U.S. GOVERNMENT PRINTING OFFICE

60–882 WASHINGTON : 1999

MODIFYING CHILD SUPPORT PENALTIES FOR

AUTOMATIC DATA PROCESSING

HEARING

BEFORE THE

SUBCOMMITTEE ON HUMAN RESOURCES

OF THE

COMMITTEE ON WAYS AND MEANS

HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTH CONGRESS

SECOND SESSION

JANUARY 29, 1998

Serial No. 105–88

Printed for the use of the Committee on Ways and Means

(

(II)

COMMITTEE ON WAYS AND MEANS

BILL ARCHER, Texas, Chairman

PHILIP M. CRANE, Illinois

BILL THOMAS, California

E. CLAY SHAW, JR., Florida

NANCY L. JOHNSON, Connecticut

JIM BUNNING, Kentucky

AMO HOUGHTON, New York

WALLY HERGER, California

JIM MCCRERY, Louisiana

DAVE CAMP, Michigan

JIM RAMSTAD, Minnesota

JIM NUSSLE, Iowa

SAM JOHNSON, Texas

JENNIFER DUNN, Washington

MAC COLLINS, Georgia

ROB PORTMAN, Ohio

PHILIP S. ENGLISH, Pennsylvania

JOHN ENSIGN, Nevada

JON CHRISTENSEN, Nebraska

WES WATKINS, Oklahoma

J.D. HAYWORTH, Arizona

JERRY WELLER, Illinois

KENNY HULSHOF, Missouri

CHARLES B. RANGEL, New York

FORTNEY PETE STARK, California

ROBERT T. MATSUI, California

BARBARA B. KENNELLY, Connecticut

WILLIAM J. COYNE, Pennsylvania

SANDER M. LEVIN, Michigan

BENJAMIN L. CARDIN, Maryland

JIM MCDERMOTT, Washington

GERALD D. KLECZKA, Wisconsin

JOHN LEWIS, Georgia

RICHARD E. NEAL, Massachusetts

MICHAEL R. MCNULTY, New York

WILLIAM J. JEFFERSON, Louisiana

JOHN S. TANNER, Tennessee

XAVIER BECERRA, California

KAREN L. THURMAN, Florida

A.L. SINGLETON, Chief of Staff

JANICE MAYS, Minority Chief Counsel

SUBCOMMITTEE ON HUMAN RESOURCES

E. CLAY SHAW, JR. Florida, Chairman

DAVE CAMP, Michigan

JIM MCCRERY, Louisiana

MAC COLLINS, Georgia

PHILIP S. ENGLISH, Pennsylvania

JOHN ENSIGN, Nevada

J.D. HAYWORTH, Arizona

WES WATKINS, Oklahoma

SANDER M. LEVIN, Michigan

FORTNEY PETE STARK, California

ROBERT T. MATSUI, California

WILLIAM J. COYNE, Pennsylvania

WILLIAM J. JEFFERSON, Louisiana

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records

of the Committee on Ways and Means are also published in electronic form. The printed

hearing record remains the official version. Because electronic submissions are used to

prepare both printed and electronic versions of the hearing record, the process of converting

between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process

is further refined.

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C O N T E N T S

Page

Advisory of January 16, 1998, announcing the hearing ....................................... 2

WITNESSES

U.S. Department of Health and Human Services, John Monahan, Principal

Deputy Assistant Secretary, Administration for Children and Families ........ 29

Association for Children for Enforcement of Support, Inc., Geraldine Jensen ... 104

California Department of Social Services, Leslie L. Frye .................................... 59

Cardin, Hon. Benjamin L., a Representative in Congress from the State

of Maryland .......................................................................................................... 129

Center for Law and Social Policy, Vicki Turetsky ................................................ 94

Center on Budget and Policy Priorities, Wendell E. Primus ............................... 80

Children’s Rights Council, Ronald K. Henry ......................................................... 116

Feinstein, Hon. Dianne, a United States Senator from the State of California . 11

Michigan Family Independence Agency, Wallace N. Dutkowski ......................... 67

New York State Office of Child Support Enforcement, and New York State

Office of Temporary and Disability Assistance, Robert Doar ........................... 46

SUBMISSIONS FOR THE RECORD

Alameda County District Attorney’s Office, Oakland CA, statement ................. 134

Thomas, Hon. William M., a Representative in Congress from the State

of California, statement and attachments ......................................................... 136

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THE AUTOMATIC DATA PROCESSING REQUIREMENTS OF THE 1988 FAMILY SUPPORT ACT AND THE 1996 WELFARE REFORM LEGISLATION

THURSDAY, JANUARY 29, 1998

HOUSE OF REPRESENTATIVES, COMMITTEE ON WAYS AND MEANS, SUBCOMMITTEE ON HUMAN RESOURCES, Washington, DC.

The subcommittee met, pursuant to notice, at 9:03 a.m., in room

B318, Rayburn House Office Building, Hon. E. Clay Shaw, Jr.

(Chairman of the Subcommittee) presiding.

[The advisory announcing the hearing follows:]

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Chairman SHAW. I have been told that Mr. Levin is on his way

down, and I will go ahead and proceed with my opening statement

and then yield to whomever on the Democrat side who might want

to make a statement. Mr. Levin can read mine if he wishes.

This morning we are going to conduct our final hearing on the

penalties imposed on States that fail to meet the automatic data

processing requirements of the 1988 Family Support Act or the

1996 welfare reform legislation. Mr. Levin and I have introduced

legislation to address the penalty issue as well as the issue of child

support incentive payments, and we have asked our witnesses

today to give us their reactions to the introduced bill.

Getting these penalty provisions right may not be very exciting,

but I believe that the task is very important. The Federal Government is spending lots of money on child support in general and on

computer systems in particular. I think that it’s fair to say that

nearly everyone believes that good computer capabilities is at the

heart of child support enforcement. Even more important, we have

a major obligation to ensure that our children receive the child support that they are due. Thus, once we agree on requirements for

States, we must have credible penalties, swift and certain penalties. Otherwise, we will only have Federal suggestions, not Federal requirements.

Both the penalty provisions and the incentive provisions of this

bill were developed on a bipartisan basis between me and Mr.

Levin. We have met with State officials, child and family advocates, and parents. In addition, we have circulated draft copies of

the legislation widely and have responded to several suggestions

for improvements in the bill. Equally important, the groups that

made the drafting decisions about the bill included Democrats and

Republicans from the Committee on Ways and Means in the House

and the Committee on Finance in the Senate as well as representatives from the Clinton Administration. I might say also, representatives from the California delegation and other States that were affected. We have also enjoyed excellent support from the Congressional Budget Office, the Congressional Research Service, and the

General Accounting Office.

The result of this work is a bill which I believe achieves balance

between the various competing interests. At least 16 States that

missed that October 1, 1997, deadline will be penalized. On the

other hand, rather than the nuclear-type penalty of losing all their

Federal child support money and all the TANF block grant money,

these States will lose 4 percent of their child support administrative money. Moreover, if penalized States can achieve certification

before October 1 of this year, they will have 75 percent of the penalty refunded to them. If States do not complete their computer

systems, the penalty increases because States that are not certified

after more than a year are substantially out of compliance with

Federal requirements that have been in place since 1988. But

States can always receive a 75 percent refund in the year that they

achieve certification.

For the States that are still having difficulty building a single

statewide system, we have included a provision that would allow

alternative systems configurations. These alternative systems, however, must be capable of meeting the goals of the child support proVerDate 20-MAR-2000 13:39 Apr 14, 2000 Jkt 063428 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 E:\HEARINGS\60882 pfrm01 PsN: 60882
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gram with the same speed, effectiveness, and efficiency as a single

State-wide system. If they do not, the Secretary may not approve

the waiver request.

I think that we have found just about the right compromise and

balance in this bill. Even so, I know that not everybody is going

to be completely satisfied. For this reason, I plan to listen carefully

to the testimony today and then discuss that with Mr. Levin and

others and decide whether we should make further changes in the

bill.

[The opening statement follows:]

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Sandy, first let me thank you for all the help on this bill. Given

all the cooperation you and I have demonstrated lately, I’m not

looking around for something to be partisan about, but I’m sure we

will find it or it will find us. Would you like to make an opening

statement?

Mr. LEVIN. Thank you, Mr. Chairman, and to my colleagues and

everybody here. Actually the statement that you read could have

been read for both of us. I have an opening statement, but because

we have witnesses here who have other things to do, I’m going to

ask that my statement be placed in the record and simply say a

few things. Just a very few, because again, Mr. Chairman, your

statement, I think, hits the nail on the head. Our staffs have

worked together. We have worked with the administration. We

have tried to tap into the information and the knowledge of the

various States.

We have made progress in this area, and we can be proud of it.

There has been a substantial increase in collections in recent years.

But I’m not even sure that the issue is if the glass is half full or

half empty. I don’t think that we are probably halfway there yet.

And moving further ahead is critical for the children of this country. It is also critical for the implementation of welfare reform that

we worked so hard on.

We now have the methodology to attack this issue much more effectively than was true a decade ago. Some years ago we said to

the States, ‘‘Use this technology and we’ll help fund the most of it.’’

It did not work as well as we’d hoped. There is a lot of blame, as

I say in my statement, to go around. And I don’t think that we

need to dwell on it, but we need to essentially face the future.

And so our task is to make sure that we have a system that not

only is in place but is implemented. And yesterday, Mr. Chairman,

you and I introduced a bill to carry that out. You made a pledge

in October or November, I think it was, that we were going to do

this, and we’re meeting this pledge right now. I think there have

to be penalties that are meaningful. We have to remember that

these problems cut across State lines, and we simply have to have

a system that is a system of effectiveness in every State. And as

you indicated, Mr. Chairman, we not only have graduated them,

but with teeth, so that there are penalties if they are not met, but

we’ve provided an alternative option, a waiver availability to the

Secretary when a State can indicate and can show that they can

integrate components that are effectively operating into a singleState system.

So, like you, I look forward to the testimony. We’re willing to listen to suggestions for changes, but I must alert everybody, a lot of

work has been done on this. We’re behind the curve. It’s children’s

lives that are at stake. And I think the burden, if I might say so,

of people who propose changes to this bill we’ve worked so hard on,

the burden is on those who suggest changes.

Chairman SHAW. Thank you, Sandy. Without objection, your full

statement will be placed in the record.

[The opening statement follows:]

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Chairman SHAW. Do any other members wish to make any opening statement at this time? If not, I’ll call our first panel.

Senator Feinstein, it’s nice to have you with us. We also are looking forward to hearing from our colleague, Mr. Cardin. He has advised us that he is going to be late, so we will fit him in at the

proper time.

We have the written statements of all the witnesses. We would,

of course, include that in the record. We would appreciate it if all

the witnesses could limit their statements to five minutes.

Senator, proceed as you wish. And welcome.

STATEMENT OF THE HONORABLE DIANNE FEINSTEIN, A U.S.

SENATOR FROM THE STATE OF CALIFORNIA

Senator FEINSTEIN. Thank you very much, Mr. Chairman. Mr.

Levin and Members of the Subcommittee, I thank you very much.

Chairman SHAW. We start Senators with a yellow light.

Senator FEINSTEIN. Well—[Laughter.]

Mr. LEVIN. Senators do not see any light. [Laughter.]

Senator FEINSTEIN. Actually, you have a point.

Mr. LEVIN. I say that in a very friendly way.[Laughter.]

Senator FEINSTEIN. Thank you.

Mr. LEVIN. In fact, we don’t see any light.

Chairman SHAW. It’s called, ‘‘Family Feud’’ in his case.

Senator FEINSTEIN. I want to thank you, Mr. Shaw, for being

available and for recognizing the concerns of California.

California isn’t alone. I believe that there are about 14 other

States that aren’t going to meet the deadline. And I very much appreciate the moratorium that you and the committee have agreed

to accept.

I would like my statement to go into the record and just informally talk.

I think the problem is, with the legislation, that it’s not going to

have enough flexibility and, very candidly, that the penalties are

going to be too high. We have here today Mr. Lawrence Silverman

who is the special assistant in the legislative and policy development area of the Bureau of Family Support Operations of the

County of Los Angeles, and also the chief of the Department of Social Services, the Office of Child Support in the State of California,

Leslie Frye. And I understand that they are both going to make a

statement, or I hope that they are. And let me see if I can summarize the problem.

The big States have had problems. And it is my understanding

that the loss of the AFDC and child support funds from the 14

States that aren’t going to make the March deadline is going to be

some $8 billion a year. California will lose $4.3 billion; Illinois,

$654 million; Michigan, $857 million, and Pennsylvania, $794 million. Now, since 30 percent of all of the child support cases cross

State lines, the consequence of the penalties are going to be serious, and children in Kansas or Georgia are going to be clearly affected by the unavailability of child support from parents in California, in Pennsylvania, or any other of the 14 States who face the

penalties.

So I am here to ask, and you have been very gracious already,

for some additional legislative flexibility. I would like to ask this

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committee if they would change the penalties from your 4, 8, 16,

20 percent penalties to 2, 4, 6, and 8 percent penalties over four

years.

California alone, under your legislation, would face penalties of

$12 million in the first year and $60 million in the fourth year. So

the bottom line is that the 2.36 million families in California that

are affected by this—2.36 million families are affected by it—aren’t

going to help children in other States. It’s my understanding that

Illinois has approximately 730,000 families with children who won’t

get their child support because the State will face $2.7 million in

penalties in the first year and up to $13 million in the fourth year.

In Michigan, it is my understanding, 1.5 million families with children may not get their child support because the State faces $3.27

million in penalties during the first year and $16.3 million in the

fourth year.

Now I know, and I talked to the organizations that argue that

the cuts are necessary, that you have to punish people for not having a seamless system. And respectfully, I must disagree with that.

I don’t think that legislation that punishes families is really the

way to accomplish this. The States aren’t penalized. The bureaucrats that may or may not do the right thing aren’t penalized, but

the families are penalized. And it’s my understanding—first of all,

let’s take the County of Los Angeles. I would like to enter into the

record a memorandum of understanding that was developed in

1989 between HHS and the County of Los Angeles. I could be

wrong, but it is my understanding that this memorandum was entered into at the request of HHS. And in fact, HHS provided approximately $50 million for a separate Los Angeles county system.

And LA County serves 550,000 families. It is 25 percent of the

California caseload. And it is a huge system with its own systems.

In some respects it is equal to the system of another State. And

I would hope that there should be—could be some accommodation

in this legislation for Los Angeles County.

Clearly, as you know, California isn’t going to meet the deadline.

It has canceled the contract with the existing purveyor who was

not able, I gather, to meet the contract criteria, and it will have

to develop a new State-wide contractor. But in the meantime, it is

my understanding—and Mr. Silverman is here—that LA County

anticipates that its system can be fully capable within the time

deadline.

So essentially, Mr. Chairman, I am asking for two things. The

second is some flexibility in the penalties. Specifically, a four-year

system of 2, 4, 6, and 8 percent. That will be bad enough if California isn’t able to meet this six-month moratorium. I believe that

within two years it will be possible, but not within the six-month

period.

So that is the thrust. It is my intention to introduce a bill in the

Senate that would have the 2, 4, 6, and 8 percent penalties and to

try to provide some form of flexibility in the legislation so that we

meet this problem, this enormous problem of Los Angeles.

If there are specific questions, I think that the people best able

to answer them, Mr. Chairman, are Ms. Frye and Mr. Silverman.

Ms. Frye from the State and Mr. Silverman from the County of LA.

[The prepared statement and attachments follow:]

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Chairman SHAW. Thank you, Senator. I don’t see Mr. Silverman

on our list, but I see Ms. Frye on our list, and I assume that she

can answer the questions that we are talking about.

I don’t have any questions. I just want to point out one thing

which I think is quite important. Most of the States will have—and

I’m sure that California will be one of them, and I know that

Michigan will certainly be one of them—will be experiencing some

savings from TANF because of the tremendous success of welfare

reform and the fact that the TANF funds have been block granted.

In those situations, some of those savings, particularly as it applies

to low-income recipients of child support, can be transferred over

to take care of any shortfall that might be experienced. So that the

question of pulling back funds that would be available should not

happen if the surplus within the TANF continues.

Mr. McCrery.

Mr. MCCRERY. Thank you, Mr. Chairman.

Ms. Feinstein, California is not the only State that has had trouble implementing the data processing requirements, but we’re curious as to why the State of California has had so much trouble coming up to speed on these requirements. Can you shed any light or

is there anybody with you that could shed some light on the troubles that have been encountered?

Senator FEINSTEIN. Perhaps the Chief of the Child Support Division of the State, if you would have no objections, Mr. McCrery,

could answer that question.

Mr. MCCRERY. If the chairman has no objection.

Chairman SHAW. And you are?

Ms. FRYE. I’m Leslie Frye.

Chairman SHAW. If we might hold the question, because Ms.

Frye will be a witness on the third panel.

Ms. FRYE. Sure, I’d be happy to do it then. Thank you.

Mr. MCCRERY. That’s all I have, Mr. Chairman.

Mr. LEVIN. Welcome.

Senator FEINSTEIN. Thank you.

Mr. LEVIN. Let me just mention briefly, because we’re going to

take a hard look at this, the reference to billions of dollars that

would be lost is, I think, is a reference to what would happen if

the States were not making a good-faith effort to implement the

law. If they were, there would be a far lesser set of penalties. And

I would assume that every State would be making a good-faith effort. So what we would be talking about primarily is the legitimacy

and the efficacy of the lesser set of penalties if they did not meet

the timetable. And I’ve talked this over with the State of Michigan,

and if it is likely that there would be a loss of several million if

they did not meet the first stage—the problem with it is this: if we

don’t have even this, I think, relatively modest set of penalties,

what is the assurance that we are going to have, that there will

be implementation of a system that is federally subsidized to a certain extent and is essentially a national problem for the very reason that you stated—that is a third, more or less, of the child-support orders in a State relate to people who are no longer in the

State. And if every State isn’t pulling its load, then no matter how

effectively California or Michigan or Florida or Louisiana or any

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State is trying to carry out its plan, there is a one-third hole that

can’t be filled.

So the large amount that you mention is most unlikely to occur.

What may well happen is that the smaller sums will be imposed—

a small fraction of the amount of Federal money that is being received by each State to implement the plan. I don’t have the

exact—it’s less than 10 percent, I think, considerably less than that

in the State of Michigan. And we want our States, with our help,

to bring their programs up to speed. So we’ll look at this issue. And

we know that whatever goes through here has to go through the

Senate, so we’re anxious, very much, to work together. But I hope

that we can do so realizing, as Mr. Shaw stated in October or November, we’ll have a moratorium, but only to allow implementation

of a new system that is so realistic that it will indeed be implemented.

Senator FEINSTEIN. May I just briefly respond to that?

Mr. LEVIN. Yes.

Senator FEINSTEIN. First of all, I agree with what you are saying.

I don’t pretend to know the ins and outs of this. I intend to learn

and try to learn.

What I’ve been told is that California is so big and all these

counties have different systems and the contractor just couldn’t put

the thing together. Now where exactly the State is right now, I

don’t know. I intend to find out. I agree that there has to be this

more seamless, interdigitating system. I’m really concerned by—I’ll

be candid with you—by the welfare bill and its impact on California because the bill is kind of backloaded as the penalties come

on. And down line—at one point when I was entertaining the possibility of running for Governor, I was very concerned because I

thought that most of this bill is going to come down to land on

California around the year 2000. The State is huge in the sense of

what it has to do to be able to meet the strictures of that bill. I

don’t have to worry about that now as a chief executive officer——

Mr. LEVIN. I hope that wasn’t the reason that you didn’t run——

Senator FEINSTEIN. But I intend to get much more familiar with

it. I do want to work in a bipartisan way. I do understand what

you are trying to do. I agree with it. It’s just with this vast sprawling entity of all of these different systems, whether they really can

be brought together in time, I don’t know. So what I would like to

offer to do is meet with Mr. Silverman and Ms. Frye as soon as you

are finished and get more involved and try to see what I might be

able to do to be helpful.

Mr. LEVIN. We’ll welcome that. I think that States need to remember—and I’ll finish with this—that other larger States have

made very considerable progress. And my own State isn’t 100 percent there, but it has made some very considerable progress, as

New York and most other States have, and I think that there is

a very particular set of issues relating to California that may not

only have to do with size. I think that you have done your job, if

I might say so, as a legislator. I’m not sure why there has been a

failing on the part of the State of California to be much further

along when it has so many of these children in need.

So we look forward to working with you and trying to have a bill

out of the Congress and on the President’s desk by the spring.

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Senator FEINSTEIN. Thanks very much.

Chairman SHAW. Mr. Collins.

Mr. COLLINS. I’ll pass.

Chairman SHAW. Mr. Coyne.

Mr. COYNE. No questions.

Chairman SHAW. Senator, thanks very much for being with us.

Senator FEINSTEIN. Thank you, Chairman Shaw. I appreciate it.

Chairman SHAW. You put forth a very forceful case.

Our next witness, who is the principal Deputy Assistant Secretary of the Administration for Children and Families of the

United States Department of Health and Human Services, John

Monahan. Welcome. Proceed as you may. We have your full statement which is going to be made part of the record.

STATEMENT OF JOHN MONAHAN, PRINCIPAL DEPUTY ASSISTANT SECRETARY, ADMINISTRATION FOR CHILDREN AND

FAMILIES, U.S. DEPARTMENT OF HEALTH AND HUMAN

SERVICES

Mr. MONAHAN. Thank you very much.

Mr. Chairman and members of the subcommittee, thank you for

providing me with the opportunity to testify today on child-support

systems penalties. As the Principal Deputy Assistant Secretary for

Children and Families, I appreciate the leadership of the committee in fashioning a bipartisan solution to this important issue.

Let me thank, in particular, the chairman and the ranking member for introducing the bill that you introduced yesterday.

We believe that child support is a critical part of welfare reform.

And the President—President Clinton has made improving enforcement and increasing child-support collections a top priority. We are

proud of this administration’s record on child-support enforcement,

but as the President said in his State of the Union on Tuesday

night, ‘‘We must do more.’’

He has set a goal of increasing collections to $20 billion a year

by the year 2000 through the implementation of tough new measures enacted in the 1996 welfare reform laws. However, these new

rules can only be implemented if every State is fully automated.

When Child Support Deputy Director, David Ross, testified before

you in September, 16 States were certified as having operational

child support enforcement systems. As of today, 36 States and two

territories have informed us that they have State-wide operational

child-support systems that meet the functional requirements set

forth in the 1988 act. We have certified 22 of these jurisdictions

and are in the process of conducting reviews or writing certifications review reports for the remaining 16. And many other systems are very close to completion. And while the focus of today’s

hearings is how to address State systems which have not been certified, I would like to acknowledge the States which have worked

diligently to meet the October 1, 1997 deadline and succeeded.

Those States deserve our sincere congratulations.

However, continued efforts to meet the certification requirements

are crucial. Any State without a certified system in place has been

notified that we intend to disapprove its State plan and informed

of its appeal rights. The financial consequences for failure to meet

the statutory deadline are, after appropriate due process, the cesVerDate 20-MAR-2000 13:39 Apr 14, 2000 Jkt 063428 PO 00000 Frm 00032 Fmt 6633 Sfmt 6602 E:\HEARINGS\60882 pfrm01 PsN: 60882
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sation all Federal child-support funding. If the State is not operating a child-support enforcement program under an approved

State plan, its TANF funds are also in jeopardy.

The statute provides the Secretary no latitude on this issue. Accordingly, we issued letters to 14 States, the District of Columbia,

and the Virgin Islands providing notice of our intent to disapprove

their child-support enforcement plans.

This is clearly not a situation that anybody favors. Eliminating

all Federal child-support enforcement funds would unfairly penalize children who rely on a State’s child-support system. At the

same time, though, because the State’s failure to automate is unacceptable and has repercussions which reach beyond its borders, it

is essential that States which have not complied be held accountable.

We believe the proposal in the bill under consideration incorporates this need for balance. The proposal creates an additional

penalty which the Secretary may impose in lieu of a full sanction

in a case of a State that has made a good-faith effort to meet the

automation requirements and that enters into an approved corrective-compliance plan for completion of its system. Such States

would be subject to an automatic penalty equal to 4 percent of their

Federal reimbursement for Fiscal Year 1997 administrative costs.

The penalty would grow annually up to a maximum of 20 percent

of Federal IV-D funding for failure to have a certified system.

These automatic, escalating penalties would give States a strong

incentive to complete their child-support systems quickly.

We believe that the approach in this bill is tough, but fair. However, we have serious concerns with the provision in this bill that

permits States to link local computer systems instead of creating

functioning State-wide systems. The proposal requires that States

with linked systems have the same functionality of the State-wide

system and take no more time nor cost more money to the Federal

Government to develop, operate, and maintain. And we very much

appreciate the committee’s efforts to put these elements in the bill.

Experience shows, however, that meeting these elements will be

difficult for most States. Developing separate systems and linking

them together represents a major technological task more complicated than a single system. Further, with this new authority,

some States may use precious time and resources to demonstrate

that they can develop an approvable link system rather than move

forward on a single State-wide system. In short, we are very concerned that the concept of a link system is unproven and thus

poses an unnecessary risk of failure.

In conclusion, Mr. Chairman and members of the committee,

while we have reservations about the feasibility of the alternative

systems aspects of the bill, we nonetheless appreciate the swift,

open, bipartisan and balanced approach this subcommittee has

taken to examining child-support systems compliance and penalties. We anxiously await enactment of this proposal. On our part

we will continue, in the meantime, to work closely with the States

and provide them any technical assistance necessary to help them

in completing their implementation efforts.

Thank you.

[The prepared statement follows:]

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Chairman SHAW. Thank you, Mr. Monahan.

I would like to say that the administration has been tremendously helpful, and it has been a pleasure to work with you on this

particular matter.

Mr. McCrery.

Mr. MCCRERY. Thank you, Mr. Chairman.

Mr. Monahan, as I think you know, Louisiana has perhaps a

unique problem in trying to comply with the law. And it is ironic

that their system is causing problems because they implemented

this system in good faith and in a way that allowed them to develop an expedited procedure for processing child-support claims in

a very efficient manner. And they have done very well with their

system. But because of the requirement for a single form of collection, they have had some problem in complying with the new law.

Recently, in an attempt to comply, the Supreme Court of Louisiana agreed to be the single collection point. And for some reason,

State officials were advised that that would not be in compliance

with the law. And I’m just wondering—in my reading of a blackletter law, there doesn’t seem to be any requirements that it be the

IV–D agency that is the single collection point, and yet, State officials have been told that that is a requirement. Can you shed some

light on that?

Mr. MONAHAN. Sure, Mr. McCrery.

I think two things. One is Louisiana is to be congratulated because it has a certified computer system in place.

The second thing is, on the point that you raise, it is true that

the welfare reform law in 1996 required all States to have a single

State dispersement unit for collecting checks and for making sure

that payments get to families. And it is up to each State to decide

to choose to be that single dispersement unit. And a court can

serve in that role. And so if State officials feel like they got the

message that a court couldn’t serve in that role, that is not true.

I think that your reading of the law is accurate in that regard.

I will mention, though, that I know that Judge Ross and other

members of the child support enforcement staff have been to Louisiana to meet with justices and other members of the court systems, and there are a number of complicated issues here. While the

court can serve in that role, we certainly intend—and I think the

judge made clear when he was down there, but you certainly have

my commitment—that we would try to work with those officials to

find a solution to the problem they face consistent with the law as

it is currently written.

Mr. MCCRERY. Well, I appreciate that. It would be a shame for

Louisiana to have to dismantle a very efficient system and in effect

defeat the purpose of the law that we imposed. So I hope that you

will work with them. I’m not quite sure that I understand your answer because State officials advised me that they were told unequivocally that their proposal was not acceptable, and I seem to

hear you saying that it is not clearly unacceptable, we’re going to

work with them. So can you clarify that?

Mr. MONAHAN. Sure. I think that—as I understood in your question, State officials had heard that the State Supreme Court

couldn’t serve as the State dispersement unit——

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Mr. MCCRERY. Well, as I understand the proposal, the State Supreme Court would be the single collection point, and then they

would transfer the funds to the State IV–D agency for dispersement.

Mr. MONAHAN. And I think that that’s where—the complication

was that the proposal that the courts have raised—when our staff

was in Louisiana—is something—because it involves two units of

the State government, it was something that doesn’t comply with

the provisions of the welfare reform law of 1996.

Mr. MCCRERY. But the black letter law doesn’t say anything

about dispersement. It says, ‘‘In addition, employers shall be given

one location to which income withholding is sent.’’

Mr. MONAHAN. And that requirement is clear in the law that it

has to have one point at which employers have to send their

checks. But I believe that there is also a requirement that the

State establish a single unit for doing the collection and dispersement. And I think that the complication is that at least in the initial proposal that the State had brought forth to us is that we

couldn’t—we weren’t able to determine that aspect of the requirement.

So I guess that what I’d like to do, if it is all right with you, is

consult with our staff, look at what our most recent discussions

have been with Louisiana officials and report back to you, if I could

on the status of this——

Mr. MCCRERY [continuing]. Yes, that would be great. It would

really be nice for you all to be able to work out something with a

State that has tried not only to comply, but go further than required in an effort to make their system efficient and effective——

Mr. MONAHAN. Absolutely.

Mr. MCCRERY [continuing]. Rather than have us have to go back

and re-engineer the welfare law to try to accommodate one State

that has gone over and above what is required. So I appreciate

your willingness to work with the State. Thanks.

Mr. MONAHAN. Thank you, sir.

Chairman SHAW. Mr. Levin?

Mr. LEVIN. Thank you very much, Mr. Chairman.

Just briefly on the waiver proposal. We’ve had a lot of discussion

about it, and I think it has been very carefully drafted and I think

it is an important part of this legislation, and I just want you to

know—I want to reiterate that I very much agree with your statements and the administration’s statements on page nine that the

administration will set a rigorous standard of proof and also that

the burden of proof will be on the State. I think that strikes the

right balance.

Thank you, Mr. Chairman.

Chairman SHAW. Mr. Collins. Mr. Coyne.

Mr. COYNE. Thank you, Mr. Chairman.

Mr. Monahan, thank you for your testimony. I appreciate it.

Several States have said that late regulations and changing system requirements and lack of technical support are part of the reason that they have not completed their systems. I wonder how you

would respond to that?

Mr. MONAHAN. Well, I think from the standpoint of the Federal

Government it is true that initial regulations to implement the

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computer-system requirements we’re talking about here that were

in the 1988 law took several years—I think took four years before

they were issued in 1992. And it is true that in response to State

concerns, the transfer policy that you alluded to was changed to not

require States that transfer in systems that have been certified in

other States.

But I would also say that I’ve been confident that for more than

five years now at least States have been clear about what has been

required of them. And we have tried our best with the resources

that we have available to provide technical assistance and guidance

for the States.

Mr. COYNE. Well, I know that Congress has extended the deadline for finishing the system several times, partially because we acknowledge that changing requirements created problems for the

States.

What steps, if any, has HHS taken to compensate for the fact

that the regulations for State-computer systems have sometimes

been issued late or have been very unclear and that technical support has not always been available to them?

Mr. MONAHAN. Well, sir, I think the first thing is, I think that

you are right. I think that Congress has compensated. The deadline

here has been extended by two years. I think that five years is a

long period of time for States to be aware of what the requirements

are. I think that we have actually been fairly clear on what has

been expected in terms of having a certified system.

In terms of technical support, we have tried to have staff available for States to identify what the requirements are, to be very

specific about what the review standards are, so when a State is

developing a system it knows what to expect on the front end and

can adequately procure the right system.

I can tell you that we have our staff working as hard as we can

to provide that kind of support but obviously we were limited by

resources, but we are trying to do as much as we can.

Mr. COYNE. Mr. Dutkowski of Michigan’s Child Support Center,

in his prepared testimony, suggested that the penalties for States

be administered quarterly with States having a higher percentage

of the penalty forgiven if they complete their systems earlier in the

year. How would such a penalty structure change the difficulty of

administering the penalties for your department, for HHS, and do

you think it would encourage States to comply faster?

Mr. MONAHAN. Obviously, we would administer whatever penalty

that Congress passes in the best way that we could. I think that

one of the advantages of the committee’s—subcommittee’s proposal

is that an annual penalty is somewhat clearer and easier to fix

than having to fix one four times a year. I think it is also easier—

the provision that permits States to earn back a portion of that

penalty is easier to administer on an annual basis. But I think—

I also think that there are—that clarity and simplicity have some

real advantages here, too, in terms of—and I think when you have

a penalty every quarter it can become more complicated.

Chairman SHAW. Would the gentleman yield on that?

The legislation does have up to a 75-percent refund. It doesn’t exactly track what you’re talking about for early compliance within

the year. But the mechanism is in there so that we don’t impose

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a full penalty if in the first few months they comply or the first

three-quarters they can get some of that penalty back. So we have

addressed that, but not exactly the way—and I know the gentleman is talking about Pennsylvania’s particular request. It

doesn’t do all of that, but it does go in that direction.

I thank you for yielding to me.

I do have a question and it follows on the track of what Mr.

Coyne was talking to you about in one of your answers with regard

to helping the States to plan. And my question focuses on the $400

million that was funded for the 1996 processing requirement. When

does the Secretary plan to let the Congress and the States know

how these funds will be distributed and can you give us an idea

of how far along you are in making that decision if indeed the decision has not already been made and when we might expect a decision in this regard?

Mr. MONAHAN. Well, we hope to have a proposed rule out very

soon, Mr. Chairman, but we haven’t issued it yet. As you know, the

1996 law did provide this $400 million fund, and in August of last

year, the Congress changed it by adding an additional jurisdiction

to be eligible for the $400 million fund. And I regret the fact that

we haven’t been able to get the proposed rule more quickly, but we

are certainly—we are working hard with every administration to

try to get it out as soon as possible.

Chairman SHAW. Without asking you to divulge exactly what

that is going to say, if you could tell us when we might expect to

have that, it might be helpful to us.

Mr. MONAHAN. I think very soon, sir, and we’ll certainly—we will

try to communicate with you——

Chairman SHAW. Is April very soon? Is August very soon?

Mr. MONAHAN. I hesitate to give you a date because I—there

are—it’s—I can assure you that it’s getting a thorough review by

all the different aspects of the administration—but I can’t—I hesitate to give you a date, sir.

Chairman SHAW. If the Secretary could advise us as to when we

might expect that, it would be helpful to us, and it would be helpful

to the States.

Mr. MONAHAN. I would be pleased to do so.

Chairman SHAW. Mr. Collins had an additional question.

Mr. COLLINS. Thank you, Mr. Chairman.

Mr. Monahan, the subcommittee is considering a request from

the American Association of Motor Vehicle Administrators dealing

with social security numbers and drivers’ licenses. They want us to

change the date—and I want to know if you see any problem from

their request to change the date when States must begin to collect

these social security numbers from January 1, 1998 to October 1,

2000.

Mr. MONAHAN. I haven’t had a chance to look at a specific legislative proposal, but I do know of the issue that they have raised,

and we have—at least based on our initial review where we understand and appreciate the concern that they are raising which is

that we might as well make a requirement for social security numbers consistent this law and the immigration bill that had passed

last year. And so I think that we would support that in concept,

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but I would like to take a look at the specific language that might

be proposed.

Mr. COLLINS. Well, basically you don’t see any problem with this?

Mr. MONAHAN. Not at this point, but we would love to take a little bit of a closer look at it as well.

Mr. COLLINS. Very good. Thank you.

Chairman SHAW. Thank you, Mr. Monahan. We appreciate it.

The next panel of witnesses. If they would come to the table. We

have Robert Doar as the Director of the Office of Child Support,

Department of Social Services from Albany, New York. We have

the much talked about Leslie Frye, Chief of the Office of Child Support, Department of Social Services from Sacramento, California.

And we have Wallace Dutkowski—am I getting that correct? Thank

you. He is the Director of the Office of Child Support, Department

of Social Services from Lansing, Michigan.

We thank you for being here. Your full statement is being made

a part of the record. We would appreciate it if you could summarize

for us.

Mr. Doar.

STATEMENT OF ROBERT DOAR, DIRECTOR, OFFICE OF CHILD

SUPPORT, DEPARTMENT OF SOCIAL SERVICES, ALBANY, NY

Mr. DOAR. Thank you, Mr. Chairman. On behalf of Governor

George Pataki and the New York State Office of Temporary and

Disability Assistance, thank you for giving me this opportunity to

testify.

My name is Robert Doar, and I am the Director at the New York

State Office of Child Support Enforcement.

I also want to thank you, Mr. Chairman and the members of this

committee, for introducing the bill that you have. It represents

great progress in where we were only six months ago.

It seems to me that the approach that you have taken, Chairman

Shaw, in conducting these hearings and all you have done on welfare reform has been to focus on two primary objectives: outcomes

for people and accountability to taxpayers. Both of the issues that

we are discussing here today, penalties for States that fail to receive Federal-certification requirements and the appropriate structure and formula for child support incentive funding are very much

tied to those objectives. In New York, focusing on outcomes while

remaining accountable to taxpayers has been our first priority. By

modifying our existing State-wide system, we were able to achieve

certification by HHS at a reasonable cost. But more importantly,

we have a State-wide automated system that allows us to help the

families that we serve.

Unfortunately, many aspects of the certification process had very

little to do with outcomes for children. Instead it was concerned

with ensuring that States conform to a rigid, federally-mandated

prescription for how the task should be accomplished. This emphasis on uniformity of process has far outweighed a proper emphasis

on results. Thus, scarce resources which should have been directed

to program improvement and to helping children have instead been

expended on system modifications. What is ironic about all these

problems is that despite them great strides have been made in improving the program in all States, including the States that have

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not met the certification requirement. This disconnect between the

failure on systems and improvements in the program shows that

certification does not equal results.

The bill under consideration today is a strong step forward to resolving the question of how to deal with States that have failed the

certification test. New York is grateful for being given the opportunity to express support for an approach which allows States

which meet milestones set out in mutually agreed to corrective-action plans to be granted a 75 percent refund. And permits waiver

of the penalty entirely to States that are certified by June 1, 1998.

That brings me to outcomes and why we in New York believe

that the proposed incentive-funding formula is so important. The

new formula will result in focused attention being placed on the

right outcomes. It will also provide the proper accountability to taxpayers. Under Governor Pataki’s direction, New York social services agencies have been strong proponents of managing through

monitoring of key outcomes. He has challenged all of us at human

services to determine appropriate outcomes and to develop ways to

measure progress toward goals. For the past three years we have

aggressively used numbers to manage our program and would like

to see the implementation of an incentive structure for child support which supports us in that endeavor.

We need that support because in New York we must bring this

focus on outcomes to the county level. In my testimony I have provided sample charts showing county-specific performance on the

measurements required by the proposed incentive package. These

charts show a county’s performance on percentage of cases with orders, attorney-establishment percentage and the other key measurements in the incentive-funding formula.

We have distributed these charts to all the county child support

offices in New York State. Everyone in the child support enforcement program needs to be aware of their performance in critical

areas and where they stand in relation to past performance and in

relation to colleagues in other geographic areas.

We also believe that the proposed incentive formula provides a

rational solution to the problem posed by States failing to meet the

certification deadline. By setting goals and providing for fiscal incentives, States will be forced to make the necessary changes, including changes to their systems, needed to improve performance.

Though New York has been certified, we are uncomfortable with

the imposition of fiscal penalties on States that have not. We believe that a thoughtfully constructed incentive funding formula will

provide the accountability necessary to ensure that States move

their programs in the right direction.

Also, from a purely selfish standpoint, we feel that any penalty

which cripples another State’s program or unwisely diverts resources to a system project, will lead to a poorer and not better performance for the interstate case in which we have a direct self interest.

I am attaching to my testimony two American Public Welfare Association resolutions which New York urges you to consider. The

first concerns the proper response to States which have failed to

achieve certification.

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The second, and perhaps more important one, makes the argument for significant change in the development and funding of all

automated information systems. If we do not tackle that bigger

problem—and now may not be the time—I think that we will be

back here again in two years talking about penalties again.

Thank you, Mr. Chairman.

[The prepared statement follows:]

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Chairman SHAW. Thank you, Mr. Doar.

Ms. Frye.

STATEMENT OF LESLIE FRYE, CHIEF, OFFICE OF CHILD SUPPORT, DEPARTMENT OF SOCIAL SERVICES, SACRAMENTO,

CA

Ms. FRYE. Good morning, Mr. Chairman and distinguished members of the subcommittee.

My name is Leslie Frye, and as you have heard, I am the Chief

of California’s Office Child Support. I really appreciate the interest

of the committee in this complicated and somewhat technical area

and the leadership that you have shown in making important

changes in child support and welfare.

I do appreciate the concern shown by many Members of Congress, the administration and the advocate community who realize

that the penalties in current law would eliminate essential services

to families and who are now willing to discuss changing those penalties. The question we are all struggling with is finding the appropriate punishment for the crime of failing to meet deadlines which

does not also cause irreparable damage to States’s programs. It is

widely accepted and well documented that the failure of the Family

Support Act systems—of the delay of them—are many and that

many entities, including States, Federal oversight agencies, and

private-sector vendors contributed to the widespread non-compliance with the original and extended deadlines.

As we look forward to the next round of systems development required by welfare reform, any difficulties in meeting those deadlines will likely result from similar factors and players. We read

daily that the year 2000 crisis is gobbling up scarce programming

resources and driving up the price of software development.

States are still waiting for directions from OCSE before they can

proceed with some of the key changes. As you mentioned, the funds

that Congress appropriated for—to pay for these changes have still

not been allocated and the hoped for reform and procurement and

approval processes have yet to materialize.

Yet it seems to be a fait accompli that penalties will ensue for

the States who are struggling to meet the Family Support Act expectations. Why should States alone shoulder the blame when no

other contributor to the problems of the past and likely problems

of the future must do so? Why the accountability here by virtue expected uniquely of States?

As a practical matter, I strongly support the bipartisan bill that

is before the subcommittee. I would make several suggestions that

we would like to see for improvements in it.

First, the annual penalty should be—the forgiveness of the annual penalty should be available to States which are continuing development of their systems under structured corrective-action plans

and meet those milestones. DHHS has had a lot of experience monitoring State’s corrective-action plans as they relate to audit findings and would be able to determine if measurable milestones are

met.

Between 1984 and 1994 OCSE conducted 154 program audits

and required corrective action for 115 times. For nine States, they

failed OSCE’s first followup review and a sanction was assessed.

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Seven States failed the second followup review and a bigger sanction was assessed. And only one State failed the third follow-up review. This process can work. The corrective-action process is widely

used by DHHS in its oversight of many social service programs as

well as by the USDA in its oversight of the food stamp program.

Second, we would recommend that the penalty structure overall

should be reduced to 2 percent initially with two percentage points

increments as Senator Feinstein indicated. The objective of the

sanction is to create the motivation for States to complete their

projects quickly. There must be a balance between this goal and

damaging programs to the point that they cannot provide services.

The penalty structure in the subcommittee’s bill would cost California about $12 million a year in the first year. That is about

$33,000 a day, or one case worker.

Many players, as I said before, contributed to this problem. Yet

only States must pay the penalties. We believe that a lower overall

structure meets the goal of underscoring the importance of project

completion without making it impossible for States to succeed.

Last, we would like to see a reinvestment provision whereby

States could choose to put the penalty dollars out of their general

fund into the child support program rather than sending those dollars or having the Federal Government retain those dollars with no

assurance that those dollars will improve the program in the State

in question or anywhere in the country.

I thank you very much for the opportunity to testify, and I would

be happy to answer any questions that you have.

[The prepared statement follows:]

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Chairman SHAW. Thank you, Ms. Frye.

Mr. Dutkowski.

STATEMENT OF WALLACE DUTKOWSKI, DIRECTOR, OFFICE OF

CHILD SUPPORT, FAMILY INDEPENDENCE AGENCY, LANSING, MI

Mr. DUTKOWSKI. Thank you, Mr. Chairman and members of the

subcommittee, for the opportunity to testify today. The State of

Michigan would like to extend its thanks to the chairman, Mr. Clay

Shaw, and members of the subcommittee for the leadership they

have displayed by introducing this bill. I would also like to thank

both Michigan members of this subcommittee, Representative Dave

Camp and Representative Sandua Levin, for their work in this important bill.

Today I would like to present Michigan’s perspective regarding

this legislation, but I urge you to review Michigan’s written testimony for more in-depth information about key issues regarding the

Title IV–D systems specifically and about all of human services

automated systems in general.

Today in Michigan, every child support enforcement office is

automated. Forty-five enforcement offices are using the State-developed child support enforcement system, or CSES. Nineteen are

using county-developed systems.

How well does Michigan do? In the Federal Child Support Enforcement’s twentieth annual report to Congress, the most recent

data publicly available, Michigan ranks number one in total distributed collections, number two in support collections for dollar expended and is one of only seven States reporting program savings

in Title IV–D. Michigan’s child support program accomplished this

in spite of not having a federally certified system. Could we do better with an approved system? Yes we could, and we will.

To complete our system, we must be allowed to link some existing local systems with the current State-developed system. I am

here today to thank the subcommittee for the language included in

the Shaw-Levin bill which supports the ability of States to select

an alternative system design. By utilizing an alternate system

strategy, large counties in Michigan will not have to surrender additional functionality already built into their systems. At the same

time, Michigan will be able to perform all the mandated functions

required of a federally-certified system.

It is important to note that Michigan did not get into this position all by itself. Both my State and HHS must share responsibility

for our lack of certification. We began development of our system,

we asked HHS for approval to build a system based on linking existing local systems. Our proposed design was denied. To better explain what we were requesting then and what we are requesting

again now, I brought with me today two graphics which are on my

left on the easel and are also at the end of each of your packets.

[Displays graphics.]

The first graphic depicts the Federal single State-wide system

design; the second provides a graphic depiction of Michigan’s proposed alternate system. I would like to draw your attention to how

similar these two designs are. Please notice there is a single point

of access for all users of the system. So to users and to the external

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world our design looks and feels like a single State-wide system.

I would also like to add here that in Mr. Monahan’s testimony—

written testimony—he identified a number of functionality requirements—a number of things that these systems must do. I want you

to know that those things already exist in Michigan’s system today.

We expect our system to do much more than that when it is completed.

Is such a system possible? Absolutely. By using existing technology similar to that used with the Internet, all of our users can

be linked to interact with each via a single, central-processing center. Using this linked system design, counties will not have to give

up functionality. They now just have to participate in our Statewide system.

We are also pleased that this subcommittee is recommending a

change to the current fiscal penalty for not meeting the FSA 1988

systems deadline. The current penalty would effectively result in

the elimination of Michigan’s child support program. Even the proposed penalty will have a detrimental effect on Michigan. A productivity loss of 4 percent due to the 4 percent fiscal penalty would result in a $43 million loss in support payments for families, 706

fewer paternities established, and nearly 11,300 child-support cases

not being enforced.

The key question that needs to be addressed is what do you want

from a penalty? If it is to encourage States to complete their systems then a modification to the proposed penalty language is necessary. We recommend that the subcommittee add a corrective-action plan process, as Ms. Frye has identified, as an additional tool

for addressing the systems-deadline issue. The corrective-action

plan would require each State not yet certified to develop a plan

that contains specific deliverables with associated timeframes. The

penalty forgiveness provisions of this bill should also apply for

States not certified if they complete all the requirements of their

corrective-action plan. If States do not complete their corrective-action plan, the full penalty would and should be applied.

Michigan achieved the results I mentioned earlier, even though

we have lost approximately $20 million in Federal child support incentive payments since Fiscal Year 1992. These payments were lost

due to the dramatic reduction in the caseload brought about because of our successful welfare reform effort To Strengthen Michigan Families. Under welfare reform, the current child support incentive formula has actually become a disincentive for States. Moving people off welfare actually reduces resources for the child support program.

We want to thank the members of this committee for including

the modified incentive language in this bill. It is critical that the

incentives and the entire Title IV–D program begin to reward

States for results that they produce not the activities they perform.

The proposed new incentive structure does just that.

In closing, Mr. Chairman, Michigan’s performance reflects its

commitment to the child support program. We are making these

recommendations so that we have the flexibility that we need to

continue our excellent performance.

We look forward to working with you on these support issues and

hope that our comments today have been helpful.

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Thank you again for the opportunity to testify, and I will be

happy to answer any questions that you may have.

[The prepared statement follows:]

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Chairman SHAW. Thank you.

Mr. Levin?

Mr. LEVIN. Thank you, Mr. Chairman, and thanks to each of you

for your testimony.

Mr. Dutkowski, it has been a pleasure working with you. I know

that Mr. Camp feels the same way. And I think that everybody

should know that the development of the waiver language occurred

only after we became assured that it could be applied in a way that

would enhance child support collections not undermine them. And

that is why I referred to the language from the administration that

they were going to be rigorous in its application and that really the

burden of proof would be on the State.

We do not need to have one made in Washington structure, however we have to have an assurance of a system that is State-wide

and that will work. And if there is an adaptation that a State can

introduce, fine. But it is going to have to meet it.

And this gets to the penalty issue which some of us have discussed. The problem of leaving it to the discretion of HHS is that

they don’t believe that they should have that discretion. They think

that there has to be some penalties with some teeth in it. And it

isn’t going to be a very substantial portion of what’s received in the

administrative funding. It won’t be meaningless otherwise it isn’t

an incentive. But I think that if you look at the amount of monies

that the States have received for administrative purposes over the

years, forgetting for a moment, just for a moment, Mr. Shaw’s point

about the gangs from TANF, just in terms of administrative funding, I think that States, in some cases have made money. They

have received more money than they have spent. And to simply—

to say to the States that they can, instead of paying a penalty, reinvest it, I’m afraid takes the balance here that has a bit of meaningful stringency to it. And every State has to act because when

one doesn’t it penalizes every single other State.

So, we’ll look at that. But I think again the burden is to show

how we’re going to achieve the result if we ease the penalties even

further. Or if we leave it open-ended and let them reinvest—we’re

reasonable people, but we’re tough reasonable people. And I’m

proud to have worked with Mr. Shaw and with our colleagues on

this bill and will continue to work with you and take your ideas.

And Ms. Frye, I very much appreciate the spirit of your testimony. You are not coming in here and saying, ‘‘Forget it. Leave us

on our own.’’ We need a system. You basically support this kind of

a structure. You would like some amelioration. But it’s been a long

time for the State of California to bring itself up to speed hasn’t

it?

Ms. FRYE. I appreciate that, Mr. Levin, and I would like an opportunity, if I might, to respond to Mr. McCrery’s question earlier.

Is that okay if I do that?

Mr. LEVIN. Sure.

Ms. FRYE. He had asked me why was the State of California having such a difficult time meeting the requirements of the Family

Support Act, and I think that many States face the issues that

have been raised: the transfer system, the delay in the change of

Federal guidance, the resources and so on across the country.

Those did affect California.

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But I did want to say one thing about why—a reason that did

not cause our system to fail. And that is that the State of California, unlike Michigan, never pursued an alternative-system configuration until it became clear that the product that our contractor

was delivering to us was not working. And the counties—you did

not see the counties here asking for alternative-system configuration support until we rolled this system out in the counties and

found that because it was a transfer system built on small States

and all these systems were small State transfer systems, it could

not work as developed by our contractor in California. And it was

only as a measure of attempting to continue to deliver services as

a survival mechanism that we came around to saying that the best,

fastest, easiest, cheapest way for us to meet these requirements

and to provide the services is to look at the alternative-system configuration. It was not the other way around which is, I think, held

to be believed to be the truth.

Mr. LEVIN. Thank you.

Chairman SHAW. Mr. Collins.

Mr. COLLINS. I’ll pass.

Chairman SHAW. Mr. Coyne.

Well, I want to thank these witnesses. I think that it’s important

to realize—and Sandy—I was noticing in his line of questioning

and in his statement that he was sounding very much like a hardhearted Republican——

[Laughter.]

Mean spirited is the word.

I think it’s important to realize here that this is—and I don’t

want to appear that we’re having a hearing and that we’re all

closed-minded—even though that point could be argued. There has

been a great deal of compromise and give and take between these

witnesses and our staff and the staff over on the Senate side to get

to where we are. And if you look at where we are now and the direction we’re going, the penalties are going from a—as I mentioned

in my opening statement—to a nuclear-type penalty, to a slap on

the wrist even though—I mean we’re still talking about a great

deal of money, but when you’re talking about four percent as compared to 100 percent and including in that 100 percent the TANF,

this is just a different—it’s not a different world, it’s a different

universe that we’ve already travelled to. So I don’t want to appear

that we are being stubborn or that we’re not going to compromise

because I think that we’ve already shown compassion for the problem that some of the States are going through. And we do certainly

recognize that—all this welfare reform—I feel awkward here in

talking about penalties for some of the States that really have led

the way and shown us the way as to welfare reform in general. But

these are not punishments. Ms. Frye, it is not a crime we’re looking

at, it’s a question of just trying to work it out and be sure that incentives are still in place to move forward and to reaching the objective that all of us would like to reach.

And I would also like to mention that my own State of Florida—

and I think that this would apply to Michigan’s situation—they

have testified before this committee that in order to come into compliance they had to renovate a Model T rather than going ahead.

So there are some problems that we have created also for the

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States that have found that they had to rush to compliance in

order to meet the deadline and avoid the nuclear penalty that is

in existing legislation.

I thank this panel very much for your very fine testimony and

also congratulate you for the work that you are doing.

Our final panel. It is my pleasure to welcome back Wendell Primus the—formerly of this committee—consultant for the Center on

Budget and Policy Priorities here in Washington, D.C. Vicki—I am

known for slaughtering names——

Ms. TURETSKY. Turetsky.

Chairman SHAW. Thank you. The senior staff attorney at the

Center for Law and Social Policy here in Washington. Geraldine

Jensen, president of the Association for Children for Enforcement

of Support of Toledo, Ohio. And Ronald K. Henry who is a partner

of Kaye, Sholer, Fierman, Hays and Handler on behalf of the Children’s Rights Council here in Washington, D.C.

As with other panels, we have your full statements which become

part of the record. I welcome you and thank you for being with us.

And Wendell, if you could head off.

STATEMENT OF WENDELL PRIMUS, CONSULTANT, CENTER ON

BUDGET AND POLICY PRIORITIES, WASHINGTON, DC

Mr. PRIMUS. Mr. Chairman and members of the subcommittee, it

is good to be back, and I very much appreciate your invitation to

testify.

My name is Wendell Primus, and I am director of Income Security at the Center on Budget and Policy Priorities.

The center strongly endorses the basic approach outlined in your

bill on child-support penalties. Withdrawing full Federal funding

for both the TANF and the child-support programs would seriously

jeopardize assisting needy families and collecting child support.

On the other hand, it is also inappropriate to grant another one

or two-year extension of the deadline without any serious consequences. It sets a bad precedent.

The approach adopted in the bill is correct. It sends a very strong

message that States should get their systems certified as quickly

as possible and that the longer they delay the greater penalty they

will face. Yet it also sets reasonable penalties that will not jeopardize States’ abilities to assist families and collect child support.

If anything, Mr. Chairman, I would urge that the penalties be increased and that at a minimum, as the bill proceeds through the

legislative process, that you resist efforts to lower these penalties.

I say this—what happened to the chart? Oh. [Laughter.]

I say this not because I want States to pay penalties to the Federal Government, but so that appropriate attention, energy, and effort are focused at the State level on getting their computer systems completed and certified as soon as possible.

To bolster the argument for increased penalties, see that table.

[Chart.]

It compares the TANF work penalties to the computer penalties

in the draft bill. The work penalty amounts are the maximum allowed under the TANF statute and assume no corrective compliance plans or reduction in the penalty due to reasonable cause or

some degree of compliance. They are hypothetical because most

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States will meet the work requirements in TANF and several of the

States identified with an asterisk have already developed a certified computer system.

But as you can see, the penalty for failing the work requirement

is much more severe than the penalty for not having the computer

system certified. These penalties should not be so disparate. Not

having the child-support system fully automated and consequently

allowing some parents to escape paying child support in a timely

manner is as serious as not having sufficient custodial parents engaged in work activities.

The relationship of those penalties is obviously a value judgment.

But using the TANF penalties as the guideline, I would argue that

the penalties in this bill are not severe, and as a result, I would

argue for increasing for increasing them somewhat and continuing

to escalate them each year instead of capping the penalty at the

end of the fourth year.

Another reason to increase penalties is that many States are

making a profit off of the child-support system. The penalties you

authorize in this bill are not really increasing State costs, rather

they are lowering the amount of monies the States make off the

child support enforcement system.

Some States affected by this legislation would have you believe

that imposing this penalty would cause States to reduce the

amount of resources flowing into the program. However, most

States have budget surpluses thanks to a strong economy. Obviously States can choose to reduce resources. But it is a choice and

not an outcome that this bill forces or mandates.

As your bill is formulated—which I strongly support—you would

not forgive any further penalties until the year the computer system is actually completed. It is too difficult for HHS to administer

and determine whether progress is being made each year in accordance with a compliance plan. It also dilutes significantly the incentive to get the computer system certified if they ultimately know

that there will be no consequences.

The center has one overriding concern about mandating a waiver

of the requirement of the single State-wide system if certain conditions are met. We feel that it will cause further delay. Moreover,

the authority to waive this requirement already exists. Placing the

authority in statute runs the real risk, by the time the bill is enacted, regulations are promulgated, the States and computer vendors understand it, the bidding process goes through—it will be a

very long time. And I think that you run the real risk that we will

delay State implementation of computer systems longer—a result

we are all trying to avoid.

That the new child-support incentive systems reward positive

outcomes is an important step which we strongly endorse. I have

one major concern with the bill as currently drafted. The section

entitled ‘‘reinvestments’’ states that the incentive payments must

be used on the child support system or activities approved by the

Secretary. Because money is fungible, the purpose of this language

is not achieved. In my written testimony it outlines, I think, a suggestion, on how that section could be tightened.

I would make two further suggestions. Aggressive enforcement of

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tions any medical support for any Medicaid child that reduces the

cost of Medicaid. And I think that giving States incentive for collecting for noncustodial parents with lower incomes could be more

readily achieved by rewarding payments from noncustodial parents

with low awards with a higher rate than payments from noncustodial parents with high child-support awards.

In closing, Mr. Chairman, I want to compliment you and your

staff on the processes you have gone through in developing this legislation. I look forward to working with this subcommittee in the

future as it continues to strengthen the child-support enforcement

program and focuses on the contribution that non-custodial parents

can make to the well being of their children.

Thank you.

[The prepared statement follows:]

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Chairman SHAW. I’ll try it again. Ms. Turetsky. How did I do?

STATEMENT OF VICKI TURETSKY, SENIOR STAFF ATTORNEY,

CENTER FOR LAW AND SOCIAL POLICY, WASHINGTON, DC

Ms. TURETSKY. Very well, thank you.

Mr. Chairman and Members of the Subcommittee, I appreciate

the opportunity to testify today.

When Congress passed the requirements that States implement

one statewide system in 1988, it passed a solid, workable piece of

legislation. The idea was that States could improve program productivity not only by automating but by streamlining and standardizing routine child support activities. Congress should not

change the single Statewide requirement or the waiver process currently administered by HHS. There are two reasons why.

First, most States say that the requirement has helped them operate better child support programs. Recently, CLASP surveyed

State child support directors to ask them directly to describe the

benefits and drawbacks of the single statewide requirement in Federal law. So far, three-fourths of the States have responded, and

while the survey results are preliminary, States mostly reported

benefits rather than drawbacks. At the top of the list were program

standardization throughout the State, the ability to pull up cases

anywhere in the State and simplified computer development and

upgrades.

What was particularly striking about the survey responses was

that nearly every State with a county-based program reported that

it was harder and more costly to implement the statewide computer. Three-quarters of these States with county-based programs

reported additional problems with their program. The problems

were with the program structure rather than with the Federal requirement for a single statewide computer. They said that the decentralized structure of their program hampered performance, decreased program accountability and made it harder to maintain reliable data.

Second—and let me emphasize the importance of this, as Wendell has—there is a serious risk of further delay if State planning

and implementation of the system are diverted by the waiver process. If Congress sends an unequivocal message that it’s not going

to change the law on this—my understanding is that California, for

example, could finish by expanding one of its county systems. However, so long as the waiver legislation is pending, State planning

efforts may stall. If the waiver door is widened, it is likely that

States will feel pressures from some of its counties to pursue a

waiver.

The legislative process in Congress could take several months.

The waiver process will take several months. Yet there is no assurance that in the end the result will be a more effective system if

the State pursues a waiver or that the system will be approved.

Other States that are well on their way to certification may well

decide to switch tracks to pursue a multiple system strategy because of internal political pressures.

If the legislation includes waiver language, Congress must preserve the key benefits of the single statewide system: program

standardization, access to cases throughout the State and simVerDate 20-MAR-2000 13:39 Apr 14, 2000 Jkt 063428 PO 00000 Frm 00097 Fmt 6633 Sfmt 6602 E:\HEARINGS\60882 pfrm01 PsN: 60882
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plified computer upgrades. The subcommittee should make clear its

intent that a State must implement an integrated system.

Let me explain what I mean by an integrated system. I’ve heard

States actually discuss two visions of multiply-linked systems. The

first vision focuses on technological flexibility, and the second vision focuses on local program control.

The first vision is a Wide Area Network or similar kind of technological system. Although there are multiple computers, they operate together. They operate as though they are one system

through shared software. A case is entered in one location and can

be pulled up in another. Data is only entered once. Program procedures are standardized throughout the State. System software is

developed and updated statewide and installed on all computers at

the same time.

The second vision is of county systems that interface for some

but not all purposes. Local programs develop and run separate programs and separate software that incorporates local policies and

procedures. Each county system separately meets functional requirements and counties upgrade their own computers. Some functions are performed at the State level and there is shared data, reporting data, shared at the State level.

The practical implications are very different for these two visions. For example, consider how a State’s linked multiple system

would respond to a custodial parent who moves from County A to

County B. Can the worker in County A electronically transfer the

case to County B or will County A close out the case and ship the

file to County B? When the person walks into County B’s office, is

she told that County B is already working on her case or is she told

to start over again and file a new application? Can the worker in

County B go to the computer and find her case anywhere in the

system?

In addition, States should show the linked multiple systems are

cost effective and this should apply not only to initial implementation but to upgrades and replacements, and to maintenance.

Let me turn to penalties briefly. The proposed penalty structure

is a balanced approach designed to encourage States to finish sooner rather than later, and CLASP strongly endorses the subcommittee’s basic approach and commends it for its work in this area.

However the penalties are on the low side. The point is to convince

the State legislature and local players that they cannot afford further delay. The subcommittee should consider increasing the third

year penalty to 20 percent particularly if it adopts a waiver provision so that States will think very carefully before pursuing a waiver.

Mr. Chairman, because there is forgiveness in the year of completion, our hope is that no State will end up paying 20 percent.

Forgiveness, however, should only be in the year of completion.

Members of the subcommittee and Mr. Chairman, I refer you to

my testimony for incentive payments recommendations I make.

Thank you very much for the opportunity to testify.

[The prepared statement follows:]

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STATEMENT OF GERALDINE JENSEN, PRESIDENT, ASSOCIATION FOR CHILDREN FOR ENFORCEMENT OF SUPPORT,

INC., TOLEDO, OH

Ms. JENSEN. Good morning, Mr. Chairman and members of the

committee. Thank you for this opportunity.

I am here today to represent the 35,000 ACES members across

the country who are families whose children are owed child support. There are now 39 million children owed $41 billion. The average ACES member is a single mother. She earns $12,000 a year.

She has two children, and she has been waiting for over two years

for the State government to act on her case.

Today we view the decisions you make as the first test about how

serious Congress is of welfare reform. Are you truly serious about

helping us move from welfare dependency to self sufficiency?

Eighty-seven percent of the families on welfare are there because

they are owed child support.

We ask you to say no to the States as they ask for county and

regional-based computer systems. Single parent families need a

single State system. It is more expensive for States to put in computers in the counties because it costs more for the hardware. It

is more expensive because it costs more for the software. It is more

expensive because you have to upgrade each individual system instead of being able to upgrade one single State system.

Yes the technology exists today to have an Apple computer talk

to an IBM, but often the results are jumbled and ineffective. And

just because we have the technology does not mean that we should

use it. Just because we can clone a human does not mean that we

should do so.

California is a perfect example of this problem. California’s welfare computer system consists of four systems linked together. It

takes one-and-a-half years to transfer a welfare case between counties in California. On the other hand, their MediCal system, which

is a single State-wide system, handles millions of transactions

every day efficiently and effectively--at least as many as a childsupport system will.

Asking or allowing HHS to determine if the multi-system will

meet the requirements, to us, is very worrisome since they are the

group that just monitored the States that spent $2.6 billion on broken and non-existent systems. They are the same group that didn’t

issue the regulations in a timely fashion in the past. We do not believe that they will be capable of determining if these proposed

multi-systems will actually work.

Families also ask you why shouldn’t States be penalized for failure to comply with the Personal Responsibility Act. Mothers who

are required to cooperate to establish paternity, they lose 25 percent of their Federal funding if they don’t follow the law. Mothers

who don’t find a job within two years could lose all their Federal

funding, their TANF benefits, if they don’t follow the law. It’s

seems to us that if it is required for the people to follow the law,

so should the government. And it seems very far away from the

Bill of Rights concepts of ‘‘for the people’’ and ‘‘by the people’’ when

the government is exempt.

Mothers might try to get out of losing the TANF benefits by saying to their case worker, ‘‘Well, the babysitter didn’t show up.’’ or

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‘‘The car wouldn’t start, or I couldn’t get to my job.’’ They will still

lose their Federal funding.

States use excuses of, ‘‘We had to transfer a system. The regulations were slow in coming out. The vendors ripped us off.’’ These

excuses are just as unacceptable and should not be allowed and

States should be punished.

We do not support taking TANF funds or taking Federal Financial Participating Funds or any operating funds. We do support,

however, that you withhold their incentive and bonus payments

until their computers are in place and working. Most States, in the

past, have put those incentive payments into their general fund

and have used it for other State programs such as paving roads

and maybe other social service programs. We feel that they are

more likely to respond quickly if they lose their incentive money.

We also believe that it is time for Congress to consider looking

at completely reshaping the child-support system. It is like we built

a one-bedroom home in 1975 when you passed the initial child-support laws. We added on a room in 1984 when you passed the ChildSupport Amendments. We added on another room in 1988 as the

number of children began to grow in the family when you passed

the 1988 Family Support Act. Last year, 1996, we built a whole

new wing when you added the Personal Responsibility Act.

When we first built the house, we had a small furnace to heat

all the rooms. As we began to grow, we put these space heaters in

all these rooms to heat them. But we found several things happened. They don’t work very well. The utility bills are higher. Heat

certainly isn’t even throughout the house, and there’s definitely not

enough heat getting in the children’s bedrooms.

We’re asking you to consider having hearings on H.R. 2189, a bill

sponsored by Congressman Henry Hyde and Lynn Woolsey, to look

at setting up a new State and Federal partnership. Not the current

one where the Federal Government provides all the money and the

States do what they want, but a partnership where States would

establish orders, establish paternity and modify orders, and the

Federal Government would participate by payroll-deducting support from all workers just like we do social security tax, collecting

child support from the self-employed through the Social Security

quarterly self-employment tax. And the Social Security Department, then, would distribute payments to families just like they do

Social Security checks.

In a country that has a Social Security system that guarantees

a child who has a dead or disabled parent support, isn’t it time

that we have a system that ensures children with living and working parents regular and adequate child-support payments?

Thank you.

[The prepared statement follows:]

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Chairman SHAW. Thank you, Ms. Jensen.

I’d like to say to the people that are standing in the back of the

room, there are a few seats here that are reserved that are no

longer reserved if you care to come up and sit down.

Mr. Henry.

STATEMENT OF RONALD K. HENRY, PARTNER, KAYE,

SCHOLER, FIERMAN, HAYS AND HANDLER, REPRESENTING

THE CHILDREN’S RIGHTS COUNCIL, WASHINGTON, DC

Mr. HENRY. Thank you, Mr. Chairman and Committee Members.

The Children’s Rights Council appreciates the opportunity to speak

to you today.

The Children’s Rights Council is a non-profit, educational organization, whose sole purposes are to encourage family formation,

family preservation, and what we like to call the demilitarization

of divorce to keep both parents actively involved in the child’s life

even if the parents aren’t under the same roof any longer.

We’ve attended the group meetings that were scheduled by staff.

We’ve listened to the testimony here today. And we believe, quite

simply, that the staff has struck the right balance on the incentiveformula-penalty issue and urge you to move forward with the legislation that is under your consideration. Accordingly, what I would

like to do in the few moments that I have is focus on another aspect of the legislation that I don’t believe has gotten any attention

yet this morning.

You will recall that last fall the House acted upon revisions to

the child support incentive formula, but no action was taken by the

Senate. The goal, of course, was to remove some of the unintended

consequences that had existed in the old incentive formula where

the States were basically being paid to focus on the wrong thing.

You are trying to redirect their energies by redirecting the incentive formula. We agree that this needs to be done and that it needs

to be done in a way that is consistent with the underlying congressional goals that have been set forth in TANF. We want to make

sure that the new incentive formula does not inadvertently create

some new unintended consequences or preserve the prior unintended consequences, and assure that, in fact, we do achieve the

TANF goals. Now, of course, one of the core TANF goals was the

encouragement of marriage as a vehicle for reducing welfare dependency. We recognized in Congress over the last several years

that marriage is the single most powerful vehicle for reducing and

preventing welfare dependency.

With that in mind, when you restructure the child-support incentive formula, we’d urge you to look at a couple of specific items because the way that the incentive formula language has been drafted to date does not operate in a way that is consistent with the

TANF goal. Look, for example, at the paternity-establishment subfactor. As currently written, the paternity-establishment subfactor

looks only at unwed births. It doesn’t look at children who are born

into marriage or marriages which occur after birth.

Now take, for example, a case worker who is counseling a young

couple before the birth of their child. That case worker looks at the

language of the incentive formula and knows that if they get a

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ment of paternity, they will score a point and get credit under the

incentive formula. If the caseworker encourages that young couple

to get married, the way the formula is written right now, they don’t

get credit. Now that is an oddity, and it really shouldn’t exist. We

should recognize in the Federal Government and in our incentives

to the States that getting that couple married is every bit as beneficial to the child, and is, in fact, as we all know, much better for

the child than getting a support order or a voluntary acknowledgement of paternity. If you’re going to write a formula which gives

the States credit for establishing paternity, we ought to write that

formula in a way that recognizes a marriage license as being every

bit as important to the child as a voluntary acknowledgement of

paternity.

You will find the same problem under the subfactor that talks

about the establishment of support orders. If a young couple gets

married, they don’t need a support order. They don’t need to establish paternity. They don’t need to enforce a support order. That

child is supported under the life and opportunity that it has within

the marital unit. The incentive should be written, very simply, to

give credit for children in a State who are given their support

through marriage, not just children who are given their support

through a support order.

I think that this is important from the standpoint of equity to

the States as well because all children, of course, are born with a

biological father even though there are variations in rates of illegitimacy among the States. So if you want to treat the States equitably, if you want to increase the number of children who are supported, if you want to be consistent with the TANF goal of encouraging marriage, let’s give the States credit in the incentive formula

for children who are supported through marriage as well as children who are supported through a judicial order.

The third factor in the incentive formula is the question of current payments. Now this was rewritten specifically because there

was a problem in the old incentive formula in that the States were

just encouraged to look at the big money cases and they were looking at gross dollars rather than looking at the number of children

supported. That problem has not been cured with the language

that exists right now.

Take, for example, a caseworker who has got, say, ten cases at

$200 per month per child and one case at $2,000 per month per

child. The way the incentive formula is written right now in the

proposed legislation, that caseworker gets as much credit for taking

care of the one $2,000-a-month child as she would for getting the

support required for all ten of the $200-a-month children. If you revise the incentive formula to say that we are going to look at the

percentage of cases which are in compliance with their order rather

than simply the percentage of gross dollars that are collected, you

will be focused on children and you will remove the incentive for

the caseworkers to only work on the handful of big cases that they

view as easier.

Finally, with respect to the arrearage payments, when you look

at that issue, you need to look at its interaction with what is

known as the Bradley Amendment. If you take, for example, a

worker whose only offense is that he was downsized out of a job,

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is no longer employed, no longer bringing in a paycheck, you don’t

want to turn that person into a deadbeat. You want to have a system which encourages modifications to the support order, encourages people to be able to get new work.

Right now, the way the Bradley Amendment is written, that

worker, on the day he loses his job, he automatically becomes a

deadbeat because the Bradley Amendment currently is structured

to make unmodifiable any arrearages which accrue beginning the

first day of unemployment.

Now this is bad for the States also because the way the Bradley

Amendment currently works forces the States to spend their resources chasing after people who simply don’t have the money. I

brought one example. This is the ‘‘Most Wanted’’ list from the State

of Virginia’s Bureau of Child Support Enforcement. You will see

that it’s got a gentleman listed named Willie Bibbins who owes

$42,000 and you think, ‘‘Well, that is probably some plastic surgeon

running around with a trophy wife in a Mercedes.’’ until you look

and you see that Mr. Bibbins’ occupation is ‘‘poultry catcher.’’ Now

you don’t know and I can’t tell you whether Mr. Bibbins is a good

person or a bad person, but I can assure you that a poultry catcher

is never going to have the $42,000 that Virginia is being asked to

collect from him.

We need to look at how the pieces of the system fit together and

the ways in which some of our impositions, such as the Bradley

Amendment, may have created deadbeats. Not all deadbeats are

born. Some of them are made by restrictions and lack of flexibility

in our system. I would ask you to look at how the pieces of the system fit together.

Mr. Chairman, in closing, as you work to improve child support

collection, let’s make sure that we come up with an incentive formula that doesn’t simply replace one group of unintended consequences with another. Let’s look specifically at how we can

incentivize the bureaucratic workers within each State to make

sure that they are working to achieve the goals that Congress has

set for them.

Thank you.

[The prepared statement follows:]

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Chairman SHAW. Mr. Collins.

Mr. COLLINS. Mr. Henry, your story about the collection reminds

me of the Hee Haw program when Buck Owens wanted to rent a

room from Roy Clark and he asked if he had a room available at

the Empty Hearts Hotel, and he said that he did. So he said, ‘‘How

much is it a night?’’ And he said ‘‘A million dollars.’’ And he said,

‘‘Well, you don’t rent many, do you?’’ And he said, ‘‘We only have

but one.’’ It’s kind of like your collections, you know.

Mr. HENRY. Right.

Mr. COLLINS. I want to ask the same question that we asked earlier to the administration about the drivers license and social security numbers. You probably heard the question. The American Association of Motor Vehicles wants to change the effective date of

that from January 1, 1998 to October 1, 2000. Do either of you all

have any objection to that date change? Or do you have an opinion

on it?

Ms. TURETSKY. Mr. Collins, I would like to look at the proposal

more closely and talk with APWA officials and States and advocates about the issue. I would be happy to get back to you, however.

Mr. COLLINS. Good. If it hasn’t raised an antenna by now, I don’t

think it is really going to have any negative effect on anyone.

Chairman SHAW. Would the gentleman yield?

I think that date change brings it into compliance with something that the Judiciary Committee did with regard to immigrants.

And that’s the reason for the change.

Mr. COLLINS. That’s the basis for it.

Mr. HENRY. And I would specifically recommend the granting of

a little extra time on that. You may have seen in this morning’s

paper the fact that Virginia is facing significant embarrassment because they threatened license revocation for over 2,000 people erroneously.

They don’t have the databases in place. They don’t have the

mechanisms right now to properly enforce the mandates that are

already in place. Part of what you are doing to force them to get

the computer systems in place will help with that. But you don’t

want to be in a position where the credibility of the entire program

is undermined by mass errors of this sort.

Mr. COLLINS. Yes, I’m amazed at our collection process. And

sometimes I wish that when I get my American Express bill that

they did the same thing that we did to child support and I wouldn’t

have to worry about sending them a check for a long time.

I thank each of you for coming.

Chairman SHAW. Mr. Levin.

Mr. LEVIN. I don’t have as good a story as Matt about the million

dollar room, but let me just say briefly, thanks. It’s really interesting testimony. In terms of the waiver provision, I think it can

be safely said that as to its revision, Ms. Turetsky, it is clearly essentially the first and not the second. There may be some details

that have to be looked at, and I think that the question is this. If

you have a system that is workable and effective, why require that

it be taken apart and discarded? I have some faith that with some

rigor that HHS can implement it in view of its dedication to making this child-support system work. And it opposes relaxation of the

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penalties, for example. I don’t think that there is any question of

the seriousness of the intention of HHS. And I hope that we not

only talk about the benefits of modern technology, but we let them

be utilized.

So I just hope that we will all continue to work together and

work on the problems that are real and not overstate problems that

we really can solve.

Ms. TURETSKY. Mr. Levin, I appreciate your comments. Technology has changed. However, the clearer the language can be

made in the waiver provisions toward the integrated and cost-effective system, I think the more helpful it will be. And in addition,

I do, again, stress that the problem is delay both in the inevitable

legislative cycle and in any waiver request process.

Mr. LEVIN. I don’t envision—I don’t see why there would be any

delay. I think that the legislation is written clearly, and if it isn’t

clear enough, we can write it still more clearly. I think that the intent is clear, and indeed the intent, I think, really binds us all together, and I don’t think that we should allow anybody to separate

us.

And as to your other suggestions, I hope that we will take them

under advisement—all of your suggestions. And I hope we will do

that very quickly because I believe that the intent is to mark-up

this bill very soon. So we have all worked together these last

months, so let’s finish doing that in the next week or so. Let’s get

this moving.

Ms. TURETSKY. Thank you, Mr. Levin.

Chairman SHAW. Ms. Turetsky, the bill that is before us lists

specific and detailed requirements that States must demonstrate to

the Secretary in order to be granted a waiver for an alternativesystem configuration. Is there anything that you see that is missing from this list? And in that regard, I would say to you and to

all the witnesses and people that are here this morning that anything—any suggestions that they might have, we are open to suggestions in this area, and we would be glad to include them in the

bill if we agree as to the wisdom of them. Do you have anything

that you would like to add at this point?

Ms. TURETSKY. Chairman Shaw, we did send some comments

over to Mr. Haskins for your review. I think that there are three

ambiguities in the language.

The first ambiguity is the question of, what role do these factors

play with respect to the rest of certification requirements? The

problem there is the word ‘‘functional.’’ The word ‘‘functional’’ applies to most of the requirements in the certification guide, but not

all of the requirements. Computers are required to be able to enforce support and send out notices and interface with other agencies. Those are all functional requirements. But in addition, the

system is required to be cost effective and cost beneficial for the

program, and the system is required to be integrated meaning

shared software, seamless linkages, no-one-can-tell kind of integration. And so I would suggest removing the word functional to refer

back to the body of the certification guide.

I would also make the list one of structurally including but not

limited to these factors. I understand that the factors hit some of

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the highlights that the administration may be concerned about

with the multiple system, but they are not inclusive.

And I would explicitly make a cost-effective standard, which is

in the statute but which gets muddied by the issue of functionality.

I would make it explicit that it be cost effective and refer back to

the statute.

There are some other wording changes that I would make with

respect to integration and with respect to the ability to pull down

cases from anywhere in the State. But those are the big areas.

Chairman SHAW. Mr. Henry, you brought up the point that we

should be scoring marriage along with support, and you also

brought up another interesting point as to percentage of collections

as opposed to the dollar amount which I think is something that

we ought to look at.

How would you, however, go through and score or be able to detect the marriages that are brought about by way of counseling by

the State?

Mr. HENRY. Well, it is actually quite simple, Mr. Chairman.

The States have data on the number of births in each State. You

have the hospital records. You have all the information that comes

forward under the existing child support data reporting requirements.

Chairman SHAW. They tie in the date of marriage?

Mr. HENRY. Yes. And——

Chairman SHAW. Well, how would you know that the State had

anything to do with that?

Mr. HENRY. Well, I’m not necessarily saying that the State has

to claim credit for any particular marriage. I’m simply saying that

you know in a State that there are a given number of births each

year. From the Federal Government’s standpoint, it is every bit as

good for that child to be born into and supported by marriage as

it is for that child to subsequently get a voluntary paternity acknowledgement or a child-support order. I’m simply saying that the

calculation can be done on quite an easy basis.

You take the total number of children, both marital and nonmarital, and that becomes your denominator. Your numerator is

the number of children for whom there is either marriage or a support order established or a voluntary paternity acknowledgement

so that you are capturing the State’s effort, if you will, and looking

at it more broadly as to how that State stacks up in encouraging

marriage and in encouraging that child to be supported by two parents.

All we are really doing is looking at all of the children in the

State rather than simply the subset who are born illegitimately.

What you find when you do that is that it sends the message to

the States and to the bureaucracy that marriage is favored by this

government. Marriage is, in fact, not to be discouraged by the State

worker.

The problem that we have right now is that the message that

goes out to the worker is that marriage is just kind of irrelevant.

It doesn’t enter into their thinking at all. They think that they are

only dealing with illegitimacy, and their only mission in life is to

get that voluntary paternity acknowledgement. I want to send to

them the message that encouraging marriage is a good thing for

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them, and not only in terms of the incentive formula, but also

throughout the entire TANF program because we know that marriage reduces welfare dependency, length of time, even the likelihood that they will go into welfare.

Chairman SHAW. Okay, it is in TANF.

Mr. HENRY. Yes.

Chairman SHAW. We are waiting for some regulations to come

down because there is something in the welfare bill that rewards

States. Yes ma’am?

Ms. JENSEN. There is one aspect that might be helpful. Families

who do subsequently, after a paternity has been established and an

order has been established, end up in a situation where the father’s

paycheck may continue to be attached for the child support even

though they are married because she was on welfare during the

time period before they got married. So it would be good if there

would be a waiver and that the welfare debt would not have to be

paid off since the mother and the father are living there and taking

care of the children and it is very difficult for them to do that plus

pay the State.

Chairman SHAW. Thank you.

And Wendell, just a quick comment. The part of your testimony

contained on page 5 with regard to the medical payments, that is

something that, as I’m sure you know, that our committee does

have interest in and that we will be addressing probably somewhere down the line. But it is a point well made, and I don’t want

to look like we are glossing over it.

Mr. PRIMUS. Thank you, Mr. Chairman.

Chairman SHAW. Thank you. I would like to thank this entire

panel for being with us this morning.

Mr. Cardin, wherever you are comfortable, sir.

Our next witness is Mr. Cardin from the State of Maryland, a—

not a member of this subcommittee but a member of the Ways and

Means Committee.

Ben, we have your complete statement which will be made a part

of the record, and you may proceed as you wish.

STATEMENT OF THE HONORABLE, BEN CARDIN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MARYLAND

Mr. CARDIN. Thank you, Mr. Chairman.

First, let me thank you for allowing me to testify out of order.

I very much appreciate the legislation that you are considering. It

is important for my State as one State that is impacted by it, and

I think that the way that you have modified the penalty proposals

for the States is commendable. I would hope that this legislation

could move quickly.

I would like to comment on a provision that I hope you will consider adding to the bill that deals with child-support enforcement,

H.R. 2985. It would cover foreign nationals, and Mr. Chairman, I

appreciate your interest in this matter and encouragement.

For foreign nationals who are $5,000 or more behind in their

child support amounts, H.R. 2985 would deny these individuals

visas to come into the United States residency status here, or the

ability to proceed with naturalization in our country. It tries to put

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establish parity for foreign nationals with the way we treat our

own citizens. Americans who are behind in child support are denied

passports. I think that it is only appropriate that we take a very

tough position in regards to foreign nationals.

This matter was brought to my attention by a person who lives

in my district. The noncustodial parent of this constituent’s child

was coming back and forth to this country regularly and owed significant amounts of money in child support. This irresponsible parent was taking advantage of the economics of our Nation and yet

not paying for the child support of his child.

The bill also would add a provision that has been suggested by

the administration that would allow subpoenas, court orders and

other legal procedures to be served at the border. This proposal

was shaped with a great deal of input from the interagency group

that deals with international child-support enforcement issues

within the administration, and I would hope that you would be

able to add this improvement in child support to the legislation as

it moves forward.

Thank you, Mr. Chairman.

[The prepared statement follows:]

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Chairman SHAW. Thank you, Mr. Cardin.

Does anyone have any questions for Mr. Cardin?

Ben I’ve looked over the legislation. I think that it is very well

thought out, and as I mentioned to you, we are considering supporting you as an addition to the bill, although the decision has not

been made.

Mr. CARDIN. Thank you.

Chairman SHAW. Thank you, sir.

That concludes today’s hearing. I thank you all for being here.

As I’m sure that most of you know, the House is not in session

today. Many of our members have gone back to their home districts

and that is the reason why we have had a low attendance. I think

that our committee is singularly good in the attendance and their

interest with regard to this legislation and other legislation within

our jurisdiction.

We stand adjourned.

[Whereupon, at 10:54 a.m., the hearing adjourned subject to the

call of the Chair.]

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