Children's Monitor Online
A Public Policy Update from the Child Welfare League of America

   
   
Vol. 18, Issue 30: 8/8/2005   
Headlines

Special Introduction

Key Decisions on Reconciliation Likely Soon

Possible Changes to Title IV-E Foster Care and Adoption Assistance Under Reconciliation

The Budget Reconciliation Process

Take Action

Key Upcoming Dates for Congress



Special Introduction

Since Congress is in recess until after Labor Day, the August editions of the Children's Monitor will highlight the potential impact of the FY 2006 budget reconciliation decisions on child welfare. This week's edition focuses on possible changes to the Title IV-E Foster Care and Adoption Assistance Program. Next week's edition will focus on potential changes under consideration for Medicaid.

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Key Decisions on Reconciliation Likely Soon

Congress passed an FY 2006 budget resolution earlier this year that requires Congress to prepare reconciliation legislation by September 16, 2005. The FY 2006 budget resolution specifically calls on Congress to reduce federal spending on entitlement programs by $35 billion over five years.

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Possible Changes to Title IV-E Foster Care and Adoption Assistance Under Reconciliation

Changes to the Title IV-E Foster Care and Adoption Assistance may be included as part of Congress's effort to reduce overall entitlement spending. Of the total entitlement reduction of $35 billion Congress is instructed to make, presumably $10 billion would be cut from the Medicaid program. Although this budget resolution does not specifically call for a cap, or reduction in federal foster or adoption assistance, the threat to reduce or cap funding levels is still present.

The budget resolution passed by Congress earlier this year gives specific direction to two key congressional committees with jurisdiction over child welfare--the Senate Finance Committee and the House Ways and Means Committee--to put together legislation by September 16 to reduce federal spending for entitlement programs.

The Senate Finance Committee must cut federal spending by $11 billion. The committee is expected to cut $10 billion from the Medicaid, but this is not certain, as all programs under its jurisdiction are open for consideration. The House Ways and Means Committee, which does not have jurisdiction over Medicaid, is required to make $1 billion in cuts. In the House, the Commerce and Energy Committee has authority over Medicaid, and they will determine the fate of that program.

Optional Block Grant
Congress may consider several changes to Title IV-E Foster Care and Adoption Assistance. One change may be to adopt a White House proposal to allow states to receive a capped or fixed amount of Title IV-E maintenance, administration, or training funds. The Title IV-E Foster Care and Adoption program is currently an entitlement, which means it's 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. The current financial eligibility criteria for Title IV-E Foster Care and Adoption assistance are linked to states' 1996 AFDC standards.

Under the White House proposal, states would receive annual grants over a locked period for five years. A state would receive funding equal to the projected federal foster care expenditures from 2006 through 2011. States would be allowed to draw up to 20% of this five-year total in any one year. States could roll over unused funds into the next year. States that didn't choose this option would continue to receive this set funding for a period of five years.

Once a state chooses the option, it could not opt-out during the five-year period. If a state experienced an unusual increase in their foster care population, it could draw funds from an emergency fund under the Temporary Assistance For Needy Families (TANF) block grant. To qualify for this relief, a state would have to meet a national and state target increase in foster care caseloads.

CWLA opposes including this option in the budget reconciliation bill as a way to reduce federal spending or as a way to address the comprehensive reforms necessary for child welfare financing. If Congress were to include this proposal in the budget reconciliation bill, it would forestall future congressional action necessry to address the comprehensive improvements needed.

Rosales v. Thompson
Congress may include in the budget reconciliation bill a White House proposal to overturn a judicial decision that resulted in more children becoming eligible for Title IV-E Foster Care and Adoption Assistance.

The Rosales v. Thompson decision was issued by the U.S. Court of Appeals, Ninth Circuit, which found the U.S. Department of Health and Human Services' (HHS) interpretation of the federal Title IV-E Foster Care law denied foster care benefits to some children who should qualify. HHS's policy required that states must determine Title IV-E eligibility based on the home from which the child is legally removed--typically the child's parent(s). The Rosales decision allows states in the Ninth Judicial Circuit to base Title IV-E eligibility for a child on the last home in which a child resided before formal placement into foster care. Frequently, a child is living with grandparents or other kinship placement just before placement in foster care.

The decision covers Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington State. Since the Rosales decision, the affected states have amended their state plans and are basing Title IV-E claims on the Rosales criteria. According to White House projections, repeal of the Rosales decision would reduce federal spending on foster care by $84 million in FY 2006, and an additional $399 million over the next five years.

CWLA opposes including this option in the budget reconciliation bill as way to reduce federal spending, as it will remove eligible children from the rolls.

Title IV-E Administration
Congress may also change the ways states receive reimbursements under Title IV-E for administrative costs. Since these costs have been increasing in recent years, some legislative proposals have suggested capping, or limiting, Title IV-E administrative funds.

Although many people envision Title IV-E administrative costs as paying for the cost of office space and utilities, it is in fact much more than that. Title IV-E Administration provides funding for the hours of court time caseworkers spend preparing for attending court hearings related to children in foster care; the time spent meeting with families and children to discuss what needs to be done to achieve permanency for the children; time spent helping foster parents cope with the difficulties of their children; advocacy for children in other systems, such as the local schools; and referring children to needed services not provided by the child welfare agency.

CWLA opposes including this option in the budget reconciliation bill as a way to reduce federal spending. Capping Title IV-E Administrative funds would create added pressure for states to fund these services.

Title IV-E Training
Congress may also change the way states receive reimbursements under Title IV-E for training costs. Congress may adopt a recent suggestion to lower the federal reimbursement from 75% to the administrative matching rate of 50%.

CWLA opposes including this option in the budget reconciliation bill as a way to reduce federal spending. Capping Title IV-E Training funds would limit a state's ability to provide dedicated funding to the needed workforce training supports.

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The Budget Reconciliation Process

Congress created the reconciliation process in 1974. Its main purpose is to make it easy for Congress to pass legislation that reduces federal spending. Congress has not used the budget reconciliation process since 1997, when a balanced budget agreement was enacted. Reconciliation bills can also address tax issues and could require caps on annual appropriations bills.

Budget reconciliation bills make it easy to reduce the federal spending because congressional rules prescribe that debate on the bill is strictly limited and only a few amendments to the bill can be offered. In the Senate, all debate on the omnibus measure is limited to 20 hours per party, and individual amendments cannot be debated for more than 2 hours. The strict time frame means the legislation cannot be filibustered. Budget reconciliation legislation requires only a simple majority to pass in the House, and 50 votes plus a tie-breaking vote of the Vice President to pass in the Senate.

Budget reconciliation is a two-stage process that begins with the passage of a congressional budget resolution in the spring. This legislation sets a targeted amount of federal spending cuts and includes instructions to specific congressional committees to make these decision by a certain date. This year's budget resolution calls for $35 billion in cuts over five years.

Congress is currently in the midst of the next stage, where each of the instructed committees prepares legislation to achieve these federal savings. The committees then send their proposals to the respective Senate and House Budget Committees. These committees will then roll the combined recommendations from all the committees into one bill that is voted on in the House and Senate. If the Senate-passed bill differs from the House-passed bill, the differences are resolved in a Senate-House conference committee. Both the Senate and House then vote on an identical bill.

This year, Congress has three reconciliation bills. On September 16, key committees are to report their decisions about how to reduce federal spending on entitlement programs by $35 billion. A week later, the tax-writing committees are to report tax cuts of $70 billion. Later, a reconciliation bill will be crafted to raise the debt ceiling. This is required each time the national debt has risen high enough that the federal government will run out of authority to continue spending that adds to the federal deficit.

Although the goal of reconciliation is to reduce spending, it is also a vehicle to limit debate and craft controversial legislation that might otherwise get stalled. A key example of this was the 1996 Personal Responsibility and Work Opportunity Reconciliation Act. That reconciliation bill ended the individual entitlement to cash assistance under AFDC and created the TANF block grant. Although key parts of TANF, such as time limits and work requirements, were in violation of the Senate's rule, those provisions remained in the bill. Other than Social Security, any federally funded program can be changed significantly as part of a budget reconciliation process.

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Take Action

August is a good time to contact members of Congress to let them know that budget reconciliation decisions should not reduce federal supports for abused and neglected children. Many members of Congress conduct town meetings during this time. Information about local congressional activity can be found by contacting your Senators' or Representative's local district offices, or from the member of Congress's website. These are great opportunities to make your views known.

All members of Congress will have an opportunity to vote on the final budget reconciliation legislation. Members of the Senate Finance Committee and the House Ways and Means Committee are especially key, since those committee members and are working to assemble recommendations that will affect child welfare. Members of the Senate Finance Committee are listed at: http://finance.senate.gov/sitepages/committee.htm; members of the House Ways and Means Committee are at: http://waysandmeans.house.gov.

You can also go to www.cwla.org/advocacy for more information.

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Key Upcoming Dates for Congress

July 30-September 5: Summer Congressional Recess

September 16: Deadline for assigned committees to adopt $35 billion in cuts to mandatory programs for budget reconciliation bill

September 23: Deadline for tax-writing committees to adopt tax cuts of $70 billion

October 1: Start of federal fiscal year


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