Adoption and Permanency Program Funding Roughly Flat in Final 2024 Spending Bill
As usual, the final federal budget package for FY 2024, which began October 1 last year, was enacted well past its statutory deadline. After some late grandstanding, the House passed the second of two major appropriations packages (H.R. 2882) on March 22. The Senate gave its approval at 2 a.m. in the morning and the president signed it into law a little later in the day on March 23.
The budget is usually a matter of partisan rancor and this year was no different. The primary difference was that both the House and Senate are evenly divided, which ultimately forced the leaderships of both parties to work together to override protests from some of their members. The result was mostly a series of modest changes, although there was enough for both Republicans and Democrats to claim a few victories as they head into the elections later this year.
Consistent with this overall spirit of modest compromise, the appropriations for Department of Health and Human Services (HHS) programs were held relatively flat at $116.8 billion. Technically, this represents a roughly one percent increase over the $115.4 billion allocated in the prior year, but it was lower than the current inflation rate (about 3 percent), which means the approved spending was a net cut in inflation-adjusted terms.
Spending on adoption and permanency programs was consistent with this larger trend. In most cases, year-over-year funding levels were flat or nearly so. Details for select programs for FY 2024-2025 are summarized below.
Adoption Assistance Payments: The final bill provides $4.706 billion for adoption assistance payments in FY 2024, an increase from $4.123 billion in FY 2023, and matching the president’s budget request. These funds are provided to states to subsidize families that adopt children with special needs who cannot be reunited with their families.
Adoption and Legal Guardian Incentive Payments: The final bill includes $75 million for FY 2024, matching the president’s budget request and level-funding the program compared to FY 2023. The president requested an identical amount in his FY 2025 budget, which was released March 11.
Adoption Opportunities Program: The final bill includes $53 million for FY 2024, an increase of $2 million over the $51 million allocated to the program in FY 2023. For more details, see the next story below. The president’s FY 2025 budget request, which came out before the FY 2024 budget was finalized, would have level-funded the program in 2025.
Promoting Safe and Stable Families Program (PSSF): PSSF funding can be used for pre- and post-adoption services and other activities that support adoptive families. PSSF has both an annual discretionary (appropriated) and mandatory (entitlement) component. The final bill includes $345 million in mandatory funding, which is level-funded compared to FY 2023. The discretionary (appropriated) funding was cut by $14 million to $72.515 million, down from $86.515 million in FY 2023. The president requested $76.515 million in his FY 2025 budget.
Title IV-E Prevention Services: The president's FY 2025 budget includes a legislative proposal that would expand federal reimbursement to states for Title IV-E prevention services (including kinship navigator programs). Post-adoption programs are also categorically eligible for this funding, although none have yet been reviewed or approved by the Title IV-E Prevention Services Clearinghouse. Under the president’s proposal, the federal match rate for these services would rise from 50 percent to 90 percent for fiscal years 2025-2027. After 2027, the budget proposes a reimbursement rate of at least 75 percent or the state’s federal match rate plus 10 percent, whichever is greater. For additional details on this ten-year, $4.9 billion proposal, see the HHS budget (p. 141).
Kinship Funding: The president's FY 2025 budget includes a proposal (p. 142) to increase federal reimbursements for kinship placements at a cost of $900 million over ten years.
Adoption Tax Credit: The enacted budget bill does not address making the adoption tax credit refundable, a long-standing priority of VFA’s. Legislation on this issue (H.R. 3662) is still awaiting further action in Congress. A similar proposal was included in President Biden’s proposed budget for FY 2025, however.
For a broader look at child welfare-related spending in the 2024 enacted budget, see this side-by-side analysis from the Child Welfare League of America.
