Statement by
Wade F. Horn, Ph.D.
Assistant Secretary for Children and Families Department of Health and Human Services
President's Proposal for Improving Child Welfare
before the
Committee on Ways and Means, Subcommittee on Human Resources, U.S. House of Representatives

June 12, 2003

Mr. Chairman and Members of the Subcommittee:

Thank you for the opportunity to appear before you to discuss the President's proposal for improving child welfare in our Nation. The proposal responds to long-term criticisms about the current structure for addressing the needs of at-risk children and families and the Administration's desire to support innovation in addressing this critical issue. Our proposal provides States and Indian Tribes with both the flexibility and sustained financial support needed to build innovative programs that provide effective services to the thousands of children and families in need of child welfare services.


Over the past several years, with your help, the Federal government has made important strides in reforming child welfare services. Through the passage of the Adoption and Safe Families Act of 1997 and other important legislative reforms, the development of national outcome measures, and the implementation of the new, results-oriented Child and Family Services (CFS) review process, we have built a national consensus on the key goals for child welfare: ensuring children's safety, meeting children's needs for timely permanency in a loving family, and promoting child and family well being. We have developed regulations and policies to promote these goals and an infrastructure to track progress toward meeting them. We also have seen important progress, most notably in the area of adoption, with the annual number of children adopted from foster care increasing from 31,000 in FY 1997 to 51,000 in FY 2001. We expect that the final number of adoptions for FY 2002 will exceed last year's impressive results.

It is fair to say that because of improved data collection and the CFS review process, we have more and better information than ever before about the state of child welfare services, both strengths and weaknesses. And despite the progress to date, it is evident that we still have a long way to go. Newspaper accounts from around the country continue to report individual tragedies where the system has failed to protect children. National statistics show that too many children are lingering in foster care and waiting for adoptive families.

The CFS reviews began in FY 2001 and, to date, we have reviewed 37 States. We will complete the first round of all 50 States, the District of Columbia, and Puerto Rico by the end of March 2004. This is the most comprehensive and far-reaching Federal review of State child welfare services ever conducted. The review covers all areas of child welfare services, from child protection and family preservation to adoption and youth development. When weaknesses are identified, States are required to implement Program Improvement Plans. Through a network of National Resource Centers, we provide technical assistance to help States develop and implement their Plans.

Among the most significant findings of the CFS reviews:

  • States are performing slightly better on safety outcomes for children than on permanency and well being. In fact, the timely achievement of permanency outcomes for children in foster care, especially adoption, is one of the weakest areas of State performance.
  • All State program improvement plans need to include provisions to strengthen the quality of front-line practice in such areas as conducting needs assessments of children and families and developing effective case plans.
  • Most States need to make significant improvements in their judicial processes for monitoring children in foster care, such as ensuring timely court hearings and increasing their attention to timely termination of parental rights, where appropriate.
  • The reviews pointed to a correlation between frequent caseworker visits with children and positive findings in other areas, such as timely permanency achievement and indicators of child well being

What more can be done to address these program shortfalls and better serve this vulnerable population?

The Bush Administration is proud of the progress we have made to date in providing more resources to States to support children, youth and families. We were pleased to be able to work with this Committee and other Members of Congress to pass legislation reauthorizing and increasing the funding level for the Promoting Safe and Stable Families program, which funds family support, family preservation, time-limited reunification, and adoption promotion and support services. And we appreciate the authorization of the President's proposal to provide education and training vouchers for youth who "age out" of foster care. This program offers youth a chance to pursue and complete their education, thereby improving their prospects to become truly independent and self-sufficient adults.

The recent 2003 Consolidated Appropriations Resolution provided almost $405 million for the Promoting Safe and Stable Families program, $29 million over the FY 2002 level, and included additional first-time funding of nearly $42 million to support educational vouchers for youth aging out of foster care. The President's FY 2004 request would go a step further and fully fund the Promoting Safe and Stable Families program at the level of $505 million and the educational vouchers program at $60 million. I hope that you will join us in supporting these targeted but important investments, as well as critical policy changes to foster care and adoption incentives requested by the Administration.

Child Welfare Program Option

The programs mentioned above make an important contribution to improving child welfare services. However, given what we have learned about the States' child welfare systems, we all must continue to do more to protect children, support families, and promote timely permanency. Therefore, in our FY 2004 budget, the Administration is proposing a major change in the title IV-E foster care program. Under this proposal, States would be offered an alternative financing option to the current title IV-E entitlement program, where States could choose to administer their foster care program with a fixed allocation of funds over a five-year period, should this approach better support their particular child welfare needs. States that do not elect to receive funding provided by this option would continue operating under the current title IV-E entitlement program.

Under current law, States may be reimbursed for a percentage (ranging from 50 to 79 percent) of the costs associated with the foster care stays of eligible children. The Federal government also reimburses States for 50 percent of allowable administrative costs and 75 percent of training costs for State and local staff and foster parents. While an essential source of funding to assist States with supporting children in foster care and related administrative and training expenses, the program has long been criticized for, among other things, its lack of flexibility, administrative burdens, and narrow focus on only those children already removed from the home.

We have consistently heard from the States that the title IV-E foster care program is too restrictive because it provides funds only for poor children who have been removed from the home. In order to be eligible for title IV-E, a child must have been removed from a family that would have met AFDC eligibility requirements as they existed in 1996, prior to the enactment of the Personal Responsibility and Work Opportunity Reconciliation Act and the creation of the Temporary Assistance for Needy Families program. Under the IV-E program, the Federal government does not share in the expenses relating to non-IV-E children and, as time passes, a declining proportion of foster care children nationally meet the old AFDC income standard.

The program also is criticized for failing to support the goal of permanency. While reimbursement for foster care and related case management services is open-ended, title IV-E funds may not be used for other types of services that could prevent a child from needing to be placed in care in the first place or that could facilitate the child's returning home or moving to another permanent placement. Furthermore, a State that is successful in preventing unnecessary removals or in shortening lengths of foster care stays actually is apt to receive less Federal funding than a State where children remain in foster care for long periods of time.

States are concerned that the title IV-E program contains significant administrative burdens, which take valuable time and resources away from serving children and families. These include making IV-E eligibility and re-eligibility determinations and engaging in the cumbersome cost- allocation process for claiming administrative costs.

In response to these concerns the Administration is proposing the alternative funding option to provide States with a more flexible environment so they can design more effective ways to strengthen services to vulnerable children and families and to further the goal of helping States develop a seamless child welfare system. Specifically, the alternative funding option would include dollars currently estimated for the existing title IV-E foster care maintenance payments program and the associated administrative costs. States that choose this option would be able to use the funds for foster care payments, prevention activities, permanency efforts (including subsidized guardianships), case management, administrative activities (including developing and operating State information systems), training child welfare staff, and other service-related child welfare activities -- a far broader range of uses than allowed under current law. The proposal would provide States with the flexibility to develop a child welfare system that supports a continuum of services to families in crisis and children at risk while removing the administrative burden of many of the current Federal requirements, including the need to determine the child's eligibility for AFDC.

While States that choose this option would have much greater flexibility in how they use 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 of 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.

States that select this alternative financing structure would be required to apply for the new child welfare program option soon after enactment of the proposed legislation and to commit to the new funding structure for the full five-year period. State allocations would be determined in consultation with States, using historic expenditure information, and would be cost neutral over five years. However, a State could receive up-front funding at the outset of the program cycle. This approach would allow States to develop innovative programs and make initial investments that are likely to result in cost savings to the States in later years. 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.

To help protect States against unanticipated emergencies affecting their foster care systems, the proposal also includes a provision that would allow a participating State to access additional funding through the TANF contingency fund if specified crisis conditions are met.

In addition to providing a new option for States, our 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 direct title IV-E funding, although some Tribes are able to access funds through agreements with States. This proposal would open the possibility for Tribes to receive direct title IV-E funding. Indian Tribes would be subject to program requirements similar to those of States. However, the Secretary could waive certain program requirements, provided that doing so would not compromise child safety.

We also are requesting a small administrative set-aside to facilitate program monitoring and technical assistance necessary to support the efforts of State and Tribal child welfare programs and to fund important child welfare research. As States and Tribes develop new and innovative service models and financing structures through the child welfare program option, it will be even more important to ensure that we have sufficient resources to provide technical assistance and to monitor their activities so we have an understanding of how the new option is affecting child welfare services and outcomes and to share any success stories with other States.

We believe this proposal will result in the development of innovative child welfare programs that ultimately will better serve vulnerable children. We ask for your support in making this vision a reality.

Adoption Incentive Proposal

Finally, I would like to take this opportunity to briefly address another proposal in the President's FY 2004 budget as part of our request to reauthorize the Adoption Incentive Program. The Adoption Incentive Program, authorized under the Adoption and Safe Families Act, was the first Federal performance-based incentive program in child welfare. The program proved very successful in engaging all States in efforts to increase adoptions and made an important contribution to the large national increases in adoption we have seen over the past several years. However, as we have analyzed adoption data, we have learned that while the overall number of children being adopted has grown dramatically, older children in foster care still face excessively long waits for adoption, and in many cases, are never adopted. This is clearly a problem that warrants our attention.

In fact, data from the Adoption and Foster Care Analysis and Reporting System (AFCARS) show that between the ages of 8 and 9, the probability that a child will continue to wait in foster care exceeds the probability that the child will be adopted. Further, the number of children in this older age group is growing, now representing almost half of the children waiting to be adopted nationally.

To ensure that the adoption incentive focuses on these hard-to-place children, the President proposes that the Adoption Incentive Program be amended so it continues to recognize and reward overall increases in the number of adoptions while providing a special focus on the adoption needs of children age 9 and older. Awarding the incentive funds in this way will provide a special focus on the adoption needs of older children, while maintaining the goal of increasing adoptions for all waiting children.


In closing, I would like to thank the Subcommittee for the opportunity to discuss the President's bold new vision for strengthening child welfare through our new child welfare program option. This option encourages innovation and the development of cost-effective programming that over time will result in children reaching permanency more quickly and fewer children being removed from the home, a goal we all share. Under this option, we believe that States would be better able to develop a seamless child welfare system that supports a continuum of services to families in crisis and children at risk.

This Administration is firmly committed to improving the lives of every child in America. Secretary Thompson has always been a strong advocate of increasing State control in designing programs that best meet the needs of their citizens. Enacting legislation that will give States a choice in how they design and fund their child welfare programs will move us closer to meeting that commitment. We look forward to working with you to pass legislation implementing these new proposals, and I would be pleased to answer any questions you may have.

Last Revised: June 13, 2003