Wyden Introduces Bill To Overhaul Foster Care Entitlement

Sen. Ron Wyden (D-Ore.), the ranking Democrat on the Senate Finance Committee, has introduced a bill that would significantly expand a multi-billion dollar federal entitlement program that currently funds only foster care services.

Finance Committee Chair Orrin Hatch (R-Utah) expressed interest in working with Wyden on the legislation, and said at a committee hearing on August 4 that the bill would receive a markup in the fall.

“I look forward to working with him on legislation that would reduce reliance on foster care group homes and use funds for…preventive services,” Hatch said at the hearing, which was held to discuss strategies for keeping families together and reducing the use of foster care.

The Family Stability and Kinship Care Act of 2015 proposes to use the federal “IV-E” entitlement for the provision of “time-limited services” aimed at keeping families together and preventing the need for some removals to foster care. It would also augment spending in “IV-B,” a key family preservation program, and incentivize states to meet new national child welfare standards.

“The bill will help put more states in a position to adopt fresh strategies,” Wyden said during yesterday’s hearing. “This is in no way condemnation of foster care. This is about creating as many good choices for youngsters growing.”

Rep. Lloyd Doggett (D-Texas) is expected to introduce companion legislation when the House returns to session.

IV-E Freedom

Since its inception, section IV-E of the Social Security Act has reimbursed states for part of their foster care costs, though only for children removed from families below a certain income threshold. Critics believe that the IV-E foster care entitlement, which routinely sends more than $4 billion to states, incentivizes unnecessary removal of youths.

Wyden’s bill would, for the first time, permit all states to seek reimbursement for other types of child welfare services aimed at keeping kids with biological parents or kin, or returning them to those homes in short order. Among the allowable new uses for IV-E funds: substance abuse services, parenting education, affordable housing and kinship care support.

The primary target for these services are families with a “child who is a candidate for foster care.” The bill defines such a candidate thusly:

 “A child who is identified in a case plan as being at imminent risk of entering or re-entering foster care but who can remain safely in the child’s current home or in a kinship placement as long as the time-limited family services that are necessary to prevent the child’s entry or reentry into foster care are provided.”

States could only seek funds to support time-limited services for a 12-month period. The clock starts with the first identification of a candidate in a case plan.

Formula Boost and Incentives

Federal funding for time-limited services has always been available through another section (IV-B) of the Social Security Act, a smaller pot of money that is mostly distributed to states through two formula grant programs. Wyden’s bill would remove the time limits for those dollars, granting states the freedom to use them beyond the previously prescribed 15-month window.

IV-B would also see a massive increase in funding under the Family Stability and Kinship Care Act. Annual spending for Promoting Safe and Stable Families, one of the two formula grants that make up IV-B, would rise to $1 billion, a $470 million boost from current appropriations, according to Wyden.

The Family Stability and Kinship Care Act of 2015 would also establish reimbursement rate bonuses starting in 2022. States could receive a IV-E reimbursement rate hike of up to 10 percent by landing above the national average on the following:

  • Percentage of “candidates for foster care” who do not end up in foster care during the 12-month window for time-limited services.
  • Percentage of children who leave foster care for “reunification, kinship placement, guardianship or adoption.”
  • Per-child spending on time-limited family services.

Conversely, states that ranked below the national average on all of those indicators could see their reimbursement rates reduced by up to 10 percent.

Flexibility Problems

Wyden circulated a draft version of this legislation in May. Since then, he has added language that constrains the scope of time-limited services, and requires states to submit a five-year plan for spending on time-limited services.

He announced his plan to formally introduce legislation yesterday at “A Way Back Home: Preserving Families and Reducing the Need for Foster Care,” a hearing held jointly with Hatch. Witnesses discussed how some systems continue to struggle with efforts to preserve or reunify families.

Sandra Killett, executive director of New York City’s Child Welfare Organizing Project, told the committee about the time she called child protection asking for assistance with her eldest son. He ended up spending a year and a half in foster care.

“I asked for help, what happened instead was an investigation,” Killett said. “I had all the protective factors in place, I knew what was necessary for my family. We didn’t get that.”

Rosalina Burton, who now works at a group home she once lived in, told the committee that her mother was never offered or provided the help she needed to shake addiction and distance herself from an abusive spouse. Burton spent 12 years moving in and out of foster care, changing schools more than a dozen times while losing touch with many of her siblings.

“All of the reunification attempts told me that my parents wanted to take care of us,” Burton said. “All of my reentries told me they didn’t know how.”

Child welfare leaders from Oregon and Utah explained how federal IV-E waivers have allowed them to spend funds previously restricted for foster care on an array of services for parents and children in crisis due to poverty, substance abuse and homelessness.

Oregon, which currently operates under a waiver, has one of the lowest rates of group care use in the country.

“The way we train caseworkers and supervisors is to use foster care as a last resort,” said Chuck Nyby, a program analyst for the Oregon Department of Human Services, when asked about Oregon’s performance. “Kinship care is well ingrained,” he said, and foster care is “not viewed anymore as a solution for kids.”

The most recent round of IV-E waivers expires in fiscal 2019.

What’s Next

Hatch said he planned to schedule a markup for the bill in the fall, but he is not currently a co-sponsor of the bill. Nor is any other Republican member of the committee.

The legislation proposes a significant spending increase to IV-B, and and has yet to be scored by the Congressional Budget Office.

Hatch and Wyden appeared to be in philosophical lockstep, at least.

“We direct the highest portion [of federal dollars] to the least desirable outcome, removal from home and placement into stranger care,” Hatch said in a statement at the outset of yesterday’s hearing.

Hatch has expressed a specific interest in limiting the federal investment in group homes. He held a hearing in May on the subject, and two years ago proposed legislation that would prohibit group placements for children under the age of 13.

Ann Silverberg Williamson, the executive director of the Utah Department of Human Services, testified that the state’s IV-E waiver allowed them to develop HomeWorks, a family support services strategy now in replication across the state.

She testified that the cost of one placement to group care in Utah is enough to cover services for 34 families under HomeWorks.

Williamson called Wyden’s bill “an encouraging measure.”

The bill begins with seven Democrat co-sponsors. Wyden has also garnered endorsements from more than 60 organizations. Among them: The Alliance for Strong Families and Communities, the Children’s Defense Fund, Child Welfare League of America, First Focus and the Dave Thomas Foundation for Adoption.

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Federal law says states should terminate parents rights if a child has been in #fostercare for 15 of the past 22 months https://bit.ly/3ixvz0I #childwelfare