Federal Budget Forecast: More Pain

Print More


February was a painful month for youth programs that get federal funding. President Bush presented a plan for domestic spending that has advocates dismayed and analysts terrified, while a recently passed spending bill may have a more immediate impact on youth work.

The president’s fiscal 2007 budget proposal follows his familiar pattern with youth funding: level funding for most, drastic cuts for some and the elimination of a slew of programs that the administration says are underperforming.

The cumulative spending for the departments of Labor, Health and Human Services, and Education – which comprise a large portion of federal youth programs – would decline at least $4 billion from fiscal 2006 and $8.5 billion from fiscal 2005, according to Seth Turner, senior director of public policy at the Association of Career and Technical Education.

The White House has said that painful budget cuts are necessary throughout the federal government, with increasing portions of the budget being taken up by entitlement spending – namely for Social Security, Medicaid and Medicare – and defense spending, because of the wars in Iraq and Afghanistan.

Among the key budget elements affecting youth programs:

After school: The president requested $981 million for the 21st Century Community Learning Centers, authorized in the No Child Left Behind Act for up to $2.5 billion in 2007. That’s the same amount appropriated by Congress this year, but $10 million less than Bush asked for in 2006.

“It is disappointing that President Bush today missed his last chance to make good on the promise of the No Child Left Behind Act,” Jodi Grant, executive director of the Afterschool Alliance, said in a prepared statement. “Instead, he sustained a series of painful freezes and cuts that have left the 21st Century Community Learning Centers after-school initiative unable to serve millions of children.”

Mentoring: The budget plans would reduce mentoring funds in the Department of Education budget to $19 million, 61 percent less than in 2006. Bush also proposes to eliminate mentoring grants from the Office of Juvenile Justice and Delinquency Prevention, which totaled $10 million for 2006.

Corporation for National and Community Service (CNCS): Congress appropriated $900 million for the corporation in 2006, which was $21 million less than Bush requested. Now the president is requesting $851.5 million. The Bush proposal would cut nearly $10 million from AmeriCorps grants and $15 from AmeriCorp’s education trust.

Juvenile Justice: The president’s $188 million proposal for juvenile justice programs is $154.1 million lower than this year’s appropriation.

The real nightmare overall, budget analysts say, lies in the administration’s long-term budget projections, which were made public by accident. A computer run of the White House budget numbers for most agencies and programs through 2011 made its way off Capitol Hill, allowing organizations such as the Center for Budget and Policy Priorities to take a look.

According to the center, Bush’s proposal would cut domestic discretionary spending programs by a cumulative $183 billion from 2007 to 2011. Drastic cuts would occur in CNCS (from $900 million this year to $819 million by 2011), Safe and Drug-Free Schools (from $730 million to $256 million), Vocational and Technical Education (from $2 billion to $557 million) and the Administration for Children and Families (from $8.9 billion to $7.9 billion).

Trouble Looming

As the battle for 2007 spending gears up, many in youth work will face the fallout from a budget reconciliation bill for fiscal 2006 passed by Congress in February. The Deficit Reduction Act – introduced to counter “unsustainable growth of mandatory spending programs,” according to a statement by its author, Sen. Judd Gregg (R-N.H.) – trims money from entitlement programs such as Medicaid and child support enforcement.

At least three major pieces of the act, known as the budget reconciliation bill, might reduce the amount of money available for serving poor and abused youth.

Medicaid Cuts: The reconciliation bill had little effect on juvenile justice programs, and “that is significant,” says Miriam Rollin, vice president of federal policy for Fight Crime: Invest In Kids. But she and other advocates fear that certain elements of the bill might push more youth into those programs.

The concern involves changes in health and welfare entitlements that some believe help to reduce juvenile crime. For example, changes in the Medicaid entitlement structure could eliminate coverage for up to 28 million children.

Currently, Medicaid beneficiaries are guaranteed what’s known as an early period screen and diagnosis treatment, which, among other things, checks young children for mental health disorders. Once diagnosed with a mental health disorder, Rollin says, “they are supposed to get whatever [help] is needed to address it. If you can address mental health at an early age, it’s much less likely to fester, get serious and spill into criminal behavior.”

The federal changes don’t cut out coverage, but give states more flexibility to spend the money in the ways they want, while providing indirect incentives to spend less. States will also be able to charge co-payments to Medicaid enrollees, which might prevent a struggling family from making a mental health visit for a child.

Kinship Care: The reconciliation bill made two major changes in kinship care funding by the Administration for Children and Families (ACF). According to Child Trends, 23 percent of foster care clients live in kinship care.

“The bottom line is, they’re creating a disincentive for placement with relatives,” says Liz Meitner, who last month left Child Welfare League of America to become vice president of policy and government affairs at Voices for America’s Children. “The implication is a chilling signal. If a state thinks placing kids in kinship care is important, then they’re on their own.”

The two major changes are:

• The bill cuts off money going to states for youth who live with relatives in homes that are not licensed to provide foster care. When a child who is removed from home by a state child welfare agency is placed with a relative, many states will allow the relative to serve as a foster parent without being a licensed foster care provider. Youth in those placements were often counted as part of the total that states submitted to ACF for federal reimbursement of their child welfare agency expenditures. The total number of youth claimed dictates how much ACF pays a state for administration of its child welfare system.

The ACF’s Children’s Bureau had plans to gradually phase out the practice and passed a final rule announcing it, says Children’s Bureau Associate Commissioner Susan Orr.

“If you’re not actually paying claims to a foster family or institution out of IV-E,” which is the main federal funding pot for foster care, “you shouldn’t be claiming administration on behalf of those people,” Orr says.

Fourteen states threatened to sue the ACF in response, saying that such a significant change could not be made by merely issuing a rule notice.

So Congress included the rule in the Deficit Reduction Act. Now, any child placed in a home that is not fully licensed for foster care cannot be counted in the totals for which states seek federal reimbursement.

The relatives could get licensed, but Meitner says that would place impossible burdens on many of them. “This rule has nothing to do with safety,” she says. “Without this provision [in the past], the state always secured safety assurances” before placing kids. “But most grandparents can’t afford a bigger house to accommodate the standards.”

Orr scoffs at the notion of grandmothers having checks torn from their hands. “I’m not sure advocates understand that not one dime is going to families” from the federal reimbursements anyway, she says.

One option for states is to find ways to license more of the homes where people care for foster youth who are related to them. Orr says ACF is willing to let a state waive all of its licensing standards except the safety criteria, when it comes to licensing kinship caregivers’ homes.

This could drive up federal costs exponentially, because more placements in licensed foster care homes would warrant more administrative reimbursements and maintenance payments – the latter of which does make its way to grandma.

ACF is gambling that states will not get aggressive about licensing more homes. Orr says the agency expects the rule change to save it $250 million over five years.

• The larger sacrifice in kinship care was that Congress overrode Rosales v. Thompson, a 9th Circuit Court of Appeals case affecting thousands of children in nine Western states, including California.

Before Rosales, California’s criteria for kinship care support were based on the finances of the family from which the child was removed. The 9th Circuit turned the tables, ruling that the finances of the caregiver should dictate support. In many cases, that means the caregivers get more money – thus, the federal government pays more to the states.

The reconciliation bill restores the requirement that the funds be based on the income of the home from which the child was removed. Meitner says that will save the federal government about $397 million.

Orr concedes that the rule, and others that regulate the current federal-state funding scheme for foster care, “don’t make sense.”

“There are many things I think are not well functioning in our system,” she says. “But fixing around the edges is not what we want to do. Our solution is complete and utter reform.”

That solution, as far as the Bush administration is concerned, is to offer states the chance to detach themselves from the constraints of the entitlement system. States would face fewer restrictions on how to spend various pots of federal foster care money, but the amount of money would not be guaranteed for certain purposes, as it is in the current arrangement.