State of Play: Pay for Success and Evidence-Based Policy (New Profit)

The following post was written by Nicole Truhe, America Forward’s Director of Government Affairs.

It has been a very exciting year for Pay for Success and Evidence Policy in this first session of the 114th Congress. Over a dozen pieces of legislation, amendments, or budget authorities that support Pay for Success, evidence, and innovation have been introduced and supported on a bi-cameral and bi-partisan basis. Before we break for the holidays, we are dedicating our last “State of Play: Pay for Success and Evidence Policy” blog post of the year to sharing five major updates on legislation and funding authorities that give us optimism and hope entering into the new year.

As you will see below, these updates reflect some of the most significant reforms in the Pay for Success and evidence space that Congress has advanced this year. The most notable update is the passing of the ESSA (Every Student Succeeds Act) that includes a variety of evidence and innovation advancing provisions. With Congress successfully passing a few major pieces of legislation, such as the ESSA, there is now new authority and more funding that is being directed to Pay for Success and evidence-based activities. In addition, the Corporation for National and Community Service is continuing to support Pay for Success through the Social Innovation Fund, which has been integral to advancing knowledge in the field and addressing questions around the applicability of Pay for Success across a variety of issue areas.

Congressional Updates:

Completed Activity

1) Education: Congressional members and staff have been working diligently since August on a negotiated conference bill that resolves the differences between the House and Senate versions of the reauthorization of the Elementary and Secondary Education Act (ESEA). Both the House of Representatives and Senate approved the inclusion of Pay for Success initiatives as an allowable use of state and local funds in various titles of their respective versions earlier in the year. On December 9th, Congress successfully passed the Every Student Succeeds Act, which is the first update to the Elementary and Secondary Education Act since No Child Left Behind was signed into law 14 years ago. The negotiated bill included Pay for Success in the following provisions:

Current Status:

    • Title I, Part D: In this part, funding is used to improve the education services for children and youth who have challenges meeting State academic standards, help children and youth make a successful transition between correctional facilities/institutions back into locally operated education programs, and prevent at-risk children and youth from dropping out of school or supporting those who have dropped out with the structure needed to get back on track.
    • Title IV, Part A: The purpose of this program is to improve students’ academic achievement by increasing the capacity of states, local education agencies, schools, and local communities to provide a well-rounded education by emphasizing school coordination, parental engagement, and partnership with community entities.
    • Both Titles include an emphasis on the use of evidence-based practices and programs, when possible.
    • A comprehensive definition of Pay for Success is included in General Provisions and serves as a helpful resource in supporting implementation of this new authority.

2) Housing and Urban Development (HUD) Pay for Success Demonstration: Bi-partisan, bi-cameral legislation was introduced this Congress that would authorize a Pay for Success multifamily energy and water conversation Pay for Success demonstration in affordable housing. HUD would be authorized to test energy efficiency solutions in HUD-assisted, multi-family housing with the goal of reducing costs to the federal government.

  • Current Status: Congress successfully voted on the Fixing America’s Surface Transportation (FAST) Act earlier this month that included formal authorization for the demonstration project. Additional details about the demonstration can be found here and we anticipate that HUD will issue an RFP sometime in 2016 for an intermediary or intermediaries to implement the demonstration.

3) Appropriations: Congress did not complete their normal order Appropriations process prior to the fiscal year ending on September 30th. As a result, a Continuing Resolution has been in place since the end of September to keep the government from shutting down. As of our last update, the White House and Congress had reached an agreement on a long-term budget deal that would raise the debt limit and set the federal budget for the next two years. Since that negotiation was reached, Congress has been working on a funding bill to allocate the increased spending caps across individual programs.

  • Current Status: Congress released their $1.1 trillion FY16 Omnibus Appropriations bill on December 15th. The President has indicated that he will sign the bill once it has passed out of both chambers. Congress has until December 22nd to complete their work on this bill before the latest Continuing Resolution runs out and the government is at risk of shutting down. The following are key highlights from the bill:
    • Investing in Innovation (i3): Flat funded at $120 million. The i3 program was defunded during the regular order Appropriations process earlier this year.
    • Workforce Innovation and Opportunity Act Governor’s Reserve: Full 15 percent funding to match the authorization included in the Workforce Innovation and Opportunity Act of 2014, which can be used to advance and support Pay for Performance in the workforce system.
    • Social Innovation Fund (SIF): Funded at $50 million including the allowable use of up to 20 percent of funds for Pay for Success projects. Though this is a decrease,SIF was zeroed out in the individual Appropriations bills debate earlier in the year.
    • Performance Partnership Pilots (P3): Continued authority to award up to 10 new pilots and the addition of the allowable use of discretionary funds from the Office of Justice Programs and the Department of Housing and Urban Development in the Pilots.

Still Pending

1) Evidence-Based Policymaking Commission Act: Representative Paul Ryan (R-WI) and Senator Patty Murray (D-WA) reintroduced their legislation that would create a commission to develop practices and processes for ensuring the use of outcomes and evidence when making federal policy and budget decisions. Known as the Evidence-Based Policymaking Commission Act, the Commission would be tasked with identifying data access and inventory needs and making recommendations for how best to incorporate outcomes into federal program design. There is no update to the current status of the legislation.

  • Current Status:
    • House: The legislation has been successfully voted out of the full House.
    • Senate: The legislation was successfully voted out of committee and action is still pending for approval by the full Senate.

2) Social Impact Partnership Act: Introduced in both the House and Senate, this legislation (H.R. 1336/S. 1089) would direct federal resources to states and local communities to support innovative Pay for Success arrangements. The bills aim to tackle social and public health challenges while evaluating programs more closely in order to achieve desired outcomes for those in need and more effectively use taxpayer dollars. There was an attempt to move the House bill by including it in the welfare reform/TANF reauthorization legislation that the Ways and Means committee was moving. However, that effort stalled. The Senate has continued to ways to fund the bill and avenues for moving the legislation.

  • Current Status:
    • House/Senate: Neither bill passed in either chamber and thus will continue to be up for debate in the 2nd session of the 114th Congress.

Agency Update

1) Social Innovation Fund Pay for Success Competition: The Corporation for National and Community Service (CNCS) has released its 2016 SIF PFS Competition Notice of Funding Availability. The competition seeks to advance PFS by providing funding to support projects from the developmental to the implementation stage. Though not required, Notices of Intent are due January 13, 2016. CNCS will be hosting a series of Q&A webinars for those who are interested in learning more.

It has been a very productive and fruitful year for Pay for Success and evidence policy at the federal level. Our hope for 2016 is the successful implementation of the authorities that have been enacted this year and continued progress on those bills yet to be passed.  In the new year, we will continue to provide these regular updates and are excited for what progress lies ahead for evidence and innovation policy and practice. 

If you are interested in learning more about Pay for Success or America Forward’s Pay for Success advocacy efforts, please contact America Forward’s Government Affairs Director, Nicole Truhe at Nicole_truhe@newprofit.org.