In the third year that the Department of Health and Human Services has had a pot of money to award to the five states that experience the greatest reductions in their out-of-wedlock birthrate, while also experiencing reductions in their abortion rate, only three jurisdictions even made the cut. For decreases of 4%, 0.25% and 0.009%, respectively, the District of Columbia, Alabama and Michigan will receive $25 million each. This "illegitimacy bonus" was enacted as part of the 1996 law overhauling the nation's welfare system. However, the bonus is awarded based on reductions in the state's overall nonmarital birthrate, encompassing all women regardless of their age or whether they receive public assistance.
It has been widely acknowledged that there is no necessary correlation between which states win the bonus and what—if anything—those states are doing specifically to reduce nonmarital childbearing; the bonus may largely be rewarding states for such external factors as demographic shifts. Moreover, questions have been raised as to whether the bonus has served to incentivize the states at all. According to an analysis published in Family Planning Perspectives in 1999, the establishment of the bonus program did not lead most states to institute any new policy or program initiatives around nonmarital childbearing in general; many of them, however, had programs in place before 1996 to combat teenage pregnancy and childbearing, the overwhelming majority of which are nonmarital and the rates of which, indeed, have been declining. (In contrast, the nonmarital birthrate among all U.S. women has been rising.)
Such questions, and the looming expiration of the 1996 welfare law next year, are prompting some advocates and policymakers to rethink the illegitimacy bonus. Some argue that there should be no bonus at all, that the government has no business involving itself in people's marital and reproductive decisions. Others argue that a bonus in and of itself may not be a bad idea, but that it should reward states for other things, such as reductions in child poverty rates or further reductions in teenage pregnancy. The terms of the bonus program might also meet with efforts at fine-tuning. Some are suggesting that states that wish to be eligible for the bonus at least be required to undertake specific actions aimed at winning it and, further, that they be required to inform the federal government about what they have tried, successfully or not, so that states can learn from one another. Other questions center on how the bonus money should be spent. Currently, winning states can use the money at their sole discretion. While some argue that that is the purpose of a "bonus," others say that bonus money should be redirected to the goals of the bonus program itself, or at least to other antipoverty goals that specifically would benefit low-income individuals and families. Such arguments about the current bonus program, and others, are sure to be raised in the coming year as Congress undertakes to reauthorize the welfare law.