The Importance of Preserving the IV-E Entitlement

“Flexibility” is a buzzword in child welfare policy circles these days. When advocates talk about child welfare reform, increasing funding flexibility is usually one of the primary objectives.

It is a worthy goal, in my estimation. But not at the cost of child welfare’s single greatest advantage in federal funding: the entitlement status.

No funding structure more sorely needs its parameters broadened than Title IV-E, by far the largest federal contribution to state and local systems. Its rigid formula rewards only the removal of children into foster care; funding may only be used to reimburse states for the cost of maintaining children in foster care and kinship care who are federally eligible; training caseworkers and providers; recruiting foster parents; and collecting data.

Compounding this problem is the comparatively paltry level of funding the federal government provides for prevention and post-permanency services, via the Title IV-B programs. Federal outlays for IV-E foster care and kinship are more then $4.3 billion per year while the IV-B programs collectively receive around $700 million.

Because of this disparity, the moral imperative to address potential abuse and neglect before it happens, and the cost-effectiveness of prevention and early intervention, many rightly advocate for more flexibility in the use of Title IV-E funds.

Meanwhile, the number of children qualifying for federal foster care assistance continues to decline precipitously because of outdated eligibility standards. As Amy Lemley from the John Burton Foundation highlighted in a recent editorial, in California only 44 percent of children in foster care currently receive federal support.  California, and others, will see its federal IV-E funding continue to erode over time.

There is no question that this is a serious conundrum. If we do nothing, federal investments in child welfare will continue to decline. Yet there is not presently the Congressional will to expand the IV-E entitlement to cover other services.

Accordingly, some advocates in Washington are reexamining the concept of a federal child welfare block grant. Presumably a block grant would combine several existing child welfare programs, including IV-E and IV-B, into one large program. Funding would then be distributed to each state based on formula. States would be given maximum flexibility in how they use those funds.

In my view, this would be a tremendous mistake.

Despite efforts to rebrand block grants as “capped entitlements to states,” they are not a new concept. In fact, they have been proposed several times in the past – most recently by former President George W. Bush – and Congress has always wisely resisted.

Yes, the flexibility inherent in a block grant would be great. States would have the resources to increase their investments in proven and underutilized preventive and post-permanency services.

But at what cost is “flexibility” worth it?

IV-E, while flawed, is currently one of the few remaining entitlement programs. This means that regardless of the fiscal or political situation, every single child eligible for funding will receive it.

Look at the recent deficit reduction battles and you’ll see why entitlement status is something that should never be conceded. Sequestration is currently wreaking havoc on a number of child welfare programs, including: the IV-B programs, the Child Abuse Prevention and Treatment programs, and the Social Services Block Grant (SSBG).

IV-E and Medicaid were spared, due to their entitlement status.

SSBG is a great example of the perils of the block grant. Created in 1981 by merging a number of funding streams, it was originally funded at more than $2.7 billion. Now it receives $1.7 billion annually, has been subjected to sequestration, and is being targeted for complete elimination by the House of Representatives.

SSBG’s flexibility is critical to the program’s success since it funds a wide range of social programs. Yet this flexibility has proven to be a double-edged sword: critics call the program duplicative and by not serving a unique population the program lacks a “face,” making it easier to attack.

Aid to Families with Dependent Children, the old federal welfare program, was also transformed into a block grant in 1996, named Temporary Assistance for Needy Families. Does anyone think TANF has been a success for children and families?

Designed to be a counter-cyclical anti-poverty program, TANF caseloads actually went down around the country the past several years despite the country experiencing the largest economic downturn in 100 years.

Anti-government conservatives in the House of Representatives are the most consistent proponents of block grants, looking to turn Medicaid and food stamps into block grants and cut billions from both in the process. Shouldn’t this be a giant red flag about the perils of a block grant?

My advice to child welfare advocates: Forget the block grant. Flexibility can and should be achieved by other means, and is in fact being done so in dozens of states around the country via IV-E waivers.

IV-E’s entitlement status has shielded it from budget cutters and should never be negotiated away. Let’s instead focus on ways to prevent the erosion of federal funding by discarding the outdated eligibility link and finding a way to make all children in this country eligible for federal support. The IV-E entitlement should be expanded, not abandoned.

Sean Hughes is a member of The Imprint’s Blogger Co-Op. He is a policy consultant working with child welfare organizations in California and Washington, D.C, and spent 10 years as a Congressional staffer. 

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Legislative leaders in California have produced an initial plan to achieve Gov. Gavin Newsom's call for the closure of the state's Department of #JuvenileJustice, which once housed more than 10,000 youth and young adults and now holds fewer than 1,000.