The Imprint will spend 2016 investigating how the federal government pays for child welfare, and the emerging momentum behind changing it.
In this installment of our recently launched series on the financing of foster care, our two analysts tackle the idea of converting the existing federal entitlement into a capped amount of money, or a block grant.
Currently, the federal government pays for out-of-home foster care through Title IV-E of the Social Security Act, which reimburses states for a portion of the costs associated with taking care of children who are in the system.
Over the years, policymakers and some advocates have thought about whether it is wise to convert that open-ended entitlement into a capped funding stream.
We will leave the debate about whether or not this is a good idea to our contributors, Sean Hughes and Richard Wexler. But I do want to highlight a few reasons why the discussion about the IV-E process is so important.
There are basically two key problems with how the feds fund foster care: one seemingly structural, but actually more philosophical, and the other downright obvious.
So let’s start with the philosophical.
If you are heading a child welfare agency, the nature of entitlement is problematic. Title IV-E is tied to children who enter foster care. So, as the numbers of children entering foster care declined over the past 15 years, so too did the federal outlay.
This is where it gets a little philosophical. If you believe that the mandate of child welfare agencies should go beyond child protection, and focus on keeping families together, then these dwindling dollars tied predominantly to caring for children only after they have been separated from their families is a real problem.
If you believe that the child welfare system is really about child protection, and that keeping families together is the provenance of other agencies, then the entitlement is acting how it should.
This is the philosophical debate within the field, and likely is — more than dollars and cents — the primary driver in the warring thoughts on whether or not the entitlement should remain open or be capped.
The other problem is actually structural and quite straightforward. It pertains to the existence of an income test for federal IV-E reimbursement, meaning that federal dollars only pay for children from poor families.
Back in 1996, the Aid to Families with Dependent Children (AFDC) program, “welfare,” was converted to a block grant, called Temporary Assistance to Needy Families (TANF). States set their own income tests for TANF eligibility, but the IV-E reimbursement test remains the AFDC income test from 20 years ago.
Translation: Title IV-E only supports foster care for children who come from families with incomes below a two-decade-old poverty test. This has wreaked havoc in terms of states struggling to document eligibility, with the State Policy Advocacy and Reform Center reporting that the 2010 rate of IV-E state reimbursements ranged from less than 30 percent of children to as much as 60.
This eligibility conversation is one we will cover in a later installment of the “Dollars and Priorities” series.
We note it now because this clearly structural and seemingly fixable problem almost always makes its way into the more philosophical question about how this country should spend its foster care money.
We look forward to your reactions to our two commentaries on the idea of block granting foster care.
To read Hughes’ piece, “Block Grants are Funding Suicide,” click HERE.
To read Wexler’s piece, “Don’t Be Afraid of the Block Grant Bogeyman,” click HERE.