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The Father Of Today s Child Support Public Policy
THE FATHER OF TODAY S CHILD SUPPORT PUBLIC POLICY, HIS
PERSONAL EXPLOITATION OF THE SYSTEM, AND THE FALLACY OF HIS "INCOME SHARES" MODEL
by
James R. Johnston*
(August 1998)
REBUTTABLE PRESUMPTION
Federal law requires that awards determined by the application of child support
guidelines be rebuttable. It specifies:
"A written
finding or specific finding on the record that the application of the guidelines would be unjust or inappropriate
in a particular case as determined under criteria established by the State, shall be sufficient to rebut the presumption
in that case."
It further specifies that guidelines:
"shall be
reviewed at least once every 4 years to ensure that their application results in the determination of appropriate
child support award amounts."
In other words, the table values established within the guidelines are "presumed"
to accurately reflect the situation of parents and their children at the various income levels. In theory at least,
federal law enables parents the possibility of pointing out to the court why the guideline numbers should not apply
in their particular case (rebutting the presumption). Practice and thoery though, are very different.
Economic studies used in the Income Shares model are based on total family expenditures in
intact families. These are estimates of spending that might occur if the parents were living together, sharing
all the expenses of a single household. Spending on children in split households has a random relationship to the
combined income of the parents. The income of both parents can be appropriately considered in the award decision
only if that consideration is consistent with the fact that the parents do not live together and therefore do not
use their income jointly. Joint income, and table values related to joint income, have no relationship at all to
family economic circumstances in the context of a child support award decision. In a particular state, even assuming
that the sample of data is appropriate (and that is dubious as I will show below), individual case circumstances
(those which deviate from the circumstances presumed in developing the guideline, such
as separate households and continued dual parent involvement), cannot be adequately
considered unless the numeric table is categorically divided (food, clothing, shelter, transportation, entertainment,
etc.). Without an explicit and clear conceptual basis for the award, a parent attempting to rebut the presumptive
amount on the basis that it is unjust or inappropriate must do so without knowing what just and appropriate means.
The only way to properly apply mathematical decision models within the context of Constitutional
justice is to fully disclose the nature of the mathematics, the underlying reasoning, and the assumptions in such
a way as to make their review practical in comparison with the circumstances of each case. Currently state committees
reviewing the models and the underlying data, the judges making awards using the resultant support schedules, and
attorneys and parents living with the results of them, are not able to directly tie the schedule to specific
cases. It literally is impossible! Federal law (and the Constitution) requires a just and
appropriate award in each case, and the goal for states is to construct guidelines that are sufficient to do so
in every circumstance to which they are applied. It is also required that judges can identify inappropriate and
unjust results and that attorneys and parents can argue for deviation when a formula fails. My state of residence,
Kansas, is a joint custody preference state by statute, which logically entails some degree of joint parental involvement.
Even those states without such a preference generally apply some minimal level of parenting time (visitation).
Separation/divorce inherently means separate households. Therefore, use of the existing guidelines based on intact
family expenditures without inclusion of involved noncustodial parent expenditures on children, is inappropriate
in all such cases. Guidelines have continued to fail to take the reality of parenting expenditures of an involved
second parent into account.
BASE DATA USED IN THE "INCOME SHARES" MODEL LEADING TO CHILD SUPPORT SCHEDULES
Upon joining the State of Kansas Child Support Guidelines Advisory Committee in early 1998,
I was advised by a long term member of the Committee to be sure and understand the economics involved in our state
s guidelines. Therefore, in an effort to understand our methodology, I researched the data base that feeds the
model here to establish the various schedules. I was astounded at what I discovered and shared the information
with the rest of the Committee. To my surprise, most of what I shared about the economic methodology used had not
been discussed to any degree with the Committee previously. This is probably common in most states.
Most state guidelines utilize expenditure data developed from the Bureau of Labor Statistics
(BLS) annual Consumer Expenditure Survey (CES) in the development of the child support obligation schedules. It
consists of 5,000 household surveys conducted each quarter, totaling 20,000 surveys/year. (The BLS said that the
5,000 surveyed is a staggered pool concept. The whole annual sample is the same 5,000 households for 3 quarters,
and a new 5,000 for a 4th quarter.)
Recognizing that each state is to have guidelines appropriate to that specific state, I called
the regional BLS office in Kansas City, as well as their main office in Washington, and asked how many of the sample
actually came from Kansas. All they could tell me was that it was "somewhat less
than 100 surveys" (with all but a few out of the Kansas City Metro area, and
the remaining coming from Lawrence, KS. None came from any other cities in the state, including Wichita which has
the largest population in Kansas). Therefore, this state s guidelines, to specifically apply to its child support
cases, are based upon generalized data, virtually all of which comes from out of state, and again which are derived
from intact family expenditures. With this small national sample size, this has to be the case in each state. The
bigger problem however, is the sample data itself.
The BLS publishes a list of "Frequently Asked Questions" regarding the CES. Number
15 specifically asks and answers:
"What
are some of the Limitations of the Data?"
"The Interview
and Diary Surveys are sample surveys and are subject to two types of errors, nonsampling and sampling. Nonsampling
errors can be attributed to many sources, such as differences in the interpretation of questions, inability or
unwillingness of the respondent to provide correct information, mistakes in recording or coding the data obtained,
and other errors of collection, response, processing, coverage, and estimation for missing data. THE FULL EXTENT
OF NONSAMPLING ERROR IS UNKNOWN. (All caps added for emphasis) Sampling
errors occur because the survey data are collected from a sample and not from the entire population. Tables with
coefficients of variation and other reliability statistics are available on request. However, because the statistics
are shown at the detailed item level, the tables are extensive."
"CAUTION SHOULD BE USED IN INTERPRETING
THE EXPENDITURE DATA, ESPECIALLY WHEN RELATING AVERAGES TO INDIVIDUAL CIRCUMSTANCES. (All
caps added for emphasis) The data shown in the published tables are averages for demographic
groups of consumer units. Expenditures by individual consumer units may differ from the average even if the characteristics
of the group are similar to the individual consumer unit. Income, family size, age of family members, geographic
location, and individual tastes and preferences all influence expenditures."
Along these same lines, Kansas Guidelines review committee economist Dr. Walter Terrell admitted
to me in a letter in April 1998 in response to a request for a detailed break out of expenditure areas at various
income levels, that:
"Given the
same total level of spending due to children, the component parts will vary from family to family. That is, families,
say, with a focus on dental and health care might show above average child spending on these items, and below average
spending on children s clothing. This applies to the USDA (United States Department
of Agriculture) estimated components as well, i.e., no measures of variation are presented
for the component parts."
"In short, if the total amount of
child support that is supposed to be spent due to children is in fact spent for that purpose, then the component
parts are irrelevant. Further, about 75
to 80 per cent of expenditures on children involve jointly consumed goods, e.g., home, auto, utilities, etc&
This further complicates the question of how much is spent (on average) for each spending class."
The application of this generalized data currently utilized in Kansas and most other states,
both from the federal government agency gathering the baseline data, as well as a committee s economist, shows
no direct relationship with specific circumstances around individual child support scenarios in the state. The
BLS explicitly discourages such application of data potentially riddled with nonsampling errors, and an "expert"
economist admits that such detail necessary in order to potentially rebut, is not discernible from the model. What
is also being pointed out is that there are absolute limits to what can be derived from the CES. Most state guidelines
currently in use, stake their entire logic on inferences from the CES. But the CES itself has no way of telling
us what the right redistribution of income actually is. It is necessary to supplement the statistical work with
what the OCSE report has pointed out is missing in state reviews, the fundamental logic of the guidelines must
also be further developed.
Continuing, the Income Shares model incorporates the CES data as repackaged by the United
States Department of Agriculture (USDA) in their report, "Expenditure of Children By Families" which
is published each year. From the 5,000 household quarterly CES data, the USDA culls it down based on the following
qualifiers:
16,245 Total Survey-Households qualified for 1997 sample
(12,850 Husband and Wife households/3,395 Single-parent households)
Only intact husband/wife households are utilized due to sample size limitations
There is a two child assumption per Husband-Wife household.
The country is then divided into regions; West/Northeast/South/Midwest, and a general US
Rural category. (Kansas for instance, is part of their Midwest Region which also includes: Illinois, Indiana, Iowa,
Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin. According to the USDA,
among the regions, the Midwest is the lowest for child-rearing expenses)
The Expenditure Categories are: Housing; Food; Transportation; Clothing; Healthcare; Child
care and education; and Miscellaneous
The expenditures for Clothing,
and Child care and education only apply to children and are divided equally between them, and exclude adult-related
expenses. Food expenditures are
determined from the USDA Food Plans to allocate among the various family members. Healthcare
expenditures are derived from the National Medical Expenditure Survey, and allocated
among the family members by age, etc.
Expenditures for Housing, Transportation, and Miscellaneous goods and services however, are allocated on a per capita basis (divided equally among the members). This has the effect of minimizing the costs to adult members,
while raising the level of expenditures on children. According to the USDA, this is done as they say there is no
research base for allocating these expenses, and they reject the marginal cost method as well for that reason.
(The study itself however, addresses the marginal cost basis in some detail in the
report appendix, referring to actual studies that show that use of the marginal cost basis can reduce Housing expenditures by 28-44%, and the Miscellaneous category by 28%.)
The per capita methodology employed for these categories also shows problems when reviewing
what is specifically included in these expenditures. For instance, Miscellaneous specifically includes such things as manicures,
make-up, hair styling, health club memberships, country club memberships, etc. Surely, many of the expensive costs associated
with maintaining adults should not be equally distributed amongst all family members including children since they
are not costs associated with raising children. The Transportation cost share as determined by the USDA included vacation travel expenses as well as automobile transportation expenses
that were calculated by subtracting the costs associated with travel to work. That is they subtracted the mileage
associated with getting to work from the costs of the automobile,
insurance, maintenance, etc., and then divided this amount by the number of members in a family. For instance, a car costing
$12,000 the day before a baby is added to an expectant family, is allocated at $6,000 for each parent. The next
day, with baby arrived, the cost of the car attributed to the baby suddenly on the scene is $4,000! Arguably, the
mileage directly associated with transporting children would be more accurate than USDA estimates, which seem to
be grossly exaggerated. The same type of treatment occurs for Housing. Using the expectant family example, the day before the baby s arrival, the cost for housing is divided
equally between the two adults. Upon the baby s arrival, the cost of housing is suddenly divided equally between
the adults and the baby. The child s "portion" is then summed and used directly in the calculations for
state child support guidelines. Are these children supposed to be buying their own cars and living in their own
apartments? Or are they living in a parent s residence and being transported sometimes, including family outings
to places the parent would be going anyway? On the face of it, it is obvious that such allocations are questionable.
These points have not been so obvious in the past because the estimates have
not been separated to the point that anyone on any state review committee understood what
the numbers in the guideline mean. With today s guidelines and their underlying data, how in the world can parents,
attorneys, and judges begin to understand them within the context of due process?
Regionalizing data creates problems as well for the figures used to calculate specific state
child support schedules. Tax rates differ in each state, along with differing costs of living. Although the survey
says that the measure of expenditures for items is after tax (arguing that it is therefore then held constant across
the country), the reality is that the level of income available based on after tax and cost of living differs across
the country, let alone each region as income available to spend varies as a result. (This
also highlights an additional area of concern regarding available income for expenditure on children in the noncustodial
home, which as established earlier, remains unaccounted for and unmeasured.)
As stated previously, to get to the schedules that have been developed in states using the
Income Shares model (and most others as well), the CES data has been utilized to feed the model. I have pointed
out many of the problems inherent in that data being used to determine child support schedules. I have also addressed
several flaws in the Income Shares model itself. First off is that actual expenditures on children by families
is not addressed. The methodology used to identify family expenditures do not actually track all costs per person
through a marginal cost accounting basis, and thus do not reflect true costs. What is reported are total "intact"
family expenditures, which are then broadly allocated to children, and then which are entered into the state economic
model based on the parameters established by the modeler (certainly not any specific individual child support case
at hand). Additionally, the model also fails to account for costs incurred while the
noncustodial parent exercises his/her parenting time. Lastly, the model purports
to accurately reflect what it costs to raise a child in a particular state (such as Kansas in my experience, based
on a household expenditure survey sample size consisting of "somewhat less than
100" Kansas participants!). An argument may be made for instance, that since
about 30% of Kansas cases involve interstate child support orders, regional and national data is fine. However,
orders under the jurisdiction of a particular state should be based on what it costs to raise a child specifically
in that state as the starting point.
SUMMARY
Dr. Robert Williams in my opinion is an absolute genius! He established himself as chief
consultant to the agency responsible for development of child support policy, and successfully manipulated his
personal approach to the subject, his
efforts leading to the most significant federal laws dealing with child support today. While
clearly a genius, one can easily call into question his ethics, however. While in his unique and influential position
in Washington, he early on concurrently established a private company called Policy Studies, Incorporated. This
company grew along with the programs he helped push through in Washington, as well as across the country. He was
able to "sell" his model through his position to the states while they were under tremendous pressure
to come up with an approach under extreme time constraints to comply with federal mandates. This particular model
led to significantly higher child support obligations owed, allows for no consideration for involved second parents,
and created an increasing pool of potential parents falling into arrears. Coincidentally, his company is the leader
in the child support "collections" business, an industry that requires an increasing pool of potential
dollars available to collect, and an increase in potential "defaulters". In the meantime, his company
continues to grow exponentially, as he continues to consult with the states about implementing and reestablishing
his model, one laden with flaws and inappropriate for use in individual child support cases. And as enforcement
continues to be subsidized by federal tax dollars, his collections and involvement in state child support efforts
continue to soar.
Nationwide, we must aggressively pursue looking at additional methodologies and economic
data gathering that will assure appropriate and just child support awards in each state. Further, states must fully
review the fundamental logic leading to child support awards. From there, a full review of available research will
better enable them to put forth a full recommendation on what their state-specific guidelines should look like,
ultimately allowing each of the parties to a child support case to be better able to exercise their full due process.
Some believe that it might be too costly to conduct state-specific studies, to include data
collection. Their inclination would be to continue on using the same flawed methodology and data, falling back
on the false belief that what we have today is the best we can do. However, this cost is arguably quite negligible
compared to the impact of our current approach. To simply continue doing the same old thing would be ignoring our
responsibility to be thorough in guideline development and review. Opening our minds to alternative approaches
of child support determinations could prove to be less costly than might be believed.
Lastly, I have not mentioned the impact that today s approach to child support guidelines
and enforcement have on our country s children. Focusing solely on "financial" child support while failing
to emphasize "emotional" child support is destroying our children s lives by depriving them of someone
that they desperately need to have involved in their lives, their other parent. All
credible research shows that for the vast majority of children, the best parent to children
of separation and divorce is quite simply both parents.
Instead of seeking out ways of facilitating dual parent involvement, our current public policy has established
economic and legal roadblocks, merely because it is easy to "garnish" income. The end result in this
crazy social experiment is increased juvenile suicide, teenage pregnancy, juvenile delinquency, and teenage drug
abuse, among many other childhood pathologies, all sharing a common variable in most of these instances, an absent
parent. Continued parental involvement of the second parent (the one currently not included in the studies of the
true ongoing costs of parenting), does indeed cost money. Such involvement is not a free good. This country is
beginning to awaken to the damaging effects of having frustrated dual parent involvement for so many years. Reforming
the child support enforcement public policy from the ground up needs to occur. Only then will we begin to turn
the corner in the direction of our country s most important assets, our children.
MISCELLANEOUS QUOTES
FROM POLICY STUDIES, INCORPORATED PROMOTIONAL LITERATURE OBTAINED IN JUNE 1998
"PSI S CHILD SUPPORT GUIDELINES EXPERIENCE"
"Policy Studies, Inc. PSI is a national leader in the child support enforcement world,
having developed an impressive portfolio of projects spanning technical assistance, privatization, and information
technology. Since our inception in 1984 we have expanded both in staff and resources, and we now operate 31 privatized
service locations throughout the country.
Our experience with child support guidelines began with the federal Child Support Guidelines
Project. Since that time, we have consulted with over 40 states, the Navajo Nation, Australia, and Canada on child
support guidelines projects." &"Our company president, Dr. Robert G. Williams, is recognized as the
leading national (and international) expert on child support guidelines. He was the Principal Researcher for the
federal guidelines project which developed the Income Shares model now used by two-thirds of the states, including
Arizona. Not only has he provided expert guidance to states using the Income Shares model, but has provided expertise
to non-Income Shares states such as Tennessee, Georgia, Delaware, and Hawaii."
FROM "CHILD SUPPORT GUIDELINES: THE NEXT GENERATION" PUBLISHED BY THE US
DEPARTMENT OF HEALTH AND HUMAN SERVICES, April 1994, page 1.
"Robert G. Williams is President of Policy Studies Inc. in Denver, CO. He directed research
and technical assistance for the federally funded Child Support Guidelines Project from 1983-1990. Dr. Williams
has provided technical assistance to more than 40 states in the development and updating of support guidelines."
FROM DENVER BUSINESS JOURNAL, JUNE 27, 1997 V48 N42
"REFORMS MIGHT BENEFIT CHILD-SUPPORT COMPANY."
"A Denver company that grew by leaps and bounds because of the national crackdown on
"deadbeat dads" stands to profit even more from the welfare-reform legislation approved by Congress and
the President last October.
Founded in 1984, Policy Studies Inc has grown from three employees to more than 400, on the
heals of child-support enforcement laws. Last year, PSI reported revenues of $21 million. The company helps government
agencies modernize child-enforcement computer systems that find fathers with delinquent child-support payments."
"Because about one-third of the welfare reform act pertains to child support, PSI president and CEO Bob Williams estimates at least one-quarter of all states will privatize their child support functions - a prediction that bodes well for the company and others like it."
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