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

   
   
Vol. 18, Issue 46: 11/28/2005   
Headlines

House Passes Federal Youth Coordination Act

Budget Reconciliation: Next Steps

House-Passed Budget Reconciliation Bill Cuts $600 Million in Foster Care

TANF and Child Care Reauthorizations in House Budget Bill

Budget Differences on Child Support

Budget Differences on Medicaid Changes

Senate-Passed Tax Cut Includes Charitable Reforms

Child Poverty Amendment Fails on Senate Floor

Key Upcoming Dates for Congress



House Passes Federal Youth Coordination Act

The U.S. House of Representatives passed the Federal Youth Coordination Act (H.R. 856) on November 15 by a vote of 353 to 62. The Federal Youth Coordination Act establishes the Federal Youth Development Council, made up of 16 members, including federal agency secretaries, youth, and representatives from youth-serving nonprofits and faith-based organizations.

Duties of the Council include ensuring communication among federal agencies serving youth, assessing youth needs and the quantity and quality of federal supports to help meet these needs, setting quantifiable goals and objectives for federal youth programs, and developing a plan to reach these goals.

The Council will provide an annual report to the President and Congress that will include an assessment of the needs and well-being of youth, recommendations for better integration and coordination of federal, state, and local policies affecting youth, and a report on the Councilís work to facilitate interagency collaboration. The Senate is expected to consider this legislation soon.

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Budget Reconciliation: Next Steps

Prior to the Thanksgiving recess, both the Senate and House passed their own versions of a budget reconciliation bill designed to reduce federal spending for entitlement programs. Since there are many differences between the House and Senate bills, members of a Senate-House conference committee will be appointed after Thanksgiving to craft a final compromise reconciliation bill. Both the Senate and House will then vote on the final bill. The conference committee will need to reconcile the differences between the House bill, that makes $50 billion in program cuts, and the Senate bill which cuts $35 billion.

Many other differences between the House and Senate bills will need to be resolved. As an example, the House bill cuts foster care by $600 million and the Senate bill does not. The conference committee will consider this difference when crafting a final reconciliation bill. Additionally, the House bill cuts Medicaid by nearly $12 billion, while the Senate bill reduces federal spending for Medicaid by just under $5 billion. The Senate bill includes cuts to Medicare by eliminating a subsidy available with the new prescription drug program, but the House bill does not include any changes to Medicare. The House bill cuts food stamps and child support, but the Senate bill makes no changes to those programs. Unlike the Senate bill, the House bill includes a reauthorization of the TANF and Child Care programs.

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House-Passed Budget Reconciliation Bill Cuts $600 Million in Foster Care

A major decision during the final budget reconciliation negotiations will be whether to include the House provisions that cut Title IV-E foster care funding.

The House bill reduces federal spending on foster care by $600 million by repealing a Ninth Circuit Court of Appeals ruling, Rosales v. Thompson, that has allowed more abused and neglected children living with relatives to receive Title IV-E federal foster care support. If the final bill included this provision, the nine states and two territories directly impacted by the Ninth Circuit's decision (Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Washington, Guam, and the Mariana Islands) estimate that tens of thousands of children living with relatives would lose federal foster care assistance. In California alone, it is estimated more than 5,000 children would lose federal support. Ultimately, the ruling may also affect children in other states.

The House bill also implements a White House rule--initially offered in 2001--that was blocked at that time due to protests from child advocates. This proposal reduces federal funding for services to kids living with their grandparents and other relatives by limiting Title IV-E administrative funds to support only licensed foster care placements. This represents a reversal of longstanding federal policy to encourage the placement of children with relatives whenever possible. The bill also limits Title IV-E administrative funding for services to kids who are considered likely "candidates" for foster care--in other words, kids who could be prevented from going into foster care. The bill also limits Title IV-E administrative funding for services to kids leaving a non-child welfare facility, such as a hospital, psychiatric center, crisis center, or juvenile facility, and being moved into foster care.

If adopted in the final budget bill, the foster care cuts could turn out to be larger than estimated by the House. The House estimates a $577 million cut in federal Title IV-E foster care funding. Cost estimates done earlier this year by the White House, however, project cuts of over $450 million for reducing Title IV-E administrative funding for foster care candidates and others, and nearly $400 million for overturning the Rosales judicial decision. The House bill estimates that repealing the Rosales decision would affect 4,000 children per month. That estimate appears low, since California has indicated that more than 5,000 children in that state alone would be affected by such a cut.

For a more detailed description of the House child welfare provisions, visit our website.

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TANF and Child Care Reauthorizations in House Budget Bill

Another major decision that will be made in the final negotiations on budget reconciliation is whether to include the House reconciliation billís provisions reauthorizing the TANF and Child Care programs. The Senate, however, decided not to include these measures in the budget reconciliation bill, but is continuing to pursue TANF and Child Care bills as separate legislation.

If the budget reconciliation Senate-House conference committee decides to include TANF and Child Care in the final budget bill, they will have to negotiate the significant differences between the provisions in the House budget bill and the Senate Finance Committee-approved TANF and Child Care legislation (S. 667).

One of the biggest differences will be to resolve the amount of additional child care funding provided. The legislation approved by the Senate Finance Committee includes an approximate $6 billion increase in child care funding. The federal government currently provides $4.8 billion annually to states to subsidize child care. This total is a combination of mandatory federal child care funding (authorized in the TANF legislation) and additional funding that requires the approval of Congress each year. One reason the full Senate has not yet considered the Committee-passed bill is because of some opposition to the increased funding provided in the bill. The White House has steadfastly opposed increases in child care funding. Meanwhile, the House budget bill includes only a one-year child care funding increase of $50 million in the first year and $500 million over five years.

Other major differences between the Senate Committee-passed bill and the House budget bill is the amount of additional work requirements that would be required for TANF recipients. The House budget bill requires TANF recipients to work 40 hours, an increase over the current 30 hours per week requirement (with reduced hours for mothers with children under six years of age). The Senate Finance Committee bill provides only some limited increase in work requirements.

Another difference between the House and Senate bills is the requirement pertaining to how much of a stateís TANF cash assistance caseload must meet the minimum work requirements. The House budget bill would reward states only if they continue to reduce their caseloads, while the Senate bill would base incentives to states on how many adults leave cash assistance for paying jobs.

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Budget Differences on Child Support

The budget conference committee must also resolve the differences between the House budget bill that would reduce child support payments by $24 billion to be collected over the next 10 years. Approximately $3 billion of the child support collected would have supported families receiving TANF. The Senate budget bill does not include child support cuts in either their TANF reauthorization or in the budget bill. In the past, child support has had strong bipartisan agreement because it is seen as cost effective and positive for families.

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Budget Differences on Medicaid Changes

Significant differences between the House and Senate budget bills would also affect Medicaid. The House bill cuts Medicaid by nearly $12 billion, while the Senate bill reduces federal spending for Medicaid by just under $5 billion. The Senate bill includes cuts to Medicaid that are not intended to affect Medicaid recipients. The Senate bills also cuts funding for Medicare by eliminating a subsidy available with the new prescription drug program, but the House bill does not include any changes to the Medicare program.

The House bill includes the identical provisions found in the Senate bill that clarify the use of Medicaid targeted case management (TCM) for children in child welfare. The bill allows TCM to be used for: assessment of eligible individuals to determine service needs by taking a client history, identifying an individual's needs, and completing related documentation; development of a specific care plan based on the information collected through an assessment that specifies the goals and actions to address the individual's needs; referral and related activities to help an individual obtain needed services; and monitoring and follow-up activities, including activities and contacts to ensure the care plan is effectively implemented and adequately addresses the individual's needs. The bill specifies that TCM benefits for children in foster care would not cover: research gathering and completion of required foster care documentation; assessing adoption placements; recruiting or interviewing potential foster parents; serving legal papers; conducting home investigations; providing transportation; administering foster care subsidies; and making placement arrangements.

Proponents of the House Medicaid package suggest that the bill does not cut federal spending for Medicaid but merely reduces the rate of growth of the program. Medicaidís growth rate is affected by the increasing number of people eligible, as well as increasing health care costs that are rising higher than the rate of inflation. Recent data indicate that Medicaid is now providing health care for people who have been uninsured in past years, a trend that could increase if more employers eliminate health insurance benefits. The provision in the House bill to reduce Medicaidís growth rate from 7.3% to 7% would be very significant over the next five years.

The House Medicaid cuts would have a devastating impact on individuals and low-income families. The House bill would give states the option to introduce premiums for persons who have incomes at or above 100% of the poverty level. This option may result in shifting health care costs to people who canít afford it. The House bill would also impose a new series of co-payments on non-mandatory persons eligible for Medicaid of up to 5% of the beneficiary's annual income. Services for foster children are exempt from this provision. The House bill also includes a limitation on the Medicaid optional benefit packages and alters the current look-back provision for asset transfers from 3 to 5 years to gain Medicaid eligibility.

Representative John Dingell (D-MI), Ranking Democratic Member of the House Energy and Commerce Committee, circulated a letter to his colleagues documenting that 75% of the Medicaid savings in the House budget bill will come directly from provisions that impact beneficiaries. That estimate includes over 3 million children who will face cost-sharing charges by 2010, increasing to 5.5 million by 2015. The new provision regarding Medicaid premiums has the potential to force 70,000 enrollees off Medicaid by the year 2010. Lost services would include options for mental health service, dental care, vision care, and certain types of therapies. These new provisions also restrict the amount, duration, and scope of services that a beneficiary can receive, often limiting service time to only 30 days.

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Senate-Passed Tax Cut Includes Charitable Reforms

The Senate approved legislation (S. 2020) November 17 that makes $60 billion in tax cuts. The bill passed by a vote of 64 to 33. The House had intended to also pass their tax bill that cuts taxes by $70 billion, but that effort has been postponed. There was speculation that it would be difficult to pass a $70 billion tax cut bill immediately after passing budget reconciliation legislation that cuts $50 billion in important programs such as foster care, Medicaid, and food stamps. The House is expected to adopt their tax cut bill in early December.

The Senate tax bill contains a number of new accountability requirements for charitable organizations. Some of the suggestions made by the Panel on the Nonprofit Sector, an umbrella group of non-profit organizations, are included in the bill. Their recommendations focused on the individual use of charitable giving for personal gain, and excessive tax deductions

The Senate bill allows a charitable deduction for total cash contributions over $210 for single filers and a $420 deduction for joint filers if the taxpayer does not itemize deductions on his or her income taxes. Tax free distributions from IRAs made directly to charitable organizations is permitted under the Senate bill for taxpayers over age 70. Donations of scholarly, art, literary, or music compositions would receive enhanced deductions under the Senate bill.

The Senate tax bill also calls for changes to donor advised funds, including the creation of a definition for donor advised funds, and suggests that the Secretary of the U.S. Treasury will monitor the actions of the corresponding sponsor organizations. Charitable reform provisions included in the bill also include tax shelter transaction involvement penalties, more stringent penalties for excess benefit and self-dealing transactions, and restrictions on credit counseling organizations.

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Child Poverty Amendment Fails on Senate Floor

CWLA endorsed Senator Edward Kennedyís (D-MA) efforts to amend the Senate tax bill. The amendment failed by a vote of 62 to 36. The "End Child Poverty Act" amendment sets a national goal of reducing child poverty by half within a decade, and to eliminate it entirely as soon as possible after that. The amendment would have established a Child Poverty Elimination Board to make recommendations to the President on how best to meet this commitment to children. The costs would have been offset with a 1% surtax on income over $1 million to be invested in a Child Poverty Elimination Fund.

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Key Upcoming Dates for Congress

December 12: Senate reconvenes
December 5: House reconvenes
December 17: FY 2006 Continuing Resolution ends
Before Christmas: Target adjournment for First Session of 109th Congress


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