Child Welfare’s Million Dollar Problem

There is essentially an unwritten rule for child welfare programs in Washington, D.C.: expanded funding must be “paid for” through cuts to other areas of the budget—usually child welfare itself.  This has been true even in times of budget surplus. On Tuesday, April 29 this requirement was on full display. The House Committee on Ways and Means came together to adopt seven different bills. All but one addressed the tax code by extending certain business-related tax deductions. The first bill to come to a vote, the Preventing Sex Trafficking and Improving Opportunities for Youth in Foster Care Act (H.R. 4058),  was the only bill that did not address the tax code. The other difference between H.R. 4058 and the six others: at least some of its costs had to be offset.

The six tax bills cost approximately $310 billion over ten years.  They are a series of complex bills with one supporting business research spending and the others dealing with businesses accounting for income such as interest and royalties.  Some of these business breaks have drawn the ire of critics who see them not as job-creators but as tax shelters for corporations with flexibility in where they report their income. The Committee approved the six tax bills without any requirement that they be paid for. Furthermore, the Committee did not demand that these tax deductions offer any evidence-base of proven job creation.  Rigorous evaluation of the kind constantly called for in human service and found in the federal home visiting, teen-pregnancy prevention, and similar programs was not required, and still the tax bills costing hundreds of billions of dollars were approved by the Committee without an offset.

However, the child welfare bill was modified predominantly because one section was projected to cost approximately $1 million per year. H.R. 4058 proposes several changes and requirements on state child welfare agencies in dealing with youth, particularly those who are victims or potential victims of sex trafficking. The removed section would have mandated that state child welfare agencies provide young people exiting foster care with a Social Security card, birth certificate, health information and in some cases, a bank account: essential documents, particularly for a young person without a family. This provision was a modification of more expansive Senate legislation that includes requirements for all youth in foster care to receive bank accounts and driver’s licenses.  With input from more than 150 public and advocacy comments, the Ways and Means Subcommittee on Human Resources had crafted H.R. 4058 with the narrowed requirements to account for concerns surrounding bank account fees and co-signing requirements and special challenges for requiring driver’s licenses in urban areas where cars may not be accessible, available or necessary via a foster parent. The narrowed provision, though essential for young people aging out of foster care, was pulled from the bill.

As a result, division arose during the course of the Committee debate despite the fact the legislation is a bipartisan bill.  Democrats, led by the Subcommittee Ranking Member  Lloyd Doggett (D-TX), questioned the provision’s removal and argued that it was simply because of the $1 million per year score calculation by the Congressional Budget Office. There was a back-and-forth between the two parties as to whether that was the complete reason why the section was removed and whether the minority party had been fully informed. It was acknowledged that the minority party was asked to propose an offset and Doggett did offer a committee amendment but withdrew it before the vote. At the end of the discussion there was some agreement through Committee Chairman David Camp (R-MI) that there would be an effort to put a similar provision back in the bill.  However, he did not commit to a straight restoration and the bill passed the Committee without the provision.

Tuesday’s Committee hearing clearly frames the constant challenge for child welfare. The $310 billion for the six tax bills is smaller than the so-called “tax extenders package” Congress may act on this year, yet it still dwarfs what will be spent in almost all of child welfare spending over the next ten years.  Under the current structure, child welfare spending (including Titles IV-B and IV-E of the Social Security Act) is likely to be less than $80 billion over the next ten years. Regardless of budget circumstance, child welfare faces a requirement that costs be offset while other budget areas, even in the same Congressional Committee, do not.

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