On June 11, the House Ways and Means Subcommittee on Human Resources held a hearing to examine the foster care flexible funding proposal in the President’s FY2004 budget proposal. The subcommittee heard testimony from expert witnesses on how best to provide states an alternative system for financing foster care.
In 1980, Congress enacted legislation that created a program of federal support for child welfare programs conducted at the state and local level. The 1980 act created two major programs: a capped grant program under Title IV-B of the Social Security Act, which gave states flexibility in providing aid to abused and neglected children and their families, as well as services for foster and adoptive families, and a series of open-ended entitlement programs under Title IV-E designed to help states operate their foster care and adoption programs for children who have been removed from their homes.
“It’s time to begin thinking creatively about how we can help states provide more comprehensive and coordinated services to children and families,” said Subcommittee Chair Wally Herger (R-CA). “States should have ample flexibility to use the resources we provide to best protect vulnerable children.”
Under the President’s proposal, states would be offered an alternative financing option to the current Title IV-E foster care program; states would be allowed to choose to administer their foster care program with a fixed allocation of funds over a five-year period, if the state determined that this approach would better serve their child welfare needs. States that opt not to receive funding under the proposal would continue operating under the current system, under which states are reimbursed for a percentage (70 to 90 percent) of the costs of foster care for eligible children.
Assistant Health and Human Services Secretary Wade Horn addressed the Administration’s proposal and reiterated its support for increasing the funding level for the Promoting Safe and Stable Families Program, which funds family support and preservation, and adoption promotion and support programs. He pointed to the President’s proposal to provide education and training vouchers for young people who “age-out” of foster care, saying the program “offers youth a chance to pursue and complete their education, thereby improving their prospects to become truly independent and self-sufficient adults.” The Promoting Safe and Stable Families program is currently funded at almost $405 million, $29 million over the FY2002 level; for the first time, an additional $42 million was authorized to support educational opportunities for foster children who have aged out of the program.
Assistant Secretary Horn noted studies showing progress in the area of adoption. In FY1997, 31,000 children were adopted from foster care; by FY2001, that number had risen to 51,000. He added that he expected the final number of adoptions for FY2002 to be even higher.
But, he continued, “despite the progress to date, it is evident that we still have a long way to go. Newspaper accounts from around the country continue to report individual tragedies where the system has failed to protect children. National statistics show that too many children are lingering in foster care and waiting for adoptive families.”
Barbara Riley of the Ohio Office of Children and Families expressed her office’s support for the proposal. She told the subcommittee that the current system does not place enough of a premium on permanency; Ohio’s children spent over 8 million days in foster care in FY2002, which is equal to 2 ? days for every child in the state. She called on the subcommittee to give states more options to tailor their child welfare programs to fit the state’s individual needs.
“There is little doubt in my mind that federal funding for foster care, as now manifested in Title IV-E, forces a rigidity onto child welfare practice that limits and stifles state and local innovation,” Ms. Riley testified. “Removal of that rigidity would, in my opinion, create a singularly powerful catalyst to state and local innovation and reform by targeting service dollars to both state federal policy objectives, and just plain good child welfare practice.”
Elaine Ryan of the American Public Human Services Association praised the notion of flexible funding, but suggested that the subcommittee explore the idea of permitting states to opt out of the program within two to three years, instead of five.
“In light of the fiscal difficulties in the states,” said Ms. Ryan, “and the uncertainty related to the rising cost of child welfare, caseload dynamics and other factors … the creation of a contingency fund, while helpful, may not be able to shield states from unexpected revenue shortfalls or rising state deficits. With the protection of children our paramount concern, states should be able to opt out of the plan.”
Dianne Edwards of the Sonoma County (CA) Human Services Department echoed Ms. Ryan’s concerns about whether states would be able to opt out of the new program. “States and counties would have to decide whether to continue serving non-federally eligible families using their own funding or scale back their programs and services. Neither option would be appealing, even if the national economy has improved by that time. … This is not the time to limit federal funding for foster care, staff training, program operations, or automation. The budget neutrality required under the Bush administration proposal could very well serve to limit, rather than expand, prevention activities and training.”
