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

   
   
Vol. 18, Issue 42: 10/31/2005   
Headlines

House Ways and Means Committee Cuts $600 Million in IV-E Foster Care

Additional Cuts in the Ways and Means Bill and TANF Reauthorization

Senate Adopts Reconciliation, Child Welfare Cuts and TANF Reauthorization Not Included

Next Steps for Reconciliation

Senate Works on HHS Appropriations

Key Upcoming Dates for Congress



House Ways and Means Committee Cuts $600 Million in IV-E Foster Care

On October 26, the House Ways and Means Committee voted 22-17 for a $9 billion package of budget cuts, including at least $600 million in Title IV-E foster care cuts. The vote was along party lines, with two members absent. For a list of Ways and Means Committee members, go to http://waysandmeans.house.gov.

The bill would repeal the Rosales v. Thompson decision by the Ninth Circuit Court of Appeals, which has jurisdiction in Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Washington, Guam, and the Mariana Island. More than 5,000 children in foster kinship care would be affected by the repeal--more than 4,000 in California alone. The repeal of Rosales would result in cuts of just under $400 million over the next five years.

The bill would also enacts a proposed regulation to restrict Title IV-E administrative funding for foster care "candidates" and children placed into kinship homes. The proposed regulation was a result of a guidance, PA 01-02, issued by the Bush administration in July 2001 that also tried to restrict such candidate kinship funding; but that guidance ran into heavy opposition.

Committee members defending the cut indicating that the repeal of Rosales merely maintains "traditional" eligibility requirements under Title IV-E foster care. Represenative Nancy Johnson (R-CT) noted that children would still be protected, noting the federal government subsidized only children who were poor. She also pointed out that if someone like Donald Trump abused his kids, they would still be protected by the state, but the federal government would not share in that cost.

The Rosales decision has the effect of assisting kinship placements. Ms. Rosales is in fact a grandmother who was denied a Title IV-E subsidy because the grandchild she was caring for was not eligible in the home from which he was removed, although he was eligible from Ms. Rosales's home. The court ruled the way the Title IV-E law was written based eligibility on whether the child was eligible based on the home he had lived in the previous six months. Under that decision, Ms. Rosales's grandson and others like him would be eligible for federal support.

Several states outside of the Ninth Circuit have also filed to expand their state plans in the same way. A recent federal court ruling in Georgia aligned adoption subsidy eligibility on the Rosales ruling. Although the Rosales ruling was issued in March 2003, the federal government has never challenged it by taking it to the U.S. Supreme Court. Instead, it instructed the remaining states to amendment their state Title IV-E plans in the same way.

For more information on Rosales v. Thompson, visit http://www.cwla.org/advocacy/rosales.htm.

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Additional Cuts in the Ways and Means Bill and TANF Reauthorization

The package of cuts in the Ways and Means bill also includes cuts to Supplemental Security Income (SSI) and the child support system, and a repeal of a trade bill. Although total cuts equal $9 billion, the net cut is $8 billion, with $1 billion used for reauthorization of the TANF and child care laws. The bill cuts $3.5 billion from state child support systems by reducing the federal match. Currently, the match is set at 66%; the bill reduces it to 50%. The reduction in funding is expected to result in less child support payments being collected--and therefore less support for these families. The Congressional Budget Office has calculated that as a result of this cut in administrative funding, $21.3 billion in non-TANF, family child support will be lost over the next 10 years. The total rises to $24.1 billion when TANF families are included in the calculation. The SSI cuts total just under $500 million.

The bill also rolls in a TANF and child care reauthorization. The bill is similar to previous House versions of the TANF and child care reauthorizations but includes less funding. The child care funding included in previous House bills provided a first-year funding increase of only $200 million, calculated as a $1 billion increase over five years. The new bill provides only a $50 million increase in the first year, rising to $200 million by year five. The total increase is calculated as costing $500 million. The current child care block grant totals $4.8 billion.

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Senate Adopts Reconciliation, Child Welfare Cuts and TANF Reauthorization Not Included

The Senate Finance Committee reported its budget reconciliation package to the Senate Budget Committee on October 25. The bill saves $10.6 billion, with $5.7 billion coming from Medicare, and the remainder coming from Medicaid.

The Finance Committee was instructed to cut $10 billion from entitlement programs through a reconciliation package that is usually reserved as a deficit reduction measure. Original instruction in this spring's budget resolution presumed that all of the savings would come directly from Medicaid. Senators Gordon Smith (R-OR) and Olympia Snowe (R-ME) had both raised objections to taking all the cuts from Medicaid. The final package includes measures that further restrict targeted case management (TCM) and asset transfers in qualifying for long-term care under Medicaid. It also changes the rebate rate for pharmaceutical drugs and eliminates a fund that was to subsidize providers and insurers to encourage them to offer the new Medicare prescription drug policy, something critics believe is now unnecessary.

On the issue of TCM, CWLA has advocated vigorously to avoid inclusion of the Administration's August recommendations to restrict Medicaid spending for the foster care population. Clarification of TCM was offered in the President's FY 2006 budget proposal and was followed up by legislative language in August. That legislation would have virtually eliminated TCM for children in foster care. The TCM language included in the Senate reconciliation bill rebuffs the Administration's language and still allows for some traditional TCM foster care services. Final legislative language is still being written, however, and both that language and the report that describes the committee's intent will go a long way in determining how the Administration will implement this service and how broadly state child welfare systems will be able to use it. The TCM provisions are calculated to reduce spending by $760 million.

The Senate Finance reconciliation legislation also includes the Family Opportunity Act, which would extend Medicaid coverage to provide for disabled children if parents' income exceeds current Medicaid eligibility rates. CWLA has supported this bill, sponsored by Finance Chair Charles Grassley (R-IA).

Also included is a $1.8 billion health package for Hurricane Katrina survivors. Grassley and Ranking Member Max Baucus (D-MT) had originally introduced S. 1716, the Emergency Health Care Act, to provide universal Medicaid coverage for all Katrina victims, regardless of where they relocated, and increase the FMAP rate to 100% for states that are providing assistance to them. S. 1716, was blocked by opposition from the White House and other members of the Senate and led to a watered-down version that only provides Katrina coverage to selective counties/parishes in Alabama, Louisiana, and Mississippi.

Grassley noted the contentious nature of the package and voiced strong displeasure that further Katrina coverage was not able to pass Senate approval. Committee Democrats offered a series of amendments to restore some of slated cuts, but all were defeated by strict party-line votes. The final package was adopted by a party-line vote of 11-9, with Senator Jim Jeffords (I-VT) voting with Democrats.

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Next Steps for Reconciliation

Now that the committees have assembled their budget cuts, their work is sent to the respective House and Senate budget committees. The Senate Budget Committee has already acted in formal session. The Senate reconciliation bill has not been assigned a bill number yet, but it actually exceeds its target of cutting programs by $39 billion, instead of the required $35 billion. The Senate is moving fast, and plans are to start debate on October 31, with the debate and final vote to be finished by the end of the week.

The House is working on bigger cuts of $50 billion. The House Energy and Commerce Committee was still assembling its bill late Thursday. The House may act the week after the Senate action. After the House and Senate pass their respective bills, a conference committee will iron out differences and create a final bill, which will be voted on again. Significant differences between the House and Senate bills include the size of the cuts, the reauthorization of TANF and child care, and the type of cuts, including child welfare and several other programs. After negotiating a final package of cuts, Congress will proceed to cut taxes by $70 billion in a separate bill.

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Senate Works on HHS Appropriations

The Senate started debate on the appropriations bill for the U.S. Departments of Labor, Health and Human Services, and Education (Labor-HHS-Education). The bill (Senate substitute for H.R. 3010) was the subject of several amendments, but the funding numbers did not change significantly from the original committee proposal.

Under the bill, the Promoting Safe and Stable Families program would be funded at $395 million, a cut of nearly $9 million. Child care funding would be frozen at a little more than $2 billion. Head Start would be funded at $6.8 billion; although an increase of $30 million, it will result in the loss of more Head Start slots due to inflation. The Child Abuse Prevention and Treatment Act is also frozen, at $27 million.

For a listing of key children's programs, go www.cwla.org/advocacy/budgetdetails06.htm.

Whatever the final result of the Labor-HHS-Education bill, the final numbers are likely to be reduced further as various proposals in the House and Senate, and by the President, would impose an across-the-board cut of 2%-5%.

The fiscal year started October 1; a continuing resolution is funding departments through November 18, 2005.

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Key Upcoming Dates for Congress

October 31: Senate scheduled to take up reconciliation bill

First Week of November: House scheduled to take up reconciliation bill

Early November (Approximate): Deadline for tax-writing committees to adopt tax cuts of $70 billion

November 1: Presidential Commission on Tax Reform releases recommendations

November 18: FY 2006 Continuing Resolution ends


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