State May Face Less Severe Welfare Penalty

Under intense pressure from California state and county officials, the principal author of the 1996 welfare reform law is ready to propose changes to the landmark measure that could shield California from a devastating $4-billion penalty in 1998.

Less than 18 months after the welfare law was enacted, Rep. Clay Shaw (R-Fla.) says Congress must scale back the automatic penalties that it would impose on states that fail to build centralized computer systems to track parents who owe child support.

Shaw is set to propose a new penalty formula that could reduce the sanction California faces this year from a projected $4 billion to about $12 million. Shaw also hopes to relax the law’s requirement that states build strictly integrated, centralized systems.

Shaw’s proposal would ease California’s path to compliance by allowing the state to establish a loosely linked network of dissimilar county child support enforcement systems.

Shaw, chairman of the House Ways and Means Committee’s subcommittee on human resources, acknowledged that his draft plan is designed specifically to bail California out of its failure to meet the welfare law’s requirements for a single, statewide computer system for child support enforcement.

The state has missed the first deadline to create such a system, and its efforts to build one have been stymied by massive technical and political problems.

“It’s not entirely fair to those who really busted their backs to get the job done and tried to comply,” said Shaw, who intends to air his proposals this month. “However, California’s problems are more immense than many other states and there will be some penalty involved. But it won’t take so much money out that it will be tremendously regressive.”

Shaw’s proposal, which has sparked controversy, comes as California’s child support enforcement effort languishes in disarray. California collects support for less than 14% of the families that apply for it, and 3 million children receive nothing from the absent parent.

Many experts fault California’s system of county-administered child support enforcement, whose parts are not linked by a single computer system. As a result, a Sacramento mother hoping to get child support from a father living in San Diego might have to deal with two distinct systems that do not easily communicate with each other and that may have vastly different rules and regulations.

The welfare reform law set out to fix that problem, mandating that each state have a “seamless” system that would track an absent parent’s moves from county to county and make it easy to track whether that parent has kept up with child support payments.

Although California has spent $100 million to build a computer system that would satisfy the requirements of the welfare law, Gov. Pete Wilson in November abandoned the project and canceled a $103-million contract with computer giant Lockheed-Martin IMS. Wilson’s action came after his administration concluded that it would cost more to correct problems with the Lockheed system than to launch a new effort.

But with that new effort not yet underway, the state is nearly certain to remain out of compliance with the welfare law for several years. And under the terms of the law now on the books, that infraction could cost California its entire welfare block grant for each year that its system fails to meet the federal standard.

Under Shaw’s plan, the secretary of the Department of Health and Human Services still would have to sanction California for each year it fails to institute an integrated system to track noncustodial parents. But the secretary would have the latitude to adopt a less punitive formula, dunning the state for 4% of its federal child support enforcement block grant--or about $12 million--in the first year of noncompliance.

The amount of the less punitive sanction would increase over consecutive years from 8%--or $24 million in California’s case--of the block grant in the second year, to a ceiling of 20%--$60 million in California--in the fifth year of noncompliance.

If a state initially fails to meet the requirements but comes into compliance later within the same year, Shaw’s plan would allow the secretary to return 75% of the penalty to that state.

Shaw’s proposal comes in response to feverish lobbying by California state officials as well as pressure from California lawmakers of both parties. Even district attorneys from throughout the state, who administer the separate county child support enforcement programs, have besieged Shaw with ideas to improve the law.

“I’ve spent more time on the California problem than on any other,” he said.

The congressman’s position represents a compromise. Many California officials have pressed for even more forgiveness for the state; children’s advocates and the Clinton administration have sought slightly stiffer penalty provisions. The administration and children’s advocates also have resisted any bid to ease the requirement for states to build centralized systems that can track the whereabouts and employment status of parents who owe child support.

In Sacramento on Tuesday, the director of the state’s Social Services Department said the proposed penalties would represent an improvement over the current law. But she blamed federal officials for giving the state incomplete and sometimes inconsistent guidance in overseeing the program, and suggested that any penalty levied against the state would be unfair.

“If my choice is between $10 million and $4 billion, I will go with the $10 million, but I would really rather not have that much,” said Eloise Anderson. “What are they spanking our hand for? We tried to do exactly what they told us to do and it didn’t work. . . . I’m pretty upset about it because we really tried hard.”

Healy reported from Washington and Ellis from Sacramento.