September 25, 2003, 8:44 a.m.
10 Ideas
The leading candidates in California should listen a little.

By Jennifer Roback Morse

I have never been a candidate for elective office, not even in the Great Recall Election of 2003. I have had the luxury of combing the newspapers, surfing the Net, and scraping the bottom of the talk-radio barrel in search of any and all reasonable proposals. Listening to the Great Debate of the Five Frontrunners, I was amazed at the number of potential good ideas that never got mentioned, or that got run over by Arianna's interruptions. In an eclectic, but disinterested spirit, therefore, I offer these proposals to whomever occupies the governor's office after the recall-election results are in.

Among the candidates that weren't in the debate, my personal favorite is Dr. Warren Farrell. The author of Father and Child Reunion, Farrell's campaign literature describes him as a "Men's Issues Author." A mild-mannered, professorial type, Farrell has spent most of his adult life arguing for greater involvement of men in the family, supporting policies that enhance their involvement, and trying to help fathers who have been shut out of their children's lives. His campaign for governor highlights these issues. I'm sure he'd be delighted to have other candidates use his ideas. I know I would.

1. Make shared-parenting time the norm for divorcing couples.
More father involvement is correlated with better outcomes for children in virtually every area. This translates into lower demands for social spending for everything from medical care, to special-education services to mental-health services to prisons and corrections. Keeping fathers involved with kids is a social policy that actually reduces government spending.

Fathers who see their children regularly are more likely to meet their child support obligations in full. Fathers who are denied access to their kids are more likely to default. Policies that keep dads paying voluntarily are a lot cheaper than trying to force them to pay.

Last but not least, a rebuttable presumption for joint custody will reduce unilateral divorces by mothers. Most people don't realize that women initiate between two-thirds and three-quarters of all divorces. Women are more likely to initiate divorces in states where they tend to get sole custody. A presumption in favor of shared-parenting time reduces that probability.

So, when are the candidates going to stop wringing their hands over "the children," and do something to keep their dads involved in their lives?

2. A Paternity-Fraud Bill.
When a man is named as father of a child, he may be required to pay child support. A man can pay for years, only to find that he is not the father of the child. Contesting paternity is a long, ugly process. These disputes are costly to all the parties, including the branches of government involved in the lawsuits, and enforcement of child support. When a man successfully contests paternity, the prize is that he no longer has to pay. I have never heard of a case in which he receives restitution for past payments. Currently, there is no penalty for a woman who knowingly names the wrong man as father of her child.

Paternity fraud may not seem like a huge issue. In fact, it isn't even on the other candidates' radar screen. But it should be. A paternity-fraud bill is a low cost way for the government to send a clear message that women are not entitled to treat men as if they were just combination sperm banks and wallets.

All the candidates in the Great Debate agreed that something has to be done about the workers'-compensation system. Only Tom McClintock seemed able to provide specifics. Cruz Bustamante's suggestion to create a discount for safe workplaces is nothing more than the experience-rating system that should be standard operating procedure for anything calling itself insurance.

A couple of economists from the Pacific Research Institute, Larry McQuillan and Andrew Gloger, have shown that California's workers compensation system is fraught with abuse. Not fraud, mind you: but perfectly legal, and entirely inappropriate overuse of the system. California employers have seen their workers' comp premiums triple since 1997. The Pacific Research Institute's recommendations would save money and improve the state's business climate.

They specifically recommend:
3. Compensable injuries should be "predominantly" work related.
Under current rules, injured workers are entitled to all medical care reasonably required to treat an injury. If contested, workers must only show the injury was "proximately" caused by employment, not predominantly caused.

4. Benefits should only be paid based on objective findings of doctors.
California is the only state that pays permanent disability benefits without "objective medical findings" such as an x-ray. Of the $3.5 billion paid in indemnity benefits in 2001, nearly half were for permanent disability benefits, many paid on subjective complaints of pain — a boon to chiropractors who are now the leading medical providers in the system.

5. Medical payments must be consistent with other plans.
Prices paid for medical services under workers' comp are higher than those paid by other plans for identical services. Payments for hospital stays are 30 percent higher than employment-based health plans. Reimbursement rates for pharmaceuticals are 50 percent higher than Medi-Cal. Outpatient surgery reimbursements are 88 percent higher than Medicare.

Finally, the Reason Public Policy Institute has published the Citizens' Budget, a 150-page detailed report, chockfull of cost-saving and efficiency-enhancing ideas. The Reason Public Policy Institute is an offshoot of Reason magazine, the brainchild of a California engineer named Bob Poole. Reason made its mark arguing for such glamorous policies as private garbage collection. Since those humble beginnings, the organization has spun off a couple of research institutes. Carl DeMaio, president of the Performance Institute, and Adrian Moore, senior fellow of the Reason Foundation Public Policy Institute, continue the venerable tradition of policy-wonkery. Their suggestions are nothing sexy: Few politicos favor photo ops in front of privatized garbage trucks. But their proposals provide the nuts and bolts of actually running the state government. These ideas would appeal to Silicon Valley nerds, if there were any left behind to turn off the lights. Davis tax-and-spend policies have turned Sillicon Valley into a near ghost town. For those of us who remain behind, here are some ideas to keep the fiscal lights on a little longer.

6. Adopt Biennial Budgeting.
By moving California to a two-year budget cycle under biennial budgeting, the challenge of balancing the budget becomes easier. Biennial budgeting is an accepted way to budget on the state level. Moreover, it will take time to thoughtfully implement the various management reforms and program restructuring that will be needed for long-term fiscal health.

7. Reform Procurement and Competitive Sourcing.
Competitive sourcing is the best tool government can use to redesign its programs to be more efficient — producing cost savings of 30 percent on average each time it is applied. A review of state agencies reveals that state employees are routinely performing activities that could be best contracted out for a lower price. Many of the contracts being used by state agencies are outdated "fee-for-service" contracts that open the state to substantial cost overruns. Those contracts should be converted to fixed-price/performance-based contracts. When Tom McClintock argued that competitive bidding and private contracting could save the state some $9 billion, he might well have been quoting the Men from Reason.

8. Create a California Sunset Commission that would systematically review the continued relevance and performance achievements of 20 percent of all state programs annually.

As the kids would say, "Duh."

9. Improve performance and accountability of state employees by:
Implementing Employee-Performance Contracts for every employee in state government to hold them accountable for clear and transparent performance goals.

Enacting Managerial-Flexibility Legislation that restores the authority of department and program heads to effectively manage the state workforce.

Adopting State-Employee Retirement Reforms by adjusting benefits and allowing partial privatization of retirement funds that would provide beneficiaries greater freedom to invest in their own retirement.

10. Create a Regulatory Review and Innovation Commission that would systematically review regulations for their cost-effectiveness and negotiate and enforce "Performance Incentive Agreements" with businesses to achieve regulatory results without high regulatory costs.

So there you have it: ten ideas anybody can use. Warren Farrell's two ideas to improve family life in California will save the taxpayers money by reducing the demand for expensive social services. The Pacific Research Institute's three ideas to reform workers' compensation will improve the business climate. And the Reason Public Policy Institute's five ideas to streamline the government and hold it more accountable will help avoid future crises.

Any takers?

— Jennifer Roback Morse is Love and Economics: Why the Laissez-Faire Family Doesn't Work.