Reps. Todd Young (R-IN) and John Delaney (D-MD) recently reintroduced H.R. 1336, social impact financing legislation dubbed the Social Impact Partnership Act, in the face of a 37 year low in the labor force-participation-rate.
Social impact financing is already used widely in the United Kingdom, helping drive labor force participation rates to record levels. To date, however, it has only been used on a limited scale in the U.S.
“Too often, Washington focuses on inputs instead of outcomes,” Young said. “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 10 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.”
First introduced by the duo during the last Congress as the Social Impact Bond Act, H.R. 1336 would expand and improve meaningful social and public health interventions and drive taxpayer savings by requiring the federal government to clearly define desired outcomes for a target population. Private sector and philanthropic investors would then be able to fund the expansion of scientifically-proven interventions aimed at achieving the defined outcomes.
If, following rigorous independent evaluation, the outcomes are determined to have been met, the federal government would then repay investor with a modest return out of savings from a decreased reliance on government programs. If, however, the outcomes are not met, taxpayer money will not be spent.
“This bipartisan legislation offers a new solution that improves government services, helps those in need and reduces taxpayer costs,” Delaney said. “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.”