Capping Federal Foster Care Assistance
Currently, the federal government shares the responsibility-and risk.
Presently, the federal government and the states share the responsibility for providing out-of-home care for abused and neglected children. The federal government pays a set share of the states' actual costs (this varies by state) for eligible children. As the number of children in foster care increases, and as the cost of caring for these children increases, the amount the federal government pays rises automatically to keep pace with these higher costs.
The President's FY 2006 budget proposes to cap Title IV-E Foster Care. Congress is poised to act on this recommendation.
Capping federal funding, or providing a "block grant" to states, for out-of-home care, means that states will receive a fixed amount of money from the federal government to care for all of the children in out-of-home care.
Capping federal foster care funding shifts the financial burden to the states.
States are obligated to care for children who are reported as abused or neglected and who are remanded by local state courts to state custody. Foster care caseloads are not automatically reduced if the federal government caps its contribution. If federal foster care funding is capped and Title IV-E becomes a block grant, states may face an additional financial burden in continuing to care for these children.
A block grant fails to provide states with the resources they need when crisis strikes.
Under a block grant, if a state's foster care caseload rises-for example, due to increased use of methamphetamine-or the costs of caring for the complex needs of children in out-of-home care goes up, the amount the federal government pays would remain fixed, and the state would be left to meet the challenge of meeting these higher costs alone.
The President's foster care proposal would allow states to draw additional funding from Temporary Assistance for Needy Families (TANF) if foster care caseloads increased, but TANF is an unreliable source of funds for foster care. If a state faces an economic downturn or other crisis that may increase caseloads for both foster care and public assistance at the same time, states would be challenged to use limited TANF funds for both cash assistance and foster care. Further, 2003 TANF spending data indicates that states are spending more then their annual TANF block grant allocation (by spending funds carried over from earlier years). Once this reserve is gone, states will have to cut back on TANF-funded services overall.
Capping federal foster care funding puts children's well-being at risk.
If federal foster care funding is capped and a state cannot draw on greater federal funding for foster care when needed, that state 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 being placed in foster care.
Capping federal funding for foster care may shift funds away from prevention.
If states receive a capped allotment of federal funding for foster care, and their foster care costs continue to rise, states may shift other state and federal dollars now used for family preservation, support, and prevention to foster care.
Capping federal funding for foster care will not lead to an automatic dramatic reduction in the number of children who need out-of-home care.
In order to reduce the number of children requiring out-of-home care, states need to be able to make substantial investments of state and federal dollars to provide a flexible array of services, including prevention, to children and their families. Capped federal funding would challenge, if not limit, states' ability to simultaneously invest in prevention while providing supportive services and foster care for those children who cannot safely remain in their own homes. If the federal government provided a substantial increase in funding for prevention and other supportive services, over time foster care caseloads would decrease and federal spending for foster care would be reduced.
Capping federal foster care assistance in exchange for more state flexibility would not equip states with all they need to care for abused and neglected children.
Capping federal funding for foster care would give states a limited source of funding to provide the wide array of services needed to prevent child abuse and neglect and to address the needs of children and families involved in the child welfare system, including meeting the needs of children when they return home from foster care.
Capping federal foster care funding does not address the real reforms that are needed.
Reform of this nation's child welfare system must include new federal investments to provide a range of services necessary to prevent child abuse and neglect, offer early intervention services, increases services to promote safety and permanency for children, and help families with problems such as substance abuse.
The history of federal block grants shows that the federal commitment to funding diminishes greatly over time.
Examples of other federal block grants indicate that federal funding is reduced over time. For example, between 1998 and 2009, the TANF block grant is projected to lose 22% of its value. The Social Services Block Grant (SSBG) has lost 84% of it value since 1973. Funding for the Child Care and Development Block Grant has been level from 2002 through 2006. According to White House projections, this continued level of funding means that 300,000 children will lose child care assistance by 2010 due to inflation.
Providing a federal guarantee of entitlement funding for foster care does not result in more children being placed in foster care.
The federal government currently provides guaranteed or entitlement funding to states to support eligible children in foster care. While the federal funding for foster care is provided on a guaranteed basis, fewer that one-half of the children now in foster care in this country receive federal support. If the availability of entitlement funding dictated placements into foster care, the number of children now in foster care in this country would decrease when fewer children became eligible for federal assistance. This has not been the case. While the number of children in foster care has declined only slightly in the past several years, the percentage of those children receiving federal assistance has dramatically diminished from 55% to approximately 44% today.
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