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Home > Advocacy > 2003 Legislative Wrap-Up & FY 2004 Final Federal Budget > 2003 Legislative Wrap-Up


2003 Legislative Wrap-Up

In 2003, Congress approved legislation in some key areas, such as state fiscal relief, adoption incentive payments, and reauthorization of the Child Abuse Prevention and Treatment Act (CAPTA) and the Runaway and Homeless Youth program. However, there were a number of initiatives considered by Congress in 2003 that were never completed. These include several important programs affecting children and families, such as the Temporary Assistance for Needy Families (TANF) program, child care, Head Start, and the Individuals with Disabilities in Education Act (IDEA). It is anticipated that the Congress may take action on reauthorizing these programs in 2004.

Congress will likely continue on-going discussions on child welfare financing reform in 2004. Congress may also tackle a variety of health policy issues that were unfinished from 2003. These include the Family Opportunity Act that extends Medicaid coverage to children with disabilities and allows families to purchase Medicaid; the Senator Paul Wellstone Mental Health Parity Act that requires coverage of mental health services the same as other health conditions; and Medicaid reform. However, 2004 is an election year and politics could hamper passage of legislation addressing these issues.

State Fiscal Relief Approved
In 2003, the Congress approved short-term aid of $20 billion to help states. Of the total amount, $10 billion was given to states as a temporary increase in the FMAP (Federal Medical Assistance Percentage, or share of Medicaid paid by the federal government). This increase in FMAP funds can provide some relief to state budgets and thus minimize the need for cuts in Medicaid programs and other children's services. The federal government made these funds available to states in the last two quarters of the 2003 fiscal year and for the first three quarters of fiscal year 2004. The remaining $10 billion can be used for temporary fiscal relief to states and local governments such as essential government services or financing unfunded federal mandates.

Proposal to Block Grant Medicaid Stopped
In the President's FY 2004 budget, a new legislative proposal to give states the option of continuing their current Medicaid program or converting their Medicaid and State Children's Health Insurance Program (SCHIP) into a capped, consolidated block grant was announced. States that choose to keep their current Medicaid program would not receive any additional funding. At a time when states are experiencing severe budget deficits, this plan would leave many states little choice in the short-term but to significantly scale back coverage for vulnerable low-income populations. CWLA and other national organizations opposed the implementation of a plan to cap or block grant Medicaid.

Under the proposal, states choosing the block grant approach would receive a loan totaling, for all states, $3.25 billion in federal funding for FY 2004 and $12.7 billion over seven years. These states would repay these funds to the federal government in lower reimbursement in years 8-10, but would also have to accept an overall cap on federal Medicaid spending over a fixed 10-year period starting next year. The Administration describes the proposal as budget neutral. We anticipate that this proposal may be offered again this year.

With pressure from the Administration to support their proposal, the National Governors Association (NGA) formed a Medicaid Reform Task Force that was directed to work with the Administration and Congress to strengthen and modernize the state-federal health care program for low-income and disabled individuals. Believing that the Medicaid program "is crushing state budgets," governors are looking at ways to restructure Medicaid and help bring state budgets under control. Most will agree that the prescription drug benefit and the long-term care benefit under Medicaid are providing the most problems in controlling costs.

The Medicaid Task Force disbanded last year, having come to no agreement. Republican governors were in favor of the block grant approach, while Democratic governors opposed the plan. Since no consensus was reached, no congressional action was taken on the proposal. Advocates were pleased that this proposal did not go forward. However, this is a battle that is likely to continue in 2004 and beyond.

Child Welfare Finance Reform Debated
Over the past several years, policymakers at the federal and state level have held discussions and hearings to review the current federal and state supports that provide services to children who are abused and neglected, their families, and children who are at risk of abuse and neglect.

In testimony before Congress in 2003, CWLA called for comprehensive reform of the child welfare system to protect and support our nation's children and families. Comprehensive reform preserves and expands the federal entitlement of Title IV-E Foster Care and Adoption Assistance while ensuring that new state and federal resources are dedicated to sustain and strengthen the comprehensive community-based systems of care that secure the safety of all children.

CWLA supports a reform proposal that ensures more children and families receive appropriate and comprehensive services, including prevention, reunification, post-permanency, and postadoption services; enhances supports for the child welfare workforce; enhances supports to foster and adoptive parents; and strengthens accountability in the child welfare system. Any reform proposal must provide new resources for the child welfare system to better protect and care for children who have been abused and neglected and to support families, and provide direct access to federal funding for tribes to care and protect Native American children who are victims of abuse and neglect.

The Administration's response to the reforms needed in the child welfare system is a proposal that would restructure the current Title IV-E foster care program. While legislation has not yet been introduced to reflect this proposal, some details have emerged through various public forums. Under the Administration's plan, each state would have the option to receive a fixed, predetermined allocation, or block grant, of Title IV-E foster care maintenance payments, administrative costs, and training funds. If a state decided to accept this option, they would receive a set amount of funding for five years with no option of returning to the current funding system, even if caseloads or costs dramatically increase. The formula for each state's fixed allotment would be based on a projected five-year cost estimate that is based upon 1996 AFDC standards, thereby resulting in an amount linked to a smaller eligible population. In exchange for a state's agreement to freeze funding at this level, states would have the flexibility to use these funds for foster care, prevention services, and any other child welfare service, and would no longer have to determine eligibility for individual children.

Debate on reform of the child welfare system will definitely continue in 2004. The Pew Commission on Children in Foster Care, an independent, bipartisan panel of experts, will submit a report to Congress. Their recommendations to Congress will focus on ways to improve existing federal financing mechanisms in order to improve the outcomes for children in the foster care system. The report will also focus on improving court oversight. These recommendations may serve as a focal point for discussion as Congress moves forward in making changes to the federal/state partnership in financing child welfare services.

Adoption Incentives Payments Reauthorized
The Adoption Incentives payments program was reauthorized in 2003. The program provides incentive funds to states if they reach a certain number of adoptions. The new law set new targets for each state and provides an additional bonus for the adoption of children 9 and older. Despite these changes, Congress provided only $7.5 million in FY 2004, well below the authorized level of $43 million. The budget allows the U.S. Department of Health and Human Services (HHS) to carry over $27 million in unspent 2003 dollars, allowing for a total of $34 million for fiscal year 2004.

Child Abuse Prevention and Treatment Act (CAPTA) and Adoption Opportunities Programs Reauthorized
In 2003, Congress reauthorized the CAPTA and the Adoption Opportunities Program (P.L. 108-36) making a few changes to current law. CAPTA provides grants to states to support infrastructure and innovations in state child protective services (CPS) and community-based preventive services, as well as research, training, data collection, and program evaluation.

The new law expands the use of basic CAPTA state grants uses for ongoing case management of treatment services; updating technology for reporting; training to promote collaboration with families; training regarding legal duties of caseworkers; improving quality and availability of caseworkers; improvements in supervision, recruitment, and retention of case workers; collaborations between agencies to provide prevention and treatment services and for referrals to address health, mental health; and collaboration between CPS and juvenile justice system.

The law also adds additional eligibility criteria. States must now have a policy on appropriate referrals to CPS to address needs of infants born affected by illegal substance abuse or withdrawal symptoms resulting from prenatal drug exposure. States must also submit an annual report to HHS on how CAPTA funds were used alone or in combination with other federal funds to address the purposes and achieve the objectives of CAPTA In FY 2004, Congress approved $21.883 million, slightly higher than $21.870, provided in FY 2003 for CAPTA state grants. Congress also approved $33.4 million for CAPTA Community Based Family Resources Centers.

The new law also extends the Adoption Opportunities program. The Adoption Opportunities Program provides discretionary grants for demonstration projects that eliminate barriers to adoption and provide permanent loving homes for children who would benefit from adoption, particularly children with special needs. In FY 2004, Congress slightly reduced funding from $27.227 million to $27.173 million for this program.

Abandoned Infants Assistance Program Reauthorized
In 2003, Congress reauthorized the Abandoned Infants Assistance (AIA) program along with CAPTA. AIA is designed to achieve safety, permanency, and well-being for infants and children, who are abandoned or at-risk of abandonment principally due to substance abuse and/or HIV, by providing them and their families with comprehensive and coordinated services. Under the AIA program, infants and children who are abandoned or at-risk of abandonment are: (1) medically cleared from hospital settings, but board there due to a lack of appropriate placement alternatives, commonly referred to as "boarder babies"; (2) physically, emotionally, or intellectually deserted by their parents, principally due to substance abuse and/or HIV; and/or 3) orphaned because their parents are deceased from HIV/AIDS.

Comprehensive and coordinated services provided by the AIA programs include, but are not limited to, the following broad categories: social, psychological, developmental, educational, legal, medical, vocational, and recreational. AIA programs provide services to children and families directly and through coordination with other community agencies. There are presently 34 AIA programs in 18 states throughout the country. The programs have served over 10,000 individuals, with documented improvements in the lives of children and families and a dramatic reduction in the number of "boarder babies" in these communities. In FY 2004, the AIA program was funded at $12.126 million.

Runaway and Homeless Youth Program Reauthorized
On October 10, 2003, President Bush signed into law legislation that reauthorizes the Runaway and Homeless Youth Act (RHYA). This new law, P.L. 108-96, improves upon RHYA, which since 1974 has been the major federal law governing federal support for services to runaway and homeless youth.

The legislation includes two critical improvements to current law.
  • Young people will be able to stay in a transitional living program beyond the 18-month maximum in those instances when they have reached the cap but have not yet reached their 18th birthday. Now, they will be allowed to stay until they turn 18.

  • Secondly, the new RHYA adjusts the formula used to determine funding levels for the two major programs supported by the legislation-the basic centers program and the transitional living program. This adjustment better reflects current community needs of the growing demand for transitional living services. These changes make important improvements in the law and will benefit many young people.
Funding for programs under the Runaway and Homeless Youth Act for FY 2004 was level funded at the FY 2003 level of $105.4 million. Funding provided through RHYA supports community-based initiatives working to reunite runaway and homeless youth with their families and, when that is not possible, to provide transitional services to prepare the youth for adulthood.

There are three major programs in the Runaway and Homeless Youth Act. The Runaway and Homeless Youth (Basic Center) Grant Program enables local non-profit agencies to operate runaway and homeless youth centers. The Transitional Living Program (TLP) supports community-based agencies that provide services and shelter to homeless youth aged 16-21 for a period of up to 18 months, including information and counseling in basic life skills. The Sexual Abuse Prevention (Street Outreach) Program awards competitive grants to local nonprofits for street-based outreach and education to runaway, homeless and street youth who have been subjected to or are at risk of sexual abuse, prostitution, or sexual exploitation.

FY 2004 Budget Highlights

Four months into current fiscal year, Congress completed action on the FY 2004 budget on January 22, 2004. This is the second year in a row that Congress waited until the new calendar year to finalize budget decisions for the federal fiscal year that begins on October 1, of each year. Most child welfare programs received only flat funding with some programs receiving small increases and some small reductions. To help finance increases for some programs in other areas, the FY 2004 budget includes a .0059% across-the-board cut for almost all domestic programs.

Title IV-E Foster Care and Adoption Assistance
The most significant increases in funding for child welfare were in the two entitlement programs, Title IV-E Foster Care and Title IV-E Adoption Assistance. Foster care funding is expected to rise to $4.9 billion, from the $4.8 billion provided in FY 2003. Adoption Assistance also increased by $115 million to $1.7 billion in FY 2004. As entitlement programs, Congress does not set the funding level each year, but rather the costs are automatically included based on the number of eligible children.

Title IV-B, Subpart 2, Promoting Safe and Stable Families Program
The Promoting Safe and Stable Families program is funded at nearly the same level as FY 2003, $404.4 million compared to $404.3 million in 2003. This action was taken despite the White House request for full funding of $505 million. States use these funds for family support, family preservation, adoption, and family reunification. Of the total $404 million, $305 million are mandatory funds-meaning that Congress does not need to approve funding each year. As a result of the 2001 reauthorization, Congress can provide an additional $200 million (for the total of $505 million), however, since that time, Congress has never approved the full amount.

Social Services Block Grant (SSBG)
While SSBG funds can be used for an array of social services, states chose to spend these funds on child welfare services more than any other service area, such as child care or services for the aging. In federal FY 2001, child protection and child foster care services each accounted for 22% of SSBG expenditures. Forty-three states used SSBG funds to address child protection services; 35 states used SSBG to fund foster care. Congress provided $1.7 billion for SSBG in FY 2004.

In 2003, Congress considered several proposals to increase SSBG funding. The Senate adopted the CARE Act (S. 476) that, in addition to changing tax law to encourage charitable giving, restored funding of SSBG to $2.8 billion in FY 2004 and restored the states' ability to transfer 10% of their TANF block grant into SSBG. The House version of the CARE Act (H.R. 7) does not include SSBG funding. The differences between the House and Senate versions of the CARE Act will be resolved in 2004. SSBG funding may also be included as part of the reauthorization of Temporary Assistance for Needy Families or as a freestanding bill. Efforts to restore SSBG funding may also include proposals that would both increase SSBG while creating a new set-aside for tribal governments.

Title IV-B Child Welfare Services
Funding for the Title IV-B, Part I, Child Welfare Services program was reduced to $289 million from $291 million in the previous year. States can use these funds for prevention services. The program is authorized at $325 million, but it has never been fully funded. A recent General Accounting Office study found that approximately 40% of these funds were actually used for foster care and administrative expenses rather than prevention services.

Education and Training Vouchers for Youth
Funding was increased for the Education and Training Vouchers to $45 million in FY 2004, up from $42 million. The vouchers are for youth aging out of foster care or who have been adopted after age 16. These funds will help older youth leaving foster care get the higher education, vocational training, and other education supports they need to move to self-sufficiency.

Child Care and Early Education
This year, the Head Start program is included amongst the programs subject to the across-the-board cut. As a result, Head Start FY 2004 funding is $6.775 billion, an increase of less than $110 million. This amount is not enough to make up for inflation and to increase the quality of Head Start services. With funding at this level, it is anticipated that some Head Starts slots will be lost nationally due to the impact of inflation and the requirement to spend a significant portion of this $110 million increase on Head Start quality.

Child care funding remains frozen at $2.08 billion. Congress did not complete action to reauthorize the TANF and child care block grants, but instead extended the funding until March 2004 at the FY 2003 level.

Juvenile Justice
Funding for juvenile delinquency prevention has been cut drastically for FY 2004. The budget slashes funding for the Juvenile Accountability Block Grant (JABG) to $60 million, cut from $190 million in FY 2003 and down from $249.5 million in FY 2002. The purpose of the Juvenile Accountability Incentive Block Grant (JABG) Program is to provide states and units of local government with funds to develop programs to promote greater accountability in the juvenile justice system. Funds are available for many program purpose areas including building, expanding, or operating temporary or permanent juvenile correction or detention facilities, training of correctional personnel, developing and administering accountability-based sanctions for juvenile offenders, hiring additional juvenile judges, prosecutors, probation officers, and court-appointed defenders, and funding pre-trial services for juveniles.

Funding for the Title V Local Delinquency Prevention Grant program is increased over the FY 2003 level, but still would be a cut from previous years and earmarks that dedicate funds for particular purposes, continue to increase. Funding for Title V in FY 2004 was set at $80 million with earmarks for special purposes totaling $61 million-leaving only $19 million for grants. Title V grants provide funding for collaborative, community-based delinquency prevention efforts to reach youth in high-risk situations before they make poor choices. The program provides local jurisdictions with the resources needed to implement a comprehensive delinquency prevention strategy that is best suited to that community.

No funding is provided for the new Delinquency Prevention Block Grant (DPBG), which was created in the recently reauthorized Juvenile Justice and Delinquency Prevention Act (P.L. 107-273). The DPBG is intended to fund activities designed to prevent and reduce juvenile crime, including projects that provide treatment to juvenile offenders and juveniles who are at risk of becoming juvenile offenders. Eligible recipients include community-based organizations, law enforcement agencies, local education authorities, local governments, social service providers, and other entities with a demonstrated history of involvement in juvenile delinquency prevention.

These funding cuts are particularly troubling since a strong and effective juvenile justice system was recently reaffirmed by passage of the bipartisan reauthorization of the Juvenile Justice and Delinquency Prevention Act in 2002. This law gives states and units of local government more flexibility to address juvenile crime and delinquency with a greater emphasis on prevention, treatment, and alternatives to incarceration.

Funding for AmeriCorps increased to $444 million. The funding represents the largest appropriation for AmeriCorps since the program's inception in 1993 and the program dollars would be an 80% increase above last year's levels which forced cuts and closures to vital programs and services.

AmeriCorps is a network of national service programs that engage youth and others in intensive service to meet critical needs in education, public safety, health, and the environment. AmeriCorps members serve through more than 2,100 nonprofits, public agencies, and faith-based organizations. They tutor and mentor youth, build affordable housing, teach computer skills, clean parks and streams, run after-school programs, and help communities respond to disasters.

21st Century Community Learning Centers
Funding for the 21st Century Community Learning Centers received a slight increase of $5 million for FY 2004, this despite the fact the President had proposed a $400 million cut in his FY 2004 budget. Total funding for FY 2004 will be $1.005 billion.

The 21st CCLC provide expanded academic enrichment opportunities for children attending low performing schools. Under the program, activities focus on enhancing the academic skills of participants to help them meet local and state academic standards. Additionally, 21st CCLC programs offer students a broad array of additional services, programs, and activities, such as youth development activities.

Funding was increased for mentoring in FY 2004. The U.S. Department of Education's Mentoring Program received $50 million, up from $17.5 million in 2003. The U.S. Department of Health and Human Services' Mentoring for Children of Prisoners program received $50 million, up from $9.9 million in 2003. A mentor is an adult who, along with parents, provides young people with support, counsel, friendship, reinforcement and constructive example. Mentors help connect children with safe places and structured activities during non-school hours, a healthy start, a marketable skill through effective education, and an opportunity to give back through community service.

Maternal and Child Health
Maternal and Child Health Block Grant, Title V, received an increase of $4 million to $734.2 million. Title V helps develop service systems in communities to meet the critical challenges facing maternal and child health, including significantly reducing infant mortality, providing preventive and primary care services for children and adolescents, immunizing all children, reducing adolescent pregnancy, and preventing injury and violence.

Children's Mental Health
Children's Mental Health Services Program increased $5 million to $103 million. This program provides direct services such as diagnostic and evaluation services; outpatient services provided in a clinic, school, or office; emergency services; intensive home-based services for the children and their families; intensive day-treatment services; respite care; therapeutic foster care; and services that assist the child in making the transition from the services received as a child to the services to be received as an adult.

Family Planning
Title X Family Planning Program received funding of $280 million, an increase of nearly $7 million. There are 4,500 Title X clinics throughout the country, serving over 4.4 million women who receive contraceptive services, supplies, and other preventive health services. These services include screening for breast and cervical cancers, testing for STDs, and screening for anemia, high blood pressure, and diabetes.

Ryan White Comprehensive AIDS Resources Emergency program (CARE) was funded at $2.3 billion, an increase of $40 million. CARE is the nation's largest federal investment in the care and treatment of people living with HIV/AIDS. It supports a range of community-based services to children, youth, and families, including primary and home health care, case management, substance abuse treatment, mental health services, and nutritional services.

Substance Abuse
The Substance Abuse Partnership Block Grant and Prevention Grants received slight increases, while the Substance Abuse Treatment Program received a substantial increase of $104 million. These programs support a variety of activities aimed at improving the lives of individuals and families affected by alcohol and drug abuse by ensuring access to clinically sound, cost-effective addiction treatment that reduces the health and social costs to our communities and the nation. In addition, it provides national leadership in the development of policies, programs, and services to prevent the onset of illegal drug use, to prevent underage alcohol and tobacco use, and to reduce the negative consequences of using substances.

Early Intervention Services Program under IDEA increased by $13 million for a total of $447 million. Under the Individuals with Disabilities Education Act (IDEA), this program provides early intervention services to infants and toddlers.

Child Welfare League of America
January 30, 2004

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