[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
HEARING ON STRENGTHENING THE CHILD
SUPPORT ENFORCEMENT PROGRAM
FOR STATES AND TRIBES
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HEARING
BEFORE THE
SUBCOMMITTEE ON WORK & WELFARE
AND
SUBCOMMITTEE ON OVERSIGHT
OF THE
COMMITTEE ON WAYS AND MEANS
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
NOVEMBER 29, 2023
__________
Serial No. 118-WW05
__________
Printed for the use of the Committee on Ways and Means
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
__________
U.S. GOVERNMENT PUBLISHING OFFICE
55-786 PDF WASHINGTON : 2024
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COMMITTEE ON WAYS AND MEANS
JASON SMITH, Missouri, Chairman
VERN BUCHANAN, Florida RICHARD E. NEAL, Massachusetts
ADRIAN SMITH, Nebraska LLOYD DOGGETT, Texas
MIKE KELLY, Pennsylvania MIKE THOMPSON, California
DAVID SCHWEIKERT, Arizona JOHN B. LARSON, Connecticut
DARIN LaHOOD, Illinois EARL BLUMENAUER, Oregon
BRAD WENSTRUP, Ohio BILL PASCRELL, JR., New Jersey
JODEY ARRINGTON, Texas DANNY DAVIS, Illinois
DREW FERGUSON, Georgia LINDA SANCHEZ, California
RON ESTES, Kansas BRIAN HIGGINS, New York
LLOYD SMUCKER, Pennsylvania TERRI SEWELL, Alabama
KEVIN HERN, Oklahoma SUZAN DelBENE, Washington
CAROL MILLER, West Virginia JUDY CHU, California
GREG MURPHY, North Carolina GWEN MOORE, Wisconsin
DAVID KUSTOFF, Tennessee DAN KILDEE, Michigan
BRIAN FITZPATRICK, Pennsylvania DON BEYER, Virginia
GREG STEUBE, Florida DWIGHT EVANS, Pennsylvania
CLAUDIA TENNEY, New York BRAD SCHNEIDER, Illinois
MICHELLE FISCHBACH, Minnesota JIMMY PANETTA, California
BLAKE MOORE, Utah
MICHELLE STEEL, California
BETH VAN DUYNE, Texas
RANDY FEENSTRA, Iowa
NICOLE MALLIOTAKIS, New York
MIKE CAREY, Ohio
Mark Roman, Staff Director
Brandon Casey, Minority Chief Counsel
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SUBCOMMITTEE ON WORK AND WELFARE
DARIN LaHOOD, Illinois, Chairman
BRAD WENSTRUP, Ohio DANNY DAVIS, Illinois
MIKE CAREY, Ohio JUDY CHU, California
BLAKE MOORE, Utah GWEN MOORE, Wisconsin
MICHELLE STEEL, California DWIGHT EVANS, Pennsylvania
LLOYD SMUCKER, Pennsylvania TERRI SEWELL, Alabama
ADRIAN SMITH, Nebraska
CLAUDIA TENNEY, New York
------
SUBCOMMITTEE ON OVERSIGHT
DAVID SCHWEIKERT, Arizona, Chairman
BRIAN FITZPATRICK, Pennsylvania BILL PASCRELL, New Jersey
GREG STEUBE, Florida JUDY CHU, California
CLAUDIA TENNEY, New York BRAD SCHNEIDER, Illinois
MICHELLE FISCHBACH, Minnesota SUZAN DelBENE, Washington
BETH VAN DUYNE, Texas GWEN MOORE, Wisconsin
RANDY FEENSTRA, Iowa
NICOLE MALLIOTAKIS, New York
C O N T E N T S
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OPENING STATEMENTS
Page
Hon. Darin LaHood, Illinois, Chairman............................ 1
Hon. Danny Davis, Illinois, Ranking Member....................... 2
Hon. David Schweikert, Arizona, Chairman......................... 4
Hon. Bill Pascrell, New Jersey, Ranking Member................... 4
Advisory of November 29, 2023 announcing the hearing............. V
WITNESSES
Vicki Turetsky, Former Commissioner of Child Support Services,
Department of Health and Human Services........................ 5
James Fleming, Director, Child Support Section, North Dakota
Department of Health and Human Services........................ 16
Bryan Tribble, Administrator, Child Support Services, Illinois
Department of Healthcare and Family Services................... 25
Susan Smith, Director, Lac Courte Oreilles Tribal Child Support
Services....................................................... 31
Marley Corbine, Parent and Tribal Member of the Lac Courte
Orvilles, Band of Lake Superior Ojibwe......................... 36
MEMBER QUESTIONS FOR THE RECORD
Member Questions for the Record and Responses from Vicki
Turetsky, Former Commissioner of Child Support Services,
Department of Health and Human Services........................ 66
PUBLIC SUBMISSIONS FOR THE RECORD
Public Submissions............................................... 72
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STRENGTHENING THE CHILD SUPPORT
ENFORCEMENT PROGRAM FOR
STATES AND TRIBES
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WEDNESDAY, NOVEMBER 29, 2023
House of Representatives,
Subcommittee on Work and Welfare,
joint with the Subcommittee on Oversight,
Committee on Ways and Means,
Washington, DC.
The Subcommittees met, pursuant to call at 2:21 p.m. in
Room 1100, Longworth House Office Building, Hon. Darin LaHood
[Chairman of the Subcommittee on Work and Welfare] presiding.
Chairman LaHood. The committee will come to order.
Good afternoon, everyone. I want to welcome everybody today
to our Joint Work and Welfare and Oversight Joint Subcommittee
hearing titled, ``Strengthening the Child Support Enforcement
Program for States and Tribes.''
I want to thank our witnesses here today and the members
for joining us. My name is Darren LaHood, and I represent
Illinois's 16th congressional district, covering much of
central and northwest parts of Illinois. And I am pleased to be
joined here by my colleague and fellow chairman, David
Schweikert of Arizona, and our colleagues from the Oversight
Subcommittee for this important discussion here today.
The purpose of today's hearing is to ensure states and
tribes have the tools necessary for effective Administration of
the Child Support Enforcement Program, one of our most
successful and vital support systems for millions of families
across the country: 12.7 million families and 18 percent of all
children in the United States receive child support from non-
custodial parents through this program. Among all families
eligible for child support, 24 percent have income below the
Federal poverty line.
Child support enforcement is one of the most cost-effective
Federal programs we have. In 2022 the program collected more
than $27 billion in payments from non-custodial parents. For
every $1 spent on enforcement, nearly $5 was collected for
families through this program. Today we are here to better
understand how a recent IRS policy change could significantly
disrupt state operation of this program, and how we can provide
tribes with the same child support enforcement tools currently
available to states.
Currently, the Social Security Act allows states to use
contractors to perform different child support enforcement
functions, and 42 states take advantage of this flexibility.
The Social Security Act also requires states to use the Federal
Tax Refund Offset Program, run by the IRS, as a tool to
intercept past-due child support for non-custodial parents.
Conversely, the IRS code generally limits contractors' access
to the tax offset program to protect the privacy of Federal
taxpayer information. These two statutes, the Social Security
Act authorizing the Child Support Enforcement Program, and the
Internal Revenue Code governing access to the offset program,
are therefore in conflict with each other.
For decades, the IRS dealt with this issue by holding in
abeyance findings that states use contractors to collect past-
due child support, in effect, really looking the other way.
This past February the IRS issued a communication to all states
that, beginning October 1 of 2024, the IRS will no longer
permit state child support enforcement agencies to use
contractors to access the State Refund Offset Program.
Both the IRS and HHS have asked Congress for legislation to
harmonize these two laws and provide the formal legislative
authority the IRS needs. Absent a legislative change, states
and the Federal Government face hundreds of millions in new
costs, and millions of families could lose their child support
payments.
Finally, I want to talk about the tribal impact. Sixty
federally recognized tribes administer their own child support
programs. Currently, these tribes must sign contractual
agreements with states to access the Tax Refund Offset Program.
As a result, the same IRS policy that I referenced earlier that
will prohibit the use of state contractors will simultaneously
cut off tribal access. A legislative solution should also
provide parity for tribes to directly access the Federal Tax
Refund Offset Program necessary for effective child support
enforcement.
This deserves our immediate attention, and that is why we
are here today. Congressional action is needed to provide a
permanent solution that recognizes states' use of contractors
to collect child support for families without compromising the
privacy of Federal taxpayer information.
Today we will hear from our witnesses about how they run
their child support programs in their different states, and how
this could impact their operations.
I am also pleased to have representatives of the Lac Courte
Oreilles, or LCO Tribe, in Wisconsin to share with us their
tribal perspective.
Again, I want to thank our witnesses for being here today,
and I look forward to the testimony.
Chairman LaHOOD. With that, I am pleased to recognize the
gentleman from Illinois, Mr. Davis, for his opening statement.
Mr. DAVIS. Thank you, Chairman LaHood, Chairman Schweikert,
both of you, for calling this joint hearing. And I am pleased
to be here and to be joined by Ranking Member Pascrell of the
Oversight Committee.
I also want to thank all of our witnesses for coming to
share your testimony with us.
Ensuring that children receive financial support from both
of their parents is a powerful and cost-effective way to fight
child poverty. In fiscal year 2022 the Federal Child Support
Program distributed more than $27 billion in parental support
to nearly 13 million children, over 700 million of that in my
home state of Illinois.
For children living in poverty, child support nearly
doubles their household income. And because the support was
provided by parents, for every dollar the Federal Government
spent facilitating child support children received $4.73, to be
exact as we could possibly be.
Child support makes children in our country better off in
many ways. Children who receive child support have fewer health
problems, fewer school problems, higher grades, and more likely
to finish high school and attend college than those who do not.
It is also a tool to improve racial equity. For example,
Black children are nearly twice as likely to live with a single
parent and need child support. Over the years we have
modernized the child support program based on research and the
voices of parents in our communities.
Today's child support program directs the vast majority of
collections to meet the immediate needs of children. It
recognizes that the primary reason for non-payment of child
support is inability to pay, not lack of love. And it focuses
on generating predictable income for families, in part by
setting child support awards at levels non-custodial parents
can afford and helping them get good jobs.
I am honored that one of our witnesses today is Vicki
Turetsky, who spent her career fighting for children, and has
been the linchpin of so much progress. I am particularly
grateful for the work Vicki did with me and other Members of
Congress to help incarcerated parents and non-custodial
parents. And I might reemphasize that: to help incarcerated
parents and non-custodial parents get a second chance to
support their children and push for child support funds to be
directed to the families who need them.
I also welcome Mr. Bryan Tribble, the administrator of the
Illinois Office of Child Support Services, where my home state
is doing many good things.
Tribal child support programs are especially critical
because of high poverty rates among Native American children.
Child support programs administered by tribes have proven to be
creative and effective in using methods rooted in their culture
to engage parents and increase support for children. I believe
tribal child support programs should have the same tools and
information access as state programs, and I am glad we have
such strong bipartisan agreement on that issue.
We can still do more to improve the Federal child support
program. To build trust with non-custodial parents, it is
important for states to fully implement regulations requiring
them to set reasonable child support award levels and pass
through child support to the children, rather than retaining it
for the state. It is essential that we ensure that states are
not charging parents child support when their children enter
foster care, a practice that delays reunification and inflicts
harm on already struggling parents.
I also support allowing states to use child support funds
for employment services. When parents earn more, they can
provide more for their children, and I want to make sure that
our child support policies do not harm kinship caregivers.
Chair LaHood, Chair Schweikert, again I thank you for
holding this hearing, and look forward to working together to
strengthen child support and reduce child poverty.
Mr. DAVIS. I thank you and yield back.
Chairman LaHOOD. Thank you, Mr. Davis. I yield now to the
chairman of the Oversight Committee, David Schweikert of
Arizona.
Chairman SCHWEIKERT. Thank you, Chairman LaHood. And look,
Oversight is here because we touch the IRS, and that is part of
our area of responsibility.
This is one of those occasions we are here--we want to do
the right thing as--each of you as witnesses, help us
understand, as the program exists today, what would you
improve?
If you also have suggestions what we have to do statutorily
to deal--and I am a little frustrated, the IRS did not need to
put us into a fire drill, they could have--we could have
actually had a conversation and done this in a different
fashion, instead of just sort of dropping it on us.
But for some members who have been around policy for a
while, it seems like a couple of decades ago we battled through
access to this data. Being from a state with 22 tribes, 21
with, you know, land, their relationship to having to contract
or sign governmental-to-governmental agreements with the state,
is there a better way to do that?
But ultimately, I think for every member here on the right
and the left, we care about the families, we care about the
kids. Help us make sure we are doing the right thing.
Chairman SCHWEIKERT. And with that, I yield back.
Chairman LaHOOD. Thank you, Mr. Schweikert. I now yield to
Mr. Pascrell of New Jersey.
Mr. PASCRELL. Thank you, Mr. Chairman. Our discussion today
may seem esoteric to some, but we are talking about real people
and real families. And I want to associate myself with the
opening comments of the chairman of Oversight, Mr. Schweikert.
Child support lifts millions of children out of poverty,
and it ensures that they have food on the table and a roof over
their head. In the wealthiest nation on Earth, we still have
nearly 12 million children living in poverty. That is a fact.
Child poverty reached an historic low in 2021, if you
remember, when we passed the Child Tax Credit. But it more than
doubled to 12.4 percent after the other side blocked the
permanent extension, erasing our progress. Maybe we ought to go
back to that, discuss it again. For families who live in
poverty and receive child support, those payments represent
roughly 40 percent of their income.
The impact of a missed support check on struggling families
cannot be overstated. It is crucial America's child support
programs are administered effectively, given adequate
resources, and have every enforcement tool. The glaring
omission from our tax code has long prevented Indian tribes
from fully administering their own supporting programs. For
tribal child support programs to function best, they need to
access specific tax data protected by section 6103. That has
become famous over the last seven years, that section. This is
information that has long been available to states. This is a
matter of tribal sovereignty, in allowing tribes to address
their own unique needs.
We must also understand how states and tribal governments
use contractors for child support activities. It is important
to understand the inner sanctums of those relationships. The
recent isolated leak of sensitive data by the IRS contractor
highlights the need to establish safeguards that protect
taxpayers while balancing the needs of child support
enforcement agencies.
Mr. PASCRELL. Thank you, Mr. Chair, and I yield back.
Chairman LaHOOD. Thank you, Mr. Pascrell, for those opening
comments. We will now turn to introduction of our witnesses.
Our first witness is Vicki Turetsky, and she is the former
commissioner of the child support services at the Department of
Health and Human Services.
Next, we have Mr. James Fleming is the director of the
child support section at the North Dakota Department of Health
and Human Services.
We are next joined by my fellow Illinoisan--I should say
our fellow Illinoisan--Bryan Tribble, and he is the
administrator of child support services at the Illinois
Department of Health Care and Family Services. I am happy to
have a fellow Illinoisan with us today.
Next is Sue Smith, and she is the director of the LCO
Tribal Child Support Services.
And lastly, we have Marley Corbine, and she is the mother
of three, and I think she may have brought her youngest with
her today.
So, we welcome you and the baby.
And she is a member of the tribal--the tribe, LCO, also.
So welcome to all of our witnesses here today. We look
forward to your testimony and then the question-and-answer
period.
At this time, I will represent--I will recognize you, Ms.
Turetsky, for your opening statement of five minutes. Thank
you.
STATEMENT OF VICKI TURETSKY, FORMER COMMISSIONER OF CHILD
SUPPORT SERVICES, DEPARTMENT OF HEALTH AND HUMAN SERVICES, NEW
YORK, NEW YORK
Ms. TURETSKY. Thank you, Chairman. Chairman LaHood,
Chairman Schweikert, Ranking Member Davis, and Ranking Member
Pascrell, and all of the members of the committee, thank you
for the opportunity to testify.
My name is Vicki Turetsky. Currently I am an independent
consultant, but for eight years I was the commissioner of the
Federal Child Support Services Agency during the Obama
Administration. In my testimony I am going to step back from
the specific section 6103 discussion involved in this hearing
and talk more generally about the importance of child support
services to children and families, and you have touched on a
number of these points.
The laws enacted by Congress over the past five decades
have strengthened the child support program and established a
public understanding that non-custodial parents are expected to
support their children as they grow up. When I was a young
attorney and low-income single mother, that expectation did not
exist. So, the body of work that Congress created over the last
50 years have made a real difference to families.
Every state and 60 tribes operate a child support program,
as was mentioned. The modern child support program is really
focused on increasing family income, improving family financial
stability, and helping families meet--make ends meet. One in
five children and their parents receive child support services.
That is nearly 13 million children and both parents that are
affected by what happens in the child support program. Nearly
two-thirds of these children participating in the program
received child support payments. Children participating in the
program are significantly more likely to receive child support
than those who do not.
The majority of financial support for poor children who
live in custodial families comes from their parents, not from
government. Child support, which is the contribution made by
the non-custodial parent, can be a significant and long-term
source of family income for families with limited means in
particular. Income from child support has doubled in the past
two decades for poor families, as was mentioned. An additional
$200 or $300 in child support income per month can really help
families meet the costs of raising their children and help
prevent child welfare involvement.
As you mentioned, an extensive body of research shows that
receiving child support payments supports positive child
developmental outcomes. And the example you gave is that
educational outcomes improve. Children who receive child
support are more likely to receive higher grades, finish high
school, go to college, and have fewer behavioral problems in
school than kids who don't get child support. In fact, payment
of regular child support seems to have a bigger impact on
children's educational outcomes, dollar for dollar, than any
other source of family income.
But the labor market and families have changed since
Congress put together the child support program 50 years ago.
The main reason for non-payment of child support is the non-
custodial parent's ability to pay the full amount ordered, as
Representative Davis said. About 25 percent of non-custodial
parents are themselves living in poverty and barely scraping
by.
Some longstanding child support practices have created
additional barriers to work and parenting and have caused real
harm to children. In order to increase program effectiveness
and public trust, as well as equitable outcomes for all
families, the child support program is incorporating evidence-
based, family-centered practices to improve employment
outcomes, increase the consistency of child support payments,
make sure kids get all of the money that their parents provide
for them, reduce child support debt, and strengthen family
relationships while protecting against domestic violence.
Three-fourths of child support payments are corrected
through--are collected through automatic payroll withholding.
The child support program has several other statutory
enforcement authorities, including offsets from Federal tax
refunds. Support deducted from Federal tax refunds is one of
the main ways that the child support program collects overdue
child support. The Federal office has a direct role in
collecting some kinds of child support, including the Federal
Tax Offset Program.
As you mentioned, currently tribal child support programs
do not have statutory access to the Tax Offset Program, even
though tribes have operated effective, community-based child
support programs for more than 25 years and have developed
strong collaborative relationships with states and consortia.
OSCE also operates the Federal Parent Locator Service,
including the National Directory of New Hires. The NDNH
contains U.S. employee new hire, quarterly wage, and
unemployment insurance data for all workers in the country. The
FPLS conducts continuous data matching and returns the right
data to the right jurisdiction in order to collect child
support.
Although states and tribes have considerable flexibility on
how to administer their child support programs, they do not
operate separately. Instead, each state and tribal child
support agency is part of a nationwide inter-jurisdictional
program. The National Child Support Program connects Federal,
state, and tribal programs to make sure we are collecting the
right amount of money for the right people--from the right
people.
More than 1.5 million cases involve children and non-
custodial parents who live in different jurisdictions. This
means that many families have child support cases that cross
state and tribal lines. Through the FPLS and other services,
the Federal office provides a technological bridge across state
and tribal programs to enforce child support.
The core of the child support program operations is
information management. I have to emphasize that the child
support program, all of the child support programs at the
state, local, and tribal levels, operate in a secure data
environment, and have successfully managed many different
sources of and kinds of sensitive data. All personal
information is managed under clear Federal confidentiality and
security rules that restrict data access, use, reuse,
transmission, disclosure, and retention, and include family
violence safeguards. These rules require Federal rule and
approval of state and tribal computer systems, secure physical
workspaces, workstation controls like audit trails, and
administrative sanctions for personnel violations.
OCSE asks that Federal agencies and states use a
combination of state employees and contractors to operate their
computer systems and payment centers. These contractors are
supervised like other in-house staff and are subject to the
same strict confidentiality and security rules.
And with that I end my testimony. Thank you.
[The statement of Ms. Turetsky follows:]
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Chairman LaHOOD. I recognize Mr. Fleming.
STATEMENT OF JAMES FLEMING, DIRECTOR, CHILD SUPPORT SECTION,
NORTH DAKOTA DEPARTMENT OF HEALTH AND HUMAN SERVICES
Mr. FLEMING. Subcommittee Chairmen LaHood and Schweikert,
Ranking Members Davis and Pascrell, and distinguished members
of the Work and Welfare and Oversight Subcommittees, thank you
for the opportunity to testify on this important issue to the
economic health of American families.
My name is James Fleming. I have been the director of child
support for North Dakota for the last 13 years after serving as
deputy director and chief attorney for eight additional years.
I have served as the policy committee co-chair and president of
both the National Child Support Engagement Association and the
National Child Support--or National Council of Child Support
Directors. I am speaking to you today on behalf of North Dakota
to address the need to expand access to FTI to tribal child
support programs and the need to clarify current law regarding
contractor access to FTI.
A key to reliable payments is a sustainable obligation
based on the parent's actual income. This can be a challenge if
the parent is not cooperative, which makes FTI very important
as an independent source of income information. When an
obligation is too high, the parent owing child support
struggles to be self-sufficient; the family owed support cannot
rely on regular payments; and the child support program
consumes resources trying to collect the uncollectible.
Delivery of child support services is highly dependent on
sensitive personal information, including banking and Federal
tax information. Safeguarding private information is in child
support's DNA. States deliver child support services through an
array of public and private partnerships. Examples include
state printing and mailing centers, local prosecutors, clerks
of court, IT maintenance and operations, state disbursement
units, call centers, and cloud service providers. These
longstanding agreements are now at risk.
The Internal Revenue Code lists three pieces of FTI that
can be shared with child support contractors: the name and
Social Security number of the taxpayer, and the amount of any
Federal offset. This list does not include taxpayer address,
taxpayer income, whether the refund comes from a joint return,
or the name of the joint filer.
Starting around 2009 the IRS conducted information security
audits of states. There was no suggestion that FTI had been
improperly disclosed to the public, but the IRS felt too much
information was being shared with contractors. These early
audit findings admitted there was a conflict in Federal law and
agreed that any agency corrective action would be held in
abeyance pending resolution of the conflicting interpretations.
In February of this year the status quo changed when the
IRS notified states that the audit findings regarding
contractors would no longer be held in abeyance. The original
deadline was October 1 of this year, 2023. The states objected,
and the IRS pushed back that deadline to October 1 of 2024.
This timeframe is still far too short. Abandoning these
successful public and private partnerships will not be easy or
popular among state legislatures.
The stakes are huge. Federal tax offset yielded $2.25
billion in collections into 2022. There were 1.25 million
offsets, averaging more than $1,800 each for each offset. In my
state a tax offset collection was the only collection in the
year for 8.2 percent of the families receiving support. In one
large eastern state that number was nearly 25 percent.
Preliminary mitigation estimates from 33 states predict need
for 4,500 additional public child support employees and
additional annual costs of $740 million, including $488 million
per year as the Federal share.
How is this issue connected to tribal child support
programs? The Internal Revenue Code has not been updated to
give tribes access to FTI. In May 2007 the Federal Office of
Child Support agreed that states could submit past-due support
in tribal cases for offset if there was an agreement between
the state and the tribe that extended all of the IRS
safeguarding requirements to the tribe. These agreements have
also been identified by the IRS as sharing too much FTI, and
those findings have similarly been held in abeyance until now.
For nine years North Dakota has hosted a consortium of
tribes from many western states who are able to submit past-due
support for offset through my state using a simple spreadsheet
and a secure file transmittal process. Collections last year
were nearly half a million dollars for these member tribes, and
I expect them to increase as more tribes went live.
In December of 2022 the IRS directed North Dakota to
immediately stop consortium operations. North Dakota has not
heard from the IRS since we sent our justification in January
of 2023. With tax season coming up soon, unless the IRS changes
its position, tribal children will miss out on offset
collections for the second year in a row.
I thank the subcommittee members for your time and
attention and for your interest in strengthening child support
for state and tribal families.
[The statement of Mr. Fleming follows:]
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Chairman LaHOOD. Thank you, Mr. Fleming. We will now
recognize Mr. Tribble.
STATEMENT OF BRYAN TRIBBLE, ADMINISTRATOR, CHILD SUPPORT
SERVICES, ILLINOIS DEPARTMENT OF HEALTHCARE AND FAMILY SERVICES
Mr. TRIBBLE. Subcommittee Chairs LaHood and Schweikert,
Ranking Members Davis and Pascrell, members of the Work and
Welfare and Oversight Subcommittees, thank you for holding
today's hearing, and thank you for the opportunity to testify
on this very important issue.
My name is Bryan Tribble. I have been fortunate to work for
the State of Illinois Department of Health Care and Family
Services, Child Support Services, and serve the families of
Illinois from 2001 to present. In January of 2021 I was named
the administrator of our program, a role in which I continue to
serve today. Today I am speaking to you on behalf of the State
of Illinois to address the need to clarify current law
regarding contractor access to FTI, and to expand the access to
tribal child support programs.
My colleagues, Ms. Turetsky and Mr. Fleming, have done a
wonderful job of providing the background, history, and context
around this issue, in my opinion, which I greatly appreciate.
This allows me to jump right in and speak to the real-world
impact access to FTI and the ability to offset Federal tax
returns for those who owe past-due support for the benefit of
the family has on the families of my state.
I want to provide just a little bit of background and some
data around our program in Illinois. We serve nearly 360,000
families with over 500,000 children. In regard to children
served, it is the third largest government program, behind only
Medicaid and SNAP. One of the most cost-effective government
programs, as both Representative LaHood and Representative
Davis pointed out, with nearly $5 per $1 invested. We also--in
Illinois we collected more than $1.1 billion for families in
Federal fiscal year 2023.
The Federal offset program makes a real difference in
families' lives. Sometimes, as Mr. Fleming also pointed out, it
is the only support that some families may receive. In Illinois
$65 million annually is offset and provided to the families of
individuals who have a past-due child support debt. These
payments are paid on behalf of more than 44,000 families. For
approximately 18,000 Illinois families, this represents the
only collection they will receive during the course of the
year. This is critical.
Child support programs simply cannot operate without access
to FTI. As has been pointed out, states are mandated to submit
past-due child support debt for collection via Federal tax
return offset. Even if it were possible for child support
programs to operate without this asset--or this access, the
impact to the families we serve would be disastrous. As I
stated, this would remove more than $65 million from the
families of Illinois.
Most child support programs cannot operate without the
assistance from contractors in certain years, and it has been
that way for many, many years. There has been a longstanding
conflict of regulations between the IRS and child support
services that everyone has pointed out that will no longer be
held in abeyance. What would be ideal would be a legislative
fix to maintain the status quo that has been in place, not
throw a new door wide open, but merely retain the status quo.
As I have said, there have been--this has been in place for
quite some time, nearly 20 years, and there have been no known
breaches of taxpayer FTI.
I wanted to also make mention of the fact that when we talk
about an IRS finding or something like that, that does not mean
that there was any type of a breach. What that does mean is
that the auditors found that this was something that was--this
was an action that was being taken that does not align with
section 6103.
Forty programs, or child support programs, operate within
highly regulated work areas that are subject to many
safeguarding requirements in order to have access to FTI. Ms.
Turetsky went through some examples of this.
Illinois has a 10-page policy memo that distills the 216-
page IRS Publication 1075 rules, requirements, and guidelines
down to those to which all with FTI access must adhere. It also
cross-references eight other security-related policy memos.
All individuals with FTI access complete training related
to FTI before they are ever granted any type of a system
access, and they must re-certify this annually. All individuals
with FTI access are subject to rigorous background checks that
must include FBI fingerprinting, review of local law
enforcement where the individual has lived, worked, and/or
attended school over the course of the last five years to
ensure that there were not any issues that may have occurred
that did not rise to the level of the FBI that might preclude
the individual having this access. They undergo citizenship and
residency reviews, and all must be completed again every five
years.
Contractors are held to the absolute same standards with
oversight. Not only do we, as child support agencies, protect
FTI, privacy and confidentiality are at the heart of our
business, and it always has been. We have robust safeguards for
identities of individuals and all of their personal
identifiable information, not to mention that of their
children.
If legislation isn't passed to resolve the conflict, the
costs of mitigation cure are large in dollar amounts and would
be a very big lift for many states, limiting our access to
experts to assist government. The scope of mitigation is
difficult to determine, but at minimum, in Illinois alone, this
would be hundreds of millions of dollars.
We are more than halfway through a system modernization
project where we are adopting a federally certified system from
another state. And if this isn't fixed, we would be all the way
back at square one, meaning every penny that we have invested
in state and Federal funding would have been for naught.
And with that, I will go ahead and turn it over to Ms.
Smith.
[The statement of Mr. Tribble follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman LaHOOD. Thank you, Mr. Tribble.
We will now recognize Ms. Smith for your five minutes.
STATEMENT OF SUSAN SMITH, DIRECTOR, LAC COURTE OREILLES TRIBAL
CHILD SUPPORT SERVICES
Ms. Smith. First, I want to thank you. Thank you, Chairman
LaHood and Ranking Member Davis, Chairman Schweikert, and
Ranking Member Pascrell, as well as--okay, should I start over?
Okay. And also, I would like to take the opportunity to express
how grateful we are for the professional staff that serves the
committees.
As the director of Lac Courte Oreilles Child Support
Services, I have been with the agency for 13 years since the
agency opened its first case. I am a member of the Lac Courte
Oreilles Band of Lake Superior Chippewa Indians in northern
Wisconsin. I currently serve as a member of the National Tribal
Child Support Association board of directors, and I am a past
president of the National Tribal Child Support Directors
Association and am chair of the IRS Legislation Committee from
the board. I continue to serve on several committees and
projects related to tribal child support.
Of the 574 federally recognized tribes in the United
States, 60 currently operate their own child support agency.
Lac Courte Oreilles Child Support Services is one of nine
tribal child support programs within the State of Wisconsin. I
appreciate the opportunity to share information about the Lac
Courte Oreilles Child Support Program and tribal child support.
Lac Courte Oreilles has a wonderful relationship with our
state partners, specifically Wisconsin and the State of North
Dakota. The challenge to tribal child support agencies lies
with the current lack of direct access to the Federal Tax
Offset Program.
The Personal Responsibility and Work Opportunity
Reconciliation Act of 1996, PRWORA, authorized funding for
tribes to operate their own Title IV-D child support programs,
but the Internal Revenue Code was not updated to give tribal
child support programs the same access to FTI that is permitted
for state and local child support agencies at that time.
We have heard from--you have heard from my colleague, Mr.
Jim Fleming, about the North Dakota Tribal Offset Program. Our
first offset through this partnership was in February of 2016,
and our final offset was received in 2022. During this time
period, Lac Courte Oreilles was able to collect over $800,000
in past-due child support and disburse all of those funds to
Native American families on our caseload. Of 40 percent of
those on our caseload who receive a tax offset, it was the only
payment that they received that year.
We are now left at a point where Native American families
on our caseload receive absolutely nothing from the paying
parent's Federal tax offset. Due to proximity of the Lac Courte
Oreilles Band of Lake Superior Chippewa Indians' reservation to
the local State of Wisconsin's county-run child support agency,
our tribal child support agency and local county child support
agency have cases with the same parent ordered to make
payments, support payments. Discouragingly, many of the
families on our tribal caseload are aware that the family on
the child support case received an offset from the common
parent. This leads to anger, frustration, and furthers the
notion of disparity.
At the current time, without direct access to the Federal
tax offsets, our office is left with the difficult job of
trying to explain why our Native American families cannot
receive these funds, while families on the state child support
cases can.
More importantly, families on the Tribal Child Support
Agency caseload do not have parity with state or county child
support agencies.
In conclusion, we all want and work for the best interest
of children and families, and I thank you for your time.
[The statement of Ms. Smith follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman LaHOOD. Thank you, Ms. Smith. I now recognize Ms.
Corbine.
STATEMENT OF MARLEY CORBINE, PARENT AND TRIBAL MEMBER OF THE
LAC COURTE OREILLES, BAND OF LAKE SUPERIOR OJIBWE
Ms. CORBINE. Thank you, Chairman LaHood, Ranking Member
Davis, Chairman Schweikert, Ranking Member Pascrell, and
honorable members of the subcommittee. I am honored by the
invitation to share my testimony here today.
My name is Marley Corbine. I am a Lac Courte Oreilles
tribal member and mother of three. My oldest daughter is Nyla,
who is eight years old, and my youngest daughter, Stella, is
four years old. My son, David, is three months old and sitting
right behind me with my sister, Tiera Corbine. I work as a
deputy clerk of court for the Lac Courte Oreilles Tribal Court,
where I have worked for almost four years. Two of my three
children received child support through the LCO Child Support
Office.
I earned my Associate's from the Lac Courte Oreilles
University, and now working towards my undergrad degree at the
University of Minnesota Duluth. I am studying tribal
administration and governance, a program that is unique to UMD.
It is important for my children to see my example of working
and studying for my goals I set for myself. I plan on going to
law school within the next five years, because I want to help
people.
As important as it is to me to set a good example for my
children, I believe that I am not the only one who should
support them.
I am here to speak especially about my eldest daughter, who
has wonderful interests and talents. She is a powwow dancer and
takes classes at the local dance school in the town where near
I live. Her father has a child support order to assist in her
care, but due to his employment schedule he is an inconsistent
payer. Because of this, the only child support I received for
the care of our daughter was through intercept of his annual
tax refund. Each time it came at an important time, when fees
are due for dance, or her dance outfits need to be made.
I have heard people say that babies are really expensive,
but I disagree. Growing children with interests and activities
are even more expensive. My daughter's regalia for powwow takes
time and material. Even though I enjoy doing this, making her
regalia, it takes money to buy supplies.
The tax return intercept payments are important. Even
though I cannot count on her dad for monthly payments through
the tax--monthly payments, the tax intercept program--he has
routinely contributed to her care. In the past my daughter's
dad used to call me and tell me I would be getting a tax
payment. He would never be angry about it. He knew that I would
always use this for the care of our daughter. In many ways, I
believe he was glad that his taxes were intercepted because it
wasn't money from a paycheck and wasn't something he ever saw.
Sadly, I was recently told by the LCO Child Support that
the program to get the child support for us by tax intercept
has been suspended. In the past those payments were managed by
the State of North Dakota for our tribe. I don't know the
details as to why this program is being suspended, but I do
know that not receiving these payments is going to make it very
difficult for my daughter to participate in her dance class
next year. Each week I skip my lunch break, so I am able to
have enough time built up to take my daughter to dance in town.
This was something he was able to help with, as well, with his
taxes. I don't believe it is fair that the--that it should
stop.
I understand that Congress has to keep the safety of
everyone's tax information in mind. My hope is that you
understand how important these payments are to families like
mine, all across the reservation and America. Thank you for
listening to my story, and I hope you are able to act quickly
to find a solution and help our families continue to receive
this vital support.
[The statement of Ms. Corbine follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman LaHOOD. Thank you, Ms. Corbine, for being here
today and for bringing your son with you and sharing your
touching story. We are grateful, and we wish you much success.
We will now turn to the question-and-answer portion of our
hearing. I want to thank all of our witnesses for your
statements, and now we will turn to questions. And for this
joint hearing we will alternate by seniority, Republican and
Democrat, for each subcommittee. And I will begin by
recognizing myself.
In accordance with the recently released IRS guidance, my
home state of Illinois has until October 2024 to come into
compliance and halt using contractors to manage its Federal Tax
Refund Offset Program. And Mr. Tribble, you pointed out in your
testimony this is a vital part of the Child Support Enforcement
Program serving families and non-custodial parents who are
behind on their child support payment or might have the regular
employment necessary for normal collections.
Pursuant to your testimony--you touched on this a little
bit--if Illinois cannot come into compliance by October of
2024, our state could be cut off from the Tax Refund Offset
Program. And you mentioned that 44,000 families in Illinois
receive support from the Tax Refund Offset Program, and this
program is the only support for approximately 18,000 of these
families in which they receive these payments each year.
What would it mean to these families if this program were
to be suspended or halted?
And would these families potentially fall into poverty and
increase the number of children and families dependent on our
other government-provided services instead of their own
families?
Mr. TRIBBLE. Thank you for the question.
They absolutely would become more dependent on other
government programs. There is no two ways about it. The needs
of the children aren't going to change. They are still going to
have the exact same needs that they do. What is different is,
because of this change in October 2024, they will no longer be
able to get those needs met by their own parents.
Chairman LaHOOD. And is there a cost associated with that?
I mean, has the--have you or the state calculated a cost
related to that?
Mr. TRIBBLE. At this point we have not calculated that
cost. I would have to get back to you on that, as far as what
the actual cost would be.
Chairman LaHOOD. And is--what about contingency measures
that the state would have to put in place if, in fact, this
went into effect?
Mr. TRIBBLE. We know that this--we know that the overall
number is the $65 million that I shared. So, we know that a
portion of that, you know, especially for at least those 18,000
families, those would have to be put in place. At this point we
do not have a contingency that is in place.
Chairman LaHOOD. Thank you for that. I will next turn to
Ms. Corbine.
You mentioned your daughter's father is happy to pay child
support, and how paying through the Tax Refund Offset Program
is best for him. Can you comment on what you expect to receive,
whether you expect to expect to receive any child support from
him if the Tax Refund Offset Program is suspended?
Ms. CORBINE. I don't believe I would. The only time I
really get any payments from him is through the tax intercept.
Chairman LaHOOD. And so, you would be directly affected by
that?
Ms. CORBINE. Yes.
Chairman LaHOOD. And Mr. Fleming, even though the IRS
extended their initial deadline from October 2023 to October
2024, this still seems like a very aggressive timeline to come
into compliance by the different states. Could you share with
the committee some of the nationwide estimates of costs and
time it would take states to comply with these--with the new
guidance?
And are there specific state examples you could share?
Mr. FLEMING. Mr. Chairman, the state directors like myself
are currently trying to assemble as much information as they
can. These are very preliminary estimates. As Bryan alluded to,
it is really hard to come up with a mitigation plan. When you
compare different state findings and audits, you find that
there are different definitions of ``contractor,'' which really
builds a--it is not a sure foundation, and even understanding
what we are going to be mitigating for.
But as I indicated in my testimony, even the 33 states who
have responded so far are estimating 4,500 new public employees
and $748 million a year. Now, if that is 33 states, you can
multiply that to a 54 response, 54-state response, and get an
idea of the magnitude of the upheaval that this is going to
cause child support. This is going to rock child support's
world in terms of changing business practices. We are going to
go through procurements. My own legislature doesn't even meet
until January 25, so good luck to us trying to meet that
deadline of 2024. It is going to be very daunting to states.
There are some aspects of this that we don't even feel are
mitigatable. For the IT hosting, it is not like each state can
become their own cloud service provider, or that they can
provide, you know, specialized technology support for these
products that states are using now. The public sector just
can't draw those kinds of candidates, because their pay scale
is not going to match what the private side is.
So, it will be very, very difficult even with additional
years attached to it.
Chairman LaHOOD. Well, thank you for sharing those
challenges. We appreciate that.
That concludes my questions. I will turn to Mr. Davis for
his questions.
Mr. DAVIS. Thank you, Mr. Chairman, and let me thank all of
the witnesses for their testimonies.
Administrator Tribble, I know that Illinois is leading the
nation in terms of efforts to pass through child support to
families and to strengthen employment opportunities for non-
custodial parents to help them meet their child support
obligations. And I must add that I am extremely proud of that
fact, that Illinois is indeed leading the nation in those
efforts. Could you talk about that a little bit?
Mr. TRIBBLE. Absolutely. Thank you for the question.
By following the available research and actively engaging
with the families we serve, there has been a fundamental shift
in the way that we do business in our program in Illinois. Most
recently--all states are required every four years to do a
review of their child support guidelines. Most recently we
finished ours at the end of last year, and the first thing that
we did is we had 27 open forum town halls to talk to all of the
families that we serve to say, how could we better serve you,
how could the guidelines work better for you in our state?
By actively engaging with them, we are now working through
several different legislative initiatives, ones that have
already passed. As you mentioned, Representative Davis, was--
Illinois in July, on July 1 of 2024, Illinois will begin
passing through all child support to the families. No longer
will the state retain a nickel of the money that a parent is
paying for the care and support of their child.
Additionally, just this past legislative year, and what
will be effective on January 1, we had a program that is going
to be started that is going to allow us to serve as a conduit
through which families can have access to career training for
state jobs through our central management services, and then
also through our Department of Employment Security. So, we are
going to serve as that conduit through which--because we can
identify the families who are not making payments, individuals
who don't have jobs, and we can perform that outreach and then
make those connections to those.
So that is just a couple of the things that we have going
on right now, and what business looks like in Illinois. So,
thank you, sir.
Mr. DAVIS. Thank you so much.
Ms. Turetsky, when children are in foster care, of course
our primary goal is to stabilize their families so that they
can return home as quickly as possible. I understand that some
states actually are sending parents a bill for child support
when their children are in foster care. Are you aware of that?
And if so, would you comment?
Ms. TURETSKY. Yes, I am, Representative Davis. The
Children's Bureau recently issued guidance interpreting Federal
statute on who--which parents need to be--are required to be
referred to the child support program. And there is a good deal
of flexibility in the Federal statute.
And the Children's Bureau effectively, I think,
communicated to state child welfare agencies that they can--
they do not need to send all of their parents over to child
support, that in fact, many parents in the child welfare system
are in no position to pay additional child support, much less
incur child support debt. They are trying to keep body and soul
together, and trying to bring their kids home, and money that
gets pulled away from that focus and instead is used to
reimburse, you know, foster care benefits is not the best use
of their strained resources.
So, the Children's Bureau has put that policy out. It was--
there were prior policies that we issued on the child support
side in my day that also encouraged states to really take a
close look at families before they send a child support case
over to child welfare. Any case that gets sent to child
welfare; the money is not used for the child. The money is used
to--you know, for public reimbursement of the benefits.
Mr. DAVIS. Well, thank you very much. You answered the next
question I was going to ask, and I agree with you
wholeheartedly, and hope that states will find a way to change
that policy.
Thank you, Mr. Chairman. My time is expired, and I yield
back.
Chairman LaHOOD. Thank you, Mr. Davis. I recognize Chairman
Schweikert.
Chairman SCHWEIKERT. Thank you, Mr. Chairman. I will try to
do this fairly quickly.
Ms. Corbine, your little person is adorable, but I don't
actually have a question for you.
Ms. CORBINE. Oh, thank you. [Laughter.]
Chairman SCHWEIKERT. Ms. Smith, okay, I want to make sure I
am understanding some of the mechanisms. Being from a state
with a number of tribes, from very, very small to very big, so
my tribe wants to do--you know, they have a number of non-
custodial parents, we are trying to take care of the kids.
Right now, they would contract through the state, and then use
the state's designated contractors for these services? Is it
the two-step process? How does the tribe end up getting the
contractor, the services?
Ms. Smith?
Ms. SMITH. For a tribe who contracts through the state?
Chairman SCHWEIKERT. Yes, is that how the law is set up
right now?
Ms. SMITH. For Lac Courte Oreilles, we have direct funding
from the Federal.
Chairman SCHWEIKERT. Okay, so you have your direct funding.
And are you doing the actual collection services?
Ms. SMITH. Yes, we are. We have--we--some tribes will
contract with the state to do their financial and case
management on their distribution system. We do not. We have--we
use the model tribal system that was developed.
Chairman SCHWEIKERT. Okay, so you are able to act as your
own contractor.
Ms. SMITH. Right.
Chairman SCHWEIKERT. Okay. And of the 60-some tribes that
do that, are those 60 operating on their own, as their own
payment collection, you know, service? And are----
Ms. SMITH. They have--some have agreements. A number have
agreements with the state to use their systems.
Chairman SCHWEIKERT. Okay. My reason for the curiosity is I
am familiar with a couple of my tribes using actually through
the state, and that seemed to be more common. So, I am trying
to learn of those who can operate [sic].
In your particular community, you are able to gain access
to the IRS information?
Ms. SMITH. We--the Federal Offset Program?
Chairman SCHWEIKERT. Correct.
Ms. SMITH. We have an agreement with North Dakota.
Chairman SCHWEIKERT. So, you----
Ms. SMITH. Through the top, and I think----
Chairman SCHWEIKERT. So, you manage the process, but you--
but then, through the state, they provide you some of the
information.
Ms. SMITH. The process for the offset that we submit for
certification through the State of North Dakota.
Chairman SCHWEIKERT. Okay. Mr. Fleming, am I going the
right direction, or----
Mr. FLEMING. Well, Mr. Chairman, close. By the way, you
gave me an idea of where I need to go to round up new members
of the consortium if we get the permission to start again.
[Laughter.]
Mr. FLEMING. The tribes are not able to access FTI.
Chairman SCHWEIKERT. That is what----
Mr. FLEMING. With regard to states around the country, some
are able to partner with their state in order to leverage the
state system to get to offsets. In most states, their
technology does not support that process. They maintain a
running list of parents--or past due that needs to be updated
regularly, and they are just not set up to do that with tribes.
My state uniquely sends a brand-new file, complete file,
every week. And so, for us to add the LCO arrears onto our file
is easier for us to do.
Chairman SCHWEIKERT. See, that would make absolute sense
in, you know, particularly in a dynamic society, particularly a
state like yours, where employment opportunities bounce around.
Last thing----
Ms. TURETSKY. Chair?
Chairman SCHWEIKERT. Oh, sorry, please.
Ms. TURETSKY. Chairman, I am sorry for interrupting. If I
could just jump in from the Federal perspective, every one of
the 60 tribes that is an authorized child support program has
to meet a set of--a lengthy set of requirements, and run a
comprehensive child support program, and be a child support
program in all respects except the tax offset.
Chairman SCHWEIKERT. How often does that get audited?
Ms. TURETSKY. How often do tribes get audited? Well, they
get audited----
Chairman SCHWEIKERT. Their compliance. Is it----
Ms. TURETSKY. The IRS audits tribes.
Chairman SCHWEIKERT. Yes, but is that once a year? Is that
every five years? What do you think?
Ms. TURETSKY. Every three years or so.
Chairman SCHWEIKERT. I heard somewhere in the testimony
someone said three at one point. So that is--okay.
Ms. TURETSKY. Yes.
Chairman SCHWEIKERT. It is just a curiosity for me.
Ms. TURETSKY. Three years, yes.
Chairman SCHWEIKERT. Mr. Fleming, the last thing and I will
stop rambling. If I was to understand the amount of--population
of non-custodial parents who have obligations for children, if
I had 100, is this affecting 15 percent, 5 percent? What
percentage of support payments are going through this type of
system?
Mr. FLEMING. Well, Mr. Chairman, the number of cases--the
commissioner might know better the number of total cases that
get payments--tax offset collections are a significant source
of collections. They are about eight, a little over eight
percent of the annual total.
Chairman SCHWEIKERT. Say that number again.
Mr. FLEMING. Eight--a little--more than eight percent of
the total annual collections come from offset. The state
figures vary, but many of those do get their exclusive
collection from tax offset. Our experience running the tribal
consortium, interestingly, is that the percentage of tribal
parents for whom offset is the only annual collection is
actually greater than the state average.
Chairman SCHWEIKERT. Yes, that----
Mr. FLEMING. And I think that may be because of all the
tools you have given us on the state side. But----
Chairman SCHWEIKERT. That is what I have heard from a
couple of my tribes. So that is why the question.
Mr. FLEMING. Right.
Chairman SCHWEIKERT. All right. With that, Mr. Chairman, I
will yield back.
Chairman LaHOOD. Thank you.
Mr. Pascrell.
Mr. PASCRELL. Mr. Chairman, like many states, New Jersey
has seen a reduction in state and county employees and
contractors administering its child support program. Still, our
program has consistently performed better than average,
collecting a significant amount of money for families relative
to its caseload size.
Ms. Turetsky, Jersey to Jersey, in your view, why has New
Jersey's program continued to perform so well, despite a
decline in employees?
And what can other states learn from New Jersey about cost-
effective administration?
Ms. TURETSKY. Thank you for that question. And employees
and contractors have declined steadily for 20 years across
states. So, it is something that all states have had to cope
with. I think there are two--a couple of things about New
Jersey that I would hold up.
One is that New Jersey has a modern child support system,
modular with data analytics. Some states have not been able to
afford to replace their old systems. So, they have re-
platformed them, or patched them, or, you know, added
components, but they have not been able to do a whole gut
replacement. And New Jersey was able to do that and adopt the
most modern technology for case analysis, so that is a big, big
advantage that New Jersey has.
In addition, New Jersey, you know New Jersey collects more
per case than many states. And one of the reasons for that is
that it has a lower TANF caseload. But you can also say the
other way around, that the amount of money that New Jersey is
able to collect for families helps prevent families from
entering--you know, having the need for public assistance in
the first place. So, New Jersey has created an environment
where its services are accessible, and where a variety of
families participate.
Mr. PASCRELL. Thank you. And it is vital that we provide
our nation's child support programs with adequate resources.
Ms. Turetsky, how much money do we deliver to children for
every dollar we invest in support programs?
And how do kids benefit when they receive child support?
Ms. TURETSKY. Yes, I am not--I can't remember the cost of--
I mean, I have been out of the child support business for seven
years now. What is the current cost effectiveness ratio?
Mr. FLEMING. Just under five now.
Ms. TURETSKY. Yes. So, there you go, $5 in child support
payments to $1 of Federal and state expenditures. And of
course, the Federal share--thank you--the Federal share is 66
percent of the dollar. So, 66 percent comes from the Federal
Government, 34 from the state.
Mr. PASCRELL. As our panel discussed, most child support
programs are administered by a mix of government employees and
contractors. Mr. Tribble, and Mr. Fleming, Ms. Smith, how many
contractors are employed by the each of your respective child
support programs, and how are these contractors supervised to
ensure the protection of sensitive data?
Mr. FLEMING. Representative Pascrell, in North Dakota our
contractors in the--as defined by the IRS are limited to state
agencies. When we need to write a refund check to a joint filer
and the joint filer spouse because we have had other
collections since we submitted for offset, that goes through
our office of management and budget and then is issued by the
statewide elected county--or state treasurer.
We also receive IT services from our state IT department,
and we are audited by the elected auditor's office.
For purposes of those agreements and just out of sound
business practices, we have all of those agencies agree to the
IRS contractor requirements. I don't look at them as
contractors, because a contract means that you have got an
element of choice on the two parties, and somebody is paying
each other money. We don't pay OMB and the treasurer for this
service. This is something that the law requires them to do
anyway.
So, in my state, Representative, they are all government,
and they all have the same language in the agreement that the
IRS would require of a private vendor.
Mr. PASCRELL. Mr. Tribble.
Mr. TRIBBLE. Let's see. In my state I want to focus on--at
the end of my testimony or my opening remarks, I talked about
the fact that we were going into a new, modernized system.
Right now, we have an old COBOL-based system. We are one of the
states Ms. Turetsky talked about that has not been able to
transition to a modern, modular system such as New Jersey.
So right now, hours would be minimal. But what we are doing
with our new system, it is going to be a proprietary system, it
is going to be SAP-based. And as I said, it is already
federally certified. It is another state system. In that to be
we will have 70 contractors who would have access potentially
to FTI, and they would be audited every three years. As per the
IRS audits, they would be audited--OCSS audits annually with
either a review or a full audit, and so that is what it would
look like in Illinois.
Mr. PASCRELL. Thank you.
Ms. SMITH. And for Lac Courte Oreilles, all are tribal
government employees, our tribal IT, legal counsel, and
accounting.
Mr. PASCRELL. Thank you.
Thank you, Mr. Chairman.
Chairman LaHOOD. Thank you, Mr. Pascrell. Consistent with
committee practice, we will now move to two-to-one questioning,
starting with Dr. Wenstrup.
Mr. WENSTRUP. Thank you, Mr. Chairman, and I want to thank
our witnesses for your time this afternoon and for being here.
The Child Support Enforcement Program is a vital support
system that serves 12.7 million families in the United States.
The CSE program successfully reimburses states and the Federal
Government for the cash assistance payments they have provided
families, and helps vulnerable families obtain consistent child
support payments from their non-custodial parent.
I have often said that we should be focused on moving
Americans from welfare to work by providing them the tools that
they need to be able to rise out of poverty. It can't just
happen with the snap of a finger. The CSE program does this by
helping families stay off of cash assistance by ensuring that
they have consistent and ongoing child support, and these
payments are coming from their non-custodial parent. We have
heard from the witness here today--thank you very much--we have
heard just how vital these resources are for custodial parents
and their families.
I am concerned that a conflict between two Federal laws
will threaten states' abilities to run their CSE program, and
tribes' ability to administer their own CSE programs.
So, Ms. Corbine, it is clear that the child support program
is vital for your family's budget and resources, but could you
also share how important it is to help maintain a connection
with and build your children's relationship with their
biological fathers?
Ms. CORBINE. I believe her having a relationship with her
father is always important. And he is in her life, but you
know.
Mr. WENSTRUP. And do you find that this program helps
facilitate that?
Ms. CORBINE. Yes, it does.
Mr. WENSTRUP. Thank you.
Ms. Smith, the LCO tribe and 59 other tribes across the
country have provided child support services to thousands of
families. Could you share with the committee why privacy and
security are so important in the program, and some of the
security protocols your office follows to ensure this privacy
is protected?
Ms. SMITH. Yes. Confidentiality is number number one in our
trainings. We do the--follow the 1075, all the security
measures. We have a required training every year that is put
out, I believe, by--is it IRS, the IRS training?
And like our IT, anyone from the legal counsel, all the
government employees that are involved with child support, they
go through that training.
And I am sorry, I forgot the rest of your question.
Mr. WENSTRUP. Well, the question was about privacy and
security, and why it is so important, and what protocols do you
have in place----
Ms. SMITH. Oh, yes, to protect our families' information.
And we do--we have--where there is--our files are double--
behind--they are required to be under double lock, and access
into our--even our offices, there is no access, no public
access into our offices.
Mr. WENSTRUP. Thank you.
Ms. Turetsky, the child support program, it is one of the
most cost-effective Federal programs to establishing parentage
and obtaining child support for custodial parents. In your
experience, what makes the Child Support Enforcement Program
such a vital program for millions of families?
Ms. TURETSKY. At the heart, the child support program is
about families. And child support is a little different from
some of the other social programs in that the child support
program works with both parents for the benefit of the child.
We see both parents.
And, you know, over time we have come to understand that
the role--that the parents and the children have relationships,
and that we can help support those relationships or we can
create barriers to those relationships, depending upon the type
of, you know, child support practices we use.
And so, family-centered child support focuses very clearly
on the relationship between both parents co-parenting and the
child and understands that action taken against one parent is
going to ripple through the family, and that child support
itself is not only money, but it is a very powerful indicator
of parental involvement and parental concern. And so, keeping
that money away, or putting the father in jail can all have
negative effects on families.
Mr. WENSTRUP. Thank you----
Ms. TURETSKY. And it----
Mr. WENSTRUP. I appreciate it.
Chairman LaHOOD. Thank you, Dr. Wenstrup. I now recognize
Mr. Steube of Florida.
Mr. STEUBE. Thank you, Mr. Chairman, and thank Chairman
LaHood and Chairman Schweikert for holding this joint hearing
together today.
It was also a privilege to be waived onto the Work and
Welfare Subcommittee recently to discuss the Care for Children
Act, led by myself and Mr. Dunn. As the Work and Welfare
Subcommittee works to advance important legislative reforms to
protect and enhance child welfare in our nation, I hope that we
can work together to advance legislation that fixes the issue
with the IRS before us today, along with bills like my Care for
Children Act.
The reversal of policy by the IRS earlier this year puts at
serious risk the ability for states to have the necessary tools
for proper child support enforcement. The limitation for states
to use contractors to obtain child support collections from the
Federal Tax Refund Offset Program would be devastating to our
nation's children. These serious concerns helped push the IRS
to delay the change until October of next year. And during this
window of time, we must develop a solution here in Congress.
A conflict between two Federal laws is threatening the
ability for states to run their child enforcement programs,
where a non-compliance decision by the IRS could mean hundreds
of millions of dollars in costs to state and the Federal
Government, and suspend child support payments to millions of
families.
This decision by the IRS is just one in a series that
illustrates why the IRS doesn't need more funding, it needs
reform. Perhaps if child support was occurring through Venmo
transactions, the IRS would be paying closer attention to the
welfare of children, or perhaps armed IRS agents who were hired
from the inflation increasing act last year would be used to
enforce child support payments.
The point is the IRS is not the agency we should put our
faith or trust or money in to do what is right. We need a
legislative fix, not choosing to be at the mercy of the IRS,
asking them to do the right thing.
Mr. Tribble, as I said earlier and spoken by others, this
abrupt change in longstanding policy by the IRS has not only
placed the millions of families at risk of losing much-needed
support, but also puts the state agencies responsible for
administering the Federal tax refund offset program at risk, as
well. Can you speak to the impact this would have on your state
program, as well as the children and families who rely on it if
this issue is not addressed by Congress?
Mr. TRIBBLE. Thank you for the question. I can.
It is--it would be--this would be polling $65 million out
of the homes of Illinois families. This would be 18,000
families who today are receiving support, and the only type of
support that they will receive during the course of the year
now will receive nothing. This is huge. This would be, you
know, a huge detriment to every family in our state who is a
part of the child support program.
Mr. STEUBE. So, Mr. Fleming, it has been mentioned
throughout the hearing the IRS's sudden shift mandating the
termination of contractor access to data necessary for the
administration of Title 40 child support programs put millions
of families and even more children at risk.
While we are worried about increasing unauthorized access
to Federal taxpayer information, I also recognize the need to
clean up the problem caused by the decades of IRS decisions. As
you know, there are several proposals being floated to
alleviate the situation and ensure child support programs can
operate as usual. Can you talk through your thoughts on what
Congress should do to fix the issue?
Mr. FLEMING. Thank you, Representative Steube.
The only way to solve this conflict in law is for you to
pass laws that clarify how it is going to go. You can either
make states bring all of this in house--and we talked about the
significant costs and additional employees that that is talking
about--or you can recognize that these agreements have been in
place long before the IRS identified this as an issue--it has
not been chronically plagued with breaches of information--and
recognize that captured within the child support field, used
exclusively for establishing or enforcing obligations, subject
to all of the safeguards that we have for other secure data
that we have, that that is the way to clarify the law.
And so, we are hoping that the situation can be clarified
with--even with the 2024 deadline, that is just entirely too
short to come up with mitigation plans. And so, just as the IRS
felt it had the authority to delay that for a year, it would
sure be helpful if you all could lean on the IRS to give
yourselves time to fix this properly through legislation and
push that date back another couple of years.
Mr. STEUBE. Mr. Tribble, do you have anything to add to
that?
Mr. TRIBBLE. No, I do not.
Mr. STEUBE. Ideas like as to what legislative fix Congress
should do to fix this problem?
Mr. TRIBBLE. I agree with everything that Jim just said.
That is exactly what needs to happen is, you know, this
conflict that has existed needs to be remedied. And the only
way that that is going to be fully remedied is through
legislative action.
Mr. STEUBE. Thank you to the witnesses for being here
today. I yield back.
Chairman LaHOOD. Thank you, Mr. Steube. I now recognize Ms.
Moore of Wisconsin.
Ms. MOORE of Wisconsin. Well, thank you, Mr. Chairman, and
I want to thank both the chairmen and the ranking members for
calling this what I think is an extremely important hearing.
And we could cover a lot of ground here, but I do want to try
to stick to the topic at hand. And if I stray a little bit,
forgive me.
I just want to go back to a point that Mr. Schweikert was
making questioning you, Ms. Smith. And I am really happy, even
though he is not here at the moment, to know that he is
interested in the tribal topic.
I just want the panel here to be clear about what it means
if we don't put this fix in. Is it the case you described a
situation where you weren't able to take advantage of the tax
offset provisions to get the tax interception for that one big
payment because you don't have parity with the state.
So, it is not--so this is a two-step bill because not only
do we need to fix this problem so that you can use contractors
or other people and give them FTI, but in particular the tribes
who are supposed to be sovereign, if this is not passed, they
would not be able to administer their own programs. Is that
correct?
Ms. SMITH. The tax offset for our tribe, it is a very
important tool, enforcement tool, that we are able to provide
those families with funds through that offset program. And it
affects just so many--like we say, 40 percent of those
families, of our families would not receive that offset.
Ms. MOORE of Wisconsin. Thank you so much for sharing that.
No, I just want to share with the committee, and again, I
want to look forward to working toward this fix, but I am also
leading bills that we have here and have had in Ways and Means
for years that create parity between the tribes and states so
that tribes can, in effect, not only get the Federal offset so
that, you know, you don't find they would be able to get it,
but also to safeguard them as well as other sort of vendors or
contractors that might be doing it.
Now, Ms. Turetsky, You seem to have done a lot of research
in Wisconsin. I just so happen to like Wisconsin. [Laughter.]
Ms. TURETSKY. I was born in Wisconsin, and I----
Ms. MOORE of Wisconsin. Okay, I knew. And I was really
interested in your finding that kids who receive child support
are better educated, with better educational outcomes.
Ms. TURETSKY. Yes.
Ms. MOORE of Wisconsin. Is that true? How can----
Ms. TURETSKY. It is true. It is not my research, but it is
research that I am citing from others, including the IRP, the
University of Wisconsin. There is a large body of research that
shows that children have--do better in school. They get better
outcomes when they get child support. And that is partly
connected to the income, having more income, but it is partly,
I believe, connected to the fact that it comes from their
parent. It is their parents' support, and the kids know it.
And so having your parents care for you sends a very
powerful message and makes the kids, you know, feel more
supported.
Ms. MOORE of Wisconsin. Let me ask you this. It is Nevada?
We have a couple of states here that talked about that 100
percent of this money goes toward the non-custodial parent.
There is no Federal law, is there, to say that you couldn't
shave some off for administrative fees or costs?
What is your experience, and why have your states elected
to pass through 100 percent of the childcare to the family?
Ms. TURETSKY. Are you asking me, or are you asking----
Ms. MOORE of Wisconsin. I am asking anybody, yes.
Ms. TURETSKY. If I can just set a stage, and then maybe----
Ms. MOORE of Wisconsin. Yes.
Ms. TURETSKY [continuing]. Turn it over to Bryan, there--in
2006 Congress passed a law giving states the option to pay some
or all of the money to families. And this is part of a--the
work started in 1996 to start moving some of the money to
families when the program used to be--back 50 years ago it used
to be primarily a cost recovery program.
And so, these two laws that Congress passed in 1996 and
2006 gave states the authority to not use the money for cost
recovery, but instead pay that money to families. Illinois is a
wonderful example, first in the country. California is
following suit. There are more than half of states that are
under that options law providing--directing, redirecting more
of that money to families.
Ms. MOORE of Wisconsin. Right. Well, the former chair of
this committee, Paul Ryan, and I are from Wisconsin----
Ms. TURETSKY. Yes.
Ms. MOORE of Wisconsin [continuing]. Sort of initiated
that----
Ms. TURETSKY. Yes.
Ms. MOORE of Wisconsin [continuing]. Conversation. We had
one amendment in the Budget Committee that was a bipartisan
bill every year, and that was to have 100 percent pass-through
for child support.
Ms. TURETSKY. I remember that Representative. I do remember
that.
Ms. MOORE of Wisconsin. I wish I could ask you more
questions, but the chairman is rolling his eyes at me already.
[Laughter.]
Ms. MOORE of Wisconsin. So, I will yield back and just
thank you all for coming.
And Brad Schneider and I are up here talking about how
good a baby felt up against your breast. But anyway.
Chairman LaHOOD. Thank you, Ms. Moore. I now recognize Mr.
Carey of Ohio.
Mr. CAREY. I want to thank both the chairman and the
ranking member of the Work and Welfare and Oversight
Subcommittee for bringing together our two subcommittees to
discuss how to strengthen child support enforcement program for
the states and the tribes.
As our witnesses and many of my colleagues have pointed
out, the Child Support Enforcement Program is a successful,
cost-effective Federal program. It provides vital support for
millions of families and children.
I know that it was probably touched on earlier--and I
apologize, I had another committee--but child support laws were
enacted basically in the 1950s by states, and it wasn't until
1975, if I am correct, that we actually had a Federal law, and
that was actually signed into law by Gerald Ford, who--his
father was an absentee parent, and did not meet those child
support payments, and was forced to--his mother was forced to
work very hard in order to support their family.
In Ohio about one in three children are affected by Ohio's
child support program, which is about one million children in
Ohio. In the 1970s I was one of those children, so I can see
how a lot of the issues that we are talking about today have
been fixed, and we have got a little glitch that we really need
to fix.
Research has shown that consistent child support and
payments create an environment where parents, caretakers can be
more involved with their children's lives, leading to better
outcomes for their future. Ms. Corbine, I read your testimony.
I didn't get to hear your testimony, but I read it. But having
that consistency, knowing that you are going to get X amount of
dollars at one given time or another, it gives you the ability
to plan. It is an awful experience for a parent to--not being
able to know whether they are going to be able to pay for the
tennis shoes or the piano lessons, or basic food.
And so again, I go back to this fix that we must get done,
and I will ask those questions here in a minute.
Currently, states do a great job of effectively running
their child support enforcement programs, and current actions
by the IRS threaten the states' ability to continue to
administrate this vital program. You know, I can blame the IRS,
but they are reading what they have in the law, and we have to
do our job in Congress and fix that.
Mr. Fleming, as the former president of the National
Council of Child Support Directors and the National Child
Support Enforcement Association, could you share with the
committee how many states utilize contracts to run and manage
their child support programs?
Just briefly. I am sure you did it before.
Mr. FLEMING. Thank you, Representative Carey. Ohio runs a
great program. I am not surprised that you are proud of it.
Mr. CAREY. Yes.
Mr. FLEMING. States vary a lot in terms of the extent to
which they contract. What you frequently see are customer
service call centers that are privatized. Each state needs to
have what we call a state disbursement unit, which is just the
in-house name for how you receive collections from parents, you
properly ledger it for the case, and then you disburse that
money to families. Those are frequently handled by private
vendors, as well.
And when I was thinking about explaining that state
agencies are not generally in a habit of buying and selling
goods. We are not the Amazons--and not to give them a plug--we
are not online merchants. But having call centers and having
disbursement units, that is very much a marketplace kind of
specialty. And so, you see a lot of states that are
privatized--or that have private contracts for those services.
The other thing that is huge is the IT area. You know,
whether you have got an old system like mine, where nobody
remembers how to program in that language so you have got to
find a contractor, or you have got a newer system where it is
built on software that is licensed from people who need to be
licensed to manage that software, you have got to get your IT
stuff outside. You can't host it. I mean, you can't do cloud
hosting at a state level.
So those are the main areas.
Mr. CAREY. Well, I just want to again thank the chair and
the ranking member for bringing this to this body, and I want
to thank all of you that came from many distances to talk about
this very important issue. It is very important, and I think
that we can work in a bipartisan way to make sure that we get
the fix done.
So, with that, Mr. Chairman, I yield back.
Chairman LaHOOD. Thank you, Mr. Carey. I now recognize Ms.
Tenney of New York.
Ms. TENNEY. Thank you, Mr. Chairman, and thank you, Ranking
Member, and thank you to the witnesses. This is a really
important issue, especially, obviously, we see so many single
parents out there. I was one of them who was dependent on child
support, as well, to raise my son.
I have got so many--I understand, I totally understand the
viewpoint of protecting privacy under the IRS. It is extremely
important, especially to everyone. And--but my question and my
understanding of this is when we are talking about Federal--or
contractors, I want to address maybe to Mr. Fleming first.
My question on the contractors is, does this include inter-
agency contracting, like contracts between, say, the state and
their attorney general's office and other enforcement agencies
that get involved?
Is that--did the IRS just cut them off, in terms--and when
they created this rule, without coming up with some kind of
harmony between the rules and the conflict?
Mr. FLEMING. Representative Tenney, in some ways the
literal answer to your question is it depends on which auditor
you got. The auditors----
Ms. TENNEY. Let's start with New York State, where I
represent.
Mr. FLEMING. The auditors are--I can't speak to New York's,
in particular, I am sorry.
Auditors are humans, like the rest, and they do their best
as they understand the rules to be. But you get two auditors,
they are not going to line up precisely on all aspects of what
is allowed or not.
You have states that, yes, for their intra-agency
agreements, have been told those are contracts and you can't do
it more than the three data elements. You have other states
that are state-supervised and county-administered. I think New
York is one of those states. And in those states many auditors
recognize, well, yes, they are local child support agency, it
is specifically listed in the Internal Revenue Code, so they
can see all the data elements. So----
Ms. TENNEY. Well, let me ask you this. So, New York is
county-run. And I used to do family court as a lawyer, and I
was involved in child support proceedings. Are they going to
cut off our local DAs, district attorneys, and others who are
involved in enforcing the child support--these child support
actions because of the privacy laws and the ability to get the
FOP, you know, to get the referral on that?
Mr. FLEMING. Representative Tenney, so far, when the states
have acknowledged this lack of consistency, there has been
confirmation that local child support agencies will not be
affected.
Ms. TENNEY. So, do you have a concern about the job that
the contractors are doing?
It seems that they had an awful lot of money that was
coming in, 27 billion in, you know, fiscal year 2022 that went
back in child support collections that we--have just gone up in
smoke now, because we are not able to get that money. So why
would the IRS make such a ruling, knowing that it is so harmful
to different parents, single parents, and people dependent on
child support without an alternative?
And I question--I know I am asking you to speculate, but
for what reason would you do such a thing?
I get Congress has to act, but why would you do something,
knowing that it would cause immediate harm--or, I should say,
soon to cause harm without a solution?
Mr. FLEMING. Representative Tenney, that--boy, that is--we
have asked ourselves--we, being the state directors--have asked
ourselves the same question. Why now? Why this?
And what we have gathered, a little bit of information, is
some new, smaller law changes that have required directors to
submit an annual certification that they are not revealing FTI
inappropriately. And the IRS doesn't want us to falsely certify
when the IRS feels that, yes, we are sharing too much with
contractors. So, I think that might be part of it, is that they
don't want us to falsely certify. And the certification was a
new requirement----
Ms. TENNEY. Why was there a presumption that you would
falsely certify? You make it sound like there is a presumption
of certification----
Mr. FLEMING. Well, I think they are looking at it as
saying, well, in the--the IRS feels that the states are sharing
too much, so they don't want to ask directors to falsely
certify that they are obeying the IRS when the IRS knows, and
we are--that they are holding in abeyance these findings that
we are sharing too much.
Ms. TURETSKY. Representative, if I can jump in from a
Federal perspective, we manage--the Federal office manages the
FPLS, the large set of databases, including employment
information about all U.S. employees. And like the IRS, we, the
former commissioner were very concerned about protecting the
confidentiality, the privacy, the integrity of the NDNH data.
And you know, and other actors wanted to use the data. There is
a tension. When you are managing confidential data, there is a
tension about how much you share and----
Ms. TENNEY. But let me get back to this. What is the--I was
trying to find the motivation for the IRS. Is the motivation to
really cause centralization and control with the agency to the
detriment of some of these contractors, who, as you say, could
be certified, and certified through a program from the IRS?
Because we have data that shows that the IRS is not
necessarily adequately certifying these contractors. And if
they did, maybe it is the IRS that needs to certify better so
that we can allow this money to come through and actually work
through the states. Because, as you implied earlier, Mr.
Fleming, it is very costly for the states to have to adopt this
program, and that the contractors have been doing an adequate
job.
That is my question. I know I have run out of time, but
maybe--would--Mr. Chairman, we could either have more time, or
you could answer it in the next round. Thank you.
Chairman LaHOOD. If you can, quickly answer that, Mr.
Fleming.
Mr. FLEMING. Representative Tenney, we are curious what led
to this, but the meetings we have had with the IRS suggest that
they are just trying to follow the laws that Congress has
passed.
What has changed now versus before is a little hard to
tell, but it is not--it doesn't appear to be motivated in any
way of driving the market to in-house people or to--away from
private. They are just feeling like they are applying the law
as it reads.
Chairman LaHOOD. Thank you.
Ms. TENNEY. Thank you, I yield.
Chairman LaHOOD. Thank you, Ms. Tenney. I now recognize Ms.
DelBene for five minutes.
Ms. DelBENE. Thank you, Mr. Chairman, and thanks to all of
our witnesses for being with us today. I greatly appreciate it.
I wanted to talk a little bit about child support programs
run by tribes. They don't have access to all the tools and--
that state-run programs have. And so maybe I will start with
you, Ms. Turetsky. I wondered if you could explain more about
why it is important to have tribal-run child support programs
that can access the same tools that state programs have.
Ms. TURETSKY. Well, certainly, we support full parity--
``we,'' meaning the Federal office; ``we,'' meaning me
individually--the Federal office and the states all support the
importance of full parity.
Some of the reasons for tribal child support program's
effectiveness is that it is working with a community of people
with a set of--with its own culture, its own expectations, its
own traditions. And working at a community level by--with
some--you know, with a caseworker who understands your
situation can go a long way to opening up trust on the part of
the parents.
And in addition, you know, tribal child support programs
are closer to the money. They know the circumstances of the
families that they are serving in a way that a large, you know,
systems-driven state really can't have that same personal touch
across all cases, and certainly not across tribal-state lines.
Just to add that the tribes also have some special
flexibilities under the law.
Ms. DelBENE. Thank you. Tribal child support programs are
very, very important in my state of Washington. I think we are
tied with Oklahoma for the most tribal child support programs
in the nation.
But also, less than a third of the tribes in Washington
have an established child support program. So, I was wondering,
Ms. Smith, if you could maybe talk about what the barriers are
for tribes in establishing these programs, and what Congress
could do to better help.
[Pause.]
Ms. SMITH. Part of it is--and I--actually, there is a rule
that is coming out that--well, that is going to help tribes,
more tribes, access the funding.
And part of the previous--kind of stopped some tribes was
the match part and coming up with that match for the--it is 80/
20. Coming up with that 20 percent was really, really hard, and
that did--that was a barrier for many tribes to move forward.
And it is--it was difficult for the tribes that did have
programs to accumulate that match for the 80/20 match.
Ms. DelBENE. So funding, primarily----
Ms. SMITH. Yes.
Ms. DelBENE [continuing]. You think is number one. Okay.
We were talking a little bit about taxpayer data a second
ago, and I wondered. Is there any difference between the way
that tribes handle and protect personal taxpayer information
than what state programs do?
Ms. SMITH. No.
Ms. DelBENE. Do you know?
Ms. SMITH. We follow all the same--we are obligated to
follow all those same guidelines. We do all the--put--we put in
all the same safeguards, all those requirements, the same as
states.
Ms. DelBENE. Thank you. And then I wondered also if you
could, Ms. Smith, if you could share your perspective--Ms.
Turetsky talked about this a little bit, but your perspective
on being able to provide culturally specific approaches to
these services.
Ms. SMITH. It is very important to have that. I get--I--the
face-to-face conversations so that you--the trust, what Ms.
Turetsky had mentioned. Trust is so important to build. And
having the community's understanding and support of child
support, and our agency, and being able to help families
actually see those outcomes within the community is so--well,
it is personally rewarding, but it also helps the individual.
The child especially.
I mean, you can support the child much better when you are
able to help the parents have a better relationship, be able to
do that co-parenting together, and be able to provide those
avenues for them, and support those avenues for them to co-
parent and provide physically, spiritually for the child,
financially.
And we do--because we are a tribal program, we are able to
reach out on the cultural side and be able to provide those
cultural aspects within the program that helps the family and
supports the family.
Ms. DelBENE. Thank you.
Thank you, Mr. Chairman, I yield back.
Mr. FEENSTRA [presiding]. I now recognize Mrs. Steel from
California for five minutes.
Mrs. STEEL. Thank you, Mr. Chairman, and thank you, Mr.
Chairman, for holding this hearing, and all the ranking--two
ranking members, too. And thank you for all the witnesses
coming today and staying long time with us.
I am hopeful that we can work in a bipartisan way to ensure
states and tribes have the tools necessary for effective child
support enforcement. With the recent IRS ruling on contractors,
Congress must work together to find a permanent solution.
Mr. Fleming, since 2009 the IRS has made audit findings in
48 states related to unauthorized disclosure of Federal tax
information beyond the three approved elements to contractors
providing support service to the CSE, Child Support
Enforcement, agencies. To your knowledge, have any of these
findings led to an information breach or leak of taxpayer
information?
Mr. FLEMING. Representative Steel, the answer is no, they
have not.
Mrs. STEEL. So that is just very simple, and they never
really find it. That is a very simple answer. So, thank you so
much.
I want to actually ask Ms. Corbine, but she has gone to
feed the baby. But she is a true hero, raising three children.
In her testimony she mentioned her other children also depend
on child support and payments. Having said that, she is not
here, so I am going to ask Ms. Smith about the question.
In Ms. Corbine's testimony she stated how the LCO Child
Support Office recently informed her that the Tax Refund Offset
Program her family depends on is now suspended. Why is this
vital program being suspended after many years working with the
State of North Dakota, and what is needed to ensure your tribe
doesn't have to suspend this program, and can run and manage
your own tax offset refund program?
Ms. SMITH. I think the most simple answer to that is the
legislative fix that is needed in order to clarify the--how the
contractor language is interpreted, and also that tribes have
parity.
Mrs. STEEL. So, what you are saying is that Congress must
work together to find a permanent solution and clear things up.
Ms. SMITH. Yes.
Mrs. STEEL. Okay, thank you.
Mr. Fleming.
Mr. FLEMING. Representative Steel, if I could also respond
to that, since North Dakota, my state, is the host of the
consortium, it is a different issue than the contractor issue.
The contractor issue, we have been warned, is going--you
are going to have to do something by October 1 of 2024.
The consortium hosted by North Dakota was stopped
immediately for two reasons. One was that the audit found that
we were--that even though we were de-identifying the
collections that we provided to tribes, that that was still a
release of FTI. That was a change in IRS interpretation from
two prior audits that we had. The second grounds are that the
IRS did not understand why North Dakota would be serving
children in Wisconsin.
And so, we hope to continue working with IRS leadership to
revisit those questions. There is no residency requirement for
child support. A person in California can apply for services
from North Dakota. North Dakota has to provide them, whether a
parent lives there or not.
So, when other tribes are saying, ``We have checked with
our state,'' their technology won't let them partner with us,
``would you help,'' that is--we are geared up to help other
child support programs when they ask us. So that is where it is
unique, and the status quo doesn't really work for that tribal
consortium. It is unplugged right now. And really, time is
fleeting if we are going to get it back in place in time for
the upcoming tax season.
Ms. MOORE of Wisconsin. Will the gentlelady yield? Will the
gentlelady yield?
Mr. FEENSTRA. Will you yield?
Mrs. STEEL. Yes.
Ms. MOORE of Wisconsin. Thank you so much. I just--a point,
he is making a point that I have been trying to make. I have
got a bill that we all need to work on that fixes the other
part of this problem, and to give tribes some parity so that
they can get the financial information. It is a matter of
tribal sovereignty.
And I would thank the lady for yielding, and I would yield
back.
Mrs. STEEL. Thanks, Mr. Chairman, I yield back, too.
Mr. FEENSTRA. Thank you, both of you. I now recognize Ms.
Van Duyne from Texas for five minutes.
Ms. VAN DUYNE. Thank you very much, Mr. Chairman, and thank
you to our witnesses for taking the time to be here today.
And the Child Support Enforcement programs play a vital
role for millions of families across the country, providing
resources to the most vulnerable members of our communities
when parents shirk their legal and most critical
responsibility. Over 1.6 million children benefit from these
programs in Texas alone. And in 2020 my home state led the
nation in total child support collections for Texas children,
more than 27 other states and territories combined.
And once again, we see that this IRS is pushing
counterproductive and harmful policies. The IRS's sudden policy
reversal to effectively terminate the use of contractors in
these programs would result in significant compliance costs to
states and put millions of families at risk.
It is crucial that we balance the efficient administration
of these vital programs with the protection of confidential
Federal taxpayer information, but the Child Support Enforcement
program is one of the most cost-effective Federal programs, and
we owe it to the American families to advance a permanent
solution that accomplishes both of these goals.
In the wake of the IRS's abrupt shift in policy, my home
state of Texas's attorney general filed suit to reverse this
policy shift, claiming that the IRS decision was arbitrary and
capricious in violation of the law. In his complaint, the
attorney general noted that the IRS did not take into account
the serious reliance engendered by the IRS's non-enforcement of
this policy since at least 2009.
And Mr. Fleming, I appreciate your testimony here today.
And while this case is still ongoing, I do think that states'
reliance on the IRS's non-enforcement of this policy for years
is worth noting. So, can you please speak to the states'
reliance on the IRS not enforcing this policy, historically?
Mr. FLEMING. Thank you, Representative Van Duyne. A state
your size, I can't imagine how many dollars are attached to the
mitigation plans.
The state agreements with these private sources pre-dates
the audit findings. The contracts came first. The audit
findings came later. And you are right, the states have relied
on this. When those audit findings were issued, it went to the
heart of how those services were delivered. And they can look
at it and say, you have got to be crazy if you think we are
going to be able to pull this off, bringing it within public
employees. It is just not going to happen.
So, with the findings being held in abeyance, with two
Federal agencies recognizing that the law was unclear, then the
states said, well, okay, until this--you said it is going to be
held in abeyance until the conflicting interpretations can be
resolved. That resolution has not happened. What has happened
this year is they said, yes, you need to stop by October of
2024.
Ms. VAN DUYNE. So, it is not getting any better. In fact,
it is potentially getting much worse.
Mr. FLEMING. Well, Representative, I don't know that it is
going to get worse, because states have always done business
the way that they have. Texas, for example, I suspect, has
always outsourced a good chunk of its IT work. So it is not
going to get--I mean, it is not like they are going to contract
with more IT people, they are just going to----
Ms. VAN DUYNE. No, no, no, no. But if they are prevented
from doing that, the results are going to be catastrophic.
Mr. FLEMING. They very well could be, yes.
Ms. VAN DUYNE. So, what are the far-reaching consequences
of the IRS's policy change that--what do you think it will have
on states and families going forward?
Mr. FLEMING. Well, based on the surveys so far for the
states, the 33 responses, if we extrapolated that, you are
talking about 6,000 new public employees across the country,
probably $1 billion a year of state mitigation costs, a billion
a year with Federal match being 66 percent of that.
If the states are required to change how they deliver
services, that is pretty much going to be all they do for the
next several years. They are going to have a lot of blowbacks
from legislators who are not happy about being asked to fund,
in your case, probably several hundred million dollars of
additional costs. And really, the program effectiveness is
going to be diminished. I mean, states are going to be
struggling to keep their core functions running. That is going
to have an impact on collections.
Ms. VAN DUYNE. Thank you.
There are a number of existing tools at the government's
disposal to incentivize parents to pay child support. While I
recognize that these are state programs, we have seen people
flee across, as you mentioned, state lines, creating interstate
problems. Our approach should include carrots and sticks to
ensure parents pay their support. Ms. Turetsky, are there other
ways that the Federal Government can impose penalties?
And are the existing tools being fully utilized?
Ms. TURETSKY. The most important Federal enforcement tool
is payroll withholding, with three-fourths of collections
coming that way.
There are--I would say Congress has done a good job giving
the child support program a range of other tools like passport
denial, like driver's license suspension, like bank account
matching and liens. And all of these tools in the right case
can make the difference between having a collection or not.
Ms. VAN DUYNE. And I appreciate that. I have run out of
time, but I thank you for your answer.
And I yield back.
Mr. FEENSTRA. Thank you. I now recognize Mr. Evans from
Pennsylvania for five minutes.
Mr. EVANS. Thank you, Mr. Chairman and Ranking Member. I am
glad to hear--to discuss ways we can improve the nation's child
support system. The issue is of vital importance, as nearly 24
million children live in single parent--or nearly 30 percent of
all single parents live in poverty. In fact, in Pennsylvania
33.1 families headed by a single parent live in poverty, which
is above the national average.
As we know, children of color are disproportionately likely
to be single parents. In Pennsylvania alone, 200,000 African
American children and 185,000 Hispanic children live with
single parents. That is why I am glad to see why--to see many
states, including Pennsylvania, starting to modernize their
child support programs in the family-centered approach. This
has been proven to strengthen family relationships, reduce
child support debt, and increase the consistency of child
support. It is vital that this committee continue to support
family-centered child support policy, ensuring that we put the
child's well-being at the center of our policy.
Ms. Turetsky, I want to make sure I get your name right.
Ms. TURETSKY. That is close enough.
Mr. EVANS. Okay. At a recent subcommittee hearing, a
grandparent caregiver spoke about the requirement for
grandparents to refer their children to child support, risk
safety of the grandchild, and bring childcare. What can
Congress do to help protect these children and grandparent
caregivers?
What other improvements to Federal child support do you see
that would be helpful?
Ms. TURETSKY. Well, grandparents who are raising their
grandchildren deserve a lot of support from the child support
program and other programs.
The Federal law called the Cooperation Law, TANF
Cooperation Law, has the flexibility to permit states to not
require grandparents to cooperate or participate in the child
support program, and the Federal law also requires states--does
require states to look at the safety of the family members if
there is family violence.
What Congress could do is take a look at that cooperation
provision in the TANF program, and exclude grandparents from
its reach, or otherwise look at how effective the cooperation
provision is, generally. What happens now is that families who
participate in TANF are required to participate, and families
who do not receive TANF can voluntarily sign up for services.
I think there is quite a bit Congress could do to take a
look at that pathway, see how effective it is, and see what
changes might be made. But the current law does allow states to
not send over grandparents for child support.
Mr. EVANS. Does anybody want--you--any comments to add?
Mr. TRIBBLE. Thank you, Representative Evans. Yes, I did
want to say, because we--in Illinois we actually leverage this.
We do not do that. We put that choice in the hands of the
family. The family can make the decision as to whether they
want to pursue child support in those cases because,
ultimately, the family is the one that is impacted positively
or negatively by that.
Further, we have also created a group of all of the social
service agencies that will serve the grandparents who are
caring for their grandchildren to where they can connect each
other, and then they can also connect those grandparents to the
host of services that that family might need to not merely
survive, but to thrive. Thank you.
Mr. FLEMING. And Representative, I would add that there is
a workgroup right now between the directors and APHSA and TANF
directors to further develop the understanding of the
parameters states have for not referring cases if good cause
exists because the grandparents simply don't want the services.
Mr. EVANS. Thank you, Mr. Chairman.
Mr. FEENSTRA. Thank you. I now recognize Mr. Smith from
Nebraska for five minutes.
Mr. SMITH of Nebraska. Way over here. [Laughter.]
Mr. SMITH of Nebraska. Thank you to all of our witnesses. I
certainly thank you to committee leadership, as well, for
having this hearing. It is timely, it is relevant.
Unfortunately, we have to look into this. But I think it is
important, as I mentioned, ensuring parents have the support
they need while also ensuring that state agencies continue to
protect and respect private taxpayer information.
You know, instances of unauthorized access to information,
these leaks have happened. I think it is important that we note
that. Now, not only is it concerning to me that it happened,
that these leaks have happened, but I believe it takes more
than 400 days, on average, for the IRS to conclude an
investigation related to these unauthorized points of access.
But the leaks themselves and the amount of time it takes to
complete this unauthorized access investigation, I think, is
simply unacceptable.
I would also like to add, though, and note that IRS
directive 1075 could affect more than just child support
collection in my home state of Nebraska. I have also heard from
our state's department of labor that the directive will have a
similar impact on their efforts to make collections in our
state's unemployment program related to overpayment of UI
benefits and delinquent UI tax payments from employers, as
well.
Like other states, removing the ability of the Nebraska
department of labor to utilize contractors would be cost
prohibitive. This is quite obvious. I hope our subcommittees
can look further into these concerns as we do continue to
address this very important issue.
Mr. Fleming, I am curious if you heard from other agencies,
as well, with concerns surrounding directive 1075.
Mr. FLEMING. Representative Smith, I have not heard from
other agencies. What you are saying is interesting to me
because, when you parse out 6103 and you look at different
agencies at the state level who can get FTI, my recollection is
that state tax department language is much more forgiving in
the contractor or agent area than the child support language.
So, what you described was news to me.
Mr. SMITH of Nebraska. Okay. Well, these are the state
officials who have reached out to me on their own, proactively
on their part. And so, I hope that we can continue to work on
this.
I know some of these issues have been touched on, but, you
know, certainly, Mr. Fleming, I commend your efforts in North
Dakota as a leader on this issue. I think it is especially
interesting that in 2007 the Office of Child Support Services
at HHS specifically endorsed and encouraged states like yours
to partner with tribal child support agencies to deliver these
payments. So, have you been told why the service your state
provides to the tribe are being suspended?
Mr. FLEMING. Representative Smith, that 2007 document was
the script that North Dakota followed.
And I do want to be clear. This is the tribes' consortium.
Whether a tribe joins or not is completely up to the tribes.
North Dakota comes to that as the service provider. They call
the shots. We make it happen as a good service provider, but
they come to us, we check with the state that they are in, and
the state confirms they are not in a position to help. And then
we will say, well then, we will be glad to help.
We design these processes to be replicable, so it is easy
for states to join or tribes to join. There is one three-page
agreement that governs the consortium. There is a two-and-a-
half-page memorandum of understanding with each tribe. That is
it. Then you have got one attachment, which is all the IRS
safeguarding stuff, which is probably as long as the rest of
the agreement combined. But it is important that that is part
of it.
But over time, in 2016 and 2019, the IRS came to North
Dakota. They did the site check. In 2016 I sat down with the
lead auditor, and I showed them all the consortium documents. I
showed them the extent to which we de-identified. When we get
collections and tax offset, we send it to LCO, we say, ``Here
is a check from the State of North Dakota.'' Then you got a
remittal that says this is this person and they get this
amount.
Now, if you intercepted that in the mail, you wouldn't know
it was FTI. It was de-identified. Up to this year, that--or
2022, in December--that had been previously blessed by two
auditors who agreed that that is not sharing FTI. So
technically, LCO would not have even had to have audits because
they were not recipients of FTI. The IRS had agreed to that. It
was December 22 when that changed. And that is why this is
unique from the contractor issue that is delayed. It was
immediate go-stop.
And the other challenge is, as we know, tribes are separate
sovereigns. To suggest that North Dakota can help tribal
children in North Dakota as opposed to those in Wyoming or
Montana or Oregon or Wisconsin, that doesn't make any sense.
But we are still going to work with the IRS on that. I am still
going to be optimistic that, with the new administrators there,
that we can work through the understanding of how
intergovernmental cases are created, we can resume the idea
that de-identification is possible, and make it happen.
But, Representative, this committee could really give us a
shot in the arm in that if it was to observe to the IRS that it
didn't appreciate the inconsistent audit findings.
Mr. SMITH of Nebraska. Well, thank you again. My time has
expired, but I hope we can continue to work on this in the
interest of many, many, many individuals. And so, thank you to
our entire panel, and everyone who is working on this.
I yield back.
Mr. FEENSTRA. Thank you. I now recognize myself for five
minutes. I am the last one, and I just do want to thank our
committee, our subcommittees for putting this all together.
And specifically, I want to thank each of you as witnesses.
Listening to you is very impressive. You have done a great job.
There is a balancing act. And when we look at protecting
the information of American taxpayers versus what needs to be
collected and what needs to be done, you think of section 6103,
the section of the internal code that protects the
confidentiality of Federal tax returns, and it does make
exceptions. But we need to be careful with those exceptions.
We saw on the GAO report on September 11 that the IRS
needs to address some of these security issues. In this case,
however, contractors in question have had access of taxpayer
information for over decades, and they have exposed a lot of
unnecessary information, which is a concern.
So, Mr. Tribble and Mr. Fleming, based on how this program
has been administered so far, do you believe this exception
should continue?
And if not, how do these programs continue to be
administered?
Mr. FLEMING. Representative Feenstra, I do think they
should continue the way that they are.
I am sitting here thinking, as well, about the medical area
and how the transfer of very sensitive medical information
still needs to happen with various providers, but it is always
in encircled in this careful, many-layered confidentiality. And
that is how child support operates, is we are continually
tested. There is nothing like a grandma in a child support case
who calls up the call center, wants to know why we are picking
on her son, or we are not delivering money for her daughter.
Mr. FEENSTRA. Sure.
Mr. FLEMING. And without a release, we can't talk to them.
And so, we are regularly tested, the boundaries of what we can
share and not share.
And just like the banking information we get, just like the
new hire data we get, the moment we get it we do our very, very
best to protect it from any hacking, to protect it from
inadvertent release. We track the footprints of people who see
that information and make sure it is always a work-related
reason. So, we are really doing, I think, a really good job of
protecting that data, but we make good use of it.
And so that is why my encouragement would be for this--for
the arrangement to continue to be the way it is, and not to
force states to revisit all these successful partnerships.
Mr. FEENSTRA. Very good.
Mr. Tribble.
Mr. TRIBBLE. I would agree wholeheartedly with Mr. Fleming.
I think that the--everything should continue as it has been.
The entirety of our systems have been built on this. We
talked earlier, I spoke briefly on the modernization project
that we have in Illinois that is ongoing and the fact that we
are adopting another state's federally certified system. That
federally certified system is reliant upon contractors, and
cloud services, and everything that we are talking about so
that we can see, you know, the benefit of a modern child
support program, as opposed to our COBOL-based program. So that
is----
Mr. FEENSTRA. That is----
Mr. TRIBBLE. Yes.
Mr. FEENSTRA [continuing].--Scary stuff.
Mr. TRIBBLE. Yes, absolutely. So yes. And just simply, you
know, making--you know, legislating what has been the practice
for the past, you know, couple of decades would get us there.
Mr. FEENSTRA. Right. So, do you think other states could
follow your models? And probably more importantly, let's look
at training. I mean, you know, now we know what is behind us.
We can look forward. Between you two, I mean, how do we look to
the rest of the country and say how do we train and how do we
make sure this happens in every state?
Mr. FLEMING. Representative Feenstra, I would say that that
training is already occurring.
Mr. FEENSTRA. Okay.
Mr. FLEMING. One of the very first things that happens when
a new employee joins a program is to have the required
safeguarding training from the IRS. We can--we have watch
parties in my office every year in January. We do that same
video. But for new hires it happens immediately because they
are not allowed to see production data until they have the
adequate security. The IRS provides the video, OCSE--or OCSS
also provides a video. All of that training is happening, and
all of that same training is required of any contractor who is
going to see FTI.
Mr. FEENSTRA. Wow. And Mr. Tribble?
Mr. TRIBBLE. We don't have watch parties in Illinois.
[Laughter.]
Mr. TRIBBLE. But we do have very robust training that
occurs very similar to Mr. Fleming's in that, you know, that we
are going through to the point where our training that we have,
it actually times people. How long are you on each page? Is it
possible for you to have not read that completely? I mean, that
is the extent that we are going to, because this is serious.
This is----
Mr. FEENSTRA. It is.
Mr. TRIBBLE. As we have all said, this is at the heart of
what we do as child support.
Mr. FEENSTRA. Right.
Mr. TRIBBLE. It is all about confidentiality and protection
of personal identifiable information, and, you know, also
Federal tax information.
Mr. FEENSTRA. Well, thank you to everyone. And now I would
like to close. I think we are done with all our questions. So,
I would like to thank our witnesses, each one of you, for
appearing before us today and sharing your experience and on-
the-ground perspectives.
As we have seen, there is a pressing issue that deserves
our immediate attention. I hope that we can work together to
find permanent solutions to this disconnect between the Social
Security Act and the Internal Revenue Code, and ensure our
states and tribes have the tools necessary to administer and
deliver this vital support system for millions of Americans,
families, and children.
Please be advised that members have two weeks to submit
written questions to be answered later in writing. Those
questions and your answers will be part of the formal hearing
record.
With that, again, thank you, and the committee now stands
adjourned.
[Whereupon, at 4:29 p.m., the subcommittees were
adjourned.]
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