Child Welfare Financing: An Issue Overview (CRS Report for Congress)
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| Release Date |
April 6, 2005 |
| Report Number |
RL32849 |
| Report Type |
Report |
| Authors |
Emilie Stoltzfus, Domestic Social Policy Division |
| Source Agency |
Congressional Research Service |
Summary:
Child welfare programs are designed to protect children from abuse or neglect. Services may be
offered to stabilize and strengthen a child's own home. If this is not a safe option for the
child,
however, he or she may be placed in foster care while efforts to improve the home are made. In
those instances where reuniting the child with his or her parents is found to be impossible, a child
welfare agency must seek a new permanent (often adoptive) home for the child.
In FY2003, the most recent year for which complete data are available, the federal government
provided states with some $6.9 billion in funding dedicated to child welfare purposes. Most of this
funding is authorized under Title IV-B and Title IV-E of the Social Security Act. Apart from these
dedicated federal child welfare funds, however, states also use non-dedicated federal
funds--including the Temporary Assistance for Needy Families (TANF) block grant, Medicaid, and
the Social Services Block Grant--to meet child welfare needs. The most recent data available (for
state fiscal year 2002) suggests that states spent at least $4.8 billion in non-dedicated funds for child
welfare purposes. While non-dedicated funding streams have increased resources to child welfare
agencies, current legislative and administrative proposals may jeopardize their continued use for
child welfare.
The way that the federal government distributes dedicated child welfare money to states has
been criticized as inflexible, out of sync with federal child welfare policy goals, and antiquated.
Because most dedicated federal child welfare funding (about 65% in FY2003) may be used only for
foster care, critics charge that states have inadequate funds to prevent removal of children from their
homes or to allow children to be reunited with their parents. In addition, a state's ability to
claim
most of the dedicated child welfare funds is directly related to the number of foster and adoptive
children it assists who meet the income, family structure, and other program rules of the now
defunct Aid to Families with Dependent Children (AFDC) program (as that program existed on July
16, 1996).
Attention to federal child welfare financing has focused almost exclusively on dedicated child
welfare funding streams and is driven in part by the belief that the current structure hampers the
ability of state child welfare agencies to achieve positive outcomes for children. This assumption
is not easy to prove. However, it is possible to say that the AFDC link, which ties federal funding
in foster care and adoption assistance to increasingly antiquated income standards, over time, will
erode the share of program costs for which states may seek federal reimbursement.
Recent proposals to alter how dedicated federal child welfare funds are distributed included
some
that would link eligibility for federally supported foster care and adoption assistance to TANF
income
rules and others that would remove income restrictions entirely. The latter proposals, which would
greatly expand the number of children for whom the federal government would be committed to
providing support, have typically sought to cap (or block grant) some or all of what is now
open-ended
federal funding for foster care and adoption assistance and/or to reduce the share of costs paid for
each
eligible child by the federal government. This report will not be updated.
