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Introduction to the Income-Shares Child Support Guideline
Income Shares Model Violates Due Process


August 7, 2002


by Roger F. Gay

Calculating the amount that parents are ordered to pay as child support involves the use of a rigid formula known as a "child support guideline." The amount determined by use of a state's guideline is legally presumed correct in all child support cases. This practice began in late 1989, in response to a newly established condition for eligibility for federal funding of the child support enforcement program. Although parents have a legal right to challenge the presumptive amount, design of the mathematical formulae and state statutes in which they are applied have not developed sufficiently in support of reasonable challenges. The result has been a dramatic arbitrary increase in the amounts courts order in child support cases.

"Promoters claimed that the Income-Shares model was derived from guidelines that were already in use and that it corresponds to traditional child support law. Neither of these claims is true."

In order to remain eligible for federal funding, states are required to review their guidelines at least once every four years. The statutory purpose of the review is to assure that use of a guideline results in an appropriate award in every case. Indiana and Virginia are among the states currently reviewing their guidelines. They are among the 37 states that base their guideline design on what is known as the "Income-Shares model." Although this is the most popular guideline design in the country, few people understand its origin, history, and character. No state has ever shown that use of an Income-Shares guideline results in appropriate child support awards. Although states go through the motions of reviews on schedule, the requirement to assure appropriate results has never been met. So far, not one single state has invented or applied a technically valid review procedure.

Promoters claimed that the Income-Shares model was derived from guidelines that were already in use and that it corresponds to traditional child support law. Neither of these claims is true. They claim that the model is supported by economic data and economic studies. These claims are also false. Contradicting their claim that the Income-Shares model corresponded to established law was their claim that orders made under established law were "inadequate" and needed to be increased by a presumptively correct formula similar to the Income-Shares model. The claim of inappropriate orders under traditional law, explained below, is also false.

Surrounding these specific claims were the more general claims incorporated into "deadbeat dad" political propaganda. These general claims were also false and illogical. Supporters claimed that men often abandoned wives and children leaving them dependent on public support. Even if true, increasing one man's child support order does not increase the regularity of another man's payments. (For more information related to the general claims, see Divorced Dads: Shattering the Myths.)

Presumptively correct child support guidelines generally have their origin in Senate hearings on welfare reform held by Daniel Patrick Moynihan. Reformers wanted to use rigid formulae, just as socialist countries do, in place of principled case-by-case decision making as required by constitutional law. Senator Moynihan grilled witnesses for evidence of a valid technical basis for such formulae, but witnesses were unable to produce it. No research had been performed to define the idea in detail and test it.

Supporters of the idea began spreading the rumor that the traditional process of awarding child support was non-uniform and unpredictable. An oft repeated complaint;

Two fathers living in the same neighborhood who go to the same job with the same income can pay different amounts of child support.
"Presumptively correct child support guidelines generally have their origin in Senate hearings on welfare reform held by Daniel Patrick Moynihan. Reformers wanted to use rigid formulae, just as socialist countries do, in place of principled case-by-case decision making as required by constitutional law."
The criticism was supported by a simple magic trick. An equation would be used that did not account for important mitigating factors such as visitation arrangements and the mother's income. One might for example calculate a fixed percent of the payer's income. The equation would produce results that differed from actual orders that did take such facts into account. Pretending the simple equation gave the correct answer created the illusion that actual amounts in orders were determined at random.

The first Income-Shares guideline, similar to those in use today, was created by William Hewitt for the National Center for State Courts (NCSC) in 1982 as a trial investigation for the Washington State Association of Superior Court Judges. [1] NCSC was a powerful driving force behind development and implementation of child support guidelines as we know them today. The primary function of this Congressional organization is to bring states into compliance with central federal administration.

Hewitt concluded that the formula was inappropriate for use as a child support guideline. He was particularly critical of the central component of its design; the so-called "estimate of the cost of raising children" derived from national family spending data. In his report he suggested that;
. . . a simple methodology which explicitly relies on "user opinion" will be more effective in moving practices more uniformly toward a fair standard than does reliance on opaque and highly derivative expert interpretations of existing but fundamentally off-target primary economic data.
Knowing what whole families spend does not tell us what the cost of raising children is and certainly does not tell us what a just and appropriate child support order is. "Experts" were making up answers that were not useful in making appropriate child support decisions. (On this point, see also Child Support's Wacky Math.)

The chain of deception in support of the Income-Shares model began with a politically involved assistant professor of psychology at the University of North Carolina. Ronald Haskins, who later became a lead analyst on welfare reform for the Republican congressional staff, wrote a report funded by the U.S. Office of Child Support Enforcement (OCSE). [2] Haskins suggested that requiring the use of either of two formulae in all child support cases would result in a 350 percent increase in the amount ordered nationwide.

Rather than reaching the obvious conclusion that the equations produced inappropriate results, Haskins claimed that existing child support awards were too low. By doing so he implied a vast conspiracy by primarily male judges against women and children. He dubbed the difference between the results of the equations and existing orders the "adequacy gap" in child support awards. News of Haskins' "adequacy gap" quickly spread through similarly politically inclined academics, special interest groups, and as sensational news on radio and in newspapers. An astonished nation was told that the system for determining child support orders established in the shadow of the Constitution had to change.

"Haskins claimed that existing child support awards were too low. By doing so he implied a vast conspiracy by primarily male judges against women and children. He dubbed the difference between the results of the equations and existing orders the "adequacy gap" in child support awards."
The adequacy gap in Haskins' research method was so wide that there is little reason to believe in the honesty of any competent analyst who relied on it. People routinely complain about its faults, which are still with us today. A Georgia court recently cited some of the same faults as part of the grounds for declaring their guideline unconstitutional, (even though Georgia uses a different guideline model). Haskins did not include consideration of visitation, tax consequences and other mitigating factors. He did not in fact, apply established child support law. He merely showed that if an equation is used that produces arbitrarily high results, then results will be arbitrarily high. He had no basis whatsoever for concluding that existing child support orders were incorrect.

As part of the Child Support Enforcement Amendments of 1984, Congress funded assistance to the states in development of child support guidelines and charged OCSE with responsibility for the project. Robert Williams, the most well-known Income-Shares promoter, had no previous history of research in development of child support guidelines and founded Policy Studies, Inc. as a new consulting business. OCSE gave the contract to Robert Williams of Policy Studies, Inc. Williams is a child support collection entrepreneur whose company keeps around one third of the child support it collects. Driving orders higher produces more cases of debt and higher average debt directly increasing his profit.

Without justification, Williams treated Haskins' "adequacy gap" as a scientifically valid phenomenon. In the first few pages of his final report [3] Williams cites Haskins' conclusion as fact and establishes the de facto goal of his design, to manipulate the amount of child support ordered nationwide to an amended 250 percent of what it would be if decided by established child support law.

Williams also used a report by Thomas Espenshade [4] as the primary economic study upon which his version of the Income-Shares model was based. Espenshade is an expert on immigration who became interested in family planning issues. His summer exploratory research on the cost of raising children failed to produce proper scientific results. His estimate of the cost of raising children was born of fudge factors used in his calculations.

I rarely mention Espenshade in my critiques because I find little reason to criticize an academic for exploratory research. To my knowledge, Espenshade never claimed to have performed any research on design of child support guidelines nor did he ever approve of the use of his estimate in Williams' Income-Shares model. Because his work became important to child support guideline activities it must be critically reviewed nonetheless.

"OCSE gave the contract to Robert Williams of Policy Studies, Inc. Williams is a child support collection entrepreneur whose company keeps around one third of the child support it collects. Driving orders higher produces more cases of debt and higher average debt directly increasing his profit."
Espenshade failed to find a valid method for accurately estimating the cost of raising children from national family spending data. The major criticism I have for his report is that he did not report the failure. He says again and again what he wants to accomplish and presents his estimate, leaving readers to assume they are looking at a scientifically valid, accurate, general purpose estimate of the cost of raising children. It is left to highly competent analysts to study his results, equations, and footnotes to equations very carefully to discover the truth. This is also a weakness in the research process of the Urban Institute that published, promoted, and sold his report. Espenshade's study was apparently not adequately reviewed before publication.

University of Chicago researchers Edward Lazear and Robert Michael reviewed existing methods of estimating the cost of raising children when trying to develop a theory for dividing expenses between individuals within households. [5] They concluded that;
. . . the presumption that underlies the focus of much of the empirical research and policy debate on income distribution seems born of ignorance and is supported by neither theory nor fact.
I agree. The cost of raising children estimates used in child support guidelines today were born of ignorance and are supported by neither theory nor fact. They would be inappropriate for use in child support guidelines even if that were not true. Espenshade's estimate was for two parent families rather than single parent households. The relationship between average spending in two parent families and spending on children in "broken homes" is mathematically random. The standard of living that might exist if the parents remained together was one of many mitigating factors in established child support law. More important however were the actual circumstances of the parents and children. Promoters of the Income-Shares model were claiming an "economic basis" for their model. But the economics of the intact family are unrelated to the real life circumstances of the people involved with court ordered child support.

Despite the importance of the claim of scientific validity or valid opinion based on "economic studies," nothing related to the chain of "studies" involved in the development of the Income-Shares model was ever established by scientific process. No part of it was tested. Nothing was validated. Nothing was tried and true.

Superficially, acceptance of Williams' work was aided by the inclusion of a highly qualified advisory panel that made recommendations upon which the technical work should have been based. But the Income-Shares model departed so far from the advisory panel's recommendations that it earned an angry critique by panel member and law professor Harry Krause, published in the University of Illinois Law Review. [6] The Income-Shares model does not correspond to the thinking of the advisory panel.

More deeply however, political acceptance of Williams' model in the states was driven by the federal funding mechanism, which was tied to the amount of child support "collected." The new child support enforcement system began enrolling the best payers and counted all payments as "collections." By inflating the amount "collected" in this way, the program received more funding. Arbitrarily increasing the amount awarded increased the amount paid, and therefore increased the amount of federal funds received.

Complaints about the "economic estimates" were so common that there was a political reaction. As part of the Family Support Act of 1988, Congress again created a line-item specific to the technical development of guidelines. This time, they charged the OCSE with the task of updating the estimates of the cost of raising children. The job went to University of Notre Dame macro-economist David Betson.

"The cost of raising children estimates used in child support guidelines today were born of ignorance and are supported by neither theory nor fact."
Betson, who holds an M.A. and Ph.D. in economics from the University of Wisconsin-Madison, was a research associate at the Wisconsin Institute for Research on Poverty when it was headed by Irwin Garfinkel. Garfinkel is the academic who imported the second most-used child support guideline, known as the Percent-of-Income formula, along with a suite of policies from socialist countries. The policies were bundled into what became known as the "Wisconsin Model" for welfare reform. The Wisconsin Model became the model for national reform and led to the appointment of Wisconsin's governor Tommy Thompson to his current position as Secretary of Health and Human Services. Betson was a research fellow at the institute from 1982-1995 and is currently a research affiliate.

Betson began his quest with the apparent naïveté of a macro-economist delving for the first time into micro-micro-economic issues. Everyone else had done poorly but he would do better, he thought. In the end, he produced several dramatically different estimates and could not provide a single rational reason to prefer one over any other. [7] He did however express a personal preference for the estimate coming closest to Espenshade's, thus providing political support for Williams' model and indirectly lending credence to the arbitrarily high results of the Percent-of-Income formula introduced by Irwin Garfinkel.

A second report was created by consulting firm Lewin/ICF. [8] The Lewin report magically produced a clear favorite claiming Betson's study as the source, but actually contradicting the absolute inconclusiveness of Betson's scientific result. The estimate selected was the one that came closest to Espenshade's. This I suppose, to someone not the least bit serious about honesty, might be regarded as the expert consensus some Income-Shares promoters contend exists.

The Lewin report was created to fulfill a requirement for a report to Congress and Lewin was required to take public comment into consideration. Competent professional analysts and economists criticized the estimates but Lewin dismissed all criticism with a short comment. Fathers were complaining because they wanted to pay less child support.

It was at this point that fathers' rights advocates may have made their biggest mistake, although it was difficult to recognize at the time. Williams pretended to have valid "economic studies" supporting his design. In fact, he claimed that the Income-Shares model was based directly on "economic data." Neither claim was true and it seemed natural and logical to attack these alleged facts. Attempts were made to do just that by producing alternative economic studies using the same data and comparable methodology. But that led to a trap.

Not only was the Income-Shares guideline never subjected to serious technical review, it would not face judicial scrutiny either. Legal challenges were filed in more than one state but courts placed a very heavy burden on challengers to prove the guidelines were wrong. A valid estimate of the cost of raising children based on national family spending data became the holy grail of guideline debate. There were plenty of rumors, speculation, and attempts to find it but no one was ever able to hold it in their hand and say "Here it is."

National family spending data shows that whole families differ, often dramatically, in their spending behavior. The data on spending by and for individual family members, including children, is grossly inadequate. Even if it was possible to derive the average cost of raising children from that data (it is not), the average would not describe what a typical family spends. There is no way to derive an accurate one-size-fits-all estimate of "the cost of raising children" from national family spending data. Challengers could prove nothing. Of course, Income-Shares advocates could not prove their case either but they did not need to. Where an Income-Shares guideline had already become law they won by default.

Courts are very much to blame for having created the trap that challengers found themselves in. Using presumptively correct child support guidelines in the absence of definitions and principles that can be used to challenge them is a direct and obvious threat to due process. Due process is a fundamental right. Therefore the highest level of scrutiny is required when reviewing child support guidelines. Instead, courts consistently applied the very lowest form of review, accepting the guidelines regardless of even the most obvious flaws merely because they approved generally of the authority of states to order payment of child support.

"Courts are very much to blame for having created the trap that challengers found themselves in. Using presumptively correct child support guidelines in the absence of definitions and principles that can be used to challenge them is a direct and obvious threat to due process."
Economic studies, using fundamentally off-target data, could not provide compelling scientific proof of anything. They were therefore not useful in meeting the standard of proof that the courts required. Economic studies could not show whether the government was pursuing a legitimate objective or acting in a completely "arbitrary and irrational" way. Courts responded that ordering the payment of child support is a legitimate objective and not arbitrary and irrational. The economic analysis of the day by Espenshade, Williams, Betson, and guideline challengers did not sufficiently address the essential legal issues.

The fact that challengers were unable to produce a scientific result by using the same technical approach as defenders only served to produce the false impression that it is impossible to reach an objective child support decision. In P.O.P.S. v Gardner, the U.S. 9th Circuit Court of Appeals said;
The table does not purport to provide merely for the child's subsistence, rather it is designed to sustain the child at a standard of living concomitant with her divorcing parents' income. The measure of that standard is subjective. [emphasis added]
Had those challenging the guidelines taken one step back from the numeric data, they would have found Williams' analysis and logic on the whole entirely baseless, filled with technical error, and in a word – goofy. The Income-Shares model did not correspond to established child support law and mishandled every aspect of child support decision making. Even if the numeric information used in the Income-Shares model had been credible, Williams' interpretation of the data, analysis, and recommendations were not.

Had they stepped back a little farther, they would have noticed the dramatic change in child support statutes. The definition of the term "child support" was suddenly missing along with the fundamental principles upon which child support awards were based. Not only did the Income-Shares model not correspond to established child support law, it does not correspond to any set of rational decision principles nor any reasonable definition of child support. It could only be implemented in the absence of such definitions and principles in the statutes.

When the Georgia guidelines were declared unconstitutional earlier this year, the critical difference was the level of review used by the court. Although I am convinced that the highest standard of review ("strict scrutiny") is required when deciding the constitutionality of guidelines, the Georgia court used an intermediate level of review. This was sufficient. Any review more probing than blind acceptance will reveal the absurdity of both Percent-of-Income and the Income-Shares type guidelines.

Once beyond blind acceptance, once courts actually take a competent look, it becomes apparent that current guidelines fail even the lowest level of review. The Georgia decision says this:
Further, if this Court were only to apply the lowest standard of scrutiny, i.e., whether the Guidelines bore a rational relationship to a legitimate government purpose, the Guidelines would still fail.
Once Income-Shares guidelines were politically adopted in many states the new argument for their continued use was established; that states use the Income-Shares guideline. States that adopted lower guidelines were faced with the argument that they were too low because they were lower than other states. Just as in Haskins initial "study," higher was treated as being correct. States were also reminded that increasing the amount ordered would entitle them to higher levels of federal funding. This would be true so long as regulators continued to ignore review requirements and courts ignored due process.

The absence of any rational basis for the Income-Shares guideline became increasingly difficult to ignore even given the excuse that other states did it. Eventually a new explanation was adopted. The Income-Shares model seeks to maintain the standard of living in the custodial parent home that might exist if the parents lived together. Although the standard of living that the parents together can provide was a traditional consideration, the explanation given by Income-Shares promoters is a perversion of traditional child support law and an idea that state courts had explicitly rejected prior to federal reforms. In post-divorce circumstances their idea is impractical and contradictory to the concept of child support, which is limited to supporting children.

It is an established scientific fact that in post-divorce circumstances, adherence to such a goal leads to the inclusion of alimony in child support awards. An alternative method for calculating child support, known as the standard of living equalization method, was rejected by all states specifically because it is illegal to include alimony or spousal support in a child support award. When the Percent-of-Income formula was declared unconstitutional in Georgia the inclusion of "hidden alimony" was given as one of the reasons.

What many people can see even without detailed analytical charts and graphs is that results given by Income-Shares guidelines are often irrational and inappropriate. In their initial form, based directly on Williams' raw theory, presumptive child support orders were often more than the payer's net income. This problem was only partially corrected by arbitrarily lowering the guidelines' numeric table at the low end and later setting hard limits. The numbers and logic were not valid at the high end either but the fact that higher income payers were able to pay did not force change.

"When the Percent-of-Income formula was declared unconstitutional in Georgia the inclusion of "hidden alimony" was given as one of the reasons."

Other obvious indications are found in dealing with parenting time. When two parents with equal income spend nearly equal time and money caring for their children, one parent can still be ordered to pay a large amount to the other. People have also noticed that Income-Shares guidelines do not reasonably account for individual categories of spending such as housing, transportation, and entertainment and that they do not properly account for such factors as dependent tax benefits and medical expenses, among other things.

Federal law includes another requirement for eligibility to receive federal funds; the inclusion of "deviation criteria" in state statutes. These criteria typically do not provide the basic definitions and principles necessary to determine whether the presumptive amount is just and appropriate. Instead, they typically provide very restrictive additions to the guideline without specific supporting mathematical procedures. Most often they support only upward deviations from the basic calculation. Such additions do not provide the missing ingredient that leads to "just and appropriate" child support awards.

The law presumes that the amount calculated by use of a guideline is the correct amount to be awarded. This presumption creates a direct and obvious threat to due process of law. If the presumption is incorrect in even one case, then the law is unconstitutional. Income-Shares and Percent-of-Income guidelines produce results that are random in relation to children's needs and parents' relative ability to provide. They are known to give wildly inappropriate results in many cases. After thirteen years in the face of compelling evidence that the guidelines are unconstitutional, it seems we are waiting for more than the decision to abandon them. We are waiting for a return to western civilization and the rule of law.

Roger F. Gay


Citations:
  1. Hewitt, William E. 1982. Report on the Washington State Association of Superior Court Judges, Uniform Child Support Guidelines, Institute for Court Management, Court Executive Development Program.
  2. Ronald Haskins, Andrew W. Dobelstein, John S. Akin, and J. Brad Schwartz, Estimates of National Child Support Collections Potential and the Income Security of Female-Headed Families, Final Report, Office of Child Support Enforcement, April 1, 1985.
  3. Robert G. Williams, Development of Guidelines for Child Support Orders: Final Report, U.S. Department of Health and Human Services, Office of Child Support Enforcement, March 1987.
  4. Espenshade, Thomas J., Investing in Children, New Estimates of Parental Expenditures, The Urban Institute Press, Washington, D.C., 1984.
  5. Edward P. Lazear and Robert T. Michael, Allocation of Income Within the Household, University of Chicago Press, 1988, page 25
  6. Krause, Harry 1989, Child Support Reassessed: Limits of Private Responsibility and the Public Interest, University of Illinois Law Review, Vol. No. 2, 1989.
  7. David M. Betson, Alternative Estimates of the Cost of Raising Children from the 1980-86 Consumer Expenditure Survey, U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation, September 1990
  8. Lewin/ICF, Estimates of Expenditures on Children and Child Support Guidelines, U.S. Department of Health and Human Services, Office of Child Support Enforcement, October 1990

Copyright 2002 Roger F. Gay


Roger F. Gay is a professional analyst and director of Project for the Improvement of Child Support Litigation Technology.
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