- The Washington Times - Wednesday, July 19, 2000

Everyone agrees that fathers should support their children. But a relic from the old welfare rules often keeps child support payments that some dads make from helping their kids. Instead, their checks become a revenue source for the government.

That is a self-defeating policy that deserves to be changed. Understanding how we got to this point makes clear why these rules make less sense with each passing day.

Here's how the policy works: In 31 states, when a dad with kids on welfare pays his monthly child support, the government keeps the support, up to the amount of the welfare benefit. In these states, the child support he pays does not make his children any better off. In 1998, for instance, states collected $2.6 billion in child support for children in families receiving public assistance and passed along only $282 million or less than 11 percent to the family the money was intended for. States used the rest to help offset the cost of the welfare benefit.

From the perspective of the fathers and their children this is effectively a 89 percent tax rate on a father's child support payment. For each dollar a dad pays to support his kids, the government gets 89 cents. Only 11 cents go to the children. Not surprisingly, this operates as a strong disincentive for many of these fathers to pay child support. No one would argue that tax rates this high on responsible behavior are a good way to motivate people to behave as they should.

This mechanism under which these child support payments go to the government instead of the children was created as a way of minimizing the cost of government public assistance programs. It was enacted at a time when the welfare rolls were large and growing, the federal budget was chronically in the red and there was a widespread though mistaken belief that most recipients made a career out of collecting welfare benefits.

Welfare has changed a lot since then.

A booming economy, a new welfare law and an expanded earned income tax credit have provided strong inducements for recipients to leave the welfare rolls for work. The number of families receiving welfare assistance has dropped significantly and continues to do so.

In addition, the philosophy of welfare has changed. It now is seen largely as a program to prepare people for participation in the work force.

Meanwhile, government budgets at every level are in the black. Today the debate is not where to cut, but what the priorities are for how the surplus should be used. Allowing use of the child support these fathers pay to actually benefit their children, and thereby to remove disincentives for their fathers to meet their obligations, is a change we can afford.

Such a change should be seen as an investment in stronger families that would reduce poverty among these children, while strengthening the children's ties with the fathers, who would now be able to see the result of their contributions.

Rep. Nancy Johnson, Connecticut Republican and chairwoman of the House Ways and Means subcommittee with jurisdiction over these matters, should be congratulated for taking a step in the right direction. She has introduced a proposal that helps former welfare families receive the child support they deserve. In other words, families would not be denied today's child support payments so the state could be reimbursed for yesterday's public assistance. When Mrs. Johnson's proposal is considered by the Ways and Means Committee this week, the policy for current welfare recipients also should be changed, as Rep. Benjamin Cardin, Maryland Democrat, is suggesting, to allow payments from fathers to increase the support children receive.

States should be encouraged to allow current welfare recipients to benefit from child support payments, as well as to simplify the complex rules governing whether the family gets the child support check. Mr. Cardin's proposal gives states the flexibility to make these changes.

Current "pay-as-you-go" budget rules require that such a change be paid for by cuts in other programs or tax increases. The budget resolution Congress adopted earlier this year exempted tax-cut legislation from these rules. If Congress is going to abandon the pay-as-you-go rules in respect to tax cuts, it ought to do so for this needed and modest reform of the child support system.

Building strong families is a policy goal that has universal support. There is reason to believe the fathers will behave more responsibly when it is clear their payments are going to help their families rather than providing the government with added revenue it can now afford to do without.

Expanding the Johnson bill in this fashion would bring the bill's cost to $2 billion annually. That's a small fraction of the surplus we're now amassing. Giving states the option to reduce this tax rate on child support payments mainly from low-income minority dads would build on and enhance welfare reform. It also would strengthen families and help poor children escape poverty.



Wendell Primus is director of income security programs at the Center for Budget and Policy Priorities.

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