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Legislative Update - No Caps On Kids!
September 16, 2005
Reconciliation Delayed--Thank You for Your Efforts
Earlier this week, congressional leaders agreed to delay temporarily, but not suspend, the reconciliation process. In part, they were responding to pressure from those, like many of you, who called and argued that it is wrong to cut vital human service programs at a time of such need. It is still the intent of congressional leadership, however, to pursue program cuts of $35 billion. Your advocacy, therefore, is still needed over the next few weeks.
As you recall, September 16 was the deadline for Congress to craft legislation that would cut human service programs by $35 billion. This is still expected to include at least $10 billion from Medicaid and other programs, including child welfare. That action was to be followed one week later by a package of $70 billion in tax cuts. The new deadline for authorizing committees to report their recommendations is set for the week of October 17. The Budget Committees will act on these recommendations the following week.
What We Can Expect Next:
While reconciliation has been delayed, key members of House and Senate leadership are still arguing for cuts of $35 billion in human service programs, including Medicaid and perhaps Title IV-E Foster Care and Adoption Assistance**, along with a package of tax cuts of $70 billion. Since coming back into session on September 6, congressional attention has been on how to provide relief to states directly hit by Hurricane Katrina, in addition to helping states indirectly effected by its aftermath. Congressional leaders envision that once they have dealt with a series of supplemental appropriations and temporary changes to programs such as Medicaid, child welfare, TANF, education, and housing, they will then have time to pursue reconciliation cuts.
Members of congress from both parties have argued for dropping reconciliation altogether because some of the programs cut by reconciliation will be the same programs providing increased funding to disaster relief states.
CWLA is continuing to work with members of Congress in opposition to a reconciliation package that would cut Title IV-E Foster Care, Medicaid, and other vital human service programs. We are also pressing the argument that, in light of the tragic consequences of Hurricane Katrina, it would be well for Congress to reassess our priorities and how we are helping our most vulnerable populations as represented by the faces of the victims of the hurricane.
Background:
- In May, Congress passed a budget resolution that included 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 had been instructed to pass legislation to achieve these entitlement cuts by September 16. A week later, on September 23, House and Senate committees were instructed to find $70 billion in tax cuts.
- $11 billion of the entitlement cuts must come from programs under the jurisdiction of the Senate Finance Committee. While the budget resolution assumes that most of these cuts will come from the Medicaid program, the Finance Committee will make the final decision about which programs to cut. The Finance Committee has jurisdiction over many programs that provide funding for child welfare services, including Title IV-E Foster Care and Adoption Assistance, the Social Services Block Grant (Title XX, SSBG), and Temporary Assistance for Needy Families (TANF). In the House, it is up to the Energy and Commerce Committee to decide how to make the $10 billion in cuts in Medicaid. Additionally, the House Ways and Means Committee, which has jurisdiction over Title IV-E Foster Care and Adoption Assistance, SSBG, and TANF, also has directions to make cuts of $1 billion.
- Capping federal foster care funding will put children's well-being at risk. If federal foster care funding is capped, a state cannot draw on greater federal funding for foster care services when the demand increases due to circumstances beyond their control, e.g. the methamphetamine crisis. Allowing states to take a capped amount of federal funding or block grant may seem harmless, however, states making this choice may face decisions such as reducing foster care payments to foster parents, decreasing the per diem paid to private providers caring for these children, or changing policies that prevent abuse--resulting in more abused or neglected children placed in foster care. Further, if this proposal is intended to serve as the major reform to child welfare financing that is truly needed, it falls far short of addressing the deficiencies documented in the Child and Family Service Reviews.
- On August 5, U.S. Department of Health and Human Services Secretary Michael Leavitt sent the Administration's Medicaid legislative proposals to Congress. These proposals specifically call for ways to reduce federal Medicaid support for children in foster care or otherwise involved with the child welfare system.
- When Congress enacts cuts to the Medicaid program they will give serious consideration to these proposals advanced by the White House to reduce federal spending for Medicaid by restricting the use of Medicaid targeted case management (TCM) and rehabilitative services for children in the child welfare system. The text of these proposals can be found at http://www.cwla.org/advocacy/nocapsonkids.htm. TCM services ensure that children's needs are assessed, a care plan is developed, referrals are made to needed services, and care plans are monitored and services are delivered. The White House proposals suggest that Medicaid should not pay for these services because they could be paid for with other federal funds, including Title IV-E Foster Care, SSBG, and TANF, or with state or local programs. However, many states report that they do not have the state or local funds--or the use of federal funding such as SSBG or TANF--to make up for the loss of these federal Medicaid funds. States also report that the services provided by Medicaid to address the health and mental health needs of children in the child welfare system cannot be paid for with Title IV-E funds.
- Congress may also consider another White House proposal to reduce the level of federal funding for TCM services to the Medicaid administrative matching rate of 50%. Currently, the federal matching rate for TCM is as high as 80% in many states. This change would start on October 1. The White House proposal also calls for a cap on Medicaid administrative expenses.
- Newly released data from the Urban Institute indicate that 961,000 children enrolled in Medicaid were in foster care at some point in 2001. In that year, states spent nearly $4 billion in Medicaid funds on children in foster care. At least $700 million of these Medicaid funds were used to provide TCM and/or rehabilitative services. These funds are in addition to other supports such as Title IV-E Foster Care and Adoption Assistance
- Adding to already tight fiscal constraints, Congress is also poised to pass another reconciliation bill that calls for $70 billion in additional tax cuts. Committees with jurisdiction over tax issues would have to pass legislation to implement these cuts by late October or early November.
For more information, visit CWLA's No Caps on Kids! Campaign website or contact Tim Briceland-Betts, CWLA Senior Government Affairs Associate, at bricebet@cwla.org or 202-942-0256.
** Title IV-E Foster Care and Adoption assistance is currently an entitlement program, which means that it is 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. A reduction, or the capping or block granting, of Title IV-E funding would reduce the federal government's commitment to share the costs of caring for these abused and neglected children. The amount of money a state would receive from the federal government would be fixed, regardless of a state's expenses, as a result of a capping or block granting Title IV-E.
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