States seek last place in nonmarital births for piece of $100 million federal bonus

The no-baby sweepstakes have begun. Final rules for snagging the bonus available to states that reduce their out-of-wedlock birthrate were published in the Federal Register in mid-April. The rules specify how to win the cash carrot dangled in front of states through the 1996 welfare reform legislation, the Personal Responsibility and Work Opportunity Reconciliation Act.

About two-thirds of the states have taken specific steps to win the bonus, according to a recent report by the Alan Guttmacher Institute in New York City. States’ efforts fall into three categories: programs and polices designed to increase contraceptive use among welfare recipients and other low-income women; activities to prevent pregnancy among teen-agers; and grants to support local initiatives for both adults and teen-agers.

For four years, beginning in fiscal year 1999, the federal government will apportion $100 million equally to up to five states that achieve the greatest declines in out-of-wedlock births. If fewer than five states qualify—winners also must reduce their abortion rate—each will receive $25 million.

The Department of Health and Human Services (HHS) recognized several comments that challenged the legitimacy of the law itself. Such comments held that that a competitive bonus is not an appropriate way to reduce out-of-wedlock births, that efforts to reduce such births should not place the burden solely on women, and that policies addressing single-parent families should not place unreasonable burdens on men.

A state winning a bonus must use it to support activities within the federally funded Temporary Assistance to Needy Families (TANF) program. Advocates and others were disappointed that the final rule does not require any reporting on how states used the money to address out-of-wedlock births.

"This is a creative approach," acknowledges Rebekah Saul, a public policy associate with the Alan Guttmacher Institute. "If we’re going to take a creative approach, we ought to learn something from it. Instead, it’s as though we’re saying, We’ve got this problem, let’s just throw some money at it.’"

To develop the ranking, federal officials will compare a state’s two-year out-of-wedlock birth rate (based on the most recent data available) with a rate describing the previous two years. The data source will be information already compiled by the National Center for Health Statistics (NCHS), a strategy chosen to ensure that data are comparable across states and that states do not have to assume additional administrative tasks. Given the current availability of data from NCHS, federal officials expect to base the first-year 1999 bonuses on a comparison of a state’s 1996-97 rate with the 1994-95 rate.

The bonus will go to the states with the largest proportional decline in the rate, assuming they have met other requirements in the law. The bonus goes only to states and territories that document a decline, so less than $100 million may be awarded if fewer than five states meet that test.

The use of a rate rather than the absolute number of out-of-wedlock births troubles Wendell Primus, director of income security at the Center for Budget Policies and Priorities in Washington, DC. Primus says while a rate is effective in minimizing the effect of population growth or decline in a state, it also has limitations. He notes that the rate of out-of-wedlock births—as measured by the ratio of such births to all live births—is affected by the extent to which married women have children, which is outside the scope of the legislation.

HHS officials did incorporate several features that they say level the playing field among large and small states vying for the bonus, including the use of a two-year comparison period for birth data and the calculation of a proportionate rather than absolute change in the ratio.

The Guttmacher analysis suggests that even second-year awards probably won’t reflect whatever states have done with the grants available under the TANF provisions of the welfare reform legislation. Author Patricia Donovan suggests, rather, that expansion of Medicaid-funded family planning services enacted before and concurrent with passage of the welfare reform law might have some impact on the early bonus awards. (See related story, p. 6.)

Mr. Primus at the Center for Budget Policies adds demographic changes and other social programs to the factors other than state TANF projects that could affect the rate of out-of-wedlock births. "We will award money, but whether this had anything to do with a state’s efforts will be only by accident," he says.

The Guttmacher analysis chronicles a staggering variety of recent efforts to reduce nonmarital births, even among states that have concluded they have little chance of winning the bonus. Ms. Donovan credits the bonus with "galvanizing" states to address the problem, but says the availability of TANF block grants is a "critical factor" supporting these initiatives.

She reports that in Alaska, for example, some officials worry that the state’s decision to end Medicaid coverage of abortions in July 1998 will cut the abortion rate but increase the rate of unintended births. Never theless, Alaska is aggressively pursuing the bonus with $350,000 for family planning services in fiscal year 1999 TANF funds and another $75,000 for a media campaign the subsequent year.

Strategies for collecting abortion data proved controversial among those reviewing the proposed rule. As detailed in the final rule, states must have a current elective abortion rate lower than the rate in 1995 to be eligible for the bonus.

The final rule gives states the option of documenting their abortion rate using data on all procedures performed in the state or just procedures among state residents. Some comments on the proposed rule suggested that using a rate generated from providers in a defined area as opposed to a resident-based rate could create an incentive for a state to reduce the availability of abortion services. The resident-specific rate is preferable, say federal officials, but they add that abortion data collection procedures and requirements among states vary too much to require its use.

Contact Ms. Saul at (202) 296-4012 and Mr. Primus at (202) 408-1080.