FY 2005 Budget in Brief

Administration for Children and Families

On this page:
Discretionary Spending
Entitlement Spending
Child Support Enforcement: Collections and Costs
ACF Proposed Entitlement Legislation

Discretionary Spending

The FY 2005 budget request for ACF totals $46.6 billion, a net decrease of $2.4 billion, or 5 percent below the FY 2004 level. The decrease from FY 2004 reflects that $2.5 billion under TANF is available for FY 2004 through FY 2009. Of total funds, $13.9 billion is the discretionary program level and $32.7 billion is the entitlement budget authority.

Discretionary Spending

The FY 2005 discretionary budget totals $13.9 billion, a net increase of $517 million or 4 percent over the FY 2004 level.

Marriage and Healthy Family Development Initiative

The budget includes an initiative to build on the research that there are life-long benefits of growing up in married-parent families. This initiative, comprised of new and existing programs, has four elements: 1) supporting marriage and families; 2) providing tools to parents; 3) teaching values to children; and 4) encouraging community and faith-based organizations to support families.

Responsible Choices: The initiative will educate teens and parents about the risks associated with early sexual activity and provide the tools needed to help teens make responsible choices. To accomplish this goal, the budget doubles funding for Abstinence Education activities totaling $273 million, of which $236 million will be administered by ACF.

The Community-Based Abstinence Education program, funded at $186 million, will support up to 440 grants to public and private entities for the development and implementation of abstinence-only education programs for adolescents, ages 12 through 18, in communities across the country. This program, which began in FY 2001, is unique in that it funds projects focused entirely on educating young people and creating a positive environment within communities that support teen decisions to postpone sexual activity until marriage.

In addition to the Community-Based discretionary grant program, ACF will administer the $50 million Abstinence Education Grants to States program. This program provides grants to 59 States and Territories for mentoring, counseling, and adult supervision to promote abstinence with a focus on those groups which are most likely to bear children out of wedlock.

HHS is proposing to transfer administration of the Community-Based Abstinence Education and Abstinence Education Grants to States programs from the Health Resources and Services Administration to ACF. This move will foster linkages with ACF's existing efforts to promote comprehensive positive youth development and reduce teen pregnancy.

Within the Office of Population Affairs, the budget also doubles funding for the abstinence activities conducted through the Adolescent Family Life program and supports a new public awareness campaign to help parents communicate with their children about the health risks.

Responsible Fatherhood and Healthy Marriage: Over 25 million children are growing up in homes without fathers. These children face a greater chance of living in poverty, performing poorly in school, and developing emotional and behavioral problems. The Administration is committed to making responsible fatherhood and healthy marriage a national priority and will continue to work with Congress to enact legislation to assist non-custodial fathers to become more involved in the lives of their children. The budget includes $50 million for 75 competitive grants to faith-based and community organizations, along with Indian Tribes and Tribal organizations, to encourage and help fathers to support their families, avoid welfare, improve fathers' ability to manage family business affairs, and support healthy marriages and married fatherhood.

Preventing and Treating Child Abuse: The most recent annual HHS Child Maltreatment Report indicates that each year an estimated 903,000 children in the United States are victims of abuse and neglect including 1,300 child deaths. As part of this initiative, the FY 2005 request doubles funding for two State child abuse grant programs totaling $107 million, to reduce the incidence of child abuse and neglect and provide services to those who are victims. Additional support for the Community-Based Child Abuse Prevention program will fund prevention services including, parent education and home visiting, available to an additional 55,000 children and families. Funding for the Child Abuse State Grant program will shorten the time to the delivery of post-investigative services by 40 percent and increase the number of children receiving those services by almost 20 percent. Examples of post-investigative services include individual counseling, case management, and in-home services such as encouraging good hygiene and positive nutritional habits, providing parent education and lessons in positive discipline.

Supporting Healthy Marriages: The initiative builds further upon the Administration's TANF Reauthorization proposal, which includes $1 billion over five years to promote healthy marriage and family formation. The budget proposes to increase Federal funds available for this purpose to $1.2 billion over five years – a $160 million increase over the original TANF proposal. For a complete discussion of the TANF proposal, see the ACF Entitlement Spending section.

Head Start

The budget request includes $6.9 billion for Head Start, an increase of $169 million over the FY 2004 level. In FY 2005, 919,000 children will receive Head Start services including 62,000 children in Early Head Start. In FY 2005, ACF will continue to emphasize the goals of the President's Good Start Grow Smart Initiative to strengthen Head Start by partnering with States to improve early childhood education; providing information on child development and early learning to teachers, caregivers, parents, and grandparents; and closing the gap between research and practice in early childhood education.

The FY 2005 request includes $45 million to support the President's initiative to improve Head Start by funding nine State pilot projects to coordinate State preschool programs, Federal child care grants, and Head Start into a comprehensive system of early childhood programs. Last year, the President proposed a comprehensive reauthorization of the Head Start program with the goal of strengthening the program and, through coordination, improving preschool programs in general to help ensure that children are prepared to succeed in school. These new pilot projects will provide States with assistance to implement these reforms. The budget also includes an increase of $124 million to allow grantees to maintain competitive salaries for Head Start teachers and to support program enhancements to promote early literacy and cognitive development. Funds are also included for training and technical assistance.

Head Start will also contribute to the President's Marriage and Healthy Family Development Initiative. In FY 2005, it will offer training for between 2,000 and 3,000 Head Start parents in a science-based curriculum designed to improve early language and literacy skill outcomes. Those parents trained would then become mentors and train thousands of other parents throughout the Country.

Head Start programs are designed to promote school readiness by enhancing the social and cognitive development of children through the provision of educational, health, nutritional, social, and other services. Head Start programs enhance cognitive, language and socio-emotional development to enable each child to develop the early reading and mathematic skills they need to succeed in school. They also fully engage parents in their child's preschool experience by helping them achieve their educational, literacy and employment goals, supporting parent's role in their children's learning, and by emphasizing the direct involvement of parents in the administration of local Head Start programs.

Faith-Based and Community Initiative

The budget maintains a commitment to fund faith-based and community organizations including a total of $161 million in ACF to help grass-roots organizations expand services to their communities, mentor children of prisoners, and provide a safe place for young pregnant and parenting mothers. As part of the larger Faith-Based and Community Initiative, these programs offer a fresh approach to addressing the unmet needs of Americans. The initiative creates results by empowering those at the community level who can best identify the social and health problems and produce change.

Since the creation of the Center for Faith-Based and Community Initiatives (CFBCI) in 2001, it has worked with Agencies across the Department to eliminate barriers in regulations, rules, internal guidance, policies and procedures, and practices to the participation of faith-based and other community organizations; to propose the development of innovative pilot and demonstration programs; and to expand Charitable Choice provisions. Outreach activities include providing technical assistance to faith-based and community groups on relevant HHS program areas, including such Presidential initiatives as the Compassion Capital Fund and the Mentoring Children of Prisoners program.

Compassion Capital Fund: The budget provides a total of $100 million for the Compassion Capital Fund, doubling the FY 2004 level. Initiated in FY 2002, the Compassion Capital Fund awards grants to organizations which provide technical assistance to help faith-based and community organizations access funding sources, operate and manage their programs, develop and train staff, expand the reach of programs into the community, and replicate promising programs. Funds are also awarded for smaller capacity-building grants, research into best practices, and to develop a national resource center and information clearinghouse. At the level requested in FY 2005, an estimated 78 intermediary organizations will be funded.

In FY 2002, Compassion Capital Fund grantees provided capacity-building training and technical assistance to many local grassroots organizations. In addition, these grantees made over $10 million available directly to 565 faith-based and community organizations in 34 States to support a range of activities including reduction of homelessness, positive youth development, and transitioning individuals who had been incarcerated back into the community. In FY 2003, the Compassion Capital Fund expanded to begin work in 10 States, plus the District of Columbia, and provided one-time capacity-building grants to smaller faith-based organizations to expand existing services to at-risk youth and people who are homeless.

Mentoring Children of Prisoners: The request includes $50 million, maintaining the FY 2004 level, to provide grants of up to $5 million each to enable public and private organizations to establish or expand projects that provide mentoring for children of incarcerated parents and those recently released from prison. In FY 2003, programs linked 6,000 children with a mentor. In FY 2004 and continued in FY 2005, programs will serve five times as many children, offering a mentoring relationship to over 30,000 children with a focus on nutrition, physical health, and messages about abstinence.

Between 1991 and 1999, the number of children with a parent in a Federal or State correctional facility increased by more than 100 percent, from approximately 900,000 to almost 2 million. Studies indicate that children with incarcerated parents have a seven times greater chance than the general population of becoming incarcerated themselves and are more likely to succumb to substance abuse, gangs, early childbearing, and delinquency. This program helps children through the time their parents are imprisoned, including efforts to keep children connected to a parent in prison, and increases the chances that the family can successfully come together when the parent is released.

Maternity Group Homes: The budget includes $10 million for the recently authorized Maternity Groups Homes program. These homes provide pregnant and parenting youth access to transitional living opportunities, an alternative to the environments of violence and despair which many young pregnant mothers face, to secure brighter futures for their children. These funds will support adult-supervised community-based group homes for mothers who cannot live safely with their own families and a range of coordinated services including child care, job training, and counseling.

Low Income Home Energy Assistance Program (LIHEAP)

The FY 2005 budget requests a total of $2.0 billion for LIHEAP, an increase of $112 million. This includes $1.8 billion for formula block grants to States and $200 million for contingency funding. The contingency funds are available for release in a heating or cooling emergency such as extreme temperature or high fuel prices or to meet energy needs related to a natural disaster.

LIHEAP provides heating and cooling benefits to approximately 4.6 million households each year. Of the households receiving heating assistance, about one-third include an elderly member 60 years or older, over one-third include a person with a disability, almost one-half include a child under age 18, and over one-third do not receive any other public assistance.

Adoption Incentives

The Adoption Incentives program provides bonus payments to States that are successful in increasing the number of children adopted from the public foster care system. Despite recent progress, at the end of FY 2002, there were over 534,000 children in foster care, almost 120,000 of whom had adoption as their permanent placement goal. Further, half of those children waiting to be adopted were over the age of nine.

The FY 2005 request includes $32 million to support all bonus earning adoptions estimated to be completed in the prior year. Beginning in FY 2004 as part of the recent program reauthorization, and continued in FY 2005, States will be eligible to receive an award specifically for the adoption of children over the age of nine. States would be eligible to receive up to $8,000 per child to use toward recruiting prospective adoptive parents, child welfare staff training, and post-adoption family support services. Reflecting the new bonuses, payments to States increased from $15 million in FY 2003 to an estimated $35 million FY 2004.

Data shows that once a child waiting for adoption reaches eight or nine years old, the probability that the child will continue to wait in foster care exceeds the probability that the child will be adopted. This new bonus recognizes the need to move older children out of foster care and into caring permanent homes. States will continue to be eligible for bonus payments based on the total number of children adopted and the adoption of children with special needs who are under the age of nine.

Child Care

The Child Care and Development Block Grant program to States, Territories and Tribes assists low-income families in accessing quality child care for children when the parents work or participate in education or training. While the majority of the funds support direct child care assistance payments for parents, funds are also used to provide consumer education to parents to enable them to make good child care choices; to assist States in implementing health, safety, licensing, and registration standards; and for research on innovative child care strategies.

ACF's most recent data indicates that $4.8 billion in Federal and related State child care funds provides child care assistance to approximately 1.8 million children each month. However, when combined with other Federal and related State funds, child care assistance is available to 2.5 million children, representing an estimated 27 percent of children eligible under State rules.

Refugee Programs

Refugee and Entrant Assistance: The budget includes $419 million in FY 2005 to support refugees, asylees, Cubans/Haitians, and victims of torture and trafficking. The FY 2005 request is sufficient to provide a full eight months of cash and medical assistance and access to social service programs such as English language training, case management, employment preparation, and job placement and retention services for an estimated 95,000 annual entrants, including 50,000 refugee entrants. In addition, the budget continues support for services, including rehabilitation, social, and legal services for those who have experienced torture as well as benefits to victims of trafficking.

Unaccompanied Alien Children: Since the Unaccompanied Alien Children (UAC) program was transferred to HHS in 2003, as part of the Homeland Security Act, ACF has worked to ensure that children are cared for in the least restrictive setting appropriate by increasing the use of shelter and foster care facilities and reducing the use of secure detention facilities. Currently, there are approximately 600 children in care at any given time, 20 percent more than when the program was transferred. In addition, the Homeland Security Act and existing legal requirements, resulting from a class-action settlement with the former Immigration Naturalization Service, mandated that ACF assume additional responsibilities including a mechanism to coordinate and assign pro-bono attorneys for UACs, a new system to maintain current and accurate information about the children in care, and enhanced medical services. In FY 2004, funding for the UAC program nearly doubled reflecting the higher number of children in care and to begin work in meeting new and existing requirements. The FY 2005 request includes a total of $54 million to maintain the current level of program support.

Developmental Disabilities

Today, there are nearly four million Americans with developmental disabilities. Developmental disabilities are severe, chronic disabilities attributable to mental and/or physical impairment, which manifest before age 22 and are likely to continue indefinitely.

In FY 2005, the budget request includes $165 million for programs that support partnerships with State governments, local communities, and the private sector to assist people with developmental disabilities to reach their maximum potential through increased independence, productivity, and community integration. This past year, a Program Assessment Rating Tool (PART) review found that the activities of the Administration for Developmental Disabilities (ADD) and its grantees complement other public and private efforts by striving to provide services that fill service gaps. ADD is planning to conduct a comprehensive, independent evaluation to inform program improvements.

Since 2002, when Secretary Thompson announced its creation, the Office on Disability (OD), in the Office of the Secretary, has been the focal point within HHS for the implementation and coordination of policies, programs, and special initiatives related to disabilities. The Office's more recent achievements include co-sponsoring a symposium on home-ownership for persons with disabilities to develop a roadmap to help all consumers understand how States, communities, and local constituent organizations can offer for home-ownership and coordinating an intergovernmental planning initiative to assist States and local communities develop and implement action plans to address the health, human service, employment, education, housing, and transportation needs of young adults (16-30 years) with disabilities.

Disabled Voter Services: The FY 2005 President's Budget maintains $15 million for the Disabled Voter Services programs. These programs provide support to States to establish, expand, and improve access for the election process to the over 20 million individuals with disabilities who are of voting age. In FY 2003, first-time grant awards supported a range of activities including facilitating web-based communication between people with disabilities and election officials and developing a training video for election officials, poll workers, and volunteers on providing assistance to voters with visual impairments.

Community Services Programs

Community services programs fund an array of programs and activities providing housing and employment assistance, education and training services, nutrition, energy assistance, health and substance abuse treatment, as well as economic development opportunities.

The budget proposes a total of $552 million in support of the Community Services Block Grant (CSBG), Individual Development Accounts and other community services programs. This is $179 million less than the FY 2004 level. Of this overall decrease, $147 million is in the block grant. The budget request is consistent with the President's reauthorization proposal to develop rigorous performance measures and target funds to programs which have demonstrated success.

The cornerstone of the President's CSBG reauthorization proposal is to strengthen accountability and performance outcomes of the CSBG program. The Administration continues to work toward legislation that provides for the Secretary, in consultation with the States and the Community Action Agencies (CAA), to establish a set of national outcome measures and standards that would be universally applied in providing services and administering programs using CSBG funds. Non-performing CAAs may lose their historical designation and be subject to a State-run award competition, open to other area community-based organizations.

A recent PART assessment of the CSBG program found that while the program has a clear purpose and addresses a specific need, it has not developed adequate national performance measures making results difficult to demonstrate. Both the CSBG funding reduction included in the FY 2005 budget and the reauthorization proposal are consistent with the PART assessment.

Native Americans

The budget request includes a total of $45 million for the programs of the Administration for Native Americans. Through direct grants, contracts, and interagency agreements, Native American programs provide financial assistance for social and economic development and governance, training and technical assistance, and research, demonstration and evaluation. The programs foster a balanced developmental approach at the community level through three major goals: self-governance, economic development, and social development.

Other Children and Families Activities

The FY 2005 budget includes $339 million for ACF's Child Welfare programs to support States and localities in their efforts to keep families together. Services offered include preventive intervention, where appropriate, so that children will not have to be removed from their homes, identifying alternative placements like foster care when necessary, and reunification services so that a child can return home. Funds are also included to train child welfare service providers, remove barriers to adoption, and to reduce the abandonment of infants and young children exposed to HIV/AIDS and drugs.

In addition, the budget includes $13 million for the Adoption Awareness program to support efforts to encourage adoptions. The budget also maintains funds for programs that offer safe havens and access to services for victims of domestic violence ($129 million) and runaway and homeless youths ($105 million). As noted in a PART assessment conducted this past year, runaway and homeless youth programs have a clear purpose, address a specific need, and are not redundant or duplicative of any Federal, State, local, or private effort. The programs are developing new performance measures with ambitious targets and expect to demonstrate results with data from a redesigned data collection system.

The FY 2005 budget does not request funds to continue support of the Early Learning Fund, which was provided $33 million in FY 2004. The Administration continues to target resources on similar activities which promote early literacy in the Department of Education and the Head Start program. The budget also includes a reduction in discretionary child abuse grants due to the completion of one-time projects.

For a complete discussion of the Promoting Safe and Stable Families and Independent Living Education and Training Vouchers programs see the ACF Entitlement Spending section.

Research/Federal Administration

Central to the ACF mission is sound research to help guide State and local efforts to help low-income families become and remain economically self-sufficient and to strengthen families. The FY 2005 budget includes $6 million for the Social Services Research and Demonstration program.

The request includes $190 million in FY 2005 to maintain related program costs and support activities to administer the programs of ACF. Consistent with the President's Management Agenda, the budget supports efforts to reduce erroneous and improper payments including adding a new data element in Head Start program reviews to confirm eligibility determinations and working with States to identify improper payments under the Child Care and Development Fund. The budget includes $2 million for the Public Assistance Reporting Information System (PARIS), a voluntary program for States to share public assistance data to maintain program integrity and detect and reduce erroneous payments. In FY 2005, ACF continues support for child welfare monitoring to ensure that State child welfare agency practice is in conformity with Federal child welfare requirements and to assist States in enhancing their capacity to help children and families achieve positive outcomes.

Entitlement Spending

The Department's FY 2005 ACF budget includes $32.7 billion in budget authority for entitlement programs. The apparent $2.8 billion decrease from FY 2004 is somewhat misleading because FY 2004 includes $2.5 billion under TANF that is available from FY 2004 through FY 2009. Regarding the decrease in Child Support Enforcement, States estimate that they will spend almost $400 million less on Child Support Enforcement than expected in FY 2005.

The ACF entitlement programs serve some of the Nation's most vulnerable populations through programs such as Temporary Assistance for Needy Families (TANF), Child Support Enforcement, the Child Care Entitlement, Foster Care, Independent Living, and Adoption Assistance. This year's request anticipates the reauthorization of TANF and the Child Care Entitlement. The budget also includes modifications in the Child Support Enforcement program, which increase both financial collections and medical support to families. In Foster Care, the budget includes an option for States to receive their foster care funds in the form of a flexible grant as well as a clarification of the eligibility definition.

Temporary Assistance for Needy Families

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) dramatically changed the Nation's approach to income support for low-income families. PRWORA replaced the individual entitlement to welfare with time-limited assistance accompanied by work requirements through the new TANF program. PRWORA also created a new partnership between States and the Federal government, giving States considerable flexibility to design their own TANF programs.

Welfare reform is widely regarded as a success. TANF caseloads have continued to decrease. Almost 5 million individuals were receiving TANF benefits in June 2003 — 60 percent fewer than August 1996. According to State reports, work effort among current welfare recipients in FY 2001 was three times the 1996 levels. According to the most recent data available from HHS studies, 80 percent of former welfare recipients worked at some point during the year after leaving welfare. When employed, TANF leavers typically worked 40 hours per week and earned between $6.50-9.00 per hour, and their earnings rise, on average, over the course of their first year off of welfare.

TANF provides approximately $16.9 billion annually to States, Territories, and eligible Tribes for the design of creative programs to help families transition from welfare to self-sufficiency. The program expired at the end of FY 2002. However, to date, Congress has provided funding for TANF State Family Assistance Grants through March 31, 2004. Other components authorized through that date include supplemental grants and the contingency fund.

States have tremendous flexibility in determining how to use their TANF dollars. States now spend much less on cash assistance payments than during initial years of TANF implementation and more on education and training, child care, and other work supports to help families achieve self-sufficiency. In 1998, States spent 63 percent of combined State and Federal funds on cash assistance and in FY 2002 spent only 37 percent. States may transfer up to a combined 30 percent of their TANF funding to either the Child Care and Development Fund or the Social Services Block Grant (SSBG) with not more than 4.25 percent transferable to SSBG. The FY 2004 appropriation provides for a 10 percent SSBG transfer authority.

TANF Legislative Proposals

The FY 2005 budget reproposes the President's FY 2003 plan to build on the considerable successes of welfare reform and reauthorize TANF. The President's proposal strengthens work requirements while allowing States greater flexibility in determining what should count as work. The proposal also strives to strengthen marriage and families, making child well-being a central tenet of the legislation (see the box outlining the President's TANF Reauthorization Plan). In addition, the FY 2005 budget request builds on the reauthorization proposal by adding a total of $40 million per year, over the $200 million per year included in reauthorization, to increase support for healthy marriage and family formation.

Child Care Entitlement to States

The Child Care and Development Fund consists of the discretionary Child Care and Development Block Grand (CCDBG) and the Child Care Entitlement funds preappropriated under TANF. The Child Care Entitlement is composed of mandatory and matching funds. Two percent of the mandatory entitlement funds are reserved for eligible Indian Tribes and Tribal organizations. States are mandated to spend at least 80 percent of the Child Care Entitlement on families receiving TANF, transitioning from TANF, or at risk of becoming eligible for TANF. States must also spend a minimum of 4 percent of the all child care funds - mandatory, matching, and discretionary - to improve the quality and availability of healthy and safe child care for all families. Additional amounts of the discretionary funds are also set aside for quality improvements and research and referral activities.

For FY 2005, the budget funds the Child Care Entitlement at $2.7 billion. This is equal to the funding level provided in FY 2004. These funds will continue to provide valuable support for working families and help move families from welfare to work.

Child Support Enforcement

The Child Support Enforcement (CSE) program is a joint Federal, State, and local partnership that seeks to ensure financial and emotional support for children from both parents by locating non-custodial parents, establishing paternity, and establishing and enforcing child support orders. Child support services, as mandated in Title IV-D of the Social Security Act, are available for all families with a non-custodial parent, regardless of whether or not the custodial parent receives welfare.

Child support collections play an important role for families transitioning from welfare to self-sufficiency, particularly in light of time limits on receipt of cash assistance. Families in which a custodial parent has never received cash assistance receive all child support collected on their behalf. Child support collections on behalf of families receiving TANF, and some collections on behalf of former TANF recipients, are shared between the State and Federal Governments. States can choose to pass through a portion of the collections to these families as well.

The Federal Government shares in the financing of this program by providing a 66 percent match rate for general State administrative costs and 90 percent for paternity testing. In addition, States receive incentive payments based on their performance on five key measures: paternity establishment, support order establishment, collections on current support, collections on past-due support, and cost effectiveness. The CSE program also includes a capped entitlement of $10 million annually for grants to States to facilitate noncustodial parents' access to and visitation of their children. In FY 2005, the Federal government will spend an estimated $4.4 billion for all of these costs.

The CSE program continues to make impressive gains:

• Child support collections hit a record $20 billion in FY 2002, serving an estimated 16 million child support cases.
• IV-D child support professionals collected $326,000 per FTE in FY 2002. States have increased collections by using a variety of approaches like income withholding, and offset of income tax refunds, among other tools provided by PRWORA.
• The government collected$1.5 billion in overdue child support from Federal income tax refunds, which benefitted more than 1.4 million families in tax year 2002.
• Also in 2002, using the Federal Parent Locator Services (FPLS), the Federal Office of Child Support Enforcement provided information to States on more than 4.5 million non–custodial parents.
• CSE established paternity for almost 1.5 million children in FY 2002.

In a recent Program Assessment Rating Tool (PART) assessment, CSE received a rating of "Effective" with a score of 90, making it the highest rated block/formula grant of all reviewed programs government-wide. This high rating is due to its strong mission, effective management, and demonstration of measurable progress toward meeting annual and long term performance measures.

Child Support Legislative Proposals

The budget anticipates the enactment of the child support provisions in the President's 2003 welfare reform proposal, FY 2004 budget, as well as two new proposals aimed at improving and increasing the collection of medical child support (see box outlining FY 2003, FY 2004, and FY 2005 proposals).

Children's Research and Technical Assistance (CRTA)

The FY 2005 President's Budget includes $49 million in this account. Of this amount, $34.4 million is devoted to: 1) training and technical assistance ($11.5 million) and 2) operating the FPLS ($23 million). The funds appropriated for these activities are equal to 1 and 2 percent respectively of the amount paid to the Federal government for its share of child support collections during the preceding fiscal year. The remaining $15 million funds welfare research. through FY 2008.

Foster Care, Adoption Assistance, and Independent Living Programs

The FY 2005 budget request for the Foster Care, Adoption Assistance, and the Independent Living programs is $6.8 billion. These programs, authorized by Title IV-E of the Social Security Act, provide essential services to vulnerable children by supporting safe living environments and preparing for independence older foster youth who are likely to age out of the system.

Of the total request, $4.9 billion will support the Foster Care program. This is a $119 million decrease from last year's request and includes the effects of the legislative proposals described in the following section. The funds will be used for maintenance payments and administrative costs for approximately 233,000 children per average month. In addition, States may use the funds for training and for the operation and development of the Statewide Automated Child Welfare Information Systems (SACWIS), a computer-based data and information collection system.

The budget includes $1.8 billion for the Adoption Assistance program, which supports families that adopt special-needs children. This is an increase of $70 million over the FY 2004 request. These funds will be used to provide maintenance payments to adoptive families, administrative payments for the costs associated with placing a child in an adoptive home, and training for professionals and adoptive parents. The proposed level of funding will support approximately 375,900 children each month.

The budget also contains $200 million for the Independent Living Program (ILP). This includes $140 million in mandatory funds, the same as the FY 2004 request, for a variety of services to ease the transition from foster care for youth who will likely remain in foster care until they turn 18 and former foster children between the ages of 18 and 21.

The Foster Care program received a rating of "Adequate" from the Program Assessment Rating Tool (PART). This is an improvement over the Results Not Demonstrated rating received for FY 2004. The better rating can be attributed to completing adoptions for 268,000 children with child welfare involvement from FY 1997 through FY 2002. The programs also received a higher rating due to new program performance measures, an initiative to develop an error rate, and improved program management. The proposed alternative financing system for Foster Care, discussed in the next section, would address PART findings to further improve the program. HHS is committed to improving PART ratings in line with the President's Management Agenda initiative on Budget and Performance Integration.

Foster Care Legislative Proposals

The FY 2005 President's Budget includes a legislative proposal for an alternative funding option for foster care, and a legislative proposal to clarify eligibility criteria for IV-E foster care maintenance payments related to home of removal. The alternative funding proposal, detailed in the Child Welfare Program Option box (see above), would allow States the option to receive their foster care funding as a flexible grant over five years to support a continuum of services to families in crisis and children at risk.

The second proposal would clarify the process for determining title IV-E eligibility in the Foster Care program. On March 3, 2003, the Court of Appeals for the 9th Circuit held in Rosales v. Thompson that a child living with an interim caregiver may be eligible for title IV-E foster care even though the child would not have been eligible in the home from which the child was legally removed. The Rosales decision contravenes the Department's long-standing interpretation of the Social Security Act stipulating that eligibility is based upon the home from which the child is removed, not the home of the interim caretaker. HHS never has interpreted the statute to mean that states may consider whether the child is eligible in either the home from which the child is removed or the home where the child is living. This proposal would amend the statute to come into accord with the Department's long-standing policy.

Promoting Safe and Stable Families

The Promoting Safe and Stable Families (PSSF) program is a capped entitlement program designed to assist States in coordinating services related to child abuse prevention and family preservation. These services include community-based family support, family preservation, time-limited reunification services, and adoption promotion and support services. States generally must spend at least 20 percent of their funds on each of the above four categories. The Adoption and Safe Family Act of 1997 (AFSA) established that a child's health and safety must be of paramount concern in any efforts made by a State to preserve or reunify a child's family. The FY 2005 request for PSSF includes $305 million in mandatory funds.

Social Services Block Grant

The Social Services Block Grant (SSBG), a capped entitlement, provides funds to assist States in delivering social services and allows States substantial discretion in allocating funds in order to best suit their specific needs. SSBG is funded at $1.7 billion for FY 2005. This is the same level as FY 2004. Programs or services that are frequently supported by SSBG funds include child care, child welfare, home-based services, employment services, case management, adult protective services, prevention and intervention programs, and special services for people with disabilities.

Performance Highlights

HHS programs demonstrate, through their aggressive performance goals and annual achievement, the Department's commitment to its strategic goals and priorities. The programs highlighted below show the commitment of HHS to improving the economic and social well-being of individuals, families and communities, and improving the stability and development of our Nation's youth.

Temporary Assistance for Needy Families:The Temporary Assistance for Needy Families (TANF) program achieved remarkable success towards its primary goal of moving TANF recipients from welfare to work and self-sufficiency. In FY 2002, all States met the work requirement for all families and 83 percent of States with two-parent family programs met the rigorous two-parent family work participation rate. As of FY 2002, 36 percent of adult TANF recipients became newly employed, 59 percent of recipients or former recipients who were employed retained their jobs over at least two quarters and 33 percent attained higher earnings over two quarters.

Child Care Development Fund: The Child Care and Development Fund helps families achieve and maintain self-sufficiency and improve the overall quality of child care. The Child Care Bureau collaborates with the Head Start Bureau, Department of Education, and the Health Resources and Services Administration to achieve these goals. HHS estimates that in FY 2004 and 2005, CCDF funds will provide subsidies to at least 2.5 million children on an average monthly basis. CCDF is developing and implementing new and improved performance measures to better meet HHS performance goals in the future. For example, in the FY 2005 performance plan, CCDF is introducing two measures to track literacy, language, pre-reading, numeracy, and school readiness.

Child Support Enforcement: Child Support Enforcement (CSE), which assures that assistance in obtaining support is available to children, consistently performs well. In FY 2002 the CSE program exceeded its targets for three of its performance measures. CSE increased the percentage of IV-D cases that have support orders to 70 percent, increased the collection rate for current support to 58 percent, and increased the percentage of paying cases among IV-D arrearage cases to 60 percent. The program also improved its performance on paternity establishment to 95 percent in FY 2002 from 91 percent in FY 2001.

Foster Care, Adoption Assistance, and Independent Living: The Foster Care, Adoption Assistance and Independent Living programs demonstrated success in improving safety, permanency, and well-being of children. In CY 2002, the programs surpassed the targets for the performance measure on safety. The programs also performed well on permanency measures. In FY 2002, 68 percent of children who exited the foster care system exited through reunification within one year of placement. The programs also improved on the family and child well-being measure by ensuring that 81 percent of children who had been in care less than 12 months had no more than two placement settings in FY 2002.

Child Support Enforcement: Collections and Costs

ACF Proposed Entitlement Legislation

FY 2005 Budget in Brief Home

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