Don’t be afraid of the Block Grant Bogeyman

In my previous column on child welfare finance reform, I wrote about the incentives that push governments toward needlessly tearing apart families. Those incentives exist for everyone from the frontline caseworker to the child welfare agency chief.

There are political incentives linked to the popularity that comes with “cracking down on child abuse” versus the price to be paid for trying to help families in which the parents have been demonized. And, of course, the financial incentives: the huge, open-ended entitlement under Title IV-E of the Social Security Act that allows states to be reimbursed for a large share of the cost of foster care for every eligible child.

With all the incentives, it’s no wonder that poverty is so often confused with neglect and so many children are needlessly consigned to the chaos of foster care.

Yes, sometimes child welfare systems will swim against that tide. Once in a while, a child welfare leader, and the governor who appointed that leader, will demonstrate amazing courage. Occasionally – well, twice, actually – class-action lawsuits lead to exceptionally enlightened settlements.

But all it takes is for the governor to change and more cowardly leadership to cave in to demagogic news coverage, and it’s back to business as usual.

So it’s no wonder that when Prof. Leroy Pelton, former director of the School of Social Work at the University of Nevada, Las Vegas, traced the rise and fall of foster care rates through most of the 20^th century in his 1991 book, For Reasons of Poverty, he found that the single biggest factor was financial incentive. More recently, the rate of known child abuse in this country peaked in 1993. Yet entries into foster care did not start to decline until 2006, and now entries are increasing again.

Something is needed to push back.

Opening up the current IV-E entitlement to “preventive services,” as is proposed under the “Family First Act,” won’t do it. For starters, from what little is known so far, it seems the bill will reimburse a very limited range of services (mostly those geared to making the helpers feel good rather than the concrete services most families need) and for a very limited time. And the knives are already out for another part of the bill that would curb the use of group homes and institutions.

But even if that bill were more generous, there is no way that overwhelmingly poor families who are disproportionately people of color and who are viewed by the general public as the worst of the worst can compete for the same pot of money against more affluent, more-likely-to-be-white foster parents, group homes, institutions and the foster care industrial complex that stands behind them.

Waivers help a little – Sean Hughes agreed in 2013, but now he’s against them – but there needs to be a much more powerful brake on the profound incentives to take the child and run. That means there must come a point where governors and mayors are told in effect: If you want to take away more and more children needlessly, destroying the lives of many of those children, then you’re going to have to pick up the tab yourselves.

But whenever anyone tries to change the way the federal government pays for child welfare services, the response is the same scary refrain: If you change our sacred “entitlement” to foster care money, you’ll be creating a block grant – and we all know what that means!

It’s especially useful for trying to scare big government tax-and-spend liberals like me. But it’s about as real as the bogeyman a child may think is under his bed.

Consider the two most recent proposals that opponents labeled “block grants,” both of them more than a decade old.

One, championed by former California Congressman Wally Herger (R), would have given states all the foster care funding they then were receiving under the IV-E entitlement, plus annual increases for inflation.

But states no longer would get more money for taking away more children. The plan would have applied only to IV-E, and would not have folded in any other funding streams. Any savings from reducing foster care would have to be plowed back into child welfare.

The foster care industrial complex was apoplectic.

Too bad. Because the Congressional Research Service later estimated that had this become law, states would have gotten $5 billion more in funding between 2005 and 2010 than they actually got by clinging to the “entitlement.”

The George W. Bush administration proposed a variation: a voluntary program in which states that wanted the option could negotiate a flat amount with the federal government. There would be annual increases for inflation. Both sides would be locked into the deal for five years. But any state that didn’t like the terms could keep the entitlement – and lose out on its share of what turned out to be a $5 billion bonanza.

The foster care industrial complex was still apoplectic, which raises the question: What part of “voluntary” don’t they understand?

Unfortunately, those who conjure up the Block Grant Bogeyman did not learn from their $5 billion blunder. So let’s look more closely at those so-called “block grant” proposals.

For starters, they weren’t block grants.

Back when the modern era of block grants began, in the Nixon administration, large numbers of different funding streams were thrown together, and then the total dollar amount was cut.  In contrast, the flexibility plans dealt with just one funding stream, Title IV-E, allowing those funds to be spent not only on foster care, but also on better alternatives. And there was no cut in funding.

To which the Block Grant Bogeyman replies: What about the future? After all, look what happened to the Social Services Block Grant and Temporary Assistance to Needy Families. Block grants are easier to cut! Beware! Beware!

But entitlements are just as easy to cut; you simply change the percentage of costs to which the state is “entitled.” It requires no constitutional amendment or super majority. In contrast, the Bush administration plan would have locked in the federal government to five-year contracts with every state that volunteered. For those five years, those funds really couldn’t be cut.

Whether or not programs are cut has nothing to do with the funding mechanism; it has to do with whom they serve. SSBG and TANF serve poor people who are widely despised – many of the same people served by prevention and family preservation programs – so they get starved.

Foster care separates the good children from the “bad” parents – making it far more popular. Because it is a middle class constituency and because a whole industry has grown up around it – complete with high powered lobbyists – it is far less vulnerable to cuts.

But having been scared off by the Block Grant Bogeyman, states lost out on an opportunity to gain $5 billion more in child welfare funding.

To which the Block Grant Bogeyman would reply: Yes, but what if the number of kids in foster care goes up?

But foster care is not a force of nature. It’s the result of decisions made by human beings. Were IV-E funding not an entitlement, states would have an incentive to invest in things like comprehensive drug treatment programs. That way, they wouldn’t have to rip apart more families every time a new “drug plague” sweeps across the nation – something that happens every few years, always accompanied by hysterical news accounts declaring it to be the Worst Drug Plague Ever.

If IV-E were not an entitlement, states would have an incentive to invest in rent subsidies, to help the 30 percent of foster children who could be home right now if their families just had decent housing.  They would have an incentive to invest in child care so thousands of children wouldn’t be taken every year because of “lack of supervision” charges.

But foster care is an industry, consisting of worthless residential treatment centers and all those group homes and all those providers. Some know better, and others have persuaded themselves that all those children really, truly must be in foster care. When there’s so much at stake, rationalization is powerful.

So they conjure up the Block Grant Bogeyman to scare us back to the status quo: a take-the-child-and-run system of child welfare that, as one study found, churns out walking wounded four times out of five.

Now that’s something to be scared of.

This analysis originally appeared as part of a series in the Chronicle of Social Change entitled: “Dollars and Priorities: The Financing of Child Welfare” where it can still be found - for the moment. Since the Chronicle, the Fox News of child welfare, has taken to suddenly moving much of my work behind a paywall, I'm reprinting it here, with some updates and changes to the links.