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Social Security is a self-financed program that provides monthly cash benefits to retired or disabled workers and their family members, and to the family members of deceased workers. The program is authorized under Title II of the Social Security Act and administered by the Social Security Administration (SSA). (The SSA also administers the Supplemental Security Income (SSI) program authorized under Title XVI of the Social Security Act. See Chapter 3 of the Green Book for a discussion of SSI, a means-tested program for the aged, blind, or disabled.) As of August 2018, there were 62.6 million Social Security beneficiaries. Of those, 46.4 million were retired workers and their family members, 10.2 million were disabled workers and family members, and 5.9 million were the survivors of deceased workers.[1]
Social Security is financed primarily by payroll taxes paid by covered workers and their employers. In 2017, an estimated 172.8 million workers were covered by Social Security.[2] Employees and employers each pay 6.2% of covered earnings up to an annual limit ($128,400 in 2018); self-employed individuals pay 12.4% of net self-employment income up to an annual limit ($128,400 in 2018).[3] Self-employed persons may deduct one-half of their Social Security payroll taxes for federal income tax purposes.[4] Social Security is also credited with tax revenues from the federal income taxes paid by some beneficiaries on a portion of their benefits, reimbursements from the general fund of the U.S. Treasury that are made for a variety of purposes, and interest earned on Social Security trust funds’ assets.
Social Security income and outgo are accounted for in two separate trust funds authorized under Title II of the Social Security Act: the Federal Old-Age and Survivors Insurance (OASI) Trust Fund and the Federal Disability Insurance (DI) Trust Fund.[5] As the Managing Trustee of the Social Security trust funds, the Secretary of the Treasury is required by law to invest Social Security revenues in interest-bearing federal government securities (special issues) held by the trust funds.[6] The revenues exchanged for the federal government securities are deposited into the general fund of the U.S. Treasury and are indistinguishable from revenues in the general fund that come from other sources. Funds needed to pay Social Security benefits and administrative expenses come from the redemption or sale of federal government securities held by the trust funds.
In 2017, the Social Security trust funds had a total income of $996.6 billion, total expenditures of $952.5 billion, and accumulated holdings (asset reserves) of $2.9 trillion.[7] Because the assets held by the trust funds are federal government securities, the trust fund balance ($2.9 trillion at the end of 2017) represents the amount of money owed to the Social Security trust funds by the general fund of the U.S. Treasury.
For more programmatic information, please see reports published by the Congressional Research Service.
CRS works exclusively for the United States Congress, providing policy and legal analysis to Committees and Members of both the House and Senate, regardless of party affiliation.
The following provides a legislative history for Social Security from the prior Green Book through most of the 115th Congress. For prior legislative history, please see prior editions of the Green Book.
Social Security Number Fraud Prevention Act of 2017 (P.L. 115-59)
The Social Security Number Fraud Prevention Act of 2017 generally prohibits agencies of the federal government from mailing documents containing full Social Security numbers (SSNs) by September 15, 2022. The law also requires agencies to provide annual reports to Congress that include a listing of documents the agency sent in the previous year containing full SSNs and an update on the agency’s progress in implementing the law.
Strengthening Protections for Social Security Beneficiaries Act of 2018 (P.L. 115-165)
The Strengthening Protections for Social Security Beneficiaries Act of 2018 made a number of changes to the SSA’s representative payee program, including:
The Economic Growth, Regulatory Relief, and Consumer Protection Act (P.L. 115-174)
Section 215 of the Economic Growth, Regulatory Relief, and Consumer Protection Act requires the SSA to develop a database, or modify an existing database, to allow certain financial institutions to verify consumers’ personal information against the SSA’s records with the consumer’s electronic consent. All costs of the development or modification and operation of the database are funded through user fees.
Tribal Social Security Fairness Act of 2018 (P.L. 115-243)
The Tribal Social Security Fairness Act of 2018 allows Tribal Councils to voluntarily enter into Social Security coverage agreements with the SSA. The bill also allows Tribal Council members to receive Social Security credit for Social Security taxes paid prior to establishment of a coverage agreement as long as these contributions were made timely and not subsequently refunded.
This page was prepared November 2018 for the 2018 version of the House Ways and Means Committee Green Book.
[1] Social Security Administration (SSA), Monthly Statistical Snapshot, August 2018, Table 2. The total does not equal the sum of the rounded components.
[2] Currently, 94% of workers in paid employment or self-employment are covered by Social Security. Social Security Administration, 2018 Social Security/SSI/Medicare Information, February 2018.
[3] The annual limit on covered wages and net self-employment income subject to the Social Security payroll tax (the taxable wage base) is adjusted annually based on average wage growth, if a Social Security cost-of-living adjustment (COLA) is payable.
[4] Self-employed individuals are required to pay Social Security payroll taxes if they have annual net earnings of $400 or more. Only 92.35% of net self-employment income (up to the annual limit) is taxable.
[5] The OASI and DI trust funds are referred to on a combined basis as the Social Security trust funds.
[6] Social Security Act, Title II, §201(d) [42 U.S.C. §401(d)].
[7] In 2017, 87.7% of Social Security’s total income was from dedicated payroll taxes, 8.5% was from interest earned on trust fund assets, 3.8% was from federal income taxes paid on Social Security benefits, and the remainder was from general fund reimbursements to the trust funds for a variety of purposes. Of total expenditures, 98.8% was for benefit payments; the remainder was for administrative expenses and transfers to the Railroad Retirement program. See Social Security Administration, Office of the Chief Actuary, Financial Data For A Selected Time Period.
Medicare is a nationwide health insurance program for the aged and certain disabled persons. Medicare consists of four distinct parts: Part A (Hospital Insurance, or HI); Part B (Supplementary Medical Insurance, or SMI); Part C (Medicare Advantage, or MA); and Part D (the prescription drug benefit). The program is administered by the Centers for Medicare & Medicaid Services (CMS). According to the Congressional Budget Office, total program outlays are estimated to reach about $714 billion in fiscal year 2018. Net federal outlays, after deduction of beneficiary premiums and other offsetting receipts, are expected to be close to $590 billion in 2018.
Medicare is administered by CMS within the U.S. Department of Health and Human Services (DHHS). Day-to-day program operations, including processing benefits and paying claims, are conducted by private Medicare contractors.
For more programmatic information, please see reports published by the Congressional Research Service.
CRS works exclusively for the United States Congress, providing policy and legal analysis to Committees and Members of both the House and Senate, regardless of party affiliation.
The following provides a brief legislative history for Medicare from the prior Green Book through most of the 115th Congress. For prior legislative history, please see prior editions of the Green Book.
The summary highlights major legislation; it is not a comprehensive list of all Medicare or health related tax amendments. Included are provisions that had a significant budget impact, changed program benefits, modified beneficiary cost sharing, or involved major program reforms. Provisions involving policy changes are mentioned the first time they are incorporated in legislation, but not necessarily every time a modification is made.
Disaster Tax Relief and Airport and Airway Extension Act of 2017 (P.L. 115-62)
Amended the Medicare IVIG Access and Strengthening Medicare and Repaying Taxpayers Act of 2012 to extend through 2020 the Medicare Patient Intravenous Immunoglobulin (IVIG) Demonstration Project to provide payments to Medicare beneficiaries for items and services needed for the in-home administration of IVIG for the treatment of primary immune deficiency diseases.
Bipartisan Budget Act of 2018 (P.L. 115-123)
Know the Lowest Price Act of 2018 (P.L. 115-262)
Prohibits a prescription drug plan under Medicare or Medicare Advantage from restricting a pharmacy from informing an enrollee of any difference between the price, copayment, or coinsurance of a drug under the plan and a lower price of the drug without health-insurance coverage. (Such restrictions are commonly referred to as gag clauses.)
Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act or the SUPPORT for Patients and Communities Act (P.L. 115-271)
This page was prepared November 2018 for the 2018 version of the House Ways and Means Committee Green Book.
The Supplemental Security Income (SSI) program is a means tested, federally-administered income assistance program authorized by Title XVI of the Social Security Act. Established in 1972 (P.L. 92-603), with benefits first paid in 1974, SSI provides monthly cash payments in accordance with uniform, nationwide eligibility requirements to needy aged, blind, and disabled persons. In August 2018, there were 8.2 million SSI recipients receiving $4.8 billion in monthly benefit payments. [1]
The SSI program replaced the federal-state programs of Old Age Assistance and Aid to the Blind, established by the original Social Security Act of 1935, as well as the program of Aid to the Permanently and Totally Disabled established by the Social Security Act Amendments of 1950. Under these programs, federal matching funds were offered to the states to enable them to give cash relief, “as far as practicable” in each state, to eligible persons whom the states deemed needy. The states set benefit levels and administered these programs. These federal-state adult assistance programs continue to operate in Guam, Puerto Rico, and the Virgin Islands. Under the Covenant to Establish a Commonwealth of the Northern Mariana Islands, enacted as Public Law 94-241 on March 24, 1976, the Northern Mariana Islands is the only jurisdiction outside the 50 states and the District of Columbia in which residents are eligible for the SSI program.
The Congress intended the SSI program to be more than just a federal version of the former state adult assistance programs, which it replaced. In describing the program, the report of the Committee on Finance stated:
The Committee bill would make a major departure from the traditional concept of public assistance as it now applies to the aged, the blind, and the disabled. Building on the present Social Security program, it would create a new federal program administered by the Social Security Administration (SSA), designed to provide a positive assurance that the nation's aged, blind, and disabled people would no longer have to subsist on below poverty level incomes. (Senate Report No. 92-1230, p. 384; U.S. Senate, Committee on Finance, Sept. 26, 1972).
The SSI program was envisioned as a basic national income maintenance system for the aged, blind, and disabled, which would differ from the state programs it replaced in a number of ways. It would be administered by SSA in a manner as comparable as possible to the way in which benefits were administered under the Old-Age, Survivors, and Disability Insurance (OASDI) program, commonly known as Social Security. While it was understood that modifications would be necessary to make SSA's systems work for the new program, SSI was seen as an add-on rather than a new system.
Under the former adult assistance programs, the amount of assistance could vary from person to person according to an evaluation of the individual's needs. The SSI program, by contrast, represented a “flat grant” approach in which there would be a uniform federal income support level.
It should be noted that even though SSA administers the SSI program, SSI is not the same as Social Security. The SSI program is funded by general revenues of the U.S. Treasury – which are comprised of personal income taxes, corporate taxes, and other taxes. Social Security benefits are funded primarily by the Social Security taxes paid by workers, employers, and self-employed persons. The programs also differ in other ways such as the conditions of eligibility and the method of determining payments. In addition, states have the option of supplementing the basic federal SSI payment. In most cases, state supplementary payments are administered by the state.
For more programmatic information, please see reports published by the Congressional Research Service.
CRS works exclusively for the United States Congress, providing policy and legal analysis to Committees and Members of both the House and Senate, regardless of party affiliation.
The following provides a legislative history of Supplemental Security Income (SSI) from the prior Green Book through most of the 115th Congress. For prior history, please see prior editions of the Green Book.
Tax Cuts and Jobs Act (P.L. 115-97)
Achieving a Better Life Experience (ABLE) accounts are state-sponsored, tax-advantaged savings accounts for individuals with certain disabilities that began before the age of 26. For the designated beneficiary of an ABLE account, assets in the account and withdrawals from the account for qualified disability expenses receive preferential treatment under the federal tax code as well as under certain public assistance programs, including SSI.
The 2017 tax reform law made three changes to the federal tax code concerning ABLE accounts, all of which are set to expire at the start of 2026. First, it permits certain employed designated beneficiaries to make special contributions to their own ABLE accounts in excess of the base annual limit ($15,000 in 2018), up to the lesser of (1) the designated beneficiary’s earnings for the year or (2) the poverty guideline for a one-person household for the preceding year. For 2018, the limit on special contributions in most states is $12,060. Designated beneficiaries are ineligible to make special contributions if they participated in certain employer-sponsored retirement plans during the year, such as a 401(k) plan.
Second, the law allows designated beneficiaries who meet certain requirements to claim the saver’s income tax credit for non-rollover contributions they made to their ABLE accounts during the year. The amount of the non-refundable credit depends on the beneficiary's filing status and adjusted gross income and is limited to $2,000 per individual.
Third, the law permits funds to be rolled over from a 529 account into an ABLE account on a tax-free basis, provided the ABLE account owner is also the designated beneficiary of the 529 account or a family member of such beneficiary. The rollover is subject to the base annual limit on all contributions to an ABLE account ($15,000 in 2018) and must be made in a timely manner.
Bipartisan Budget Act of 2018 (P.L. 115-123)
Under SSA’s Prisoner Incentive Payment Program, state or local correctional facilities may receive incentive payments from SSA for reporting information to the agency on the confinement of Social Security or SSI recipients. The confinement must be reported within a specified number of days, and the amount of the incentive payment is based on the number of days from confinement to report. There are two incentive payment amounts: $200 and $400.
The Bipartisan Budget Act of 2018 decreased the timeframe for reporting the confinement of a SSI recipient for purposes of the $400 incentive payment from 30 days to 15 days. Correctional facilities remain eligible for the $200 incentive payment for notifying SSA of the confinement of a SSI recipient, provided the notification is made after 15 days but within 90 days. The law did not change the timeframes that correctional facilities have to report the confinement of a Social Security recipient for purposes of the $200 and $400 incentive payments.
Strengthening Protections for Social Security Beneficiaries Act of 2018 (P.L. 115-165)
The Strengthening Protections for Social Security Beneficiaries Act of 2018 made a number of changes to SSA’s representative payee program, which provides benefits management for Social Security or SSI recipients who are unable to manage or direct the management of their own benefits. Among other things, the law includes the following provisions:
This page was prepared October 2018 for the 2018 version of the House Ways and Means Committee Green Book.
Unemployment Insurance (UI) is a joint federal-state program that provides income to eligible, unemployed workers through the payment of state UI benefits. Each state oversees its own UI program within federal guidelines, so there is wide variance within and among states. Although generally there are up to 26 weeks of benefits available in most states. For example: Generally, most states provide up to 26 weeks of UC benefits. Montana and Washington provide up to 28 and 30 weeks, respectively. Additionally, there are nine states provide fewer than 26 weeks. The amount of compensation is usually based on the individual’s earnings over the based on a 12-month period. In Fiscal Year 2018, there were an estimated 5.4 million first UI benefit payments made and total UI benefit outlays were estimated to be $28.8 billion.
One purpose of the UI program is to help counter economic fluctuations such as recessions. This intent is reflected in the current UI program’s funding and benefit structure. When the economy grows, UI program revenue rises through increased tax revenues while UI program spending falls as fewer workers are unemployed. The effect of collecting more taxes than are spent dampens demand in the economy. This also creates a surplus of available funds for the UI program to draw upon during a recession. During recessions, UI tax revenue falls and UI program spending increases as more workers lose their jobs and receive UI benefits. The increased amount of UI payments to unemployed workers dampens the economic effect of earnings losses by injecting additional funds into the economy.
UI benefits may be extended at the state level by the permanent law Extended Benefit (EB) program if high unemployment exists within the state. Once regular unemployment benefits are exhausted, the EB program may provide up to an additional 13 or 20 weeks of benefits, depending on worker eligibility, optional state laws, and economic conditions in the state. The EB program is typically funded 50% by the federal government and 50% by the states who decide to operate a program. In addition, Congress can authorize additional temporary unemployment insurance programs during economic downturns.
For more programmatic information, please see reports published by the Congressional Research Service.
CRS works exclusively for the United States Congress, providing policy and legal analysis to Committees and Members of both the House and Senate, regardless of party affiliation.
The following provides a brief legislative history for Unemployment Insurance from the prior Green Book through most of the 115th Congress. For prior legislative history, please see prior editions of the Green Book.
Bipartisan Budget Act of 2018 (P.L. 115-123)
The Ways and Means Committee is responsible for UI benefits, while the Appropriations Committee is responsible for the providing administrative funds to operate the program. Since 2005, as the overall appropriation for UI administration has declined with the caseload, Appropriations has been specifying increasing amounts of funds for RESEAs. Without any authorizing language from Ways and Means, the program has been completely designed and operated by the Department of Labor. This law retakes the Committee’s jurisdiction over RESEAs so that they are administered by the states in a more consistent manner from year to year.
The law:
Within the ten-year period, this bill authorizes $117 million annually within the discretion of the Appropriations Committee, that then must be funded before an additional amount, the cap adjustment, is provided. According to CBO, a total investment of $2.8 billion produces a net savings of $500 million over ten years.
This page was prepared August 2018 for the 2018 version of the House Ways and Means Committee Green Book.
Retirement, survivor, disability, unemployment, and sickness insurance benefits for railroad employees and their families are administered by the U.S. Railroad Retirement Board (RRB), an independent Federal agency headquartered in Chicago. The term “Railroad Retirement Board” (RRB) refers both to the agency that administers the Federal benefits of railroad industry employees and to the 3-member governing board that oversees the agency.
The programs are governed by the Railroad Retirement Act and the Railroad Unemployment Insurance Act. Railroad retirement came into existence in 1936 and was substantially modified by the Railroad Retirement Act of 1974 (Public Law 93-445), which provided for closer coordination with the Social Security system. In the House of Representatives, jurisdiction over the Railroad Retirement and Unemployment Benefit Programs is divided between two standing committees. The Transportation and Infrastructure Committee has jurisdiction over legislation pertaining to “railroads… and railroad retirement and unemployment (except revenue measures related hereto).” The Subcommittee on Railroads of the committee has primary responsibility for the Railroad Retirement Act (RRA) and amendments affecting railroad retirement. The Committee on Ways and Means has jurisdiction over all revenue measures, including the Railroad Retirement Tax Act (chapter 22 of the Internal Revenue Code). Within the Committee on Ways and Means, jurisdiction over employment taxes and trust fund operations relating to the Railroad Retirement System lies within the Subcommittee on Social Security.
For more programmatic information, please see reports published by the Congressional Research Service.
CRS works exclusively for the United States Congress, providing policy and legal analysis to Committees and Members of both the House and Senate, regardless of party affiliation.
There were no legislative changes to Railroad Benefit programs during the 115th Congress. For prior legislative history, please see prior editions of the Green Book.
This page was prepared November 2018 for the 2018 version of the House Ways and Means Committee Green Book.
Trade Adjustment Assistance (TAA) is a group of programs that provide federal assistance to parties that meet certain eligibility criteria to demonstrate that they have been adversely affected by trade. TAA programs are authorized by the Trade Act of 1974, as amended, and were last reauthorized by the Trade Adjustment Assistance Reauthorization Act of 2015 (TAARA; Title IV of P.L. 114-27).
The largest TAA program, TAA for Workers (TAAW), provides federal assistance to groups of workers who have become separated or partially separated from their employment or have been threatened with total or partial separation under certain circumstances related to trade. The largest components of the TAAW program are (1) funding for career services and training to prepare workers for new occupations and (2) income support for workers who are enrolled in an eligible training program and have exhausted their unemployment compensation. The TAAW program is administered at the federal level by the Department of Labor.
TAA programs also are authorized for firms and farmers that have been adversely affected by imports. TAA for Firms, administered by the Department of Commerce, supports trade-impacted businesses by providing technical assistance in developing business recovery plans and by providing matching funds to implement those plans. The TAA for Farmers program was reauthorized by TAARA but the program has not received an appropriation since FY2011.
The eligibility and benefit provisions of TAARA are authorized to continue through June 30, 2021. After that, the program is set to revert to a more limited set of eligibility and benefit provisions for one year before it is scheduled to phase out.
For more programmatic information, please see reports published by the Congressional Research Service.
CRS works exclusively for the United States Congress, providing policy and legal analysis to Committees and Members of both the House and Senate, regardless of party affiliation.
There have been no significant legislative changes to TAA during the 115th Congress. For prior history, please see prior editions of the Green Book.
This page was prepared October 2018 for the 2018 version of the House Ways and Means Committee Green Book.
The Temporary Assistance for Needy Families (TANF) block grant provides grants to states, Indian tribes, and territories for a wide range of benefits, services, and activities that promote and increase work among low-income families with children. TANF is most commonly associated with funding state cash welfare programs. It was created in the 1996 welfare reform law (The Personal Responsibility and Work Opportunity Reconciliation Act of 1996, P.L. 104-193), replacing the Aid to Families with Dependent Children (AFDC) cash welfare program and several related programs. In FY2017, states reported that cash welfare represented only 23% of state and federal spending in the TANF program, and states now use TANF funds for a wide range of other activities. In addition to state block grants, TANF includes competitive grants to fund healthy marriage and responsible fatherhood initiatives.
Federal TANF law is contained in Title IV-A of the Social Security Act. At the federal level, TANF is administered by the Department of Health and Human Services (HHS). However, benefits and services are provided by the states, territories, and tribes, which have broad flexibility in how to administer their programs. TANF programs operate in all 50 states, the District of Columbia, Puerto Rico, Guam, and the Virgin Islands. American Samoa is eligible to operate a TANF program, but has not opted to do so.
Congressional Research Service (CRS) Reports
For more programmatic information, please see reports published by the Congressional Research Service.
CRS works exclusively for the United States Congress, providing policy and legal analysis to Committees and Members of both the House and Senate, regardless of party affiliation.
The following provides a legislative history of the Temporary Assistance for Needy Families (TANF) program from the prior Green Book through most of the 115th Congress. For prior history, please see prior editions of the Green Book.
Consolidated Appropriations Act, 2017 (P.L. 115-31)
The Consolidated Appropriations Act extended TANF through September 30, 2018 and made several other policy changes.
What Works Clearinghouse
The Act required HHS, in consultation with the Department of Labor, to develop a database named "What Works Clearinghouse of Proven and Promising Projects to Move Welfare Recipients into Work." This database consists of the projects that used a promising or proven approach in delivering services to move TANF recipients into work. The database also includes a list of projects that used a developmental approach, and a list of projects that were ineffective in moving recipients to work. The categorization of these projects as proven, promising, ineffective, or developmental is based on rigorous evaluation of them.
Census Bureau Welfare Reform Research
The Act also required the Census Bureau, in consultation with the Secretary of HHS and the Bureau of Labor Statistics, to implement a new household survey and/or enhance existing household surveys to provide for the assessment of the effects of welfare reform on the economic and child well-being of low-income families. The Census Bureau, the Secretary of HHS, and BLS are required to consider ways to improve the surveys, and data derived from the surveys, to address underreporting of means-tested benefits; increase understanding of poverty spells, long-term poverty, and intergenerational poverty; better understand the geographical dimensions of poverty; increase understanding of the effects of means-tested benefits and tax benefits on the earnings of low-income families; and improve how poverty and economic well-being are measured, including the use of consumption measures.
Welfare Research Funding
Finally, these research activities are funded through a set-aside from the basic TANF block grant, 0.33% of the total block grant amount. This provides a total for welfare-related research of $54.7 million. Of this total, at least $10 million is required to be used for research related to Census Bureau household surveys, though the Secretary of HHS would have had the authority to increase funding for those activities above $10 million.
Department of Defense and Labor, Health and Human Services, and Education Appropriations Act, 2019, and Continuing Appropriations Act, 2019 (P.L. 115-245)
The Continuing Appropriations Act extended TANF funding (at previous year’s levels) through December 7, 2018.
This page was prepared October 2018 for the 2018 version of the House Ways and Means Committee Green Book.
The federal Child Support Enforcement (CSE) program was signed into law in 1975 by President Gerald Ford. It was part of the Social Services Amendments of 1974 (P.L. 93-647). The CSE program is codified in Title IV-D of the Social Security Act.
Child support is the cash payment that noncustodial parents are legally obligated to make for the financial support of their children. It generally is established when parents divorce or separate or when the custodial parent applies for public assistance. It is usually paid on a monthly basis. The mission of the CSE program is to enhance the well-being of children by helping custodial parents and children obtain financial support from the noncustodial parents on a consistent and continuing basis. This program is based on the premise that both parents are financially responsible for their children, and that parents who do not live with their children should fulfill that responsibility to them by contributing to the payment of childrearing costs.
When the CSE program was first established, its goals were to reimburse the states and the federal government for the cash assistance (“welfare”) payments it provided families, and to help other families obtain consistent and ongoing child support payments from the noncustodial parent so that they could remain self-sufficient and stay off all forms of public assistance. The CSE program has evolved over time from a “welfare cost-recovery” program into a “family-first” service delivery program that seeks to enhance the well-being of families by making child support a reliable source of income.
Throughout this evolution in program focus, the CSE program has maintained different rules for assistance and nonassistance families. Families who are required to enroll in the CSE program are those receiving cash assistance under the Temporary Assistance for Needy Families program (TANF), Medicaid coverage, or, at state option, Supplemental Nutrition Assistance Program (SNAP) food assistance. The program is also available to nonassistance families if they choose to enroll. Nonassistance child support cases are assessed an application fee and a $35 annual user fee per $550 in child support that is collected for that case, unless the state chooses to waive or cover the cost of those fees. The CSE program provides seven basic services on behalf of children. It (1) locates noncustodial parents, (2) establishes paternity, (3) establishes child support orders, (4) reviews and modifies child support orders, (5) collects child support payments from noncustodial parents, (6) establishes and enforces medical child support, and (7) distributes child support payments to custodial parents.
The CSE program is administered at the federal level by the Office of Child Support Enforcement (OCSE) in the Department of Health and Human Services (HHS). The CSE program is available in all 50 states, the District of Columbia, the territories of Guam, Puerto Rico, and the Virgin Islands, and about 61 tribal nations. The CSE program is usually operated at the county-level of government.
There are four primary funding streams for the CSE program. (1) States spend their own money to operate a CSE program. (2) The federal government reimburses each state 66% of all allowable expenditures on CSE activities. (3) States collect child support made on behalf of TANF families to reimburse themselves and the federal government for the cost of TANF cash payments. (4) The federal government provides states with an incentive payment to encourage them to operate effective CSE programs. In addition, application and user fees and costs recovered from non-assistance families may help finance the CSE program.
Not all child support goes through the CSE program. The CSE program handles between 50-60% of all child support cases; the rest are handled by private attorneys or collection agencies, or through mutual agreements between parents.
For more programmatic information, please see reports published by the Congressional Research Service.
CRS works exclusively for the United States Congress, providing policy and legal analysis to Committees and Members of both the House and Senate, regardless of party affiliation.
The following provides a legislative history of the Child Support Enforcement (CSE) program from the prior Green Book through most of the 115th Congress. For prior history, please see prior editions of the Green Book.
Tax Cuts and Jobs Act (P.L. 115-97)
The Tax Cuts and Jobs Act increased the annual user fee from $25 to $35 for using the child support enforcement system while also increasing the minimum amount of child support collections that triggers the imposition of that fee from $500 to $550. The act made no changes to the types of cases that are subject to this fee.
This page was prepared September 2018 for the 2018 version of the House Ways and Means Committee Green Book.
Child care has been an ongoing issue of public policy concern primarily because, in most American families with children, parents are working outside the home and must arrange for care for their children. This is true regardless of whether parents are married or unmarried and regardless of the age of their children, although mothers of school-age children have a higher rate of employment than mothers of preschoolers. Thus, some form of child care is a fact of life for the majority of families with children, and federal grants and tax credits exist to help offset the expense for those who purchase child care.
Over time, policymakers have debated the appropriate federal role in addressing questions of availability, affordability, and quality of child care. The role of child care as a work support for low-income and welfare-recipient families has been a particular focus of debate. In recent years, child care as a policy issue has broadened into the related areas of early childhood development and education, as research has focused on the connection between children’s early experiences and their successful long-term development. Child care discussions increasingly include a focus on content and quality, while discussions of early childhood development and education increasingly address the need for coordination with child care services to fit the schedules of working families.
The federal government has used a number of different strategies to invest in child care, including broad-based social programs as well as targeted child care programs and tax provisions. This section of the Green Book focuses primarily on the Child Care and Development Fund (CCDF), a term used to refer to the combination of mandatory and discretionary child care funding streams administered jointly by the U.S. Department of Health and Human Services (HHS). The CCDF is the primary source of federal funding dedicated solely to child care subsidies for low-income working and welfare families.
The FY2018 funding level for the CCDF was roughly $8.1 billion, which included $5.2 billion in discretionary funds and $2.9 billion in mandatory funds. Discretionary CCDF funding is authorized by the Child Care and Development Block Grant Act of 1990, which was reauthorized through FY2020 by the Child Care and Development Block Grant Act of 2014 (P.L. 113-186). Mandatory CCDF funding is authorized in Section 418 of the Social Security Act (sometimes referred to as the "Child Care Entitlement to States"). These mandatory funds have generally been operating under temporary extensions of the Temporary Assistance for Needy Families (TANF) program since FY2011.
The CCDF provides block grants to states, according to a formula, which are used to subsidize the child care expenses of working families with children under age 13. In addition to providing funding for child care services, funds are also used for activities intended to improve the overall quality and supply of child care for families in general.
For more programmatic information, please see reports published by the Congressional Research Service.
CRS works exclusively for the United States Congress, providing policy and legal analysis to Committees and Members of both the House and Senate, regardless of party affiliation.
Figure 9-1. Federal Funding Appropriated to the CCDF, FY1997-FY2018
Figure 9-2. Total Federal and State CCDF Expenditures, FY1997-FY2016
Figure 9-3. Total CCDF Expenditures (Federal and State) in Nominal and Constant FY2016 Dollars, FY1997-FY2016
Figure 9-4. CCDF Expenditures in Constant FY2016 Dollars and Average Monthly Children Served, FY1998-FY2016
Figure 9-5. Percent of Children Eligible under State Rules Who Were Served by the CCDF in 2015
Table 9-1. Characteristics of Selected Early Childhood Care and Education Programs and Tax Provisions
Table 9-2. CCDF Funding History, FY1997-FY2018
Table 9-3. CCDF State Allocations Based on Appropriations for FY2018
Table 9-4. CCDF Expenditures in Nominal Dollars and Constant FY2016 Dollars, FY1997-FY2016
Table 9-5. Estimated Average Monthly Number of Families and Children Served by the CCDF, FY1998-FY2016
Table 9-6. Labor Force Participation Rates of Women by Presence and Age of Youngest Child, Selected Years, 1947-2016
Table 9-7. Labor Force Participation Rates of Women with Children by Marital Status and Age of Youngest Child, Selected Years, 1980-2016
Table 9-8. Average Hourly Wages for Child Care Workers and Preschool Teachers, May 2017
The following provides a legislative history for child care from the prior Green Book through most of the 115th Congress. For prior legislative history, please see prior editions of the Green Book.
Bipartisan Budget Act of 2018 (P.L. 115-123)
The Bipartisan Budget Act of 2018 raised the discretionary defense and nondefense spending limits for FY2018 and FY2019. Underlying this budget agreement was a commitment to use a portion of the increase in the nondefense spending limit to provide (via the annual appropriations process) higher discretionary funding levels for child care in fiscal years 2018 and 2019.
This page was prepared October 2018 for the 2018 version of the House Ways and Means Committee Green Book.
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The SSBG has received annual appropriations of $1.7 billion in every year since FY2002. However, since FY2013, the appropriated funding level for the SSBG has been reduced each year due to budget sequestration. (Sequestration is a spending reduction process under which budgetary resources are canceled to enforce budget policy goals.) In addition to funding from annual appropriations, the SSBG has occasionally received supplemental appropriations, most recently to support states in responding to the effects of Hurricane Sandy in 2013, natural disasters in 2008, and the Gulf Coast hurricanes of 2005.
At the federal level, the SSBG is administered by the U.S. Department of Health and Human Services (HHS). Legislation amending title XX is typically reported by the House Ways and Means Committee and the Senate Finance Committee.
Title XX of the Social Security Act was created in 1975 (P.L. 93-647); however, it was the Omnibus Budget Reconciliation Act of 1981 (P.L. 97-35) that amended title XX to establish a Block Grant to States for Social Services. More recently, health reform legislation enacted in March 2010 (P.L. 111-148) inserted a new subtitle on elder justice into title XX, which was itself re-titled as Block Grants to States for Social Services and Elder Justice. (Under this new law, the SSBG is authorized in subtitle A of title XX, while the elder justice provisions are contained in subtitle B of title XX.) The health reform law also amended subtitle A of title XX to establish two demonstration projects to address the workforce needs of health care professionals and a new competitive grant program to support the early detection of medical conditions related to environmental health hazards. These other components of title XX are not addressed here; the purpose of this chapter of the Green Book is to provide an overview of the SSBG.
For more programmatic information, please see reports published by the Congressional Research Service.
CRS works exclusively for the United States Congress, providing policy and legal analysis to Committees and Members of both the House and Senate, regardless of party affiliation.
Figure 10-1. SSBG Annual Appropriations in Nominal and Constant FY2018 Dollars, FY1982-FY2018
Figure 10-2. SSBG Expenditures by Selected Spending Categories, FY2015
Table 10-1. SSBG Funding Levels in Nomincal and Constant FY2018 Dollars, FY1982-FY2018
Table 10-2. SSBG Allocations by State and Territory, Selected Fiscal Years 1998-2018
Table 10-3. Number of States Offering Selected Services, Fiscal Years 1999-2015
Table 10-4. Use of SSBG Funds by Expenditure Category, Fiscal Years 2001-2015
The following provides a legislative history of the Social Services Block Grant (SSBG) from the prior Green Book through most of the 115th Congress. For prior history, please see prior editions of the Green Book.
The annual appropriations acts for FY2017 (P.L. 115-31) and FY2018 (P.L. 115-141) maintained the SSBG appropriation at $1.7 billion. However, this amount was reduced in both years due to sequestration, with final funding levels totaling $1.583 billion in FY2017 and $1.588 billion in FY2018. The annual appropriations acts maintained the 10% TANF transfer authority for states.
This page was prepared October 2018 for the 2018 version of the House Ways and Means Committee Green Book.
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Federal child welfare policy is largely concerned with preventing the abuse or neglect of children in their own homes and responding to the consequences of any such abuse or neglect. The primary goals of the policy are to ensure children’s safety and permanence, and to promote the well-being of children and their families.
Under the U.S. Constitution, states are understood to have the primary obligation to ensure the welfare of children and their families. At the state level, the child welfare “system” consists of public child protection and child welfare workers, private child welfare and social service workers, state and local judges, prosecutors, and law enforcement personnel. These representatives of various state and local entities assume interrelated roles while carrying out child welfare activities. These include: offering services to strengthen and support biological, adoptive, and kinship families; removing children from their homes when that is necessary for their safety; supervising and administering payments for children placed in foster care; working to permit safe reunification of children with their parents or, when this is not possible, finding them a new permanent family through adoption, legal guardianship or placement with a fit and willing relative; and providing services to help older children in foster care and youth who “age out” of care become successful adults.
Children and Families Served
Most children or families served by a public (state or local) child welfare agency first come into contact with that agency following an allegation of child abuse or neglect. There are some 74 million children in the nation, and in FY2016 state or local child protective service workers investigated or otherwise provided a response to allegations of abuse or neglect involving some 3.5 million children. An estimated 1.3 million of those children and their families received additional services following this child protective services response and states identified 676,000 children as victims of child abuse or neglect under state law and policy. The large majority of children who received services from the child welfare agency after an abuse or neglect investigation or response were served in their own home rather than being removed to foster care.
Foster care is a temporary living arrangement for children who cannot safely remain in their own homes. There were some 274,000 children who entered foster care in FY2014. This represented an increase of 23,000 children compared to five years earlier. and was the highest one-year total of children entering care in five years. For most of the children entering foster care in FY2016 (61%), states reported that neglect was one of the circumstances that led to their removal from their homes and placement in foster care. Other circumstances of removal for children entering care in FY2016 included (alone or in combination with additional factors) drug abuse by the child’s parent (34%), “caretaker inability to cope” due to physical or mental illness or other reason (14%), physical abuse (12%), a child behavior problem (11%), inadequate housing (10%), parental incarceration (8%), alcohol abuse by child’s parent (6%), abandonment (5%), and sexual abuse (4%).
The number of children remaining in foster care declined from a high of 567,000 children on the last day of FY1999 to a low of 397,000 as of the last day of FY2012. Since then the number of children in foster care has steadily climbed, reaching 437,000 as of the last day of FY2016. The general decline in the number of children in foster care across much of FY1999-FY2012 may be credited to successful efforts by states to reduce the length of time children spend in care, locate more permanent homes for children and, in more recent years, reduce the number of children entering care. While state efforts to locate and find new permanent homes for children continues to be strong, the more recent increases in entries to foster care, which appears linked to rising parental substance abuse, may largely explain the increase in the overall foster care caseload.
Requirements and Oversight
Most federal child welfare requirements are included in Title IV-B and Title IV-E of the Social Security Act. To receive federal support through the federal child welfare programs authorized under those parts of the law, states must provide no less than 20% of total program costs, and may be required to provide up to 50% of total program costs (depending on the program and kind of activity). As a condition of receiving these federal funds, states must also provide certain protections to each child in foster care (and without regard to whether or not the child meets federal eligibility criteria for Title IV-E support). Further, states must meet additional federal requirements related to planning for and administering services to children and families. State compliance with these requirements is subject to various federal audits and conformity reviews, of which the most comprehensive is the Child and Family Services Review (CFSR).
State Spending on Child Welfare Purposes
States spend substantial funds on child welfare purposes. In FY2018 federal dedicated child welfare funding was about $9.5 billion, and to fully draw down those federal funds states are expected to provide non-federal resources of roughly $7.4 billion. This suggests total federal, state, and local spending for child welfare purposes of close to $17 billion. However, according to a survey of state child welfare agency spending for state fiscal year 2014 (the most recent available), those public agencies spent $29.1 billion on child welfare activities in that year with more than half of this spending ($16.3 billion or 57%) coming from state or local funds. The remainder ($12.8 billion or 43%) drew on federal funds, including the funding streams discussed previously that are dedicated to child welfare purposes (primarily those authorized in Title IV-E and Title IV-B), as well as additional federal funding that states may choose to direct to child welfare purposes. Principally this “non-dedicated” funding is expended by states’ child welfare agencies out of federal funds provided under the Temporary Assistance for Needy Families (TANF) block grant, the Social Services Block Grant (SSBG), and Medicaid. [1]
[1] Kristina Rosinsky and Dana Connelly. Child Welfare Financing SFY2014: A survey of federal, state, and local expenditures, Child Trends. Casey Family Programs, and Annie E. Casey Foundation (October 2016).
For more programmatic information, please see reports published by the Congressional Research Service.
CRS works exclusively for the United States Congress, providing policy and legal analysis to Committees and Members of both the House and Senate, regardless of party affiliation.
Figure 11-1. Trend in Title IV-E Foster Care and Permanency Assistance Caseload, FY1996-FY2019 and Table 11-1. Title IV-E Caseload by Type of Assistance, Number and Rate, FY1984-FY2017
Figure 11-2. Caseload and Federal Outlay Estimates for the Title IV-E Program, FY2018-FY2028
Figure 11-3. Trends in Foster Care Use, FY1982-FY2016 and Table 11-3. National Estimates of Foster Care Use, FY1982-FY2016
Figure 11-4. Rate of Entry to Foster Care by State, FY2016; Figure 11-4A. Circumstances Associated with Children’s Removal From the Home, FY2016; Figure 11-4B. Percentage of Children in Foster Care by Type of Placement Setting and by State, FY2016; and Table 11-4. Current Placement Setting of Children in Foster Care by State, FY2016
Figure 11-5. Trend in Title IV-E Foster Care Coverage, FY1996-FY2016 and Table 11-5. Estimated Share of Foster Care Caseload Eligible for and Receiving Title IV-E Foster Care Maintenance Payments by State, FY2016
Figure 11-6. Trend in Federal and State Title IV-E Spending for Foster Care, Adoption Assistance, and Kinship Guardianship Assistance, FY1989-FY2016 and Table 11-6. Federal and State Title IV-E Spending for Foster Care (FC), Adoption Assistance (AA), and Kinship Guardianship Assistance (GA), FY1989-FY2016
Figure 11-7. Trend in Federal Title IV-E Spending by Program Component, FY1989-FY2016; Figure 11-8. Share of Federal Title IV-E Spending by Program Component, FY1989-FY2016; and Table 11-7. Federal Title IV-E Spending by Component, FY1989-FY2016
Table 11-8. Total Title IV-E Foster Care, Adoption Assistance, and Kinship Guardianship Assistance Spending by State, FY2016
Figure 11-9. Trend in Total Title IV-B Funding, FY1992-FY2018; Table 11-9A. Total Title IV-B Funding, FY1990-FY2018; and Table 11-9B. Title IV-B Funding by State, FY2018
The following provides a legislative history of amendments to child welfare programs in the Social Security Act from the 2016 Green Book through August 2018. For prior history, please see earlier editions of the Green Book.
Bipartisan Budget Act of 2018 (P.L. 115-123)
Title VII, Division E of the Bipartisan Budget Act of 2018, enacted February 9, 2018, includes the Family First Prevention Services Act (Family First). Family First renamed the Title IV-E program in the Social Security Act (SSA) as the Foster Care, Prevention, and Permanency program. It amended that program to authorize new support for services to prevent the need for children to enter foster care; limit federal support for children in foster care who are placed in settings other than foster family homes; require improved standards for group or congregate care facilities providing care to children in Title IV-E financed foster care; and to temporarily reinstate (for certain children adopted before their second birthday) more narrow eligibility for Title IV-E adoption assistance.
Separately, the bill extended, through FY2021, funding authorizations for Adoption and Legal Guardianship Incentive Payments (Section 473A of the SSA) and for the child and family services grant programs included in Title IV-B of the SSA. These are the Stephanie Tubbs Jones Child Welfare Services (CWS) and the Promoting Safe and Stable Families Program (PSSF), which includes funding reservations for the Court Improvement Program, Monthly Caseworker Visit Grants, and Regional Partnership Grants.
Additionally, Family First renamed the program that targets services and supports for older children in foster care and those youth who have aged out of foster care, as the Chafee Foster Care Program for Successful Transition to Adulthood (Section 477 of the SSA). It also extended the age at which those program services and supports may be made available to former foster youth.
These and selected other changes made by Family First are outlined below.
This page was prepared October 2018 for the 2018 version of the House Ways and Means Committee Green Book.
The Pension Benefit Guaranty Corporation (PBGC) is a federal government agency that was established in 1974 to protect the benefits of participants in private-sector defined benefit pension plans. The PBGC runs two insurance programs: a single-employer program and a multiemployer program. Single-employer pension plans are plans to which one employer makes contributions. Multiemployer pension plans are collectively bargained pension plans to which more than one employer contributes. The single-employer program is the larger of the two insurance programs.
The PBGC oversees the termination of single-employer defined benefit pension plans and pays the benefits to participants in those terminated plans which do not have assets sufficient to pay 100% of promised benefits. There is a statutory maximum benefit that the PBGC is allowed to pay, which is indexed annually for inflation ($65,045 per year for a participant in a pension plan terminated in 2018 who receives a single-life annuity beginning at age 65). Most participants in terminated single-employer pension plans receive the full benefit earned at the time of plan termination.
The PBGC does not directly pay benefits to participants in multiemployer pensions. Rather, the PBGC provides insolvent multiemployer plans with financial assistance, sufficient to pay PBGC guaranteed benefits and reasonable administrative expenses. Such assistance is in the statutorily-required form of loans, which the PBGC indicates are rarely repaid. The PBGC statutorily guaranteed benefit for a participant in a multiemployer plan generally is the participant’s years of service times 100% of the first $11 of the monthly benefit rate and 75% of the next $33 of the monthly benefit rate. Thus, a participant with 30 years of service would receive a maximum annual benefit of $12,870. This benefit amount is not indexed for inflation.
The two insurance programs are financed by premiums paid by sponsors of defined benefit plans, investment income, assets from pension plans trusteed by the PBGC, and recoveries from the companies formerly responsible for the trusteed plans. The PBGC does not receive any funds from general tax revenues, and the obligations of the PBGC are not obligations of the U.S. government.
For more programmatic information, please see reports published by the Congressional Research Service.
CRS works exclusively for the United States Congress, providing policy and legal analysis to Committees and Members of both the House and Senate, regardless of party affiliation.
The following provides a legislative history for the Pension Benefit Guaranty Corporation from the prior Green Book through most of the 115th Congress. For prior legislative history, please see prior editions of the Green Book.
The Bipartisan Budget Act of 2018 (P.L. 115-123) created the Joint Select Committee on Solvency of Multiemployer Pension Plans to improve the solvency of multiemployer pension plans and the PBGC. The committee shall provide to Congress no later than November 30, 2018, recommendations and legislative language to significantly improve the solvency of multiemployer pension plans and the PBGC. P.L. 115-123 provides for expedited procedures in the Senate if the committee approves of the proposed legislative language. There are no provisions that provide any special procedures governing House consideration of such legislation.
This page was prepared in November 2018 for the 2018 version of the House Ways and Means Committee Green Book.
Many, but not all, social welfare programs that are available in the 50 states and the District of Columbia are also available in the U.S. territories of American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands.[1] Some programs are only available in certain territories and for some programs the territories receive funding based on different formulas or under different circumstances than do the states.
This Appendix provides information on the availability in each territory of the following two types of social welfare programs:
Information on the coverage of each territory for each direct payment program is provided in Table A-1 while information on coverage for each federal-state program is provided in Table A-2. Additional information on certain programs under the jurisdiction of the House Committee on Ways and Means is also provided.
The federal government administers several large social welfare programs that provide benefits directly to individuals. These benefits are in the form of retirement, disability, and survivors benefits administered by the Social Security Administration (SSA), Railroad Retirement Board (RRB), and Department of Veterans Affairs (VA), as well as medical benefits provided by the Medicare program and by the VA. Direct benefits are also provided to needy aged, blind, and disabled persons and through Department of Education grant and loan programs.
Supplemental Security Income (SSI)
The Supplemental Security Income (SSI) program provides means-tested cash assistance to needy aged, blind, and disabled individuals, including blind or disabled children. Benefits are paid without regard to work or insurance requirements and are financed by general revenue funds. Eligibility for the SSI program is limited to residents of the 50 states, the District of Columbia, and the Northern Mariana Islands.
Prior to the establishment of the SSI program by the Social Security Amendments of 1972, benefits for the needy aged, blind, and disabled were provided by the states and territories, with the exception of American Samoa, and financed by federal grants under Titles I, X, XIV, and XVI of the Social Security Act. The 1972 amendments replaced this system of grants with the federal SSI program in the states and District of Columbia only. Residents of the territories were excluded from the SSI program. The territories of Guam, Puerto Rico, and the U.S. Virgin Islands remain eligible for federal grants for aid to the aged, blind, and disabled. Residents of American Samoa are not eligible for SSI or benefits under the aged, blind, and disabled grants. Eligibility for SSI for residents of the Northern Mariana Islands was included in the 1976 covenant that established the Northern Mariana Islands as a United States territory.
Many social welfare programs are operated by the states and territories using federal funds and in accordance with federal guidelines. Often, in order for a state or territory to participate in one of these programs, the state or territorial government must provide matching funds or meet other program requirements. As a result, in some cases, a state or territory may be eligible for a program but may choose not to participate in that program.
Major federal-state programs include the unemployment compensation system and the nation’s major public assistance, nutrition assistance, and child care assistance programs. Federal-state programs also provide benefits to older persons and persons with disabilities, and finance certain education and rehabilitation programs.
Consolidated Grants to the Territories
The Omnibus Territories Act, enacted in 1977, authorizes federal agencies to consolidate grants, except for grants that provide direct services to individuals, awarded to American Samoa, Guam, the Northern Mariana Islands, and the U.S. Virgin Islands. Consolidated grant funds may be co-mingled and used for any purpose permitted under any of the programs consolidated into the grant. Puerto Rico is not eligible for grant consolidation. Today it is common for territories to consolidate several grants from the Department of Health and Human Services into larger grants such as the Social Services Block Grant.[3] One advantage to grant consolidation for the territories is that it allows the territories to receive federal funds in some cases without having to meet all of the program rules that apply to states.
Section 1108 Ceiling on Certain Grants to the Territories
Section 1108 of the Social Security Act places a ceiling on the total amount of annual grant funding that may be awarded by the Department of Health and Human Services for certain programs to American Samoa, Guam, Puerto Rico, and the U.S. Virgin Islands.[4] Section 1108 does not set a ceiling for grants to the Northern Mariana Islands. Grants for Aid to the Aged, Blind, and Disabled; Temporary Assistance for Needy Families (TANF); and foster care and adoption assistance under Title IV-E of the Act are included in this ceiling. The current ceilings, set by statute and not subject to any automatic adjustment, are:
Table A-2 provides a list of territorial eligibility for and participation in selected federal-state programs. Programs under the jurisdiction of the House Committee on Ways and Means that have special rules for territorial eligibility are discussed below.
Unemployment Compensation
Puerto Rico and the U.S. Virgin Islands are the only territories eligible under federal law for the Unemployment Compensation program. These two territories have Unemployment Compensation programs as certified by the Department of Labor. As a result, Puerto Rico and the U.S. Virgin Islands can access federal Unemployment Compensation benefits when available through temporary programs, such as the now-expired Emergency Unemployment Compensation (EUC08) program, or the permanent Extended Benefit (EB) program.
Child Support Enforcement
Under the federal-state child support enforcement program, the federal government finances 66% of a state or territory’s child support enforcement program. The federal government also provides each state and territorial program with incentive payments to encourage program effectiveness, and grants to support noncustodial parent access and visitation with their children. While each of the territories is eligible to participate in the federal-state child support enforcement program, only Guam, Puerto Rico, and the U.S. Virgin Islands currently have territorial programs that qualify for federal support.
Foster Care, Prevention, and Permanency
Under Title IV-E of the Social Security Act, the federal government provides partial reimbursement to states and territories for provision of foster care, adoption assistance, and kinship guardianship assistance to eligible children. Subject to the Section 1108 ceiling discussed above, this federal support finances 55% of a territory’s eligible foster care maintenance and permanency assistance costs, 75% of its eligible program training costs, and 50% of all other eligible program administration costs. States and territories that participate in the Title IV-E program also receive a funding allotment under the John H. Chafee Foster Care Program for Successful Transition to Adulthood. Beginning in FY2020, states and territories may amend their Title IV-E plan to include provision of specified evidence-based services intended to prevent the need for children to enter foster care. Federal support for Title IV-E prevention services will be available for at least 50% of a territory’s eligible IV-E prevention costs and this federal support to territories will not be subject to the Section 1108 ceiling.
American Samoa, Guam, Puerto Rico, and the U.S. Virgin Islands are considered “states” under Title IV-E of the Social Security Act and are eligible to participate in the Title IV-E program. Puerto Rico and the U.S. Virgin Islands are the only territories that participate. The Northern Mariana Islands is not eligible to participate in the Title IV-E program.
Temporary Assistance for Needy Families (TANF)
The Temporary Assistance for Needy Families (TANF) program provides block grants to states and eligible territories to provide cash welfare and other benefits to qualified needy families. Guam, Puerto Rico, and the U.S. Virgin Islands are eligible for TANF funds and participate in the program. American Samoa is eligible for TANF funds but does not participate in the program. Under federal law, the Northern Mariana Islands is not eligible for TANF funds.
This page was prepared October 2018 for the 2018 version of the House Ways and Means Committee Green Book.
[1] This appendix discusses the availability of social programs in the five major territories and provides an overview of special rules that apply in the territories. It does not discuss federal financial assistance for three areas that were formerly part of the trust territories and are now independent in "free association" with the United States: the Marshall Islands, the Federated States of Micronesia, and Palau. These areas remain eligible for some residual aid from the United States.
[2] This appendix’s classification of programs making direct payments to individuals differs from that found in federal budget documents. This appendix classifies unemployment compensation as a federal-state program because states administer and design their own programs within federal guidelines. The Supplemental Nutrition Assistance Program (SNAP) is also classified in this appendix as a federal-state program because it is administered by the states.
[3] The rules for the consolidation of grants from the Department of Health and Human Services are provided in the Code of Federal Regulations at 45 C.F.R. §§ 97.10-97.16.
[4] Section 1108 of the Social Security Act also sets ceilings on Medicaid funding for the territories.
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