Order Code RL31746
CRS Report for Congress
Received through the CRS Web
Child Welfare Issues in the 108th Congress
Updated September 17, 2004
Emilie Stoltzfus
Analyst in Social Legislation
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress

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Child Welfare Issues in the 108th Congress
Summary
Child welfare services seek to protect children who have been abused or
neglected or who 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
the 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 896,000 children were the victims of child
abuse or neglect in the year 2002. Some children who experience maltreatment are
removed from their homes with protective custody given to the state. On the last day
of FY2002, an estimated 532,000 children were living in foster care (foster family,
group, residential or other kind of home or placement setting).
In December, President Bush signed the Adoption Promotion Act of 2003 (P.L.
108-145), which reauthorized and amended adoption incentives payments for states
that increase the number of adoptions out of the public child welfare system. The
Keeping Children and Families Safe Act of 2003 (P.L. 108-36), which reauthorized
the Child Abuse Prevention and Treatment Act (CAPTA) and several related
programs, was signed into law in June 2003. In June 2004, P.L. 108-262 extended,
through September 30, 2004, the authority of the U.S. Department of Health and
Human Services (HHS) to approve new child welfare waivers.
In May 2004 the Pew Commission on Children in Foster Care released its
recommendations for revamping the way federal child welfare funds are distributed.
Among its suggestions, the Commission would end the current income eligibility
requirements for federal adoption assistance and foster care maintenance payments;
it also recommends keeping the current open-ended funding of these programs while
reducing the federal matching rate for eligible claims. Introduced in July, H.R. 4856,
would follow the Pew Commission’s proposal by removing most income eligibility
criteria for federal adoption assistance and foster care maintenance payments and by
lowering federal matching rates for eligible adoption assistance and foster care
maintenance payment claims. H.R. 4856, however, proposes to end open-ended
federal funding for foster care maintenance payments (while retaining it for adoption
assistance). A number of generally less broad legislative proposals related to child
welfare financing have been introduced in the 108th Congress. Additional child-
welfare-related proposals designed to improve services, promote timely placement
of children across state lines, and for other purposes, are described in this report.
On September 9, the House passed H.R. 5006, which would provide FY2005
funding for child welfare programs. The full Senate has not yet considered FY2005
appropriations for child welfare programs. However, on September 15, the Senate
Committee on Appropriations approved a bill (S. 2810) with child welfare program
funding levels similar, in many cases, to those passed by the House and requested by
the President. (See Table 1 inside.) This report will be updated as needed.

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Contents
Child Maltreatment and Children in Foster Care . . . . . . . . . . . . . . . . . . . . . . 1
Child Welfare Legislation Enacted in the 108th Congress . . . . . . . . . . . . . . . 3
Adoption Incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Child Abuse Prevention and Treatment Act (CAPTA) . . . . . . . . . . . . . 5
Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Child Welfare Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
President’s Child Welfare Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Pew Commission Recommendations and Child SAFE Act . . . . . . . . 11
Other Child Welfare Funding Proposals . . . . . . . . . . . . . . . . . . . . . . . 14
Other Child Welfare Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Interstate Placement of Children . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Kinship Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Data Collection and Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Student Loan Forgiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Tax Provisions Related to Adoption . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Tribal Child Welfare Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Support For Current and Former Foster Care Children and Youth . . . 22
Preventing Voluntary Relinquishments for Mental Health Reasons . . 22
Recruitment of Foster Care and Adoptive Parents . . . . . . . . . . . . . . . . 24
TANF Reauthorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
President’s FY2005 Budget Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Child Welfare Funding Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
For More or Related Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
List of Figures
Figure 1. Estimates of U.S. Children in Foster Care, 1985-2002,
Including Entries and Exits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
List of Tables
Table 1. Proposed and Final Funding for Selected Child Welfare Programs,
FY2002-FY2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

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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 their homes. 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 FY2003, the
federal government provided more than $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 federal programs, such as Medicaid
and Supplemental Security Income (SSI).
Most child welfare and related child abuse and neglect 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, 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 Department of
Justice. (These Department of Justice programs are outside the scope of this report.)
Child Maltreatment and Children in Foster Care
In 2002, an estimated 896,000 U.S. children were found to be victims of abuse
or neglect and an estimated 1,400 children died due to abuse and neglect. The total
estimated number of child maltreatment victims in 2002 falls below the 903,000
victims reported in 2001 and is well below the annual estimated highs of more than

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1 million child maltreatment victims recorded through the mid-1990s. For 2002,
states reported 61% of the child maltreatment victims experienced neglect (alone or
in combination with another form of maltreatment). In recent years, the percentage
of all victims who experienced neglect has ranged from a low of 58% in 1999 to a
high of 63% in 2000. The percentage of physical abuse and sexual abuse victims has
declined over the past five years but held fairly constant between 2000 and 2002.1
Preliminary estimates show 532,000 children were in foster care on the last day
of FY2002. The national foster care caseload showed a record 567,000 children in
care on FY1999 but has been in decline since that year. The decline in the national
foster care caseload between FY1999-FY2002 is not shared by all states. About half
of all the states (26), including the District of Columbia recorded reductions in their
foster care caseload between those years. California, New York and Illinois, three
states with large populations, recorded the greatest numerical declines in their
caseloads from FY1999 to FY2000. California’s caseload dropped by nearly 17,500
children and both New York and Illinois saw caseload decreases of around 10,000
children. Five states, including New York and Illinois, as well as Connecticut,
Delaware and Wisconsin, saw 20%-29% reductions in their caseloads deduction from
FY1999 to FY2002. Over that same time period, a nearly equal number of states saw
increases in their caseloads — ranging from a low of less than 1% in Washington to
a high of 31% in Texas. Texas also showed the highest numerical increase in foster
care caseload, as the number of children in the state’s care grew by more than 5,000
between FY1999 and FY2002. New Jersey, with an increase of more than 1,900
children and Colorado, with an increase of close to 1,600 children posted the next
highest numerical gains, and both states registered a close to 21% jump in their foster
care caseloads in this period.2
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.
Nationally, the number of entries to foster care has outpaced the number of exits for
two decades; however, between FY1998 and FY2002 the number of entries ranged
from 293,000 to 303,000, while the number of exits rose from 257,000 to 281,000.3
1 U.S. Department of Health and Human Services, Administration on Children Youth and
Families, Child Maltreatment 2001, 2004, 21-50. Available on the web, at
[http://www.acf.hhs.gov/programs/cb/publications/cm02/cm02.pdf].
2 Caseload changes, numeric and percent, are based on children reported in care on the last
day of FY1999 compared to those reported in care for the last day of FY2002. Available
data includes 49 states, the District of Columbia and Puerto Rico. Caseload data for Nevada
is not reported for FY1999. Foster care caseload information is available, by state, at
[http://www.acf.hhs.gov/programs/cb/dis/tables/entryexit2002.htm].
3 Data for FY1998 and FY1999, which were previously reported by HHS as final, have been
updated to reflect corrected data submissions; HHS now considers these estimates final.
Estimates for FY2000 and FY2001 are “interim” and for FY2002 “preliminary”; these
numbers are expected to be revised. For the most current available data, see
[http://www.acf.hhs.gov/programs/cb/dis/afcars/publications/afcars.htm].

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Figure 1. Estimates of U.S. Children in Foster Care, 1985-2002,
Including Entries and Exits
567,000552,000 545,000
537,000
532,000
483,000
445,000
Total caseload
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
2002
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 FY2000 and FY2001 data are
interim and may be revised; the 2002 data are preliminary and are expected to be revised several times.
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.
Child Welfare Legislation Enacted in the 108th Congress
Adoption Incentives. The Adoption Promotion Act of 2003, introduced by
Representative Camp (H.R. 3182) and Senator Grassley (S. 1686), was signed into
law on December 2, 2003 (P.L. 108-145). The act extends funding authorization for
adoption incentive payments (Section 473A of the Social Security Act) through
FY2008. Initially created in the 1997 Adoption and Safe Families Act (P.L. 105-89),
as part of that act’s overall strategy to promote safety and expedited permanency for
children in state foster care systems, the incentive payments coincided with a
significant increase in adoptions out of the child welfare system.
P.L. 108-145 preserves much of the current adoption incentive payment
structure but updates the baselines (that is, the number of adoptions a state must
exceed in order to be eligible for bonuses) and provides a new incentive tied to the
number of adoptions of older children (age nine years and above). The new law
provides for three separate baselines and allows states to receive adoption incentive
payments if they exceed some or all of these baselines.
Overall adoption. The new law continues a $4,000 bonus for increasing
overall adoptions out of foster care but establishes a new baseline for determining if
a state has achieved this increase. Beginning with adoptions out of public foster care
that were finalized in FY2003, a state that exceeds the number of such public foster
care adoptions accomplished in FY2002 (or in succeeding years, the highest numbers

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of such adoptions completed in a previous year beginning with FY2002) can claim
the $4,000 bonus for each one of those adoptions over the baseline. A state may earn
a bonus for an increase in its overall adoptions without regard to whether it meets the
older child or special needs baselines described below.
Older child adoption. Independently the statute establishes a new bonus for
the adoption of children out of public foster care who are aged nine years or older.
The older child adoption baseline is set for FY2003 at the number of such adoptions
accomplished in FY2002 and for succeeding years, the highest number of such
adoptions achieved in any year (beginning with FY2002). For every older child
adoption over the baseline, a state may earn a $4,000 bonus. A state may earn a
bonus for an increase in its older child adoptions without regard to whether it exceeds
the overall adoption baseline or the special needs baseline (described below).
The addition of an award tied specifically to an increased number of older child
adoptions was proposed by the Administration based on HHS analysis of foster care
adoption data. These data indicated that older children are less likely to be adopted
than younger children and that older children constitute an increasing proportion of
the children waiting to be adopted.
Special needs adoption. The new law amends the prior incentive available
for special needs adoptions and ties the current incentive to special needs children
who are under the age of nine years.4 The state’s FY2003 baseline for special needs
adoptions of children under the age of 9, is the total number of such adoptions it
completed in FY2002; for FY2004 and succeeding years it is the highest number of
such adoptions it completed in a previous year (beginning with FY2002). For every
one of these special needs adoptions over its baseline a state may earn a $2,000
incentive. However, in order to be eligible for these incentives a state must also
exceed either its overall adoption baseline or its older child adoption baseline.
Funding. States are permitted to use adoption incentive funds for any purpose
authorized under Title IV-B or Title IV-E of the Social Security Act. P.L. 108-145
increases the funding authorization level for adoption incentives to $43 million
annually, or a total of $215 million for the five-year period, FY2004 through FY2008
(These funds are to reward states for adoptions finalized in FY2003 through
FY2007). Prior law had authorized a total of $123 million for five years (FY1998-
FY2002.) However, state success at completing adoptions outpaced this funding
level — states won adoption incentive payments totaling nearly $160 million for
adoptions in those five years and Congress appropriated funds above the
authorization level to ensure full payments states could be made.5 For FY2004,
Congress appropriated just $7.5 million. However, the FY2004 omnibus spending
measure (P.L. 108-199) specifies that $27.5 million in unspent FY2003
4 “Special needs” are factors or conditions that pose a barrier to a child’s adoption. They are
defined by each state, and often include the child’s age, ethnicity, membership in a sibling
group, a medical condition or disability, or combinations of such factors or conditions.
5 For more information on adoption incentives, including amounts awarded by state for
adoptions completed in FY1998-FY2002, see CRS Report RL32296, The Adoption
Incentives Program, by Kendall Swenson.

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appropriations for adoption incentives are to remain available for FY2004. This
ensures at least $35 million for FY2004 adoption incentive funding. The President’s
FY2005 budget request includes just over $32 million for Adoption Incentives and
the House Appropriations Committee has tentatively approved this same amount for
FY2005. (See Table 1) This Administration’s budget justifications explain this
funding level as the amount of money it expects states may earn for adoptions
finalized in FY2004.
P.L. 108-145 reauthorizes funding for technical assistance to help states increase
their number of adoptions or other permanent placements. (No funds have been
appropriated for this purpose since its initial enactment.) The new law also requires
HHS to report to Congress by October 1, 2004, on the efforts made by states to
promote adoption and other permanency options for foster children, with special
emphasis on older children. In preparing this report, the law directs HHS to review
state child welfare waiver programs and consult with state governments, child
welfare agencies, and child advocacy organizations to identify “promising
approaches.” Finally, the new law explicitly authorizes financial penalties for states
who fail to submit timely or adequate child welfare data via the Adoption and Foster
Care Analysis Report System (AFCARS). (For more information on these
provisions, see “Data Collection and Reporting,”below.)
Child Abuse Prevention and Treatment Act (CAPTA). On June 25,
2003 President Bush signed the Keeping Children and Families Safe Act of 2003 into
law (P.L. 108-36). The law reauthorizes the Child Abuse Prevention and Treatment
Act (CAPTA) and related programs. The House (by a roll call vote of 421 to 3) and
the Senate (by unanimous consent) had agreed to the conference report (H.Rept. 108-
150) in the previous week. Legislation to reauthorize CAPTA, which had expired
in FY2001, was introduced early during the first session of the 108th Congress (H.R.
14 and S. 342).6
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. P.L. 108-36 increases the funding authorization for
CAPTA’s grant programs to $200 million for FY2004 and extends its program
authority through FY2008. While Congress maintained CAPTA funding through
FY2002 and FY2003, when funding authorization had expired, it has generally
appropriated CAPTA funding well below the statute’s authorized amount (previously
set at $166 million for FY1997). Between FY2000 and FY2001, however, total
CAPTA funding grew from $72.4 million to $87 million, with most of the increase
devoted to the Discretionary Grants part of CAPTA and linked to specific
congressional earmarks for this money. This pattern also holds in subsequent years
(i.e., increases over the FY2000 level are primarily linked to CAPTA’s Discretionary
6 On Feb. 12, 2003, the Senate Health, Education, Labor and Pensions Committee ordered
S. 342 to be reported without amendment (S.Rept. 108-12) and, one day later the House
Education and Workforce Committee ordered H.R. 14 to be reported, as amended (H.Rept.
108-26). In March both chambers passed slightly different versions of the legislation (S.
342) by unanimous consent.

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Grants). Funding was $81.6 million for FY2002 (P.L. 107-116), $88.9 million for
FY2003 (P.L. 108-7) and $89.5 million for FY2004 (P.L. 108-199).
The President’s FY2005 budget recommends significant funding increases for
the Basic State Grants and the Community-Based Grants authorized under CAPTA,
along with a decrease in funding for the Discretionary Grants. For FY2005, the
House Appropriations Committee has given tentative approval to more limited
funding increases for the Basic State Grants and the Community-Based Grants and
would reduce funding to Discretionary Grants as requested by the President. (See
President’s FY2005 Budget Request and Table 1.)
Beyond extending and increasing CAPTA funding authorization, P.L. 108-36
includes provisions 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 law also
includes for-profits (generally) among the groups that may seek demonstration grant
funds and receive technical assistance for programs related to treating or preventing
child maltreatment.
P.L. 108-36 also requires states that seek Basic State Grant Funds under CAPTA
to meet a number of new “assurances” to be eligible for this funding. In requesting
these CAPTA funds states must assure that they will7 —
! require health care providers involved in delivery of an infant who
was prenatally exposed to an illegal drug and is identified as being
affected by this substance use to report this to child protective
services and require that a “safe plan of care” for this newborn be
developed;
! have triage procedures for the appropriate referral of children (who
are not at risk of imminent harm) to a community organization or
voluntary preventive service;
! 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 provisions to ensure that alleged child maltreatment
perpetrators are promptly informed of the allegations made against
them;
! develop (within two years of the legislation’s enactment) provisions
for criminal background checks of all adults in prospective adoptive
and foster care homes;
7 Each of the assurances required of states seeking an allotment under CAPTA’s Basic State
Grant authority must also be met in order for a state to receive funding under the Children’s
Justice Act grants. Program authority for the Children’s Justice Act grants is included in
CAPTA but funding is made available, out of non-appropriated funds, via P.L. 98-473.

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! have provisions for improving the training, retention, and
supervision of caseworkers;
! have provisions to address training of child protective service
workers regarding their legal duties in order to protect the rights and
safety of children and families;
! develop procedures for referral of child maltreatment victims under
three years of age to the statewide early intervention program (for
developmental assessment and services) operated under Part C of the
Individuals with Disabilities Education Act (IDEA).8
The Keeping Children and Families Safe Act of 2003 also reauthorizes (through
FY2008) and increases the funding authority for two related 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, the new
law amends and extends (through FY2008) the authority of certain programs under
the Family Violence and Prevention Services Act. Among the new provisions is a
requirement that HHS reserve some portion of any funds appropriated above $130
million for state family violence prevention grants to fund entities that provide
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.)
Since agreement was reached on the CAPTA reauthorization, two additional
proposals that would amend CAPTA have been introduced. H.R. 2541 (introduced
by Representative Moore) would amend CAPTA to require public disclosure of
findings or information about a case of child abuse or neglect that results in the
child’s death, near-death, other serious injury, or a felony conviction (if such
disclosure is determined appropriate by a judge and is in accordance with applicable
law). H.R. 2582 (introduced by Representative Deutsch) would amend CAPTA to
require that state foster care agencies report to law enforcement authorities any
information they have about a missing foster child, as soon as they determine the
child is missing.
Waivers. P.L. 108-262, which was signed into law on June 30, 2004, extends
the authority of HHS to grant states waivers of certain federal child welfare
requirements through September 30, 2004.9 That law also extended the current
8 The House and Senate have passed differing versions of a bill (H.R. 1350) to amend the
Individuals with Disabilities Education Act (IDEA); both versions, however would require
states seeking grants under IDEA’s Part C to describe their mandatory policies for referral
of child maltreatment victims under the age of 3 and would further require referral of infants
identified as having been effected by prenatal drug exposure; (the House explicitly includes
infants evidencing harmful prenatal exposure to alcohol in its definition of required
referrals). In 2002 states reported close to 198,000 children under the age of 3 who were
victims of child maltreatment; a comparable number of children prenatally exposed to
alcohol or other drugs is not known.
9 Authority to grant child welfare waivers expired with the start of FY2002 but was
(continued...)

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CRS-8
TANF provisions through the end of June. Both the House-passed and the Senate
Finance Committee-approved versions of H.R. 4, which would primarily extend and
amend TANF on a multiyear basis, would give HHS authority to grant child welfare
waivers through FY2008. However, the House-passed bill makes additional changes
to the waiver provisions that are not included in the Senate Finance Committee-
approved version of H.R. 4. The House-passed bill would permit HHS to approve
an unlimited number of child welfare demonstration projects (currently authority is
limited to 10 projects annually). 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. The House-passed 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. Each of the House-passed child
welfare waiver provisions is also included in the more recently introduced H.R. 4856,
which primarily seeks to restructure federal child welfare financing. (More discussion
of H.R. 4856 is included under Child Welfare Financing).

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
and Title 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 afforded children in the
public child welfare system may not be waived in any case.) Between 1996 and 2001
a total of 25 demonstration components were approved and implemented in 17 states.
Of these 10 (located in 8 states) have been completed or were terminated early by the
state and there are 15 ongoing components located in 12 states. Demonstration
projects are typically granted a five-year term and a number of the ongoing
components are operating on the basis of temporary extensions granted by HHS and
pending review of their final evaluation reports. As of August 2004, Delaware is the
only state to request, and be denied a full term extension; the following states have
been granted full five-year extensions: Illinois (for its subsidized guardianship
project), Oregon (for its flexible funding demonstration), and North Carolina (for its
flexible funding demonstration).10
In early September 2004, the Administration announced approval of two new
waiver projects proposed by Minnesota and Wisconsin. Both of the waivers would
allow use of Title IV-E funding for children who leave foster care for subsidized
guardianship. In addition, the Wisconsin waiver will allow children who leave foster
care for either adoption or foster care at age 16 or older to retain eligibility for Title
IV-E services designed to help youth successfully transition from foster care custody
to independent living.
9 (...continued)
reinstated by P.L.108-40 (through the end of FY2003), extended again (through March 31,
2004) by P.L. 108-89 and subsequently, through June 30, 2004, by P.L. 108-210.
10 Information regarding waiver findings as of May 2004 is available on the Children’s
Bureau website at [http://www.acf.dhhs.gov/programs/cb/initiatives/cwwaiver.htm].

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In November 2003, HHS solicited new child welfare demonstration proposals
from states. The last solicitation for these proposals had been issued in February 2000
for FY2000 and FY2001.11 In this past solicitation, the Department had 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.
In its latest call for proposals, however, HHS indicates that it would not necessarily
be bound by these prior policies.12 As of early September 2004, 13 states had
submitted formal proposals seeking approval of new waiver projects (AK, AZ, FL,
ME, MI, MN, MO, NH, NJ, NM, VA, WA, and WI) and, as noted above, two of
those proposals have thus far been approved (MN and WI). Half of the states
submitting proposals (AK, ME, MI, NJ, VA, WI) propose using Title IV-E funds to
establish various kinds of subsidized guardianship programs, including Wisconsin’s,
which has been approved. Minnesota’s approved waiver will allow the state to use
Title IV-E to enhance its current guardianship and adoption assistance payments.
Two states (NM, WA) request waivers to establish a variety of services for kin care
providers, which might include some limited financial assistance. The remaining
proposals are related to provision of preventive services, intervention in cases of
chronic neglect, alternative or intensive case management services and other
reunification services.13 (For more information on child welfare waivers, see CRS
Report RL31964, Child Welfare Waiver Demonstrations.)
Child Welfare Financing
Concerns about the way federal child welfare funds are distributed have
prompted several recent proposals for change. Currently federal funds dedicated to
child welfare (primarily under Title IV-B and Title IV-E of the Social Security Act)
go to states through a complex package of grants, with different allocation formulas
and matching requirements. The bulk of this dedicated federal child welfare funding
is available for children who have already been maltreated and have been removed
from their homes. Nearly all observers of the current methods of distributing federal
child welfare dollars concede one or all of the following points —
! The largest portion of this dedicated federal funding is not available
for use to protect children from abuse or neglect or to enable those
children to receive services that would allow them to remain in their
homes.
! Federal dollars dedicated for support to children in out-of-home
placements generally pay for their room and board and some
associated administrative costs; they are not permitted to be spent for
11 ACYF-CB-IM-00-01, Feb. 4, 2000, may be viewed at [http://www.acf.dhhs.gov/
programs/cb/laws/im/im0001.htm].
12 The new solicitation of child welfare waiver projects, ACYF-CB-IM-03-06, November
24, 2003, may be viewed at [http://www.acf.dhhs.gov/programs/cb/laws/im/im0306.htm].
13 A summary of each of these proposals is available at [http://www.acf.hhs.gov/programs/
cb/initiatives/cwwaiver/proposals/index.htm].

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CRS-10
other kinds of mental health or social services, which these children
are likely to need.
! Federal eligibility rules — limiting state claims for reimbursement
of foster care and adoption costs to children who were removed from
homes that would have been eligible for Aid to Families with
Dependent Children (AFDC), as that program existed in the given
state on July 16, 1996 — are burdensome to administer, and,
illogical (because children may need protection regardless of the
financial circumstances of their biological family).
Apart from these concerns about the delivery to states of federal funds that are
dedicated for child welfare purposes, an understanding of federal financing of child
welfare programs is further complicated by the discretionary use states make of non-
dedicated federal funds. These federal dollars are not specifically, or solely,
authorized for child welfare purposes but may be used for those purposes. The three
largest sources of these non-dedicated funds are the Temporary Assistance to Needy
Families (TANF) block grant, the Social Services Block Grant (SSBG) and
Medicaid. An Urban Institute survey of state child welfare expenditures for FY2000
showed that while states varied greatly in the use of these funds, together they spent
nearly $4 billion from these three sources — or an estimated 42% of all federal
funds expended by states for child welfare purposes in that year.14 The Urban
Institute is expected to release a survey of state FY2002 child welfare expenditures
in early 2005 and preliminary analysis of these data suggests that state use of TANF
and Medicaid for child welfare purposes increased.
While there are few child welfare advocates who fully support the financing
status quo, some are reluctant to accept changes that might jeopardize the current
open-ended entitlement nature of federal foster care and adoption assistance
funding.15 Further while states and child welfare advocates seek greater flexibility
in the use of federal child welfare dollars, some also argue that the system is
fundamentally underfunded and that increased flexibility without additional dollars
will not guarantee improvements. Finally, policy makers, even those who support
increased flexibility, remain concerned that increased flexibility, with or without new
funds, might result in a loss of accountability. In sum, while many observers believe
that the current child welfare financing system is counterproductive to the interests
of children and families, no consensus exists on a method of reform. Some recent
proposals for change are discussed below.
President’s Child Welfare Option. The President’s FY2005 budget, re-
proposes, but does not elaborate on, the administration’s FY2004 budget request to
offer states an alternative method for financing their child welfare system. According
14 Roseanna Bess, Cynthia Andrews, Amy Jantz, Victoria Russell, Rob Geen, The Cost of
Protecting Vulnerable Children, III (Washington: Urban Institute, Dec. 2002), p.18.
15 Funds available on an “open-ended entitlement” are not subject to the discretion of the
annual appropriations process (i.e., Congress must appropriate the full amount to which
states are entitled) and every eligible claim submitted by a state must be reimbursed,
regardless of the total cost to the federal treasury (i.e., they are open-ended).

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CRS-11
to the Administration FY2004 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 to enact this plan has been introduced.
However, the Administration indicates that under this “flexible funding” plan, states
could opt to receive their foster care funding as an annual pre-established, capped,
grant amount, would be able to use these funds for the full range of child welfare
services — from family preservation and other services designed to prevent
placement through provision of foster care and placement for adoption — and would
no longer need to determine a child’s federal foster care eligibility status in order to
use federal funds on the child’s 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 and states choosing the alternative financing plan could also opt
to declare all foster care children eligible for Medicaid. (Current law provides
automatic Medicaid eligibility to foster care children who are eligible for federal
foster care assistance only.) Finally, 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.
Pew Commission Recommendations and Child SAFE Act. In May
2004, the Pew Commission on Children in Foster Care, co-chaired by former
Representatives Gray and Frenzel, released a set of recommendations to restructure
the current federal child welfare system.16 Some of these recommendations have been
made a part of the Child Safety and Family Enhancement Act (Child SAFE Act),
which was introduced in July by Representative Herger (H.R. 4856).17
Foster care, adoption assistance and guardianship. The Pew
Commission recommendations include removing the income eligibility requirements
for adoption assistance and foster care maintenance payments, which would expand
eligibility for these federal dollars. The Commission also recommends creating a new
federal funding stream to reimburse states for payments made on behalf of eligible
children who leave foster care for subsidized guardianship. Reimbursement to states
for costs associated with foster care maintenance, adoption assistance, and subsidized
16 Pew Commission on Children in Foster Care, Fostering the Future: Safety, Permanence
and Well-Being for Children in Foster Care, May 2004. The full report is available online
at [http://pewfostercare.org/research/docs/FinalReport.pdf].
17 For a side-by-side comparison of current law and these proposals, request a copy of the
CRS Congressional Distribution Memorandum, “Child Welfare Funding in Titles IV-B and
IV-E of the Social Security Act (Current Law) and as separately proposed by the Pew
Commission on Children in Foster Care and by the Child Safety and Family Enhancement
(Child SAFE) Act (H.R. 4856),” Aug. 4, 2004, by Emilie Stoltzfus.

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CRS-12
guardianship would continue (or be established) on an open-ended entitlement basis
but the federal matching rate for each state (which currently may range from 50% to
83% depending on the state’s per capita income) would be reduced by 35% (i.e., new
federal matching range of, roughly, 33% to 54%, subject to adjustment).18
The Child SAFE Act (H.R. 4856) would also expand eligibility for adoption
assistance and foster care maintenance payments by removing income eligibility
requirements, but it does not propose new federal funding for subsidized
guardianship. Like the Pew Commission, H.R. 4856 would maintain the current
open-ended entitlement funding for adoption assistance but it would provide for a
greater federal matching rate for adoption assistance than would the Pew
Commission (potential federal matching range of 43% to 71%). Unlike the Pew
Commission, it would place an annual cap on the guaranteed federal foster care
maintenance payment funding while at the same time reducing the federal matching
rate for eligible foster care maintenance payment claims by 35% (as proposed by the
Pew Commission). The overall annual cap would be established by mandatory
funding levels included in H.R. 4856, and each state would have access to these
mandatory funds up to its share of the total FY2003 federal expenditures for foster
care maintenance payments. In FY2003, the federal government expended an
estimated $1.722 billion in foster care maintenance payments; H.R. 4856 proposes
funding of $1.836 billion in FY2005 rising to $2.210 billion in FY2014.19 And, as
also suggested in the President’s Child Welfare Option, the legislation would provide
that states experiencing a “severe foster care crisis” could access additional funds for
foster care maintenance payments out of the TANF contingency fund.
18 States that currently are able to claim the greatest percentage of their caseloads as eligible
for Title IV-E assistance would likely lose money under a straightforward implementation
of this approach. The Commission, which sought to make this part of its proposal cost
neutral to both the federal government and the states, therefore recommended that states
continue to determine Title IV-E eligibility as they have in the past for an additional three
years; states that would have lost money under the proposal would be made whole by
redistributing dollars that would have gone to states that won increased funding under the
proposal. At the conclusion of the three years, the commission recommends that the states
discontinue determining Title IV-E eligibility under the old terms and that they negotiate a
permanent claims adjustment rate. Thus the final federal matching rate available under the
Pew Commission recommendation is not certain.
19 To access their share of the capped entitlement funds for foster care maintenance
payments states would need to submit eligible claims, which would be matched at 65% of
their current matching rate (i.e., federal match of roughly 33% to 54%). States who currently
receive federal reimbursement for a relatively small share of their foster care caseload could
receive reimbursement for a greater share of their caseload — albeit at a lower matching rate
than is provided by current law. However, a state could only receive funds up to their
statutorily established cap, which would be based on the state’s past share of foster care
funding. For these states, then, the cap on funding might mean not all eligible claims would
be matched by the federal government. Alternatively, because of the reduced matching rate,
states who currently have a high percentage of their foster care maintenance payment costs
reimbursed by the federal government might not be able to access all of the funds reserved
for their foster care maintenance payments in a given year. While these states might
experience reduced access to federal foster care maintenance payment funding in the given
year, H.R. 4856 would give states the ability to bank any unused foster care funds for use
in another year or to transfer those funds to their Safe Children, Strong Families Grant.

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CRS-13
Services, Administration, and Training Related to Child Welfare. As
also recommended by the Pew Commission, H.R. 4856 would create a single Safe
Children, Strong Families grant by combining a variety of current federal funding
streams. The grant would provide states with a capped amount of guaranteed funding
in each year. Currently the majority of federal funding for these purposes is available
as an open-ended entitlement for eligible administration and training costs related to
state foster care and adoption assistance programs (authorized under Title IV-E of the
Social Security Act). All eligible state claims are matched at 50% for administrative
costs and 75% for training costs. More limited discretionary and some capped
entitlement funding is also available for services to children and their families (under
Title IV-B of the Social Security Act). The federal government matches state
spending for these purposes at 75%, up to the total amount of funding appropriated.
Under both the Pew Commission recommendations and H.R. 4856, the
proposed Safe Children, Strong Families Grant could not be used for foster care
maintenance payments but would be available for virtually any other child welfare
purpose, including providing services to children and their families, casework
support for children and other administrative costs, and training of child welfare,
court and other relevant personnel. Both proposals would also provide an initial grant
of guaranteed federal dollars of approximately $3.9 billion (which is about $200
million more than the FY2003 funding for these purposes). H.R. 4856 would
additionally include an authorization for discretionary funding up to $200 million in
each of the next 10 years. States would receive a share of the mandatory (and any
discretionary money) based on their historic allocation of the prior funding streams.
The Pew Commission proposes to increase the mandatory grant annually by 2% plus
inflation (Consumer Price Index). By contrast, H.R. 4856 would specify mandatory
and increasing funding amounts for the grant for each of the next 10 fiscal years
(FY2005-FY2014).20 In order to receive these funds, both the Pew Commission and
H.R. 4856 would require states to match federal funds available to them. (The federal
match would be 68%.)
Additional changes proposed. Although in some instances important
details vary, both the Pew Commission and H.R. 4856 propose direct access to Title
IV-E funding by Indian tribes, continued open-ended entitlement funding (50%
federal matching rate) for development and implementation of the State Automated
Child Welfare and Information System (SACWIS), expanded HHS authority to
waive Title IV-E requirements (to allow states to experiment with new ways of using
this funding), new funding to courts that handle child welfare cases, and continued
reservation of funds for child welfare-related research and evaluation.
The two proposals also would provide some new and revised incentive
payments to states, although they differ significantly in their approach. The Pew
Commission recommends replacing current adoption incentive payments with a
20 Under H.R. 4856 states would claim their share of the total grant funding based on their
average share of federal funding for the combined funding streams in FY2001-FY2003. The
mandatory funding level for FY2005 would be $3.878 billion and would rise to $5.010
billion in FY2014. As noted, the legislation would also permit Congress to appropriate
additional discretionary funds of $200 million to the mandatory amount in each year.

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CRS-14
permanency incentive (for achievement of lasting reunification, guardianship, or
adoption) and would also provide an enhanced federal matching rate for the Safe
Children, Strong Families Grant where a state showed increased competence and
reduced caseloads among its child welfare workforce. H.R. 4856 would retain
adoption incentives as they currently exist and would establish a new Challenge
Grant for states that significantly exceed most or all of the national standards
associated with performance indicators now used in the Child and Family Services
Reviews.
The Pew Commission also recommends that at least some of a state’s assessed
penalties for noncompliance with federal child welfare policy be used to implement
a state’s Program Improvement Plan (with this spending directed by HHS) and it also
urges periodic review, by an expert advisory panel, of the methodology and measures
used in the Child and Family Services Reviews.
Other Child Welfare Funding Proposals. The Pew Commission
recommendations and H.R. 4856 suggest comprehensive changes to the current
method of distributing child welfare funds, and the President’s proposal would allow
states to make significant changes in the way they receive federal child welfare
dollars. With the exception of H.R. 1534 (introduced by Representative Cardin) and
the companion measures H.R. 936 and S. 448 (introduced by Representative George
Miller and Senator Dodd), most of the bills introduced in the 108th Congress would
make more targeted changes to the federal child welfare financing structure.
Measures introduced in the 108th Congress are discussed below.
Eligibility for federal foster care and adoption assistance. H.R. 1534
and S. 367 (introduced by Senator Rockefeller) would allow states to substitute their
TANF rules to determine a child’s eligibility for federal foster care and adoption
assistance. Alternatively, H.R. 936 (introduced by Representative George Miller)
and S. 448 (introduced by Senator Dodd) are companion measures that would remove
all income eligibility criteria for purposes of determining whether a state can claim
federal reimbursement of foster care and adoption assistance costs. These bills
would also set the federal matching rate for all Title IV-E components (including
training, administration, and data collection) at a state’s Medicaid matching rate; this
rate may range from 50% to 83%. Finally, S. 862 (introduced by Senator
Rockefeller), would make several adjustments to eligibility rules for federal adoption
assistance, including removing the current income-eligibility requirements.
Subsidized guardianship. A number of recent proposals, including the
companion bills H.R. 936 and S. 448, H.R. 1534, the Pew Commission
recommendations, and S. 2706 (introduced in July by Senators Clinton and Snowe)
have proposed that federal reimbursement be provided for subsidized guardianship
payments. Guardianship is be a legally created relationship between a child and an
adult. A number of states have received special waivers of federal Title IV-E
requirements that have enabled them to provide subsidized guardianship payments
on behalf of former foster care children and more states are seeking this waiver
authority (see Waivers). Advocates of federal reimbursement for subsidized
guardianship emphasize that the payments can eliminate the monetary barrier to
finding a permanent placement option for certain children in foster care for whom
neither adoption or reunification with their family is a possibility.

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CRS-15
The current proposals include similar legislative language or recommendations.
They provide that the federal government would reimburse a part of every eligible
guardianship payment on an open-ended entitlement basis and that payments would
be available for children who were formerly in foster care (if those children were
placed with relative care givers who had undergone criminal background checks, as
currently prescribed by Title IV-E). Other than S. 2706, however, all the subsidized
guardianship proposals are embedded in larger recommendations for changes to
current law that would affect the universe of children on whose behalf a state could
make reimbursement claims and/or the rate at which the federal government would
match those claims.
Other new or expanded services. H.R. 1534 and H.R. 936/S. 448 also
seek a range of new mandatory federal funds that would be dedicated to child welfare
services. H.R. 1534 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-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.)
H.R. 936/S. 448 would allow open-ended federal matching funds, 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. Separately S.
614 (Senator Snowe) would provide $2 billion over five years to help states
coordinate substance abuse services related to child welfare needs.
Federal support for training. H.R. 1534, as well as H.R. 1378 (introduced
by Representative Weller), S. 669 (introduced by Senator Snowe) and H.R. 2437
(introduced by Representative Stark) each includes language that would allow states
to claim federal reimbursement for the short-term training of state-licensed or
approved private child welfare agency staff at a matching rate of 75%. Currently
states may claim reimbursement of this kind of training only at a 50% federal match,
while reimbursement for costs associated with the long-term or short-term training
or education of public state child welfare employees (or future employees) and the
short-term training of current or prospective foster or adoptive parents and for staff
at state-licensed or approved child care institutions may be claimed at a 75% federal
matching rate. Both H.R. 1534 and H.R. 2437 would also extend the 75% matching
rate to short-term training for members of the staff of abuse and neglect courts,
agency attorneys, attorneys representing children, parents, or guardian ad litems, or
other court-appointed special advocates representing children in abuse and neglect
courts, and to other persons employed by state, local, or nonprofit child-serving
agencies that work with the state or local child welfare agency to keep children safe,
provide permanent families for them and provide them with mental health services.

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CRS-16
Finally, S. 2706 would extend the 75% open-ended federal reimbursement for
training to include costs related to short-term training of current or prospective
relative guardians. As noted earlier, both the Pew Commission and H.R. 4856 would
expand the list of individuals for whom federal training funds could be used and
would include both private child welfare workers and court personnel who carry out
child welfare related duties to this list. However, both proposals would also cap
federal funds available for child welfare training purposes. (See Services,
Administration and Training subheading above.)
Other Child Welfare Issues
Interstate Placement of Children. On June 3, House Majority Leader Tom
DeLay, introduced the Orderly and Timely Interstate Placement of Foster Children
Act of 2004 (H.R. 4504). Senator Domenici, on September 8, 2004, introduced
identical legislation (S. 2779). The proposed legislation would amend the current
Title IV-E state plan requirements to provide that states must complete and return a
request from another state for a home study within 60 days of receiving the request
and that, within seven days of receiving the completed home study report, the state
that requested it must make a decision about the use of that home study. It also
includes language created to encourage each state to afford “full faith and credit” to
home studies completed by another state, seeks to remove legal or other barriers to
the use of private agencies to complete interstate home studies, encourages the use
of such contracted services when necessary to expeditiously handle interstate home
study requests and amends the law to promote routine consideration of both in-state
and out-of-state placement options as part of case reviews and permanency planning.
H.R. 4504 would also require the General Accounting Office (GAO) to make a study
of how criminal records checks are done for child welfare purposes and what they
include.21
Th bill would further authorize HHS to make incentive award payments to states
that process an interstate home study request within 30 days. States would be
required to submit certain data to verify their eligibility for the award and, based on
the availability of funds, would receive up to $1,000 for each interstate home study
completed within 30 days. H.R. 4504 would authorize appropriations for the timely
home study incentive payments beginning in FY2005, with appropriations in that
year limited to $10 million; the incentive program would be repealed at the end of
FY2008.
Current federal law provides several protections specific to foster children who
are placed across state lines. These include periodic reassessment of whether the out-
of-state placement remains appropriate and a visit no less frequently than every 12
months to a child placed out-of-state. H.R. 4504 would require a visit at least once
21 These checks are sometimes cited as a source of delay for the completion of home studies.
For more information on delays in interstate home studies, generally, and regarding criminal
records checks for child welfare purposes see Understanding Delays in the Interstate Home
Study Process (Sept. 2002) at [http://aaicama.aphsa.org/home%20study%20report.pdf], and
Understanding Criminal Records Checks (Oct. 2002) at [http://aaicama.aphsa.org/
Survey-CRCF.pdf].

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CRS-17
every six months and would allow private agency case workers (working under
contract with a state agency) to make these visits. Current law requires that a state
agency worker (either of the child’s home state or the state where the child is placed)
make the visit.22
The process of placing a child across state lines is generally governed by the
Interstate Compact on the Placement of Children (ICPC). The ICPC is a kind of
contract between all states, the District of Columbia and the Virgin Islands — each
of which has adopted the identical compact language as a part of their governing
statutes. A compact regarding the interstate placement of foster children is widely
viewed as an important protection for children but the ICPC itself, which was drafted
in 1960 and has not been significantly changed since then, is seen as outmoded and,
in some cases as a contributor to delays in interstate placement. H.R. 4504 includes
a sense of Congress calling for the states to “expeditiously” revise the ICPC. The
American Public Human Services Administration (APHSA), which provides
secretariat services to the ICPC, has formally endorsed “comprehensive reform” of
the ICPC. The APHSA has called for a narrowing of the scope of child placements
covered under the compact, the addition of a standard tying decisions regarding a
child’s placement to the child’s best interest, and new financing and enforcement
mechanisms. APHSA has also called for improved data collection and exchange and
reformed administrative practices related to the ICPC.
Beyond the issue of interstate placements, H.R. 4504 proposes a few other
changes to law, which intend to better ensure the safety of all children in foster care,
protect youth aging out of foster care, and clarify the rights of foster care parents, pre-
adoptive parents and relative caregivers. These changes would amend current law to
require that all states conform their criminal background checks to the standards
included in the Adoption and Safe Families Act (i.e., eliminate the opt-out provision
currently in Section 471(a)(20)(B)) and would require states to check child abuse and
neglect registries before approving a prospective adoptive or foster parent.23 The law
also seeks to enhance the ability of foster and pre-adoptive parents and relative
caregivers to be heard at any proceeding regarding a child in their care and would
require that state courts receiving Court Improvement funds (under Section 438 of
the Social Security Act) notify these individuals of any such proceeding. The bill
would also grant courts that place children for adoption or foster care access to the
Federal Parent Locator Service for the purpose of locating a child’s parent. Finally,
it would strengthen requirements related to maintaining updated health and education
records for children in foster care and specifically require that a copy of those records
22 Federal law includes a number of other provisions primarily concerning placement of
children across state lines. These include a prohibition on the delay or denial of a child for
adoption when an appropriate family is available but living in another state then the child
and a requirement that states develop plans to make effective use of “cross-jurisdictional
resources.”
23 Most child abuse and neglect proceedings are not considered criminal in nature. Thus
current law requirements related to criminal record checks, only, do not capture most abuse
and neglect findings. A survey conducted by APHSA in 2002 found that of the 49 states
responding, 23 included checks of child abuse registries as part of approving foster care or
adoptive placements.

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CRS-18
be made available to any child who is exiting foster care because he or she has
reached the age of majority in their state.
Kinship Care. As noted in the discussion of child welfare financing, a number
of recent bills have called for federal reimbursement of guardianship payments,
particularly for kin who assume legal responsibility for children who are in foster
care. (See Subsidized Guardianship.) These proposals are still pending. However,
Congress recently enacted legislation intended to assist elderly kinship care providers
find affordable housing. In December, the LEGACY Act of 2003 (Living Equitably:
Grandparents Aiding Children and Youth Act) was enacted as Title II of P.L. 108-
186. The law requires the Department of Housing and Urban Development (HUD)
to make grants designed to improve and increase the availability of
“intergenerational dwelling units” and to ensure provision of other needed services
for grandparents caring for their grandchildren. The legislation authorizes
appropriations of $10 million for grants to no more than four private nonprofits and
requires HUD to make a report on the effectiveness of these demonstration projects
no later than December 16, 2006. Authorization for this grant program is repealed
after five years. P.L. 108-186 also requires HUD to ensure that appropriate field
office personnel and headquarter staff receive training concerning how grandparents
or other elderly relatives caring for children can be served under existing affordable
housing programs and further provides that HUD and the Census Bureau must jointly
conduct a study to (1) determine both the number of families in which grandparents
or elderly relatives are caring for children and the affordable housing needs of those
families, and (2) to make recommendations regarding how major HUD-assisted
housing programs can be used, or amended to meet those needs. The report is to be
submitted to Congress by December 16, 2004.
S. 2706 includes a number of additional proposals for supports to kin care
providers. First it would establish a guardianship payment demonstration program
that would be available to metropolitan agencies (e.g., counties) within states that did
not opt to provide subsidized guardianship payments under Title IV-E. Beyond this,
S. 2706 would establish a “kinship navigator” grant program to establish information
and referral systems that would assist caregivers in accessing existing financial and
other supports; promote partnerships between public and private agencies to better
serve kinship caregivers; establish and support kinship care ombudsmen, and support
other activities “designed to assist kinship caregivers in obtaining benefits, services,
and activities designed to improve their caregiving.” The bill would authorize $25
million in FY2005 rising to $75 million in FY2007 for this grant program. Eligible
grantees would need to submit a detailed application and could be a state agency,
metropolitan agency, and tribal organization with experience in addressing the needs
of kinship caregivers or children and jurisdiction over a relevant area (e.g., child
welfare, income-based financial assistance, or aging office). However, HHS would
be required to award at least half of the grant funding to state agencies. The grants
could not exceed three years in duration; federal funding would be 100% in the first
year of the grant period, and 75% or 50% respectively in years two and three of the
grant period (if applicable).
As amended by P.L. 104-193 (the Personal Responsibility and Work
Opportunity Reconciliation Act) Title IV-E requires states to “consider giving
preference” to relative caregivers when determination of a child’s placement is being

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CRS-19
made. S. 2706 would amend this provision to further require that within 60 days of
a child’s removal from his or her home, a state must notify grandparents or other
adult relatives of the child of this removal and explain the options the relative has
under local, state or federal law to participate in a child’s care and placement.
Data Collection and 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.24 In addition, some states and researchers
believe that the measurements currently taken may not accurately reflect the program
improvements states have achieved. The House Ways and Means Subcommittee on
Human Resources held a hearing on November 19, 2003, to assess what data are now
collected, how they are or might be used, and what additional data might be gathered
to enhance safety, permanence, and well-being for foster care children.25 And in May,
the Pew Commission on Children in Foster Care recommended that Child and Family
Services Reviews incorporate “better measures of child well-being” and use
longitudinal data to “yield more accurate assessments of performance over time.”26
The Adoption Promotion Act (P.L. 108-145), which became effective with the
first day of FY2004, authorizes financial penalties for states that submit late or
inadequate AFCARS data. These penalties were previously established in regulation,
but HHS announced in January 2002 that it would withhold further penalties after a
Departmental Appeals Board ruling found they were not authorized in the statute.
The new law explicitly grants HHS authority to penalize states for failing to meet
federal data submission requirements. It establishes that HHS must notify states,
within 30 days after the date that AFCARS data are due to be submitted, of any
failure by the state to submit the data as required in the regulation; HHS must also
give notice that federal payments will be reduced to the state if the data are not
correctly submitted within six months. If the state does not meet this six-month
deadline, federal payments for administrative costs associated with foster care are to
be reduced by 1/6 of 1% of the state’s total expenditures in the first quarter of this
failure and 1/4 of 1% in the second and any subsequent quarters.
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
24 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].
25 The hearing testimony and related documents may be viewed, at
[http://waysandmeans.house.gov/hearings.asp?formmode=detail&hearing=114&comm=2].
26 Pew Commission, Fostering the Future, pp. 28-30. The Commission recommends that a
National Academy of Sciences panel be convened to recommend best outcomes and
measures to be used in child welfare data collection.

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CRS-20
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.
On April 28, 2003, HHS published a request for comment on ways to improve
AFCARS. The agency is particularly interested in obtaining input on the specific
strengths or weaknesses of AFCARS; suggestions for areas of improvement,
including ideas about how the suggested improvement could be made and how the
federal government could facilitate the changes; data elements currently in AFCARS
that could be deleted and any elements that should be added; and strategies to
improve data quality for AFCARS, including the use of incentives. Comments were
also invited based on individuals’ use of the current characteristic and financial data
collected and on the structure of the data file and how it is submitted.27
Student Loan Forgiveness. S. 407, S. 409, H.R. 734 and H.R. 2437
seeking to encourage better-trained, higher-quality workers and greater longevity in
the fields, would offer some student loan forgiveness to professionals providing
social services to children and families. S. 407 (introduced by Senator DeWine)
would amend the Higher Education Act of 1965 to provide student loan forgiveness
for attorneys who receive some training in family, juvenile, or domestic relations law,
and who go on to represent low-income families or individuals involved in the family
or domestic relations court systems. The loan forgiveness would range from 20% for
attorneys who spend at least three consecutive years in the field to 50% for those who
spend at least five years in this kind of employment. The bill would authorize up to
$20 million in FY2004 and such sums as are necessary for FY2005 through FY2008.
H.R. 734 (introduced by Representative Stephanie Jones) and S. 409 (introduced by
Senator DeWine) would provide the same level of funding authorization and similar
loan forgiveness terms for individuals who receive a graduate or undergraduate
degree in social work and then find employment with a public or (certain) private
child welfare agencies. Finally, H.R. 2437 would also amend the Higher Education
Act of 1965 to provide student loan forgiveness for individuals whose social work,
or other related higher education studies, focus on serving children and families and
who have been employed for at least two consecutive years as a child welfare worker.
Under this proposal the loan forgiveness would range from 20% for workers with the
minimum two years of service to 30% for those with four or five consecutive years
of service. This bill would authorize up to $10 million in each of five years for this
purpose. All four of these proposed student loan forgiveness bills would require HHS
to evaluate their effectiveness.
Tax Provisions Related to Adoption. H.R. 336 (introduced by
Representative Camp), H.R. 1057 (introduced by Representative DeMint), and S.
1931 (introduced by Senator Bunning) are identical bills that would make the current
adoption tax credit fully permanent. As a part of the Economic Growth and Tax
27 U.S. Department of Health and Human Services, Administration for Children and
Families, “Request for Public Comment on the Improvement of the Adoption and Foster
Care Analysis and Reporting System (AFCARS),” 69 Federal Register 22386, Apr. 28,
2003.

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CRS-21
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.
In 2001 Congress doubled the existing adoption tax 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 could
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 may claim this entire credit amount regardless of their actual adoption
expenses.
Legislation introduced by Representative Peter King (H.R. 584) and Senator
Lisa Murkowski (S. 2316) would further amend the Internal Revenue Code to ensure
that adoptive parents could, without penalty, withdraw funds from an Individual
Retirement Account (IRA) or 401(k) plan in order to finance an adoption. 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. Although the specifics vary, H.R. 4856 along
with the President’s optional child welfare financing system and the
recommendations offered by the Pew Commission would allow direct federal
funding to tribes for Title IV-E purposes.28 In addition, Representative Camp (H.R.
443) and Senator Daschle (S. 331) have introduced identical bills that 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 by the Senate Finance Committee (H.R. 4737), when the Congressional
28 For a side-by-side review of differences in the proposals see “Tribes” in the CRS
Congressional Distribution Memorandum, “Child Welfare Funding in Titles IV-B and IV-E
of the Social Security Act (Current Law) and as separately proposed by the Pew
Commission on Children in Foster Care and by the Child Safety and Family Enhancement
(Child SAFE) Act (H.R. 4856),” Aug. 4, 2004, by Emilie Stoltzfus.

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CRS-22
Budget Office estimated their cost at $12 million for FY2004 and $398 million over
the FY2004-FY2012 period.29
Additional legislation relevant to tribal child welfare includes H.R. 4 (TANF
reauthorization), which passed the House early in the 108th Congress and would set-
aside $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; S. 1601 (by Senator Nighthorse Campbell), which would amend the
Indian Child Protection and Family Violence Prevention Act and was reported out
of the Senate Committee on Indian Affairs on March 9, 2004; and H.R. 2750 (by
Representative Don Young), which would amend the Indian Child Welfare Act.
Support For Current and Former Foster Care Children and Youth.
As introduced by Representative Millender-McDonald 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 website 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. An almost identical version of
this bill (which would also allow direct grants to local political subdivisions) was
introduced by Representative Millender-McDonald as H.R. 2880 and by Senator
Landrieu as S. 1419.
H.R. 4003, as introduced by Representative George Miller, would amend Title
IV of the Higher Education Act to establish separate grants to public and private
institutions of higher education 1) to provide technical assistance and supportive
services, including education and financial aid counseling or other appropriate
services to foster care youth and 2) to ensure basic housing for foster care youth who
are living in college dormitories during the regular school year and during school
breaks (excluding the summer break). The act would also allow a part of a foster care
youth’s cost of living to be added to the “cost of attendance” figure, which is used as
part of determining financial need for college students. Finally it would make other
revisions designed to expand access to federal financial aid for foster care youth,
identify the number of such youth who apply for such aid, and to track the number
of former foster care youth who complete an undergraduate degree. For its purposes,
H.R. 4003 would define “foster care youth” to includes youth who are currently in
care, or who were in foster care at age 18 and who are in high school or college.
Preventing Voluntary Relinquishments for Mental Health Reasons.
The Keeping Families Together Act (S. 1704, introduced by Senator Collins, and
29 The major differences between the earlier reported language (H.R. 4737, 107th Congress)
and provisions introduced in the current Congress (S. 331 and H.R. 443) are that the bill
reported in the 107th Congress included a separate definition of “tribe” for native groups in
Alaska and would have required that those Alaska groups meet the same federal foster care
home requirements that states must meet.

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CRS-23
H.R. 3243, introduced by Representative Ramstad) would amend Title V of the
Public Health Act to authorize competitive “family support grants” for states seeking
to establish systems of mental health care and services that would prevent the
practice of parents relinquishing their children to child welfare or juvenile justice
custody to obtain mental health services for their children. The General Accounting
Office reported in April 2003 that a survey of 19 state child welfare directors and
juvenile justice officials in 30 counties had produced a conservative estimate of
12,700 children who, during FY2001, were placed in child welfare or juvenile justice
custody so that the children could receive mental health services. State and county
officials surveyed by GAO reported that limitations of public and private health
insurance, inadequate supplies of mental health services, limited availability of
services through mental health agencies and schools, and difficulty meeting eligibility
rules of services influenced these kind of placements.30
S. 1704/H.R. 3243 would authorize $4.5 million for FY2004, $6.5 million for
FY2005, and $11 million in each of FY2006 through FY2009 to award grant funds
to states to establish a “sustainable system of care” for children and youth (under the
age of 21) who are in state custody to receive mental health services or who are at
risk of this placement. States winning grant funds could use them to deliver mental
health care and family support services to these children and their families, but only
as part of a transition to this “sustainable system.” The grant funds, which would be
received over six years and would require increasing levels of state matching funds
beginning with year three, must also be used by states to establish a state and local
infrastructure that permits interagency cooperation and cross-system financing;
expand public health insurance programs to cover an array of community-based
mental health and family support services; provide outreach and public education;
and provide the necessary training and professional development for personnel who
work with eligible children and youth to implement the state’s plan; and for
administration of the plan, including development and maintenance of data systems.
The state’s plan must be submitted in the second year of the grant and, among other
things, must describe how the planned system of care would be financed — including
contributions from state agencies, state use of funds via Medicaid options or waivers
or the State Children’s Health Insurance Program (SCHIP), and other public health
insurance mechanisms.
The grants would be administered by the HHS administrator of the Substance
Abuse and Mental Health Services Administration (SAMHSA) in consultation with
officials of the Administration for Children and Families (ACF) and the Centers for
Medicaid and Medicare Services (CMS), also at HHS, the Office of Juvenile Justice
and Delinquency Prevention (OJJDP) at the Department of Justice, and the Assistant
Secretary of Education for Special Education at the Department of Education.
SAMHSA, along with each of the above-named agencies, would also be required to
establish and staff a task force to examine problems of mental health in the child
welfare and juvenile justice systems, along with access by children and youth to
mental health services and the role of agencies in promoting access to these services
30 U.S. General Accounting Office, Child Welfare and Juvenile Justice: Federal Agencies
Could Play a Stronger Role in Helping States Reduce the Number of Children Placed Solely
to Obtain Mental Health Services, GAO-03-397, Apr. 2003.

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CRS-24
for children and youth. The task force would work with stakeholders in the system
to make recommendations to Congress on how to improve delivery of mental health
services to children and youth with serious emotional disturbances; develop
improved reporting requirements concerning the numbers of children entering child
welfare and juvenile justice systems to access mental health services and create
standard definitions for categories of data to be collected; encourage interagency
cooperation to eliminate the practice of custody relinquishment; provide advice to
SAMHSA on administering the family support grant program; coordinate and deliver
technical assistance for states and agencies implementing the grant program; make
recommendations for breaking down barriers to coordination in existing federal
programs; and, finally, provide a biannual report to Congress on its recommendations
and progress in carrying out its duties. S. 1740/H.R. 3243 would appropriate $1
million in each of FY2004 through FY2009 to fund this task force.
Recruitment of Foster Care and Adoptive Parents. As introduced by
Representative Jim Cooper, H.R. 4431 would create a competitive grant program
(modeled after the “One Church, One Child” program) that would support the
establishment or expansion of programs that use networks of public, private and
faith-based organizations to recruit and train qualified foster parents and adoptive
parents and to provide support services to foster and adoptive parents and their
children. Eligible applicants would include state or local governments, local public
agencies, community-based non-profits and charitable or faith-based organizations.
H.R. 4431 would authorize up to $20 million in each of FY2005-FY2009 for this
purpose. In addition, the legislation would require HHS to annually report on the
grants made and the effectiveness of those grants. And it would separately authorize
up to $1 million in each of FY2005-FY2009 for the creation of a National
Clearinghouse for Adoption Promotion and Foster Parent Recruitment Programs.
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, has touched
on child welfare-related issues, and some child welfare-related measures are included
in the comprehensive TANF reauthorization legislation passed in the 108th Congress
by the House on February 13, 2003 (H.R. 4). On October 3, 2003, the Senate
Finance Committee reported its version of TANF reauthorization legislation (H.R.
4, S.Rept. 108-162).
Improve Child Well-Being and Reduce Child Poverty. Congress is
considering 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,
TANF policies are important to child welfare advocates, workers and clients.
As passed by the House in February 2003, 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 House-

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CRS-25
passed bill would also require HHS to develop “uniform performance measures” to
determine how well states are achieving the stated purposes of the block grant
funding. The Senate Finance Committee, which reported its version of the TANF
reauthorization legislation in October 2003 (H.R. 4, S.Rept. 108-162), would also
require development of these performance measurements. However, that bill does not
amend the overall purposes of TANF to explicitly include improvement of child
well-being. At the same time, the Senate Finance Committee-approved version of
H.R. 4 would require states to address child (or where appropriate) adolescent well-
being in each Family Self Sufficiency Plan (development of these plans would also
be mandatory for TANF recipients). Additionally, both the House-passed and the
Senate Finance Committee-approved versions of H.R. 4 would require the Census
Bureau to implement a new survey of program participation to assess outcomes of
continued welfare reform on the economic and child well-being of low-income
families. The Senate Finance Committee-approved bill would further require the
Commerce Department to produce reports for Congress on the survey findings at the
second and fifth year following enactment of the legislation.
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. The House-passed H.R. 4 would limit this kind
of “child-only” case by requiring that after two 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. (The House-passed H.R. 4 provides an exemption for
states whose constitution or statute would prohibit a full family sanction, but this
exemption would expire within one year of enactment of this provision.) The Senate
Finance Committee bill does not amend these sanction provisions. Both the House-
passed and Senate Finance Commitee-approved versions of H.R. 4 would newly
require states to report on the number of families (and total number of individuals)
that lost TANF assistance due to sanctions or time limits, or for other specified
reasons.
President’s FY2005 Budget Request
As in past years, the President’s FY2005 budget requests a total of $505 million
for the Promoting Safe and Stable Families and a total of $60 million for Education
and Training Vouchers to former foster care youth. These amounts represent the full
funding authorizations proposed by the Administration in 2001 and passed by
Congress late that same year (P.L. 107-133). For FY2004, Congress provided $404
million in Safe and Stable funding and $44.7 million for the vouchers. In addition,
the President’s FY2005 budget proposes a total of $133.3 million for three grant
programs authorized under the Child Abuse Prevention and Treatment Act. These
same programs were funded at $89.5 million in FY2004. The President’s FY2005
proposal would offer $42 million for Basic State Grants, a little less than twice their
$21.9 million funding level in FY2004 and $65 million for the newly re-named

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Community-Based Grants for the Prevention of Child Abuse and Neglect, which
received $33.2 million for FY2004. At the same time it would decrease (by $8.1
million) funding for CAPTA’s research and demonstration (discretionary) grants.
The Administration’s Budget Justifications assert that the increased funding for
Basic State Grants and Community-Based Grants for the Prevention of Child Abuse
and Neglect would strengthen state child abuse prevention and treatment efforts by
assisting them in meeting new “prevention-related” eligibility requirements included
in the Keeping Children and Families Safe Act of 2003 (P.L. 108-36) and by enabling
states to provide more post-investigative services to children, improve the capacity
of their community-based programs to measure the effects of their work, and also
allow these programs to serve more families. As in other years, the Administration
explains the requested decrease in the Discretionary Grants as roughly equivalent to
the amount of congressional earmarks attached to this grant program for the previous
fiscal year. (See discussion of Child Abuse Prevention and Treatment Act, above.
The FY2005 President’s budget renews the Administration’s call for an
alternative child welfare financing option, although it has not proposed any specific
legislation for this purpose. (For more discussion of this proposal see Child Welfare
Financing, above.) Finally, noting that a March 2003 decision of the United States
Court of Appeals for the Ninth Circuit (Rosales v. Thompson) “contravenes the
Department’s longstanding interpretation of the Social Security Act,” the
Administration’s FY2005 proposal also states its intention to seek an amendment of
that act to clarify that “home of removal,” for purposes of determining a child’s
eligibility for federal foster care assistance, is “linked inextricably” to the custodial
relative’s home from which the child is removed.31
Child Welfare Funding Levels
On September 9 the House passed H.R. 5006, the Departments of Labor, Health
and Human Services, and Education, and Related Agencies Appropriations Act for
FY2005. The bill includes the same FY2005 funding levels for child welfare
programs that were recommended by the House Committee on Appropriations (see
H.Rept. 108-636). The full Senate has not yet considered FY2005 appropriations for
child welfare programs. However, on September 15, the Senate Committee on
Appropriations approved a bill (S. 2810) with child welfare program funding levels
similar, in many cases, to those passed by the House and requested by the President.
31 Rosales v. Thompson , 321 F.3d 835 (9th Cir., Mar. 3, 2003). The court of appeals ruled
in this decision that a child could be eligible for federal foster care participation if he or she
would have met the required AFDC-eligibility test either in the home of the parent or
relative from which he or she was removed or in the home of a specified relative where he
or she had been living at the time court proceedings were held. HHS has estimated that
application of this ruling, in all nine states included in the Ninth Circuit, would cost the
federal government $77 million in FY2005 and $375 million over five years. In California,
where the case arose, the Sacramento Bee has reported that a federal judge ruled that the
state and its counties must pay more than $80 million in previously denied foster care
benefits as a result of the Rosales ruling. The federal government would be responsible for
matching these eligible claims. See “Foster Ruling to Cost State Millions,” Sacramento Bee,
Feb. 14, 2004.

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Compared to the President’s FY2005 request, both H.R. 5006 (as passed by the
House) and S. 2810 (as approved by the Senate Appropriations Committee) would
appropriate smaller increases for CAPTA’s State Grants and Community-Based
Grants. In addition, H.R. 5006 recommends more funding ($410 million) for the
Promoting Safe and Stable Families Program than is included in the Senate
committee-approved S. 2810 (which would maintain the FY2004 funding level of
$404 million). At the same time both congressional proposals are lower than the
President’s request of $505 million for the program. Similarly the House-passed
H.R. 5006 would provide more funding for Education and Training Vouchers to
youth who have aged out of foster care ($50 million ) than is recommended by the
Senate Appropriations Committee in S. 2810 (which would maintain the FY2004
funding level of $44.7 million), but both proposals are lower than the President’s
request of $60 million for the program. In addition, as approved by the Senate
Committee on Appropriations, S. 2810 would fund the discretionary grants program
authorized by CAPTA at the current year level of $34.4 million, while both the
House-passed H.R. 5006 and the President’s budget recommend lowering that
funding level to $26.3 million for FY2005. Finally, the Senate Appropriations
Committee bill (S. 2810) estimates the need for somewhat more funding (additional
$40.4 million) in the mandatory foster care account, as compared to what is included
in both the House-passed H.R. 5006 and the President’s FY2005 budget request.
(Eligible claims made under this mandatory account must be paid regardless of the
level of funding included in the final appropriations measure.)
Table 1 (below) lists final funding levels for selected child welfare programs
in FY2002, FY2003 and FY2004 and indicates whether the program receives
mandatory or discretionary funding. The table also shows proposed FY2005 funding
for these same programs.

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Table 1. Proposed and Final Funding for Selected
Child Welfare Programs, FY2002-FY2005
($ in millions)
Final Funding
Proposed FY2005 c
Program
President’s
House
Senate
kind of funding
FY2002 FY2003a FY2004b
request
passed Comm.
Title IV-B of the Social Security Act
Child Welfare Services
292
290
289
292
292
292
discretionary
Child Welfare Training
7.5
7.4
7.4
7.5
7.5
7.5
discretionary
Promoting Safe & Stable Families
mandatory + discretionaryd
375
404
404
505
410
404
Mentoring Children of Prisoners
discretionarye
0
9.9
49.7
50
50
50
Title IV-E of the Social Security Act
Foster Care
mandatoryf
4,519
4,485
4,974
4,855
4,855
4,896
Adoption Assistance
mandatoryf
1,342
1,463
1,700
1,770
1,770
1,770
Adoption Incentives
43
42.7
7.5g
32.1
32.1
32.1
discretionary
Foster Care Independence
140
140
140
140
140
140
mandatory
Foster Care Independence
Education and Training Voucherse
0
41.7
44.7
60
50
44.7
discretionary
Child Abuse Prevention and Treatment Act
Basic State Grants
22.0
21.9
21.9
42.0
28.5
27.5
discretionary
Discretionary Grants (for research
and demonstration)
26.2
33.8
34.4
26.3
26.3
34.4
discretionary
Community-Based Grants for the
Prevention of Child Abuse and
33.4
33.2
33.2
65.0
43.2
43.2
Neglecth
discretionary
Children’s Justice Act Grants
off-budgeti
20.0
20.0
20.0
Not applicable
Other Programs (all discretionary funding)
Abandoned Infants Assistance
12.2
12.1
12.1
12.1
12.1
12.1
Adoption Opportunities
27.4
27.2
27.1
27.3
27.3
27.3
Adoption Awarenessj
12.9
12.8
12.8
12.9
12.9
12.9
Source: Table prepared by Congressional Research Service (CRS) .
a. The numbers in this column reflect the 0.65% funding rescissions approved as a part of the final
funding law (P.L. 108-7), which was applicable to all of the discretionary funds in this table.
b. The numbers in this column reflect the 0.59% funding rescissions approved as part of the final
funding (P.L. 108-199), which was applicable to all of the discretionary funds in this table.

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c. The numbers in the “House” column reflect those that were passed as part of H.R. 5006 on
September 9, 2004. The numbers in the “Senate Comm.” column reflect funding levels included
in S. 2810 as it was approved by the Senate Committee on Appropriations on September 15,
2004.
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. Funding
above the mandatory level was subject to the funding rescissions in both FY2003 and FY2004.
See table notes a and b.
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 level shown for FY2002 and FY2003 are estimated
federal expenditures based on state claims; the final funding level for FY2004 and the
President’s FY2005 request reflect estimates of what states are expected to claim for these
programs in those years.
g. P.L. 108-199 includes language to ensure the availability of unused FY2003 adoption incentive
funding (totaling approximately $27.5 million) for FY2004. Thus Congress expect the total
available FY2004 adoption incentive funding to equal about $35 million.
h. P.L. 108-36 renamed these grants, which are authorized under Title II of CAPTA and were
previously call Community-Based Family Resource and Support Grants.
i. 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.
j. 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 FY2002 and $9.8 million in
each of FY2003 and FY2004. Section 330G authorizes a Special Needs Adoption Program
aimed at improving awareness of adoption of special needs children. This program received
$3 million in funding for each of FY2002 (first years funds were authorized under this section),
FY2003 and FY2004.
For More or Related Information
CRS Report RS20230, Child Welfare: The Chafee Foster Care Independence
Program, by Emilie Stoltzfus.
CRS Report RL31242, Child Welfare: Federal Program Requirements for States, by
Emilie Stoltzfus.
CRS Report RL32070, Interstate Compact on the Placement of Children, by
Douglas Reid Weimer.
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.
CRS Report RL31769, Immigration: International Adoption, by Alison Siskin.
Section 11, House Ways and Means Committee Green Book, 2004 edition
[http://waysandmeans.house.gov/media/pdf/greenbook2003/Section11.pdf]

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