On February 8, 2006, President Bush signed the Deficit Reduction Act of 2005 ( P.L. The largest child welfare programs receive mandatory federal funding, and certain changes to these programs would be made by the Deficit Reduction Act of 2005. These were added during the December 2005 conference agreement negotiations. The Congressional Budget Office (CBO) estimates that this provision will reduce federal outlays to the foster care program by $380 million over five years (FY2006-FY2010) and $863 million over 10 years (FY2006-FY2015). The "Candidates" Provision or Limiting Eligibility for Federal Matching of Foster Care Administrative Costs

As enacted, the Deficit Reduction Act ( P.L. CBO estimated that these provisions will reduce federal outlays for the Title IV-E foster care program by $174 million over five years (FY2006-FY2010) and $405 million over 10 years (FY2006-FY2015). 109-171 ) increased the FY2006 mandatory funding authorization level for the Promoting Safe and Stable Families program to $345 million from the previous level of $305 million. These provisions were not included in the House or Senate version of the reconciliation bill. However, under the provisions of P.L. 109-171 ) requires (as a condition of eligibility for funding under the Child Welfare Services program, Title IV-B, Subpart 1 of the Social Security Act) that a state demonstrate "substantial, ongoing, and meaningful collaboration" with state courts in developing and implementing the state plan for Child Welfare Services, the state plan for the Promoting Safe and Stable Families Program (Title IV-B, Subpart 2 of the Social Security Act), the state Adoption Assistance and Foster Care plan (under Title IV-E of the Social Security Act), and any Program Improvement Plan that may be required. Use of Child Welfare Records in Court Proceedings

The Deficit Reduction Act also amends the state plan requirements for foster care and adoption assistance (Section 471 in Title IV-E of the Social Security Act) to clarify that required confidentiality provisions related to information about the children served do not limit the ability of a state to determine its policies regarding public access to court proceedings on child abuse and neglect or other child welfare related court proceedings (except that the policies must, at a minimum, ensure the safety and well-being of the child, parents, and family). 109-171 ) includes statutory language (previously included in both the House and Senate versions of the reconciliation bill) that intends to clarify when states may make Medicaid claims related to optional targeted case management (TCM) services. This increased foster care spending would offset savings to the Medicaid program; the net federal savings are consequently estimated at $760 million over the same five years (FY2006-FY2010) and $2.1 billion over 10 years (FY2006-FY2015). What is Medicaid TCM? 4241 ) also included several other provisions relevant to child welfare, and for which no significant budget effect (savings or cost) was estimated or expected. These provisions, which would have extended the authority of HHS to issue waivers of federal child welfare policy through FY2010 (House bill only), authorized a federal student loan forgiveness program for child welfare workers and others (House bill only)," and amended the Higher Education Act in ways intended to encourage greater access to youth aging out of foster care (primarily included in the Senate bill) were not included in the final conference agreement. These provisions were not in the Senate reconciliation legislation nor the conference agreement, and were thus not a part of the Deficit Reduction Act as enacted ( P.L.
On February 8, 2006, President Bush signed the Deficit Reduction Act of 2005 into law ( P.L. 109-171 ). As enacted, the Deficit Reduction Act includes two child welfare provisions intended to reduce federal foster care spending under Title IV-E of the Social Security Act. Those provisions, sometimes called the Rosales provision and candidates provision, respectively, would 1) clarify individual eligibility for federal foster care and adoption assistance programs (Title IV-E of the Social Security Act); and 2) limit certain kinds of state claims for federal reimbursement of administrative costs under the federal foster care program. The Congressional Budget Office (CBO) estimated that together, these changes will reduce federal spending under the foster care program by $554 million over five years, and by almost $1.3 billion over 10 years.
As enacted, the Deficit Reduction Act also includes several child welfare provisions that will increase federal child welfare spending and make other limited changes to federal child welfare policy. These provisions were added during conference negotiations and were not included in either of the earlier Senate or House versions of the budget reconciliation bill ( S. 1932 ) that passed in November 2005. Those provisions 1) increase the FY2006 mandatory funding authorization under the Promoting Safe and Stable Families program (Title IV-B, Subpart 2 of the Social Security Act) to $345 million (from current $305 million); 2) appropriate $100 million in mandatory funds over five years (FY2006-FY2010) to improve state courts' handling of child welfare proceedings; 3) require court and child welfare agency collaboration; and 4) clarify confidentiality rules with regard to open child welfare court proceedings. CBO estimated that the first two of these provisions will increase federal budget authority for child welfare purposes by $300 million over five years.
As enacted, the Deficit Reduction Act also includes provisions related to federal reimbursement of costs for "targeted case management" (TCM) under the Medicaid program (Title XIX of the Social Security Act). These provisions were included in both the House and Senate reconciliation bills (as they were passed in November 2005), and may limit the ability of state child welfare agencies to use Medicaid TCM for children in foster care. CBO estimated the net federal savings for this change, all of which would be to Medicaid (and not all of which would affect financing of services for children in foster care), at $760 million over five years and $2.1 billion over 10 years.
Finally, as enacted, the Deficit Reduction Act does not include House and Senate proposals that would have 1) extended the authority of the U.S. Department of Health and Human Services (HHS) to grant child welfare waivers; 2) amended the Higher Education Act to improve higher education access for youth leaving foster care; and 3) authorized a discretionary student loan forgiveness program available to child welfare workers. This report discusses child welfare provisions in the enacted version of the budget reconciliation bill ( P.L. 109-171 ), and will not be updated.