Larson, Young Introduce Social Impact Bond Act
(Washington) - Today, Congressman John B. Larson joined Congressman Todd Young (R-IN) in introducing the Social Impact Bond Act, H.R. 4885. The legislation would foster the creation of public-private partnerships that harness philanthropic and other private-sector investments to scale up scientifically-proven social and public health programs.
Under the proposed legislation, the federal government would establish desired outcomes to pressing social challenges that, if achieved, would improve lives and save government money. State and municipal governments could then submit proposals to work towards those outcomes—such as increasing adoption rates of teenagers in foster care, or improving the health and mortality rates of infants born into low-income families—by scaling up existing, scientifically-proven interventions. Private sector investors would provide the capital needed to expand the existing programs, and, if an independent evaluator were able to validate that the desired outcomes were met and money was saved, the investors would be paid back their initial investment plus a small return from the realized government savings.
“Government is most effective when it combines the best our public sector has to offer with the entrepreneurial spirit and innovation of the private sector. By utilizing those partnerships to cultivate better outcomes for the American people, we can strengthen our efforts on social issues and ensure more effective use of tax-payer dollars,” said Larson. “This legislation will help create a pathway for the development of evidence-based initiatives designed to address some of the most difficult issues we face. I am proud to join Representative Young on this measure and look forward to continuing our efforts to produce more effective outcomes in Connecticut and across the nation.”
“Social Impact Bonds have the potential to transform our nation’s social safety net by shifting the focus of such programs from inputs to outcomes,” said Young. “In other words, instead of arguing about how much or how little we are spending, policymakers should reward what works based on actual evidence. Whether you think government ought to do more to help our fellow Americans in need, or you think government needs to save money wherever possible, social impact bonds provide a solution on both counts. I've been honored to work on this idea with a bipartisan group of colleagues, including Congressman John Delaney and Congressman John Larson, and I look forward to our continued cooperation on these efforts.”
Already in widespread use in the United Kingdom, thus far social impact bonds have only been utilized on a very limited scale in the United States. The Social Impact Bond Act is the first detailed proposal to adapt the 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-bonds.