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October 1999 - Vol. 1, No 7

• New Fathers Count Bill to be Introduced
• Earned Income Credit Subject of New Study, But House Proposes Conversion of Program
• Domestic Violence Underreported by Welfare Participants
• Report Compares Welfare-to-Work Approaches
• States May Allow Post-Secondary Education Under TANF
• State Developments

New Fathers Count Bill to be Introduced

Representatives Johnson (R-CT) and Cardin (D-MD) have drafted a new fatherhood bill, the Fathers Count Act of 1999, and plan to introduce it soon. The bill would combine many separate bills related to fatherhood and child support currently being considered by Congress. Primary among its provisions would be grants to fatherhood programs totaling $36,250,000 for each fiscal year from 2002 through 2005. The bill establishes several criteria for the grant allocations, including the requirement that at least 75% of the grant amounts be awarded to: 1) non-governmental organizations (including faith-based organizations); 2) projects that are coordinated with the state child support enforcement agency; and 3) projects "suspending payment of child support arrearages for fathers making timely child support payments or maintaining a marital relationship with the mother of the child". At least 50% of the funding must go to projects that enroll at least 50% of their participants in the project at the time of the birth of their first child. The State is required to pass collected arrearages through to the children of fathers participating in the funded projects. It is not clear how this would affect policy toward fathers not in the programs funded by the legislation.

The bill also:

• Provides $5 million to a national fatherhood promotion organization with experience in public education campaigns to form a clearinghouse with an emphasis on the promotion of married fatherhood as the ideal. The Responsible Fatherhood Bill introduced earlier this year would have allocated $2 million to this clearinghouse.
• Provides $5 million to each of two "nationally recognized nonprofit fatherhood promotion organizations" with experience in conducting programs meeting the purposes of the clearinghouse, and in conducting multi-city fatherhood projects, to conduct projects in three major metropolitan areas.
• Provides $6 million for an evaluation of the fatherhood projects.
• Simplifies and broadens the eligibility for participation of noncustodial fathers in Welfare-to-Work programs and for children aging out of foster care, and allows training and basic education as allowable activities under Welfare-to-Work.
• Eases penalties relating to the State's compliance with establishing its State Child Support Disbursement Unit.

Earned Income Credit Subject of New Study, But House Proposes Conversion of Program

The Earned Income Tax Credit (EITC) has become the largest cash income support program for low-income families in the United States. The EITC is the subject of a new study from the Center for Policy Research, The Economic Impact of the Earned Income Tax Credit (EITC): Consumption, Savings and Debt. At the same time, some House members are proposing a plan to make up a shortfall in the current FY 2000 appropriations bill for Labor, Education and Health and Human Services by converting the EITC program from a lump-sum refund to a monthly payment in order to reserve funds this fiscal year. The proposed changes would undermine the benefits of the lump-sum payments found to be an important source of social mobility to low-income families. The report finds that, although employees can currently choose to receive up to 60% of their EITC in monthly or weekly installments, over 95% choose to receive the lump sum payment. The lump sum payments were found to be used to assist with: moving and housing, automobiles and transportation (the report cites a separate study that found car ownership to be as effective as a high school diploma in terms of higher future earnings), payment of student tuition and loans, and establishing savings.

According to the Children's Defense Fund, the House plan to convert the EITC to monthly payments would "force the nation's low-income working families to lend the nation $8.7 billion next year and $10.6 billion over the next decade."

A copy of the Center for Policy Research report (Working Paper No. 13) is available on the web at http://www.cpr.maxwell.syr.edu/.

Domestic Violence Underreported by Welfare Participants

A September 1999 report from the Institute for Wisconsin's Future, Domestic Violence Victims in Transition from Welfare to Work: Barriers to Self-Sufficiency and the W-2 Response, looks at the impact of domestic violence on jobs and education. Two hundred seventy-four women, all of whom were victims of domestic violence and current or former welfare participants, were surveyed for the report. Among the key findings:

• Domestic violence prevents many victims from being able to maintain jobs or to succeed at education and training efforts, due to such difficulties as inability to sleep, fear of attendance, refusal of abuser to provide transportation or child care, repeated calls from abuser at work, and severe beatings that prevented attendance.
• Almost 70% of victims surveyed reported that they did not report the abuse to their welfare (W-2 in Wisconsin) caseworker. The reasons cited for not reporting the abuse included that it was not the caseworker's business (31%), that the victim was ashamed (24%), and that there was not an expectation that the caseworker would have the time or sensitivity to help (16%).
• For those victims who did report the abuse to their W-2 caseworker, very few were informed of available support services, program options or exemptions from certain regulations. In fact, only 5% of those who reported abuse were informed of the good cause exemption from cooperation with child support enforcement rules. The report notes that this is particularly disturbing given that 27% of respondents reported being afraid that a former partner would return and harass them if the state attempted to collect child support.

The executive summary of the report can be found on the web at http://www.execpc.com. The full report can be ordered by phone at 414/384-9094.

Report Compares Welfare-to-Work Approaches

The General Accounting Office (GAO) has released a report, Welfare Reform: Assessing the Effectiveness of Various Welfare-to-Work Approaches, that examines and compares the findings of studies that evaluated the effect of a rapid employment approach, an education-based approach, and a combination of these two approaches on outcomes for welfare recipients. Also reviewed were studies that looked at the effect of welfare recipients' educational attainment on that of their children. In order to allow for the likelihood that education-based programs would take longer to result in positive outcomes than would job search programs, the report focused on studies with relatively long term analyses of five years.

The GAO concludes that programs with a combined approach, including both job search assistance and some education and training, tend to be more effective over a 5-year period than either of the approaches alone in increasing employment and earnings while reducing welfare payments. Job search programs were found to increase participants' reliance on earnings over welfare in the short-term, but not overall financial well-being or earnings capacity. Additionally, the report finds that there is a group of studies that consistently find a positive relationship between a mother's and her children's educational attainment.

The report helps to explain the early results of California's welfare-to-work program (Greater Avenues to Independence, or GAIN), which found that in the short-term, job search was more effective than education at increasing recipients' incomes. The short-term results fueled the move toward job search requirements and welfare reform. The education-based strategy, however, may begin to show more dramatic results over time, and may have apositive impact on the future educational attainment of children. The full report can be accessed at the GAO website, http://www.gao.gov/reports.htm

States May Allow Post-Secondary Education Under TANF

A recent publication from the Center on Law and Social Policy (CLASP) provides states with the rationale and with information on the means by which states can provide access to post-secondary education for TANF recipients. In addition to the demonstrated benefit of longer-lasting increases in employment and earnings when post-secondary education is a part of welfare-to-work programs, the report cites research finding that each year of post-secondary education increases earnings by 6-12%.

Regarding the states' ability to provide access to post-secondary education through TANF, the report provides a detailed explanation of the relevant TANF statutes. In brief, the statutes allow states to: use TANF and state maintenance of effort funds to support post-secondary education; count post-secondary education as being "engaged in work" for the purpose of meeting the work requirements of TANF; count post-secondary education toward the state's TANF participation rates; avoid counting these activities against TANF time limits. The report can be downloaded from the web at http://www.clasp.org

State Developments

• California. On Friday, September 24, 1999, Governor Gray Davis signed legislation overhauling the California child support enforcement system. The new law transfers the responsibility of collection from county district attorneys to a new state agency. (See August Policy Fax Briefing for summary of the California State Auditor Report on the state's child support enforcement program.)
• Michigan. Beginning October 1, 1999, Michigan's Family Independence Assistance (FIA) program is instituting universal drug-testing for all program participants in several pilot counties. In order to receive assistance, participants will have to provide a drug-free urine sample. The Michigan ACLU has filed a class-action lawsuit to establish the Fourth Amendment right of assistance applicants not to be required to submit to 'suspicionless' drug testing.
• Wisconsin. The state budget bill passed October 6, 1999 includes several measures that would affect child custody and placement. The measures:
  1. Create a rebuttable presumption of joint legal custody.
  2. Instruct courts to maximize the amount of time a child spends with each parent.
  3. Apply all custody and placement changes equally to paternity cases.
  4. Require parents in a custody dispute to file detailed parenting plans. If a parent fails to file a plan, that parent can lose the right to object to the other parent's plan.
  5. Restrict retroactive child support to the period beginning with the date of the filing of the paternity action.
  6. Reduce interest on child support arrears from 18% to 16% annually.

Wisconsin Governor Thompson has not stated his intentions regarding a veto of the measures, but has indicated that he is unhappy with the fact that it has been proposed as an amendment to the budget bill.