December 1, 2007

Penny wise but pound foolish? You betcha

Mothers Skimp as States Take Child Support (NYT)

The collection of child support from absent fathers is failing to help many of the poorest families, in part because the government uses fathers’ payments largely to recoup welfare costs rather than passing on the money to mothers and children.

Close to half the states pass along none of collected child support to families on welfare, while most others pay only $50 a month to a custodial parent, usually the mother, even though the father may be paying hundreds of dollars each month.

Critics say using child support to repay welfare costs harms children instead of helping them, contradicting the national goal of strengthening families, and is a flaw in the generally lauded national campaign to increase collections.

[...]

Reflecting a growing, bipartisan sense that diverting child support money to government coffers is counterproductive, Congress, in the Deficit Reduction Act passed in early 2006, took a modest step toward change. Beginning in 2009, states will be permitted to pass along up to $100 for one child and $200 for two or more children, with the state and federal governments giving up a share of welfare repayments they have received in the past.

The Bush administration has set a goal of increasing the share of collections distributed to families and reducing the amount retained by the government. But the drive to reduce the budget deficit has gotten in the way. As part of last-minute budget crunching, the Republican-controlled Congress in that same act reduced by 20 percent the child-support enforcement money it gives to the states, starting this fall. Many states say the effort to force them to pay more of the enforcement costs will impede collections and prevent them from passing more money on to needy families.
As we've seen in the past, the Republican Party hates any government program that works, that is: benefits average Americans (as is the case with Social Security, Medicare, Pell Grants, etc). It really messes with their mantra that "government is the problem" and that the "free market" can solve anything.
On Nov. 15, 24 governors from both parties sent a letter to Congress asking it to repeal the cuts, arguing that they would hurt one of the government’s most cost-effective programs, which raises more than $4 in child support for every $1 spent on enforcement.

[...]

When Congress set up the current child support system in the 1970s, recovering welfare costs was an explicit goal, with some experts arguing that it was only fair for fathers to repay the government for sustaining their offspring and that giving families the money was a form of “double dipping.” But experience and research have suggested to most experts and state and federal officials from both parties that the policy is counterproductive — driving fathers into the underground economy and leaving families more dependent on aid.

[...]

Studies of the Wisconsin experiment showed that when support payments were fully passed along to mothers, more fathers came forward and paid more of the support they owed, said Maria Cancian, director of the Institute for Research on Poverty at the University of Wisconsin, Madison. As families receive more support money, they are less apt to require public assistance, she and other experts say, making up for any short-term loss of revenues. And fathers are more likely to establish lasting patterns of payment and connection with their children, Ms. Cancian said.
I'd call this a win-win, wouldn't you?

I know of at least one Democratic candidate who is addressing this issue specifically. From the fact sheet on her Youth Opportunity Agenda, Hillary Clinton proposes:
To support both responsible fatherhood and economic opportunity, Hillary will:
  • Reverse the Bush Administration's Deep Cuts to the Child Support Enforcement Budget: The Bush Administration's cuts would reduce child support payments by $11 billion over the next decade. Hillary will reverse these cuts, and make sure that states and counties have the resources they need to collect child support. This is a wise investment: every dollar spent on child support returns $4.58 in child support payments. Hillary will also encourage states to take more realistic, cooperative approaches to managing arrears, so that fathers leaving prison are not immediately saddled with unrealistic payment obligations.

  • Promote Policies to Ensure that Every Dollar of Child Support that Fathers Pay is Passed on Directly to their Children: Research demonstrates that fathers pay more of their child support and develop deeper bonds with their children if they know that those payments are going directly to their children. Hillary will work with states and counties to ensure that they have support and incentives to pass on every dollar of child support to benefit children. This reform will increase child support payments and result in substantial administrative savings.

  • Make Work Pay for Responsible Fathers by Expanding the EITC: While the EITC is widely seen as one of the most successful anti-poverty programs in the US, single workers and non-custodial parents currently receive only a modest maximum credit of $412. As a result, single workers and non-custodial fathers -- many of whom face substantial child support obligations -- have only a weak incentive to work through the EITC. In addition, because the credit is available only to those over age 25, it does not provide a work incentive to many young minority men and fathers who face the steepest barriers to participate in the labor market. Hillary will triple the size of the EITC benefit for single workers, providing more than 4 million people a pro-work tax cut averaging $750.

1 comment:

Nevada Mojo Rising said...

Hmmmm. Let's see. I could have received welfare in the 80s but I chose not to for this very reason. I worked two jobs and kept my child support instead to raise my kids. That way, welfare couldn't collect and I wouldn't have to live on $500. a month to feed 3 kids.

So why didn't anyone do anything about this back then or when the Clintons were in office? It's always been like this. If they had let me keep my child support and welfare at the time, I would have had a wopping $850. a month to support the three of them and me. Wow. Novel idea. Getting a fulltime job and one 10 hour a week job was better.