Young, Delaney reintroduce bipartisan Social Impact financing bill03/05/15
Reps. Todd Young (R-IN) and John Delaney (D-MD) re-introduced their social impact financing legislation on Wednesday as the Social Impact Partnership Act (H.R. 1336). Joining them were Reps. Bob Dold (R-IL), Joe Kennedy (D-MA), John Larson (D-CT), Jared Polis (D-CO), Tom Reed (R-NY), Dave Reichert (R-WA), and Aaron Schock (R-IL). Sens. Orrin Hatch (R-UT) and Michael Bennet (D-CO) plan to introduce companion legislation in the Senate.
The legislation—which was first introduced by the pair last Congress as the Social Impact Bond Act—aims to expand and improve meaningful social and public health interventions, while driving taxpayer savings. It does so by first requiring the federal government to clearly define desired outcomes for a target population (for example, decreasing the recidivism rate of a given population by a set percentage). It then allows private sector and philanthropic investors to fund the expansion of scientifically-proven interventions aimed at achieving those outcomes. If rigorous independent evaluation confirms that predetermined outcomes are met, the federal government would repay investors with a modest return out of savings realized from a decreased reliance on government programs. If the outcomes are not met, no taxpayer money is spent.
“Too often, Washington focuses on inputs instead of outcomes,” said Young. “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. Since the 1990’s, just ten of these programs have been subject to rigorous scientific evaluation, and nine of them were found to have little to none of the desired impact. And yet we continue to fund these programs. It’s time we shift the focus to achieving desired outcomes, evaluating our social programs more carefully, and only paying for what works.”
“This bipartisan legislation offers a new solution that improves government services, helps those in need and reduces taxpayer costs,” said Delaney. “The Social Impact Partnership Act also increases cooperation from federal, state and local governments and means that we’ll be more likely to use data-driven and evidenced-based policies. Social Impact Bonds and Pay for Success Programs are being implemented in red states and blue states because it is a win-win approach that combines progressive ideals with fiscal responsibility. I have a been a strong supporter of Social Impact Bonds and the Pay For Success model, and I thank Congressman Todd Young for his leadership on this issue.”
Additional statements from legislative co-sponsors and outside groups can be found at http://toddyoung.house.gov/sip-supporters.
Already in widespread use in the United Kingdom (where they have helped drive labor force participation rates to record levels), thus far social impact financing has only been utilized on a very limited scale in the United States. The Social Impact Partnership Act is the first detailed proposal to adapt the UK’s social impact bond model for broad use at the federal level, and the first proposal to incentivize the realization of savings across multiple layers of government (i.e., federal, state, and local). More information on the concept and legislation, including full bill text, supplementary materials, and a list of supporters, can be found at http://toddyoung.house.gov/social-impact-partnerships.