April 2003Vol 16, No. 2President Releases FY 2004 BudgetWith the FY 2003 budget completed, Congress now turns to the FY 2004 budget and appropriations process. Those deliberations and negotiations will, in part, be in reaction to the Bush Administration's funding priorities for fiscal year 2004, recently released by President Bush.Congress is also expected to consider an FY 2003 supplemental spending bill to provide additional funds for military operations in Afghanistan and Iraq, as well as homeland security. The President's FY 2004 budget offers sweeping proposals in several human service areas that, if enacted, would have long-term implications for the children and families we serve. These proposals include major reforms for Title IV-E foster care, Medicaid, Head Start, and Section 8 housing assistance. Seeking to give states more control over the delivery of social services, these proposals include some elements of fixed state block grants with less federal direction on how the funds may be spent. The President's budget provides only an outline of these proposals. Until more specific legislation is available, many details remain unknown. In addition, the President's proposed budget once again provides significant new funding for defense-a 4.7% increase, or $17 billion. The budget also includes proposed tax cuts totaling $674 billion over 10 years. The centerpiece of the tax plan is a $374 billion proposal to eliminate the tax on investment dividends. The President's budget also includes $400 billion for a Medicare overhaul. The budget anticipates a record annual deficit of $307 billion for FY 2004. This figure includes the impact of the tax cut plan, but does not cover the cost of the war in Iraq. The overarching criteria used in evaluating any sweeping reforms of major federal funding sources for child welfare services must be whether they advance our goal of better protecting our children and assisting families. Details of the President's FY 2004 can be found below. FY 2003 Budget CompletedFour months into the fiscal year, Congress finally completed action on the FY 2003 budget. Since it passed only two of the 13 annual appropriations bills last year, Congress rolled the remaining 11 bills into one omnibus appropriations measure. To help finance increases in some priority areas, the omnibus FY 2003 budget bill includes a 0.65% across-the-board cut for almost all domestic programs.The budget does include a $100 million increase in the Promoting Safe and Stable Families program, first-time funding of $42 million for educational and training vouchers for youth aging out of care, and $10 million for mentoring children with incarcerated parents. Funding for several child welfare programs will continue at current levels, minus the across-the-board cut, including child welfare services, state grants under the Child Abuse Prevention and Treatment Act, adoption opportunities grants, and adoption incentive payments to states. Funding for the Title V Local Delinquency Prevention Grant program was cut from $94.3 million to $46.5 million. This is the only federal program specifically targeted toward primary local delinquency prevention efforts, funding programs aimed at high-risk youth who have not had contact with law enforcement. For more details about the FY 2003 budget, see "Funding for Selected Children's Programs". Hill HighlightsFY 2004 Bush Budget and ChildrenChild WelfareChild Welfare Financing Reform The President's FY 2004 budget suggests that a legislative proposal will be developed to establish a new child welfare financing option. The Administration's budget documents, and subsequent testimony by Health and Human Services Secretary Tommy Thompson at a congressional hearing on February 6, offer only an overview of the proposal. Many details of are still unknown. The budget documents indicate that the proposal would allow states to move to an alternative system for foster care to better meet the needs of their child welfare populations. States choosing to participate will receive funds in the form of flexible grants, which will serve as an incentive to create innovative child welfare plans with a strong emphasis on prevention and family support. Participating states will also face fewer administrative burdens. Under the flexible funding plan, states will be required to continue to uphold the child safety protection outlined in the Adoption and Safe Families Act, agree to maintain existing levels of state investment in child welfare programs, and continue to participate in the Child and Family Service Reviews. The proposal provides access to the TANF Contingency Fund from which states may receive additional funding under certain circumstances if a severe foster care crisis were to arise. A $30 million set-aside will be available for Indian tribes, and a one-third of 1% set-aside will be available for monitoring and technical assistance of state foster care programs.The budget further indicates, State flexibility will be coupled with accountability-by holding states to high standards of performance-to ensure the best outcomes regarding safety, permanency, and well-being for vulnerable children and their families. Participating states will be required to continue to maintain the child protections outlined in the Adoption and Safe Families Act, agree to maintain existing levels of state investment in child welfare programs, and conduct an independent third party evaluation of their programs.Thompson's testimony before the House Ways and Means Committee provides only a few additional details: This plan would allow states to choose a fixed allocation of funds over a five-year period rather than the current entitlement funding for the Title IV-E Foster Care program…States which elect this option and experience emergencies affecting their foster care systems may access additional funding from the TANF contingency fund.Foster Care The Administration's budget projects that Title IV-E foster care mandatory spending will increase to $5 billion. This is an increase of $238 million from FY 2003 and is expected to also fund the child welfare finance option described above. The funds would be used for maintenance payments and administrative costs for approximately 240,600 children each month. In addition, states use these funds for training and for the operation and development of the Statewide Automated Child Welfare Information Systems, a computer-based data and information collection system. Adoption Assistance The President's budget projects that mandatory spending for federal adoption assistance will increase to $1.7 billion -$80 million over 2003. These funds would provide maintenance payments to adoptive families, administrative payments for costs associated with placing a child in an adoptive home, and training professionals and adoptive parents. The proposed funding would support approximately 348,700 children each month. Independent Living The President's budget contains $200 million for the Independent Living program. This includes $140 million in mandatory funds, the same as the FY 2003 request, for a variety of services to ease the transition from foster care for youth who will likely remain in foster care until they turn 18 and youth formerly in foster care, ages 18-21. Approximately 20,000 young people leave foster care each year at their 18th birthday. Of this total funding, $60 million is proposed for the Independent Living Education and Training Voucher program, which was authorized in 1999 (P.L. 106-169). The program was funded for the first time in FY 2003 at $42 million. The voucher program helps older youth leaving foster care obtain the higher education, vocational training, and other education supports they need to move to self-sufficiency. Up to $5,000 per year would be available to a young person for the cost of attending college or vocational training. This program expands on state efforts to provide such services 17 states now provide education and training assistance for college or vocational training to youth leaving foster care. Promoting Safe and Stable Families The President's budget would fund the Promoting Safe and Stable Families program (Title IV-B, Subpart 2) at $505 million. This represents full funding, with $305 million in mandatory, or guaranteed, funding, and an additional $200 million in discretionary funds that require congressional approval. Children of Incarcerated Parents The Administration requests $50 million for a program to provide mentoring for children with incarcerated parents. This program was authorized in the Promoting Safe and Stable Families Amendment Act of 2001 (P.L. 107-133) and funded for the first time at $10 million in 2003. This is a competitive grant program providing grants up to $5 million each. Child Welfare Under the President's budget, funding for several other child welfare programs would continue at current levels, including child welfare services (Title IV-B, Subpart I), $292 million; Child Abuse Prevention and Treatment Act (CAPTA) state grants, $22 million; CAPTA discretionary grants, $26 million; adoption opportunities grants, $27 million; and adoption incentive payments to states, $43 million. Social Services Block Grant (Title XX) The President proposes to fund the Social Services Block Grant (SSBG) atits current level of $1.7 billion. The budget would also permanently restore the amount a state can transfer from the Temporary Assistance for Needy Families (TANF) program to SSBG to 10%. Currently, states are able to transfer only 4.25% from TANF to SSBG, but each year Congress temporarily allows states to transfer up to 10%. In FY 2000, $816 million of the SSBG funds were spent on services to children and youth, including adoption, foster care, child protection, independent living, and residential services. Child Care The Child Care and Development Fund (CCDF) includes both discretionary and mandatory child care dollars. The mandatory or guaranteed funding is now $2.7 billion. Of this, approximately $1.6 billion flows to the states by formula if a state puts up state dollars as a match. The remaining funds are provided to states without a required match. The President proposes no increase in discretionary child care funding for FY 2004. The Child Care Development Block Grant, the discretionary portion of the child care fund, is currently funded at $2.1 billion. In 2002, Congress was unable to complete action on legislation to reauthorize child care. The Administration's reauthorization proposal, as packaged along with TANF, proposes no increase in child care funding for the next five years. The Administration's proposal would continue discretionary funding at the current level of $2.1 billion and continue mandatory funding of $2.7 billion for five years. The demand for child care, however, continues to grow. In 1999, only 12% of all potentially eligible children were receiving CCDF subsidized child care. With tight state budgets, current child care funding at the state level could be forced to absorb cuts. The Administration's budget proposal, as documented by a recent analysis by the Center for Law and Social Policy and the Center on Budget and Policy Priorities, demonstrates that by the Administration's own projections, the number of children served through the child care block grant will decrease by 200,000 by 2007. The Administration also calls for eliminating funding for the Early Learning Fund. In FY 2002, this program was funded at $25 million. The program funds efforts to coordinate child care and other early education initiatives and has had the strong support of key members of Congress in recent years. Head Start The President's budget increases Head Start funding by $148 million, bringing total funding to $6.8 billion. This increase does not keep pace with inflation once funds are set aside for Early Head Start and services targeted to enhance the quality of programs. The Administration proposes to shift the emphasis of Head Start from children's social, emotional, and physical development to developing literacy. Reflecting that change, the Administration has proposed moving Head Start from the U.S. Department of Health and Human Services (HHS) to the U.S. Department of Education. This move would begin in 2004 and be completed in 2005. In another significant change, the President proposes to shift Head Start funding to the states. The budget indicates it would "provide states with the opportunity to exercise more control over Head Start, so that they can better coordinate with state preschool and other preparatory programs." The Administration's budget documents don't explain how Head Start funding would be administered under this proposal. Information from the Department of Education suggests that control of Head Start funding, which now flows directly from HHS to local programs, could go to states, allowing funds to be shifted away from the current population of children and families to subsidize a state's education or child care system. TANF The President's FY 2004 budget continues recommendations made in his FY 2003 budget concerning TANF reauthorization. Since Congress did not complete action on TANF reauthorization in 2002, it will consider that legislation again this year. The President's FY 2004 budget indicates the Administration will seek level funding for TANF, including a base amount of $16.5 billion in TANF funds to all 50 states, and approximately $319 million in supplemental grants to 17 states. The budget indicates the President's central focus will be on work requirements in the current TANF law and the need to promote marriage. Again, the Administration will propose increasing current work requirements to 40 hour per week, increasing the percentage of a state's cash assistance caseload who must be in work, and spending $1 billion over five years on marriage promotion. Fatherhood Initiatives The Administration proposes legislation to establish the Responsible Fatherhood and Healthy Marriages Program, funded at $20 million, with grants going to community- and faith-based programs to assist noncustodial fathers. Community- and Faith-Based Initiative Currently funded at $30 million, the Administration requests $100 million for the Compassion Capital Fund. These grants are used to finance startup costs for charitable organizations. Behavioral Health The President proposes $3.4 billion in FY 2004-a net increase of $204 million-for the Substance Abuse and Mental Health Services Administration (SAMHSA) to improve the quality and availability of prevention, early intervention, treatment, and rehabilitation services to reduce illness, death, disability, and the cost to society resulting from substance abuse and mental illness. Substance Abuse Meeting the treatment needs of people who are currently substance dependent is a major priority in the President's budget, and a new state voucher program is proposed. In FY 2004, new funds will be available for SAMHSA to administer this new drug and alcohol treatment voucher initiative. The purpose of the initiative would be to assist more individuals in obtaining drug and alcohol treatment services by increasing treatment capacity, and to enhance consumer choice by broadening the base of treatment providers to include proprietary and faith-based providers. The program's goal would be to expand treatment to an additional 100,000 individuals per year. SAMHSA's Center for Substance Abuse Treatment would administer the new program, which would provide $200 million per year for three years for competitive grants to 15-25 states. Funding for the Substance Abuse Performance Partnership Block Grant would be increased to $1.785 billion, after a cut of $22.2 million in FY 2003. The Substance Abuse Treatment Programs of Regional and National Significance would be increased to $557 million. The Substance Abuse Prevention Grants, however, would be cut an additional $50.3 million, for a total of $148.1 million for FY 2004. In all, substance abuse programs would receive federal funds of $2.49 billion, a $194 million increase, if the President's budget were approved as is. Abandoned Infants Assistance The Abandoned Infants Assistance Program would receive a small increase of $11,000 for FY 2004, for a total of $12.205 million. This program provides demonstration grants for services to infants and young children, many of whom are HIV infected or drug afflicted. These infants and young children are medically cleared for discharge from acute hospital settings but remain hospitalized due to a lack of appropriate out-of-home placement alternatives. Mental Health The President's budget includes $834 million for mental health activities for FY 2004. In FY 2003, the Children's Mental Health Services Program (CMHS) received $862.1 million. The Mental Health Services Block Grant for states to provide community based care for adults and children would be funded at $433 million. CMHS would receive an increase of $8 million, for a total of $107 million. SAMHSA's Mental Health Programs of Regional and National Significance would be reduced again to $212 million. In FY 2003, the program was funded at $246 million. Health Medicaid/SCHIP Medicaid provides a vital health care safety net in every state. It is a lifeline to health care for children, people with disabilities and chronic illness, and low-income elderly people. To broaden coverage to low-income children, Congress enacted the State Children's Health Insurance Program (SCHIP), which targets uninsured children under age 19 with family incomes below 200% of poverty who are not eligible for Medicaid or covered by private insurance. The President's budget request projects Medicaid mandatory spending to be $162 billion for FY 2003 and $176 billion for FY 2004. SCHIP funding for FY 2003 was $4.7 billion and is projected to be $5 billion in FY 2004. Medicaid Block Grant Proposal In his FY 2004 budget request, the President proposes a "sweeping new plan" to redesign the state-federal partnership that now exists in Medicaid and SCHIP. The future viability of these programs is at stake. States would be given the option of continuing their current Medicaid programs without additional federal financial assistance or transforming their Medicaid and SCHIPs into a single capped, consolidated block grant. The proposal does allow for state flexibility, with additional federal funding in the form of loans to states to assist in tight budget times, but only if they agree to a capped allotment. The proposal would provide states participating in the block grant with an additional $3.25 billion in FY 2004. A total of $12.7 billion in additional federal funds would be available for the first seven years. Unclear is whether the entire amount would be available if not all states participate. It also appears to be a loan that states would have to repay. In contrast, a Senate proposal to increase the federal share of Medicaid costs would provide states with a temporary increase of $10 billion through June 2005; a House proposal would provide states with $8 billion over 12 months. States would have to agree to accept two allotments or block grants-one for acute care and one for longterm care. A state would not be able to get federal matching funds for any expenditure that exceeded its allotment. The proposal would merge children's Medicaid and SCHIP coverage into one acute care block grant. All SCHIP enrollees-more than 4 million children since 1997-as well as all children currently covered by Medicaid could be affected by this proposal. In addition, 3.7 million parents receiving Medicaid as "optional" beneficiaries could be affected. Further, Medicaid currently requires Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) services for all children. States opting for the block grant could eliminate the protections of EPSDT for "optional" children. It is unclear whether EPSDT would be part of the "comprehensive" benefit package HHS would require for mandatory populations. Family Planning The Family Planning program (Title X) supports a network of more than 4,500 clinics nationwide serving 4.8 million people. Family Planning clinics provide access to an array of reproductive health and preventive services. In FY 2003, Title X was funded at $275 million. The FY 2004 budget request includes $265 million. Abstinence Education The President's budget includes a substantial increase in abstinence education for FY 2004, a total of $136 million. The Community-Based Abstinence Education program, administered through the Maternal and Child Health Block Grant's Special Projects program, would be funded at $73 million. In FY 2003, it was funded at $55 million. This program provides grants to public and private entities to develop and implement abstinence-only education programs for adolescents ages 12-18. Mandatory funding for the Abstinence Education Grants to states in the amount of $50 million would continue. This program provides grants to 59 states and territories to provide mentoring, counseling, and adult supervision targeted on those youth who are most at risk. In addition, the Adolescent Family Life Program would receive $12 million for abstinence-only activities, an increase of $3 million. Maternity Group Homes As it did last year, the Administration is asking for $10 million for Maternity Group Homes, more commonly referred to as Second Chance Homes. These homes are supervised, nurturing residences for teen mothers and their children. They provide the support teen mothers need to become self-sufficient and be good parents, with such services as child care, education, job training, counseling, and advice on parenting and lifeskills. No funding was provided for this program in FY 2003. Maternal and Child Health Title V of the Social Security Act, the Maternal and Child Health Services Block Grant, is increased by $19 million in the FY 2004 budget request, for a total of $751 million. Title V was funded at $732 million in FY 2003. The block grant supports federal and state partnerships that provide critical services to 27 million women and children, including direct health care services for children with special health care needs, promoting health and safety in child care settings, and enabling services such as home visiting and nutrition counseling. It also provides support for newborn screening, trauma care, and injury prevention. The budget request also proposes $99 million for the Healthy Start program, which supports community driven programs to reduce low birthweight and inadequate prenatal care, both conditions that contribute to infant mortality. HIV/AIDS The FY 2004 budget request includes $2.01 billion for the Ryan White HIV/AIDS program. In FY 2003, this program was funded at $2.031 billion. The Ryan White program provides HIV medical care and related supportive services to individuals with HIV/AIDS, including early intervention services to underserved communities. The budget also calls for a $100 million increase for the AIDS Drug Assistance Program, which would purchase medications for more than 9,000 additional people living with HIV/AIDS. National Violent Death Reporting System The Centers for Disease Control and Prevention's (CDC) Injury Prevention Center would be funded at $149 million. The National Violent Death Reporting System, which collects data on deaths and injuries caused by firearms, suicide, and child abuse, is listed as a priority program for FY 2004. Children with Disabilities Under the Individuals with Disabilities Education Act (IDEA), the Early Intervention Services Program (Part C) would be funded at $447 million in FY 2004. Under IDEA, the Department of Education works with states to ensure that children with disabilities receive an appropriate public education that includes preparing them for employment and independent living, and that all schools are held accountable for the educational results of children needing special education. CDC's Birth Defects, Developmental Disabilities, Disability, and Health Center would be funded at $87 million, a cut of $11.6 million from the FY 2003 funding level of $98.6 million. The center conducts a range of activities, including programs for preventing and treating autism, fetal alcohol syndrome, and spina bifida. Health Research The President's FY 2004 budget request includes $27.4 billion for the National Institutes of Health (NIH), the world's largest, most distinguished organization dedicated to maintaining and improving health through medical research. Of NIH's 27 institutes and centers, those of particular importance to children and their families in the child welfare system include the National Institute of Child Health and Human Development ($1.245 billion); the National Institute of Mental Health ($1.382 billion); the National Institute on Drug Abuse ($996 million); and the National Institute on Alcohol Abuse and Alcoholism ($430 million). Housing The President's budget would convert Section 8 housing vouchers for lowincome renters into a block grant program administered by the states. Project-based vouchers would continue to be administered by the U.S. Department of Housing and Urban Development. The budget's funding for these two programs and related activities in FY 2004 is $17.1 billion. The budget would eliminate the Hope VI program, which focuses on modernizing and revitalizing the housing stock. The proposed budget notes the Administration's intent to continue funding the Family Unification Program, which provides Section 8 vouchers to families with children who have been placed, or are at risk of placement, in foster care primarily because the family lacks adequate housing, and to youth transitioning out of foster care. Community Service The President's budget includes a $128 million increase, for a total of $554 million, to support 75,000 AmeriCorps members. AmeriCorps enables Americans of all backgrounds to serve in local communities through programs sponsored by nonprofit organizations. Youth Development The President's budget includes $600 million for the 21st Century Community Learning Centers program-$400 million less than the current level. This program provides opportunities for students and their families to continue learning new skills and discover new abilities after the school day has ended. Juvenile Justice Under the President's budget, funding would be eliminated for the Juvenile Accountability Block Grant (JABG). This program was created in the appropriations for the U.S. Departments of Commerce, Justice, and State for FY 1998 (Public Law 105-119) and was recently authorized as part of the U.S. Department of Justice legislation enacted November 2, 2002 (P.L. 107-273). JABG provides funds for implementing graduated sanctions programs, establishing or expanding substance abuse programs, and promoting mental health screening and treatment. The President's budget includes $77.3 million for the Justice Department's local delinquency prevention program (Title V). This is a reduction from approximately $95 million in recent years, but would be an increase from the $46.5 million in FY 2003.Title V is the only federal funding source, specifically targeted toward primary prevention, that provides funding for programs aimed at youth who have not had contact with law enforcement but who are at high risk for doing so. Also included in Public Law 107- 273 was a new Juvenile Delinquency Prevention Block Grant that combines a number of previously separate components of the federal juvenile justice system, including gang-free schools, state challenge activities, and mentoring. The President's budget includes $37.9 million for this new block grant. Points of Interest2003 National and State Fact Sheets Now OnlineThe 2003 state and national fact sheets are now available on CWLA's advocacy website. Available as an HTML document, the national fact sheet explores the status of America's children on indicators of abuse and neglect, health care, poverty, violence, and investments in children. The state fact sheets, available as 51 separate, downloadable PDF files, provide descriptive information on the condition of vulnerable children in all 50 states and the District of Columbia, using indicators of child protection, health, child care, education, and income support. To access the national fact sheet or any of the 51 individual state fact sheets, go to CWLA's Advocacy page, scroll down, and click on either "National Fact Sheet 2003" or "State Fact Sheets for 2003". Also available under "State Fact Sheets for 2003" is a link to archived state fact sheets for 2000-2002. Take Action!Contact the President and your U.S. Senators and Representative about key children's issues. Tell them how their actions impact the vulnerable children and families in your state and local community. Your voice does make a difference!President George W. Bush The President The White House 1600 Pennsylvania Avenue NW Washington DC 20500 Comment Line 202/456-1111 Fax 202/456-2461 Your U.S. Senators The Honorable (insert name) U.S. Senate Washington DC 20510 Your U.S. Representative The Honorable (insert name) U.S. House of Representatives Washington DC 20515 Call Your Member of Congress Call the U.S. Capitol switchboard at 202/244-3121 and ask for your senator's or representative's office. Contact by Email Use CWLA Kids' Advocate Online to e-mail your senators and representative about key children's issues with a CWLA issue-specific letter, or write your own letter. Access Kids' Advocate Online via the advocacy page of CWLA's website.  Back to top  Homepage
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