[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]


 
                     FEDERAL FOSTER CARE FINANCING

=======================================================================

                                HEARING

                               before the

                    SUBCOMMITTEE ON HUMAN RESOURCES

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                              JUNE 9, 2005

                               __________

                           Serial No. 109-14

                               __________

         Printed for the use of the Committee on Ways and Means

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                      COMMITTEE ON WAYS AND MEANS

                   BILL THOMAS, California, Chairman

E. CLAY SHAW, JR., Florida           CHARLES B. RANGEL, New York
NANCY L. JOHNSON, Connecticut        FORTNEY PETE STARK, California
WALLY HERGER, California             SANDER M. LEVIN, Michigan
JIM MCCRERY, Louisiana               BENJAMIN L. CARDIN, Maryland
DAVE CAMP, Michigan                  JIM MCDERMOTT, Washington
JIM RAMSTAD, Minnesota               JOHN LEWIS, Georgia
JIM NUSSLE, Iowa                     RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas                   MICHAEL R. MCNULTY, New York
PHIL ENGLISH, Pennsylvania           WILLIAM J. JEFFERSON, Louisiana
J.D. HAYWORTH, Arizona               JOHN S. TANNER, Tennessee
JERRY WELLER, Illinois               XAVIER BECERRA, California
KENNY C. HULSHOF, Missouri           LLOYD DOGGETT, Texas
RON LEWIS, Kentucky                  EARL POMEROY, North Dakota
MARK FOLEY, Florida                  STEPHANIE TUBBS JONES, Ohio
KEVIN BRADY, Texas                   MIKE THOMPSON, California
THOMAS M. REYNOLDS, New York         JOHN B. LARSON, Connecticut
PAUL RYAN, Wisconsin                 RAHM EMANUEL, Illinois
ERIC CANTOR, Virginia
JOHN LINDER, Georgia
BOB BEAUPREZ, Colorado
MELISSA A. HART, Pennsylvania
CHRIS CHOCOLA, Indiana
DEVIN NUNES, California

                    Allison H. Giles, Chief of Staff

                  Janice Mays, Minority Chief Counsel

                                 ______

                    SUBCOMMITTEE ON HUMAN RESOURCES

                   WALLY HERGER, California, Chairman

NANCY L. JOHNSON, Connecticut        JIM MCDERMOTT, Washington
BOB BEAUPREZ, Colorado               BENJAMIN L. CARDIN, Maryland
MELISSA A. HART, Pennsylvania        FORTNEY PETE STARK, California
JIM MCCRERY, Louisiana               XAVIER BECERRA, California
DAVE CAMP, Michigan                  RAHM EMANUEL, Illinois
PHIL ENGLISH, Pennsylvania
DEVIN NUNES, California

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Ways and Means are also published 
in electronic form. The printed hearing record remains the official 
version. Because electronic submissions are used to prepare both 
printed and electronic versions of the hearing record, the process of 
converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.










                            C O N T E N T S

                               __________

                                                                   Page

Advisory of June 2, 2005, announcing the hearing.................     2

                               WITNESSES

U.S. Department of Health and Human Services, Hon. Wade F. Horn, 
  Ph.D., Assistant Secretary for Children and Families...........     7

                                 ______

Casey Family Programs, Adrienne Hahn.............................    50
Chapin Hall Center for Children, Fred Wulczyn....................    56
Florida Department of Children and Families, Don Winstead........    44

                       SUBMISSIONS FOR THE RECORD

Bryan, Barbara, Davidson, NC, statement..........................    75
Child Welfare League of America, Alexandra Yoffie, statement.....    78
Children's Law Center of Los Angeles, Monterey Park, CA, Miriam 
  Aroni Krinsky, statement.......................................    83
County Welfare Directors Association of California, Sacramento, 
  CA, Frank J. Mecca, statement..................................    86
Fight Crime: Invest in Kids, David Kass, statement...............    89
Generations United, Pamela Pressley, statement...................    92
Gladwell, Lisa, River Edge, NJ, statement........................    94
Mullenix, Glenna Bible, Jefferson City, TN, statement............    96
National Council For Adoption, Alexandria, VA, Thomas Atwood, 
  statement......................................................   101
National Indian Child Welfare Association, Portland, OR, Terry L. 
  Cross, statement...............................................   103
Podesta Mattoon, Seth Nichols, statement.........................   105
Reese, Cheryl Renee, Round Rock, TX, statement...................   105
Richards, Frank, Hillsborough, CA, statement.....................   106
Roberts, Daniel Allen, Dunnellon, FL, statement..................   107
South Carolina Children's Foster Care Review Boards, Columbia, 
  SC, Denise Turbeville Barker, statement........................   108
The Sociology Center, North Little Rock, AR, James Roger Brown, 
  statement......................................................   109
Transitions Incorporated, Boca Raton, FL, Eric Roy Budwizer, 
  statement......................................................   114
Zero to Three: National Center for Infants, Toddlers, and 
  Families, Matthew E. Melmed, statement.........................   116


                     FEDERAL FOSTER CARE FINANCING

                              ----------                              


                         THURSDAY, JUNE 9, 2005

             U.S. House of Representatives,
                       Committee on Ways and Means,
                           Subcommittee on Human Resources,
                                                    Washington, DC.

    The Subcommittee met, pursuant to notice, at 10:05 a.m., in 
room B-318, Rayburn House Office Building, Hon. Wally Herger 
(Chairman of the Subcommittee) presiding.
    [The advisory announcing the hearing follows:]

ADVISORY

FROM THE 
COMMITTEE
 ON WAYS 
AND 
MEANS

                    SUBCOMMITTEE ON HUMAN RESOURCES

                                                CONTACT: (202) 225-1025
FOR IMMEDIATE RELEASE
June 09, 2005
No. HR-3

                      Herger Announces Hearing on

                     Federal Foster Care Financing

    Congressman Wally Herger (R-CA), Chairman, Subcommittee on Human 
Resources of the Committee on Ways and Means, today announced that the 
Subcommittee will hold a hearing on Federal foster care financing. The 
hearing will take place on Thursday, June 9, 2005, in room B-318 
Rayburn House Office Building, beginning at 10:00 a.m.
      
    In view of the limited time available to hear witnesses, oral 
testimony at this hearing will be from invited witnesses only. 
Witnesses will include Administration and State officials, and other 
individuals familiar with Federal foster care financing issues. 
However, any individual or organization not scheduled for an oral 
appearance may submit a written statement for consideration by the 
Subcommittee for inclusion in the printed record of the hearing.
      

BACKGROUND:

      
    In fiscal year 2004, the Federal Government provided more than $7 
billion in dedicated funds for child protection. The bulk of these 
funds--almost $5 billion--supported children who had been removed from 
their homes and placed in temporary foster care. Federal foster care 
funds are available to assist States with maintenance payments, 
administrative costs, and training to provide services for certain low-
income children. These funds are provided on an open-ended basis, which 
means that States are reimbursed by the Federal Government for a 
portion of any allowable cost. At the hearing, the U.S. Department of 
Health and Human Services is expected to release new data on Federal 
foster care funds received by States under this open-ended system. This 
hearing will review how the current foster care financing system works 
and examine how children have fared under this system.
      
    In announcing the hearing, Chairman Herger stated, ``We have 
repeatedly heard over the past few years how children have been left at 
risk in the current child protection system. Everyone should expect 
better outcomes, starting with our primary focus and utmost priority, 
ensuring these vulnerable children are well cared for and safe. I look 
forward to learning more at this hearing about how current funds are 
being spent, and how funding is related to outcomes experienced by 
children.''
      

FOCUS OF THE HEARING:

      
    The focus of the hearing is on Federal foster care financing 
issues.
      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
    Please Note: Any person(s) and/or organization(s) wishing to submit 
for the hearing record must follow the appropriate link on the hearing 
page of the Committee website and complete the informational forms. 
From the Committee homepage, http://waysandmeans.house.gov, select 
``109th Congress'' from the menu entitled, ``Hearing Archives'' (http:/
/waysandmeans.house.gov/Hearings.asp?congress=17). Select the hearing 
for which you would like to submit, and click on the link entitled, 
``Click here to provide a submission for the record.'' Once you have 
followed the online instructions, completing all informational forms 
and clicking ``submit'' on the final page, an email will be sent to the 
address which you supply confirming your interest in providing a 
submission for the record. You MUST REPLY to the email and ATTACH your 
submission as a Word or WordPerfect document, in compliance with the 
formatting requirements listed below, by close of business Thursday, 
June 23, 2005. Finally, please note that due to the change in House 
mail policy, the U.S. Capitol Police will refuse sealed-package 
deliveries to all House Office Buildings. For questions, or if you 
encounter technical problems, please call (202) 225-1721.
      

FORMATTING REQUIREMENTS:

      
    The Committee relies on electronic submissions for printing the 
official hearing record. As always, submissions will be included in the 
record according to the discretion of the Committee. The Committee will 
not alter the content of your submission, but we reserve the right to 
format it according to our guidelines. Any submission provided to the 
Committee by a witness, any supplementary materials submitted for the 
printed record, and any written comments in response to a request for 
written comments must conform to the guidelines listed below. Any 
submission or supplementary item not in compliance with these 
guidelines will not be printed, but will be maintained in the Committee 
files for review and use by the Committee.
      
    1. All submissions and supplementary materials must be provided in 
Word or WordPerfect format and MUST NOT exceed a total of 10 pages, 
including attachments. Witnesses and submitters are advised that the 
Committee relies on electronic submissions for printing the official 
hearing record.
      
    2. Copies of whole documents submitted as exhibit material will not 
be accepted for printing. Instead, exhibit material should be 
referenced and quoted or paraphrased. All exhibit material not meeting 
these specifications will be maintained in the Committee files for 
review and use by the Committee.
      
    3. All submissions must include a list of all clients, persons, 
and/or organizations on whose behalf the witness appears. A 
supplemental sheet must accompany each submission listing the name, 
company, address, telephone and fax numbers of each witness.
      
    Note: All Committee advisories and news releases are available on 
the World Wide Web at http://waysandmeans.house.gov.
      
    The Committee seeks to make its facilities accessible to persons 
with disabilities. If you are in need of special accommodations, please 
call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four 
business days notice is requested). Questions with regard to special 
accommodation needs in general (including availability of Committee 
materials in alternative formats) may be directed to the Committee as 
noted above.

                                 

    Chairman HERGER. Good morning, and welcome to today's 
hearing. Today's hearing provides new insights on efforts to 
protect children who have been abused and neglected by their 
own parents. Specifically, we will learn from a U.S. Department 
of Health and Human Services (HHS) report released today what 
the programs designed to protect children cost and what that 
spending buys in terms of protection for children. Most of what 
the Federal Government spends each year on child welfare 
programs, about $5 billion in all, supports low-income children 
in foster care. These funds support the cost of maintaining 
children in out-of-home placements, the cost of administering 
this program, and some training costs.
    What we will learn today is that Federal funding per child 
in foster care ranges from about $5,000 to more than $40,000 
per year, depending on the State. Those are huge differences 
between the States. What is even more surprising is that the 
evidence shows that more spending does not necessarily mean 
better outcomes for the children. This information will add 
important details to our knowledge about the current child 
protection system.
    Unfortunately, much of what we have learned during recent 
hearings has highlighted ways the current system fails to 
adequately protect children. For example, previous hearings 
have shown that States lack important data needed to protect 
and even keep track of children in foster care. Every State 
failed to pass Federal reviews of their child protection 
programs. When it came to the sensitive issue of whether 
children in foster care can be placed in clinical trials and 
under what circumstances, we had to engage HHS to survey States 
about their policies. We look forward to getting this 
information. We learned about the real-world effects when 
systems don't perform, such as a brutal starvation case in New 
Jersey, and the beating death of two infants in Baltimore 
released to their mother, a foster care runaway.
    Last year, I introduced legislation that would have 
reformed how foster care and adoption programs are financed. 
That legislation would have locked in growing levels of funding 
for payments to families for administration and for services. 
It offered an additional $2 billion in funding, much for 
services designed to better protect children and keep them out 
of foster care in the first place.
    Clearly, it is hard to look at the current funding system, 
with average Federal spending per child per State ranging from 
$5,000 to more than $40,000 per child, and say that system is 
responsibly spending taxpayer dollars. That doesn't include 
what States spend on foster care from the Temporary Assistance 
for Needy Families (TANF), Social Services Block Grant (SSBG), 
or Medicaid programs, or even their State funds. All of that 
spending, as the report suggests, is not related to better 
outcomes for children. That is disturbing. There has to be a 
better way.
    With us today are a number of experts, as well as 
Administration and State officials, to discuss the HHS report 
and its implications. I would like to thank all our witnesses 
for joining us today to explore this important issue. Without 
objection, each Member will have the opportunity to submit a 
written statement and have it included in the record at this 
point. Mr. McDermott, would you care to make a statement?
    [The opening statement of Chairman Herger follows:]
   Opening Statement of The Honorable Wally Herger, Chairman, and a 
        Representative in Congress from the State of California
    Today's hearing provides new insights on our Nation's efforts to 
protect children who have been abused and neglected by their own 
parents.
    Specifically, we will learn from an HHS report released today what 
the programs designed to protect children cost, and what that spending 
buys in terms of protection for children.
    Most of what the federal government spends each year on child 
welfare programs--about $5 billion in all--supports low-income children 
in foster care. These funds support the costs of maintaining children 
in out-of-home placements, the costs of administering this program, and 
some training costs.
    What we will learn today is that federal funding per child in 
foster care ranges from about $5,000 to more than $40,000 per year 
depending on the state. Those are huge differences between states. But, 
what's even more surprising is that the evidence shows that more 
spending does not necessarily mean better outcomes for children.
    This information will add important details to our knowledge about 
the current child protection system. Unfortunately, much of what we 
have learned during recent hearings has highlighted ways the current 
system fails to adequately protect children.
    For example, previous hearings have shown that states lack 
important data needed to protect and even keep track of children in 
foster care.
    Every state failed to pass federal reviews of their child 
protection programs.
    When it came to the sensitive issue of whether children in foster 
care can be placed in clinical trials and under what circumstances, we 
had to engage HHS to survey states about their policies. We look 
forward to getting that information.
    And we learned about the real-world effects when systems don't 
perform--such as a brutal starvation case in New Jersey and the beating 
deaths of two infants in Baltimore released to their mother, a foster 
care runaway.
    Last year I introduced legislation that would have reformed how 
foster care and adoption programs are financed. That legislation would 
have locked in growing levels of funding for payments to families, for 
administration, and for services. It offered an additional $2 billion 
in funding, much for services designed to better protect children and 
keep them out of foster care in the first place.
    Clearly it is hard to look at the current funding system, with 
average federal spending per child per state ranging from $5,000 to 
more than $40,000 per child, and say that system is responsibly 
spending taxpayer dollars. And that doesn't include what states spend 
on foster care from the TANF, Social Services Block Grant, or Medicaid 
programs, or even their state funds. And all that spending, as the 
report suggests, is not related to better outcomes for children. That's 
disturbing.
    There has to be a better way.
    With us today are a number of experts as well as Administration and 
State officials to discuss the HHS report and its implications. I'd 
like to thank all of our witnesses for joining us today to explore this 
important issue.

                                 

    Mr. MCDERMOTT. Thank you, Mr. Chairman. At times, we are 
separated by a political divide, but you and I share something 
much more powerful than political party affiliation. We are 
both dads. Perhaps I can speak for both of us when I say 
parenting is one of the toughest jobs you would never want to 
give up, true?
    Chairman HERGER. True.
    Mr. MCDERMOTT. As we move ahead in Committee, let's 
remember that something powerful unites us; no doubt you and I 
lived a good part of our lives following the same philosophy, 
we wanted our children to be safe, healthy, happy, and have a 
chance to do better than we have done. It is every parent's 
dream. It is our responsibility as we look at the kids in 
foster care who need us as much as our sons and daughters did.
    Now, I agree with you that the child welfare system is in 
need of reform. The stakes couldn't be higher, and there is an 
urgent need for action; there has been talk about it for years. 
We have all heard the tragic stories about children being 
abused, tortured, even murdered when they are under the 
supervision of the child welfare system. Every State has an 
example every year and State legislatures gather around and 
ring their hands, and we go on. All of us, not just the foster 
care system, must take responsibility for protecting our most 
vulnerable children. If not us, who is going to do it? If not 
now, when?
    Now, there is a lot we can do together. For instance, we 
can advocate for prevention and focus attention on support 
services that can help stop abuse and neglect before it occurs; 
I think the Chairman and I might agree on that. However, I 
strongly disagree with anyone who suggests that the only way to 
emphasize prevention is to cap, cut, or block foster care. 
Robbing Peter to pay Paul will not improve outcomes for 
children, and that is our responsibility. If anything, denying 
or shifting the financial burden will only lead to more 
tragedies, in my view.
    It has been suggested that the open-ended nature of Federal 
foster care payments is part of the problem because the 
payments might be an incentive for States to keep children in 
out-of-home placements. That theory holds if only these same 
Federal dollars were sent to the States as flexible capped 
grants, everything would be fine. Well, two words describe 
that, ``Get serious.'' That theory ignores the truth about 
funding.
    Worse yet, it is brazenly callous to the untold number of 
unsung heroes in every State who dedicate themselves to making 
the world better for kids who got a bad break in life. Whoever 
thought this one up still believes the world is flat. Well, the 
world is round, so let's get together on the facts.
    Every State already has financial incentives to move kids 
out of foster care. No State doesn't have that. Caseworkers are 
overwhelmingly making decisions based on what they believe is 
best for the child, not the State treasurer. According to the 
Urban Institute, half of all Federal spending comes from 
nondedicated sources outside the Federal foster care, such as 
TANF, the SSBG, or Medicaid. In other words, States already 
spend flexible funds on foster care when they could spend the 
money on something else.
    The States don't deserve a black eye in this discussion. We 
do. If we say prevention and family support services are 
important, then we need to put our money where our mouth is. 
The Congress has not been shy about spending money on just 
about everything else--we will put out shortly here a $400 
billion defense budget, half the discretionary spending in this 
country, and we say we don't have any more for foster care. We 
cannot forget that 40 percent of the cases in which child abuse 
or neglect has been substantiated, proved, they do not 
concurrently receive any follow-up services--40 percent of the 
cases in which there is child abuse.
    Now, even the Bush Administration advocated last year for 
$100 million annual increase for promoting the Safe and Stable 
Families (P.L. 107-133) program, which focuses on prevention. 
These are tough times, and we have got a war to fight in Iraq, 
so the President walked away from his commitment in his most 
recent budget proposal. We just can't do that. My hope today is 
that we are marking a beginning with a real hope for real 
solutions, and I welcome the opportunity to learn more from our 
witnesses. The stakes are too high to make this anything other 
than a bipartisan issue. I look forward to considering serious 
solutions from Republicans and Democrats.
    Also, Mr. Chairman, I hope you and I will work together to 
hold hearings to consider solutions from both sides of the 
aisle. We have within our power the ability to work together to 
find a solution. Children who cannot defend themselves look to 
us to make a difference in their lives--safe, happy, healthy, 
with a chance. That is all they want, and I think that is what 
we have to do as their surrogate parents. Thank you, Mr. 
Chairman.
    Chairman HERGER. Thank you, Mr. McDermott. Before we move 
on to our testimony, I want to remind our witnesses to limit 
their oral statements to 5 minutes; however, without objection, 
all the written testimony will be made a part of the permanent 
record. To start our hearing this morning, I would like to 
welcome Dr. Wade Horn, Assistant Secretary for Children and 
Families at HHS. Dr. Horn, please proceed with your testimony.

   STATEMENT OF THE HONORABLE WADE F. HORN, PH.D., ASSISTANT 
SECRETARY FOR CHILDREN AND FAMILIES, U.S. DEPARTMENT OF HEALTH 
                       AND HUMAN SERVICES

    Dr. HORN. Thank you. Mr. Chairman, and Members of the 
Subcommittee, I am very pleased to appear before you today to 
discuss the current state of child welfare financing and the 
continuing need for reform.
    Currently, the Federal Government spends approximately $5 
billion per year to reimburse States for a portion of their 
annual foster care expenditures. Given the weaknesses in the 
current child welfare financing structure, we are convinced 
that the reform envisioned by the President's Child Welfare 
Program Option is critical to achieving better results for 
vulnerable children and families. There are six key weaknesses 
that we have identified with the current child welfare 
financing structure.
    First, the program has evolved to include complex 
documentation requirements. There are four categories of 
expenditures for which States may claim Federal funds, each 
matched at a different rate. In addition, there are several 
statutory eligibility rules that also must be met in order to 
justify claims made on a child's behalf; some apply at the time 
a child enters foster care, while others must be documented on 
an ongoing basis. These eligibility rules are based in part on 
the Aid to Families with Dependent Children (AFDC) program, 
which no longer exists. The time and costs involved in 
documenting and justifying claims is significant. In addition, 
the process also frequently results in contentious 
disallowances, appeals, and litigation.
    Second, there are widely different claiming practices among 
States. For example, based upon 3 year average claims from 
fiscal year 2001 through fiscal year 2003, the average annual 
amount of total foster care funds received by States ranges 
from $4,155 to $41,456 per title IV-E eligible child.
    Third, the current funding structure has not resulted in 
high-quality services. Strengths and weaknesses of States' 
child welfare programs, identified through the child and family 
services reviews indicated significant weaknesses in programs 
across the Nation.
    Fourth, there seems to be no relationship between State 
expenditure claims and service quality or outcomes. There are 
States with both high and low levels of Federal title IV-E 
claims of each level of performance in the children and family 
services reviews. In addition, there is no relationship between 
the amount States claim and the proportion of children for whom 
timely permanency is achieved.
    Fifth, the current program structure is inflexible and 
emphasizes foster care over other solutions. Specifically, 
foster care funding represents 65 percent of the Federal funds 
dedicated to child welfare services, and adoption makes up 
another 22 percent. In contrast, funding sources that may be 
used for prevention and reunification services represent only 
11 percent of Federal child welfare program funds.
    Finally, the current program has not kept pace with best 
practices in the changing child welfare field. The result is a 
funding stream seriously mismatched to current program needs. 
Over the last few years, we have made great strides toward 
reorienting child welfare programs to be outcomes focused; 
however, until the funding is structured to support these 
outcomes, further improvements will be constrained.
    Given the serious weaknesses of the current structure, the 
need for child welfare financing reform has never been more 
evident. In order to assist States in assuring positive 
outcomes for children and families, the President's fiscal year 
2006 budget once again proposed to create a Child Welfare 
Program Option that would permit States to choose to administer 
their foster care programs more flexibly, with a fixed 
allocation of funds over a 5-year period. States that choose 
the program option would be able to use these funds for foster 
care payments, prevention activities, permanency efforts, 
training for child welfare staff, and other such service-
related child welfare activities.
    States that choose not to receive funding provided by this 
option would continue operating under the current title IV-E 
entitlement program. While States that choose this option would 
have much greater flexibility in how they use title IV-E funds, 
they will continue to be required to maintain the child safety 
protections under current law.
    The proposal also includes a maintenance of effort 
provision to ensure that States selecting the new option 
maintain their existing level of investment in the program. The 
Administration believes that this proposal would offer a 
powerful new means for States to structure their child welfare 
services programs in a way that supports the goals of safety, 
timely permanency, and enhanced well-being for vulnerable 
children and families.
    In closing, I would like to thank the Subcommittee, 
especially you, Congressman Herger, for your ongoing commitment 
to improve our Nation's child welfare system and for allowing 
me to highlight the President's bold vision for strengthening 
the system through the Child Welfare Program Option. We look 
forward to working closely with you and the rest of the 
Committee on this proposal. I am convinced that the result will 
be a stronger and more responsive child welfare system that 
achieves better results for vulnerable children and families. 
Thank you, and I would be pleased to answer any questions you 
might have.
    [The prepared statement of Dr. Horn follows:]
Statement of The Honorable Wade F. Horn, Ph.D., Assistant Secretary for 
  Children and Families, U.S. Department of Health and Human Services
    Mr. Chairman and Members of the Subcommittee, I am pleased to 
appear before you today to discuss the current state of child welfare 
financing and the need for reform. With what we know about weaknesses 
in the current child welfare financing structure, we are convinced that 
the reform envisioned by the President's child welfare program option 
is critical to achieving better results for vulnerable children and 
families.
    Currently, the Federal Government spends approximately $5 billion 
per year to reimburse States for a portion of their annual foster care 
expenditures. Foster care services are intended to provide temporary, 
safe alternative homes for children who have been abused or neglected 
until they can safely return home or be placed in other permanent 
homes. Federal foster care funds, authorized by the Social Security 
Act, are paid to States on an uncapped, ``entitlement'' basis. This 
means that any qualifying expenditure by a State will be partially 
reimbursed, or ``matched'' without limit. Over the years, layers upon 
layers of regulations and policy interpretation have been developed to 
define which expenses qualify for reimbursement. Although each may have 
made sense individually, cumulatively this represents a level of 
complexity and burden that fails to support the program's basic goals 
of safety, permanency and child well-being.
    I will use my time today to provide a brief overview of the funding 
structure for the title IV-E Federal foster care program, and share 
what the Administration believes are key inherent weaknesses of the 
program and how the President's proposal to establish a Child Welfare 
Program Option would address these weaknesses. Additional detail on 
each of these issues is available in an analysis of Federal foster care 
financing being released by HHS today.
Background of Title IV-E Foster Care
    The Federal Government has, since 1961, shared the cost of foster 
care services with States. Prior to this time foster care was entirely 
a State responsibility. From 1961 until 1980, foster care funding was 
part of the Federal welfare program, Aid to Families with Dependent 
Children (AFDC), originally known as Aid to Dependent Children (ADC). 
However, since 1980, foster care funds have been authorized separately, 
under title IV-E of the Social Security Act.
    From 1980 to 1996, States could claim reimbursement for a portion 
of foster care expenditures on behalf of children removed from homes 
that were eligible for the pre-welfare reform AFDC program as long as 
their placements in foster care met several procedural safeguards. 
While the underlying AFDC program was abolished in 1996 and replaced by 
the Temporary Assistance for Needy Families Program (TANF), income 
eligibility criteria for title IV-E foster care continues to follow the 
old AFDC criteria as it existed prior to the enactment of the TANF 
program.
    The major appeal of the current program has always been that, as an 
entitlement, funding levels were supposed to adjust automatically to 
respond to changes in ``need.'' However, we do not believe that under 
current conditions--with the link to old AFDC eligibility criteria, 
these adjustment features respond appropriately and equitably to 
reflect true changes in need.
Key Weaknesses of Current Structure
    There are six key weaknesses that we have identified with the 
current child welfare financing structure:

    1.  The program has evolved to include complex documentation 
requirements;
    2.  There are widely different claiming practices among States;
    3.  The current funding structure has not resulted in high quality 
services;
    4.  There seems to be no relationship between State claims and 
service quality or outcomes;
    5.  The current program structure is inflexible and emphasizes 
foster care over other solutions; and
    6.  The current program has not kept pace with best practices in 
the changing child welfare field.

    I would now like to address each of these weaknesses in more 
detail. First, documenting eligibility and claiming foster care funds 
is burdensome for States. There are four categories of expenditures for 
which States may claim Federal funds, each matched at a different rate. 
In addition, there are several statutory eligibility rules that also 
must be met in order to justify claims made on a child's behalf. Some 
apply at the time a child enters foster care, while others must be 
documented on an ongoing basis. The time and costs involved in 
documenting and justifying claims is significant. In addition, the 
process also frequently results in contentious disallowances, appeals, 
and litigation.
    Second, differing claiming practices result in wide variations in 
funding among States. Based upon three year average claims from FY 2001 
through FY 2003, the average annual amount of total Federal foster care 
funds received by States ranges from $4,155 to $41,456 per title IV-E 
eligible child, with a median of $15, 914. The range in the maintenance 
claims was $2,829 to $22,418 per title IV-E eligible child with a 
median of $6,546. Claims for child placement services and 
administration ranged from $1,190 to $23,724 per title IV-E eligible 
child with a median value of $6,909. These figures represent only the 
Federal share of title IV-E costs; if one were to include the State 
share in these calculations, the expenditure figures would be 
substantially higher.
    It is unlikely that disparities this large are the result of actual 
differences in the costs of operating foster care programs or reflect 
differential needs among foster children. Some States are quite 
conservative in their claims, counting only children in clearly 
eligible placements and defining administrative costs narrowly. Other 
States have more aggressively pursued administrative processes 
necessary to justify more extensive claims. Variation in States' 
claiming practices may be seen most clearly in the relationship between 
claims for title IV-E maintenance and title IV-E administrative costs. 
Six States claim less than 50 cents in title IV-E administrative costs 
for every dollar they claim in title IV-E maintenance, while nine 
others claim more than two dollars in title IV-E administrative costs 
per every title IV-E maintenance dollar.
    Third, the current structure has not resulted in high quality 
services. Strengths and weaknesses of States' child welfare programs 
are identified through the Child and Family Services Reviews (CFSR). 
States reviewed have ranged from meeting standards in one to nine of 
the 14 outcomes and systemic factors examined. Significant weaknesses 
are evident in programs across the nation.
    Fourth, we have been able to document through the CFSR that State 
title IV-E claims bear little relationship to service quality or 
outcomes. There are States with both high and low levels of Federal 
title IV-E claims at each level of performance on these reviews. In 
addition, there is no relationship between the amounts States claim and 
the proportion of children for whom timely permanency is achieved. Wide 
disparities in Federal claims might be viewed in a favorable light if 
States were achieving better outcomes with higher spending; however, 
this argument does not hold up to scrutiny in the face of the CFSR 
results. Average per-child claims did not differ appreciably between 
the highest and lowest performing states. In fact, the CFSR findings 
were disappointing even for States with relatively high costs.
    Fifth, the current structure is highly inflexible, and places an 
emphasis on foster care over other solutions and services that would 
either prevent the child's removal from the home or speed up permanency 
efforts. Specifically, foster care funding represents 65 percent of 
Federal funds dedicated to child welfare purposes, and adoption 
assistance makes up another 22 percent. In contrast, funding sources 
that may be used for preventive and reunification services represent 
only 11 percent of Federal child welfare program funds.
    Lastly, the current financing structure has not kept pace with 
changes in the child welfare field, including the growing role of 
kinship foster care, the significant extent to which parental substance 
abuse often underlies the abuse and neglect of children, and the 
field's increased emphasis on permanency planning for children in 
foster care. The result is a funding stream seriously mismatched to 
current program needs. From complex eligibility criteria based in part 
on a program (i.e., AFDC) that no longer exists, to intricate claiming 
rules, it is clear that the current system of title IV-E funding is 
driven by process rather than outcomes.
    Over the last few years, we have made great strides towards re-
orienting child welfare programs to be outcomes focused. However, until 
the funding is structured to support these outcomes, further 
improvements will be constrained.
Child Welfare Program Option
    Given the serious weaknesses of the current structure, the need for 
child welfare financing reform has never been more evident. In order to 
assist States in ensuring positive outcomes for children and families, 
the President's Fiscal Year 2006 budget once again proposes to create a 
Child Welfare Program Option that would permit States to choose to 
administer their foster care programs more flexibly, with a fixed 
allocation of funds over a five-year period, should this approach 
better support their unique child welfare needs. This concept was first 
proposed in FY 2004 and we continue to believe this option offers a 
number of distinct advantages over both current law and traditional 
block grants that have been considered in the past.
    The Program Option provides States with greater flexibility so they 
can design more effective ways to strengthen services to vulnerable 
children and families. States that choose the Program Option would be 
able to use funds for foster care payments, prevention activities, 
permanency efforts, training for child welfare staff, and other such 
service-related child welfare activities. States that choose not to 
receive funding provided by this option would continue operating under 
the current title IV-E entitlement program.
    While States that choose this option would have much greater 
flexibility in how they use title IV-E funds, they would continue to be 
required to maintain the child safety protections under current law, 
including requirements for conducting criminal background checks and 
licensing foster care providers, obtaining judicial oversight over 
decisions related to a child's removal and permanency, meeting 
permanency timelines, developing case plans for all children in foster 
care, and prohibiting race-based discrimination in foster and adoptive 
placements. The proposal also includes a maintenance-of-effort 
requirement to ensure that States selecting the new option maintain 
their existing level of investment in the program.
    In addition to providing a new option for States, the President's 
proposal includes a $30 million set-aside for Indian Tribes or 
consortia that can demonstrate the capacity to operate a title IV-E 
program. Currently Tribes are not eligible to receive title IV-E 
funding, although some Tribes are able to access funds through 
agreements with States.
    The Administration believes that this proposal would offer a 
powerful new means for States and Tribes to structure their child 
welfare services program in a way that supports the goals of safety, 
timely permanency and enhanced well-being for vulnerable children and 
families.
Conclusion
    In closing, I would like to thank the Subcommittee, especially you 
Congressman Herger, for your ongoing commitment to improving our 
Nation's child welfare system and for allowing me to highlight the 
President's bold vision for strengthening the system through the Child 
Welfare Program Option. We look forward to working closely with you on 
this proposal. I am convinced that the result will be a stronger and 
more responsive child welfare system that achieves better results for 
vulnerable children and families.
    I would be pleased to answer questions at this time.

                                 ______
                                 
                            ASPE ISSUE BRIEF
     Office of the Assistant Secretary for Planning and Evaluation
                   Office of Human Services Policy--
              U.S. Department of Health and Human Services

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
ABOUT THIS ISSUE BRIEF

  This ASPE Issue Brief on ``How and Why the Current Funding Structure Fails to Meet the Needs of the Child
Welfare Field'' was written by Laura Radel with assistance from staff in the Administration for Children and
Families.

  The Issue Brief provides an overview of the financing of the Federal foster care program, documenting and
explaining several key weaknesses in the current funding structure. It also discusses the Administration's
alternative financing proposal, the creation of a Child Welfare Program Option, which would allow States to
choose between financing options.
Office of the Assistant Secretary for Planning and Evaluation
Office of Human Services Policy
U.S. Department of Health and Human Services
Washington, DC 20201
Michael J. O'Grady, Ph.D.
Assistant Secretary
Barbara B. Broman
Acting Deputy Assistant Secretary for Human Services Policy
----------------------------------------------------------------------------------------------------------------


FEDERAL FOSTER CARE FINANCING

How and Why the Current Funding Structure Fails to Meet the Needs of 
the Child Welfare Field

This Issue Brief provides an overview of the Title IV-E Federal foster 
care program's funding structure and documents several key weaknesses.

Executive Summary
    The Federal foster care program pays a portion of States' costs to 
provide care for children removed from welfare-eligible homes because 
of maltreatment. Authorized under Title IV-E of the Social Security 
Act, the program's funding (approximately $5 billion per year) is 
structured as an uncapped entitlement, so any qualifying State 
expenditure will be partially reimbursed, or ``matched,'' without 
limit. This paper provides an overview of the program's funding 
structure and documents several key weaknesses. It concludes with a 
discussion of the Administration's legislative proposal to establish a 
more flexible financing system.
    The program's documentation requirements are burdensome. There are 
four categories of expenditures for which States may claim Federal 
funds, each matched at a different rate. In addition, there are several 
statutory eligibility rules that must be met in order to justify the 
Title IV-E claims made on a child's behalf. Some of these apply at the 
time a child enters foster care, while others must be documented on an 
ongoing basis. The time and costs involved in documenting and 
justifying claims is significant.
    Differing claiming practices result in wide variations in funding 
among States. The average annual amount of Federal foster care funds 
received by States ranges from $4,155 to $41,456 per eligible child, 
based on three year average claims from FY2001 through FY2003. It is 
unlikely these disparities are the result of actual differences in the 
cost of operating foster care programs or reflect differential needs 
among foster children.
    The current funding structure has not resulted in high quality 
services. Strengths and weaknesses of States' child welfare programs 
are identified through Federal monitoring visits called Child and 
Family Services Reviews. States reviewed have ranged from meeting 
standards in 1 to 9 of the 14 outcomes and systemic factors examined 
(the median was 6). Significant weaknesses are evident in programs 
across the nation, but many of the improvements needed cannot be funded 
through Title IV-E.
    States' Title IV-E claiming bears little relationship to service 
quality or outcomes. There are States with both high and low levels of 
Federal Title IV-E claims at each level of performance on Child and 
Family Services Reviews. In addition, there is no relationship between 
the amounts States claim in Title IV-E funds and the proportion of 
children for whom timely permanency is achieved.
    The current funding structure is inflexible, emphasizing foster 
care. Title IV-E funds foster care on an unlimited basis without 
providing for services that would either prevent the child's removal 
from the home or speed permanency. Foster care funding represents 65% 
of Federal funds dedicated to child welfare purposes, and adoption 
assistance makes up another 22%. Funding sources that may be used for 
preventive and reunification services represent only 11% of Federal 
child welfare program funds.
    The financing structure has not kept pace with a changing child 
welfare field. The structure of the Title IV-E program has continued 
without major revision since it was created in 1961, despite major 
changes in child welfare practice. The result is a funding stream 
seriously mismatched to current program needs. It is driven towards 
process rather than outcomes and constrains agencies' efforts to 
achieve improved results for children.
    The proposed Child Welfare Program Option offers substantial 
benefits. The Child Welfare Program Option, first proposed in HHS's 
Fiscal Year 2004 budget request and currently included in the 
President's Fiscal Year 2006 budget request, would allow States a 
choice between the current Title IV-E program and a five-year capped, 
flexible allocation of funds equivalent to anticipated Title IV-E 
program levels. It would allow innovative State and local child welfare 
agencies to eliminate eligibility determination and claiming functions 
and redirect funds toward services and activities that more directly 
achieve safety, permanency and well-being for children and families.
    The combination of detailed eligibility requirements and complex 
but narrow definitions of allowable costs within the Federal Title IV-E 
foster care program force a focus on procedure rather than outcomes for 
children and families. The Administration's proposed Child Welfare 
Program Option is intended to introduce flexibility while maintaining a 
focus on outcomes, retaining existing child protections, and providing 
a financial safety net for States in the form of access to the TANF 
Contingency Fund during unanticipated and unavoidable crises. The 
result will be a stronger and more responsive child welfare system that 
achieves better results for vulnerable children and families.
Introduction
    The Federal Government currently spends approximately $5 billion 
per year to reimburse States for a portion of their annual foster care 
expenditures. Foster care services are intended to provide temporary, 
safe alternative homes for children who have been abused or neglected 
until such time as they are able to return to their parents' care 
safely or can be placed in other permanent homes. Federal foster care 
funds, authorized under Title IV-E of the Social Security Act, are paid 
to States on an uncapped, ``entitlement'' basis, meaning any qualifying 
expenditure by a State will be partially reimbursed, or ``matched,'' 
without limit. Definitions of which expenses qualify for reimbursement 
are laid out in regulations and policy interpretations that have 
developed, layer upon layer, over the course of many years. Each may 
have made sense individually, but cumulatively they represent a level 
of complexity and burden that fails to support the program's basic 
goals of safety, permanency, and child well-being.
    This paper provides an overview of the current funding structure, 
and documents several key weaknesses. In essence, the paper shows that: 
(1) The current financing structure is connected to the old Aid to 
Families with Dependent Children program (AFDC) for historical, rather 
than programmatic reasons; (2) The administrative paperwork for 
claiming Federal funds under Title IV-E is burdensome; (3) Current 
funding is highly variable across States; (4) Child welfare systems 
claiming higher amounts of Federal funds per child do not perform 
substantially better or achieve better outcomes for children than those 
claiming less funding; (5) The current funding structure is inflexible 
and emphasizes foster care payments over preventive services; and (6) 
The financing structure has not kept pace with a changing child welfare 
field. The paper concludes with a discussion of the Administration's 
proposal to establish a Child Welfare Program Option, allowing States 
to receive their foster care funds in a fixed, flexible allocation as 
an alternative to the current mode of financing.
Background and History of Title IV-E Foster Care
    The Federal Government has, since 1961, shared the cost of foster 
care services with States. Prior to this time foster care was entirely 
a State responsibility. Since its very first days foster care funding 
was intimately linked to Federal welfare benefits, then known as the 
Aid to Dependent Children Program, or ADC. In fact, the Federal foster 
care program was created to settle a dispute with the States over 
welfare payments to single-parent households. At the time, some States 
routinely denied welfare payments to families with children born 
outside of marriage. These States had declared such homes to be morally 
``unsuitable'' to receive welfare benefits. Following a particularly 
extreme incident in which 23,000 Louisiana children were expelled from 
ADC, the Federal Department of Health, Education, and Welfare (HEW), in 
what came to be known as the Flemming Rule after then-secretary Arthur 
Flemming, directed States to cease enforcement of the discriminatory 
suitable homes criteria unless households were actually unsafe for 
children. If homes were unsafe, States were required to pay families 
ADC while making efforts to improve home conditions, or place children 
in foster care. When States protested the added costs of protecting 
children in unsafe homes, Congress reacted by creating Federal foster 
care funding. In this way, the Federal Government ensured States would 
not be disadvantaged financially by protecting children (Frame 1999; 
Committee on Ways and Means 1992).
    From 1961 until 1980, Federal foster care funding was part of the 
Federal welfare program, Aid to Families with Dependent Children 
(AFDC). Since 1980, however, foster care funds have been authorized 
separately, under Title IV-E of the Social Security Act. From 1980 
through 1996, States could claim reimbursement for a portion of foster 
care expenditures on behalf of children removed from homes that were 
eligible for the pre-welfare reform AFDC program, so long as their 
placements in foster care met several procedural safeguards. While the 
underlying AFDC program was abolished in 1996 in favor of the Temporary 
Assistance for Needy Families Program (TANF), income eligibility 
criteria for Title IV-E foster care continues to follow the old AFDC 
criteria as they existed just before welfare reform was enacted. States 
are reimbursed on an unlimited basis for the Federal share of all 
eligible expenses.
    It should be noted that while Title IV-E eligibility is often 
discussed as if it represents an entitlement of a particular child to 
particular benefits or services, it does not. Instead, a child's Title 
IV-E eligibility entitles a State to Federal reimbursement for a 
portion of the costs expended for that child's care.
    Title IV-E remained little changed from its inception in 1980 until 
the passage of the Adoption and Safe Families Act in 1997 (ASFA). With 
ASFA, Congress responded to concerns that children were too often left 
in unsafe situations while excessive and inappropriate rehabilitative 
efforts were made with the family. It also addressed what was at least 
a perceived reluctance on the part of child welfare agencies and judges 
to seek terminations of parental rights and adoption in a timely 
fashion when reunification efforts were unsuccessful. ASFA clarified 
the central importance of safety to child welfare decision making and 
emphasized to States the need for prompt and continuous efforts to find 
permanent homes for children. These permanent homes might be with their 
birth families if that could be accomplished safely, or with adoptive 
families or permanent legal guardians if it could not. ASFA, together 
with related activity to improve adoption processes in many States, is 
widely credited with the rapid increases in adoptions from foster care 
in the years since the law was passed.
    ASFA's emphasis on permanency planning has contributed to 
increasing exits from foster care in recent years, both to adoptive 
placements and to other destinations including reunifications with 
parents and guardianships with relatives. Combined with relatively flat 
numbers of foster care entries, the number of children in foster care 
has begun to decline, the first sustained decrease since the program 
was established.
    State claims under the Title IV-E foster care program have always 
grown more quickly than the population of children served. But the 
recent declines in the number of children in foster care have 
substantially curbed the tremendous growth the program experienced 
during the 1980s and 1990s. The number of children in foster care began 
declining slowly in 1999 after more than doubling in the preceding 
decade. Federal foster care program expenditures grew an average of 17 
percent per year in the 16 years between the program's establishment 
and the passage of the Adoption and Safe Families Act (ASFA) in 1997. 
During that period, in only 3 years did growth dip below 10 percent. 
However, in the five years since ASFA was enacted, program growth has 
averaged only 4 percent per year. While some of the growth through 1997 
paralleled an increasing population of children in foster care, 
spending growth far outpaced growth in the number of children served. 
Improvements in States' ability to claim reimbursement and expanded 
definitions of administrative expenses in the program also contributed 
to funding growth. Figure 1 displays the growth in foster care 
expenditures and the number of children in foster care funded by Title 
IV-E.

  Figure 1. Federal Claims and Caseload History for Title IV-E Foster 
                                  Care
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    The major appeal of the Title IV-E program has always been that, as 
an entitlement, funding levels were supposed to adjust automatically to 
respond to changes in ``need,'' as represented by State claims. Annual 
discretionary appropriations were unnecessary to accommodate changing 
circumstances such as a larger population of children in foster care. 
The automatic adjustment features of the entitlement structure remain a 
strength, however, only so long as they respond appropriately and 
equitably to factors that reflect true changes in need and that promote 
the well-being of the children and families served. There is little 
reason to assume this is true at present. Figure 1 shows that funding 
levels and caseloads have not closely tracked one another for over a 
decade, and indeed since 1998 have been moving in opposite directions.
Documenting Eligibility and Claiming Foster Care Funds is Burdensome
    In order to receive Federal foster care funds, States are required 
to determine a child's eligibility, and must document expenditures made 
on behalf of eligible children. This documentation becomes the basis 
for expenditure reports that are filed quarterly with the Federal 
Government. The Federal share of eligible expenditures may then be 
``drawn down'' (i.e. withdrawn from Federal accounts) by States. While 
good estimates of the time and costs involved in documenting and 
justifying claims are not available, such costs can be significant.
    As laid out in law and regulations, there are four categories of 
expenditures for which States may claim Federal funds. Each of these is 
matched at a particular rate that varies from category to category. In 
addition, the match rate for foster care maintenance payments varies 
from State to State and may be adjusted from year to year. These 
categories are:

      foster care maintenance payments for eligible children 
(matched at the Medicaid rate which varies by State and by year, but 
currently ranges from 50 to 80%)
      short- and long-term training for State and local agency 
staff who administer the Title IV-E program, including those preparing 
for employment by the State agency, as well as for foster parents and 
staff of licensed child care institutions in which Title IV-E eligible 
children reside (75% Federal match)
      administrative expenditures necessary for the proper and 
efficient administration of the program (50% Federal match)
      costs of required data collection systems (50% Federal 
match)

    With so many different categories of expenses, each matched at a 
different rate, States must accurately track spending in each of these 
categories and attribute how much of their efforts in each category are 
being made on behalf of eligible children. States report that doing so 
is cumbersome, prone to dispute, and does not accomplish program goals. 
Adding an additional layer of complexity, costs must be allocated to 
those programs which benefit from the expenditures, a standard practice 
in Federal programs. A State's cost allocation plan is approved by the 
Federal Government and distributes expenses that relate to multiple 
programs and functions.
    The categories of administrative and training expenses are 
typically the most difficult to document and the most often disputed. 
Federal regulations (45 CFR 1356.60) provide the following examples of 
allowable administrative expenses:

      eligibility determination and re-determination, plus 
related fair hearings and appeals
      referral to services
      preparation for and participation in judicial 
determinations
      placement of the child
      development of the case plan
      case reviews
      case management and supervision
      recruitment and licensing of foster homes and 
institutions
      rate setting
      a proportionate share of agency overhead
      costs of data collection systems

    There is an ambiguous dividing line between an administrative 
expense such as case management and ineligible service costs, such as 
counseling. Such activities may be performed by the same staff and 
sometimes in the same session with a client. This makes accurate 
claiming difficult and gives rise to frequent disputes about allowable 
expenditures. For this reason, administrative costs are much more 
frequently the subject of disallowances than are other funding 
categories.
    The ability of States to claim Title IV-E funds spent on training 
activities is confounded by statutory and regulatory provisions that 
are mismatched with how State agencies currently operate their 
programs. For instance, while many States now contract with private 
service providers for administrative functions such as those listed 
above, they receive lower rates of Federal reimbursement of their costs 
for training these workers to perform these functions. Only costs 
incurred by the State in the training of State and local agency workers 
and those preparing for employment with the state agency can be 
reimbursed under Title IV-E at the enhanced, 75 percent match rate 
(rather than the 50 percent match rate for administrative expenses). 
Furthermore, only public funds or expenditures can be used to match 
Title IV-E training funds. It is common practice to consider the staff 
time and other resources of a state university as match for Federal 
funds when training child welfare agency employees. However, this 
practice disadvantages States that utilize private colleges and 
universities for training and limits the training resources available, 
particularly in rural States where the number of State universities and 
colleges are limited and at great distances from those people requiring 
the training.
    Just as claiming rules are complex, requirements for children's 
Title IV-E eligibility are also cumbersome. Several eligibility 
requirements must be met in order to justify the Title IV-E claims made 
on a child's behalf. These are described in the text box below. Some of 
these apply at the time a child enters foster care, while others must 
be documented on an ongoing basis. Most of these are procedural 
requirements intended to protect children from potential harm caused by 
inattentive agencies and systems. It is unclear, however, that they 
function reliably as eligibility criteria. For example, the fact that 
judicial determinations routinely include ``reasonable efforts'' and 
``contrary to the welfare'' determinations may represent a judge's 
careful consideration of these issues, or may simply appear because 
prescribed language has been automatically inserted into removal 
orders. These process requirements were essential when Federal 
oversight was limited to assuring the accuracy of eligibility 
determinations. However, now that the Child and Family Review process 
(discussed in some detail in a later section) provides comprehensive 
assessments of States' child welfare programs, some of what are 
currently individual eligibility criteria could be addressed more 
effectively as part of the systemic assessment process.
    The eligibility criterion that is most routinely criticized by 
States and child welfare advocates is the financial need criteria as 
was in effect under the now-defunct AFDC program. As noted above, this 
requirement relates to the historical origins of the foster care 
program as part of the welfare system. However, there is no policy 
reason that the Federal Government should ``care'' (in monetary terms) 
more about children in imminent danger of maltreatment by parents who 
are poor than it does about children whose parents have higher incomes. 
The requirement is particularly peculiar because the AFDC program was 
eliminated in favor of Temporary Assistance for Needy Families in 1996. 
Therefore the means test used for Title IV-E no longer parallels the 
income and asset limits for existing welfare programs. And since this 
so-called ``look back'' provision did not index the 1996 income and 
asset limits for inflation, over time their value will be further 
eroded. Fewer children will be eligible for Title IV-E in the future as 
income limits for the program remain static while inflation raises both 
incomes and the poverty line.
    That each child's eligibility depends on so many factors, some of 
which may change from time to time, makes Title IV-E a potentially 
error-prone program to which there is recurrent pressure for accuracy, 
close procedural scrutiny, and the taking of disallowances. On the 
other hand, the potentially large sums involved mean that disallowances 
are met with procedural disputes, appeals, and protests from agency 
directors, legislators, and governors. Yet it is not at all clear that 
the time and effort spent tracking eligibility criteria results in 
better outcomes for children. For all the complexity of the eligibility 
process, the number of States out of compliance is actually quite low.

----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Eligibility Requirements for Title IV-E Foster Care
  Contrary to the welfare determination. A child's removal from the home must be the result of a judicial
determination to the effect that continuation in the home would be contrary to the child's welfare, or that
placement in foster care would be in the best interest of the child. Children in foster care as a result of a
voluntary placement agreement are not subject to this requirement.
  Reasonable efforts determination. The State agency must obtain a judicial determination within 60 days of a
child's removal from the home that it has made reasonable efforts to maintain the family unit and prevent the
unnecessary removal of a child from home, as long as the child's safety is ensured. In addition, there must be
ongoing documentation that the State is making reasonable efforts to establish and finalize a permanency plan in
a timely manner (every 12 months).
  State agency placement and care responsibility. The State child welfare agency must have responsibility for
placement and care of the child. Usually this means the child is in the State's custody. A tribal agency or
other public agency may have responsibility for the child's placement and care if there is a written agreement
to that effect with the child welfare agency.
  Pre-welfare reform AFDC eligibility. The State must document that the child was financially needy and deprived
of parental support at the time of the child's removal from home, using criteria in effect in its July 16, 1996
State plan for the Aid to Families with Dependent Children program. Income eligibility and deprivation must be
re-determined annually.
  Licensed Foster Family Home or Child Care Institution. The child must be placed in a home or facility that
meets the standards for full licensure or approval that are established by the State.
  Criminal background checks or safety checks. The State must provide documentation that criminal records checks
have been conducted with respect to prospective foster and adoptive parents and safety checks have been made
regarding staff of child care institutions.
  Special Requirements in the Case of Voluntary Placements. If a child is placed in foster care under a
voluntary placement agreement, Title IV-E eligibility rules apply slightly differently. Determinations that
remaining in the home is contrary to the child's welfare and that reasonable efforts have been made to prevent
placement are not required in these cases. However, if the child is to remain in care beyond 180 days, a
judicial determination is required by that time indicating that continued voluntary placement is in the child's
best interests.
----------------------------------------------------------------------------------------------------------------


    Compliance with eligibility rules is monitored through Title IV-E 
Eligibility Reviews that have been conducted since 2000. Fifteen of the 
forty-four States reviewed by the end of 2003, plus the District of 
Columbia and Puerto Rico, were found not to be in substantial 
compliance with IV-E eligibility rules. The remainder had minimal 
errors in their eligibility processes and were generally operating 
within program eligibility rules. Even among the States required to 
implement corrective action plans, several are not far from compliance 
levels.
    Of those States not in substantial compliance, the pattern of 
errors varied. The most widespread problems relate to reasonable 
efforts to make and finalize permanency plans. Ten states had large 
numbers of errors in this category and 44% of all errors involved 
reasonable efforts violations. In most cases these are cases with late 
or absent permanency hearings; that is, States were not operating 
within the time frames laid out by the Adoption and Safe Families Act. 
Four States had frequent licensing problems, usually that children were 
placed in unlicensed foster homes (23% of all errors). Three States had 
significant errors related to the application of pre-welfare reform 
AFDC eligibility criteria (11% of all errors). Two States had quite a 
few missing criminal background checks on foster parents (8% of all 
errors). There were very few errors with respect to ``contrary to the 
welfare'' determinations, placement and care responsibility, or 
extended voluntary placements. A full listing of errors documented in 
eligibility reviews through Fiscal Year 2003 appears in Table 1.
Differing Claiming Practices Result in Wide Variations in Funding Among 
        States
    States vary widely in their approaches to claiming Federal funds 
under Title IV-E. Some are quite conservative in their claims, counting 
only children in clearly eligible placements and defining 
administrative costs narrowly. Other States have become more skilled in 
the administrative processes necessary to justify more extensive Title 
IV-E claims. Further, not all States have the financial means or 
budgetary inclination to invest in the full array of foster care 
related services for which Federal financial participation might be 
available. The result of these different approaches is a complex 
pattern of Title IV-E claims covering a great range of funding levels. 
However, the disparities in Title IV-E claiming are so wide and so 
lacking in pattern as to undermine the rationale for the complex 
claiming rules.
    Figure 2 shows the average amount of funds each State claimed from 
the Federal Government for Title IV-E foster care during FY2001 through 
FY2003, shown as dollars per Title IV-E eligible child so as to make 
the figures comparable across States. That is, for each State the three 
year average annual Federal share in each spending category is divided 
by the three year average monthly number of Title IV-E eligible 
children in foster care, to give an average, annualized cost per child. 
Three year averages are used to smooth out claiming anomalies that may 
occur in a single year because of extraordinary claims or 
disallowances.
    There is a wide range in the amounts claimed as well as in the 
division of claims between maintenance payments and the category that 
includes both child placement services and administration. These are 
the two principal claiming categories. The remaining categories, 
training and demonstrations, were relatively small in most States. 
Spending on State Automated Child Welfare Information Systems (SACWIS) 
has been excluded since these system development costs can vary 
substantially from year to year in ways unrelated (at least in the 
short term) to services for children.
    Total Federal claims per Title IV-E child (averaged across three 
years), excluding funds for the development of State Automated Child 
Welfare Information Systems (SACWIS), ranged from $4,155 to $41,456. 
The median value was $15,914. The range in maintenance claims was 
$2,829 to $22,418 per Title IV-E child, with a median of $6,546. Claims 
for child placement services and administration ranged from $1,190 to 
$23,724 per Title IV-E child, with a median value of $6,909. These per-
child amounts reflect only the Federal share of Title IV-E costs, which 
vary according to the match rates used for different categories of 
expenses. If one were to include the State share in such calculations, 
the expenditure figures would be substantially higher. This discussion 
has been framed in terms of the variation in Federal share so as to 
best illustrate and isolate issues related to the Federal funding 
rules.


--------------------------------------------------------------------------------------------------------------------------------------------------------
                   Table 1.  Distribution of Errors Among States Found Not in Substantial Compliance with Title IV-E Eligibility Rules
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Lacking                    Missing     Child Welfare    Extended
                                  Number                   Criminal      Reason-    Contrary to   Agency Lacks     Voluntary     1996 AFDC
                               Cases Found   Licensing      Back-         able      the Welfare   Placement and  Placement w/    Criteria      Disallow-
                                Ineligible    Problems      ground      Efforts     Determina-      Care Re-       out Court     Not Met     ance Amount
                                                            Checks     Violations      tions      sponsibility     Approval
--------------------------------------------------------------------------------------------------------------------------------------------------------
New Jersey 2000 Initial                44        33            0           14             0               4             3            3          $269,903
 Primary (IP)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Kansas 2000 IP                         16         6            0            6             7               0             0           10           $74,265
--------------------------------------------------------------------------------------------------------------------------------------------------------
Maine 2001 IP                          24        22            0            3             0               2             0            3          $182,737
--------------------------------------------------------------------------------------------------------------------------------------------------------
Hawaii 2001 IP                         25         0           18            1             0               2             1            3          $238,432
--------------------------------------------------------------------------------------------------------------------------------------------------------
Iowa 2001 IP                           22         0            3            6             6               0             0           15          $156,915
--------------------------------------------------------------------------------------------------------------------------------------------------------
Vermont 2002 IP                        26         2            0            4             7               4             0           14          $312,918
--------------------------------------------------------------------------------------------------------------------------------------------------------
Maryland 2002 IP                       37         3            1           36             1               0             0            1          $601,820
--------------------------------------------------------------------------------------------------------------------------------------------------------
Wisconsin 2002 IP                      23         3            0           13             4               2             2            1          $206,833
--------------------------------------------------------------------------------------------------------------------------------------------------------
New York 2003 IP                       31         0            0           26             7               4             2            5          $806,811
--------------------------------------------------------------------------------------------------------------------------------------------------------
New Jersey 2003 Secondary              56        27            4           36             5               6             7            1       $6,220,853
--------------------------------------------------------------------------------------------------------------------------------------------------------
District of Columbia 2003 IP           54        39           24           19             4               7             1            2       $1,416,169
--------------------------------------------------------------------------------------------------------------------------------------------------------
Puerto Rico 2003 IP                    70        17            7           98             7               0             0           26          $271,056
--------------------------------------------------------------------------------------------------------------------------------------------------------
Montana 2003 Primary (P)               22         1            0           28             2               1             1            0          $317,752
--------------------------------------------------------------------------------------------------------------------------------------------------------
West Virginia 2003 P                   25         4            0           20             0               0             1            0          $451,305
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama 2003 P                         23         2            2           19             1               0             1            1          $174,856
--------------------------------------------------------------------------------------------------------------------------------------------------------
Mississippi 2003 IP                    10         9            0            3             1               0             0            0            $8,133
--------------------------------------------------------------------------------------------------------------------------------------------------------
Arkansas 2003 IP                       10         6            3            0             0               0             0            1           $67,067
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Cases with Errors           518                                                                                                   $11,777,825
--------------------------------------------------------------------------------------------------------------------------------------------------------
      TOTAL ERRORS                    757       174           62          332            52              32            19           86
--------------------------------------------------------------------------------------------------------------------------------------------
        Percent of all errors                      23%           8%          44%            7%              4%            3%          11%
--------------------------------------------------------------------------------------------------------------------------------------------------------
During 2000 to 2003, 50 states plus the District of Columbia & Puerto Rico were reviewed; of these 35 were found to be in substantial compliance and 17
  not in substantial compliance.
Six states (PA, MA, FL, TN, MN, & MI) have not been reviewed.
Six states (KS, NJ, WV, AL, TX, & MT) have had an initial primary plus a primary or secondary review.
Substantial compliance is defined as less than 8 errors for an initial primary review or 4 errors in a primary review. In secondary reviews substantial
  compliance is calculated as a percentage of cases and/or dollars.
Ineligible cases may have more than one error reason.
Licensing errors were usually children placed in unlicensed homes. In Maine, most errors were foster homes that lacked a fire inspection. Most
  reasonable efforts violations were late/absent permanency hearings.


Figure 2. States' Foster Care Claims--Federal Funds (excluding SACWIS) 
         per IV-E Child (average of fiscal years 2001 to 2003)
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    As shown in figure 3, the balance between maintenance and 
administrative claims also varies considerably among the States. Claims 
for child placement and administration vary from 10 cents per dollar 
claimed of maintenance to $4.34. Six States claim less than 50 cents in 
administration for every maintenance dollar claimed, while nine States 
claim more than $2 in administration for every dollar of maintenance. 
These differences reflect the extent to which States use a wide or 
narrow definition of child placement and administrative costs. In 
addition, some States claim administrative expenses for non-IV-E 
children as ``Title IV-E candidates'' over extended periods of time, 
even if those children or the placement settings they reside in never 
qualify under eligibility rules. In such States this drives up 
administrative costs as a proportion of total Title IV-E payments. A 
Notice of Proposed Rulemaking published by HHS January 31, 2005 
proposes to prohibit this practice except under limited circumstances.

  Figure 3. Administrative Dollars Claimed per Dollar of Foster Care 
 Maintenance Varies Widely (calculated on the basis of average claims 
                         FY2001 through FY2003)
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Below, factors such as the quality of child welfare services are 
examined in relation to the funding differences across States. Here it 
is simply observed that the spread of claims is far wider than one 
would expect to see based on any funding formula one might rationally 
construct. It is unlikely that differences this large are the result of 
actual differences either in the cost of operating a foster care 
program or reflect actual differential needs among foster children 
across States.
The Current Funding Structure Has Not Resulted in High Quality Services
    If State and local child welfare systems were generally functioning 
well, most of those concerned might take the view that the 
approximately $5 billion in Federal funds, and even more in State and 
local funds, was mostly well spent. In fact, however, knowledgeable 
observers are hard-pressed to name systems that are functioning well 
overall. Typically one aspect of an agency's efforts may be lauded, 
while serious weaknesses are acknowledged in other areas. Even so, good 
evidence of system performance has, until recently, been hard to come 
by.
    After several years of development and pilot testing, the 
Children's Bureau in 2000 began conducting Child and Family Services 
Reviews (CFSRs) in each State. These reviews, which include a data-
driven Statewide Assessment and an onsite review visit by Federal and 
State staff, are intended to identify systematically the strengths and 
weaknesses in State child welfare system performance. Once areas of 
weakness are identified, States are required to develop and implement 
Program Improvement Plans (PIPs) designed to address shortcomings. 
During onsite reviews, teams examine a sample of case files of children 
with open child welfare cases and interview families, caseworkers and 
others involved with these cases to determine whether Federal standards 
have been met. System stakeholders such as child advocates and judges 
are also interviewed. In addition to examining practice in specific 
cases, the reviews also examine systemic factors such as whether the 
States' case review system, training, and service array are adequate to 
meet families' needs. Overall, 47 specific factors are rated and then 
aggregated to assess whether or not ``substantial conformity'' with 
Federal requirements is achieved in seven child outcomes and seven 
systemic factors (shown in the text box below).

----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Outcomes and Systemic Factors Examined in Child and Family Services Reviews
  Outcomes
 Children are, first and foremost, protected from abuse and neglect.
 Children are safely maintained in their homes whenever possible and appropriate.
 Children have permanency and stability in their living situations.
 The continuity of family relationships and connections is preserved for children.
 Families have enhanced capacity to provide for their children's needs.
 Children receive appropriate services to meet their educational needs.
 Children receive adequate services to meet their physical and mental health needs.
  Systemic Factors
 Statewide Information System
 Case Review System
 Quality Assurance System
 Training
 Service Array
 Agency Responsiveness to the Community
 Foster and Adoptive Parenting Licensing, Recruitment, and Retention
----------------------------------------------------------------------------------------------------------------


    As described above, there are 14 areas in which a State might be 
determined in or out of substantial compliance during its Child and 
Family Services Review. Figure 4 shows the distribution of State 
performance on initial reviews among all 50 States and the District of 
Columbia. Median State performance was to be in substantial compliance 
in 6 of 14 areas. States reviewed to date have ranged from meeting 
standards in 1 area to 9 areas. While simply counting the areas of 
compliance presents a very general, simplified, and broad-brush 
approach to evaluating child welfare system quality, the purpose here 
is not to analyze system performance in any detailed fashion. It is 
simply to recognize that most States achieved substantial compliance in 
fewer than half of areas examined, and that all systems reviewed have 
been in need of significant improvement. Indeed, in the area of 
permanency and stability in their living situations, an area of crucial 
importance to children in foster care, no State has yet met Federal 
standards although a few approach them. Clearly the current Federal 
funding structure has not, to date, resulted in a child welfare system 
that achieves outcomes with which we may be satisfied.

Figure 4. Summary of Results for Child and Family Services Reviews (for 
                           50 States plus DC)
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


States' Title IV-E Claiming Bears Little Relationship to Service 
        Quality or Outcomes
    Even if not achieving high quality overall, one might expect and 
hope that spending variations among States might relate to the overall 
quality of child welfare systems as revealed in results of the Child 
and Family Services Reviews. Analyses presented below relate the 
variations in claiming patterns among States described above to child 
welfare system performance.
    Figure 5 shows per child claims plotted against the number of areas 
measured in the CFSR in which the State was found to be in substantial 
compliance. The three states with the highest claims per child were in 
compliance with 6, 3 and 5 areas respectively of the 14 possible areas 
of compliance in their first Child and Family Services Review (CFSR). 
Average per-child claims did not differ appreciably between the highest 
and lowest performing states. The eight states that were in compliance 
in the fewest areas (1, 2 or 3 of 14) averaged $19,293 in Federal funds 
per Title IV-E child, while the 12 highest performing states (in 
compliance with 8 or 9 of the 14 areas) averaged claims of $19,824 per 
child. There are States with relatively high- and low-Federal claims at 
each level of CFSR performance.
    Claiming levels similarly bear little relationship to States' 
performance in achieving permanency for children in foster care. Figure 
6 plots each State's Federal claims for the Title IV-E foster care 
program per Title IV-E eligible child against the percentage of 
children in foster care for whom permanency is achieved. Permanency 
data, from the States' Child and Family Services Reviews, shows that 
States' success in either reunifying children with parents within one 
year or finalizing an adoption within two years of foster care entry 
varies widely. Six States achieve permanency within these time frames 
for under one-third of children in foster care, while five either 
approach or exceed the national standard of 90 percent. Most perform 
somewhere in between. The wide disparities among States' performance on 
what is a key child welfare function seem unconnected to the amount of 
Federal funds claimed from the major source of Federal child welfare 
funding, the Title IV-E foster care program.

 Figure 5. Child and Family Services Review Compliance Is Only Weakly 
Related to Levels of Title IV-E Foster Care Funds Claimed Per Eligible 
                Child (data shown for 50 States plus DC)
[GRAPHIC(S) NOT AVAILABLE IN TIFF FOMRAT]


    If claims levels are not strongly related to child welfare system 
quality or outcomes, what other factors might be involved in 
determining spending? Variation among States in the actual foster care 
rates paid to families caring for children bears only a weak 
relationship to per-child foster care claims levels (figure 7). As an 
example, four of six States with basic maintenance payments in 2000 of 
less than $300 per month for a young child had higher than median 
levels of claims per child. These four States also had higher Federal 
claims per child than did four of seven States which in 2000 paid basic 
maintenance rates of higher than $500 per month for young children. 
Patterns of residential care use among States are similarly unrelated 
to claiming disparities.
    Wide disparities in Federal claims might be viewed as positive if 
States were achieving better outcomes with higher spending. This 
argument does not hold up to scrutiny, however, in the face of Child 
and Family Services Review results. The findings of these reviews are 
disappointing even in States with relatively high costs. Of course, 
because Title IV-E is the focus here, this analysis only includes 
foster care costs. States' spending on other child welfare services may 
contribute to performance. The wide variety of these other potential 
funding sources and their variability among the States, however, makes 
it quite difficult to examine them in a consistent fashion.

 Figure 6. Permanency Outcomes are Unrelated to Levels of State Title 
       IV-E Foster Care Claims (data shown for 50 States plus DC)
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


The Current Funding Structure is Inflexible, Emphasizing Foster Care
    Title IV-E has long been criticized because it funds foster care on 
an unlimited basis without providing for services that would either 
prevent the child's removal from the home or speed permanency (see, for 
example, The Pew Commission on Children in Foster Care, 2004 and 
McDonald, Salyers and Shaver 2004). Funding sources for preventive and 
reunification services, primarily the Child Welfare Services Program 
and the Promoting Safe and Stable Families Program funded under title 
IV-B of the Social Security Act, are quite small in comparison with 
those dedicated to foster care and adoption. As shown in figure 8, 
foster care funding under Title IV-E made up nearly two-thirds (65%) of 
Federal funding dedicated to child welfare purposes in Fiscal Year 
2004. Adoption Assistance funding (also authorized under Title IV-E) 
represents another 22%. Funding sources that may be used for preventive 
services (but which also fund some foster care and adoption related 
services), including funds from the Title IV-B programs and the 
discretionary programs funded from authorizations in the Child Abuse 
Prevention and Treatment Act, represent 11% of Federal child welfare 
program funds.
    Other Federal social services programs such as the Social Services 
Block Grant (SSBG) and Temporary Assistance for Needy Families (TANF) 
also fund some services for families experiencing or at risk of child 
welfare involvement, as can Medicaid. These funding streams are not 
intended primarily for these purposes, however, and, with the exception 
of SSBG, available program data does not break out spending on child 
welfare related purposes. (The Fiscal Year 2002 annual expenditure 
report for the SSBG program (HHS, 2004) shows that states spent a total 
of $634 million in SSBG funds for child welfare services that year.) 
Surveys and analysis conducted by private research organizations 
indicate these funding sources provide considerable funding for child 
welfare services, though much of that is still concentrated on out-of-
home care. Studies conducted by the Urban Institute found that in State 
Fiscal Year 2002 these ``non-traditional'' Federal child welfare 
funding sources (primarily SSBG, TANF, and Medicaid) paid for just over 
$5 billion in child welfare services. Of this total, $2.1 billion was 
spent on out-of-home placements, $1.3 billion paid for other services 
including prevention and treatment, $419 million went to administrative 
activities, and $98 million funded adoption services. States were 
unable to categorize purposes on which the remainder of funds were 
spent, nearly $700 million (Scarcella, Bess, Zielewski, Warner and 
Geen, 2004).

 Figure 7. Foster Care Maintenance Rates Are Weakly Related to Foster 
                              Care Claims
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 


    Some have argued that because foster care is an entitlement for 
eligible children while service funds are limited, Title IV-E 
encourages foster care placement. However, it seems unlikely that 
caseworkers make placement decisions on the basis of children's Title 
IV-E eligibility, nor is it likely that judges use Title IV-E status as 
a significant factor in their placement rulings. Indeed, caseworkers 
and judges are often unaware of children's eligibility status. A lack 
of available family services, however, could plausibly tip caseworkers' 
decisions toward placement or delay a child's discharge. Quantifying 
such effects is difficult, however.
    Many in the child welfare field believe that with more flexibility 
in funding States would devote additional resources to preventive and 
reunification services, and that better outcomes for children and 
families could be achieved. Since 1996, Child Welfare Demonstration 
Projects in 17 States have generated evidence about the effects of 
allowing State and local agencies to use Federal foster care funds more 
flexibly, either for children not normally eligible for Title IV-E or 
for services Title IV-E would could not otherwise cover. While most of 
the States tested a single, specific alternative use for foster care 
funds, such as guardianship subsidies or improved interventions for 
parents with substance abuse problems or children with serious mental 
health conditions, four States are testing broader systems of flexible 
funding that resemble the Administration's proposal for a Child Welfare 
Program Option. These demonstrations are operating in Indiana, North 
Carolina, Ohio, and Oregon. In each case, the State provides counties a 
fixed allotment of Title IV-E funds which then may be used to pay for 
services to prevent foster care placement, facilitate reunification, or 
otherwise ensure safe, permanent outcomes for children.

            Figure 8. Federal Child Welfare Funding, FY2004
[GRAPHIC(S) NOT AVAIILABLE IN TIFF FORMAT]


    This chart includes only programs dedicated to child welfare 
functions. It does not include funding for programs with broader or 
other purposes of which portions may be used on child welfare 
functions. For most of these broader programs (such as TANF, Medicaid, 
and the Social Services Block Grant) federal data cannot reliably 
identify the portion spent on child welfare. Percentages are calculated 
from 2004 spending figures shown in the President's FY2006 budget 
request.

    Evaluation results to date are encouraging. While the 
demonstrations did not always achieve their goals, in no case did 
outcomes for children deteriorate as a result of increased flexibility. 
North Carolina found flexible funding contributed to declines in the 
probability of out-of-home placement following a substantiated child 
abuse or neglect report. Demonstration counties in Ohio expressed 
increased support for prevention activities and were more likely than 
traditionally funded counties to create new or expanded prevention 
services. And in Oregon, the combination of demonstration funds and the 
State's System of Care Initiative dramatically improved the likelihood 
that at-risk children could remain safely in their homes rather than 
being placed in foster care. It should be noted that demonstration 
projects did not provide any more Title IV-E funds than the State would 
have received in the absence of a demonstration. The projects were 
cost-neutral. States were granted only the flexibility to spend funds 
in broader ways than is normally allowed.
    Flexible spending alone will not address the weaknesses in child 
welfare systems around the country. But such flexibility can allow 
strong local leaders to implement practice improvements more easily and 
thereby generate improved outcomes. Among the types of practice changes 
implemented in flexible funding demonstrations are strengthened family 
assessments; enhanced visitation; intensive family reunification 
services; family decision meetings; and improved access to substance 
abuse and mental health treatment. That nearly half of States have 
implemented waiver demonstrations indicates widespread interest in more 
flexible funding for State child welfare programs. Interest in flexible 
funding has grown now that many States have successfully implemented 
new service models while enhancing, or at least not compromising, 
safety, permanency, and child well-being.
    In recognition that flexibility can produce best results when 
accompanied by enhanced funding, the Bush Administration has 
consistently supported funding increases for child welfare. In 
particular, HHS budgets from FY2002 through FY2005 each included 
substantial proposed increases for the Promoting Safe and Stable 
Families Program, in the amount of $1 billion over five years. However, 
Congress each year appropriated substantially less than the requested 
amount. For FY2005, the Administration also proposed substantial 
increases for several key child abuse prevention efforts authorized 
under the Child Abuse Prevention and Treatment Act, which again were 
not funded by Congress.
The Financing Structure Has Not Kept Pace with a Changing Child Welfare 
        Field
    A great deal has changed in the world of child welfare since the 
Federal foster care program was established. The program initially 
created in 1961, however, has continued without major revision to its 
financing structure. The result is a funding stream seriously 
mismatched to current program needs. The goals of the child welfare 
system are to improve the safety, permanency, and well-being of 
children and families served. By requiring that the great majority of 
Federal funding for child welfare services be spent only on foster 
care, the financing system undermines the accomplishment of these 
goals.
    Title IV-E funding was designed with the intention that the program 
funding would adjust automatically to changes in social need. However, 
it is difficult to conclude from claims levels that social need has 
been the driving force behind spending patterns that vary wildly from 
State to State. Service practices seem to have adjusted to the funding, 
rather than vice versa. Throughout the program's history, growth far 
outpaced changes in the population of children being served. And while 
current growth has slowed considerably, declines in the number of 
children in foster care have not yet translated into lower program 
claims. The recent stabilization of the program's funding, however, 
makes this a good time to re-examine the structure of Title IV-E and 
whether that funding structure continues to meet the needs of the child 
welfare field. Since the number of children in foster care is expected 
to be flat or declining for the foreseeable future, there is less 
short-term risk in potential financing system changes than is the case 
when needs are rapidly escalating.
    Improved preventive and family support services for children and 
families at risk of foster care placement, therapeutic care and 
remediation of problems for families with children in foster care, and 
post-discharge services for families after children leave out of home 
care, are each essential to the achievement of the child welfare 
system's goals. Yet these are precisely the services that Title IV-E is 
least able to support. The result has been child welfare systems unable 
to achieve positive outcomes for children. This weak performance has 
been documented by Child and Family Services Reviews conducted across 
the nation. But as States develop and implement Program Improvement 
Plans, Title IV-E funds are largely unavailable to address the 
challenges.
    From complex eligibility criteria based in part on a program that 
no longer exists, to intricate claiming rules that demand caseworkers' 
every action be documented and characterized, Title IV-E is a funding 
stream driven toward process rather than outcomes. With the advent of 
the Child and Family Services Reviews, and systemic improvements 
initiated in response to the Adoption and Safe Families Act, Congress 
and the Department of Health and Human Services have made significant 
strides toward re-orienting child welfare programs to be outcomes 
focused. Until the funding is structured to support these outcomes, 
however, improvements may be constrained.
Proposed Child Welfare Program Option Described
    The President's FY2006 budget once again proposes to create a Child 
Welfare Program Option (CWPO) which would allow States a choice between 
the current Title IV-E program and a five-year capped, flexible 
allocation of funds equivalent to anticipated Title IV-E program 
levels. This concept was first proposed by the President for FY 2004. 
While the last Congress did not complete work on child welfare 
financing, the Administration continues to call for consideration of 
financing reform. The President's proposal has a number of distinct 
advantages over both current law as well as in contrast to more 
traditional block grants that have been considered in the past.
    The Child Welfare Program Option would allow States to use Title 
IV-E funds for foster care payments, prevention activities, training, 
and other service-related child welfare activities--a far broader range 
of uses than allowed under current law. Increased flexibility will 
empower States to develop child welfare systems that support a 
continuum of services for families in crisis and children at risk while 
being relieved of the administrative burden created by current Federal 
requirements, including the need to determine the child's eligibility 
for AFDC.
    Child safety protections under current law would continue under the 
President's proposal. These include requirements for conducting 
criminal background checks and licensing foster care providers, 
obtaining judicial oversight of decisions related to a child's removal 
and permanency, meeting permanency time lines, developing case plans 
for all children in foster care, and prohibiting race-based 
discrimination in foster and adoptive placements.
    In contrast to some previous flexible funding proposals, the 
President's Child Welfare Program Option would be an optional 
alternative to the current financing system. States desiring the 
flexibility it would afford could opt in during the initial program 
year for a five-year period. State allocations would be based on 
historic expenditure levels and would be calculated to be cost-neutral 
to the Federal Government over a five-year period. A State could choose 
to receive accelerated, up-front funding in the early years of the 
program in order to make investments in services that are likely to 
result in cost savings in later years. The proposal includes a 
maintenance of effort requirement to ensure that those States selecting 
the new option maintain their existing level of investment in the 
program. But those States unwilling to accept the risk and the promise 
of flexibility could choose to continue operating under current program 
rules.
    To address fears that some future social crisis might create 
unexpected and unforeseeable child welfare needs, the President has 
also proposed to allow participating States access to the TANF 
Contingency Fund if unanticipated emergencies result in funding 
shortfalls. Specific criteria would govern the circumstances under 
which States could withdraw funds from this source. This feature, too, 
responds to concerns expressed in past child welfare financing 
discussions.
    The proposal includes two set asides within the Child Welfare 
Program Option. The first would provide some Tribes direct access to 
Title IV-E funds. Under current law Tribes may only receive Title IV-E 
funds through agreements with States. Through a proposed $30 million 
set aside in the CWPO, however, tribes demonstrating the capacity to 
operate foster care programs could receive direct funding to do so and 
would be subject to similar program requirements as States.
    A second set aside would dedicate a relatively small amount of 
funds to facilitate program monitoring, technical assistance to support 
the efforts of State and tribal child welfare programs, and to conduct 
important child welfare research. These funds will ensure that 
sufficient resources are available to understand how the new option 
affects child welfare services and outcomes for children and families, 
and to support States in their efforts to reconfigure programs to 
achieve better results.
Benefits of the Proposed Child Welfare Program Option
    The Child Welfare Program Option would allow innovative State and 
local child welfare agencies to eliminate eligibility determination and 
drastically reduce the time now spent to document Federal claims. This 
effort could then be redirected toward services and activities that 
more directly achieve safety, permanency and well-being for children 
and families. Investments in preventive services and improved case 
planning could also reduce foster care needs. States taking child 
welfare funds through the Option would be held accountable for their 
programs through Child and Family Services Reviews and standard audit 
requirements. But these States would no longer be required to document 
expenditures in the level of detail now required to justify Federal 
matching funds. The flexibility afforded by the Option would allow 
agencies to direct funds to those activities most closely addressing 
families' needs. HHS could then focus more fully on partnerships with 
States to achieve positive outcomes for children and families.
    The proposed Child Welfare Program Option:

      Creates Structural Incentives for Better Outcomes. The 
CWPO provides incentives for child welfare system improvement because 
it is through better outcomes that a State would ``win'' under the 
program. With a fixed funding level, States would be better off 
financially if children either stay at home safely, return home 
quickly, or are placed in adoptive homes (since Adoption Assistance 
would remain an entitlement). Since these are also the preferred 
outcomes for children, the program creates structural incentives that 
are in line with program goals.
      Facilitates Quality Improvement. The CWPO would encourage 
States to fund service improvements, particularly those called for in 
their Program Improvement Plans (PIPs) by allowing Federal funds to be 
used for the full range of activities contemplated under the PIPs. In 
contrast with current law, States operating under the CWPO that are 
successful in reducing the need for foster care will be able to 
reinvest their Title IV-E funds in other child welfare services rather 
than losing them to diminished foster care claims.
      Reduces Burden. Under the CWPO, the level of 
documentation required of States in order to receive Federal child 
welfare funds would be reduced dramatically. While States would still 
be required to spend funds on child welfare services, they would no 
longer need to justify to the Federal Government for funding purposes 
precisely which services were delivered to which children. State and 
local funding decisions could in turn be made more in line with the 
needs of children and families without respect to whether the specific 
activity were reimbursable under Title IV-E.
      Increases Flexibility. The restrictions in current law 
regarding which child welfare services may be provided with Federal 
funds constrain State and local decision making regarding service 
offerings. The increased flexibility afforded by the CWPO will provide 
officials closest to child welfare cases with additional funding 
options, potentially leading to a more comprehensive service array for 
children and families.
      Promotes Ongoing Programmatic Adaptation and Innovation. 
The current system for claiming Federal funds encourages status quo 
programming through its documentation requirements and close scrutiny 
of categories in which funding levels change significantly from year to 
year. States risk disallowances if they change how they claim or the 
services for which they claim Federal funds. Alternatively, under 
current law innovation may be implemented without Federal financial 
participation, a relatively costly option. The CWPO, on the other hand, 
would enable states to innovate using their Federal foster care funds. 
Funds could be shifted among child welfare functions without concern 
for artificial expenditure categories or differential matching rates. 
The result is likely to be increased attention to outcomes for children 
and an improved ability to focus funding on strategies most likely to 
result in improved performance.

    This paper has described the funding structure of the Title IV-E 
foster care program and documented a number of its key weaknesses. In 
particular, the combination of detailed eligibility requirements and 
complex but narrow definitions of allowable costs force a focus on 
procedure rather than outcomes for children and families. Rules which 
have built up over the years cumulatively fail to support the program's 
goals of safety, permanency and child well-being. In addition, the 
restrictiveness of the Federal foster care program prevents States from 
using these funds, by far the largest source of Federal funding 
dedicated to child welfare activities, to implement many important 
elements in their Program Improvement Plans. These plans have been 
required of all States to address weaknesses in their programs detected 
during Child and Family Services Reviews. The Administration's proposed 
Child Welfare Program Option is intended to introduce flexibility while 
maintaining a focus on outcomes, retaining existing child protections, 
and providing a financial safety net for states in the form of access 
to the TANF Contingency Fund during unanticipated and unavoidable 
crises. The result will be a stronger and more responsive child welfare 
system that achieves better results for vulnerable children and 
families.
References
    Scarcella, Cynthia Andrews, Bess, Roseana, Zielewski, Erica Hecht, 
Warner, Lindsay, and Geen, Rob (2004). The Cost of Protecting 
Vulnerable Children IV. Washington, DC: The Urban Institute. Available 
online at: http://www.urban.org/
Template.cfm?Section=ByAuthor&NavMenuID=63&template=/TaggedContent/
ViewPublication.cfm&PublicationID=9128.
    Committee on Ways and Means, U.S. House of Representatives (1992). 
1992 Green Book. Washington, DC: U.S. Government Printing Office.
    Committee on Ways and Means, U.S. House of Representatives (2004).  
2004 Green Book. Washington, DC: U.S. Government Printing Office. 
Available online at: http://waysandmeans.house.gov/
Documents.asp?section=813.
    Frame, Laura (1999). Suitable homes revisited: An historical look 
at child protection and welfare reform. In Children and Youth Services 
Review, Vol 21, Nos. 9/10, pp. 719-754.
    McDonald, Jess, Salyers, Nancy, and Shaver, Michael (2004). The 
Foster Care Straightjacket: Innovation, Federal Financing and 
Accountability in State Foster Care Reform. Urbana-Champaign: Child and 
Family Research Center, School of Social Work, University of Illinois. 
Available online at http://www.fosteringresults.org/
    The Pew Commission on Children in Foster Care (2004). Fostering the 
Future: Safety, Permanence and Well-Being for Children in Foster Care. 
Washington, CC: The Pew Commission on Children in Foster Care.
    U.S. Department of Health and Human Services (2005). Budget in 
Brief FY2006. Washington, DC: U.S. Government Printing Office. 
Available online at: http://www.hhs.gov/budget/docbudget.htm.
    U.S. Department of Health and Human Services (2004). SSBG 2002: 
Helping States Serve the Needs of America's Families, Adults and 
Children. Washington, DC: Administration for Children and Families. 
Available online at: http://www.acf.hhs.gov/programs/ocs/ssbg/index.htm
    Note on Data Sources:
    Data presented in this report are derived primarily from HHS 
information sources. Most are publicly available as follows:

      Data on Title IV-E funding and caseload history (figure 
1) are from the ``2004 Green Book'' published by the U.S. House of 
Representatives Committee on Ways and Means (tables 11-2 and 11-3). 
Years not included in the 2004 Green Book may be found in the 
equivalent table from previous editions. The 2004 Green Book is online 
at: http://waysandmeans.house.gov/Documents.asp?
section=813.
      Data for 2002 Federal foster care claims is available in 
2004 Green Book, table 11-8. Other years used in this report are 
unpublished HHS data. These data are used in figures 2, 3, 5, 6 and 7.
      Final Reports for Child and Family Services Reviews 
(which contain data used in figures 4, 5 and 6) and Title IV-E 
Eligibility Reviews (containing data used in table 1) are available 
online from the Children's Bureau within HHS's Administration for 
Children and Families at: http://www.acf.dhhs.gov/programs/cb/cwrp/
index.htm.
      State foster care maintenance rates shown in figure 7 are 
those reported by the Child Welfare League of America. They are 
included in the 2004 Green Book, table 11-9.
      Data on child welfare funding in figure 8 are derived 
from 2004 actual figures shown in HHS's FY2006 Budget. Available online 
at http://www.hhs.gov/budget/docbudget.htm.

                                 

    Chairman HERGER. Thank you, Dr. Horn. I think your closing 
sentence really sums it up. All of us, even though we might 
have different opinions on how to reach the results, are united 
that this is a system that we need to work together to fix. I 
am convinced there isn't anyone in any of these States that is 
involved in any of these programs who does not have the right 
intentions of making it work. The fact is, it is not working; 
and working together with Mr. McDermott and yourself and the 
Administration and all of us is the only way we can do that.
    My concern is, we have gone on for too many years talking 
about this and yet not taking the steps to actually make sure 
we have the results with these young children, that they 
deserve and, certainly, the American taxpayers demand. The 
gentlelady from Connecticut, to inquire.
    Mrs. JOHNSON. Thank you, and welcome, Dr. Horn. How much do 
we know about these numbers? If they range from over $4,000 to 
a little over $41,000, do we know how much goes to the foster 
care family, how much goes to supporting services, how much 
goes to administrative costs?
    Dr. HORN. Yes. In the report itself there is a chart that 
breaks down those figures by how much goes into foster care 
maintenance payments, and those are the payments that reimburse 
States for----
    Mrs. JOHNSON. Is this gross or by State?
    Dr. HORN. It is by State. We also break it down into how 
much goes into administrative costs and how much goes into 
training, and our costs reimbursements for the States.
    Mrs. JOHNSON. Does it break it down into support services? 
Do we know what portion of the money is spent on services to 
support families? Maintenance, administration, and training are 
the ways that we pay for it, but do we know what the money is 
being spent on? Some of the administration, I would assume, was 
actually paying local community-based services to support the 
family.
    Dr. HORN. I can tell you that the amount of the almost $5 
billion that is being spent on services is zero.
    Mr. MCDERMOTT. Zero?
    Dr. HORN. Zero, if by ``services'' you mean providing 
interventions to help children and families, that is, to 
provide, for example, access to mental health services, 
parenting education services. You can't use these funding 
streams to provide services to these families. If you are 
talking about prevention----
    Mrs. JOHNSON. What about providing services to families, to 
a child in foster care placement? Can't some of this money be 
used for those kinds of services once the child is placed?
    Dr. HORN. It depends on what your definition of 
``services'' is. If you are talking about preparing, for 
example, a social worker preparing to go to court, to the 12-
month----
    Mrs. JOHNSON. If the child has significant emotional 
difficulties and needs to be able to also see a counselor, I 
thought that kind of service could be paid for.
    Dr. HORN. No.
    Mrs. JOHNSON. That is all just State funding?
    Dr. HORN. They can use other Federal funding sources. For 
example, title IV-B funds or Safe and Stable Families program 
funds. That is the problem with the title IV-E funding stream; 
it doesn't allow you to pay for the services that kids require 
to be able to prevent----
    Mrs. JOHNSON. I am keenly aware of that. When you say these 
dimensions of numbers, Connecticut is high on this. They can't 
possibly be spending all that money, even including all the 
State employee salary and everything, administration, so I just 
wondered if you knew anything more about what is behind the 
numbers?
    Dr. HORN. We can give you a breakdown----
    Mrs. JOHNSON. For instance, in health care and everything 
we do a wage adjustment, so Connecticut's wages are much higher 
and the cost of living is much higher, so you do get a real 
disparity, a significant disparity in cost areas. That doesn't 
appear to me to account for the great disparity that you are 
seeing in this chart.
    Dr. HORN. For example, in the title IV-E program, you can 
pay for referrals to services, but you cannot pay for the 
services themselves. You can pay for the development of a case 
plan, but if the case plan has elements in it that say certain 
kinds of services should be provided to the child, you cannot 
use title IV-E funds to pay for these services. That is why 
this program is broken. You know that better than anyone.
    Mrs. JOHNSON. Well, I do know that. On the other hand, I 
know that the proposal that I made, which if it actually would 
have been adopted when I made it, States would have a lot more 
money than they do now. We are having trouble getting that 
adopted; we are having trouble because States are just plain 
scared about a flat budget, about a set amount. If they are 
unwilling to do that, what can we do about the category of 
grants and the flexibility? What are our other options here? 
This is much too serious to be stuck where we are stuck. We 
have been stuck there 5 years in the short term, 10 years in 
the long term, maybe 15 years in the long term.
    Dr. HORN. I think it is important to emphasize a 
distinction between earlier proposals, like you and I were both 
involved in, and the President's proposal, that the current 
proposal from the President is one that provides an option to 
the State. A State can simply stay in the same system if they 
think the current----
    Mrs. JOHNSON. It is a one-time choice, isn't it?
    Dr. HORN. It is a choice for 5 years, and at the end of 5 
years they can opt back into the current financial system.
    Mrs. JOHNSON. If they opt back in, what is their base?
    Dr. HORN. Well, they would go back to a system where the 
State would be reimbursed for claims that they send in to the 
Federal Government.
    Mrs. JOHNSON. They wouldn't be harmed by being out for 5 
years if they wanted to?
    Dr. HORN. That is right.
    Mrs. JOHNSON. Is that the major change between this 
proposal and preceding proposals?
    Dr. HORN. Well, this has been the President's proposal for 
the last 3 years, and it is also the proposal, as I understand 
it, that is reflected in the Chairman's proposal, proposed 
legislation. If we go back a few years to the early 1990s, 
there were different proposals on the table. You are quite 
right, if we had enacted those proposals, States would have 
more money than they have now.
    Mrs. JOHNSON. Well, between this report and the earlier 
report--about a year or so, was it--how catastrophically 
children are doing in foster care, and the lack of services, we 
do need to move forward. I am disappointed that money is not 
there, but we will may be able to find other money. I hope you 
will work with us on that.
    Chairman HERGER. I thank the gentlelady. The gentleman from 
Washington, Mr. McDermott, to inquire.
    Mr. MCDERMOTT. Thank you, Dr. Horn, for your testimony. 
Last year when you were here, you said the President is firm in 
his commitments to continue to seek and secure full funding, 
$505 million per year, for this important program. Why has he 
backed off this year?
    Dr. HORN. Each year we put a budget together, and this year 
the budgetary constraints were such that we weren't able to 
again----
    Mr. MCDERMOTT. Is that less children?
    Dr. HORN. Each year you put a budget together.
    Mr. MCDERMOTT. You don't pay attention to what the caseload 
is; you just set a number. Is that what I am to get out of 
that?
    Dr. HORN. First, I think it is important to keep in mind 
that the President did get, in fact, $500 million over 5 years 
in additional funding under the Safe and Stable Families 
program, which he proposed and the Congress appropriated. 
Congress chose not to appropriate the other half of that----
    Mr. MCDERMOTT. He backed down to the Congress. That is good 
to hear. I am glad to hear the President pays attention to the 
Congress----
    Dr. HORN. The second thing I would point out is, in last 
year's budget he also asked for increases in the Child Abuse 
Prevention and Treatment Act (P.L. 93-247) programs.
    Mr. MCDERMOTT. Tell me something, which puzzles me. I have 
been doing this for a while, and I never understand why after 3 
years you have no legislative language to bring up here and lay 
on the table. You say, we have a proposal, and proposals are 
proposals, proposals are proposals, but when are you going to 
bring legislative language so we can actually work on it?
    Dr. HORN. We have been working with the Chairman on his 
bill. If you would like me to come up and work with you on 
legislative language, I will make that appointment with you 
tomorrow.
    Mr. MCDERMOTT. The Chairman is the problem; it is not the 
White House?
    Dr. HORN. No. The Chairman has actually proposed 
legislation.
    Mr. MCDERMOTT. Why don't you lay your proposal on the 
table?
    Dr. HORN. We have laid our proposal on the table.
    Mr. MCDERMOTT. I notice that your--one of the things about 
your chart that I would just point out--it is misleading, and 
Mrs. Johnson was really asking you about it--is, you are using 
only foster care money. You are not talking about any TANF 
money, you are not talking about any Medicaid money, you are 
not talking about any SSBG money.
    The presentation is misleading. It is practically useless 
because you can't figure out what is going on in any particular 
State when you see that Tennessee is down here at $4,000, and 
Ohio--for heaven's sake, Ohio--at $44,000, Connecticut is 
$32,000. What is going on? There is nothing--we don't learn 
anything from this because you didn't put all the dollars, and 
I think that is really the point.
    What troubles me--and I guess, besides your proposal, which 
you don't put in writing--you also have a proposal that would 
restrict the States' ability to claim administrative funds for 
foster care children living with relatives whose homes have not 
been licensed, so you are going to cut out some money there. 
You also have a proposal to eliminate the ability of States to 
claim Medicaid matching payments for case management services 
provided to foster care children with health care needs.
    Finally, there is a legislative proposal to reduce foster 
care eligibility for certain children by overturning a court 
decision by the Ninth Circuit Court. Now, it seems to me not 
only has the President backed off, but you are also cutting 
money by taking away things that now States are using to 
supplement whatever this chart is really supposed to mean. How 
do you justify cutting money and then saying, if we just give 
it to them in a big bag, it will be okay? Is that the idea?
    Dr. HORN. Again, I want to remind the Committee that this 
is an option. If the State doesn't think this is a good deal 
for them, they don't have to say yes, they don't have to take 
the option. I don't understand why you feel you should make 
that decision for the States. States have the option to 
continue their current funding structure if that is what they 
feel they should do. Why shouldn't a State, if they feel they 
could use the money more flexibly for the betterment of the 
children in their State, why shouldn't they have the option to 
do that?
    Mr. MCDERMOTT. Well, maybe you can help me with that. 
Besides the President's brother who, I would expect, would 
probably go along with his brother, how many State Governors 
have come forward supporting the President's plan and proposal?
    Dr. HORN. Well, the issue is, if you make an option 
available, States will go into decisionmaking as to whether or 
not they want to do it.
    Mr. MCDERMOTT. How many have said, ``please give us that 
option''?
    Dr. HORN. Well, we have a number of States who have 
requested through the child welfare waiver demonstration 
process to, in fact, do precisely this.
    Mr. MCDERMOTT. Which ones are they?
    Dr. HORN. Oregon, Indiana, North Carolina, and Ohio.
    Mr. MCDERMOTT. Are they agreeing to a cap or a block grant?
    Dr. HORN. Under existing waiver authority, what States get 
is a cost-neutral waiver that they can then use title IV-E 
funding flexibly as reflected in the President's proposal for a 
variety of different kinds of services. What do we find? We 
find that of the three States that concentrated on preventing 
removal of children from their homes, all three of those States 
showed significantly reduced placements in foster care without 
any detriment to child well-being. We also found in Indiana 
that there is a significantly reduced time to reunification for 
children who were in foster care to return to their family of 
origin because States were able to provide their families with 
intensive services while the child was in foster care.
    Mr. MCDERMOTT. If it is a good idea, why aren't the other 
47 States coming forward and asking for it? You named three 
States that have asked for it.
    Dr. HORN. Four.
    Mr. MCDERMOTT. Four, excuse me. Where are the other 46? If 
it is such a good idea, why are these other Governors asleep?
    Dr. HORN. It would be up to them. If they have an option--
even if only one State takes it----
    Mr. MCDERMOTT. We don't need the President's proposal, we 
already have a proposal. If they come forward and ask for a 
waiver, they are all taken care of.
    Dr. HORN. The only difficulty is they cannot do that waiver 
statewide. They can do it in certain jurisdictions within the 
State, but not statewide. We have had States come to us--Ohio 
has, for example--asking us to allow them to do the waiver 
statewide, but that is not possible under the Child Welfare 
Waiver Demonstration authority. Even if there is only one State 
that wants to do it, what is the problem with them doing it and 
demonstrating whether this makes a difference for kids in their 
State?
    Mr. MCDERMOTT. Because you are cutting the money. Thank 
you. Thank you, Mr. Chairman.
    Dr. HORN. May I just clear up one thing, Mr. Chairman? The 
proposed regulation that you referenced, Congressman, has to do 
with the fact that some States are claiming administrative 
costs for children who are not part of the title IV-E program. 
The administrative cost portion of the title IV-E program is 
meant to help States with the administrative costs of 
administering the title IV-E program. Why should States be able 
to claim administrative costs for kids who are not part of the 
program? We are simply saying that is what the statute says. We 
are simply enforcing the statute.
    Chairman HERGER. The gentleman's time has expired. The 
gentleman from Colorado, Mr. Beauprez.
    Mr. BEAUPREZ. Thank you, Mr. Chairman. The gentleman from 
Washington says he is troubled; I am troubled, too. I am 
troubled by some of the results I see in here. Especially when 
it says in here that there is absolutely no correlation to 
spending more money and permanence for foster kids, that 
troubles me greatly.
    Now the old adage, ``If it ain't broke, don't fix it'' 
probably applies, but it is broke and we ought to fix it. In 
advance of this hearing, Mr. Horn, I checked with my Governor's 
office in Colorado; he is very interested in pursuing this. You 
can probably add Colorado to your list of States, too, of who 
wants to talk to you if this moves forward. As I looked at 
figure 2, this chart--and this is just the Federal dollars--
tell me, first of all, what is the relationship between Federal 
and State matching money?
    Dr. HORN. It depends upon which of the four Federal funding 
streams in the title IV-E foster care program you are referring 
to. Some expenses are matched at the Medicaid match rate, some 
are matched at 50 percent, some at 75 percent enhanced match.
    Mr. BEAUPREZ. I think we are 50/50. There is a lot of money 
being spent. I am stunned--one of the places, again, I am 
troubled is by the amount of administrative dollars that are 
being spent. You have already talked about that to a degree.
    Do you have any indication--time is money, and it looks 
like we are spending a whole lot of money on time here--is all 
of this money being spent on administration? Are we forcing the 
States to push paper unnecessarily, perhaps, or have the States 
sometimes developed an empire because they can't?
    Dr. HORN. The current funding structure forces the States 
to do things that are highly burdensome and that take away 
valuable resources that could be used to provide services to 
children.
    Mr. BEAUPREZ. Every program I have talked to back in my 
State, whether it is at the county level where the rubber 
really meets the road, county officials that are trying to 
administer TANF or a WIC or Head Start or this program tell me, 
``Boy, when you go to Washington, if you could get us more 
flexibility, please, please, please.''
    When you are talking about not forcing, but as I 
understand, again, your proposal is a voluntary program for 
more flexibility, that is what very much intrigued local 
officials when I talked to them about that. I, for one, at 
least applaud you for that. Tell me, it just seems 
incomprehensible with the disparity in the money spent from the 
various States, $4,000 to over $40,000--did I hear you right, 
there is really no correlation between the amount of money 
spent and permanence for the kids? Which I assume is the 
objective here, right?
    Dr. HORN. The analysis is very clear that when you 
correlate the amount of money that is being drawn down from the 
title IV-E program with permanency outcomes, that is, the 
number of kids who are either reunified within a year with 
their family of origin or placed for adoption after removal 
within 2 years, when you do that correlation, 99.8 percent of 
all the variance is accounted for by something other than the 
amount of money States are drawing down. The amount of variance 
and permanency outcomes that is accounted for with the amount 
of money that States are drawing down is minuscule.
    I hasten to add, I am not blaming the States. The States 
are simply operating under the system as it is currently 
structured. It is not as though the States are saying, We 
really like jumping through all these hoops, doing all this 
paperwork, doing these cost allocation plans; we really like 
spending all this money on everything except services for kids 
in our foster care program. States don't say that but that is 
what we make them do. It seems to us that we ought to at least 
give them the option of structuring things differently.
    Mr. BEAUPREZ. Whether it is Medicaid--I heard from one of 
my doctor-administrators that 30 percent of her overhead is 
administrative overhead, and if we could only save some of that 
paper-pushing money. Tell me in the little bit of time we have 
got left, Dr. Horn. We are talking kind of in theory and 
intangibles here. If we provide them that flexibility, what 
sort of things might a State do to promote this permanence 
outcome?
    Dr. HORN. First of all, I think they would provide more 
prevention services for families so that those children are not 
abused and neglected in the first place. An interesting model 
for prevention, one that has received a lot of empirical 
support, is home-based nurse practitioner visiting, where high-
risk families are visited in the first 2 years of their lives 
by a nurse practitioner who helps those families with some 
general child development knowledge and also provides social 
support. Those studies have shown that if you do that for the 
first 2 years of a child's life, by the time the child is 16 
years of age, we have reduced by 75 percent substantiated cases 
of child abuse and neglect.
    A compassionate society, is not one that says, let's have a 
really wonderful foster care system for kids to go into after 
they are abused and neglected, as important as that is, but 
rather one that says, let's try to prevent those tragedies from 
happening in the first place. Why not allow States to put more 
investments into prevention?
    Also, States could use flexible funding for intensive 
reunification services once the child is placed in foster care. 
In Indiana that is what they did, and they showed they were 
able to reunify families faster. There are a lot of ways that 
this money could be used as a State option in order to provide 
services for kids that would enhance permanency.
    Mr. BEAUPREZ. I thank the Chairman.
    Chairman HERGER. I thank the gentleman. Thank you for your 
last comments. I think this is exactly what this Committee--in 
a bipartisan manner, in all of us working together--needs to be 
working to do. What do we do to help these young kids? I think 
your point of the fact--I am convinced, as you have mentioned, 
there aren't any of these States that are on purpose setting up 
these programs to fail. It is that we at the Federal level have 
set up the hoops that they have to jump through that is 
preventing these young people from getting the services they 
need to help them in their lives. I thank you for that. The 
gentleman from California, Mr. Becerra, to inquire.
    Mr. BECERRA. Thank you, Mr. Chairman. Mr. Secretary, thanks 
for being here. Let me ask a question, because I know we are 
interested in trying to follow up on the Administration's 
proposals, especially with this optional proposal for--I guess 
it is called the Child Welfare Program Option. Can you provide 
us with the legislative language that the Administration has 
come up with to have us go forward with any particular optional 
program that you have devised?
    Dr. HORN. I would be very happy to come and meet with you 
and work out legislative language that would reflect the 
President's proposal.
    Mr. BECERRA. No. I am asking for the legislative language 
that you all have for this option that you are proposing that 
Congress pass.
    Dr. HORN. We understand that the legislative process is an 
interactive one between the Administration and the Congress, 
and we would be very happy tomorrow to come up to your office 
and start working on legislative language.
    Mr. BECERRA. You don't have the legislative language?
    Dr. HORN. We have a proposal that is very detailed, and we 
believe it wouldn't take very much for us to translate it with 
you, in partnership, into legislative language.
    Mr. BECERRA. That proposal that is detailed, is that before 
us already? Have you provided that?
    Dr. HORN. Yes.
    Mr. BECERRA. We do have that? Do you have that with you 
right now?
    Dr. HORN. Not in my back pocket, but I can get it to you.
    Mr. BECERRA. If we have already gotten it, forgive me, but 
I don't happen to have it with me, so if you could be sure that 
whatever detail you have on the proposal you make available to 
us, because my understanding is, you don't have legislative 
language, but you do have, as you have described, details on 
this proposal for an opt-out program.
    Dr. HORN. I would be very happy to share that with you.
    [The information was not received at time of printing.]
    Mr. BECERRA. I appreciate that.
    The other question relates to this idea of block granting. 
To me, the difficulty I have with block granting is that when 
you talk in terms of funding based on aggregate members, the 
macro numbers, to me that begins to treat those that you are 
trying to service, trying to help, the children in this case, 
foster care children, as commodities because you are not basing 
a determination based on the needs of that particular, 
individual child, but some aggregate, macro number that a State 
is providing to you. Each year your funding that we would 
provide, under your plan, to a State for its foster care 
children wouldn't be based on a child's particular needs and 
the collective children's needs in that State, but based on a 
number on paper that says that from year to year funding may 
increase or decrease based on a macro formula.
    To me, the more we treat children as widgets, especially in 
the foster care program, the more you actually make them 
believe that that is what they are, widgets. We are, in 
essence, warehousing them somewhere, rather than treating them 
as individuals who need to have the attention and need to have 
the sense of caring that now we have at the highest levels, a 
block grant that defaces, in essence, the foster care 
recipients here, the children.
    I don't know how we would go about making these children 
feel that they should have esteem and believe that someone 
cares about them if you are now going to be telling the State 
that your funding is based not on the actual need of the 
children in your State, but based on last year's funding level. 
I don't know if there is a question here, but I would certainly 
give you an opportunity to respond.
    Dr. HORN. Well, again, it is important to keep in mind that 
this is not a block grant proposal, it is an option; if a State 
doesn't want to opt into this, they can continue on----
    Mr. BECERRA. They are locked into what they would receive 
once they go into this option, right?
    Dr. HORN. For 5 years.
    Mr. BECERRA. If one year my State of California has, what 
is our number, somewhere in the area of about 60,000--is it 
60,000 children in foster care? I am looking at your chart 
here; I am not sure if that is the correct number, but say it 
is 60,000. What happens if all of a sudden we continue to see 
some hard times in California, let's say some drought 
difficulties hurt our farmland communities and we have even 
more poverty among our agricultural communities where we 
already see 15 to 20 percent unemployment rates. Your formula, 
if a State should opt in to your opt-out program, our optional 
program, wouldn't take care of it if the needs increase 
dramatically for foster care.
    Dr. HORN. Under the President's proposal, States that find 
themselves in that situation, who do opt in, with circumstances 
beyond their control, seeing an increase in foster care, would 
be able to draw down funds from the $2 billion TANF contingency 
fund----
    Mr. BECERRA. That is a contingency fund. This isn't a 
contingency. If you have got kids who are now in foster care, 
we are not sure if they are going to leave foster care in a 
year or if they are going to be there for some quite time. That 
is not a contingency for most States; that becomes a hard 
expenditure to try to help that child.
    Dr. HORN. Perhaps I misunderstood your question. I assume 
what you are asking is, let's say you have 60,000 kids in 
foster care in California. You have a fixed amount of money. If 
the caseload drops to 40,000, everybody's happy. That is what I 
think would happen if you are able to use these funds more for 
prevention and reunification services, for example. What 
happens if the caseload goes from 60,000 to 70,000? That is 
where the contingency fund comes in. The State would draw down 
additional money from the contingency fund.
    Mr. BECERRA. You roll the dice?
    Dr. HORN. It is not a roll of the dice.
    Mr. BECERRA. Are you guaranteeing us that the rolls will 
drop, that there will be fewer foster care----
    Dr. HORN. If they don't, the point is that you get to draw 
down additional funds over and above the fixed allotment.
    Mr. BECERRA. Right. The rainy day fund is used for what 
would otherwise be a natural increase in the size of your 
foster care population. The Chairman has been gracious for the 
time. We can explore this more. I look forward to receiving the 
details of your plan, but I must tell you it really concerns me 
when we start talking about kids as widgets and commodities 
versus what they really are, productive and potential future 
leaders of this country.
    Dr. HORN. I agree with you that we should never treat 
children as widgets. The problem is that right now, if the 
widget needs services, you can't pay for them through the title 
IV-E program; that is the problem. If you have a broken widget, 
you can't use this money to fix it?
    Mr. BECERRA. Cutting $4 billion over the next 5 years under 
your particular program doesn't help any more than what we 
have.
    Dr. HORN. Where did we cut $4 billion under our program?
    Mr. BECERRA. When you give me the details of your plan, I 
will go through the $4 billion that you are cutting.
    Dr. HORN. I know we are not cutting $4 billion.
    Chairman HERGER. The gentleman's time has expired. The 
gentlelady from Pennsylvania, Ms. Hart, to inquire.
    Ms. HART. Yes. I thank you, Mr. Chairman. If I am not 
mistaken, we have already established that it is not the money 
that makes a success in foster care, so we can argue over the 
money, but I think the point that you made earlier is that we 
want to provide flexibility for the folks who are actually on 
the frontline. Is that your goal?
    Dr. HORN. That is exactly right.
    Ms. HART. Like a lot of Members of Congress, we have had 
our own experiences, snapshot experiences, with the foster care 
system. As a private practice lawyer I had a pretty bad 
experience with a family who wanted to try to adopt a child, 
and the foster care system pretty much insisted on keeping this 
child in the foster care system. My concern when you talk about 
permanence for the child, can you give me a little bit of the 
theory behind what you think this flexibility will allow as far 
as permanence that is best for the child, which may not be 
reunification with the family?
    Dr. HORN. See, I do not believe--and I agree with 
Congressman McDermott on this, and we actually point it out in 
the report. The current funding structure provides an incentive 
for children to be pulled out of their homes and placed in 
foster care. There is no evidence that that is the case, and 
even in theory, it would work only if the Federal Government 
picked up 100 percent of the cost.
    The State has to put some money in, so it is a real cost to 
the State to put a child in foster care. The difficulty is that 
you can't use any of that money to prevent a placement in 
foster care, and once the child is in foster care, you can't 
use any of that money for services that will allow you to 
reunify that child with their family in an expeditious manner. 
What you can use the money for is continued placement in foster 
care and to reimburse States for some of their costs, 
administrative costs for running the program, but not for 
services for that child.
    Ms. HART. On the front end, when we are talking about a 
child who has been removed from a family and there is progress, 
and so there is an expectation that this child will be able to 
be reunified, is there an amount of time that they are 
expecting? Is there, a couple years, 3 years, whatever it is, 
that this program would expect this child to be able to be in 
foster care reasonably before that child is returned to the 
family or another permanent placement is decided? Is that 
something that is conceived of in this plan?
    Dr. HORN. Some of those issues were addressed in previous 
bipartisan legislation originating in this Committee. For 
example, his Committee reduced the length of time between when 
a child is put in foster care and their dispositional hearing--
basically a hearing that says, what is the plan here, what are 
we going to do, what is the goal--from 18 months to 12 months, 
and that was a very good thing. There is also a requirement 
under a current statute that every 6 months there be an 
administrative review to make sure that the plan still makes 
sense.
    Ms. HART. That is a Federal requirement?
    Dr. HORN. Yes. All of that stays; even under the option, 
all of that stays. It is important to get a plan in place 
quickly, it is important to have some review of that plan in a 
systematic and timely fashion. The biggest problem is that you 
can spend money on developing the plan, but if the plan says 
these are the three services that this family needs in order to 
help reunify this child, you can't use title IV-E foster care 
funds to pay for these services.
    Ms. HART. Under this proposal we would be able to do that?
    Dr. HORN. That is exactly right.
    Ms. HART. That is helpful then. The next step, though--
because I still see a green light--how many times and how many 
reviews are expected, or anticipated, before there really is a 
permanency plan? When you say there is a review every 6 months, 
can there be a review every 6 months for 6 years?
    Dr. HORN. Sure, in theory one can, although again there are 
time limits in the statute that require if a child is in foster 
care for 15 of the most recent 22 months there is a presumption 
that the State agency should start to move toward termination 
of parental rights and subsequent adoption.
    Ms. HART. The States are doing that a little bit 
differently.
    Dr. HORN. Yes. In fact, we are seeing a dramatic increase 
in the number of adoptions out of foster care because of the 
work of this Committee. We have gone from about 28,000 
adoptions a year back in the mid-1990s, to about 50,000 
adoptions a year out of foster care today and that is a direct 
result of the work of this Committee.
    Ms. HART. Okay, good. Just finally, because I am running 
out of time, is there anything in the Federal regulation 
currently that would be against the actual adoptive parents in 
that case being the foster care? Is there any prejudicial 
regulatory----
    Dr. HORN. Not that I am aware of.
    Ms. HART. Good. I just want to make sure. Okay, thank you. 
I appreciate your cooperation. Thank you, Mr. Chairman.
    Chairman HERGER. Thank you. Dr. Horn, on my time, the 
gentlelady from Connecticut has a brief correction that she 
would like to make.
    Mrs. JOHNSON. I just wanted to clarify that in my 
frustration about this report, and also the report we had on 
State compliance with the overall law for permanent placement 
of children. The picture is terrible, but I am a strong 
advocate of flexibility. We had a waiver in my State. It was 
the first time the pipes of services began really talking to 
each other and thinking through, how can we use this money best 
for children? It was extraordinarily powerful and it was 
extraordinarily successful, and we are minimizing the power of 
that through this kind of discussion. On the other hand, the 
problems are extraordinary, and we have got to figure out some 
way to get through this and get change to happen. Thank you. 
Thank you, Mr. Chairman, and I appreciate that.
    Chairman HERGER. Dr. Horn, there have been some questions 
on whether or not the Administration has a plan, and I just 
want to make it clear, the legislation that I have proposed has 
been the Chairman's legislation, legislation we have been 
working on hand and hand with you and the Administration to 
work through. I just want to make that point clear.
    Probably one of the biggest criticisms of changing the 
current funding system is this concern of some unforeseen 
circumstances that could cause foster care caseloads to 
increase significantly. For example, I have heard repeatedly 
from individuals about how this policy would hurt kids if drugs 
such as methamphetamines would cause foster care caseloads to 
grow substantially. Dr. Horn, could you tell us how the 
President's option would assist States in these circumstances.
    Dr. HORN. There are two ways. First of all, as I previously 
discussed, the President's plan would allow a State that saw an 
increased need for foster care placements to draw down 
additional funds from the $2 billion TANF contingency fund, 
which has already been appropriated. The money is there, but 
very little of that money has ever been drawn down under the 
TANF program. We would like the flexibility for States who 
choose this option to be able to draw down additional funds if 
they see an increase in foster care placements in their State.
    More to the point, if States are able to build community-
based prevention programs, then you will see less kids made 
vulnerable to these kinds of changing circumstances. The 
current system, at least from the Federal funding level, is 
weighted toward foster care. It is not that they are running 
around pulling kids out of their homes and placing them in 
foster care willy nilly, but they are basically sitting around 
waiting for a kid to show up already abused and neglected. What 
we need to do is provide States the ability to build 
comprehensive, community-based systems of care that prevent 
these kinds of tragedies from happening in the first place. 
States can't do that with this funding source.
    Now the President understands there are other funding 
sources. It is the reason why he proposed and the Congress 
appropriated $100 million of additional funds per year under 
the Safe and Stable Families program; some of that can be used 
for prevention. It is also why last year he proposed increases 
in the Child Abuse, Prevention and Treatment Act but Congress 
didn't appropriate as much as he wanted.
    The President understands the funding streams. This is the 
largest funding stream. Why in the world do we say the largest 
funding stream the Federal Government has, where there is no 
evidence, none, that it is related to better outcomes for kids, 
we are going to leave that alone? We are not going to touch it 
and allow States the option of using that money more flexibly, 
because we here in Washington know better than Governors' 
offices about the best way to use those funds in their own 
States?
    It seems to me that we ought to provide the States the 
option of building comprehensive, community-based systems of 
care so that those children are not made vulnerable to these 
kinds of changing circumstances that otherwise would lead to 
increases in abuse and neglect.
    Chairman HERGER. Thank you. Following up that question, is 
there any reason to believe that the current funding structure 
adequately protects States against those spikes in foster care 
caseloads?
    Dr. HORN. None, because they can't. Those funding streams 
don't become available to the State until a child has been 
abused, neglected and placed in foster care. It is not possible 
to use those funds to protect kids from abuse and neglect. That 
is the problem.
    Chairman HERGER. What is being--this concern is not really 
being adequately taken care of, even now under the current 
program?
    Dr. HORN. Absolutely not. Look, if the title IV-E funding 
streams could be demonstrated to be correlated with 
improvements in outcomes for kids, if you could demonstrate 
that these funding streams were--in fact, were allowing States 
to have really good outcomes in their child welfare system--
then we wouldn't be having this conversation.
    In the same way that it was hard to demonstrate that AFDC, 
back in 1996, was this wonderful program that helped millions 
of people escape welfare dependency and poverty, given the 
absence of evidence that it was working so well, this Committee 
and the Congress decided, in concert with President Clinton, to 
change the system. It seems it is time for us to ask the same 
question about child welfare.
    Chairman HERGER. Well, thank you, again, Dr. Horn, for your 
testimony. I thank you. Your testimony indicates why this 
system is so severely broken. It isn't that anyone is 
intentionally wanting it to be broken or to do all this harm to 
these innocent children, but the fact is, it is broken, and the 
sooner we can work together to repair it, the better off our 
Nation will be--and certainly these young children that are 
involved. I thank you.
    Mr. MCDERMOTT. May I have just one question?
    Chairman HERGER. Very quickly.
    Mr. MCDERMOTT. If I am not incorrect, the last 3 years the 
number of children in poverty in this country has been up all 3 
years, right?
    Dr. HORN. It has gone up, as you would expect, during a 
recession.
    Mr. MCDERMOTT. That definition that you gave of getting rid 
of the AFDC was going to make it all better for kids has not 
worked?
    Dr. HORN. You don't think TANF has improved things for kids 
and families in this country?
    Mr. MCDERMOTT. If more kids are living in poverty, isn't 
that--is that a measure you don't want to use?
    Dr. HORN. It is substantially down since the 1990s.
    Mr. MCDERMOTT. If the plan you put in, TANF, is supposed to 
work and bring kids out of poverty, and now you have more kids 
in poverty, you call that a success?
    Dr. HORN. You have less kids in poverty since 1996.
    Mr. MCDERMOTT. Not the last 3 years.
    Dr. HORN. Yes, the last 3 years.
    Mr. MCDERMOTT. The way the system is structured, the last 3 
years it didn't work, right?
    Dr. HORN. I don't believe that is true.
    Chairman HERGER. Are there a million fewer children in 
poverty today than there were when we started this?
    Dr. HORN. Yes.
    Chairman HERGER. This has dramatically worked even though 
we had a recent change.
    Mr. BECERRA. Mr. Chairman, is our measure--are we looking 
at where children are today or are we looking at where children 
were in 1996? Today, a child who lives in poverty is concerned 
about what is going on for that child today, not what happened 
in 1996.
    Chairman HERGER. Well, that is obviously a fact, but I 
think we need to look at the direction we are going. I believe 
virtually everyone would have to admit this TANF program has 
been overwhelmingly successful. With that, I would like to 
thank you, Dr. Horn, and ask our next witnesses to be seated at 
the table.
    On this panel we will be hearing from Don Winstead, Deputy 
Assistant Secretary of the Florida Department of Children and 
Families; Adrienne Hahn, Vice President for Public Policy at 
Casey Family Programs; and Fred Wulczyn, Research Fellow at the 
Chaplain Hall Center for Children.
    Mr. MCDERMOTT, I understand you have someone you would like 
to introduce.
    Mr. MCDERMOTT. Thank you, Mr. Chairman.
    It is a pleasure today to have Adrienne Hahn here from the 
Casey Family Foundation. She comes with a heap of experience. 
She is an attorney, who worked for a number of years as the 
Director of government Relations for the Independent Sector, 
which is a coalition of 700 nonprofit organizations ranging 
from March of Dimes to Boys Home in Nebraska to the Children's 
Defense Fund. She comes with a broad experience before coming 
to the Casey Family Foundation, where she really is in charge 
of focusing on child welfare reform. It is a great pleasure to 
you have here today.
    Ms. HAHN. Thank you for inviting me.
    Chairman HERGER. Mr. Winstead to testify.

STATEMENT OF DON WINSTEAD, DEPUTY SECRETARY, FLORIDA DEPARTMENT 
         OF CHILDREN AND FAMILIES, TALLAHASSEE, FLORIDA

    Mr. WINSTEAD. Thank you, Mr. Chairman. Mr. Chairman, Mr. 
McDermott, Members of the Committee, I am pleased to appear 
before you to discuss Child Welfare financing. I am Don 
Winstead; I am Deputy Director of the Florida Department of 
Children and Families.
    I returned to Florida in March of this year after more than 
3 years of service at HHS, and although I was familiar with 
this issue in my time with the Federal Government, I would like 
to be very clear today that my comments are from the State's 
perspective. In my written statement, I summarized the 
development of community-based care in Florida, described 
improvements being made in program outcomes, and provided an 
Internet link for our online performance dashboard. If you 
would like to see how our performance is in every area of 
Florida, all it takes is a couple of clicks of your mouse.
    Since my return to the State, I have been shocked by the 
amount of time and attention that is consumed by administrative 
issues related to financing. Simply stated, child welfare 
financing is a nightmare. Complex and inconsistent eligibility 
requirements frustrate frontline professionals and those who 
administer child welfare programs, depriving children of time 
and resources.
    The Chief Financial Officer (CFO) from our community-based 
care provider in Broward County, Fort Lauderdale, put it this 
way, quote, ``Speaking as a CFO who has come from the private 
sector, I am still amazed at how much of my time is taken up 
wrestling with the State and Federal complexities and defending 
our actions to the oversight people. I am guessing that a whole 
50 percent of my time is taken up with these issues. I can also 
say with absolute certainty that we spend close to a million 
dollars a year to manage Federal eligibilities,'' end quote.
    Title IV-E eligibility relies on eligibility rules that 
derive from the now-defunct AFDC program, as it existed in 
1996. TANF funding, another source we use, relies on at least 
two sets of eligibility rules; regular TANF has one set of 
requirements, and costs that are eligible because they are 
allowable under a prior AFDC State plan require a different 
process. Even the SSBG, which is very flexible, has one set of 
rules for regular SSBG's and a different set of eligibility 
requirements for SSBG's transferred from TANF. The sum of that 
leads to a very complex and burdensome system.
    Central to your focus today is child welfare financing 
under title IV-E. The eligibility requirements, as Dr. Horn has 
detailed, are complex and burdensome. It emphasizes out-of-home 
care and does not provide for prevention services and 
reunification services that can be so important. The 
President's 2006 budget outlines the Child Welfare Program 
Option. The President's proposal is similar to concepts from 
were part of the Child Safe Act of 2004--your legislation, Mr. 
Chairman. We believe the framework of the Child Welfare Program 
Option would offer substantial improvements over the existing 
program and merits serious consideration by the Congress.
    A couple of key features: First of all, it provides an 
option for States to select an allotted amount of Federal funds 
to use flexibly for prevention and in-home services, as well as 
out-of-home care. We believe the allotment should be the 
equivalent to the State's anticipated future title IV-E funding 
and should consider funding trends, demographics and provide 
for contingencies. This would permit States to choose the 
option to eliminate complex eligibility requirements and have 
greater flexibility in meeting the needs of children. We 
believe this flexible funding option should include foster 
care, but we would support keeping adoption subsidies as an 
uncapped entitlement.
    This approach would align funding incentives with good 
casework practice. In addition, we would support more 
flexibility in use of title IV-E funds in our ways of operating 
and administering child welfare programs. Some of the current 
constraints are tied to the obsolete provisions of the now 
defunct AFDC program. Eliminating complex and obsolete 
eligibility requirements would permit States to better align 
procedures among programs particularly in areas where we 
administer and operate the programs through community-based 
providers.
    Florida is transforming our child welfare program. We have 
established community-based care organizations to provide a 
system of care within each community in our State. We are 
committing more State resources and encouraging local 
communities to add their resources and their commitment to this 
partnership. We believe that providing States with the 
opportunity to use Federal funds with greater flexibility would 
greatly assist us in meeting our goals, and we encourage your 
serious consideration of legislation that would provide this 
option. Thank you, Mr. Chairman.
    [The prepared statement of Mr. Winstead follows:]
  Statement of Don Winstead, Deputy Secretary, Florida Department of 
              Children and Families, Tallahassee, Florida
    Mr. Chairman, Mr. McDermott, and Members of the Committee, I am 
pleased to appear before you to discuss child welfare financing. I am 
Don Winstead, Deputy Secretary of the Florida Department of Children 
and Families. The Department of Children and Families is the state 
agency in Florida responsible for child welfare.
    I returned to the State of Florida in March of this year after more 
than three years of service in the U.S. Department of Health and Human 
Services (HHS). Although I was familiar with the issue of child welfare 
financing during my time in Washington, I would like to be very clear 
that my comments today are from the State's perspective.
Community-Based-Care
    Florida's child welfare system has undergone substantial reform and 
redesign. In the past, like most states, Florida performed protective 
investigations and provided services to children and families through 
caseworkers who were employees of the state agency.
    Under Governor Bush's leadership, Florida has transformed our child 
welfare system by implementing a community-based care model. The key 
feature of community-based care is that the provision of services is 
fully integrated into the infrastructure of communities. In Florida, a 
lead agency is charged with coordinating and providing all foster care 
and related services in a geographic area no smaller than a county. 
With 22 competitively selected lead agencies serving Florida's 67 
counties, the statewide transition to community-based care was 
completed in May 2005.
    Lead agencies are governed by volunteer boards of directors 
representing key stakeholders in their respective communities. These 
include business leaders, community providers, court representatives 
such as guardians ad litem, law enforcement officials, community 
funding agencies like the United Way and county government.
    To further enhance local community service integration, Community 
Alliances were created by Florida statute in 2000. The role of the 
Community Alliance is to serve as a catalyst for community resource 
development and to provide a focal point for community participation 
including joint planning for resource utilization, needs assessment, 
and goal setting.
    In addition to the implementation of a community-based care 
structure, Florida is also contracting with Sheriffs in five counties 
to perform protective investigations and a sixth Sheriff's office is 
beginning start-up activities this year.
    In April 2005, Florida Tax Watch, a private, non-profit, non-
partisan research institute that is widely recognized as a watchdog of 
citizens' hard-earned tax dollars, issued a briefing reporti 
calling for an integrated, streamlined monitoring system for child 
welfare service contracts. Along with a number of thoughtful 
recommendations, the Florida TaxWatch report found that community-based 
care is showing results. The report noted that information from the 
Department of Children and Families and Community-Based Care lead 
agencies showed that improvement is being made in these areas:
---------------------------------------------------------------------------
    \i\ http://www.floridataxwatch.org/

      more children being visited each month;
      fewer children in care;
      fewer children in out-of-home care;
      fewer children re-entering foster care;
      more children adopted;
      more available foster families; and
      less foster home crowding.

    For those who may be interested in tracking performance on these 
and other outcome measures in Florida, we have developed a performance 
``dashboard.'' This dashboard is available on the internet so that 
performance data is accessible to our stakeholders, community partners 
and the public. The performance data can be accessed at http://
dcfdashboard.dcf.state.fl.us
    We believe that the best results for children and families will 
come through community-based solutions. Our community-based care 
organizations are building systems of care that will promote better 
outcomes through more effective use of scarce federal and state 
resources. This is good news for Florida's children and families. 
However, there is still much work to do.
Child Welfare Funding is Complex and Burdensome
    Since my return to the state, I have been shocked by the amount of 
time and attention that is consumed by administrative issues related to 
financing. Simply stated, child welfare financing is a nightmare. 
Complex and inconsistent eligibility requirements frustrate front line 
professionals and those who administer child welfare programs--
depriving children of time and resources.
    The Chief Financial Officer from our community-based care provider 
in Broward County put it this way,

         Speaking as a CFO who has come from the private sector, I am 
still amazed at how much of my time is taken up wrestling with the 
State and federal complexities, and defending our actions to the 
oversight people. I am guessing that a full 50% of my time is taken up 
with these issues. I can also say with absolute certainty that we spend 
close to a million dollars a year to manage federal eligibilities, . . 


                           Peter Greenhough, Chief Financial Office
                                                     ChildNet, Inc.

    While the focus of today's hearing is title IV-E funding, it is 
important to place the issue in the context of the variety of federal 
and state funds that are used in child welfare.
    Our child welfare programs rely on a variety of funding sources 
including title IV-E, Temporary Assistance for Needy Families (TANF), 
Social Services Block Grant (SSBG), and other state and federal funding 
sources. As the chart below shows, over 90% of our federal funds used 
in child welfare come from TANF, title IV-E and SSBG, with TANF being 
the largest single source of funds.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Title IV-E eligibility relies on eligibility rules that derive from 
the now-defunct Aid to Families with Dependent Children (AFDC) program 
as it existed on July 16, 1996. TANF funded services rely on at least 
two sets of eligibility rules. Regular TANF has one set of requirements 
while activities that are TANF-eligible because they were allowable 
under a prior AFDC state plan require a different eligibility process. 
SSBG has flexibility, but SSBG funds transferred from TANF have a 
financial eligibility requirement that does not apply to SSBG funds not 
transferred from TANF.
    One reason for the relatively high proportion of TANF funds in 
child welfare in Florida is related to the Relative Caregiver program. 
In 1998, Florida established a Relative Caregiver program that is 
funded primarily through TANF. Over half of the children in out-of-home 
care in our state are in relative placements, many in TANF-funded 
relative settings.
    In our public assistance programs, Florida has embarked on an 
exciting redesign of the entire eligibility process to use modern 
technology to make programs more efficient and more accessible. We are 
reducing our reliance on bricks and mortar and asking community 
partners to allow applicants to access services through computer 
portals located in their service sites. To date, we have identified 
over 2,000 sites where community partners will provide better access to 
our common customers.
    I mention this to contrast the situation with child welfare 
financing. In public assistance, we have used statutory flexibility to 
simplify access to TANF, food stamp programs and Medicaid eligibility. 
In child welfare, however, we remain mired in the procedural 
requirements of AFDC. In many ways, child welfare eligibility is more 
convoluted and difficult than eligibility in public assistance.
The Need for Reform of Child Welfare Financing
    Central to your focus at today's hearing on child welfare financing 
is title IV-E funding. The eligibility requirements for title IV-E are 
complex and burdensome. There are different categories of expenditures 
with differing federal matching rates and the documentation and 
reporting requirements are complicated, subject to interpretation, and 
prone to dispute. These would be easier to justify if there was a clear 
relationship between the requirements, goals, and outcomes of the 
program. This, however, is not the case.
    IV-E funding emphasizes out-of-home care and does not provide for 
services that prevent removal of children from the home and support 
reunification, when this can be accomplished safely. Prevention 
services, family support services for children who are at risk of 
placement in out-of-home care, therapeutic care and services to 
remediate issues that prevent reunification are important to achieving 
child welfare goals. In addition, services for families after children 
leave foster care are critical. However, these services are not 
allowable costs under title IV-E, the primary federal funding source 
for child welfare.
Recommendations for Change
    The President's FY 2006 budget outlines a Child Welfare Program 
Option. The President's proposal is similar to concepts that were part 
of the ChildSAFE Act of 2004 (HR 4856). We believe the framework of the 
Child Welfare Program Option would offer substantial improvements over 
the existing program and merits serious consideration by the Congress. 
Key features that should be considered include:

      Provide states an option to select an allotted amount of 
federal funds to use flexibly for prevention and in-home services as 
well as for out-of-home care.

    The allotment should be equivalent to the state's anticipated 
future IV-E funding and should consider funding trends, demographics, 
and provide for contingencies. This would permit states that choose the 
option to eliminate complex eligibility requirements and to have 
greater flexibility in meeting the needs of children. We believe this 
flexible funding option should include foster care, but we would 
support keeping adoption subsidies as an uncapped entitlement.
    This approach would align funding incentives with good casework 
practice. The capacity of a protective investigator to safely leave a 
child at home, or move quickly to return a child home, with appropriate 
supports in place to address continued risk, is the first permanency 
option that child welfare can place in action for children. This 
approach would encourage states to prevent removal where possible and 
to accomplish reunification when this can be done safely. Children who 
cannot safely remain in the home or safely be reunified should be 
expeditiously moved toward adoption or other appropriate permanency 
option.

      Provide greater flexibility in administration and 
operation of the program.

    In addition to providing more flexibility in the use of title IV-E 
funds, states should have greater flexibility to administer and operate 
child welfare programs. Some of the current constraints are tied to 
obsolete provisions of the now defunct AFDC program. Eliminating 
complex and obsolete eligibility requirements would permit states to 
better align procedures among programs, particularly in areas where we 
administer and operate the programs through community-based providers.
    Greater flexibility in administration and operation of the program 
should be provided regardless of whether a state chooses the Child 
Welfare Program Option. Consideration should also be given to reforming 
the cumbersome and arcane cost allocation requirements under which 
costs are attributed to the various federal and state funding sources. 
These procedures could and should be simplified.
    States should be able to administer and operate child welfare 
programs consistent with how we administer other major programs. It 
would greatly improve the seamlessness of title IV-E funds with major 
funding sources such as TANF and permit service providers to focus more 
attention on service and help increase our focus on the service needs 
of children and families rather than the bureaucratic requirements of 
eligibility and documentation.
    Florida is transforming our child welfare program. We have 
established community-based care organizations to provide a system of 
care within each community in our state. We are committing more state 
resources and encouraging local communities to add their resources and 
their commitment to this partnership. We believe that providing states 
with the opportunity to use federal funds with greater flexibility 
would greatly assist us in meeting our goals and we encourage your 
serious consideration of legislation that would provide this option.

                                 
    Chairman HERGER. Thank you. Ms. Hahn, please proceed.

  STATEMENT OF ADRIENNE HAHN, VICE PRESIDENT, PUBLIC POLICY, 
                     CASEY FAMILY PROGRAMS

    Ms. HAHN. Mr. Chairman, Members of the Committee, I am 
pleased to have this opportunity to share experiences and 
recommendations of Casey Family Programs as you consider 
Federal foster care financing options. Casey Family Programs is 
the Nation's largest national foundation whose sole mission is 
to provide and improve and ultimately prevent the need for 
foster care. We draw from 40 years of experience in expert 
research and analysis to improve the lives of children and 
youth in foster care in two important ways: by providing direct 
services and support to foster families and promoting 
improvements in child welfare practice and policy.
    Casey Family Programs was started by Jim Casey, founder of 
what is now the world's largest delivery company, United Parcel 
Service. We are here today to provide our input regarding a 
very important and significant topic, foster care financing. 
Casey Family Programs highly recommends the Committee bear in 
mind these three things when it examines the issue of foster 
care financing. First, it is imperative that Congress maintain 
the open-ended entitlement including administrative funds for 
title IV-E that are tied to performance-based measures. Having 
the ability to measure results will help us better understand 
the successes of the program and where we can make adjustments.
    History is not a good guide for States to accept cap 
funding for foster care or even a flexible block grant with 
guaranteed funding level. As many of you know, the Social 
Service block grant was severely cut from its authorized level 
of $2.9 billion to $1.7 billion where it has remained frozen 
since 1998. The title IV-B, Subpart I, Child Welfare Services 
Fund has consistently been appropriated at far less than the 
authorized $325 million. We must recognize that many of these 
funds are used for prevention and family support in an effort 
to avoid entry into foster care, which is precisely the deal 
that the Administration is offering States with title IV-E. 
However, the purchasing power has been eroded and the real 
dollar value of the existing block grants have been reduced. 
Consequently, States are facing a balancing act between the 
real needs of other groups served by the block grants and the 
consistently shrinking buying power.
    We at Casey Family Programs are very concerned that child 
welfare financing changes should not reduce the Federal fiscal 
resources now available, or make administration of programs 
more complex for States. Casey recommends that the entitlement 
be continued and that more flexibility be added particularly to 
assist relative care givers and to provide preventive services 
to families. In keeping with the idea of the greater 
flexibility to the States, Casey Family Programs conducted an 
extensive analysis of the child welfare financing waivers last 
December. A copy of that executive summary or report is 
attached for the record. In addition, the full report entitled 
``The Effects of Federal Child Welfare Financing Waivers'' is 
available on www.casey.org.
    Second, based on the findings from those white papers, it 
is critical that States are permitted to be reimbursed through 
title IV-E for subsidized guardianship. Through our work we 
found that positive results, and even cost savings, occurred in 
the area of assisted guardianship and kinship care. There was 
much enthusiasm in States for assisted guardianship and kinship 
care. The waiver activity demonstrated success, and even proven 
savings in Illinois.
    Recognizing non-licensed kinship care homes for 
reimbursement under title IV-E would allow all States to reap 
the benefits of these programs. Our analysis also demonstrates 
the need to adequately fund existing funding programs such as 
TANF and SSBG. By providing adequate funding for these 
programs, States may use some funds for child well-being 
activities currently provided under child welfare waivers.
    Third, we urge the Committee to focus on providing 
statutory language to encourage States to provide mental and 
behavioral health and rehabilitative services to the child 
welfare population under their existing Medicaid and State 
Children's' Health Insurance Programs (SCHIP). Fifteen of the 
25 child welfare waivers utilize title IV-E funding for 
behavioral health services, including substance abuse, despite 
authorization of such services under Medicaid and SCHIP. 
Although children whose foster care is federally reimbursed are 
automatically eligible for Medicaid behavioral mental health 
services, often States are purchasing them through capped funds 
such as through title IV-B, TANF, or SSBG, or with title IV-E 
waiver funds.
    This recommendation is underscored by a recently released 
study from an extensive research project that Casey did in 
corroboration with Harvard Medical School that examined the 
long-term effects of foster care on more than 650 young adults 
who were formerly in care. One of the most significant findings 
were the fact that these youths experienced post-traumatic 
stress disorder at rates twice as high as U.S. war veterans, 
including soldiers returning from Iraq and Afghanistan. These 
findings, along with many others highlighted in this report, 
reflect how difficult it is for these children's circumstances 
and how important it is to provide access to effective mental 
health treatment.
    In closing, I would like to thank the Committee for 
affording Casey this opportunity to present our views, and we 
would welcome the opportunity in the future to work with the 
Committee on proposals to improve the delivery of child welfare 
services.
    [The prepared statement of Ms. Hahn follows:]
Statement of Adrienne Hahn, Vice President, Public Policy, Casey Family 
                                Programs
    Mr. Chairman, Members of the Committee, I am pleased for the 
opportunity to share the experiences and recommendations of Casey 
Family Programs as you consider federal foster care financing options. 
My name is Adrienne Hahn, Vice President of Public Policy for Casey 
Family Programs.
    Casey Family Programs is an operating foundation based in Seattle, 
Washington. It has 40 years of experience of caring for abused and 
neglected children. Casey Family Programs was started by Jim Casey, 
founder of what is now the world's largest package delivery company--
United Parcel Service. In 1907, the enterprising 19 year-old, Jim, 
borrowed $100 from a friend to begin this Seattle-based business which 
is now worth billions of dollars.
    It was with this same enterprising and visionary spirit that Mr. 
Casey founded Casey Family Programs. His hope was to create stability, 
security and a sense of permanence for children in need of stable 
family homes. All that we have done over the past four decades prepares 
us to step up in a bigger way than ever before. This explains why we 
are genuinely appreciative the opportunity to speak you today on this 
important issue of foster care financing.
    Much concern has been expressed in recent years regarding child 
welfare financing and state program flexibility--especially whether 
more flexibility can be granted only if it is coupled with reduced 
federal funding. I would urge you at the outset not to make that the 
case. There is no evidence to demonstrate that states can improve child 
well-being outcomes with capped funding, even if given more flexible 
use of various funding streams.
    History is not a good guide for states to accept capped funding for 
foster care, or even a flexible block grant with a guaranteed funding 
level. The Social Services Block Grant (SSBG) was severely cut, from 
its authorized level of $2.9 billion to $1.7 billion, where it has 
remained frozen since 1998. And the Title IV-B, Subpart I Child Welfare 
Services fund has consistently been appropriated at far less than the 
authorized $325. Even as states have repeatedly advised the Congress 
that these funds are used for prevention and family support to avoid 
entry into foster care--precisely the ``deal'' that the administration 
is offering states with IV-E--the purchasing power has been eroded and 
the real dollar value of the existing block grants have been reduced. 
So In paying for some child welfare services through SSBG or TANF, 
states face a balancing act between the real needs of other groups 
served by those block grants and the constantly shrinking buying power.
    Casey's analysis of the child welfare demonstration waiver projects 
further indicates that limited, fixed funding poses problems for child 
welfare programs, in that the budget neutrality provision has been a 
barrier to success of the demonstrations.
    Chairman Herger, Casey appreciates you bringing greater attention 
to the need for more performance based results, given the many concerns 
about outcomes for children. We know we can and must do better for the 
children who require protection, family services directed to 
prevention, or foster care.
    I believe that we all want similar things from the nation's foster 
care system. Among these are: more flexibility in use of various 
funding streams; better accountability in assuring that goals are met; 
and effective pre-placement services for families, which can reduce the 
incidence of out of home placement. We also agree, I am sure, that we 
need to find ways to reduce the inequitable response to and treatment 
of children and families of color in the child protection and foster 
care system.
    Most of all, we want to make sure that no child is taken from his 
or her family whenever possible, and that family voices are heard in 
defining what they need. We want to assure that when foster care is 
unavoidable, the child goes to a home that respects his tradition and 
culture. To achieve this, it is essential that we provide a sufficient 
workforce that is well trained, and adequate resources to recruit, 
train and support foster families.
    We know that some of the data are discouraging and that 
improvements must be made. Any changes in the federal financing of 
foster care need to facilitate and enhance the ability of the states 
and counties to make the improvements needed. Capping or reducing funds 
now available to the states for foster care and child welfare services 
would likely slow states' progress in improving outcomes.
    We at the Casey Family Programs are very concerned that child 
welfare financing changes should not reduce the federal fiscal 
resources now available, or make administration of programs more 
complex for states. Casey recommends that the entitlement be continued 
and that more flexibility be added, particularly to assist relative 
caregivers and to provide preventive services to families. 
Specifically, our recommendations include the following:

      Title IV-E entitlement funding structure should be 
preserved. A capped block grant to states poses the potential for 
funding cuts for critical child welfare services. States' entitlement 
to administration funds should also be maintained, with no reduction in 
the rate of reimbursement.
      Title IV-E funds should be made available to children 
requiring services in their homes, to help prevent out-of-home 
placement.
      Title IV-E funds should be made available to all children 
removed from their homes, including those placed with relative 
caregivers and in subsidized guardianships. States should be held 
financially harmless. The federal eligibility link tied to AFDC 
eligibility as of 1996 is outdated, burdensome to administer, and 
illogical, because children may need protection regardless of the 
financial circumstances of their biological family.
      State child welfare systems should continue to be 
accountable for meeting federal standards ensuring child safety and 
well-being.
      State child welfare systems should be provided adequate 
resources to meet those standards.

    Another area of concern that we would like to see addressed is that 
of eliminating disproportionality and disparities in results for 
children of color in the child welfare system. Children of color are 
over-represented in the child welfare system and too often have poorer 
experiences when they are in the system and when they leave it--even 
when they come from similar situations and circumstances.
    Casey recommends that a GAO study be done to examine the entire 
continuum of care with respect to children of color, with a focus on 
how states can reduce their disproportionate representation in the 
system and improve outcomes. The study should look at how responses 
differ to reports of abuse, removal from home into foster care, 
prevention and treatment offered the family, length of time in care, 
and adoption rates, compared with the general child welfare caseload. 
Hopefully the report's recommendations will include possible solutions 
that states can use.
    Meanwhile, states need to look at how they can better address the 
disparities, such as by targeted recruitment of staff and foster 
families of color, and providing training that is culturally 
appropriate, could help to reduce the disparities.
Casey Analysis of Child Welfare Waiver Evaluations
    Mr. Chairman, I believe one way Casey can bring some light to the 
discussion on child welfare financing is to share the results of our 
analysis of child welfare financing waivers, completed last December. 
We attach for the record a copy of the executive summary, titled The 
Effects of Federal Child Welfare Financing Waivers. The full report is 
available online, at www.casey.org. Casey analyzed child welfare 
demonstration projects designed to expand state program flexibility 
while maintaining, but capping, the current level of program funding.
    Our analysis of the waiver evaluations available to date lead one 
to the inescapable conclusion that it would be premature to move to a 
level block grant or capped allocation of Title IV-E funding. State 
demonstrations conducted with child welfare waivers generally do not 
demonstrate the kind of statistical significance necessary to conclude 
that children benefit in measurable ways from waiver activities, but 
they do indicate that limited funding is a significant barrier to their 
successful implementation.
    The core findings of our analysis that relate to child welfare 
financing and state program flexibility, is that there is only limited 
success among waiver demonstration programs that maintain budget 
neutrality, a federal requirement.
    Waiver activities have a cost associated with them that must be 
offset by other child welfare activities in order to remain budget 
neutral. Therefore, it is vital to know that positive outcomes outweigh 
the potential negative outcomes from the shift in spending, before 
expanding allowable activities that can be reimbursed through Title IV-
E in a capped or budget neutral environment.
    Our analysis found positive results--even cost savings--in the area 
of assisted guardianship and kinship care, but did not find 
statistically significant outcomes in other waiver areas under 
federally-required budget neutrality. In many cases, waiver activities 
were more expensive than anticipated and therefore had to be pulled 
back during implementation, which negatively impacted potential 
positive outcomes. In general, waiver evaluations required by law did 
not have statistically significant findings, primarily due to low 
participation. As a result, it is difficult to determine whether waiver 
activities benefit the children they serve.
    In addition to recommendations based on the analysis, the Casey 
report looks at other federal funding resources that can be used for 
child welfare services. We note in the analysis that most child welfare 
waiver activities attempted by states in a budget neutral context could 
have been conducted alternatively under other federal programs such as 
Medicaid, State Children's Health Insurance Program (SCHIP), Temporary 
Assistance for Needy Families (TANF), and the Social Services Block 
Grant (SSBG). Each of these programs provides existing authority to 
states for many of the activities performed through the child welfare 
waivers.
    Though evaluations of waiver activities do not support sweeping 
reforms of the child welfare system, they do raise targeted policy 
options that could benefit State child welfare programs:

      Allow subsidized guardianship to be reimbursed through 
Title IV-E: There was much enthusiasm in states for assisted 
guardianship and kinship care. This is the only waiver activity that 
demonstrated success within the context of budget neutrality, and even 
with proven savings in Illinois. Recognizing non-licensed kinship homes 
for reimbursement under Title IV-E would allow all states to reap the 
benefit of these programs.
      Adequately fund existing programs: Federal programs such 
as TANF and SSBG already provide the authorities for states to conduct 
many waiver activities. More adequate funding for these programs may 
allow states to use some funds for child well-being activities 
currently provided under child welfare waivers. Some states do provide 
child welfare-related services under one or both programs. However, 
TANF funding has been fixed since 1996 and no increase is anticipated, 
while the SSBG authorization was significantly reduced in 1998, making 
it an unlikely source to expand child welfare services.
      Explicitly authorize mental health and rehabilitative 
services for the child welfare population under Medicaid and SCHIP: 
Fifteen of the twenty-five child welfare waivers utilized Title IV-E 
funding for behavioral health services, including substance abuse, 
despite authorization of such services under Medicaid and/or SCHIP. 
Although children whose foster care is federally reimbursed are 
automatically eligible to Medicaid, behavioral and mental health 
services for foster children are often purchased by states under other 
capped federal programs, such as Title IV-B, TANF or SSBG, or with 
Title IV-E waiver funds.

    We urge the Committee to focus on providing statutory language to 
encourage states to provide mental and behavioral health and 
rehabilitative services to the child welfare population under their 
existing Medicaid and SCHIP programs.
    To reinforce our recommendation on access to mental health services 
for foster children, I want to discuss another Casey study released 
this year. Our findings from Improving Family Foster Care: Findings 
from the Northwest Foster Care Alumni Study strongly emphasize the 
long-lasting effects on young adults of not having access to proper 
mental health care during their years in foster care. Conducted jointly 
with Dr. Robert Kessler of Harvard University, the report shows that 
compared to the general population, a disproportionate number of alumni 
(at ages up to 24) had certain kinds of mental health problems, 
especially post-traumatic stress disorder, major depression, social 
phobia, panic syndrome, and generalized anxiety.
    Over 54 percent of the alumni had at least one current mental 
health problem, compared with 22 percent for the general population. 
Particularly striking--and sad--is the fact that one in four (25%) had 
experienced symptoms of Post-Traumatic Stress Disorder (PTSD) within 
the past 12 months. These PTSD rates are nearly double that of most 
U.S. war veterans. For comparison, 6% of Afghanistan veterans, 12-13% 
of Iraq veterans, and 15% of Vietnam veterans currently suffer from 
PTSD.
    Members of the Committee, I submit that among all of our concerns 
about improving the care of children entrusted to the child welfare and 
foster care system, this shocking evidence of the lack of proper mental 
health care stands out as one of those that--collectively--we can and 
must do something about.
    Thank you for the opportunity to present the views of the Casey 
Family Programs. Our public policy office here in Washington is 
available to work with the committee on proposals to improve the 
delivery of child welfare and foster care services. Not only does Casey 
conduct our own research, but we partner with a variety of non-
government organizations and foundations investing resources on these 
issues.
                                 ______
                                 
Attachments:

Executive Summary, The Effects of Federal Child Welfare Financing 
Waivers

December, 2004, Casey Family Programs. (2 pages)

Graph: Mental Health Diagnoses Among Foster Care Alumni and the General 
Population. Improving Family Foster Care: Findings from the Northwest 
Foster Care Alumni Study, Casey Family Programs, 2005.
  The Effects of Federal Child Welfare Financing Waivers December 2004
                           Executive Summary
    Much concern has been expressed in recent years regarding child 
welfare financing and state program flexibility. In an effort to 
educate policy-makers, Casey Family Programs has undertaken an analysis 
of child welfare demonstration projects designed to expand state 
program flexibility while maintaining, but capping, the current level 
of program funding. In looking at evaluations to date, we found only 
limited success for demonstration projects that maintain budget 
neutrality. In addition, our analysis found that alternative federal 
programs provide existing authority to states for many of the 
activities performed through child welfare waivers.
    It is important to note that waiver activities have a cost 
associated with them that must be offset by other child welfare 
activities in order to remain budget neutral, a federal waiver 
requirement. Therefore, it is vital that, before expanding allowable 
activities that can be reimbursed through Title IV-E, statistically 
significant evidence indicates that the activity has positive outcomes 
that outweigh the potential negative outcomes from the shift in 
spending. Our analysis of the waiver evaluations available to date lead 
one to the inescapable conclusion that it would be premature to move to 
a level block grant or capped allocation of Title IV-E funding. State 
demonstrations conducted with child welfare waivers generally do not 
demonstrate the kind of statistical significance necessary to conclude 
that children benefit in measurable ways from waiver activities, and 
indicate that limited funding is a significant barrier to their 
successful implementation.
    Our analysis found positive results in the area of assisted 
guardianship and kinship care (and even cost savings), but did not find 
statistically significant outcomes in other waiver areas under 
federally-required budget neutrality. In many cases, waiver activities 
were more expensive than anticipated and therefore had to be pulled 
back during implementation, which negatively impacted potential 
positive outcomes. We note in our analysis that most child welfare 
waiver activities attempted by states in a budget neutral context could 
have been conducted alternatively under other federal programs such as 
Medicaid, State Children's Health Insurance Programs (SCHIP), Temporary 
Assistance for Needy Families (TANF), and the Social Services Block 
Grant (SSBG). In general, waiver evaluations required by law did not 
have statistically significant findings, primarily due to low 
participation. As a result, it is difficult to determine whether waiver 
activities benefit the children they serve.
Recommended Targeted Reforms That Could Make a Difference
    Though evaluations of waiver activities do not support sweeping 
reforms of the child welfare system, they do raise targeted policy 
options that could benefit State child welfare programs:

      Allow subsidized guardianship to be reimbursed through 
Title IV-E: There was much enthusiasm in states for assisted 
guardianship and kinship care. This is the only waiver activity that 
demonstrated success within the context of budget neutrality, and even 
with proven savings in Illinois. Recognizing non-licensed kinship homes 
for reimbursement under Title IV-E would allow all states to reap the 
benefit of these programs.
      Adequately fund existing programs: As noted above, 
federal programs such as TANF and SSBG already provide the authorities 
for states to conduct many waiver activities. Unfortunately, funding 
for TANF has been level since 1996, and funding for SSBG has actually 
decreased in recent years. Adequate funding may allow states to use 
these programs for child well-being activities currently provided under 
child welfare waivers.
      Explicitly authorize mental health and rehabilitative 
services for the child welfare population under Medicaid and SCHIP: 
Foster care placement instability has been associatedwith increased 
mental health costs during the first year infoster care, particularly 
among children with increasing generalhealth care costs.\1\ Fifteen of 
the twenty-five child welfare waivers utilized Title IV-E funding for 
behavioral health services, including substance abuse, despite 
authorization of such services under Medicaid and/or SCHIP. Children 
whose foster care is federally reimbursed have been automatically 
eligible for Medicaid since 1980.\2\ Nevertheless, behavioral and 
mental health services for foster children are often purchased by state 
child welfare agencies under other capped federal programs, such as 
Title IV-B, TANF or SSBG, or with Title IV-E waiver funds. Policy-
makers should focus on why states are not already providing these 
services under Medicaid and/or SCHIP, and consider inserting more 
explicit statutory language to encourage states to provide mental and 
behavioral health and rehabilitative services to the child welfare 
population under their existing Medicaid and SCHIP programs.
---------------------------------------------------------------------------
    \1\ PEDIATRICS Vol. 113 No. 5 May 2004, pp. 1336-1341
    \2\ MaryLee Allen and Mary Bissell, Safety and Stability for Foster 
Children: The Policy Context, Vol. 14 The Future of Children No. 1, at 
59 (December, 2003).

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



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    Chairman HERGER. Thank you Ms. Hahn. Again, you mention 
that these children--the study showed that they have twice the 
rate of stress of soldiers, if there is any indication of how a 
system is broken, I think that is certainly it. Thank you. Dr. 
Wulczyn to testify.

STATEMENT OF FRED WULCZYN, PH.D., RESEARCH FELLOW, CHAPIN HALL 
             CENTER FOR CHILDREN, CHICAGO, ILLINOIS

    Dr. WULCZYN. Chairman Herger, Members of the Subcommittee, 
thank you very much for inviting me to speak with you today. My 
name is Fred Wulczyn. I am a research fellow at the Chapin Hall 
Center for Children at the University of Chicago, an 
independent research and development center devoted to bringing 
sound information, rigorous analysis, and an independent 
perspective to the public debate about the needs of kids.
    I want to thank you for the opportunity to speak with you 
today about outcomes for children served by our Nation's child 
welfare system and whether expenditures on their behalf align 
with those outcomes. My remarks today are based on my research 
with States and localities, including places like New Jersey, 
Connecticut, New York, Illinois, helping public child welfare 
agencies better understand their outcomes and linking outcomes 
to funding. In the interest of time, I will keep my remarks 
brief and to the point.
    As you have heard, one of the central challenges facing 
child welfare administrators today has to do with managing how 
the child welfare system is financed, while working hard to 
achieve positive outcomes for children and families. The task 
is complicated because even though Federal policy favors 
prevention over foster care, Federal funding in the United 
States leans more heavily toward foster care over other types 
of services. In response to this fiscal incentive, States and 
localities have over the years come to rely on foster care as a 
large part of the system that serves maltreated children. Today 
as States work to meet the needs of children and families 
without removing them from their homes and communities, the 
nature of Federal funding does indeed limit the opportunity, 
because once funding is tied up in the foster care system, 
redirecting foster care dollars when it is advantageous to do 
so is difficult.
    As you know, various proposals designed to address how 
Federal revenue flows to the States have been offered over the 
years. Some critics of the current system recommend expanding 
the level of funding, the types of services eligible for 
Federal reimbursement, and the list of who is eligible to 
receive federally funded services. Proposals that fit this 
category increase flexibility by expanding the scope of 
services.
    Other critics of the current system prefer block grants as 
a solution. Block grants increase flexibility by pulling back 
on the rules that regulate how Federal revenue may be spent. As 
I am sure you know, the various proposals that fit these 
categories have strengths and weaknesses. I will not delve into 
the arguments except to make a single point, which is this: any 
proposal that purports to increase flexibility over the use of 
Federal funds earmarked for foster care, that does not contain 
an explicit and unambiguous link between outcomes and funding, 
is inherently inferior to a proposal that does contain such a 
link. The reasons why this is true are quite simple. Within the 
child welfare system, flexibility refers to the ability to 
spend funds earmarked for one type of service, in this case 
foster care, or some other type of service that achieves the 
same outcome. The aim of the foster care program is to provide 
services, provide for the safety of the children, funds that 
are spent on services other than foster care must meet the 
safety needs at a level commensurate with or better than what 
would have been true had those dollars been spent on foster 
care. If the services provided do not lower the need for foster 
care, then funds originally earmarked for foster care must be 
spent on foster care. That is the way to provide safety.
    In other words, real flexibility depends on changing foster 
care outcomes. Without better outcomes, fiscal flexibility 
exists in name only, regardless of how revenue is conveyed to 
the States from the Federal Government. Proposals that connect 
outcomes with finance have several other advantages over 
proposals that do not. First, the focus on outcomes keeps the 
needs of children front and center. Historically, changes to 
fiscal policy have been seen as a way to drive the system 
toward better outcomes. The assumption has been that sound 
fiscal policy begets better outcomes. A focus on outcomes flips 
this thinking on its head by placing fiscal decisions in a 
context defined by outcomes. In this context the dynamic shifts 
such that better outcomes begets better fiscal policy.
    Second, the direct and unambiguous link between outcomes 
and finance focuses greater attention on agency management, the 
linchpin of success in any and all serious reform efforts, 
regardless of how the system is funded. To achieve real 
flexibility as I have defined the term, each State needs to 
devise a service strategy that matches increased purchases of 
preventive services with real changes in the utilization of 
foster care. For this to happen, each State has to understand 
their baseline utilization of foster care, the pattern of 
outcomes and the service alternatives that offer the best and 
clearest alternative to reducing the need for foster care. 
Without clear baselines, no State locality or provider can hope 
to know whether investments in alternative services are having 
their intended effect.
    Third, a clear link between outcomes and funding also 
provides a more seamless approach for connecting State 
performance with what is happening at the local level. One of 
the critical tasks facing States is how to convey their power 
to allocate Federal revenue flexibly to the local level. In 
county operated systems, local child welfare administrators may 
want to offer greater flexibility to their network of 
providers. There is no loss of accountability for outcomes as 
funding passes from one level of government to another because 
outcomes are tied to funding.
    In closing, let me offer the following conclusion. We have 
had for the past 25 years, if not longer, a child welfare 
system in which funding and outcomes are only loosely 
connected. I am not surprised that per capita spending for 
foster care bears little relationship to outcomes. However, we 
have to remember that the rationale for how the current system 
is funded draws on a different set of principles. The current 
system was not designed with an explicit link between outcomes 
and funding in mind. If we want a child welfare system that 
connects outcomes with funding, then we have to construct a 
policy context that makes that link explicit. Simple 
entitlements do not accomplish that aim anymore than simple 
block grants do. Thank you very much for your time.
    [The prepared statement of Mr. Wulczyn follows:]
 Statement of Fred Wulczyn, Ph.D., Research Fellow, Chapin Hall Center 
                    for Children, Chicago, Illinois
    Chairman Herger, Members of the Subcommittee, thank you very much 
for inviting me to speak with you today. My name is Fred Wulczyn. I am 
a Research Fellow at the Chapin Hall Center for Children at the 
University of Chicago, an independent research and development center 
devoted to bringing sound information, rigorous analysis, and an 
independent perspective to the public debate about the needs of 
children and the ways in which those needs can be met. I want to thank 
you for the opportunity to speak with you today about outcomes for 
children served by our nation's child welfare system and whether public 
expenditures on their behalf align with those outcomes. My remarks 
today are based on my research with states and localities, helping 
public child welfare agencies better understand their outcomes, and 
linking outcomes to funding. In the interest of time, I will keep my 
remarks brief and to the point. If I may be of further assistance to 
the Committee, I hope you will feel free to ask. I would be happy to 
help in anyway that I can.
    One of the central challenges facing child welfare administrators 
today has to do with managing how the foster care system is financed 
while working hard to achieve positive outcomes for children and 
families. The task is complicated because even though federal policy 
favors prevention over foster care, federal funding in the United 
States leans more heavily toward foster care over other types of child 
welfare services. In response to this fiscal incentive, states and 
localities have over the years come to rely on foster care as a large 
part of the system that serves maltreated children. Today, as states 
work to meet the needs of children and families without removing them 
from their homes and communities, the nature of federal funding for 
foster care limits the opportunity, because once funding is tied up in 
the foster care system, redirecting foster care dollars when it is 
advantageous to do so is difficult.
    Various proposals designed to address how federal revenue flows to 
states have been offered over the years. Some critics of the current 
system recommend expanding the level of federal funding, the types of 
services eligible for federal reimbursement, and the list of who is 
eligible to receive federally funded child welfare services. Proposals 
that fit this category increase flexibility by expanding the scope of 
services. Other critics of the current system prefer block grants as a 
solution. Block grants increase flexibility by pulling back on some of 
the rules that regulate how federal revenue may be spent.
    As I am sure you know, the various proposals that fit these 
categories have their strengths and weaknesses. I will not delve into 
the arguments for or against, except to make a single point, which is 
this: Any proposal that purports to increase flexibility over the use 
of federal funds earmarked for foster care that does not contain an 
explicit, unambiguous link between outcomes and funding is inherently 
inferior to a proposal that does contain such a link. The reason why 
this is true is quite simple.
    Within the child welfare system, flexibility refers to the ability 
to spend funds earmarked for one type of service (i.e., foster care) on 
some other type of service that achieves the same outcome. Because the 
aim of the foster care program is to provide for the safety of 
children, funds that are spent on services other than foster care must 
meet the safety needs at a level commensurate with or better than what 
would have been true if those dollars were used to provide foster care. 
If the services provided do not lower the need for foster care (e.g., 
by reducing the likelihood that a child will enter placement, reducing 
the time a child is in foster care, or reducing the likelihood of 
returning to foster care following discharge), then funds originally 
earmarked for foster care must be spent on foster care. In other words, 
real flexibility depends on changing foster care outcomes. Without 
better outcomes, fiscal flexibility exists in name only, regardless of 
how revenue is conveyed to the states from the federal government.
    Proposals that connect outcomes with finance have several other 
advantages over proposals that do not. First, the focus on outcomes 
keeps the needs of children front and center. Historically, changes to 
fiscal policy have been seen as a way to drive the system toward better 
outcomes. The assumption has been that sound fiscal policy begets 
better outcomes. A focus on outcomes flips this thinking on its head by 
placing fiscal decisions in a context defined by outcomes. In this 
context, the dynamic shifts such that better outcomes beget better 
fiscal policy.
    Second, a direct and unambiguous link between outcomes and finance 
focuses greater attention on agency management, the lynchpin of success 
in any and all serious reform efforts, regardless of how the system is 
funded. To achieve real flexibility as I defined the term above, each 
state agency has to devise a service strategy that matches increased 
purchases of preventive services with changes in the utilization of 
foster care. For this to happen, each state has to understand their 
baseline utilization of foster care, their pattern of outcomes, and the 
service alternatives that offer the best hope of reducing the need for 
foster care. Without clear baselines, no state, locality, or provider 
can hope to know whether investments in alternative services are having 
their intended effect. The link between outcome and funding also 
requires active monitoring in real time. If the link to outcomes is not 
explicit from the outset, it will not be possible for states to 
understand how they are doing relative to assumptions that have been 
made regarding the potential benefits of any given program strategy. In 
other words, self-correction is only possible after the fact, when it 
is too late.
    Third, a clear link between outcomes and funding also provides a 
more seamless approach for connecting state performance with what is 
happening at the local level, provided the baselines are established on 
a state-by-state basis, which is how this should be done. One of the 
critical tasks facing states is the need to pass their power to 
allocate federal revenue flexibly onto the local level. In county 
operated systems, local child welfare administrators may want to offer 
greater flexibility to their network of providers. Because outcomes are 
tied to funding, there is no loss of accountability for outcomes as 
funding passes from one level of government to the next. This feature 
is absolutely critical to promoting a rational, outcome driven system.
    Fourth, connecting outcomes with funding within a flexible funding 
strategy provides an opportunity for devising more sensible risk-
sharing arrangements between the federal and state governments. Risk 
sharing refers to what happens when the observed demand for foster care 
exceeds the expected demand and costs increase. For the most part, 
everyone agrees that increased foster care costs driven by real changes 
in demand (e.g., greater risks to children) should be addressed with a 
plan that equitably shares costs between the various levels of 
government. However, distinguishing between a real increase in demand 
and increases caused by other factors is impossible if the parties to 
the discussion do not have the clear baselines needed to pinpoint how 
and why demand increased (e.g., more admissions, longer lengths of 
stay, greater reentry). The baselines needed to deliver real 
flexibility provide the input needed for those discussions.
    In closing, let me offer this conclusion. We have had for the past 
twenty-five years, if not longer, a child welfare system in which 
funding and outcomes are only loosely connected. I am not surprised 
that per capita spending for foster care bears little relationship to 
outcomes. However, we have to remember that the rationale for how the 
current system is funded draws on a different set of principles. The 
current system was not designed with an explicit link between outcomes 
and funding in mind. If we want a child welfare system that connects 
outcomes with funding, then we have to construct a policy context that 
makes that link explicit. Simple entitlements do not accomplish that 
aim anymore than simple block grants do.

                                 

    Chairman HERGER. Thank you very much. Now, the gentlewoman 
from Connecticut to inquire.
    Mrs. JOHNSON. Ms. Hahn, I have tremendous respect for the 
Casey Foundation and the work you have done for children and 
the difference you have made in their lives. I am, however, 
disappointed in your analysis. I appreciate that the history of 
block grants isn't all good but it is also true that these 
block grants would be tied by law to the same increases in 
baseline that the current program is tied to. Now foster care 
spending goes up according to baseline projections, and where 
there is an expected increase there is an expected rise in the 
baseline, and that is what the State gets. Unfortunately, both 
good and bad, there are States that are leveling out or 
declining, sometimes because they can't find foster parents, 
not because the children don't have needs.
    You know--and in the proposal as it has been detailed, 
legislative language or not, you can choose to have 20 percent 
a year. You can choose to allocate your 5 years of baseline 
increase any way you want. It costs a lot more money to give 
States an option, because only those States that have a clear 
upward trend in their baseline are going to take it.
    I think by making analogy to other programs, the Community 
Service Block Grant is a particular case because of the 
vagueness of exactly what it does, and the accountability 
issues. I am a big advocate of it. I am a chief advocate. It is 
a completely different--you are comparing apples and oranges. 
You are saying we need to fund guardianship, which I agree--I 
don't know why you are not harder on States about not using 
Medicaid to pay for mental health services when Medicaid covers 
mental health services, and that could save foster care 
dollars. We are all saying the administrative nightmare that is 
this program is worse than any other program I have ever seen 
because all four parts are different.
    Then there is TANF and there is this and there is that. You 
can't duck on this one. I appreciate your concerns about the 
block grant. Are there any ways we can build it in, and why not 
an option? At least those block grant funds could be used for 
funding guardianship and substance abuse treatment and the 
other kinds of services that families need to keep kids out of 
foster care.
    We have all kinds of models. I hear it every day. We kept 
the family together. We didn't have to take the kid out because 
we went to the parents' alcohol abuse problem and we began 
talking about it, treating it, and the whole family was 
involved. The idea of just not doing anything because the 
history of every block grant isn't good, the history of TANF is 
very good. In spite of the fact that caseload has dropped 50 
percent, we have stayed absolutely true to our pledge to keep 
funding at the same level. There is a lot of service money in 
TANF that never used to be there.
    You have got to help us on this administrative issue. If 
you don't want to take on the option of flexibility because of 
your fears, then make recommendations about how we very 
radically simplify the program so much less money goes into 
administration. I don't think I have ever seen a program in 
which so much money went into administration. If you look back 
at that evaluation of the States' performance under the Safe 
Families Act, not one State--after how many years--was in 
compliance. It was an absolutely appalling review and then this 
review.
    There isn't any good news out there. This program is doing 
badly and it is for the children who need it most. We have got 
to do better than say the old way has to stay and we have got 
to add money for this, that, and the other thing, because in 
today's world that just isn't going to happen. Whether I like 
it or not is not the issue. I really expect more of the Casey 
Foundation. I know how important guardianship is. We have had 
some excellent testimony on things we have to do. We have to 
have the States--we have to give them the latitude. You must be 
aware of all the wonderful things that they are doing.
    Ms. HAHN. I guess let me start, because you raised a number 
of issues.
    Mrs. JOHNSON. I am just appalled at the negativeness of 
your testimony and its failure to address the obvious problems 
that, day in and day out, that caseworkers at DCF in 
Connecticut, who are dedicated, wonderful people, are 
struggling with.
    Ms. HAHN. First I want to apologize. I didn't mean to cut 
you off, Congresswoman Johnson. I apologize. First thing I want 
to say is Casey doesn't defend the status quo. We recognize 
that there are problems with the current situation in child 
welfare and actually lay out three recommendations that we feel 
would help improve the current child welfare system.
    Recommendation one was--dealt with the issue of kinship 
care and ensuring that they were able to be reimbursed. The 
second issue dealt with SSBG and TANF. Now, the reason why we 
think that is extremely important is because right now, based 
on the Urban Institute study that was released in December of 
2004, it showed that 43 percent of child welfare services are 
paid for through SSBG, TANF, and Medicaid. It is very critical 
that those programs be adequately funded because States are 
using those dollars to pay for the exact preventive services 
that you, the Committee, and Dr. Horn has been advocating for.
    Third, I wholeheartedly agree with you and Mr. Chairman 
about the issue around the post-traumatic stress syndrome for 
kids in foster care. It is appalling. I like to say that it is 
like children walking around who are walking wounded. Would we 
consider it acceptable to allow our soldiers to return back to 
the States with these levels of post-traumatic stress syndrome? 
I think not. That is why we feel it is very critical.
    I know that the Medicaid program is not in the jurisdiction 
of the Committee on Ways and Means. It is in the jurisdiction 
of Energy and Commerce. However, we know that you--there is 
much interplay between child welfare and Medicaid and it is 
very critical, I think, to take this opportunity to speak on 
this issue because clearly Medicaid is not paying for these 
services, and that is why.
    Mrs. JOHNSON. My time has expired but I do hear what you 
are saying. Just to say more money in these categories, when 
under the current circumstances, when in TANF we really have 
had a remarkably persistent and honorable commitment, I think 
is not realistic. There is so much money we can save within the 
current program through administrative reform and using the 
money more effectively, and we need your help on that as well.
    Chairman HERGER. The gentle lady's time has expired. The 
gentleman from Washington, Mr. McDermott, to inquire.
    Mr. MCDERMOTT. Thank you, Mr. Chairman. Mr. Winstead and 
Ms. Hahn, would you support Congress removing a cap on title 
IV-B?
    Ms. HAHN. I guess I will speak up for--yes, absolutely. The 
purpose of title IV-B is for preventive services to a large 
extent, and in fact that was the way it was sold to the child 
welfare community. Unfortunately, it has never been adequately 
funded up to its authorized levels. If we removed that cap, it 
would allow States to have the flexibility that Dr. Horn has 
spoken to and what we are hearing from the States in order to 
be able to do more on the front end as opposed to the tail end.
    Mr. WINSTEAD. Congressman, if you would like me to take 
more money with me back to Florida, I would be glad to have the 
extra luggage with me. However much the funding is, I think the 
critical issue is can we make it work better, can we be more 
efficient, and can we be more effective in our funding? We need 
to focus more on prevention. I think the proposal that is made 
by the Administration in the Chairman's bill will help us to do 
that but certainly we need to focus more on prevention.
    Mr. MCDERMOTT. You don't have any problem with taking more 
money? What I hear you saying is that if you could move the 
money around, you wouldn't need more money. Is that what I am 
hearing you say?
    Mr. WINSTEAD. No. What I am saying, Mr. McDermott, is that 
if we could take the resources we have and use them more 
efficiently and effectively, it would be better than the 
complex and burdensome rules that we have now where we have to 
look back to 1996 eligibilities in title IV-E. The AFDC program 
was repealed by this Subcommittee and this Committee, yet it 
still is alive and well embedded in the lookback provisions of 
title IV-E. That is why that kind of complexity and that kind 
of administrative burden is what we would like to do away with, 
so that our frontline professionals can focus more on the job 
of several children and not on the accounting tasks related to 
eligibility.
    Mr. MCDERMOTT. Let me ask a question further from Ms. Hahn 
about the question of the whole methamphetamine question. Tell 
me about that and what is going on out in the various States 
around the country.
    Ms. HAHN. Well, why don't we start with Washington State 
first? In 1996 we looked at the number of individuals going 
into that State around substance abuse treatment specifically 
for the meth issue, and it was at 1.5 percent. It is now in 
2003 at 20 percent. Washington State is not unique. Colorado 
has very similar numbers as well. We are also seeing it in 
northern California and it is growing across the country.
    Recently. Casey had a convening of child welfare State 
directors in the seven States that were in operation and we 
heard across the board, Arizona, Texas, California, Idaho, 
Washington State, that they are seeing the issue growing and 
that is leading to higher numbers of caseloads. That, again, 
reemphasizes, where is the ability for States to be able to 
respond to a crisis like that?
    We experienced much the same with the crack cocaine issue. 
We hadn't anticipated or saw anything in previous years to 
prepare us for that. I know that Dr. Horn has made mention of 
the fact that there is the contingency fund in TANF. He didn't 
mention the fact that they also provide $200 million in the 
Congressional Budget Office (CBO) baseline as well.
    However, let me just give you an example of just one State 
alone. Texas just passed $250 million to provide for additional 
caseworkers. Now, that is 250 million. We are providing 
Congress $200 million for all 50 States. I think that speaks 
volumes about the fact of how much resources would really be 
readily available when States experience what we are seeing 
already, as it looks like the tip of an iceberg in terms of a 
surge around this issue.
    Mr. MCDERMOTT. If you have got yourself locked in for 5 
years and you have a spike, where do you go? You get it all out 
of that $2 billion.
    Ms. HAHN. You would look at that, the contingency fund. You 
would look at this also, the CBO baseline. Right now as we just 
said, Texas alone, that $200 million, they have expended 
already $250 million, which exceeds that. If you have all 50 
States drawing down on those TANF contingency funds--and 
remember, TANF is also to be paying for these same low-income 
families on another issue as well--so to think that that would 
be adequate resources I think is very optimistic.
    Mr. MCDERMOTT. The money that--or if we added the word 
prevention to title IV-E, would that help?
    Ms. HAHN. I think that there is an enormous need for 
allowing States more flexibility, but I think flexibility tied 
to a capped funding. There is no way that we can show that 
there is going to be proven results in terms of better outcomes 
for kids. If we did speak to prevention, I think this would be 
wonderful, because as we know, we can save so much more on the 
front end as opposed to the tail.
    Mr. MCDERMOTT. Dr. Horn made a big point of saying no money 
can be used for services. If we allowed prevention in that 
placement services and administrative costs and prevention, if 
we added that word, simple word, we would at least open it up, 
although it is capped, that still makes a problem.
    Ms. HAHN. Yes. I think this would be of benefit.
    Mr. MCDERMOTT. Thank you, Mr. Chairman.
    Chairman HERGER. Thank you. The gentleman from Colorado, 
Mr. Beauprez, to inquire.
    Mr. BEAUPREZ. Thank you, Mr. Chairman. Ms. Hahn, I expect 
we were all blanched considerably at your testimony about Post 
Traumatic Stress Disorder (PTSD). Those are absolutely 
staggering results from your study. Do you have any information 
that would indicate whether the PTSD is a result of what 
happened before or during foster care?
    Ms. HAHN. Actually we were so troubled by those numbers at 
Casey that we are now working with Harvard University to find 
out where exactly--is it a result of what they experienced 
prior to coming into care; is it a result of what they 
experienced during their care; is it a result of the fact that 
once we emancipated them they weren't provided any health 
insurance coverage because their State didn't provide health 
insurance up to the age of 21 under Medicaid? We are really 
trying to find where along the continuum are these kids 
actually receiving the most harm. I think it might be a 
combination of the factors, truthfully.
    Mr. BEAUPREZ. Were there geographic variations? Did your 
results vary widely depending where these children came from?
    Ms. HAHN. Actually, no. What we did see, and I know the 
post-traumatic stress syndrome is also a very troubling issue. 
Included in our testimony, our written testimony, we also 
looked at some other issues around mental health outcomes and 
we saw that kids in the foster care system also had higher 
rates of depression, substance abuse, sociophobia; and we 
actually tied that, interestingly enough, to some educational 
outcomes that explained why we had higher rates of kids going 
into obtaining a General Equivalency Degree (GED). Many of them 
expressed the fact that they couldn't stand to be in a closed 
setting of a school classroom, and therefore they found that a 
GED allowed them to deal with some of their mental health 
issues as opposed to trying to do the more traditional route. 
We are following up on these studies to see if there is some 
more information that we can garner in terms of where exactly 
along that entire continuum is leading to not only the post-
traumatic stress syndrome but these other troubling outcomes as 
well.
    Mr. BEAUPREZ. Some of your dialog just moments ago--
actually, I probably already demonstrated in my first Q and A 
that I am a fan of flexibility. I hear it from my State 
officials over and over again. Your testimony in regard to the 
meth increases that I am very much aware of in my State--and 
while some areas are going to deal with those kind of problems, 
some aren't; some are going to deal with other problems, some 
aren't. That to me argues for local officials having more and 
more ability to deal with their own peculiar circumstances or 
unique circumstances.
    Doctor, you are the one who said if you are going to go 
down this path of providing flexibility, I think, I don't want 
to put words in your mouth, but it seemed like you acknowledged 
that our outcomes, at least today under the system as it 
exists, are not as good as we would like them to be. Is that a 
fair characterization?
    Dr. WULCZYN. I think it is a fair characterization. I also 
think that it is fair to say that it is very hard to draw a 
single conclusion about a system that is as diverse and as 
complicated as this one is. Even in States that have not 
performed particularly well on the child and family service 
review, there are places in those various States where there 
are models of good child practice. I think it is very difficult 
to draw sort of one-size-fits-all conclusions.
    Mr. BEAUPREZ. Perhaps we then should learn from those where 
the outcomes have been good. You are the one who suggested 
rather strongly that if we are going to go down the flexibility 
path, then we ought to tie it to outcomes. What outcome 
specifically ought we be incentivizing, I guess, if we can put 
it in that context?
    Dr. WULCZYN. Well, that is exactly the question. I think 
there is already, in terms of how the field has developed over 
the last 10 years, considerable consensus on what are the 
outcomes. How long do children stay in care? What is the 
likelihood that they will be reunified with their parents? What 
is the likelihood that they will be adopted? I think it is 
useful to point out in this context that the child and family 
service reviews do not measure those outcomes. They get close 
but they do not measure. The idea of correlating public 
expenditures, Federal expenditures with the State level 
outcomes as derived from the child and family service review, I 
think you get--you are on target, but you are not hitting the 
center of the target, the bulls-eye. It is very important. That 
is why I made a point of saying we have to be very explicit 
when we talk about linking outcomes with revenue and we need to 
start with the outcomes and then looking at the implications 
vis-a-vis funding.
    Mr. BEAUPREZ. Lastly, if I might in a few seconds. If we 
are providing taxpayer dollars and we are insisting on certain 
outcomes and those outcome targets are not met, then what do we 
do?
    Dr. WULCZYN. Well, you have several options at your 
disposal. There are penalties embedded in the current Federal 
legislation in terms of what happens when States don't meet 
Federal standards. I think that those are the sticks. I think 
the carrots are providing technical assistance using the model 
child welfare programs, to the extent they exist around the 
country, to better educate folks on program miles. I think it 
would be useful to fund better and more comprehensive research 
in the area. The funding for child welfare research was zeroed 
out of the budget in 1996. We are running a multibillion dollar 
program and there is a very small research and development 
program from the Federal Government. That has hurt the field 
tremendously.
    Mr. BEAUPREZ. I thank the panel and thank you, Chairman.
    Chairman HERGER. The gentleman from California, Mr. 
Becerra, to inquire.
    Mr. BECERRA. Thank you, Mr. Chairman. Thank you for your 
testimony. I think it helps further enlighten the issue. Ms. 
Hahn, I want to get back to some of the issues that were raised 
with regard to the whole issue of flexibility and block grants. 
You begin your testimony, your written testimony at least, with 
some details about why we should have some concerns about cap 
funding or flexible block grants with a guaranteed funding 
level. You point out how the SSBG, which others have pointed 
out along with you is an important component in trying to help 
us service foster care children, that it was severely cut from 
what it was authorized at $2.9 billion to now $1.7 billion and 
there is where it has remained since 1998. Obviously we have a 
lot more to do since 1998, but we still have the same amount of 
money as in 1998, and that is one of the pitfalls of trying to 
just cap the moneys or block grant it because States are unable 
to have even the flexibility, if they desired to do what they 
need, because they don't have the resources.
    You also touched on the issue of the whole problem with 
kids who have to deal with methamphetamine addiction and the 
whole issue that occurs with them. My understanding is that 
mental health services today are not reimbursable by the 
Federal Government for any State that provides those mental 
health services to that child or to that foster family for that 
child. Is that correct?
    Ms. HAHN. Well, the money is under the Medicaid program for 
targeted case management. Unfortunately the Administration has 
decided to cut that program as a part of the President's 
budget, which is extremely alarming in relation to the studies 
that we have done that speaks to the high rates of post-
traumatic stress syndrome and the other issues that plague kids 
in the foster care system, higher rates of substance abuse, 
depression, and so forth.
    Mr. BECERRA. Let me tell you that I think that we should 
publish further testimony rather than try to hide it, because I 
think you rely on history and numbers to tell us what could 
happen. While I think all of us would like to see flexibility, 
we have to be realistic. You can't continue to expect 
caseworkers, who are underpaid and overworked, to want to do 
this job as we continue to see the caseloads become more 
complicated; maybe not even so much increasing, but becoming 
much more complicated. Methamphetamines were not part of our 
mix for foster kids 20 years ago. Today they are becoming a 
greater part, and, as you said, perhaps the tip of the iceberg. 
Rather than strap a State by limiting its funding or actually 
causing the State to have to have it compete, agencies compete, 
whether you give more money for administrative costs to help 
train a caseworker versus provide actual services to that 
foster child, to me it seems like what we need to do is target 
the moneys so that we address where the real gaps are for a 
State and where the real deficiencies are.
    I don't think that we can expect--and we are going to be 
meeting here over and over and over again to talk to all of you 
as experts and to the Secretary, Secretary Horn in the future, 
if we don't do something to address the fact that people who 
are trying to provide services and do yeoman work, as I believe 
the Chairman may have said, are underpaid. Any comment on that? 
Any comment from anyone on the panel on that?
    Ms. HAHN. Well, I think just one of the big issues is that 
Casey strongly supports the need for greater flexibility but 
flexibility alone is not going to solve the issue. I think 
Texas really speaks to that very eloquently. Right now Texas 
uses 40 percent, funds 40 percent of its child welfare services 
through TANF dollars. Yet at the same time, they are 
experiencing a--true, probably a lot to do with the meth issue. 
Nonetheless, they are experiencing a real dramatic increase in 
caseload. It has gone up from 16,000 to basically 22,000. Even 
despite the fact that 40 percent of their moneys are flexible 
to a large extent, they still are not being able to reach the 
outcomes that they would hope to achieve.
    Mr. BECERRA. It reminds me of the whole situation we see 
our soldiers facing in Iraq, where we have got these 
sophisticated weapons that cost millions if not billions of 
dollars, yet we find that so many of our soldiers are having to 
put up metal sheets to help protect their vehicles from the 
propelled grenades that are sent at them.
    If we could just target our money a little bit wiser, we 
could do a lot more and certainly not shortchange those areas 
where we know we could have a great result if we were to just 
provide the resources. I think what all of your testimony 
points out is that we do have to provide more flexibility, but 
we have to do it in smart ways. You can't say that simply 
providing flexibility means that you can start cutting the 
funding. Some of these States are doing yeoman work. Again, I 
applaud the folks that do some of these--some of the work in 
foster care because it is so debilitating emotionally for the 
foster care caseworker as well.
    I hope that what we find is a way to not only give you the 
flexibility but truly help you target the resources where they 
need to go so that we don't see you in another 5 years coming 
back and saying, well, you gave us the flexibility but we still 
found that we are losing caseworkers after twoyears on the job, 
and we have more kids coming in under circumstances we did not 
expect. After the methamphetamine blip, now we are seeing 
something else. I urge you all to continue, and I hope you 
always will be candid in your testimony, because we need that 
as we try to make the best assessments. Thank you.
    Mr. WINSTEAD. If I can quickly just comment, Mr. Becerra, 
that I think one of the critical things is to build effective 
community-based systems of care to bring together the resources 
and the expertise and communities to focus on these issues. We 
are experiencing methamphetamine issues disproportionately in 
rural areas of Florida and the Panhandle in central Florida, 
and those community-based solutions I believe are going to be 
the most effective.
    Mr. BECERRA. That is right on target. I just hope we don't 
do what we did with mental health when we talked about doing 
community-based services where we took folks out of 
institutions but then didn't provide the community-based care 
but you are right.
    Chairman HERGER. Gentleman's time has expired. The 
gentlelady from Pennsylvania, Ms. Hart, to inquire.
    Ms. HART. Thank you, Mr. Chairman. Mr. Deputy Secretary, I 
appreciate your testimony. I was a State Senator for 10 years, 
and that is really where a lot of my experience comes in with 
trying to make sure the system on the frontlines is working. I 
gathered that the proposal would actually help you in what your 
goal is, and that is to basically make sure the services are 
provided. Right now it seems from your testimony that there is 
a lot of time spent on process and compliance, yet you really 
don't have that power that you need to focus on outcomes. Is 
that correct?
    Mr. WINSTEAD. Yes, Congresswoman. The issue I think for us 
is that in order to make the system work, we need to bring 
together a variety of Federal, State, and local resources. The 
more effectively that we can help local communities knit that 
together, the more effectively that they can provide services 
to the children and families that need them and produce those 
outcomes.
    I would certainly concur wholeheartedly with the need to 
have clearly defined outcomes and to tie incentives to those 
outcomes. That certainly would be something that our State 
legislature would also support in the direction that they are 
very interested in. The more effectively we can bring those 
resources together, then the more effectively we can serve 
children and families. The complexities that we have in title 
IV-E eligibility particularly, along with some of the other 
funding sources, are part of the problem, not part of the 
solution.
    Ms. HART. From your testimony, the CFO of Childnet had 
stated that he spends close to a million dollars a year to 
manage Federal eligibility. Obviously, given more flexibility 
and more opportunity to make the decisions on the State level, 
on the local level, would you see that almost as an increase, 
even if we keep funding levels the same?
    Mr. WINSTEAD. Sure, if they are resources that are going 
today to maintain eligibility and administrative and accounting 
processes, and it is not only a lot of the time, 50 percent of 
the time of the CFO is certainly there, but a lot of resources 
that he talks about are frontline caseworkers that are having 
to spend their time documenting eligibility, documenting 
administrative processes to justify various Federal funding. 
That is time that we can free up, and if we can use that more 
effectively that is a more efficient use of resources that will 
let us do our jobs better.
    Ms. HART. I think it also would make the caseworkers a lot 
happier.
    Mr. WINSTEAD. I would say virtually all of our caseworkers 
got into the business not because they wanted to be 
accountants.
    Ms. HART. Right. Actually it is a common complaint. Our 
goal certainly is to make sure that those who are actually 
providing the direct services and, every case being different, 
are going to have the opportunity to utilize the resources that 
we give them obviously to the best advantage of the child and 
the family.
    Mr. WINSTEAD. Yes.
    Ms. HART. What would--aside from the opportunity to use the 
money more effectively, do you see a problem with funding under 
this plan? It has been stated and restated over and over again 
that there is some phantom loss of money here.
    Mr. WINSTEAD. I understand that, and the same struggle; I 
was with the State also in 1995 when we were looking at what 
would the future be like for TANF, and we heard many of the 
same concerns. It was an extraordinary benefit to children and 
families in Florida that we got that flexibility and the fixed 
funding has not turned out to be an issue there. As you can see 
from my testimony, we spend a lot of TANF money in child 
welfare. A lot of that is part of a program we call the 
relative care giver program. The first goal of TANF is that 
children in needy families grow up in their homes or the homes 
of relatives. We thought it was very consistent with TANF 
purposes to take that portion of our children and create a 
special program, which we did. We use a lot of TANF money for 
that. That is an example, I think, of making good use of 
flexibility.
    I understand the fear that people would have about funding, 
but I think it has been pointed out, we are not talking about 
fixed funding. We are talking about an anticipated level of 
funding consistent with what you would expect to earn under 
title IV-E. If we can get the same amount of dollars but use 
them more efficiently and effectively, then we are ahead.
    Ms. HART. Well, I think you have answered my question. 
Thank you and I yield back.
    Chairman HERGER. I thank the gentlewoman. Dr. Wulczyn, if I 
could ask a follow-up question to what was asked before. In 
your experience of working with States and their outcomes 
linked to the level of funding, are there examples of cities or 
States that have systems in place to track outcomes in real 
time that might help us with our work? For example, what does 
New York City do in this regard?
    Dr. WULCZYN. Well, that is an excellent example of the kind 
of progress that is being made in relationship to connecting 
funding with the outcomes that the Administration For Childrens 
Services is seeking. It is perhaps a bit too much inside 
baseball to go into the details. I think that the 
Administration for Children's Services has made tremendous 
progress on establishing the kind of explicit link between 
outcomes and services that I talked about and in a way that I 
think highlights some of the tensions that have been brought to 
the Committee's attention regarding what is basically a risk-
sharing problem that happens. That is the case.
    What happens when our expectations for the future don't 
match what actually happens? How do we reconcile the two 
differences? There are various proposals that have been put 
forth for sharing that risk. I think that the experience in New 
York City is an example of how to understand the risk, and how 
to develop proposals for dealing with it in a fair and 
equitable manner that eliminates the notion of a cap but 
connects the money to the outcomes.
    Chairman HERGER. Thank you. Mr. Winstead, what would 
adopting the President's option, if available, mean for the way 
you operate child protection programs in Florida? What would 
you change, and what would most benefit?
    Mr. WINSTEAD. I think the primary benefit, it would be to 
simplify the way that we use funds. It would help free up the 
time of frontline caseworkers and those who administer those 
programs so that our community-based systems of care could 
operate more effectively.
    First of all, let me say, Mr. Chairman, I don't think, in 
fact I know, that we do not remove children from their homes 
based on their funding or return children from foster care 
based on what funding is tied to them. However, the time it 
takes us to manage those administrative processes is time taken 
away from the needs of children and their families. If we can 
say to our community-based partners, here is the money that you 
are going to have, you can use those funds to help prevent 
entry into foster care, when that can be safely done for 
children who have been removed from their homes but who can be 
safely returned home through a provision of services, that you 
can use resources for that purpose, for children who are 
returning after a stint in foster care, that you can use those 
resources, as well as provide out-of-home care when children 
cannot be safely returned, then I think that flexibility is 
what we need.
    Chairman HERGER. Mr. Winstead, I want to thank you for your 
comparison. I know there is a great deal of concern, the idea 
of block granting is a scary thing to many. Yet the example of 
what we saw, what we are seeing happening with TANF, where we 
block granted and we actually saw those on welfare roles 
reduced by some 60 percent, and yet the money remained there, 
that that was an incentive there, and perhaps the incentive to 
try to adopt earlier, try to get these children out into homes 
and allow this incentive of the dollars to remain there, I 
think is one that we certainly should explore and I----
    Mr. WINSTEAD. Mr. Chairman, it is incontrovertible that the 
lives of tens of thousands, perhaps hundreds of thousands of 
children in Florida are better because of the legislation you 
passed in 1996.
    Chairman HERGER. I thank you for that. Mr. McDermott, did 
you have a follow-up question?
    Mr. MCDERMOTT. Yes, thank you, Mr. Chairman. It sounds as 
though you have a better understanding of what the President's 
proposal is than I do because you sound pretty positive. One of 
the things about that program would be the baseline that would 
be locked in for 5 years. Is that correct?
    Mr. WINSTEAD. As I understand it, it would be an amount of 
money that would--that States would have the option to take a 
disproportional amount of that early in the process and rather 
than just taking an equal amount over 5 years is my 
understanding.
    Mr. MCDERMOTT. I was just sitting up here pondering how it 
is going to work, having done this for a long time. Sometimes 
we make decisions and haven't got any clue what Murphy's Law is 
going to turn out to be when it gets out on the ground. Now, I 
look at this chart we were given which shows us, Ohio, at 
$40,000 and Tennessee at $4,000, and I see you are somewhere 
around $15,000. If they locked you in at that level for 5 
years, you would be glad to stay with that?
    Mr. WINSTEAD. Mr. McDermott, we would want to examine those 
figures very carefully of course. I think----
    Mr. MCDERMOTT. I thought maybe you were ready to commit 
here today so we could move on.
    Mr. WINSTEAD. I think in concept, I think, assuming that--
--
    Mr. MCDERMOTT. I know in concept but how are you going to 
have this negotiation go on when you have got Florida down here 
in the middle and you have got Ohio up here? Now, what kind of 
negotiation--do you think that is going to go over on in the 
HHS Secretary's office, Mr. Leavitt's?
    Mr. WINSTEAD. Congressman McDermott, when you see a ranking 
of Federal funds to States, a list that puts us in the middle 
makes us proud most days. Sometimes, we are a little bit on the 
low end of that.
    Mr. MCDERMOTT. You don't want to be locked in for 5 years 
at that level.
    Mr. WINSTEAD. If it is fairly reflective--and we would have 
to see the details of the proposal--but if it is fairly 
reflective of what we would expect to receive in title IV-E 
funds in the next 5 years and if you look back over the past 5 
years, our title IV-E funds from our figures have been 
relatively stable, and I think that there may be variation in 
other States, but if we have been stable in the past 5 years 
and we can project out and we see numbers that look like they 
treat the State of Florida fairly, that would be reflective of 
what we would likely receive in the next 5 years, and we have 
access to contingency funds, so that if there is an unexpected 
shift, that we would have some place to go with that, then I 
think we would be very interested in that. That would be good 
for our State.
    Mr. MCDERMOTT. If I can summarize what you said, you really 
said what you would like to see is the legislative language. 
You could see exactly how it is going to work for the State of 
Florida. Is that correct?
    Mr. WINSTEAD. I don't know whether it is the legislative 
language. I would like to see the spreadsheets. I think, in 
concept, what I have seen sounds like it would be something we 
would be very interested in and certainly very supportive of 
having that option.
    Mr. MCDERMOTT. That reminds me of the story about how 
Kruschev and Eisenhower were talking about this, and they said 
they could solve the international problems of nuclear weapons 
except for the details. It was the details that got them every 
time, and I think that is maybe what we are talking about here.
    Mr. WINSTEAD. Well, we would look forward to having the 
ability to work on those details with the Federal Government 
because where we are right now is, we know the details today 
are burdensome and complex.
    Mr. MCDERMOTT. Thank you, Mr. Chairman.
    Chairman HERGER. You are welcome. It is these details that 
we want to work on. Just the fact that we have States that are 
receiving $4,000 and another State receiving $40,000, and yet 
there is no noticeable difference in the results of these 
foster care children tells us that we have a problem of the 
greatest magnitude. As was pointed out by Ms. Hahn, this is 
only part of the money they are receiving. They are receiving 
far more money than $4,000 and $40,000. We have a major 
problem. The gentlelady from Connecticut to inquire.
    Mrs. JOHNSON. I thank the Chairman. A couple of things. 
First of all, I am glad the Administration doesn't have 
legislative language on the table. Don't you understand the 
power that gives us, the opportunity that gives us? They have 
given us a detailed proposal. One of the things that you say 
over and over again is you want a State-by-State decision about 
base. I think that is wise. We have had a lot of trouble in the 
past with blanket cut-off years and so on, so what I would be 
interested in, Mr. Winstead, in what considerations--in other 
words, we couldn't just say pick the highest cost, the highest 
spending year and decide we will go with it. What should be the 
parameters? What are some of the guidelines you would suggest 
that we should put around those negotiations between the 
States? You can think about this and get back to us, because I 
think that is important to recognize that the base is going to 
be important.
    Mr. WINSTEAD. Yes, and I would be happy to give you more 
detail. I think three concepts that I tried to mention in my 
testimony: one is, I think it would make sense to look at the 
trend State by State and see what is happening in the trend in 
terms of dollars and in terms of children. I think it would be 
important to look at the demographics and in terms of how that 
is going. We are a growth State, and that is certainly 
something that is also important to us. I think the other thing 
is the contingencies, having access, so that if there is an 
unanticipated event, that there is an appropriate contingency 
fund available for that. I think those would be three areas of 
particular concern, and we would be very happy to get into the 
fine details on those.
    Mrs. JOHNSON. Good. Thank you. Ms. Hahn, I hope in your 
study with Harvard, that you will include in your study the 
Independent Living Program because the post-traumatic stress 
issue is very different for those kids who have had, in a 
sense, a pre-adult experience together and then moved from that 
16, 17-year-old group that are able to stay in that with 
support and go to college. Whether they go to college or not, 
they are able to stay in a program beyond 18; that is 
important.
    Ms. HAHN. We totally concur with you, Congresswoman 
Johnson. We think it is utterly critical that we look at that.
    Mrs. JOHNSON. Just briefly, Mr. Wulczyn, would you either 
in writing, because you are not going to have much time left 
here, but we need to know more about the New York experience. 
How did you share the risk? What were the terms, because it is 
striking what New York was able to accomplish? I thought your 
whole testimony was going to be dedicated to that. It was 
dedicated to what was really pretty arcane about linking, but I 
appreciate how important that is. Let me give you a couple of 
minutes, whatever time I have left, on the Chicago experience. 
Then if you will get back to us in writing, how you think we 
could deal with this risk issue because that is really what 
everybody is concerned about. What is the contingency? How are 
we going to define that, and what is going to happen if you hit 
that?
    Dr. WULCZYN. Sure. Let me say that, on the question of base 
lines, the one thing that I would have to add, particularly 
given the testimony regarding the relationship between outcomes 
and funding, is that if our baseline only looks at funding, 
where are the outcomes in that situation? We need to have a 
baseline understanding of, how long do children stay in foster 
care? What is the likelihood that they will enter? What is the 
likelihood that they will move around while they are in foster 
care? What is the likelihood they will be adopted? That has to 
be in that baseline assessment, and then we need to look at 
that in relationship to the money. Not the other way around.
    We have already heard that there is no relationship, so 
let's start with the outcomes and then see how the funding 
relates to that. I think that that is absolutely critical. 
Otherwise, you are going to be left 10 years from now with a 
system that has a block grant or whatever you want to call the 
nature of the appropriation, but without that explicit design 
on day one connecting it to outcomes, you run the risk of 
failing to establish that connection because a block grant by 
itself is not a link to outcomes. It is a promise of a link to 
outcomes. It is not a guarantee.
    On the question of linking risk for costs for providing 
safety services for children, I think there are a number of 
proposals that would be suited to resolving the differences 
between the open-ended entitlement and the block grant, the 
hard company cap. I think one way to accomplish an analysis of 
that would be to look at the Pew Commission findings on their 
resolution of this basic tension, which is something that I 
know they worked very hard on. I think that there is a model 
there. Whether there is something in there that appeals to the 
various constituencies in this Committee, I think is something 
that requires some analysis of the details. As we have heard, 
that is where the action is.
    Let's take a look at those details and see how they differ 
one from the other. I think that there would be a variety of 
ways to modify the Pew Commission proposal that makes it look 
less like the old entitlement system but that requires 
analysis. I think the middle ground here is findable if people 
take the time to do that.
    Chairman HERGER. The gentlelady's time has expired. 
Gentleman from Colorado, Mr. Beauprez to inquire.
    Mr. BEAUPREZ. Thank you, Mr. Chairman. Really, a comment 
and not even a question. We hear the word ``details'' a lot 
here lately, and I think we are exactly right. It feels like 
the details are wagging the dog a little too much. I look at 
this chart again. I can't take my eyes off figure two in the 
report. When we have got States that are spending, many States 
spending $10,000, some States spending over $20,000 per case 
just on administration, frankly, it is obscene. I think about 
another partner, who I guess we are supposed to represent in 
all this, and that is the American taxpayer. We have got an 
obligation, I think, to at least spend the money wisely if we 
can.
    I remember one of the--another study that was dropped on my 
desk a couple of years ago that indicated, thanks to the 
efforts of those of us back here in Washington, that in, of all 
places, emergency rooms, we burden doctors and nurses with 1 
hour of paper work for every hour of patient care.
    Mr. Winstead, you talked about your caseworkers. At least 
we ought to be focused on letting caseworkers be caseworkers 
not pencil pushers. It seems to me that, in the name of good 
care and good outcomes, we ought to at least focus there on how 
we can be a whole lot more efficient. We talked about the 
arcane rules that are still driving much of what we burden you 
folks with and your staffs. That just seems to me to be 
bordering on insanity. Maybe they ought to do a study on that 
mental disorder, too.
    Mr. BEAUPREZ. Mr. Chairman, this has been a far more 
interesting hearing than, frankly, I was prepared for. I found 
it very fascinating and very productive. I applaud you for 
bringing it to us, and I applaud the members of the panel for 
their testimony. Thank you very much
    Chairman HERGER. Well, I thank you. Interesting, but yet 
very, very tragic what we are dealing with. The gentlelady from 
Pennsylvania, Ms. Hart, to inquire.
    Ms. HART. Thank you, Mr. Chairman. I have--he is hard to 
follow. One of the things that was sort of touched on in a 
roundabout way is, everybody's interested in outcomes, but I 
think the difficulty that we have had is actually linking, the 
government's behavior, whether it is funding or particular 
programs, with outcomes. I know different States have had 
positive experiences.
    I guess I want to ask Dr. Wuczyn--is that the way you say 
it? In the studies that you have done, is there something that 
is really obvious that is working well as far as connection of 
both funding and outcome, but also certain changes that some of 
the States have made or some of these programs have made with 
really good outcomes?
    Dr. WULCZYN. Well, I don't know that it----
    Ms. HART. Sticks in your mind as a positive.
    Dr. WULCZYN. I don't know that it qualifies as obvious 
because I want to be clear there is no silver bullet here that 
is going to solve all the problems.
    Ms. HART. That is what I was asking you for, though.
    Dr. WULCZYN. It is not an inoculation. I think there are, 
in a place like New York City, where the caseload has gone from 
nearly 50,000 to under 20,000 in a span of 8 years time, I 
think we can draw some lessons from that situation. There are 
other places like Illinois that have seen similar declines in 
the caseload. I think there is reason for hope. The Committee 
tends to be drawn to the issue when there is tragedy, but I 
think it is important to remember that there are situations 
where a lot of progress has been made.
    It is a question of investment, investment in 
infrastructure, training, computers, filing cabinets, 
caseworker salaries, all those things are vitally important to 
running a modern child welfare system that cares about outcomes 
for kids. I think they do a lot of that in New York City. 
Commissioner Scoppetta, if he were here, Commissioner Bell, 
Commissioner Mattingly would say unequivocally that those 
things are very important. If you want better outcomes for 
kids, you need to invest in them directly and indirectly, and 
that speaks to the issue of administrative costs. Those are 
administrative costs. You want better services. You have to 
have investments in those things. Whether or not the 
disparities that we have seen justify that, that I can't say, I 
am not a commissioner, but those are the sorts of things.
    I think we run into somewhat more difficult territory when 
we talk about evidence-based practices that really work; that 
is to say, they have a known benefit so that, if you provide X, 
Y or Z service, you will diminish the demand for foster care. I 
think that Dr. Horn talked about nurse-to-family partnerships. 
There are other selective approaches to dealing with children 
and families where there is a risk of placement, but they are 
not widely used. The bench strength here, if you will, the 
number of programs that we don't invest nearly enough in those 
things, given the size of this program and the very important 
problems that families have.
    Ms. HART. Well, I guess if you claimed there was a silver 
bullet, everybody in this room would probably question that 
anyway.
    Mr. Winstead, Mr. Secretary, as far as your experience in 
the things that you have been able to improve in the time you 
have been--what would you say you have done to really make the 
most difference as far as this? Would you be able to even 
improve even more as far as your processes that flexibility 
that we are talking about?
    Mr. WINSTEAD. I think the key improvement--and we just have 
completed in recent months the transition to community-based 
care in Florida, which has been a multiyear transition. 
Certainly the process is far from over; it is a continuous 
process. We now have complete in every area of Florida 
community-based care and developing systems of care.
    Florida Tax Watch, which is a taxpayer watchdog 
organization in Florida, recently wrote a report that I 
referred to in my written testimony with a link to that report 
some of the outcomes that they noted as more children being 
visited each month, fewer children reentering foster care, more 
children being adopted, less foster home crowding. Another part 
of our strategy and something we think is very important is 
increasing transparency of those outcomes. That is why we put 
our outcomes not only for child welfare, but for all the 
programs we administer on the Internet by outcome, by area of 
the State, so that people can hold us accountable for 
continuing to show results.
    Ms. HART. Thanks, I appreciate that. I thank all three of 
you panelists for coming in with your expertise and for your 
commitment to this issue. Thank you, Mr. Chairman.
    Chairman HERGER. Thank you, Ms. Hart. I want to thank each 
of our witnesses that has appeared before us. This has been a 
very informative hearing. This is an incredibly serious issue, 
obviously, that we are dealing with. When we see the fact that 
we have children that are passing through the foster care 
system that are being rated with post-traumatic stress at twice 
the level of our soldiers returning from Iraq, that tells us 
something. When we see that the funding varies from less than 
$5,000 to $40,000-plus going into these children, but yet no 
noticeable change in the outcome, that indicates we have an 
issue that it behooves all of us to work together to change for 
the better just as soon as we possibly can. I thank you. With 
that, this hearing stands adjourned.
    [Whereupon, at 12:13 p.m., the hearing was adjourned.]
    [Submissions for the record follow:]
          Statement of Barbara Bryan, Davidson, North Carolina
    Taxpayers--federal, state and local--as well as contributors to 
tax-exempt non-profit groups are being defrauded under color of law as 
children are injured and innocent families are dis-membered in and 
because of America's foster care system.
    Without the usually unquestioned spending of billions of dollars 
appropriated by Congress, changes would have to be made.
    States routinely cannot find hundreds of children either taken or 
entrusted to their agents. Children suffering real abuse and neglect, 
and always emotional trauma, in instant pre-adoptive homes (as former 
foster homes have too often become), are ignored because of financial 
and adverse publicity consequences to agencies that removed and 
reallocated them.
    The Third World ``Rule of Suspect,'' one decried by more in 
Congress today for imprisoned foreign enemy combatants, is alive and 
has been hell for parents and caretakers ``suspected'' of often clearly 
non-existent abuse and neglect of children. Anonymous reporting, ruled 
out in the old USSR in 1984 because it is so unreliable, is the sine 
qua non of America's child protection reporting that consigns a child 
to foster care.
    Paper Orphans are a tax-subsidized phenomenon of the monopoly (no 
other agency permitted to investigate or handle child abuse/neglect 
reports: see the shameful DeShaney decision of the USSC) designated 
child protection agencies who recommend ``termination'' of parental 
rights.
    That is achieved with an immunizing stroke of a judge's pen and 
both the agency and adopting strangers are eligible for adoption 
bonuses (per 1997 Adoption and Safe Families Act). Most states sweeten 
the pot with post-adoption subsidies, now a part of nearly every out-
of-agency adoption for some.
Sibling Date; Marry?
    Very few children in America are genuine orphans. Most have 
relatives, family friends, neighbors or godparents who could, and are 
willing to, keep them if they must be moved temporarily or permanently 
from parental homes.
    Taxpayers are defrauded and children are at risk for what already 
has happened--brothers and sisters, not knowing they were redistributed 
by foster care, dating each other or marrying--because too many agency 
directors encourage taking an expensive, heart-breaking route to 
purported child protection rather than allowing the child to remain 
somewhere in the natural family or minimally in frequent contact.
    If ``most of the prison population once was in the foster care 
system'' is a true statement, the success and efficiency of the program 
is obvious.
    The public pays for backpacks, teddy bears, memory books and more 
to make moving around among strangers or getting accustomed to never 
seeing one's grandparents, siblings and other friends and relatives 
more palatable.
    Foster care in America is a disaster: financially, legally, 
emotionally, physically and by nearly any other perspective or measure 
possible to consider it.
    That so many influential people in Congress, media, entertainment, 
sports as well as other elected, appointed and employed positions of 
respect have themselves adopted children and may prefer not to reveal 
the entire story of the system has slowed exposure of long known 
problems.
Supremes Avoid Precedent Setting
    Equally, it is clear that the U.S. Supreme Court prefers not to 
deal with human and civil rights issues relating the foster care and 
how a child is sent to it or fares in it as an ``institution.'' If the 
whole truth were told, if Constitutional law were applied to federal 
and state permissions to suspect, accuse, remove children, forever cut 
them off from natural family and to be financially rewarded for 
reallocating them, it would and will rival the eras of slavery, 
sterilizations, treatment of native Americans and more.
    Currently, although known for years, two health issues that have 
been accepted by courts in America and still are--despite notice--are 
being upended in United Kingdom's courts and professional review 
boards.
    Specifically they are the imaginative but mythical ``Munchausen 
Syndrome by Proxy'' (MSP) for which there never has been scientific 
support and the concept of ``Shaken Baby Syndrome'' (SBS) for which 
there is considerable science proving that without severe accompanying 
neck injury shaking cannot be the cause of the ``signs'' of SBS when 
they are described.
    Because foster homes have become pre-adoptive homes, and because 
belief about MSP allows existing and subsequent children to be removed 
from a presumptively homicidal lying mother, newborns are whisked from 
delivery rooms and into the arms of delighted people who are doubtless 
pleased that mute media ignores the reality of both syndromes' 
discrediting.
    Rare and brave federal auditors have tried for years to show the 
shambles of the foster care misspending and occasionally the damage to 
children and families. The Commonwealth of Virginia in the early 1990s, 
through the office of its then-Attorney General's assistant, tried to 
beat a federal audit of its foster care system by covering its failure 
to visit homes every year. It had regulations changed to say every 
other year was all right. That has improved since.
    The best cover up, and example of why Congress is looking 
(repeatedly) at the same errors that only have been refined as well as 
the spin given auditors who genuinely try to learn, was that HHS/OIG 
noticed 40 court papers had failed to check the now ASFA-trumped 
``reasonable efforts'' block about keeping the family together.
Nunc pro tunc, Nice Try
    Cleverly, but in vain, the State tried to substitute 40 nunc pro 
tuncs that, of course, did have the blocks checked after all.
    Most people gave up arguing ``reasonable efforts'' because there 
simply were none made. When an agency decides to take a child--and most 
often they are instantly put into foster care without alternatives, 
especially when they are attractive and marketable, the biggest 
influence is the attitude (preservation or termination) of the agency 
director. (see Ray Sirry, PhD dissertation at VCU).
    Nearly always the ticket to regaining children from foster care 
was/is a mental health evaluation, but only if it is done by person or 
group either informally or by contract connected with the accusing 
agency. The anti-Fifth Amendment breach, agreed to in desperation by 
parents believing their children can be liberated faster if they 
``cooperate,'' turns out to be ``evidence'' gathering and the child/ren 
too seldom ever leaves foster care to return to natural family.
    In 1995 I walked the halls of Congress to leave with each office 
four pieces of paper and the plea to NOT continue sending boatloads of 
money to states to be used as they had been and, in the intervening 
decade, become worse.
    Using the analogy of gas, rags and matches, I explained that 
CONGRESS and its large appropriations is, in the end, the proximate 
cause of the problem that cannot be avoided in its tragic expression in 
foster (or hostage, albeit official and legal) care.
Unmonitored money, actions
    Congress provides the gas. Without huge amounts of money to spend 
and gain, individuals who use and get it might well not warehouse 
children they cannot do better for than the real abuse that some of 
them suffered (but still did not need to become a Paper Orphan).
    States provide the rags. State agencies accept the giant 
appropriations and often do a pass-through, creating ``revenue 
enhancement'' by upping the value of the dollars in creative ways that 
consultants figure how to gain. That includes how children are 
``labeled'' as special needs, at risk and the like, sometimes just 
because they have not yet been adopted at various descending age 
limits.
    Agencies strike the matches. It is at the local level that the 
usually unmonitored expenditures occur. Federal auditors, and judges 
also, read the ``documentation'' in the agency record or court case 
file of an accused. I would have removed my own children if what was 
once written about me in 1983-84 had been true.
    Foster care is an unsupervised, largely completely unneeded and 
expensive money sink and family-fracturing cottage industry that never 
should be used at all unless there truly are orphans in America without 
relatives and friends who can take them in. Grandparents and others 
should, in appropriate situations, not be deprived of the benefits and 
services (when they are both or either) available to children but only 
to be given to cooperative strangers.
    Every admiration a reasonable citizen has for his/her own home--
mixed up and messy as is every one sometimes and in some too often--has 
been turned on its head by the ease with which parents may be 
``suspected'' and children taken and put into foster care.
Legal Extortion?
    Oh, and the legal extortion of instant child support orders: that 
has a lasting impact on IRS collections and HHS outflow. Parents 
mortgaging their homes to liberate children from foster care, people 
unable (and unwilling) to pay ``child support'' for children who could 
stay with relatives without cost and not dun the taxpayer, find liens 
against their earnings IF they can keep a job after their employers are 
called and businesses visited by investigators on the report.
    Countless Americans, former taxpayers, even if the agency has its 
own attorneys overturn its actions against innocent parents, cannot get 
or keep employment. That is because their pre-employment credit checks 
show there is a problem so they are not hired. If they do work, their 
usually low wages are garnished, all to pay a debt they had no control 
in creating and should never have been made: one to foster care that 
injured the child and family.
    A benefit of these hearings could and should be a federal law 
requiring states whose errors are proved, early or late, to make whole 
the injured citizen, especially one under the eternal mark of a child 
support lien that was needless ab initio.
    States should be required to expunge and remove (after ensuring the 
injured parties have true and correct copies) all ``documentation'' 
used to break up the family that remains in courthouses. Currently 
there is no mechanism to make that paper vanish even if the agencies 
have purged their records.
    Because I personally know and/or have closely communicated with 
countless hundreds of families whose children were taken into foster 
care, I know things that I also know have been communicated to every 
possibly interested person for decades. Too frequently the most often 
suggested and tried ``solution'' is to bring law suits to ``reform 
foster care.''
    Wrong answer.
Purse & Sword of State
    We can re-form Frankenstein but we still have a monster. Children 
do not deserve to be punished for suspicions--even correct ones--
against their parents or caretakers. I deal with false mistaken, 
mischievous or malicious allegations, too many arising from 
professionals hoping to distract an anticipated adverse professional 
report or malpractice action, hence ``Shawna's Bill'' (ask for it).
    Parents cannot overcome the power of the purse and sword that 
Congress ensures states have to defend against extraconstitutional but 
``legal'' actions of their empowered but unmonitored agents. Top law 
enforcers in each state--the Office of Attorney General--also is the 
lawyer for the offending agencies. Guess whose interests are first and 
best served?
    Taxpayers should not be subsidizing all: everything that happens 
before, during and consequences of foster care as well as local and 
larger payoffs for suits that finally succeed against those needless 
and injurious actions that led to foster care and what happens when a 
child's natural protectors are prevented from being there for him/her.
    Only by tell the whole truth, now and not another decade or two 
later when the worst offenders, originators and continuing proponents 
are retired or deceased, will Congress have the heart and stomach to 
stop funding family-fracturing, child-traumatizing foster care (ever 
more obvious pre-adoptive pipeline, as it became after ASFA and 
continuing Congressional appropriations made money more available).
    If the right, reasonable, compassionate and Constitutional route is 
chosen, the current foster care system that fuels America's holocaust 
of the home will go into the history books and stop dis-membering 
American families.

                                 
     Statement of Alexandra Yoffie, Child Welfare League of America
    The Child Welfare League of America (CWLA) and our nearly 900 
public and private nonprofit child-serving member agencies nationwide 
applauds the House Ways and Means Human Resources Subcommittee for 
addressing the issue of federal funding for child welfare at this 
hearing. We believe that as a country we must confirm our commitment to 
prevent child abuse and neglect and support those children whose lives 
have been affected by abuse and neglect. We support strengthened 
partnerships between federal, state, and local governments and 
providers in the nonprofit and charitable communities in order to do a 
better job of protecting our nation's most vulnerable children.
A Comprehensive System of Care
    We urge this Subcommittee to examine the entire child welfare 
system in its review of federal financing. In addition to foster care, 
the child welfare system also includes child abuse and neglect 
prevention, treatment, out-of-home care, adoption, and services 
provided to children and families when a child returns from foster care 
or becomes part of a family through adoption. It is critical that any 
evaluation and reform of the child welfare system not be narrowly 
focused on just one funding stream, such as Title IV-E funding that is 
used to subsidize the foster care system.
    Nearly three million children are reported as abused and/or 
neglected annually and nearly 900,000 children are substantiated as 
victims of abuse and neglect. We do not know if these reports actually 
capture all of the children whose lives may be affected by abuse and 
neglect. We do know that of the children reported as neglected or 
abused, many will receive some form of preventive services. However, we 
also know that 40% of children substantiated as victims of abuse or 
neglect never receive any services. Approximately 20% of children 
reported as abused and neglected are placed in foster care as a result 
of an investigation or assessment.
Federal Funding Sources that Support Child Welfare
    CWLA urges the Subcommittee to expand its review of federal funding 
for child welfare to encompass the entire system of federal supports. 
The funding made available through Title IV-E Foster Care and Adoption 
Assistance is absolutely critical and should be maintained as an 
uncapped, open-ended entitlement program. However, an exclusive focus 
on Title IV-E Foster Care and Adoption Assistance funding, which 
provides 49% of all federal funding for child welfare services, is too 
narrow and captures only a portion of the patchwork of federal supports 
that states and communities use for child welfare.
Title IV-E Foster Care and Adoption Assistance
    A new report issued by the U.S. Department of Health and Human 
Services Office of the Assistant Secretary for Planning and Evaluation 
(ASPE) on June 9, Federal Foster Care Financing, points out a number of 
key weaknesses with the current Title IV-E funding structure and 
concludes that allowing states to receive a capped amount of funding, 
or block grant of Title IV-E funding will lead to ``a stronger and more 
responsive child welfare system that achieves better results for 
vulnerable children and families.''
    CWLA has long called for comprehensive reform of the federal/state 
partnership that supports abused and neglected children and their 
families. The status quo is not working. CWLA has highlighted the 
weaknesses in the current Title IV-E federal funding structure numerous 
times in testimony presented to this Subcommittee. We agree with the 
observations contained in the HHS report about these weaknesses, 
however, we disagree with the recommendation that the best way to 
ensure better outcomes for children is to cap federal funding for Title 
IV-E.
    In testimony previously presented to this Subcommittee, CWLA has 
pointed out many of the same observations contained in the HHS report 
about the limitations of Title IV-E funding. Observations contained in 
our previous testimony have included:

      The current Title IV-E financial eligibility criteria 
connected to the old AFDC program has resulted in a diminishing of 
children eligible over time. This link needs to be eliminated or 
adjusted.
      The administrative paperwork for claiming under Title IV-
E is complex, burdensome, and costly to states.
      The current system is inadequately linked to both need 
and outcomes.
      Current Title IV-E funding is highly variable across 
states.
      Funding is limited to payments for out-of-home care and 
cannot be used for child abuse prevention, treatment, and aftercare.
      The current Title IV-E funding structure is inflexible.

    The ASPE report proposes that an analysis of Title IV-E will 
explain to policymakers all they need to know about child welfare 
financing. However, an examination of only Title IV-E foster care 
funding cannot tell members of this Subcommittee very much at all about 
a state's child welfare system.
    The ASPE report uses two facts to emphasize the problems with the 
Title IV-E funding structure. The report finds that a broad range of 
per child spending currently exists. However, this report does not 
accurately portray the federal child welfare investment being made or 
the children who receive them. The report looks at only Title IV-E 
foster care funding and children receiving Title IV-E payments. The 
report calculates that Title IV-E maintenance claims, ``averaged across 
three years . . . [state spending] ranged from $4,155 to $41,456.'' The 
report also indicates that, ``the range in maintenance claims was 
$2,829 to $22,418 per Title IV-E child, with a median of $6,546.'' 
These findings are not an accurate portrayal of state's spending on 
child welfare. For instance, the HHS report cites Ohio's per child 
Title IV-E spending to be at the high end of $41,456 and Tennessee's 
spending to be a the low end of $4,155 per child. While this Title IV-E 
per child spending may be accurate, it fails to take into consideration 
that 88% of Ohio's federal child welfare funding comes from Title IV-E 
(including adoption assistance) while Title IV-E accounts for only 20% 
of Tennessee's spending on child welfare.
    The report also does not acknowledge that over one-half of all 
federal child welfare funding comes from funding streams other than 
Title IV-E. The report also fails to acknowledge that Title IV-E 
administrative and training funds provide supports to children in 
adoptive families, as well as foster families.
    The report also finds that there is not a link between higher 
spending and improved performance on the gross measures used by the 
Child and Family Service Reviews. We agree with HHS's acknowledgement 
in the report that, ``simply counting the areas of compliance present a 
very general, simplified, and broad brush approach to evaluating child 
welfare system quality.'' A link between the level of Title IV-E foster 
care funds and the results of a state's Child and Family Service 
Reviews do not tell a complete or accurate story. An additional caution 
is that an analysis of outcomes and Title IV-E expenditures cannot be 
tied solely to maintenance payments. Reimbursement for a child's food, 
clothing, shelter, school supplies, and watchful supervision never 
purports to be about outcomes, only about meeting the child's physical 
needs. Although providing the funds for two or three meals a day and a 
new pair of tennis shoes is important, it will not move children toward 
permanency.
    Again, we emphasize the point that examining Title IV-E in 
isolation, or merely restructuring it, is an inadequate response to the 
comprehensive reform needed. True reform of this nation's federal 
financial support of children in the child welfare system must not be 
limited to maintenance payments to support children in foster care or 
other residential facilities. Reform must include a continued and 
expanded commitment for Title IV-E administrative and training funding, 
which provides funding towards a strong and well-trained workforce. 
Comprehensive reform must also include a review of the other major 
funding streams that support children and families in the child welfare 
system. These supports include Title IV-B prevention funds, CAPTA, 
Medicaid, TANF, and the Social Services Block Grant.
Foster Care Caseloads are Affected by a Number of Factors
    A review of federal financing must also include a review of all of 
the factors that impact foster care caseloads, including those factors 
outside the control of the child welfare system. While there were 
523,000 children in foster care at the end of fiscal year 2003, each 
year over 800,000 children will spend some time in foster care. In 
2003, 278,000 children left foster care while 296,000 children entered 
foster care.
    Factors within the child welfare system that affect foster care 
caseloads include the lack of preventive and supportive services for 
families and children and an inadequately staffed, and in some 
instances poorly trained, child welfare workforce. Many factors outside 
the control of the child welfare system impact the number of children 
placed into foster care. These include poverty, the economy, and 
epidemics--such as the explosion of HIV-AIDS in the 1980s (a topic 
recently examined by this Subcommittee) and the crack-cocaine epidemic 
in our urban centers in the late 1980s.
    The current use and manufacture of methamphetamines in many rural 
areas is the most compelling factor to suggest that foster care 
caseloads may increase. According to a June 2003 report from the U.S. 
Department of Justice, there were 2,023 reported cases of children 
residing in seized meth labs in the United States in 2002. This 
represents an increase from 216 cases reported in 2000. National data 
also suggests that in at least 70% of all methamphetamine arrests, 
there is a child living in the home.
    Other factors that influence foster care caseloads include the 
impact of state and local policy, political leadership, how well courts 
coordinate with child welfare systems, and court oversight through 
consent decrees and other oversight efforts.
Reducing Foster Care Caseloads
    CWLA agrees with the goals of the Adoption and Safe Families Act 
(ASFA)--to ensure that children are placed into, or remain in foster 
care only if absolutely necessary for their safety. New investments in 
prevention are needed to reach this goal. CWLA fully supports a 
comprehensive child welfare system that is able to take measures to 
ensure that child abuse and neglect is prevented and that families have 
the supports they need to care for their children so fewer children 
need foster care.
    No evidence exists that demonstrates that capping federal support 
for foster care will result in fewer children needing foster care. A 
Title IV-E entitlement does not lead to more children being removed 
from their homes and placed into foster care simply because open-ended 
federal funding is provided for foster care.
    In fact, evidence contradicts suggestions that Title IV-E foster 
care funding drives state systems to remove children in order to draw-
down federal funds. CWLA examined state foster care caseloads from 1999 
through 2002, and found that 28 states showed patterns that counter 
these suggestions. These 28 states followed one of two patterns: either 
they experienced a decline in their foster care caseloads and their 
Title IV-E claims decreased faster than their non-Title IV-E funded 
placements; or their overall caseloads increased and their Title IV-E 
claims increased slower than their non-Title IV-E funded placements. Of 
the remaining 23 states, one state showed inconclusive evidence and the 
remaining 22 states results were mixed.
    If Title IV-E drove states to remove children and place them in 
foster care, then the patterns in these 28 states would have been 
different. When a state's foster care caseload increased, Title IV-E 
funded placements would have increased faster than the non-Title IV-E 
funded placements. Additionally, when a state's foster care caseload 
decreased, Title IV-E funded placements would have decreased slower 
than the non-Title IV-E funded placements.
    Foster care placements have declined from 1999 through 2002, from 
565,253 in 1999 to 532,739 in 2002. Caseloads have varied widely, with 
24 states experiencing some increases and another 27 experiencing some 
decreases. Overall, while placements declined between 1999 and 2002, 
the non-Title IV-E subsidized placements have actually increased. The 
number of children placed in foster care without federal assistance has 
increased. Between 1999 and 2002 Title IV-E placements declined from 
302,422 to 254,004, while non-Title IV-E funded placements increased 
from 262,831 in 1999 to 278,735 in 2002. The number of children placed 
in foster care who were eligible for federal funding actually 
decreased.
    Furthermore, if Title IV-E drove states to remove children and 
place them in foster care, states would not be using other flexible 
funds, such as state or local dollars and other federal funds like the 
Social Services Block Grant (SSBG) and Temporary Assistance for Needy 
Families (TANF), for foster care placements except when absolutely 
necessary. For example, Texas experienced a substantial increase of 
30.7% in overall foster care caseloads in the last five years and a 
recent Urban Institute survey of state child welfare financing found 
that Texas uses more TANF funds than any other state as a percentage of 
its overall child welfare financing. Forty-seven percent of federal 
funding for out-of-home care in Texas comes from the TANF block grant--
not Title IV-E. Title IV-E provided 39% of the state's out-of-home 
placement funding.
CWLA's Call for Reform
    CWLA believes that the way to ensure the goals articulated in ASFA 
is to ensure that states and communities have the resources necessary 
to prevent foster care placements from ever occurring. CWLA urges this 
Subcommittee to reject the Administration's proposed Child Welfare 
Program Option and instead take action on what is truly needed to build 
a comprehensive system of care so that children are protected.
    If Congress feels constrained this year, then incremental steps can 
be implemented to improve the lives of children.

      Fully fund Title IV-B (Subparts 1 and 2) and make funding 
mandatory. Furthermore, an increase should be considered so that 
services can be provided to the 40% of children who are now reported as 
not receiving services, even though abuse or neglect has been 
substantiated. As part of an effort to improve accountability, an 
annual report on Title IV-B spending should be required. This detailed 
information will provide data on how many children and adults are 
assisted with these funds. Increased funding for Title IV-B (Subparts 1 
and 2) must be part of any comprehensive plan to ensure that federal 
funds are available to prevent child abuse and neglect.
      Eliminate the financial eligibility criteria for Title 
IV-E Foster Care and Adoption assistance. Current outdated income 
eligibility criteria represent a carryover from when federal foster 
care funding was part of Aid to Families with Dependent Children 
(AFDC).

    CWLA appreciates, however, that incremental change may be necessary 
in addressing this concern; therefore, CWLA recommends, as an interim 
step, that the Title IV-E Foster Care eligibility link with AFDC be 
replaced with a link to another federal program, such as Medicaid.

      Maintain the federal commitment to provide guaranteed 
support for training child welfare workers through the Title IV-E 
training program. Access to these federal training funds should be 
expanded to support the training of private agency staff, related 
child-serving agency workers, and court staff working with any children 
in the child welfare system. The decisions made everyday by workers 
affect the lives and well being of children in the child welfare 
system. A well trained and adequate workforce will ensure better 
outcomes for these children.
      Maintain Title IV-E administrative funding as a separate 
source of funding.

    While many envision ``administrative'' funds as paying for the cost 
of office space and utilities, it is in fact much more than that. Title 
IV-E administrative funds are used to pay for the hours of court time 
spent by caseworkers preparing for and attending court hearings related 
to children in foster care. It includes the time workers spend meeting 
with the families and children to discuss what needs to be done in 
order to achieve permanency for the children or time spent helping 
foster parents cope with the needs of the children. Administrative 
costs pay for workers time spent accessing services for children that 
are not provided by the child welfare system such as education and 
mental health. Administrative costs are used to pay for the travel 
expenses workers may incur as a result of working with a specific 
child. Recruiting foster and adoptive families for specific children 
are also paid for with administrative funds.
    States reported to the U.S. Department of Health and Human Services 
that nearly half of Title IV-E Administrative funds were spent for case 
management and nearly 20% was used for pre-placement services. Less 
than 5% of the funds were reported as being used for eligibility 
determinations.
    To better understand and improve accountability, annual reporting 
requirements should be strengthened to ensure that states' use of these 
funds are more clearly reported to better describe expenditures that 
are administrative expenses and those that are case planning and 
management, pre-placement services, and other important activities.

      Extend Title IV-E funding to kinship/guardianship 
placements for children in state custody. Grants should also be 
provided to states to facilitate the development of kinship navigator 
programs. States should be allowed to have separate training standards 
for kinship placements while safety and background requirements are 
met.
      Make Medicaid targeted case management (TCM) and 
rehabilitative services available for children in the child welfare 
system. The federal matching rate for TCM and rehabilitative services 
should not be reduced.State child welfare systems should have a lead 
role in how Medicaid services are provided to children in the child 
welfare system to ensure that therapeutic and rehabilitative services 
are available to these children.
      Provide new federal targeted funds to states and private 
child welfare agencies to seed or start initiatives that expand and 
strengthen the child welfare workforce. Federal loan forgiveness should 
also be made available to students who become child welfare workers.
      Provide Native American tribes with direct access to 
Title IV-E Foster Care and Adoption Assistance and greater access to 
Title IV-B funding. The Senate version of a TANF reauthorization 
includes a provision that would expand Title IV-E access in this way. 
We urge Congress to include this provision in the final TANF bill.
      Restore funding to the Social Services Block Grant (SSBG, 
Title XX of the Social Security Act). In 2002, SSBG represented 12% of 
all federal funding for child welfare services.
CWLA Concerns About the Proposed Child Welfare Program Option or Block 
        Grant
    The ASPE report on federal foster care funding concludes with a 
recommendation in support of the President's proposed Child Welfare 
Program Option or block grant. CWLA presented this Subcommittee with 
our concerns about this proposal in testimony submitted on 6/11/03. 
(Available online at http://www.cwla.org/advocacy/
financingtestimony030611.htm) We believe that that the Administration's 
proposal does not offer the depth of reform or the guarantee of 
sufficient federal financing necessary nationwide to improve the child 
welfare system and ensure that all children are protected. The proposal 
appears to freeze federal resources at a time when there is a great 
need for significant new investments and reform in our national child 
welfare system.
CWLA's Concerns about the Administration's Proposal:
      The proposal breaks the link between federal entitlement 
funding based on the number of eligible children and transforms it into 
a fixed amount of funds no longer driven by need.
      The proposal does not address the complex array of 
federal funding sources for child welfare. Title IV-E Foster Care, the 
subject of the Administration's proposal, comprises only 38% of all 
federal child welfare spending.
      The Administration's foster care proposal is cost 
neutral, setting a five-year cap on spending. The proposal does not 
recognize the need for any new resources to build a system of care to 
better protect children and address pressing issues, including supports 
for the child welfare workforce and substance abuse treatment for 
families that come to the attention of the child welfare system.
      A state choosing the Administration's foster care option 
would receive a fixed allocation/block grant based on the current Title 
IV-E eligibility criteria that link eligibility to 1996 AFDC standards. 
This means that the allocation/block grant would be based on a 
declining number of children becoming eligible over the next five 
years.
      The proposal would not ensure that funds would be used 
for prevention services. Current Title IV-E funding does not cover all 
children in out-of-home care and few, if any states, adequately fund 
their child welfare systems so as to provide the safety and permanence 
contemplated by current law. States may have to use the fixed 
allocation/block grant funds to cover non-Title IV-E eligible children. 
There is no guarantee that any funds would be used for prevention 
services. Federal Title IV-E funding currently supports less than 50% 
of the children in out-of-home care.
      The proposed state maintenance-of-effort is based only on 
state funds currently used to draw Title IV-E federal funds. Since the 
financing of child welfare services (adoption, foster care, child 
protection, and other services) involves a variety of federal, state, 
and local funds, it appears that states would be able to reduce state 
spending by billions of dollars and still meet the federal spending 
requirement necessary to draw down the fixed allocation/block grant.
      Questions remain about the formula being developed to 
determine each individual state's share of the fixed amount of funding. 
Will all states that take the fixed allocation/block grant option and 
project they will have increased costs over the next five years be 
eligible to receive increased funds? Will the formula be based on 
historical claim or actual reimbursements? Since the overall total 
federal allotment is fixed, would some states get less if other states 
negotiated an increase since certain formulas that benefit one state 
could result in less funding for another state?
      In order to access needed additional funds if states 
experience a dramatic increase in child welfare caseloads (or an 
increasingly complex caseload with greater needs), the proposal 
suggests that states could access the TANF emergency fund. The trigger 
that would allow a state to draw these TANF funds would be based on 
national and the individual state increases in foster care. These 
criteria would not necessarily reflect what is happening in a county or 
city where the bulk of the foster care population might be found. 
Furthermore, these emergency relief funds would divert funds from TANF. 
If the same event (a recession for example) caused both cash assistance 
and foster care caseloads increase, a state may have to choose whether 
they wanted to fund increases in TANF or foster care.
      The proposal would combine Title IV-E training funds into 
the fixed allocation. States would have to choose what, if any, portion 
of the allocation could be dedicated to training and staff development.
      While an optional block grant will allow for a reduction 
in some administrative burden and cost, this benefit should not be 
over-estimated. Caseworkers will still be required to establish that 
reasonable efforts were made in keeping a family together. States will 
still be subject to financial audits. Caseworkers will still be 
required to track and input data, especially in light of any new or 
additional outcome measures that will have to be driven by data 
collection, input, and time. We should not ignore the reality that 
casework is labor intensive and complex. According to the ASPE report, 
the areas where states were found to be in substantial non-compliance 
with Title IV-E regulations include problems related to reasonable 
efforts to make and finalize permanency plans; problems with the 
licensing of foster homes; problems with background checks; and 
problems related to eligibility rules tied to the 1996 AFDC standards. 
Of these areas of non-compliance, only AFDC eligibility would no longer 
be a problem if the block grant option were taken.
Conclusion
    CWLA believes that important and necessary reforms must be enacted 
to ensure a consistent level of safety and care for all of America's 
children. We look forward to working with this Subcommittee to develop 
and move forward with proposals that meets all the needs of America's 
most vulnerable children and families and ensures that every child is 
protected.

                                 
    Statement of Miriam Aroni Krinsky, Children's Law Center of Los 
                   Angeles, Monterey Park, California
    The Honorable Bill Gray, former Majority Whip and Vice Chairman of 
the Pew Commission on Children in Foster Care, aptly observed, 
``Children need the grounding of a permanent home. You don't get that 
in foster care. You get it in a family.'' As a nation, however, we fail 
to put our money behind such sound policies.
    Because Title IV-E, the largest source of federal child abuse 
prevention and treatment funds, can only be accessed once a child is 
removed from his or her biological family and brought into the foster 
care system, the child welfare system is left with little or no 
resources to provide in-home or other preventive services that could 
keep more families intact. Nor is there fiscal encouragement for 
practices that enable children to be reunified with their birth 
families or live permanently with other relatives.
    Family maintenance and family reunification efforts are overlooked 
in the crafting of our budgetary priorities. The current risk-averse 
position of removing children from their homes provides a short-term 
solution, but may well engender long-term problems for the very 
children we are trying to protect and better. Moreover, we laud the 
valuable family resource represented by relatives who, although they 
may be reluctant to usurp the parental role, nonetheless are willing to 
assume legal guardianship and give children safe and lasting homes. 
However, we fall short of providing financial or other critical support 
for relative caregivers.
    Regulations, driven by fiscal policy, confront social workers with 
an impossible dilemma. They are forced to either wait until a situation 
becomes serious enough to warrant removal, then place children in 
foster care at great expense both to the child and the community, or do 
nothing and risk a resulting tragedy.
    Once a child is removed from his or her family, life in foster care 
can be a turbulent experience, characterized by movement from placement 
to placement, disruption of schooling, and the severing of ties with 
all that is familiar to the child, often including siblings and 
extended family. Children in foster care possess a resilience and 
indomitable spirit that serve them well, despite the worst that life 
has thrown their way, but they also pay a heavy emotional toll, often 
feeling that they are not good enough for their own family or any other 
family to want them. Their self-image declines, and prospects for 
building supportive relationships in the future pale.
    It thus is not surprising that foster youth, too often living in 
chaotic circumstances, find it difficult to keep up--75% of children in 
foster care are working below grade level in school, almost half do not 
complete high school, and as few as 15% attend college.
    Nor is it surprising that these troubled youth become troubled 
adults. Within two to four years after young people emancipate from 
foster care, 51% are unemployed, 40% are on public assistance, 25% 
become homeless, and one in five are incarcerated. Moreover, 
approximately one in three return to live with their biological 
families after ``aging out'' of foster care, even though too often none 
of the family's underlying problems has been addressed.
    With each abandonment and each severed relationship, the child 
finds it more difficult to trust again, to move beyond his or her 
victimization, and to develop healthy relationships in the future--
whether it be with a caregiver, family member, or his or her own child 
someday. One former foster youth observed, ``Coming out of foster care, 
I didn't know how to have relationships with people. I always found a 
way to burn those bridges.''
    Another youth wrote the following in response to the 2005 Los 
Angeles Foster Care Awareness Campaign theme, Where Have I Come From . 
. . Where Am I Going? ``As I look back, my life has been rough for the 
past 17 years. My mom left me and my sister crying in a bucket of 
tears. It was hard for me, but my sister told me to stay strong. One of 
these days we are going to find our own home. I told her when that day 
comes everything will be all right. But for right now, I am going to 
finish going to school during the day and write my poems during the 
night.''
    Searching for solutions and new approaches in no easy task. The 
Children's Law Center of Los Angeles (``CLC'') is the largest 
representative of foster youth in California, if not the nation. CLC is 
committed to help devise and promote new practices in foster care on a 
local, state, and national level.
    There are a variety of areas where we believe that new approaches 
to our nation's longstanding and less than successful way of doing 
business could enhance our ability to address the needs of abused and 
neglected youth in foster care. And in light of every state's failure 
to achieve the standards set forth in the recent federal child welfare 
system reviews, to date, the time is ripe for change.
    First, consideration should be given to reform of the ``front 
door'' of the system and the need for more flexible funding mechanisms. 
Current restrictions on federal funding streams favor entry of children 
into foster care rather than the development of supportive prevention 
and diversion programs. In particular, Title IV-E--the largest share of 
our federal child welfare financing system--fails to devote adequate 
resources to programs and services aimed at maintaining children at 
risk, when appropriate, in the home.
    Indeed, there is a disincentive to serve children within their home 
under existing federal funding eligibility requirements that tie 
monetary allocations to the placement of children in out of home care 
and the length of time a child spends in care. A social worker has 
relatively few programs or child welfare services, either long term or 
on an emergency basis, to provide immediate stabilization and 
maintenance of a child at risk within his or her family of origin. In 
many instances it would be in the child's best interest to keep the 
family intact, with supportive services directed toward that end.
    Under the current funding structure, however, the lack of resources 
available to children who would be best served within their existing 
family results in early warning signs being effectively ignored. At the 
time of a family's initial contact with child welfare, the risk may not 
be serious enough to warrant the drastic step of removing the child 
from his or her family home. The lack of funding for cost-effective in-
home services or ongoing visitations by the social worker, coupled with 
long wait lists at community based agencies, ultimately places the 
child and family at greater risk for future abuse.
    Unless they apply for a waiver of these regulations, states are 
barred from spending federal money to provide a full range of services 
that might stabilize fragile families at risk, protect children in 
their own homes, and divert them from the foster care system. 
Tellingly, states that have received waivers and thereby are released 
from federal-funding constraints point to positive results. Innovative 
programs that provide a continuum of services from prevention to 
treatment, to support for children once they leave the foster care 
system have been shown to have significant success.
    Second, current federal financing laws effectively close off 
guardianships for many relatives by making federal financial assistance 
available only to relatives who either remain within the foster care 
system or choose to adopt. In addition, relative foster parents lose 
financial assistance if they become legal guardians. This makes it 
impossible for families who cannot afford to carry the financial burden 
of care on their own to pursue legal guardianship.
    The number of children in long-term care declined by one third in 
states where Title IV-E waivers opened the door to use of federal 
dollars to support permanent legal guardianship by relatives, according 
to a national study, Family Ties: Supporting Permanence for Children in 
Safe and Stable Foster Care with Relatives and Other Caregivers. Mark 
Testa, Fostering Results Co-Director and author of the brief,observed: 
``Our research shows that foster children are safer and more secure 
when placed with relatives than in foster homes unknown to them.''
    California's experience points to the promise of this model. The 
state established the Kinship Guardianship Assistance Payment program, 
Kin-GAP, an option that allows relatives to receive a financial subsidy 
for the children in their care. The program has contributed to the 
reductions in the number of children in long-term kinship foster care 
in the state by 42.8 percent during its first two years.
    This program enables families to receive needed support, without 
having unnecessary government intrusion including social worker visits 
and court appearances required by law when a child is in foster care. 
As a result, children placed with relatives have the advantage of 
maintaining cultural and familial connections and establishing a more 
normal family life.
    ``Kin-GAP has been good for our family,'' a California grandfather 
of four said. She explained that, prior to her exit from foster care 
through the Kin-GAP program, ``I used to take a day off work several 
times a year, so I could go to court with my grandchildren. A social 
worker came out to our house every month. The children were 
embarrassed, maybe a little ashamed, to be in foster care, and I was 
frightened that a judge who didn't know us was making decisions about 
them.''
    As a result of Kin-GAP, California's child welfare and court 
systems have benefited from decreased supervised caseloads and 
administrative cost savings. However, the program is funded through the 
state's Temporary Assistance for Needy Families program, thereby 
potentially limiting its future stability and coverage. Moreover, even 
with Kin-GAP, relatives continue to struggle based on woefully 
inadequate support and assistance.
    In sum, federal child welfare funding can and should be 
restructured in a manner that would enable local jurisdictions to fully 
fund child welfare services, whenever and wherever those services are 
needed. As recommended in the report of the Pew Commission on Children 
in Foster Care, FOSTERING THE FUTURE: Safety, Permanence and Well-Being 
for Children in Foster Care, new approaches should be developed to 
release the current federal funding straitjacket and allow for use of 
the largest source of federal child welfare funds in a manner that 
better attends to the needs of children and families, without 
jeopardizing child safety.
    A more flexible federal funding stream would allow for the creation 
of effective and comprehensive methods of diverting families from the 
foster care system, while also stimulating greater innovation aimed at 
supporting families. By allowing child welfare agencies to implement 
services aimed at serving families before tragedy strikes, the Federal 
Government will ultimately realize the ability to serve more families 
with greater success.
    Increased flexibility in the use of resources would allow counties 
and states to develop and access a wide variety of community resources 
to respond to the safety and permanency needs of all children and 
families in the most timely, effective, efficient and least intrusive 
manner. Such a restructuring of financing for child welfare services 
would enable states to develop a more effective and fact-driven 
differential response at the front end of the foster care system, based 
on a rational assessment of both risk to the child and family 
strengths. This approach would also enable the more intensive court 
supervised interventions to be focused on children and families with 
the greatest need.
    The Pew Commission recommended not simply greater leeway in the use 
of federal dollars, but also that states be allowed to ``reinvest'' 
federal dollars that would have been expended on foster care into other 
child welfare services, if those approaches safely reduce the use of 
foster care. States should be allowed to use federal funds proactively 
for services to keep children out of foster care or to leave foster 
care safely.
    The Commission also recommended that the Federal Government expand 
and streamline the child welfare waiver program, devote resources to 
training, evaluation, and sharing of best practices, and provide 
bonuses to states that make workforce improvements and increase 
permanence for children in foster care. All of these approaches warrant 
the Committee's serious consideration.
    As Pew Commissioners wrote, ``[W]e believe that dissatisfaction 
with the failure of the current financing structure to produce better 
outcomes for children is sufficiently strong that leaders on both sides 
of the aisle are ready and willing to consider new financing 
proposals.'' We hope this positive prognostication is accurate.
    Talking about better programs for abused and neglected children is 
not sufficient. Our nation must start acting and developing a federal 
budget that reflects a tangible commitment to a better future for 
abused and neglected youth. These are the children of our community and 
our future. They deserve our very best efforts.
    Thank you for affording me the opportunity on behalf of the 
Children's LawCenter and the thousands of young clients we represent to 
offer my perspectives in regard to ways our nation can better serve our 
neediest and most vulnerable children.

                                 
 Statement of Frank J. Mecca, County Welfare Directors Association of 
                   California, Sacramento, California
    The County Welfare Directors Association of California (CWDA) 
appreciates the opportunity to submit testimony for the record 
regarding federal foster care financing. CWDA has long advocated for 
changes to the federal child welfare financing structure in order to 
better serve abused and neglected children and their families. We 
support federal changes that will help states and counties achieve 
better results for these children and move them more quickly into safe, 
permanent homes. Each of California's 58 counties operates a child 
welfare program, with oversight from the state and Federal Governments. 
Counties are partnering with the state and with their communities in 
numerous ways to enhance children and family services, but federal 
reform is necessary to achieve the desired results.
    According to the California Department of Social Services:

      More than 700,000 children come into contact with 
California's child welfare system annually.
      On any given day, more than 175,000 children are in 
contact with the child welfare system.
      More than 86,000 children were in foster care in 2004. 
That compares to 108,000 children who were in foster care in 2000.
      Of the children in foster care, about 19,000 will reunify 
with their parents and 8,000 will be adopted during the course of a 
year.
      Most children entering foster care (76 percent) were 
removed from their homes for neglect-related reasons.
      Of children who enter foster care, more than 50 percent 
are age five or under.
      Every year, California county child welfare agencies 
receive more than one-half million reports of suspected child abuse and 
neglect. Of these referrals, the vast majority of the cases receive no 
services, despite assessments that indicate many of these families 
would benefit from services and support to prevent child abuse and 
neglect.\1\
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    \1\ California Department of Social Services (August 26, 2004). 
Child Welfare in California: Facts at a Glance. http://
www.dss.cahwnet.gov/cdssweb/res/pdf/Factatglance.pdf

    Based on our counties' experiences in administering California's 
child welfare system, CWDA has six legislative principles it wishes to 
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share for the record:

      CWDA supports maintaining Title IV-E funding as an open-
ended entitlement, including funding for administrative activities, 
training, services and automation;
      CWDA supports increased flexibility in the use of IV-E 
funding for a broader array of services, especially to achieve the 
Child and Family Services Reviews outcomes;
      CWDA supports increased Title IV-B funding, which is a 
more flexible funding source for services to children and families;
      CWDA supports de-linking the Title IV-E eligibility rules 
from the old AFDC program;
      CWDA supports federal funding for guardianships to 
enhance permanency options for children; and,
      CWDA supports the flexibility afforded under the Rosales 
decision to extend IV-E eligibility to relatives caring for children 
previously eligible only for Temporary Assistance to Needy Families 
benefits.

    Our detailed comments follow.
Maintain IV-E Entitlement Funding
    CWDA strongly urges that the IV-E entitlement be maintained. Foster 
care maintenance, administration, training, and automation funds should 
be kept as uncapped funding streams. Maintaining the federal commitment 
to a stable, dependable funding source is critical for states as they 
invest in the very programs that the Child and Family Services Reviews 
(CFSR) encourage them to create and expand. Those investments are 
needed to prevent abuse and neglect, intervene appropriately in 
families where abuse and neglect are occurring, and achieve timely, 
permanent solutions for children.
    Last year, California built on the model started with the CFSR by 
initiating a statewide system improvement effort recognizing that local 
communities are in the best position to assess their strengths and 
needs and jointly develop strategiesto improve and achieve child 
safety, permanence and well-being. Known as the Child Welfare System 
Improvement and Accountability Act (AB 636), the law established a 
comprehensive approach to oversight and accountability which measures 
and monitors the performance of every county's child welfare services 
system.
    We support the continuation of separate entitlement funding for the 
Statewide Automated Child Welfare Information System (SACWIS). The 
ability of states and counties to accurately and effectively measure 
their improved outcomes over time is an important element in improving 
the child welfare system.
    Title IV-E administrative funds support social workers who form the 
system's foundation. These vital staff provide the day-to-day contact 
with children and families, foster families, the court system, 
community agencies, and other partners. They work to ensure the best 
result for children and families in their caseload. Key to the system's 
success is regular, quality contact between them. Court orders 
requiring enhanced services and the increasing workloads are already 
straining the system in many parts of the country, including 
California. Additionally, CFSR outcome measures depend in large part on 
social workers' ability to meet with and assess the needs of children 
and families. Funds for placement services and administrative 
activities are therefore fundamentally intertwined.
    California, like other states, faces a shortage of trained social 
workers, inadequate funding to hire enough workers, and increasing 
demand for a wider array of services and supports for families. A 
comprehensive study of child welfare workloads in California counties 
released in 2000 found that our child welfare workers carry caseloads 
twice the recommended levels, making it difficult, if not impossible, 
for them to provide services beyond the basic protections to children 
and families--let alone the enhanced services that are needed in order 
to substantially improve counties' performance.\2\ Since that time, the 
state's fiscal situation has not improved, and the number of 
requirements placed on child welfare staff have only increased. Those 
demands have also increased due to increasing methamphetamine abuse in 
a number of our counties. Predictable and stable federal funding which 
continues the federal, state and county partnership is a critical 
underpinning to the IV-E system.
---------------------------------------------------------------------------
    \2\ California Department of Social Services (April 2000). SB 2030 
Child Welfare Services Workload Study: Final Report. Sacramento, 
California.
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Provide Flexibility to Use Title IV-E for Broader Services
    Title IV-E continues to focus on out-of-home foster care placement 
rather than providing prevention and reunification services. Further, 
Title IV-E dollars are limited primarily to income-eligible children. 
Ironically, use of federal Title IV-E funds is not allowable for most 
of the services and supports that the CFSR seeks to increase. 
Consequently, states and counties must use their limited Title IV-B 
funds and patch together funding from other inadequate sources. This 
fragmented system means that thousands of families are unable to 
receive the services they need, and children remain in foster care far 
longer than they should.
    Enabling states and counties to use Title IV-E funds in a more 
flexible manner would lead to system improvements. Allowing counties to 
use Title IV-E to pay for substance abuse and mental health treatment, 
for example, could ensure faster access to these services. Parental 
substance abuse is estimated to be a factor in two-thirds of foster 
care cases.\3\ Similarly, up to 85 percent of children in foster care 
exhibit significant mental health problems.\4\
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    \3\ U.S. Department of Health and Human Services (April 1999). 
Blending perspectives and building common ground: A report to Congress 
on substance abuse and child protection. Washington, DC. Retrieved from 
http://aspe.hhs.gov/hsp/subabuse99/subabuse.htm
    \4\ Marsenich, L. (2002). Evidence-based practices in mental health 
services for foster youth. Sacramento, CA: California Institute for 
Mental Health.
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Increase Funding and Access to Title IV-B Funds
    Counties use a patchwork of numerous programs, including funding 
from the substance abuse, mental health, education, and medical care 
systems to serve children and families in the child welfare system. 
Counties also use Title IV-B funding, an allocation that is much 
smaller but more flexible than Title IV-E. Title IV-B funding can be 
used for a wide range of activities to protect and reunify families, 
but it is an insufficient allocation that most California counties 
exhaust in the first three months of each fiscal year.
    Increasing the amount of funding provided through Title IV-B would 
assist counties and states in providing the types of services allowable 
under the existing rules for this funding source, including expanding 
investments in providing prevention, reunification and family support 
services. In California, a Title IV-B expansion would support ongoing 
child welfare system reform initiatives and facilitate implementation 
of the State's Program Improvement Plan (PIP).
De-link Title IV-E from AFDC
    CWDA supports eliminating the AFDC look-back requirement, which 
wastes precious resources on the processing of unnecessary paperwork, 
so that limited funding and social worker's time can be focused on 
direct services to children and families. The cost of care and services 
for children whose parents don't meet the outdated AFDC criteria are 
the sole responsibility of the states and, in California, the state and 
counties. Federal funding should be available to children in need of 
protection regardless of their parents' income.
    County staff must evaluate every child who enters foster care to 
determine those who are Title IV-E eligible, using AFDC rules that are 
nearly a decade old. Federal financial participation is available only 
for children who are removed from income-eligible homes based on the 
old rules. Yet, states and counties are federally required to provide 
the same services to non-IV-E eligible children and meet the same 
outcomes, without any federal assistance. Because the income 
eligibility rules have not been updated, the number of eligible 
California children has dropped. Between 1999 and 2002, the number of 
foster children receiving Title IV-E funds in California dropped by 
24.9 percent, and the proportion of the foster care caseload that was 
IV-E eligible was reduced by 7.85 percent.\5\ This decline is expected 
to continue if nothing is changed, with the state and counties paying 
the entire cost for ineligible children.
---------------------------------------------------------------------------
    \5\ U.S. House of Representatives, Committee on Ways and Means, 
2004 Green Book.
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Provide Federal Funding for Guardianships
    About 40 percent of all children first entering foster care in 
California live primarily in a relative care placement. These children 
are more likely to be placed with their siblings, less likely to have 
multiple foster care placements and more likely to maintain their 
living situation and family relationships when they turn 18 than 
children who are placed with non-relatives.\6\
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    \6\ Needell, B., Webster, D., Cuccaro-Alamin, S., Armijo, M., Lee, 
S., Lery, B., Shaw, T., Dawson, W., Piccus, W., Magruder, J., & Kim, H. 
(2004). Child Welfare Services Reports for California.
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    CWDA strongly supports federal financing of guardianships. Due to 
the success of California's ground-breaking Kin-GAP program created in 
1998, thousands of California children are in permanent homes. However, 
the future of Kin-GAP may be in jeopardy, since it is financed with 
increasingly scarce TANF funds. Kin-GAP has encouraged relatives to 
enter into permanent guardianships for children as an alternative to 
adoption. Participants receive monthly subsidies equal to the amount 
they would have received as foster parents, with a sliding scale based 
on regional costs and the age of the child. Kin-GAP, however, cannot 
assist non-relatives who assume guardianship of children, because of 
TANF funding rules.
    CWDA supports federal legislation to include guardianships as an 
allowable activity in the Title IV-E maintenance funding stream, and 
enable children placed into guardianships to retain IV-E eligibility, 
with the maintenance subsidy payable to the guardian. Continued receipt 
of IV-E funding would be consistent with the federal Adoption and Safe 
Families Act of 1997 (ASFA), which contains provisions aimed at 
promoting adoption and permanent placement for children removed from 
their homes due to abuse or neglect.
Maintain Rosales v. Thompson
    CWDA strongly opposes any efforts to legislatively overturn Rosales 
v. Thompson. Thousands of vulnerable children living with needy 
caretaker relatives have benefited from the decision of the Ninth 
Circuit Federal Court of Appeals to uphold a California state court 
decision to extend Title IV-E eligibility to these families. If Rosales 
wereoverturned, caregivers of these children would be eligible only for 
lower, TANF-funded assistance, which would make needy relatives less 
financially capable of caring for children and increase the likelihood 
that those children will not have a stable placement. Overturning the 
decision would run counter to a nationwide focus on recruiting and 
supporting relative caregivers.
Conclusion
    The County Welfare Directors Association of California appreciates 
the opportunity to provide written comments on federal financing of 
foster care. Thoughtful and well-structured reforms are vital to 
children and families. States and counties need an enhanced and more 
flexible federal partnership to improve the safety, permanence, and 
well-being of children and families. CWDA stands ready to work with 
members of the Human Resources Subcommittee to achieve those goals.

                                 
          Statement of David Kass, Fight Crime: Invest in Kids
    Thank you for the opportunity to submit this written testimony. My 
name is David Kass, and I am the Executive Director of Fight Crime: 
Invest in Kids, an anti-crime group of more than 2,500 police chiefs, 
sheriffs, prosecutors, and victims of violence from across the country 
who have come together to take a hard-nosed look at what the research 
says works to keep kids from becoming criminals. Law enforcement 
leaders know from their firsthand experience that child abuse and 
neglect is often only the first chapter in a tragic story of violence. 
Abuse and neglect increase the likelihood that a child will engage in 
later violence. Leaving children in dangerous homes where they may be 
subject to continuing abuse or neglect makes them even more likely to 
grow up to become criminals, endangering the safety of our communities.
    We commend the House Ways and Means Subcommittee on Human Resources 
for drawing attention to the need to increase prevention services and 
address the inadequacies of the child welfare system. As you consider 
reform of child welfare financing, we encourage you to adopt the 
following recommendations:

      Maintain Title IV-E foster care maintenance ``room and 
board'' funding as an uncapped entitlement;
      Allow states to reinvest funding saved by reducing foster 
care expenditures into prevention and services, without capping foster 
care funding;
      Increase funding for the Promoting Safe and Stable 
Families program and in-home parent coaching programs, and reject 
proposals that combine designated prevention funding with other funding 
thereby decreasing expenditures that help prevent children from being 
abused or neglected in the first place; and
      Consider child welfare reform through a deliberative 
process that allows for full debate of this complex, critical issue 
with the goal of changing federal policies to best protect children--
not through the budget reconciliation process, which has the sole goal 
of reducing expenditures.
Child Abuse and Neglect
    Each year, 900,000 cases of child abuse and neglect are 
investigated and verified by state child protection systems. The Third 
National Incidence Study of Child Abuse and Neglect, a Congressionally 
mandated study, concluded that the actual number of children abused or 
neglected each year is three times the officially recognized number, 
meaning that an estimated 2.7 million children in America are abused or 
neglected every year. It is estimated that more than 2,000 children die 
from abuse or neglect each year, including 1,400 deaths that are 
officially reported.
    Research confirms what law enforcement leaders know--that being 
abused or neglected sharply increases the risk that children will grow 
up to be arrested for a violent crime. Severe abuse and neglect, 
particularly when they occur during the earliest months and years of 
life, can permanently injure children in ways that make them much more 
susceptible to engaging in violence. The best available research 
indicates that, based on confirmed cases of abuse and neglect in just 
one year, an additional 35,000 violent criminals and more than 250 
murderers will emerge as adults who would never have become violent 
criminals if not for the abuse or neglect they endured as kids.
Child Abuse and Neglect Prevention
    We strongly agree that prevention must be the focus of child 
welfare reform. By the time law enforcement gets involved, it is too 
late to undo the damage that results from child abuse and neglect. 
After all, over half of the children who die from abuse or neglect were 
previously unknown to Child Protective Services, and children who 
survive abuse or neglect are dramatically more likely to engage in 
later crime and violence.
    Fortunately, there are effective prevention programs that are 
proven to reduce child abuse and neglect and later delinquency, helping 
to reduce the need for foster care placements. For example, the Nurse 
Family Partnership in-home parent coaching program provides home visits 
by trained nurses to low-income, first-time mothers from pregnancy 
until the child is two years old. The nurses provide coaching in 
parenting skills; help reduce cigarette, alcohol, and drug use during 
pregnancy; and provide other support. Rigorous research, published in 
the Journal of the American Medical Association, shows that when the 
Nurse Family Partnership randomly assigned at-risk mothers to 
participate in this program, children whose mothers were left out of 
the program had five times as many confirmed reports of abuse or 
neglect as the children whose mothers received this in-home parent 
coaching program. Fifteen years after services ended, the mothers who 
participated had only one-third as many arrests, and their children had 
only half as many arrests compared to those who received no services. 
The RAND Corporation concluded that the Nurse Family Partnership saved 
$4 for each $1 spent, and paid for itself by the time the kids were 
three years old.
    Unfortunately, too many families do not have access to such 
prevention programs. In fact, the Nurse Family Partnership serves only 
12,000 of the 500,000 eligible women nationwide. This inadequacy has 
led to numerous preventable foster care placements, and an 
unnecessarily large number of kids growing up to become violent 
criminals.
    However, proposals that would remove the long-time federal 
guarantee of foster care ``room and board'' funds for the protection of 
abused or neglected children would jeopardize the safety of these 
children, while providing no guarantee or likelihood that any 
substantial part of the funding would go to prevention.
Maintain Uncapped Foster Care ``Room and Board'' Funding
    For kids who have been abused or neglected, every attempt should be 
made to keep children safely at home. However, when that is not 
possible, we must ensure the availability of a safe foster home so that 
kids are not subject to continuing abuse or neglect. Researchers 
compared outcomes of abused and neglected children who were initially 
placed in foster care with outcomes of abused and neglected children 
who were initially left at home and then later placed in foster care 
because of continuing abuse or neglect. They found that abused and 
neglected children who were wards of the court and initially remained 
at home, but were later placed in foster care because of continuing 
abuse or neglect, were 27% more likely to become violent criminals than 
abused or neglected children who were initially placed in a safe foster 
home. In fact, four out of ten wards of the court who were abused or 
neglected and left in their homes but later needed to be placed in 
foster care grew up to become violent criminals.
    To ensure that children are not left in dangerous homes where they 
are subject to continuing abuse or neglect, it is critical that 
Congress maintain Title IV-E foster care maintenance ``room and board'' 
funding as an open-ended entitlement. Between 1999 and 2003, over \3/4\ 
of the states had increases in the number of children needing a safe 
foster home during at least one year. Over \1/4\ of the sates had 
increases of more than ten percent in at least one year but did not 
reach the increased level needed to access the contingency fund in the 
foster care cap legislation proposed by Subcommittee Chairman Herger 
last year. In 2003, ten percent of the states had foster care caseloads 
that were at least 35% higher than their 1999 caseloads.
    There are many reasons why a state's foster care caseload may grow, 
some of which are beyond the control of a child welfare agency. For 
example, the growing epidemic of methamphetamine is already beginning 
to lead to a substantial increase in children needing a safe foster 
home in some states. In 2003, the Drug Enforcement Administration 
counted more than 17,000 methamphetamine lab seizures by law 
enforcement across the country. These seizures alone resulted in 
thousands of children needing foster care placements. In addition, 
judges and child protection workers in Colorado have labeled 
methamphetamine the ``walk away'' drug because many parents who are 
addicted to methamphetamine abandon their children, resulting in the 
need for more safe foster homes.
    Foster care caseloads may also rise as states improve their ability 
to fully and more accurately investigate reported cases of abuse or 
neglect. As stated above, the actual number of children abused or 
neglected nationally is estimated to be three times the officially 
recognized number. Increased abuse and neglect education and awareness 
outreach efforts to doctors, nurses, law enforcement officers, 
teachers, child care providers, and the general public may also result 
in the identification of more children who have been abused or 
neglected and need foster homes.
     We are extremely concerned that, in the event of capped foster 
care ``room and board'' funding, a cash-strapped state with a rising 
foster care caseload and set funding would have to make a difficult 
decision: risk leaving children in dangerous homes where they may be 
subject to continued abuse or cut other services for kids, such as 
prevention, to pay for foster care. Either option would result in more 
child abuse and neglect and more crime. Therefore, we agree with the 
Pew Commission on Foster Care's recommendation to maintain the foster 
care ``room and board'' payments as an uncapped entitlement.
    At the July 13th, 2004 hearing before your subcommittee, Pew 
Commission Chair Bill Frenzel stated the Pew Commission's opposition to 
capping foster care ``room and board'' assistance, even with a 
contingency fund. As Mr. Frenzel stated:
    We recommend maintaining that entitlement without a cap. The 
members of the Pew Commission feel strongly that protecting children 
who cannot stay safely in their own homes is a shared Federal-State 
responsibility--and that the Federal Government should maintain its 
responsibility, especially if the need for foster care increases 
dramatically for reasons beyond the control of State policymakers, as 
was the case in the early 1990s. Mr. Chairman, we recognize that you 
designate the TANF Contingency Fund as a safety net for States that 
experience severe increases in foster care. In a capped system, a 
contingency fund is essential. But in our deliberations, we concluded 
that an uncapped system was a better approach, in part because the 
Contingency Fund is hard for States to access in a timely manner and 
may not contain sufficient funds to respond to a nationwide surge in 
the need for foster care.
    We agree that it would be very difficult for states to access the 
contingency fund proposed in the legislation that Chairman Herger 
introduced in July 2004. The average number of children in foster care 
in a state would have to increase by 15% (provided the national 
caseload also increased by 10%), or 20%, in order for a state to access 
the contingency fund for additional resources. The amount that could be 
claimed from the contingency fund would be limited nationally and on a 
state by state basis (to 20% of the state's federal foster care 
allotment). In the past 25 years, there have only been two years when 
foster care caseloads increased more than 10% nationally in one year. 
Those two years were during the peak of the crack cocaine epidemic--
1987-1988 and 1988-1989. In addition, the contingency fund would only 
help the state for the year in which it experienced the dramatic 
increase in caseloads. The following year, even if the caseloads remain 
at the same elevated level, the state would revert to its previously 
set foster care ``room and board'' capped funding for that year.
    The law enforcement leaders who constitute Fight Crime: Invest in 
Kids have seen children sexually abused, abandoned, or beaten so 
severely that there is no question that they need safe foster homes. 
Foster care funding is not ``free money'' encouraging states to take 
kids away from decent parents. To receive federal foster care funding, 
states must contribute a funding match. In addition, to receive federal 
foster care funding, a judicial determination must be made for each 
child that there were reasonable efforts to prevent foster care 
placement. As Assistant Secretary for Children and Families Wade Horn 
stated during the June 9th hearing, there is no evidence that uncapped 
foster care funding is an incentive to unnecessarily place kids in 
foster care. The June 2005 Office of the Assistant Secretary for 
Planning and Evaluation Issue Brief on Federal Foster Care Financing 
states, ``Some have argued that because foster care is an entitlement 
for eligible children while service funds are limited, Title IV-E 
encourages foster care placement. However, it seems unlikely that 
caseworkers make placement decisions on the basis of children's Title 
IV-E eligibility, nor is it likely that judges use Title IV-E status as 
a significant factor in their placement rulings. Indeed, caseworkers 
and judges are often unaware of children's eligibility status.''
Allow States to Reinvest Saved Foster Care Funding
    Capping foster care ``room and board'' funding is not the only way 
to allow states to shift funding from foster care to prevention and 
services if they reduce their foster care expenditures. We support the 
Pew Commission's recommendation to amend Title IV-E to allow states to 
reinvest foster care savings, while maintaining Title IV-E foster care 
``room and board'' payments as an uncapped entitlement. Under such a 
proposal, if a state reduced its foster care ``room and board'' 
expenditures below the state's projected foster care expenditures by 
reducing the number of children in foster care or the length of stay in 
foster care, the state could reinvest the federal savings in prevention 
and child protection. This proposal would promote flexibility and would 
help ensure that states that can safely reduce their foster care 
expenditures have funding to pay for prevention and services to keep 
kids at home.
Increase Funding Designated for Child Abuse and Neglect Prevention
    We are also concerned that the proposed new flexible state grant, 
Safe Children, Strong Families, in the foster care bill that Chairman 
Herger introduced last year, would not accomplish the goal of increased 
funding for prevention services. Historically, states have used multi-
purpose funding for prevention services only after they have met needs 
related to kids who have already been abused or neglected, except when 
funding is specifically designated for prevention, such as in the Title 
IV-B Promoting Safe and Stable Families (PSSF) program. A September 
2003 Government Accountability Office report demonstrated that over 70% 
of funding from the flexible Title IV-B Child Welfare Services program 
is spent on child welfare system uses to help kids who have already 
been abused or neglected and only 10% is spent on family support/
prevention and family preservation, while over 60% of funds from PSSF 
supports prevention and family preservation services and only 8% is 
spent on child welfare system uses. The Safe Children, Strong Families 
grant would combine funding from PSSF with other child welfare funding 
streams in a flexible grant. Without funding specifically designated 
for upfront prevention services, states would likely decrease--rather 
than increase--their investments in prevention.
    Instead of combining the Promoting Safe and Stable Families program 
in a flexible grant, we recommend that Congress increase funding for 
this program by at least $1 billion over five years and make all of the 
funding mandatory to ensure that the program receives its full 
authorized amount. Increasing funding for PSSF would enable states to 
implement programs proven to prevent child abuse and neglect and 
thereby reduce foster care placements. The discretionary component of 
PSSF is authorized at $200 million per year. Despite the fact that the 
President had requested this amount, PSSF has never received more than 
$101 million per year in discretionary funding. Making all of the PSSF 
funding mandatory would ensure that the full amount is available to 
help prevent child abuse and neglect, which would reduce foster care 
placements and later crime. In addition, we recommend that Congress 
provide funding specifically for evidence-based in-home parent coaching 
programs for at-risk families, such as the Nurse Family Partnership 
described above. To reduce foster care caseloads and keep children 
safely at home, Congress should increase investments specifically 
designated for proven prevention programs like in-home parent coaching.
Use a Deliberative Process to Consider Child Welfare Reform
    Since child welfare financing is extremely complex, we urge the 
Committee to use a deliberative process that allows for full 
consideration of the best ways to prevent child abuse and neglect and 
ensure that children have safe, permanent homes through legislation 
with the goal of changing federal policies to best protect children. We 
urge you to not include child welfare financing reform in budget 
reconciliation legislation, which has the sole goal of reducing 
expenditures and would limit the opportunity for debate and adequate 
attention to this critical issue.
    By maintaining Title IV-E foster care ``room and board'' payments 
as an uncapped entitlement, allowing states to reinvest saved foster 
care expenditures on prevention and services, and increasing funding 
for the Promoting Safe and Stable Families program and in-home parent 
coaching programs, Congress would protect the safety of kids who have 
already been abused and neglected while preventing more kids from 
suffering abuse or neglect. These strategies will help to break the 
cycle of violence caused by child abuse and neglect that victimizes 
many thousands of additional innocent people each year.
    Thank you for this opportunity to present our views on how your 
subcommittee can help to reduce child abuse and neglect and later 
crime.

                                 
            Statement of Pamela Pressley, Generations United
    As an organization dedicated to improving the lives of children, 
youth, and older people through intergenerational strategies, 
Generations United is pleased to have this opportunity to submit 
testimony about federal foster care financing issues to the 
Subcommittee on Human Resources of the Committee on Ways and Means.
    Generations United recommends that foster care and child protection 
programs be maintained in a way that ensures continued access to the 
programs while sustaining and improving the level and quality of 
services and protections in order to enhance outcomes for children and 
families. Efforts to provide flexibility to the states should be tied 
to improved outcomes for those intended to benefit from the programs 
and resources.
    Among the children served by the foster care system are those being 
raised by grandparents or other relatives. According to the U.S Census 
2000, more than six million children across the country are living in 
households headed by grandparents or other relatives. More than 130,000 
of those children are part of the formal foster care system.
    Children are being raised in relative headed families due to a 
variety of factors such as parental substance abuse, incarceration, 
HIV/AIDS, death, poverty, mental health issues and military deployment. 
Subsidized guardianship programs have demonstrated success supporting 
families and obtaining permanency goals.
Recommendation: Allow states to use Title IV-E federal funds for 
        subsidized guardianship
    Many relatives choose to become licensed foster parents in order to 
receive foster care payments which provide them the necessary resources 
to raise children in their care.
    As with all children, the goal is permanency, however in certain 
family situations, guardianship or permanent custody might be the best 
permanence option available when children cannot return home. A 
federally funded Subsidized Guardianship Program would allow states the 
flexibility to use Title IV-E funds to support subsidized guardianships 
that move grandparent-headed families from temporary to permanent 
placements. State waiver programs have demonstrated the cost 
effectiveness of the use of such funds and the positive impact this has 
on families.
Benefits of Subsidized Guardianship
    Subsidized guardianship arrangements are particularly important for 
children raised by grandparents or other relatives because they:

      Enable families to maintain bonds with the birth 
parent(s) who may have a physical or mental disability that makes them 
unable to care safely for the children in their own home;
      Honor the wishes of many older children who may not wish 
to be adopted and/or to break ties with their birth parents;
      Allow birth parents who may one day be able to resume 
caregiving activities to regain custody of the child with the oversight 
and approval of the courts and/or child welfare agency;
      Respect the norms existent in many cultures where 
terminating parental rights defies important societal norms of extended 
family and mutual interdependence;
      Provide the courts with flexibility to limit or expand 
the legal guardians' and parents' authority as necessary to best serve 
the changing needs of individual children, their caregivers, and birth 
parents; and
      Limit state oversight and intervention in the lives of 
children who are being raised by grandparents or other relatives, for 
whom adoption and reunification have been ruled out, and who want to 
minimize the states ongoing role in their lives.
Supportive Research
    An evaluation of the Illinois Title IV-E waiver program found that 
over five years, subsidized guardianship provided permanence for more 
than 6,800 children who had been in foster care, that discussing all 
permanency options actually helped to significantly increase the number 
of adoptions, and that the children involved perceived guardianship as 
providing as much security as adoption. GU strongly encourages states 
to use Title IV-E federal funds for subsidized guardianship
    Generations United is the only national membership organization 
focused solely on promoting intergenerational strategies, programs, and 
public policies. We represent more than 100 national, state, and local 
organizations representing more than 70 million Americans. GU is the 
only national organization advocating for the mutual well being of 
children, youth, and older adults. We serve as a resource for educating 
policymakers and the public about the economic, social, and personal 
imperatives of intergenerational cooperation.
    Thank you to the members of to the Subcommittee on Human Resources 
of the Committee on Ways and Means for the opportunity to submit 
testimony about federal foster care financing issues.

                                 
           Statement of Lisa Gladwell, River Edge, New Jersey
    It is with mixed feelings that I make this, my third statement for 
the record regarding my family's plight to reunite: to reverse the 
unjust and illegal termination of a vulnerable and loving family and 
the responsibility of the Federal Government to ensure state adherence 
to federal standards. Without a requirement of accountability the 
Federal Government is party to the annihilation of families and the 
deprioritization of innocent children's well being through the creation 
of income streams for states.
    Understanding the spirit and good intent of the Adoption Assistance 
and Child Welfare Act of 1980 and the Adoption and Safe Families Act of 
1997, it is none the less irresponsible to distribute hundreds of 
millions of taxpayer dollars to immoral state administrations hungry 
for handouts which will maintain the bureaucratic status quo absent of 
any compliance to federal standards.
    My children's last day at home was the same day I asked for help 
with my alcoholism. My children were never abused or neglected, but by 
virtue of my disease I was classified as negligent. My husband, not an 
alcoholic, was torn from his sons' lives because he took the advice of 
addiction experts, encouraged the recovery of his children's mother, 
educated himself and believed what the professionals said: that 
addiction is a family disease and recovery is attainable. The State of 
New Jersey told him he must rid himself of the problem--me--if he was 
ever going to have his children returned. He moved out of our home 
thereafter. But, that was insufficient to those bent on destroying our 
family. He was declared in court as ``non-autonomous'' for 
participating in recovery support activities and programs designed to 
educate and encourage an addiction free life. Ultimately his belief in 
and following the advice of experts has proven correct (I have been in 
recovery for over three and a half years at this time), but ``doing the 
right thing'' has left him estranged from his sober wife and completely 
severed from his two young sons. Is this the application of the 
legislation the Federal Government had in mind?
    Since my testimony and appearance before your committee (November 
9, 2003 statement published as part of the Human Resources' November 
19, 2003 Hearing on Improved Monitoring of Vulnerable Children, orally 
testimony at the January 28, 2004 Human Resources Hearing to Review 
Federal and State Oversight of Child Welfare), my experience and 
knowledge has expanded greatly in regard to the immoral Child Welfare 
Machine and the state practice of child trafficking. What I have 
learned is frightening. The depth of in-grained corruption, attitude of 
entitlement, unchecked power and unethical conduct necessary to feed 
the Child Welfare Machine is astonishing as is the complicit acceptance 
of this practice by public servants charged to protect and defend the 
vulnerable from being pulverized and sorted into income producing 
commodities and discarded scraps of human waste.
    When pressed for specifics in my family's case, James Davy, the New 
Jersey Commissioner of Human Services has made contradictory and 
blatantly false statements in writing as to the basis of the state's 
action. The New Jersey Child Advocate, requested to provide an 
independent assessment of those statements, chose not to answer on the 
record, despite having the information, responsibility and moral 
obligation to do so. New Jersey Legislators, state attorneys, 
commissioners' staff, members of the judiciary, ``advocates'' and 
public servants all have given witness to and provided validation to 
the existence of what is nothing less than domestic child trafficking, 
but yet all are powerless against the fiscally driven Child Welfare 
Machine, fueled on the carcasses of vulnerable families and discharging 
the best interest of children as an emission.
    This practice of bullying of weak individuals by the Child Welfare 
Machine in the bureaucratic school yard, egged on by associates, in 
plain view of those lacking the courage and/or power to speak up and 
with an eye on the next, unsuspecting target is reprehensible. Lest we 
forget:
                  First they came for the Communists,
                         And I didn't speak up,
                     Because I wasn't a Communist.
                      Then they came for the Jews,
                         And I didn't speak up,
                        Because I wasn't a Jew.
                   Then they came for the Catholics,
                         And I didn't speak up,
                      Because I was a Protestant.
                         Then they came for me,
                   And by that time there was no one
                        Left to speak up for me.
                                  --Reverend Martin Niemoller, 1945

    Ignorance abounds--and the survival of the Child Welfare Machine 
depends on that. Federal Legislators have confidently stated there are 
no federal incentives involved in adoption. The public, by enlarge, is 
unaware of their tax dollars being spent to finance the immoral 
decimation of families. But, those in significant decision-making 
positions within the state judiciary as well as other key roles are 
acutely aware of this significant source of revenue which funds their 
paychecks. The Director of New Jersey's Division of Youth and Family 
Services' staff personally told me, after speaking with her superiors 
and upon conceding that my family's case involved unethical actions, 
that they are not interested in introspection or willing to examine any 
of their ethical lapses. It is the job of the [understandably 
overtaxed] Child Advocate to ``catch them.''
    No longer blissfully ignorant, I now have personal knowledge 
beginning with the unfortunate victimization of my innocent loved ones. 
It is no wonder that I have been warned to be cautious for my speaking 
out on this issue financially threatens many powerful people. I have 
met many others who also hold the permanent scars from the 
reprehensible Child Welfare Machine and even more who are being 
processed now as fiscal fuel for this bully. These travesties of 
justice are not just happening in New Jersey--there are countless inter 
and intra state victims of this immoral practice. Often it is in the 
interstate conflicts that the perverse role of federal funding most 
prominently reveals itself. No one else should have to hear during 
their last visit with their children the caseworker nonchalantly 
volunteer, ``Don't worry, this is not goodbye. As soon as they turn 
eighteen they will come home.''
    My reluctant journey is to eliminate this federally financed 
holocaust: to provide a voice for those who have been robbed of theirs 
by personal devastation, dehumanization and suppression by the machine 
feeding upon them. I do not take this journey lightly. It is mine, but 
it was not my choice (or that of my loved ones). It is not my strength, 
courage or limited abilities that carry me on this path. It is belief 
in the spirit and principles of this great nation, its respect and 
concern for its entire people and, finally, divine intervention that 
drives me forward. Again, I will be part of the solution: my family and 
others deserve nothing less.
    In recovery over three and a half years, since well before the 
termination of my family, I am active in recovery support. From my 
individual recovery to active leadership roles in regional as well as 
state organizations, my life is a testament to the reality (and 
miracles) of recovery. To attain the ultimate financial target of 
severing my parental rights, the state's [admitted] non-experts'' in 
addiction erroneously doomed me to a hopeless life of addiction, 
lacking the psychological capability to maintain a meaningful recovery. 
With that mistaken and self-serving prognosis, the Child Welfare 
Machine sentenced my family to execution.
    There are many of ``us'' in all stages of ``life sentences'' due to 
the abuse of federal funding. The Child Welfare Machines, thumbing 
their noses at federal standards, are thriving on federal dollars. The 
Jackson ``family'' of Collingswood, NJ momentarily brought the Child 
Welfare Machine to the national spotlight. Initially, to squelch the 
public outrage, NJ DYFS workers were blamed, removed and/or fired. 
Through public scrutiny, the NJ Child Welfare Machine was forced to 
prostrate itself to falsely assuring the public the issues have been 
rectified and to dim the national spotlight. Quietly, however, New 
Jersey Child Welfare Machine returned to the status quo. The workers 
were quietly returned, the administration continued intact and the 
financial incentive that created this devastating situation continues 
unabated today. What of the Dollars of Hollywood, Florida and the 
Davisons of Beachwood, New Jersey?
    Today the corrupt Child Welfare Machine and domestic child 
trafficking are healthy and continue to churn out victims. These 
travesties of federal funding continue and will do so until states are 
held accountable to federal standards: genuine requirements to consider 
family preservation, provide reasonable efforts for family 
reunification. Financial incentives to traffic children must be 
eliminated in favor of the seeming ``expense'' to preserve and reunify. 
It is irresponsible and morally reprehensible in light of reality to 
continue to financially fuel the corrupt Child Welfare Machine without 
oversight and accountability. The Federal Government has an obligation 
to its citizens/stakeholders to ensure their dollars are being spent 
wisely and ethically.
    I have made many contacts through this tragedy and received much 
moral support. But in my search for assistance from those interested in 
and responsible for affecting change, I have been unsuccessful to date. 
Amongst notable others, the Children's Bureau responded with a form 
letter completely unrelated to this practice. In fact, there seemed to 
be no acknowledgement that they were concerned or making a note of 
these issues. Again, ignorance is bliss. Personally I am aware of a 
website under development with frightening accurate details of the 
Gladwell tragedy, which may include (readily available for your 
examination and investigation) documents, tapes, transcripts, etc. 
Also, there are documentaries underway calling attention to these 
atrocities. But, I ask of you, the federal committee culpable for 
monitoring and controlling this funding of corruption, where is MY 
family to go for justice? What can I do to help you make this 
immorality and devastation stop for all those victimized? Please help 
the vulnerable and innocent from being destroyed: stop the states from 
putting their fiscal priorities before the best interest of children 
and the preservation of family.
    May God continue to bless your good works. I look forward to 
hearing your thoughtful words.

                                 
     Statement of Glenna Bible Mullenix, Jefferson City, Tennessee
    I appreciate the work you are doing and the fact that you have 
allowed me to submit my information. This is only the tip of the 
iceberg, as far as I, and a lot of other people are concerned. I am 
feeling so much guilt, as I made most of the referrals to CPS, because 
I thought they could help me. I don't think I am as naive as I once 
was, the last 8 months' research has helped me grow in truth and 
knowledge. To whom does DCS answer? DCS is like the Vatican; ruled by 
them, contained by them, a great many resources for money, they 
``govern'' us, we have no way to be heard (of course the church does 
have confession booths, but where do we go? Don't say to court, that's 
a joke!) The 2 judges I have dealt with are so ``DCS'' oriented, I 
wonder if DCS pays them or entertains them, or owns them? I bet if some 
of the money was cut back, DCS wouldn't be so quick to hold children 
for 2 or 3 or 5 years! And what was W thinking when he enacted this 
adoption deal, giving DCS the ``incentive'' to steal kids, put them up 
for adoption and get the money? That is like the proverbial carrot in 
front of the rabbit!
    SOME OF MY FINDINGS DO GO BACK SEVERAL YEARS, BUT IT STILL OBVIOUS 
THAT A LOT OF WHICH MS. MILLER WAS CONFRONTED WITH, AT HER TIME OF 
BEING APPOINTED BY GOV. BREDESEN, HAVEN'T EVEN BEEN ADDRESSED, LET 
ALONE CORRECTED. THE ONLY POSITIVE I WAS ABLE TO SEE IS THAT HER FIRST 
DUTY WAS TO PROTECT TENNESSEE FROM A LAWSUIT FILED AGAINST HER 
DEPARTMENT, BEFORE SHE TOOK OFFICE. I AM SURE SHE GOT KUDOS FOR THIS, 
BUT WHAT NOW? BASICALLY SHE HAS UNTIL 2006 TO COMPLY! BUT IF I CAN SEE 
SOME OF THEIR FAULTS, U AM NOT SURE THEY ARE GOING TO MAKE IT.
    MY 3 GRANDCHILDREN, THE WOLFE CHILDREN, IN FOSTER CARE THROUGH THE 
MORRISTOWN OFFICE, CERTAINLY APPEAR TO BE A POSITIVE FISCAL RESOURCE, 
FOR DCS, IS THIS WHY THEY ARE STILL IN CUSTODY?
    ALSO, OMNIVISIONS IS STILL CONTROLLING DENNIS' CARE AND EXAGERATING 
HIS NEED FOR THEM TO STILL BE CO-ORDINTING HIS CASE. ANOTHER, MORE 
DISTURBING FACT, IS THE REQUEST HAS BEEN MADE, NUMEROUS TIMES, TO 
REMOVE DENNIS FROM HIS FOSTER MOM, AS SHE IS BEING ALLOWED, BY OMNI,AS 
FAR AS I AM CONCERNED, AND ELMER STAPLETON, IN PARTICULAR, TO KEEP HIM, 
HOPING SHE WILL HAVE HIM FOR 2 YEARS. SHE WANTS TO ADOPT HIM AND HAS 
NOT HIDDEN THIS FACT AS EARLY AS JANUARY OF 2005!!!!!!!! THIS CASE 
EXEEDS THE LIMIT NECESSARY FOR FOSTER CARE OF ALL 3 OF THESE CHILDREN!! 
THEY HAVE ME AND THE BOYS' DAD, BOTH APPROVED TO HOME THEM, AND YET DCS 
AND OMNI STILL ARE DRAGGING THEIR FEET. THIS CANNOT BE IN THE BEST 
INTEREST OF THESE CHILDREN, I DON'T CARE WHAT ANY CASEWORKER, CO-
ORDINATOR, OR DIRECTOR SAYS!!! I DO BELIEVE I HAVE MADE MYSELF CLEARLY 
UNDERSTOOD.
GLENNA BIBLE MULLENIX
THE CONTINUING CRISIS
    In October of 2004, the regional newspaper The Tennessean reported 
that: ``A recent series of alarming cases--ranging from severe physical 
abuse to prolonged sexual abuse to the beating death of a toddler--has 
prompted renewed scrutiny of the state Department of Children's 
Services' ability to protect children.''
    One state legislator suggested that the problems in DCS are so 
entrenched that the agency may have to be abolished and rebuilt from 
the ground up.
    ``One of the things we have to decide is, do we abolish DCS and 
start over?'' said state Senator Thelma Harper (D, Nashville).
    ``There are days when every one of us has that thought,'' said 
Department head Viola Miller. ``We may not be perfect, but we're better 
than nothing.''
    Senator Harper, a member of the Select Committee on Children and 
Youth, said Miller came into a ``sinkhole'' when she took over the 
agency in January, inheriting 20,000 cases that hadn't been acted upon 
in two years.
    Some child advocates said that some DCS workers simply don't 
respond to reports of abuse, even when the abuse has been confirmed. If 
families question the judgment or authority of a caseworker, the 
workers ``take it personally'' and sometimes become vindictive, said 
Helen Shelton, a victims' advocate with the Tennessee Victims 
Coalition. She also said workers sometimes fail to deal with confirmed 
cases of abuse.
    ``I have found in my 15 years of experience that when the authority 
of DCS is questioned, the best interest of the child is set aside and 
they take it personally,'' she said. ``I'm so sick of this department 
abusing their authority and failing to protect the best interests of 
the child.''
    Linda O'Neal, executive director of the Tennessee Commission on 
Children and Youth, conceded that some caseworkers aren't receptive to 
criticism or suggestions from the families they work with but said 
there is a new training program designed to alleviate that problem. The 
Commission she directs is an independent state agency formed to 
evaluate services for children in state care and act as an advocate for 
legislative and policy improvements.
    DCS head Viola Miller also conceded that some case workers have not 
been as open and compassionate as they should have been in dealing with 
some situations, while describing her new training program.
    ``A big focus of this training is about building trusting 
relationships with families and treating people with empathy, 
compassion and dignity,'' she said.
THE NEW YEAR BEGINS
    The year 2005 began with a report of the parents of a six-month-old 
boy presenting a $600,000 claim to the Tennessee Claims Commission 
after their son drowned in the bathtub in a foster home.
    The foster mother, Sherika Hamilton, was scheduled to make her 
first court appearance on charges of aggravated child neglect in mid-
January.
    DCS became involved with the family after the boy was born, and 
after his mother was hospitalized for post-partum depression.
    Another veil was lifted on the operations of the juvenile courts 
when it came to light that Wilson County Judge Barry Tatum had been 
ordering foreign-born women to learn English for the good of their 
children. In a January case, he insisted that an 18-year-old Mexican 
woman take language classes and consider using birth control.
    ``A parent has the right to raise a child the way they see fit, but 
government gets involved at some point,'' Tatum said. ``I'm concerned 
about the civil rights of the child and what will happen to her.''
    The immigrant woman and her American-born toddler both entered the 
state's custody in 2003 after a complaint was made to DCS accusing the 
mother of neglect by not following up on immunizations said a DCS 
spokesperson.
    Local civil rights attorney Jerry Gonzalez said the case sounded 
similar to another recent order issued by Tatum, a decision that 
Gonzalez is appealing. In that case, Gonzalez said, Tatum had ordered a 
Mexican woman in a neglect case to learn basic English within six 
months. If she didn't comply, a hearing was to be held to consider 
terminating the mother's parental rights to her 11-year-old daughter.
    ``Ordering a woman to learn English or lose her child, that's 
blatantly unconstitutional,'' Gonzalez said. ``The First Amendment 
allows all of us to speak whatever language we choose to speak. There's 
nothing compelling us to speak English, to learn English or be able to 
write English.''
    Judge Tatum said he could not immediately remember the case 
Gonzalez referred to because of the volume of cases that move through 
his courtroom.
    ``This is clearly not acceptable, and we're worried that the judge 
has gone over the line,'' said Hedy Weinberg, executive director of the 
American Civil Liberties Union of Tennessee. ``A judge should not 
require a parent to learn English to have access to their child, and 
the government should not be telling parents how to communicate with 
their children.''
    ``The need for fundamental reform of the child welfare system was 
readily apparent from the mid-1980s on,'' writes Lisbeth Schorr, who 
explains that: ``Current services and approaches, while much 
criticized, have a constituency often resistant to change, including 
tens of thousands of caseworkers trained in traditional approaches.'' 
Many of them suffer from what Schorr describes as a ``bureaucratic 
malaise,'' one that ``routinely sabotages and undermines the agency's 
capacity to change.''
    Sociologist John Hagedorn recounts his efforts at reforming the 
Milwaukee child welfare system as having been thwarted by a deeply 
entrenched ``good old boy network'' composed of lifetime bureaucrats 
and services providers. He cautions his reader to beware of ``symbolic 
reforms.'' Among the lessons he learned was that efforts at reforms 
``historically have been coopted by bureaucracies and used to feed 
their self-interests.''
    Beyond the interests of the caseworkers and the upper level 
management bureaucrats is an army of self-styled professionals who earn 
enviable livings serving as field consultants and expert witnesses 
while masquerading as benevolent ``reformers'' to legislators and other 
outsiders with their eyes on a child welfare agency caught in the 
spotlight.
    An army of counselors, psychologists, parent educators, group home 
providers, foster parents, home visitors, attorneys, as well as other 
industry vendors and adjuncts add only further to the burden of 
bringing about reform.
    Another army of educators provides the industry with training 
seminars, and with an ever-growing body of largely useless and 
derivative articles in industry journals, even as they rake in 
uncounted millions in federal grants. A recent examination of one such 
writer's resume indicates a federal grant allotment of $80,000 for just 
one article in print. Simply stated, the child welfare system has far 
too many ``stakeholders'' with far too much at stake to allow for 
meaningful reforms.
    Through a variety of industry-only trade associations, a discreet 
spider's web exists behind the helping facade. Attendance at 
invitation-only industry events, such as the annual CPS Risk Assessment 
Roundtable, help to ensure both the cross-contamination of ideas and 
the building of cordial affiliations between various players in the 
industry.
    The National Center for Youth Law currently maintains a 
``Litigation Docket,'' which holds an ever-growing list of legal 
actions taken against states and their child welfare institutions for 
gross violations against children.
    Yet is this the best answer to be devised? ``This system has been 
sued and sued and orders have been issued and people have just 
continued on their merry way,'' observed George Miller as he presided 
over the federal hearings leading to the passage of the Adoption 
Assistance and Child Welfare Act during the 1970s.
    Service provision to parents in need is a rarity in the field of 
child protection, and in this respect, Tennessee mirrors well the 
majority of other states:
    Stakeholders were in general agreement that services to parents, 
particularly in foster care cases, are not adequate to support 
reunification and that the agency in general tends to be child-focused 
rather than family-focused in its service approach. Stakeholders noted 
that the agency will specify for parents the services in which they are 
expected to participate, but will not facilitate access to, or 
engagement in, those services. In addition, parents often are expected 
to pay for the services themselves if their insurance does not cover 
them.
    Retaliation against foster parents who advocate on behalf of the 
children in their care is a theme that is familiar to many child and 
family advocates, and Tennessee provides no exception to the rule, as 
the report explains:
    A key problem noted by stakeholders in two sites included in the 
onsite review is that foster parents sometimes are threatened with the 
removal of children in their care if they ask about subsidies or other 
forms of financial supports. Several stakeholders also expressed the 
opinion that DCS rarely provides foster parents with services to 
preserve placements when foster parents indicate that they are 
experiencing problems with a child in their care or with their ability 
to continue as foster parents.
    By the time the federal reviews were completed, it was reported 
that: ``No state fully complies with standards established by the 
Federal Government to assess performance in protecting children and 
finding safe, permanent homes for those who have suffered abuse or 
neglect.''
    Tennessee scored among the ranks of the worst. ``Federal officials 
said 16 states did not meet any of the seven standards. These states 
were Alaska, California, Georgia, Illinois, Indiana, Michigan, 
Minnesota, Nebraska, North Carolina, Ohio, Oklahoma, South Dakota, 
Tennessee, Washington, West Virginia and Wyoming,'' the New York Times 
reported.
    In June of 2003, DCS conducted some housecleaning, firing its top 
Memphis official, Regional Administrator Juanita White, amid an 
investigation into the deaths of several children under state care. The 
Shelby County office under her direction had come under scrutiny 
earlier during the year when The Associated Press reported on a state 
audit that found the administrator tried to conceal questionable 
purchases, including $5,750 paid for the use of a yacht club.
    For the seventh consecutive year, Children's Services 
inappropriately requested and received reimbursement from TennCare for 
children not eligible for TennCare services. Inappropriate 
reimbursements were for incarcerated youth, children not in state 
custody, children on runaway status, and hospitalized children. Total 
overpayments were $1,742,440.
    In November of 2003, the Children's Rights lawsuit now settled, 
Sheila Agniel, the federal court monitor in the settlement, found that 
DSC was complying with only 18% of the corrective provisions it was 
required to meet by February 2005.
    The service delivery system for foster children and their families 
needs improvement
    IS DCS AN ADOPTION AGENCY? JUST FOR THE MONEY? THEY ARE SELLING OUR 
BABIES!
Special Section: November Is National Adoption Month
HHS Awards Adoption Bonuses to States
    On October 14, 2004, U.S. Department of Health and Human Services 
(HHS) Secretary Tommy G. Thompson announced the awarding of $17,896,000 
in adoption bonuses to 31 States and Puerto Rico. The funding comes 
from the Adoption Incentives Program and is given to States that were 
successful in increasing the number of adoptions from the public child 
welfare system over the number of adoptions in 2002.
    This is the first time that bonuses have been given to States and 
territories since the program was revised and strengthened in December 
2003. The bonuses go to State child welfare agencies for a variety of 
child welfare and other related services including adoption and 
adoption-related services.
    ``Adoption is a wonderful option for families and must be promoted 
by all levels of government,'' said Secretary Thompson. ``The Federal 
bonuses we are announcing reward States that have worked hard to help 
children--particularly older children--in the child welfare system find 
loving, adoptive homes.''
    The Adoption Incentive Program, which was revised and strengthened 
last December by the Bush Administration, for the first time adds a 
focus on the growing proportion of children aged 9 years old and above 
who are in dire need of adoption before they ``age out'' of foster 
care. Two key changes that strengthen States' adoption and child 
welfare services are:

      An additional bonus of $4,000 to States for each child 
aged 9 and above adopted from the public child welfare system. This 
bonus is on top of the current $4,000 provided for each child and on 
top of the $2,000 bonus for each special needs child adopted.
      The threshold to receive incentives has been reset based 
on the number of adoptions in FY 2002, making States that reached their 
highest number of adoptions in the earlier years of the program more 
likely to qualify for a bonus.

    ``President Bush has worked hard to increase the number of 
adoptions so more children can grow up in safe, stable, and loving 
homes,'' said Dr. Wade F. Horn, HHS Assistant Secretary for Children 
and Families. ``Today's grants continue this Administration's efforts 
to promote adoption from the foster care system so no child will be 
left behind.''
    Currently, there are 129,000 children in the public child welfare 
system waiting to be adopted. Of this number, approximately 50,000 
children each year are placed into adoptive families. Approximately 
19,000 children ``age out'' of the foster care system without ever 
having the opportunity to be adopted. The adoption bonus is in addition 
to a website previously launched by ACF--www.adoptuskids.org--aimed at 
the recruitment and retention of adoptive families for children in the 
foster care system.
    For a complete list of HHS adoption bonuses, go to www.acf.hhs.gov/
adop_inc_2003.htm.
Related Item
    For more information about the Adoption Incentive Program, read 
``President Signs Adoption Promotion Act of 2003'' in the December 
2003/January 2004 issue of Children's Bureau Express (http://
cbexpress.acf.hhs.gov).
    I SENT THE NEXT LETTER TO TENNCARE, THINKING THEY WERE PAYING THE 
BILL:

TO WHOM IT MAY CONCERN,

    I AM UNDER THE IMPRESSION THAT DCS, MORRISTOWN, AND OMNIVISIONS, 
KNOXVILLE, MAY BE HOLDING ALL 3 OF MY GRANDCHILDREN WITHOUT VALID 
REASONS. THE OLDEST, A BOY, ERIC DANE WOLF, HAS ADHD, WHICH IS WELL-
CONTROLLED BY MEDS AND IN THE RIGHT ENVIRONMENT. HIS MOM IS THE ONLY 
ONE WHO HAD A PROBLEM WITH HIM DUE TO HER ABUSIVE BOYFRIEND. MY 
DAUGHTER IS NOW IN TREATMENT FOR CO-DEPENDENCY.
    THE SECOND OLDEST CHILD, ALSO A BOY, HAD BEEN DIAGNOSED AS ADHD, 
BUT WHILE IN DCS AND OMNI CUSTODY IT WAS DETERMINED HE IS NOT ADHD. 
HOWEVER, DCS AND OMNI ``CLAIM'' HE STILL NEEDS A ``THERAPUETIC'' FOSTER 
HOME AND THEY STILL NEED TO SEE HIM? I CLAIM THIS IS FRAUDULANT! HE IS 
A VERY SWEET, DOCILE CHILD AND NEEDS TO AT LEAST BE IN THE SAME HOME 
WITH HIS BROTHER AND SISTER. HE HAS BEEN SEPARATED FROM THEM SINCE 2 
WEEKS INTO CUSTODY. THIS IS SO WRONG! THE YOUNGEST, A GIRL, IS FINE, 
JUST NEEDS OUT OF FOSTER CARE ASAP, AS DO THEY ALL.
    AS A FORMER NURSE, WHO ONCE DID QA/UR, I CAN KINDA ``SMELL'' 
ATTEMPTS TO INCREASE A LENGTH OF STAY WITHOUT ADEQUATE CRITERIA! THANK 
YOU.

GLENNA BIBLE MULLENIX

TO WHOM IT MAY CONCERN:

    I have just returned from a non-productive meeting at DCS with 
Amanda Dunn, Leslie England, Teresa Dockery and Omni workers Amanda 
(don't know last name) and Elmer Stapleton. It started out like they 
wanted to address concerns I have expressed via e-mail and phone 
messages. It turned out to be to tell me how I had violated the 
program.
    Even though I expressed my concerns, valid concerns like, why is 
Dennis' foster mom so obsessive and thinks she is going to adopt him 
and why did she tell me ``Dennis has no family''? DCS agreed, verbally 
that it had been inappropriate, but Omni, Elmer, took up for her as if 
what I had said was a lie, it isn't a lie! I also asked Elmer why he 
attended Dane's ball games, since he is not Dane's Omni worker due to a 
conflict of interest since his mom is Dane's foster mom. He told me it 
was a public place. I told him that's what I said about going and DCS 
now forbids me to go watch my grandson play ball as it is considered a 
non-supervised visit. I have no contact with him, I watch, cheer him 
on, and leave. I am sickened unto death at the things DCS AND OMNI get 
by with and I see some of it as fraud. In particular that Omni is 
seeing Dennis, although it has been determined that he is not ADHD and 
his behavior is excellent, yet I heard his date of release is NOVEMBER, 
2006!!!!!!!FRAUD!!!!!!! He is separated from his brother and sister and 
there has been no attempt to reunite them so they can bond once again. 
STALL TACTIC LEADING TO FRAUD! WHICH MAY EVENTUALLY LEAD TO TERMINATING 
PARENTAL RIGHTS AND THUS ADOPTION AND MORE MONEY? DID SIMON LEGREE HAVE 
ANYTHING TO DO WITH FOUNDING DCS? Dane has been allowed visits with his 
Dad and begs not to be taken back to his foster home and cries. NOT 
ACTING IN THE BEST INTEREST OF THE CHILD! He doesn't need to be in 
foster care either! What is his release date, November, 2010? Ariel has 
never had issues and could have been placed with me, as Tennessee will 
grant custody to someone who has been an integral part of the 
children's lives and her mother and I are the only ones in her life! 
Based on this, I should have been considered long ago and considered 
now for immediate custody.
    My daughter, their mom, is in a treatment program, finally, and 
appears to be very involved so she can get her children back and be the 
mother they need. It may take her 9 to 12 months, but that's fine.
    The paternal grandfather and his wife, the children's step-
grandmother, are allowed visits with the children in their home, phone 
calls, go to ball games, etc., but I am not. Want to know why? Because 
they go along, like cattle, as does the boys' dad, and accept anything 
DCS and Omni tells them. I on the other hand stand up for the 
injustices I see, the children's readiness to leave foster care, and 
the need to do it ASAP due to being alienated from their family and 
because several have already expressed an interest in adopting them. 
GROSS MISCONDUCT BY FOSTER MOMS
    These paternal grandparents refused to take custody of them on Oct. 
8th and that's why they put them in foster care. When they were close 
to being placed a time before this (this is their first time in foster 
care) I called these grandparents and asked them to help me keep them 
out of foster care and was told, ``let them go to foster care,'' they 
could not have cared less! My daughter didn't have them call and ask if 
I would take them, because she had lied to them about me and DCS 
thought I was not a very good candidate, due to the lies. She was angry 
at me for the referrals to DCS I made and wanted to get back at me and 
knew she could hurt me by keeping the children from me. Since Jan has 
been in treatment, she has notified DCS that she told the lies and is 
trying to rectify her error.
    I now have to consider if I want supervised visits, the only person 
involved to need to be supervised, or not. I am considering my options. 
I truly enjoy watching my grandsons play ball, like I did last year. 
Giving my support in what they are doing is so important to them and 
most anything they do I just think they are the best!
    Bottom line, I must be the only person to ever question the reasons 
for continued stay in foster care, confronted them and Omni regarding 
this, how unreasonable the plans to keep them is, and the continued 
care by Omni constitutes fraud. I am not popular, but one thing Ms. 
Dunn said is that I am a good child advocate. I knew I was and I will 
continue to be until DCS and Omni do the right thing for these 
children. I was told I needed to ``work with'' them. I told them I did, 
I made most of the referrals for almost 4 years and since then have 
seen their inconsistencies, been lied to, had several people tell me 3 
or 4 answers to the question I ask, and use the court system as a 
scapegoat when they are unable to come up with a valid reason for my 
concerns about the actions they have taken.
    I have written everybody but God and I talk to Him, but nobody 
seems able or willing to do something to correct all of my allegations, 
concerns, and requests. The judge even told me I had no legal claim to 
get custody of these children when I knew a person with an integral 
role, had the right. I am that person. I am so tired of swimming 
upstream by myself. I can't afford a lawyer and tried to get one pro 
bono, but when they learn DCS is involved, they drop it like a hot 
potato.
    Remember, Morristown DCS also handles Claiborne County, where baby 
Haley lived and DCS never acted on her referrals, stating there wasn't 
a valid need, well, not until she was rushed to the hospital, near 
death, due to child abuse!
    PLEASE HELP MY GRANDCHILDREN GET OUT OF ``THE SYSTEM'' BEFORE THEY 
ARE SWALLOWED UP. THEIR FAMILY NEEDS THEM AND THEY NEED US.

                                 

Statement of Thomas Atwood, National Council For Adoption, Alexandria, 
                                Virginia

    Dear Chairman Herger and Members of the Subcommittee:
    The National Council For Adoption thanks you for the 
opportunity to submit this written statement for your June 9, 
2005 hearing's record, on the subject of federal foster care 
financing. The National Council For Adoption (NCFA) applauds 
the Human Resources Subcommittee's perseverance in studying and 
reforming federal foster care financing. The Chairman's and 
Subcommittee's leadership in addressing this issue has helped 
to create an excellent opportunity to take an important next 
step in foster care reform. In both political parties, and 
across the philosophical spectrum, there is a rare moment of 
consensus regarding many key principles and policies that can 
be adopted to better serve children in foster care, through 
financing reform.
    There are important differences, which must be debated and 
resolved in the legislative process. But in reviewing the major 
federal foster care financing reform proposals--such as the 
Child SAFE Act of 2004, the report of the Pew Commission on 
Children in Foster Care, and the President's Child Welfare 
Program Option--it is clear that there are large areas of 
agreement, both in principle and policy. Whatever one's ideas 
regarding the ``perfect'' reform agenda, many of the ideas that 
have been presented would be improvements upon the existing 
policy. We should not let the perfect be the enemy of the good. 
NCFA urges all leaders and stakeholders to take advantage of 
this rare moment of consensus and achieve the achievable, for 
the sake of America's deserving foster children.
    At the level of principle, there is widespread agreement 
that federal foster care financing must be made more flexible, 
so that states are not so narrowly restricted to spending their 
federal dollars on foster care maintenance. NCFA agrees with 
the many advocates and policy makers who have cited the need to 
enable states to direct some of these funds to prevention and 
reunification efforts. NCFA would add parent recruitment and 
preparation to this short list of priorities for which states 
need more flexibility in their federal foster care funding.
    There are enough prospective parents resources in America 
to care for the children in foster care, but they need 
leadership in order to recognize their callings to adopt or 
foster parent. There are more than 425 married couples for each 
child waiting to be adopted out of foster care, and millions of 
qualified singles who could adopt as well. There are three 
places of worship for each child waiting to be adopted, and all 
of America's faiths exhort their believers to care for orphans. 
There are private adoption agencies that, with training, could 
join in serving children in foster care, through adoption and 
foster placements, pre- and post-placement counseling, and 
other services. Increased flexibility in federal foster care 
funding would loose the ``laboratories of democracy'' on this 
strategic agenda of parent recruitment and preparation.
    States need to be able to spend their foster care dollars 
on effective efforts to prevent children from entering the 
system in the first place and to rehabilitate families so they 
can be reunified. But please consider one cautionary note: 
While moving in this direction, let us not forget one of the 
main reasons Congress enacted the Adoption and Safe Families 
Act in 1997. At that time, many children were languishing in 
foster care because the child welfare system's efforts to 
preserve the family sometimes went beyond any reasonable 
expectation that it was in the child's interest to do so. We 
should be careful to avoid recurrences of that problem.
    At the policy level, there is widespread consensus on: 
allowing states to reinvest unspent foster care funds in other 
child welfare services; expanding and improving child welfare 
waiver options for states; de-linking federal foster care and 
adoption assistance payments from AFDC income standards, to 
cover all children; extending foster care and adoption 
assistance payments to tribes and territories; and guaranteeing 
increasing foster care funding. If all that Congress 
accomplished was to enact these policies, Congress will have 
achieved a great deal.
    The issue of whether foster care maintenance payments 
should be capped is important. But considering that both sides 
support, at a minimum, guaranteed rising foster care spending 
and access to contingency funds, it is difficult to see how the 
outcome of that debate, whatever it is, should cause a reformer 
to oppose the final legislative product. NCFA will have more to 
say about these and other related issues in a later 
publication.
    Mr. Chairman and Members of the Subcommittee, if ever there 
was a good use of federal taxpayer dollars, it is to provide 
for right and timely placements of children in foster care. 
America's foster children are in public care for their 
protection, through no fault of their own. The National Council 
For Adoption applauds your efforts to ensure that federal 
foster care funding is adequate, and appropriately directed, in 
order to ensure the safety, permanence, and well-being of 
America's deserving foster children. NCFA stands ready to 
assist you in this worthy cause, in any way possible.

                                 
Statement of Terry L. Cross, National Indian Child Welfare Association, 
                            Portland, Oregon
    The National Indian Child Welfare Association (NICWA) submits this 
statement on the Administration's proposal to change the financing 
structure of the Title IV-E foster care program.
    The June 9 testimony of Wade Horn, Department of Health and Human 
Services Assistant Secretary for Children and Families, relies on an 
issue brief from the Office of Human Services Policy as a justification 
for the Department's recommendations. The Department's study concerns 
state administration of the Title IV-E foster care program. We expect 
that significant improvements could and should be made to the IV-E 
program as administered by the states. We also recognize that the study 
is a snapshot of the program not taking into account, for instance, 
local and state funds that are available for foster care services and 
up-front investments that states have made in their child welfare 
systems.
    Our organization, on the other hand, is focused on tribal 
government delivery of child welfare services to the children under 
their jurisdiction. Foster care is an important component of any tribal 
service delivery system, but tribes have not been allowed to directly 
access the Title IV-E program, and, therefore, we find that 
generalizations about state service delivery have limited application 
to American Indian and Alaskan Native (AI/AN) children under tribal 
care. Our experience, accumulated over 20 years of working with tribal 
and state governments on child welfare issues, reveals important 
principles that guide successful program and policy decisions. We 
actively use these to guide our work in improving access and the 
quality of child welfare services to this population. First, tribal 
governments have a sovereign right and governmental responsibility to 
protect their children. They also have unique knowledge and resources 
that are critical to successfully addressing child abuse and neglect 
issues with their tribal members. Therefore, service delivery and 
financing schemes must support them as the primary service provider and 
decision-making entity. Second, AI/AN children have better outcomes 
when their connection to their cultures, families, and tribes are 
supported and actively incorporated in child welfare interventions. 
Third, the ability to exercise tribal authority and responsibility is 
based in large part on the resources available. Adequate resources are 
necessary for tribal governments to successfully carry out their 
authority for children under their jurisdiction.
    The Administration's proposal, entitled ``The Child Welfare Program 
Option,'' would provide to tribes and tribal consortia $30 million 
annually in capped entitlement funds to operate Title IV-E foster care 
programs. Only those tribes that can ``demonstrate the capacity'' to 
operate a Title IV-E program would be able to access these funds. When 
the Administration first made this proposal in its budget three years 
ago we were very encouraged by its recognition that something should be 
done about the fact that the Title IV-E statute does not include tribal 
governments and the children under their jurisdiction. We also 
recognized that the proposal did not address several issues and hoped 
to be able to work with the Administration to move forward on workable 
legislation to allow tribes to directly administer the IV-E program. 
However, the Administration has shown little interest in other Tribal 
IV-E proposals and has provided few details regarding their own 
proposal. This environment has made it difficult to meaningfully 
discuss the fundamental issue of AI/AN children being left out of a 
federal entitlement program and effective solutions to this inequity.
    We do agree with the Administration's position that the continued 
linking of IV-E eligibility to the former AFDC eligibility is outdated 
and should be changed. There either needs to be new income eligibility 
criteria, or IV-E services should not be income-based.
    We also agree that adding more service flexibility in the use of 
IV-E Foster Care funding, including increased support for kinship care, 
would be beneficial.
   We have major concerns with the Administration's proposal in the 
                            following areas:
    Tribes Have Only One Option. The proposal does not allow tribes the 
same options as states. It would allow tribes (and a limited number at 
that) only one option, and that is to administer the new capped 
program. States, on the other hand, could either administer the current 
open-ended entitlement program or opt to administer the more flexible 
capped program.
    Not All Tribes Would Be Eligible to Administer the Program. The 
proposal would allow only some tribes to administer the program--those 
that the Department deems to have the capacity. Little information is 
given about what criteria would be utilized, but Department 
representatives have previously indicated that it might be based upon 
the eligibility of certain federal programs (i.e., Title IV-E and IV-B, 
Subpart 2--approximately 70 tribes) that are not available to all 
tribes. Nonetheless, it is clear that not all tribes will be allowed to 
provide the services and protections of this important program to their 
children.
    This sends a confusing message regarding how Indian children who 
are abused and neglected will be provided foster care services in an 
equitable and comprehensive fashion.
    As we understand the proposal, tribes would have only two years to 
decide to administer the IV-E program. That in and of itself would 
severely limit tribal participation. IV-E is a complicated program and 
many tribes may require more lead time. As tribes have watched states 
operate the IV-E program and seen first hand the issues they face in 
trying to manage this program effectively, many tribal governments may 
not want to jump into a program without first assessing their readiness 
and having time to make adjustments needed to successfully operate the 
program. Unfortunately, the Administration's proposal would likely 
severely limit tribal participation and ask tribes to hurry decisions 
that should be made more carefully.
    The Funding Baseline Is Too Low. We feel the Department's $30 
million cap for tribal IV-E programs is too low. We do not know how the 
Department arrived at that figure. The most recent CBO score on tribal 
IV-E legislation (S. 667, which is included in the Senate Finance 
Committee-approved welfare reform bill) estimates $66 million after the 
program has been available to tribes for a number of years. Tribal 
governments have not been afforded the opportunity to operate the Title 
IV-E program and therefore have not been able to establish historical 
data on their needs or trends in relation to foster care. The best 
option is to allow tribes to administer the program on an open ended 
entitlement basis; after 10 years, we would see what a reasonable 
baseline would be. We expect that tribes will come gradually into the 
IV-E program, just as they have into the TANF program.
    Tribes Left Out of Adoption Assistance. The Administration's 
proposal does not include tribal eligibility for the Adoption 
Assistance Program. We find this puzzling given the high priority the 
Department places on adoption. There is no reason why tribes should not 
be eligible to administer this portion of the IV-E program.
    Capping the Program Could Harm Tribal-State Agreements. We are very 
concerned that capping the funding for the IV-E program will be a 
disincentive for states to enter into future IV-E agreements with 
tribes, and some states may not want to renew existing agreements. 
There are and will be cases where a tribe finds that a tribal-state IV-
E agreement is the better route for them than direct administration of 
the program.
Conclusion
    Our best recommendation is for the Administration to re-evaluate 
their communication and decision-making strategy with regards to the 
tribal portions of their proposal. By more effectively utilizing their 
tribal governmental consultation policies, we think a meaningful 
dialogue can be established that can lead to better services for all 
AI/AN children. We continue to be in communication with Subcommittee 
staff about various Title IV-E Foster Care and Adoption Assistance Act 
proposals and look forward to continuing this dialogue. We are hopeful 
that there will finally be the political will in Congress to end the 
discriminatory treatment of vulnerable Indian children and look forward 
to assisting you in this endeavor.

                                 
               Statement of Seth Nichols, Podesta Mattoon
    Under current law, private non-profit and for-profit child care 
institutions of any size are eligible for foster care maintenance 
payments regardless of accreditation. However, public child care 
institutions with more than 25 children are not eligible, even if they 
are accredited. This poses a problem for public institutions that house 
more than 25 children but, no more than 12 children per building on one 
campus. The requirement of separate budgets and separate on-sight 
management of each building is not a viable option for these 
institutions due to cost and personnel constraints.
    While it is understood that the Federal Government does not want a 
return to the public orphanage system of days past, please explain why 
this requirement of separate budgets and separate on-sight management 
exists?

                                 
           Statement of Cheryl Renee Reese, Round Rock, Texas
    In fiscal year 2004, the Federal Government provided more than $7 
billion in dedicated funds for child protection. The bulk of these 
funds--almost $5 billion--supported children who had been removed from 
their homes and placed in temporary foster care.
    It is amazing that throughout the some odd 50 years no one has 
thought about the children at all. This 5 billion dollars would have 
better served the state if family members would be considered for 
payment instead of strangers. When you have family members that want to 
help but, budget shortfalls will not allow them to without some 
assistance from the state. The state will chose a non-family member, 
possibly a crowded home with violations and or drugs for the child to 
go on in this home. Not once thinking if it is necessary for this child 
to be on drugs in the system maybe some assistance to the parents could 
have prevented this child from being removed in the first place. I am 
not suggesting that the state put children on drugs as a method of 
helping them. I am just saying how best can the state help the family 
before removing children.
    I myself have assisted three foster children who are my nieces and 
nephew, by giving them a place to live and grow up. There was no 
assistance provided or even mentioned. There have been other family 
members taking in family children in order to get them out of the 
system and with family. Initially we asked for daycare assistance 
because it was not in our budget. We were denied because we made too 
much money. There was no consideration that our money may have been 
allocated in other directions and we needed a little assistance until 
we could adjust or budget to include daycare. Not to mention clothing 
and food and extra gas. After 13 years of no assistance we don't even 
try to get it anymore. While trying to get the children out of the 
system they were cared for worse than the mother was providing for 
them. Their clothing didn't match nor was their hair taken care of, it 
was uncombed and matted, we had to cut and treat for months.
    My nephew was medicated by the system because they said he was 
hyper. His mother abandoned him because she said he needed to be fixed. 
He did not need to be medicated and he asked at 10 years old if he had 
to continue to take the slow down medicine. He said it made everything 
go in slow motion. He was prescribed redalen for his hyperness.
    In March of this year there was a report done by 60 minuets about 
grandparents having to take in their grandchildren. While this is not 
new, it has been ignored for many years. These grandparents are on 
fixed income but, still want to try to keep the family together. This 
is just another example of the unavailability of assistance. These 
people need your help to keep these children from going into a 
different system when they are older.
    Below are just a few of the things I saw that need to be addressed 
by the committee. Please take a look at them.

Goals of Child Protective Services:

    Remove the children as a last resort, not first then investigate.
    Determine what imminent dangered really means for CPS.
    What service can CPS provide to assist the parents 1st before 
removing the child.
    Qualify immediate family members to assist with children before 
putting in nonfamily member home.
    Give assistance by way of clothing, food and daycare stipends.
    Plan for returning children be an attainable plan.
    If children are removed, their care should be better than what the 
parents were doing.
    Hair care is not considered cosmetic, this should fall under 
regular care of child.
    Keep the children drug free while in the system, If they were not 
on drug while at home why are we medicating in the system?

                                 
         Statement of Frank Richards, Hillsborough, California
    Thank you for providing an opportunity for input on this important 
issue. Although I am sending this as a private citizen, it is my 
experience with Foster Care from the vantage point of a former 
administrator of a Child Support program that makes me aware of this 
issue. I held the position of Deputy Associate Commissioner of Child 
Support Enforcement Services in New York City from 1998 to 2004. I 
should note that this input reflects my personal view only.
    If the Committee is looking at funding for the Foster Care effort, 
and is seeking consistency across the States, I would urge the members 
to look at the issue of child support collections made on behalf of 
children in Foster Care. Having worked for child support agencies in 
New Hampshire and New York, my experience can hardly be claimed to be 
national, but I do believe that the problems inherent (in collecting 
support from parents whose children are in Foster Care) are common; 
collection rates are low and the rates of reimbursement (to the Foster 
Care programs) are relatively low nationally.
    My recommendations fall into two basic areas: the first being ways 
to improve the collection rates, which would lower the cost to the 
states and to the Federal Government for administering the program; the 
second a means of sharing the collections with the children, 
particularly older children, while they are in placement, or in the all 
too common instances when older children are emancipated into adulthood 
directly from Foster Care. Collections could be used as ``allowance'' 
(to help maintain ties between children and parents, and to improve 
life in Foster Care), and to provide individuals with a nest egg that 
may assist them in their all too often failed efforts to become fully 
functional, independent members of society in the event they remain in 
Foster Care until adulthood.
    In the first instance, child support regulations regarding Child 
Support and Foster Care need to be both simplified and fortified. 
Existing federal requirements do allow for coordination between Foster 
Care and Child support programs, but I believe the relationship is 
tenuous. Child support program requirements technically insist that 
support be sought from both ``absent'' parents (which is sometimes 
appropriate), even when child welfare workers are working to reunite 
children with their families (often a single parent). There are 
certainly times when taking court actions against parents in the early, 
often delicate stages of intervention are inappropriate (at least in my 
view). I believe, honestly, that if child support workers and foster 
care workers were better able to share the same basic mission (of 
serving the true needs of the children), that Congress would make it 
easier for caseworkers to place child support activities against one or 
both parents ``on hold''. (This can be done but the process is 
cumbersome).
    If done correctly, child support matters could be considered in the 
initial hearings, or instructions regarding support could be included 
in the order separating children from the parents. This would clarify 
the intent of the court and provide a clear direction for both agencies 
to work from.
    In return for this heightened sensitivity, I would at the same time 
seek increased and improved cooperation. If the funds (or potential 
funds) from collections are truly seen by Foster Care workers as 
something that will benefit the child directly--then I believe the two 
programs can and would work in better concert, and that overall 
collections would increase. This would be aided by better information 
sharing between the two programs, and perhaps improved automated 
interfaces. If the efforts on the part of both agencies/programs could 
be focused on the cases where the court has ordered support from the 
onset (which should happen in any/all ``voluntary'' placements) or on 
taking only taking a parent or parents back to court for child support 
when it is truly appropriate (thus spending less time documenting why 
nothing was done) then I truly believe revenue would increase. While 
not all Foster Care cases are IV-D, clarifying program requirements and 
laws regarding support and Foster care would go a long way.
    Better define when child support actions should be taken and 
against whom.

      Short-term ``protective actions'' should be avoided.
      Parents who will be reunited (or where the plan calls for 
it) within a year perhaps, should be avoided.
      Parents who are able to pay and have place children into 
Foster Care ``voluntarily'' should have child support actions included 
in the initial court actions.
      Whenever Foster Care workers identify child support as an 
important asset to the child and/or family, child support against any 
truly absent parent should be initiated in early court proceedings, 
with child support agencies and foster care agencies working in 
concert. Paying support may be an excellent way for a parent who 
desperately wants a child ``back'', or who might want to gain custody 
to ``prove'' responsibility.

    The main issue here is, for support enforcement and Foster Care, to 
better define a common mission for Foster Care cases, to avoid multiple 
case hearings and fruitless documentation--the result will be increased 
assets made available to the program. I my view this should be used in 
two ways: to reduce Foster Care expenditures, but also to make better 
investment in the children themselves.
    This brings me to my second main point. Currently, mostly to 
promote cooperation from TANF case heads, child support regulations 
allow a ``pass-through'' of child support benefits directly to the 
families. This does serve to provide motivation for cooperation in 
court, and helps provide agencies with information, but it also 
increases the financial resources of very low-income households, and it 
may document the presence of other resources for the children--an 
absent parent who pays support.
    Foster Care has no provisions for pass-through. While it makes no 
sense for a parent to in essence be paying pass-through to themselves, 
provisions for allowance to the children in placement certainly makes 
sense. Particularly for older children this could be important. In my 
view regulators should look carefully at the all too large population 
of children that leave Foster care at age 18 or 21; many either never 
``leave the system,'' or end up back on it, or worse in prison. If 
during the course of their placement in Foster Care, some or possibly 
all of the child support received on their behalf was held in escrow, 
decisions could be made over the course of their case histories as to 
how this asset should be applied.

      The support collected on behalf of young children whether 
or not they return to a parent or parents should certainly be used to 
offset government expense (in many if not most cases);
      Children in care with a parent paying support should be 
granted some sort of allowance;
      Children whose parents have paid support should NOT be 
allowed to be dropped from the system at ``adulthood'' without 
providing them with something of a ``nest-egg''--for schooling, getting 
settled, whatever. This could reduce long-term expenses in many 
programs.

    I honestly believe that if the right decisions are made both 
objectives could be met. Children could better served with less overall 
government expense if these programs were better coordinated.
    If there are any questions I would be pleased to respond.

                                 
         Statement of Daniel Allen Roberts, Dunnellon, Florida
    This is in response to the issue of the Funds that are distributed 
to the States. These funds primarily come from the The MONDALE Child 
Abuse Prevention and Treatment Act of 1974 (CAPTA--Public Law 93-247). 
While this law title sounds as if it is a valid area of concern and 
proper law, it has been the incentive of improperly incarcerating 
Children into foster care, and adopted out and away from non offending 
parents each and every year. As it is, the money also provided to 
Foster Care and to the Offices responsible for placing them, not only 
railroads children from innocent parents who are low income and cannot 
afford legal help, but due to the sheer volume of children, places the 
children in danger as just about anybody is sought out to house these 
children. In the efforts to also find children to fill these 
statistics, CPS (Child Protective Services) Agents have been known to 
violate the 4th Amendment, 5th Amendment, 6th Amendment and 14th 
Amendment of our U.S. Constitution on a regualr basis. The police also 
wrongly think the CPS Agencies are not subject to these Amendments, and 
enforce illegal investigations, impossible to do case plans all for the 
sake of getting the children removed from the home for the monetary 
incentives. They also target children who are disabled to secure Title 
IV-E funds from Social Security. To also prove this money that is paid 
out clogs the Foster Care System to the point of children being abused 
and killed in Foster Care far more than if they were left at home is 
here: Number of Cases per 100,000 children in the United States. These 
numbers come from The National Center on Child Abuse in Washington. 
CPS--Physical Abuse (160) Sexual Abuse (112) Neglect (410) Medical 
Neglect (14) Fatalities (6.4) Parents--Physical Abuse (59) Sexual Abuse 
(13) Neglect (241) Medical Neglect (12) Fatalities (1.5) As you can 
see, children are abused far more in care than at home. The calculated 
average is for every 1 abused child removed from an abusive home, there 
are 17 unabused children removed from loving non-offending homes 
nationwide. Please remove the Motive for the States to process Children 
in huge quantities from non offending parents by ending totally this 
funding. It's imperative we take the profit out of destroying good 
families away from the states and CPS. Sincerely, Mr Daniel A. Roberts 
& Family care, and adopted.

                                 
Statement of Denise Turbeville Barker, South Carolina Children's Foster 
              Care Review Boards, Columbia, South Carolina
    As the Subcommittee on Human Resources evaluates the financing for 
public foster care administered through Title IV-E, I would like to re-
emphasize the role of state citizen foster care review board programs 
in ensuring the safety, permanence and well-being of children placed in 
the foster care system. South Carolina is one of several states with 
citizen foster care review board programs who contract with their state 
child welfare agencies for Title IV-E funding to fulfill the mandate 
for independent, third party review required by Title IV-E. We seek 
continued support for this funding from your subcommittee in order to 
ensure that state citizen foster care review programs are recognized 
for their ongoing efforts to provide programmatic data and targeted 
recommendations for improvement to their state child welfare agencies 
about their foster care programs. If there are expanded evaluative 
services we could provide that would be helpful to you in your review 
of the foster care program, we would be happy to participate in 
discussions around that possibility.
    In 1974, South Carolina was the first state to implement a citizen 
foster care review program. Thirty years later, our program remains 
strong and citizen review influences program and policy in 23 other 
states patterned after South Carolina's original model. Our small 
coalition has been a leading voice in foster care review issues around 
the country. We have previously sought funding from your committee to 
support this national network (NAFCR) in order to unify and expand 
efforts started by state grassroots organizations who invest so much to 
secure permanent homes for children in foster care.
    The SC Foster Care Review Board program was an active participant 
in the Child and Family Service Review conducted in South Carolina. 
Points targeted in South Carolina's Program Improvement Plan(PIP) have 
now been incorporated into the data tracked by local foster care review 
boards and we will provide a check and balance on time lines and 
outcomes required by South Carolina's PIP. Recommendations made in the 
2003-2004 South Carolina Foster Care Review Board Annual Report are 
based on Review Board data related to violations of Public Law 96-272, 
violations of Title IV-E requirements, South Carolina law, and other 
specifications of the South Carolina PIP. A full copy of this report is 
available on our website: www.govoepp.state.sc.us/children/foster.htm.
    Looking back, I can say with confidence that without the influence 
of citizen review programs, these positive changes in the child welfare 
system would not have occurred:

      The passage of Public Law 96-272 in 1980--This landmark 
legislation, with its requirement for periodic review of children in 
foster care, would not have happened without the invaluable information 
provided by the determined citizen foster care review organizations in 
existence at that time;
      Development and passage of model termination of parental 
rights statues across the country that have enabled the adoption of 
thousands of children in foster care;
      A continued focus on the need for permanence for all 
children in the foster care system--Child welfare agencies continue to 
be overburdened and without the vigilant oversight provided by boards 
of citizen advocates, the system might easily revert to an ``emergency 
management'' mode that traps children in the foster care system 
indefinitely with no hope of a positive future with a permanent 
family--in SC we would not have seen a decrease in the length of time 
children spend in foster care;

    Citizen volunteers serving on local foster care review boards have 
penetrated the veil of confidentiality that prior to 1974, shielded the 
foster care system from public scrutiny and accountability--This well-
trained, informed and growing population of volunteers in each local 
community have done more to advance the importance of child abuse 
prevention, adoption and community responsibility for system change, 
than any other volunteer movement in this country--we have just done it 
quietly and at the local level.
    These are just a few examples of how trained and dedicated 
volunteers can move and improve the system. I have worked with the 
citizen review program in South Carolina for the past twenty-five years 
and I know citizen foster care review board programs can be invaluable 
to you as you seek to improve quality assurance assessments for states 
receiving Title IV-E funding. Funding for third party, external citizen 
review through Title IV-E is critical if we are to continue and improve 
the progress made thus far.

                                 
  Statement of James Roger Brown, The Sociology Center, North Little 
                             Rock, Arkansas
    Five-year-old Florida foster child Rilya Wilson was kidnapped from 
State custody in February 2001. Florida officials did not detect the 
kidnapping for fifteen months. The kidnapping went undetected for two 
reasons, Rilya Wilson was kidnapped by persons knowledgeable of the 
inner workings of the child protection system, and Florida Department 
of Children and Families case file record forms were falsified for 
fifteen months. Case workers falsely reported Rilya Wilson was in 
Florida State custody and in good health.
    The Rilya Wilson case is not an isolated incident. Falsification of 
child protection system records is part of a national pattern of 
organized crime. For one example, Employees of the Florida Department 
of Children and Families were also implicated in the kidnapping of an 
Arkansas child that involved falsification of records. In a June 6, 
2002, opinion, the Arkansas Supreme Court ruled that an infant Arkansas 
citizen had been illegally transferred to Florida State custody in what 
was essentially an interstate criminal conspiracy to seize and 
transport children in complete disregard of State and Federal law. (See 
Arkansas Department of Human Services v. Cox, Supreme Court of Arkansas 
No. 01-1021, 349ark, issue 3, sc 9, 6 June 2002 http://
courts.state.ar.us/opinions/2002a/20020606/01-1021.wpd)
    The Rilya Wilson case is merely the tip of a criminal iceberg. 
Beginning about 1973, criminal elements in the mental health and social 
work professions began cooperating to construct a nationwide organized 
criminal bureaucracy to exploit children and implement a shared 
political agenda behind the legislated secrecy of the child protection, 
juvenile justice, and mental health systems. (For details see EVIDENCE 
BOOK SUBMITTED TO CONGRESS link on page 9.) The current result is a 
nationwide organized criminal operation integrated across the child 
protection, mental health and social work systems that uses everything 
from sophisticated science fraud-based ``evaluation'' instruments 
structured to produce false positives (see EVIDENCE BOOK) to third-
party State service contracts written to sustain a system of structural 
corruption in which State employees and contract service providers must 
falsify records and testimony or they will not continue to be employed 
or paid.
    To maintain their existence, organized criminal operations such as 
these are no different from other bureaucracies that must construct 
policies, methods, and procedures necessary to sustain daily 
operations. The only special adaptation required to run criminal 
operations in government and quasi-government agencies is that 
organized crime bureaucracy policies, methods, and procedures must be 
integrated into the policies, methods and procedures of the umbrella 
agency or program and not be detected as criminal processes.
    The existence of organized crime in the child protection system in 
any given State is not that difficult to detect. Prominent among the 
indicators (see EVIDENCE BOOK) are:

    1.  Systematic, consistent falsification of child protection agency 
records and testimony, contract mental health evaluations and 
testimony, and social work intervention records and testimony;
    2.  The annual number of ``founded'' child abuse allegations can be 
predicted from the number of conditional federal grant and 
reimbursement salary fund dollars needed to balance the State child 
protection agency payroll (the number of children taken into State 
custody each year will be the number sufficient to generate the federal 
fund claims necessary to balance the agency payroll); and
    3.  Third-party contracts to file State child protection agency 
federal fund claims will contain provisions that only compensate the 
contractor for increases in federal funds paid to the State over and 
above the amount paid in the previous contract for such claim filing 
services.

    Inserting a contract provision that links a federal fund claims 
contractor's compensation to increasing annual federal fund dollars 
generated over the previous contract period is a classic example of 
structural corruption. If the contractor fails to increase paid federal 
fund claims for a specified time period (usually quarterly), their 
contract can be cancelled. The end result is a system in which everyone 
stays employed only if the annual number of founded child abuse cases 
always increases and never decreases, or annual paid federal fund 
claims increases and never decreases. An important byproduct of this 
criminal process for exploiting children, independent of the true child 
abuse rate, is the blind political support for the criminal operations 
generated by the constant flow of conditional federal funds into the 
respective State's economy. In the Rilya Wilson case, even the Foster 
Mother continued to receive and accept payments for the care of Rilya 
over a year after the child disappeared. Caseworkers reportedly told 
her to take the money.
    An ironic twist is that this corrupt modern child slave trade 
system is another example of history repeating itself. A criminal 
bureaucracy previously developed and operated in the Swiss social 
welfare system from about 1850 to 1950 under the same pretext of 
protecting children from alleged inadequacies of their parents. The 
Swiss Verdingkinder system is described in Peter Neumann's documentary 
film ``Verdingkinder '' and Marco Leuenberger's Thesis, 
``Verdingkinder. Geschichte der armenrechtlichen Kinderfursorge im 
Kanton Bern 1847-1945, 211 S., 1991.'' (An internet search using the 
term ``Verdingkinder '' will produce links to some English language 
articles.)
    The Swiss ``Verdingkinder'' and United States child slave trade 
systems have the following social processes in common:

     1.  Poor families are required to register with the Government. 
(U.S. Public Assistance, Welfare, Medicaid, Medicare and numerous other 
special programs.)
     2.  Once registered with the Government, Parents are subjected to 
ongoing monitoring to determine if ``the best interest of the child'' 
is served by removing the child from the home and placing the child in 
State ``protective'' custody.
     3.  Children who age out of the system are not intellectually and 
emotionally prepared for adult life, especially marital relationships.
     4.  Decisions about the ``best interest of the child'' are made by 
Government employees using vague subjective criteria and State or 
personal economic interest.
     5.  Children are auctioned off or distributed under government 
sanction. (U.S. Child Protection Agencies post pictures of children 
held for adoption on the internet, and foster parents are enticed with 
additional household income generated by foster child ``support'' 
payments.)
     6.  Children are physically abused, starved, and malnourished by 
State and foster custodians.
     7.  Children are sexually abused by State and foster custodians.
     8.  Children are murdered by State and foster custodians.
     9.  Children are economically exploited. (In the Swiss system by 
the middlemen, farmers and businesses using the child slave labor; In 
the U.S. system by State employees who wrongfully seize children for 
federal funds to meet the agency payroll; by psychiatrists, 
psychologists and social workers filing fraudulent insurance claims; by 
crime victim therapy service providers filing claims for nonexistent or 
fictitious child abuse crime victims; and by attorneys, prosecutors, 
child abuse investigators, juvenile court judges, and civil court 
judges who exploit false child abuse allegations to sustain their 
income, power or prestige.)
    10.  Criminal activity is concealed through falsified records, 
incomplete records and failure to keep records.
    11.  Government agencies pay fees and subsidies to State and foster 
custodians who physically abuse, murder, sexually abuse and 
economically exploit children.
    12.  Law enforcement agencies ignore or cover up criminal acts 
against children by State and foster custodians.
    13.  When prosecutions do occur for crimes against Verdingkinder or 
foster children, the punishment is minor compared to the crime.
    14.  The operation intended to benefit poor families and children 
becomes an organized criminal enterprise that economically, physically, 
and sexually exploits children.
    15.  Government officials and media not directly involved in the 
criminal activity refuse to believe that a child slave trade could 
develop in a civilized nation like Switzerland or the United States.
    16.  The economic exploitation of children in the Swiss 
Verdingkinder system coincidently did not end until machinery was 
developed that provided a cheaper means of farm and factory production 
than child slave labor. The United States child exploitation system 
will not end without intervention unless States find easier methods of 
obtaining federal fund revenues equal to the amount currently generated 
by taking children into State ``protective'' custody.
    17.  Both the Swiss and United States child slave trade systems 
expanded and operated outside of Government control. (The private 
purchasing and sale of children in the U.S. are conducted by private 
child brokers and child adoption attorneys.)

    Relevant insights can also be extracted from parallels in the 
embarrassment of the Bush Administration over numerous ignored warnings 
that Osama bin Laden planned to hijack planes and fly them into 
buildings, and the embarrassment of Florida Officials having to explain 
fifteen months of falsified child protection records, sworn court 
testimony that Rilya Wilson was in Florida State custody and doing 
fine, and falsified federal fund claims for services delivered to a 
child who may have been dead the entire time. After the collapse of the 
World Trade Center, both the American Public and terrorists worldwide 
now know the United States is vulnerable to attack, due in large part 
to corruption, incompetence and mismanagement in intelligence and law 
enforcement agencies.
    As a consequence of the Rilya Wilson case in Florida, the Public 
and every child molester, pornographer and other criminals who need 
children for their misdeeds know that the corruption, incompetence and 
mismanagement in the child protection system can be exploited as cover 
to acquire children for their own illicit purposes. What happened to 
Rilya Wilson in Florida can, does, and will happen in any State where 
the current organized criminal exploitation of children is allowed to 
continue. Sooner or later other criminals are going to become 
sufficiently aware of the mechanisms the current child protection 
system organized criminals use to manage their criminal bureaucracy, 
that child molesters, pornographers, pimps, and drug smugglers will 
also be able to exploit the system, as were the people who reportedly 
kidnapped Rilya Wilson and returned a week later to collect her 
clothes. This was the behavior of persons who believed they had no 
reason to fear being held accountable for kidnapping or any other 
criminal offense.
    Among the obvious criminal opportunities is obtaining information 
about the illicit activity (falsifying federal claims, official 
reports, insurance claims, etc.) of individual State employees or 
licensed professionals, such as psychiatrists and psychologists, and 
blackmailing or otherwise compelling them to allow access to children 
for criminal exploitation or perversion.
    Of major importance to prosecutors is that the systematic 
falsification of records by child protection system crime participants 
in psychiatry, psychology, social work and child abuse investigation 
units, results in the systematic falsification of evidence used in 
child-related criminal and civil judicial proceedings. (See EVIDENCE 
BOOK.) It may be tempting for police and prosecutors not to look too 
closely at experts and evidence which make convictions easier, but 
relying on criminals who protect themselves by providing tainted 
essential services and corrupted evidence to the people who should be 
arresting and prosecuting them is a house of cards that will collapse 
locally or nationally at some point. We have contemporary examples of 
chaos created by the falsification of evidence in the Los Angeles 
Police Department, and the newly-documented error rate in death row 
convictions. Several decades of both Los Angeles and death row cases 
have to be reviewed and readjudicated.
    When the disastrous consequences of entering the fourth decade of 
organized criminal administration of the child protection system are 
finally disclosed, State Governments and the Federal Government face 
having to remedy the chaos and carnage caused by malicious 
prosecutions, false child abuse allegations and convictions, falsified 
adoptions, bankrupted families, damaged children and adult lives, and 
the children stolen by State employees and diverted into prostitution 
and other criminal activities.
    In addition to the Swiss Verdingkinder scandal, at least one other 
historical precedent exists with several parallels to the manner in 
which the United States child protection system currently engages in 
the now-documented systematic abuse and atrocities with the tacit 
approval of State Officials and Federal Agencies and Officials.
     From 1976 to 1983, the government of Argentina under the control 
of a military junta conducted a ``Dirty War'' against anyone perceived 
as ``leftist.'' Just as with child protection agencies, the Argentine 
Military Junta went after anyone who criticized either the way it 
operated or its policies. Most of the same types of people targeted by 
the Military Junta are likewise targeted by child protection agency 
organized crime managers: the poor, critics of the system, social 
activists, people who resist personal intimidation and the abuse of 
fellow citizens, and people who ask too many questions.
    In Argentina, thousands of individuals and entire families were 
rounded up and executed by being beaten to death, shot in the back of 
the head, or sedated and thrown alive from an airplane over the open 
ocean. Concurrently, the Argentine Military maintained a list of 
soldiers wanting children. Pregnant women taken into custody were kept 
alive until their babies were born, then executed. Infant children of 
the pregnant women and murdered families were distributed among the 
soldiers who killed them. [Criminal investigations and prosecutions of 
Argentine soldiers involved in the atrocities are still going on.] (See 
http://www.yendor.com/vanished/junta/caraballo.html and http://
seattletimes.nwsource.com/html/nationworld/
2001960898_argentina21.html.)
    On October 7, 1976, United States Secretary of State Henry 
Kissinger met with Argentina's Foreign Minister Admiral Cesar Augusto 
Guzzetti. At the time of this meeting, Congress was preparing to 
approve sanctions against the Argentine Junta because of widespread 
reports of human rights abuses. Henry Kissinger communicated to 
Guzzetti United States Government approval of the Junta's use of mass 
arrests, torture, and mass executions to deal with suspected leftists. 
According to a declassified transcript of the meeting, Kissinger 
stated:
    ``Look, our basic attitude is that we would like you to succeed. I 
have an old-fashioned view that friends ought to be supported. What is 
not understood in the United States is that you have a civil war. We 
read about human rights problems but not the context. The quicker you 
succeed the better. The human rights problem is a growing one. Your 
Ambassador can apprise you. We want a stable situation. We won't cause 
you unnecessary difficulties. If you can finish before Congress gets 
back, the better. Whatever freedoms you could restore would help.'' 
National Intelligence Archives: http://www.gwu.edu/nsarchiv/NSAEBB/
NSAEBB104/.
    Those working to obtain justice for the victims of abuse and 
atrocities committed by perpetrators embedded in the United States 
child protection system should keep Kissinger's words in mind as 
another parallel. Even with the possibility of Congressional action on 
the horizon, reform efforts can be undermined by friendship or economic 
ties between Federal Officials and State-level cronies directly 
participating in the child protection system organized crime.
    Some of the more brutal foster care abuse and death scandals were 
cases in which children taken into State custody were placed in the 
homes of case workers in violation of regulations prohibiting it. In 
some cases the abuse and deaths occurred in the homes of the very case 
workers who had seized the children. (See EVIDENCE BOOK.)
    One disturbing parallel is that for Argentina's Military Junta and 
for the United States child protection system, proof of guilt is not a 
requirement to be placed under government control; allegation or 
suspicion of guilt alone is sufficient. In both systems, whether you 
die or survive the process, the life you had before is completely 
destroyed and you are tainted for the rest of your life by the mere 
fact of an allegation or suspicion.
    Unless something is done to shut down the organized criminal 
activity in every State in which it currently exists, Rilya Wilson is 
not going to be the last horror story to capture national attention. 
Similar incidents in the future will continue to ruin careers as the 
Rilya Wilson kidnapping did in Florida. People will end up in prison 
for crimes far more severe than falsifying a few reports to obtain 
federal funds for their State, or filing fraudulent insurance claims. 
Prosecutors, Legislators, and other State officials who thought they 
were benefitting their State by ignoring criminal acts in the child 
protection system which bring federal fund dollars into the State's 
economy may end up having to face situations far uglier than they ever 
thought.
    Former Arkansas State Senator Nick Wilson was sentenced to federal 
prison for his sponsorship of and participation in one such legislated 
criminal enterprise to exploit children. Several Arkansas attorneys 
involved in this scam lost their licenses to practice law.
    During the 2001 Arkansas Legislative Session, Senate Bill 860, 
drafted by Arkansas Department of Human Services employees, was 
discovered to contain provisions that would have required employees to 
lie about records and facts, even if subpoenaed. The bill was withdrawn 
once the Legislator duped into being the primary sponsor was made aware 
of its contents.
    An Austin, Texas, DHS Supervisor committed suicide after being 
arrested for operating a foster child prostitution ring from his office 
computer. Also, the Texas Comptroller has issued a report on the 
exploitation and abuse of children in State custody, including some who 
were forced to live outdoors in tents year-round. (See CHILD SLAVE 
TRADE PAGE link below.)
    Congress is now in the preliminary phase of possibly holding 
hearings on corruption in the child protection system. Public hearings 
on the abuse of children and parents involved in the child protection 
system have been held in at least two States. Reforming the child 
protection system is currently part of the platform of candidates who 
are running for public office in at least three States.
    For information regarding the status of a possible Congressional 
Investigation of the child protection system, contact local United 
States Representatives and Senators.
    The handwriting may or may not be on the wall now, but child 
protection system criminals will continue to push the envelope on 
everything they can get away with until they are stopped and 
prosecuted. The important issue is how much more obvious, 
sophisticated, brutal and embarrassing organized crime in the child 
protection system will be allowed to become before it is addressed--and 
stopped.
    While the current state of knowledge about interlinked organized 
crime in the child protection, mental health, and social work systems 
paints a dismal picture, it also reveals practical solutions to the 
problem of how to arrest and prosecute participants in this organized 
crime bureaucracy. Information publicly available now makes it possible 
to catalogue the criminal acts used to sustain the child protection 
system organized crime bureaucracy. These criminal acts include but are 
not limited to:

     1. Murder;
     2. Manslaughter;
     3. Kidnapping;
     4. Conspiracy;
     5. Blackmail;
     6. Terroristic threatening;
     7. Witness tampering;
     8. Evidence tampering;
     9. Perjury;
    10. Fraud;
       a. Medicaid
       b. Medicare
       c. Federal grant and reimbursement programs
       d. Insurance claims
       e. Crime victim reparation claims
       f. Psychological testing results
       g. Psychological diagnoses
    11. Tampering with government records;
    12. Falsifying government records;
    13.  Deceptive and unconscionable trade practices by psychiatric, 
psychological and social work practitioners operating as public 
businesses;
    14. Emotional, mental and physical child abuse;
    15. Racketeering;
    16. Human trafficking;
    17. Production and possession of child pornography;
    18. Child prostitution; and
    19.  Organized crime generated child abuse statistics collected 
from States and reported to Congress and the public violate the Federal 
Data Quality Act.

    One simple achievable remedy would be the establishment of a 
special organized crime task force in each State specifically targeting 
interlinked organized crime in the child protection, mental health, and 
social work systems. Associated with this crime control effort would be 
the enactment of legislation prohibiting science fraud-based insurance 
claims and the establishment of science fraud detection protocols 
within State insurance fraud divisions. Currently, no State or Federal 
Code exists prohibiting the use of science fraud for illicit purposes. 
Governors facing State budget deficit crises could find this approach a 
useful tool for shutting down corrupt agencies and programs with 
minimum political backlash. What special interest group could publicly 
protest an effort to shut down organized crime in the child protection, 
mental health, and social work systems without raising questions about 
their own motives and credibility?
    Creating an organized crime task force to go after criminals in the 
child protection, mental health, and social work systems, and 
establishing science fraud detection protocols to control fraudulent 
psychiatric, psychological, and social work service provider insurance 
claims are attainable goals for those individuals and groups seeking to 
end the current atrocities committed in the name of child protection. 
Objections that sovereign immunity applies to state employees and 
expert witness immunity applies to the testimony of mental health and 
social work practitioners are not valid in many States when gross 
negligence, gross incompetence, or acting with malice are present.
    To provide additional and future updated information on the 
criminal exploitation of children in the child protection, mental 
health, and social work systems, a page on THE SOCIOLOGY CENTER web 
site has been dedicated to monitoring the child slave trade in the 
United States. The Child Slave Trade Page currently contains 
information on how to contact the FBI Human Trafficking Task Force; 
downloadable PDF format copies of some evidence books submitted to 
Congress (including mine); child protection system criminal 
intelligence; links to support organizations and other information. In 
the hope this National Advisory will alert the public to the organized 
criminal threat to families concealed behind the veil of child 
protection system secrecy and help prevent any repeats of the Rilya 
Wilson horror story, I draw the following material to your attention:

    1.  The Child Slave Trade Page at http://
www.thesociologycenter.com/slavetrade.html.
    2.  EVIDENCE BOOK SUBMITTED TO CONGRESS: The Compendium of 
Documentation of Organized Crime Methods and Procedures Integrated into 
State and Federal Agencies for the Purpose of Political and Economic 
Exploitation of Children and Families Through State and Federal Child 
Protection, Mental Health, and Social Work Systems. (356 pages 
summarizing more than ten years research on organized crime methods and 
procedures in the child protection, mental health and social work 
systems. File size: 3.6 MB.) at http://www.thesociologycenter.com/
EvidenceBooks/COMPENDIUM.pdf
    3.  ``Forgotten Children: A Special Report on the Texas Foster Care 
System'' Texas Comptroller, April 2004 http://www.window.state.tx.us/
forgottenchildren/
    4.  ``UK firm tried HIV drug on [New York] orphans: GlaxoSmithKline 
embroiled in scandal in which babies and children were allegedly used 
as `laboratory animals.' '' Antony Barnett in New York, Sunday April 4, 
2004, The Observer. http://www.guardian.co.uk/medicine/story/
0,11381,1185360,00.html

    AN OBJECTIVE PROTOCOL FOR ANALYZING EVIDENCE IN CHILD ABUSE 
ALLEGATION CASES HAS BEEN DEVELOPED BASED UPON DECLASSIFIED CENTRAL 
INTELLIGENCE ANALYSIS METHODOLOGY. SEE MANUAL AT http://
thesociologycenter.com/HypothesesTestingManual/HypothTest
ManualFinal.pdf

    ALSO: Two national organizations have been working to obtain 
Congressional and State level hearings on fraud, corruption, and abuse 
of power in the child protection, mental health, and social work 
systems. Contact these organizations for information on their current 
activities and reports:

                                 

 Statement of Eric Roy Budwizer, Transitions Incorporated, Boca Raton, 
                                Florida

    Assistant Secretary for Children and Families Wade Horn 
testified that there are Weaknesses in the current child 
welfare financing structure, including complex and inflexible 
requirements and lack of connection between money spent and 
Quality of service provided.
    Well I agree to that statement. I have been trying to start 
a pilot model program to complement the services available to 
emancipated foster youth. The statistics are staggering. This 
population deserves the attention that other populations of our 
society receive. It is now 2 years since I organized my public 
non profit to provide services to the children that age out of 
the foster care system, and I am still having difficulties 
receiving funding. The following is a description of my 
organization. I would appreciate any kind of assistance that 
could be offered to me. Thank you all for your most generous 
time, sincerely Eric Roy Budwizer.

                        Transitions Incorporated

Who we are:

    Transitions is a nonprofit organization founded in 2002 to 
complement the services available to youths who are making the 
challenging transition from foster care to independent living.

Our Mission:

    It is the mission of Transitions to enhance the long-term-
self-sufficiency among emancipated foster youth by providing 
them with the skills, resources, and support to make a 
successful transition to adulthood.

Our Services:

    Transitions pursues its goals through various programs that 
offer resources, skills training, and support.

Supportive Independent Living Program (SILP)

    The objective of the SILP is to provide emancipated foster 
youth with access to safe, stable, affordable housing, where 
they have the opportunity to develop and use life skills to 
achieve long-term-self-sufficiency with support.
    Homelessness is the number one problem youths face after 
discharge from foster care.\1\ To address this serious issue, 
Transitions developed the Supportive Independent Living Program 
(SILP). The SILP's participants are provided with the necessary 
resources to help them become self-sufficient-adults living in 
the community.
    The goals of the SILP are accomplished by making available 
to the participants a micro loan up to $1,500 dollars. This 
loan is used for the first month's rent and security deposit on 
an independent rental unit co-signed by Transitions. The 
participants also receive a stipend of $200 dollars to get them 
started with crucial living necessities such as a bed, bedding, 
kitchen supplies, and bathroom items.
    The participants of the SILP are also assisted with a 
monthly rental subsidy. Here the goal of transitions is to give 
the participants support in achieving long-term-housing-
solutions--not temporary housing. Having the participants pay 
30% of their income towards their rent helps to achieve this 
goal. Overtime, the portion paid by Transitions gradually 
decreases, and the portion paid by the participants increase. 
Once the subsidy has terminated, tenancy of the apartment 
officially transfers over to the participants, and they may 
remain living in the unit as they wish. Community integration 
is achieved by having the rental units scattered throughout the 
community. This ``scattered Site'' model is affective because 
it integrates the participants into the community, provides an 
opportunity to develop independent living skills, and removes 
the stigma of foster care.
    Transitions also provides the participants with an 
opportunity to acquire various skills needed to live 
successfully as an adult in the community. Transitions provides 
the participants with a comprehensive curriculum that covers 
such topics as personal money management, social skills, 
personal health and hygiene issues, community resources 
educational goals, and work related issues. This is achieved 
through Transition's supportive services.
    Transitions participants receive a comprehensive network of 
supportive services to ensure their first experience in 
independent living is successful. These services average five 
to seven hours of individual services each week per 
participant. Discussed at those meetings are steps that the 
participants are taking to meet their individual goals in the 
areas of employment, health, education, personal financial 
management, and personal relationships. This part of the 
structured services is geared towards the personalized 
individual and then put into practice through group 
interactions.
    Transitions participants also attend a weekly peer meeting 
facilitated by a Transitions Life Coach. The purpose of these 
meetings is to help the participants utilize positive peer 
support with the skills being acquired through the individual 
support services. This weekly peer meeting also integrates 
life-skills training to address the challenges they face in 
independent living, educational, work, and personal/
interpersonal issues.
    As a positive reinforcement, participants that attend the 
weekly peer meeting and pay their rent on time will receive a 
$50 dollar food stipend to help them out with their grocery 
expenses.
    Transitions participants also participate in a community-
building event. The participants do this each and every month 
to ensure consistency. These events are selected and planned by 
the participants, and helps the participants develop a 
community of peers and other adults. This gives the 
participants an opportunity to acquire and utilize leadership 
and organizational skills. It also incorporates a sense of 
community spirit and belonging. During the event, participants 
are given an opportunity to interact with people who are in 
similar circumstances and discuss the day-to-day challenges 
they face.
    The successful participant will be able to sustain self-
sufficiency within the community, thus enabling the individual 
to live in and support the community and be a positive force in 
the economic, spiritual, and civic pride of that community.
    Transitions founder and CEO Eric Roy Budwizer is from 
Natick Massachusetts. He now resides in Boca Raton Florida. He 
attended college at Framingham State College and graduated with 
a Bachelor of Arts Degree in Psychology in 1998. He then 
continued his studies and earned his Master of Arts Degree in 
Counseling Psychology in 2001. Eric Roy Budwizer has ten years 
experience in the field of mental health services. His 
expertise lies with working with youths in state foster care. 
He is very dedicated and passionate about his endeavors in 
providing assistance to this population.\1\
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    \1\ Department of Health and Human Services, Statistics from the 
U.S. and Florida, 1999.

                                 
  Statement of Matthew E. Melmed, Zero to Three: National Center for 
                    Infants, Toddlers, and Families
    I am pleased to submit the following testimony on federal foster 
care financing on behalf of ZERO TO THREE. My name is Matthew Melmed. 
For the last 10 years I have been the Executive Director of ZERO TO 
THREE. ZERO TO THREE is a national non-profit organization that has 
worked to advance the healthy development of America's babies and 
toddlers for over twenty-five years. Mr. Chairman, I would like to 
start by thanking you for your ongoing commitment to strengthen our 
nation's child welfare system. I commend you and the Subcommittee for 
holding hearings to address the current structure and financing of the 
foster care system.
    The implications of spending time in foster care are particularly 
important for very young children. We know from the science of early 
childhood development that infancy and toddlerhood are times of intense 
intellectual engagement.i A child's first years set the 
stage for all that follows. During this time--a remarkable 36 months--
the brain undergoes its most dramatic development, and children acquire 
the ability to think, speak, learn, and reason. In fact, by age three, 
roughly 85 percent of the brain's core structure is 
formed.ii Future development in key domains--social, 
emotional, and cognitive--is based on the experiences and relationships 
formed during these critical years.
---------------------------------------------------------------------------
    \i\ Shonkoff, J., & Phillips, D. (Eds.). (2000). From neurons to 
neighborhoods: The science of early childhood development. Washington, 
DC: NationalAcademy Press.
    \ii\ Bruner, C., Goldberg, J. and Kot, V. (1999). The ABC's of 
early childhood: Trends, information and evidence for use in developing 
an early childhood system of care and education. A joint publication of 
Iowa Kids Count and the Iowa Forum for Children and Families.
---------------------------------------------------------------------------
Portrait of Very Young Children in Foster Care
    Infants are the fastest growing category of children entering 
foster care in the United States.iii They comprise the 
largest cohort of young children in care--accounting for 1 in 5 
admissions.iv Twenty-one percent of all children in foster 
care were admitted prior to their first birthday and 45 percent of all 
infant placements occurred within 30 days of the child's 
birth.v
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    \iii\  Dicker, S., Gordon, E., Knitzer, J. (2001) Improving the 
odds for the healthy development of young children in foster care.  New 
York: National Center for Children in Poverty.
    \iv\  Ibid
    \v\  Wulczyn, F., Hislop, K., & Harden, B (2002). The placement of 
infants in foster care. Infant Mental Health Journal, 23(5), 454-475; 
Oser, C. & Cohen, J. (2002). America's babies: The ZERO TO THREE 
PolicyCenter data book.  Washington, DC: ZERO TO THREE Press.
---------------------------------------------------------------------------
    Once they have been removed from their homes and placed in foster 
care, infants and toddlers are more likely than older children to be 
abused and neglected and to stay in foster care longer.vi 
Half of all babies who enter foster care before they are three months 
old spend 31 months or longer in placementvii and they are 
less likely to be reunified with their parents. Thirty-six percent of 
infants who enter care between birth and three months of age are 
reunified with their parents compared to 56 percent of infants who 
enter care at 10-12 months of age.viii
---------------------------------------------------------------------------
    \vi\ Wulczyn, F. & Hislop, K. (2002). Babies in foster care: The 
numbers call for attention. ZERO TO THREE Journal, (22) 4, 14-15.
    \viii\ Ibid
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Developmental Impact of Child Abuse and Neglect on Very Young Children
    The developmental impact of child abuse and neglect is greatest 
among the very young. Infants and toddlers are extremely vulnerable to 
the effects of maltreatment. Its impact on their emotional, 
developmental and physical health can have life-long implications if 
not properly addressed. Research shows that young children who have 
experienced physical abuse have lower social competence, show less 
empathy, have difficulty recognizing others' emotions, are more likely 
to be insecurely attached to their parents, and have deficits in IQ 
scores, language ability, and school performance.ix Without 
intervention, by the time these children reach school age, they will 
also likely be at risk for social problems and learning deficits. 
Compounding the problem, one third of the individuals who were abused 
and neglected as children can be expected to abuse their own 
children.x
---------------------------------------------------------------------------
    \ix\ Shonkoff, J., & Phillips, D. (Eds.). (2000). From neurons to 
neighborhoods: The science of early childhood development.  Washington, 
DC: NationalAcademy Press.
    \x\ National Research Council. (1993). Understanding child abuse 
and neglect.  p. 223.
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    According to one longitudinal study, being abused or neglected as a 
child increased the likelihood of arrest as a juvenile by 59 percent, 
as an adult by 28 percent, and for a violent crime by 30 
percent.xi Abused and neglected children are also more 
likely to have mental health concerns (suicide attempts and 
posttraumatic stress disorder); educational problems (extremely low IQ 
scores and reading ability); occupational difficulties (high rates of 
unemployment and employment in low-level service jobs); and public 
health and safety issues (prostitution in males and females and alcohol 
problems in females).xii However, research confirms that the 
early years present an unparalleled window of opportunity to 
effectively intervene with at-risk children. And intervening in the 
early years can lead to significant cost savings over time through 
reductions in child abuse and neglect, criminal behavior, welfare 
dependence, and substance abuse. It is critical that child well-being 
be the first priority in all child welfare cases.
---------------------------------------------------------------------------
    \xi\ Widom, C., & Maxfield, M. (2001). An update on the ``Cycle of 
Violence'', Research in Brief, Washington, DC: U.S. Department of 
Justice, Office of Justice Programs, National Institute of Justice.
    \xii\ Ibid
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ZERO TO THREE Recommendations
    We at ZERO TO THREE are very concerned about the financing of the 
federal foster care system. Any changes made to strengthen the system 
must not include a reduction in the federal fiscal resources that are 
currently available. It is critical that we preserve Title IV-E as an 
open-ended entitlement and ensure that any flexibility provided to 
states enables them to invest in the full continuum of services--from 
preventive services to post permanency services. If states do not have 
the assurance of the open-ended entitlement, they will not have the 
option to turn their attention and resources to preventive services. 
Instead, they may be forced to choose between providing foster care 
maintenance payments and providing prevention and post permanency 
services that are key if we hope to reduce the number of children going 
into foster care. Our recommendations on financing include the 
following:

      Maintaining Title IV-E Foster Care Maintenance Payments 
and Adoption Assistance as open-ended entitlements. An open-ended 
entitlement program, Title IV-E is the largest source of federal 
funding for child welfare, providing 48 percent of all federal funding 
for child welfare in 2000.xiii Other programs that support 
child welfare services for the most part are not entitlements and in 
recent years, funding for these programs has been reduced or held 
constant. Title IV-E has increased each year because of the growing 
number of children in need. Title IV-E's open-ended funding ensures 
that caseworkers always have the option of removing eligible children 
from dangerous situations in their homes when other approaches have not 
worked. This open-ended entitlement is also an assurance for states and 
allows them to turn their attention and resources to preventive 
services. Without the assurance of federal funds for foster care 
maintenance payments, states will not be able to invest in front-end 
services which enable them to reduce the number of children going into 
foster care. It is critical that Congress maintain Title IV-E Foster 
Care Maintenance payments and Adoption Assistance as open-ended 
entitlements to ensure an ongoing and stable federal commitment to 
supporting the needs of abused and neglected infants and toddlers.
---------------------------------------------------------------------------
    \xiii\ Child Welfare League of America. 2004 Children's Legislative 
Agenda. Financing Child Welfare Services. Retrieved November 28, 2004 
from www.cwla.org/advocacy/2004legagenda01.htm
---------------------------------------------------------------------------
      Allowing states to reinvest federal dollars that would 
have been expended on foster care to prevention and training efforts if 
states safely reduce the use of foster care maintenance. Under current 
law, when states reduce their foster care expenditures, they lose the 
federal share of savings associated with the reduction. However, 
keeping a child out of foster care can involve significant investments 
for states in early intervention, treatment, and support once a child 
leaves foster care. States should be allowed to reinvest the federal 
dollars that would have been expended on foster care to prevention and 
training efforts if states are able to safely reduce the use of foster 
care maintenance payments. The additional funds would provide an added 
incentive to states to move away from relying on foster care by 
allowing them to transfer the federal savings into a broad range of 
prevention and training efforts to further reduce the need for foster 
care.xiv States should then be required to match the federal 
dollars that they transfer to prevention and training efforts.
---------------------------------------------------------------------------
    \xiv\ The Pew Commission on Children in Foster Care, Fostering the 
Future: Safety, Permanence and Well-Being for Children in Foster Care, 
2004.
---------------------------------------------------------------------------
      Expanding and designating substantial funding to build 
early, preventive services and post permanency services to preserve and 
support families. The structure of child welfare funding must ensure a 
continuum of services, beginning with those that can help prevent abuse 
and neglect and keep families together. Currently such ``front-end'' 
services must compete for funding with more crisis-oriented services. 
Services to preserve and support families are particularly important 
for families with infants and toddlers who may need extra support in 
parenting. We know that 40 percent of young children in foster care 
were born prematurely or with low birthweight, suggesting challenging 
behaviors for which parents may lack the skills to cope. Reunification 
or adoption may bring additional challenges for parents. We know that 
foster children who have returned home to their biological families or 
have been adopted often exhibit difficult behaviors as well as 
emotional issues and medical conditions that may impact their 
development--often due to a history of maltreatment and extended stays 
in foster care. While the Promoting Safe and Stable Families Program 
currently requires states to spend ``significant portions'' of funds 
for Family Preservation and Family Support programs, this vague 
standard and the level of funding for the program do not meet the need 
for supporting families. Greater investment and more direction to 
states are needed to create a system that begins with preventive and 
supportive services. Such services may include home visiting services 
and family support services for families struggling with substance 
abuse and maternal/paternal depression while the child is in out-of-
home care and once the child returns home.
Concerns Beyond Financing
    Our concerns about the foster care system extend far beyond how the 
system is financed. Congress must also focus its attention on the 
social, emotional and cognitive needs of infants and toddlers in foster 
care and those who are at-risk of entering care. We must ensure that 
there is greater awareness among federal and state policymakers, 
judges, social workers, and parents of the unique needs of very young 
children in the system and assure that babies and toddlers in out-of-
home care have access to the services they need to support their 
healthy development. Our recommendations include:
Require the Department of Health and Human Services to Promote Greater 
        Awareness of the Unique Needs of Infants and Toddlers and 
        Improve Their Care While in the Child Welfare System:
      Provide guidelines for states for the care of infants and 
toddlers in the child welfare system in the Child and Family Service 
Reviews (CFSRs) including:

        Visitation standards and developmentally appropriate 
visitation practices for infants and toddlers in out-of-home care. One 
of the major challenges faced by young children in foster care is 
maintaining attachment relationships with their parents. Current 
visitation practices usually consist of brief encounters that occur 
anywhere from once a month to once or twice a week. For very young 
children, infrequent visits are not enough to establish and maintain a 
healthy parent-child relationship. Infants and toddlers build strong 
attachments to their biological parents through frequent and extended 
contact. One month in the life of a baby is an eternity. Parental 
visitation can and should be looked at strategically. Visits can play 
an important role in concurrent planning and can be used to assess the 
parent-child relationship and how the family is progressing. The 
frequency and success of visits between children and parents can 
provide a caseworker with evidence for either movement to an 
alternative plan for the child (i.e. adoption or guardianship) or 
movement for early reunification. Visits should occur frequently, in a 
safe setting that is comfortable for both parent and child, and should 
last long enough for a positive relationship to develop and strengthen. 
Guidelines should be developed for states on visitation standards and 
developmentally appropriate visitation practices for infants and 
toddlers in out of home care. In addition, supports for visitation--
training for child welfare workers and foster parents--should be 
developed since the challenges of seeing and losing a parent during a 
visit can be so painful for all involved.
        Minimizing multiple placements while in out-of-home 
care. In the first year of life, babies need to have the opportunity to 
develop a close, trusting relationship or attachment with one special 
person. The ability to attach to a significant caretaker is one of the 
most important emotional milestones a baby needs to achieve in order to 
become a child who is trusting, confident, and able to regulate his or 
her own stress and distress. For babies in foster care, forming this 
secure attachment is difficult. Multiple foster care placements present 
a host of traumas for very young children. When a baby faces a change 
in placement, fragile new relationships with foster parents are severed 
reinforcing feelings of abandonment and distrust. Babies grieve when 
their relationships are disrupted and this sadness adversely effects 
their development. All placement decisions should focus on promoting 
security and continuity for infants and toddlers in out-of-home care. 
Guidelines should be developed for states on how to minimize multiple 
placements for infants and toddlers in out of home care. For example, a 
state may decide to develop specialized foster care homes for infants 
who come into the child welfare system or decide to develop a system 
for tracking the number of moves an infant makes while in foster care. 
When a change in placement is necessary, child welfare workers and 
foster parents should receive training and information on how to handle 
transitions with infants and toddlers.
Provide incentives and adequate funding for states to:
      Promote timely permanent placements for infants and 
toddlers in foster care by creating a new permanence incentive that 
includes reunification with the child's biological family, adoption or 
guardianship. States should be provided with a Permanence Incentive to 
promote timely permanent placements for infants and toddlers in foster 
care. As previously discussed, when a baby faces a change in placement, 
fragile new relationships with foster parents are severed reinforcing 
feelings of abandonment and distrust. Creating a Permanence Incentive 
would help to ensure babies are placed in a stable foster care 
arrangement and moved to a permanent placement as quickly as possible 
whether that move is through reunification with the biological family, 
adoption or guardianship. Post permanency services should also be made 
available for families to facilitate the child's successful transition 
back home.
      Provide training for child welfare workers and staff of 
related agencies who work with infants in foster care around the unique 
needs of infants and toddlers. There is a wealth of scientific 
knowledge available about very early child development which can be 
used to make informed decisions about babies in the child welfare 
system. However, child welfare workers are overburdened and do not have 
the time or means to seek the training that would provide them with 
this scientific knowledge base. Congress should provide grants to 
states to enable them to develop and provide training for child welfare 
workers and other staff who work with infants in foster care around the 
unique needs of infants and toddlers. Staff of related agencies who 
work with infants in foster care may include mental health specialists, 
child care providers, Early Head Start teachers and early intervention 
specialists. Funds are needed not only to support the development of 
the training but also to provide reprieve for the caseworkers and other 
agency staff so they can have time off for ongoing training.
      Improve the courts' ability to address the needs of 
infants and toddlers through training for juvenile and family court 
judges and cross-systems approaches to building community capacity to 
address these cases. Juvenile and Family Court Judges are uniquely 
positioned to improve the well-being of infants and toddlers in the 
child welfare system and to ensure that they are receiving the 
resources and supports they need to address their special needs. In 
fact, judges have an opportunity, perhaps the last one for these most 
vulnerable infants and toddlers, to focus on healing in the process of 
adjudicating the case.xv A groundbreaking effort has been 
developed in the Miami-Dade Juvenile Court to address the well-being of 
infants, toddlers and their families. Three years of data in the Miami-
Dade Juvenile Court show substantial gains in improving parental 
sensitivity, child and parent interaction, and behavioral and emotional 
parental and child responsiveness. Congress should provide incentives 
and adequate funding for states to improve the courts' ability to 
address the needs of infants and toddlers through training for Juvenile 
and Family Court Judges and cross-system approaches to building 
community capacity to address these cases.
---------------------------------------------------------------------------
    \xv\ Lederman, C., Osofsky, J., & Katz, L. (2001). When the bough 
breaks the cradle will fall: Promoting the health and well being of 
infants and toddlers in juvenile court. Juvenile and Family Court 
Journal, (52)4, 33-37.
---------------------------------------------------------------------------
      Implement the CAPTA and new IDEA mandate requiring states 
to develop provisions and procedures for referral of a child under Age 
3 involved in a substantiated case of child abuse and neglect to Part C 
of IDEA. As states work to implement the CAPTA and IDEA mandate, they 
face new challenges in trying to ensure that the Part C system is able 
to respond to these new referrals. Impacts will vary substantially from 
state to state because of significant differences among states' Part C 
systems. In some states, very large increases in workload for providers 
of Part C evaluation, assessment and intervention services are likely 
as a result of this legislation. In all states, a need to enhance the 
capacity of the Part C system to respond to social-emotional and 
behavioral problems (early childhood mental health) is likely. And in 
most or all states, the cost of responding to this federal mandate will 
be a problem, given very tight state budgets, unless the Federal 
Government significantly increases funding for Part C. Congress should 
provide incentives and adequate funding for states to implement the 
CAPTA and IDEA mandate.
      Increase access to early intervention screening and Part 
C services for infants and toddlers in foster care. Because of the 
rapid rate of development in the first three years, developmental 
screening in early childhood needs to be repeated on a regular basis 
with infants and toddlers in the child welfare system. These babies 
have ongoing risk factors that predispose them to developmental delays. 
We know that different domains of development have key milestones 
emerging at different times in early childhood. For example, a six-
month-old may receive age appropriate scores in motor and speech-
language development; however, when that child is 18-months-old and the 
demands of communication are more sophisticated, that six-month-old may 
now be a toddler with a significant language delay. And this delay may 
not be picked up without guidance to foster parents and child welfare 
workers on the need for early intervention. Congress should provide 
incentives and adequate funding for states to increase access to early 
intervention screening and Part C services for infants and toddlers in 
foster care. They should receive developmental evaluations every 6 
months before one year of age and then annually until 3 years of age.
      Increase access to preventive and treatment services for 
families in the child welfare system for whom substance abuse is an 
issue. Millions of children and families are impacted by the growing 
epidemic of substance abuse. In fact, an estimated 11 percent of all 
children live in families where one or more parents abuse alcohol or 
other drugs.xvi This issue is even more pressing for 
families in the child welfare system--up to 80 percent of children in 
the child welfare system are affected by substance 
abuse.xvii Families need access to a community-based, 
coordinated system of comprehensive family drug and alcohol treatment. 
Congress should increase access to prevention and treatment services 
for families in the child welfare system for whom substance abuse is an 
issue. Prevention and treatment services should include: prevention and 
early intervention services for parents at-risk of substance abuse; a 
range of comprehensive treatment options including home-based, 
outpatient, and family-oriented residential treatment options; 
aftercare support for families in recovery; and preventive and early 
intervention services for children that address their mental, 
emotional, and developmental needs.
---------------------------------------------------------------------------
    \xvi\ Child Welfare League of America. 2004 Children's Legislative 
Agenda. Substance Abuse, Families and Recovery. Retrieved December 14, 
2004 from www.cwla.org/advocacy/2004legagenda14.htm
    \xvii\ Child Welfare League of America. 2004 Children's Legislative 
Agenda. Substance Abuse, Families and Recovery. Retrieved December 14, 
2004 from www.cwla.org/advocacy/2004legagenda14.htm
---------------------------------------------------------------------------
Require state child welfare agencies to:
      Include in their state plans a description of their 
approach to addressing the specific needs of infants and toddlers 
including the items addressed by the department of Health and Human 
Services Guidelines Regarding Care of Infants and Toddlers in the Child 
Welfare System. Infants and toddlers in foster care have needs that are 
very different than older children. They also move through the child 
welfare system in ways that are very different than older children--
they stay in care longer, they are less likely to be reunified with 
their parents and they are more likely to be abused and neglected while 
in foster care. State Child Welfare Agencies should address the unique 
needs of infants and toddlers in their state plans, with a detailed 
description of their approach to dealing with issues for babies in 
foster care such as reducing multiple foster care placements, assuring 
regular visitation with biological parents, assuring that all infants 
and toddlers have access to early childhood and family mental health 
services, addressing the effects of trauma and separation on infants 
and toddlers, and promoting interventions that can help foster their 
healthy development across all domains.
      Establish cross-system commissions on young children in 
foster care to ensure that they receive comprehensive, developmentally 
appropriate health care, mental health assessment and access to mental 
health services, and access to quality early care and learning 
experiences.

    Children in foster care often have needs that extend beyond the 
scope of the child welfare agency and receive services from a variety 
of other agencies such as mental health agencies, health agencies, and 
early learning programs. If these various agencies that provide 
services and supports to at-risk children and their families were in 
close contact, we would be better able to ensure that the children's 
physical, social, emotional and cognitive needs were met. Congress 
should require that states establish multi-disciplinary commissions on 
young children in foster care to ensure that they receive 
comprehensive, developmentally appropriate health care, mental health 
assessment and access to mental health services, and access to quality 
early care and learning experiences. These commissions should also 
provide interdisciplinary cross-system training for case workers, home 
visitors, foster parents, advocates, child care providers, and early 
intervention specialists and others who work with children in the child 
welfare system so that all public programs available for babies, 
toddlers and their caregivers (i.e. WIC, Early Head Start, Child Care, 
TANF, Medicaid, Part C, home visitors, Title V Maternal and Child 
Health, and State Children's Health Insurance) can come together to 
support early development.
Conclusion
    We must ensure that babies and toddlers in the child welfare system 
are healthy and safe. During the first years of life, children rapidly 
develop foundational capabilities--cognitive, social, and emotional--on 
which subsequent development builds. The amazing growth that takes 
place in the first three years of life creates vulnerability and 
promise for all children. These years are even more important for 
maltreated infants and toddlers. We know from the science of early 
childhood development what infants and toddlers need for healthy 
social, emotional, and cognitive development. We also know that infants 
and toddlers in the child welfare system are at great risk for poor 
outcomes. We must continue to seek support for services and programs 
that ensure that our nation's youngest and most vulnerable children are 
healthy and safe.
    An effective child welfare financing approach must ensure that 
states can focus on what is best for individual children rather than 
pushing them toward one option or another. It is simply unacceptable to 
wait until the safety of very young children is put at-risk before 
proper investments are made to address their needs. However, it is 
unrealistic to think that placement in out of home care will not be the 
proper course of action for some children. We must therefore provide 
states with adequate funds to both ensure the safety, permanence and 
well-being of children in foster care and provide preventive services 
for those at risk of needing care.
    I urge the Subcommittee to at a minimum, maintain the federal 
fiscal resources that are currently available for children in foster 
care. We must preserve Title IV-E as an open-ended entitlement and 
ensure that any flexibility provided to states enables them to invest 
in the full continuum of services--from preventive services to post 
permanency services. I also urge the Subcommittee to acknowledge and 
address the unique needs of our youngest citizens who are in out-of-
home care and ensure that they have access to the services and supports 
they need for healthy social, emotional, and cognitive development.
    Thank you for your time and for your commitment to our nation's at-
risk infants and toddlers.

                                 
