[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]
H.R. 866, TO PROHIBIT THE PROVISION OF FINANCIAL ASSISTANCE BY THE
FEDERAL GOVERNMENT TO ANY PERSON WHO IS MORE THAN 60 DAYS DELINQUENT IN
THE PAYMENT OF ANY CHILD SUPPORT OBLIGATION
=======================================================================
HEARING
before the
SUBCOMMITTEE ON GOVERNMENT EFFICIENCY,
FINANCIAL MANAGEMENT AND
INTERGOVERNMENTAL RELATIONS
of the
COMMITTEE ON GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
ON
H.R. 866
TO PROHIBIT THE PROVISION OF FINANCIAL ASSISTANCE BY THE FEDERAL
GOVERNMENT TO ANY PERSON WHO IS MORE THAN 60 DAYS DELINQUENT IN THE
PAYMENT OF ANY CHILD SUPPORT OBLIGATION
__________
JUNE 6, 2001
__________
Serial No. 107-72
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
-------
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WASHINGTON : 2002
____________________________________________________________________________
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COMMITTEE ON GOVERNMENT REFORM
DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut MAJOR R. OWENS, New York
ILEANA ROS-LEHTINEN, Florida EDOLPHUS TOWNS, New York
JOHN M. McHUGH, New York PAUL E. KANJORSKI, Pennsylvania
STEPHEN HORN, California PATSY T. MINK, Hawaii
JOHN L. MICA, Florida CAROLYN B. MALONEY, New York
THOMAS M. DAVIS, Virginia ELEANOR HOLMES NORTON, Washington,
MARK E. SOUDER, Indiana DC
JOE SCARBOROUGH, Florida ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio DENNIS J. KUCINICH, Ohio
BOB BARR, Georgia ROD R. BLAGOJEVICH, Illinois
DAN MILLER, Florida DANNY K. DAVIS, Illinois
DOUG OSE, California JOHN F. TIERNEY, Massachusetts
RON LEWIS, Kentucky JIM TURNER, Texas
JO ANN DAVIS, Virginia THOMAS H. ALLEN, Maine
TODD RUSSELL PLATTS, Pennsylvania JANICE D. SCHAKOWSKY, Illinois
DAVE WELDON, Florida WM. LACY CLAY, Missouri
CHRIS CANNON, Utah ------ ------
ADAM H. PUTNAM, Florida ------ ------
C.L. ``BUTCH'' OTTER, Idaho ------
EDWARD L. SCHROCK, Virginia BERNARD SANDERS, Vermont
------ ------ (Independent)
Kevin Binger, Staff Director
Daniel R. Moll, Deputy Staff Director
James C. Wilson, Chief Counsel
Robert A. Briggs, Chief Clerk
Phil Schiliro, Minority Staff Director
Subcommittee on Government Efficiency, Financial Management and
Intergovernmental Relations
STEPHEN HORN, California, Chairman
RON LEWIS, Kentucky JANICE D. SCHAKOWSKY, Illinois
DAN MILLER, Florida MAJOR R. OWENS, New York
DOUG OSE, California PAUL E. KANJORSKI, Pennsylvania
ADAM H. PUTNAM, Florida CAROLYN B. MALONEY, New York
Ex Officio
DAN BURTON, Indiana HENRY A. WAXMAN, California
J. Russell George, Staff Director and Chief Counsel
Bonnie Heald, Professional Staff Member and Director of Communications
Scott R. Fagan, Staff Assistant
Michelle Ash, Minority Counsel
C O N T E N T S
----------
Page
Hearing held on June 6, 2001..................................... 1
Text of H.R. 866................................................. 5
Statement of:
Bilirakis, Hon. Michael, a Representative in Congress from
the State of Florida....................................... 8
Fuentes, Frank, Acting Commissioner, Office of Child Support
Enforcement, Department of Health and Human Services; Hon.
J.B. Penn, Under Secretary for Farm and Foreign
Agricultural Services, Department of Agriculture; Daniel L.
Hatcher, senior staff attorney, Children's Defense Fund;
Wendell Primus, director of income security, Center on
Budget Policy Priorities; and Geraldine Jensen, president,
Association for Children for Enforcement of Support, Inc... 19
Letters, statements, etc., submitted for the record by:
Bilirakis, Hon. Michael, a Representative in Congress from
the State of Florida, prepared statement of................ 11
Fuentes, Frank, Acting Commissioner, Office of Child Support
Enforcement, Department of Health and Human Services,
prepared statement of...................................... 23
Hatcher, Daniel L., senior staff attorney, Children's Defense
Fund, prepared statement of................................ 42
Horn, Hon. Stephen, a Representative in Congress from the
State of California, prepared statement of................. 3
Jensen, Geraldine, president, Association for Children for
Enforcement of Support, Inc., prepared statement of........ 65
Penn, Hon. J.B., Under Secretary for Farm and Foreign
Agricultural Services, Department of Agriculture, prepared
statement of............................................... 32
Primus, Wendell, director of income security, Center on
Budget Policy Priorities, prepared statement of............ 55
Schakowsky, Hon. Janice D., a Representative in Congress from
the State of Illinois, prepared statement of............... 16
H.R. 866, A BILL TO PROHIBIT THE PROVISION OF FINANCIAL ASSISTANCE BY
THE FEDERAL GOVERNMENT TO ANY PERSON WHO IS MORE THAN 60 DAYS
DELINQUENT IN THE PAYMENT OF ANY CHILD SUPPORT OBLIGATION
----------
WEDNESDAY, JUNE 6, 2001
House of Representatives,
Subcommittee on Government Efficiency, Financial
Management and Intergovernmental Relations,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:05 a.m., in
room 2154 Rayburn House Office Building, Hon. Stephen Horn
(chairman of the subcommittee) presiding.
Present: Representatives Horn and Schakowsky.
Staff present: J. Russell George, staff director and chief
counsel; Bonnie Heald, professional staff member and director
of communications; Scott Fagan and Chris Barkley, staff
assistants; Alex Hurowitz and Ryan Sullivan, interns; Michelle
Ash, minority counsel, David McMillen, minority professional
staff member; Jean Gosa, minority assistant clerk.
Mr. Horn. The Subcommittee on Government Efficiency,
Financial Management and Intergovernmental Relations will come
to order.
Today's hearing will examine the merits and challenges of
H.R. 866, sponsored by the gentleman from Florida,
Representative Michael Bilirakis. This proposed legislation is
designed to send a loud and clear message to all parents that
regardless of means and despite other responsibilities, they
must support the children they bring into this world.
In essence, this is a hearing about the family, the soul of
society and the cornerstone of our Nation. As we are all aware,
however, the nature and structure of today's family is vastly
different from that of a century ago or even 50 years ago.
Today, 20 percent of all children live with only one
parent, a mother or a father; more likely a mother. According
to the 2000 census figures, 11 million American families are
owed support and 7 million of them never receive any payment
toward the cost of raising their children.
There are State and Federal laws to track down deadbeat
parents and make them pay their delinquent child support.
The problem transcends economic status. Consider just three
examples of several hundred deadbeat parents who were
prosecuted by the Department of Justice and convicted of
failing to support their children last year.
A plastic surgeon pled guilty to willfully failing to pay
his child support, despite his yearly net income of more than
$200,000. The physician still owes $50,000 for his two
children.
A Florida chiropractor pled guilty to a felony for his
failure to pay approximately $87,000 in delinquent child
support. His income averaged about $100,000 a year.
A former NBA basketball player waited until he was arrested
in an unrelated charge before paying the $173,000 he owed in
five separate child support enforcement orders in five separate
States.
As a father and grandfather, I cannot understand those who
walk away from the fundamental responsibilities and true joy of
parenthood.
As legislators, we cannot force these irresponsible parents
to love and nurture their children. We can, and we must,
however, do everything in our power to ensure that at a minimum
they provide the financial support those children need and
deserve.
Our witnesses today will present a variety of perspectives
on H.R. 866 to help us in our examination of this bill. I
welcome all of you and look forward to your testimony.
[The prepared statement of Hon. Stephen Horn and the text
of H.R. 866 follow:]
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Mr. Horn. I am especially pleased to welcome as our first
witness my colleague from Florida, Mr. Michael Bilirakis, who
will speak on behalf of his legislation.
Without objection, I would like to have Mr. Bilirakis join
us on the dais after his testimony so we can have a useful
dialog. Without objection, that will be done.
I am delighted to have you here. Thank you very much.
Please proceed in any way you would like.
STATEMENT OF HON. MICHAEL BILIRAKIS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF FLORIDA
Mr. Bilirakis. Thank you very much, Mr. Chairman, for your
interest in this legislation, as much as your interest in doing
what is really best for the children out there who have been
the innocent of wayward fathers.
I do want to apologize for coming in a little late. I don't
really know what transpired, but we were advised that 2247 was
going to be the hearing room. That is where we went. I
appreciate you waiting for me.
Mr. Chairman, you have basically said it. Child support is
certainly a very critical problem in this great country. Our
system for enforcing child support orders has failed miserably.
We all have to realize that. By current estimates, at least 30
million children are now owed $50 billion in unpaid child
support.
Payment is received, we know, in less than a quarter of all
cases. Even though the government spends nearly $4 billion per
year, and employs more than 50,000 people, to collect child
support, billions and billions remain uncollected. I would like
to think that we all would agree, that this certainly cannot be
tolerated.
Individuals who neglect their parental obligations simply
transfer the costs to the rest of society. They should not be
rewarded for such action. That is the point behind the
legislation. It is designed to deny a broad range of Federal
benefits to individuals who willfully refuse to pay child
support.
It requires applicants to sign an affidavit to certify,
applicants for Federal financial assistance, to certify that
they are not more than 60 days delinquent in the payment of any
child support obligation or if so delinquent, that they are in
compliance with an approved repayment plan. It is really quite
simple, maybe a little too simple.
It is intended to encourage payment of child support and to
preclude the use of Federal taxpayers dollars to assist
individuals who neglect their children.
Mr. Chairman, back in the 103d Congress I introduced a
piece of legislation which was enacted into law to amend the
Small Business Reorganization Act to deny small business loans
and loan guarantees to individuals who refuse to pay child
support. My prepared remarks say that the Small Business
Administration has implemented these provisions. We should have
said that the Small Business Administration should have
implemented these provisions because it is our understanding
that they have not done so. We can talk about that later, if
you would like.
Mr. Chairman, failure to pay child support is not merely
being late or forgetful of one's obligation. It is a violation
of a lawful court order. It is considered contempt of court. It
is not unreasonable, I submit, to require applicants for
Federal assistance to comply with their legal duties. There is
precedent for that.
I would like to clarify a few points on this legislation.
The Federal agency involved is not required to research the
applicant's status. Rather, an applicant for assistance must
make a simple, affirmative statement of compliance. This
requirement will be enforced through existing provisions of
Federal law, which establish penalties for fraud in obtaining
Federal financial assistance.
We are talking about a line on a form, an affidavit line on
a form when they apply for some sort of Federal assistance. The
agency is not required to research the applicant's status. But
if it turns out downstream somewhere that there is a
determination that the applicants have lied under oath, then
the fraud provisions come into play and the applicant could be
hit over the head.
I think just the fact that they would have to certify, by
an affidavit, that they are in compliance would if nothing
else, play a terrific role psychologically.
The bill does include a good cause exception to avoid
penalizing parents who are unable to satisfy their child
support obligations due to factors beyond their control. It is
necessary, I think, to avoid penalizing parents in situations
where, despite a good faith effort, they are unable to modify
the terms of their child support obligation or obtain a
repayment agreement.
This is designed to emphasize that the payment is a
fundamental civic responsibility. I think it is going to help
to ensure that individuals who fail to satisfy their most basic
parental obligation are not rewarded for such action.
Sir, I know that in your mind and certainly in our minds,
we don't want to do something where the consequences would turn
out to be worse than the intent of the legislation. We don't
intend to prevent parents from obtaining Federal benefits that
directly aid children or that provide a subsistence level
support to parents.
Family programs, such as Medicaid and the Temporary Aid to
Needy Families program provide assistance that may be necessary
for the well being of other children currently living in the
household or of the parent's own survival.
I have not included a list of all Federal programs. There
are hundreds of Federal programs, although we have not included
a list of programs to be exempted in the bill text. We really
believe that each Federal agency can best determine which types
of assistance should be excluded.
However, direction from Congress in report language, can
guide the rulemaking process regarding necessary exemptions to
the act. We are very much aware of that particular concern. We
have been working with the Office of Legislative Counsel to
discuss possible modifications. We want to work with the
various organizations, such as the Children's Defense Fund, to
try to work out language if it is felt by this committee that
it is necessary.
There is no pride in authorship. I wish to make clear, Mr.
Chairman, that I am not concerned about having my name on
anything at all. I am concerned about the fact that bad
parents, mostly fathers, are out there taking advantage of the
system and being rewarded by the Federal Government in spite of
the fact that they are not doing what they should do for the
benefit of their children.
That is really all I am concerned with. If we could only do
something that would be consistent with trying to reach that
goal, then we can call it whatever we want to call it. It can
be part of the basic legislation or whatever the case may be.
[The prepared statement of Hon. Michael Bilirakis follows:]
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Mr. Horn. I agree with the gentleman. I think all of us who
try to legislate feel exactly as you do, let us get the job
done and we don't care who takes credit for it.
You mentioned yourself, before I yield to the ranking
member, that the Small Business Administration delegates the
task of the SBA loan applicant's child support certifications
to the financial institutions handling the loan and that these
certifications are not being checked against a Federal registry
such as the Federal Parental Locator Service, unless someone
makes a request to do so.
According to the Small Business Administration's Inspector
General, that simply has not occurred. What is your feeling and
the intention you have on the self-certifications?
Mr. Bilirakis. Well, Mr. Chairman, I think the intent of
the legislation back in the 103d Congress was clear about what
should have been done. We went into this. When we have our
oversight hearings, we sometimes find that agencies just don't
follow through with what we mandated them to do.
I am very disappointed to see that the SBA apparently, and
I say this only because I have not really seen their forms,
does not even include the line on the form to the effect that
certification that we insist be in there. This means there are
an awful lot of bad parents out there who are taking advantage
of taxpayers' dollars and still not complying.
Do you think it is the best thing to leave it open to the
Secretary or the Administrator, or would you want to make it
very clear in this current bill what should be done?
I have found that legislative intent doesn't mean a thing
around here when they all go to court. If we are going to do
it, we ought to stick it in the law and follow up on it.
I believe that we have to mandate that the certification
and affidavit language has to be on the Federal form. Now
insofar as the exceptions are concerned, that is the will of
this committee.
I should think that because it is so complex with so many
government programs out there we probably ought to leave it to
the discretion of the particular agency whether exceptions
should apply in certain cases.
There is language that exempts programs that directly aid
children in the household, ``or to provide subsistence level
assistance for the parent.'' In other words, if the agency
determines that programs fall within those types of categories,
they could make that decision or we could leave it up to them
completely.
We are all human beings, and we know when we put up our
hand swear to or certify something, it is very meaningful. I
think that psychologically, certification could really play a
role.
Mr. Horn. Well, I thank you.
I now yield to the ranking member. I am delighted to have
you here.
Ms. Schakowsky. Thank you so much, Mr. Chairman. Mr.
Chairman, I want to thank you for holding this hearing. It is
vitally important that Congress continually review
opportunities to strengthen our child support system. I support
using a strong hand to ensure that deadbeat parents pay the
child support they owe their children.
This hearing can demonstrate how seriously all of us regard
a parent's responsibility to support his or her children. In
1997, there was an estimated 11.8 million single-parent
families, 9.8 million maintained by the mother. Of that 11.8
million, about 40 percent of those families had incomes below
the poverty threshold.
When a poor family receives child support, the child
support amounts to about 26 percent of the family's budget.
There is evidence that fathers who pay support are more
involved with their children, providing them with emotional
support as well as financial support.
Of the total $29.1 billion owed for child support in 1997,
$12 billion was not paid. Among those due support, 40.9 percent
received the full amount, 26.5 received partial payment, and
32.6 percent received nothing.
In 1997, the Urban Institute, using the assumption that all
custodial parents had child support orders and that all orders
were paid in full, estimated that $51 billion should be
collected in child support each year, compared to the $18
billion that was collected in 2000, we have a long way to go.
Although these numbers are startling, I do not think we can
understate how far we have come. State agencies have been given
a number of tools to enforce child support orders. For example,
agencies can garnish IRS refund checks, strip a parent of his
or her professional licenses, report delinquency to credit
reporting bureaus, take away drivers licenses and deny passport
requests.
Progress has been made. Identification of the non-custodial
parents has increased dramatically. In the year 1994, 676,000
paternities were established and acknowledged. In the year
2000, 1,600,000 paternities were established and acknowledged.
In addition, collections have increased. In 1995, 34
percent of custodial parents received some child support when
an order was in place. In 2000, 68 percent of custodial parents
received some child support when an order was in place.
Today, we are here to discuss whether a parent should be
denied Federal financial assistance if he or she is delinquent
in child support payments.
I want to commend the author of this legislation for
highlighting the need for strong child support enforcement. I
have been talking with some of the child advocacy groups who
have some concerns about this particular proposal, but I would
really like to work with the sponsor, because I think we
absolutely share the same goal here.
So, I am eager to hear from our witnesses. I want to thank
them for being here today. Perhaps our witnesses can help us
understand whether Congress should be increasing the number of
punitive tools available and also to see if there are other
alternatives such as working with parents, giving them the
support systems they need to find and keep jobs.
In Illinois, we have had a persistent problem. There have
been a number of different proposals that have been made, but
yet we still continue to be, in my State, one of the worst in
terms of our record in child support collection.
So, I really appreciate this effort. There is a growing
public awareness of the problem of nonpayment of child support.
I am very hopeful that this hearing will shed more light on the
issue.
Thank you.
[The prepared statement of Hon. Janice D. Schakowsky
follows:]
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Mr. Horn. We thank you. Would you have some questions of
Mr. Bilirakis now? He is going to join us up here, as we do
with all authors. So, without objection, you can come up to the
dais, if you were like.
Mr. Bilirakis. May I, Mr. Chairman, respond very briefly?
First of all, you are right. There are an awful lot of
loopholes, and a lot of questions, and changes that need to be
made. We are not really talking only about our legislation,
although we are very grateful that it is the subject of this
hearing. It is a subject we have to address.
You have talked about the improvements in collections. But
we are told, and Ms. Jensen will testify to this later on and
do a much better job than I could, that a lot of the money is
collected, is not being distributed to the kids.
That is another point that the committee may want to
address.
Ms. Schakowsky. Let me just ask you, are you talking about
the percent of those that are receiving any kind of assistance?
It goes to the States rather than to the families?
Mr. Bilirakis. I am talking about child support
collections.
Ms. Schakowsky. Yes. I fully agree with you.
Mr. Bilirakis. Thank you, Mr. Chairman.
Mr. Horn. Thank you.
We will now have the second panel join us. That is Mr.
Fuentes, Mr. Penn, Mr. Hatcher, Mr. Primus and Ms. Jensen.
Let me go through the ground rules on this. This is an
investigating unit under the Government Reform Committee. We do
swear in all witnesses except Members of Congress. I realize
that some of you have not had a chance to really be in your own
position in these agencies and we appreciate your coming here
to give us some views on this--realizing this is all that you
are going to do.
So, now, if you will stand and raise your right hands, and
if there are any assistants who are going to assist, please get
up. The clerk will take your names. So, the people back of you,
let us do it once and not have to swear everybody in
individually.
[Witnesses sworn.]
Mr. Horn. The clerk will note that all five witnesses and
five assistants have affirmed the oath.
We will go down in the agenda that is before us. We are
delighted to have Mr. Frank Fuentes, the Acting Commissioner,
Office of Child Support Enforcement, Department of Health and
Human Services. I assume, Mr. Fuentes, you are new to this
role, with another administration.
Dr. J.B. Penn, Under Secretary for Farm and Foreign
Agricultural Services, Department of Agriculture. Have both of
you been confirmed by the appropriate people in the Senate or
is that currently underway?
Mr. Penn. I have.
Mr. Horn. Mr. Fuentes, has the Senate confirmed you or is
that a secretarial appointment?
Mr. Fuentes. I am the senior civil servant in the Office of
Child Support Enforcement. My regular position is that of
Deputy Commissioner. Until someone is appointed, I am the
Acting Commissioner.
Mr. Horn. Well, maybe in the year 2002 we will have these
confirmations. Be of good cheer until then.
Then we have Mr. Primus, director of Income Security Center
on Budget Policy Priorities. That is a nonprofit, I believe, is
that correct?
Mr. Primus. That is correct.
Mr. Horn. Is that funded by HHS, essentially?
Mr. Primus. No. We receive no government moneys.
Mr. Horn. I see. OK. President Jensen, Association for
Children for Enforcement of Support, Inc. Is that a nonprofit
also?
Ms. Jensen. Yes, it is.
Mr. Horn. Who funds that?
Ms. Jensen. We are mainly privately funded but we do
receive $15,000 through the city of Toledo block grant program,
which is a Federal program.
Mr. Horn. That is interesting. So, one city has decided you
are a good place to get some things done. That is fascinating.
Ms. Jensen. ACES was founded in Toledo, OH, and we have an
office there.
Mr. Horn. That is interesting.
So, let us go now with Frank Fuentes, the Acting
Commissioner, Office of Child Support Enforcement, Department
of Health and Human Services.
May I say, don't read it to us. I have stayed up most of
the night reading it all. I have read every sentence. But what
we would like you to do in the 5 to 10 minutes you have is to
talk from the heart as to what the key things are and the rest
we can bring out in the questions by the Members here and also
some of your colleagues here. So, go ahead.
STATEMENT OF FRANK FUENTES, ACTING COMMISSIONER, OFFICE OF
CHILD SUPPORT ENFORCEMENT, DEPARTMENT OF HEALTH AND HUMAN
SERVICES; HON. J.B. PENN, UNDER SECRETARY FOR FARM AND FOREIGN
AGRICULTURAL SERVICES, DEPARTMENT OF AGRICULTURE; DANIEL L.
HATCHER, SENIOR STAFF ATTORNEY, CHILDREN'S DEFENSE FUND;
WENDELL PRIMUS, DIRECTOR OF INCOME SECURITY, CENTER ON BUDGET
POLICY PRIORITIES; AND GERALDINE JENSEN, PRESIDENT, ASSOCIATION
FOR CHILDREN FOR ENFORCEMENT OF SUPPORT, INC.
Mr. Fuentes. Thank you, Mr. Chairman. Good morning.
Distinguished members of the subcommittee, it really is a
wonderful opportunity to share with you what we have been doing
in the Office of Child Support Enforcement. So, we very much
appreciate the opportunity to come before you.
As I stated before, my name is Frank Fuentes. I am the
Acting Commissioner for the Office of Child Support
Enforcement.
The program has been truly successful in its Federal-State
partnership effort fostering family responsibility and
promoting the well-being and self-sufficiency of children and
their parents, especially by providing the financial and
emotional support children need in order to thrive.
The goals of the program are to identify and locate
custodial parents, establish paternity, establish child support
obligations and then to enforce those support orders so that
children receive what they need.
The welfare reform legislation, the Personal Responsibility
and Work Opportunity Reconciliation Act of 1996, gave us some
very effective tools that we have been using to produce
significant improvements and achievements.
My purpose in being here is to share that information with
you, but then, as requested, to also share some initial
thoughts on Mr. Bilirakis' proposal to further strengthen our
child support enforcement efforts. This, of course, is a goal
that we all share.
But to give a little background on what we have been doing
with the tools that Congress provided, in fiscal year 2000, we
collected a record $17.9 billion in support of children. In
addition, this number of child support cases with collections
rose to 7.2 million. I think you would agree that those are
impressive results.
To add to the magnitude of the improvement, if you look
over the history of the Child Support Enforcement Program, $100
billion has been collected in that 25-year period.
Approximately 20 percent of that was collected just last year.
So, we are seeing progress your tools have allowed us to use.
In addition to collections, we have had similar success in
the establishment of paternity. The numbers there have also
increased in the voluntary acknowledgement of paternities. We
have now reached in fiscal year 2000, 1.6 million voluntary
paternity establishments. Of these, over 688,000 were done
through in-hospital acknowledgement programs and another
867,000 were done through the establishment by State Child
Support Enforcement Programs.
The interesting part of this, of course, and the most
exciting, is that in addition to being the first step in
collecting child support, it is also through the establishment
of paternity the first opportunity to engage dads in the lives
of their children, create the kinds of emotional bonds, and the
security, that are really crucial to the continued emotional
and financial support of their children.
Some of the tools we have utilized have been the National
Directory of New Hires, Automatic Wage Withholding, the
streamlining of paternity establishment, creating uniform
interstate child support forms, computerizing statewide
collections, and authorizing tough new penalties for nonpayment
of support; such as the revocation of drivers' licenses.
We are excited about the dramatic results we have seen and
the changes that have been generated by the use of these tools.
OCSE and the States are convinced that as we mature in the use
of these tools that future child support enforcement will
continue down a successful path.
At this point, I would like to turn to a brief discussion
of H.R. 866. First, I would like to acknowledge the importance,
again, of the bill's goal which is the improvement of child
support and to strengthen our abilities to enforce it.
While we are proud of the inroads we have made there is no
question there is still room for improvement. We certainly
realize there are areas that by working with the Congress we
can continue to improve and build on the record we have already
achieved.
The administration has not taken a formal position on H.R.
866 at this time; however, I would like to share some serious
technical concerns of this bill. As we understand it, the
intent of H.R. 866 is to help improve the collection of
support.
The bill would provide some limited exceptions requiring
applicants for any form of Federal financial assistance to
certify they are not more than 60 days delinquent in their
child support obligations. If the applicant is delinquent, they
would be required to comply with a repayment plan or an
agreement as conditioned by the Federal agency administering
that benefit.
The bill provides exceptions if assistance is subject to
garnishment for payment of overdue support or if the assistance
agency determines that the applicant has good cause, for
failing to pay the support or entered into or complying with a
repayment plan.
Our comments focus on two concerns. The first is what we
believe are structural difficulties that would impede the
effectiveness of the bill. Second is questions on the efficacy
of potentially targeting the low-income population for
nonpayment of child support.
With respect to the first issue, the sole enforcement tool
envisioned is self-certification of compliance. That is, there
would be no mechanism to verify an applicant's certification of
payment of child support. While this might serve as an
incentive for some to become current in their support, or enter
into a payment agreement, the value of this approach without
subsequent verification seems unclear. Further, if verification
were required, its effectiveness would be hampered by the fact
that many cases remain outside of the Title IV-D Child Support
Program.
On the other hand, modification of a child support order
following a change in a particular non-custodial parent's
circumstances, such as the loss of a job, can take
significantly longer than 60 days. Arrearages often buildup
during that time period.
Withholding of Federal financial assistance at this point
may only worsen the impact of the change that necessitated the
modification request. Now, we note that the bill provides for
good cause exemptions, presumably to address situations like
these and others. However, these provisions are currently
undefined and therefore ambiguous. Also undefined is the broad
reference to Federal financial assistance programs. There is a
wide range of such programs and the implementation and impact
of the bill would vary greatly depending on the breadth of that
definition.
With respect to the second broad issue, the lack of clarity
in the bill raises the potential of focusing on applicants for
basic Federal assistance. In potentially targeting those
parents who themselves are impoverished and least able to pay
child support, rather than those who can provide the support
but refuse to, the result could be denying assistance to
destitute individuals without increasing the payment to the
children who are owed the support.
The administration is committed to supporting efforts to
improve the Child Support Program; however, we are concerned
about whether the approach taken in H.R. 866 will accomplish
its intended goal.
In closing, I would like to reiterate the positive impact
that the existing enforcement tools are having in helping to
improve the lives of the Nation's children. We look forward to
building on these successes with the Congress and with the
State to ensure that the program is most effective in
addressing the needs of children and families.
Thank you, Mr. Chairman. I would be pleased to answer any
questions that you may have.
[The prepared statement of Mr. Fuentes follows:]
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Mr. Horn. We are going down the line first and then we will
come back to ask questions generally.
Dr. J.V. Penn is the Under Secretary for Farm and Foreign
Agricultural Services of the Department of Agriculture. Like
Mr. Fuentes, you are both new on the job, but you have now been
confirmed by the Senate. So, you can say what you want now.
Proceed and just give us the overview of it for 5 to 10
minutes.
Mr. Penn. Thank you very much, Mr. Chairman. I, too, am
very pleased to be here today to share the Department of
Agriculture's views on H.R. 866. Also, like the previous
witness, we also very much support the goals of this
legislation, but we, too, have some serious concerns about the
impact that it might have on the programs we operate at the
Department of Agriculture.
Now, in terms of the applicability of this legislation to
USDA programs, I want to note at the outset that 43 percent of
the total budget of the Department of Agriculture is for food
assistance programs that are primarily administered through the
States.
Second, another 36 percent of the Department's budget
provides a host of program benefits to farmers and rural
communities all across the country. Some of our programs are
for emergencies in response to natural and other disasters such
as hurricanes, floods and droughts. Thus, we are a bit
concerned at the outset that H.R. 866 doesn't define the term,
``financial assistance.''
That is important to us, as you will note, when I describe
some of our programs. First, addressing our food assistance
programs, strictly speaking, these programs provide nutrition
assistance rather than financial assistance. We do this through
the use, as everyone knows, of Food Stamps, coupons or vouchers
or through actual service of meals in school daycare homes, or
through the distribution of commodities themselves.
So, if H.R. 866 is intended to apply to these programs,
then we would have the following observations: The first is
that these programs need to be implemented by the States or by
local governments acting in their role as partners with Federal
agencies. That is certainly the case for the Food Stamp
Program.
We already have an enormous amount of complaints and
criticism from the States in that these programs are terribly
complex and that they are not being reimbursed properly for
their administration.
Our fear would be that enactment of this legislation might
further complicate the administration of the program and make
it even more costly and more difficult, and provide an even
greater burden on the States.
Second, I would like to note that the Food Stamp Act of
1977 already allows the States the option to disqualify
individuals from receiving Food Stamp benefits if they are
delinquent in court-ordered child support payments or they fail
to cooperate with child support enforcement programs in
establishing paternity and obtaining child support.
So, we are not certain of our further ability to promote
personal responsibility that would be needed for the Food Stamp
Program.
I would like to note it is unclear from this legislation
whether the disqualification would apply just to the individual
who is delinquent in payments or to other members of the
household living with that individual.
Our department in the past has not supported penalizing
entire households where only one member of the family failed to
comply with some program rule.
So, any legislation that would potentially deny food
assistance to low-income households needs to be very carefully
considered because, I want to note, 50 percent of the Food
Stamp recipients are children and the Food Stamp Program, we
think, already has existing authority that encourages personal
responsibility.
So, we think any modifications to this authority might be
more appropriately considered when the Food Stamp Act comes up
for reauthorization in fiscal year 2003.
Now, turning to the Child Nutrition Programs, H.R. 866, as
introduced, we think presumes that the benefits denied are
those to which the applicant alone is entitled. But in almost
all cases, the benefits under the Child Nutrition Program are
intended for someone other than the applicant and so, as with
the Food Stamp Program, we think it would be counterproductive
to deny benefits to others who may be associated with the
individual who is not in compliance.
So, benefits under both the Child Nutrition Program and the
Special Supplemental Nutrition Program for Women and Children,
the WIC Program, and our commodity distribution programs are
provided by local schools, childcare centers, health clinics
and similar entities under arrangements with the States.
We think any additional responsibilities for collecting,
monitoring and carrying out the administration of this process
could prove to be extremely burdensome and costly and would
have a negative impact on the overall administration of the
program.
One other point, Mr. Chairman, we think is important is the
exemptions already made for means-tested programs. The Debt
Collection Improvement Act of 1966 has uniformly included
language that exempts benefit payments made in means tested
programs or it allows the delegation of authority to make such
exemptions.
We would suggest that just to be in conformance with the
existing legislation H.R. 866 might include similar language.
I just talked about the food assistance programs and now
want to note the impact on the farm programs.
We are troubled by the lack of a clear definition of the
term ``financial assistance,'' because without it we don't know
how broadly H.R. 866 might apply to these programs.
We operate a host of programs that provide assistance to
farmers and rural communities, as well as farm loan and debt
restructuring programs. We certainly think that H.R. 866 would
apply to the farm loan and debt restructuring programs and we
are not certain how that would affect co-obligors if there is
more than one borrower and only one borrower was in default.
How would that affect the other parties?
Also, we are concerned that the certification process might
add to delays in making these loans to farmers. As we know,
there is a seasonal element involved here and loans have to be
timely or otherwise the season moves along.
We are also concerned about the direct payments made to
farmers. The payments made under the marketing loan programs
and a whole variety of other programs as well as the loan and
loan restructuring programs--how all of those might be affected
without a clear definition of the term ``financial
assistance.''
Finally, Mr. Chairman, let me end by saying again, USDA
strongly supports the intent of the legislation, but we would
like to see further analysis to ensure that administrative
costs and processes don't inadvertently reduce benefits to
children and others in need.
I would note that the bill touches on some very complex
issues such as cause and effect, State versus Federal roles,
and we have some serious concerns about those issues.
Additional concerns include the denial of financial assistance
benefits to children and diminishing the applicant's subsequent
earnings and thus the means to pay the child support payments.
With that, I will stop. Thank you.
[The prepared statement of Mr. Penn follows:]
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Mr. Horn. Thank you.
We now have Daniel L. Hatcher, the senior staff attorney
for the Children's Defense Fund. Mr. Hatcher, we are glad to
have you here. We know of a lot of the work of the Children's
Defense Fund. That, too, is an NGO, or a nonprofit.
Mr. Hatcher. It is. We receive no government funds as well.
Mr. Horn. We would like you to summarize your statement and
then get to the key things.
Mr. Hatcher. Thank you, Mr. Chairman, and good morning. We
also commend the subcommittee for holding this hearing on H.R.
866 and the very important issue of child support enforcement.
We appreciate the opportunity to testify.
Children need support from both parents, both financial
support, and when possible, emotional support. The Children's
Defense Fund applauds Representative Bilirakis for introducing
H.R. 866 and making an important statement about parent's
responsibility to support their children.
However, we do have a number of reservations about this
legislation. Everyone agrees that the continued improvement of
child support enforcement is vital. The question really begins
to come down to the focus. With State programs facing limited
resources, how should those resources be best used to best help
children, especially low-income children?
Rather than implementing a new set of penalties at this
time, we believe that the limited resources of the State child
support programs can be better used to continue improvements to
existing enforcement tools, including the tools already
mentioned that came out of the 1996 Welfare Reform Law, to
reform child support distribution rules to get more child
support that is already being collected to the families with
children, especially those families that are now leaving
welfare for work, and to provide supportive services to both
low-income custodial and non-custodial parents to be better
equipped to better support their children.
First, turning to the issue of child support distribution,
I would like to spend just a couple of minutes discussing what
we believe to be the most important issue. Reform to the Child
Support Distribution rules is needed to help low-income
children.
The reform that is included in the Johnson-Cardin Child
Support Distribution Act of 2001 and also incorporated into the
act, to leave no child behind, an omnibus bill for children, is
crucial for several reasons. Families that receive welfare
under current law have to assign their child support benefits
to the government.
When families leave welfare, they often end up in a
situation where some of the child support is owed to the
government and some is owed to the children, which then creates
a very complex set of distribution rules to decide when the
money comes in how much goes to the government, to the State,
the Federal Government and when and how much goes to the
children.
Child support that is owed to the government rather than
children can work against families, where non-custodial fathers
can become more alienated from their families when they
struggle to pay child support that they know is being taken
from the children and kept by the government. Poor mothers and
fathers that reunify are often still forced to pay child
support arrearages that are owed to the State government even
though the children are now with them.
Now, the States do have the option to give some of this
assigned child support back, but only after they pay the
Federal Government its share. So, they don't have the option to
give it all back at this point.
The Child Support Distribution Act would change this to
give States the option to pass through all assigned child
support to children with Federal participation in the pass-
through.
Also, another troubling aspect of the current child support
distribution rules is that the most effective means of
collecting child support arrears for low-income families, those
families who have received or are receiving TANF tax
intercepts, is often not available to low-income families.
Now, changing the child support distribution rules, the
reason I am spending time on this is that it is so important.
It would take some funding from State child support programs
that are already facing limited resources, which adds to our
concern of adding a new set of administrative burdens on the
Child Support Program.
It is clear, it is very clear that H.R. 866 has the obvious
intent to serve the best interests of children. But in addition
to some of these concerns we have with the limited resources,
there are concerns that have already been mentioned with some
of the language in H.R. 866.
I won't spend a lot of time, since some of these items have
already been discussed. We do have concerns with the fact that
financial assistance is not defined and that the failure to
adequately define ``financial assistance'' could lead to the
unintended result of denying benefits when in some
circumstances they could actually help children. They could
help low-income non-custodial parents work toward self-
sufficiency and then be better able to help their children.
Some good examples could be legislation which is introduced
in the Senate and House now for Federal funding for fatherhood
programs, to provide assistance to low-income, non-custodial
parents in the form of responsible fatherhood programs, job
training, parental counseling, domestic violence counseling and
the like; all geared toward the goal of helping these low-
income, non-custodial parents be more involved with their
families when appropriate and provide better support to their
children.
Also, we take concern with the good cause exception,
although it is clear the good causes exception is there with
the intent to take into account these situations where it might
be better for the non-custodial parent to get the benefits to
help the children. As has already been said, the exception is
not defined.
We also have concerns about who would make the decision on
good cause, what would be the procedure? There are no
provisions for protecting against due process concerns, for
providing the right to contest and appeal the good cause
decisions.
It seems most likely that the place where the decision
would fall for determining good cause would end up on the child
support programs, otherwise there would be great difficulty if
each agency was making the decision about what is good cause in
those circumstances without really having a lot of information
about the personal facts of these families and children.
Possible modifications to H.R. 866 could definitely be made
to improve upon some of these concerns. For example, changes
could be made to clarify which specific types of financial
assistance would be targeted. Rather than adding a growing list
of exemptions of programs that would not be denied, it would
likely be a better approach to only add those programs that
would be specifically targeted and only after very careful
consideration is given to those specific programs to ensure
that their denial would actually encourage more child support
payments rather than in some circumstances hurting the
situation further, as has already been discussed.
Also, changes to the good cause exception could be made to
better indicate what factors are going to be considered on good
cause. Is it the best interest of the children that is the
over-riding standard? Specific examples could be listed as
examples of what meets good cause such as when a family
reunifies and the non-custodial parent now lives with the
children for whom child support is owed.
It would also be important to add in the right to contest
and appeal good cause decisions, both to protect against due
process concerns and to better ensure that when a good cause
determination is made that it is not made in error. Again, as I
have already said, it would be important to decide where that
decision is made and come up with the structure for that
decision.
That leads me to some of the concerns on the additional
administrative burdens that this could have on the child
support programs. Even with these potential changes to the
legislation, the Children's Defense Fund fears that H.R. 866
could place an undue administrative burden on State Child
Support Enforcement Offices.
Now, I am aware that the idea is that this would be through
self-certification, but it does seem difficult that the self-
certification would, when carried out, not include significant
involvement from the child support enforcement agency, either
in tracking a situation where reports are made where there may
have been false certification filed and looking at situations
where the parent was at first not in compliance but then came
into compliance.
The self-certification does allow for working out an
agreement even if the parent is behind on child support but
questions can come up about who would they work out the
agreement with. It seems like it would have to be with the
child support enforcement offices.
Initial conversations with some child support IV-D
Directors confirm these concerns, that the serious funding
difficulties that the State child support enforcement programs
are facing, at the same time that they are trying to step up
enforcement activities and really get up to speed on all the
existing child support tools that are now available, including
those new tools that were made available through welfare
reform.
They are providing new services to both custodial and non-
custodial parents to really look at the holistic approach to
serving low-income families and to helping both custodial and
non-custodial parents better serve their children and have more
involvement with their children when appropriate.
In developing and implementing State-wide computer systems,
there is concern that implementing this new set of penalties
could require some very complicated interaction between the
child support enforcement agencies and several different
Federal and State agencies in determining when parents are or
are not in compliance.
So, again, rather than adding the burden on State programs
at this time to implement this new set of penalties, we believe
that a better use of the limited funds available to child
support programs at this time is to continue improvements to
the existing tools, to continue reform of child support
distribution to get that child support that is already being
collected to these families with children, and to provide
additional supportive services both to custodial and non-
custodial parents so they can better provide for their
children.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Hatcher follows:]
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Mr. Horn. Thank you very much. We now go to Wendell Primus,
the director of income security, Center on Budget Policy
Priorities.
Mr. Primus. Mr. Chairman and members of the subcommittee,
thank you for the opportunity to testify today on H.R. 866. I
will summarize my testimony and try not to repeat what has been
raised by the three witnesses to my right.
We basically agree with the three previous statements and
believe that H.R. 866 is flawed and could have a number of
harmful and counterproductive effects.
We strongly agree with Representative Bilirakis that the
payment of child support is a fundamental civic responsibility
and parents who do not live with their children have an
obligation to provide both financial and emotional support to
them. Research also shows that strong child support enforcement
programs reduce entrances into and hastens exits out of welfare
and reduces divorce and out-of-wedlock childbearing.
I think the real issue is: Does the child support
enforcement program need another tool or should we use the
existing tools we have better? I think having watched this
program over the last 25 years, we have given the program many
more tools and the key ones were added in the Welfare Reform
Act of 1966.
That was through the New Hire Directory. Every time a
person is hired today in the United States, the employer must
forward a form which is matched against a registry of all the
child support orders. If there is a match, you can immediately
order automatic wage withholding.
I think we are on the threshold of seeing enormous
increases in performance and just in the last 5 years, the
probability of collecting from someone with an order in the IV-
D system hearings doubled from 34 percent to 68 percent. So, I
think we have made enormous strides.
So, I think rather than adding another penalty, I believe
our focus should be on ensuring that States use the tools they
already have as effectively as possible.
Going through your two or three examples at the beginning
of the hearing, Mr. Chairman, the question is, why didn't that
NBA star get an automatic wage withholding so that his salary
was reduced and sent to child support? I mean, why wasn't the
State involved doing that?
In terms of the other two examples, the question was, you
know, why didn't we take away their professional licenses?
Those tools are available. It is not that we really want to
take it away, because then we have destroyed probably his
ability to earn a livelihood, but my point is that the system
already has sufficient tools.
The question is: Should we be using those tools better and
how can we help States utilize those tools better?
But I am also concerned that this bill could make it more
difficult for low-income non-custodial parents to become
employed and meet their parental responsibilities.
Many dads in the current IV-D system need support and
probably need financial assistance such as job training and
education programs. I think in the next round of welfare reform
we have got to be more concerned about the non-custodial
parents' involvement in the lives of their children and helping
them move into the labor force, retain employment and make
payment.
As Dan has already indicated, I think the first step in
that process is really passing H.R. 4678, a bill that passed
last September by a margin of 405 to 18 in the House. The
Senate, unfortunately, did not take it up. But this really was
the first step. It would also have assured that more of the
child support actually gets from the dads to the children.
Today, we have a 100 percent tax rate in the case of low-
income dads where mothers are on welfare. The dad is ordered to
pay. If he pays, all of the moneys accrue to the benefit of the
State or Federal Government.
I know that Illinois has considered passing through. The
problem is that the Federal Government doesn't help them in
that effort. I know the bills have actually passed the House. I
think the last one was vetoed by the Governor. My understanding
of the situation is if you passed H.R. 4678 and had the Federal
Government participate partially in getting those payments to
the mother, many States would take advantage of that.
So, I share the concerns about the definition of good cause
and what is financial assistance. I worry that might be applied
to job training programs. Since my time is up, I do want to
emphasize that this issue of arrearages is a big issue among
low-income, non-custodial parents.
In Baltimore City, I have looked carefully at Maryland and
the State did runs for me. The average arrearage for a low-
income male in Baltimore City was $9,000. We are hearing lots
of anecdotal evidence that is forcing them to go underground
and is doing just the opposite of what we intended.
So, I think our emphasis has got to be on getting those
low-income, non-custodial parents to meet their parental
responsibility. That is different from the three examples that
you cited earlier. I don't think another punitive tool is the
right way of going about that.
Thank you.
[The prepared statement of Mr. Primus follows:]
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Mr. Horn. Thank you.
Our last presenter is Geraldine Jensen, president of the
Association for Children for Enforcement of Support, Inc.
Ms. Jensen. Thank you, Mr. Chairman, members of the
committee and thank you, Representative Bilirakis, for
introducing the STOP Act.
I am here today to represent ACES members who are typical
of the over 20 million families who are now owed $71 billion in
unpaid child support. The STOP Act will assist these children
and it will send a strong message that child support is a
fundamental responsibility.
Examples of Federal programs where parents who fail to pay
child support can and do receive Federal grants and loans
includes venture capitalists for high-risk technologies from
the National Institute of Standards and Technologies, doctors
who are remodeling their offices and receive money from HUD,
sponsors of festivals and exhibits who receive funding from the
National Endowment of the Arts.
We believe that the ``good cause'' provisions in the bill
and the requirement to make arrangements for payments will
improve child support collections and promote payment.
Certification that one pays, done in the same way as one
certifies that they have reported for the draft on a college
loan is not burdensome.
The bill does, however, need the clarification to ensure
that programs such as Food Stamps and Medicaid and TANF are
exempted.
The STOP Act will increase collections, but it will be
important that these payments as well as all child support
payments be quickly and efficiently distributed to families.
ACES is very concerned about a recent report from HHS which
shows that at the end of 2000, $644 million in child support
was collected, but not distributed to families.
States cite the lack of being able to locate the custodial
parent and the complicated welfare distribution regulations as
among the reasons that payments are not distributed.
California has the largest amount of undistributed funds at
$176 million. They are currently surveying counties to validate
this total.
In Illinois, the only State with the new State disbursement
unit online, it was so plagued with problems and payments were
so delayed that it shut the system down and returned payment
distribution to the counties. They are currently rebidding the
contract in Illinois to put a new system in place.
Michigan reports $26 million in undistributed payments.
Problems with locating custodial parents in Michigan resulted
in $300,000 being credited to unclaimed funds departments in
1999. After the State disbursement unit went online,
undistributed payments more than doubled to $700,000 in 2
months, between October to December, and another $2.7 million
has gone unclaimed this year.
Michigan received $327 million in Federal funding to
computerize child support. At present, 13 counties, including
Detroit, are still not on-line and the system does not meet
Welfare Reform requirements.
Ohio, knowingly and purposely put a computer system on-line
which miscalculates the amount of child support due to families
leaving welfare. This has literally stolen $10 million from the
State's neediest families. Ohio tries to justify this behavior
by stating that they were trying to avoid Federal penalties for
missing deadlines.
Ohio has received $250 million from the Federal Government
for developing this broken system. The Ohio State Disbursement
Unit is run by Bank One under a contract that pays them out of
interest earned on collections and rewards them for slow
distribution. Families report delays of weeks and months in
receiving payments.
ACES recommends that the Federal law that would require
States to notify parents about unclaimed funds, require them to
use the Federal locator to find the custodial parent, and
prohibit vendors from being paid out of the interest. In fact,
all interest earned should go to the children. It requires
State auditors to annually certify that the State is meeting
its fiduciary responsibility in processing these payments.
It recommends that the States return unclaimed funds when
they can't find the custodial parent after 3 years, to the non-
custodial parent, rather than to the State coffers, and setup a
fair hearing process for parents so that if we have a dispute
we can have a way to resolve the problems with payment
distribution with the State.
New studies show that child support enforcement reduces the
divorce rate, reduces the number of births of never-married
parents, and reduces teenage premarital child bearing. Children
who receive support are more likely to have contact with their
fathers, have better grade point averages and significantly
better test scores. They have fewer behavioral problems and
remain in school longer.
Your support of the STOP Act will help children. We ask you
to please act to ensure that the support paid reaches the
children rather than enriching the State coffers.
Thank you.
[The prepared statement of Ms. Jensen follows:]
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Mr. Horn. Thank you very much.
Now, we are going to go on 5 minutes for the Members. We
will start with the ranking member from Illinois, 5 minutes.
Then Mr. Bilirakis will have 5 minutes and back and forth so we
get the questions out of us and the information out of you.
The gentlewoman from Illinois has 5 minutes.
Ms. Schakowsky. In Illinois, you are right, Mr. Primus, the
Governor vetoes a bill that would have allowed more than $50 to
go to parents who receive TANF, but also then they don't
receive it through child support payments. They just get the
flat $50.
That $50 goes to support the entire child support
collection system of Illinois, which serves not only low-income
children, but also all children who are receiving child
support. So, you have poor kids really subsidizing this child
support system. Also, 10 percent of the money then just goes to
run activities of Illinois government.
It seems to me that one of the rationales requiring--as
does Wisconsin, by the way--my understanding is that there is a
Federal waiver in Wisconsin so that all money collected for
families on public aid goes to those families and that
Wisconsin, which is experiencing a 90 percent drop in welfare
caseloads, didn't penalize a person's cash grant due to child
support.
So, it seems to me that if some States, Wisconsin, Vermont,
and Connecticut could get that Federal waiver, that surely we
ought to figure out some way for more of that money to be able
to go to those children and it would be an incentive for the
working parent to provide more child support, knowing that more
than $50, in the case of Illinois, is going to go directly to
the children and would encourage, also, the custodial parent to
help find the other parent to contribute to their support. That
is one question.
The other was, I am trying to understand how that
interfaces with the Cardin legislation and if that is what this
addresses, that more money would go to the kids?
Any one can answer that.
Mr. Primus. Yes. The Nancy Johnson-Ben Cardin legislation
of last year speaks directly to the issues you have raised. I
agree with Geraldine. I think one of the chief problems in the
system right now is the distribution rules.
I defy anyone to explain those in cases where the
arrearages have been accumulated before the mother went on
welfare, what happens to arrearages accumulated while she was
on welfare and then afterwards. So, the Johnson-Cardin
legislation of last year would have done two primary things. It
would have said, ``When we intercept the IRS refund check, if
the mother is owed money or the State is owed money, you must
give it to the mother first.''
That was a mandatory provision and Nancy Johnson was the
primary sponsor of that.
Congressman Cardin added another provision which would have
gone to your Illinois example and said, if the State
disregards--right now if the mother is on welfare, half of the
child support, in some cases more, goes to the Federal
Government, regardless of what the State does in terms of
disregarding the child support and calculating the TANF
payment.
What the Cardin amendment would have done is said if the
State of Illinois wants to disregard $200, then it no longer
has to send to the Federal Government $100. It participates in
the cost of providing that assistance to the mother.
I think all of us would agree that really is the
legislation that you want to support. I think that would do a
lot for the system. We need to simplify these distribution
rules.
Ms. Schakowsky. In a June 4, 2001 article in the Chicago
Sun-Times, it mentions there is enormous dissatisfaction right
now with the State disbursement unit. It seems that, though, is
in compliance with fairly new Federal regulations that require
disbursement to go on this way.
Did we create a system that further exacerbates the
problem? Is that what we have done, in your view?
Ms. Jensen. Yes. The State disbursement unit has caused
many more problems in States that have a State-supervised
county-run system. In those States in the past, mainly the
county clerk of courts disburses payments.
Instead it said we will have one place that all the
payments come into and go out of. The vendors that were hired
in many States did a very poor job. Those payments went in and
they couldn't identify which families to send them to. There
have been many problems.
We would like to see reform to that system that would allow
States to let money come in locally and just send the records
back and forth. Right now, in places like Michigan, money comes
into the State disbursement unit. They then take the money and
send it to the county friend of the court who then sends it to
the family.
It seems to us they should send the money to the family and
send a record to the county so that they quit passing this
money between agencies.
We also would like to see it easier for people to pay, so
that you could pay with your credit card or your ATM card at
the bank.
Mr. Horn. Thank you. We will get back to that.
The gentleman from Florida, Mr. Bilirakis, 5 minutes.
Mr. Bilirakis. Thank you very much, Mr. Chairman.
I want to thank the panel, and I mean that sincerely. We
get so darned frazzled sometimes, and often our intentions
don't always make it into the legislation.
I said at the outset, that there are a lot of loopholes and
a lot of corrections and improvements that need to be made. I
have no pride in authorship.
If the only thing that comes out of this hearing and the
introduction of our legislation is prudence, then I think it is
worthwhile.
I guess one of the questions I would ask Ms. Jensen is what
happens to the money that is collected that doesn't get down to
the families, to the children?
Ms. Jensen. The States have not been able to give us a good
answer. Most of them can say that a portion of it is
unidentified. They don't know which custodial family to send it
to. We ask them to do the Federal parent locator to find the
custodial parents because, you know, they are not hiding. They
would want these payments.
The other money, I just think they need to be better
monitored and they need better fiscal controls because it is
very hard to determine where the rest of those un-issuable
payments are going.
Mr. Bilirakis. I am sure we could try to help in that
regard. I just want to point out, do we want grant money,
Federal taxpayers' grant money, to go to Creators for Literary
Publishing, cultural festivals and various types of artistic
and cultural exhibits given by the National Endowment for the
Arts?
When those people have been bad actors in terms of not
caring enough about their children, do we want money to go to
venture capitalists as Ms. Jensen mentioned for the creation of
high-risk technologies given by the National Institute of
Standards Technology? Do we want money to go to developers for
modernizing or purchasing land, building or machinery given by
every one of these departments and agencies when there have
been bad actors?
Do we want grant money to go to creators and inventors for
projects that present to the public conservation of art
exhibits, again the National Endowment of the Arts? Do we want
money to go for the construction of doctors' offices?
Ms. Jensen shared this with us. I find it hard to believe
that we spent money for it. I have been here 19 years and I
still get surprised.
Money to doctors for constructing medical facilities,
incorporating new construction concepts given by HUD? I mean,
do we want Federal dollars to go to those types of people
making applications for grants and getting them when in fact
they have been bad actors as far as their children are
concerned?
That is really the intent of our legislation. I want to
apologize that we didn't make that clear. Obviously the way it
is worded, as you and I have said, the intent is not there.
We are not talking about the impoverished. We are not
talking about people on Food Stamps. We are talking about
people who clearly earn enough to support their children and
are coming to the Federal Government as bad actors, getting
these grants.
I guess I would ask the question: Would you all support
this legislation, more fully if it focused on Federal loans,
loan guarantees and grants rather than Federal assistance in
general? Of course, it would more clearly define good cause to
include economic necessity. That is a little bit tough because
it is ambiguous but that can all be worked out.
Let me ask the question. Mr. Fuentes.
Mr. Fuentes. Congressman Bilirakis, there is no question
that we share the goal.
Mr. Bilirakis. But would you support that type of
legislation?
Mr. Fuentes. I would say that the administration would be
happy to review any revisions and modifications to the proposal
that you put forward and get back to you with a very thoughtful
and constructive response.
Mr. Horn. Without objection, it will be put at this point
in the record.
It seems to me it is very simple. You either say artists
can go out and leave their kids in the gutter and you people
getting HUD grants can go get them and they are left on the
curbs. So, it is very simple, yes or no?
Mr. Penn.
Mr. Penn. We support the objective of the legislation. Our
only concern is with the way you implement it. If we can find a
way to implement it that doesn't overly burden the
effectiveness of the programs, we would be happy to support it.
Mr. Bilirakis. Just a little line or two on an application
form. Mr. Hatcher.
I am sorry, Mr. Chairman.
Mr. Horn. No. I just wanted to get it going down there. You
asked a question. Let's see if it is yes or no.
Mr. Hatcher. Thank you, Mr. Chairman. I will start with
``yes,'' but add clarification. We definitely support the
intent that Mr. Bilirakis has described and would not like to
see those types of services going to parents who can afford to
pay child support and who aren't paying child support.
We still do have concerns on the timing questions and the
ability to implement additional penalties at this time.
If I could use an example, I just bought an old house that
I am trying to fix up. I get restless as I move from one room
to the other room. I start tearing into something and then I
get bored with that project and pretty soon my whole house is a
shambles. Now, I have a new baby and it is a mad house. Nothing
ever gets completely fixed.
So, our concern here is that we really spend the limited
resources of State child support programs to fix the current
things that need to be fixed rather than trying to implement
new programs.
Mr. Horn. Mr. Primus.
Mr. Primus. We also support the intent of the legislation.
But I guess we really question the effectiveness. I mean, if it
is a bad actor and you just have a line on the form, I am not
so sure that does much. I worry that we will create more cost
trying to route out the bad actors, as you put it.
I would rather see those moneys and efforts spent making
the existing tools more effective so we weed out the bad actors
before they even get around to applying for any Federal grants.
I also share some concerns, you know, if you have a farmer
who is behind, but he is behind for other reasons. Then you
have to sort out whether he should get assistance or not. I am
not so sure we should put that burden on every program that
supplies assistance.
I would rather focus on getting the current tools working
and working better and getting this system funded better.
Mr. Horn. Ms. Jensen.
Ms. Jensen. Yes, absolutely. We believe the certification
process will help based on the experience of when the law was
passed for revocation of drivers' licenses. For example, the
State of Maine just sent a letter out to people telling them
that they can lose their license and they collected millions of
dollars.
So, just bringing this to people's attention and saying
that the Federal Government is concerned about this issue will
have a big impact for the children.
Mr. Horn. OK. We will now move back to the ranking member,
Ms. Schakowsky, for 5 minutes of questioning.
Ms. Schakowsky. Thank you, Mr. Chairman.
Mr. Fuentes, does the Secretary of HHS support the Johnson-
Cardin legislation?
Mr. Fuentes. My understanding, Congresswoman, is that
Secretary Tommy Thompson has gone on record as supporting
simplified distribution and that there are a number of
proposals. The Department, I believe, is reviewing the bill and
at the appropriate time will provide an answer to that.
But there is no question that he is very supportive of
simplifying and certainly helping welfare families become self-
sufficient and remain self-sufficient.
Ms. Schakowsky. So, at this point do you have any
legislation addressing this issue that is being promoted by the
Department and the Secretary or are you in the process still of
considering it?
Mr. Fuentes. The administration is in the process of
considering it.
Ms. Schakowsky. We are reauthorizing TANF this Session, are
we not? Might this be part of that?
Mr. Fuentes. We will see exactly what the best approach
might be. Certainly the consideration of TANF reauthorization
will be an opportunity to touch on many of these areas.
Ms. Schakowsky. Ms. Jensen, regarding the issue of the
State disbursement unit, you suggested a number of corrections
that could be made. Are these incorporated in any legislation
right now? Is there any activity now in either body?
Ms. Jensen. The only legislation I am familiar with is the
thing that everyone has been talking about, the Johnson-Cardin
bill. I think we have a need for some new laws to deal with
some of the problems that have come out of the State
disbursements units, with timeliness of payments and unclaimed
funds and all those other issues.
Ms. Schakowsky. In Illinois, a committee of the
legislature, a task force of the House of Representatives,
which I used to serve on, was created. They are going to hold
hearings on whether to create a new State agency with child
support its sole responsibility.
One of the Republican members was quoted as saying that
this program is broken. It doesn't need another band-aid. It
needs either a private contractor or it needs a director to go
to Washington and say, ``Look, the old system worked fairly
well. This new system has been a disaster.''
What would you say about that characterization around the
country of this system?
Ms. Jensen. We have been very involved in Illinois with the
task force and with the need of moving child support out of the
Illinois Department of Public Aid and into a different State
agency where it is a priority. We think that would help a great
deal.
We do need to be computerized. It is amazing that in this
century child support is not yet computerized in States
effectively.
So, I don't think we need to go backward, but they do need
to make sure that the computer systems for payments
distribution, for tracking cases actually work and help
families instead of hurting them.
So, there needs to be a tooling of that system to get it up
and running.
Ms. Schakowsky. Are you talking about just Illinois or in
general?
Ms. Jensen. I am talking throughout the whole country. The
system they setup was that each State developed its own
computer system. So, California and Michigan and, I forget the
other State, Ohio is not certified but is in the process of
getting certified, along with Nebraska.
Those systems are all going to need to be updated at
different times. They are all different from each other. So,
the Federal Government, if it continues to fund this, is going
to pour millions and millions of dollars into something that
doesn't work and probably has no hope of really working.
Plus, the systems don't talk to each other. It would make
much more sense to revisit that whole issue and maybe adopt one
system that all the States used, kind of like everyone using
Windows.
Ms. Schakowsky. It seems so reasonable. The Department of
Public Aid has said, ``Non-payment of child support is a
primary reason almost half a million children in Illinois
receive welfare.''
The Federal role is so critical here. I would certainly
like to work with everyone, Mr. Bilirakis and everyone, to see
if there isn't something that we can do, particularly with
perhaps this new opportunity with the TANF reauthorization,
although it certainly extends beyond that, to come up with
something that is really going to work.
This is a persistent problem that doesn't defy solution. We
just have to come up with a better one. Thank you.
Mr. Horn. The gentleman from Florida, Mr. Bilirakis, 5
minutes.
Mr. Bilirakis. Thank you, Mr. Chairman.
You know, we have talked about improvements made over the
last few years. God knows that has been the case and we are
very grateful for that. Ms. Jensen shared with us about how
collections have been improved. But an awful lot of that money,
as much as half a billion dollars, is really not going down to
the children.
HHS has furnished us with State breakdowns. So I guess a
question ought to be raised as to where that money went. Where
is it? It was intended for a certain purpose.
Mr. Chairman, not belittling any of these other areas, and
the ranking member is quite correct, if we don't improve the
collection and distribution process, getting it to where it is
supposed to go, we are not really accomplishing very much.
I still say that there are people out there who are
receiving Federal dollars who are not impoverished, who are not
on Food Stamps, who can well afford to pay child support for
their children and who are not doing it.
There seems to be a reluctance to supplement all of the
good things that are now taking place by basically having a
certification.
Now I assure you, and I guess we all have different
opinions in this, but we are talking about people who are,
doctors, lawyers, engineers, scientists, painters. We can go on
and on here.
I don't think that they would be willing to sign a
statement under oath to the effect that they have not followed
the law in terms of their children and still go forward and try
to get Federal dollars.
In any case, the point of the matter is that I don't think
we ought to get away from the purpose of the legislation and
that is to prevent those kinds of people from getting Federal
dollars.
The purpose is not to go after the impoverished and people
on Food Stamps or welfare. As far as farmers are concerned,
there are an awful lot of big farmers out there who get a lot
of subsidies and Federal loans who may be bad actors. Is it
intended to reach them? You are right it is. I think so.
Thank you, Mr. Chairman. I appreciate very much your giving
me this time.
Mr. Horn. Well, I agree with you on those last remarks. I
wouldn't give them an inch.
Let me get down to the Federal Parental Locator Service.
Under whose responsibility is that? Mr. Fuentes.
Mr. Fuentes. Yes, that is an activity of the Office of
Child Support Enforcement.
Mr. Horn. How many employees are currently assigned to
updating and checking the Federal Parental Locator Service and
associated systems?
Mr. Fuentes. Federal employees, we currently have 12. We
have 123 contractor staff working specifically on that system.
Mr. Horn. And that is spread out over all 50 States?
Mr. Fuentes. The 12 Federal staff and the contractors are
housed specifically in Washington and the surrounding area.
Mr. Horn. OK, so all the work is done here.
Mr. Fuentes. It is all done here, but it is communicated on
a regular automated basis with all the States.
Mr. Horn. How long does it take to verify whether a person
is listed on the Federal Parental Locator Service? How long
does it take; 5 seconds; 5 minutes?
Mr. Fuentes. It is a very quick process. It is
instantaneous. It really is tape-to-tape. All of these machines
have their data bases. The work that is done is actually
creating matches between numerous data bases and then providing
the State the necessary information.
Mr. Horn. Now, is there ever a breakdown on this or how
does that work?
Mr. Fuentes. From time to time there are systems failures
in terms of the computers, but there are redundant and backup
systems. We utilize the data system at SSA, which is state-of-
the-art. So, as soon as one system or one series of computers
go down, there are those that back it up. So, the matches are
continual. They go back to the States on a daily basis.
Mr. Horn. Do we know what type of person is locating this?
Is this a city or a county where the welfare department is
delegated or where Federal agencies--what is the profile of
people that you are serving?
Mr. Fuentes. That we are serving?
Mr. Horn. Yes.
Mr. Fuentes. Our primary clients are the States. The States
provide us on a regular basis information from their State case
registry, their requests for the locator service. Within 20
days of a person being hired, the employer must provide certain
information to the State and then the State automatically
provides that to our data base.
Mr. Horn. Are there any lawsuits or anything where people
have tried to interfere with that and say, ``What do you mean?
I am entitled to that million dollars of Federal taxpayers'
money and I can still not give a dime to my kid.''
Mr. Fuentes. Not to my knowledge, sir.
Mr. Horn. No lawsuits on that? Sometimes there are weird
groups.
Mr. Fuentes. In the last 15 months that I have been there,
I have learned all manner of kinds of groups. But the fact of
the matter is this has not happened.
Mr. Horn. Now, with some of the States not having much of a
system, should we just do it for them? What would we miss if it
weren't the States that was doing it?
Mr. Fuentes. Sir, we are working with all of the States in
bringing their systems up. All but four States are certified
for the FSI-88 requirements. We have just finished full
certification of six States for the PRWORA requirements. We
have a number of other States ready to be certified.
We continue under the current arrangement to provide
technical assistance, but also, where necessary, invoking the
penalties if States are not moving on the timeline that they
are required to.
Mr. Horn. Where is California in all this? As I remember a
couple of years ago, the Los Angeles District Attorney, which
represents one-third of the State of California, which is 32
million people, they have 10 million. The smaller counties
didn't want to have the same computing ability that the Los
Angeles District Attorney had.
I am just curious about what happened on that. Have you
been in the middle of that?
Mr. Fuentes. Well, sir, the way that has been working out,
Mr. Chairman, is that in working with the State of California,
because of the circumstances that came about there and the
desperate conditions, the State legislature created a separate
agency for child support enforcement. It removed responsibility
from the counties and provided it to a statewide agency. I
believe by this October all of the personnel working in the
District Attorney's Offices or other county offices across the
State will now be part, officially part of the new child
support agency.
In addition, working with them on their automated systems,
we have been supporting an interim system of six, taking all of
the 58 counties. Am I correct?
Mr. Horn. Yes, 58.
Mr. Fuentes. Taking all of the 58 counties, the State
probably had 50 different approaches. We have taken an interim
step to get one system in place because it is a very laborious
and time-consuming process.
We have authorized six systems so any one of the counties
can now come on to one of the six approved systems. They are
approved because they meet the criteria laid out in PRWORA and
FSA-88.
The State has indicated by 2006 that they will have a
statewide system across the country. However, again, because we
implement the law, California this year paid $113 million in
penalties. Until their system is up and running or unless those
requirements change, those penalties will continue to be
invoked.
Mr. Horn. Where does that money go to, the U.S. Treasury?
Mr. Fuentes. Currently, it reverts to the Treasury, sir.
Mr. Horn. That is a good place for it to revert. Thank you.
I am sorry my people in California don't seem to know what they
are doing. But that is not the only issue they have out there.
So, if you are going to go out there, take a candle with you.
Mr. Fuentes. If I could just add something, because we have
talked about the undistributed collection issue and I would
just like to take the opportunity to share with you what the
Office of Federal Child Support Enforcement has been doing
about that issue.
First, it was the No. 1 priority the last fiscal year and
it remains this fiscal year one of our top three priorities.
Second, just as recently as yesterday morning we were
meeting with the IV-D Director Association in a panel
discussion that was all morning long in identifying approaches
to resolving those undistributed collections.
We have also come to understand, because of the attention
we have put on it, both with the States, but also nationally,
that at any given time about half of that money is explainable.
The Federal tax offset requirements includes a provision for
the injured spouse. So, States routinely hold that money up to
6 months. So, half of the undistributed amount is allowing time
for an ``injured spouse claim'' to be processed and acted on.
We are still working with the States through a task order
that we have offered to identify best practices and to provide
technical assistance to them on how to reduce that other half
of the amount.
Mr. Horn. That is very well said. My last question, because
we have two votes on the floor. Ms. Jensen, I am curious, you
suggested in your testimony that custodial parents should also
be listed in the Federal system so they could be located for
issuing child support payments.
What would it take to accomplish that?
Ms. Jensen. It would take a regulation from HHS. They
already have all the names and Social Security numbers of the
custodial parents when you apply for services. It would just be
a regulation requiring the States to use that tool to track
down parents that they need to find to get this money to.
Mr. Horn. Well, we thank you all. You have all been great
witnesses. We appreciate your answers to the questions. The
majority staff and the minority staff might well have questions
to send to you. If you would be as nice on those questions as
you were on ours, they will put it in the record at this point.
With that, we are in adjournment.
[Whereupon, at 11:45 a.m. the subcommittee was adjourned,
to reconvene at the call of the Chair.]