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A First Look at the President's Proposed FY 05 Budget for Human Services Programs

Feb. 2, 2004

Today President Bush revealed his FY 05 budget, setting into motion the appropriations process that will end with a federal budget for the fiscal year that begins October 1, 2004. Additional information will be forthcoming as we learn more details. Some of the highlights for proposal for t the Department of Health and Human Services include:

• The budget proposes a competitive matching grant program for states, territories, and tribes to develop innovative approaches to health marriage and reducing out-of-wedlock births. The grants require a dollar for dollar match of federal funds. Including the match, the amount available would be $240 million. The federal funds for this effort would largely be redirected from the High Performance Bonus fund in the Temporary Assistance to Needy Families (TANF) program.
• The budget also includes a $120 million annual fund to conduct research and demonstration projects largely focused on family formation and marriage. This provision would principally be funded by eliminating the Illegitimacy Reduction Bonus in the TANF program.

• The Administration is seeking $50 million to assist non-custodial fathers be more involved in the lives of their children.

• The budget doubles the federal commitment of support for federal programs aimed at 12 to 18 year olds that promote abstinence and encourage responsible choices. Activities financed through these grants also include parent education and outreach, media campaigns, and research. The total funding available would be $273 million. This included the Community-Based discretionary grant program and the Abstinence Based Education Grants to states, which would both be transferred to the Administration for Children and Families.

• The President's budget includes an increase of $169 million for Head Start funding. Within that increase, $45 million is provided to support nine new state pilot projects to coordinate state preschool programs, federal child care grants, and Head Start into a comprehensive system of early childhood programs.
• The President proposes a parent/mentor early education initiative. This initiative would offer training for between 2,000 and 3,000 parents in a "science-based" curriculum designed to improve early language outcomes. These parent-mentors would then train tens of thousands of Head Start parents. The initiative would apparently be funded by reallocation of existing Head Start funds.

• The Administration will continue to propose the child support legislative proposals provisions first included in the President's 2002 and 2003 budgets. Those include federal cost sharing to allow states to pass through and disregard child support for TANF families, and simplification of distribution rules for former TANF families. The President had also previously proposed enforcement tools that included lowering the threshold for denying passports to noncustodial parents to $2,500.
• The President's budget includes will include new proposals intended to improve the establishment of medical support for children without health insurance in the child support enforcement system. Health care plan administrators would have to notify the IVD administration when a child loses health coverage. Also, IVD agencies would be required to seek medical support for children through health insurance available to either parent. (This last proposal is considered a cost savings to the Medicaid program of $15 million over five years.)

• The HHS budget documents state that it is a "high priority" of the HHS to pursue with Congress passage of the Child Welfare Program Option. This proposal was made last year, but no legislative language was drafted. The Administration is proposing that states could elect to receive a fixed sum of money for IVE in return for the flexibility to use foster care funds more flexibly. Again, this is a legislative proposal that will need action outside of the budget process.
• The President's 2005 budget includes a $52 million increase for child abuse prevention through the Child Abuse Prevention and Treatment (CAPTA) state grants and the Community-Based Child Abuse Prevention (CBCAP) program. This will support new requirements included in the reauthorization of CAPTA. The increase in funding is intended to allow states to reach more families with prevention services and allow 55,000 additional families to receive CBCAP services.
• The President's budget calls for the recruitment of 35,000 new foster and adoptive parents in five years. A public service campaign in support of this goal will be launched in the spring of 2004.

• The budget contains a proposal to states' federal reimbursement for administrative costs of Medicaid by $300 million to reflect the share assumed in the TANF block grant and will prohibit states form using TANF funds to pay for these costs during FY 2005. In the past, costs common to AFDC, Medicaid, and Food Stamps were charged to the former AFDC program and so included in each state's TANF base year. This is a reduction for one year, for FY 2005.

• There are five grant programs under the White Office of Faith-Based and Community Initiatives: Compassion Capitol fund ($100 million), mentoring children and prisoners ($50 million), Maternity Group Homes ($10 million), and Access to Recovery ($200 million).

Refugee and Asylee Exemption

• The President's budget proposes to extend the eligibility for certain refugees and asylees for the SSI program. Currently refugees and asylees residing in the U.S. who entered the country on or after 1996 are exempted from a ban on receiving SSI that applies to most immigrants. Currently, most legal immigrants must live in the country for five years or have obtained citizenship to be eligible for SSI. Refugees and asylees on SSI are exempted for the first seven years that they are in the US. The President proposes to extend this exemption for an additional year -- to eight years -- in order to allow more time for these refugees to complete citizenship process.

For further information, please contact Sheri Steisel or Lee Posey in NCSL's Washington, DC Office at 202.624.5400 or fedhumserv-info@ncsl.org.