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Tuesday, February 8, 2011

postheadericon What a new GAO report could mean for social program spending

The Government Accountability Office recently released a seemingly obscure report that could have important implications for the federal-state partnership on social programs in the years ahead. 

The report has a title only a wonk could love: “Child Support Enforcement: Departures from Long-Term Trends in Sources of Collections and Caseload Reflect Recent Economic Conditions.” It tracks how states responded to federal funding changes in the child support enforcement (CSE) program as a result of the Deficit Reduction Act of 2005. That law closed a loophole that previously allowed states to claim federal matching payments when they spent federal child s! upport incentive dollars. That sort of double dipping â€" getting a second federal dollar for spending a first federal dollar â€" made no sense. The loophole was closed in 2007, and starting in 2008 states were to get only the incentive payments, not the matching funds for spending them.

Experts predicted trouble ahead. For example, in estimates widely cited by reform opponents, the Congressional Budget Office predicted the change would be followed by both lower spending on CSE activities and smaller child support collections. Fortunately, GAO found that after the policy change “collections increased to reach their peak in 2008, the year the incentive match was eliminated and total CSE expenditures increased slightly.”

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