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In New York, a welfare experiment for single dads

By Staff writer of The Christian Science Monitor / January 27, 2005



NEW YORK

New York is considering an experiment in welfare reform for fathers - a move that, if successful, could transform social policy across the nation.

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In what would be the first move of its kind, New York Gov. George Pataki (R) is proposing to subsidize the wages of low-income working fathers who don't have custody of their children, as long as they are up to date on their child support.

The goal is to bring more low-income fathers into the workforce, while at the same time increasing their financial and social involvement with their children. Studies have shown that men who believe their child support is going to their children are more likely to pay it, as well as more likely to be involved with their families.

The subsidy would come in the form of a significantly expanded Earned Income Tax Credit (EITC), which is praised for helping millions of single mothers stay off welfare and in the workforce in the 1990s. During that same time, participation in the labor force by young low-income males actually declined.

"The thrust of social policy affecting poor families during the past 10 years has been to encourage single mothers to work, and, if they do, give them more support - and give them less if they don't," say Bruce Meyer, a policy expert at the University of Chicago. "But we haven't done anything to help support the very low-income fathers to get by or to encourage them to work, and there hasn't been much to encourage them to be involved with their children. This proposal does all three."

$1,500 extra in their pocket

The Pataki proposal will start out as a fairly small statewide initiative, just like many of the initial ideas that went into the making of welfare reform in 1996, which transformed the nation's social policy in its own way by forcing people off welfare rolls and into the workforce.

If approved by the New York State Legislature this year, noncustodial fathers between the ages of 18 and 30 who earn less than $12,000 a year will be eligible for tax credits as high as $1,500, if they're up to date on their child support. An estimated 10,000 men would be eligible.

"This is a very original idea. It's not something that we have experience with, and New York is smart to start out small," says Mr. Meyer. "It's sensible to see how it works first."

Currently, only custodial parents, most of whom are women, now qualify for such large tax credits. That has sometimes caused tension between divorced or separated parents, which can have a negative effect on the children, say experts. By extending the larger tax credit to noncustodial fathers as well, the goal is to encourage them to work and to transfer more of their income to poor children - ideally improving family relationships.

"Certainly, it will be better for child-support enforcement because people have a reason to be up-to-date on it," says Jill Tiefenthaler, an associate dean at Colgate University who initiated an EITC program to help people apply for it in her community. "The better financial shape the noncustodial parent is in, the better off the kids will be in the long run."

While concern persists about fraud in the EITC program, studies have shown that it has been successful in encouraging women with children to stay in the workforce, since it is essentially a wage subsidy. And because it rewards work, it has also proven to be popular with both conservatives and liberals.

"It maintains a lot of popularity because you don't get it unless you have an earned income," says Stacy Dickert-Conlin, a professor of economics at Syracuse University. "But it will always suffer some criticism because it smells a little like welfare because it's targeted at low-income families and is seen as a social program."

Some conservatives are wary of the EITC because it is in essence an income redistribution program. Daniel Mitchell, a senior fellow at the Heritage Foundation in Washington, is also concerned about the inequity and disincentives it creates.

Because people lose the credit as their income goes up, it could create an incentive to work fewer hours to keep the tax break. But if they do increase their income enough so they're no longer eligible, they end up paying a higher marginal tax rate than wealthier people.

Prospects of passage

Still, given that it is a Republican governor who is proposing the extension to fathers may help the proposal politically. Nonetheless, the initiative is expected to cost $16 million, and the greatest impediment to the idea might be New York's own tight finances. The state is currently facing a deficit between $4 billion and $6 billion.

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