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NOTE: Hyperlinks provided in this policy fax briefing were correct as of the time of publication.
April 2000 - Vol. 2, No 3
Capitol Hill Update On Child Support Legislation
The House Committee on Ways and Means Subcommittee on Human Resources held hearings on the Compassion for Children and Child Support Enforcement Act of 1999, sponsored by Rep. Henry Hyde (R-IL), which would turn over enforcement of child support orders to the Internal Revenue Service. Senator Bayh, meanwhile, is adding a Sense of the Senate on Fatherhood as an amendment to the 2000-2001 Budget. The resolution calls for the promotion of responsible fatherhood through the implementation of fatherhood programs and media campaigns, and encourages the Senate to hold hearings on pending legislation before June 18, 2000 (Father's Day).
In addition, three bills related to child support have been introduced in the House:
- On March 2, Representative Benjamin Cardin (D-MD) introduced the Child Support for Children Act (H.R. 3824), which would mandate a child support pass-through, but allow states to choose not to disregard the amount of collected child support when determining eligibility for, or the amount of, the TANF grant. The bill is similar to the pass-through bill introduced in the Senate last May by Senator Herb Kohl (D-WI) that is currently in the Senate Finance Committee. The primary differences in the bills are that the Cardin bill mandates a pass-through, and would prohibit the use of child support enforcement offices to collect any amount of costs owed to the state for pre-natal, birthing or post-natal services. The introduction of this bill could increase the likelihood that some form of a pass-through will be addressed and possibly enacted this session. The Cardin bill has been referred to the House Committee on Ways and Means.
- The Subsidy Termination for Overdue Payments Act of 2000 (H.R. 3929) was introduced by Rep. Michael Bilirakis (R-FL) on March 5, 2000. The bill would prohibit federal financial assistance for child support obligors who are more than 60 days delinquent in the payment of child support unless they are in compliance with an agreement regarding the payment of child support. Although the bill does not define financial assistance, Rep. Bilirakis' staff report that the bill is not intended to affect assistance that is based on financial need or disability, but is directed at such assistance as small business loans, federal student grants and loans, and more discretionary forms of assistance. The bill has been referred to the House Committee on Government Reform.
- On March 23, 2000, Rep. Michael Castle (R-DE) introduced the Child Support Fairness and Tax Refund Interception Act of 2000. The bill would expand the tax refund intercept to collect past-due child support on behalf of all children, regardless of age or disability. Currently, the tax refund intercept, in which a person's tax refund is withheld in order to pay a child support debt, is restricted to child support that is owed for children under the age of 18, unless the child has been determined to have a disability. The bill has been referred to the House Committee on Ways and Means.
Recent Research Related To Low-Income Fathers
The current issue of Poverty Research News, the newsletter of the Joint Center on Poverty Research, is devoted to fatherhood issues. The authors review a range of policy and program initiatives, and chronicle the lives of low-income fathers. Articles include Can Child Support Policies Promote Better Father Involvement? The Role of Coercive vs. Supportive Policies, by H. Elizabeth Peters; Talking with Low-Income Fathers, by Kathryn Edin, Laura Lein, Timothy Nelson and Susan Clampet-Lundquist, and Fathers on the Margins of Work and Family: The Paternal Involvement Project, by Kevin Roy. The issue has not yet been posted on the website (www.jcpr.org), but can be ordered by telephone at 847/467-6670.
States Move To Utilize TANF Surplus Funds
Reconciliation Act of 1996 (PRWORA) gave states broad discretion to use TANF funds for a variety of activities, and guaranteed states a level of funding equal to at least the amount they received in 1994, with a requirement that states must spend at least 75-80% of the historic state expenditure level on a given array of benefits and services for low-income families (known as the TANF Maintenance of Effort requirement). Since PRWORA has led to a dramatic decline in the TANF caseload, however, most states have accumulated significant unspent TANF funds. Options for using these funds include:
- saving the funds to cover possible future caseload increases that could result from a downturn in the economy
- investing the funds in enhanced programs and support services for low-income families
- providing a benefit to taxpayers by replacing existing state funding for low-income families with TANF funds, thereby freeing up those funds for tax relief.
As states look to ways to spend this money, it is possible that they will increasingly find uses similar to those described below. Some examples of current uses of the funds include:
- Diversion of TANF funds. According to a recent report from the National Campaign for Jobs and Income Support, six states have replaced funding for existing services with TANF funds, then used the savings to fund tax cuts and other programs that do not benefit low-income families. Among these strategies:
As of September 1999, New York had accumulated $1.1 billion in unspent TANF funds. By "refinancing" state and local spending on cash assistance and emergency assistance, and transferring TANF funds to the Social Services Block grant, New York used $233 million in TANF funds to finance fiscal relief (tax cuts) in 1998-1999, and $403 million in1999-2000. The 2000-2001 Executive Budget projects this fiscal relief to be $591 million.
In spite of a state general revenue surplus of $6.4 billion, Texas used $173 million in TANF funds to free up $162 million in state general revenues.
In Wisconsin, roughly $80 million is being diverted from TANF services through the use of TANF funds to replace the state's own spending on its existing Earned Income Tax Credit program, and through a transfer of $32 million in TANF funds to the Social Services Block Grant over two years, with no expansion of these services. The result is a savings in general state revenues of approximately $112 million.
Minnesota transferred more than $90 million in TANF funds to cover existing state costs for childcare programs and other social service programs, freeing up $90 million for the state to use in non-restricted ways. In the current legislative session, however, Governor Ventura is proposing a TANF investment plan that would end this practice.
- Promotion of marriage. In Oklahoma, Governor Bill Keating announced that he would use $10 million in TANF funds to promote marriage as a means to reduce divorce, out-of-wedlock births and welfare dependency. An Arizona bill has been introduced that would spend $17 million in TANF funds to teach communication and conflict resolution skills and develop a public education campaign promoting the virtues of marriage. And in Wisconsin, the state legislature recently allocated $45,000 in TANF funds to hire a person to "develop community-wide standards for marriages solemnized in the state."
Teen Birth Rate Continues To Decline
The Center for Disease Control recently reported that the national rate of births to teenagers has dropped to its lowest level in ten years, at 51 births per 1000 women aged 15-19. The rate of African-American births declined by 26% from 1991-1998, the sharpest decline for any racial group.
Supreme Court Denies Appeal Of Ban On Welfare Benefits To Immigrants
On March 27, 2000, the United States Supreme Court rejected a challenge (Chicago v. Shalala) to a PRWORA provision that eliminated cash assistance, food stamps and other benefits, including disability benefits, to legal immigrants. The Court agreed with the federal appeals court in Chicago (see February 1999 Policy Fax Briefing) that the federal government does have the power to draw distinctions between immigrants and citizens in the allotment of benefits. The City of Chicago argued unsuccessfully that in enacting the ban, Congress violated an immigrant's constitutional right to equal protection. Chicago officials also argued that this decision sets a precedent for Congress to enact progressively more onerous laws discriminating against noncitizens.
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