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Legislative Update
May 3, 2005
Congress Passes Final Budget Resolution
Late last week, Congress approved a final FY 2006 budget resolution. This resolution serves as a blueprint for Congressional budget decisions made this year. As passed, the resolution paves the way for future cuts to entitlement programs, additional tax cuts, and restrictions on FY 2006 spending.
Thanks to your advocacy efforts, along with others in the child welfare community, the budget resolution as passed is less severe than originally proposed. Your advocacy efforts will need to continue over the next several months as Congress passes legislation to implement the requirements set forth in the budget resolution.
Below is a general description of the budget resolution along with a question and answer description about what this budget resolution could mean for children, youth, and families.
Highlights of the FY 2006 Budget Resolution
- The budget resolution includes instructions that direct relevant congressional committees of the House and Senate to pass "reconciliation" legislation to reduce federal spending for entitlement programs by $35 billion. The House and Senate committees are instructed to pass legislation to achieve these entitlement cuts by September 16.
- $10 billion of these entitlement cuts must come from programs under the jurisdiction of the Senate Finance Committee. The budget resolution assumes that most of these cuts will come from the Medicaid program, but it is up to the Finance Committee to make the final decision about which programs to cut. The Finance Committee has jurisdiction over many programs that fund child welfare, including Title IV-E Foster Care and Adoption Assistance, SSBG, and TANF. Senator Gordon Smith (R-OR) led the effort to reduce the total amount of cuts intended for Medicaid from $16 billion to $10 billion. Part of that agreement included the creation of a new commission that would meet over the next few months to determine how to reduce federal Medicaid spending.
- The budget resolution caps domestic discretionary program funding at $843 billion. This cap would mean education, veteran's health, environment protection, housing, child care, and other child welfare discretionary programs could be cut. Under the budget resolution, discretionary spending (outside of the $439 billion designated for the defense budget) would be cut by $4 billion. The non-defense part of discretionary spending would be reduced from the 2005 level of $408 billion to $404 billion. The annual appropriations process for choosing which cuts to make will begin in May and must be completed by the end of September at the beginning of the next federal fiscal year.
- The budget resolution also calls for $106 billion in additional tax cuts. Of this total, $70 billion would be enacted through a second reconciliation bill. Committees with jurisdiction over tax issues would have to pass legislation to implement these cuts by September 23. The budget resolution also allows for an additional $36 billion in tax cuts outside of the $70 billion enacted through a reconciliation bill. These $36 billion in tax cuts would have to move without the limits and protection of a reconciliation process.
Next Steps
In the coming weeks, we will be providing you with greater detail as the reconciliation and appropriations processes move forward. In the meantime, please continue to use whatever opportunity you can to let members of congress and their staff know that any proposals to cut federal assistance for child welfare should be rejected.
Again, thank you for your continued advocacy efforts. To find out how your U.S. Senators voted, click here.
Message
- Reject any budget proposal that could lead to a cap or block grant of Title IV-E Foster Care and Adoption Assistance.
- Support a real reform of the child welfare system that provides more funding for prevention and support services while fully funding key programs, including adoption assistance and foster care.
Background Questions and Answers
Q: Now that Congress has agreed to a budget resolution, what happens next?
A: The budget resolution sets in motion the reconciliation process. This requires Congress to pass legislation to cut federal spending for entitlement programs and to pass tax cuts. Legislation passed under reconciliation rules present special challenges to advocates since they are subject to special rules in the Senate that limit both the number of amendments that can be considered and the duration of the debate on the bills. Reconciliation bills can pass in the Senate with just 51 votes, instead of the 60 votes needed to end a filibuster. Committees with jurisdiction over entitlement programs must pass legislation by September 16. Committees with jurisdiction over taxes must pass legislation by September 23. The Congress will then pass one reconciliation bill that enacts cuts in several programs. Congress will also pass a second reconciliation that will enact additional tax cuts of $70 billion.
Q. Since the budget resolution requires cuts of $10 billion to programs under the jurisdiction of the Senate Finance Committee and the understanding is that Medicaid will absorb these cuts, does that mean Title IV-E Foster Care and Adoption Assistance and any other mandatory funding for child welfare will not be cut?
A. No. Even though there is an understanding or assumption that the Senate Finance Committee will make $10 billion in entitlement cuts in the Medicaid program, the budget resolution cannot require authorizing committees to meet their target cuts with any particular policy changes. While the budget resolution does bind the assigned committees to make the level of cuts directed, the committees with jurisdiction have discretion to pass legislation with whatever cuts they decide upon. It is possible that the Senate Finance Committee will decide to make cuts in other programs along with, or instead of, cuts to Medicaid.
Q. Since there is a reduced level of cuts in the final budget resolution and since Medicaid seems targeted for most if not all cuts, is it still possible that Title IV-E Foster Care and Adoption Assistance will be converted into some form of block grant and included as part of the reconciliation bill?
A. It is still possible to include a major change such as a block grant or optional block grant into a reconciliation bill. Although reconciliation is intended as a way to change the amount of revenues and spending, it has been used to enact major laws. The 1996 reconciliation act was used to convert AFDC into the block grant known as Temporary Assistance for Needy Families (TANF). The 1997 reconciliation act included an agreement to balance the federal budget within a few years and it also created Title XXI of the Social Security Act, the State Children's Health Insurance Program (SCHIP), now available in all fifty states. Overall the legislation must achieve savings.
Federal spending for foster care and adoption assistance could be reduced in the reconciliation process by:
- Capping federal funding for Title IV-E Foster Care and Adoption Assistance.
- Repealing the 2003 Rosales v. Thompson judicial decision that has resulted in more children becoming eligible for federal foster care assistance. For more information about the Rosales decision, see http://www.cwla.org/advocacy/rosales.htm.
- Restricting the use of Title IV-E administrative funds that currently support services and supports for the child welfare workforce.
Q. Is our work done as far as protecting child welfare programs from budget cuts?
A. No, the budget debate is a long process and the coming months will still brings changes. At the same time, preventing cuts is only one part of our work. We also need to support comprehensive reform of the child welfare system.
Q. Will Congress increase funding for non-entitlement programs that support child welfare this year?
A. While there has been much attention to ensuring that federal spending for important child welfare entitlement programs are not cut, discretionary programs also face very serious challenges. The budget resolution allows for $843 billion in discretionary spending. While that sounds like a great deal, it is not. That total includes all of the Defense Department (outside of the cost of the war), all of the State Department, all of Homeland Security, and everything spent on education, child care, the environment, justice, commerce, veterans, and many other programs. $843 billion represents what is being spent this year, without an adjustment for programs and population changes. In other words, this new level of spending will not keep pace with annual increased demands.
More Information
We hope this information is useful. Please share with others and your networks. For more information, contact Liz Meitner, CWLA Vice President of Government Affairs, at emeitner@cwla.org or 202-942-0257.
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