, Geraldine Jensen, who 
will be testifying in a little bit. Geraldine Jensen, President 
of ACES--The Association for Children for Enforcement of 
Support--is here to support legislation that I and 
Congresswoman Woolsey have introduced. Geraldine has been a 
tireless advocate for our nation's children and her life's 
story is a testament to her cause. Geraldine's advocacy group 
is a product of the failed child support system. After years of 
unsuccessfully working with local authorities to force her ex-
husband to pay up and spending some time on welfare, she gave 
up. In fact, a local county prosecutor challenged her to try 
and do a better job collecting it, since he could not do 
anything to force her ex-husband to pay the $12,000 owed to 
her. So, in 1984, she spent $8 of her last $13 on a newspaper 
advertisement that read, ``Not receiving your child support? 
Call Me.'' Today her self-help group, ACES, has 40,000 members 
in 48 States and they are trying to draw attention to the need 
for a system that makes children as important as taxes.
    Too many defenseless children are victimized by ``deadbeat 
parents,'' and their irresponsibility imposes a terrible burden 
on children and society. The absence of responsible parents is 
now widely regarded as one of the primary causes of America's 
social decline. We cannot forget that the family is a 
commonwealth upon whose integrity the safety of the larger 
commonwealth depends.
    As you know, the Federal Office of Child Support in its 
preliminary report for 1998 reports that over $50 billion in 
accumulated unpaid child support is due to over 30 million 
children in the United States. Unfortunately, state agencies 
only make collections in less than 23% of the cases they 
handle. This is not because of a lack of resources or effort 
dedicated by the States, but in many cases, it is due to an 
inter-jurisdictional problem with neighboring States. States 
are largely responsible for operating the child support 
enforcement program, but there is a greater federal involvement 
in the interstate caseload since almost 36% of all child 
support cases are now interstate cases. This additional layer 
of governmental bureaucracy adds to the inability of many of 
the states to communicate with one another about child support 
collection, in addition to taking longer periods of time to 
enforce. No longer should custodial parents have to wait years 
while court systems in two different States coordinate their 
problems.
    In FY1998, the federal and state governments spent a 
combined total of over $3.6 billion dollars toward child 
support enforcement. I find it difficult to comprehend that 
this amount of money was spent by the taxpayers to get only 23% 
of non-custodial parents to live up to their responsibilities 
and support their children. Let us not forget the $2.2 billion 
the Federal Government paid to automate the state systems, 
which still are not in place, or the additional governmental 
costs for the prosecution of individuals who fail to support 
their children.
    In the meantime, I can only imagine what further burdens 
these deadbeat parents are placing on our society in the form 
of increased health care and welfare expenses. Our nation's 
children, abandoned by their non-custodial parents, are forced 
to turn to the government for assistance. As welfare reform 
reduces the options of welfare payments for many, the 
effectiveness of the child support enforcement system is 
critical. Though it is important to remember the child who is 
struggling, it is also important that we remember the taxpayer 
who must pay for the irresponsible actions of others. We must 
continue the culture of responsibility that Welfare Reform 
ushered in.
    It is time to hold deadbeat parents responsible, and to 
help all parents develop the potential of their children. 
Chairwoman Johnson, has already taken much needed legislative 
steps in helping parents to learn relationship building, 
parenting, budgeting, and family planning skills. We must 
continue to encourage parents but make sure that those parents 
who close their hearts and their wallets are held accountable.
    As you know, the Department of Justice is charged with the 
responsibility of prosecuting those who willfully fail to pay 
their child support obligations with respect to a child who 
lives in another state or those parents who move across state 
lines in order to evade paying child support. While the number 
of cases filed and convictions obtained have slightly 
increased, I am still extremely troubled by the small number of 
cases actually investigated, accepted and prosecuted with 
regard to these matters. In FY1999 alone, only 396 defendants 
were charged. I find this figure dismaying and that more cases 
against deadbeat parents were not prosecuted.
    These may not be crimes that spill blood or result in 
broken bones, or make the evening's headline news, but the 
reality is that these crimes affect a lot more people than 
generally realized. These are not criminals of one 
jurisdiction--they cross state borders to commit these crimes 
of financial neglect, which affects all of us. Since it appears 
as though not many cases have actually been prosecuted, it is 
even more important to devise an effective collection system.
    What is the human toll in this record of failure? I have 
seen it in the eyes of children I have met at candlelight 
vigils in my district, organized by the Association for 
Children for the Enforcement of Support,--children who cannot 
understand why their parents have abandoned them, who cannot 
understand why there is no money for rent or food.
    With all of this having been said, our nation's child 
support enforcement system is in desperate need of repair and 
innovative concepts that will allow this problem to be solved 
while children are still children, and desperately need 
support. The legislation before you, H.R. 1488, the 
``Compassion for Children and Child Support Enforcement Act of 
1999,'' would allow the Internal Revenue Service (IRS) to 
collect child support in the same manner that taxes are 
collected, and then disburse it to the custodial parent with 
penalties and interest if appropriate, which currently is not 
possible. This obviously adds incentive toward the prompt 
payment to the custodial parent. It sets up afederal/state 
partnership to collect child support throughout the nation even 
when parents move across state lines. States would still 
establish paternity and child support orders and modifications, 
however, the collection enforcement would be done on the 
federal level where payments would be made just like federal 
income taxes. I believe that this would be at a cost savings to 
the government as well, since this system would be building on 
the current tax collection system and the federal government 
would no longer be footing the bill for the state enforcement 
programs. Now, I know too well the antipathy towards giving the 
IRS more authority, but it makes a lot of sense with deadbeat 
parents, especially when the means have proven so effective.
    This legislation would make paying child support 
indistinguishable from paying taxes. Think of what a statement 
this would make. We, as a nation, would go on record, as 
believing that the duty of support owed to one's child is every 
bit as important as the duty to pay taxes. There is one 
governmental agency that has the reputation and the statutory 
resources needed to make good on this country's promise to 
custodial parents, and that they will get their child support 
at an affordable rate to us all--the Internal Revenue Service. 
In fact, the federal tax intercepts that are conducted by the 
IRS for overdue child support enforcement is the most effective 
means of collection under the entire state/federal child 
support program nexus. The IRS is one example of where the 
federal government, with its centralized efficiencies, can 
bring both parents back into the equation--stream-lining the 
child support collection system while reducing welfare 
dependency and giving custodial parents the time to nurture 
their children.
    If there is any truth brought home to us by conscience, it 
is this--that we are personally responsible for what we do, 
that we cannot shift our responsibility, and that dereliction 
of duty will not be tolerated. The will towards encouraging 
responsibility to our children is there; it is only finding the 
right mechanism to effect parental accountability that has been 
lacking. Congress must do what's right. Let's close this failed 
chapter once and for all and get these kids the support they 
deserve.
    Madame Chairwoman, I hope my comments have been useful to 
you and the sub-committee concerning our child support 
enforcement system. Thank you for providing me the opportunity 
to testify today.

                                


    Chairman Johnson. Henry, thank you very much. I didn't 
realize you had a markup going on, and I am sorry I missed that 
information in rushing and trying to get started.
    Mr. Hyde. Not at all, that is the way it goes around here.
    Chairman Johnson. Thank you very much for your testimony, 
and one thing that we will be looking at is whether one would 
have to keep the new hires bank in place and the matching 
program going on, which is now beginning to make an enormous 
number of matches, and so you are not seeing court cases 
because the matches are being made and the wages are being 
attached, and the numbers are very significant in that regard 
now. So, if we increase the role of the IRS, which is what I am 
listening for, we also--I think there are elements of the new 
system that has gotten in place that are proving themselves so 
valuable that they can get the money immediately and not under 
the IRS. Thank you.
    Mr. Hyde. Thank you so much. Thank you.
    Chairman Johnson. We will go vote and return right away.
    [Recess.]
    Chairman Johnson. I am going to open the hearing, and 
recognize my colleague, Mr. Cardin.
    Mr. Cardin. I thank you, Madam Chairman. Madam Chairman, I 
didn't know whether looking at the list of witnesses we have 
today, I couldn't decide whether I should give an opening 
statement or sing an opening statement, but I think what I will 
do is just put my statement in the record and, also, if I 
might, put a letter from Assistant Secretary of the Department 
of Treasury, Jonathan Towsman, into the record also, raising 
certain administrative concerns with the proposal, and welcome 
my colleague, Lynn Woolsey, for all the hard work that she has 
done over her entire career on behalf of children, and it is a 
real honor to have you before our Committee.
    [The opening statement of Mr. Cardin follows. Mr. Towsman's 
letter was not available at the time of printing.]

Statement of Hon. Benjamin Cardin, a Representative in Congress from 
the State of Maryland

    Madame Chairwoman, let me start by thanking you for holding 
this hearing and for your continuing commitment to 
strengthening our Nation's child support enforcement system. 
Our efforts to reduce poverty, the long-term success of welfare 
reform, and the well-being of millions of families all depend 
on parents taking responsibility for their children.
    Under your leadership, Chairwoman Johnson, the House passed 
legislation last year to help non-custodial parents who want to 
support their children, but lack regular employment. These are 
dead-broke, not dead-beat parents.
    Nevertheless, we all know some parents have the ability to 
pay support, but they simply refuse to meet this basic 
obligation to their children. I very much agree with my friends 
Henry Hyde and Lynn Woolsey that far too much of this support 
goes uncollected. However, I do have reservations about both 
the political viability and the technical feasibility of their 
proposal to require the Internal Revenue Service to assume the 
lead role in collecting child support.
    Furthermore, it is not clear to me that their proposed 
system, which depends on individuals voluntarily informing 
their employer that they have a delinquent child support order, 
will collect more support than the current system, which relies 
on National data bases to automatically find deadbeat parents 
when they change jobs to avoid paying child support. I look 
forward to a discussion of this and related issues with our two 
esteemed colleagues who are sincerely dedicated to improving 
the child support system.
    As we discuss various proposals to increase child support 
collections, I hope this Subcommittee will consider sending 
more support to the families for whom it is intended, rather 
than to State and Federal governments for past welfare costs. 
Commonsense dictates that at least some non-custodial parents 
will be more likely to pay support if their payments are 
actually helping their children. The time has therefore come to 
change the central focus of the child support system from cost 
recovery for government programs to reliable support for 
families.
    I would like to conclude by telling the many frustrated 
parents who are waiting for unpaid child support that Congress 
enacted several meaningful reforms in 1996 that have begun to 
yield positive results.
    For example, all States are now required to suspend the 
drivers' licenses and the professional licenses of non-
custodial parents who refuse to pay court-ordered child 
support. My home State of Maryland has used the threat of this 
procedure to collect more than $100 million in past-due child 
support over the last four years.
    In addition, the establishment of a National data base on 
all newly-hired employees in every business in the country 
allows States to find deadbeat parents where they work, even 
when they are employed in another State.
    We must now work with the States to ensure they gain the 
maximum potential out of these new resources. Our Nation's 
children deserve nothing less than a child support enforcement 
system that is quick, efficient, and resolute.
            Thank you.

                                


    Chairman Johnson. Welcome, Lynn.

 STATEMENT OF HON. LYNN WOOLSEY, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF CALIFORNIA

    Ms. Woolsey. Thank you very much, Madam Chairwoman, and I 
want to thank you, too, Mr. Cardin, Ranking Member, and thank 
you for not singing. I want to thank the Committee for giving 
Chairman Hyde and myself the opportunity to testify on behalf 
of our bill, the Compassion for Children and Child Support 
Enforcement Act of 1999.
    Chairman Hyde and I have been working on this together in 
order to have legislation to improve the collection of child 
support for so long now that one of my newspapers calls Woolsey 
and Hyde ``The Odd Couple'', and that is true.
    But we are both familiar, and I am particularly familiar, 
with the difficulties of collecting child support, and I lived 
with this long before I came to Congress.
    I know personally how important child support is because a 
number of years ago--it was over 30 years ago--I was a single 
mom, I was working, I had one-, three- and 5-year-old children, 
and although the courts ordered my children's father to pay 
child support, we never received one penny.
    I went to work, but in order to provide my children with 
the health care, and child care and food stamps, we were forced 
to go on Welfare, even though I continued full-time employment.
    Today, millions of American families rely on Welfare for 
exactly the same reason that I did--a deadbeat absent parent. 
It wasn't fair to my family, it wasn't fair to me, and it is 
certainly not fair to families today, and it is absolutely not 
fair to American taxpayers.
    Today, over one-quarter of the children in America live in 
a household with just one parent. Even though 60 percent of 
noncustodial parents have been ordered by a court to pay child 
support, less than half of the children actually receive 
payment from the absent parent.
    Currently, as Chairman Hyde told you, children in this 
country are owed close to $50 billion in unpaid child support, 
and this amount is growing by $5 billion a year. That may not 
seem like much when we are so used to dealing with Federal 
funding programs in the millions and billions and trillions of 
dollars, but for each child who is owed money, each check can 
mean the difference of a new pair of shoes, a warm winter coat, 
or even something as basic as food on the table. And I want to 
tell you, from my experience, having a parent that does not 
fulfill their share of the responsibility is hard on those 
children.
    It is hard enough being poor, we all know that. But it is 
even worse when you can't count on the money that your children 
are owed--not knowing how to budget, not knowing if there will 
be enough to make it through to the end of the month, is worse 
than being poor in the first place.
    This nation has tried over and over to find a way to ensure 
that families receive the child support that is owed to them. 
There were child support enforcement reform laws in 1984, 1988, 
1993, and 1996. None of them has resulted in any significant 
improvements in the rate of child support collections.
    That is because child support collection in America still 
relies on a complicated bureaucratic system where almost 1500 
state and local agencies are charged with local collections--
1500 bureaucracies. The Federal Government assists with 
interstate collections through a variety of tools, such as the 
new Parent Locator Service and the National Directory of New 
Hires. Yet, states still collected only 23 percent of the child 
support due in 1998. And in December 1998, 23 states and the 
District of Columbia were sitting on $68 million in 
undistributed child support payments because they don't know 
where to send the money.
    In fact, the only part of child support enforcement reform 
that has worked is the provision that gives the Internal 
Revenue Service the authority to attach tax refund checks for 
collection of back support. Last year alone, the IRS collected 
over $1 bill dollars in child support, still far short of the 
$50 billion that is owed.
    The Hyde-Woolsey bill makes paying child support as easy 
and as regular as paying FICA taxes. Employees simply fill out 
another line on their W-4 form, providing IRS with information 
about court-ordered child support. The child support is then 
withheld from the employee's wages, just as FICA taxes and 
income taxes are withheld. This results in a consistent and 
timely distribution of the funds to the families.
    Why the IRS? First of all, the IRS has the tools and the 
experience to collect child support. The IRS has an 85 percent 
collection rate. The IRS would get a lot more money to needy 
families than the 23 percent collected by the states. That is 
85 percent success versus 23 percent.
    Second, the IRS can enforce support orders across state 
lines. In today's mobile society, that is absolutely crucial.
    And, finally, the reputation of the IRS, which I know gives 
some people in this room heartburn--and it should--but that 
reputation will actually be a big plus here. The Hyde-Woolsey 
bill gives the IRS the authority to pursue deadbeat parents 
just as vigorously as it does tax cheats. And that tells this 
nation that we are finally taking child support enforcement 
seriously.
    It is time to enact the Hyde-Woolsey bill to make child 
support enforcement a national priority, rather than state-by-
state failing bureaucracy.
    It is time to let deadbeat parents know that there are now 
three things they cannot avoid--death, taxes and paying child 
support. Thank you.
    [The prepared statement follows:]

Statement of Hon. Lynn Woolsey, a Representative in Congress from the 
State of California

    Thank you, Madam Chairwoman. I also want to thank you, and 
the ranking member, Mr. Cardin, for giving Chairman Hyde and me 
this opportunity to testify on behalf of our Bill, ``The 
Compassion for Children and Child Support Enforcement Act of 
1999.''
    Chairman Hyde and I have been working together on 
Legislation to improve the collection of Child Support for so 
long now, one of my local newspapers has dubbed us ``The Odd 
Couple.''
    However, I was familiar with the difficulties of collecting 
Child Support long before I came to Congress.
    I know just how important Child Support Collection is 
because a number of years ago I was a single working mother 
with three small children, ages 1, 3, and 5. Although the 
courts ordered my children's father to pay child support, we 
never received a penny. I went to work, but in order to provide 
my children with the health care and child care they needed, I 
was forced to go on welfare even though i was working full-
time. Today, millions of american families still have to rely 
on welfare for the same reason.... A Deadbeat Parent.
    That wasn't fair to my family and me; Its not fair to 
families today; and its certainly not fair to american 
taxpayers!
    Today over one quarter of the children in america live in a 
household with just one parent. Even though 60% of non-
custodial parents have been ordered by a court to pay child 
support, less than half of the children actually receive 
payment from the absent parent.
    Currently, children in this country are owed close to $50 
billion in unpaid child support, and this amount is growing by 
$5 billion each year. That may not seem like much when you're 
used to funding federal programs, but for each child who is 
owed money, each check can mean a new pair of shoes, a warm 
winter coat, or even something as basic as food on the table.
    Its hard enough being poor. But its even worse when you 
can't count on the money your children are owed--not knowing 
how to budget or, if there will be enough to make it through to 
the end of the month.
    This nation has tried over and over to find a way to ensure 
that families receive the child support that is owed to them. 
There were Child Support Enforcement Reform Laws in 1984, 1988, 
1993, and 1996. None of them resulted in any significant 
improvements in the rate of Child Support Collections.
    That is because Child Support Collection in america still 
relies on a complicated Bureaucratic System where almost 1500 
state and local agencies are charged with local collections, 
and the federal government assists with interstate collections 
through a variety of tools, such as The New Parent Locator 
Service and the National Directory of new hires.
    Is it any wonder that states collected only 23% of the 
Child Support due in 1998? or that in December, 1998, 23 States 
and the District of Columbia were sitting on $68 million in 
undistributed Child Support payments because they don't know 
where to send them?
    In fact, the only part of Child Support Enforcement Reform 
that has worked is the provision that gives the Internal 
Revenue Service the authority to attach tax refund checks for 
collection of back support. Last year alone, the irs collected 
over $1 billion in child support.....still far short of the $50 
billion owed.
    The Hyde-Woolsey Bill makes paying child Support as easy 
and as regular as paying FICA Taxes. Employees simply fill out 
another line on their W-4 form, providing IRS with information 
about court-ordered Child Support. The Child Support is then 
withheld from the employee's wages, just as FICA Taxes and 
income taxes are withheld, and distributed to the families on a 
consistent and timely basis.
    Why the IRS?
    First of all, the IRS has the tools and the experience to 
collect Child Support. The IRS has an 85% collection rate. That 
gets a lot more money to needy families than the 23% collected 
by the states.
    Second, the IRS can enforce support orders across state 
lines. In today's mobile society, that's crucial.
    And, finally, the reputation of the IRS, which I know gives 
some people concerns, will actually be a big plus here. The 
Hyde-Woolsey Bill gives the irs the authority to pursue 
deadbeat parents just as vigorously as it does tax cheats, and 
that tells this nation that we are finally taking Child Support 
Enforcement seriously.
    Its time to enact The Hyde-Woolsey Bill and make Child 
Support Enforcement a national priority, rather than a state-by 
state failing Bureaucracy.
    Its time to let deadbeat parents know that there are now 
three things they cannot avoid--death, taxes and paying child 
support!

                                


    Chairman Johnson. Thank you very much, Congresswoman 
Woolsey. Would you describe how the IRS would collect child 
support and disburse it on a monthly basis?
    Ms. Woolsey. Once the system is in place and regular 
withdrawals are coming from the employer to the IRS, then there 
will be an order and a check written. And it could be through 
the IRS or it could be through another agency. It could be 
Social Security.
    Chairman Johnson. So they would not only attach returns for 
arrearages, but would manage the wage withholding system?
    Ms. Woolsey. Absolutely, just like a FICA deduction. And 
for a parent--I heard, Madam Chairman, you brought up the 
absent parent that is actually responsible. The custodial 
parent can opt not to have the money withdrawn from the 
noncustodial parent's check. And as Chairman Hyde said as we 
drove over to vote, he said, ``And if that is such a good 
father, I am sure the mother will ask for that to come out of 
his paycheck'', but it is up to the custodial parent.
    Chairman Johnson. In your legislation, you don't have any 
estimate of cost. In fact, I think the assumption is that it 
would save money.
    Ms. Woolsey. It would absolutely save money, but the Office 
of Budget and Management has not been able to give us the exact 
cost, but we absolutely know of the cost of not doing this--85 
percent success rate of collections versus 23 percent. And it 
is costing the Federal Government investing in state programs 
that are not working, and the billions of dollars we paid for 
computer systems that aren't working.
    Chairman Johnson. I was very interested in the letter from 
the Assistant Secretary of the Treasury. He says that 
``implementation of your bill would be a monumental undertaking 
for the IRS as new personnel would have to be hired, new 
computer systems developed, and new operating procedures 
established. This would be particularly burdensome at a time 
when the IRS is in the middle of a major reorganization, 
striving to modernize its own systems and improve customer 
service, and trying to overcome significant challenges with 
respect to the collection of taxes as it seeks to implement the 
reforms of the IRS Restructuring and Reform Act of 1998''.
    I bring that to your attention because, remember, just on 
the issue of modernizing their own equipment for a known 
purpose--that is, the purpose that they had been fulfilling for 
decades--they wasted $4 billion in technology that didn't work.
    So, we can't underestimate the problem of asking them to 
now develop a technology for wage withholding. They do a very 
good job of attaching returns, they do that now, but the kind 
of work we would be asking them to do would be quite different. 
And there is one other aspect--
    Ms. Woolsey. Could I respond to that, Madam Chairman? 
Actually, we have looked at that, and the systems that they 
have in place are so similar that it would be--and this is a 
computer world we are in. I mean, there is supposed to be 
simplification in these kinds of programs because of computers. 
And one more line doing virtually the same thing that FICA 
does--they deduct money and they deposit it somewhere--so our 
point is that it is not--we don't think it would be that 
complicated but, of course, we would be appreciative to hear 
what the challenges will be.
    Chairman Johnson. It is not just one more line on the wage 
withholding, it is distributing it, and all 50 states have some 
different rules about distribution. You are not going to 
override the state role in paternity identification, in court 
orders and all of that. So there is a whole level of state 
involvement in distribution issues that you also could not 
override. So the issue of the IRS distribution is a very 
complicated issue, to get it all the way down to the person 
that it is supposed to go to.
    Also, I have here--I am going to give this to Henry, I will 
give you a copy--it is a report from the Health and Human 
Services Department, on the National Directory of New Hires 
which, in its first year of operation--which was not a full 
year--it located 1.2 million noncustodial parents and putative 
fathers. In 1999, the next year, it located 2.9 million--1.2 
going up to 2.9--and this year, as of February 1st, has already 
provided information to the states about 2 million parents, in 
2 months.
    So, the difference is that the Federal New Hires Bank is 
finally established, and at least states now have in place the 
computer capability, and 20 states have the whole thing 
automated, and so they are attaching wages immediately, and 
distributing it immediately.
    So, when you look at the increases--Virginia attributes $13 
million in new collections to the matches just last year, and 
we are seeing the numbers exponentially grow in these last few 
years as the system has gotten in place.
    So, the challenge, the technical challenge, is getting in 
place one national system that--in a different department--that 
would substitute for the state systems, but there would have to 
be a state aspect to it, I would imagine.
    Ms. Woolsey. Absolutely. States would set the orders. 
States would negotiate with increasing or decreasing orders, 
and states would play a major role--it would cut their burden 
about 50 percent--and the Federal Government pays them to do 
all of this, and my state has a 13 percent success rate. My 
district has a 50 percent success rate, but the state has a 
terrible success rate.
    Chairman Johnson. The success rates are changing so 
rapidly. In Texas, 36 percent of the total collected through 
wage withholding for a single month recently was collected 
through the new Matching Distribution program. So the new 
technology is just exploding the ability of states to get the 
person at the time. And since most of our problems are involved 
with interstate location and employer relationships and 
enforcing that--in Washington State, over 80 percent of the 
employer verification led to increased child support payments--
85 percent. In Minnesota, over 89 percent. In Iowa, over 94 
percent.
    So the reforms we adopted a few years ago are only now 
taking hold, but to get reforms working, the technology you 
have to have, the interdepartmental communication, the 
relationships with the employer community, it would just take 3 
years to get that in the IRS, there is no question in my mind 
that it would be complicated. And I have watched simple 
implementation of taxpayer protections that we adopted when I 
chaired that Committee and wrote the taxpayer protection bills, 
and 2 years later you are still wondering why don't you have 
this completely implemented.
    So, my confidence in IRS management of the system I have to 
weigh against what I actually see happening in the system, and 
rarely in my experience have I seen this kind of growth in 
effectiveness as a result of Federal action. We had a hearing 
earlier about the bank matches and how much money we are 
finding in assets, the IRS couldn't begin to do that.
    Ms. Woolsey. Well, we wouldn't undo any of the successful 
programs, obviously. I mean, where it is working, it is 
working, but it is not working--I mean, as far as I am 
concerned, where there is a will, there is a way. We had the 
will to put the new systems in place, and they are working 
better than what we had, but they are not at an 83 percent 
collection rate like the IRS.
    I am all about these children. I don't really care about 
the IRS. I know how hard it is for those kids and their moms 
when they don't have the money that that parent owes them.
    Chairman Johnson. I would certainly want to put clear in 
the record that we are all all about these children. It is a 
question of whether we set back the growth of the tools, the 
power of the tools that are in place, and whether we reach the 
goal faster that way or less fast that way. Mr. Cardin.
    Mr. Cardin. Thank you, Madam Chair. And, Lynn, first, thank 
you for your passion on this subject. There is no question that 
the status quo is unacceptable, that we have to do a better 
job, and I applaud you for coming forward with innovative ways 
for us to take a look at how we could be more effective in 
collecting child support from those noncustodial parents that 
otherwise would be unwilling to live up to their obligations.
    And, Madam Chair, let me also congratulate you because I 
think it is important to point out that this Subcommittee, 
under your leadership has been in the forefront of giving 
states additional tools in order to collect child support. One 
of the most important ones, I might say, is the suspension of 
driver's license which, talking to people in Maryland, has been 
responsible for the collection of about $100 million, and that 
has been done without really suspending too many licenses, just 
the fear of losing your driver's license.
    And I think one of the things that is probably an 
unintended consequence of the IRS legislation is to repeal 
those tools because the states are not involved in collections, 
it is the IRS involved in collections.
    So, I think one of the things we need to do is to make sure 
that those valuable tools that are currently available for 
child support collections are not damaged by any change that we 
make.
    I have, I guess, a more philosophical question, and that 
is, the Ways and Means Committee is charged with the oversight 
of the IRS. I worked with Rob Portman on the IRS Restructuring 
Act, and the concept and the success of our Internal Revenue 
Service has been that it is a voluntary system, by and large, 
on compliance. People pay the taxes that they owe. And we audit 
very few returns. There is no information reports that go to 
IRS on your deductions or your modifications to your income, or 
what your tax base is on assets that you sell, or the date of 
acquisition, date of sale. We don't have a lot of information 
that goes to IRS, we depend upon the taxpayer voluntarily 
supplying the correct information to the IRS, and we have a 
very, very high success rate, the highest in the free world, on 
people voluntarily paying the taxes that they owe.
    I guess my concern is, by definition, what we are trying to 
do is go after the person who is not going to voluntarily 
supply the right information. And it seems to me a very 
difficult task to tell the IRS, who relies upon the individual 
supplying the information--and your legislation requires each 
employee to provide on the withholding certificate the amount 
of money that that individual owes for child support--why do we 
think that someone who otherwise is not paying child support is 
going to make this voluntary information available to the IRS?
    Ms. Woolsey. Well, the state will also know where the 
individual works, and people who are not employed be also 
reporting when they pay their taxes. We know now that the IRS 
is able to collect owed past-due child support out of tax 
returns. So, it can happen. There is a way for them to know 
that this particular individual owes child support, and when 
they are getting money back from their taxes it goes either to 
the county that has been paying the welfare instead, or to the 
family.
    Mr. Cardin. Everything works OK if the employee reports the 
right amount of money that he owes, or she owes. But if the 
individual does not report the proper amount of money, then you 
run into a real difficult issue--working with the state agency 
that has been helpful in establishing paternity and 
establishing child support and updating child support, the 
custodial parent who has her view or his view as to the amount 
of money that is owed, and the IRS is sort of in the middle 
here, does not have a good track record of being able to 
determine accurate information for the initial information that 
goes on taxes.
    Ms. Woolsey. In the bill, Mr. Cardin, there is a penalty 
for not--
    Mr. Cardin. If you can't collect the child support, then 
you try to collect the penalties. You also, of course, run into 
the problem under the penalty provision, that you could have an 
innocent mistake on a return, and you have to wait 2 years, I 
think, for the penalties to really kick in.
    Ms. Woolsey. And we also have the custodial parent who is 
going to be part and party to letting the IRS or the state know 
whether or not the deduction is happening.
    Mr. Cardin. That is one of the problems we have with 
collection today, is the custodial parent is somewhat at a 
disadvantage. We depend upon the aggressiveness of an agency, 
whether it is a state agency now, or the IRS.
    I thank you. It is something I think we need to figure out, 
but the bottom line is we want to make sure more child support 
is actually collected in the most cost-efficient way.
    Chairman Johnson. Thank you very much, Lynn, that certainly 
is our goal, and in pursuit of that goal the House passed our 
Fatherhood Bill, which would begin to address the part of the 
problem that some fathers pay no child support because they 
don't make any money, or they work underground. And one of the 
problems with the IRS would be that it would deal only with 
those who have reportable income, and a lot of the 
nonsupporting fathers actually have income that is not 
reported. So there are certainly aspects to the system that we 
would want to keep in place. Thank you very much for being 
here.
    Chairman Johnson. I would like to call up now the first 
panel, Geraldine Jensen, the President of ACES from Toledo, 
Ohio; Victoria Williams, Senior Vice President, Policy Studies, 
Inc., Denver, Colorado; Art Alexakis, a member of Everclear, 
West Hollywood, California--and we are very glad that you have 
sung throughout your life even though we weren't interested in 
others--Wayne Doss, Director of the District Attorney's Office, 
Bureau of Family Support Operations, in California.
    Let me tell you that your testimony will be included in its 
entirety, but so that we do get a chance to get to some 
questioning and we don't keep the second panel waiting too 
long, and for other complexities of the schedule around here, 
your remarks must be limited to 5 minutes at the beginning.
    Ms. Jensen.

   STATEMENT OF GERALDINE JENSEN, PRESIDENT, ASSOCIATION FOR 
 CHILDREN FOR ENFORCEMENT OF SUPPORT, INC. (ACES), TOLEDO, OHIO

    Ms. Jensen. Chairman Johnson, Members of the Committee, 
thank you for this opportunity. My testimony follows the charts 
that are listed in your packet.
    ACES families are representative of the 30 million children 
owed $50 billion in unpaid child support. We ask you to support 
H.R. 1488 which sets up a partnership whereby state governments 
establish paternity and orders, and the expertise of the IRS is 
used for enforcement.
    Parents can afford support. 60% of nonresident parents earn 
over $30,000 a year. Most of their children are living in 
families with significantly lower incomes. Collection rates are 
dismal, at about 30% for all families, VI-D rates are lower at 
23%. States collected $14.3 billion in 1998. New data for 1999 
shows that collections were only $15.5 billion, and that about 
50% of the payments are through payroll deduction. This shows 
no significant increase since Welfare Reform. States spend $25 
to collect $100.
    The IRS serves more families. They collected $1.6 trillion, 
and they spend 44 cents to collect $100. IRS collections from 
the offset program are up 634 percent, 83% of the IRS 
collections are from payroll deductions.
    Interstate collections are low. The complicated process 
outlined in the chart shows a New Hire reporting system from 
employers to another state, to the Federal Government, and back 
to the state. It is not working. The IRS direct-withholding 
system would solve this problem. Payments made by employers to 
banks could then be directly distributed to families and we 
wouldn't need so many state central disbursement units.
    States have acted on few of the 2.8 million Federal New 
Hire matches. Texas only acted on 12,000 out of 1.3 million 
matches they received from the state and Federal registry.
    The system to collect from the self-employed does not work. 
Not very many of the 662,000 bank accounts with assets of $1 
billion have been attached because 26 states don't accept 
interstate attachments. 40% of the caseload is not automated. 
State systems are incompatible, and even the CSNet Internet e-
mail system does not connect all states. California alone spent 
$371 million on a computer system that doesn't work.
    Customer service is poor. This North Carolina poster, 
included in your packet, blames Moms for selecting Dads with 
bad character. States restrict ph1 hours. They don't sent out 
delinquency notices.
    In 1999, states referred an average of only four cases from 
each state to the U.S. Attorney General for prosecution out of 
a pool of 9 million.
    State disbursement units now have $200 million of families' 
child support checks they have not distributed. North Carolina, 
Florida, Tennessee, and Illinois report massive problems with 
SDUs.
    Private contractors, like PSI, Maximus, and Supportkids.com 
are expensive, and their collection rates are no better than 
the states.
    The IRS uses payroll-deduction on almost all cases. They 
would take over the Federal New Hire Directory system and build 
on that current system. They collect from the self-employed 
through FICA and monthly payments. Interstate cases are not an 
issue. The IRS attached 544,000 bank accounts in 1997. They 
have made recent improvements to their automation and customer 
service. The IRS collection rate is 83%.
    States like Virginia that have an aggressive collection 
system using roundups, booting cars, still only collect on 25% 
of the cases.
    Vermont, the nation's highest collection rate of 45%, has 
one of the smallest caseloads at 27,000. Los Angeles--as the 
chart on the last page shows--has one of the worst collection 
rates in the nation.
    States are improving in establishing paternity and orders, 
but all states report that they are having difficulty on 
interstate and self-employed cases. So, at least act to use the 
expertise of the IRS on those kind of cases.
    We have lost a generation of children to non-support. 
Children born in 1975 when the program began, turned 21 in 
1996. Only 20 percent of them collected child support. Please 
act now. Don't lose yet another generation. Thank you.
    [The prepared statement follows:]

Statement of Geraldine Jensen, President, Association for Children for 
Enforcement of Support, Inc. (ACES), Toledo, Ohio

    ACES has 45,000 members and 400 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 believes that it is time for a new state-
federal partnership to improve the child support enforcement 
program. A partnership where state government would establish 
paternity and child support orders, and modify orders. The 
federal government would use the collection expertise of the 
IRS to collect payments just like we do for income and self 
employment taxes.
    HR 1488, sponsored by Representative Henry Hyde and 
Representative Lynn Woolsey, accomplishes this, thus making 
children as important as taxes in the U.S.
    ACES has been monitoring the current child support 
enforcement system since 1984. In addition to obtaining 
information about the child support enforcement system for our 
members, ACES operates a national toll-free Hot Line for 
families with child support problems, issues and questions. We 
receive up to 100,000 calls per year from parents throughout 
the U.S. From these calls and our members, we gather statistics 
and data on the status of the current child support enforcement 
system.
    The average ACES member is a single-parent, and she has two 
children. About 50% of ACES members are divorced, and the other 
half were never married. Members average income is $14,000 per 
year as of the end of 1999, and 85% have received some form of 
public assistance. At present, about 33% of our membership 
receives public assistance. ACES members report that collection 
of child support, when joined with available earned income, 
allows 88% 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 so 
that they can move their family out of poverty, and on to self-
sufficiency. The collection of child support, when joined with 
earned income, means our members can pay their rent and 
utilities, buy food, pay for healthcare, and provide for their 
children's educational opportunities. Lack of child support 
most often means poverty and welfare dependency. At the very 
least it means having to work two or three jobs to survive. 
This leaves our children with literally no parent who spends 
time providing their children adequate nurturing, supervision, 
and the attention they need and deserve.
    About 33% of our nation's children have a parent living 
outside the household. They are 4 times more likely to be poor 
and 5 times more likely to receive food stamps than children 
who live with two biological parents. Child support, when 
received, accounts for 16% of the family's income, and averages 
$3,795 per year. Child support is even more important for poor 
children where it represents 26% of the family's income.
    Characteristics of Families Using Title ID-D Services in 
1995, a study by Matthew Lyon shows that 1% of families using 
IV-D services had $0 income; 10% had an income of $1$5,000; 18% 
had an income of $5,000-$10,000; 15% had an income of $10,001-
$15,000; 10% had an income of $15,001-$20,000; 7% had an income 
of $20,001-$25,000; 8% had an income of $25,001-$30,000 and 
30.5% had an income above $30,000. In the book, Fathers Under 
Fire, by Irv Garfinkel, data reported on the income of non-
resident parents showed that 20% had an income under $6,000; 
20% had an income of $10,000-$30,000; 10% had an income of 
$30,000-$40,000; 40% had an income of $40,000-$55,000 and 10% 
had an income over $55,000 (Chart 1)

Children who receive child support:

     are more likely to have contact with their fathers 
\1\
---------------------------------------------------------------------------
    \1\ Argys, Peter, Brooks-Gunn, and Smith, ``Contributions of Absent 
Fathers to Child Well-Being: The Impact of Child Support Dollars and 
Father-Child Contact, University of Colorado, 1996.
---------------------------------------------------------------------------
     have better grade point averages and significantly 
better testscores \2\
---------------------------------------------------------------------------
    \2\ Graham, Beller, and Hernandez, ``The Relationship between Child 
Support Payments and Offspring Educational Attainment'' in Child 
Support and Child Well-being (Garfinkel, MacLanahan, and Robbins (eds), 
Washington DC (1994).
---------------------------------------------------------------------------
     have fewer behavior problems \3\
---------------------------------------------------------------------------
    \3\ McLanahan et al, National Survey of Families and Households, 
1994
---------------------------------------------------------------------------
     remain in school longer \2\

STATE CHILD SUPPORT AGENCIES FAIL TO COLLECT SIGNIFICANT AMOUNTS OF 
CHILD SUPPORT

    A whole generation of our children have not received 
adequate and regular child support payments as promised when 
the Title IV-D child support system was set up in 1975. The 
system was supposed to establish paternity, establish child 
support orders, and enforce orders. Children born in 1975 were 
9 years old when Congress acted to improve the child support 
system for the first time in 1984. The number of cases without 
orders was about 50% and the collection rate was 15% when 
income-withholding laws, liens on property, posting of bonds, 
attachment of tax refunds, and reporting of child support debt 
to credit bureau laws were passed as part of the 1984 Child 
Support Amendments. When the children were 13 years old in 
1988, Congress acted again because only about 50% of the 
children had orders and the collection rate was only 18%. In 
the 1988 Family Support Act, income-withholding was to begin at 
the time of divorce or establishment of paternity, modification 
of orders were to occur every 3 years, child support guidelines 
were required to be followed by the courts, and paternity was 
to be established via genetic tests and through voluntary 
programs.
    When the children were 17 years old in 1992, about 50% of 
the children still did not have orders and the collection rate 
was 19.7%. Congress again acted in the Child Support Recovery 
Act to assist children with interstate cases. The collection 
rate on interstate case was less than 50% of the other cases. 
When the children were 18 in 1993, about 50% of the children 
still did not have orders and the collection rate was 18.2%, 
Congress acted yet again. This time medical support orders were 
required and a better system for establishing paternity was put 
in place as part of the budget. When the children were 19 in 
1994, about 50% of the children still did not have orders and 
the collection rate was 19.4%. Congress enacted the Full Faith 
and Credit Act in another attempt to correct problems with 
interstate cases. When the children reached age 21 in 1996 and 
a little less than 50% of the children still did not have 
orders and the collection rate was 20%, Congress acted again as 
part of the Personal Responsibility and Work Opportunities Act 
( PRWORA) establishing New Hire Directories, Case Order 
Registries, and State Distribution Units (SDU), professional 
drivers and recreational license revocation, and required 
states to adopt UIFSA (Uniform Family Support Act). UIFSA is 
the third attempt to remedy interstate case problems.
    The Federal Office of Child Support, in its preliminary 
data from the year 1998, reports that a little less than 50% of 
the children do not have orders and the collection rate is 23%. 
In Chart 2, U.S. Census Bureau Data from the May 1999 Current 
Population Report for the year 1998 shows that the percentage 
of single-parent families who receive child support (some or 
all support due in 1998) was only 32%. The chart reflects 
collections based on census data that includes all families, 
IV-D and non-IVD, from 1984 to present. The collection rate 
shows no significant improvement. The collection rate remained 
about 30%. Also on the chart is data from IV-D child support 
collections. This collection rate shows only slight a 
improvement from 15% in 1984 to 23% in 1998.
    The most recent data available from the Federal Office of 
ChildSupport shows that the total collections for 1999 are 
$15.5 billion, up from the $14.3 billion in 1998 reported in 
Chart 3 & 3A, which was up from $13.3 billion in 1997. This 
chart also shows that collections rise about $1 billion/year no 
matter wether there is or is not new legislation. In Chart 5, 
interstate collections are listed from 1993 to the present. 
Collections have risen from 1993 pre-PRWORA $725 million 
dollars to $983 million in 1997, and to $1 billion in 1998. 
Collections on interstate cases have risen about $100 million/
year before and after PRWORA. PRWORA required UIFSA, the 
Uniform Interstate Family Support Act, to be adopted verbatim 
by all states. PRWORA has not yet shown itself to be of any 
assistance in processing interstates cases faster or more 
effectively. In fact, ACES has been told by several state IV-D 
agencies and state courts that it is more difficult to use than 
URESA, its more complicated predecessor. Problems are being 
reported with the provision for direct income-withholding. If a 
non-resident parent receives an income-withholding order at 
their place of employment and the order is for the wrong 
amount, wrong person, or contains some other mistake of fact, 
there is no mechanism in place to resolve problems. The state 
which sent the order is inaccessible to the non-resident parent 
and the state IV-D agency in their state is not even aware of 
the order or that a case exists in another state.

FAMILIES REPORT PRWORA HAS NOT HELPED AND HAS HURT!

    Statistics indicate little or no effect from any portion of 
PRWORA. Lack of results from the expanded Federal Parent 
Locator System with the National New Hire Directory and Case 
Order Registry are particularly disheartening.
    ACES members report no noticeable improvements since 
enactment of PRWORA, even with the National New Hire Directory 
reporting that 2.8 million matches were found in 1999, more 
than double the 1.2 million matches in 1998. Our research shows 
that the majority of the 2.8 million data matches made by the 
National New Hire/Case Order Registry have not been acted on by 
the State IV-D agencies. For example:
    Texas processed 2,481 income withholding orders due to New 
Hire information from the National Directory in three months. 
Texas received 1.34 million matches from state and the National 
New Hire directories.
    Virginia reports averaging 100,000 matches/year with their 
state New Hire Directory, resulting in collections of $7.5 
million. This is $75/match. For 180,000 matches/year with the 
National Directory, collections of $13 million resulted. This 
is $72/match.
    Iowa reported 20,000 matches to date with the National 
Directory and has collected $365,297. This is $18/match.
    Arizona, in three months of comparisons with the National 
Directory, located 11,218 matches . No data is available for 
the number of cases where action was successfully taken to 
collect support. The intrastate New Hire Reporting System 
resulted in collections of $13 million on 45,083 matches. This 
is $288/match.
    Minnesota, in FY 1999, had 39,078 matches with its state 
directory, and collections increased by $11.6 million (3%). 
This is $296/match. Minnesota is averaging 166 matches/day with 
the National Directory but no data is available on the action 
taken on these matches.
    ACES members have seen neither the synergy nor improvement 
in collections that is being touted by federal and state 
government. In fact, in some states, the situation is even 
worse than it was pre-PRWORA. These states are having problems 
setting up State Disbursement Units. Our members in North 
Carolina report delayed and missing payments since Sept 24, 
1999 when the new State Disbursement Unit went into operation. 
Many have been unable to buy needed food, pay rent, or take 
care of their families because payments that had been processed 
by local Clerks of Courts are now lost in the state's new 
distribution computer system. North Carolina reports having 
more than $10 million of undistributed funds on hand. Reasons 
cited are that Clerk of Courts bundled up checks, money orders, 
and cash brought in by non-resident parents and mailed it to 
Raleigh without identifying information attached, and employers 
did not use the new case numbers assigned to them for income-
withholding cases. Each case was given a new number in the 
distribution unit system. The number was neither parent's 
social security number nor the court docket number. Rather than 
obtaining a list of names and addresses from employers for whom 
the payments have been sent, the money was returned to the 
employers.
    Other families report massive problems because the 
statewide computer system cannot adequately interlink with the 
state distribution computer system to determine payment 
distribution in multi-family cases. A class action law suit has 
been filed against the computer vendor in North Carolina due to 
failure to even test the new system before putting it on-line 
and for contract violations.
    In Illinois, ACES members report the same type of problem 
as in North Carolina. County Clerks of Courts mailed checks and 
money orders paid to them by non-resident parents to the state 
with no identifying social security numbers. Illinois has more 
than $6 million in unidentified funds on hand. Tennessee, 
Nevada, part of Pennsylvania, and Missouri are reporting 
similar problems. States chose to set up systems where all 
payments are sent to a central intake and then disbursed. This 
process has made it more difficult for parents to pay. The lack 
of adequate planning and testing has led to missing payments, 
long delays, and other problems for some of the poorest 
families in our nation. North Carolina made families pay back 
emergency aid checks out of the first child support check 
issued after months of not receiving payments. This newest 
bureaucratic glitch has caused thousands of children to go to 
bed hungry.
    SDU's federal policies should be immediately reviewed and 
revised. Payments should be able to be made at many places, 
such as ATMs, utility payment sites, banks, and the central 
payment collection site. This would ensure employers one place 
to send payments while, at the same time, make it easy for 
parents to pay. Payments received off-site could be sent via 
Electronic Funds Transfer to the central payment site. The 
Federal Office of Child Support should immediately audit states 
with undistributed funds to ensure that an adequate plan is 
being put in place to provide for emergency and long term 
needs.
    States have more unidentified undistributed funds on hand 
than ever before. An ACES survey, (see Chart 8) shows $100 
million on hand at the beginning of 1999. For example, ACES 
found $30 million undistributed funds in Florida, $2 million in 
Georgia, and $10 million in Los Angeles, CA. The Federal Office 
of Child Support has listed distribution of unidentified funds 
as one of their major priorities for the year 2000 due to the 
growing amount reported by states in 1999.
    Other problems \4\ with State Distribution Units are:
---------------------------------------------------------------------------
    \4\ American Association of Payroll Managers (March 2000)
---------------------------------------------------------------------------
     There are 11 states that do not yet have an 
operating SDU. They are Alabama, California, Indiana, Kansas, 
Louisiana, Michigan, Nebraska, Nevada, Ohio, South Carolina, 
and Texas.
     Of the 43 states/jurisdictions that say they have 
functioning SDUs, 6 only serve IV-D cases. They do not take 
payments for non-IV-D withholding cases as required by federal 
law. These six are Arkansas, Georgia, Kentucky, New York, 
Oklahoma and Wyoming.
     Of the 43 states/jurisdictions that say they have 
functioning SDUs, 14 have no capacity to receive electronic 
payments. These states are Delaware, Washington DC, Georgia, 
Hawaii, Maine, Maryland, Massachusetts, Missouri, Nebraska, 
Oklahoma, Tennessee, Utah, Virgin Islands and West Virginia.
    The Federal Office of Child Support reports they have made 
matches of delinquent parents with financial institutions for 
662,000 accounts since August 1999. The accounts are valued at 
about $1 billion. No data is available about whether any of 
these accounts were successfully attached to collect child 
support.
    Problems exist with the bank account attachment process. 
Administrative Process is used by 31 states to attach bank 
accounts; 12 states use Judicial Process; and 7 states use 
both. Twenty-six states do not accept orders from other states, 
2 states sometimes accept orders from other states, 1 state 
leaves it up to the financial institution, 8 states have not 
yet made decisions about whether or not they will accept out-
of-state attachment orders, and 2 states have state laws which 
are silent on the issue.

MORE BROKEN PROMISES OF IMPROVED COLLECTIONS FROM FEDERAL LAWS 
AUTOMATION PROBLEMS

    Since the 1984 Child Support Amendment passed, Congress has 
been giving states incentives and funding to put statewide 
computer systems in place. Many deadlines have passed and been 
extended. In the 1988 Family Support Act, states were told to 
have computers in place by Oct. 1, 1995 in order to receive 90% 
federal funding. When only 1 state met this deadline, it was 
extended to October 1, 1997. When only 21 states met this 
deadline, penalties were changed so that states could get 
waivers to penalties if they were making sufficient progress on 
computerization.
    Since 1990 CSNet an intranet communications system for 
state IV-D agencies has been in the process of being set up. 
This would enable state IV-D agencies to email each other 
location requests and case information within a secure Internet 
setting. The system is still not fully functionally after ten 
years of work. Results of CSNet implementation include;
    1 state still does not communicate at all
    2 states communicate with only one state
    29 states communicate with ten or less other states
    9 states communicate with 11-20 other states
    4 states communicate with 21-37 other states
    0 states communicate with all other states
    Additionally, all states and jurisdictions have 
independently designed and developed their statewide automated 
systems. All have various software and hard ware. As the 
certification dates below show, few computer systems were put 
in place at the same time. Therefore, few will need maintenance 
upgrades simultaneously. This causes the systems to be 
expensive to maintain and acts as a barrier to the state 
systems becoming compatible at any given time.
    The Federal Office of Child Support reports the following 
\5\
---------------------------------------------------------------------------
    \5\ Certification Reviews or Child Support Enforcement Systems, 
Division of Child Support Information Systems, January 6, 2000
---------------------------------------------------------------------------
    Montana was the only state to the meet the October 1, 1995 
deadline.
    The October 1, 1997 deadline was met by Delaware 
(conditional), Georgia (conditional), Virginia, Washington, 
West Virginia (conditional), Arizona (conditional), Utah, 
Connecticut (conditional), Wyoming, Mississippi, Louisiana 
(conditional), New Hampshire, Idaho, Colorado, Oklahoma 
(conditional), Wisconsin, Rhode Island (conditional), Guam, New 
York (conditional), Iowa, and Alabama (conditional).
    Certified in 1998: Texas (conditional), 
Arizona(conditional), North Carolina (conditional), New Jersey 
(conditional), Vermont (conditional), Puerto Rico 
(conditional), Maine, Tennessee (conditional), Minnesota 
(conditional), Kentucky, South Dakota, Arkansas, Massachusetts, 
Florida, Missouri, and Hawaii,
    Certified in 1999: New Mexico (conditional), Illinois 
(conditional), Oregon (conditional), Maryland, Pennsylvania 
(conditional), Arkansas
    States NOT Certified (representing 40% of the interstate 
child support caseload): California, Washington DC, Indiana, 
Kansas, Michigan, North Dakota, Nebraska, Nevada, Ohio, South 
Carolina, and the Virgin Islands.
    Conditional Certification for many states is due to the 
inability of their computer systems to correctly distribute 
payments. California has one of the worst problems with 
computerization. The state spend $371 million on a statewide 
system which does not work. Los Angeles was given a special 
waiver by the Federal Office of Child Support to have its own 
computer which would connect to the computer for the rest of 
California. When the California computer system failed, Los 
Angeles had no connection point. A review of the Los Angeles 
computer system determined it had so many problems it was 
unacceptable as the basis for a state-wide system.

Few referrals to the U. S. Attorney General

    States fail to send referrals to the U.S. Attorney General 
for prosecution under the 1992 Child Support Recovery Act and 
the 1998 Deadbeat Parents Punishment Act. Under guidelines 
established by the U. S. Justice Department, state IV-D 
agencies must refer cases to be reviewed for potential 
prosecutions. The Justice Department reports that few cases 
have been referred to them by state IV-D agencies. In an effort 
to increase referrals the Federal Office of Child Support asked 
states to refer cases. States referred 600 due to the is 
request. Also, a program titled, Please Support Our Children 
(PSOC) has been established to assist states in reviewing cases 
to determine if they are appropriate for referral to the U.S. 
Attorney General's office. Families report slow or little 
action at State IV-D agencies on cases with potential for 
federal prosecution. Families report that they are turned away 
at U.S. Attorney offices who insist that cases must be referred 
to them from state IV-D agencies. Because of the lack of 
referrals and the lack of action by the U. S . Justice 
Department, few charges have been filed under the federal 
criminal non-support statue. In 1995, charges were filed on 
only 82 cases. In 1996, charges were filed in 140 cases. In 
1997, charges were filed in 201 cases. In 1998, charges were 
filed in 249 cases of which 134 were guilty, 5 were not guilty 
and 89 were dismissed for payment or Rule 20; and in 1999, 
charges were filed in 396 cases of which 194 were guilty, 1 was 
not guilty and 81 were dismissed for payment or Rule 20. There 
are nine million children owed $14 billion in unpaid child 
support with interstate cases.
Poor Customer Service

    The number one complaint that ACES receives from families 
about state IV-D child support Agencies on our Hot Line is that 
they are provided poor customer service from local agencies. 
Families report that they are victimized by caseworkers who 
tell them, ``what do you expect, you went out and got your self 
pregnant?'' or ``what did you do to make him so mad he won't 
pay?''. See Chart 9, a copy of a poster from a North Carolina 
county child support office which states in part, ``The amount 
of time your individual case will take depends on two things: 
1. The quality of information you provide and 2. The character 
of the person you chose to have as the parent of your child.'' 
Others report that the phones are not answered for hours/day or 
are constantly busy. Few agencies have a system where case 
workers can be left voice mail messages if phones are busy or 
it is after hours. Not even one state has a system for 
notifying clients of actions taken on their case. Families 
report that they are unable to understand quarterly 
distribution notices if received, and that there is no system 
in place for the notices to be explained to them. Families 
report that many IV-D agencies restrict hours when they will 
accept phone calls form families to obtain or give caseworkers 
information. This is a major barrier to families providing 
agencies needed information about location and employment 
status of non-payors. We have not found even one state which 
sends delinquency notices to non-payors when they miss a 
monthly payment.

Liens on property not routinely used

    Only 15 states report routinely placing liens on property 
of non-payors. Twenty six states report that placing liens is a 
difficult and technical legal action.

Suspension/ Revocation of licenses rarely used

    Although proven effective, suspension or revocation of 
professional licenses is rarely used by any state. Also, 
suspension /revocation of fishing and hunting licenses is 
rarely used by states. Most states do not have any effective 
system for recreational license suspension/revocation. Several 
states identify non-payors who buy fishing or hunting licenses 
and ask them to voluntarily report themselves when making a 
license purchase at a local carry out, sporting goods store, 
etc. This has been very ineffective. Colorado recently did a 
study of suspension/revocation of driver's licenses and 
reporting to credit bureaus for failure to pay child support. 
Support collections increased 20% within the first six months 
following notices being sent to non-payors. Only a few states 
have on-going program for drivers license suspension and /or 
credit reporting and often these states only make the threat of 
the action . Thousands may receive notices of potential 
suspension but only a small percentage are actually suspended.

Problems with Payment Distributions to families or to pay off 
welfare debt

    Payment distribution problems, especially with the 2-day 
distribution requirement, have been reported in 14 states 
without SDUs. There are problems in 40 states if the case 
involves more than one county or more than one state. ACES 
members report problems in all states determining correct 
amount of support due to the family and the correct amount due 
to pay-off a welfare debt. This is an especially a serious 
problem in Florida and California.

Expedited Process and Federal Timeframes are not being followed 
by state IV-D agencies

    ACES members report a 1-3 year wait to establish paternity, 
2 years to establish an order, 6-9 months for an income-
withholding, 6-9 months for court hearing, 1-3 years for 
modification, 5 years for medical support establishment and/or 
enforcement, 1 year for a Federal Parent Locator to be done, 
and 1-2 years for action on interstate cases.\6\
---------------------------------------------------------------------------
    \6\ ACES annual membership survey (1999).

---------------------------------------------------------------------------
Lack of adequate controls and monitoring of private contractors

    Many of the State Government Child Support Agencies 
currently have contracts with private companies to perform many 
different child support program functions. ACES looked at 
several projects states have undertaken to improve their child 
support programs in hopes of finding a model that all states 
could use. We were hopeful that privatization would be the 
solution families so desperately need but, unfortunately, we 
have not found this to be the case. The child support agencies 
that are run by private companies are not performing any better 
than the state-run agencies. For example, Policy Studies 
Incorporated (PSI) ran a full-service Child Support Office in 
Douglas County, Nebraska, for a cost of $15.7 million in 1997. 
They had a caseload of 45,600, of which only 9,857 cases 
received a payment, for a 22% collection rate. In the other 97 
Nebraska counties, the child support agencies run by the 
government had a 21% collection rate in that same year. In 
Arizona, PSI operated child support agencies in two counties, 
Yavapai and Santa Cruz, at a cost of $3 million. The total 
caseload at that time in both counties was 10,100, of which 
1,777 cases received a payment, a 17% collection rate. The 
Arizona state-run agencies had a 14% collection rate that same 
year.
    In Mississippi, Maximus operated full-service child support 
agencies in Hinds and Warren counties, at a cost of $4 million. 
The caseload at that time was about 35,000, of which 3,385 
cases received a payment. This is an 11% collection rate. The 
Mississippi counties whose child support program is run by the 
government agencies had a 14% collection rate that same year. 
In Tennessee's four judicial districts, a project was run by 
Maximus at a cost of $2.3 million. We found the overall Maximus 
collection rate to be 11% compared to 14% for the whole state 
that same year.
    In Maryland, Lockheed Martin IMS operated a full-service 
child support agency in Baltimore City and Queen Anne's County 
at a cost of $70 million. The caseload for both agencies is 
214,299, of which 23,979 cases received a payment, an 11% 
collection rate. Agencies operated by the state government in 
Maryland averaged a 23% collection rate in the same time 
period. In Virginia, Lockheed Martin IMS operated full-service 
child support agencies in Chesapeake and Hampton Counties and 
were paid $7 million. The caseload is 31,161, of which 7,767 
received a payment, a 23% collection rate. The other Virginia 
counties operated by government agencies have a 23% collection 
rate. We are concerned not only about the poor collection 
performances but with the high cost of privatization. Lockheed 
Martin IMS received seven times more money in Maryland as it 
did in Virginia for doing exactly the same type of work.
    Some of the companies that are collecting child support for 
the state are paid on a commission basis, predicated on the 
actual dollar amount collected. We have found that this results 
in these private companies placing more resources and energy 
into getting those who are paying to pay more rather than 
pursuing those who do not pay at all. ACES believes the highest 
level of resources and energy should be placed on getting all 
parents to pay their fair-share rather than on getting a few to 
pay more.
    Another problem we have noticed is that private vendors 
appear to vary prices charged for the same services provided. 
In the past, PSI charged Ohio $22,130, Pennsylvania $34,190, 
West Virginia $20,082, South Dakota $11,800, Arkansas $10,000 
and Rhode Island $7,000 to review and update their child 
support guidelines. States seem to be unaware of the usual 
market price for services to be provided by private vendors.
    A June 1997 GAO report entitled Child Support Enforcement--
Strong Leadership Required to Maximize Benefits of Automated 
Systems found that the Federal Office of Child Support did a 
very poor job monitoring what was happening with private 
vendors who had contracts for the providing statewide child 
support computer systems. The same thing can happen when states 
hire private vendors for child support enforcement services.
    ACES members in all of the states using private companies 
to run a child support enforcement program report that they 
were unaware that a private company was responsible for taking 
action on their cases. Many also experienced problems trying to 
find which government agency is responsible for monitoring the 
private company so they can complain if they are having 
problems with services. Families with cases at privately run 
child support agencies that are not receiving services cannot 
determine who to hold accountable for lack of services.
    ACES has found some private child support enforcement 
services very effective and beneficial to families. Central 
payment registries run by banks who collect and distribute 
payments are especially effective. The Massachusetts system 
works very quickly and accurately. Our members report their 
arrearage records are kept correctly and they can count on 
regular checks being processed. Georgia has a long positive 
history of turning over public assistance arrears-only cases to 
private companies who are paid only if they collect on the 
case. This system has recovered millions of dollars owed to the 
state. Use of private companies to act as consultants for 
improvements in the child support system to set up better 
procedures for establishing paternity and developing New Hire 
registries has been effective in some states.
    The success and assistance that some private companies 
provide to the government child support agencies in locating 
absent parents have been successful and are needed. There are 
many legitimate and beneficial uses of privatization of some 
government services. The issue appears to be which services are 
appropriate to be privatized and which should remain within the 
government as part of the public trust.

HR 1488 BUILDS ON STATE GOVERNMENT STRENGTHS

    States have made progress establishing paternity especially 
through hospital and voluntary acknowledgment programs. The 
number of paternities established have risen from 554,00 in 
1993 to 1,290,000 in 1997. In-hospital paternities make up 
about 33% of all paternities established. As of the end of 
1997, 55.9% of the child support collections were from wage-
withholding. States who have had a system to attach wages at 
the time of hiring showed the most significant increases in 
collections via income-withholding.
    The investment in state automated systems would not be 
wasted under HR 1488. States would use already existing 
computer systems to track and establish cases and then 
interface with the IRS as they assume the responsibility for 
the Federal Parent Locator System's New Hire Directory and 
Federal Case Registry.
    Problems with State Distribution Units could be corrected 
by having local banks take over responsibilities of payment 
processing via Electronic Funds Transfer directly from 
employers who would deposit payments at the bank just like they 
deposit taxes withheld from a payroll. Other local payment 
collection sites could be made available if they have access to 
Electronic Funds Transfer payments. By piggy-backing the 
collection system onto the tax payroll collection system, we 
maximize the chances of collecting support from parents who are 
working and have the ability to pay.
    States would continue to need workers to process paternity 
and establishment cases and to handle case modifications. Other 
enforcement workers would be needed to work in the IRS Child 
Support Division. Concerns about workers being displaced are 
unfounded. The current caseload for most state workers is about 
800 per worker, even with 50% of the cases there will be plenty 
of work for years. Failure to improve the child support system 
due to fear of loss of state jobs would be like refusing to 
reform the welfare system because success would mean fewer 
families on welfare and a need for fewer welfare workers.
    HR 1488 is needed because even states with aggressive 
enforcement programs have not been able to collect support for 
the majority of parents who owe it. For example, in 1998, in 
Virginia, there are about 414,000 cases. Collection were made 
on 94,124 cases. This is a 23% collection rate. In 1999, 
collections were $347 million with an accumulated $1.65 billion 
due. Almost 60% of Virginia's cases have orders, one of the 
highest rate in the nation. Virginia has an aggressive 
collection program called Kids First. They have booted cars of 
70 parents who were delinquent in payments, use Most Wanted 
Posters, have round-ups of non-payors, and suspend driver's 
licenses. Virginia set-up one of the first statewide, automated 
child support enforcement systems, was one of the first states 
to have a state New Hire Reporting, and has an award-winning 
in-hospital paternity establishment program. The non-payment 
rate in Virginia for all cases, those with and with out orders 
is 88%; for cases with orders it is still 66%.
    In 1998, Vermont had 27,022 cases of which 12, 123 received 
payments. They collected almost $40 million and about 45% of 
the cases received payments in 1998. Collections have steadily 
increased since 1992. Even with one of the nation's lowest 
caseloads (in comparison, Toledo, Ohio's caseload is 60,000 
cases), collection rates are not near the employment rate. 
Vermont has programs for suspending fishing and hunting 
licenses and attaching bank accounts. Vermont lists is largest 
problems as collections on interstate cases and from the self-
employed.
    Los Angeles, California, with one of the worst track 
records for child support enforcement in the U.S., has shown 
some improvement. There are about 650,000 cases, of which about 
400,000 do not have child support orders; only 10% of the cases 
received a payment last year. Los Angeles established paternity 
for about 50,000 families last year through a controversial 
program of default hearings for absent parents who don't 
attend. Families report that most of these cases eventually get 
thrown out of court due to service-of-process issues and the 
constitutional right to notice and hearing. Absent parents 
raise these issues years after default orders are entered, 
resulting in wiping out the default order. Often the support 
order entered is also based on last known earning so they are 
often too low or too high. The county reported an increase in 
receipt of locate information on cases, from 238,776 to 711,789 
but follow-up action is taken on less than 20% of the locate 
leads.
    In a recent study of U.S. Census Current Population data 
done by the Urban Institute, it was shown that California has a 
lower collection rate than the rest of the nation and that Los 
Angeles is even lower. See Chart 10. Nationally, single-
mothers, both IV-D and non-IV-D, receive support in 31% of the 
cases--28% in California, and in only 24% in Los Angeles.
    Because of the many problems with the California child 
support enforcement system under the county District Attorneys 
the California enacted a new law 1999 which established a 
Statewide child support agency. District Attorney's offices 
will begin to transfer child support case to the new agency in 
2001.

HR 1488 ESTABLISHES A FEDERAL/STATE PARTNERSHIP WHICH WILL 
STRENGTHEN THE CHILD SUPPORT ENFORCEMENT PROGRAM

    By adding the expertise of the Internal Revenue tax 
collection system to the state child support enforcement 
program, children will receive all needed services. States 
continue to have an important local role in establishing 
paternity, establishing and modifying support orders. The 
states role is strengthened because they can focus on tasks for 
which they have established expertise. Adding child support to 
tax collection by the IRS will ensure improved collections via 
payroll deductions. The IRS is not limited by state lines like 
the current system. The IRS currently collects 83%of taxes from 
payroll deductions (see Chart 4). The IRS has a system in place 
to collect from the self-employed through FICA. Currently, 
state IV-D programs have no system effective in collecting from 
self-employed non-payors. The IRS collected $1,623,272,071 from 
268,495,000 tax payers in 1998. It was able to attribute 
payments to the taxpayer accounts and reconcile them at the end 
of the year. The IRS reports that 83% of Americans pay taxes. 
Of the 17% who do not pay, it is due to non-filing of tax forms 
or under-reporting.
    The IRS has a reputation for being an aggressive collector. 
This would lead to more voluntary compliance with child support 
orders and encourage voluntary acknowledgment of support 
obligation due upon being hired and completing W2 forms.
    The IRS has a proven track record in collecting child 
support through the IRS Offset Program. Collection under this 
program has increased from $205 million in 1984 to $1.33 
billion in 1998, a 634% increase.
    The IRS has recently enacted a Taxpayers Bill of Rights 
which could be easily modified to include child support 
enforcement issues. It includes sections on:
     I. Protection of Your Rights
     II. Privacy and Confidentiality
     III. Professional and Courteous Service
     V. Payment of Only the Correct Amount of Tax
     VI. Help With Unresolved Tax Problems
     VII. Appeals and Judicial Review
     VIII. Relief From Certain Penalties and Interest.
    Other IRS customer Service improvements include expanded 
information services beyond the traditional telephone and walk-
in assistance to include a web site, telefax--offering forms 
and instructions by return fax--and a CD-ROM disk with forms 
and publications. Beginning January 5, 1998, the live 
assistance lines have been open 7:00 A.M. to 11:00 P.M., Monday 
through Saturday.
    The IRS has a system to identify citizens who do not pay 
their taxes. This could be expanded to identify those who fail 
to meet court-ordered child support obligations. The IRS 
identifies possible non-filers in two ways. The first way looks 
for taxpayers who stop filing tax returns. They are identified 
through an annual computer matching program. The second way 
looks for citizens who have never filed a tax return. This is 
achieved through the IRS information returns program. Every 
year, payers of any type of income have to report to the IRS 
the amount of that income and to whom it is paid. Each year, 
the IRS receives about 750 million of these information returns 
reporting interest, dividends, stock sales, gambling winnings, 
mortgage interest paid, etc. These documents are sent directly 
to the IRS by banks, insurance companies, casinos, and state 
governments. The IRS also receives wage information from the 
Social Security Administration where about 250 million W2 forms 
are processed each year. If these information returns reflect 
enough income that a citizen should have filed a tax return, 
but did not, the IRS sends the taxpayer a notice. This notice 
asks that the taxpayer either file the return, or explain why 
he or she doesn't need to file. If the taxpayer doesn't 
respond, the IRS sends a secondnotice. In Fiscal Year 1996, the 
IRS sent out non-filer notices to 1.3 million taxpayers. Many 
taxpayers respond when they receive these notices. In FY 1995 
and 1996, taxpayers filed more than 620,000 returns after 
receiving non-filer notices. Other taxpayers call the IRS after 
receiving such a notice because they don't have the money to 
pay. In many of these cases, the IRS sets up a payment 
agreement. From FY 1992 to FY 1996, collections from 
installment agreements increased from $2.28 billion to $6 
billion.
    In June of 1999, Congress released $35.1 million as the 
first installment for modernizing the Internal Revenue Services 
massive computer system. The move followed a rigorous review 
process, which included a new General Accounting Office report 
praising the IRS initial effort on computer modernization. 
``This represents a vote of confidence in our efforts to 
overhaul IRS computers and create a state-of-the art system 
designed to deliver top-quality service to taxpayers,'' IRS 
Commissioner Charles O. Rossotti said.
    The IRS alleviates privacy issues associated with passing 
sensitive social security and financial information between 
many agencies and a private contractor hired by government is 
worrisome. It is almost impossible to ensure confidentiality 
when states have county child support agencies and contracts 
with private collection companies. Literally, any child support 
worker in the county could gain access to sensitive financial 
information that is essential for successful child support 
enforcement. The IRS already has this information listing place 
of employment and income. They have a proven track record of 
maintaining confidentiality
    Also, ACES hopes that members of the Sub-Committee on Human 
Resources will support HR 816 sponsored by Representative 
Christopher Cox. HR 816 brings fairness to the tax code's 
treatment of child support payments. It gives parents a strong 
financial incentive to pay child support in full and on time by 
adding unpaid child support onto gross income thereby 
increasing tax liability. It provides families owed support tax 
relief by allowing them to deduct unpaid child support from 
income as a bad debt. It is estimated that HR 816 will raise 
$394 million in revenue more than ten years.
    It is time to make children as important as taxes in this 
nation. If the committee is unable to embrace HR 1488 in it's 
entirely, ACES recommends that the bill be at least enacted in 
ways that sets up IRS collection via payroll deduction in 
interstate cases and from the self-employed. Or at the very 
least, if states are given ``one more chance'' to improve, it 
be time-limited, and they be required to meet the standards of 
the IRS, such as state IV-D collection must be at the 83% 
collection rate by 2002 or HR 1488 is automatically enacted.
    Please act today to help our children. We need support 
now--the rent is due and we need to buy them food. We have lost 
one generation. Please, no more.
    ACES, The Association For Children For Enforcement of 
Support Inc., does not receive any Federal or State government 
funding
                                Geraldine Jensen, President
[GRAPHIC] [TIFF OMITTED] T1291.001

[GRAPHIC] [TIFF OMITTED] T1291.002

                            IV-D Collections

    Number of Cases: 19,419,449
    Dollars Collected: $14,347,706,681 ($14.3 billion)
    $25 in costs for every $100 collected
    55.5% from payroll deductions

  1999 IV-D Child Support Collection: $15.5 Billion. The dollar collection are increased at about time the same
rate the year before PRWORA and in the two years since ints enactment. (1997-$13.1 billion; 1998--$14.3 billion)
                   1998 Child Suport Statistic (Preliminary--Federal Office of Child Support)
----------------------------------------------------------------------------------------------------------------
           State                       #Kids                     $Amount Owed               Collection Rate
----------------------------------------------------------------------------------------------------------------
               Alabama                     695,236                 $1.2 Billion                         21%
                Alaska                     112,616                 $475 Million                         25%
               Arizona                     624,993                 $1.7 Billion                         21%
              Arkansas                     425,474                            *                         25%
            California                   3,976,190                Not Available                         28%
              Colorado                     411,213                   $1 Billion                         20%
           Connecticut                     482,556                 $853 Million                         19%
              Delaware                     115,204                 $229 Million                         28%
        Dist. of Col.a                     203,085                 4184 Million                         14%
               Florida                   1,865,632                Not Available                         17%
               Georgia                   1,008,930                 $1.2 Billion                         33%
                  Guam                      18,914                Not Available                         21%
                Hawaii                     129,395                 $163 Million                         23%
                 Idaho                     165,714                 $359 Million                         19%
              Illinois                 1.4 Million                Not Available                         12%
               Indiana                     653,524                 $707 Million                         15%
                  Iowa                     394,726                            *                         25%
                Kansas                     275,131                 $563 Million                         37%
              Kentucky                     597,584                 $1.3 Billion                         19%
             Louisiana                     632,207                 $414 Million                         18%
                 Maine                     132,963                 $434 Million                         44%
              Maryland                     608,678                 41.6 Billion                         29%
         Massachusetts                     454,947                 $1.3 Billion                         29%
              Michigan                 3.3 Million                 $4.5 Billion                         19%
             Minnesota                     510,030                Not Available                         40%
           Mississippi                     549,744                 $698 Million                         14%
              Missouri                     770,491                 $1.5 Billion                         14%
               Montana                      78,549                 $222 Million                         31%
              Nebraska                     230,699                 $244 Million                         31%
                Nevada                     159,820                Not Available                         25%
         New Hampshire                      97,568                 $303 Million                         40%
            New Jersey                     917,228                 $226 Million                         28%
            New Mexico                     147,998                Not Available                         11%
              New York                 2.5 Million                Not Available                         20%
        North Carolina                     988,362                 $1.4 Billion                          7%
           Nort Dakota                      77,487                            *                          7%
                  Ohio                 1.8 Million                 $3.7 Billion                         34%
              Oklahoma                     255,475                 $148 Million                         19%
                Oregon                     508,787                 $919 Million                         23%
          Pennsylvania                 1.6 Million                 $2.2 Billion                         25%
           Puerto Rico                     431,634                 $698 Million                         23%
          Rhode Island                     137,670                 $251 Million                         17%
        South Carolina                     415,782                 $581 Million                         32%
          South Dakota                      63,610                 $160 Million                         36%
             Tennessee                     945,491                Not Available                         19%
                 Texas                 2.3 Million                 $6.9 Billion                         20%
                  Utah                     207,597                 $670 Million                         31%
               Vermont                      51,341                 $125 Million                         45%
        Virgin Islands                      53,433                  $44 Million                          6%
              Virginia                     788,235                 $379 Million                         23%
            Washington                     767,909                 $1.2 Billion                         40%
         West Virginia                     235,639                 $181 Million                         24%
             Wisconsin                     903,189                Not Available                         27%
               Wyoming                     112,331                 $315 Million                         19%
                 Total                  30 million                  $50 Billion                         23%
----------------------------------------------------------------------------------------------------------------

                            IRS Collections

    Number of Taxpayers 268,495,000
    Dollars Collected $1,623,272,071 ($1. 62 Trillion)
    $0.44 in costs for every $100 collected
    83% from payroll deduction
    [GRAPHIC] [TIFF OMITTED] T1291.003
    
    [GRAPHIC] [TIFF OMITTED] T1291.004
    
    [GRAPHIC] [TIFF OMITTED] T1291.005
    
                              IV-D Summary

     New Hire reporting leads to payroll deduction in 
some cases
     No system for collectinig from self-employed
     Lowest collection ratefor interstate cases
     26 states don't accept interstate bank account 
attachment orders
     40% of the child support caseload is not automated
     Poor track record for customer service
     Poor track record on collections; rarely use liens 
on propertly, license revocation, referrals to the U.S. 
Attorney General, and problems with new SDU's

                              IRS Summary

     New Hire reporting: payroll deduction in almost 
all cases
     Collectioin system for self-employed taxpayers
     Interstate cases not an issue
     Bank account attachments routinely ordered: 
544,000 in 1997
     Recnt automation improvements
     New customer service improvements: Taxpayer Bill 
of Rights
     Good track record on collections: 83% citizens pay 
taxes (17% are non-filers)

  We also asked the states for the amount of undistributed/unidentified
 child support payments as of December 1998 because they did not have a
                current address of the custodial parent.
------------------------------------------------------------------------
                                                          UNIDENTIFIED
      STATE        NUMBER OF MATCHES   RESULTS OF THE    CHILD PAYMENTS
                                           MATCHES       AS OF 12/31/98
------------------------------------------------------------------------
       Alabama     The computer does  Computer does
                   not tabulate the   not tabulate the
                       numbers of         number of
                          matches           matches
        Alaska      Not available     Not available     $3,967,484.21 as
                                                             of 12/98
       Arizona      Not available     Not available        $2,535,727
      Arkansas      First reports     Data unavailable       $149,000
                    received 3/99
    California      California is     As California is  '' Following the
                   currently unable         a state     Public Records
                   to submit data to    supervised,       Act request
                     the National        county run     CDAA's Office of
                   Directory of New   operation, we at  Child support
                   Hires due to lack  the state level   has no data on
                   of automation.     are unable to        the dollar
                   To compensate for  track how the         amount of
                   this inability,    county Family     undistributed
                   OCSE conducted a   Support Division  child support
                    one time data     uses the data.    payments. We are
                   match of New Hire                    not required to
                   records with the                     report any such
                   69,811 Tax Refund                    information to
                   Offset requests                        the Federal
                   sent for the 1997                    OCSE, and do not
                        Tax Year.                        collect this
                   New Hire Matches:                    information from
                            6,162                       the counties''
                   Quarterly Wage:                                   Los Angeles
                           19,301                       County reports
                     Unemployment                         $10,000,000
                   Insurance: 2,710
                   Of the 422,735
                   cases processed
                      through the
                   Federal Parent
                                 Locator Service
                   for 10/97-5/98,
                          102,999
                       delinquent
                       California
                     parents were
                   matched to non-
                       California
                        employers
   Connecticut        No response       No response          $385,302
   District of     12,400 for 1998          Unknown        $1,376,298
       Columbia
      Delaware     ``State computer      6,000 wage        $2,040,215
                   does not process     withholding
                     matches from     notices sent out
                   federal registry,  since 1/29/99,
                       being done     impossible to
                     manually. No     tell which are
                   records available  from state new
                     of number of     hire data and
                        matches''        which from
                                      federal new hire
                                               data
       Florida        No response       No response             ``Our
                                                        undistributed
                                                        balance includes
                                                        receipts that
                                                         are awaiting
                                                        normal monthly
                                                        processing as
                                                        well as those
                                                        which require
                                                           additional
                                                            research.
                                                        Unfortunately,
                                                          neither the
                                                        Florida Online
                                                            Recipient
                                                        Integrated Data
                                                             Access(FLORIDA)
                                                        computer system
                                                         or the State
                                                            Automated
                                                           Management
                                                           Accounting
                                                            Subsystem
                                                          (SAMAS) can
                                                        differentiate
                                                        between these
                                                                 two.
                                                        Consequently, we
                                                        cannot provide a
                                                             specific
                                                        delineation of
                                                          those funds
                                                        which are being
                                                         held pending
                                                           additional
                                                          research.''
       Georgia     As of April 1999,  Not successfully       $966,403
                      ``Georgia's     interfaced with
                   system has not     federal New Hire
                     successfully      information.
                   interfaced with
                   the federal New
                             Hire
                   information.''
          Iowa             12,887     30% resulted in     $712,330 in
                                             income     undistributed
                                       withholding,     collections of
                                      does not track    IV-D families
                                             orders     whose addresses
                                       established,          were not
                                      paternity, or     verified. In a
                                              other     typical month,
                                      administrative    the percentage
                                        or judicial       of payments
                                        enforcement     processed that
                                                        are held until a
                                                        IV-D family's
                                                           address is
                                                        verified is .06%
       Indiana     Not available at   Not available at    No response
                     current time      current time
        Kansas     94,418 with state  Unknown, don't    $528,931, ``this
                         new hire             track     includes money
                     registry. We                          eventually
                   don't know how                       retained by the
                   many matches were                    state as well as
                      made at the                       money due to the
                   national level                       family. We do
                   and sent to us                       not track the
                      through the                       reason the money
                   Federal Parent                        could not be
                                 Locator Service        distributed.''
      Kentucky            115,343     System does not      $1,726,981
                                        gather this
                                        information
              LouisWe receive around  Information not         $60,825
                   50,000 records         available
                   each month, of
                   these we match
                   about 7% or 3,500
      Maryland             10,958     Support Orders:        $228,244
                                              2,164
                                             Income
                                      Withholdings:
                                              8,493
                                              Court
                                       Enforcement:
                                      7,473* (totals
                                          more than
                                          received)
      Michigan     ``We do not have   ``We do not have   As of 12/98,
                   this information   this information   $21,974,063,
                     available in      available in     This amount is
                       Michigan''        Michigan''     in the process
                                                        of being revised
                                                           due to the
                                                        submission of
                                                           additional
                                                           collection
                                                        reports by the
                                                        offices of the
                                                        Friend of the
                                                                Court
     Minnesota            Unknown           Unknown     $255,632 unknown
                                                           address of
                                                            custodial
                                                        parents, 43,673
                                                           interstate
                                                        cases, unknown
                                                         case numbers
   Mississippi            101,286     ``8,544 matched     No response
                                      our records. We
                                      receive employer
                                      name and address
                                      for NCP, which
                                            is very
                                          helpful''
       Montana     172,686 (state     Does not have          $295,208
                   and federal new      information
                    hire matches)
      Nebraska                901     Does not have       No response
                                        information
        Nevada     Statistical data   Statistical data       $121,835
                   is not kept on     is not kept on
                          matches           matches
  North Dakota     31,968 reports      Not tracking       No response
                   received; 1,410          results
                          matches
North Carolina            142,967        381 orders     $7,862,986 total
                                       established,      consists of:
                                      order data not      $3,857,585:
                                          available          futures;
                                                            $390,922:
                                                        canceled checks;
                                                        $508,725: hold
                                                        transactions;
                                                        $583,794: hold
                                                            accounts;
                                                              $2,490:
                                                        adjusted. not
                                                            approved;
                                                         $125,251: no
                                                        mail address;
                                                            $962,692:
                                                        miscellaneous;
                                                             $16,672:
                                                         unidentified
                                                               payor;
                                                           $1,414851:
                                                         agency level
          Ohio             98,437     Not a federal     $10,897,870 IV-D
                                      requirement to        funds and
                                         track this     $677,141 non-IV-
                                        information          D Funds;
                                                        $15,561,361 as
                                                              of 9/99
      Oklahoma     4,158 received     Not available       No response
         Texas       1.34 million     Unable to track   As of December
                          matches       results, in             1998,
                                         process of     $16,298,991, of
                                         automating     this $3,179,002
                                                            is due to
                                                              unknown
                                                         addresses of
                                                            custodial
                                                             parents,
                                                            $6,361291
                                                        undistributed as
                                                           of 3/26/99
     Tennessee     We sent our test   Did not track       No response
                   load of 500 cases        results
                     and received
                   matches of 16,
          Utah             12,441     ``We do not have       $268,313
                                           computer
                                      capability to
                                            track''
       Vermont              5,010             Still     $1,434,499 as of
                                        determining       12/98; this
                                                             includes
                                                        contested tax
                                                        intercept money
                                                          and 2 month
                                                        delay on EOG's
      Virginia             57,000      Have not yet     $40,900 due to
                                        studied the     unknown address
                                            results      of custodial
                                                              parents
    Washington     23,722 total, 10/  Washington does      $3,036,757
                   98: 9,049; 11/98:            not
                    8,796; 12/98:     technologically
                            5,877     link New Hire
                                      data to child
                                         support or
                                          payments.
                                            Current
                                         electronic
                                      tracking methods
                                      are inaccurate
                                      and unreliable.
                                      Resources not
                                      available to do
                                      manual tracking
     Wisconsin        35,911 NCP*            Income        $3,168,757
                          matches       withholding       accumulated
                                            25,000,     since 10/1/96 of
                                      approximately,    which $1,761,472
                                      based on worker   is held because
                                      estimates of 75%     of unknown
                                                        custodial parent
                                                              address
------------------------------------------------------------------------

                                                        [GRAPHIC] [TIFF OMITTED] T1291.006
                                                        
                                                        [GRAPHIC] [TIFF OMITTED] T1291.007
                                                        

                                


    Chairman Johnson. Thank you.
    Mr. Alexakis.

 STATEMENT OF ART ALEXAKIS, MEMBER, EVERCLEAR, WEST HOLLYWOOD, 
                           CALIFORNIA

    Mr. Alexakis. Good morning. My name is Art Alexakis, and I 
am the lead singer, guitar player, director and producer of a 
popular rock band by the name of Everclear. We have been 
nominated for Grammy Awards and have sold millions of records 
worldwide, but I am not here to talk to you about my musical 
accomplishments, I am here to tell you about my experiences as 
a child who grew up without child support, and tell you what a 
different life I would have had if H.R. 1488 had been in 
existence when I was a child.
    When I was 6 years old, my mother left my father because he 
physically and emotionally abused her. We lived in California 
and my father moved to Florida. In Florida at that time, back 
in the late sixties, there was no law to allow nonpayers of 
child support to be extradited, so he hid there and was never 
made to pay child support. To this day, he has never paid a 
dime in child support.
    By the way, my father was an aerospace engineer. He made 
more than a decent living, he could have paid child support. He 
did it out of hurt because my mother left him. And, 
incidentally, my mother put him through engineering school 
before he left.
    I was the fifth of five children. My mom gave us all she 
could financially and emotionally, but life was really very 
hard for all of us. When I think of a hero, I think of my 
mother. People ask me who my hero is. I am kind of a famous 
person, so I think people expect me to name musicians or actors 
or someone like that, but my idea of a hero is my mom. She 
taught me tenacity and to be a goof person, even when it is 
hard to be. I am only at where I am in life because of my 
mother. I only talked to my dad three or four times a year, 
growing up. I didn't see him again after he left until my 
brother died of a drug overdose when I was 12. He was 21.
    My parents owned a house together when they were married, 
but my dad refused to sign it over to my mom after the divorce. 
Since he wouldn't help us out with child support or sign over 
the house, we lost the house. It wouldn't have cost him 
anything, all he had to do was sign it over to my mother and he 
refused to do that. We moved to a housing project, which was 
the only place my mom could afford at the time. My life grew 
even harder. I swore then that when I grew up and had children, 
that I would never abandon them or let this happen to them.
    This experience, along with the experience of having a 
child--I have a seven and a half year old daughter, Annabella--
affected me so much that I wrote a song about it. It is called 
Father of Mine, and it talks about, among other things, how my 
dad would send me a birthday card with a $5 bill, but that was 
the only time I heard from him growing up, basically. He didn't 
understand, or he said he didn't understand, how he was hurting 
me by no supporting me.
    There is a line in the song that says ``My daddy gave me a 
name, and then he walked away''. I think it is a really 
terrible kind of emotional abuse when parents neglect the 
innocent little people of this world that they created by not 
providing the necessary food, shelter and clothing that these 
children cannot provide for themselves.
    Apparently my song touched so many others, mostly kids, who 
were abandoned like me and could relate to my song, that my 
song did very well. It sold well over two million records, and 
it went to Number 3 on the radio charts. It seemed to have 
touched a nerve with people because there are millions of 
people out there, millions of kids out there--and not just 
kids, people in their thirties and forties--I am almost 40 
years old--who, like me, know who their father is, but don't 
know their father. And in a lot of cases, to be fair, there are 
a lot of deadbeat moms out there who aren't owning up to their 
responsibilities, as well.
    It is a cycle of abuse that needs to stop now. We have to 
stop the cycle of abuse. We cannot let another generation, as 
Geraldine said, grow up thinking that it is acceptable not to 
support your children.
    If H.R. 1488 were a law when I was a kid, my life would 
have been very different. It would have meant a steady stream 
of income for my mom, and she wouldn't have had to work so hard 
to support us. Maybe we could have kept the house, and maybe I 
wouldn't have gotten beaten up so much because I lived in a bad 
neighborhood. Maybe I would have had a relationship with my dad 
because he would not have had anywhere to hide, so he wouldn't 
have tried hiding.
    Too many kids see their parents getting away with not 
having to pay support. When I was a kid, I knew my dad didn't 
have to pay and I learned that deadbeat dads and moms can get 
away with it. If we pass this bill, we will end this ability 
for parents to be able to get away with not paying. We will 
teach kids and a whole new generation a new lesson. Kids will 
learn that when you have children, you have to be responsible 
for them, then they will think that they have to pay, so they 
are entitled to have a relationship with those children, that 
it is a privilege to have a relationship with their own 
children.
    People will learn this because we will use the muscle of 
the IRS to teach them. Most folks know that you don't mess 
around with the IRS or the punishment will be severe. Some 
people only respond to being forced into taking action. We have 
to protect our children, America's children. We have to fight 
for the people who can't fight for themselves. That is kind of 
what being an American is all about. Thank you.
    [The prepared statement follows:]

Statement of Art Alexakis, Member, Everclear, West Hollywood, 
California

    Good Morning. My name is Art Alexakis, and I am the lead 
singer, guitar player, director and producer of the grammy 
award winning rock and roll band, Everclear. But I'm not here 
today to tell you about my rock and roll accomplishments. I'm 
here to tell you about my experiences as a child who grew up 
without child support, and tell you what a different life I 
would have had if HR 1488 had been in existence when I was a 
child.
    When I was 6 years old, my mom left my father because he 
physically abused her. We lived in California and my father 
moved to Florida. In Florida at that time there was no law to 
allow non-payors of child support to be extradited, so he hid 
there and was never made to pay support.
    I was the fifth of five children. My mom gave us all she 
could financially and emotionally, but life was very, very 
hard. When I think of a hero, I think of my mom. I'm only where 
I'm at in life because of my mom. I only talked to my dad 3 or 
4 times a year, tops. I didn't see him again after he left 
until my brother died when I was 12.
    My parents had a house together, but my dad refused to sign 
it over to my mom after the divorce, and the state of Florida 
wouldn't help us. Since he wouldn't help out with child support 
and he wouldn't sign over the house, we lost the house. We had 
to move to the projects. My life became even harder. I swore 
that when I grew up and had children, I would not abandon my 
children.
    This experience hurt me so much that I wrote a song about 
it. It's called ``Father of Mine'' and it talks about how 
sometimes he would send me a birthday card with a five dollar 
bill, but he just didn't understand how he was hurting me by 
not supporting me. It says ``My daddy gave me a name, and then 
he walked away.'' I think that it is a terrible abuse when 
parents neglect the innocent little people of this world that 
they created by not providing the necessary food, shelter and 
clothing that these little people cannot provide for 
themselves.
    My song touched so many others, mostly kids, who were 
abused like me and could relate to my song, that my song went 
to number five on the billboard charts. My album went double 
platinum. That tells me that there are millions of kids out 
there who are angry with their parents and forced into poverty 
because of non-support. We have to stop this cycle of abuse. 
Now. We cannot let another generation of children grow up 
thinking that it is acceptable not to support your children.
    If HR 1488 were law when I was a kid, my life would have 
been very different. It would have meant a steady stream of 
income for my mom, and she wouldn't have had to work so many 
jobs to support us. Maybe we could have kept the house, and I 
wouldn't have gotten beaten up so often because I lived in a 
bad neighborhood. Maybe I would have had a relationship with my 
dad, because he would not have had anywhere to hide, so he 
wouldn't have tried hiding.
    Too many kids see their parents getting away with not 
having to pay support. When I was a kid, I knew my dad didn't 
have to pay and I learned that dads can get away with it. If we 
pass HR 1488, we will end this ability for dads to be able to 
get away with not paying. We will teach kids a new lesson. Kids 
will learn that when you have children, you have to be 
responsible for them. Then they will think that they have to 
pay, so they are entitled to have a relationship with those 
children.
    People will learn this because we will use the muscle of 
the IRS to teach them. Most folks know that you don't mess 
around with the IRS or the punishment is severe. Some people 
only respond to being forced into taking action. We have to 
protect our children. America's children. We have to fight for 
the people who can't fight for themselves. We can't close our 
eyes anymore, and sometimes to do this we have to put ourselves 
in uncomfortable situations to clean things up. Its time for us 
to do that now, for our kids. Please support the passage of HR 
1488.
            Thank you.

                                

    Chairman Johnson. Thank you very much for your testimony.
    Mr. Doss.

  STATEMENT OF WAYNE D. DOSS, DIRECTOR, LOS ANGELES BUREAU OF 
   FAMILY SUPPORT OPERATIONS, COMMERCE, CALIFORNIA, AND PAST 
   PRESIDENT, GOVERNMENT RELATIONS COMMITTEE, NATIONAL CHILD 
                SUPPORT ENFORCEMENT ASSOCIATION

    Mr. Doss. Good morning, Madam Chair and Mr. Cardin. Thank 
you for allowing me to be here this morning. I appreciate the 
fact that these comments will be in the record because I want 
to depart from them to some degree to talk about this bill and 
some of the concerns that have been raised this morning.
    Let me begin by saying that all of us in the National Child 
Enforcement Association, which organization I am here to 
represent this morning, appreciate the efforts that Mr. Hyde 
and Ms. Woolsey have placed on child support enforcement in 
terms of priority. Whatever agreements we have, or 
disagreements we have, with respect to the merits of their 
proposal, there is no question that they are committed to the 
well being of the nation's children, and we share that 
commitment with them.
    We also appreciate the fact that their bipartisan approach 
to this problem is emblematic of the bipartisan approach that 
Congress has taken over the many years that it has been 
involved in this program.
    Having said that, I have to say that we have some 
significant variations in agreement with respect to this 
proposal. First and foremost, I think it needs to be understood 
that there is a reason that Congress has vested responsibility 
for enforcement of child support in the states, and that is 
because in our constitutional system and in our tradition, it 
is the states which bear responsibility for dealing with 
families. It is state domestic courts which set support orders, 
modify support orders, and enforce support orders. And imposing 
a Federal bureaucracy on top of that is a significant problem.
    Another philosophical difference that we have with the 
approach that is being taken by this bill is that it creates 
for the first time a universal system of child support very 
different from what Congress has supported up until this time. 
By that, I mean this--under the terms of this bill, every 
family would be included for the first time in the child 
support system as opposed to those families that choose to be 
included or who are required to be included as a result of 
participation in our Nation's TANF program. That is a 
significant departure and it would add significant cost, we 
believe, to the conduct of this program nationwide.
    You have already touched upon some of the concerns that I 
have expressed in my testimony. One of those is that this bill 
would essentially preempt some of the most successful state 
efforts that have been put in place, with the Congress' 
mandate, over the last several years. States have pioneered a 
number of successful approaches to collecting child support, 
like the driver's license match. We have implemented mandatory 
wage withholding on a large scale, which has been very 
successful.
    This bill would do away with all of those efforts in favor 
of a program that essentially relies on voluntariness on the 
part of the child support obligor in the system. And if there 
is one thing we have learned--and we have learned a number of 
things in the course of this 25 years that the child support 
program has been in place--it is that voluntariness is not the 
answer. That is why so much of what we have done has been done 
on a mandatory basis--the mandatory wage withholding, the 
mandatory inclusion and submission of delinquent obligors to 
all the different databases that we have in this country and in 
each of our states. We know that we cannot rely on parents to 
pay support.
    I heard with concern the statement made by Mr. Hyde at the 
beginning that this program represents a failure of government. 
I would submit to you--and I believe that the members of the 
National Child Support Enforcement Association would submit to 
you as well--that this represents first and foremost a failure 
of parental responsibility, and I do not think that it is 
reasonable to believe that we can rely on the same parents who 
don't support their children in the first instance--as you have 
indicated, Mr. Cardin--to voluntarily submit themselves to the 
IRS process of enforcement.
    There is no question that state laws involving child 
support enforcement are complex. They are complex for a reason. 
They involve matters of custody and visitation every bit as 
much as they involve the orders of support. The information 
that the IRS would need to have at hand in order to effectively 
and correctly enforce court orders is enormous. The automation 
that would be required to put this program in place would be 
enormous.
    Another lesson we have learned in this program is that if 
child support enforcement is difficult, automating programs to 
enforce child support is even more difficult. I don't think it 
is reasonable to expect that the IRS will be able to do a 
better job in this area--an area with which they are entirely 
unfamiliar at this point, with the exception of the limited 
role they play now in the collection of tax refund intercepts--
I don't think it is reasonable to expect that Congress can do 
the job by implementing a program that would require the IRS to 
take over the problem of enforcing child support.
    We are now seeing the fruition of those things Congress 
mandated on the states beginning in 1988. While it has taken 
longer then we might have liked for us to get some of these 
things in place, they are finally coming together. States are 
coming together with their automation systems. The National New 
Hire Directory and the National Case Registry are coming 
online, and they will be tremendous tools in assisting us in 
enforcing our nation's child support laws. I think the IRS 
would be a mistake.
    [The prepared statement follows:]

Statement of Wayne D. Doss, Director, Los Angeles Bureau of Family 
Support Operations, Commerce, California, and Past President, 
Government Relations Committee, National Child Support Enforcement 
Association

    Madame Chair and Distinguished Members of the Committee:
    I am pleased and greatly honored by your invitation to be 
here today to offer this testimony as you consider H.R. 1488, 
the child support bill authored by Representatives Hyde and 
Woolsey.
    My name is Wayne Doss. I am the Director of the Bureau of 
Family Support Operations of the Los Angeles County District 
Attorney's office. I am here today to speak not as a 
representative of Los Angeles County or the State of 
California. I speak here on behalf of the National Child 
Support Enforcement Association (NCSEA). I am a past president 
of that organization and a member of its Policy and Government 
Relations Committee.
    NCSEA is the largest organization of child support 
professionals in the country. It brings together staff from all 
levels of state and local government as well as participants 
from non-profit organizations, the private sector and the 
advocate community. All of these partners are united in their 
commitment to secure for our children the financial support to 
which they are entitled under the laws of our nation.
    I want to begin by telling this committee that all of us in 
the child support community recognize, appreciate and honor 
both Representative Hyde and Representative Woolsey for their 
longstanding personal commitment to ensuring that the children 
of this country receive the full benefit of the child support 
which is so essential to their day-to-day existence.
    Mr. Hyde and Ms. Woolsey have been consistent and 
unwavering in their outspoken advancement of this cause. Their 
joint authorship of H.R. 1488 is emblematic of the bi-partisan 
approach that has marked the federally mandated child support 
enforcement program from its earliest days.
    This bi-partisan spirit is an enormous force for good in 
advancing the public perception and the national discussion of 
the goals of the child support program. It speaks to all 
children and says that, as a society, we treasure them. It 
speaks to every parent and says that we believe they owe no 
greater obligation than to provide for their children. It 
speaks to every citizen of our country and says that we will do 
all that we can to ensure that our next generation is given 
every benefit of our laws and our devotion.

    Altering Traditional Federal and State Roles

    Besides bi-partisanship, one other feature has been a 
constant in the approach Congress has taken to the child 
support enforcement program. Ever since the enactment of Title 
IV-D of the Social Security Act in 1975, Congress has 
recognized that the states, not the federal government, should 
bear primary responsibility for carrying out the program's 
mandates.
    Congress has often seen fit to pass laws to govern the 
national progress and development of the child support 
enforcement program. It has mandated the enactment of a variety 
of laws at the state level and required the creation of 
automation systems to effectively carry them out. Congress has 
provided monetary incentives to states to spur their efforts in 
a desired direction and has directed that funds be withheld 
from states which have failed to meet deadlines or performance 
expectations.
    In all that it has done over the years to advance the 
success of the child support program, Congress has not varied 
in it appreciation for the singular relationship that exists in 
law and tradition between the states and families. Throughout 
our history, it is the states which have been the sources of 
law and, when necessary, the intervening authority in the 
affairs of families and the welfare of children.
    H.R. 1488 would fundamentally alter the relationship which 
has existed until now between the federal and state governments 
in the operation of the child support enforcement program. For 
the past 25 years, the federal government has performed the job 
of oversight. It has done so by setting national policy and 
monitoring state performance.
    True, the federal government does provide some operational 
support for the states. Examples of this operational 
involvement include the Federal Parent Locator Service, the 
Internal Revenue Service tax refund intercept program, the 
development of national data bases for new hire reporting and 
court order registries, passport denials and federal criminal 
prosecution of parents who cross state lines to avoid the 
payment of child support.
    This list of examples underscores an important point: The 
federal government's operational role in the child support 
enforcement program until now has been limited to those 
activities which it is uniquely empowered to perform, (such as 
federal tax refund intercepts and passport denials) or uniquely 
positioned to perform (such as maintaining the national new 
hire registry and national court order registry). Everyday 
involvement in the ongoing collection of support has never been 
seen as a necessary or desirable role for our national 
government.

    Complexity of State Laws a Barrier to IRS Enforcement

    In our constitutional tradition, the states have been 
accorded primacy in matters involving the establishment of 
parentage, the creation and dissolution of marriage, the 
awarding of custody and visitation and the setting, 
modification and enforcement of support. These are, to say the 
least, complex and highly intertwined and interdependent 
matters. The rules that govern parent and child relationships 
in each state have been highly refined over time. Critical 
details differ widely from state to state. While the 
development of the federal child support enforcement program 
has brought a semblance of uniformity to some parts of this 
landscape, the body of domestic relations law still 
accommodates widely varying applications of law and equity.
    The suggestion that a bureaucracy such as the Internal 
Revenue Service, challenged as it is to apply a uniform 
national tax code, could successfully assume the responsibility 
for enforcing state support orders defies our common experience 
in dealing with the state domestic relations law and policy.
    Indeed, the states themselves have found the problem of 
enforcing the orders of other jurisdictions to be among the 
most daunting of tasks. Some progress has been made in bringing 
uniformity and simplicity to this field through the mandated 
enactment of the Uniform Interstate Family Support Act (UIFSA). 
Still, states struggle with the application of such concepts as 
continuing exclusive jurisdiction, not to mention the 
multiplicity of state interest rates and penalties which may be 
applied to delinquent court orders. If state child support 
enforcement agencies, which are versed in the nature and kinds 
of issues that occur in the course of enforcing support orders, 
wrestle with the vast complexity of state variations, what hope 
is there that a new federal bureaucracy--especially one alien 
to the field--will do better? We submit that the likelihood is 
nil.

    Preemption of State Enforcement Remedies a Backward Step

    From our vantagepoint, one of the most troubling aspects of 
H.R. 1488 is the preemption of state child support enforcement 
activities in favor of the proposed Internal Revenue Service 
support withholding process. Beyond anything else we have 
learned in over years of trial and error, we have come to know 
that collecting child support is not easy. While some tools, 
such as universal wage withholding, are very effective, they 
are not by themselves capable of ensuring that more than a 
certain percentage of parents will pay regularly. Even 
universal wage withholding provisions working in combination 
with state and federal new hire registries are not sufficient 
to secure regular payments for the vast majority of families 
served by the child support enforcement program.
    Over many years, states have pioneered many new enforcement 
tools to secure support from those who do not regularly pay 
through court ordered assignments of salary and wages. Credit 
reporting, professional and motor vehicle license suspensions, 
real and personal property liens, intercepts of insurance 
payments and lottery winnings and state criminal prosecutions 
are but a few of the enforcement remedies which must be used by 
states to collect support from unwilling obligors. Many of 
these tools have proven so effective, in fact, that federal law 
now mandates that states employ them.
    Combined with such previously mentioned federal remedies as 
passport denial and income tax refund intercepts, an 
unprecedented ``dragnet'' of enforcement mechanisms exists to 
bring the unwilling payer to heel. Still, with all these tools 
at our command, the national collection rate continues to hover 
around 21%. It does not make sense to us that we should expect 
more obligors will pay if we do away with these tools and turn 
to a system which relies first and foremost on payers to make 
voluntary declarations to their employers regarding the nature 
and extent of their obligations.

    Problems with Voluntary Declarations of Support Withholding

    To ensure appropriate withholding and disbursements of 
child support payments, the enforcement scheme envisioned by 
H.R. 1488 relies on obligors to provide their employers with 
information concerning the amount of their court or 
adminstrative support order obligations. It also relies on the 
obligor to know the social security numbers of the obligees to 
whom support is owed. The assumption that obligors will know 
this information, much less provide it on a voluntary basis, 
does not square with the realities that we in the states know 
all too well.
    By far the greatest number of court and administrative 
orders obtained through the child support enforcement program 
are secured through a default process. This means that after 
service of initial pleadings on a prospective obligor, he or 
she does not respond and the legal or administrative process is 
carried to conclusion in their absence and without their 
involvement. While these proceedings may involve parents who 
were formally married but are now separated, most frequently 
they involve parents who were never married. In these cases, to 
be sure, the likelihood that an obligated parent will even know 
of the existence of the court or administrative order, much 
less the monthly amount of the ordered obligation, is remote.
    One of the primary assumptions underlying H.R. 1488--that 
obligated parents can be expected to voluntarily and 
knowledgeably report the existence of their obligations--is 
flawed. Indeed, it contradicts the premise along which federal 
and state policy direction has moved for the last several 
years. The idea behind the federal requirement for mandatory, 
universal wage withholding and the creation of new hire 
registries is that obligors cannot be relied upon to pay 
support voluntarily. The approach has been to eliminate as far 
as possible the ability of an employed obligor to avoid or 
delay the payment of support.
    States have succeeded very well at the task of securing 
support from parents who are regularly employed. As automated 
systems continue to improve and interfaces with new hire and 
other employer data bases continue to develop, we can expect 
that the capability to quickly and effectively implement wage 
withholding for support will become even better. Already, in 
many states and localities, including Los Angeles County, it is 
commonplace for wage withholding orders to be in the mail to an 
employer within 24 hours of a match between a state or local 
jurisdiction's obligor data base and the state's new hire 
registry. In many of these places, the same quick response 
occurs when a parent entitled to support or another party calls 
or writes to update the records of the support enforcement 
agency with employment information about the obligated parent.
    The mandatory wage withholding system in place today 
provides far more certainty to employers with respect to 
whether and how much pay ought to be deducted from a supporting 
parent's wages or salary than would be the case in a system 
which relies on the parent to provide this information in the 
first instance. Beyond the amount of current support to be 
paid, mandatory withholding orders issued from support 
enforcement agencies can provide an employer with specific 
information concerning the aggregate amount of arrears and an 
amount to be withheld to liquidate them.
    States have come a very long way in implementing mandatory 
wage withholding mechanisms since the first proposal to have 
the Internal Revenue Service institute a support withholding 
process was introduced in 1992. Much of this progress has come 
as states have brought their automation systems on line. Still 
more progress in this area is owing to the development of the 
state and federal new hire systems. It seems anomalous that we 
should now be considering proposals to do away with the 
structures we have successfully put in place and, instead, 
substitute a process that appears less certain to ensure the 
same level of efficiency and accuracy in withholding that we 
can now provide. It may have taken longer in coming than we 
would have liked, but a highly effective system for support 
withholding now exists across the nation. Greater improvements 
can be made to this process, to be sure; still, those 
improvements can be made far more readily than the development 
of a system at the Internal Revenue Service to replace what we 
have so painstakingly built.

    Automating the IRS to Collect Support Would Be Lengthy and 
Expensive

    One of the most painful lessons we have learned in the 
child support program is this: If there is anything more 
difficult than operating a state child support enforcement 
program it is building an automation system to operate a state 
child support program. The records of this committee's past 
hearings are no doubt replete with stories of failed automation 
developments, delayed automation developments and automation 
developments plagued with cost over-runs well beyond original 
estimates. While the great majority of state systems are now 
federally certified, there are still states (my own state of 
California notable among them) that have not succeeded in 
implementing the automation requirements first laid down by 
Congress over a decade ago in the Family Support Act of 1988 
and substantially augmented in the Personal Responsibility and 
Work Opportunity Reconciliation Act of 1996.
    There are many reasons why so many states have either 
failed or taken over long in implementing federal automation 
requirements. One common theme consistently cited by those 
involved in successful and unsuccessful automation efforts 
alike is that child support enforcement is by its nature a 
complicated business, dealing as it does with complex family 
relationships and governed more and more by complex federal 
rules.
    H.R. 1488 would require the Internal Revenue Service to 
enter the same automation minefield that has so enormously 
taxed the ingenuity, resources and efforts of the states for 
more than a decade. In fact, we think it is likely that the 
problems faced by states would pale by comparison to those the 
Internal Revenue Service would be taking on in order to 
effectively implement wage withholding.
    Here's one example of what we mean. As noted above, legal 
provisions with respect to child support guidelines, interest 
and penalties differ widely from state to state. In order for 
the Internal Revenue Service to ensure accurate withholding of 
support from an obligor's wages it must be capable of tracking 
guideline support plus principle and interest balances 
according to the laws of every state and territory. This is a 
challenge far greater than those faced by any state automation 
developers, who in each case need only to have devised a 
mechanism for dealing with one set of applied rules.
    Interest and penalty calculations are only one aspect of 
the vagaries with which a support enforcement system must deal. 
Problems associated with changes of custody and visitation are 
yet another. Although courts regularly deal on a formal basis 
with alterations to custody and visitation arrangements, it is 
far more common for families to deal with these issues 
informally. When this happens, it introduces significant 
complications into the calculation of whether or how much 
support is owed. States have different rules and policies for 
determining when and whether to allow credits or offsets, 
depending on the circumstances. We think it is too much to 
expect that the Internal Revenue Service can successfully take 
on the job of duplicating the mechanisms already in place in 
the states to wrestle with and resolve these problems.

    The IRS and Meeting the Challenges of Customer Service

    In the course of the last few years, child support 
enforcement administrators have focused increasingly on finding 
ways to serve customers of the child support enforcement 
program more effectively. As in virtually every other segment 
of government and industry, consumers of our services have 
become more knowledgeable, more sophisticated and more 
demanding. With more and more frequency, parents want to know 
not only what has happened with their case but also what will 
happen next and when.
    Nor are parents alone in being customers of the program. 
The implementation of universal, mandatory wage withholding has 
made employers an important and significant customer base for 
the child support program. For example, payroll managers and 
personnel staff frequently have need to secure answers about 
the terms and conditions for withholding from an employee's 
salary or wages.
    States have made tremendous strides in working to give 
parents, employers and other customers of the child support 
program meaningful access and response to their customer 
information needs. This has led to the development of large 
scale call center operations in many states and localities as 
well as internet-based applications to provide child support 
customers with rapid access to useful information. In almost 
every instance, the ability to provide customers with responses 
to their information needs is dependent upon a tie-in with the 
jurisdiction's child support automation system.
    From the standpoint of the states, if the Internal Revenue 
Service were to enter the field of child support enforcement as 
the enforcer of first and last resort, it must grapple with the 
need to provide an equivalent quality of customer service to 
that now offered or being developed in state programs. 
Furthermore, the Internal Revenue Service would have to adopt 
an approach to this area which treats child support agencies 
themselves as customers, since they need for a close working 
relationship to share information would be critical to both 
partners in the child support collection effort.
    It is clear that the volume of demand that we know would be 
faced by the Internal Revenue Service stemming from 
responsibility for the enforcement of support obligations could 
not be met with available resources at that agency. In Florida, 
for example, the state child support agency processes one 
million telephone inquiries per month. In Los Angeles County, 
the child support call center processes more than 80,000 phone 
calls per week.
    Not only is the volume of calls daunting but also the 
knowledge base required to deal with inquiries in more than a 
superficial or ``message taking'' way is significant. The new 
and different demands that would be made on customer service 
agents within the Internal Revenue Service means that they must 
be specially trained and equipped to deal with the inquiries of 
parents, employers and other child support customers.
    Recent reports on the status of efforts at the Internal 
Revenue Service to upgrade the delivery of customer service in 
the tax area raise doubts about that agency's capacity to take 
on the customer service needs of an entirely new and decidedly 
different sort.

    Summary

    The child support enforcement system in the United States 
is still relatively young. Efforts to improve the national 
system through automation which were begun a decade and longer 
ago, as well as more recent changes brought about by welfare 
reform, have finally begun to take hold and produce results. 
The success of these efforts is directly attributable to 
knowledgeable and dedicated staff in each state and 
jurisdiction who work daily to accommodate the requirements of 
the child support program to the state environments in which 
they operate.
    While the child support enforcement program is national in 
scope, it is still very much state-based in terms of its 
connections to the laws and institutions that establish and 
govern the affairs of families and children. So long as state 
courts and institutions are vested with responsibility for 
ordaining the existence, scope and extent of parental financial 
obligations toward their children, child support enforcement 
should continue to be viewed as best conducted at the state 
level.
    The enforcement of child support is a complex business. 
Many tools and remedies are needed to maximize the payment of 
support from parents who are unwilling to pay what they owe. 
Discarding state-based tools in favor of a single remedy 
solution through the Internal Revenue Service would be a 
backward step in the nation's efforts to secure financial 
support for its children
    The federal government has an important role to play in the 
administration and oversight of the child support enforcement 
program. To a lesser but still necessary and significant 
extent, the federal government can provide operational support 
for state efforts by providing uniquely federal assistance 
through such unique programs as passport denial and the 
maintenance of national locate, court order and new hire 
registries.
    The intricacies of state child support and domestic 
relations laws, coupled with the high volume of demand for 
program services and information as well as expectations of 
customer service make the Internal Revenue Service an unlikely 
and expensive alternative to consider at this juncture in the 
history and development of the program.
    States have learned much, accomplished much and are now 
beginning to reap benefits from the years of trial and error 
that have preceded this moment. The time is not now to consider 
an overhaul of the child support enforcement program as 
extensive, time-consuming and costly as turning to the Internal 
Revenue Service would prove to be.
    I thank you, Madame Chair and members of this Committee for 
the time you have given me today. I shall be happy to answer 
any questions you may have.

                                


    Chairman Johnson. Thank you. We will pursue this problem 
later.
    Ms. Williams.

 STATEMENT OF VICTORIA WILLIAMS, SENIOR VICE PRESIDENT, POLICY 
                STUDIES, INC., DENVER, COLORADO

    Ms. Williams. Madam Chairwoman, Member of the Committee, 
Mr. Cardin, my name is Victoria Williams. I am Senior Vice 
President of Policy Studies, Inc. It's a Denver-based private 
consulting company that also is involved in privatization of 
child support services in a number of states.
    I am here today to talk to you as a private citizen who has 
dedicated her entire professional career to improving the child 
support program and helping people collect child support. I 
started early, 20-some years ago, back in the early days of the 
IV-D program, as an Assistant Prosecuting Attorney, and I have 
seen a lot of changes in the program that have seen a lot of 
improvements in child support, one of those things being that 
we are collecting child support very effectively from people 
who are employees, who have conventional means of employment.
    What I see that hasn't changed in the child support program 
is that we still have a tremendous amount of difficulty 
collecting child support from people who do not work, who are 
underemployed, who work for cash, and who work in the 
underground economy.
    Ms. Johnson and Mr. Cardin, you have both mentioned a lot 
of the things that I have expressed in my written testimony, 
and I am going to talk about the three concerns that I have 
about this bill. I think the idea of treating child support 
obligations as tax debts philosophically is a wonderful idea, 
but there are three things about this bill that cause me 
concern.
    One is, as you mentioned earlier, Mr. Cardin, that this 
bill would eliminate all of the local enforcement remedies that 
states have worked so hard over the last 20 years to implement, 
and those are enforcement remedies that many of which are 
designed to get at obligors who work for cash under the table, 
who refuse to remain employed, and who need constant local 
attention.
    Ms. Woolsey mentioned that there are 1500 state and local 
child support agencies. There is a reason why there are 1500 
state and local child support agencies--that is because a 
difficult segment of our population is dealing with people who 
will not pay their child support and who do not work for 
employers who can withhold those wages and pay through the 
regular tax system. That is a significant amount of the effort 
that we expend in collecting child support, is expended on 
people who in those circumstances. As Ms. Jensen mentioned, 60 
percent of noncustodial parents make over $30,000 a year. Well, 
that means clearly 40 percent of them make less than $30,000 a 
year. Those are people who move in and out of regular 
employment, who work for cash--they are construction workers, 
oyster shuckers, chicken catchers, moss pickers. These are 
people that the IRS right now does not effectively really 
collect taxes from. They don't seem to be particularly 
interested in this population. In the 20 years that I have been 
doing this, so many of the people that we try to collect child 
support from do not pay taxes. They don't file. When we ask 
them for copies of their tax returns, we can't get them because 
they are not paying.
    I wonder whether having the IRS more involved in this 
program might precipitate more taxpaying as well, but it could 
actually have the opposite effect, that being driving these 
people even further underground and making them invisible to 
the child support program where now we are at least able to 
take them into court and make them pay their child support 
through at least the threat of jail.
    One thing that we all know is that the IRS has no means of 
making people work in order to pay their taxes and support our 
government, yet at the local level in the child support program 
we spend much of our resources taking people to court, asking 
judges to make people work, to get better jobs, so they can pay 
their child support. Every day, across the United States, 
judges tell obligors, ``If you don't have a job by next 
Wednesday, you better bring your toothbrush back here into the 
courtroom because you are going to go to jail''. The IRS will 
simply never have that kind of power to make people go to work. 
And if we ignore that population and take away judicial 
enforcement, we will be completely ignoring about 40 percent of 
our child support obligors, and that is the reason why this 
program is so expensive.
    So, that is my most important point. You have already 
talked a lot about complexities of the distribution system--I 
hate to even say the word ``distribution'' because it is a word 
that makes my skin crawl--but for the IRS to think about trying 
to interface with 54 state public assistance programs, and know 
how much public assistance has been paid, and distribute money 
properly to families strikes me as an impossible situation.
    People think that the child support system is simple, but 
it is very complex, and it is based on state laws. It is based 
on differing state laws having to do with interest accrual, 
ages of emancipation, statutes of limitation, and we simply 
can't expect the IRS to have a grasp of 54 different sets of 
state laws.
    You are going to hear some more testimony in a few minutes 
about the successes of state child support programs, and I 
would urge you to continue your extraordinary support in 
helping state programs get better and better. Thank you.
    [The prepared statement follows:]

Statement of Victoria Williams, Senior Vice President, Policy Studies 
Inc., Denver, Colorado

    Chairwoman Johnson and members of the Human Resources 
Subcommittee, thank you for inviting me to testify. My name is 
Victoria Williams and I am Senior Vice President of Policy 
Studies Inc. (PSI), a private company that has, over the past 
15 years, provided child support consulting or privatization 
services to almost every state's child supportprogram.
    I am here today to ask you to oppose H.R. 1488, called the 
``Compassion for Children and Child Support Enforcement Act of 
1999,'' which would turn over enforcement of child support 
orders to the Internal Revenue Service. While I applaud this 
subcommittee's continued efforts to help children by improving 
the child support program, I fear that this bill will not 
successfully serve that purpose. I have three main concerns. 
First, this bill would eliminate important local enforcement 
tools now used by states. Second, it would serve to confuse 
parents by fragmenting the program between state and federal 
responsibilities, and by creating duplication at the federal 
level of already complex state child support record-keeping 
systems. Third, this is not a good time to transfer this 
important national responsibility to the IRS.

States Will Lose Effective Enforcement Tools

    The bill is based on the premise that obligors will fear 
the IRS more than they do state child support agencies and 
local courts. While this may apply to people working in 
conventional settings, it is not true for those involved in the 
underground economy. A great deal of state agencies' work on 
IV-D child support cases involves parents who are self-employed 
or paid in cash, not to mention parents who refuse to work at 
all. From what I have heard working in this field for the past 
20 years, many of these people do not pay taxes either. They do 
not have employers who report to new hire databases or who can 
deduct child support from wages, and they have few assets. The 
only effective way of staying on top of these obligors is 
through constant local attention.
    This bill would move responsibility for enforcing child 
support orders from states to the IRS, thereby potentially 
eliminating state-level enforcement mechanisms. Some of these 
tools, such as revocation of drivers' and professional licenses 
are fairly new to most states, and their effect on collections 
not yet fully realized. Two state-level mass collection 
programs--state tax offset and unemployment intercepts, which 
together generated over $325 million in collections in FY 
1997--could be severely compromised if the IRS has to recreate 
these matches for each state.
    Furthermore, the ability of courts to enforce their orders 
through civil contempt, an age-old enforcement remedy, is 
extremely important in reaching certain groups of noncustodial 
parents. I believe it is a myth that contempt actions are 
ineffective and a waste of judicial resources. My experience 
tells me that many thousands of non-custodial parents who are 
now marginally employed would happily quit working and let 
their parents, spouses, and friends support them if they were 
not under constant threat of going to jail. Since there is no 
duty on the taxpayer to get a job to support our government, 
the collection arsenal of the IRS does not include these state-
level tools to deal with under-employed noncustodial parents.

This Will Fragment Child Support Services

    This bill proposes to leave certain responsibilities with 
the states, including paternity and support order 
establishment, order modification, and enforcement of medical 
support orders. To illustrate how this construct will create 
customer confusion, imagine the typical case that involves both 
a medical support and a child support order. Custodial and 
noncustodial parents, as well as the obligor's employer, would 
receive communication from the state agency regarding the 
medical support obligation, and a separate directive from the 
IRS regarding child support. When parents and employers have 
questions about support arrears, they will have to contact the 
IRS, but questions about medical support or modifications child 
support cases, they would have to know which agency to call for 
which service.
    This fragmentation will also create expensive duplication 
of services. A state agency may have to go to court to enforce 
the medical support provisions of the order, but would not have 
the authority to address non-payment of child support at the 
same time. Likewise, if the state took action to modify the 
support order, it could not simultaneously address the support 
arrears.
    The division of responsibility envisioned by the bill will 
also create a huge technical challenge for states and the 
Service. In order to enforce child support orders, the IRS will 
need to know the current obligation, and will have to calculate 
arrears balances for each case. The existing federal case 
registry does not contain this information, nor does it 
maintain an historical payment record. This will make it 
impossible for the IRS to resolve disputes without reference to 
state records. Even with access to complete payment records, 
agents will have to understand the law of the state that issued 
the order, including potentially complicated arrears and 
interest calculation issues, abatements, and statutes of 
limitation. Once the Service takes over payment processing, the 
state payment records will no longer be accurate, thus further 
eroding the possibility of obtaining local enforcement, even if 
the custodial parent later opted out of the IRS collection 
scheme.
    Of greater concern, however, is the idea that the IRS will 
be able to create a successful interface to 54 different state-
based public assistance programs in order to disburse payments 
properly. The IRS would need to know which cases involve 
custodians who currently receive or formerly received public 
assistance, while also keeping track of how much support is 
assigned to the state, and what amounts remain due to the state 
for repayment of TANF grants.
    Assuming that these interfaces could be successfully built 
within a reasonable period, the IRS would still be hard pressed 
to understand the complicated circumstances surrounding the 
disbursement of support payments. One of the most difficult 
problems facing the child support system involves tracking 
children and their custodians. Many children move from state to 
state, and from one custodian to another. States spend enormous 
resources tracking children--and the obligations attached to 
them--from one household to another and into and out of foster 
care. This would have to remain a state-level function, but 
since the states would not be maintaining the payment records, 
it is hard to imagine that they would be able to keep accurate 
child-based debt records.
    In addition to tracking child support payments and TANF 
grants, the IRS would have to track accruals and payments on a 
number of other items, including: interest, penalties, genetic 
testing fees, fees for state services, court costs, judgments 
for retroactive support and medical expenses, and cash medical 
support. Parents will find themselves in a bureaucratic maze, 
negotiating information between two very distinct agencies, at 
different levels of government, in order to make sure that 
their payments are correctly handled.

Could be a Poor Fit for the IRS

    Even if H.R. 1488 did not fragment state child support 
systems, it does not appear that support enforcement would be a 
good fit for the IRS at this time. The Service is in the middle 
of its own reorganization and is seeking additional funds to 
hire new auditors. Passage of this bill would add one more 
extremely complicated function to an already over-burdened 
agency, one that Congress has been working hard to reform. The 
IRS would be required to recruit, hire and train thousands of 
additional employees, located in jurisdictions throughout the 
country, solely to enforce child support obligations, at the 
same time that it is trying to revise its image and practices.
    The bill will also impair the IRS's plan to improve 
customer service. Employers and parents would have to deal with 
two government agencies, not one. A person who felt better 
treated by the IRS as a taxpayer, might be furious at the way a 
child support case was batted back and forth between the state 
and federal government. Furthermore, the first of the Services' 
five modernization principles is to understand and solve 
problems from the taxpayer's point of view. While this is a 
reasonable goal when dealing with two parties, the Service and 
the taxpayer, it is hard to imagine how this would work in a 
child support case. Whose point of view should it consider, the 
custodial parent, the noncustodial parent, the state agency or 
the child? When the IRS negotiates a payment schedule with a 
taxpayer, it represents the obligee: the US Treasury. In a 
child support case, the obligee is a third party and the 
Service does not have the authority to negotiate a deal on this 
person's behalf.

Conclusion

    By asking the IRS, an agency that already has its hands 
full with a reorganization plan, to perform support enforcement 
functions, Congress will splinter the child support system and 
undermine much of the progress made since the Personal 
Responsibility and Work Opportunity Reconciliation Act (PRWORA) 
was passed in 1996. As state governments and the IRS work to 
improve customer service and accountability to taxpayers, this 
fragmentationof the system will only serve to undermine their 
efforts.
    As you will hear from this afternoon's hearing, states have 
made enormous strides in recent years in improving child 
support collections. Much of this progress has been due to the 
changes brought about by your work on welfare reform. I urge 
you to allow the states to continue their efforts to improve 
this important program.
            Thank you for your time.

                                

    Chairman Johnson. Thank you very much. What I was trying to 
clear up with my staff--sometimes there is a very simple issue 
and you want to try to clarify it for the record, and it is a 
little embarrassing not to be able to do it, so you think if 
somebody just helps you you will be able to do that. But this 
85 percent figure and the 23 percent figure, these are not 
apples and oranges, and I don't want the record to reflect that 
or to support that indication.
    So I would like each of you to speak to 85 percent of what, 
and 23 percent of what, because they are not comparable. Ms. 
Jensen.
    Ms. Jensen. Yes. Actually, the figure that I got from the 
IRS was that 83% of Americans pay taxes, 17 percent do not 
file, and that is what that figure is based on.
    So, if we had 85% of Americans paying taxes through the 
system and they owed child support and we do what this bill 
says, which is to move the Federal New Hire Registry into the 
IRS so that if I write on my W-4 form I owe child support, my 
employer withholds it and sends it to the IRS. If I don't write 
it on my form, it is caught just like it is right now through 
the Federal New Hire Registry and the employer is told to 
withhold, so that if there is an order, it is on file, it is 
part of the Registry, and they would take it out of my 
paycheck.
    Chairman Johnson. So you are not saying--the implication in 
the earlier testimony was that the IRS collects 85 percent of 
the child support that they are now empowered to collect, or 
that they would have the ability to collect 85 percent of the 
child support owed.
    Ms. Jensen. They collect taxes from 85% of Americans----
    Chairman Johnson. I appreciate that, that is a different 
issue.
    Ms. Jensen.--and those Americans that would have an order 
on file through the current Federal and state order case 
registries, which would be about 2/3 of the child support cases 
in the nation. They would be listed, there would be an order on 
file when they went to work, and they would collect child 
support from their paycheck.
    So, from that, one could extrapolate that they would 
collect about 75 percent of the families who owe support, 
possibly as high as 85 percent.
    Chairman Johnson. What you are saying is that you would 
hope that they could collect 85 percent of the 2/3 of the 
parents who have orders.
    Ms. Jensen. Yes, because they cannot collect from people 
who don't have orders. And there will always be those who will 
earn money under the table and who won't pay.
    Chairman Johnson. And who would try to collect from those?
    Ms. Jensen. Under the current form of this bill, the 
contempt powers of the state are left intact, so they could be 
taken into state court for contempt.
    Chairman Johnson. For tax law contempt?
    Ms. Jensen. No. Under this--if they didn't collect it 
through the payroll deduction system, the IRS would go after 
them at the end of the year, just like they do if you don't pay 
taxes. If you have a tax liability, they could do the same 
thing to you.
    In addition to that, state government maintains its power 
to do contempt of court, maintains its power to do criminal 
nonsupport on the state level, and maintains its power to go 
into court and do--
    Chairman Johnson. I would remind you that the IRS audits 
only a very, very small percentage--I have forgotten what it 
is--it is about 10 percent of all returns. So, the likelihood 
of their reaching those--
    Ms. Jensen. Which is why putting that Federal order case 
registry inside of the IRS is so important, so that they would 
catch up with these people who don't voluntarily report. So 
that is an essential part of this bill.
    Chairman Johnson. I just wanted to make clear what the 85 
percent, what that figure was that was thrown around earlier, 
and I think even in your comments it is clear what a big 
responsibility administratively and bureaucratically this would 
be for the IRS, for them to have the entire state order 
registry centralized at the Federal Government, which has never 
been done, that that is a lot of people, the order 
centralization, and then the New Hire Bank moving to them. I 
want to give Mr. Doss a chance to----
    Ms. Jensen. If I could just correct one thing that maybe I 
haven't said clearly. They would not be taking on anything more 
than what is in PRWORA. In the Welfare Reform Act, where the 
Federal Case Order Registry was created, that would be moved to 
the IRS. So they wouldn't be taking on anything more than what 
HHS does right now. It isn't like they are going to get a new 
one, we are just transferring it over.
    Chairman Johnson. I would just like to ask Mr. Doss then if 
he--because it is difficult. It is a complicated system, and it 
isn't at all clear from the bill what exactly would go to the 
IRS and what would remain. And in my estimation, it is such a 
complex system, the idea that you are going to be able to move 
this all into the IRS and not have a million pieces at the 
state level is the stuff of charts and papers, and not the 
stuff of reality. But Mr. Doss is a professional in this area, 
I want to hear what you think the 85 percent is of what, and 
what is the 23 percent.
    Mr. Doss. I am not entirely conversant with the information 
available about the IRS collection rates, although I have seen 
some information. It is very clear, however, that the IRS does 
a very good job, for the most part, of collecting taxes from 
people who are employed and whose employers withhold it from 
their paychecks. By the way, that calculation is generally done 
by the employer, not by the employee.
    But the IRS has the same problems that we have in child 
support, in collecting from those who are not regularly 
employed, who move around, who work, as Victoria said, in the 
underground economy.
    The challenge of child support enforcement is one of 
constant monitoring, and you have already indicated, with the 
allusion you have made to the number of audits that are done by 
the IRS, that the resources available currently in the IRS to 
do the kind of monitoring that is done at the local level to 
collect child support are simply not there, and the addition of 
staff at the IRS to do the kind of work that is currently being 
done by local government and state government in enforcing 
child support would be massive. It would simply be massive.
    There is a cost to doing it this way, there is no question. 
If we are going to collect child support, we are going to have 
to spend money to do it, that is why the program is so 
expensive. But I repeat what we said earlier, collecting child 
support is not a simple business. It is not an easy business. 
We need lots of tools, not one tool. I would love to believe 
that there is a magic bullet.
    Chairman Johnson. Could either of you comment on what 
percentage of the child support that we are not collecting now 
is--well, I guess you gave this in your chart--40 percent comes 
from people making less than $30,000. What I want to get is, in 
the wage withholding group, that is the easiest.
    Mr. Doss. Absolutely the easiest.
    Chairman Johnson. And that is why the match system is 
working so well, and the new hire system, and we are just going 
to see that grow, I would think, exponentially.
    Mr. Doss. I think that is correct.
    Chairman Johnson. How many years would you think it would 
be, knowing about the state progress, before the states could 
pretty well collect from people who are working just through 
the new hires and the matches? Is this going to take 10 years, 
or do you think we are going to be there in five?
    Mr. Doss. I think you are going to see significant 
improvement in less time than that. Five years would probably 
be a good increment in which to measure the state's progress 
because of the implementation of all of the automation systems 
and the implementation of--and full effectiveness of the New 
Hire Registry and all of the other databases that are being put 
together at the state level. I think that is going to greatly 
increase our capacity and ability to do the job.
    Chairman Johnson. And how long do you think it will take us 
to improve our capability in this other group, the 
nonsupporting fathers who actually work underground, make 
money, but don't pay.
    Ms. Jensen. Ms. Johnson, we have an estimate on the 
improvement timeframes under the current system. There was a 
study done by the Children's Defense Fund that showed if it 
continued to improve at the current rate, it would take 180 
years for all the children to receive payment, but--
    Chairman Johnson. Ms. Jensen, if I may, please. That study 
was for--only Massachusetts has really fully implemented the 
match law and the banking system. You can't believe what is 
coming out of the assets people have. So, it is going to take 
us probably two more years to get that match system, now that 
we have a few model states working well, but that study of the 
Children's Defense Fund sufficiently pre-date it because these 
tools are really now--each year there is a dramatic change that 
really--that is why I am asking the question.
    Ms. Jensen. We did an extrapolation of updating on that 
study, that was just the starting point, and we determined that 
if you took the best state, if you looked at states improving 
income withholding by 36% and that bank matches add another 10 
percent--I mean, at best, you have got down to about 75 to 100 
years at that rate.
    Chairman Johnson. I think from the testimony--and I would 
be happy to have you review the testimony of our last hearing 
where we went sort of method-by-method, and what is happening--
driver's license suspension has proved to be very powerful.
    Ms. Williams, would you like to comment on this?
    Ms. Williams. I would like to comment on the possibility 
that the IRS can effectively address the nonemployee part of 
the population, going back to a 4-year study that the IRS did 
where it took--we now have the ability to refer cases to the 
IRS for what is called ``full collection services'', and it is 
not an exceedingly massively used remedy, it is partly because 
the IRS sends out letters to obligors and says ``what are you 
going to do about this?'' The IRS, last year, for collecting 
taxes, only did 161 property executions for collection of back 
taxes.
    So, we are looking at primarily a voluntary system of tax 
collection. But if you look at the 168 cases that the IRS 
followed over a 4-year period, they only had a success rate of 
2 percent per year in collecting on the $14 million that was 
owed on those 168 cases, and they found when they tried to 
collect child support from these people, treating the 
delinquent child support as back taxes and using all of their 
remedies that they have to collect back taxes, they found that 
hardship based on income level of the taxpayer was a 
significant barrier and that these obligors had a high degree 
of tax debt, which indicated to them that these are people who 
do not follow laws and are certainly not intimidated by the 
IRS. And they also found that the high cost of the field 
investigation to try to collect money from this group of 
obligors was not supported by the relatively small return.
    So, I think what we are looking at is the IRS is not going 
to be successful in collecting child support from people who 
don't work in the normal economy.
    Chairman Johnson. So they only collected 2 percent of the--
    Ms. Williams. Two percent per year, for a total of 8 
percent over a 4-year period.
    Chairman Johnson. --of 168 cases, total?
    Ms. Williams. On a $14 million debt.
    Chairman Johnson. Well, we are not, certainly, going to 
conclude this, but I did want to make it absolutely clear that 
the numbers are not to be comparable, that the IRS currently 
collects 85 percent of what it could collect, and the other 
system collects 23 percent of what it could collect. And one of 
the big difficulties would be how would we deal with the 
nonfilers.
    Mr. Doss. Ms. Johnson, if I may intercede with one other 
point, I think something that is going on in my State of 
California would be useful to the national discussion--and I 
think there is some national discussion--in terms of 
determining what percent of the outstanding unpaid support is 
actually collectible.
    We know that many parents have large debts. Those debts are 
compounded with interest which is accumulated at different 
state rates. But the point is, those parents' circumstances 
today are different than they were when those orders were 
entered. Many of them are disabled, they are not working, they 
are working at lower wages or salaries.
    The question really should be what are we looking at in 
terms of a realistic collectible base of unpaid support, and I 
don't think we know the answer to that question.
    Chairman Johnson. Thank you very much. I think it is 
important for this Committee to begin the process of trying to 
determine what that number is because one of the things that 
has always haunted the IRS is this big number of uncollected 
taxes. When you get down to it, the IRS does a very good job of 
collecting taxes. Most of the uncollected taxes are 
uncollectible. So, I will pursue that. Thank you very much. Mr. 
Cardin.
    Mr. Cardin. Thank you, Madam Chair. Mr. Alexakis, I think 
you will be pleased to know that we have changed the laws since 
your circumstance, and we now have interstate New Hire 
Directory to track down noncustodial parents nationwide and to 
enforce child support orders across state lines.
    Mr. Alexakis. I am aware of that.
    Mr. Cardin. So we have made some progress in that regard. 
Using the IRS would not appreciably increase, and perhaps could 
actually reduce the amount of collections--we all acknowledge 
that the collections are too low--what should we be doing? What 
options should we be putting on the table in an effort to help 
the states in their collection process? Let me address that to 
Mr. Doss and Ms. Williams. What would you suggest that Congress 
could do in order to help you?
    Ms. Williams. I think you did so many things in 1996 that 
it would be nice to not impose anymore requirements on the 
states at the moment, and to spend a few years, do some 
research, and watch to see which of these remedies are 
effective, and then make sure that states implement them 
appropriately. The most important thing is getting states to be 
effective.
    States make errors and they don't always effectively 
implement things, but there are 55,000 local child support 
employees out there who consider it their ``calling'' to 
enforce child support orders, and I think you have given them 
all the tools that they need to do it, you just need to make 
sure the states are good at implementing them.
    Mr. Doss. I would echo the comment that we need a little 
break in terms of the new requirements that were placed on us 
to do this more effectively. I would suggest to you that we 
haven't seen the full benefit of some of the things that you 
have done. For example, the multi-state National Institution 
Data Match that was referred to earlier has turned up billions 
of dollars in accounts around this country. We have got to find 
mechanisms now to get at those accounts and make sure that we 
are collecting money from people who are putting it away and 
who are earning interest on that money. States have not yet 
progressed to the point where we are effectively taking 
advantage of those dollars.
    I believe very strongly that what we need to do in this 
country is create more and more ways to stop up the avenues of 
escape for parents who don't pay child support. I don't think 
there is a single way to do this. I think there are many 
remedies and many different tools that have to be used to make 
this program effective. We are finding them. We need to fully 
utilize them. When we do, we will see much better success that 
we are seeing today.
    Mr. Cardin. Let me suggest a couple of points that I would 
hope that you would work with us on. One is the legislation 
that has passed the House of Representatives--it is now in the 
U.S. Senate--to deal with noncustodial parents to help them 
become--get jobs, put some resources behind the noncustodial 
parents. There are a lot that are dead broke, not deadbeat, and 
we should be putting more attention--and we have on Welfare 
Reform--in that regard.
    Second is the passthrough of child support to the family, 
the issue that we changed and actually made it more difficult, 
I think, for noncustodial parents to be a part of the family 
when the support goes to the child collection agency rather 
than to the family. I think that we could improve that 
circumstance, and that might also have an impact on child 
support collections. They are two suggestions that I would hope 
this Congress would take a look at under the existing 
structure.
    Mr. Doss. I'd like to address the latter point and then I 
will get to your former point. All of us in the National Child 
Support Enforcement Association would appreciate greatly a 
simplification of the rules of distribution. It is one of the 
single, most--it is the foremost reason, I think why child 
support automation has been so difficult.
    Accommodating automation systems to very complex rules of 
distributing money to families, to governments, to other 
states, has made the system far more complex, far more 
difficult to deal with than it ought to have been, and I think 
we would do everybody in this country a favor if we could give 
as much money as we collect to the family as possible.
    On the first point that you made, I can tell you that we 
are very supportive of the Fatherhood initiatives that have 
been talked about in this Congress and in past Congresses. In 
my own county of Los Angeles, we have been a demonstration site 
for a couple of those programs. We have seen a tremendous 
effect on the fathers that we deal with. There are many 
alienated fathers in our country, and we need to bring them 
back into a position where they believe they can participate 
with their families. Many of them do not believe they can do 
that today.
    Mr. Cardin. Thank you. Thank you, Madam Chairman.
    Chairman Johnson. I did want to put a couple of facts on 
the record because I think they are relevant in framing the 
challenge that continues to face us. 75% of divorced fathers 
have a child support order, and 75 percent of those with an 
order make a payment. That isn't to say that they make the full 
payment, I don't know about that. So, overall, 50 percent of 
divorced fathers make some payment. In the never-married 
category, only 40 percent have orders and 60 percent of that 40 
percent pay. So, you can see how much of the problem is in the 
never-married sector.
    Then of the poor people who are adults--well, poor people 
over 16, only 41 percent work at anytime during the year, and 
only 12 percent work full time.
    So, this issue of ability to pay, of hardship, of getting 
people in positions where they pay, is every bit as important 
as trying to make them pay. So I think that is one of the 
things that we are really struggling with, and it is curious to 
me, Mr. Alexakis--
    Mr. Alexakis. Alexakis.
    Chairman Johnson. It is so easy when you say it.
    Mr. Alexakis. I have been doing it for a while.
    [Laughter.]
    Chairman Johnson. It is mysterious to me that your mother 
didn't have a support order or that for some reason there was 
no help for her in enforcing it.
    Mr. Alexakis. Back in the late sixties and early seventies, 
there wasn't that kind of network set up in the State of 
California. Basically, what the social worker told my mother 
when she tried to get help was that maybe next time she should 
pick a better man and should concentrate on getting herself a 
man. That is not a joke, that really happened. My mother never 
went on welfare. I did when my daughter was born because I 
couldn't support my child at that time. I later went off 
welfare and paid that money back.
    The one thing I wanted to bring up was the fact that--
everybody is making really good points and bringing good data 
to this, but I think the issue is not those people that can't 
pay or won't pay, but the people that can pay, the people that 
do have Federal income tax taken out of their check. There are 
a lot of those people who don't pay.
    I don't know the numbers--you said the numbers of those who 
can, even a partial amount, is 75 percent of divorced fathers. 
That is not necessarily--
    Chairman Johnson. They have an order, and then of that 75 
percent, 75 percent pay. So, effectively, only 50 percent of 
divorced fathers--well, I don't know that that is true. Some of 
the ones that don't have orders may pay, so I guess we can't 
actually say that. But it should be 100 percent. I mean, this 
is a terrible showing for America.
    Mr. Alexakis. It is. I am not a public servant, I am a 
person. I pay my support. I am supporting of friends of mine 
who do. Most of my friends do, and a lot of them don't. 
Unfortunately, we have grown up in a time when marriages just 
don't seem to last like they used to, and relationships don't, 
and children suffer from it. Those are the people that suffer. 
And that is why I am here today. I just want to be an advocate 
for children because there is also some very attractive 
charities entertainers and people in the public eye attach 
themselves to, but no one wants to talk about this, this or 
domestic abuse or something like that, and those are things 
that hit just about every household, or close to every 
household.
    Chairman Johnson. You make a very good point and, in fact, 
people have been willing to attach themselves to the issue of 
abuse, spousal abuse, domestic abuse, really quite readily, and 
we have made a lot of progress both in people understanding it 
and early intervention, but people don't want to attach 
themselves to the issue of nonsupport, and we don't yet have a 
way of talking to our friends about the fact that you can't not 
support your child. And if just all of those with orders paid, 
or if all of those who could pay paid, the picture would be 
very different.
    So, there is a human and moral dimension. If we can get out 
more the terrible suffering of children, not just monetary, but 
the sense of abandonment is just--we have to get people to 
understand better, that you cannot abandon your children.
    I know hearings get burdened down with figures, but you 
might be interested to know that of the never-married parents, 
at the time of birth, 80 percent say this is an important 
relationship with long-time consequences--80 percent--among the 
ones we do paternity establishment. So those are the ones that 
are going to be on public assistance but, nonetheless, these 
are young people who are already in poverty--I mean, that is 
why the mother is going to be eligible for welfare--and so in 
our Fatherhood Bill we now are going to treat the young man 
just the way we treat the young woman. Help them with job 
search, help them get into the work force, and even give them 
training in parenting skills, since most of their friends are 
not struggling with how to deal with a crying child all night.
    We do, unfortunately, have to move on to the next panel, 
but thank you very much for being here, and I appreciate your 
input very much.
    On the next panel, if we could start with Mr. Jeffrey 
Cohen, Director of the Vermont Office of Child Support; Nick 
Young, Director of Child Support Enforcement from Virginia; Jim 
Owen, Meijer Stores, Grand Rapids, Michigan; Mark Rogers, the 
Commissioner of the Georgia Child Support Commission and 
Economist for the Federal Reserve Bank of Atlanta. It is my 
pleasure to welcome you and thank you for being here. Mr. 
Jeffrey Cohen of Vermont. Is he not here? OK. We will move on 
to Nick Young, of the Commonwealth of Virginia, then we will 
come back to you, Mr. Cohen.

 STATEMENT OF NICK YOUNG, DIRECTOR, CHILD SUPPORT ENFORCEMENT 
DIVISION, VIRGINIA DEPARTMENT OF SOCIAL SERVICES, BOARD MEMBER, 
  NATIONAL CHILD SUPPORT ENFORCEMENT ASSOCIATION, AND EASTERN 
  REGIONAL INTERSTATE CHILD SUPPORT ASSOCIATION, AND OFFICER, 
          NATIONAL COUNCIL OF CHILD SUPPORT DIRECTORS

    Mr. Young. Madam Chairwoman, good morning, Mr. Cardin. It 
is good to be back before the Committee again, I appreciate 
being invited back.
    I am a Board Member of the National Child Support 
Enforcement Association as well as the Eastern Regional 
Interstate Child Support Association, and those organizations 
are committed to this effort and appreciate being included in 
this testimony this morning.
    My purpose for being here this morning is I want to talk 
about the state and National New Hire Directories and how 
effective they are and the success that we enjoy from them, and 
I will even make some predictions, as you asked the last panel, 
as to how well they will do in the coming years.
    I also want to say I appreciate the kind remarks by Ms. 
Jensen about our program. We do have an aggressive program and 
we are very proud of it, and we think that it is turning in a 
success rate in the current support owed in Virginia and 
collecting right at 57 percent of the current support that is 
owed.
    As Mr. Doss pointed out, it is somewhat specious at times 
to go back and include arrearage figures that include people 
that are deceased and still owe an arrearage and owe interest, 
and so that inflates the number and makes states look 
artificially bad. I would only add that for clarification.
    But my remarks today are focused on the state and National 
New Hire Directories. All employers now report employees that 
they hire within 20 days. I must say that most report within 48 
hours. It is a simple matter of filing out the W-4 form, and 
you do not have to add anything extra to the W-4, it is filled 
out as it was intended by the Federal Government to start with.
    These reports help measure, as you brought out earlier, 
Madam Chairwoman, not only just the people that have gone to 
work, but also it helps us to locate absent parents, enforce 
outstanding support orders, establish paternity, and basically 
track people down and make them accountable.
    With these quick matches, child support workers can 
initiate income withholding much sooner than previously 
possible. And I have already mentioned about paternity, and 
that will work very much so for the never-married population as 
we do in-hospital paternity when, as you said, 80 percent of 
the people indicate that it is an important relationship 
whether they have gotten married or not. And we do in-hospital 
paternity immediately to when they still have that relationship 
and those feelings, so that two or 3 years down the road when 
they perhaps do not have those same feelings, we do not have to 
turn to the New Hire database or any other database to try to 
establish paternity.
    I have three charts I would like to show the Committee--and 
they moved them to the right. Thank you. Just in the 90 days 
from when somebody goes to work and when the old system would 
have quarterly reports of new hires, we have collected $43 
million over the last 5 years--just in those 90-day periods 
where we previously did not have the National Director of New 
Hires. So that $43 million is money that would not have been 
collected.
    I would like to add, also, that this is an excellent 
example of public-private partnership. The State of Virginia 
contracted this out to PSI, Inc., who does a wonderful job on 
it. It is cheaper than the state. I didn't have to hire 
employees. And it is basically a self-run operation that pays 
for itself.
    The next chart moves to the National Directory of New 
Hires, which we are certainly a member, and most states are by 
now. Since July 1999, Virginia has received 255,000 matches 
both new hire quarterly wage and unemployment claims. Between 
1997 when Virginia began using the national data and 1999, the 
number of income withholding actions increased by 22 percent. 
This year, we expect to increase the number of income 
withholdings by 31,000, a 27% increase. So, right there is a 
49% increase in the number of wage withholdings in a two-to 3 
year period.
    This dramatic increase in income withholding actions comes 
as a result of Virginia increasing its automation capabilities 
and most of the income withholding documents that are produced 
now are done automatedly. We get a report at night. The next 
night it produces an automated wage withholding, and it goes to 
the employer, and my child support workers never touch the 
action, it is just documented in the case files, and all we 
wait for is in about 13 days, whenever the man or woman gets a 
paycheck, we get a return on investment by getting the money.
    The last chart that I have may help describe to you when we 
are going to see some improved results. Right now, we collect 
over $1 million a day in Virginia, on 422,000 cases. You will 
notice the green bar is the collections bar, the blue bars are 
the caseload. The green is going up faster than the blue. Even 
though we will see an increase in caseload as the population 
continues to increase, the divorce rate stays at 50 percent, 
and the out-of-wedlock birth rate maintains itself at about 25-
30 percent. I think you will see within the next 2 years 
dramatic increases in the number of parents held accountable 
for their children both through driver's license suspensions, 
through income withholdings, through established paternity at 
the hospitals, and all the tools that you have entrusted us 
with that are now coming to fruition and are actually showing 
some remarkable--remarkable--improvements.
    As you said earlier, in 1997 we located 1.2 million people 
using the National Director of New Hire, and the next year 2.9 
million, and already this year over 2 million, just in this 2-
month period. It is becoming increasingly harder to hide in the 
United States. That concludes my testimony, Ma'am.
    [The prepared statement follows:]

Statement of Nick Young, Director, Division of Child Support 
Enforcement, Virginia Department of Social Services, Board Member, 
National Child Support Enforcement Association, and Eastern Regional 
Interstate Child Support Association, and Officer, National Council of 
Child Support Directors

    Good morning Madam Chairman and members of the 
Subcommittee. My name is Nick Young, and I am the Director of 
the Virginia Department of Social Services' Division of Child 
Support Enforcement. I am also a Board member of the National 
Child Support Enforcement Association (NCSEA) and the Eastern 
Regional Interstate Child Support Association (ERICSA), as well 
as an officer in the National Council of Child Support 
Directors (NCCSD).
    The subject before you today is the ``Feasibility of 
Shifting the Nation's Child Support Enforcement Program to the 
Internal Revenue Service.'' I am here today to tell you that 
such a major operational shift will negatively influence, in a 
very dramatic way, the laws and systems you have worked so hard 
to put in place. Such a significant shift will endanger the 
vision you have set forth for welfare reform and jeopardize 
full implementation of the powerful new tools you have given 
states to realize success in their Child Support Enforcement 
Programs. My remarks today will focus on the National Directory 
of New Hires (NDNH). This, and other initiatives that you have 
put in place, will be adversely affected. Specifically, I 
portend that you will lose the momentum that has taken four 
years to achieve, severely disrupt the Program, and compromise 
its ability to serve our citizens by making such a major change 
as asking the IRS to collect child support. My comments, of 
course, will be from the perspective of the successful program 
we run in Virginia, and specifically the New Hire Reporting 
System, which is showing great results.
    First, permit me to share a couple of telling statistics 
about Virginia's child support enforcement program: Our 
caseload today is 421,000, representing approximately 558,000 
children--25 percent of Virginia's child population. Though 
Virginia is recognized as having a very efficient program, it 
is unfortunately the case that we carry a $1.65 billion 
arrearage, an amount that is growing by $200 million a year. 
Our caseload, which had grown by 25 percent between 1996 and 
1999, has now leveled off, while our collections continue to 
increase at a rate of approximately 13 percent per year. We are 
one of only a handful of states that can conduct our business 
both administratively and through the courts. As a result, 
approximately 70 percent of our cases are managed 
administratively, which saves a great deal of time, paperwork 
and money. Our work is also accurate; we have a very low rate 
of appeals of our administrative decisions. Virginia was one of 
the first two states in the nation to receive in early 1996 
full federal certification of its automated case management 
system, placing Virginia in the forefront of the nation 
regarding such systems. It is the promise automation holds, in 
conjunction with the powerful new tools available under the 
Personal Responsibility and Work Opportunity Reconciliation Act 
(PRWORA) that will bring to fruition the full potential of the 
nation's Child Support Program.
    In many ways, the status of Virginia’s child support 
program illustrates challenges experienced throughout the 
nation in child support enforcement today. The overall picture 
is a study in contrasts. The good news is that Virginia 
collected over $350 million in child support in state fiscal 
year 1999--a record. The bad news is that this amount is but a 
drop in the bucket compared to the $1.65 billion that is still 
owed. The good news is that we are extremely productive in our 
work: for every $1.00 spent, we collect $5.63 in child support.
    More good news is the success of the national and 
Virginia's own statewide welfare reform initiatives. Welfare 
reform has resulted in a tremendous drop in the welfare portion 
of our child support caseload. Although our overall caseload is 
still rising somewhat, welfare reform is definitely working. We 
are heartened by the tremendous level of federal support 
welfare reform has given to many of Virginia's creative 
initiatives to combat the child support problem. These 
initiatives--some of which I am about to highlight--have helped 
make Virginia's program one of the most dynamic, successful 
child support enforcement programs in the country.
    Most of my comments today focus on strategies Virginia uses 
to crack down on child support evaders. Many of these 
strategies are today in existence and thriving because of 
PRWORA. I stand before you today to emphasize that welfare 
reform has given us the means to strengthen our enforcement 
activities and crack down on delinquent parents and deliver to 
children the support they deserve.
    PRWORA marked a profound turning point in fighting the twin 
scourges of welfare and child support delinquency and has 
generated success on many fronts.
    First, the new law has proven to be a catalyst for profound 
changes in many of the basic statistics regarding welfare. In 
Virginia, the most dramatic example is the 30 percent reduction 
of child support TANF (Temporary Assistance for Needy Families) 
cases since the law went into effect. More parents have moved 
off the welfare rolls and into jobs, thereby providing the 
means to support their children. Virginia's non-TANF child 
support caseload has correspondingly gone up--not altogether a 
bad problem, since many of those cases are former TANF 
recipients. Welfare reform is definitely providing more 
Virginia children the support they are due.
    PRWORA has also generated a burst of collaboration and 
cooperation between public and private entities, such as law 
enforcement, the courts, and public agencies.
    One example is Virginia's co-location initiative. Begun as 
an experiment in the summer of 1993, the co-location of public 
assistance and child support staff has blossomed under welfare 
reform into a mutually beneficial strategy for TANF (Temporary 
Assistance for Needy Families) and child support staff and 
clients. Co-location has helped promote customer self-reliance 
under welfare reform, and allows TANF and child support staff 
to collaborate to provide better service for customers, 
streamline elements of case management, reduce administrative 
costs, and above all, provide more successful outcomes for 
customers. Co-location is now a vibrant statewide strategy. As 
of today, approximately 26 child support staff have been co-
located full- or part-time at 28 sites serving 22 local social 
service agencies. Five distinct models tailored to specific 
community needs have evolved throughout the state.
    Another example of collaboration and cooperation is 
Virginia's Paternity Establishment Program (PEP). Established 
in 1990, PEP grew under welfare reform into an effective 
program that gives unmarried parents the opportunity to 
voluntarily acknowledge paternity in the hospital, before the 
child goes home. Currently, 69 hospitals are participating 
statewide, generating approximately 10,000 paternities per 
year.
    Yet another example is the Commonwealth's KidsFirst 
Campaign. Initially begun in June 1997, KidsFirst kicked off 
with a two-week limited amnesty offered to 57,000 of the most 
egregious support evaders. While the amnesty netted $1.2 
million from 4,039 noncustodial parents; the crackdown that 
followed also generated outstanding results. Working in close 
cooperation with local law enforcement and judicial 
communities, a statewide ``roundup'' resulted in 512 arrests 
and show-cause notices issued. Today, eleven roundups later, 
the money generated by this campaign has topped $91 million, 
and 37,315 delinquent parents are paying support. An added 
bonus has been enhanced rapport with the law enforcement 
community and the judiciary. PRWORA has also provided 
authorization to strengthen a multitude of enforcement 
mechanisms, nearly all of which have allowed Virginia to expand 
and enhance its efforts to crack down on child support evaders.
    One such example is the suspension of drivers' and 
professional licenses. Since Virginia's welfare reform law was 
implemented in July 1995, Virginia has suspended a total of 
2,600 driver’s licenses alone, generating collections in 
excess of $61.8 million. Virginia has fully implemented the 
revocation of both occupational and recreational licenses, as 
well as the denial of passports to delinquent parents.
    Virginia's In-State New Hire Program is our premier 
example. Thanks to federal welfare reform, Virginia now 
requires employers to report all new hires within 20 days of 
employment. This measure helps locate absent parents, enforces 
outstanding child support orders, and saves administrative time 
and expense. With these quick matches, child support workers 
can initiate income withholding much sooner than previously 
possible. Additionally, this tool facilitates faster paternity 
establishment and--as we all know--paternity establishment gets 
the ball rolling toward obtaining financial supportfor the 
child. Approximately $43 million in collections can be 
attributed toVirginia's New Hire Program since its inception in 
July 1993.
    Virginia also participates in and benefits from the 
National Directory of New Hires, the federal program to place 
new hire information in a national database. Since July 1999, 
Virginia has received 255,109 matches from new hire, quarterly 
wage, and unemployment claims submitted by other states. 
Between 1997, when Virginia began using NDNH data, and 1999, 
the number of income withholding actions increased by 22 
percent. This year, we expect to increase the number of income 
withholdings by 31,000 (from 113,000 in 1999 to144,000 in 
2000--a 27 percent increase). This dramatic increase in income 
withholding actions comes as a result of Virginia’s 
increasing its automation capabilities. Many income withholding 
documents are now produced without manual intervention.
    Still more examples center around the general challenges of 
pursuing interstate cases. Expanding the Federal Parent Locator 
Network to improve the collection of locate information on 
interstate cases, adopting more uniform state child support 
laws to improve enforcement activities between states, and 
allowing administrative enforcement of interstate cases have 
all begun to ease the pursuit of child support evaders across 
state lines. In addition, the passage of the Uniform Interstate 
Family Support Act (UIFSA) in each state has given states a 
framework to process interstate cases more sensibly. Virginia 
is redoubling its efforts to train its staff on the intricacies 
of UIFSA rules and working interstate cases. It is exploring 
the option of hiring private contractors to work the cases in 
other states where large caseloads and differing rules have 
prevented a Virginia case from being worked. It is developing a 
tracking program that will allow us to identify specific states 
and localities where one-on-one interaction is needed to 
resolve case processing problems.
    Other examples of improved enforcement techniques include 
mandating the use of a single case registry, the authority to 
enforce child support obligations from federal employees and 
members of the Armed Forces, and many changes in the law that 
allowed the administrative process to be streamlined. All of 
these elements of PRWORA--taken alone or together--have 
resulted in marked improvements to Virginia's child support 
enforcement efforts--particularly the ability to crack down on 
delinquent parents.
    I've enumerated a number of very powerful enforcement tools 
that states are using to help them collect the over $50 billion 
owed the Nation’s children. Moving the Child Support 
Enforcement Program under an agency already scurrying to 
recreate itself as a friendlier, more accountable agency will 
imperil the entire child support enforcement operation. Such a 
move at a time when the nation is enjoying unprecedented child 
support collections and a leveling of its caseload requires 
serious reconsideration, as it will most assuredly have 
significant deleterious effects on the program and its 
customers. Similarly, the unrealized promise of greater 
automation held out by welfare reform will be endangered. Many 
states are still working to fully automate their child support 
programs to take advantage of the new tools. Even more 
important is maintaining and nurturing the vital collaboration 
and linkages that have been so carefully crafted with the 
judicial and law enforcement communities, as well as the public 
and private sectors. These important relationships stand to be 
irrevocably damaged. I cannot imagine why, at this late 
juncture, we would want to start anew....It is taking a step 
back to ask an agency that has no foundation in social welfare 
to assume responsibility for a Program that has evolved from a 
collection agency to one that considers the emotional, as well 
as the financial, well-being of the nation's children.
    In conclusion, PRWORA has served as the catalyst for the 
most comprehensive revisions to the nation's Child Support 
Enforcement Program in its 25-year history. PRWORA's 
comprehensive elements also fully support Congressional 
determination to clearly communicate society’s lack of 
tolerance for those who fail in their responsibilities to 
financially and emotionally support their children.
            Thank you.

                                

    Chairman Johnson. Thank you very much, Mr. Young.
    Mr. Cohen.

 STATEMENT OF JEFFREY COHEN, DIRECTOR, VERMONT OFFICE OF CHILD 
                            SUPPORT

    Mr. Cohen. Thank you. Good afternoon. My name is Jeff 
Cohen, I am the Director of the Vermont Office of Child 
Support. I have been the Director for 10 years and have been 
with the child support program for about 19 years.
    We hear a lot about how effective or ineffective the child 
support program is nationally, and typically the comparisons 
are made comparing states-against-states, the states over time, 
or perhaps the states' performance against some theoretical 
amount that might be collected.
    I would like to try a few other ways of looking at state 
performance, particularly looking at the benefits and 
effectiveness of the child support program especially compared 
to other alternatives. I believe you will see that it is a very 
effective program. And another point is that you pretty much 
get what you pay for.
    The first program I would like to have you look at is 
Medicaid, which I think you are familiar with. The red bar in 
the negative numbers is the amount of administrative costs used 
to pay out Medicaid benefits. It is almost $7 billion in order 
to pay out $150-plus billion in public benefits.
    Another program that you are familiar with is TANF. TANF 
has about $3 billion-plus in administrative costs. These are 
1996 figures. Those administrative costs support about $20 
billion in TANF benefits that go to families. So, in other 
words, when you look at TANF, families are only getting 86 
percent of the total dollars that are expended for that 
purpose.
    When you look at the child support program under Title IV-D 
of the Social Security Act, you see that there is also about $3 
billion in public taxpayer money spent for the cost of the 
program. But unlike the other programs, the benefit of child 
support, the $12-plus billion that was collected in 1996, for 
example, is not paid out of public coffers, but comes from 
noncustodial parents. So, just looking in these terms alone, it 
is an incredibly cost-effective way to benefit low-income 
families. On top of the actual collections, there is also a 
cost-avoidance factor. The Urban Institute numbers that I have 
used estimate that over $1 billion in cost-avoidance is 
associated with the IV-D program relating to avoided Food Stamp 
costs, TANF costs, and so forth.
    Another way of looking at this from a monetary standpoint 
is the return on investment. Because TANF has a relatively high 
proportion of administrative costs, there is essentially a 16 
percent negative return on investment, with Medicaid it is 
less. Comparing it to another number you might be familiar 
with, the S&P 500 only increased about 19 percent. I say only, 
but for one year up to April 1998. Compare that with the 
investment in the child support program. For every dollar spent 
in child support, even after you deduct out the administrative 
costs, we were returning about $3.00 for every dollar spent on 
the program--incredibly effective--which is not to say we 
wouldn't like to see that go higher, but when you consider 
other alternatives it still is a good bang for the buck.
    I might also add that when it comes to costs, the average 
cost of a child support case in this country is about $158 
compared to about $717 of admin cost for an average TANF case. 
So, child support is relatively cost-effective.
    One last thought is, you get what you pay for. We heard 
testimony about the low performance of states. If you look at 
the bottom-most five states in this country, in terms of 
percent of cases with collection, you see that, using the scale 
across the bottom, that they are collecting in only about 14 
percent of their cases. They are also spending only about $103 
per case. So, in other words, those states that spend about 
$100 per case only collect in about 14 percent of the cases.
    In the case of the five states that spend the most on their 
caseload on a per capita basis have very different results. 
Those states, the top performing states, spend almost three 
times as much per case and they collect almost three times as 
much across their caseload. They collect in 34 percent of their 
cases, on average, which suggests to me that there is a strong 
correlation between what you put in and what you get out of the 
program, and that we may be, in some states, being ``penny wise 
and pound foolish'' when it comes to investing in the program. 
Thank you.
    [The prepared statement follows:]

Statement of Jeffrey Cohen, Director, Vermont Office of Child Support

    Good morning, my name is Jeff Cohen, I have been involved 
in the child support program for over 18 years and have been 
the Director of the Vermont Office of Child Support for the 
past 10 years. Thank you for inviting me to testify on the 
status of the child support program.
    Over the past few years there has been a lot of discussion 
about the performance of the national child support program. 
Typically the discussion revolves around whether the child 
support program administered under Title IVD of the Social 
Security Act is effective. Often these discussions try to 
measure programs by comparing one state to another, comparing 
states over time or, perhaps comparing actual state performance 
against the theoretical amount of child support that might be 
paid if all noncustodial parents contributed their fair share.
    I suggest there is yet another way to consider the 
performance of the child support program; look at outcomes for 
every dollar of government funding invested child support 
compared to alternative investments.
    As the result of Welfare Reform, more and more families 
have been dropping off the welfare rolls. At the same time, 
these families have become part of our non-public assistance 
child support caseload under title IV-D. As a result, most of 
our child support caseload now consists of low income families 
who no longer have the benefit of TANF as a safety net. For 
many of these families, the national child support program is a 
critical income support program to supplement wages.
    With that said, how does the Child Support Program stack up 
against other programs that might benefit the same population? 
The chart below compares a few of the most well-known programs. 
The first column shows $153 billion in total Medicaid 
expenditures in federal fiscal year 1996. Of these 
expenditures, $6.7 billion went to administrative costs. In 
other words, recipients received about 96 cents of each dollar 
spent.
    The next column shows that recipients in the TANF program 
only received 86% of the $23.7 billion total spent on the 
program, the other 14 percent went to administration.
    The third and final column shows that state and federal 
governments combined contributed a total of about $3 billion 
nationally toward the administration of the child support 
program. This resulted in over $12 billion in child support 
``benefits'' that were returned to families, or reimbursements 
to state and federal government. Unlike the benefits in other 
programs, this money did not come from taxpayers. It came from 
noncustodial parents of children. So, unlike other programs 
there is a significant net gain rather than a net loss for 
every public dollar invested.
[GRAPHIC] [TIFF OMITTED] T1291.008

    Looking at the program purely from an investment standpoint 
even after deducting administrative costs from child support 
collections, the chart below shows that returns on investment 
in the child support program far exceed the alternatives. In 
fact the return is almost 300%.
[GRAPHIC] [TIFF OMITTED] T1291.009

    Aside from the obvious benefit derived from child support 
collections which results directly in money to families, other 
non-monetary benefits are also provided including:
     percentage establishment,
     health-care coverage for children,
    cost avoidance for other programs such as food stamps, 
TANF, and Medicaid, and
     deterrence which impacts IV-D and Non IV-D 
families alike.
    Considering the myriad of activities involved in each case 
including disbursements, location of parents, establishment of 
orders, modification of orders, and enforcement of orders for 
millions of cases, the program costs per case are relatively 
low. The annual administrative cost per child support case is 
only about $158 or only about 22% of the $717 annual 
administrative cost per TANF case.
    Finally, both states in the federal government should 
consider the correlation between investment in the program and 
program performance. Using data from the Federal of Office of 
Child Support's 21st Report to Congress the chart below 
compares states with respect to investment per child support 
case and outcomes as measured by the percentage of all cases 
with a child support collection. The five states that spent the 
least per child support case ($103 per case on average) made 
collections in only about 14% of their child support caseload. 
At the same time states that spent three times as much per case 
collected support at a rate almost three times higher than the 
lowest performing states.
[GRAPHIC] [TIFF OMITTED] T1291.010


                                


    Chairman Johnson. Thank you very much, Mr. Cohen.
    Mr. Owen.

 STATEMENT OF JAMES OWEN, PAYROLL OPERATIONS/SERVICES PAYROLL 
         MANAGER, MEIJER STORES, GRAND RAPIDS, MICHIGAN

    Mr. Owen. Thank you. I appreciate the opportunity to speak 
this morning, or this afternoon, in regards to an employer's 
perspective of the bill and what we see from the SDUs, state 
disbursement units.
    My name is Jim Owen. I am Payroll Manager from Meijer 
Stores, and we employ about 80,000 people in the Midwest. We 
process many child support orders. We get about 60 to 75 new 
orders a week. We have about 1610 active orders distributed to 
about 218 different agencies and courts around the country 
sending payments to about 18 different states, that totals 
approximately $6 million in withholding that go to the children 
each year. I think that is great, that everybody who has 
spoken, has focused on how we get the money to the children as 
quick as possible.
    Three things I want to try and address today, one is 
dealing with the need for burden reduction on employers; the 
second being how the H.R. 1488 would affect employers--even 
though my testimony goes into a lot more detail, I want to 
share a couple of highlights--and, finally, some of the 
successes from the employer's perspective of the SDUs.
    On the burden reduction for employers, employers really 
supported the SDUs. We supported it, Meijer Stores supported it 
and joined with many other employers. In fact, I might add that 
I am an American Payroll Association member, which represents 
18,000 individuals and businesses, including Meijer, who backed 
the establishment of the SDUs. And some of the reasons why we 
backed the SDUs were because it reduced the check processing 
and reconciliation fees--some people won't think of that as 
much to deal with, but it is; reduced numbers of check issue 
problems helps reduce employer burdens--for example, when we 
send a check to all these various courts, if it isn't 
identified just perfectly, you would get it back, and it not 
only has just the person that you are sending the court order 
to, but it has a list attached to it, so you have maybe ten 
orders attached to that one check, it would all be returned to 
you, causing the payment late to all ten custodial parents on 
that particular check. So that has been resolved, going through 
the SDUs. We are not receiving payments back with the lists of 
custodial parents.
    Also, the SDUs open up opportunities for electronic 
payments using e-commerce, going into the EDI processing, 
staying current with business world changes and staying in tune 
with low overhead and improved servicing. And I think I have 
heard a couple testimonies identifying the SDUs need time now 
to develop, and we agree because we have experience--from the 
private sector when you are trying to implement projects, it 
takes time to reap the full benefits.
    When we also look at many of the states that do have SDUs, 
they even had them before this law took place, but the ones 
that did not are involving employers. The more successful ones, 
like Connecticut, Minnesota, Michigan, who are involving 
employers, are finding benefits by getting their input up 
front. In fact, I am personally involved with the Michigan on 
their Business Rules Oversight Committee, to try and do things 
right to make sure that the money is going to get processed as 
quickly as possible.
    Now, when we talk about H.R. 1488 and the effect on 
employers, there is a days-and-days issue. For example, it 
takes, under the bill, 30 days to initiate a certificate, 20 
days to verify it, 20 days to get to the employer, 30 days for 
a correct order to take effect in monthly payrolls. So you are 
extending the time, that I think I heard on my right in today's 
process, dramatically from what is currently being available.
    Another issue is with the handling of the W-4 in HR 1488. 
Additional handling of withholding certificates, copies being 
sent into the secretary, employee changes jobs, you are 
constantly redoing those W-4 withholding certificates. W-2 HR 
1488 impacts reporting. We are being asked to submit things on 
W-2s that we have never done before. We are being asked to do a 
whole retooling with a huge expense to employers and states, to 
something that we feel is working at this point from our 
perspective. We feel that the SDUs are working from the 
employer's perspective. We are able to talk to those states on 
an individual basis when we have issues or problems.
    Some of the successes of the SDUs include open lines of 
communication, which I mentioned; our team member productivity 
and fewer costs from team members having late custodial 
payments; fewer issues with correct mailing addresses, because 
there is only one address; and state SDUs--there are 42 in 
operation, nine in process of operation--and this is done by a 
survey that the American Payroll Association along with other 
employers did--and there is a lot of work being done to bring 
everybody up-to-snuff so that they can process the payments 
that employers do send them. Thank you.
    [The prepared statement follows:]

Statement of James Owen, Payroll Operations/Services Payroll Manager, 
Meiger Stores, Grand Rapids, Michigan

    My name is James Owen, Payroll Operations/Services Payroll 
Manager for Meijer Stores. Meijer Stores is a retailing firm 
which employs nearly 80,000 team members. We receive and react 
on many child support withholding orders each year, including 
1,610 active orders. In addition, we remit money in 18 states. 
These orders respond to directives from 218 courts and agencies 
totaling some $6 million in payments annually.
    I would like to address the impact of the State 
Disbursement Units on Employers and the potential impact of 
Bill H.R. 1488. Specifically, I’d like to address:
     Burden reduction for employers.
     How H.R. 1488 would affect employers.
     Successes of the State Disbursement Units.

    THE NEED FOR BURDEN REDUCTION--SDU AND EMPLOYERS:

    As an employer, Meijer Stores joined with many other 
employers in strong support of a centralized system for 
remitting child support payments. I might add that the American 
Payroll Association, which represents some 18,000 individuals 
and businesses including Meijer, also backed the concept of 
establishing SDUs. We had many reasons for seeking this 
dramatic reform to the current system. Among the key reasons:
    1. For large employers like mine, remitting to multiple 
jurisdictions was extraordinarily burdensome and time 
consuming. As I stated earlier, my company alone was responding 
to orders from more than 200 jurisdictions. Each jurisdiction 
had its own requirements. States like Texas, with county based 
child support programs, were particularly difficult for us. 
That one state alone has more than 200 counties, each with its 
own set of rules for us to follow.
    2. Various jurisdictions within one state could vary 
significantly in how they collected remittances from employers.
    3. Each remittance required us to carry-out a separate 
check processing and reconciliation program.
    4. We believed--as did many states--that the consolidation 
of remittance locations would promote the use of electronic 
payment technologies in the states. In other words, it would be 
far more economical for a state to receive payments from one 
location than to have multiple remittance sites all doing 
essentially the same thing.
    5. We were looking for some standardization of 
organizational structure within the states. Depending on how a 
state's child support program is organized, we may be sending 
payments to a court, an administrative agency or in some 
instances directly to a custodial parent. We were optimistic 
that in revamping their remittance procedures, states would 
invite input from employers; much the way the federal Office of 
Child Support Enforcement always has. In many instances we were 
not disappointed. States such as Connecticut, Minnesota and 
Michigan involved employers in every phase of their SDU's 
development. I have personally been involved with the 
development of the Michigan SDU and sit on the state's Business 
Rules Oversight Committee. The systems that have been developed 
through these kinds of partnerships have resulted in SDUs that 
are cost effective for the states, manageable and cost 
effective for employers and most importantly, get money to 
children more quickly.

    HOW H.R. 1488 WOULD AFFECT EMPLOYERS:

    H.R. 1488 is geared at transferring the responsibility for 
child support collection and disbursement from the states to 
the Internal Revenue Service. Employers tend to favor programs 
that are centralized, since they tend to reduce redundancy of 
data and reporting. This program (H.R. 1488) has many issues 
for concern. These issues, along with some brief concerns of 
employers are listed below:
    1. Cost. Employers have invested huge amounts of resources 
to accommodate a state-based withholding system. The costs 
associated with retooling their systems to accommodate a new 
IRS system could be enormous.
    2. Information Submission Requirements. It is not clear 
what information employers would be required to remit with our 
payments. We are concerned that giving over collection and 
remittance authority to the IRS would require us to collect, 
remit and track information we don't already handle. This of 
course, would carry a whole new set of costs.
    3. Multiple Use of Tax Forms. The bill seems to suggest 
that some business tax forms would be used for child support 
collection purposes as well. However, in practice, the person 
who deals with business taxes is often not the same individual 
who deals with child support payments.
    4. BILL: Standardized information that the States would 
have to report to the IRS could potentially impact what the 
Employers would have to report. Employer's may be asked to 
report information that is currently not tracked or maintained 
today.
    CONCERN: As the IRS develops standards and other pertinent 
information it may require from the states on withholding 
certificates, this would be additional information that may 
impact what the employers are required to send to the States 
and potentially to the IRS.
    5. BILL: The employee must submit a revised withholding 
certificate, if the obligation changes, within 30 days of the 
change. If the employee has multiple employers the employee may 
split up the obligations as long as the separate payments equal 
the total obligation.
    CONCERN: Again, there is an issue here of impacting the 
paperless withholding certificates many employers have 
implemented. The splitting up of the employee obligations 
complicates the withholding process for employers. It allows 
the employee full autonomy with the employer and will produce 
frequent changes to certificates as many people move from job 
to job. Employers are used to requiring a document from a third 
party that details the withholding obligations.
    6. BILL: Employees are to specify, on each withholding 
certificate A) the monthly amount (if any) of each child 
support obligation of such employee and B) the TIN of the 
individual to whom each obligation is owed.
    CONCERN: The transition to the Internal Revenue Service is 
vague, if this were to take place. Transitioning this type of 
processing out of the state systems and into the IRS would be 
extremely difficult and expensive. Employers will be handling 
these forms multiple times. Also, the efforts of making 
subsequent withholding certificates filed electronically after 
the original form will be greatly impacted. This will impact 
employer's ability in reducing paper flow because many 
paperless systems do not have fields available to process the 
additional required fields. In addition, somehow theinformation 
is to be sent in to the Secretary.
    7. BILL: The employer who receives a certificate that 
specifies a child support obligation, must withhold during each 
month that such certificate that is in effect, an additional 
amount equal to the amount of such obligation or such other 
amounts as may be specified by the Secretary.
    CONCERN: The determination of what to withhold when would 
be very complex and confusing to employers. We would apparently 
be receiving the amount to withhold from the employee and then 
an additional document from the Secretary indicating other 
withholdings. The timing of all these notices, processing the 
paperwork and accuracy of withholding would be a significant 
burden on the employer community. The lack of proper 
documentation, like the Standardized Income Withholding form, 
would cause significant confusion to the origination of any 
deductions made by the employer of the employee wages.
    8. BILL (Remittance of certificate): The bill states that 
every employer who receives a withholding certificate shall, 
within 30 business days after such receipt, submit a copy of 
such certificate to the Secretary. This seems to imply that 
additional information is going onto the withholding 
certificates.
    CONCERN: Employers are currently sending new hire 
information to the states. Multi-state employers are sending 
information electronically to the states. The bill is now 
indicating employers will have to send another copy to the 
Secretary. There are also no provisions of eliminating the 
paper flow and allowing employer's paperless filing options. It 
appears this may not be cited because of the need to have the 
employee's signature for the income withholding amounts, 
otherwise the IRS would be lacking in legal cases for non-
compliance of the employee.
    9. BILL (Exception Processing): Employers would need to 
review exceptions if; 1) a previous withholding certificate is 
in effect with the employer and 2) the information shown on the 
new certificate with respect to child support is the same as 
the information with respect to child support shown on the 
certificate in effect.
    CONCERN: Allowing employees to change withholding as much 
as they change jobs will cause a significant burden on 
employers in tracking this activity and maintaining all the 
withholding certificates for multiple purposes; income tax 
deduction determination and withholding of child support 
amounts.
    10. BILL (Time-lapse): Within 20 business days after 
receiving withholding certificate of any employee, the 
Secretary will verify the obligation connected with the 
certificate.
    CONCERN: This Bill is allowing more time to pass than is 
currently recognized, in ensuring the correct withholding 
amounts are withheld from the employee's wages. This will 
cause, at minimum, more frequent changes to existing 
withholding orders or certificates under this Bill than ever 
before.
    11. BILL: If the Secretary determines that an employee's 
child support obligation is greater than the amount (if any) 
shown on the withholding certificate in effect within 20 
business days the employer will be notified of the change and 
the employer must then apply the adjusted amount.
    CONCERN: With all the business days provided in the various 
steps of an income withholding deduction determination, under 
this Bill, it will take ``DAYS AND DAYS'' for a corrected 
withholding order to take place. The process described in this 
Bill tends to extend the amount of time for an order to begin 
and allows for more loopholes for the employee to evade the 
withholding. In addition, there appears to be much more paper 
processing and handling of an order from the employer 
perspective. Instead of handling an order once....there are 
many updates, revisions, etc. that apparently would become 
inherent in the new system.
    12. BILL: Withheld Child Support is to be shown on W-2 
forms.
    CONCERN: Many Payroll systems do not track the total 
withheld in Child Support. This has not been an obligation of 
the employer in the past. This would cause significant changes 
for employers to both their current systems and maintenance of 
balances as well as the rework to providethis information on W-
2s.
    13. BILL: A new withholding certificate is required to each 
of theemployee's employers within 90 days of the enactment of 
this law.
    CONCERN: This provision appears unclear. If this really 
means a new certificate on all employees, this would be an 
extreme burden on employers, especially large employers like 
our company with nearly 80,000 Team Members.

SUCCESSES OF THE STATE DISBURSEMENT UNITS:

    From the development of New Hire Reporting and now the 
implementation of the State Disbursement Units, employers and 
state agencies have developed significant teaming 
relationships. Employers are able to provide input and the 
States are listening in order to make their programs 
successful.
    In the first year of New Hire Reporting 1.2 million parents 
who owed child support were located. Last year that figure 
doubled, resulting in nearly $16 billion being collected for 
children. Much of this success is due to the partnership 
between states and employers. Olivia A. Golden, Assistant 
Secretary for Children and Families at the U.S. Department of 
Health and Human Services stated, ``Receiving the Hammer Award 
(presented by Vice President Al Gore) is a tribute...to the 
millions of employers who make it work everyday.'' David Gray 
Ross, Commissioner of the OCSE, replied, "I am very 
proudof the nation's child support workers and the nation's 
employers...this is a government-private sector partnership at 
its best, truly achieving results Americans care about'' (Press 
Release, 2-9-00).
    With the State Disbursement Units established in most 
states, employers have experienced many gains. As in any new 
process there have been some issues to work through, but the 
significant gains for employers include:
    1. One place for employers to go for problem resolutions on 
payment processing.
    2. Open lines of communication between courts and state 
agencies with employers on procedural issues because less time 
is being spent on payment processing at the local levels.
    3. Employers team member's productivity increased and fewer 
calls from team members and custodial parents on late payments. 
A few start up states have had issues, but are now involving 
employers more to assist in the process.
    4. Fewer issues with correct mailing addresses and returned 
checks with multiple orders.
    5. Employers and states are now able to assist one another 
on undistributed funds.
    H.R. 1488 would be changing the new processes and 
procedures that employers and States have been working so hard 
to implement in the last couple of years. The programs have 
been developed with emphasis on accuracy of payments and 
reducing the time it takes for withheld funds to make it to a 
child's custodial parent. H.R. 1488 could cause the Child 
Support program to take a very large step backwards at great 
cost to employers and greatly minimize employer involvement in 
developing and maintaining withholding related programs.
    Thank you for your time and consideration of my comments on 
the State Disbursement Units and Bill H.R. 1488. Please feel 
free to contact me if you have any questions or require 
clarification of any of my comments.
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[GRAPHIC] [TIFF OMITTED] T1291.018


                                


    Chairman Johnson. Thank you very much, Mr. Owen.
    Mr. Rogers.

STATEMENT OF R. MARK ROGERS, ECONOMIST, FEDERAL RESERVE BANK OF 
                            ATLANTA

    Mr. Rogers. Thank you, Madam Chair. As a formality, the 
following are my personal views and do not in any way reflect 
those of the Federal Reserve Bank of Atlanta nor the Federal 
Reserve Board of Governors. I am here as a professional 
economist, one who was a member of the 1998 Georgia Commission 
on Child Support and is familiar with the economics and 
regulations regarding child support. I am a split-custody 
parent and am familiar with the needs of both custodial and 
noncustodial parents.
    The key concerns I have about H.R. 1488 are the bill's 
apparent lack of constitutionality, the need for regulatory 
compliance by states and the IRS, the IRS' loss of 
confidentiality, the unintended political developments, and the 
loss of a broad appreciation of noncustodial parent needs for 
their children.
    First, does the Federal Government have authority to 
broadly transfer child support enforcement from the states to a 
Federal agency? Under the Tenth amendment, governance of 
domestic relations generally is reserved to the states. 
Specifically, the issuance or modification of marriage, 
divorce, award of child support or of alimony are reserved 
solely for the states, as spelled out in U.S. Supreme Court 
decisions, such as Ankenbrandt v. Richards.
    On another constitutional issue, states have different 
child support guidelines, and each state enforces its own 
guidelines. If the IRS is given national child support 
enforcement responsibility, will the IRS be open to complaints 
of violation of equal protection? In contrast, the IRS does not 
impose different income tax rates on different states.
    Next, under Federal-state financial agreements, states are 
to have met Federal regulations regarding the nature of the 
guidelines and protections for obligors, but no state has 
completely done so. Not only should these issues be resolved 
before transferring authority to the IRS, but resolving these 
regulatory issues is likely the best solution for child support 
compliance problems.
    As a Federal agency, the IRS would not be able to dodge 
lack of compliance with Federal regulations the states have. 
The IRS would face legal challenges in the following areas: 1) 
Child support guidelines should be rational and based on 
economic data for child costs, but are not; 2) Guidelines are 
supposed to take into account basic living needs of an obligor, 
but often do not and push obligors below the poverty level; 3) 
Employers are forbidden from withholding child support that 
exceeds limits set by the Consumer Credit Protection Act, but 
guidelines do exceed those ceilings in some states; 4) Child 
support obligors are not given the same subsistence protection 
that other debtors are given under the CCPA likely violating 
equal protection; 5) Guidelines that the IRS would be enforcing 
are supposed to comply with the Administrative Procedures Act, 
but generally do not.
    As a nationwide enforcer that is directly required to 
comply with Federal regulations, the IRS would face many legal 
challenges attempting to enforce noncompliant state laws.
    Next, as holder of record for child support cases, the IRS 
would lose the confidentiality of taxpayer files. As a matter 
of due process, parties in child support cases enforced by the 
IRS would be entitled to access to IRS records through standard 
requests for disclosure for court.
    Finally, there is the broad issue of the IRS not addressing 
both parents' needs. Placing child support enforcement under 
the jurisdiction of the IRS would be a move that runs counter 
to the recent and long overdue trend to look at child support 
enforcement as just one facet of children's needs. Focusing on 
collections alone is not in the best interest of children.
    After two decades of educating HHS, that Department, in the 
last few years, has acknowledged that the whole picture needs 
to be addressed, including the need for children to be nurtured 
by noncustodial parents.
    Visitation access programs, parenting skills classes, job 
training and education programs have been initiated by HHS, and 
these would be lost by focusing only on collections through the 
IRS. Noncustodial parents will be seen as only a checking 
account. Instead, the IRS would be viewed by noncustodial 
parents as siding with custodial parents and not being neutral. 
The IRS would see the political needs of custodial parents as 
being in the IRS' interest.
    I do not believe this Congress should set in motion these 
political developments with that of the IRS attaching itself to 
the politics of custodial mothers. This politicizing of the IRS 
would reduce the credibility of the IRS in its more traditional 
role of collecting general revenues for the Federal Government. 
However, should the IRS be granted this authority, I believe it 
is important that child support obligors be given a bill of 
rights analogous to a Taxpayer Bill of Rights. I have brought a 
draft version for your consideration. Thank you for your 
attentiveness.
    [The prepared statement follows:]

Statement of R. Mark Rogers, Economist, Federal Reserve Bank of Atlanta

    Madam Chair and Members of this Committee, thank you for 
permitting me to speak today. First, as a matter of tradition 
in accord with my employer's policies regarding employee public 
statements, I would like to state that the following are my 
personal views and do not in any way reflect those of the 
Federal Reserve Bank of Atlanta nor the Federal Reserve Board 
of Governors.\1\
---------------------------------------------------------------------------
    \1\ The speaker presents this testimony as an expert as a member of 
the 1998 Georgia Commission on Child Support (not necessarily 
representing other commissioners' views), as an economist published on 
child costs and other areas of economics, and as a representative of 
non-custodial parents as an officer of the Atlanta, Georgia based 
advocacy group, Fathers Are Parents Too. Presenter's 
email:[email protected]
---------------------------------------------------------------------------
    Second, I would like to mention my background. I'm a 
professional economist. I have authored books on analyzing 
economic data. Also, I served as the only economist on the 1998 
Georgia Commission on Child Support. While on that commission I 
conducted extensive research on child costs and on the history 
of child support guidelines, and compared guideline impact on 
custodial and non-custodial parents. I have been a non-
custodial parent since 1991 and have been an advocate for 
equality for both parents after divorce. Over one year ago, one 
of my two children moved to my household with eventual transfer 
of custody. I now can say that I have seen the needs for both 
custodial and non-custodial parents first hand.
    I would like to arrange my comments into several 
categories: (1) first, and most importantly, broad 
philosophical and political concerns about this proposed 
transfer of enforcement authority (2) legal and regulatory 
issues and, finally (3) implications for proper policy. Before 
beginning, I would like to state that I am completely in favor 
of appropriate child support enforcement. However, appropriate 
can only be defined in the context of the proper legal 
framework--including due process, as part of broadly 
encompassed domestic relations issues, and in the context of 
implementation using true economics of child costs.

Broad Issues

    My first reaction to placing child support enforcement 
under the jurisdiction of the IRS is that this would be a move 
that runs counter to the recent and long overdue trend to look 
at child support enforcement as just one facet of children 
living in two households. Putting child support enforcement in 
an agency that is technically focused on collections alone is 
not in the best interests of children. After perhaps two 
decades of educating personnel in DHHS, that department has 
only in the last few years acknowledged that the whole picture 
needs to be addressed--including non-custodial parent needs and 
children's needs in regard to being nurtured by non-custodial 
parents. Visitation access is now recognized as an issue that 
DHHS should be and is beginning to address. Only a department 
with a broad focus can properly address such a multifaceted 
issue of providing the proper legal and enforcement framework 
for not just financial support but emotional support as well. 
Transfer of child support enforcement to the IRS will likely 
result in a reversion to the old mode that non-custodial 
parents are good only for being a checking account for the 
custodial parent. This non-recognition of the other needs of 
children is not in children's best interest. Additionally, the 
IRS would be viewed by non-custodial parents as being solely 
concerned about the vested financial interests of custodial 
parents. The IRS would not be viewed as neutral by non-
custodial parents. Given Federal incentives for states to enact 
various child support enforcement procedures, the IRS also 
would be seen as a profit center for states with the child 
support profits being obtained at the expenseof non-custodial 
parents.
    The political issue is not a small one. It is one that in 
the long run will have a negative impact on the credibility of 
the IRS. It is generally acknowledged that any government 
agency will eventually develop close ties with its clientele if 
there are mutual benefits to reinforcing those relationships. 
Should child support enforcement be transferred to the IRS, the 
IRS would be viewed by custodial parents as their benefactor. 
Similarly, the IRS would see the political needs of custodial 
parents, as related to childsupport, as being in the IRS's 
interests in terms of maintaining or expanding its role. I do 
not believe that it is appropriate for this Congress to set in 
motion these long-run political developments with the IRS. I do 
not believe it is appropriate for the IRS to eventually attach 
itself to the politics of custodial mothers, however subtle or 
not-so-subtle such politics may become. In an agency solely 
focused on collections of child support, rather than in an 
agency that has authority to address the broader issues of 
visitation access, these inappropriate political ties are more 
likely to develop. Such political ties would be in sharp 
contrast to current policies of the IRS and also would reduce 
the credibility of the IRS in its more traditional role of 
collecting general revenues for the Federal government.

Constitutional Issues

    HR 1488 proposes to create a nationwide presumption that 
child support orders will be enforced by the Internal Revenue 
Service. In essence, a Federal law will mandate that a Federal 
agency will presumptively enforce individual state domestic 
relations orders. It is my understanding that under the Tenth 
Amendment to the U.S. Constitution that domestic relations 
issues that are not intertwined with specifically stated 
Federal issues, that those are matters specifically reserved 
for the states. Certainly, there are domestic relations issues 
that the Federal government can regulate as related to other 
Federal matters, but the U.S. Supreme Court has continued to 
hold to a well-defined domestic relations abstention doctrine 
in which specific domestic relations issues are completely 
reserved to the states. Specifically, the Federal government is 
not given authority for the granting, the issuance or 
modification of marriages, divorce, award of child support, or 
of alimony. This is spelled out in decisions such as 
Ankenbrandt v. Richard. \2\ HR 1488 attempts to use Federal 
statute to presume that the IRS shall enforce and collect child 
support, which would mean that a Federal agency would become 
entwined with part of the issuance of domestic relations orders 
as issued by individual states. The Federal government would be 
telling states how to issue these domestic relations orders, in 
part.
---------------------------------------------------------------------------
    \2\ Ankenbrandt v. Richards, 112 S.Ct. 2206 (1992).
---------------------------------------------------------------------------
    On another constitutional issue, currently, there are 51 
different sets of child support guidelines (including 
Washington, D.C.) but each state enforces its own guidelines. 
If the IRS is given child support enforcement responsibility, 
will the IRS be open to complaints of violations of equal 
protection? In other words, when a single Federal agency is 
enforcing child support, why should an obligor in Oregon pay 
child support based on one guideline and an obligor in 
Wisconsin based on another if both obligors have similar 
financial standing and the children similar costs? Should a 
single Federal agency enforce very different child support 
guidelines? This would be a sharp contrast to collection 
practices for Federal revenues. Certainly, taxpayers would 
complain and file suit if the IRS charged tax payers in 
different states different tax rates.

Legal Issues Regarding Compliance with Federal Regulations

    Before the IRS is given nationwide responsibility for child 
support enforcement, a number of key regulatory issues need to 
be addressed. In fact, these issues are the key reasons for an 
apparent lack of compliance by child support obligors. Not only 
should these issues be addressed before the IRS is given child 
support enforcement authority, but resolving these regulatory 
issues is likely the best solution for child support 
compliance.
    When the Federal government first offered incentive grants 
for adoption of state-wide guidelines for child support, 
Congress had the wisdom to establish criteria under Federal 
regulation that the guidelines should be based upon. Most of 
these are and have been found in the general vicinity of 45 CFR 
300.\3\ Child support guidelines were to be based on economic 
data on the cost of raising children within each state, were to 
take into account the economic necessities of the non-custodial 
parent, and modifications were to be readily obtained when 
economic circumstances justified such a modification. Congress 
left enforcement of these regulations with DHHS. Additional 
legislation with the Consumer Credit Protection Act set limits 
on withholding for child support, to be enforced by the U.S. 
Department of Labor.
---------------------------------------------------------------------------
    \3\ See specifically 45 CFR 302.56.
---------------------------------------------------------------------------
    However, no state has completely complied with these 
Federal regulations with the effect that states commonly award 
child support that exceeds the cost of raising children. In 
turn, many obligors cannot meet their obligations, leaving the 
impression that the fault with child support arrears is theirs 
rather than the lack of state compliance with Federal 
regulations. The problem is that for political considerations 
and financial gain from Federal incentive monies, states have 
deliberately chosen to pick and choose which regulations they 
wanted to comply with and DHHS has chosen to not enforce 
regulations related to the economic basis of the guidelines and 
the affordability of the awards. As you likely know, 
individuals have no right to sue DHHS to enforce its own 
regulations with the states. In contrast, if the IRS took over 
child support enforcement, it would no longer be a situation of 
states ignoring Federal regulations and states enforcing non-
compliant state laws but rather a matter of a Federal agency 
directly interacting with individual citizens in the 
implementation of Federal regulations through enforcement of 
child support guidelines that are supposed to meet Federal 
regulations. The non-compliance of child support guidelines 
with Federal regulations could not be ignored as the IRS would 
likely face immediate legal challenge for enforcing non-
compliant regulations--the awards based on non-compliant 
guidelines.
    Let's examine how these non-compliant child support 
guidelines will create regulatory problems for the IRS unless 
resolved first. Let's look at one of the more basic 
regulations. In 1990, CFR required that states base guidelines 
on--among other factors--a non-custodial parents basic living 
needs. Many states, however, do not have non-custodial income 
guaranteed for at least poverty level existence. For example, 
Georgia has the same before-tax percentages for child support 
for an obligor earning $800 a month as for an obligor earning 
$6,000 per month. An obligor in Georgia (and in many other 
states) earning modestly above the poverty level is pushed 
below the poverty level by presumptive child support 
obligations and is forced to make a choice between eating to 
survive and not making full payment on child support. Lack of 
state compliance with CFR creates this alleged deadbeat parent. 
Would the IRS be able to enforce such a guideline when not 
meeting Federal regulations?
    The Consumer Credit Protection Act (CCPA) sets limits for 
debtors on garnishment by their employers. Wage withholding 
generally does not exceed 25 percent of after-tax income unless 
there are child support or alimony withholdings in which case 
employer withholding can go up to 50 percent of after-tax 
income (the percentage rises somewhat when there are arrears). 
Federal regulations have required states to enact statutes or 
regulations that employers cannot exceed these percentages for 
child support withholdings. However, Federal regulations do not 
require that presumptive child support guidelines and awards 
comply with the CCPA--only the withholdings. This means arrears 
develop when awards exceed CCPA ceilings on withholdings. 
Indeed, a number of states do not constrain child support 
guidelines to fall under the CCPA ceilings.
    Georgia, for example, has presumptive awards that exceed 
CCPA ceilings when the obligor makes as low as $3,100 per month 
gross for 5 children cases and $4,500 month gross for 4 
children cases. This is for a basic award and does not include 
add-ons, such as medical insurance, which push the gross income 
levels lower for which presumptive awards exceed CCPA ceilings. 
Further problems arise when obligor income falls after 
presumptive awards are set and courts refuse to downward modify 
obligations. Would the IRS be allowed to enforce child support 
awards that exceed CCPA limits?
    Other CCPA issues have not been resolved. Most realize that 
the CCPA sets limits on withholding as a percentage of after-
tax income. Few realize that the CCPA exempts the first 30 
times minimum wage weekly earnings for standard types of debt 
payment withholdings. This is intended to help guarantee 
subsistence income. However, this exemption does not apply for 
child support withholdings. There is no subsistence earnings 
guarantee. As long as the percent requirement is met, the wage 
earner can still be left with almost no take home pay after 
child support withholdings. How can subsistence earnings be 
protected for one type of creditor but not another? What is the 
rational basis for this distinction? Will the IRS become 
embroiled in equal protection issues again because of 
inconsistencies in the CCPA?
    Federal regulations require that child support guidelines 
be based on economic data. This is intended to ensure that both 
custodial parents and non-custodial parents are treated fairly 
in these matters. Yet, no child support guidelines implemented 
by the states are truly based on data on child costs. Some 
states such as Wisconsin and Georgia simply took welfare case 
guidelines (fixed before-tax percentages that are high to 
reflect child costs high share of expenses at low incomes) and 
applied them to all income situations--even in the context of 
rapidly rising income taxes.\4\ In these states, it has been 
documented that in most situations, the custodial parent ends 
up with a presumptively notably higher standard of living than 
the non-custodial parent--even when the custodial parent earns 
significantly less than the non-custodial parent. The Supreme 
Court of Oregon issued an opinion that welfare case guidelines 
are inappropriate for non-welfare situations.\5\ Will the IRS 
face constitutional challenges for attempting to enforce 
guidelines that have no rational economic basis--such as 
welfare percentages applied to high-income cases?
---------------------------------------------------------------------------
    \4\ R. Mark Rogers, ``Minority Report of the Georgia Commission on 
Child Support,'' July 1, 1998.
    \5\ Smith v. Smith, 626 P2d 342 (1980).
---------------------------------------------------------------------------
    Other states have taken guidelines from studies allegedly 
based on child costs. So-called income-shares states do not 
base their guidelines on actual expenditures on child costs but 
are instead based on indirect measures of child costs. This may 
come as a shock to some, but income-shares guideline states use 
guidelines that are based on comparisons of adult consumption 
of alcohol, tobacco, and adult clothing in intact households--
not child expenditures. This methodology estimates the income 
needed to restore the custodial parent's standard of living 
after supporting children by restoring certain discretionary 
prior adult consumption--specifically for the above-mentioned 
adult goods.
    This indirect measure is used to award ``child support'' so 
as to cover the full cost of raising children and to restore 
the adult lifestyle to its pre-divorce level for an intact 
household. The adult lifestyle-restoration bias has the effect 
of incorporating an alimony component into child support plus 
it ignores the added overhead for non-intact families. In turn, 
with these types of guidelines the custodial parent at 
moderately low to moderately high incomes generally has the 
higher standard of living than the non-custodial parent--
assuming that child support can and is paid.\6\
---------------------------------------------------------------------------
    \6\ R. Mark Rogers, "Wisconsin-Style and Income SharesChild 
Support Guidelines: Excessive Burdens and Flawed Economic 
Foundation,''; Family Law Quarterly, Spring 1999, pp.141-162.
---------------------------------------------------------------------------
    Essentially, we are judging child support compliance on 
badly estimated and inflated me assures of child costs. Reports 
of non-compliance may look especially high for states which do 
not incorporate self-support reserve components into their 
guidelines as required by Federal regulations. Those states are 
failing to assure that obligors can actually afford to support 
themselves while paying presumptive child support awards.
    Next, the Administrative Procedure Act (APA) requires that 
all implementations of Federal regulations have a stated 
``basis and purpose.'' Without Administrative Procedure Act-
compliant guidelines, validity of the orders that the irs seeks 
to enforce may be subject to Federal court challenges. Many 
states have enacted guidelines without complying with APA. For 
example, Georgia's statements concerning child support 
guidelines appear to lack any basis showing how the state 
considered ``the cost of raisingchildren'' as required by 
Federal Regulations. No economic basis is stated. There is no 
explicit economic basis for rebutting the presumptive awards. 
The state of Georgia expresses no requirement that ``child 
support'' monies be used for the benefit of the children. 
Because Georgia gives no guidance--as is required under APA, 
these transfer payments that are characterized as ``child 
support'' may or may not trickle down to the children, but no 
one-neither the father nor the children-has any standing to sue 
for an accounting of use of the funds. Since many states such 
as Georgia do not have a stated basis and purpose, the IRS may 
have difficulty enforcing these guidelines until such time 
states are forced to comply with APA.
    Other complications would arise for the IRS as child 
support enforcement agent. The IRS would become holder of 
records for child support cases. As a matter of due process, 
parties in child support cases enforced by the IRS would be 
entitled to access to IRS records. Likely, IRS confidentiality 
would be compromised as a legal right for parties involved. The 
IRS clearly would be subject to standard requests for 
disclosure for court and perhaps FOIA requests. The IRS would 
regularly be put on the witness stand to disclose its records 
and practices--including for IRS records for child support 
purposes. It does not appear that the IRS would be able to 
continue its current policies of confidentiality should the IRS 
become chief enforcer for child support.
    Before the IRS is assigned child support enforcement 
duties, these state compliance lapses should be addressed so as 
to prevent embroiling the IRS in conflicts grounded in failures 
to comply with Federal regulations. More importantly, forcing 
states to comply with current Federal regulations would solve 
most of the child support enforcement problems and preclude the 
need for building a huge and expensive administrative agency 
within the IRS that would duplicate existing agencies at the 
state level and at DHHS.
    However, should the IRS be granted this authority, I 
believe it is important that child support obligors be given a 
bill of rights analogous to a tax payer bill of rights. I've 
brought a draft version for your consideration.
    Madame Chair and committee members, thank you for your 
attentiveness and thank you again for allowing me this 
opportunity to speak.

ADDENDUM:


A CHILD SUPPORT PAYER'S BILL OF RIGHTS


I. Use of Child Support

    1. Child support shall be used solely for support of the 
child, not support of the parent's lifestyle.

II. Calculation of Child Support

    1. Generally Accepted Cost Accounting Principles shall be 
employed in developing child support guidelines. Child support 
estimates shall be based on the incremental cost of supporting 
a child. Those cost estimates shall control the finder of fact 
in determining the amount of child support to be allocated 
between the parents.
    2. Individualized estimates of child support to be awarded 
shall employ Generally Accepted Cost Accounting Principles and 
shall be based on the incremental costs of supporting the 
child.
    3. If a parent has multiple children from multiple 
marriages, child support shall be calculated only on the 
incremental cost of supporting each child.
    4. Child support shall not reduce a parent's income to a 
level that entitles that parent to any form of need-tested 
government entitlement.
    6. A non-parent shall not collect more child support from 
both parents than either parent would be obliged to pay 
separately.

III. Who Shall Pay Child Support

    1. Child support may not be imposed on any individual other 
than the biological father or mother or an adoptive parent.
    2. No parent who has been shown by DNA testing to not be 
the father shall be obliged to pay child support for that 
child.

IV. Payment through a Financial Intermediary

    1. Child support shall be treated as any conventional 
debtor-creditor relationship.
    2. Separation of duties shall be accomplished by utilizing 
lockbox, automatic transfer, or other commercial banking 
services to receive and deposit funds.
    3. Funds shall be handled in accordance with good fund 
accounting practice and with Generally Accepted Accounting 
Principles.
    4. Child support collection operations shall comply with 
all statutes and regulations that apply to financial 
intermediaries in general.
    5. All payments received shall be credited to the obligor's 
account within two business days and posted as of the date 
received.
    6. The obligor may direct application of payments: The 
recordkeeper shall apply payments to current and past 
obligations as directed in writing by the obligor. Those 
writings shall be accepted and acted upon as if they were 
endorsements to a financial instrument as described in the 
Uniform Commercial Code whether the obligor pays directly or 
through some intermediary, e.g., through income deduction.
    7. All funds received by a child support receiver or its 
contractor by 2 PM shall be assembled into a deposit to a 
commercial bank and physically deposited in that bank the same 
day.
    8. All payments shall be disbursed within two business 
days.
    9. No child support payment may be deposited to any account 
where it might be commingled with any funds excepting other 
child support payments.
    10. Child support collection activities and workers shall 
be subject to fiduciary obligations as they apply in general to 
governmental officers or employees who handle or control funds. 
All individuals who handle or control funds shall be bonded in 
the same manner and amounts as other government officials and 
employees with similar fund handling duties.
    11. An arms-length relationship shall be maintained between 
the organization that receives, posts, and disburses payments 
and the organization that enforces collections.
    12. Upon inception of any child support order requiring 
payment through any financial intermediary, and upon any change 
of organizational address or telephone number of the 
organization(s) (governmental office or contractor) that 
maintain(s) records of that payor's payments received, 
application of those payments to obligations, and disbursement 
of payments to the ordered recipient, the obligor shall be 
notified of the identity of the organization(s) which 
maintain(s) authoritative records of that information.
    13. The obligor shall be notified at inception, and upon 
any change, of the address for mail and in-person requests, and 
phone numbers for telephonic and (if available) facsimile 
requests. The recordkeeping organization shall accept written 
requests for information telephonically, by in-person delivery 
and by facsimile transmission during their entire working day. 
Mail delivery by U.S. Postal Service employees directly to the 
recordkeeping unit shall be maintained.
    14. The obligor shall, on request, be permitted to inspect 
and optionally, to copy, a history of posting dates and amounts 
of child support payments posted, application of those payments 
to current and past-due obligations, and amounts and dates of 
payments disbursed to the recipient in the most concise form 
available to the recordkeeper. For any account paid through 
income deduction, the recordkeeper shall retain and permit 
inspection and permit copying at no charge of the employer's 
transmittal letters detailing payments remitted on the 
employee's behalf.
    15. If the child support recordkeeping organization is 
unable to provide employer transmittal letters, the employer 
shall, at the obligor's request, provide copies of transmittal 
letters and canceled remittance checks endorsed by the child 
support receiving organization within 7 working days after the 
request.

V. Collection Operation Audit

    1. Each such individual child support recordkeeping unit 
(including all contractors) shall operate in accordance with 
Generally Accepted Accounting Principles and individual 
obligors accounts shall be audited annually applying 
"Standards for Audit of Governmental Organizations, 
Programs, Activities and Functions," issued by the U.S. 
Comptroller General and, supplementally, state administrative 
policies and proceduresmanuals.
    2. A separate annual audit shall be performed at each child 
support recordkeeping location of individual obligor accounts, 
using those same definitions and requirements. The audit shall 
be unannounced and shall test the timeliness and accuracy of 
posting of obligations and payments, and of disbursement of 
remittances to obligees, and accuracy of obligor's account 
balances and transactions. Substantive tests of balances and 
transactions shall be performed in sufficient number to support 
an opinion based on an estimate to a 95% confidence level of 
the maximum number of accounts in which errors will be found 
and the percentage such number of accounts bear to the total 
number of currently active accounts. Substantive tests shall be 
performed to estimate the average and maximum days from receipt 
of a payment to posting for each recordkeeping location to a 
95% confidence level. For all locations for which obligees 
disbursements are issued, one hundred percent testing by EDP 
auditing shall be performed to determine the average and 
maximum days from posting of a payment to its disbursement for 
each recordkeeping location.
    3. An audit report and management letter incorporating 
recommended improvements shall be issued for each recordkeeping 
location. A copy of all audit reports and management letters 
shall be made available for inspection at the recordkeeping 
location upon walk-in request during regular working hours and 
copies shall be made available to the general public at a cost 
no higher than that charged for FOIA requests.
    4. Certified copies of such records of obligations, 
payments and application of payments maintained by a 
recordkeeping location for which an audit in each of the two 
previous years estimates errors of less than 1% to a confidence 
level of 95% shall, without further proof, be admitted into 
evidence in any legal proceeding in this state. Records showing 
a failure to meet these standards shall be admissible in court 
in support of a defense of inaccurate recordkeeping.

VI. Child Support Determination

    1. There shall be no ex parte child support decisions.
    2. A parent is entitled to a jury trial in a request for 
modification of child support.
    3. Child support obligations shall not be exempt from 
generalized statutes of limitations.

VII. Alternative Payment Arrangements

    1. Both parents may agree to binding arbitration in any 
matter concerning child support by any individual who is not a 
government employee or grantee directly or indirectly. That 
arbitration shall be binding upon the courts and child support 
collection and enforcement personnel. Parents may agree to 
direct child support payments without the intervention of any 
governmental collection process.
    2. Payers shall be permitted to authorize any federally 
insured financial institution to automatically deduct child 
support that may be disbursed either directly to the recipient 
or to another (government-sponsored) financial intermediary.

VIII. Income Deduction Orders and Implementation

    1. An income deduction order shall not emanate from a 
criminal proceeding. Child support is a civil obligation.
    2. The term of an income deduction orders shall not extend 
beyond the term of the underlying obligation.
    3. There shall be no statutory exclusion of defenses to 
income deduction orders.
    4. The payor shall be notified in the manner of personal 
service two weeks before an employer is notified of an income 
deduction order.
    5. An employer may not take any action against an employee 
because of an income deduction order.
    6. Existence of an income deduction order may not be 
inquired about nor taken into consideration in hiring 
decisions.
    7. While an income deduction order is subject to appeal, 
all funds deducted shall be held in escrow pending a final 
determination.
    8. The income deduction order shall state all fees or 
interest that have accrued and shall be accompanied by a 
computation of the components of those amounts.
    9. Proof of deduction from a paycheck shall be a complete 
defense to non-payment by the obligor. Proof of remittance 
shall be a complete defense to non-payment by the employer.
    10. Employers shall permit employees to inspect and copy 
records of withholding and remittance of child support withheld 
from the employee no less than once per year and whenever an 
allegation arises as to status of child support.
    11. Annotations on pay stubs shall clearly indicate ``child 
support'' so as to facilitate legal defense.
    12. Child support payments in controversy may be collected 
but shall be held in escrow until the controversy is resolved.

IX. Enforcement

    1. Administrative Procedures prescribed by HHS OCSE 
publication ``Essentials for Attorneys in Child Support 
Enforcement'' shall be employed.
    2. Any notice issued in enforcement of child support 
obligations shall be accompanied by a summary of obligations 
met and unmet, payment history, and application of payments 
sufficient to permit a finder of fact to review the relevant 
transactions.
    3. Obligors in arrears shall be notified if the arrearage 
exceeds one month's obligation. The arrearage shall be treated 
as unknown to the obligor until notified by certified mail.
    4. In addition to any other adjudicatory authority, an 
adjudicatory officer with the authority to temporarily restore 
license privileges shall be available in the same times and 
business locations as is authority to issue an arrest warrant.
    5. No government employee or contractor may act in a matter 
of law on behalf of a parent who is not a current recipient of 
needs-tested governmental entitlement.
    6. Payers and recipients files shall be merged and both 
parties shall have access to all contents of the merged file.
    7. Warrantless searches for financial information shall not 
be permitted in the context of child support. Financial 
institutions shall not divulge information without a court 
order. Financial institutions shall not divulge under the guise 
of child support enforcement any personal financial information 
concerning persons merely alleged to owe child support or 
persons who are not alleged to owe child support.
    8. Levies upon property shall not issue without notice and 
hearing.
    9. Collection organizations shall be liable for withdrawal 
penalties and loss in market value in the case of unjustified 
liquidation of financial instruments, securities, and accounts.
    10. No license may be revoked or suspended without personal 
service on the licensee nor without hearing and a showing of 
arrearage at the time of the hearing.

X. Paternity

    1. Accused fathers shall have access to all DNA testing 
work product and shall be permitted to obtain an opinion by an 
analyst of their choice as to the indications of that test. 
That analyst shall be permitted to testify. An accused father 
shall be entitled to a jury trial.

XI. Enforcement of These Rights

    2. A child support recipient and a child support obligor 
shall be entitled to take legal action in any court of record 
in the state in which an alleged violation occurs.

                                


    Chairman Johnson. Thank you very much, Mr. Rogers, for the 
detail of your considerations of the legal implications of IRS 
involvement.
    While we have you at the table, what are some of the things 
that we could do to improve the child support enforcement 
system, from your point of view? Mr. Cohen?
    Mr. Cohen. There are several things. Aside from allowing us 
a little time to digest the massive changes from the 1996 
amendments, for the next go-around I think there are some 
things that are developing in the states that are worth 
consideration. One I know Nick is familiar with is booting 
vehicles as a way of getting compliance, and that cuts across 
people who are employed and not employed.
    Another development that is taking place in New England is 
intercepting insurance settlements. A fair number of 
noncustodial parents have insurance claims pending and they 
receive considerable lump sums from personal injury 
settlements, and they are working on a match similar to bank 
matches.
    Another one relates to money, it might be considering 
resources for the Office of Inspector General or U.S. Attorneys 
to prosecute the cases that they are now responsible for. They 
have authority now to prosecute both misdemeanor and felony 
nonsupport, but I am not sure they are fully staffed up to do 
that.
    As well, following on my presentation, considering what it 
might take in those states that are not doing well to have 
those states invest more in the child support effort, if that 
is the reason for their low performance.
    Mr. Young. Madam Chairwoman, I would add two things. You 
have passed the laws, you have given us the responsibility, you 
do not see the child support community coming in here trying to 
give this mission up. It is someone who has come up with an 
idea, and not a particularly good idea, to give it to an agency 
that does not understand the needs of fathers and noncustodial 
parents, nor would I expect the IRS to understand that. And if 
the order is not correct or if they have issues with the 
guidelines in the quadrennial review, I can hardly see the IRS 
paying attention to those. They would just say, ``I just 
enforce the order. You owe the money, send us a check''.
    I would ask that we would stay the course we are decisively 
engaged and not lose the momentum that we have achieved with 
such as the New Hire Directory, the wage withholding, the 
driver's licenses, even the booting. I think if we work through 
the distribution simplification issue, it will be the crowning 
blow on having the entire cake, and within 2 years you will see 
remarkable improvements in the collection rates as well as in 
the satisfaction of people that previously have found this to 
be unsatisfactory.
    Chairman Johnson. In that regard, we are going to do a 
bill, and it is going to address simplification, and if any of 
you have concrete suggestions about how to simplify the system 
we would be interested because every time you simplify it, you 
do get a pretty good cost estimate on the Federal side.
    Mr. Young. I really don't like using the words 
``distribution'' and ``simplification'' in the same sentence. 
It is sort of like ``slim fast'' or ``free money'', it really 
doesn't fit.
    Chairman Johnson. I just invite you to write follow-up 
letters, if you would care to do that, we would be happy to 
hear from you. Mr. Owen.
    Mr. Owen. From an employer's perspective, the one thing 
that I have heard some discussion about, but I haven't heard in 
this discussion on H.R. 1488, is independent contractors and 
undistributed funds and some of those other kinds of things 
that should be addressed, and employers can help participate in 
some of that as the SDUs develop.
    I think what we have happening is the SDUs haven't had an 
opportunity to fully mature, so we are not, from an employer's 
perspective, able to participate in a real partnership with the 
states to make sure that they are getting the full benefit of 
those kinds of things. And we are developing our systems to do 
EFT/EDI processing with the states and all those kinds of 
expenditures, and to stop those efforts where there is a very 
large payroll service provider, for example, that does 22 
states through EFT/EDI, and for all of that to stop and be 
retooled is just a huge expense.
    The other thing, just quickly, too, on the withholding 
certificates, people seem to think that just filling something 
out on their withholding certificate is going to provide all 
the answers for people and get the information to the secretary 
and so on, but it really is a challenge for employers, 
particularly under this bill where they say that every time a 
person changes a job you have to fill out a new W-4 along with 
your child support obligation. Also, people change jobs quite 
frequently, and that would be a huge burden on employers to 
process all that paperwork on a consistent basis.
    Chairman Johnson. Thank you. Mr. Rogers.
    Mr. Rogers. Well, this is going back to the economics 
perspective. The basic issue we are dealing with here is the 
cost of raising children, and why are there arrearage problems? 
Why are there noncustodial parents who are not paying orders 
that are outstanding or when there aren't any orders?
    The issue frequently--and we forget, it is merely a matter 
of how much money is available, how much money does a 
noncustodial parent earn, and how do the guidelines themselves 
reflect what a good child support award should be. I don't 
think the states have adequately paid attention to the true 
economic cost. For example, a lot of states use--well, a dozen 
or so states use the Wisconsin style guideline, which is truly 
intended only for welfare situations, that they apply it to 
higher income levels basically forcing obligors to be obligated 
for a level they cannot afford. And I believe the basic data 
show that arrears \2/3\ of the time when the noncustodial 
parent cannot pay. I think we need to refocus on the very basic 
foundation of the issue--what are some true costs? How do we 
guarantee a subsistence level of income for the obligor? And 
only then can we have a true picture of what the arrears are, 
and then enforce it properly.
    Chairman Johnson. I think that is a very important point. 
In our Fatherhood Bill, we do give a preference for states who 
develop some way of helping parents to deal with arrearages, 
and that has been very controversial, but any thoughts you have 
about how to encourage that or deal with it--and your point 
about realistic support orders is one thing that we are not 
planning to get to this year, but ultimately we will have to.
    Mr. Rogers. Just very quickly, I think most fathers want to 
be able to support their kids. They don't want to be called 
deadbeats. But they also want to be able to feed themselves. We 
really just need to basically look at what is a subsistence 
level of income, how do we train someone to get beyond that and 
do not overtax the increments to income moving beyond that. 
There are, I believe, a significant number of fathers who are 
forced by states that have guidelines that do not allow 
subsistence, they are forced to go from working for well 
respected employers because of automatic withholdings and they 
have to go to cash in order to be able to live, and the 
children lose income from that because there is not adequate 
consideration.
    Chairman Johnson. This is a good point at which to yield to 
my colleague who prefers to distinguish between deadbeat dads 
and dead-broke dads.
    Mr. Cardin. Thank you, Madam Chair, and I appreciate very 
much this panel, I think it has been extremely helpful. Mr. 
Owen, I want to at least thank you, the business community, for 
their support on child support collections. It is very clear 
that the success that we are enjoying today is because 
employers around the nation know the importance of parents 
contributing to the support of their children. It certainly is 
not without a cost, as you point out, and your requests are 
certainly very reasonable for us to try to make it a little bit 
easier, but certainly your willingness to endure a lot of the 
administrative burdens on the collection of child support is 
very important, and we thank you for that.
    I want to follow up on the Chair's question. The 
Administration has brought forward several suggestions on 
improving child support collections around the country. I sense 
a reluctancy to move forward with additional mandates at this 
point with the current law being implemented, but I do think 
some of these are worthy of consideration by Congress, and if 
you want to comment on it I would be glad to listen to any of 
your response.
    We have already talked about the simplification of the 
distribution rules, so I won't go through that again. And I 
have mentioned several times the encouragement of more 
passthrough of child support to the families, the 
administration suggesting that the Federal Government would 
match the greater of $100 or $ 50 over current state policy.
    We have talked about vehicle booting, the administration is 
recommending that we require vehicle booting for registration 
to noncustodial parents owing $1,000 or more in overdue child 
support. There is a proposal here to deal with intercept of 
gambling winnings. I could go through some of the others--there 
is a proposal to expand work requirements for noncustodial 
parents in arrearage, and so forth, reducing the passport 
denial from $5,000 to $2500. Any comments on these suggestions 
whether Congress should act or not?
    Mr. Young. I would speak to the passport. I would think 
that would be a pretty good bill. Many people try to game the 
system. I have people who will attempt to get their passport 
back by buying under the $5,000 criteria trigger that would 
have caused a revocation, and don't allow it. You pay the whole 
amount, or no passport.
    Mr. Cardin. On the passport, let me point out that we have 
also tried to bring equity to have a similar restriction on 
nonresidents who want to come into the United States that owe 
child support, to allow them to come in here for the child 
support issues, but not to do business until they have settled 
up their child support arrearages.
    Mr. Young. Absolutely. Booting is now statewide in 
Virginia. I would remind everyone that booting is not something 
we do lightly. It is similar to your remarks, sir, in Maryland, 
about the driver's license suspension. The threat thereof, of 
booting, is what is causing people to become more responsible 
than the actual booting themselves. I have booted very few cars 
in the State of Virginia, and it is time-intensive, it takes a 
lot of effort. I think the law should be on the books. I do not 
think it should necessarily be mandated in every state. If it 
doesn't work in Maryland or Connecticut of Michigan, then it 
shouldn't be a law enforcement tool that is brought out, but it 
should be on the books as an option.
    Mr. Cohen. Another issue, too, when it comes to these high 
arrearages. The gentleman at the end mentioned child support 
guidelines. Very often, it is not the guidelines that are the 
issue, but the fact that a parent's circumstance is changed, 
whether upward or downward, and the state process for modifying 
support orders is very time-consuming and burdensome and, 
unfortunately, a lot of noncustodial parents don't go back to 
court, they leave the old order on the books, and the buildup 
an arrears. On the flip side, a lot of custodial parents don't 
get the benefit of increases in noncustodial parent's income 
where a support order should go up because of that process, and 
I think whatever we could do to simply establishing the amounts 
or modifying them and speeding that process up would be very 
beneficial.
    Mr. Cardin. On that last point--I want to give the other 
two witnesses a chance to respond--one of my concerns about the 
specific bill before us is that I think the more you make this 
a Federal issue, the less likely you are going to get the 
updating of child support orders. I know that it is still going 
to be a local function, but the incentive locally is not going 
to be as strong. It will be perhaps if there are TANF funds 
that are involved, but if there are not, it is going to be 
very--just removing it more from where the direct interest is.
    Mr. Young. That is what I was trying to say about the IRS 
is not going to listen to the issues of either review and 
modification, quadrennial review issues, guidelines. They are 
not going to do that, that is a social services type of issue 
that needs to be dealt with with a person that is generally in 
a social services network, and that is not the Internal Revenue 
Service. And I think you would further remove people from the 
very people that could help them, by turning it into a revenue 
only issue.
    Mr. Cardin. Mr. Owen? Mr. Rogers?
    Mr. Owen. The one comment I would have on that, as well, is 
that when they are talking about these withholding certificates 
and setting them up under the bill, there is nothing that I saw 
under lump sums or bonuses or incentives, and there is a lot of 
communication on a one-on-one basis with the state agencies to 
say, ``Look, this person is receiving $1,000 or $2,000 bonus, 
what should be withheld on that?'' And that would be lacking in 
this type of a program that is being presented, and there are 
some significant dollars that go to the children in arrearages 
as well as just lump sum payments that somehow would get missed 
in this particular bill. So, the one-on-one--employer, state, 
SDUs, courts and so on--is a good thing, and I think that 
should be maintained.
    Mr. Rogers. I had a reaction to Mr. Cohen's comment about 
the need to modify more frequently, and I think that is a very 
important issue, especially when we are dealing with low-income 
fathers, fathers that don't interact well with the system. 
Basically, we have an arrangement where the state provides 
legal services for the custodial parent--maybe not as timely as 
they would like--but in terms of if a noncustodial parent has a 
loss in income or earnings decline, that father generally may 
not have the resources to go to court, may not be able to hire 
an attorney, basically becomes in a vicious cycle in which 
there is no way out. We are going to have to address the issue 
of arrears, how to modify them, and try to find some type of 
procedures to help these low-income fathers deal with the legal 
system that they are just not accustomed to dealing with.
    A quick final comment on the booting, states make mistakes. 
I am very reluctant to encourage a public airing of personal 
matters, especially when there is a strong opportunity for a 
mistake. And I think it would be a mistake to go down that 
road.
    Mr. Cardin. Thank you, Madam Chair.
    Chairman Johnson. I thank the panel very, very much for 
your comments, I appreciate it.
    [Whereupon, at 1:27 p.m., the hearing was adjourned.]
    [Submissions for the record follows:]

Statement of John Smith, Research Analyst, Alliance for Non-Custodial 
Parents' Rights

    Combining one bad idea with another will not produce a good 
idea. Child support enforcement (CSE) agencies have 
demonstrated their inability to perform simple invoicing 
functions. The IRS has earned a reputation as one of America's 
most brutal, out-of-control and insensitive agencies as the 
American public witnessed during the Senate Finance Committee's 
1997 Hearings on IRS Abuse. Combining these two organizations 
is a recipe for disaster.
    This is how William Roth, R-Del, Chairman of the Senate 
Finance Committee described the IRS in a press release: \1\
---------------------------------------------------------------------------
    \1\ Press Release #105-167, ROTH TO TAKE UNPRECEDENTED LOOK AT IRS, 
September 11, 1997.
---------------------------------------------------------------------------
    ``Our six month long look at the IRS shows a troubled 
agency, with widespread, serious problems.''
     ``...an unresponsive agency with some employees 
who do not care about the taxpayers they serve.''
     ``...an agency in which a subculture of fear and 
intimidation has been allowed to flourish...''
    Child support collections are at an all-time high, yet 
child well-being is at an all-time low. If money is the 
solution, why hasn't it worked? Children's lives are not 
improving, even on a proportional basis, proving that money is 
not the answer. Why haven't any studies been commissioned to 
investigate the links between child support paid, family 
structure and child well-being? Prof. William S. Comanor shows 
that 80% of child support is not spent on the children.\2\
---------------------------------------------------------------------------
    \2\ Comanor, William S., ``Child Support Feels Different on Male 
Side,'' The Los Angeles Times, Feb. 22, 1999.
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    Child support is a single-parent household enabler, 
guaranteed to diminish parental involvement by forcing 
noncustodial parents into exile through excessive awards and 
draconian punishments. It is a well-known fact that it costs 
much less to raise a child than to pay child support.\3\ 
Everyday we are seeing the results of the lack of parental 
involvement: school shootings, violent crimes, drug abuse and 
teen pregnancies. Until the practice of rewarding family 
disintegration is ended, society will continue to pay a high 
price under the guise of ``supporting the children.''
---------------------------------------------------------------------------
    \3\ Winner, Karen, ``Divorced From Justice,'' 1996, ReganBooks, p. 
52.
---------------------------------------------------------------------------
    Instead of escalating the war on noncustodial parents, all 
efforts should be aimed at preventing the further erosion of 
families and reuniting children with their biological parents. 
This can be accomplished by:
     Withholding federal funds to states that fail to 
make equal shared parenting* the presumption in law; penalize 
states that frequently override this presumption
     Prohibiting custodial parents from moving away 
with or without their children; prosecute them under existing 
kidnapping laws**
     Withholding federal funds to states that fail to 
repeal no-fault divorce laws
    In the event that this misguided bill gets out of 
committee, I would recommend the following changes:
     Apply the same IRS documentation rules that are 
required for tax deductible expenses to child support. That is, 
require documented proof that the child support received from 
noncustodial parents was actually spent on the child.
     Apply the same IRS documentation rules that are 
required for tax deductible expenses to child support. That is, 
require documented proof that custodial parents are paying 
their share of child support.
    Prosecute custodial parents that embezzle or otherwise 
misuse child support under existing IRS tax fraud laws.
    The only thing both sides agree upon, is that child support 
policy has been a failure. After 25 years of failed policy, 
billions of taxpayers' dollars squandered and millions of 
families destroyed, it's time to try truly new solutions, not 
re-implementations of proven failures.
            Sincerely,
                                                 John Smith
                                                   Research Analyst
    *--Under shared parenting, the only way visitation can be 
increased through voluntarily reached agreements. This 
equalizes custodial and noncustodial parents, rewards 
responsibility and eliminates fighting, because there is 
nothing to fight for. If one parent wants more visitation, they 
both have to agree to it. With equal shared parenting, the need 
to pay child support disappears. If one parent wants to pay 
support, they are free to negotiate that too.
    **--Geraldine Jensen, founder of ACES (the country's 
largest child support lobbying organization), is the poster 
girl of ``Move-Away Moms.'' Jensen violated court order after 
court order and deliberately moved for the sole purpose of 
thwarting the father's visitation. Jensen is a darling of Henry 
Hyde and Hollywood (ABC made a movie of the week featuring her 
story, which left out all of her harassing and illegal 
behavior). Toledo newspaper reporter D. C. Burch wrote an 
extensive account of Jensen's shenanigans in a May 1995 article 
``Gerri Stacks The Deck.'' This article, along with others on 
ACES, can be found on the ANCPR website at: www.ancpr.org/
indexenemy.html

     Appendix A--Brief Comments on the Testimony of R. Mark Rogers

    R. Mark Rogers presented testimony to this committee. He 
makes many insightful observations and offers brilliant action 
items in his Child Support Payor's Bill of Rights. However, 
even Rogers feels the need to perpetuate the ``money is the 
solution'' myth when he states ``Before beginning, I would like 
to state that I am completely in favor of appropriate child 
support enforcement.'' As long as the law is obsessed with this 
fixation on money instead of parental involvement, the problem 
will continue.
    Rogers, like many people, feel that if child support could 
just be made ``more reasonable'' or base it on the ``true 
economics of child costs,'' this policy would be fine. The 
problem is, it is impossible to determine the cost of raising a 
child and attempting to do so and enforcing it through statutes 
violates a person's freedom of religion (set of beliefs). There 
are too many factors and dynamics to do this, and if tried, the 
bureaucracy would be huge and cost more than any imagined 
benefit it might produce (remember, CSE organizations cannot 
adequately perform simple invoicing).
    The solution is very simple, requires minimal government 
involvement, would increase parental involvement and would free 
up court caseloads-all saving taxpayers' money. The solution is 
to make equal shared parenting the presumption in law and make 
it next to impossible to override this presumption, unless both 
parents reach their own voluntary agreement. When each party 
realizes that cannot ``win'' or gain through fighting, the 
fighting will cease. When allegations must be backed up by 
physical evidence and tough penalties for perjury are 
vigorously enforced, parents won't dare make false abuse 
charges for fear of losing everything.
    Because it is so much cheaper for a parent to provide for 
his/her children than to pay child support, equal shared 
parenting is the solution. There is no need to attempt to 
calculate child support based on bogus methodologies or 
chronically outdated economic statistics. Given the choice of 
being forced to pay abnormally high child support under 
constant threat of legal punishments and expensive litigation 
required for downward modifications or not having to pay 
anything, but providing for your children--who wouldn't opt for 
the latter?
    Everyone wins with equal shared parenting. Children win by 
gaining equal time with each parent (approximately emulating 
their former two-parent household). Each parent wins because 
they have access to their children and free time too. This 
prevents overload, which leads to burnout, which can lead to 
ignoring or even abusing their children. Society wins, as 
children raised with lots of active parental involvement 
(quantity time), are better disciplined and less likely to 
commit violent crimes, get involved with drugs and have fewer 
behavioral problems.

                                


Statement of Paula Roberts, Senior Staff Attorney, Center for Law and 
Social Policy

STATEMENT OF INTEREST

    My name is Paula Roberts and I am submitting this statement 
on behalf of the Center for Law and Social Policy (CLASP). 
CLASP is a public interest law firm that focuses on the plight 
of low-income families. For the last two decades, a major part 
of our work has been directed toward improving the child 
support enforcement system so that it provides a steady, 
reliable source of income to single-parent families.
    Since passage of the Personal Responsibility and Work 
Opportunity Reconciliation Act of 1996 (PRWORA) the need for 
improvement has become even more compelling. Many families are 
leaving public assistance for low-wage employment and need 
regular, timely child support payments to supplement that 
income if they are to provide even the basic necessities for 
their children. Other families--cognizant of the time-limited 
nature of public assistance--are making every effort to live on 
their earnings, trying to avoid the need to use up precious 
months of public assistance eligibility. Many are able to doso 
only if child support is a timely, reliable source of income to 
support the custodial parents work effort.
    Past efforts to improve the ability of states to locate 
absent parents, establish paternity for non-marital children, 
set reasonable awards pursuant to numeric child support 
guidelines, and periodically modify support awards are 
beginning to pay off. Many states have improved their 
performance in these areas. However, the collection and timely 
distribution of ordered child support payments remains 
problematic. The problems are particularly acute in interstate 
cases. For this reason, as detailed below, CLASP supports H.R. 
1488 as the best way to reform the current collection and 
distribution efforts so that low and moderate income families 
will obtain the child support they desperately need.

THE NEED FOR CHANGE

    The Needs of Families.
    According to the National Survey of Americas Families, 
there are 21.7 million children living in single parent 
families. Thirty seven percent (37%) of these children live in 
families whose income is below the poverty level and another 
twenty-five percent (25%) live in families with income between 
100 and 200 percent of poverty. Child support could be an 
important source of income to these children. Indeed, a recent 
Urban Institute study indicates that, when a low income family 
receives child support, that money constitutes 25 percent of 
family income.\1\ The average amount is nearly $2,000 a year. 
For somewhat higher income families, the average payment is 
close to $4,000 per year.
---------------------------------------------------------------------------
    \1\ Elaine Sorensen and Chabva Zibman, ``To What Extent Do Children 
Benefit from Child Support?''. Discussion Paper from the Assessing the 
New federalism Project, January 2000.
---------------------------------------------------------------------------
    Efforts by states to locate absent parents, increase the 
number of children who have their paternity established, and 
quickly obtain child support orders will lead to an increase in 
the number of children who have access to this potentially 
valuable source of income. Recent data suggests that these 
efforts are beginning to pay off. However, unless those orders 
are fully enforced, the state efforts will not translate into 
better lives for children. For children to reap the benefits of 
the states efforts to obtain support orders for them, the money 
must be collected regularly and on time each month. It must be 
a steady, reliable source of income. If it is not, the children 
will live in deep poverty or their families will have to rely 
on Temporary Assistance for Needy Families (TANF), exactly the 
opposite result of Congress intention in PRWORA.
    Unfortunately, as noted in the testimony by the Association 
for Children for Enforcement of Support (ACES), the child 
support collection rate for those with orders has remained 
stagnant. This is true for all single parents whether in or out 
of the state IVD system. Most disturbingly, of those with 
orders, the percent who receive full payment appears to be 
declining as does the percent who receive partial payment. In 
fact, the majority (55.7%) of those with child support orders 
receive partial payment (20.5%) or no payment at all (35.2).\2\ 
This is actually worse than the situation uncovered by the 
Census Bureau in 1984, when 52% of those with orders received 
either partial payment (26%) or no payment at all (26%).\3\
---------------------------------------------------------------------------
    \2\ Sorensen and Zibman, supra note 1, Table 2.
    \3\ US Bureau of Census, CHILD SUPPORT AND ALIMONY: 1985, Series P-
23, No. 152 (August 1987), pp.1-2.
---------------------------------------------------------------------------
    The Needs of Employers
    About sixty percent of all single parent families use the 
state child support (IVD) system to help them with their child 
support issues. The other forty percent use private attorneys 
or act pro se. Whether they use the public or the private 
system, however, the major method of collecting child support 
is through the use of income withholding.\4\ The role of 
employers in making this system function properly cannot be 
overemphasized.
---------------------------------------------------------------------------
    \4\ Since 1984, Congress has required all child support orders to 
be enforceable through income withholding when there are arrears; since 
1994, all IVD orders and all private orders must be enforceable through 
immediate income withholding unless (in private cases) the parents opt 
for a different method of enforcement. 42 USc Section 666(a).
---------------------------------------------------------------------------
    Employers are a major part of the process for enforcing 
most child support orders. Because they now play such a major 
rule--at some inconvenience and cost to themselves--it is 
important that the wage withholding system accommodate the 
needs and concerns of these private entities to the maximum 
extent possible. PRWORA recognized this and attempted to make 
the withholding process easier for employers. A major change 
was the requirement that each state create a State Disbursement 
Unit (SDU) so that employers would only have to send payments 
to one location within each state. Moreover, the SDUs are 
supposed to have the capacity to receive payments 
electronically, allowing employers to use the most convenient 
technology to transmit payments. SDUs are also supposed to have 
the authority to receive payments in IVD cases and private 
cases being enforced through income withholding. All of this 
was to be in place by October 1, 1999. Unfortunately, a recent 
survey reveals that:
     eleven (11) states do not yet have an SDU.
     of the forty-three (43) states which do have an 
SDU, six (6) serve only IVD cases. They do not process non-IVD 
withholding cases as required by federal law.
     of the forth-three (43) state which do have an 
SDU, fourteen (14) have no capacity to receive electronic 
payments. This too is a violation of federal law.
    Among the states which do not yet have an SDU are four of 
the largest states: California, Michigan, Ohio and Texas. These 
states contain thirty (30) percent of the entire IVD caseload. 
The failure of these states effects the citizens of those 
states: it also effects the citizens of other states when they 
are trying to enforce an interstate child support order. 
Moreover, employers are and will continue to be asked to be 
non-paid partners in child support enforcement while their 
ability to meet their income withholding obligations is 
undercut by the very states seeking their help. This situation 
needs to be addressed.
    In addition, PRWORA required employers to participate in 
New Hire Reporting. Employers must now report all new and re-
hires to the State New Hire Directory in their State. That 
directory then forwards the information to a National Directory 
of New Hires operated by the federal Office of Child Support 
Enforcement (OCSE) and housed at the Social Security 
Administration (SSA). The National Directory is used to find 
matches in interstate cases. If the National Directory of New 
Hires matches a report with a case found in the National Case 
Registry, information is sent out to the state where the case 
is being enforced. That state is supposed to initiate 
interstate wage withholding. Unfortunately, as documented by 
ACES testimony, many states are not readily processing 
information being sent to them by the National registries. 
Either the information is not used, or there is a substantial 
delay so that by the time the state does act, the obligor has 
moved on to a new job. In the meantime, the family is without 
support and employers are processing a good deal of unnecessary 
paper work. This problem needs to be addressed.

THE PROBLEM OF INTERSTATE CASES

    Historically, the collection of support in interstate cases 
has been difficult and time-consuming. Collection rates in 
these cases are even lower than the national average collection 
rate. Only forty-three (43) percent of mothers with orders in 
interstate cases report receiving regular payments as compared 
to sixty (60) percent in one-state cases.\5\ PRWORA contained a 
number of provisions designed to improve this situation, 
including a mandate that all states adopt the Uniform 
Interstate family Support Act (UIFSA).\6\ Unfortunately, these 
efforts have not been as successful as anticipated. As aresult, 
one of OCSEs project priorities for federally-funded 
demonstration projects this year are projects designed to 
foster improvement in interstate case processing.\7\ As OCSE 
has noted: Although a great deal of progress has been made over 
the last couple of years, states are still facing many 
challenges in the implementation of UIFSA.''
---------------------------------------------------------------------------
    \5\ US General accounting Office, INTERSTATE SUPPORT: MOTHERS 
REPORT RECEIVING LESS SUPPORT FROOM OUT-OF-STATE FATHERS, GAO/HRD 92-
39FS (1992).
    \6\ Many of the changes were proposed by the US Commission on 
Interstate Child Support in its report to Congress titled SUPPORTING 
OUR CHILDREN: A BLUEPRINT FOR REFORM (1992).
    \7\ See, 65 Federal register 489-491 (January 5, 2000).

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THE HISTORIC ROLE OF THE FEDERAL GOVERNMENT IN COLLECTIONS

    States and employers are not the only entities involved in 
the collection of ordered child support. The second largest 
source of child support collections is the federal tax 
intercept program. This program has been in existence since 
1981, and has played an increasingly important role in 
obtaining arrears for public assistance and non-public 
assistance families using the IVD system. Originally operated 
by the Internal Revenue Service (IRS), in 1999, it was moved to 
the Department of the Treasurys Financial Management Service 
(FMS).
    In addition to this program, FMS also operates an 
administrative offset program which allows payments from the 
federal government (e.g., expense reimbursements, travel 
payments) to be seized for the payment of child support 
arrears. The FMS also operates the passport revocation program 
authorized by PRWORA in 1996.
    In other words, for the last twenty years, the federal 
government has had a strong role in enforcing child support 
obligations. The provisions of PRWORA enhanced this role. It is 
a logical next step to move all enforcement to the federal 
level, streamlining the process for employers as well as 
creating a system with national scope that can, move quickly 
and efficiently to ensure that child support is a regular and 
reliable source of income to single parent families.

THE HYDE-WOOLSEY CHILD SUPPORT BILL (HR 1488)

    The Hyde-Woolsey bill provides a framework for creating 
such a system.. It gives the IRS primary responsibility for 
this enforcement function. All other child support functions in 
IVD cases (e.g., establishing paternity, issuing support 
orders) would remain state responsibilities. In this sense, it 
is not a radical departure from the current system. States 
would retain responsibility for those parts of the system best 
done at the state and local level.
    The basic elements of the proposed system build on the 
federal governments historic role in this area. They include:
     Each state would create a presumption that in 
every child support order issued or modified in the state, that 
the custodial parent had assigned her/his right to collect 
child support to the IRS. The IRS would be responsible for 
collecting current support, arrears, and any fees or interest 
owed under the child support order.
     Parents who did not want to use IRS enforcement 
system could opt out. If they opted out, they would be able to 
opt back in at any time they wished to do so.
     Those who choose to use the IRS system would 
receive notice of how collections and disbursements would be 
made. They would also be given information about where any 
questions or complaints about collections and disbursements 
could be directed.\8\
---------------------------------------------------------------------------
    \8\ These are the basic elements of the customer service component 
of the program. They go well beyond what most states now provide to 
those parents using the IVD system.
---------------------------------------------------------------------------
     The Federal Case Registry created by PRWORA would 
continue to function. Courts and administrative agencies which 
establish or modify child support orders would continue to 
provide standardized case abstracts to the Federal Case 
Registry. These abstracts would contain information about the 
parents, the amount of the order and any arrears owed. The IRS 
would obtain basic case information through interface with this 
Registry.
     The W-4 form would be modified to provide an 
employee with the opportunity to declare that he/she owed child 
support, the amount of the obligation, and the tax 
identification number of the person to whom the support was 
owed. Thereafter, if a new order was issued or an old order was 
modified, the employee would be required to file a new W-4 form 
within 30 business days of the change. A covered employee who 
willfully failed to provide correct information could be 
prosecuted and fined up to $1,00 and sent to jail for up to one 
year, or both.
     If the W-4 indicated that the employee owed child 
support, the employer would be required (within the limits of 
the Consumer Credit Protection Act) to begin withholding child 
support from the employee's first/next paycheck. The employer 
would also send a copy of the original or revised withholding 
certificate to the IRS for comparison with information in the 
Federal Case Registry. The IRS would compare the information 
provided by the employee with the information contained in the 
Federal Case Registry. If the W-4 declaration understated the 
amount of the child support obligation, the IRS would notify 
the employer of the correct amount of withholding. The employer 
would then adjust the withholding accordingly.\9\
---------------------------------------------------------------------------
    \9\ Provison is made for dealing with situations where the employee 
has multiple employers. So long as the amount owed is paid, an employee 
can have some of the support withheld from one paycheck and the rest 
withheld from another.
---------------------------------------------------------------------------
     The employee's annual W2 form would tell him/her 
how much child support had been deducted from his/her wages. 
This would be credited against the actual obligation. If the 
employee had overpaid, he/she would get a credit. If he/she had 
underpaid, any support still owed would have to be paid to the 
IRS along with any taxes owed by the employee. If an employee 
failed to pay all child support due on or before April 15, the 
IRS would proceed to collect the delinquent support using the 
same methods it uses to collect unpaid taxes. Moreover, the 
employee would face the same penalties and interest as apply to 
delinquent taxes.
     For the selfemployed, the IRS would collect child 
support along with estimated tax payments. Adjustments would be 
made for those who are also employees and are having support 
withheld from their wages.
     Support would be disbursed as soon as practicable. 
Generally, the PRWORA disbursement rules would be used to 
determine who would receive payment. One major difference is 
that the special rules for disbursement of monies collected 
through the federal income tax intercept program would be 
deleted so that the same distribution rules would apply to all 
collections.
     Since the IRS would be collecting support, states 
would no longer be required to provide this service and the 
federal government would no longer fund state collection 
efforts. Therefore, all language contained in Title IVD of the 
Social Security Act relating to a state's responsibility to 
collect and distribute child support would be removed. The only 
enforcement obligation left to the states would be for medical 
support. Also eliminated from Title IVD would be the state 
incentive payment system. In addition, states would no longer 
be under a mandate to have certain state laws relating to the 
collection of child support. Gone would be the requirement that 
state law must provide for immediate wage withholding, state 
income tax refund intercept, liens, bonds, or credit reporting.
     It would be a federal felony to willfully fail to 
pay child support being enforced by the IRS for a period longer 
than two years or in an amount larger than $10,000. The 
Attorney General would be required to submit a report to the 
appropriate committees of Congress which details the impact 
that these changes have had on the workload, personnel, 
staffing and budget resources of Department of Justice and the 
federal courts.

CONCLUSION

     There are many benefits to the Hyde-Woolsey approach. 
These benefits include:
    There would be a universal system for collecting child 
support which would function irrespective of the residence of 
the parents. This would lead to substantial improvement in 
interstate case collection.
    2. Employers would be able to interface their income 
withholding obligations with their current obligations to 
withhold income tax and social security payments. This would 
create a system which was much less difficult for employers to 
handle.
    3. Income withholding would be implemented as soon as an 
employee obtained a new job. The current lag time to process 
new hire reporting information and then issue an income 
withholding order would be eliminated. This means children 
would get their support much faster than they do under current 
law.
    4. All employers would be able to use electronic processes 
and computer-driven technology to process payments. This would 
greatly reduce the amount of time between withholding and when 
the money actually reaches the children 

All of these benefits would help children. They would be particularly helpful to low-income children whose families rely on child support payments for a substantial part of their income. The ability to improve the collection of child support for these post-TANF families and families trying to stay out of the TANF program is essential if PRWORAs mandates are to translate into better lives for children. Moreover, as Congress places increasing emphasis on efforts to improve the ability of low-income non-custodial parents to contribute to the well-being of their children, there is new hope that such parents will be helping to support their children. The next logical step in these efforts is to make sure that those parental contributions are collected and swiftly sent to the children who need them. Thank you for your attention to these comments. Statement of Dr. Richard Weiss, Director, Children's Rights Council of Alabama, and William Wood, Coordinator, Children's Legal Foundation and Justice Coalition H.R. 1488, THE ``HYDE-WOOLSEY'' CHILD SUPPORT BILL, MARCH 16, 2000 WRITTEN TESTIMONY FOR THE HUMAN RESOURCES SUBCOMMITTEE OF THE HOUSE WAYS AND MEANS We would like to thank the Honorable Nancy L. Johnson and the other committee members for this opportunity to contribute written testimony on this very important issue. It is an indication of the greatness of this country when our citizenry has direct input into the National Political process. Dr. Richard Weiss is an Associate Professor of Veterinary Pathology, College of Veterinary Medicine, Auburn University. Richard is a non-custodial parent of two daughters, 11 and 12 years old and he has recently served on several Alabama Supreme Court Committees on Custody and Divorce. William Wood is a Business Management and Technology Consultant volunteering his time to help families and children in the State of North Carolina and around the country. William is a custodial father of an 8 year-old little girl and can appreciate Ms. Woolsey's challenges in trying to raise children as a single parent. INTRODUCTION As is increasingly evident today, families and relationships are fragile. We have a divorce rate surpassing 50% and many of these broken marriages include children who represent our nation's next generation of leaders, scientists, doctors, lawyers, politicians, policemen, etc. More and more children find themselves in the midst of a money war. Caught between feuding parents, feuding lawyers, and a state ``Family'' Court system who's purpose is the division of property, apportioning ``visitation,'' awarding child support, and dissolving their parent's marriage. Child support compliance is a 50 state plague on the United States of America with 55,000 ENFORCEMENT AGENTS. I would like to reiterate, that is 55,000 ENFORCEMENT AGENTS which does not include the police officers involved with jailing ``deadbeat dads,'' judges, advocates, administrative personnel processing claims, OCSE staff and expenses, attorneys, (at a rough average of some $185 an hour), and other ancillary individuals and costs. Let's consider that number for just a moment: 55,000 ENFORCEMENT AGENTS each at an estimated average salary of $25,000 a year is approximately 1.375 BILLION DOLLARS a year in just ENFORCEMENT AGENT wages alone, excluding associated fees such as jails, courts, administrators, computer systems, lawyers, judges, and other ancillary costs associated with tracking down ``deadbeat dads.'' Child Support collections in the United States have become BIG BUSINESS represented by special interest lobby groups offering testimony to this US House Committee. Child Support Collections in the United States has become a new millennium FEDERALLY FUNDED GROWTH INDUSTRY. The entire industry relies on junk data and junk statistics inflated by half-truths and deceptions. These are designed to perpetuate the ``deadbeat dad'' myth in spite of considerable evidence that indicates more fathers are instead just ``deadbroke''\1\. --------------------------------------------------------------------------- \1\ BAD DADS [Dead beat vs. Dead broke dads], ABC News program 20/ 20, John Stossel and Barbara Walters, January 7, 2000. --------------------------------------------------------------------------- For this new growth industry to flourish, it constantly needs more destroyed families and children to harvest more ``deadbeats.'' This divorce industry seems to have now leveled off at 50% of BROKEN FAMILIES to plunder, creating a pervasive need to recruit more ``deadbeats.'' As a result, further distortions, fabrications, half-truths, and increasingly harsher draconian measures have been instituted to ensure greater levels of ``non-compliance.'' The more COLLECTIONS, the fatter the ``bonus check'' from the Federal Government to the states and other vested interests in this new growth industry. The entire domain of Child Support Enforcement has become a haven for Junk Science by those with an interest in the destruction of the family and obsessive collection of Child Support checks. Junk Science and Junk Data have been used to manipulate the entire lawmaking process. ``Peter Huber coined the phrase ``junk science'' to refer to questionable expert testimony in the courtroom. [FN28] ``Junk science,'' Huber writes, ``is the mirror image of real science, with much of the same form but none of the substance.'' [FN29] He complains that courts permit ``self-styled scientists'' to engage in ``pseudoscientific speculation.'' [FN30] A central issue in the junk science debate is the admissibility of expert opinion in the adjudicative process. [FN31]'' \2\ Though this quote deals with the courts, the entire legal process, including legislative hearings have been virtually hijacked by self-serving special interests who pretend to ``protect children'' but do not care what destructive side affects their advocacy may have on those children. --------------------------------------------------------------------------- \2\ Partially Quoted from 72 N.C. L. Rev. 91 at 97; ``[FN28] PETER HUBER, GALILEO'S REVENGE: JUNK SCIENCE IN THE COURTROOM 2 (1991); [FN29]. Id.; [FN30]. Id. at 3. Huber notes that ``[t]he best test of certainty we have is good science--the science of publication, replication, and verification, the science of consensus and peer review.'' Id. at 228.; [FN31]. In Daubert v. Merrell Dow Pharmaceutical Inc., 113 S. Ct. 2786 (1993), the Court dealt with the admissibility of expert testimony about scientific evidence...'' --------------------------------------------------------------------------- Background and Case Law The Hague Convention on Recognition and Enforcement created an international cooperative in the enforcement of child support orders in 1973. ``Coincidentally,'' in 1974 Senator Russell Long came to the conclusion that there was a connection between ``fathers who abandon their children'' and a growth in Aid to Families with Dependent Children (AFDC). With no study and no basis for this conclusion, his efforts led to the original federal child support and paternity legislation enacted in January 1975 \3\. The new agency's purpose was to collect Child Support from those fathers whose children were on welfare. This was done to try to reduce welfare expenditures by funding states through their legislatures if those states would create guidelines. These ``guidelines'' replaced legal due process procedures for determining the actual cost of raising a child. --------------------------------------------------------------------------- \3\ The Child Support Guideline Problem, Roger F. Gay, MSc and Gregory J. Palumbo, Ph.D., May 6, 1998 --------------------------------------------------------------------------- A landmark case occurred in the Oregon Supreme Court in 1981 that substantively explained child support doctrine \4\. This case found that the welfare formula for Child Support Collections did not apply to cases outside of the welfare system and required a special burden of ascertaining financial details appropriate for the support of children. --------------------------------------------------------------------------- \4\ In the Marriage of Smith, Or 626 P2d 342 (1981). --------------------------------------------------------------------------- It frustrated the Courts to deal with the details of determining actual needs based on gross and net income, property values, forms of compensation, and then attempting to equitably apportion them because these cases were often appealable\5\. From this original evidentiary based ``rebuttable presumption'' of actual costs and needs, we moved to more uniform ``guidelines'' presenting a facade of a rebuttable presumption (45 CFR 302) but whose outcome often prevents appeals. Today, appeals are difficult because the defining facts and specific data for the guidelines are unknown and have never been published. Therefore, the ``rebuttable presumption'' is only a concoction fabricated by the states to meet Federal requirements. There are, in fact, no actual costs or data available to rebut. --------------------------------------------------------------------------- \5\ Silvia v. Silvia, 400 N.E.2d 1330 --------------------------------------------------------------------------- All of these guideline problems make the ``rebuttable presumption'' mandated by the Federal Government (under 45 CFR 302) a useless facade. The PSI guidelines and Income Shares exacerbate this problem by failing to meet the Federal requirement of the most recent economic data on child rearing'' required for the stipulated quadrennial state reviews. One pending case in Alabama challenges the rebuttable presumption of the child support guidelines.\6\ There is a related followup case to this that seeks to force the courts to abide by their own contracts with child support awards.\7\ --------------------------------------------------------------------------- \6\ Blackston v. Alabama, 30 F.3d 117. (11th Cir. 1994); \7\ U.S. District Court for the Middle District of Alabama Case #99-A-295-N --------------------------------------------------------------------------- The State of Kansas has filed a Federal Appeals case against the United States Government \8\ and stated in opening arguments on January 20, 2000 in the 10th Circuit Court of Appeals that current Child Support guidelines are ``unconstitutionally coercive.'' --------------------------------------------------------------------------- \8\ State fighting feds in appeals court, The Topeka Capital- Journal, Robert Boczkiewicz, January 22, 2000 --------------------------------------------------------------------------- A Michigan attorney has successfully challenged the constitutionality of some of the Child Support Enforcement practices in the State of Michigan \9\. Based on this initial victory about the UNCONSTITUTIONAL nature of Michigan's practices, another Class Action has been filed representing the 2,000,000 obligors (predominantly fathers) in the state \10\. The Michigan papers are beginning to recognize the Courts and the Child Support ``system'' are out of control \11\. --------------------------------------------------------------------------- \9\ Tindall v. Wayne County Friend of the Court, 98-CV-73896-DT, Eastern District of Michigan, Southern Division; 9/30/99 \10\ Child Support Collection Leads Divorced Fathers to Sue the State of Michigan, Current Events in Law--Online Section, Paul Reed, January 26, 2000 \11\ Michigan Court out of Control, Wayne County FOC & Circuit Court Accused of Fraud and Abuse, Sierra Times Exclusive, Franklin Frith, February 9, 2000 --------------------------------------------------------------------------- In a March 1, 2000 Louisiana appeals case, the lower Court engaged in blatant, capricious, and malicious gender bias \12\. The husband and wife had similar seasonal jobs. The husband's wages were imputed with low points of the seasonal job ignored, and the wife's wages were treated differently. The lower court's ruling was reversed on appeal. In a March 7, 2000 Minnesota appeals case\13\, the lower court refused to correct imputed income and it too was reversed on appeal. An Ohio court of appeals remanded a case back to the lower court\14\ on March 6, 2000 for reconsideration because Tax adjustments for the obligor were not appropriately factored into the guidelines and should have been considered as part of the ``rebuttable'' presumption. --------------------------------------------------------------------------- \12\ Otterstatter v. Otterstatter, No. 99-1481 (Louisiana Court of Appeals) \13\ Behnke v. Green-Behnke, No. C7-99-820 (Minnesota Court of Appeals) \14\ Topp v. Topp, No. 1999CA0243 (Ohio Court of Appeals, District 5): Relying on Singer v. Dickinson, 63 Ohio St. 3d 408 (1992) --------------------------------------------------------------------------- These are just a few of the cases heard within the last couple of months. The fact that such cases have been routinely overturned on appeal demonstrates not only that the ``guidelines'' are faulty but also that lower courts are reluctant to consider reasonable ``rebuttals'' to the guidelines. These ``guidelines'' have in fact become rigid de facto laws. JUNK SCIENCE--Distortions, Deceptions, Data Manipulations, and Misunderstandings Census Bureau data from 1989 indicated that 75 percent of all child support owed is paid \15\, and showed that the TOTAL amount of Child Support owed was 14.8 BILLION dollars. Of that amount, 11.1 BILLION had been paid (7.6 BILLION was paid in full, and 3.5 BILLION was partially paid). According to a 1992 report by the Government Accounting Office, Child Support non- payment is NOT by choice This report showed that 66% of the fathers were not able to pay, 5% were unable to be located, and 29% were classified as other\16\. --------------------------------------------------------------------------- \15\ Current Population Reports, Series P-23, No 173, 1989 \16\ GAO/HRD-92-39FS, January 9, 1992; page 19 --------------------------------------------------------------------------- Analysis of methodology used by the Census Bureau Child Support to compile data is even more disturbing. Dan Weinberg, who heads the census division that collects Child Support data, has stated that this data is based solely on the custodial mother's recollection, and there is no cross-check or verification with the non-custodial parent OR any requirement for documentation \17\. This statement was made on the ABC 20/ 20 program on January 7, 2000, where it was concluded that ``deadbeat dads'' are actually ``deadbroke dads.'' Let's reiterate, the Census Bureau data is based solely on the custodial mother's memory, influenced by her personal bias or anger, and with NO verification to support the claims. --------------------------------------------------------------------------- \17\ BAD DADS [Dead beat vs. Dead broke dads], ABC News program 20/ 20, John Stossel and Barbara Walters, January 7, 2000. --------------------------------------------------------------------------- In 1992 custodial mother SELF REPORTED figures didn't quite fit the expected ``deadbeat dad'' outcomes \18\ indicating that 66% of non-support by fathers was from inability to pay. In fact, the rate of child support noncompliance by non-custodial MOTHERS is greater than that of non-custodial fathers \19\ yet there are no slogans about ``deadbeat moms'' or social ostracism. --------------------------------------------------------------------------- \18\ GAO/HRD-92-39FS, January 9, 1992; page 19 \19\ Bureau of the Census, Statistical brief--SB/95-16; June 1995 --------------------------------------------------------------------------- License revocations, property liens, contempt jailing, and referrals to the US Attorney General enacted under Federal authority are not generating significantly more collections. This indicates that many targeted fathers are just ``deadbroke.'' Simple logic dictates that revoking a license will likely result in the inability to work and therefore exacerbate the problem. ``The Federal Office of Child Support Enforcement has nearly a $4 BILLION annual Budget. Of the $12 billion CS arrearages, about three-fourths of them are categorized as ``uncollectable''--this is largely due to unemployment.'' \20\ --------------------------------------------------------------------------- \20\ Divorced Fathers: Shattering the Myths, Sanford Braver. --------------------------------------------------------------------------- Reviewing testimony before this committee, we are now supposed to believe that some 50 BILLION dollars in Child Support is owed. That would be over 3 times the amount owed just over 10 years ago, based on inaccurate, unverified, and likely inflated numbers (see fn17 above). This assumption would require us to believe that any one or all of the factors underlying Child Support collections have increased by over 3 times as well: salaries have increased 3 times, divorce rates have skyrocketed 3 times, ``awards'' have increased 3 times, or any combination. resulting in 3 times the problem. This 50 BILLION dollar figure professed by Nick Young, Geraldine Johnson, and others testifying before this committee defies logic \21\. Those with the most to gain by this system perpetuate this 50 BILLION dollar junk data. --------------------------------------------------------------------------- \21\ Statement of Nick Young, Division of Child Support Enforcement; Statement of Geraldine Jensen, Association for Children for Enforcement of Support, Inc. March 16, 2000 --------------------------------------------------------------------------- US Census Bureau data indicates there are 11.6 million custodial mothers (85% of all custody awards) collecting support. It seems a fair assumption that there are 11.6 million Child Support obligors for an average ARREARAGE of $4,310. If this figure were in fact accurate, this would indicate that there are nearly 11 million obligors who are within a couple of support payments (the $5,000 threshold) of incarceration \22\. With the number of states that engage in mandatory pay check withholding, this shows that either the 50 BILLION figure is false, child support ``awards'' are too high, or most likely, both. Will America soon require a massive penal system to house all these poor fathers? --------------------------------------------------------------------------- \22\ 3/99 U.S. Dept. of Commerce, Current Population Report (P60- 196 Child Support For Custodial Mothers and Fathers: 1995), there are 11.6 Million Custodial Mothers (85%). --------------------------------------------------------------------------- ``The Bureau of the Census reported on child support payments in the spring of 1995 \23\. According to that report, the so-called ``deadbeat dads'' are few and far between in the population of fathers with legitimate child support orders \24\. Comments on child support compliance often focus on the estimate that only about 66% of the child support that has been awarded is paid. This does not consider the fact that more than 14% of the amount under study had been recently awarded and was not yet due. Considering custodial parent reporting bias and adjusting for awards not yet due brings us closer in line with the information provided by Braver et al.\25\ as well as information collected by commissioners in the states. Approximately 80% of the total amount of child support awarded in the U.S. has historically been paid each year. The compliance rate was not significantly affected by reforms.'' \26\ This indicates that special interests are manufacturing a problem when none exists. --------------------------------------------------------------------------- \23\ Who Receives Child Support? Bureau of the Census Statistical Brief, June 1995. \24\ Although according to the data used in that report, child support had been awarded for only 56% of all separated custodial parents. Part of the lack of support orders however, can be explained by the death of an ex-spouse, agreement not requiring a court order, and other reasons. A significant part however is simply because paternity has not been established. \25\ Non-Custodial Parent's Report of Child Support Payments, Braver, Sanford, Pamela J. Fitzpatrick, and R. Curtis Bay, 1988, presented at the Symposium ``Adaptation of the Non-Custodial Parent: Patterns Over Time'' at the American Psychological Association Convention, Atlanta, GA, August, 1988. Compared Bureau of Census custodial parents reports (approx. 70% received) with father survey (approx. 90% paid). \26\ The father of today's child support public policy, his personal exploitation of the system, and the fallacy of his ``income shares'' model, James R. Johnston, August 1998. --------------------------------------------------------------------------- The Honorable Lynn Woolsey has stated there were child support enforcement reform laws in 1984, 1988, 1993, and 1996. None of them resulted in any significant improvements in the rate of child support collections.'' \27\ The data would seem to indicate this is because the numbers used by those with a financial stake in Child Support Enforcement are false or misleading, and that most of the non-support is from inability to pay. To wit, a mandatory withholding experiment conducted in 10 Wisconsin counties yielded only a 2.89% increase in compliance, INDICATING THOSE WHO COULD PAY WERE PAYING! \28\ --------------------------------------------------------------------------- \27\ Statement of Lynn Woolsey, M.C., CALIFORNIA, March 16, 2000. \28\ Journal of Contemporary Policy Issues, Garfinkle and Klawitter, 1992--after instituting mandatory wage witholding of child support in Wisconsin, 10 pilot counties collected only 2.89% more of what was owed than the ten control counties that didn't garnish --------------------------------------------------------------------------- Child Support enforcement has criminalized Fatherhood.\29\ Yet it is interesting that there is little or no information about bad mothers. If this were truly about children, there would be more public vilification of mothers based on the high rates of child abuse perpetrated solely by mothers \30\. The lack of concern about children's health, safety, and welfare, coupled with the insatiable lust of the divorce industry for the FATHER'S PAYCHECK exposes the financial motivation of the entire system. This system LIES about ``child'' support while neglecting the welfare of children. The rhetoric about ``deadbeats'' advances a family destructive agenda when considering the US has historically had one of, if not the highest compliance with child support orders in the world.\31\ --------------------------------------------------------------------------- \29\ Beating Up on ``Deadbeat Dads,'' American Spectator, Stephen Baskerville, August 20, 1999. \30\ Donna Shalala, ``National Child Abuse Prevention Month'' and Child Maltreatment 1994: Reports from the States to the National Center on Child Abuse and Neglect. Patrick Fagan, Heritage Foundation, THE CHILD ABUSE CRISIS: THE DISINTEGRATION OF MARRIAGE, FAMILY, AND THE AMERICAN COMMUNITY, Rick Thomas, The Dirty Little Secret: Abuse in Foster Care \31\ id. at footnote 25 (Non-Custodial Parent's Report of Child Support Payments) --------------------------------------------------------------------------- When Child Support becomes TAX FREE Alimony Robert Williams, the father of the Income Shares model, worked as a consultant with the US Health and Human Services (HHS) Office of Child Support Enforcement from 1983-1990. In 1984 he started Policy Studies, Inc. In 1987 he developed and introduced the ``Income Shares'' model now used by over 30 states. Williams currently consults states in Child Support guidelines while owning and operating his child support collection service with some 500 employees creating a direct conflict of interests \32\. In the Mid 80's, under the ``guise'' of a need to raise child support, a 250-350% increase was suggested without specifically focusing on the child. The name of the report itself betrays the unstated motive to include Alimony or Spousal support under the pretense of increasing basic child support needs: 350%: Estimates of National Child Support Collections Potential and the Income Security of Female-Headed Families \33\[emphasis added]. --------------------------------------------------------------------------- \32\ id. at footnote 25 (Non-Custodial Parent's Report of Child Support Payments) \33\ Ronald Haskins, Andrew W. Dobelstein, John S. Akin, and J. Brad Schwartz, Final Report, Office of Child Support Enforcement, April 1, 1985. --------------------------------------------------------------------------- At about this same time (mid 80's), women's groups rallied around Lenore Weitzman's statistically flawed ``73%'' study in a frenzied attempt to gain alimony. This ``study'' with its erroneous math and questionable methods, helped disproportionately increase child support payments for the custodial parent--, 90% of whom are mothers \34\. This egregiously flawed data has been used in discussing child support reforms. Typically, income differences between men and women are used as an excuse for the need to increase child support. This ``logic'' is a direct appeal to include some form of spousal support or alimony in the ``child'' support calculation. Williams ``model'' then accepted presumed ``increases'' in his 1987 report. --------------------------------------------------------------------------- \34\ The Divorce Revolution: The Unexpected Social and Economic Consequences for Women and Children in America, Lenore Weitzman, PhD, 1985. Discredited because of simple mathematical errors in her calculations and a fatally flawed methodology. She did not admit to these mistakes for 11 years until 1996 when they were openly exposed in A re-evaluation of the economic consequences of divorce. American Sociological Review 61:528-36, Peterson, R.R. 1996. As a result of Weitzman, a huge number of states--virtually all--have upwardly revised their child support guidelines by using and citing this work. --------------------------------------------------------------------------- Williams widely used Incomes Shares model is not based on separated or divorced household expenses for children, and it arbitrarily under-accounts for shared parenting time \35\. Standard of living adjustments aren't properly factored; Williams simply raises the numeric tables arbitrarily producing results so high that they often grossly inflate ``child support'' to include alimony \36\ (more junk ``science''). Apportioning support based on time with each parent has been suggested and some judges and lawyers openly oppose these equitable determinations factoring the amount of time with each parent in child support amounts \37\. --------------------------------------------------------------------------- \35\ The Child Support Guideline Problem, Roger F. Gay, MSc and Gregory J. Palumbo, Ph.D., May 6, 1998 \36\ Gay, Roger F. The Alimony Hidden in Child Support, New Scientific Proof that Many Child Support Awards are Too High, The Children's Advocate (NJCCR, Box 316, Pluckemin, NJ 07978-0316), January, 1995, Vol. 7 No. 5. \37\ Parents Get Way to Lower Child Support, Dow Jones Newswires, Greg Winter, July 28, 1999 --------------------------------------------------------------------------- Williams (the owner of PSI) regularly advocates increasing Child Support awards with little or no credit for time with the non-custodial parent. This creates a hardship on non-custodial parents (generally fathers) struggling to remain involved with their children. This increases the pool of child support obligation, or arrearage for the non-custodial fathers. Williams' (PSI) collection division can then exploit them for their personal financial gain. ``Economic analysis comparing pre and post divorce standard of living is highly speculative, is based on unsubstantiated assumptions about family spending patterns, and leaves out many important considerations that would tend to show that post- divorce standard of living is more nearly equal among the households of split parents. \38\'' --------------------------------------------------------------------------- \38\ Weitzman and Betson use the same approach to estimating pre- and post-divorce standard of living differences. Betson's paper provides a short list, including items such as visitation and tax consequences that are not included in his standard of living analysis. For a critical review of Weitzman's analysis, see the following. Abraham, Jed H., 1989, The Divorce Revolution Revisited: A Counter- Revolutionary Critique, Northern Illinois University Law Review, Vol. 9, No. 2, p. 47. (as quoted from New Equations for Calculating Child Support and Spousal Maintenance With Discussion on Child Support Guidelines, Roger Gay, July 20, 1994) --------------------------------------------------------------------------- Williams underlying data is flawed in its ``economic'' studies and information that are in fact based on non-like groups of intact families to arrive at major ``statistical'' conclusions \39\ (i.e. junk science) ''...the presumption that underlies the focus of much of the empirical research and policy debate on income distribution [within households] seems born of ignorance and is supported by neither theory nor fact.'' \40\. --------------------------------------------------------------------------- \39\ The Child Support Guideline Problem, Roger F. Gay, MSc and Gregory J. Palumbo, Ph.D., May 6, 1998 \40\ Allocation of Income Within the Household, Lazear, Edward P. and Robert T. Michael, University of Chicago Press, 1988. --------------------------------------------------------------------------- Williams' company, PSI, uses data erroneously based on the study of costs of raising children in INTACT households \41\. PSI data relied partially on the Rothbarth estimator which concludes family well-being depends on the amount the family spends on alcohol and tobacco! \42\. The Williams PSI ``income shares'' model also relies on the Engle estimator which is based on century-old findings of an economist, Ernst Engle. The premise appears valid at first and then Williams (PSI) extrapolates completely unrelated data from this study which dramatically inflates guideline numbers \43\. Gross Income versus Net Income as well as Day care and Medical costs are estimated with no proper basis. The underlying data is erroneous and not disclosed. Most states using the Williams model also add additional amounts as separate and distinct items for daycare, health insurance, and medical expenses, yet PSI did not parse those items from the expenditures for children and are at least partially included in the base ``guidelines'' creating double allocations for obligors \44\ (all junk ``science''). --------------------------------------------------------------------------- \41\ May 26, 1999 Memorandum from Richard J. Byrd, P.C. to the Virginia Quadrennial Guideline Review Panel. Analysis of the PSI Study and Recommendation. (page 1 of 13) The Panel requested this law firm to review the Guidelines and offer commentary. Richard Byrd is also the Chairman of the Family Law Section of the Fairfax Bar Association. \42\ See Footnote 41at page 2. \43\ See Footnote 41at page 3. \44\ See Footnote 41at pages 5-9 --------------------------------------------------------------------------- Some states allow for ``child support'' to continue AFTER a ``child'' is 18 and even living away from home. This comes in the form of post-secondary support for college. If a ``child'' is over 18, and no longer living at home, and the check is still drafted to the custodial parent and NOT the child, how can this be called ``child support''?. Though supporting children through college is important, this additional burden is clearly little more than Alimony or spousal support. Ten states allow this, 11 states have restrictions, 7 are silent on the issue, and the remainder forbid it through statute or case law \45\. Also, there is no accountability to the obligor for a ``child'' in college getting grants, loans, or other public assistance from the government. --------------------------------------------------------------------------- \45\ Allowed -CA, CT, IL, MS, MO, NJ, SC, TN, WA,WY; Restricted - AL, CO, IO (to age 22 only?), MD, MA, MI (to age 21 only?), MN, NY, OR (declared unconstitutional, under appeal), TX, UT; Silent -AR, HA, IN, NE, NV, NH, WV. --------------------------------------------------------------------------- ``Robert W. Braid, an accounting, finance and economics professor, performed a detailed cost analysis in his own case in New Jersey \46\. Based on a comprehensive cost and cash flow analysis, he calculated that he should pay approximately $180 per month to the mother in addition to sharing the direct costs of education for one child in college. Based on the established New Jersey formula, he was ordered to pay $903 per month, plus half his daughter's college expenses. Mr. Braid found that the judges decision implied that it 'must cost $21,672 a year in after tax money to support one child at home full-time (excluding any medical expense and any money the father spends on vacations, entertainment and hobbies with the boy), and one child spending about 25% of her time at home and the rest in college.' '' --------------------------------------------------------------------------- \46\ The Making of a Deadbeat Dad, Robert W. Braid, Trial Lawyer, March 1993. (as quoted from New Equations for Calculating Child Support and Spousal Maintenance With Discussion on Child Support Guidelines, Roger Gay, July 20, 1994) --------------------------------------------------------------------------- For example, using NY income numbers shows how child support impoverishes the obligor. A non-custodial parent (fathers 90% of the time), earning $55,000 per year pays child support for 2 children and ends up with an income of only $14,000. The mother, earning $26,000 per year, ends up having a disposable income of over $44,000. Tax cost of all this to American Taxpayers? Over $22 Billion! \47\. The cost to the obligor is virtual financial oblivion so severe that the obligor can rarely even afford an appropriate residence for maintaining a relationship with HIS children (predominantly fathers). These poor, but carefully manufactured living conditions through financial destitution are often the basis for the Courts restricting or removing even more of the father's relationship with the child. --------------------------------------------------------------------------- \47\ Melanie Cummings of Children's Rights Council, illustrative Excel Spreadsheet to show the actual and real distribution of ``child'' support. --------------------------------------------------------------------------- Requirements do not exist for child support recipients to provide proof that the money was being spent in support of the children. This is clearly an ``open door'' to use this money for virtually any non-child related wish the custodial parent may have (alimony). The lack of accountability is violative of supporting children and promotes personal use of the ``award'' by the recipients \48\. --------------------------------------------------------------------------- \48\ In re Marriage of Hering, 84 Or App 360, 733 P2d 956 (1987). ``the money is for the support and welfare of the children, not for the enrichment of the custodial parent.'' --------------------------------------------------------------------------- The press is also starting to understand that the whole ``child support'' shell game is about alimony or spousal support. ABC Market Watch recently did an article defining this as plainly biased against men and is by design to ``hide'' alimony \49\. The errors and additional expenses included in the ``guidelines'' support the claim that there is much more than just child support included in the ``award.'' --------------------------------------------------------------------------- \49\ When men lose the divorce game, Courts often feel what's his is theirs, but what's hers is hers, Alan Feigenbaum, CBS Marketwatch, December 27, 1999 --------------------------------------------------------------------------- A fully informed challenge of the current Support ``Guidelines'' in effect in most states would not likely stand the reliability, validity, and methodology standards erected by the US Supreme Court for ``expert'' testimony. These more stringent standards recently imposed by the Kumho case were designed by the justices to create an affirmative responsibility by lower courts to invalidate the junk science that permeates the courts and legal system today. The Supreme Court, in a rare move declared that admitting unreliable, questionable, or invalid data was an ABUSE OF JUDICIAL DISCRETION \50\. Robert Williams and his ``Income Shares'' model would likely not fare well in a direct, substantive, and well-prepared court challenge. --------------------------------------------------------------------------- \50\ Kumho Tire, Inc. v. Carmichael, 119 S.Ct.1167 (1999) Justice Scalia, with whom Justice O'Connor and Justice Thomas join, concurring opinion clarified stating in part ``Rather, it is discretion to choose among reasonable means of excluding expertise that is fausse and science that is junk... the Daubert factors are not holy writ, in a particular case the failure to apply one or another of them may be unreasonable, and hence an abuse of discretion.'' --------------------------------------------------------------------------- PAYING FOR THE DESTRUCTION OF OUR CHILDREN It is finally becoming widely understood that father- absence is one of the most destructive forces to children in our society--; fatherless homes account for 63% of youth suicides, 90% of all homeless and runaway children,\51\ 85% of all children exhibiting behavioral disorders,\52\ 80% of rapists motivated with displaced anger,\53\ 71% of all high school dropouts,\54\ 75% of all adolescent patients in chemical abuse centers,\55\ 70% of juveniles in state-operated institutions,\56\ and 85% of prison youths.\57\ --------------------------------------------------------------------------- \51\ U.S. D.H.H.S., Bureau of the Census \52\ Center for Disease Control \53\ Criminal Justice & Behavior, Vol 14, p. 403-26, 1978 \54\ National Principals Association Report on the State of High Schools \55\ Rainbows for all God`s Children \56\ U.S. Dept. of Justice, Special Report, Sept 1988 \57\ Fulton Co. Georgia jail populations, Texas Dept. of Corrections 1992 --------------------------------------------------------------------------- Contrast this with 37.9% of fathers have no access/ visitation rights \58\. Non-compliance with court ordered visitation by custodial mothers prevents 77% of non-custodial fathers from being able to ``visit'' their children \59\. Non- compliance with court ordered visitation is three times the problem of non-compliance with court ordered child support and impacts the children of divorce even more. 40% of custodial mother SELF-REPORTS indicate they interfered with the father's visitation to ``punish'' them,\60\ 50% see no value in the father's involvement with the child,\61\ and many use the children to retaliate against the father for their own ongoing personal problems.\62\ --------------------------------------------------------------------------- \58\ p.6, col.II, para. 6, lines 4 & 5, Census Bureau P-60, #173, Sept 1991 \59\ Visitational Interference--A National Study, Ms. J Annette Vanini, M.S.W. and Edward Nichols, M.S.W. (September 1992) \60\ p. 449, col. II, lines 3-6, (citing Fulton) Frequency of visitation by Divorced Fathers; Differences in Reports by Fathers and Mothers. Sanford Braver et al, Am. J. of Orthopsychiatry, 1991. \61\ Surviving the Breakup, Joan Kelly & Judith Wallerstein, p. 125 \62\ Journal of Marriage & the Family, Vol. 51, p. 1015, Seltzer, Shaeffer & Charing, November 1989 --------------------------------------------------------------------------- The court system does not enforce orders for ``visitation'' but jails for non-compliance with a ``child'' support order. This is a clear indication that the whole DIVORCE INDUSTRY is about money and children are just the ``poker chips'' in this high stakes ``game.'' Their destruction is just ``collateral damage'' for the marriage hating special interests pushing their junk data. Conclusion The entire arena of Family Law has become a domain of Constitutional violations and usurpation of civil rights. What a normal person would consider a Debtor's Prison has been instituted. To usurp the Constitution, the courts have ``legislated'' a perversion of the law declaring ``contempt'' as the new Debtor's Prison Mantra by stating it is not a debtor's prison because the jailing for contempt can be remedied upon clearing the contempt (i.e. paying the DEBT! aka Debtor's Prison). One man who earns $70 a week as a street musician is in jail now and will NOT be allowed to get out unless he can come up with $28,000 \63\. After all, the courts have REFUSED to allow visitation with his son for the last 6 years but DEMAND his money... Fathers in similar situations abound. The cost of the jail cell, incarceration, court time, and other fees associated for those who obviously CAN'T pay make for the state sponsored destruction and eradication of fatherhood. --------------------------------------------------------------------------- \63\ Man is jailed again in Child Support battle, The [New Jersey] Star Ledger, Timothy O'Conner, March 19, 2000. --------------------------------------------------------------------------- A California appeals court also declared that some Child Support incarcerations were a violation of the 13th Amendment for involuntary servitude \64\. Federal enforcement of Child Support through the IRS, as proposed in H.R. 1488, is arguably unconstitutional by forcing the states to comply with Title IV- D \65\. The United States Supreme Court stated\66\, ``Congress is without power to enlist state cooperation in a joint federal-state program by legislation which authorizes the States to violate the Equal Protection Clause.'' and ``[W]hile the Fifth Amendment contains no equal protection clause, it does forbid discrimination that is 'so unjustified as to be violative of due process.' `` --------------------------------------------------------------------------- \64\ LLR No. 9609060.CA Moss V. Moss, September 25, 1996 \65\ Blessing, Director, Arizona Department Of Economic Security v. Freestone et al. [1997, US SupCt, 95-1441]. Child Support Enforcement is not a federal right that can be used to force states to substantially comply with Title IV-D. \66\ Shapiro v. Thompson, 394 U.S. 618, 22 L.Ed.2d 600, 619, 89 S.Ct. 1322 (1969) citing Katzenbach v. Morgan, 384 U.S. 641, 651, n. 10, 16 L.Ed.2d 828, 836, 89 S.Ct. 1717 (1966) et. al. --------------------------------------------------------------------------- Nearly every state has legislation to seize bank accounts and real property without a court order (for ``child'' support) eliminating due process without a sworn statement that the money is owed. In child support politics, the Constitution has become passé and encumbers or impedes the cash machine that has been created. In child support politics, the Constitution has become pass and encumbers or impedes the cash machine that has been created. In this entire domain of ``Family Law'' the Constitution as we know it has ceased to exist. ``State judges, as well as federal, have the responsibility to respect and protect persons from violations of federal constitutional rights.'' \67\ This responsibility has been abandoned to pursue Title-IV funding for the states. --------------------------------------------------------------------------- \67\ Goss v. State of Illinois, 312 F2d. 1279 (US App Ct, Illinois, 1963) --------------------------------------------------------------------------- State and Federal Governments now expend HUNDREDS OF BILLIONS of dollars each year to support the marriage and family destruction INDUSTRY with little to promote or support marriage and families. There is some indication that the press is starting to take note of Child Support and the Multi-BILLION dollar Divorce INDUSTRY that destroys families and thwarts the Constitution\68\. Many ``deadbeat'' dads are just plain ``deadbroke.'' They are humiliated and bankrupted by a system that hides ``alimony'' in child support payments designed to support single mothers and their children \69\ making it ``profitable'' for women to divorce. Under Child Support Enforcement efforts, draconian measures including ``badges of infamy'' like the fabled ``scarlet letter'' have been instituted in the form of jack boots for cars. In a Washington Times article, Nick Young has STATED the intent of such measures is humiliation \70\. --------------------------------------------------------------------------- \68\ Q: Is court-ordered child support doing more harm than good? Yes: This engine of the divorce industry is destroying families and the Constitution. Insight Magazine, Stephen Baskerville, Vol. 15, No. 28-- August 2, 1999. \69\ Some 'Deadbeat' Dads Are Dead Broke, David Crary, Associated Press, November 7, 1999 \70\ Pink and blue car boots shouldn't be forced on police, Police Beat--Fred Reed, The Washington Times, Jan. 10, 2000; page C2. --------------------------------------------------------------------------- Family Courthouses in America, in practice, have become Family slaughterhouses. Families, children, and our futures are being plundered through the use of junk science represented as 'gold standards.''. Destroying families and children in America has become BIG BUSINESS... A MULTI-BILLION DOLLAR INDUSTRY. The deadbeat dad myth, is just that, a myth. Fathers want accountability and equity in a system that is both unconstitutional and out of control \71\. --------------------------------------------------------------------------- \71\ Father's protests deserve airing, Kathleen Parker, USA Today, November 8, 1999 --------------------------------------------------------------------------- Fathers are being destroyed by a system that seeks to squeeze every ounce of money possible before discarding them, with disdain for father's essential roles as nurturing parents, protectors, role models, and caretakers of their children. A father in Canada (a country with similar custody policies and child support ``guidelines'' as the US) recently killed himself after being ordered to pay TWICE his income in support payments \72\. With the current junk rhetoric like the unsubstantiated 50 BILLION dollars arrearage amounts(not based on ANY FACTUAL STUDY, i.e. junk data), we are not far from this kind of tragedy being commonplace in America \73\. This destructive DIVORCE INDUSTRY must be dismantled. --------------------------------------------------------------------------- \72\ Anti-Male Bias in Family Courts blamed for Man's Suicide, couldn't afford support payments, backers say, Donna Laframboise, National Post, March 23, 2000 \73\ Throwaway Dads, Houghton Mifflin, Ross Parke and Armin Brott, 1999. --------------------------------------------------------------------------- Robert Williams involvement with Child Support Guideline creation through PSI, and his Child Support Collections business creates a conflict of interest and an inherent need for his ``junk science'' to manufacture more ``deadbeats.'' US citizens, as well as Federal and State governments should DEMAND A full reimbursement of all PUBLIC FUNDS that his Child Support Collections business has received for the destruction of families. The IRS does not have a stellar reputation for resolving financial issues while observing the rights of the citizenry and the Child Support Guidelines are a mess. Giving them to the IRS to enforce with its reputation would likely create even more of a mess \74\. To resolve some of this mess the Federal Government must require states to define what the child support presumptions are, and then assign appropriate values to each of those presumptions making them truly rebuttable to qualify for Federal Funds. --------------------------------------------------------------------------- \74\ Everyone Loses in the Daddy War, Wall Street Journal, Stuart Miller, May 31, 1995, page A-17 --------------------------------------------------------------------------- The Federal Government MUST get involved, but not through Child Support Collections via the IRS. Rather, the government must now demand Justice and Equity in the state ``Family'' Courts, and promote the preservation of intact families and protect the rights of children to be raised and supported--both financially and emotionally--, by BOTH parents. Federally subsidized collection agencies need to stop taking from the children what their RHETORIC pretends to protect \75\. --------------------------------------------------------------------------- \75\ More for SRS Collections but less for Children, Kansas is taking a larger percentage of the child support payments it collects-- and parents are not happy about it. Wichita Eagle, Jennifer Comes Roy, January 24, 2000 --------------------------------------------------------------------------- The social fabric of society is built upon the strength of its family structure. Impoverishing and vilifying parents by misguided and flawed practices of government, joined at the hip to a multi-billion dollar divorce industry, is rapidly exsanguinating and killing the American family. Restore Constitutional protections to the ``Family Court'' process. It's time to look past the marriage and family hating special interests, marriage hating gender politics, and the bureaucracies. Look to the families and children of America, or tomorrow there may not be an America. D. Luke Davis Tacoma, WA 98402 March 24, 2000 A.L. Singleton Chief of Staff Committee on Ways and Means U.S. House of Representative 1102 Longworth House Office Building Washington, DC 20515 Subject: Statement against H.R. 1488 Child Support Collection Dear Committee; This bill is simply an attempt to correct the symptom of Child Support variations versus repairing the root cause. First weed out the women who does not or will not tell the name of the father or fathers of her children. These figures of child support arrears should not be added until a father has been identified by paternity testing and given the opportunity to correct the arrears. You should also weed out the people who are dead, permanently disabled, or in prison. True, all these people need to do is get child support modified by explaining the situation. In my jurisdictional state I have to file motions affidavits and orders in the district court and this takes money to hire legal help to do this. The reason the people listed above are in arrears is because they have no money. My jurisdictional state does not require the sole custodial parent to pay child support so in essence the state is taking a chance without the children's well being in mind by expecting one person to support the sole custodial parent and the children. This is not child support but rather alimony. People do in fact become underemployed/unemployed from time to time so consequently the children suffer because the non-custodial parent is without work and the sole custodial parent refuses to work. Let us talk about compliance to child support now that we have weeded out the people who can not pay because of undetermined paternity, death, disabled, unemployed/ underemployed, and incarcerated. The compliance rate of child support is highest in custody cases where both parents have Joint Physical Custody. The compliance rate of child support is lowest in custody cases where one parent has Sole Physical Custody and the other parent has an injunction against seeing the parent's own children which in domestic law is referred to as visitation. I am not a lawyer and I am not going to go ad-nausea about joint physical custody and the advantages including but not limited too; high child support compliance rate, lowest teen pregnancy, highest high school graduation rate, lowest crime rate among children who were allowed to see both parents frequently under Joint Physical Custody. I will not go on either about the highest rate of child abuse occurs in single head of households where the female has sole physical custody. The issue is child support compliance. Whether intentional or other wise, the sole custodial parent uses the child as a weapon like the sword of Damocles hanging over the parent. The non-custodial parent who is enjoined legally or by the other parent from seeing the children except during the joke of parenting time called visitation. The sole custodial parent will use everything from the threat of moving to another state and filing abuse charges to saying that unless you buy the children shoes do not come over. The two most common reasons why parents without custody deliberately refuse to pay child support is not because they are deadbeats but rather, the custodial parent is one, interfering with visitation and/or, two, spending the money on things other than the children such as the boyfriend, crack, pull tabs, the lotto, and bingo. Enclosed is the affidavit and order to show cause that I am having to file to get a child support review because of my underemployment. These document's lists the states refusal to follow their own state laws as well as federal law such as the Work Responsibility Act of 1996 which requires all states to implement simplified child support reviews creating the appearance of arrears on my part. SEE ATTACHMENT Pages 5-8 Inclusive. I simply can not pay the present level of child support and the state refuses to follow federal and state law, statutes, and regulations for which their organization receives budgeted funds at my expense and the children. My children's mother has been telling the children since the age of seven to ask me why I am not current on child support. My children's mother has been telling me repeatedly that I can not see the children because I am not current on child support. I also can not pay child support if I am incarcerated for contempt of court for being in arrears causing me to fall even farther behind in arrears. Arrears caused by a state without administrative process to correct child support which is available in most states, not forcing custodial parent to pay child support, and a state which is only one of two states in the country without legislation forcing judges to consider and grant Joint Physical Custody. I will not embarrass Senators Byron Dorgan and Kent Conrad and Representative Pomeroy by naming this state. Child collection services, just like law enforcement and the IRS, receive bigger budgets by being inefficient and lazy. Funds that are then wasted in the bureaucratic nonsense of more office buildings, bigger offices, more corner offices, and more friends and relatives on the payroll. Where is the budgeted money going that is deliberately not being used for the enforcement of laws, statutes, and regulations. These organizations can say that the lack of money is why the collections and arrest are dropping. The organizations budgets are based upon their mandates to perform certain functions based upon laws, statutes, and regulations which they ignore with the excuse of being overworked and understaffed. This women Jensen from ACES who is pushing for this legislation is the Poster Woman for the Sole Custodial Parent. Using the excuse that her ex-husband was not visiting the children and not paying child support Jensen filed for adoption of their two children by her new husband. Jensen took the children out of Jurisdiction without court order by taking the children 1500 miles to the city where the paternal grandparents lived. Jensen refused to allow the grandparents and the father to visit with the children and the father gave the child support to the grandfather with the stipulation that Jensen would get the money if she stopped interfering with visitation. Although the father had to go to an appeal court, the father did convince the court that Jensen committed one fraudulent act after another and the appeals court rejected the adoption. To solve the problem of sole custodial parents treating child support payments as alimony and spending the money on things other than the children is to issue a debit card just as welfare entitlements are disbursed. The system, the equipment, and the trained people are in place. Just like welfare entitlements, child support payments would be spent on specific allowable items only. The following reasons listed demonstrate child support legislation including HR 1488 is only attempting to correct a symptom not the disease whose compliance rate has been quoted being from 6 billion to 40 billion in arrears by members of Clinton's cabinet, the US Congress, for profit groups, non- profit groups, and the states to insure votes and budgets without helping the children, the parents, and society. Deliberate polices, processes, and refusal by bureaucratic agencies to follow federal and state laws, statutes and regulations creating artificial arrears Assuming not assuring by bureaucratic agencies that child support is reaching the children and not the Sole Custodial parents who treats child support payment as alimony to support crack habit Stop using arrears caused by undetermined paternity, death, disabled, and incarcerated. Stop Sole Custodial Parents interference with visitation which has been written and surveyed with an incidence rate as high as 70% when the female has sole physical custody. High incidence of Parental Alienation by sole custodial parent demonstrated by physical visitation interference and money as stipulation for visitation The following items listed are solutions other than HR 1488 to correct the disease and not the symptom of child support compliance . An additional benefit besides increased child support compliance to the parents, children, and society would be mandatory Joint Physical Custody. If Clinton's cabinet, the US Congress, for profit groups, non-profit groups, and the states had the best interest of the children, the parents, and society in mind, they would cure the disease and not the symptom. Force the states through federal legislation to grant all parents Joint Physical Custody which has a 95% compliance rate for child support Force the states through federal legislation to require both parents to pay child support which helps the children especially when one parent has a period of underemployment/ unemployment Force the states through federal legislation to limit child support moneys to items consumed and or used by the children and not the parent Force the states through federal legislation to create administrative child support reviews which are free when parent goes through underemployment/unemployment Force the states through federal legislation to grant all parents Joint Physical Custody which reduces visitation interference and legal kidnapping by the Sole Custodial Parent. This would limit child abuse by parent, child murders by parent, sex abuse by parent, low drop out rate, incarceration rate, low drug abuse rate, and teen age pregnancy rate by the children. This would increase child support increase child support compliance through Joint Physical Custody. D. Luke Davis STATE OF NORTH DAKOTA IN DISTRICT COURT GRAND FORKS COUNTY NORTHEAST CENTRAL JUDICIAL DISTRICT Pamela Gordon Davis Plaintiff 97-C-277 D. Luke Davis Defendant AFFIDAVIT TO SUPPORT ORDER TO SHOW CAUSE RE: MODIFICATION OF JUDGMENT, COLLECTION OF CHILD SUPPORT, AND VIOLATION OF CONSTITUTIONAL RIGHTS I, D. Luke Davis do swear and affirm the following; That a judgment of divorce was granted between the above parties September 9, 1998 in the case captioned above. That both parties reside in Grand Forks, North Dakota. That Plaintiff has interfeared with, shamed, and embarrased children and defendant during authorized and ordered visitation. Two examples are plaintiff came to the hotel where the children and defendant were staying September 98 with a police officer and yelled and screamed at the defendant by the hotel pool in front of the children and dozens of hotel guest. Plaintiff repeatedly stated to the defendant and defendants parents that visitation would not be allowed August 1999. Plaintiff has demonstrated an active and persistant interferance with defendants visitation with children. Plaintiff is not happy that defendant was granted in plaintiffs eye excessive visitation. Plaintiff has demonstrated: physically; by withholding sex, Religiously; requiring defendant to use birth control and refusing to raise children in the Catholic faith, morally; by failing to support wedding vows by dumping husband the first time he was ever unemployed using lies and omissions to get out of the marriage, the complete and utter disrespect for the defendant yet wishes to continue using the defendants name. The defendants professional and educational background is in the field of Human Resources. The openings for this position in Grand Forks are rare and limited. Grand Forks has no manufacturing but excessive government and service jobs. The college population drives the wage scale down excessively leaving a low median earning potential in Grand Forks. The State of North Dakota as trustees of the obligees support payments is giving the obligors child support payments directly to the custodial parent who is not the obligee without insuring that the support payments are in fact being received by the obligees. The Judgment does not contain the plaintiffs social security number. The State of North Dakota is requiring only one parent, the non- custodial parent to pay child support. The State of North Dakota has refused to allow the obligor any administrative process to address sudden and frequent unemployment/ underemployment. The State of North Dakota has told the obligor repeatedly that child support reviews request by the obligor will be granted only if an attorney is hired to represent the obligor. Obligor was informed by the State of North Dakota that only the State of North Dakota could request a child support review with a referee and the obligor could only use the circuit court to request a review. The State of North Dakota has repeatedly told the obligor by letter and verbally that they will not act upon the obligors request to review child support until 36 months have passed since last adjustment or review. The State of North Dakota has repeatedly stated; what obligor can not do and that the State of North Dakota will not conform to NDCC statutes; but has repeatedly refused to help or explain how the obligor can efficiently and correctly implement child support review procedures other than to say that lawyers are exempt to the 36 month minimum period between reviews and we can not give legal advice. . D. Luke Davis Defendant STATE OF NORTH DAKOTA IN DISTRICT COURT GRAND FORKS COUNTY NORTHEAST CENTRAL JUDICIAL DISTRICT Pamela Gordon Davis Plaintiff 97-C-277 D. Luke Davis Defendant ORDER TO SHOW CAUSE RE: MODIFICATION OF JUDGMENT, COLLECTION OF CHILD SUPPORT, AND VIOLATION OF CONSTITUTIONAL RIGHTS 1) That Judgment in above captioned case be modified by changing visitation from every other weekend to every odd weekend of the month. 2) That Judgment in above captioned case be modified by removing suitable habitation as stipulation for overnight visitation. 3) That Judgment in above captioned case be modified by adding that defendant is not required to gain permission of the plaintiff when defendant wishes to participate or volunteer with the children's organized activities that fall outside of the normal visitation schedule. 4) That Judgment in above captioned case be modified by stating plaintiff no longer use Davis as part of legal name and revert to maiden name of Pamela Kay Gordon. 5) That Judgment in above captioned case be modified by adjusting amount of child support to meet the wage earning level and potential of defendant. 6) That Judgment in above captioned case be modified by stating Petitioner as custodial parent be ordered to pay child support meeting the child support guidelines in line with wage earning level and potential of petitioner. 7) That Judgment in above captioned case be modified by requiring Trustees of obligee child support payments develop and implement procedures to insure that child support is going for minor non-married children's support and not custodial parent support. 8) That Judgment in above captioned case be modified by including Plaintiffs social security number. 9) That Judgment in above captioned case be modified by stating the State of North Dakota act on obligors request for child support review regardless that 36 months have not passed since last review if Respondent meets 12 month rule or material change of circumstance since last review. 10) That Judgment in above captioned case be modified by stating Defendant be allowed the same ease and latitude as the State of North regarding processing procedures when requesting child support reviews by allowing the Defendant to use a circuit court or referee. The State of North Dakota develop and implement procedures to provide information and instruction simple enough that the obligor can efficiently and correctly request and implement child support review procedures without benefit of counsel. 11) That Defendant not be responsible for fees and costs incurred by the State of North Dakota and the Plaintiff when challenging the defendants position on this order. Statement of Hans R. Dutt, Columbia, MD Background Thank you for allowing me the opportunity to add input in evaluating this legislation which transfers child support collection activities to the Internal Revenue Service.. The entire House relies to a great extent on the expertise of subcommittee members on select issues involving proposed legislation. It is therefore of paromount importance that the subcommittee members be fully informated of ramifications from proposed legislation. However, there appears to be a lack of objective information on this topic. I believe that a significant part of this problem stems from the marketing concerns of academic journals and the press to reinforce existing stereotypes. Thus, a type of market failure has occurred concerning child support and child custody issues. Consequently, I am compelled to propose a more objective basis of evaluating this proposal. I am a professional economist that has conducted economic research and policy analysis for ten years. Although I am employed with the Federal government, the work I have done in the area of child support has been strictly outside the scope of public employment. Consequently, the comments I present do not necessarily reflect the views of the Health Care Financing Administration, its staff, or any other component of the Federal government. I am writing representing my own views that are based on economic theory and empirical research. I am associated with the Project for the Improvement of Child Support Litigation Technology (PICSLT) that is a child support think-tank dedicated to objectively determining child support awards. I am not associated with any interest groups though certain groups may use my analyses because it supports their position. In summary, I strongly oppose HR 1488. Under the current environment of inaccurate child support awards with respect the child rearing expenditures, the effects of increased child support enforcement efforts, including HR 1488, will likely result in unfavorable social outcomes including LOWER living standards of children. Other socially undesirable outcomes that I will not specifically address here include greater disenfranchisement of fathers, greater incentives for divorce, and fewer incentives for marriage. In the following pages, I lay down the theoretical and empirical support for opposition to HR 1488. The prevailing assumption I make throughout this document is that the underlying social goal is to maximize the well-being of children who are involved in the divorce or other custody process. In other words, I am assuming that the well- being of children is the end goal of this legislation and the proposal to strengthen child support enforcement is not a social goal in and of itself, simply a means to enhancing the well-being of children. In my professional opinion, the income share and percentage-of-income models produce the same undesirable outcomes: inadequate child support awards for the poor, and excessive child support awards for moderate and higher income parents. For example, Dutt (1999) has shown that the child support level relative to the child rearing costs in Maryland are too low for lower income parents, and too high for moderate and higher income parents. Other income share state's models will produce the same results. Percentage-of-income model states which assign child support as basis of the non-custodial parent's income will exasperate this phenomena to a greater degree. Economic theory dictates that inaccurate child support guidelines will produce an excessive number of sole custody awards when coupled with gender bias in the court system (Dutt 1999). When child support levels are too low, it will give parents the incentive to become the non-custodial parent, in effect, forcing the custodial parent to pay the non- custodial parent alimony. If the child support award is too high, it will have the effect of giving the likely custodial parent a financial incentive to fight for and win sole custody. Further, standard economic theory dictates that, when child support payments are excessive, a rational custodial parent will chose to spend some portion of the child support on his/ herself and the other component on the child. Thus an economic incentive exists to obtain full custody. Because of gender bias in the court system, the father will not be penalized for taking the non-custodial parent role. Consequently, in the poorer parental income cases, it is economicly rational for the father to chose not to take custody. In higher parental income cases, the mother can obtain sole custody simply by contesting custody. Courts will, with near certainty, award custody to the mother. Hence, for lower income parents, incentives exist to force sole custody on the mother. For moderate and higher income parents, incentives exist for the mother to pursue sole custody. The end result is that inaccurate child support awards promote excessive sole custody awards. Empirical research in psychology suggests that children are better adjusted when both parents are actively involved in their rearing. Courts have supported the `one-home' model based upon developmental models put forth by mental health professionals and theorists. The model suggests that there is a primary mother-child bond and a peripheral father- child bond. The implication of this theory is that supporting the father-child bond comes at the cost of the primary mother- child bond. However, there is no scientific evidence to support the primary bond hypothesis and a significant amount that refutes it. Empirical evidence suggests the contrary, that children thrive under conditions where they form multiple bonds with parents, grandparents, stepparents and other relatives (Waldron 1999). The notion of child adjustment is considered the benchmark for child well-being. Child adjustment refers to the psychological, emotional, and developmental success of the child over time. These are measured by academic achievement, intelligence level, social skills and competence, sibling relationships, measures of mood, aggressive behavior, and quality of parent-child relationships. Empirical evidence consistently suggests that children raised in mother-only families have significantly greater risk factors for mal- adjustment. Single-mother households are nine times more likely to live in poverty with incomes less than half of the official poverty line. Children in single parent households are more likely to exhibit poorer school performance, be at greater risk of teen pregnancy, have higher rates of delinquency, suffer adverse mental health conditions and establish less successful future relationships (Eggebeen et al. (1991). Economic research has placed the value of parental participation at a significantly higher level than the typical child support award. According to two economists of the University of California at Santa Barbara, Llad Phillips and William S. Comanor, boys living without their father are much more likely to be delinquent. Girls were also found to face increased delinquency risk, but less so. To counteract the father's absence on boys and girls, they estimated that the mother-only household would need to have additional annual income of $54,000 and $17,000, respectively. In addition, they found that, in father-only households, the mother's absence had a negligible effect on the rate of delinquency for boys, but resulted in a 56 percent greater likelihood in teen pregnancy for girls. Thus, evidence shows that that parental participation may be of greater value than the typical financial support. It follows that, for most families, it would be difficult to order enough child support to adequately replace and absent parent Research suggests that aggressively pursuing child support obligors that do not pay child support is likely to be ineffectual from a financial perspective and may cause non- compliant child support obligors to not participate in their children's upbringing to avoid enforcement sanctions. According to Braver et al. (1998), the number one cause of child support non-compliance is unemployment. Braver et al. estimated that between there was between 80% (obligees claim)-100% (obligors claim) of full child support compliance when the obligor was employed. The true compliance rate for the employed is therefore probably around 90 percent. The implication is that most of the non-compliant child support funds are caused by obligors who have not earned the income that the child support order is assuming is earned. This puts into question whether any government sanction can force them to pay. Resulting sanctions will likely result in non-compliant obligors leaving the area to avoid harassment. To the degree that this occurs, affected children will now pay two costs (1) the financial loss and (2) the parental participation loss. Economic theory suggests that better adjusted children will have greater opportunity sets and consequently enjoy greater living standard. Well-adjusted children can more effectively work within society and therefore have greater opportunities. This greater opportunity set from routine interaction with both parents translates into greater expected living standards for children. This is consistent with 1998 Nobel Prize winning economist Armatya Sen's conception of the standard of living. Implications: Enhanced collection actions when child support guidelines do not accurately reflect the cost of raising children are likely to do two things detrimental to the welfare of children. First, it would increases incentives for sole custody awards since it increase chances for the sole custodial parent to get the payoff. Secondly, it would decrease dual-parent involvement in child rearing since non-custodial parents will have greater incentives to stay away from their children. Both of these are detrimental to the dual-parental support that children empirically need. To approach the objective of enhancing children's well- being, dual parent child rearing needs to be encouraged. If not encouraged explicitly by actions such as enacting a presumption of joint physical custody, child support awards should be brought into line with the cost of child rearing at given parental income levels. In short, this will take away the economic incentives of sole custody an increase dual-parent involvement indirectly. In an environment where child support awards reflect actual child rearing costs, stronger enforcement efforts might be appropriate to enhance children well-being. However, under the current environment of inaccurate child support awards and gender bias, it can be severely detrimental to the short and long run welfare of children. Therefore, I strongly urge that Congress conduct in-depth research on appropriateness of child support accuracy before passing such legislation. Specifically, I believe the following questions should be addressed to determine the effect of the current child support systems and the well-being of children. Due to the apparent market failure of objective reporting on these issues, I urge that Congress fund research to directly answer these questions. Further, I suggest that they be addressed by entities that are not associated with child support enforcement activities, given the inherent conflict of interest. How much of the increase in child support collections has actually been collected on behalf of poor custodial parents? How much of the increased collections have been due to the general improvement in the economy? How much child support funds are being diverted to collection agencies and are these collection costs in line with the costs expended? In other words, are collection agencies earning a normal economic profit? How many obligors completely withdrew financial and parental participation as a result of enhanced collection efforts leaving children in a much worse plight? To the extent collections occurred on behalf middle and upper middle class parents, what proportion of the money actually was spent on the children? To the degree that excess funds were given to the custodial parent through child support awards resulting in some proportion of the payment being allocated to the custodial parent's personal desires, what was the impact on other obligor family members to whom the obligor had responsibility to support (of particular concern are children that relied on the non-custodial parent for support, but were not part of the custody proceeding)? Recommendation: The legislation should not be passed until questions regarding its detrimental effects are fully understood. If the goal is to make maximize children's well being, Congress should instead consider equalizing child rearing cost and child support awards to maximize chances of dual parenting. Perhaps a uniform national guidelines based upon real economic costs of child rearing (not per capita costs) with cost of living adjustments by locality would be appropriate. References: S.L. Braver and D. O'Connell, Divorced Dads: Shattering the Myths, Putnum (1998) H. Dutt, ``Child Support Guidelines, Imbedded Alimony and Perverse Incentives,'' Working Paper (4/1999), FRTC website (www.deltabravo.net/custody) under research articles David J. Eggebeen and Daniel T. Lichter, ``Race, Family Structure, and Changing Poverty Among American Children,'' American Sociological Review 56 (December 1991) Sen, A., The Standard of Living: Taner Lectures, Clare Hall, Cambridge (1985) Waldron, K., ``A Default Schedule Physical Custody of Children: Part I,'' American Journal of Family Law, Vol. 13, 24-33 (1999) Brooklyn, New York 11224 March 30, 2000 A.L. Singleton, Chief of Staff, Committee on Ways and Means, U.S. House of Representatives, 1102 Longworth House Office Building, Washington, DC 20515 Subject: Committee on Ways and Means, Subcommittee on Human Resources, Hearing Advisory HR 1488 3/16/00 FROM THE COMMITTEE ON WAYS AND MEANS SUBCOMMITTEE ON HUMAN RESOURCES No. HR-18 ---------- Johnson Announces Hearing on H.R. 1488, the ``Hyde-Woolsey'' Child Support Bill In accordance with the published requirements, I am submitting six copies of a single spaced document that I want included in the record. Additionally, I have included the statement on an IBM compatible 3.5-inch diskette in MS Word format(and also in RTF format), with their name, address, and hearing date noted on a label, by the close of business, Thursday, March 30, 2000, to 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. Please feel free to reproduce this document. This document is being submitted in response to the legislation currently being considered to turn over child support collection to the IRS. My interest in child support collection started when I went through a state divorce in New Jersey. It was a very bad experience. From that experience, however, I learned that the current systems that are used by the HHS, Department of Families and Children, defraud the American taxpayers. Before proposing new legislation and additional bureaucracy, the procedures that are used in the current system must be fixed. I have submitted for the record, suggestions for accounting and computer procedures that would save the Federal Government, I believe, at least 100 million dollars a year. If the state procedures were are reviewed, I believe even more money could be saved. HHS has been served with a FOIL Number O- 604FW that can be used to review their procedures. The procedures that are outlined in a Federal Complaint review the current computer systems that are being used by the State Governments. The States have a cash cow, and very little accountability. The economic models that are currently used for child support are not based on reality. One company, PSI, has a sweetheart deal and has assisted in developing more than 30 of the current child support guidelines. Since they also get paid to collect child support, and that payment is based on the amount collected, there is a clear conflict of interest, and FRAUD. The models and guidelines purposely omit categories that are used in other Federal Programs to reduce Federal Grants. In child support, however, these categories are not considered! Re: US ex rel Eisenstein vs. Christie Whitman et al. Docket No. 98 CIV 8448 History Of The Complaint The original complaint was filed December 1, 1998. The complaint remain sealed through March of 2000. However, the court failed to send the relator and the Justice Department the order unsealing the action. Relator had to file a Writ Mandamus and the Appellate Court found that the writ was moot since the District Court had unsealed the complaint (The writ of mandamus was filed in May of 1999.) during the time that the action was sealed the relator discovered another cause of action. Relator initially filed an order to show cause to expand the time to serve the original complaint. The Judge however, failed to hear this order to show cause. Only after a modified complaint was filed that included a new cause of action was a new summons issued by the clerk of the court. On December 3, 1999, the court heard argument based on the motions to dismiss. The court immediately dismissed the actions against PSI and Jeb Bush and the state of Florida. (The transcript pages 37 through 42 outline the court's questionable reasoning). A Brief Explanation Of The Causes Of Action This action is being brought on behalf of the United States by Relator (Eisenstein). The False claims act 31 U.S.C. 3729 et seq. is the federal statute that allows recovery for fraud. It allows an individual to sue on behalf of the United States when that individual recognizes fraud against the United States. It is not necessary that the relator suffer any damages in order to bring an action. The False claims act was passed and became law during the Civil War (1863). Congress at that time was paying excessive amounts for goods for the army. The goods were frequently not first quality. Several state officials became rich by brokering contracts and receiving kickbacks. The law was also called the Lincoln law because it was passed during the Lincoln presidency. The law was drafted based on other law that existed in this country, and in England. The English called this law QUI Tam pro Domino rege quam pro si ipso in hac parte sequitur'' (They used a long Latin phrase.) The Qui Tam action was for those who sued on their own behalf, and also on the behalf of the king. The dictionary says ``who sues on behalf of the King as well as for himself.'' The order is important. These individuals would be rewarded for taking a chance when they prosecuted actions and placed themselves at risk. The US Supreme Court on Nov. 29, 1999 heard argument related to the Qui Tam statute when the party committing fraud is a State. The Commissioner of Child Support, Health and Human Services, 901 D St. SW, Washington, DC 20447, or a representative was to have been shown a copy of the complaint by the Justice Department, in Washington. Based on HHS's refusal to join the action initially, Plaintiff Relator is prosecuting the action on behalf of the United States. There is currently a request under Federal Statutes to gather information from H.H.S. This is being addressed by HHS, but has not yet been satisfied(3-25-2000) If HHS, has a change of heart, or at any time desires to join the action with the Justice Department, Plaintiff (relator), will assist in prosecuting this action along with the government. There are currently five causes of action in this complaint. Each cause of action is only being pursued against one or two states. Relator knows that several of the causes of action are applicable against many different states (about thirty Seven states (37)) emancipate children at eighteen, or upon graduation from high school (but before nineteen)). In summary, the causes of action are: Arrears are an amount that states assess against individuals who the courts determine owe money. In this action it is alleged that New Jersey continues to collect Arrears in child support after the total amount owed has been collected. Arrears are frequently not assessed fairly or lawfully. Failure of New Jersey to automatically terminate arrears when the amount is paid in full, results in over collection and the resulting fraud against the Federal government(New Jersey continues to collect arrears even when the arrears amounts have been satisfied.) New Jersey gets a bonus for money collected. New Jersey also gets reimbursed for administrative expenses associated with child support collection. 1 Even after acknowledging the error, the state continues to collect excessive arrears. 45 CFR 307 relates to states maintaining up to date computer or manual systems. New Jersey is not in compliance with this statute) Each State receives administrative expenses for collecting child support (at least 66% of all expenses). Each state receives a bonus of not less than 6% of all money collected. Additionally, New Jersey over assesses arrears in order to collect federal reimbursement. Failure of New Jersey to keep accurate computer or manual records, and to have a uniform, statewide computer system, is in violation of Federal guiding and controlling statutes. The failure to have an accurate computer system is design, and allows the state to fraudulently over collect and assess. 2 Failure of New Jersey to allow, in practice, a rebuttable presumption on the low end of the child support spectrum. (Federal question--some states do allow a rebuttable presumption when a party is at or below the poverty level.). In New York law, in 1993 in a case called Rose v Moody, the highest court of New York(Court of Appeals) used the Supremacy Clause and said that the minimum amount of child support required in the New York guidelines and law violated federal law because it did not allow a rebuttable presumption. People who cannot afford child support must be able to say they cannot pay child support. When someone loses a job they should be able to apply for relief, and the state is supposed to insure that they receive 105% of the minimum living wage. New Jersey judges do not recognize this, and frequently assess child support against individuals who are earning or receiving below the minimum livable wage. This results in failure to pay child support, and frequently incarceration. Individuals can receive unemployment benefits, and welfare, but still must pay child support. 3. Failure of New Jersey to automatically include individuals in the household budget, and to consider economy of scale when there is a remarriage, or a child who is emancipated remains in the household. In Welfare programs when the state makes payments, in New York, New Jersey and most other states, the states require that the recipient of benefits report any change in household composition so that a social service grant can be reduced based on an economy of scale. The purposeful failure to use the same economic standard in child support collections result in over assessments of at least 15-30 million dollars a year in New Jersey, and excessive Federal bonus payments to the state. The persons who know when a child graduates from school, or quits school (college) is the child or the custodial parent. New Jersey does not recognize this, or recognizes this selectively. The failure to report this change in circumstance results in an over payment of child support, and continued administrative expenses being collected by the state. The person who pays excessive child support cannot get the money back. New Jersey, plaintiff believes, never notifies the Federal government that they over-collected, and received bonuses in excess of the lawful limit. 4. Failure of Florida to match the child support collections databases with school graduations or dropouts results in child support collection after a child is, by law, emancipated. This extra payment of child support also results in a bonus to the state, and additional funds for administrative expenses. (37 states emancipate children in intact families at 18, or upon graduation from high school (before 19) but may not terminate child support automatically in non-intact families). HHS automatically terminates Federal SSI payments when children have their eighteenth birthday. In the Interest of Judicial Economy, it should not require that actions be started in about twenty 20 other states for the same Federal Cause of Action! 5. PSI the company that assists in, and develops many states guidelines also collects child support. PSI failed to include significant groups in guidelines that they helped develop that would reduce child support. The child support that they collect, and the amount that they receive for collection is excessive. Any competent economist would recognize the groups excluded, and the economies of scale. This failure of PSI to include or exclude these groups results in excessive child support collection, and fraud against the Federal government. Plaintiff has included several Economic reviews in his response papers to the District Court. Some of the factors that PSI failed to include are: a. Children who are emancipated who remain at home. These children can be school graduates, or dropouts. They contribute to the fixed costs of a household and income must be imputed based on the fixed expenses that are now split and should include another party. In welfare actions, the grant amount is based on the number of people living in a household who share expenses. HHS the federal agency that monitors child support and welfare has two standards, or the states use two standards. This results in overpayment. PSI purposely omitted this group to insure that child support was excessive. b. When there is a remarriage, (or cohabit) at least 16 percent of all custodial parents remarry, or cohabit) based on the income shares model, the new party in the household should be included when calculating costs. In households with 4, 5, and 6 children, the percentages are much less than the 16 percent in this group. (look at the census bureau for these numbers.) c. There are very few adjustments for household expenses, when a couple has been in a house for a very long time, and have a very low mortgage. This results in separating the non- custodial parent from the children since he/she frequently can't afford to live in the area. Since there is no adjustment in child support when the rent or mortgage is reduced, the child support is excessive. The resulting child support payments are excessive. The economic models and child support standards exclude other factors. However, the factors included in the above explanation should justify questioning the behavior of PSI, an economic expert. Other Federal Programs do include and use the factors that are not used by PSI or their state models. Why would any sane person allow another Federal Organization to squander money? Why has it taken more than six (6) years to NOT recognize that the system does not work? Sincerely, Irwin R. Eisenstein [By Permission of the Chairman.] Statement of Roger F. Gay, Project for the Improvement of Child Support Litigation Technology, Sweden Federal reform of the child support system has been the most significant part of welfare reform in the US over the past 25 years. The purpose of the reforms was to 1.) federalize the child support system, 2.) extend the welfare system's formulae and enforcement methods to non-welfare cases, and 3.) adapt to defined and as yet undefined international standards. In 1973, The Hague Convention on Recognition and Enforcement established an international view of cooperation in the enforcement of child support orders. In 1974, apparently lacking any sense of coincidence, Senator Russell Long ``perceived a connection'' between ``fathers who abandon their children'' and a growth in AFDC spending. This led to the original federal child support and paternity legislation enacted in January 1975. By the mid 1980s, it was clear that the proposed reforms were being promoted by people who could profit directly from them. The most aggressive promoters were private collection agencies which take a percent of the amount of child support paid in return for acting as middle-man in the payment process. These entrepreneurs worked together with other special interest groups, and unfortunately government employees and politicians, in a persistent and largely successful nationwide propaganda attack against a relatively peaceful, law-abiding, politically unorganized group of American citizens--fathers. At the Hague Conference on Private International Law in 1995, a U.S. delegate promised the international community that federal legislation would ``provide for services at the federal level through a Central Authority to ensure an efficient, workable and uniformly implemented system in cooperation with the states and with the foreign countries which are willing to take part. In addition, the federal government is considering the possibility of the United States becoming a party to one or more of the existing conventions.'' The domestic political discussion has consisted almost exclusively of propaganda demonizing non-custodial parents. But not a hint of information has been fed to the general public on integration of or ``cooperation'' in an array of social programs or the impact of global integration on our domestic judicial system. Had the government made a greater effort at full disclosure, the American public would surely have responded with pressure to adapt newly proposed systems to Constitutional requirements. Such dramatic reform as has been undertaken was neither necessary nor appropriate even in the context of cooperation with other nations. As a result of the Child Support Enforcement Amendments of 1984, the National Center for State Courts and the Office of Child Support Enforcement selected someone to write a report to ``assist states in development of their child support guidelines.'' By that time, it was clear that funding of the OCSE and their state operations would be tied to the amount of child support paid. These government organizations selected someone with no expertise in the application of laws governing child support decisions who had done no previous work in developing child support decision models. They selected a child support collection entrepreneur whose interest in arbitrarily increasing child support awards for profit was at least as great as their interest in increasing the funding they received. Due to federal legislation tying funding to the amount paid, states have a direct financial interest in increasing child support awards. They have increased payments, mostly by middle and upper income payers to middle and upper income recipients, largely by accepting the recommendations for arbitrarily increasing awards and by eliminating due process rights that would lead to correction of award levels. While complaints from citizens pile up by the millions, states defend their use of the formula with bold-faced lies. Among them is that the National Center for State Courts has carried out extensive economic studies which have led to a highly credible formula for determining just and appropriate child support awards. In addition, I quite recently have read newspaper articles claiming that the reforms have been an economic success. The child support decision model recommended by the child support collection entrepreneur, in slightly modified form is the most popular formula in the states. State child support commissions today, which control the review of child support guidelines required by federal law are largely controlled by government units that receive funding in relation to the amount paid. Not one state has ever shown that use of their child support guideline results in just and appropriate awards in each case, as required by law. And the child support collection entrepreneur continues to be the consultant in highest demand in carrying out the reviews. The second most popular child support formula in the states was first suggested by a group at the Institute for Research on Poverty and is part of what has been called the ``Wisconsin Model'' in relation to welfare reform. The Wisconsin Model for child support determination and enforcement was largely plagiarized from old Soviet law. Some, and probably most of it is still part of Russian family law today. There is no justification for its use in the United States. Still today, there are defenders of the Wisconsin Model. There are those who will not admit the wrong that has been done. There are those who continue to blame the victim of the injustice, who continue to rely on the prejudice against fathers that was so skillfully built during the 1980s and 1990s. Instead of admitting the fault, they recommend a further reduction in human rights and the use of greater force against that target population. And we hear about it more subtly in political discussion today from candidates for office who want to ``build on what has already been done.'' A result of my own research that I should convey is that there is no credible research supporting the idea of the ``adequacy gap'' in the amount of child support awarded in the past. The ``adequacy gap'' served as the stated justification for increases in award amounts. It meant that courts had wrongfully awarded child support under rational child support laws and the prescribed correction was the use of rigid formula that promoters claimed would produce appropriate awards. My own research led to an understanding that on the whole (overall result), judges did not award child support improperly (footnote *) and that the rational basis for the award of child support used before the federal reforms was appropriate. The so-called ``adequacy gap'' was nothing more than the arbitrary increase in award levels promised by formula promoters. Individual case results may have been wrong, but no one showed that such problems could not be dealt with in the best way through proper administration of justice in the courts. Among other things, new federal child support enforcement services were thought to be required for families receiving assistance under AFDC, FC, and Medicaid programs. Even if true, it does not explain the expansion of federal government authority into non-welfare related family law, nor the mandate for use of rigid formulae for calculating child support awards in non-welfare cases. It came nowhere near explaining the import the expensive, dysfunctional, bureaucratic child support systems from other countries, which has been accomplished over the past two decades. This is particularly true since they have largely been a failure, both in the United States and in the countries of origin. Even the best of them simply achieves what parents most often do privately and none of them have achieved the high level of support for children by parents in the US (both current and historical). All this might suggest that my testimony is in support of H.R. 1488, which would apparently reduce the profit potential in child support enforcement by shifting at least some of the collection process to the IRS. I do not however, support H.R. 1488. Still, it is apparent that something must be done. While child support reforms have not produced the reduction in welfare cost promised by their promoters, they have certainly produced a great deal of harm. Footnote * One very important exception was found in the details. Prior to the introduction of the Income Shares model (most popular) after federal reforms were in place, many state judges and local bar associations developed and used ``cost sharing guidelines'' sharing the same logic. The difference was largely in the numeric values representing the ``cost of children'' and the judicious consideration of a wider range of mitigating factors before ``guidelines'' became presumptively correct. The logic expressed mathematically in this simple cost sharing model produces cost sharing proportions that unfairly reduce the amount of support awarded when the recipient's income is low, especially when the payer's income is much higher. The problem is easily corrected by proper inclusion of a self-support reserve as it is expressed in, for example, the Delaware-Melson formula. Lancaster Non-Custodial parents of Lancaster, Pennsylvania Wrightsville, PA 17368 March 20, 2000 A.L. Singleton, Chief of Staff, Committee on Ways and Means, U.S. House of Representatives, 1102 Longworth House Office Building, Washington, DC 20515 Good morning Madam Chairman and members of the Subcommittee, My name is Don Hank and I am the chairman of Lancaster Non- Custodial Parents in Lancaster, Pennsylvania. I have been an admirer of Henry Hyde's ever since I heard him in a TV interview say that laws are too often made without considering the far-reaching consequences. Amen, Mr. Hyde. Something we need to beware of today more than ever is the creeping expansion of central power. No one is better qualified to speak of central power than historian Robert Conquest, author of ``The great Terror,'' a 1968 account of Stalin's purges, and ``Harvest of Sorrow'' the 1968 chronicle of collectivization of agriculture in the Ukraine which alone resulted in the deaths of 10 million people. I am particularly sensitized to past events in the Soviet Union and to manifestations mimicking them in this country because I studied there as a language student in the early 1970s. In an interview entitled ``Control Freaks'' appearing in the January/February issue of The American Enterprise, Conquest makes the point that ``the slow drift toward bureaucratic centralism is harder to warn against than outright socialism.'' But for this author, there is little difference in final outcome between the two. I agree. I want to go on record as opposing the Hyde-Woolsey Child Support Bill for several reasons, one of which is a justified fear of the kind of centralized power of which Conquest warns, and another that child support awards are based on an endemic gender bias of the family courts such that men are denied custody on little more than a gender basis. It is my belief that if gender bias were eliminated from family court, not only would child support awards be reduced by billions annually (resulting in enormous enforcement savings), but in fact divorce rates would plummet. All of this would redound to the best interest of children. Thus there is little justification in further stepping up of enforcement until measures are taken on the federal level to eliminate this bias. In my activities with Lancaster Non-Custodial Parents (LNCP, listed with United Way) I have had personal dealings with hundreds of child support payers. As incredible as it may sound, probably less than 10% of these clients had issues with child support payment. The main reasons they stated for joining or contacting LNCP were in fact overwhelmingly their concern for their children and their desire to spend more time with them. Certainly, it is by now redundant to dwell on the suffering caused by true ``deadbeat dads'' who turn their backs on their children. Indeed my own family has been particularly hard hit by these men and I have no time for them. Yet in my experience with LNCP, and from the messages I see daily from around the country on the Internet, it is clear that the salient issue with separated and divorced fathers in America is not child support payment but rather alienation of these fathers from their children with the willing assistance of the State. As Sanford Braver convincingly shows in his book ``Divorced Dads, Shattering the Myths,'' (Penguin Putnam, 1998), tens of thousands of fathers are separated from their children by an endemic gender bias of family courts, which reflexively grant custody to women on the basis of gender alone, despite wording in state statutes vaguely alluding to the ``best interests of the children.'' The Inherent Unfairness of Current Child Support Enforcement The existence of the true ``deadbeat dad,'' a species quite a bit rarer than once suspected (see the above-mentioned book by Braver), will probably always make it fair for the State to enforce justifiable and true child support payments. The thorniness arises when the State also decides how much the non- custodial parent (NCP) should pay. Child support in this country is perceived by a growing number of men as wife support because it is predicated on the notion that the mother, to adequately provide for her children, must enjoy the same lifestyle she did when married, a notion that is in turn predicated on the notion that she, as a woman, is powerless to maintain the lifestyle herself, while the father has enormous earning power simply because of the traditional status enjoyed by men as a group for centuries. I am personally acquainted with low-income working men who pay child support to their millionaire ex-wives. Indeed, one of the women in my group is now paying child support to her millionaire ex-husband because she made the mistake of turning the children over to him, thereby entering the man's world of child support obligation. With 1.8 million more women than men attending colleges and universities today, women will soon be much more able to maintain a luxurious lifestyle than the men in their lives, and many already are. Yet law and jurisprudence make no provision for this radical societal change, enshrining in statutes and case law the antiquated paradigm of the female as victim and the male as her oppressor, to the detriment of men. Under no-fault divorce law, we encounter a frequent scenario where a man sincerely enters into a solemn marriage contract with a woman, who after having one or more children with the man, decides marriage is boring and exits the marriage, against the husband's will and at variance with his expectations. Child support laws then attempt to enforce against the man a contract that is in fact not a contract, because he had only agreed to the marriage, not to the divorce and hence to what amounts to quasi-perpetual wife support, while he himself is forced to live a lonely life without his wife or children. No amount of ``deadbeat dad'' propaganda can make this father ``see'' the fairness of this enforcement because it is not only unfair on its face, it is in fact a gross injustice in practice as well. To illustrate how this works in practice, let me cite a call I received from a man who, though he makes a decent income as an electrical engineer, is now living out of a truck in a supermarket parking lot. It seems his wife started meeting and courting men on the Internet. She soon made arrangements to meet some of them for romantic encounters. When the husband discovered the messages from the men on his computer (which she had been using to access the Net) and confronted her with this, she confessed everything. But then she went to court and asked for a restraining order against her husband. She admitted to the judge that the husband was not abusive but said she was afraid he might lose control because of her behavior. The judge granted the restraining order and the husband was immediately evicted. Then, in order to receive visits from her lovers in the family home (which he still pays on under court order), the wife placed their son in the care of his grandparents. Then she went back to court and won a child support order that pays her $800.00-a-month ``child'' support even though the son spends most of his time with his grandparents and his father, who has liberal visitation rights. The judge will not award custody to the man or waive the child support obligation. In fact, the judge refused to listen to the man's story. How is the ``child'' support helping this child? And by what right to we use the term ``best interests of the child'' to describe the current disaster that is family court? Child Support as Support for Irresponsibility After the government had for many years paid poor women welfare in direct proportion to the number of children they had, and for unlimited numbers of children, it finally realized that some women were having children for the sole purpose of collecting welfare, and therefore ultimately abandoned this policy, now paying them only for one child. Yet the government seems to have learned nothing from this experience with regard to child support. What it should have learned is that if women are capable of having unlimited numbers of children to collect welfare, then they may well be capable of having unlimited numbers of children to collect child support from fathers. Could it be that we have forgotten the story of Charney Wise? In Philadelphia, little 5 year old Charney was persecuted and tortured by her mother, a welfare recipient, who admitted she hated her daughter and that she had had the girl solely to collect welfare. Her mother chained her in the basement and refused to feed her regularly or give her water. Naturally, Charney died. The mother was so convinced of the benevolence of the courts toward women that she bragged she would ``walk.'' It is clear that Charney never would have been born into this hell in the first place had it not been for a State welfare system that gives money to mothers for having children without requiring them to show even a modicum of love or care for these children. It should be clear that child support can work analogously, inducing women to have children out of wedlock to a variety of men without any natural love for these youngsters and without any constraint on the part of the government, which focuses its undivided attention on the largely mythical creature known as the ``deadbeat dad.'' Though the outcome of the Hyde-Woolsey bill is not clear, the aforementioned statement of Henry Hyde himself regarding the hasty passage of legislation without due study ring in my ears. And the grievous wrongs perpetrated against fathers and children, which I have witnessed and testified to above, portend the tragic results that can be expected. A Little Victim of Gender Bias (Warning: Reading the Following May Cause You to Cry) Here in Lancaster, Pennsylvania, we have a case that epitomizes the monstrous outcome of unconsidered gender-based custody decisions in the lives of children. Jason Huff, a three-year-old toddler, was left in a dangerous home with a drug-addicted mother and her paramour. (See ``Would Jason Huff Be Alive if Agency Had Heeded Warning?,'' Janet Kelley, Lancaster New Era, Aug 28, 1982.) The boy had been removed from the home by the Children and Youth Agency and hospitalized when the mother forced him to drink hot coffee as a ``punishment'' for some misdeed. At that point, the alarmed father, Larry Huff, intervened, suing for custody. The father had been involved in the youngster's life, keeping up regular visitation over a long distance. He spent thousands to sue for custody. He took off work to appear in court. He plead sincerely for his son's safety. The judge's decision: ``Children belong with their mothers.'' The judge further explained that Larry was not really a caring father and did not have the child's best interests at heart. Those closest to the boy were alarmed. One of the father's witnesses remarked to another attendee of the hearing as he walked down the steps of the courthouse, ``That boy won't live to see his fourth birthday.'' (Personal report by my friend Biddy Helton, who was mentioned in the above-cited New Era article). Less than a month before Jason's 4th birthday, Larry Huff got a call from the emergency room of the Lancaster General Hospital and was told to come as quickly as possible. His heart in his throat, Larry raced to the hospital. On the scene he was guided by a nurse through a curtain surround to a small cot in a corner, where he saw the boy's little form, gasping and unconscious. Jason had a lump on his head ``the size of a goose egg,'' according to a friend of mine who knew the boy. Tears streaming down his cheeks, Larry sat down on the edge of the cot, took the little boy's hand in his, and gave it a gentle squeeze. The little hand squeezed back ever so faintly. Then Jason died. The judge who rendered the custody decision now sits on a higher court. Something's Wrong Here According to abused women's advocates, there is a 70% correlation between spousal abuse and child abuse. This has been widely accepted among legal specialists as a valid argument to avoid joint custody legislation, which, it is claimed, would promote abuse of women. Yet according to the pamphlet ``Child Maltreatment 1996,'' (US Department of Health and Human Services) 60% of all child abuses are perpetrated by women. Thus it is hard to understand why, in our country, fathers rarely get custody or even 50-50 shared custody or why it is primarily men who are forced to leave their homes under restraining orders. In fact, out of the first hundred parents who contacted my organization in Lancaster for help, only two were mothers, one of whom did not get custody because she willingly relinquished it to the father, and the other of whom lost because she had been served a restraining order for violence. Most of the men had no such justifying circumstances for losing custody and most seemed genuinely baffled as to the custody outcome. In fact, three of the men had been victims of extreme violence (two were hospitalized, due to vehicular homicide attempts) at the hands of their ex-wives. Yet in all three cases, these violent women got custody of the children and the men were forced to pay handsome amounts to these women just to keep themselves out of prison. One was left with $78 a week to live on. Under archaic state laws, some men who have sired no children are forced to pay child support simply because they were once duped into believing they were biological fathers and accepted the fatherhood role under these false circumstances. One of the fathers in my group falls into this category. DNA is on his side. PA, kafkaesque, pursues him like an animal. Should these non-fathers be hounded now by an IRS turned KGB? It seems our dragnet is far too wide and is misguided. As a result, child support collection is quickly becoming the new McCarthyism. Men-both white and black this time-are the new slave class. These men in Lancaster, PA, and according to Braver, tens of thousands like them throughout America, are forced into secondary parental roles when in fact any reasonable person would admit they are the better parent. The fact that they are paying child support is due to an unacceptable bias on the part of judges who believe men are simply unsuitable parents, an assumption which Dr. Sanford ably demonstrates to be false. Thus before child support enforcement is further strengthened, there needs to be a major reform to ensure that the custody awards are in fact for the most part fair. This reform cannot come from the states at this point. Here is why: The federal involvement in child support collection whereby the federal government pays rewards to states in porportion to child support amounts collected has led state legislators to avoid legislating a rebuttable presumption of 50-50 joint physical custody of children after divorce, despite pressure from fathers groups. Such a presumption is now in place in several states which had the integrity to put the interests of children ahead of federal funding. However, children in many states, like Pennsylvania, for example, are not as fortunate. Here legislators avoid the issue of joint custody without stating why. Groups such as mine that approach state legislators with their comments are stonewalled or ignored. After divorce (63- 67% of which are filed by women according to Braver), fathers become visitors, coming around typically twice a month yet supporting the ex wife and children with up to 50% of their salaries and sometimes more. Women, while encouraged by the wording on their custody order to be generous with father's time with the children, are in fact strongly discouraged from being too generous by legislation that allows a reduction of child support payments when father's time approaches parity with mother's time. In my own case, my son was dumped into day care despite my offer to care for him while my ex went to work (I have a business in the home). Medical research has shown that constant day care at the ages of 1-3 can result in severe emotional damage (See ``Ghosts from the Nursery'' by Robin Karr-Morse and Meredith Wiley, Atlantic Monthly Press 1997). Nonetheless, there are no legal provisions for fathers taking over the child care role. The primary custodian is boss and she need provide no explanation-indeed my ex could not have provided one--or her decision. It is therefore my conviction that, since the federal government has already entered States domain in a way that has had harmful fallout for children, then it must, to be fair to those children, also enter States domain to protect them, and to do so must mandate state legislation requiring a rebuttable presumption of 50-50 joint physical custody after divorce or separation or in cases of out--of--wedlock births as a prerequisite to eligibility for the federal CS collection award. This would be the most effective legal means of protecting children from the now well--known ill effects of fatherlessness. It would do so by discouraging divorce in the first place by reducing the monetary rewards for mothers, and second by allowing children equal contact with both parents once a divorce does occur. It would further redound to major tax savings since in joint physical custody each parent provides for the children with a minimum of money exchange between parents and hence with a minimum of State intervention. The federal reward would be substantially reduced in this elegant solution. Finally, such equal treatment of parents provides for greater equality among children as well, in contrast to the present status of 2 administratively created classes of children, ie, those living in intact families with equal access to both parents and those living in divorce and unfairly separated from one parent by court decree in a manner inconsistent with our Constitution. ``Child'' Support Clearly is not for Children, So Why the Focus on Enforcement When Reform is the Really Pressing Issue? Another reason why current child support enforcement policy is unfair on its face is that, while it purports to be in the children's best interest, it clearly seems designed primarily to empower women, particularly divorced or unmarried women, thereby supporting the institution of single motherhood that has caused grievous harm to our society in the form of fatherlessness and the now well-known attendant ills. If the State merely wished to ensure that children's material needs were cared for, in addition to vigorously enforcing child support payment, it would: 1) establish accountability regulations ensuring that the custodial parent is indeed utilizing the funds for the children; 2) establish a minimum child support amount to be allotted for children within intact marriages, with specific amounts assigned to each parent depending on their incomes. 3) establish strict penalties, including jail terms, for persons who owe money to families, part of which could reasonably be expected to go for child support. Thus, if a plumber with children repaired a leaky faucet and the person who hired him failed to pay, that person would be charged with non-payment of child support corresponding to the amount that could reasonably be expected to be spent on the plumber's children. One might be tempted at first to dismiss this argument as sophistry or glib banter. But in fact, a very large proportion of family-owned businesses go bankrupt every year due to insolvency, and the children suffer every bit as much as the children of single moms not receiving child support. Clearly the State is concerned not with the children's best interests but rather with the best interests of single mothers, placing the interests of the group of single mothers far above those of wedded parents and their children. Further, what the State has in fact done in its child support enforcement and judicial system is to create, at variance with Constitutional provisions, two classes of parents, one with no dollar-specific legal constraints to support their children monetarily and another with a very specific obligation to pay, in most cases, far more than children ordinarily need to live, without providing a convincing rationale for so doing. To add to the grievousness of this distortion, the State forces non-custodial parents, overwhelmingly males, to pay ill- justified sums of money to custodial parents, overwhelmingly females, in a system that seems clearly designed to hurt men and benefit women, at variance, at least de facto, with legal gender neutrality constraints. Children's Best Interests The very least that must be done before beefing up child support enforcement is to ensure that children are given optimal contact with both parents. This cannot be done with our antiquated adversarial system whereby one parent takes all, both money and children, while the other is left empty-handed and alone, and where children are left with one parent and one visitor. Compliance Sanford Braver, in the above-cited book, makes the point that, ``When mothers received sole custody of the children despite the father's wishes, fathers reported paying 80% of child support they owed; according to mothers, fathers paid 62%. When joint legal custody was awarded over the mother's initial objections, child support zoomed to very high compliance: 93% by fathers' reports; 89% by mothers' reports.'' Imagine the willful compliance rates that would result from awarding not only joint legal custody but also 50-50 shared physical custody. Providing on a national level for a rebuttable presumption of 50-50 shared physical custody would certainly be a more rational approach than strengthening child support enforcement. And psychologically, this is certainly the common-sense approach. Centralization is a terrifying thing, and as Soviet history has shown, its outcome is dangerously unpredictable, but whether states or the IRS collect child support, what really matters is that the system be fair and that children's best interests be the bottom line. In a compassionate society, any bill of law that touches on child support must necessarily include ways to make the system fair and truly pro-children. As things stand now, with 40% of America's children living in fatherless homes (see ``Fatherless America,'' by David Blankenhorn, Harper Perennial, 1996), America is fast approaching the Hegelian ideal of the State as parent. We must find ways to reverse this trend rather than reinforcing it with legislation like the Hyde-Woolsey CS Bill, which would raise state involvement to an even higher level than before and hence promote to a higher degree the family breakdown deplored by Americans everywhere. Specifically, we need national legislation mandating a rebuttable presumption of so-so shared physical custody in custody decisions on the state level as a prerequisite to federal CS collection incentive payments. Further, in the event the IRS should take over CS collection, we need to establish tax credits for fathers who do pay CS regularly. This way the emphasis is on rewarding good behavior rather than punishing bad behavior. Thank you for your attention to my concerns. Sincerely, Donald E. Hank -