Order Code RL31746
Report for Congress
Received through the CRS Web
Child Welfare Issues in the 108th Congress
Updated April 1, 2003
Emilie Stoltzfus
Analyst in Social Legislation
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress

Child Welfare Issues in the 108th Congress
Summary
Child welfare services seek to protect children who have been abused or
neglected or are at risk of maltreatment. These services take many forms, ranging
from counseling and other supports for parents – intended to prevent child abuse and
neglect and improve child well-being – to removal of the children from home. At
the most extreme, these services include termination of parental rights and placement
of the children for adoption. States have the primary responsibility for designing and
administering child welfare services. However, the federal government supports the
services with significant funds and requires states to comply with federal standards.
An estimated 903,000 children were the victims of child abuse or neglect in the year
2001. The majority of these children (59%) experienced neglect (alone or in
combination with another form of maltreatment). Some children who experience
maltreatment are removed from their homes with protective custody given to the
state. On the last day of FY2001, an estimated 542,000 children were living in foster
care (foster family, group, residential or other kind of home or placement setting).
S. 342, the Keeping Children and Families Safe Act of 2003, passed the Senate
on March 19 and on March 26 a different version of the legislation passed the House;
(the original House bill number was H.R. 14). The bill would reauthorize the Child
Abuse Prevention and Treatment Act (CAPTA), and several related programs. On
February 13, the House passed H.R. 4, which includes provisions to extend and
expand the authority of the Department of Health and Human Services (HHS) to
grant child welfare waivers.
In his FY2004 budget, President Bush proposes an “alternative financing system
for child welfare,” under which states choosing to participate would “face fewer
administrative burdens and would receive funds in the form of flexible grants.”
Legislative language addressing child welfare financing differently is included in
S. 367 and H.R. 1534, both of which would allow states to use TANF income and
resource requirements to determine a child’s eligibility for federal assistance under
Title IV-E of the Social Security Act, and in S. 448 and H.R. 936, which propose
removing all income eligibility criteria. The Administration has also proposed to
extend Adoption Incentive funding (now set to expire with FY2003) and to amend
the program to especially reward adoptions of children age 9 or older.
Other child welfare proposals are included in H.R. 1534 which would provide
funds to states to implement required program improvements, enhance the quality
of the child welfare workforce, offer substance abuse treatment services to families
involved with child welfare agencies, and would provide reimbursement to states for
kinship guardianship payments; H.R. 1401, which would provide grants to support
mentoring of children in foster care; H.R. 443 and S. 331, which would grant tribes
new authority to operate foster care and adoption assistance programs under
Title IV-E of the Social Security Act; H.R. 336 and H.R. 1057, which seek to repeal
the current “sunset” provision related to the adoption tax credit; and H.R. 584, which
would allow penalty-free withdrawal of Individual Retirement Account (IRA) funds
for some qualified adoption expenses. This report describes child welfare legislative
issues in the 108th Congress and will be updated as needed.

Contents
Child Maltreatment and Children in Foster Care . . . . . . . . . . . . . . . . . . . . . . 1
Child Welfare Issues in the 108th Congress . . . . . . . . . . . . . . . . . . . . . . . . . 3
Child Abuse Prevention and Treatment Act (CAPTA) . . . . . . . . . . . . . 3
Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Adoption Incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Adoption Tax Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Tribal Child Welfare Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Data Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Mentors for foster care children . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
TANF Reauthorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Child Welfare Funding Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
For More Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
List of Figures
Figure 1. Estimates of U.S. Children in Substitute Care, 1985-2001,
including Entries and Exits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
List of Tables
Table 1. Proposed and Final Funding for Selected Child Welfare Programs,
FY2002-FY2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Child Welfare Issues in the 108th Congress
Child welfare services are intended to protect children who have been abused
or neglected or are at risk of maltreatment. These services take various forms,
ranging from counseling and other supports for parents – which are intended to
improve child well-being and prevent child abuse and neglect – to removal of the
children from home. At the most extreme, these services include termination of
parental rights and placement of the children for adoption.
States have primary responsibility for delivering child welfare services and
deciding when to intervene in a family’s life to protect the children. The federal
government supports these state efforts with substantial funds. In FY2002, the
federal government provided close to $7 billion in funds dedicated to child welfare
services, primarily for costs related to maintaining the foster care or adoptive
placements of children who have been maltreated. In exchange for this funding
(mostly offered under Title IV-B and Title IV-E of the Social Security Act), states
must comply with federal rules intended to protect children who are served by the
child welfare system. States also draw significant federal funds for support of child
welfare services from the Social Services Block Grant (SSBG, Title XX of the Social
Security Act), the Temporary Assistance for Needy Families block grant (TANF,
Title IV-A of the Social Security Act), and other sources of federal funding, such as
Medicaid and Supplemental Security Income (SSI).
Most child welfare and related child abuse programs are administered at the
federal level by the Children’s Bureau of the Department of Health and Human
Services (HHS). The House Ways and Means and the Senate Finance committees
have exercised jurisdiction over the majority of child welfare programs currently
authorized. These include all of the programs provided for under Title IV-B and
IV-E of the Social Security Act. (See Table 1 at the back of this report for a list of
these programs.) The House Education and Workforce, and Senate Health,
Education, Labor, and Pensions Committees have exercised jurisdiction over the
Child Abuse Prevention and Treatment Act (CAPTA). A handful of smaller
programs, related primarily to the court handling of child abuse cases, are
administered by the Department of Justice (DOJ), and some of these are under the
jurisdiction of the House and Senate Judiciary Committees. Likewise, programs for
missing and sexually exploited children are administered by the DOJ. (These
Department of Justice programs are outside the scope of this report.)
Child Maltreatment and Children in Foster Care
In 2001, an estimated 903,000 U.S. children were found to be victims of abuse
or neglect. This number is above the estimated 879,000 child maltreatment victims
in 2000 but below the annual estimated highs of more than 1 million child
maltreatment victims recorded through the mid-1990s. For the year 2001, states

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reported 59% of these victims experienced neglect, compared to 63% in 2000 and
58% in 1999. The percentage of physical abuse and sexual abuse victims has
declined over the past 5 years but held fairly constant between 2000 and 2001.1
There were an estimated 542,000 children in foster care on the last day of
FY2001 compared to an estimated 572,000 in FY1999 (when the foster care caseload
reached the highest-ever recorded level) and an estimated 537,000 in FY1997. The
size of the foster care caseload rises or falls depending upon both the number of
entries to foster care – children who are removed from their homes in a given year
– and the number of exits in that same year – children reunited with their families,
adopted, emancipated, or placed in another permanent setting. The number of entries
to foster care has outpaced the number of exits for two decades; however, in recent
years the number of entries has remained fairly stable at around 290,000 while the
number of exits increased from 249,000 in FY1998 to 275,000 in FY2000.2
Figure 1. Estimates of U.S. Children in Substitute Care,
1985-2001, including Entries and Exits
572,000 556,000
537,000
483,000
542,000
Total caseload
445,000
414,000
387,000
300,000
276,000
Entries
Exits
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
Source: Data from 1985 to 1996 are from the American Public Human Services Association. Data
from 1997 forward are estimates by the U.S. Department of Health and Human Services based on the
Adoption and Foster Care Analysis Reporting System (AFCARS). The 2000 data are interim; the
2001 data are preliminary. Both numbers may be revised.
Note: The number of children in care is shown for the last day of the given fiscal year. The number
of entries and exits are cumulative totals for the given fiscal year.
1 U.S. Department of Health and Human Services, Administration on Children Youth and
Families, Child Maltreatment 2001, 2003, 21-42. Available on the web at
[http://www.acf.hhs.gov/programs/cb/publications/cm01/cm01.pdf].
2 For the most current adoption and foster care data go to
[http://www.acf.hhs.gov/programs/cb/dis/afcars/publications/afcars.htm].

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Child Welfare Issues in the 108th Congress
Child Abuse Prevention and Treatment Act (CAPTA). Legislation to
reauthorize CAPTA and several related programs, S. 342, cleared the Senate on
March 19 and, in somewhat different form, the House on March 26. Both chambers
passed the legislation with unanimous consent; differences will need to be resolved
by a conference agreement. The Keeping Children and Families Safe Act of 2003
was introduced in the House on January 7 (as H.R. 14) and in the Senate on February
11 (S. 342). On February 12, the Senate Health, Education, Labor and Pensions
Committee ordered S. 342 to be reported to the Senate without amendment (S.Rept.
108-12) and on February 13, the House Education and Workforce Committee ordered
H.R. 14 to be reported to the House, as amended (H.Rept. 108-26).
As currently written, CAPTA authorizes grants and research funds designed to
improve state and local child protective services, offer services aimed at preventing
child abuse and neglect, and increase knowledge about ways to prevent child
maltreatment or better respond to its occurrence. Although the Act expired with
FY2001, Congress appropriated $81.6 million to continue CAPTA programs in
FY2002 (P.L. 107-116) and, the FY2003 omnibus spending measure (P.L. 108-7)
includes $88.9 million for CAPTA. Nearly all of the increased FY2003 funding is
provided for earmarks under the discretionary grants portion of the CAPTA
appropriation. The President’s FY2004 budget requests $81.7 million for CAPTA.
The House-passed version of S. 342 substituted the language of H.R. 14 for the
Senate’s S. 342 language. However, these bills have similar provisions. Both would
increase the funding authorization for CAPTA’s grant programs to $200 million and
would extend its program authority through FY2008. Both are also designed to
strengthen efforts to prevent child abuse and neglect, to promote increased sharing
of information and expertise between child protective service agencies and education,
health, and juvenile justice systems, to encourage a variety of new training programs
designed to improve child protection, and to improve communication and
collaboration between child protective services workers and families who are part of
a child abuse and neglect investigation. The proposals would also include for-profits
(generally) among the groups that may seek demonstration grant funds and receive
technical assistance for child maltreatment related programs.
Both proposals would also require states that seek Basic State Grant Funds
under CAPTA to meet several new “assurances.” However, they do not include
identical provisions for all of these requirements. New assurances included in both
the House and Senate versions of S. 342 would require states to –
! disclose confidential information to federal, state, and local
government entities (or their agents), if the information is needed to
carry out their lawful duties to protect children;
! have triage procedures for the appropriate referral of children not at
risk of imminent harm to community organization or voluntary
preventive service;
! have provisions to ensure that alleged child maltreatment
perpetrators are promptly informed of the allegations made against
them;

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! develop (within 2 years of legislation’s enactment) provisions for
criminal background checks of all adults in prospective adoptive and
foster care homes;
! have provisions for improving the training, retention, and
supervision of caseworkers; and
! have provisions to address training of child protective service
workers on their legal duties in order to protect the legal rights and
safety of children and families.
Both the Senate and House versions of S. 342 also include a new requirement
regarding appropriate response to children born with, and showing evidence of,
prenatal drug exposure. The House-passed bill would require health care providers
involved in delivery of a drug-exposed newborn to report this to child protective
services and also would require that a safe plan of care for the child be developed.
By contrast, the Senate-passed bill would require a state to have some provision in
place to respond to the birth of an infant who was prenatally exposed to an illegal
drug, and stipulates that this response may include appropriate referrals to child
protective services but must include development of a safe plan of care for the child.
The House-passed bill would also require states to have procedures for referral of
child maltreatment victims under 3 years of age to the statewide early intervention
program (for developmental assessment) operated under Part C of the Individuals
with Disabilities Education Act (IDEA). The Senate-passed bill does not include a
comparable requirement.
In addition, both the Senate and House-passed versions of S. 342 include
language that would reauthorize (through FY2008) and increase the funding authority
for two related and also expired programs, Adoption Opportunities and Abandoned
Infants Assistance. A number of the proposed changes in the Adoption Opportunities
program are intended to eliminate barriers to the adoption of children across state and
other jurisdictional boundaries. Finally, both bills also propose to amend and extend
(through FY2008) the authority of certain programs under the Family Violence and
Prevention Services Act. However, only the Senate-passed version would require
HHS to reserve 50% of any funds appropriated above $150 million for state family
violence prevention grants to fund entities providing services to children who witness
domestic violence. (For more background information and discussion of issues, see
CRS Report RL30923, Child Abuse Prevention and Treatment Act: Reauthorization
Proposals in the 107th Congress
).
Waivers. As passed by the House on February 13, H.R. 4, which primarily
reauthorizes TANF, would permit HHS to approve an unlimited number of child
welfare demonstration projects (often called waivers) through FY2008. It would
also prohibit HHS from limiting the number of demonstrations (or waivers) approved
for a single state or from denying a demonstration project simply because the policy
alternative is already being tested (or may be tested) in another state. H.R. 4 also
would require HHS to streamline its child welfare waiver approval process and make
evaluation reports available to states or other interested parties. ( S. 5, introduced by
Senator Talent on February 14, contains these same child welfare waiver provisions.)

Child welfare waivers allow states to use federal funds to test new services
without meeting all of the federal child welfare requirements specified in Title IV-B

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and IV-E of the Social Security Act. The proposed demonstration program or service
must be designed to accomplish the same goals as those federal child welfare
programs, must be cost-neutral to the federal government, and must be formally
evaluated. (Further, certain specified federal protections offered to all children in the
public child welfare system may not be waived in any case.) Under current law, HHS
could approve up to 10 demonstration projects (including one or more waivers of
federal rules) in each of FY1998 through FY2002. In the past, HHS has expressed
its preference for approving projects in states not previously granted authority to
operate a demonstration project and for projects that test unique policy alternatives.
Financing. The President’s FY2004 budget proposes to offer all states an
alternative method to finance their child welfare system. According to
Administration budget documents, this option is intended to “serve as an incentive
[for states] to create innovative child welfare plans with a strong emphasis on
prevention and family support.” No specific legislative language has yet been
proposed, but the Administration indicates that under this “flexible funding” plan,
states could opt to receive their foster care funding (currently an open-ended
entitlement for costs incurred on behalf of eligible children) as an annual pre-
established grant amount, would be able to use these funds for the full range of child
welfare services – from prevention of the need for removal through foster care
placement and adoption – and would no longer need to determine a child’s federal
foster care eligibility status in order to use federal funds on his or her behalf. At the
same time states would be required to uphold existing child safety protections, agree
to maintain existing levels of state investment in child welfare programs, and
continue to participate in the HHS-administered Child and Family Services Reviews
(to ensure compliance with federal child welfare policy). States experiencing a
“severe foster care crisis” would, under certain circumstances, be able to tap TANF
continency funds to meet this unanticipated need. In addition, the President’s
proposal includes a $30 million set-aside to be available for Indian tribes (tribes are
currently not eligible to directly receive federal foster care funds under Title IV-E of
the Social Security Act) and a one-third of 1% set-aside for monitoring and technical
assistance of state foster care programs.
Currently federal funds dedicated to child welfare (primarily under Titles IV-B
and IV-E of the Social Security Act) go to states through a complex package of
grants, with different allocation formulas and matching requirements. States also rely
on other non-dedicated federal funds to support their child welfare programs. The
1996 welfare reform law that created TANF (P.L. 104-193) eliminated Emergency
Assistance (which had been primarily used by states to support family preservation),
and reduced the SSBG, also a major source of child welfare funds. However,
TANF’s flexible funds, combined with declining caseloads, allowed states to use
TANF dollars for certain child welfare services and at least through FY2000, this
provided a boost to child welfare spending. According to an Urban Institute survey,
in FY2000 state child welfare agencies expended some $2.3 billion in TANF funds
(some of which were funneled through SSBG). But the continued availability of

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some or all of these TANF funds for child welfare purposes appears to be jeopardized
by changing TANF and state budget priorities linked to economic recession.3
The 1996 TANF law also maintained a historic connection between federal
child welfare funding and TANF’s predecessor program, Aid to Families with
Dependent Children (AFDC); the law continued to link a state’s entitlement to
federal reimbursement for foster care and adoption assistance costs to whether those
costs can be tied to a child who was removed from a family that was receiving (or
would have been eligible to receive) AFDC – as that program existed in a given state
on July 16, 1996. The 1996 law did not provide a mechanism for adjustment of the
1996 AFDC income-eligibility rules. This concerns states who predict declining
levels of federal foster care and adoption assistance funding due to inflation and the
administrative complexity inherent in using eligibility rules for a program that no
longer exists. Some observers also question the rationale of an income eligibility test
for federal foster care and adoption assistance reimbursements and argue that a
child’s need for protection and care is not limited by family income.
Other financing proposals. While many observers believe the current child
welfare financing system is counterproductive to the interests of children and
families, no consensus exists on a method of reform. H.R. 1534 and S. 367 would
allow states to substitute their TANF rules to determine a child’s eligibility for
federal foster care and adoption assistance and H.R. 936 and S. 448 would remove
all income eligibility criteria for purposes of determining whether a state can claim
federal reimbursement of foster care and adoption assistance costs. In addition,
H.R. 936 and S. 448 would set federal matching rate for all Title IV-E services
(including training, administration, and data collection) at the Medicaid matching
rate. This rate varies by state per capita income and in FY2003 ranged from 50% to
77%.
Both H.R. 1534 and H.R. 936/S. 448 also seek to provide new federal funds
dedicated to child welfare services. H.R. 1534, introduced by Representative Cardin
on April 1, would add several capped entitlement programs under Title IV-B of the
Social Security Act. The bill would provide $100 million in each of FY2004 to
FY2008 to help states achieve required program improvements; $100 million in each
of FY2004-FY2008 for state enhancement of their child welfare workforce or
coordination of services; $100 million in FY2004 rising to $200 million in FY2008
for coordination and provision of substance abuse treatment to families involved with
the child welfare system; and it would make mandatory all of the current annual
funding authority ($505 million) under the Promoting Safe and Stable Families
Program. (As authorized through FY2006, the program now receives $305 million
in mandatory funds each year and up to $200 million in discretionary dollars.) In
addition the bill would allow uncapped entitlement funding to reimburse states for
ongoing payments to relatives who assume legal guardianship of children, but only
if those children were previously eligible for federal foster care maintenance
payments.
3 Roseanna Bess, Cynthia Andrews, Amy Jantz, Victoria Russell, Rob Geen, The Cost of
Protecting Vulnerable Children III,
Urban Institute: Washington, D.C., Dec. 2002, p.18.

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H.R. 936 (introduced by Rep. Miller on February 26) and S. 448 (introduced by
Senator Dodd on February 26) are companion measures that would allow open-ended
federal matching, under Title IV-E of the Social Security Act, for a variety of new
services. These include preventive, protective and crisis services; permanency
services; independent living services; and living expenses of former foster youths
under the age of 22, (if they are in school or working and participating in an
independent living program), substance abuse treatment for families involved with
the child welfare system, and ongoing payments to relative guardians of former foster
children.
Financing reform proposals in the recent past included a proposal introduced
late in the 106th Congress by Representative Nancy Johnson to permit “flexible
funding” demonstrations, including block grants, in a limited number of states (H.R.
5292). Also in 2000, Senator Grassley (with Senators DeWine and Landrieu)
announced a proposal (never formally introduced) that would have increased federal
matching payments for foster care during the first 18 months of a child’s stay in care,
then reduced and eventually eliminated federal matching the longer the child
remained. (For more information, see CRS Report RL31082, Child Welfare
Financing: Issues and Options.
)
Adoption Incentives. The 1997 Adoption and Safe Families Act (P.L. 105-
89) created the Adoption Incentives program (Section 473A of the Social Security
Act). Funding authorization for these incentive payments expires with FY2003 and
Congress may consider reauthorization legislation in this session. As part of its
FY2004 budget justification, HHS proposes to reauthorize funding for the program
(through FY2008) and to amend the program to reward adoptions of foster care
children age 9 or older while continuing to offer incentives to states who increase
their total adoptions out of foster care.
Currently the Adoption Incentives program authorizes funds for incentive
payments to states that increased the number of adoptions out of the public foster
care program in each of FY1998-FY2002. Eligible states receive $4,000 for each
foster child whose adoption is finalized above a state’s specified foster child adoption
baseline. States also receive an additional $2,000 for each of those adoptions, which
involved a special needs child who receives federal adoption assistance, and that are
above the state-specified special needs adoption baseline. For adoptions finalized in
1998, the baselines drew on the state’s average number of foster child adoptions (or
special needs adoptions) in FY1995-FY1997. For adoptions finalized in FY1999-
FY2002, the baselines are drawn from the year (beginning with FY1997) in which
the state achieved its highest number of foster child adoptions (or special needs
adoptions). States are permitted to use these incentive funds for any purpose
authorized under Title IV-B or Title IV-E of the Social Security Act.
The Administration proposal would maintain two independent adoption
baselines but would replace the current “special needs” baseline with one for children
age 9 or older. For each child adopted out of the foster care system (above the state’s
baseline), the state would receive an incentive payment of $4,000; for each child age
9 or older who is adopted out of the foster care system (above the state baseline for
older children) the state would receive an incentive of $6,000. According to the HHS
Budget justifications, analysis of adoptions from public foster care indicate that older

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children remain less likely to be adopted and specifically that once a child waiting for
adoption reaches 8 or 9 years of age, “the probability that the child will continue to
wait in foster care exceeds the probability that the child will be adopted.” In addition,
HHS notes that “older children constitute an increasing proportion of the pool of
children waiting for adoptive families.”
As originally enacted, the law authorized $20 million annually. However, states
have increased adoptions at a rate far greater than this funding level. (There were
some 26,000 adoptions out of the public child welfare system in FY1995 compared
to an estimated 51,000 in FY2000 and an estimated 50,000 in FY2001.) HHS
estimates a total of 238,000 adoptions from the public child welfare system were
completed in the 5 years (FY1998-FY2002) in which the Adoption Incentives
program has authorized rewards for increased adoptions. Along with its
reauthorization request the Department proposes to set a new goal of 300,000
adoptions over 5 years (FY2004-FY2008).
Through FY2002, Congress appropriated a total of $147.7 million for Adoption
Incentive payments of which states have (for adoptions through FY2001) earned
$144.7 million. All states, the District of Columbia, and Puerto Rico have earned an
adoption incentive award in at least 1 year. For adoptions finalized in FY1998, states
earned $42.5 million; for FY1999 adoptions, $51.5 million; for FY2000 adoptions,
$33.2 million and for FY2001 adoptions, $17.5 million. President Bush requested
$43 million in FY2003 funding for this program, this is equal to the program’s
FY2002 funding level and to the amount of Adoption Incentives funding (subject to
the .65% funding rescission) included in FY2003 omnibus spending measure (P.L.
107-8). The President’s FY2004 budget request again includes $43 million for
Adoption Incentives.
Adoption Tax Credit. H.R. 336, introduced on January 27 by Representative
Camp and H.R. 1057 introduced by Representative DeMint on March 4 would make
the current adoption tax credit fully permanent. As a part of the Economic Growth
and Tax Reconciliation Act of 2001 (P.L. 107-16), Congress expanded the adoption
tax credit and made it a “permanent” part of the tax code. However, P.L. 107-16
provides that the tax changes it contains must expire (or “sunset”) in 2010. H.R. 336
would exempt the adoption tax credit from this sunset provision. The 107th Congress
considered identical legislation (H.R. 4800, S. 2643). Although the House passed
H.R. 4800, the full Senate did not act on this matter, and the proposals died with the
107th Congress.
In 2001 Congress doubled the existing credit (from $5,000 to $10,000), made
the full credit available to families with incomes up to $150,000 (previously the
phase-out began at $75,000), and provided for a cost-of-living inflation adjustment
of this credit. As of the 2002 tax year, adoptive parents may claim the $10,000 credit
up to the full amount of their qualified adoption expenses; beginning with tax year
2003, parents who finalize the adoption of children with special needs will be able
to claim this entire credit amount regardless of their actual adoption expenses.
As introduced by Representative Peter King, on February 5, H.R. 584 would
further amend the Internal Revenue Code to ensure that adoptive parents who
withdrew funds from an Individual Retirement Account (IRA) in order to finance an

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adoption could do so without penalty. In general individuals would be allowed to
withdraw up to $10,000 for certain adoption expenses (generally those “qualified
adoption expenses” not already covered by the adoption tax credit). Parents who
adopt a “special needs” child could make penalty-free withdrawals on a somewhat
broader basis.
Tribal Child Welfare Issues. As noted above, tribes are currently not
eligible to directly receive federal foster care and adoption assistance funds under
Title IV-E of the Social Security Act, and the President’s FY2004 budget request
proposes to set-aside $30 million for tribes out of an optional child welfare financing
system. On January 29, Representative Camp introduced H.R. 443; and on February
6, Senator Daschle (with eight bipartisan cosponsors) introduced S. 331; the bills are
identical and would grant new authority to tribes to operate foster care and adoption
assistance programs on the same general financing basis currently available to states.
The bill provides that tribal programs would define the service area where their plan
is in effect and would be able to grant approval of foster care homes based on tribal
standards that ensure the safety of children, but would otherwise need to comply with
all federal program provisions that apply to states. (However, the HHS Secretary
could waive any requirement if he found doing so would “advance the best interests
and safety of the children” served by the tribal plan.) Tribes that currently have
agreements with a state to receive some Title IV-E reimbursement could continue
those agreements.
The provisions of H.R. 443 and S. 331 are similar to those reported in the 107th
Congress (H.R. 4737) by the Senate Finance Committee, except that H.R. 4737
included a separate definition of “tribe” for native groups in Alaska and would have
required those Alaska groups to meet the same federal foster care home requirements
that states must meet. The Congressional Budget Office estimated the cost of the
Senate Finance Committee provisions at $12 million for FY2004 and $398 million
over the FY2004-FY2012 period.
As noted earlier, the Administration’s child welfare financing proposal would
include a $30 million set aside for direct tribal child welfare funding. Also, as passed
by the House on February 13, H.R. 4 set-asides $2 million for demonstration projects
designed to test the effectiveness of tribes in coordinating child welfare and TANF
services to tribal families at risk of child abuse or neglect.
Data Reporting. Currently states receiving federal foster care funds are
required to submit caseload characteristic data twice a year through the Adoption and
Foster Care Analysis and Reporting System (AFCARS). The data can be used for
program management to enhance state performance and is now used, in part, to
determine a state’s compliance with certain federal child welfare policies. Although
the data are considered improved from the first years of reporting, concerns about
AFCARS data reliability persist.4 In addition, some states and researchers believe
that the measurements currently taken may not accurately reflect the program
4 See U.S. Department of Health and Human Services, Office of Inspector General, Adoption
and Foster Care Analysis and Reporting System (AFCARS): Challenges and Limitations
,
Mar. 2003, available on the web at [ http://oig.hhs.gov/oei/reports/oei-07-01-00660.pdf].

CRS-10
improvements states have achieved. H.R. 1534 would require HHS to provide
Congress (no later than October 2004) with recommendations on improving the
quality and usefulness of data being collected through AFCARS. HHS would need
to develop the recommendations in consultation with state child welfare agencies and
other experts. It would further be required to consider modifying AFCARS to
include 1) collection and analysis of data that could track a single foster care child
across time (longitudinal data); 2) analysis of groups of children who enter or exit the
system within the same period of time (entry and exit cohort data); and 3) a measure
of adoption disruption.
Mentors for foster care children. As introduced by Representative
Millender-McDonald on March 20, H.R. 1401 would provide money to states for
support of networks of public and private community entities that offer mentors to
children in foster care. It would authorize funding of $15 million for this purpose in
each of FY2004 and FY2005, and such sums as necessary in succeeding years. In
addition, it would allow HHS to award a grant for establishment of a National
Hotline Service or Web site to provide information to individuals who are interested
in becoming mentors to youth in foster care. Funding for this grant would be
authorized at $4 million for each of FY2004 and FY2005 and such sums as may be
necessary for each succeeding fiscal year.
TANF Reauthorization. When the 1996 law creating the TANF block grant
was enacted, some child welfare advocates were concerned that work requirements,
time limits, and other changes in the cash welfare system might harm children.
Research on this issue has not been conclusive; however, concerns remain. (See
CRS Report RL31508, Child Welfare and TANF Implementation: Recent Findings.)
The TANF reauthorization debate, which began in the 107th Congress, touches on
certain child welfare-related issues and some child welfare-related measures are
included in the comprehensive TANF reauthorization legislation passed by the House
on February 13 (H.R. 4). In addition, several child welfare-related measures were
included in the TANF reauthorization legislation approved in the 107th Congress by
the Senate Finance Committee (H.R. 4737, as reported to the Senate). These are
discussed below.
Improve Child Well-Being and Reduce Child Poverty. The 107th
Congress considered several proposals to amend the purposes and/or practice of
TANF to explicitly address the issues of child well-being and child poverty. Because
a majority of children who enter the public child welfare system come from poor
families and a major goal of the system is to ensure and improve their well-being,
these issues are important to child welfare. As passed by the House, H.R. 4 would
make improving child well-being the overarching goal of each of TANF’s four
stated purposes and would amend one of the current law goals to include reducing
family poverty. The TANF reauthorization legislation approved by the Senate
Finance Committee in the 107th Congress would have required states to assess and
discuss child well-being as part of developing individual responsibility plans.
H.R. 4 would also mandate new child well-being-related research and
performance measures. As passed by the House, the legislation would require HHS
to develop “uniform performance measures” to gauge how well states are meeting
TANF goals, and would require the Census Bureau to implement a new survey of

CRS-11
program participation to assess outcomes of continued welfare reform on the
economic and child well-being of low-income families. Further, evaluation of
“fatherhood programs” authorized under H.R. 4 would need to assess program affects
on a range of issues, including child well-being and child abuse and neglect. The
TANF reauthorization legislation approved by the Senate Finance Committee in the
107th Congress would have required HHS to establish child well-being indicators
(including measures related to education, social and emotional development, health
and safety, and family well-being), to establish an Advisory Panel to make
recommendations regarding how the indicators would be assessed, and to assess state
performance using these indicators.
Sanctions. Current TANF law requires states to impose a penalty on
individuals who fail to meet work participation rules, and it allows states to choose
between cutting a family’s entire benefit or reducing some part of the benefit as a
sanction for noncompliance. This means a portion of some states’ caseload consists
of “child-only” cases where, because of failure to meet work or other rules, a parent
(or other adult) is no longer receiving benefits on their own behalf, but the child(ren)
in the family continue to receive aid. As passed by the House, H.R. 4 would limit
this kind of “child-only” case by requiring that after 2 months of an adult failing to
meet established work requirements (without good cause), a state must end the entire
benefit for the family of which the noncomplying adult is a part. Continuing benefits
to the child(ren) in the family, using federal TANF or state Maintenance of Effort
funds, would not be allowed. (H.R. 4 provides an exemption for states whose
constitution or statute would prohibit a full family sanction, but this exemption
would expire within 1 year of enactment of this provision.).
Child Welfare Funding Levels
Table 1 (below) lists proposed and final funding levels for selected child
welfare programs and indicates whether the program receives mandatory or
discretionary funding. On February 13, the House and Senate passed FY2003
appropriations legislation (H.J.Res. 2) and on February 20 the President signed the
measure into law (P.L. 108-7).

CRS-12
Table 1. Proposed and Final Funding for Selected
Child Welfare Programs, FY2002-FY2004
($ in millions)
Final
Proposed
Final
Proposed
Program
funding
FY2003
funding
FY2004
kind of funding
President’s
Senate
H.R.
President’s
FY2002
request
omnibusa
246b
FY2003c
request
Title IV-B of the Social Security Act
Child Welfare Services
292
292
292
292
290
292
discretionary
Child Welfare Training
7.5
7.5
7.5
7.5
7.4
7.5
discretionary
Promoting Safe & Stable
Families
375
505
505
375
404
505
mandatory + discretionaryd
Mentoring Prisoners’ Children
discretionarye
0
25.0
12.5
0
9.9
50.0
Title IV-E of the Social Security Act
Foster Care
mandatoryf
4,519
4,885
4,885 4,885
4,885
4,939
Adoption Assistance
mandatoryf
1,342
1,585
1,585 1,585
1,585
1,700
Adoption Incentives
43
43
43
43
42.7
43
discretionary
Foster Care Independence
140
140
140
140
140
140
mandatory
Foster Care Independence
Education and Training
0
60.0
60.0
39.8
41.7
60.0
Vouchers
discretionary
Child Abuse Prevention and Treatment Act
Basic State Grants
22.0
22.0
22.0
22.0
21.9
22.0
discretionary
Discretionary Research and
Demonstration Grants
26.2
26.4
26.4
26.4
33.8
26.3
discretionary
Community-Based Family
Resource and Support Grants
33.4
33.4
33.4
33.4
33.2
33.4
discretionary
Children’s Justice Act Grants
off-budgetg
20.0
NA
NA
NA
20.0
NA
Other Programs (all discretionary funding)
Abandoned Infants Assistance
12.2
12.2
12.2
12.2
12.1
12.1
Adoption Opportunities
27.4
27.4
27.4
27.4
27.2
27.3
Adoption Awarenessh
12.9
12.9
12.9
12.9
12.8
12.9

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Source: Table prepared by Congressional Research Service (CRS) based on Administration budget
documents and House and Senate documents related to H.J.Res. 2 and H.R. 246.
NA = not applicable
a The numbers in this column do not reflect funding rescissions that were included in the Senate-
approved FY2003 omnibus spending measure (H.J.Res. 2). As passed by the Senate, the
funding cut totaled approximately 3% on most discretionary, domestic, nonmilitary programs.
b H.R. 246 was introduced in the House on January 8, 2003 by Representative Regula who chairs the
House Appropriations Subcommittee on Labor, Health and Human Services, and Education.
There was no similar bill approved by the House Appropriations Committee for FY2003.
c The numbers in this column now reflect the funding rescissions that were approved as a part of the
final funding legislation (P.L. 108-7). As enacted, the funding cut equaled 0.65% on most
discretionary, nonmilitary programs, including all of the discretionary funds shown in this table.
d Before FY2002, all funding for this program was mandatory. P.L. 107-133, which reauthorized the
program through FY2006, set an annual mandatory funding level of $305 million for it and
authorized additional discretionary funding up to $200 million in each fiscal year. Out of the
total final FY2003 funding shown for this program, $100 million is discretionary and therefore
subject to the legislation’s funding rescission. See table note c above for more information on
the funding rescission.
e P.L. 107-133, which was signed into law in January 2002, first authorized this funding.
f The Federal Foster Care and Adoption Assistance Programs are the only two child welfare programs
funded with mandatory (or entitlement) dollars that are also on an “open-ended” basis. This
means there is no annual cap on the amount of federal money that may be spent on these
programs; states may claim reimbursement for a part of all eligible foster care and adoption
assistance related costs. The final funding levels shown in this row are estimated federal
expenditures; the proposed funding levels reflect estimates of what states are expected to claim
for these programs in FY2003.
g These grants are not funded out of the general treasury. Instead, P.L. 98-473 (Victims of Crime Act
of 1984), as amended, provides that up to $20 million annually is to be set-aside for these grants
out of the Crime Victims Fund. That fund is composed of various criminal fines, penalties,
assessments and forfeitures and is administered by the Department of Justice.
h Appropriations shown in this row are for programs authorized under the Children’s Health Act of
2000 (Sections 330F and 330G of Title III of the Public Health Service Act). Section 330F
authorizes Adoption Awareness, which received $9.9 million in both FY2001 and FY 2002.
Section 330G authorizes a Special Needs Adoption Program aimed at improving awareness of
adoption of special needs children. This program did not receiving funding in FY2001, but
received $3 million in FY2002.
For More Information
CRS Report RL30894, Child Welfare: Reauthorization of the Promoting Safe and
Stable Families Program in the 107th Congress, by Emilie Stoltzfus and Karen
Spar.
CRS Report RL31242, Child Welfare: Federal Program Requirements for States,
by Emilie Stoltzfus.
CRS Report RS20230, Child Welfare: The Chafee Foster Care Independence
Program, by Emilie Stoltzfus.
CRS Report RS21365, The Missing, Exploited and Runaway Children Protection
Act: Appropriations and Reauthorization, by Edith Cooper.
CRS Report RL31655, Missing and Exploited Children: Overview and Policy
Concerns, by Edith Cooper.
Section 11, House Ways and Means Committee Green Book, 2000 edition.