In the parlance of the Bush administration, phrases like “innovative financing” and “flexibility for states” usually mean “budget cuts.” Why, then, have progressives kept their own rhetorical guns safely holstered since the president applied this language to foster care in his budget proposal this winter? Even more confounding, why are some child welfare advocates actually voicing support?

In one noteworthy example of the truly surreal battle lines developing on foster care reform, Senator Hillary Clinton recently joined with notorious Clinton-hater Tom DeLay, the House Majority Leader, in co-authoring a USA Today op-ed on the topic. In the article, Clinton and DeLay say that the Bush proposal on foster care “deserves careful consideration” and might “do more to prevent children from entering foster care, shorten the time spent in such care and provide more assistance to children and their families after they leave the system.”

The foster care system indeed appears to be broken, as governments annually yank obscene numbers of children from their families and shuttle them among temporary homes. In 2001, one in 20 children in Central Harlem was in foster care. For liberal child welfare advocates like Clinton, perhaps the most attractive aspect of Bush’s plan is the flexibility it would give states to cut those numbers by redirecting federal foster care money to family preservation and recruitment of adoptive parents.

Details remain murky, but some aspects of this potential panacea have emerged, and it is safe to say that they constitute a major overhaul of the child welfare system. In the rush to fix an increasingly shaky program, those flirting with their usual enemies may get more “reform” than they’re looking for.

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The federal government began funding foster care in 1961. It bulked up the child welfare system in 1974, when it began also funding programs to preserve families by preventing the abuse and neglect that prompts government to move kids into foster homes. But the two funding streams are hardly equal. In 2003, Washington will dish out almost $5 billion for foster care to support roughly 550,000 children nationwide, but only $400 million for the primary family preservation program.

Foster care is funded through an entitlement system. There are no ceilings for entitlements, because they essentially represent economic rights. As long as states meet eligibility requirements for foster care funds, the feds have to pony up. New York State currently receives 50 cents from the federal government for every dollar it spends on foster care maintenance and administration, helping finance placements for 53,600 kids in 2000.

The new Bush plan would nix this entitlement system and replace it with a block grant–a buzzword that pops up a lot in Washington these days. Block grants are capped, and come in a lump sum, often with the bulk of the cash coming up-front. “I am always leery of block grants. Once they come, they always get chopped,” says Ellie Ward, the executive director of Statewide Youth Advocacy in Albany. “With a block grant you get rid of a child’s right to foster care.”

The Bush budget offers numerous carrots to make the deal attractive to both states and child welfare advocates. Under the status quo, to determine whether a child is eligible for federal foster care funds, states must establish that the birth family of the child meets poverty guidelines that were set in 1996 and have not been adjusted for inflation. So with poverty indicators stuck in the era of the Gingrich Congress’s welfare reform, every year a smaller percentage of children qualifies for federal foster care funds. Bush’s block grant would wipe away these arcane eligibility requirements and the associated administrative red tape. But, more important to advocates like Clinton, it would lump foster care and prevention money into one pool, mandating a base amount that must be spent on prevention but allowing states to spend as much beyond that as they like.

Another selling point for the Bush plan is that the block grants would be voluntary agreements between individual states and the federal government. If Congress passes the proposal, states will then negotiate with federal administrators on the amount of the block grant. Any state could choose to walk away from the bargaining table and stick with the current system of entitlements. But once a block grant agreement is reached, a state is locked into a contract for five years. And those that hold on to their entitlements are stuck with the outdated poverty indicators controlling their flow of federal funds.

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This is a reform formula the Bush administration is trying to apply to poverty programs across the board, from Medicaid to housing subsidies. And in each case the traditional defenders of those programs have quickly ganged up to frustrate the White House’s efforts. But the deep philosophical rift over the comparative value of foster care and family preservation complicates matters when it comes to child welfare. And that divide is the breeding ground for the odd alliances that are emerging in this latest donnybrook.

Conservatives think the foster care system is a resource-draining bureaucracy in which financial incentives work to keep children languishing in foster homes instead of moving on to permanent placements. Tom DeLay, the Heritage Foundation and likeminded folks rarely meet an entitlement cut they don’t like, and have long advocated for privatization and other reductions in foster care spending. But creative financing for foster care has gained traction in progressive circles as well. The plight of 7-year-old Faheem Williams, who was found dead in a locked Newark basement in January, has brought child welfare services under intense scrutiny. And several recent well-publicized horror stories of overcrowded and abusive foster homes have spurred both sides of the ideological divide to prioritize permanent homes.

“Even though the city of New York has done better in recent years, there is still a problem of children being needlessly placed in foster care,” says longtime child advocate Richard Wexler, who heads the National Coalition for Child Protection Reform.

Wexler argues that the child welfare community would be foolish to walk away from the table before hearing the details of the Bush plan. But he charges that’s exactly what the city’s Administration for Children’s Services (ACS) is doing, and he’s frantically working to froth up advocates to stop it from happening. Wexler claims that at a March symposium held in Washington, ACS Commissioner William C. Bell launched into a vociferous attack on the Bush block grant, citing a failed New York State experiment with block granting local funds for a variety of social service programs as a reason for opposing the plan. (An ACS spokesperson could neither confirm nor deny Bell’s statements at the conference, and says that the agency is “not in a position to respond” to the Bush plan.)

“It provides more ammunition to the Manhattan Institutes of the world if we boil all issues down to ‘More money, good; less money, bad,'” Wexler warns.

Most other prominent national and New York-based child welfare advocates seem to be in a wait-and-see mode with the Bush block grant. Only the Children’s Defense Fund has voiced opposition to the plan, and even that group’s rhetoric was uncharacteristically tentative, stating in a position paper that “children could be harmed by such a proposal.”

“This might be a lifeline that the feds are throwing. Sometimes ill-intentioned people stumble onto something good,” Wexler says.

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But while it would be a mistake to attempt to shoot down the Bush administration’s trial balloon before its details come into focus, it’s a safe bet that this is a deal that will fail to help New York City in the quest to protect vulnerable children–particularly in the context of state and local budget deficits.

Mayor Bloomberg has proposed cuts of more than $200 million to the Administration for Children’s Services in the next fiscal year. If New York City were to experience a glut of children needing foster care, and the federal government was not obligated to reimburse state and local funding, it’s unclear where the resources to respond would come from.

The block grant would also benefit New York less than it would most other states. According to Roseana Bess, a research associate at the Urban Institute, the number of children currently in a state’s foster care system would likely determine the funding level for the block grant. But New York has done a better job than many other states in reducing the number of children stuck in long stays in foster homes. These good deeds, Bess notes, would not go unpunished: “There are winners and losers to doing a block grant.”

The financial incentives in the system Wexler calls “the foster care industrial complex” do need an overhaul–foster care pays, prevention does not. But jeopardizing federal funding is not the answer; most flaws can be fixed within the entitlement system, by establishing a flexible mix of prevention services and foster care. A bill introduced this April in the House by Harlem Rep. Charles Rangel and others would increase funding for substance abuse programs and improve accountability by creating a $500 million grant that would reward agencies for reducing long-term stays in foster homes. It would also base foster care funding eligibility on current welfare standards rather than 1996 poverty indicators.

All of the improvements proposed by this bill would be made within an entitlement system, which maintains a child’s right to federal funding for foster care. That way, if New York experiences a jump in demand for child welfare services, the state and the city won’t get left holding the bag. As Ward puts it, “Life gets in the way of all of these plans. That’s why entitlements are important.”

Paul Fain is a freelance journalist in Washington, D.C.