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October 17, 2005


Following Hurricane Katrina, congressional leaders agreed to temporarily delay the budget reconciliation process. Returning from the Columbus Day recess, however, Congress has decided to move forward with their plans to reduce overall federal spending on mandatory or entitlement programs. The targeted amount for these cuts prior to Hurricanes Katrina and Rita was $35 billion. Congressional leaders have now raised the goal to $50 billion.

While Congress is not required to reduce federal supports for abused and neglected children through changes or cuts to Title IV-E Foster Care and Adoption Assistance* or Medicaid to reach their budget reduction goals, or to pay for hurricane relief efforts, these programs are threatened unless Congress hears from constituents that such cuts are unacceptable.


Join advocates from across the country in a unified voice in proclaiming "No Caps on Kids!" Contact your U.S. Senators and Representative immediately. Express your concerns about decisions that could cap, or limit, federal funding for Title IV-E Foster Care and Adoption Assistance and restrict access to Medicaid services for children in the child welfare system.

You can contact your U.S. Senators or Representative in Washington, DC by calling the U.S. Capitol switchboard at 202-225-3121. On October 17 and 18, you can join human service advocates from across the country by using a toll free number, 800-426-8073, provided by the by the American Friends Service Committee to alert congressional members for No Caps on Kids!


  1. Support abused and neglected children by REJECTING budget proposals that:

    • Cap or block grant Title IV-E Foster Care and Adoption Assistance.

    • Restrict the use of Medicaid targeted case management and rehabilitative services for children in the child welfare system and lower the federal matching rate for Medicaid services.

  2. Call for a real reform of the child welfare system that provides more funding for prevention and support services while fully funding key programs, including foster care and adoption assistance.


  • In May, Congress passed a budget resolution that included instructions that direct relevant congressional committees of the House and Senate to pass "reconciliation" legislation to reduce federal spending for entitlement programs by $35 billion. The House and Senate committees had been instructed to pass legislation to achieve these entitlement cuts by mid-September. House and Senate committees were also given an additional week to pass legislation cutting $70 billion in taxes.

  • Following Hurricane Katrina, congressional leaders agreed to temporarily delay the reconciliation process.

  • On October 6, leadership of the House of Representatives announced their proposal to continue the reconciliation process and increase the amount of cuts in mandatory programs to $50 billion, up from $35 billion, and further reduce federal funding across the board for all other programs.

  • $11 billion of the entitlement cuts must come from programs under the jurisdiction of the Senate Finance Committee. While the budget resolution assumes that most of these cuts will come from the Medicaid program, the Finance Committee will make the final decision about which programs to cut. The Finance Committee has jurisdiction over many programs that provide funding for child welfare services, including Title IV-E Foster Care and Adoption Assistance, the Social Services Block Grant (Title XX, SSBG), Temporary Assistance for Needy Families (TANF), and Medicaid. In the House, the Energy and Commerce Committee must decide how to secure the $10 billion in cuts in Medicaid. Additionally, the House Ways and Means Committee, which has jurisdiction over Title IV-E Foster Care and Adoption Assistance, SSBG, and TANF, also has directions to make cuts of $1 billion.

  • Capping federal foster care funding will put children's well-being at risk. If federal foster care funding is capped, a state cannot draw on greater federal funding for foster care services when the demand increases due to circumstances beyond their control, e.g. the growing methamphetamine crisis. Allowing states to take a capped amount of federal funding or block grant may seem harmless, however, states making this choice may face decisions such as reducing foster care payments to foster parents, decreasing the per diem paid to private providers caring for these children, or changing policies that prevent abuse--resulting in more abused or neglected children placed in foster care. Further, if this proposal is intended to serve as the major reform to child welfare financing that is truly needed, it falls far short of addressing the deficiencies documented in the Child and Family Service Reviews.

  • Congress will also be considering White House proposals to reduce federal spending for Medicaid by restricting the use of Medicaid Targeted Case Management (TCM) and Rehabilitative Services for children in the child welfare system and to lower the federal matching rate for these services. The text of these proposals can be found at the No Caps on Kids! Campaign website. TCM services ensure that children's needs are assessed, a care plan is developed, referrals are made to needed services, and care plans are monitored and services are delivered. The White House proposals suggest that Medicaid should not pay for these services because they could be paid for with other federal funds, including Title IV-E Foster Care, SSBG, and TANF, or with state or local programs. However, many states report that they do not have the state or local funds--or the use of federal funding such as SSBG or TANF--to make up for the loss of these federal Medicaid funds. States also report that the services provided by Medicaid to address the health and mental health needs of children in the child welfare system cannot be paid for with Title IV-E funds.

  • Congress will also consider another White House proposal that would reduce the level of federal funding for TCM services to the Medicaid administrative matching rate of 50%. Currently, the federal matching rate for TCM is as high as 80% in many states. The White House proposal also calls for a cap on Medicaid administrative expenses.

  • Newly released data from the Urban Institute indicates that 961,000 children enrolled in Medicaid were in foster care at some point in 2001. In that year, states spent nearly $4 billion in Medicaid funds on children in foster care. At least $700 million of these Medicaid funds were used to provide TCM and/or rehabilitative services. These funds are in addition to other supports such as Title IV-E Foster Care and Adoption Assistance

  • Adding to already tight fiscal constraints, Congress is also posed to pass an additional reconciliation bill that calls for $70 billion in additional tax cuts.
For more information, visit CWLA's No Caps on Kids! Campaign website or contact Liz Meitner, CWLA Vice President of Government Affairs, at or 202-942-0257.

** Title IV-E Foster Care and Adoption assistance is currently an entitlement program, which means that it is available to anyone who meets the program's strict eligibility criteria. The federal government reimburses each state for a percentage of the overall cost of the program. A reduction, or the capping or block granting, of Title IV-E funding would reduce the federal government's commitment to share the costs of the caring for these abused and neglected children. The amount of money a state would receive from the federal government would be fixed, regardless of a state's expenses, as a result of a capping or block granting of Title IV-E.

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