[House Hearing, 106 Congress]
[From the U.S. Government Publishing 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).
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have fewer behavior problems \3\
---------------------------------------------------------------------------
\3\ McLanahan et al, National Survey of Families and Households,
1994
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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:
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\4\ American Association of Payroll Managers (March 2000)
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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\
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\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\
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\6\ ACES annual membership survey (1999).
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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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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\
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\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].
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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.
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\2\ Ankenbrandt v. Richards, 112 S.Ct. 2206 (1992).
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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?
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\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\
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\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\
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\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.''
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\3\ Winner, Karen, ``Divorced From Justice,'' 1996, ReganBooks, p.
52.
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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.
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\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.
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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\
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\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.
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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.
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\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).
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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.''
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\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\
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\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.
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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\
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\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.
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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\.
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\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.
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\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...''
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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.
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\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.
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\4\ In the Marriage of Smith, Or 626 P2d 342 (1981).
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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)
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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\.
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\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.
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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\.
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\71\ Father's protests deserve airing, Kathleen Parker, USA Today,
November 8, 1999
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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.
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\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.
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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
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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\.
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\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
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