Child Welfare Financing: An Issue Overview

Congressional research reportApr 6, 2005

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Child Welfare Financing:

An Issue Overview

April 6, 2005

name redacted

Analyst in Social Legislation

Domestic Social Policy Division

Congressional Research Service ˜ The Library of Congress

Child Welfare Financing: An Issue Overview

Summary

Child welfare programs are designed to protect children from abuse or neglect.

Services may be offered to stabilize and strengthen a child’s own home. If this is not

a safe option for the child, however, he or she may be placed in foster care while

efforts to improve the home are made. In those instances where reuniting the child

with his or her parents is found to be impossible, a child welfare agency must seek

a new permanent (often adoptive) home for the child.

In FY2003, the most recent year for which complete data are available, the

federal government provided states with some $6.9 billion in funding dedicated to

child welfare purposes. Most of this funding is authorized under Title IV-B and Title

IV-E of the Social Security Act. Apart from these dedicated federal child welfare

funds, however, states also use non-dedicated federal funds—including the

Temporary Assistance for Needy Families (TANF) block grant, Medicaid, and the

Social Services Block Grant—to meet child welfare needs. The most recent data

available (for state fiscal year 2002) suggests that states spent at least $4.8 billion in

non-dedicated funds for child welfare purposes. While non-dedicated funding

streams have increased resources to child welfare agencies, current legislative and

administrative proposals may jeopardize their continued use for child welfare.

The way that the federal government distributes dedicated child welfare money

to states has been criticized as inflexible, out of sync with federal child welfare policy

goals, and antiquated. Because most dedicated federal child welfare funding (about

65% in FY2003) may be used only for foster care, critics charge that states have

inadequate funds to prevent removal of children from their homes or to allow

children to be reunited with their parents. In addition, a state’s ability to claim most

of the dedicated child welfare funds is directly related to the number of foster and

adoptive children it assists who meet the income, family structure, and other

program rules of the now defunct Aid to Families with Dependent Children (AFDC)

program (as that program existed on July 16, 1996).

Attention to federal child welfare financing has focused almost exclusively on

dedicated child welfare funding streams and is driven in part by the belief that the

current structure hampers the ability of state child welfare agencies to achieve

positive outcomes for children. This assumption is not easy to prove. However, it

is possible to say that the AFDC link, which ties federal funding in foster care and

adoption assistance to increasingly antiquated income standards, over time, will

erode the share of program costs for which states may seek federal reimbursement.

Recent proposals to alter how dedicated federal child welfare funds are distributed

included some that would link eligibility for federally supported foster care and adoption

assistance to TANF income rules and others that would remove income restrictions

entirely. The latter proposals, which would greatly expand the number of children for

whom the federal government would be committed to providing support, have typically

sought to cap (or block grant) some or all of what is now open-ended federal funding for

foster care and adoption assistance and/or to reduce the share of costs paid for each

eligible child by the federal government. This report will not be updated.

Contents

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Federal Interest in Child Welfare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Federal Funding Dedicated to Child Welfare Purposes . . . . . . . . . . . . . . . . . 4

What Does this Money Support? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

What Kind of Funds Are Available? . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

How Are Child Welfare Funds Provided to States? . . . . . . . . . . . . . . . 6

Trends in Child Welfare Spending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Adoption Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Foster Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Services for Child Welfare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Non-Dedicated Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Temporary Assistance to Needy Families (TANF) . . . . . . . . . . . . . . . 20

Social Services Block Grant (SSBG) . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Medicaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Proposals for Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

The “Look Back” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Capping or Block Granting Foster Care Funds . . . . . . . . . . . . . . . . . . 33

Calls for New Funding Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Appendix A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Congressional Interest in Child Welfare, Selected Legislation . . . . . . . . . . 40

Appendix B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Recent and Proposed Funding For Child Welfare—Funds Distributed

on a Discretionary or Competitive Basis . . . . . . . . . . . . . . . . . . . . . . . 42

Appendix C—Federal Funds Dedicated to Child Welfare, Distribution

by State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Appendix D—Actual Distribution of Foster Care Funds and

Hypothetical Distributions of Capped Foster Care Funds . . . . . . . . . . . . . . 58

List of Figures

Figure 1. Share and Amount of Dedicated Federal Child Welfare Funds

by Program Type, FY2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Figure 2. Share of Federal Dedicated Child Welfare Funding

by Program Type, Selected Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Figure 3. Average Share of Title IV-E Foster Care

Administrative Claims by Category, FY1999-FY2003 . . . . . . . . . . . . . . . . 13

List of Tables

Table 1. Recent and Proposed Funding for Federal Child Welfare Programs—

Funds Distributed to all Eligible States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Table 2. Kinds of Federal Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Table 3. Federal Grants Dedicated to Child Welfare Purposes and Distributed

to All Eligible States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Table 4. Title IV-E Adoption Assistance: Monthly Federal Cost per Eligible

Child, Selected Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Table 5. Title IV-E Foster Care: Monthly Federal Cost per Eligible Child,

Selected Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Table 6. Non-Dedicated Federal Spending by State Child Welfare Agencies . . 19

Table 7. TANF Spending by Child Welfare Agencies, by State . . . . . . . . . . . . . 21

Table 8. SSBG-Appropriated Funds Spent by Child Welfare Agencies,

by State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Table 9. Funding Level for the Social Services Block Grant in

Nominal and Constant (FY2003) Dollars, Selected Years . . . . . . . . . . . . . 26

Table 10. Medicaid Spending by Child Welfare Agencies, by State . . . . . . . . . 27

Table C-1. Dedicated Federal Child Welfare Funding Available

for Services FY2001-FY2004, by State . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Table C-2. Dedicated Federal Child Welfare Funding for the Foster Care

Program, FY2001-FY2003, by State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

Table C-3. Dedicated Federal Child Welfare Funding for the Adoption

Assistance Program, FY2001-FY2003, by State . . . . . . . . . . . . . . . . . . . . . 52

Table C-4. Dedicated Federal Child Welfare Funding for Independent

Living, FY2001-FY2003, by State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Table D-1. Actual Distribution of Federal Title IV-E Foster Care Funds,

FY1999-FY2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

Table D-2. Actual Distribution of Title IV-E Foster Care Funds,

FY2003 and Hypothetical Distribution of Funds (at the FY2003 Funding

Level), Based on a State’s Share of Certain Child Populations . . . . . . . . . . 62

Table D-3. Actual and Hypothetical Distribution of Title IV-E Foster Care

Funds, Based on Historical Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . 65

Child Welfare Financing:

An Issue Overview

Current law links a state’s ability to claim federal foster care and adoption

assistance to the 1996 income and other program rules of the former cash welfare

program, Aid to Families with Dependent Children (AFDC). This means that as the

number of foster care and adoptive children who meet the static income rules of the

now-defunct AFDC program inevitably declines, the federal government’s share of

support for all children in need of protection will decline. Apart from this specific

concern about the federal financing structure, some advocates and policymakers

consider the way that federal funds for child welfare programs are distributed to

states to be counterproductive to the overall goals of federal child welfare policy.

Common charges are that the current structure does not grant states the flexibility

needed to meet the needs of children and their families, and that it encourages states

to rely too heavily on foster care. A connection between the specific federal

financing structure and the ability of states to achieve positive outcomes for the

children and families is hard to establish. Nonetheless the assumption of a link

between these two factors has helped drive recent attention to the federal child

welfare financing structure.

The purpose of this report is to describe the federal interest in child welfare (as

expressed by Congress); describe the current level and structure of federal dedicated

child welfare financing and examine trends in the appropriation and spending of this

money; and to review the extent to which states rely on non-dedicated federal funds

for child welfare purposes. Finally, the report discusses the future federal

commitment to child welfare financing, along with the concepts of flexibility and

accountability, as these relate both to current law and to recent proposals to alter

federal child welfare financing.1

Background

Total spending by child welfare agencies has been increasing and all sources of

public funding—federal, state, and local—have contributed to this growth. According

to the most recent available survey by the Urban Institute, in state fiscal year (SFY)

2002 child welfare agencies expended more than $22.2 billion on child welfare

purposes of which just over half ($11.3 billion) was from federal sources. The

federal share of total child welfare spending has risen—from 43% in SFY1996 to

51% in SFY2002—and, at least for the most recent years, nearly all of this increased

I am grateful to (name redacted), (name ted),

redac(name redacted), (name redacted), and

(name redacted) for their insightful comments on this report.

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funding has been from federal funds not specifically dedicated to child welfare (i.e.,

TANF and Medicaid).2

Over roughly the same time period, the number of children reported as victims

of child abuse and neglect and the number of children in foster care have declined

while the number of children adopted out of the foster care system has risen

significantly. Whether these positive demographic trends are in some part related to

the increased child welfare spending has not been determined. At the same time, and

despite these positive trends, state child welfare agencies—as a whole—have been

found unable to meet many of the outcome measures established with regard to the

central goals of federal child welfare policy. These goals are related to safety and

permanency for children and primarily seek to—

prevent child abuse and neglect and to protect and care for children

who must be removed from their homes;

find permanent, stable homes for children who must be removed

(primarily through family reunification or adoption); and

enhance the well-being of children and the ability of families to meet

their children’s needs.

The failure of states to meet the federal outcome measures established may be

linked to any number of things—for instance, perhaps the federal measures do not

accurately capture what states achieve, or the degree to which states were unable to

comply with federal outcome measures has been over-stated, or perhaps states are

struggling to meet more complex needs than ever before.

Some child welfare advocates and administrators, however, believe that the

current federal financing system contributes to states’ difficulties or, at the least,

hampers their efforts to achieve positive outcomes for children. This assumption,

combined with concern about the “look back” to AFDC, may prompt the 109th

Congress to consider proposals to alter the federal child welfare financing structure.

Recent proposals—including legislation introduced in the 108th Congress,

recommendations from the nonpartisan Pew Commission on Children in Foster Care

released in May 2004, and a policy option again offered in the Administration’s

FY2006 budget proposal—have in some part focused on the perceived need for

greater flexibility in state use of federal funds and removing or replacing eligibility

rules that link open-ended entitlement funding for adoption and foster care costs to

the 1996 program rules of the now defunct AFDC program.

See Cynthia Andrews Scarella, Roseana Bess, Erica Hecht Zielewski, Lindsay Warner, and

Rob Geen, The Cost of Protecting Vulnerable Children IV: How Child Welfare Funding

Fared during the Recession (Washington, DC: Urban Institute Press, 2004), pp. 6-8, 13.

(Hereafter cited as Scarella et al., The Cost of Protecting Vulnerable Children IV.) States

report on spending for their own state fiscal year to the Urban Institute. Some states have

a fiscal year that mirrors that of the federal government (i.e., Oct. 1 through Sept. 30);

however, other states use different months for a fiscal year (e.g., July 1 through June 30).

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Federal Interest in Child Welfare

The central focus of federal child welfare funding is to ensure safe and adequate

care is provided to all children. In many cases this requires providing support and

services to both children and their care-taking families. Under the U.S. Constitution,

the well-being of children and families has traditionally been understood as a primary

duty of state governments. Nonetheless, congressional interest in improving child

welfare is longstanding and, as Congress has authorized new funds for state child

welfare programs, it has also required states to enact policies and meet certain

standards related to those programs. Thus, while state and local governments are the

primary administrators of child welfare programs, and policies and practices can and

do vary significantly by political jurisdiction, certain federal standards must be met

in all locations to ensure continued federal child welfare funding.3

The largest federal funding streams specifically for child welfare purposes are

authorized to support children in foster care and children who are adopted out of

foster care (primarily). Some children need to be removed from their homes and

placed in foster care to ensure their safety and well-being (which is another way of

saying for their own “welfare”). This is true without regard to their parents’ income

or resources. However, when Congress initially authorized funds for federal foster

care (1961) it did so as part of what was then the nation’s cash welfare program,

AFDC. Thus its focus was not on ensuring the safety and well-being of all children

removed from their homes, but only those children who Congress had already

defined to be of federal concern (i.e., children in poor families who were eligible for

federal cash aid).

In 1980, when Congress established federal foster care as an independent

program (rather than a component of AFDC), and for the first time established

federal adoption assistance, it relied on this prior law to define the population of

foster and adoptive children for whom the federal government would assume specific

(and open-ended) financial responsibility. At the same time, the 1980 legislation

sought to give states an incentive to provide the protections and services to all

children in foster care and it linked the new foster care and adoption assistance

program to the much longer standing Child Welfare Services program. Since 1935

that program has been authorized to serve all children—without regard to income.

However, Congress has provided much more limited funding, and on a discretionary

basis, for this purpose.

During the 1990s Congress passed additional laws asserting that nearly every

protection required of a child for whom the federal government provides funding

must be extended to all children in foster care, regardless of whether the federal

government pays any of their foster care expenses. (Examples of these protections

are written case plans and regular reviews of those plans.) Thus while the federal

government has expanded the group of children in which there is a federal interest

—at least from the perspective of providing protections and monitoring the

achievement of outcomes—it has not similarly expanded the share of children in

See CRS Report RL31242, Child Welfare: Federal Program Requirements for States, by

(name redacted).

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foster care for whom it claims specific financial responsibility. On the contrary,

under current law, as amended by P.L. 104-193 (1996), the share of children for

whom the federal government has asserted financial responsibility will decline.

(Appendix A provides a short legislative history of federal interest in child welfare.)

Federal Funding Dedicated to Child Welfare Purposes

States receive some federal funds that are explicitly dedicated to child welfare

purposes and which must be used for those purposes.4 These are available primarily

through Title IV-B and Title IV-E of the Social Security Act and grants authorized

by the Child Abuse Prevention and Treatment Act (CAPTA). The combined FY2005

appropriations for these programs were approximately $7.6 billion. Table 1 (below)

lists each of these programs and their recent and proposed funding levels. See

Appendix C for information on the distribution of these funds by state.

Table 1. Recent and Proposed Funding for Federal Child

Welfare Programs—Funds Distributed to all Eligible States

Funding by fiscal year

(in millions of dollars)

Program

2002

2003

2004

2005

President’s

FY2006

request

Title IV-B of the Social Security Act

Child Welfare Services

292

290

289

290

Promoting Safe and Stable Families

375

404

410

Title IV-E of the Social Security Act

Foster Carea

Adoption Assistance

(Chafee) Independent Living

(Chafee) Education and Training Vouchers

4,519

4,485

4,974 4,896

4,643

1,342

1,463

1,700 1,770

1,797

140

Child Abuse Prevention and Treatment Act b

Basic State Grants

Community-Based Grants for the

Prevention of Child Abuse and Neglect

Source: Table prepared by the Congressional Research Service (CRS).

a. The Foster Care and Adoption Assistance programs are funded on a mandatory, open-ended basis.

Funding amounts shown for FY2002 and FY2003 are estimated total federal expenditures based

The dedicated funding sources described in this report are appropriated and made available

to all eligible states by formula distribution or by other program rules. The federal

government also provides approximately $200 million in dedicated child welfare-related

funds, which are generally available on a competitive grant basis; states may or may not be

eligible grant applicants. These programs and their recent and proposed funding levels are

displayed in Appendix B.

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on state claims made for those years. Amounts shown for FY2004 and FY2005 are the

appropriated amounts which, like the President’s request for FY2006, represent an estimated

federal spending for that year. Readers should note that these appropriation levels are typically

higher than the final funding amount.

b. Program authorization for the Children’s Justice Act grants are also included under CAPTA. These

grants are distributed to all eligible states by formula. However, the funding for these grants

($20 million in FY2001 and each subsequent fiscal year) is not appropriated but made available

out of the Crime Victims Fund as specified in the Victims of Crime Act (P.L. 98-473, as

amended). The Crime Victims Fund consists of criminal fines, penalties and other assessments

collected by the federal treasury and is administered by the Department of Justice.

What Does this Money Support? Dedicated child welfare funding is

appropriated for four basic purposes:

adoption assistance (administration, training and subsidies for

adopted children);

foster care (administration, case planning and placement, training,

and maintenance (i.e., room and board));

services (child protective, family support, preservation, or

reunification services and adoption promotion and support); and

independent living (assistance for those leaving foster care without

a new permanent home).

In FY2003 (the most recent year for which foster care and adoption assistance

expenditure data are available) combined federal funds appropriated for services

totaled 11% of the dedicated child welfare funding ($750 million) while 65% of the

funds ($4.5 billion) was spent on the federal foster care program (including

maintenance payments, administration, training and data collection). The remaining

federal expenditures were for adoption assistance (21%, $1.5 billion for subsidies,

administration and training), and independent living (3%, $182 million). (See Figure

1 below.)

Figure 1. Share and Amount of Dedicated Federal Child

Welfare Funds by Program Type, FY2003

Services

$750 million

11%

Independent Living

$182 million

Adoption

$1.5 billion

21%

Source: Congressional Research Service (CRS).

Foster Care

$4.5 billion

65%

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What Kind of Funds Are Available? The kind of appropriation included

in federal law can have a significant effect on the availability of federal child welfare

funds for particular purposes. Federal law provides for both mandatory and

discretionary appropriation of child welfare funding. Mandatory appropriations,

sometimes called entitlement funding, may be capped or open-ended. (See Table 2.)

Table 2. Kinds of Federal Funding

Discretionary

A funding authorization level is included in the legislation that authorizes

the program. Congress has the discretion to appropriate all, some, or

none of the funds that are authorized for the program. Thus the ultimate

funding level is determined via the annual appropriations process.

Mandatory—

capped

The funding level is a part of the legislation that authorizes the program.

Congress must annually appropriate funds at the specified level.

Mandatory—

open-ended

The funding level matches the amount of eligible claims made under the

legislation that authorizes the program. Congress must annually ensure

that enough funds are available so that every eligible expense for which

a state seeks reimbursement, can be paid out of the federal treasury.

Source: Congressional Research Service (CRS).

How Are Child Welfare Funds Provided to States? The factors that

determine the distribution of federal child welfare funds to each state vary by

program. In general, the number of federally eligible foster care and adoptive

children is key for the distribution of most dedicated child welfare funds. Separate

factors include state per capita income, the relative size of states’ child populations

or total foster care populations. Table 3 includes a description of each of the federal

child welfare programs, along with a description of the program’s purpose,

distribution factors, and kind of appropriation.

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Table 3. Federal Grants Dedicated to Child Welfare Purposes and Distributed to All Eligible States

Program

Purposes

Kind, level and (length) of funding

authorization

Distribution factors and federal match

Title IV-B of the Social Security Act

Child Welfare

Services

Promoting Safe

and Stable

Families

Improve public child welfare services to prevent

removal of children; find foster or adoptive homes

for children who cannot remain in their homes;

and offer appropriate reunification services.

Provide funds for four categories of services:

family preservation, family support, time-limited

reunification, and adoption promotion and

support.

Discretionary - $325 million

(permanent - indefinite)

Minimum allotment of $70,000 to each state. State’s relative

share of population under age 21 and state’s per capita average

income. (Federal match: 75%)

Mandatory—capped - $305 million, plus

Discretionary - $200 million

(through FY2006)

Set-asides or allotments are made for tribes, territories, court

improvement, and research and evaluation. State’s relative

share of children receiving food stamps. (Federal match: 75%)

Title IV-E of the Social Security Act

Foster Care

Adoption

Assistance

Chafee

Foster Care

Independence

Education and

Training

Vouchers

Reimburse states for cost of room and board

payments and case planning on behalf of eligible

foster children and for related eligible

administration, training and data collection costs.

Reimburse states for cost of adoption subsidies for

eligible special needs children and for related

training and administration costs.

Provide funds for services to foster children under

age 18 and former foster youth who leave foster

care without a permanent home (aged 18-21) to

help them transition to independent living.

Vouchers valued at up to $5,000 for college

education or vocational training for current or

former foster youth who leave foster care without

a permanent home (up to age 21, or age 23 if

enrolled in school in training and receiving

voucher when reaching 21 birthday) and for

children adopted out of foster care (age 16 or

older).

Mandatory - open-ended - as much

money as is required to pay all eligible

claims (permanent - indefinite)

All eligible claims submitted by a state are reimbursed.

(Federal match ranges from 50%-83% (the lower the state’s per

capita income the higher the federal match) for maintenance

payments and adoption subsidies; 50% for administration and

data collection and 75% for training related to these programs.)

Mandatory—capped - $140 million

(permanent - indefinite)

State’s relative share of the national foster care caseload (most

current numbers), except that no state may receive less than

$500,000 or the amount of funding it received for this program

in FY1998. (Federal match: 80%)

State’s relative share of the national foster care caseload (most

current numbers). (Federal match: 80%)

Discretionary - $60 million

(permanent - indefinite)

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Program

Kind, level and (length) of funding

authorization

Purposes

Distribution factors and federal match

Child Abuse Prevention and Treatment Act

State Grants

Improve child protective services.

Discretionary - part of $120 milliona

(through FY2008)

CommunityBased Child

Abuse

Prevention

Provide funds to all states for distribution to

community groups engaged in a range of child

abuse and neglect prevention activities.

Discretionary - $80 millionb

(through FY2008)

Minimum allotment of $50,000 to each eligible state; State’s

relative share of population under age 18. (Federal match:

100%)

Out of first 70% of grant: State’s relative share of the

population under age 18, except that no state may receive less

than $175,000. Remaining 30% awarded based on amount of

non-federal funds leveraged for community-based child abuse

prevention purposes in previous year. (Federal match: 100%)

Source: Congressional Research Service (CRS).

a. Funding for CAPTA State Grants and for Discretionary Grants under CAPTA (which are not included in this table) are part of the same authorization level. This was set at $120

million for FY2004 and such sums as necessary for FY2005-FY2008. The total FY2005 appropriation under this authorization was $59 million.

b. Funding authorization was set at $80 million for FY2004 and such sums as necessary for FY2005-FY2008.

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Trends in Child Welfare Spending

Total dedicated federal child welfare spending grew by 516% between FY1983

and FY2003 (the most recent year for which Title IV-E Foster Care and Adoption

Assistance expenditure data are available). Viewed in constant (FY2003) dollars

these funds increased from $1.1 billion in FY1983—soon after the Adoption

Assistance and Child Welfare Act of 1980 ( P.L. 96-272) reorganized or established

most of the major components of the current system—to $6.9 billion in FY2003.5

The share of all dedicated child welfare funds expended through the Title IV-E

Foster Care program has been in decline for close to a decade while the share of those

funds expended for the Title IV-E Adoption Assistance program is up sharply.

Although dedicated child welfare funding for services has increased, the share of

these funds for services declined since FY1983 and has been relatively stagnant since

FY1990.

Figure 2. Share of Federal Dedicated Child Welfare Funding by

Program Type, Selected Fiscal Years

Foster care

78%

Adoption

76%

Services

Independent Living

73%

69%

65%

32%

21%

19%

13%

10%

14% 12%

12%

11%

10%

1983

1990

1995

1998

2001

2003

Source: Congressional Research Service (CRS).

Adoption Assistance. Among the four categories of federal dedicated child

welfare funding, the Adoption Assistance program has seen the most dramatic

growth. Spending rose some 6,166% from $23.4 million in FY1983 to some $1.463

billion in FY2003. Over that same period the share of all federal child welfare funds

dedicated to Adoption Assistance increased from 2% to 21%. (See Figure 2 above.)

Throughout this discussion of spending trends for dedicated federal child welfare dollars,

amounts are presented in constant FY2003 dollars and percentage changes in spending are

presented based on a comparison of those same constant dollar amounts. FY2003 dollars

were calculated from an average annual (Oct. through Sept.) Consumer Price Index for All

Urban Consumers (CPI-U).

CRS-10

The substantial growth in spending for adoption is consistent with strong federal

support for adoption as a permanent placement option for children who cannot return

to their biological parents. In addition, growth in program spending between FY1983

and FY2003 should be expected both because the program was in its infancy in

FY1983 and because the 1980 law that established Adoption Assistance (P.L. 96272) provided it with an open-ended and mandatory funding authorization. This kind

of funding authority allowed the program cost to grow along with the number of

adopted children eligible for subsidies.

In FY1983, just over 5,300 children received a federally subsidized adoption

assistance payment, a fraction of the more than 314,700 who received such a subsidy

in FY2003. Over this same time period, the average monthly cost to the federal

government for each program-eligible child has fluctuated while remaining relatively

stable—rising about 6%—from $367 in FY1983 to $383 in FY2003. (See Table 4.)

Thus, the substantial growth in the caseload largely explains the substantial growth

in federal program cost.

Table 4. Title IV-E Adoption Assistance: Monthly Federal Cost

per Eligible Child, Selected Fiscal Years

(in constant FY2003 dollars)

1983

1990

1995

1998

2001

2003

TOTAL program

$367

$344

$390

$388

$403

$383

Subsidy

$329

$266

$291

$286

$303

$308

Administration

$71

$87

$86

$70

Source: Congressional Research Service (CRS).

Note: NA = Data not available. The total program costs include adoption subsidy, related

administration, training, and demonstration costs. Therefore the sum of the per child subsidy and

administration costs do not equal the total per child cost for the program.

Adoption Assistance Costs Projected to Increase. With the 1997

Adoption and Safe Families Act (ASFA, P.L. 105-89) Congress sought to encourage

adoption by enacting new/shorter time frames for required case (permanency)

planning for children in foster care and by providing incentive funds to states that

increased the number of children adopted out of foster care. The number of children

adopted out of foster care was an estimated 37,000 in FY1998, climbed to 51,000 by

FY2000 and, despite a decline in the foster care caseload size, has remained

relatively stable in number since that year.6 In its March 2005 baseline, the

Congressional Budget Office (CBO) projects the number of children receiving

Adoption Assistance will continue to grow, reaching an estimated 482,000 children

The estimated number of adoptions out of foster care was 50,000 in FY2001, 53,000 in

FY2002 and, although this number is still expected to rise with new data reports, is now

estimated at 49,000 for FY2003. The total number of children in foster care peaked in

FY1999 at 567,000 and has declined each year since then, reaching 523,000 in FY2003

(most recent year for which data are available).

CRS-11

by FY2010 and an estimated 586,000 by FY2015. This growth is projected despite

the current link between the program rules of the now defunct AFDC program (as it

existed on July 16, 1996) and eligibility for federal adoption assistance.7

The majority of children adopted from public foster care are eligible for

adoption assistance (roughly estimated as 74%), the median age at which these

children are adopted remains at just over six years of age, and children remain

eligible until their 18th birthday. Thus children who receive Adoption Assistance

now—and who were adopted immediately following ASFA—will likely continue to

receive these federal subsidies until at least FY2010. Meanwhile, as states continue

to complete high numbers of foster child adoptions, they are joined each year by

increasing numbers of newly adopted children.

The policy goals and dynamics of Adoption Assistance are very different from

those of Foster Care. Foster care is assumed to be a temporary setting. Good

practice dictates that foster children be reunited with families or, if necessary, placed

for adoption within the shortest time frame possible. Thus the policy goal is

generally to reduce the length of time a child would be counted as a part of the foster

care caseload. By contrast, if adoption is the best permanency option for a child, the

goal is to have the adoption completed as early as possible in the child’s life and thus

to increase the length of time a child receives Adoption Assistance. Overall, and

consistent with the strong support of adoption by Congress, spending of dedicated

child welfare funds for adoption assistance has been rising steadily and can be

expected to continue to rise.

Foster Care. Federal spending for foster care continues to represent the

largest share of total dedicated child welfare funding. At the same time, its share of

that funding pie has been in decline for about a decade (in large part due to the

growth in the share of spending for adoption assistance). In FY1983, just under onethird (65%) of all dedicated federal child welfare funding was expended under the

foster care program. That share increased at least through FY1990 and in that year

(through FY1994) stood at approximately 78% of total dedicated child welfare

spending. Beginning with FY1995, the share of federal dedicated child welfare funds

expended for the foster care program began to decline. By FY2003 it had essentially

returned to its FY1983 share of the pie. (See Figure 2 above.) Across those same

two decades federal dollars expended for foster care have increased by 513%

(virtually the same as the rate of increase for total dedicated child welfare spending)

—from $732 million in FY1983 to $4.5 billion in FY2003.

Because the Foster Care program, like Adoption Assistance, receives federal

funding on an open-ended and mandatory funding basis, some of the change in

program spending might be attributed to changes in caseload size. However, an

analysis of state claims for foster care shows that changes in the size of the federally

eligible caseload cannot alone explain the change in federal program costs. The size

AFDC eligibility rules (including income) apply to the child and the family from which the

child was removed. Federal law prohibits application of an income test to an adoptive

family to determine a child’s eligibility for Adoption Assistance. Children who are eligible

for Supplemental Security Income (SSI) benefits do not need to meet the AFDC rules.

CRS-12

of the Title IV-E Foster Care caseload (a subset of all children in foster care)

generally rose from close to 93,400 children in FY1983 through FY1998, when it

crested at close to 305,200 children; it has declined each year since then and stood

at 242,200 in FY2003. Over the same time period, the average monthly cost to the

federal government for each program-eligible child rose from $653 to $1,543. The

growth in total program cost per eligible child—while coming to a near standstill in

recent years—nonetheless continued through FY2003.8

Table 5. Title IV-E Foster Care: Monthly Federal Cost

per Eligible Child, Selected Fiscal Years

(in constant FY2003 dollars)

1983

1990

1995

1998

2001

2003

TOTAL program

$653

$1,080

$1,186

$1,149

$1,438

$1,543

Maintenance

(room and board)

$456

$609

$618

$598

$629

$582

Administration

$442

$469

$457

$644

$773

Source: Congressional Research Service (CRS).

Note: NA = Data not available. Total program costs include foster care maintenance (room and

board), as well as related administration, training, demonstration and State Automated Child Welfare

Information System (SACWIS) costs. Therefore the sum of per child maintenance and administration

costs do not equal the total per child program costs.

States seek federal reimbursement for eligible foster care expenses by

submitting claims in several program categories, including foster care room and

board (maintenance payments), program administration (including case planning),

training, and data system development and operation (i.e., State Automated Child

Welfare Information System, SACWIS). When viewed as federal cost per eligible

child, claims for foster care maintenance payments have been relatively stable for

more than 15 years, while claims for administration have risen significantly over the

same time period.9 In FY1987 states made foster care administrative claims worth

$506 million compared to administrative claims worth $2.2 billion in FY2003. The

average monthly cost per eligible child for these administrative claims was $373 in

The eligible caseload referred to here is the average monthly number of children for whom

a state may claim reimbursement for foster care maintenance payment claims, as reported

by HHS in its annual Title IV-E expenditure data. The total foster care caseload (including

children who are eligible for federal reimbursement and those who are not and expressed

as the number of children in foster care on the last day of the given fiscal year) was an

estimated 269,000 in FY1983. The total caseload rose through FY1999, when it was an

estimated 567,000 and has since declined in each year to 523,000 in FY2003.

This analysis begins with FY1987 because data on administrative claims (separate from

training claims) are not available before that year. There were large changes in claims for

SACWIS (i.e., data system development and operation) and for training within this time

frame. However, because these claims represent a relatively small portion of the total

program cost (3% and 5%, respectively, of FY2003 foster care claims) they are not believed

to be driving federal costs.

CRS-13

FY1987 compared to $773 in FY2003. By contrast, the federal share of claims for

foster care maintenance payments rose from $717 million in FY1987 to $1.7 billion

in FY2003. The average monthly cost per eligible child for these claims was $528

in FY1987 and $582 in FY2003.10 (See Table 5 for information in additional years.)

What’s Going on with Administrative Claims? The largest share of state

foster care administrative claims—an average of between 68%-75% of those claims

for FY1999 to FY2003—are linked to “child placement services.” These include

claims submitted for case planning and management as well as claims for preplacement casework. Accordingly, the bulk of foster care administrative claims, at

least in recent years, reimburses states for caseworker time spent making referrals for

services and developing case plans designed to prevent removal of a child from

his/her home; developing, revising or reviewing a foster child’s permanency plan;

preparing for and participating in related judicial proceedings; making a child’s

placement; and for the supervision or management of those cases. Between 3% and

4% of administrative claims for FY1999 to FY2003 were related to determining

eligibility for the program and the remainder were claimed under the category of

“other,” which might include setting foster care payment rates and recruiting and

licensing foster care providers.11 (See Figure 3 below.)

Figure 3. Average Share of Title IV-E Foster Care

Administrative Claims by Category, FY1999-FY2003

Other

$548 million

28%

Determine

Eligibility

$80 million

Case planning

$985 million

50%

Pre-placement

$358 million

18%

Changes in the relative share of administrative and maintenance payment claims are

affected by new reporting requirements that, effective with FY2000, required states to

submit claims for their demonstration projects in a separate category. For purposes of this

discussion, demonstration costs are not included in either administrative or maintenance

payment totals for FY2000-FY2003.

Based on analysis of administrative claim data provided by HHS for FY1999-FY2003

(FY2003 data are estimates). Comparable administrative claiming data for years prior to

FY1999 were not available. Some claims related to operation of the State Automated Child

Welfare Information System (SACWIS) are reported by states as administrative claims.

However, HHS generally excludes these costs when it reports the total amount of

administrative claims—as is also done in this analysis and throughout this report.

CRS-14

Source: Congressional Research Service (CRS) based on Title IV-E Foster Care expenditure data by

administrative claim category (FY1999-FY2003) provided by U.S. Department of Health and Human

Services; (FY2003 data are estimates). Because not all states report administrative spending in each

category and especially because some states report all or most spending as “other,” this figure is

expected to have overstated the “other” categories. If only data from the 40 states (including the

District of Columbia) that reported spending in each of the category for all four years of the analysis

are included the the average FY1999-FY2003 shares of spending by administrative category would

be 54% for case planning; 21% for pre-placement; 3% for determining eligibility; and 22% for other.

The cost of foster care “administration” then may be substantially related to the

permanency planning and other requirements imposed by federal law. In 1994

Congress made provision of pre-placement services a mandatory condition of funding

(effective no later than the first day of FY1997) and required HHS to establish a new

monitoring system to ensure state compliance with these and other federal child

welfare policies (P.L. 103-432). In 1997, the Adoption and Safe Families Act

increased the frequency of certain permanency planning requirements (from every 18

months to every 12 months) and added new caseworker responsibilities (related to

seeking termination of parental rights).

A second important factor, and one that clearly skews the per-eligible-child cost

of Title IV-E foster care administration, is the ability of states to make “preplacement” claims. Federal law requires that the child welfare agency must make

reasonable efforts to prevent the removal of children from their homes. Accordingly,

federal policy permits states to seek reimbursement for applicable costs for these

foster care “candidates” (e.g., caseworker time related to providing referrals to

services or for case planning, etc.).12 The ability of states to claim reimbursement of

such pre-placement costs means that the universe of children for whom states may

make administrative claims is larger than the universe of children for whom they may

make foster care maintenance payment claims. Although hard data on the number

of children for whom states make “candidate” claims are not available, HHS has

recently estimated that in FY2002 the average monthly number of children for whom

states made candidate claims was 144,600.13

Candidates must also meet certain other Title IV-E eligibility requirements, including

those linked to the old AFDC program.

A third factor that might affect administrative claims is the practice some states had of

making Title IV-E administrative claims for candidates on a broader basis than HHS now

allows and also the practice of claiming administrative costs for otherwise eligible children

who were placed in unlicensed homes (usually those of relatives). HHS has already ended

or (in the case of claims for the otherwise eligible child placed with a relative) is seeking to

end these practices. In July 2001, asserting that some states had too expansively interpreted

the meaning of “candidate,” HHS issued a policy announcement (ACYF-CB-PA-01-02)

detailing which children may be considered a candidate for foster care. Most of this policy

guidance was subsequently incorporated into the official Child Welfare Policy manual,

although provisions that would have denied states the ability to make Title IV-E

administrative claims for children living in unlicensed foster care homes were delayed and

then placed on indefinite hold pending release of formal rules. On Jan. 31, 2005, HHS

published a notice of proposed rulemaking concerning Title IV-E administrative claims with

regard to candidates for foster care, children placed in unlicensed relative homes, and

children temporarily moved to ineligible placement settings. HHS estimates that the “policy

(continued...)

CRS-15

Foster Care Costs Projected to Decline. In its March 2005 baseline,

CBO projects the federally eligible foster care caseload will continue to decline,

dipping to 195,000 by FY2010 and declining further to 162,000 by FY2015. This

projected decline is consistent with the Administration’s assumptions which, in both

its FY2005 and FY2006 budgets, notes a “decrease in children and payments” for

foster care in explaining its estimated total foster care costs for those years.14 The

total foster care caseload (both federally eligible and those not eligible) has been in

decline. However, both the Administration and CBO’s projected reduction in the

eligible caseload may be in large part due to the program rules that require a child to

have been removed from a family that would have met the income eligibility

requirements to receive cash aid under the former AFDC program (as they existed

on July 16, 1996). The statute does not provide any mechanism for inflation

adjustment of these 1996 rules. Thus, the amount of money a state used nearly a

decade ago to determine whether a family was financially needy continues to apply

for purposes of determining Title IV-E foster care eligibility. Because the real value

of this dollar amount continues to erode, over time, fewer and fewer children are

expected to be eligible for federal foster care. (For more discussion of the link

between AFDC and Title IV-E eligibility see The “Look Back” below.)

Overall, federal spending for Title IV-E foster care claims makes up the largest

share of total dedicated child welfare spending but federal spending for Title IV-E

Foster Care is no longer growing and, due largely to the shrinking caseload, is

expected to continue to decline. Administrative claims have recently overtaken

claims for foster care maintenance payments as the largest share of Title IV-E claims.

The bulk of these administrative claims are for case planning and pre-placement costs

associated with federally required protections for children, and some of these costs

are associated with children who are not yet in foster care but who require services

to prevent their removal from the home.

Services for Child Welfare. Federal spending for services more than

doubled (107% increase) between FY1983 and FY2003, growing from $363 million

to $750 million. Across this same period, however, the share of total dedicated child

welfare funding appropriated for services declined from just under one-third of the

dedicated dollars (32%) in FY1983 to 11% of the funding in FY2003.15 One of the

(...continued)

clarification” could result in a reduction of federal reimbursement for administrative claims

of $65-$78 million for FY2006. See Federal Register, vol. 70, no. 19, pp. 4803-4808.

U.S. Department of Health and Human Services, Administration for Children and Families

FY2005 Budget Justifications, p. C-4 and U.S. Department of Health and Human Services,

Administration for Children and Families FY2006 Budget Justifications, p. G-5. For

FY2005 this decrease in the base funding represented $78.7 million; for FY2006 it

represented $210.5 million.

For the purposes of this paper, funding for services is defined to include grants under the

Child Abuse Prevention and Treatment Act (CAPTA) that are distributed by formula to all

eligible states; and the grants under Title IV-B of the Social Security Act (Child Welfare

Services and Promoting Safe and Stable Families), which are also distributed by formula to

all eligible states. (In FY1983 this category also includes $60 million (valued in constant

(continued...)

CRS-16

most often repeated criticisms of the federal child welfare funding structure is that

the bulk of the funding is only available once a child has been removed from his or

her home; funding to prevent removal is more limited. This is true, however, as

noted above, a great deal of “foster care” funding in fact supports the work of

developing and reviewing both pre-placement and in-placement service plans, or

activities which might legitimately be called a service. Outside of that critical

support for the logistics of case planning, however, funding for services (e.g.,

counseling, mental health or substance abuse treatment services)—whether intended

to prevent removal (support and preserve a family) or to allow for reunification or

improve child and family well-being—is relatively scarce.

In 1980 when Congress debated enacting the current Foster Care and Adoption

Assistance programs (P.L. 96-272), the need for services to prevent the removal of

children from their homes was a key consideration, and Congress included a number

of measures designed to ensure that states used new funds authorized in the

legislation for services (as opposed to foster care). That legislation expressly linked

the Title IV-B Child Welfare Services program with the new Title IV-E Foster Care

program, capped the amount of Child Welfare Services dollars that states could

spend for foster care, and allowed states to transfer some of their Title IV-E funds for

use in the Child Welfare Services (Title IV-B) program, under certain conditions.

That is, states that wished to transfer funds were required to have in place certain

protections for children in foster care and also to select a Title IV-E funding ceiling

for a given fiscal year. If the state had greater claims than the ceiling, it would not

be reimbursed for those costs; if, however, the state submitted fewer claims for Title

IV-E funds than its selected ceiling, the extra funds (subject to certain limits) could

be transferred to the state’s Child Welfare Services (Title IV-B) program. Between

FY1981 and FY1991, states transferred approximately $218 million (or $406 million

measured in FY2003 dollars) from their Title IV-E funds to the Title IV-B Child

Welfare Services program.16

The design of the transfer provisions, however, meant that as appropriations for

Title IV-B grew, the value of the transfer to states declined. Although between 20

and 29 states transferred funds under the provision in each of FY1982-FY1985, by

FY1990 just two states transferred any money and effective with FY1994 Congress

repealed these provisions entirely (P.L. 103-432). Just before this repeal, Congress

enacted a significant new source of funding. P.L. 103-66 established Subpart 2 of

Title IV-B of the Social Security Act and provided funding for family preservation

and family support services. (P.L. 105-89 amended this subpart, renaming it the

Promoting Safe and Stable Families Program, adding new funding, and requiring

(...continued)

FY2003 dollars) in funds that states transferred from Title IV-E to Title IV-B under a

special incentive program that no longer exists.)

P.L. 96-272 provided that state foster care funding ceilings were mandatory in any year

for which the Title IV-B appropriation reached its full authorization level. This occurred

in one year only (FY1981). The transfer provisions, and the methods by which a state could

choose a given funding ceiling are described in U.S. Congress, House Committee on Ways

and Means, Green Book 1990, pp. 775-776.

CRS-17

states to spend some funds on two new categories: time-limited (15 months)

reunification and adoption promotion and support.)

Despite these efforts, dedicated child welfare funding for services remains small

relative to funding for Adoption Assistance and Foster Care. The most obvious

reason for the difference is that none of the dedicated service funding is available on

an open-ended basis, and with the exception of some of the Promoting Safe and

Stable Families Program money, none is mandatory. Authorization of open-ended

mandatory funding allows actual funding to move with changes in the value of the

dollar (inflation/deflation), size of the eligible population, and changes in program

requirements. By contrast, discretionary funding authorization mean that each year,

the needs of a given program will be weighed against a multitude of other

discretionary budget needs. And while a mandatory capped funding authorization

usually guarantee a minimum level of money will be available, it does not necessarily

provide for increases to match inflation or new program costs. (See Table 2 for

description of kinds of funding authorizations.)

Congress has consistently used the discretion afforded by CAPTA and Title IVB of the Social Security Act to fund grants under these programs below their full

authorization levels. Child Welfare Services (Title IV-B, Subpart 1) has been

authorized to receive $325 million in every year since FY1990 but its funding peaked

in FY1994 at $294 million; in FY2005 it received $290 million. Laying aside the

difference in the value of $325 million in FY2005 compared to its value in FY1990,

this means that actual appropriations for this program peaked at about 90% of its

funding authorization and have since declined. Even less of the program’s authorized

funds have been appropriated under CAPTA. In FY1996, when CAPTA funding was

first appropriated under the current grant structure, actual funding was $58 million

—or roughly one-third (35%) of the $166 million authorized. While this may have

been a program low point, the recent high point—$102 million appropriated under

CAPTA in FY2005—represents only about one-half (51%) of the $200 million

authorized beginning in FY2004.17 Finally, while the mandatory portion of funding

for the Promoting Safe and Stable Families program grew in each year for which the

authorizing statute provided that it would, additional discretionary appropriations that

were first authorized for FY2002 have ranged between roughly one-third and onehalf of the total $200 million authorization level.

Overall, funding for services in child welfare has lagged far behind growth in

funding for Foster Care and Adoption Assistance—despite a longer standing funding

authorization and a great deal of rhetorical support. The type of funding authorized

(i.e., mostly discretionary) is a key distinction that explains much of this difference

Total CAPTA funding was authorized at $166 million for FY1996 and such sums as

necessary for FY1997-FY2001. Program funding authorization had expired for FY2002 and

FY2003, although Congress continued to fund the program at prior year levels. For FY2004

CAPTA was authorized at $200 million and it is authorized at such sums as necessary for

FY2005-FY2008. The FY2005 comparison of appropriated to authorized funding level then

uses the most recent specific amount of authorized funding. In addition, because of the way

the authorization level is written in the law, the comparison is made between funding

authorization and appropriation for three CAPTA grants, even though only two of these are

distributed to all eligible states by formula.

CRS-18

Non-Dedicated Funding

Non-dedicated federal funding for child welfare purposes is funding that is not

solely authorized for child welfare purposes but which states may choose to draw

down or expend for those purposes. Non-dedicated sources of federal child welfare

funding include: Temporary Assistance to Needy Families (TANF), Medicaid, the

Social Services Block Grant (SSBG), Supplemental Security Income (SSI) and Social

Security Survivors Benefits.18 There are virtually no federal reporting requirements

that provide data for an analysis of state child welfare agencies’ use of non-dedicated

federal funding sources. However, since 1996 the Urban Institute has conducted four

surveys of state child welfare expenditures and these surveys provide the best overall

picture of the use of non-dedicated federal funds for child welfare.

For state fiscal year (SFY) 2002, state child welfare agencies reported spending

at least $4.8 billion from these non-dedicated funding sources alone. However, not

all state agencies were able to report the amount of spending out of each of these

funding streams and because spending by other state agencies (e.g., the TANF

agency) may also support child welfare purposes, this number should be viewed as

a low estimate of total non-dedicated federal funding of child welfare.19 Based on

the available information, the median share of total federal child welfare spending

derived from non-dedicated federal funding equaled nearly half of all the federal

dollars (47%) expended by state child welfare agencies in SFY2002. However, the

use of non-dedicated federal funding by each state varied considerably from a high

of 75% of total federal child welfare funds expended in Alabama to less than 2% of

total federal child welfare funds expended in North Carolina.20 (See Table 6.)

For children who are eligible for SSI (Title XVI of the Social Security Act) or Social

Security Survivors Benefits (Title II), states may act as the “representative payee” of this

money on behalf of the child. The right of states to act in this capacity, and to use these

funds to reimburse their foster care costs on behalf of that child was recently upheld by the

U.S. Supreme Court Washington State v. Keffler, 537 U.S. 371 (2003).

Calculated using data collected by Urban Institute for its survey of state child welfare

agencies expenditures in SFY2002.

Readers should also bear in mind that there was considerable range (28%-79%) across the

states in their reliance on federal (as opposed to state and local) funds for all child welfare

spending. For more information, see Scarella et al., Protecting Vulnerable Children IV, pp.

9, and 22-28.

CRS-19

Table 6. Non-Dedicated Federal Spending

by State Child Welfare Agencies

(as reported by states to the Urban Institute for SFY2002)

Share of total Federal Child

Welfare spending from nondedicated sources

71%-75%

Alabama ($132), Tennessee ($139)

66%-70%

New Hampshire ($18), Oregon ($116), South Carolina

($113), Wyoming ($10)

61%-65%

Idaho ($18), Iowa ($91), Rhode Island ($51), Virginia

($137)

56%-60%

Arizona ($89), Colorado ($103), Massachusetts ($149),

North Dakota ($14), South Dakota ($14), Texas ($306),

West Virginia ($51)

51%-55%

Georgia ($121), Kansas ($59), Nebraska ($32), New

York ($737), Oklahoma ($67), Vermont ($23)

46%-50%

Alaska ($15), District of Columbia ($36), Florida ($215),

New Jersey ($87), Utah ($27), Washington ($95)

41%-45%

Illinois ($311), Michigan ($191), Minnesota ($94),

Pennsylvania ($274)

36%-40%

Kentucky ($48), Louisiana ($47), Maryland ($74),

Mississippi ($13), Nevada ($17)

31%-35%

New Mexico ($14)

26%-30%

Indiana ($32), Missouri ($90)

21%-25%

Montana ($5), Hawaii ($9), Wisconsin ($38), California

($430)

16%-20%

Delaware ($3)

11%-15%

Maine ($7)

6%-10%

Arkansas ($4), Ohio ($33)

1%-5%

North Carolina ($3)

Data not available

Connecticut

State

Name ($ amount in millions)

Source: Table prepared by the Congressional Research Service (CRS). Based on data reported to

the Urban Institute for its survey of state child welfare agency expenditures in SFY2002.

Note: The percentage (and dollar amounts) shown are based on the total money reported by a state

as spent by the child welfare agency out of TANF, SSBG, Medicaid, SSI, and Social Security

Survivors Benefits as a share of its total reported federal child welfare spending (dedicated, nondedicated and “other”). Some states used one or more of these funding streams but were not able to

report the exact amount. (See, for example, states listed as “Data not available” in Tables 7 and 10

of this report.) For these states the totals shown in this table are based on the federal child welfare

spending they reported and categorized. Much of the “other” funding may well be non-dedicated

funds that states were not able to categorize by funding stream. However, as this category was

believed to include CAPTA funds and may also have included other dedicated child welfare funding

CRS-20

(available to certain states or localities on a discretionary basis) it was excluded from the calculation

of a state’s non-dedicated federal funds total. For more complete details on this spending, readers are

encouraged to see Scarella et al., The Cost of Protecting Vulnerable Children IV, pp. 22-30.

The Urban Institute surveys demonstrate the growing importance of nondedicated funds to state child welfare programs, show the great variation in their use

by states, and indicate that in recent years the largest growth in spending of federal

funds for child welfare purposes has occurred not with dedicated child welfare funds

but instead with TANF and Medicaid. Information on state child welfare agencies’

use of TANF, SSBG and Medicaid is discussed below.

Temporary Assistance to Needy Families (TANF). TANF (Title IV-A

of the Social Security Act) is funded on a mandatory basis and its basic block grant

is capped at $16.5 billion annually.21 Federal reporting requirements for the TANF

block grant group spending for child welfare in a generic “other” category and so do

not permit analysis of TANF spending for child welfare purposes. However, data on

child welfare expenditures collected by the Urban Institute for state fiscal years 1996,

1998, 2000 and 2002, showed a decline in state use of Title IV-A (now TANF) funds

for child welfare purposes between 1996 and 1998, but an increase in every

subsequent survey.22 Based on its most recent survey, the Urban Institute reports that

in SFY2002, public child welfare agencies spent $2.7 billion in TANF funds for child

welfare purposes. (This includes $431 million in TANF funds transferred to SSBG

and expended from that fund for child welfare purposes.) This spending represented

roughly one-quarter (24.1%) of all federal resources spent that year by states for child

welfare purposes. The extent to which each state used TANF funds for child welfare

ranged from 50% of all federal funds used for child welfare in New York to 0% in

Nebraska.23 (See Table 7 for more information.)

See CRS Report RL32748, The Temporary Assistance for Needy Families (TANF) Block

Grant: A Primer on Financing and Requirements of State Programs, by (name redacted).

Scarella et al., Protecting Vulnerable Children IV, p. 24.

Figures are based on data provided by the Urban Institute from its survey of SFY2002

child welfare spending. The exact amounts and percentages differ slightly from what is

reported by Urban in Scartella et al., Protecting Vulnerable Children IV because that report

excludes TANF funds transferred to SSBG (and used for child welfare purposes) in its

discussion of state TANF spending for child welfare.

CRS-21

Table 7. TANF Spending by Child Welfare Agencies, by State

(as reported by states to the Urban Institute for SFY2002)

Share of total Federal

Child Welfare spending

from TANF

46%-50%

New York ($690)

41%-45%

Arizona ($72), Florida ($191), Pennsylvania ($261), Texas

($220), Virginia ($97), West Virginia ($38), Wyoming ($6)

36%-40%

Michigan ($171)

31%-35%

—

26%-30%

Idaho ($8), Kansas ($30), Kentucky ($35), North Dakota ($7)

21%-25%

Georgia ($50), Illinois ($168), Oklahoma ($28), Oregon ($44)

16%-20%

Alabama ($34), Hawaii ($6), Iowa ($24), Maryland ($34),

Montana ($4), New Jersey ($35), South Dakota ($5),

Wisconsin ($30)

11%-15%

Alaska ($5), California ($236), District of Columbia ($11),

Louisiana ($13), South Carolina ($23), Washington ($28)

6%-10%

10 Arkansas ($3), Colorado ($11), Indiana ($10), Mississippi

($3), Missouri ($27), Nevada ($3), Ohio ($25), Rhode Island

($8), Utah ($6), Vermont ($4)

1%-5%

Maine ($3), Minnesota ($9), New Hampshire ($1), New

Mexico ($1), North Carolina ($3), Tennessee ($8)

Nebraska ($0)

Data incomplete

Connecticut, Delaware, Massachusetts

State

Name ($ amounts in millions)

Source: Table prepared by Congressional Research Service (CRS). Based on data reported to the

Urban Institute for its survey of state child welfare agency expenditures in SFY2002. The dollar and

percentage amounts shown here include all TANF dollars expended by the child welfare agency,

including those that were first transferred to the Social Services Block Grant (SSBG).

What Authority Permits Use of Tanf for Child Welfare Purposes?

Current law permits states to use TANF funds for child welfare purposes in several

ways. These include—

provision of certain services that are consistent with the general

purposes of TANF;

provision of services previously authorized under a state’s

Emergency Assistance plan as it was in place before enactment of

P.L. 104-193 (which replaced the prior federal program of AFDC as

well as the related Emergency Assistance and JOBS programs with

the TANF block grant); and

transfer of limited TANF funds to the SSBG grant (which explicitly

allows funding of a range of child welfare purposes).

CRS-22

The first stated purpose of TANF is to “provide assistance to needy families so

that children may be cared for in their own homes or in the homes of relatives.”24

Federal guidance released with the final rules for the TANF block grant expressly

note that under this purpose certain child welfare costs, including “family

preservation activities, such as counseling, home visits, and parenting training ...

[are] allowable TANF costs because they are reasonably calculated to enable a child

to be cared for in his or her own home.”25 In addition, this guidance noted, that while

payments for out-of-home placement (e.g., foster care maintenance payments) are not

allowed under the general purposes of TANF, states that provided for these payments

as a part of their pre-existing Emergency Assistance plan could continue to use Title

IV-A funds (now TANF) for this purpose. Nearly all states made some provision for

both family preservation services and foster care payments as part of their preexisting Emergency Assistance plans.26 Finally, P.L. 104-193 provided that states

could transfer up to 10% of their TANF funds to SSBG. Transferred funds may not

be used to serve any families with incomes over 200% of the federal poverty level,

but beyond this restriction, may be used for any of that block grant’s broad social

service purposes. The use of SSBG for child welfare purposes is discussed below.

Future Availability of TANF for Child Welfare Purposes? Although

initial concerns that the economic recession in 2001 would reduce the availability of

TANF funds for child welfare purposes appear to have been unfounded (at least for

most states), child welfare advocates and administrators remain uncertain about their

long-term access to these funds.27 Current proposals to reauthorize the TANF block

grant include more stringent work requirements (H.R. 240, S. 6, S. 105, S. 667),

which may require states to allocate more of the block grant toward employment

related services only. Moreover, the proposed funding for the basic block grant

remains at the FY1997 appropriation level, which represents an estimated 17%

Section 401(a)(1) of the Social Security Act.

Federal Register, vol. 64, part 2, Apr. 12, 1999, p. 17762. The guidance indicates that in

certain cases, this kind of service to a family is an allowable cost even when the child is

temporarily placed out of the home (but only if the service is provided in order to reunite the

family). See pp. 17822-17823. Each June, HHS requires states to report their intended

spending for child welfare services (by categories and anticipated sources of funding) for

the upcoming federal fiscal year. Between FY2001 and FY2002 states anticipated an

increased reliance on federal funds to provide both family preservation and family support

services and the number of states reporting their intention to use TANF to fund these

services (especially family preservation) jumped significantly. See Analysis of States’

Annual Progress and Services Reports and Child and Family Services Plans (1999-2002),

James Bell Associates, Apr. 5, 2002.

State Emergency Assistance plans defined eligibility for assistance and the length of time

that assistance could be provided. The rules that were in place before the creation of TANF

must also be applied when TANF funds are used. While Emergency Assistance was

generally defined as a support offered to meet a temporary need, some offered this

“temporary aid” for as long as 12 months. In addition, while income and/or resource tests

were used in some state EA plans, many provided that certain categories of children or

families were eligible, e.g., children at risk of abuse or neglect, children who had recently

been maltreated, or children receiving state-funded foster care maintenance payments, etc.

Scarella et al., Protecting Vulnerable Children IV, p. 24.

CRS-23

decrease in the purchasing power of this grant (through FY2005). At the same time,

H.R. 240 and S. 105 would amend the purposes of TANF to make “child well-being”

the overarching goal of the program.

Social Services Block Grant (SSBG). Title XX of the Social Security Act

authorizes the Social Services Block Grant (SSBG), under which states may fund a

broad range of social services. SSBG is funded on a mandatory, capped basis;

beginning with FY2002, SSBG has been funded at $1.7 billion annually.28 States

receive an allotment of this total funding based on their relative share of the national

population and they do not need to provide matching funds. For FY2002, states

reported expending more than $518 million in SSBG-appropriated funds—or just

under one-third (31%) of the total SSBG appropriation—for child welfare purposes.

However, more than half (53%) of all the dollars states transferred to SSBG for

FY2002 were used for child welfare services, and when these TANF-appropriated

dollars are added, the total SSBG expenditure for child welfare purposes in FY2002

rises to just over $1.0 billion (or 39% of total SSBG expenditures).29

Spending for the three child welfare services that appear to have common

reporting categories in FY1979 and FY2002 (adoption services, foster care-children,

and protective services-children) was $480 million in FY1979 and $258 million in

FY2002 (without counting TANF transfer dollars spent on these purposes).30

However, states were much more likely to report spending TANF-transfer dollars

(rather than SSBG-appropriated funds) for these three child welfare services. When

TANF transfer dollars are included, FY2002 spending out of SSBG for these

purposes rises to $634 million.

What Authority Permits Use of SSBG for Child Welfare Purposes?

The use of Title XX funds to provide child welfare services—particularly child

protection and foster care—is longstanding but the amount of funding available under

As a general rule, capped mandatory (or entitlement) funds are provided at the level of

their entitlement cap in each given fiscal year. Funding for SSBG however has sometimes

risen above or fallen below its entitlement ceiling. And in some years, Congress has

adjusted the SSBG entitlement ceiling to match the level of appropriated SSBG funds. See

CRS Report 94-943, Social Services Block Grant (Title XX of the Social Security Act), by

(name redacted).

These amounts and percentages are calculated from Table 3-1 of the SSBG Annual Report

2002 and are based on the six service categories identified by HHS in an Apr. 2004

conference presentation as child welfare services. These categories of services are:

Adoption, Foster Care-children, Home-based, Independent Living/Transitional, Prevention

and Intervention, and Protective Services-children. While services in a few of these

categories may have been provided for other than child welfare purposes, additional service

categories that were not included (e.g., counseling and case management) may have been

used for child welfare purposes. Finally, states reported a mixture of items in the “Other”

services category, including, in at least one case, “adoption subsidies.”

Expenditure data by Title XX service category is available for FY1979, after which no

comparable data are available until FY1998. The amount of FY1979 spending for these

three services is shown in nominal dollars ($480 million—equal to $1.2 billion in FY2003

dollars) and was calculated based on the share of total funding reported as expended for

these purposes in that year multiplied by total FY1979 Title XX funding.

CRS-24

this Title has declined significantly. An original purpose of the Title XX Social

Services program (created by P.L. 93-647), and which remains a purpose under the

current SSBG (created by P.L. 97-35), was the provision of services designed for

“preventing or remedying neglect, abuse, or exploitation of children and adults

unable to protect their own interests, or preserving, rehabilitating or reuniting

families.”31 State use of SSBG for services to child welfare clients varies in both size

and kind of service. In FY2002, according to the data reported to HHS, 40 states

used some SSBG funds for child protective services, 35 for foster care, 35 for

prevention/intervention services, 35 for home-based services, 31 for adoption

services, and 17 for independent/transitional living.32

States reported to the Urban Institute that spending of SSBG-appropriated funds

by the state child welfare agency accounted for a high of 34% (MA) to a low of 0%

(MT, NE, NC, and RI) of all federal funds it spent in SFY2002. (See Table 8.)

Table 8. SSBG-Appropriated Funds Spent

by Child Welfare Agencies, by State

(as reported by states to Urban Institute for SFY2002)

Share of total federal

Child Welfare spending

from SSBG—

appropriated funds

31%-35%

Idaho ($10), Massachusetts ($84)

26%-30%

Louisiana ($31), Mississippi ($10)

21%-25%

South Dakota ($5)

16%-20%

Virginia ($40)

11-15%

Alabama ($23), Alaska ($4), Colorado ($25), Delaware ($3),

Illinois ($89), Indiana ($14), Iowa ($17), Maryland ($31), New

Jersey ($21), Tennessee ($22), Vermont ($6), Washington

($28), West Virginia ($13)

6-10%

Arizona, ($16) California ($162), Georgia ($16), Hawaii ($2),

Kentucky ($8), Minnesota ($16), Missouri ($26), Nevada ($4),

New Hampshire ($3), New Mexico ($3), North Dakota ($2),

Oregon ($13), Wyoming ($1)

1-5%

Arkansas ($1), District of Columbia ($1), Florida ($10),

Kansas ($6), Maine ($1), Michigan ($20), New York ($47),

Ohio ($7), Oklahoma ($6), Pennsylvania ($10), South Carolina

($5), Texas ($8), Utah ($2), Wisconsin ($7)

Montana ($0), Nebraska ($0), North Carolina ($0), Rhode

Island ($0)

Data not available

Connecticut

State

Name ($ amount in millions)

Source: Table prepared by the Congressional Research Service (CRS). Based on data reported by

states to the Urban Institute for its survey of state child welfare agency expenditures in SFY2002. The

data shown in this table reflect only SSBG spending for child welfare purposes from funds specifically

Section 2001(3) of the Social Security Act.

Table 3-1 of the SSBG Annual Report 2002.

CRS-25

appropriated for SSBG. They do not include funds transferred to SSBG from TANF and subsequently

spent under SSBG rules for child welfare purposes.

Note: Data in this table are not directly comparable to the data reported to the U.S. Department of

Health and Human Services (HHS) and which are also discussed in the text. Among the reasons for

this are—differences in reporting/surveying requirements and the fact that the data reported to HHS

are for the federal fiscal year 2002 while the data reported to the Urban Institute are for the state fiscal

year.

Future Availability of SSBG for Child Welfare Purposes? In 1979,

when Congress debated the legislation that would put in place much of the current

child welfare financing structure, Title XX funding totaled close to $3 billion (or

roughly $7.8 billion in FY2003 dollars) and some 16% of this funding was used by

states for services categorized as adoption, foster care and child protective services

($480 million in FY1979 dollars; $1.2 billion in FY2003 dollars). Citing concerns

about the decline in the value of social services funding due to inflation, Congress

(as part of the same law that created the federal adoption assistance program and

established federal foster care as an independent program), raised the mandatory

funding level for the Title XX program.33 Following an initial decline, P.L. 96-272

specified that funding for the program was to rise to nearly $3.4 billion by FY1985

(P.L. 96-272).34 In 1981, however, P.L. 97-35 repealed the prior Title XX program

replacing it with SSBG. Funding under the new block grant was set at $2.4 billion

for FY1982 (or nearly $1 billion less in nominal dollars than was available in

FY1979). Nominal dollar funding for the program rose as high as $2.8 billion by

FY1990, but began to decline in FY1996 and by FY2001 had reached $1.7 billion

and has remained at this level through FY2005. (See Table 9.)

U.S. Congress, House Committee on Ways and Means, Social Services and Child Welfare

Amendments of 1979, report to accompany H.R. 3434, 96th Cong., 1st sess., H.Rept. 96-136,

p. 34; U.S. Congress, Senate Committee on Finance, Adoption Assistance and Child Welfare

Act of 1979, report to accompany H.R. 3434, 96th Cong., 1st sess., S.Rept. 96-336, pp. 59-61.

U.S. Congress, Conference Committee, conference report to accompany H.R. 3434, 96th

Cong., 2nd sess., H.Rept. 96-900 (Washington, GPO, Apr. 28, 1980), pp. 60-63. The Title

XX entitlement ceiling for the program was to rise to $3.3 billion for FY1985. However,

the law also included under Title XX a separate $16.1 million in entitlement funding for

social services in the territories and separate matching funds for training (estimated $75

million). Funding for these separate accounts (which is also included in the approximately

$3 billion shown for FY1979 Title XX funding) was rolled into the single $2.4 billion

entitlement ceiling when the SSBG was created.

CRS-26

Table 9. Funding Level for the Social Services Block Grant in

Nominal and Constant (FY2003) Dollars, Selected Years

Funding level

(in billions)

Fiscal year

1983

1986

1989

1992

1995

1998

2001

2003

Nominal

$2.7

$2.6

$2.7

$2.8

$2.3

$1.7

Constant

$5.0

$4.3

$4.0

$3.7

$3.4

$2.6

$1.8

$1.7

Source: Table prepared by the Congressional Research Service (CRS). The nominal dollar value is

the amount appropriated in the given fiscal year. The constant dollar is the value of that amount of

money if it had been appropriated for FY2003.

In sum, the current child welfare financing structure was created in a context

where funding for a range of child welfare services was expected to be available

through Title XX, and in which the value of funding under the program was

expected, at least, to keep pace with inflation. Overall, while Title XX (SSBG)

remains an important source of funding for child welfare agencies, especially with

regard to child protective services, its value has declined greatly and its significance

as a share of total federal child welfare funding is declining.

Medicaid. Medicaid (Title XIX of the Social Security Act) is funded on an

open-ended basis that permits states to claim federal reimbursement for certain health

care related costs made on behalf of eligible (generally low-income, aged, blind, or

disabled) individuals. Eligible claims for services are matched at 50% to 83% (higher

for states with low per capita income and vice versa) and at 50% for administrative

claims. Total federal program outlays were $148 billion in FY2002 and are expected

to rise to $188 billion in FY2005.

The Urban Institute reports that state child welfare agencies expended $1.1

billion in federal Medicaid funds for child welfare clients in SFY2002. Between

SFY1996 and SFY2002, Medicaid spending by child welfare agencies increased 41%

(based on data from 39 states). Between SFY2000 and SFY2002, however, half of

the states (25) reported an increase in Medicaid spending by their child welfare

agency; 12 states reported a decrease over those two years and five states reported no

change.

As with other non-dedicated sources of child welfare funds, Medicaid spending

by child welfare agencies varies greatly by state. For SFY2002, Tennessee reported

that as much as 55% of the total federal resources expended by its child welfare

CRS-27

agency were from Medicaid, while eight states reported no such Medicaid spending.

(See Table 10).35

Table 10. Medicaid Spending by Child Welfare Agencies, by

State

(as reported by states to the Urban Institute for SFY2002)

Share of total federal

Child Welfare

spending from

medicaid

51%-55%

Rhode Island ($41), Tennessee ($103)

46%-50%

Nebraska ($30), New Hampshire($13), South Carolina ($84)

41%-45%

Alabama ($75)

36%-40%

Colorado ($67)

31%-35%

District of Columbia ($24), Iowa ($47), Minnesota ($69), Oregon

($55), Utah ($19)

26%-30%

Vermont ($13)

21%-25%

Georgia ($54), Massachusetts ($61), Nevada ($10), Oklahoma

($29), Washington ($40)

16%-20%

Alaska ($6), Kansas ($23), New Mexico ($8), North Dakota ($5),

South Dakota ($4), Wyoming ($3)

11%-15%

New Jersey ($29), Texas ($70)

6-10%

Missouri ($31)

1-5%

California ($33), Delaware (a), Florida ($4), Idaho ($1), Illinois

($36), Maine ($1), Maryland ($9), Pennsylvania ($3)

Arkansasb, Kentucky, Louisiana, Montana, New York, Ohiob,

Virginia, Wisconsinb

Data not available

Arizona, Connecticut, Hawaii, Indiana, Michigan, Mississippi,

North Carolina, West Virginia

State

Name ($ amounts in millions)

Source: Table prepared by the Congressional Research Service (CRS). Based on data reported by

states to the Urban Institute for its survey of state child welfare expenditures in SFY2002. Dollar

amounts shown reflect only those that were expended via the child welfare agency. Does not include

Medicaid spending for routine health checkups and procedures. Spending varies by state for a number

of reasons, including that not all states require the child welfare agency to provide Medicaid matching

funds for certain services to child welfare clients and not all states include the same optional services

in their Medicaid state plan.

a. Delaware reported spending $257,000 (1.3% of its total federal child welfare spending) out of

Medicaid.

b. Arkansas, Ohio and Wisconsin each reported spending some Medicaid funds ($109,000, $1.5

million, and $367,000, respectively) but in each state this spending totaled less than one-half of

1% of the total federal child welfare spending.

What Authority Permits Use of Medicaid for Child Welfare

Purposes? Medicaid is a complex program. The kinds of services available and

Scarella et al. The Cost of Protecting Vulnerable Children IV, pp. 26-27.

CRS-28

the eligible populations for those services vary by state. Foster care or adopted

children who meet the federal Foster Care or Adoption Assistance program eligibility

criteria are automatically deemed eligible for Medicaid services, and most foster care

or adoptive children who are not deemed so eligible are expected to be eligible under

Medicaid’s own program rules.36

As the obligation of Medicaid to provide routine or preventive health care

services to eligible foster and adoptive children is expressly made in the law,

discussion of state child welfare agency spending on Medicaid does not refer to costs

associated with this health care. However, states use Medicaid to fund certain other

health care related services, including, according to the Urban Institute,

transportation, rehabilitative services, targeted case management, and therapeutic and

psychiatric services provided in residential treatment facilities. These are generally

optional services that some or all states may choose to provide under their state

Medicaid plan. The optional nature of these services helps to explain some of the

variety in the Medicaid spending for child welfare across all states.37

Future Availability of Medicaid for Child Welfare Purposes? The

Bush Administration has in recent years sought to reduce claims made for foster care

children under certain optional services of Medicaid, including targeted case

management. The Administration’s FY2006 budget proposes to reduce the amount

of federal matching funds most states may claim for targeted case management

services and also to clarify reimbursement policies for both targeted case

management and rehabilitative services.38 The Administration projects savings of $3

billion over five years from these proposals. Because these services are available to

many more Medicaid-eligible individuals than foster care children, the share of these

savings expected to come from state child welfare agency budgets is not known. At

the same time, this budget proposal illustrates the uncertainty that can surround the

availability of non-dedicated federal funding sources for child welfare.

Proposals for Change

Proposals intended to alter federal child welfare financing have focused

exclusively on dedicated funding under Title IV-B and Title IV-E of the Social

Security Act. However, the discussion of child welfare agencies use of nondedicated federal funds indicates that any of these proposed changes would occur in

a context of greatly varied use of these other federal funds.

Federal law requires that children who are adopted out of foster care, but who do not meet

federal eligibility requirements for adoption assistance be provided with either Medicaid or

a comparable health care plan. See also CRS Congressional Distribution Memorandum,

Medicaid Eligibility for Foster Care Children vis-à-vis the President’s FY2004 Reform

Proposals for Title IV-E and Medicaid, by Elicia Herz and (name redacted), May 23, 2003,

(available from the authors).

For additional reasons and discussion, see Scarella et al., The Cost of Protecting

Vulnerable Children IV, pp. 26-27.

U.S. Department of Health and Human Services, Centers for Medicare and Medicaid

Services, FY2006 Budget, Congressional Justifications, pp. 92-93.

CRS-29

Many of the recent proposals to change the federal child welfare financing

structure have sought to amend the eligibility requirements for the Title IV-E foster

care and adoption assistance programs (specifically to end the “look back

provision”). Other proposals have sought to cap (or block grant) funding for some

or all of the Title IV-E Foster Care program, which is currently funded on an openended basis. Still others have sought new mandatory open-ended funding streams for

particular services (e.g., subsidized guardianship), new mandatory capped funding

for particular purposes, and other funds that would be made available only to those

states that improve their performance in specific areas (incentive funding). The

following section discusses some of the issues raised by the kinds of proposals

made.39

The “Look Back”. Foster (and most adoptive) children for whom the state

may claim federal reimbursement of costs under Title IV-E of the Social Security Act

must meet certain eligibility requirements of the now defunct AFDC as that program

existed on July 16, 1996 (in the given state). These program rules include

determinations that (1) the family from which a child was removed would have been

found “needy” under the 1996 income standards in the state’s AFDC program; (2)

the child is “deprived” of parental care or support because one of the child’s parents

is absent from the home, incapacitated, dead, or unemployed; and (3) the child meets

age rules (under 18 years of age for most children).

Recent financing proposals have sought to change the link from the prior AFDC

program rules to the current state TANF program rules, or to remove any link to other

programs for eligibility. However, because foster care and adoption assistance are

funded on an open-ended basis—states may seek reimbursement for all eligible

claims—any change to the eligibility rules that increases the number of eligible

children represents an additional cost to the federal treasury. Thus, a number of

proposals that remove the link entirely have been coupled with some form of funding

cap and/or reduction in federal matching funds for eligible claims. Proposals to link

Title IV-E eligibility to TANF would likely have a cost as well. The exact effect of

this change on eligibility rates is hard to predict, although the cost is presumed to be

less.

Policymakers first established federal funding for foster care in the early 1960s.

At the time, child welfare advocates were concerned that no arrangements to ensure

the safe and proper care of children were being made by states that routinely denied

cash aid (i.e., AFDC) to families, including children, upon deeming a home

“unsuitable.”40 The practice reached national attention in 1960 after a newly passed

A capsule review of financing proposals in the 108th Congress is included in Scarella et

al., The Cost of Protecting Vulnerable Children, Appendix C, pp. 66-68. For a detailed sideby-side of current law and two major proposals in the 108th Congress, request a copy of the

CRS Congressional Distribution Memorandum, Child Welfare Funding in Titles IV-B and

IV-E of the Social Security Act and as Separately Proposed by the Pew Commission on

Children in Foster Care and by the Child SAFE Act of 2004 (H.R. 4856), by (name

redacted), Aug. 4, 2004.

The program was called Aid to Dependent Children (ADC) at this time. It was renamed

(continued...)

CRS-30

Louisiana state law effectively removed 22,501 children from the state’s welfare

caseload by declaring as “unsuitable” any home where a mother bore a child out of

wedlock after receiving a cash aid check. Further investigation revealed that other

states had similar laws or policies in place that denied aid to needy children. The U.S.

Department of Health Education and Welfare (HEW, predecessor to HHS) responded

to the controversy by informing states that as of July 1961, if a child otherwise

eligible for AFDC was denied aid because his/her home was declared unsuitable, the

state would be out of compliance with federal policy and thus ineligible for any

federal reimbursement of their AFDC costs. The new regulation provided that

assistance to such a child must be continued “during the time efforts are being made

to either improve the home conditions or to make arrangements for the child

elsewhere.”41

Responding in turn to this federal regulatory move, Congress acted to ensure

that states received funding for any foster care placements that might be expected to

result from the new AFDC policy. In essence, federal cash aid was to follow the

needy child to a new suitable home and thus the link between open-ended federal

funding for foster care and eligibility for cash aid AFDC was established at the

beginning of the program.42 In 1980, when Congress established Foster Care as an

independent program and created the Adoption Assistance program (P.L. 96-272),

it relied on the prior law to establish for what group of children the federal

government would share financial responsibility. Subsequently the 1996 law (P.L.

104-193), which abolished the AFDC program and replaced it with TANF,

maintained this connection by including the “look back” provision. The continuation

of a link between a newly abolished program and an on-going program likely

occurred as a matter of legislative convenience, and because the cost of changing the

link was unknown.43

(...continued)

Aid to Families with Dependent Children (AFDC) by the 1962 Public Welfare Amendments

(P.L. 87-543).

U.S. Department of Health, Education and Welfare, “Denial of Aid to Dependent

Children,” Social Security Bulletin, July 1961, p. 19; Louisiana Department of Public

Welfare, Twenty-Fourth Annual Report, July 1, 1960-June 30, 1961, pp. 5-6; Elizabeth

Wickenden and Winifred Bell, Public Welfare: Time for a Change (New York: Columbia

University Press, 1961), pp. 1-2.

Initially (P.L. 87-31) a child was eligible for federal foster care aid only if the family

he/she was removed from had been receiving cash aid just prior to the child’s removal. P.L.

90-248 (enacted Jan. 1968) expanded the eligibility criteria to include children who would

have been declared needy under the state’s AFDC program rules if they were still living in

their homes and if an application for this aid had been made. When Congress created the

Adoption Assistance program in 1980, it largely mimicked the then existing foster care

program with regard to establishing eligibility.

A number of the welfare reform proposals under discussion in 1995-1996 included major

changes to child welfare financing—including a block grant of all identified child

protection/child welfare related funding streams. These changes would have removed

income eligibility requirements. However, they did not become a part of the final law and,

in the end, Congress appears to have sought a status quo solution by continuing to link

(continued...)

CRS-31

Virtually no one believes that the look back to a repealed program makes sense

today. Apart from administrative costs and presumed difficulties of determining

eligibility based on rules of a no longer existing program, given the lack of any

inflation-adjustment, the pool of Title IV-E eligible children could eventually shrink

to zero. This will result in a shift of costs to states and/or to non-dedicated federal

funds (e.g., TANF). In 1996, when the look back was established, the median state

need standard under AFDC (for a family of three) equaled 60% of the federal poverty

level; by 2005 that median was 48%.44 This means that in as many as 25 states,

eligibility for the Title IV-E foster care program may only be established for children

removed from families with incomes less than half the federal poverty level (roughly

$8,000/year for a family of three).45 In FY2003, an estimated 46% of all children in

foster care nationally were eligible for federal foster care maintenance payments.

This is down from the mid- to late-1990s when the share of all foster care children

eligible for Title IV-E support ranged from 51%-55%, but higher than the mid- to

late-1980s when that rate ranged between 35%-40%.46

While the first consideration is often cost, the most basic question concerning

changing the look back provision is—for which children does the federal government

believe there is an obligation to provide some support for foster care and adoption

assistance? Proposals to link foster care and/or adoption assistance eligibility to

current state TANF rules seek to maintain a federal commitment to support the needs

of children from the poorest families. Removing all income eligibility rules would

have the advantage of eliminating the administrative burden of determining program

eligibility and would suggest a federal commitment to the protection of all children

in need of foster care. At the same time, because fewer than half of all foster children

are now eligible for Title IV-E Foster Care payments (estimated 46% for FY2003),

without other changes to the law, elimination of any income test could double (or

more) the cost of the federal foster care program. Federal eligibility under the

(...continued)

eligibility for most federal adoption assistance and all federal foster care to the old AFDC

program rules.

Calculations are based on an annualized monthly need standard for a family of three and

the federal poverty guidelines for a family of three. Some states had more than one need

standard (e.g., need was considered to vary by location in state); this analysis relies on a

U.S. Department of Health and Human Services (HHS) compilation of 1996 need standards,

which assigned a single need standard to represent the entire state.

The need standard is the maximum level of counted income that a family may have and

still be considered needy. Some states determined the amount of benefits available in a way

that meant not all “needy” families received cash aid (i.e., state need standard was higher

than its maximum cash benefit). However, for purposes of Title IV-E, a child may be an

eligible child if the family income met the state’s need standard (that is regardless of

whether or not the family would have been eligible for a cash benefit).

Readers should be aware that data on the share of all foster care children who are eligible

for Title IV-E maintenance payments are notoriously bad, that the share of these “IV-E

eligible” children varies greatly by state, and also may vary depending on source of data.

The national percentages discussed here are based on a comparison of the total estimated

foster care caseload on the last day of the given year compared to the average monthly

number of children for whom IV-E claims were made in the same given year.

CRS-32

adoption assistance program is estimated to be closer to 74%; thus, costs for this

program would rise significantly, albeit not as dramatically. Accordingly, proposals

to remove all income eligibility for these programs have sought to simply cap the

amount of funds available for the programs, and/or to reduce or neutralize cost to the

federal treasury by reducing the federal matching rate for certain foster care and

adoption assistance claims.

Home of Removal and the Rosales Decision. In both its FY2005 and

FY2006 budgets, the Bush Administration has proposed amending the statute to

“clarify” Title IV-E eligibility rules that relate to a child’s “home of removal.” No

legislation has yet been introduced. However, as stated in the budget documents, the

intent of such legislation would be to effectively nullify a March 2003 decision in the

Ninth Circuit Court (Rosales v. Thompson, 321 F. 3d. 835). In its FY2006 budget,

the Administration projects the savings for the proposed “clarification” of this

statutory language to be $399 million for five years. (CBO projects the savings at

close to the same amount for those five years—$431 million.)47

Prior to Rosales, HHS had held that states may only claim Title IV-E eligibility

if a child would have been eligible for AFDC (as the program existed on July 16,

1996, in the given state) in the home from which the child was removed for his/her

protection. The Rosales decision, however, held that if the child was no longer living

in the home considered unsafe but was instead living with another relative at the time

his/her parental home was found unsafe (i.e., contrary to his or her welfare), then the

child’s Title IV-E eligibility could be based on the relative’s home (rather than the

home found to be unsafe). Under AFDC program rules a child who is not living with

his/her biological parents but is living with a specified relative would nearly always

be considered eligible for cash aid.48 Thus the Rosales decision could expand the

ability of states in the Ninth Circuit (California—where the case originated;

Washington, Oregon, Arizona, Montana, Idaho, Nevada, Alaska, Hawaii) to

determine that children are eligible for Title IV-E foster care.

HHS has instructed states in the Ninth Circuit that they are to amend their plans

to comply with this court decision. State claims under this revised definition of

eligibility are expected to have only recently been made (if they have been made at

all) and the process of changing state plans and modifying how eligibility

determinations are done is presumed to be ongoing for most states in the Ninth

Circuit. In the meantime, HHS notes that states outside the Ninth Circuit may not

U.S. Department of Health and Human Services, Administration for Children and

Families, “CBO Estimates for Foster Care & Adoption Assistance, Mar. 2005 baseline, Reestimate of Administration Proposals,” FY2006 Budget Justifications, G-13. The estimated

“savings” cited here relates to “budget authority.”

This is due to how income and resources are counted. For a child living with his or her

parents, the income and resources of the parents must be considered in determining AFDC

eligibility. For a child not living with his or her parents but who is living with a specified

relative, only the income or resources of the child need be considered.

CRS-33

alter their state plans in this same way but must continue to determine eligibility

based on the child’s home of removal.49

The Rosales decision would primarily impact projected federal child welfare

funding if legislation to make the statutory clarification is not made. As responded

to by HHS, the decision effectively establishes different rules for AFDC eligibility

in the Ninth Circuit states than for those in the rest of the nation. States in other

Circuits may also choose to challenge the HHS interpretation of the statute (with

regard to home of removal and determining AFDC eligibility) but it is not clear that

another court would reach the same conclusion as did the Rosales court. For Ninth

Circuit states the decision (unless nullified by Congress) would allow greater access

to Title IV-E funds and could change policy and practice with regard to relative

placements.

Capping or Block Granting Foster Care Funds. Advocates of capping

funding for foster care argue that doing this would give states more flexibility in how

they spend federal child welfare dollars and that it would be consistent with the

federal government’s commitment to ensuring that foster care remains a temporary

setting for most children. (Recent proposals have not suggested capping Adoption

Assistance funding.) Opponents of the block grant argue that a funding cap amounts

to the federal government reneging on its commitment to protect vulnerable children

—even in the best run state child welfare agency, caseloads may rise, and children

who must be removed from their homes need to be provided care in any case. Many

also question whether these proposals meaningfully increase state flexibility in use

of child welfare funds and they fear that block granting will ultimately mean less

federal money for foster care than would otherwise be the case.

Amount and Distribution of Capped Foster Care Funding. Proposals

to cap or block grant foster care funding have usually based those capped funding

levels on recent expenditure amounts and have made some provisions to expand the

amount of funding (using an inflation adjustment or other method) over a fixed

period of time. Because federal foster care spending has been declining—and is

expected to continue to do so—choosing a base historical spending period is an

increasingly critical part of any financing proposal. In addition, the share of funds

each state is expected to receive from this grant remains a key question. Here again,

recent proposals typically rely on past state expenditures, or a state’s share of overall

past expenditures (for a given period) to establish distribution of capped funds. For

a host of reasons—because states are eligible to receive different federal matching

rates, because they have shown different ability to draw down federal funding,

because they have made different choices about which federal funding sources to

pursue, because foster care reimbursement claims (within a given state) are

notoriously uneven from year to year, and because some states have experienced

recent changes in the size of their caseloads that effect the distribution of funds

(states with caseload growth get more dollars; those with declines fewer)—this piece

See U.S. Department of Health and Human Services, Administration for Children and

Families, ACYF-CB-IM-04-03, Feb. 27, 2004, available online at [http://www.acf.dhhs.gov/

programs/cb/laws/im/im0403.pdf].

CRS-34

of any financing proposal is also critical. (See Appendix C for Title IV-E funding

amounts, and overall share, by state, for FY2001-FY2003.)

Setting total funding at or slightly above current spending for a program and

establishing distribution of that money based on prior distribution patterns has the

strong political advantage of ensuring no (or limited and measured) increased cost

to the federal treasury enabling a guarantee that no state sees a reduction in nominal

dollars available for foster care. At the same time, freezing the distribution levels

based on the amount of past claims made by a given state locks in any current

inequities in the federal child welfare financing structure and provides no mechanism

for changes in need for federal funding based on demographic changes (e.g., size of

child population, or the number of poor children in each state may shift over time),

foster care caseload spikes, or other factors not currently identifiable. (See

Appendix D, for hypothetical distributions of foster care funds using a variety of

baseline data.)

Some proposals have suggested availability of contingency funds to meet

unanticipated caseload spikes. Critical questions regarding contingency proposals

include when could the funds be accessed (e.g., what indicates that a caseload spike

is outside of the control of the child welfare agency), how much contingency funding

should be available, and are there other unpredictable circumstances that might

require access to contingency funds?

Flexibility. In the context of changing how federal child welfare funds are

distributed, “flexibility” usually means nixing the look back provision (states could

serve children without regard to the 1996 eligibility provisions of the now defunct

AFDC program) and allowing states to spend what are now foster care program funds

on any of the broad range of child welfare purposes, including services. Some

proposals have coupled broader eligibility for Title IV-E foster care (either complete

removal of the income test or modernizing the test by allowing states to use their

TANF income rules) with continued open-ended funding for foster care, and

authorization of new open-ended and/or capped mandatory funding for new services

or other child welfare purposes. These proposals would grant states flexibility to

spend federal dollars on more children and for a greater number of purposes

(although those purposes would remain defined by the federal government) and

would generally expand the use of federal funds to permit this flexibility. Other

proposals have advocated allowing states to spend federal funds on any foster care

child and for a broad range of services, while simultaneously seeking to cap foster

care funding and/or reduce the share of federal funding available for every eligible

child. Thus these proposals attempt to permit flexibility with little or no increase in

the amount of federal funding for child welfare.

Proponents of flexibility as part of capped funding proposals suggest that this

change would allow states to spend money on children before they are removed from

the home and thus to prevent their removal and costly placement in foster care. They

cite the continued desire of states to waive program rules and spend Title IV-E

dollars on a range of services as an indication of states’ belief that they can

accomplish more with the same money if they have flexibility to spend funds how

CRS-35

they choose.50 In addition, they might point to the ability of states to redirect

spending currently used to determine eligibility (under 1996 AFDC program rules)

to provide services. Between FY1999-FY2003, state and federal spending (split 5050) for eligibility determinations averaged $177 million annually. This is a small

share of the overall foster care administrative cost; at the same time it is significantly

more than the combined funding available to states under CAPTA in FY2005 ($70

million).

Critics of capped funding proposals argue that the authority to use program

funds for the whole range of child welfare services could prove an empty promise

given that no, or relatively modest, new funds would be available. While they

acknowledge that a decrease in the size of a state’s foster care caseload could give

states some flexibility, they also point out that any unplanned increase in the size of

the caseload would apparently constrain state flexibility in spending more than is the

case now. Further, no one has proposed a reduction in the far more costly federal

program rules related to case planning; indeed many of these rules are aimed at a

central goal of the child welfare system—achieving timely permanency for children

in care. Between FY1999-FY2003, the average annual total case planning and

management costs for Title IV-E-eligible children alone was $2.0 billion. As this

cost, and the still more costly provision of room and board (the FY1999-FY2003

average annual federal and state maintenance payment costs for Title IV-E eligible

children was $3.4 billion) will remain relatively unchanged, critics charge that

finding money to spend on prevention of placement might not be possible.

Flexibility and Kind of Funding. With regard to federal dedicated child

welfare funding, programs that grant states the greatest degree of choice in how they

spend their money are the least well funded and have discretionary appropriations

(i.e., CAPTA and Child Welfare Services under Subpart 1 of Title IV-B), while the

programs that most constrain state choice in spending receive open-ended funding

(i.e., the Title IV-E Foster Care and Adoption Assistance programs) and offer states

virtually no ability to direct how they use these dollars (outside of waivers). There

is some logic to this; federal lawmakers like to know what they are buying. Without

a closely defined program authority, an open-ended funding stream is akin to writing

a blank check (limited simply by the ability of states to imagine ways to spend the

money and provide their own matching dollars). To protect the federal treasury then,

lawmakers create rules that limit the federal matching rate, and closely define on

whose behalf the money may be used and for what purposes. By contrast, fixed

Under Section 1130 of the Social Security Act, states may seek waivers of certain federal

child welfare rules (contained in Title IV-B and Title IV-E of the Social Security Act) to

demonstrate innovative ways of using federal child welfare funds. Compared with states

that sought to implement waivers for what HHS defined as a “managed care” demonstration

project (generally services made available for various subsets of children via a contracted

private provider), states that operated flexible funding waivers (generally a range of preplacement or in-placement services made available to maltreated children, those at imminent

risk of placement and those in placement via a local/county public child welfare agency)

were more likely to complete the five-year waiver term and to seek its renewal. Brief

descriptions of these waivers are available on the HHS/ACF Children’s Bureau website at

[http://www.acf.dhhs.gov/programs/cb/initiatives/cwwaiver/summary.htm].

CRS-36

funding programs may simply offer dollars with the directive that states spend these

resources to achieve certain broad purposes.

For some, the appeal of capped funding—provided it is available on a

mandatory instead of a discretionary basis—is that states may create a plan of

services within the guaranteed funding level. With regard to child welfare services

in particular, defining eligible children and families and the services for which child

welfare should pay, is sticky. In general, any child may be the victim of abuse and

neglect by a family member. The fact that poor children tend to experience

maltreatment more often than those who are not poor does not mean that all or even

most poor children are maltreated; neither does it mean that no child from a middle

or high income family will experience such maltreatment. Thus eligibility for

services related to child welfare needs tends to be broadly written and the need for

such a service is essentially decided by the caseworker (based on social work

principles). Further, many services (e.g., counseling, mental health treatment,

substance abuse treatment), might be considered the primary function of other public

agencies. Does the child welfare agency—and by extension federal child welfare

funding—bear responsibility for these service costs? Or should the responsibility of

the child welfare agency be to simply bring the child or parent to the service (paid for

out of another public source)? And if the service, which might be costly, doesn’t

exist (e.g., no appropriate substance abuse or mental health treatment services can be

accessed), is it the job of the child welfare agency, and by extension federal child

welfare funds, to build such capacity?

Capped mandatory funding could relieve federal lawmakers of some of these

eligibility and service need decisions and, might also allow states to design programs

that mesh best with their own needs and resources. At the same time, if the amount

of funding is decided without regard to current resources and needs, or if it is static

(meaning its value does not at least rise with inflation) it would seem to give states

less opportunity to alter the status quo.

Accountability. Advocates of change to the federal child welfare structure

have not called for less accountability but—in keeping with the proposed shift to cap

more of the dedicated child welfare funding—the meaning of accountability has

shifted from fiscal rules to outcome measures. Indeed, over more than two decades,

Congress has established mandatory data reporting for child welfare agencies,

required establishment of a new federal review system to gauge how well states

achieve the goals of federal child welfare policy, and has added significant new

program rules intended to better ensure the goals of safety and permanency for

children are achieved. While there is broad bipartisan appeal and support for these

efforts, the focus on accountability without significant new funding to achieve higher

standards (like the discussion of flexibility without new funding) has drawn criticism

from some advocates as well as those policymakers who believe the system is

fundamentally underfunded.

Calls for New Funding Sources. Some proposals have called for new

funding tied to achievement of specific goals (e.g., lower caseworker to client ratio),

or achievement of certain outcomes (e.g., reduced length of stay). Other recent

proposals have supported new or increased access to federal funds for training of

child welfare workers or to implement program improvements. The most ambitious

CRS-37

proposals have sought new open-ended funding for particular categories of services

or individuals, including subsidized guardianship.

Incentive or Performance Funding. On the whole, proposals for this type

of funding are relatively small in scale and may be popular with both those who

believe the current system is adequately funded, as well as with those who think it

is underfunded. The enactment of Adoption Incentives (P.L. 105-89), which

provides bonus funds to states that increase the number of children who are adopted

out of public foster care, coincided with continued and expanded growth in these

adoptions, and encourages the idea of performance funding.51 Along with the

significant task of ensuring that whatever measure is used adequately reflects a state’s

true performance, incentive proposals must be designed to avoid perverse incentives.

(For instance, if a state is to be rewarded for reducing the amount of time a child is

in foster care, how will the state’s performance be measured and will this incentive

encourage the state to reunify a child too quickly, compromising his/her safety.)

While many of these performance funding proposals would roughly follow the

Adoption Incentives model—authorizing a relatively small pot of funding to be

divvied out to states that meet the performance goals—a much broader kind of

performance funding proposal would link significant parts of existing federal funds

to achievement of certain performance goals. Although no formal legislation of this

type has been offered, informal proposals have suggested maintaining open-ended

funding for foster care but linking the amount of federal matching funds to the state’s

achievement of a specific outcome for a specific foster care child. (As a purely

hypothetical example: a state could receive a 75% federal match of program costs

for a child during the first year of his/her stay in foster care; this federal match would

be reduced to 50% if the child remained in care for more than three years, and to 0%

for a state extending more than five years.)

Subsidized Guardianship. New spending for subsidized guardianship has

been the focus of numerous proposals in recent years. Guardianship is a legal

relationship that grants custody and decision-making rights (e.g., with regard to

education) to an adult caretaker of a child. Proponents argue that federal support of

guardianship for children who cannot otherwise be adopted and who might otherwise

remain for many years in foster care, is consistent with the federal goal of finding a

permanent home for every foster care child. Currently, five states are operating under

waivers of the Title IV-E program that allow them to use Title IV-E funds for

subsidized guardianship (IL, MT, NC, NM, OR). Requests from two additional

states (MN, WI) to implement such waivers have been recently approved and at least

six additional states (AK, IA, ME, MI, NJ, VA) have similar requests pending.52

For more information, see CRS Report RL32296, Child Welfare: The Adoption Incentives

Program, by Kendall Swenson.

Two additional states completed five-year waivers of which guardianship was a

component. These states either withdrew their original request for an extension (MD) or

were not granted an extension of the waiver (DE).

CRS-38

Eleven states use TANF to fund subsidized guardianship, and at least one state (SD)

uses SSBG funds for this purpose.53

There appears to be broad sympathy for the provision of subsidized

guardianship; however, the cost of a new open-ended program continues to raise

concerns. Proponents argue that in addition to better meeting the needs of children,

the cost of guardianship (primarily due to less case management cost) is far less than

foster care. Thus, moving a child out of long-term foster care into permanent

guardianship saves money. Opponents might suggest that because many times

guardians are relatives, these family members should bear the largest responsibility

for the cost of raising their kin and, further, that such caretakers, regardless of their

own income, are usually eligible to receive TANF cash aid on behalf of the child

(child-only benefits).

Conclusion

Federal policymakers may choose to alter how dedicated federal funds for child

welfare purposes are made available to states. This change might be prompted by the

belief that the current system encourages states to over rely on foster care or

otherwise hampers states’ ability to achieve positive outcomes for children and

families. Alternatively, more limited change may be tied to the concern that the

federal statute currently links states’ ability to receive their largest share of child

welfare funds to static 1996 income rules and that if unchanged, this provision (the

“look back”) will erode federal support for children in need of protection. Any

changes made to the amount and/or distribution of dedicated federal child welfare

funds would occur in the context of greatly varied use by states of other federal funds

for child welfare, particularly TANF, Medicaid, and SSBG. The varied use of these

non-dedicated funds and their less certain availability for child welfare purposes,

adds complexity to the picture of federal support for child welfare.

Congress could choose to eliminate or replace the look back provision and to

leave unchanged the current structure for distributing child welfare funds. For

instance, they could strike the look back entirely or they could replace the current

AFDC link with a link to TANF, to a given percent of the federal poverty level, or

to some other eligibility standard. Costs for these options would vary in relation to

their effect on the size of the eligible Title IV-E caseloads (more children eligible more cost and vice versa). But any of these options would address the declining

federal support for foster care and adoption assistance that appears inherent in the

look back provision and would not need to address other aspects of the current

distribution of federal funds dedicated to child welfare (e.g., mix of open-ended

mandatory, capped mandatory, and discretionary funds).

Children’s Defense Fund, State Subsidized Guardianship Laws At a Glance, Oct. 2004.

Of the states listed in this report as using TANF for subsidized guardianship programs, only

NJ is now seeking a Title IV-E waiver to fund this purpose. However, one of these states

(IN) had (at least temporarily) stopped adding new children due to a reduction in available

TANF funds, at least half made guardianship payments under the foster care payment level,

and not all of them directed this guardianship assistance to children leaving foster care.

CRS-39

More sweeping changes, as included in several recent proposals, would greatly

expand Title IV-E eligibility but would reduce the resulting cost to the federal

treasury by capping certain funds and/or reducing the federal matching rate for some

program purposes. If policymakers choose to design more sweeping changes to the

federal child welfare structure, they may need to explore for what purposes federal

child welfare funding might best be provided on a capped basis (affording states the

greatest ability to direct the use of these funds); if there are certain categories for

which they want to insist that states must spend a certain amount of federal dollars

(e.g., family preservation services, adoption promotion and support, or training for

child welfare workers who assess need for services); and if there are categories for

which the federal government should open, or keep open, its checkbook (e.g.,

subsidized guardianship, foster care room and board, case planning for children in

foster care, adoption assistance).

CRS-40

Appendix A

Congressional Interest in Child Welfare, Selected Legislation

Titles referenced in this table are a part of the Social Security Act

1912

P.L. 116 establishes the federal Children’s Bureau to investigate and report on all

matters relating to the welfare of children (P.L. 116).

1935

Title V, Part 3 of the original Social Security Act (P.L. 271) authorizes federal Child

Welfare Services funding “for the protection and care of homeless, dependent, and

neglected children, and children in danger of becoming delinquent.”

1961

States are given the temporary option to seek federal funds for a child placed in

foster care—provided that the child was removed from a home in which he/she was

eligible for Aid to Dependent Children (ADC) and that a judge had determined that

remaining in that home was “contrary to the welfare” of the child (P.L. 87-31).

1962

P.L. 87-543 authorizes Federal foster care payments on a permanent (indefinite)

basis as part of the newly renamed Aid to Families with Dependent Children (AFDC)

program; also requires coordination between Child Welfare Services and services offered

under AFDC.

1967

Federal foster care eligibility expanded to include a child who would have been eligible

for AFDC if an application for this aid had been made; Child Welfare Services moved

to a new Title IV-B; Emergency Assistance is created (as part of Title IV-A) (P.L. 90248, passed Dec. 1967, signed into law Jan. 1968).

1974

Child Abuse Prevention and Treatment Act (P.L. 93-247, CAPTA) enacted, requiring

states to have procedures for receiving and investigating reports of child maltreatment.

1975

Title XX created with an annual $2.5 billion funding ceiling. (It primarily replaces

what, between 1963-1972, had been open-ended funding of social services to AFDC and

“potential” AFDC recipients.) Among its five broad goals are “preventing or remedying

neglect, abuse or exploitation of children and adults unable to protect their own interest,

or preserving, rehabilitating and reuniting families” (P.L. 93-647).

1980

The Adoption Assistance and Child Welfare Act (P.L. 96-272), a keystone of the

current federal child welfare structure creates a federal adoption assistance program,

establishes federal foster care as an independent program (both placed in a new Title

IV-E), and links these programs to a revamped Child Welfare Services program

under Title IV-B. Funding for Title IV-E is open-ended; funding for Title IV-B authorized

on a discretionary basis at $266 million. The law intends to discourage foster care

placement and increase the use of preventive services. It authorizes funding mechanisms

designed to encourage states to offer certain protections to a greater number of children

in foster care and to cap their foster care spending. The law further provides that capped

mandatory funding for Title XX Social Services is to rise to $3.3 billion by FY1985.

1981

The Social Services Block Grant (SSBG) consolidates several social service spending

streams into a rewritten Title XX but maintains the purposes of the prior program. The

SSBG funding ceiling is set at $2.4 billion for FY1982 rising to $2.7 billion by FY1986

(P.L. 97-35).

1986

Federal (capped, mandatory) funds for services to help foster care youth, age 16 and

older, make the transition to independent living authorized on a temporary basis

(P.L. 99-272); Department of Health and Human Services required to establish an

Advisory Committee to make recommendations on data collection and to issue final

rules for mandatory collection of adoption and foster care data (P.L. 99-509). Final

regulations implementing the resulting Adoption and Foster Care Analysis and Reporting

System (AFCARS) were issued in Dec. 1993.

CRS-41

1993

Grants for family preservation and family support services authorized with annual

mandatory funding set at $60 million for FY1994 rising to at least $255 million by

FY1998. Independent living services authorized on a permanent basis with annual capped

mandatory funding of $70 million (P.L. 103-66).

1994

HHS required to create and issue formal regulations for a new review system to

better assess state compliance with federal child welfare policy (final regulations issued

Jan. 2000); effective no later than Oct. 1, 1996, child protections extended to all

children in foster care, and states are required to have pre-placement prevention

services; HHS authorized to waive certain Title IV-B or IV-E requirements to allow

up to 10 states to demonstrate innovative use of federal child welfare funds (P.L.

103-432).

1996

Personal Responsibility and Work Opportunity Act (PRWORA) repeals AFDC and

Emergency Assistance and creates the Temporary Assistance for Needy Families

(TANF) block grant. Eligibility for federal foster care and (most) adoption assistance

remains linked to the income and family structure rules of the old AFDC program

(as they were in place in given state on July 16, 1996) (P.L. 104-193).

1997

Adoption and Safe Families Act (ASFA) increases frequency of case planning

procedures, requiring an initial plan within 12 months or removal (rather then 18) and

renames this process “permanency” planning; institutes Title IV-E rules intended to

ensure safety of child is pre-eminent concern in all placement decisions; requires states

to initiate termination of parental rights proceedings for each child in foster care 15

of the last 22 months, unless good cause not to do so; establishes Adoption Incentives

to pay states bonuses for increasing the number of children adopted out of public foster

care; requires annual report of state achievement of required outcomes for children;

extends authorization of Subpart 2 of Title IV-B, renaming it the Promoting Safe and

Stable Families, requiring state to use funding for two new categories of services—

adoption promotion and support and time limited reunification—and raising

mandatory funding cap to $305 million by FY2001; expands authority of HHS to issue

waivers of IV-E or IV-B rules to include up to 10 demonstration projects each year

through FY2002 (P.L. 105-89).

1999

Capped entitlement funding for independent living services doubled to $140 million

annually and services available expanded, and services for youth who exit foster care

without a permanent home are required; renames the program Chafee Foster Care

Independence (P.L. 106-169).

2001

Promoting Safe and Stable Families program amended to provide additional

discretionary authorization of $200 million annually; establishes discretionary

funding authorization ($60 million annually) for education and training vouchers

for Chafee foster care youth (P.L. 107-133).

Source: Congressional Research Service (CRS).

CRS-42

Appendix B

Recent and Proposed Funding For Child Welfare—Funds

Distributed on a Discretionary or Competitive Basis

Final funding by fiscal year

(in millions of dollars)

2002

Program

2003

2004

President’s

FY2006

request

2005

Title IV-B of the Social Security Act

Child Welfare Training

Mentoring Children of Prisoners

Title IV-E of the Social Security Act

Adoption Incentives

Child Abuse Prevention and Treatment Act

Discretionary Grants

(for research and demonstration)

Victims of Child Abuse Act

Children’s Advocacy Centers

Court Appointed Special Advocates

Training for Judicial Personnel

Other programs

Abandoned Infants Assistance

Adoption Opportunities

Adoption Awareness

Source: Table prepared by the Congressional Research Service (CRS).

CRS-43

Appendix C—Federal Funds Dedicated to Child Welfare, Distribution by State

Table C-1. Dedicated Federal Child Welfare Funding Available for Services FY2001-FY2004, by State

(by fiscal year, in millions of dollars)

Title IV-B of the Social Security Act

Child Welfare Services

State

2001

2002

2003

2004

Child Abuse Prevention and Treatment Act

Promoting Safe and Stable

Families

2001

2002

2003

2004

State Grants

2001

2002

2003

Community-Based Grants

2004

2001

2002

2003

2004

Total to State

2001

2002

2003

2004

Alabama

Alaska

Arizona

Arkansas

California

$5.13 $5.30 $5.26 $5.14 $5.68 $7.22 $8.13 $8.49 $0.34 $0.36 $0.36 $0.35 $0.42 $0.47 $0.32 $0.31 $11.57 $13.36 $14.07 $14.30

0.44 0.40 0.27 0.29 0.58 0.79 0.88 0.85 0.10 0.10 0.10 0.10 0.24 0.24 0.25 0.19 1.36 1.53 1.50

1.44

5.21 5.24 4.97 5.46 4.88 6.35 6.75 7.47 0.41 0.43 0.43 0.46 0.53 0.56 0.53 0.57 11.04 12.57 12.69

13.96

3.30 3.31 3.29 3.32 3.00 4.41 5.28 5.33 0.23 0.24 0.24 0.24 0.19 0.19 0.19 0.19 6.72 8.16 9.00

9.08

34.04 34.28 34.05 33.24 42.82 55.88 59.88 47.88 2.48 2.64 2.62 2.65 2.95 2.55 2.84 2.95 82.29 95.35 99.39 86.72

Colorado

Connecticut

Delaware

Dist. of Col.

Florida

4.10 3.94 3.91 4.02 2.56 3.37 3.33 3.18

2.03 2.08 2.06 2.07 2.44 3.42 3.80 3.03

0.71 0.78 0.77 0.76 0.62 0.81 0.75 0.73

0.30 0.37 0.37 0.37 1.10 1.58 1.83 1.48

14.21 14.40 14.31 15.44 14.08 17.70 18.70 16.93

0.34

0.28

0.10

0.08

1.02

0.36

0.29

0.10

0.08

1.07

0.36

0.28

0.10

0.08

1.06

0.37

0.29

0.10

0.08

1.12

0.29

0.38

0.18

0.19

0.98

0.38

0.39

0.18

0.19

1.00

0.39

0.40

0.18

0.19

0.99

0.52 7.29 8.04 7.99

0.43 5.12 6.17 6.55

0.18 1.60 1.88 1.81

0.19 1.66 2.21 2.47

1.05 30.30 34.17 35.06

8.09

5.82

1.77

2.13

34.54

Georgia

Hawaii

Idaho

Illinois

Indianaa

8.74 8.89 8.83 9.13 8.97 12.35 12.61 12.27

1.16 1.23 1.22 1.27 1.40 2.18 2.50 2.02

1.73 1.78 1.76 1.76 0.85 1.07 1.07 1.31

11.45 11.46 11.38 11.41 12.16 16.48 17.87 16.27

6.58 6.75 6.71 6.66 3.94 5.56 6.65 7.22

0.61

0.13

0.15

0.92

0.66

0.13

0.15

0.96

0.65

0.13

0.15

0.95

0.67

0.13

0.15

0.95

0.83

0.46

0.18

0.88

0.84

0.82

0.60

0.18

0.89

0.84

0.81

0.76

0.18

0.89

0.78

0.87 19.15 22.72 22.91

0.87 3.14 4.15 4.61

0.18 2.91 3.18 3.17

0.90 25.40 29.78 31.09

0.55 11.36 13.15 14.13

22.95

4.30

3.40

29.54

14.43

Iowa

Kansas

Kentucky

3.25

3.04

4.72

0.25

0.24

0.31

0.26

0.25

0.33

0.25

0.33

0.24

0.31

0.45

0.62

1.70

0.79

0.75

1.74

0.81

0.67

1.70

0.46 5.71 6.67 6.91

0.73 5.59 6.20 6.22

2.03 11.36 13.17 13.55

6.27

6.34

14.31

3.24

3.03

4.68

3.22

3.01

4.65

3.08

2.94

4.37

1.77

1.69

4.63

2.38

2.17

6.41

2.62

2.30

6.87

2.48

2.43

7.61

CRS-44

Title IV-B of the Social Security Act

Child Welfare Services

State

2001

2002

2003

2004

Child Abuse Prevention and Treatment Act

Promoting Safe and Stable

Families

2001

2002

2003

State Grants

Community-Based Grants

2004

2001

2002

2003

2004

2001

2002

2003

2004

Total to State

2001

2002

2003

2004

Louisiana

Maine

Maryland

Massachusetts

Michigan

Minnesota

Mississippi

5.78 5.75 5.71

1.35 1.36 1.36

4.49 4.57 4.54

4.62 4.59 4.56

10.04 10.18 10.06

4.87 4.63 4.58

3.91 3.91 3.88

5.60 7.40 10.13 11.83 11.55

1.28 1.13 1.59 1.68 1.63

4.54 4.35 5.83 5.91 4.12

4.20 4.19 5.59 6.04 5.00

9.84 10.08 13.73 15.06 13.82

4.42 2.97 3.80 4.35 4.27

3.79 4.54 6.02 6.04 6.33

0.37

0.13

0.41

0.45

0.75

0.40

0.26

0.39

0.13

0.43

0.47

0.78

0.41

0.27

0.39

0.13

0.43

0.47

0.77

0.41

0.27

0.38

0.13

0.43

0.45

0.76

0.39

0.26

0.36

0.18

0.50

0.49

0.82

1.90

0.21

0.37

0.18

0.63

0.46

0.89

1.94

0.21

0.35

0.18

0.52

0.75

0.83

1.75

0.21

0.34 13.92 16.64 18.28

0.18 2.79 3.26 3.35

0.63 9.74 11.46 11.39

0.44 9.75 11.12 11.82

0.98 21.69 25.57 26.72

1.39 10.14 10.79 11.09

0.21 8.92 10.42 10.40

17.87

3.21

9.73

10.09

25.40

10.48

10.59

Missouri

Montana

Nebraska

Nevada

New Hampshire

5.99

0.87

1.95

1.86

1.14

5.85

0.84

1.84

2.20

1.11

5.67

0.77

1.17

1.04

0.54

7.57

1.07

1.68

1.29

0.72

8.59

1.22

1.85

1.36

0.82

8.86

1.13

1.66

1.60

0.72

0.43

0.11

0.17

0.18

0.13

0.45

0.11

0.18

0.19

0.14

0.45

0.11

0.18

0.19

0.14

0.43

0.11

0.17

0.21

0.13

0.45

0.18

0.19

0.20

0.18

0.47

0.18

0.19

0.20

0.18

0.47

0.18

0.20

0.18

0.46 12.55 14.51 15.49

0.18 1.93 2.21 2.41

0.18 3.49 3.95 4.08

0.20 3.28 3.53 3.58

0.18 1.99 2.20 2.30

15.61

2.26

3.85

4.21

2.15

New Jersey

New Mexico

New Yorkb

North Carolina

North Dakota

5.69 6.00 5.96 6.02

1.92 1.94 1.83 1.84

14.23 14.94 14.84 14.58

8.41 8.31 8.23 8.58

0.72 0.72 0.72 0.63

5.85

2.58

6.59

0.41

7.73

3.48

8.61

0.60

8.05 6.21

3.94 3.60

0 25.74

9.72 10.19

0.67 0.68

0.60

0.19

1.26

0.58

0.09

0.63

0.19

1.36

0.60

0.10

0.63

0.19

1.35

0.60

0.09

0.64

0.19

1.32

0.62

0.09

0.62

0.33

1.26

0.60

0.18

0.64

0.26

1.30

0.86

0.18

0.63

0.55

1.30

0.81

0.18

0.65 12.76 14.99 15.27

0.49 5.02 5.87 6.51

1.25 16.75 17.60 17.49

0.90 16.18 18.38 19.36

0.18 1.40 1.60 1.66

13.51

6.11

42.88

20.29

1.58

Ohio

Oklahoma

Oregon

Pennsylvaniaa

Rhode Island

11.81 11.77 11.69 11.58 9.59 12.22 12.15 12.55

2.66 2.67 2.30 2.18 3.60 5.02 5.67 5.63

3.50 3.45 3.44 3.50 2.68 3.69 4.36 5.23

11.21 11.45 11.38 11.04 10.96 15.04 15.56 14.11

1.00 1.03 1.02 1.00 1.05 1.50 1.71 1.65

0.83

0.29

0.28

0.12

0.86

0.30

0.29

0.12

0.85

0.30

0.29

0.12

0.84

0.29

0.12

1.36

1.37

0.23

0.94

0.22

0.85

1.29

0.23

0.93

0.22

0.85

0.95

0.23

0.99

0.21

0.89 23.60 25.70 25.54

0.84 7.92 9.29 9.22

0.23 6.69 7.66 8.31

0.95 23.11 27.43 27.92

0.20 2.39 2.87 3.06

25.87

8.94

9.25

26.10

2.97

6.02

0.85

1.91

1.85

1.17

5.99

0.89

1.88

1.83

1.16

CRS-45

Title IV-B of the Social Security Act

Child Welfare Services

State

2004

2001

2004

2001

2002

2003

South Carolina

South Dakota

Tennessee

Texas

Utah

Vermont

Virginia

4.63 4.74 4.71 4.54 4.27 6.02 6.81 6.73

0.86 0.77 0.71 0.64 0.58 0.84 1.00 0.96

5.91 6.08 6.04 6.02 6.38 8.78 9.63 9.99

24.68 24.24 24.08 24.68 26.83 34.11 35.14 33.16

3.49 3.38 3.35 3.34 1.30 1.89 2.09 1.77

0.67 0.71 0.70 0.65 0.53 0.69 0.80 0.67

6.48 6.58 6.54 6.52 5.46 7.11 7.44 6.33

0.31

0.10

0.42

1.61

0.24

0.09

0.50

0.33

0.11

0.44

1.70

0.25

0.09

0.54

0.33

0.11

0.44

1.69

0.25

0.09

0.53

0.32

0.10

0.44

1.73

0.25

0.09

0.54

0.28

0.18

0.56

1.58

0.29

0.26

0.47

0.28

0.18

0.60

1.63

0.29

0.25

0.49

0.28

0.18

0.63

1.64

0.28

0.24

0.48

0.27 9.50 11.38 12.13

0.18 1.72 1.89 1.99

0.67 13.27 15.90 16.73

1.67 54.70 61.68 62.54

0.30 5.32 5.80 5.96

0.25 1.55 1.74 1.83

0.49 12.92 14.72 14.99

11.86

1.89

17.11

61.25

5.66

1.66

13.88

Washington

West Virginia

Wisconsin

Wyoming

5.73

2.12

5.67

0.64

5.56

2.08

5.61

0.62

5.51

2.07

5.56

0.62

5.42

1.97

5.40

0.52

4.93

2.71

3.11

0.35

6.29

3.75

3.94

0.47

6.61

4.23

4.38

0.49

5.84

3.68

4.96

0.47

0.46

0.16

0.42

0.08

0.47

0.16

0.43

0.09

0.47

0.16

0.43

0.09

0.47

0.16

0.42

0.08

0.43

0.26

0.43

0.18

0.43

0.25

0.42

0.18

0.43

0.23

0.40

0.18

0.42 11.55 12.76 13.02

0.24 5.25 6.24 6.69

0.42 9.62 10.40 10.78

0.18 1.26 1.35 1.37

12.15

6.05

11.19

1.25

279

281

278

277

257

341

367

368

20.4

21.4

21.3

30.0

30.4

30.3

30.2

696

4.47

8.46

4.44

6.95

5.38

6.90

5.51 3.05 4.45 5.04 5.04

6.91 8.29 8.98 9.79 8.93

NA 16.00 20.60 22.56 22.56

0.62

0.59

0.33

1.22

1.28

0.33

1.21

1.48

0.33

1.21

1.32

0.33 7.85 9.23 10.75

1.21 18.59 17.72 18.49

1.45 17.28 22.08 23.87

10.88

17.63

24.01

292

290

289

21.0

22.0

21.9

32.8

33.4

33.2

375

2003

404

2004

Total to State

2003

284b

2002

Community-Based Grants

2002

Total

2003

State Grants

2001

Tribesc

Territoriesd

Othere

2002

Promoting Safe and Stable

Families

2004

Subtotal

2001

Child Abuse Prevention and Treatment Act

2001

586

630

2002

673

722

2003

750

2004

749

Source: Table prepared by the Congressional Research Service (CRS). Program funding amounts to each states are the “actual” amounts awarded each state for the given fiscal year

as reported in the U.S. Department of Health and Human Services (HHS), Administration for Children and Families (ACF) Budget Justifications to Congress (FY2003 through FY2006).

Due to rounding, the sum of each state’s grants may not equal the displayed total of those grants.

NA = Not Applicable.

a. Indiana and Pennsylvania did not meet all the required state plan assurances and so were not eligible to receive CAPTA state grants. The statute provides that all funds appropriated

are to be distributed, by formula, among eligible states. Funds that would otherwise go to Indiana and Pennsylvania were therefore distributed among all the other states.

CRS-46

b. New York chose not to receive Promoting Safe and Stable Families (PSSF) funds in FY2001-FY2003. For FY2001 the statute did not provide for re-allotment of that money. Thus

the $20.9 million that was allotted to New York was returned to the federal treasury. (This is the reason that the total funds distributed in FY2001 is shown as $284 million rather

than the $305 million that was appropriated.) P.L. 107-133 provided for re-allotment of any unclaimed PSSF funds beginning with FY2002.

c. Tribes eligible to receive Child Welfare Services funding receive an amount based on their population and which is drawn out of the initial allotment of the state in which the tribe

is located. The program authorizations for both the Promoting Safe and Stable Families and CAPTA’s Community-Based Grants provide for certain funds to be set aside for

eligible tribes prior to allotment of remaining funds to eligible states. Tribes are not eligible to receive CAPTA’s state grants.

d. As used here, the territories refer to—American Samoa, Guam, the Northern Mariana Islands, Puerto Rico and the Virgin Islands. Each of these jurisdictions received some funding

under each one of the programs included in this table.

e. Other generally refers to technical assistance and/or program evaluation and support. In the case of Promoting Safe and Stable Families, it also includes a set-aside for Court

Improvement grants. The totals for these court grants ranged in value from $10 million to just over $13 million between FY2001 and FY2004. There are no set asides for program

evaluation, technical assistance or other purposes included in the program authorizations for Child Welfare Services or CAPTA state grants.

CRS-47

Table C-2. Dedicated Federal Child Welfare Funding for the Foster Care Program, FY2001-FY2003, by State

(by fiscal year in millions of dollars)

Foster Care - Title IV-E of the Social Security Act

Maintenance payments (including

demonstrations)b

2001

2002

2003

Training

2001

2002

Alabama

Alaska

Arizona

Arkansas

California

4.75

2.86

19.81

8.38

397.37

6.51

1.91

20.89

12.85

413.00

7.10

0.93

23.12

10.59

386.04

12.23

6.80

24.31

13.62

602.28

17.74

7.11

16.41

12.59

681.49

15.01

9.00

16.58

14.46

776.43

2.17

0.95

0.61

6.65

57.30

2.56

0.00

2.68

7.24

76.79

Colorado

Connecticut

9.12

31.85

13.62

13.06

18.04

22.07

33.42

59.79

32.88

34.46

50.63

34.71

0.87

3.47

Delaware

Dist. of Col.

Florida

1.86

12.58

38.77

1.47

15.84

27.50

0.64

12.28

30.22

7.92

14.03

99.57

8.75

9.24

93.21

7.28

8.45

64.88

Georgia

Hawaii

Idaho

Illinois

Indiana

29.65

5.29

1.65

175.62

26.78

28.63

3.85

1.87

209.19

29.45

13.52

5.48

2.47

225.37

26.97

29.05

10.90

3.76

103.30

7.60

29.36

11.93

3.67

104.27

17.07

Iowa

Kansas

Kentucky

Louisiana

Maine

14.37

9.82

28.63

21.80

27.30

11.51

5.00

28.13

22.36

24.87

10.37

12.07

29.59

20.57

18.19

10.64

26.67

15.45

18.55

3.98

7.96

21.47

16.61

24.50

5.11

State

2003

Child placement and administrationc

(including SACWIS)

2001

2002

Total foster care to state

2003

2001

2002

2003

1.73

0.65

3.57

6.63

76.04

19.16

10.61

44.73

28.65

1,056.95

26.81

9.02

39.99

32.68

1,171.27

23.83

10.57

43.27

31.68

1,238.51

0.86

2.66

0.72

1.55

43.41

95.11

47.36

50.17

69.40

58.33

0.72

11.06

0.45

6.09

0.09

5.57

10.50

26.61

149.40

10.67

25.08

126.80

8.00

20.73

100.67

15.16

11.57

3.70

109.63

16.33

3.54

3.36

0.05

10.40

0.64

3.64

1.27

0.16

7.74

0.35

2.80

1.21

0.29

7.28

0.24

62.24

19.54

5.45

289.32

35.01

61.63

17.05

5.69

321.21

46.87

31.49

18.26

6.47

342.27

43.53

8.49

19.34

14.09

29.37

2.97

1.56

1.20

12.08

3.18

2.43

1.04

1.89

9.43

6.00

3.45

1.13

1.51

4.29

5.60

0.86

26.57

37.69

56.16

43.53

33.71

20.51

28.36

54.17

52.85

33.42

19.99

32.93

47.97

55.55

22.02

CRS-48

Foster Care - Title IV-E of the Social Security Act

Maintenance paymentsa (including

demonstrations)b

State

2001

2002

2003

Child placement and administrationc

(including SACWIS)

2001

2002

2003

Training

2001

2002

Total foster care to state

2003

2001

2002

2003

Maryland

Massachusetts

Michigan

Minnesota

Mississippi

65.58

33.80

80.40

22.77

6.64

64.26

31.33

74.70

22.63

2.10

59.73

23.43

61.29

19.79

3.31

65.62

34.44

71.42

46.78

8.74

70.17

23.49

69.40

40.59

7.75

66.19

44.69

66.78

42.34

7.92

5.96

0.57

10.64

0.39

6.79

0.77

11.25

0.13

5.23

0.24

1.77

6.11

0.39

137.16

68.25

152.39

80.19

15.77

141.21

54.82

144.87

74.48

9.99

131.16

68.35

129.84

68.24

11.62

Missouri

Montana

Nebraska

Nevada

New Hampshire

21.66

5.43

12.47

4.14

4.85

24.90

5.93

11.96

3.85

5.19

19.75

6.36

12.90

7.26

6.80

37.18

4.63

6.32

7.06

2.85

36.22

3.79

7.16

9.21

5.33

34.22

2.21

7.98

10.14

6.12

8.95

0.08

3.26

1.24

0.99

5.99

0.04

2.85

0.77

1.28

4.47

0.06

3.05

0.78

1.72

67.79

10.14

22.05

12.45

8.69

67.11

9.76

21.97

13.83

11.80

58.45

8.63

23.93

18.19

14.65

New Jersey

New Mexico

New York

North Carolina

North Dakota

34.02

3.75

340.80

41.59

4.47

32.55

3.42

296.06

32.92

4.96

25.32

4.47

183.80

32.49

5.23

26.05

8.47

173.78

28.69

7.15

40.70

7.45

173.01

28.93

7.47

32.33

12.55

252.25

19.89

4.70

1.74

4.53

8.39

3.97

1.04

3.83

5.03

10.56

1.78

0.68

-3.00

6.02

9.94

0.25

0.59

61.80

16.75

522.97

74.26

12.65

77.09

15.89

479.63

63.62

13.11

54.66

23.04

445.99

52.63

10.52

Ohio

Oklahoma

Oregon

Pennsylvania

Rhode Island

107.42

14.84

13.95

158.35

4.66

119.41

15.32

14.73

189.70

4.50

124.01

13.23

15.86

158.22

4.73

81.82

14.03

16.65

134.56

8.43

89.32

9.18

16.36

140.47

9.02

91.15

7.59

18.25

146.42

9.16

12.77

5.38

0.75

13.87

0.29

13.22

4.67

0.80

15.09

0.34

10.69

3.18

1.07

15.76

0.49

202.00

34.25

31.35

306.78

13.38

221.95

29.17

31.88

345.25

13.86

225.85

24.00

35.18

320.39

14.38

South Carolina

South Dakota

19.16

2.98

12.46

2.78

12.25

2.62

15.88

2.86

19.51

2.93

7.57

2.81

3.85

0.08

3.35

0.08

3.10

0.03

38.90

5.92

35.33

5.79

22.91

5.46

CRS-49

Foster Care - Title IV-E of the Social Security Act

Maintenance paymentsa (including

demonstrations)b

2001

State

2002

2003

Child placement and administrationc

(including SACWIS)

2001

2002

2003

Training

2001

2002

Total foster care to state

2003

2001

2002

2003

Tennessee

Texas

Utah

Vermont

Virginia

15.56

81.42

3.31

8.89

18.36

15.54

75.21

3.08

9.07

27.22

17.58

90.19

3.59

8.27

29.87

18.60

32.70

14.59

2.60

35.63

9.02

66.37

15.04

2.41

48.92

6.85

57.47

15.26

2.27

63.68

2.83

6.31

1.88

0.82

4.39

-0.36

6.49

1.98

1.31

5.09

-0.14

8.81

1.57

0.47

4.50

36.99

120.44

19.78

12.31

58.38

24.21

148.07

20.09

12.80

81.23

24.29

156.47

20.42

11.01

98.04

Washington

West Virginia

Wisconsin

Wyoming

12.26

17.75

29.09

1.26

16.28

18.60

26.12

1.29

16.75

18.97

19.59

0.84

25.57

3.35

50.40

1.02

35.40

3.89

51.20

1.53

40.99

4.00

60.20

1.22

2.47

0.61

3.30

0.00

1.45

0.76

2.73

0.06

2.60

0.76

1.74

0.07

40.29

21.71

82.79

2.28

53.13

23.25

80.04

2.89

60.33

23.73

81.52

2.13

2,060

1,884

2,092

2,207

2,373

234

243

214

4,385

4,510

4,471

9.91

13.44

14.00

0.00

9.91

13.44

14.00

2,070

2,073

1,898

2,092

2,207

2,373

234

243

214

4,395

4,523

4,485

Subtotal

Puerto Ricod

Total

Source: Table prepared by the Congressional Research Service (CRS). Based on annual expenditure file prepared by the U.S. Department of Health and Human Services (HHS).

This file includes federal share of state claims as made by each state, including certain claims which may subsequently be disallowed. If a state is shown as receiving a negative amount

of dollars for a given kind of claim this means that an adjustment in federal funding was made in the given fiscal year for prior claims.

Note: Title IV-E of the Social Security Act does not authorize tribes to receive direct Foster Care funding from the federal government. Tribes that wish to receive such Title IV-E

funds must seek these funds through an agreement with the state (or states) in which they are located. With regard to the territories, Title IV-E permits American Samoa, Guam, Puerto

Rico and the Virgin Islands to directly operate Title IV-E Foster Care programs. It does not give this authority to the Northern Mariana Islands. Of the territories, only Puerto Rico

is currently operating a Title IV-E Foster Care program.

a. These data include the portion of child support monies collected on behalf of children receiving Title IV-E foster care maintenance payments and which are reimbursed to the federal

government. For FY2001-FY2003 the federal share of child support collections ranged from $27 million to $32 million.

b. States report to HHS any costs associated with their demonstration projects (waivers) under a separate expenditure category. Demonstration projects must be cost neutral to the

federal government. Thus “demonstration” claims are those that would previously have been made under the foster care maintenance or foster care administration categories.

The exact distribution of these claims—if there were not a demonstration in place—can not be known. For purposes of this table only, all demonstration claims are included

in the foster care maintenance payment columns.

CRS-50

c. HHS reports state claims related to the State Automated Child Welfare Information System (SACWIS) (both for development and operation) separately from administration claims.

For purposes of this table only, SACWIS claims are included in the total Administration costs.

d. Puerto Rico began making claims for Title IV-E Foster Care in FY1999. It has not yet developed the necessary cost allocation plan that should allow it to receive program

administrative and training claims.

CRS-51

Table C-3. Dedicated Federal Child Welfare Funding for the Adoption Assistance Program, FY2001-FY2003, by State

(by fiscal year in millions of dollars)

Adoption Assistance—Title IV-E of the Social Security Act

Subsidy

Administration

(includes demonstrations)a

State

2001

2002

2003

2001

2002

2003

2001

Training

2002

Total adoption assistance

2003

2001

2002

2003

Alabama

Alaska

Arizona

Arkansas

California

1.45

4.63

14.52

5.42

134.40

2.13

5.09

16.62

3.43

175.11

3.60

5.82

19.01

6.28

201.00

4.17

0.72

2.49

1.43

40.48

1.12

0.49

2.47

1.07

43.61

0.61

0.48

2.48

1.50

41.77

0.92

0.00

0.01

2.14

1.04

0.01

0.00

0.02

2.49

0.85

0.01

0.00

0.02

2.36

6.53

5.35

17.01

6.87

177.01

4.29

5.60

19.09

4.52

221.21

5.06

6.31

21.49

7.80

245.14

Colorado

Connecticut

9.53

9.98

13.02

11.71

14.50

13.15

5.08

1.71

3.36

2.75

2.63

3.81

1.29

1.37

1.40

2.24

1.29

1.25

15.90

13.06

17.78

16.69

18.42

18.21

Delaware

Dist. of Col.

Florida

1.06

2.33

22.41

1.32

6.63

27.24

1.28

4.45

33.62

0.42

3.53

13.01

0.52

2.24

14.00

0.33

4.19

12.86

0.01

0.00

2.25

0.00

0.84

0.00

0.99

1.48

5.87

37.67

1.84

8.87

42.07

1.62

8.64

47.47

Georgia

Hawaii

Idaho

Illinois

Indiana

16.66

4.96

1.44

56.26

19.63

19.81

5.42

1.66

63.01

22.24

21.73

6.82

1.83

66.50

24.13

7.54

0.56

0.73

11.29

2.07

5.47

0.86

0.65

9.26

1.98

10.79

1.01

0.76

8.46

1.72

4.95

0.02

0.00

0.23

0.00

4.45

0.04

0.00

0.48

0.00

3.21

0.04

0.00

0.45

0.00

29.15

5.55

2.17

67.78

21.70

29.73

6.32

2.31

72.75

24.22

35.73

7.88

2.59

75.41

25.86

Iowa

Kansas

Kentucky

Louisiana

Maine

18.45

7.54

9.44

7.72

6.57

20.30

7.84

11.12

8.45

7.88

21.83

7.88

12.98

9.30

9.01

2.69

1.49

0.90

10.78

1.05

2.63

1.52

1.00

2.44

1.87

2.96

1.41

0.98

2.20

1.83

0.18

0.00

1.65

2.48

1.03

0.17

0.00

1.42

0.66

2.01

0.00

1.28

0.85

1.13

21.32

9.03

11.98

20.98

8.66

23.09

9.36

13.54

11.55

11.76

24.79

9.29

15.23

12.35

11.98

CRS-52

Adoption Assistance—Title IV-E of the Social Security Act

Subsidy

(includes demonstrations)a

State

2001

2002

Administration

2003

2001

2002

Training

2003

2001

2002

Total adoption assistance

2003

2001

2002

2003

Maryland

Massachusetts

Michigan

Minnesota

Mississippi

11.33

17.93

77.29

9.70

2.74

0.41

22.11

84.71

10.68

2.96

27.90

21.91

89.41

11.93

3.07

0.07

3.30

4.66

2.91

1.17

0.07

3.50

5.98

3.74

0.62

0.09

2.66

4.58

5.46

0.47

0.00

1.69

0.00

1.86

0.00

1.57

0.00

11.39

21.24

81.94

14.29

3.91

0.48

25.62

90.70

16.27

3.58

27.99

24.57

93.99

18.96

3.55

Missouri

Montana

Nebraska

Nevada

New Hampshire

12.07

2.32

4.54

1.62

0.98

15.06

2.92

5.24

2.41

1.13

18.63

4.24

5.54

2.32

1.37

4.57

2.55

0.26

0.87

0.35

4.91

1.68

0.39

0.85

0.37

4.78

1.71

0.38

0.77

0.54

0.00

0.05

0.00

0.04

0.01

0.00

0.02

0.00

0.37

0.01

0.00

0.05

0.00

0.01

16.63

4.92

4.81

2.53

1.34

19.97

4.62

5.63

3.63

1.51

23.40

6.00

5.92

3.10

1.92

New Jersey

New Mexico

New York

North Carolina

North Dakota

12.91

6.52

165.75

14.92

1.31

13.96

7.92

180.13

16.96

1.58

16.17

8.84

183.08

19.69

1.93

4.93

2.25

9.43

3.21

0.43

10.69

2.00

5.82

0.84

0.48

7.10

1.75

2.77

0.51

0.49

0.00

0.63

0.36

0.00

0.11

0.00

0.34

0.05

0.00

0.34

0.00

0.12

0.20

0.00

17.84

8.77

175.81

18.49

1.74

24.76

9.92

186.28

17.85

2.06

23.60

10.60

185.97

20.39

2.42

Ohio

Oklahoma

Oregon

Pennsylvania

Rhode Island

44.44

10.44

13.80

28.22

3.50

50.53

10.66

16.46

35.00

5.37

55.58

11.18

17.72

38.99

5.46

66.65

3.00

2.40

12.36

0.43

77.45

4.27

1.82

14.16

0.39

82.73

2.71

2.77

14.93

0.34

10.32

0.66

0.00

3.45

0.19

9.72

0.97

0.00

3.73

0.34

7.09

0.56

0.00

4.83

0.44

121.41

14.10

16.20

44.03

4.12

137.69

15.90

18.28

52.89

6.10

145.40

14.45

20.49

58.76

6.24

South Carolina

South Dakota

8.32

1.23

10.09

1.46

9.07

1.83

0.93

0.15

1.21

0.16

0.67

0.14

1.67

0.00

1.43

0.00

1.41

0.00

10.93

1.37

12.72

1.62

11.15

1.98

CRS-53

Adoption Assistance—Title IV-E of the Social Security Act

Subsidy

(includes demonstrations)a

2001

State

2002

Administration

2003

2001

2002

Training

2003

2001

2002

Total adoption assistance

2003

2001

2002

2003

Tennessee

Texas

Utah

Vermont

Virginia

8.42

32.66

4.03

3.93

7.90

9.78

37.29

4.45

4.70

9.45

12.17

40.26

4.96

5.26

10.24

1.05

5.82

1.09

1.18

0.23

1.01

5.68

0.92

1.37

0.30

0.72

6.70

0.86

1.59

0.49

0.10

0.36

0.28

0.36

3.11

0.00

0.79

0.34

0.65

3.58

0.00

0.68

0.33

0.31

3.13

9.57

38.84

5.41

5.47

11.24

10.80

43.76

5.71

6.72

13.33

12.89

47.64

6.15

7.17

13.86

Washington

West Virginia

Wisconsin

Wyoming

12.94

4.94

20.40

0.38

15.22

5.06

22.96

0.50

17.68

5.94

25.36

0.46

3.44

2.28

2.11

0.12

3.69

2.96

5.06

0.09

5.02

3.81

3.64

0.06

0.04

0.71

0.00

0.04

0.97

0.00

0.05

1.22

0.00

16.42

7.93

22.52

0.50

18.95

8.99

28.01

0.59

22.75

10.97

29.00

0.52

902

1037

1163

256

262

264

1,201

1,342

1,463

0.18

0.20

0.37

0.00

0.18

0.20

0.37

902

1037

1163

256

262

264

1,201

1,342

1,463

Subtotal

Puerto Ricob

Total

Source: Table prepared by the Congressional Research Service (CRS). Based on annual expenditure file prepared by the U.S. Department of Health and Human Services (HHS).

This file includes federal share of state claims as made by each state, including certain claims which may subsequently be disallowed. This file is believed to be the best estimate of

annual federal expenditures under the Title IV-E adoption assistance program.

Note: Title IV-E of the Social Security Act does not authorize tribes to receive direct Adoption Assistance funding from the federal government. Tribes that wish to receive such Title

IV-E funds must seek these funds through an agreement with the state (or states) in which they are located. With regard to the territories, Title IV-E permits American Samoa, Guam,

Puerto Rico and the Virgin Islands to directly operate Title IV-E Adoption Assistance programs. It does not give this authority to the Northern Mariana Islands. Of the territories, only

Puerto Rico is currently operating a Title IV-E Adoption Assistance program.

a. States report to HHS any costs associated with their demonstration projects (waivers) under a separate expenditure category. Demonstration projects must be cost neutral to the

federal government. Thus “demonstration” claims are those that would previously have been made under the adoption assistance subsidy or administration categories. The exact

distribution of these claims—if there were not a demonstration in place—can not be known. For the purposes of this table only, all demonstration reported demonstration claims

are included in the adoption subsidy columns.

b. Puerto Rico began making claims for Title IV-E Adoption Assistance in FY1999. As of FY2003 it had not yet developed the necessary cost allocation plan that should allow it to

receive program administrative and training claims.

CRS-54

Table C-4. Dedicated Federal Child Welfare Funding for Independent Living, FY2001-FY2003, by State

(by fiscal years in millions of dollars)

Independent Living—Title IV-E of the Social Security Act

Education and Training

Vouchersa

Chafee Foster Care Independence Program

State

2001

2002

2003

2004

2003

2004

Total independent living

2001

2002

2003

2004

Alabama

Alaska

Arizona

Arkansas

California

1.29

0.50

1.68

0.68

27.57

1.34

0.50

1.55

0.69

26.99

1.42

0.52

1.47

0.74

26.24

1.54

0.55

1.61

0.76

26.11

0.43

0.16

0.47

0.22

8.38

0.50

0.18

0.52

0.25

8.52

1.29

0.50

1.68

0.68

27.57

1.34

0.50

1.55

0.69

26.99

1.86

0.68

1.94

0.96

34.62

2.04

0.73

2.13

1.01

34.63

Colorado

Connecticut

Delaware

District of Columbia

Florida

1.79

1.57

0.50

1.09

8.02

1.87

1.50

0.50

1.09

10.08

1.82

1.79

0.50

1.09

7.92

2.18

1.52

0.50

1.09

8.27

0.55

0.08

0.25

2.53

0.71

0.50

0.07

0.27

2.70

1.79

1.57

0.50

1.09

8.02

1.87

1.50

0.50

1.09

10.08

2.37

2.34

0.58

1.35

10.45

2.90

2.02

0.57

1.36

10.96

Georgia

Hawaii

Idaho

Illinois

Indiana

2.80

0.51

0.50

9.41

2.09

2.69

0.58

0.50

7.93

2.07

3.01

0.64

0.50

7.03

2.27

3.12

0.70

0.50

6.32

2.18

0.92

0.20

0.08

2.25

0.72

1.02

0.23

0.10

2.06

0.71

2.80

0.51

0.50

9.41

2.09

2.69

0.58

0.50

7.93

2.07

3.92

0.84

0.58

9.28

2.99

4.14

0.93

0.60

8.38

2.90

Iowa

Kansas

Kentucky

Louisiana

Maine

1.13

1.58

1.33

1.36

0.74

1.20

1.57

1.37

1.36

0.75

1.26

1.54

1.64

1.36

0.77

1.34

1.55

1.74

1.36

0.77

0.40

0.47

0.52

0.38

0.23

0.44

0.51

0.57

0.40

0.25

1.13

1.58

1.33

1.36

0.74

1.20

1.57

1.37

1.36

0.75

1.67

2.01

2.16

1.74

1.01

1.77

2.05

2.31

1.76

1.02

CRS-55

Independent Living—Title IV-E of the Social Security Act

Education and Training

Vouchersa

Chafee Foster Care Ind

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