Should State and Local Governments Show Their Social Programs Get Results Before Getting Grants? (H.R. 5170)

What is H.R. 5170?

(Updated July 29, 2017)

This bill would seek to expand partnership grants to state and local governments aimed at supporting a social goal like improving high school graduation rates. The Dept. of the Treasury would be required to publish a request for proposal from state and local governments in the Federal Register that clearly defines the outcomes and how they’d provide a social benefit.

Examples of the outcomes these social impact partnerships would look to improve may include:

• Reducing unemployment among people between ages 16 and 24;

• Boosting high school graduation rates;

• Helping people receiving unemployment benefits find jobs;

• Reducing teen and unplanned pregnancies;

• Mitigating and reducing the incidences of child abuse and neglect.

The Treasury would decide whether to enter into an agreement for the social impact partnership within six months of receiving an application. It would also reserve funds that could provide for up to 50 percent of the cost of a feasibility study undertaken by a state or local government for a proposed partnership before their application is filed. $100 million in funds from the Temporary Assistance for Needy Families’ (TANF) contingency account would be reserved for this purpose.

Before the governments can receive payments related to a successful outcome of the partnership, an independent evaluation of the state or local governments would be undertaken to determine if the project met its stated goal.

This legislation would also establish two entities related to social impact partnerships:

• The Federal Interagency Council on Social Impact Partnerships to coordinate the efforts of social impact partnership projects as well as establish a public website for project information;

• A Commission on Social Impact Partnerships to assist Treasury and the Federal Interagency Council in reviewing funding applications.

Argument in favor

State and local governments are best equipped to deal with problems like youth unemployment and low graduation rates in their communities, and what federal funds they get should only go to programs that get results.

Argument opposed

Congress needs to provide more funding for projects like these from the outset rather than asking state and local governments to carry the load initially with private sector help and only rewarding them if they meet their goals.

Impact

People who may be covered by a state or local social impact partnership; state and local governments; and the Dept. of the Treasury.

Cost of H.R. 5170

The CBO estimates that implementing this bill would reduce spending, on net, by $10 million over the 2017-2026 period.

Additional Info

In-Depth: Sponsoring Rep. Todd Young (R-IN) introduced this bill to ensure that federal funding for social programs goes toward achieving the desired outcomes at the community level:

“Too often Washington focuses on inputs instead of outcomes. We spend too much time talking about how much or how little to spend on social safety net programs, and not enough time talking about whether or not we’re improving lives… It’s time we shift the focus to achieving desired outcomes, evaluating our social programs more carefully, and only paying for what works.”

Lead cosponsor Rep. John Delaney (D-MD) concurred, adding that:

“This bipartisan legislation offers a new solution that improves government services, helps those in need and reduces taxpayer costs. [It] also increases cooperation from federal, state, and local governments and means that we’ll be more likely to use data-driven and evidence-based policies.”

This legislation was passed by the House Ways and Means Committee on a voice vote, and has the support of 26 cosponsors — including 15 Republicans and 11 Democrats.

Of Note: The social impact partnerships created by this bill would be modeled after social impact bonds which involve a commitment by governments to fund programs aimed at improving social outcomes that ultimately lead to public sector savings. Often the savings is realized through a reduced reliance on public benefits programs and increased tax revenue as people who’d been out of work get jobs and earn income. In some cases, philanthropies or other private sector entities contribute funds to help the partnership achieve its goal.

Media:

• Sponsoring Rep. Todd Young (R-IN) Press Release
• CBO Cost Estimate
• The Chronicle of Philanthropy
• Herald Times Online
• The Hill
• The Case Foundation
• Enterprise Community Partners (In Favor)
• Save the Children Action Network (In Favor)