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Excerpted from the 2000 House Ways and Means Green Book, "Social Services Block Grant"

Social Services Block Grant


Title XX of the Social Security Act, also referred to as the Social Services Block Grant (SSBG), is a capped entitlement program. Thus, States are entitled to their share, according to a formula, of a nationwide funding ceiling or ``cap,'' which is specified in statute. Block grant funds are given to States to help them achieve a wide range of social policy goals, which include preventing child abuse, increasing the availability of child care, and providing community-based care for the elderly and disabled. Funds are allocated to the States on the basis of population. The allotments for Puerto Rico, Guam, the Virgin Islands and the Northern Marianas from the national total are based on their allocation for fiscal year 1981 adjusted to reflect the new total funding level. The Omnibus Budget Reconciliation Act (OBRA) of 1987 (Public Law 100-203) extended eligibility for title XX funds to American Samoa. The Federal funds are available to States without a State matching requirement.

Title XX of the Social Security Act was created in 1975 (Public Law 93-647); however, it was OBRA 1981 (Public Law 97-35) that amended title XX to establish a ``block grant to States for social services.'' The entitlement ceiling, or cap, was cut from the fiscal year 1981 level of $2.9 billion to $2.4 billion for fiscal year 1982.

PROGRAM GOALS   

The purpose of the Title XX Social Services Block Grant Program is to provide assistance to States to enable them to furnish services directed at one or more of five broad goals: 

  • Achieving or maintaining economic self-support to prevent,  reduce, or eliminate dependency; 
  • Achieving or maintaining self-sufficiency, including reduction or prevention of dependency; 
  • Preventing or remedying neglect, abuse, or exploitation of children and adults unable to protect their own interests, or preserving, rehabilitating or reuniting families;
  • Preventing or reducing inappropriate institutional care by providing for community-based care, home-based care, or other forms of less intensive care; and 
  • Securing referral or admission for institutional care when other forms of care are not appropriate, or providing services to individuals in institutions.   

States are given wide discretion to determine the services to be provided and the groups that may be eligible for services, usually low income families and individuals. In addition to supporting social services, the law allows States to use their allotment for staff training, administration, planning, evaluation, and purchasing technical assistance in developing, implementing, or administering the State social service program. States decide what amount of the Federal allotment to spend on services, training, and administration. 

Some restrictions are placed on the use of title XX funds. Funds cannot be used for the following: most medical care except family planning; rehabilitation and certain detoxification services; purchase of land, construction, or major capital improvements; most room and board except emergency short-term services; educational services generally provided by public schools; most social services provided in and by employees of hospitals, nursing homes, and prisons; cash payments for subsistence; child day care services that do not meet State and local standards; and wages to individuals as a social service except wages of welfare recipients employed in child day care.

DATA ON SERVICES, RECIPIENTS, AND EXPENDITURES   

In the past, limited information has been available on the use of title XX funds by the States. Under the Title XX Social Services Block Grant Program, each State must submit a report to the Secretary of the U.S. Department of Health and Human Services (DHHS) on the intended use of its funds. These preexpenditure reports are only required to include information about the types of activities to be funded and the characteristics of the individuals to be served.

 The Family Support Act of 1988 (Public Law 100-485) strengthened reporting requirements. That legislation required States to submit annual reports containing detailed information on the services actually funded and the individuals served through title XX funds. DHHS published a final rule on November 15, 1993 implementing the reporting requirements and providing uniform definitions of services. Although all States are now submitting these reports, DHHS has released very little summary information. In July 1999, DHHS released an analysis of expenditure and recipient data for fiscal years 1995-97; however, the analysis included only 40 States. At least 35 States in 1997 used title XX funds for each of the following services: (1) daycare for children; (2) foster care services for children; (3) home-based services; (4) prevention/intervention; and (5) protective services for children. 

The single largest category of spending in fiscal year 1997 was child day care, accounting for almost 13 percent of expenditures. The percentage of total title XX expenditures dedicated to child welfare-related services, shown in several categories (adoption services, foster care services for children, and protective services for children), appears to have dropped from 22.5 percent in 1995 to 16 percent in 1997. Home-based services and special services for the disabled represent significant categories of expenditures in 1997, accounting for almost 12 and 9 percent of spending, respectively. States devoted about 14 percent of their expenditures to administrative costs in each of the 3 years.

TRANSFER OF FUNDS AMONG BLOCK GRANTS   

Welfare reform legislation enacted in 1996 (Public Law 104-193) replaced the Aid to Families with Dependent Children (AFDC) Program with a block grant to States called Temporary Assistance for Needy Families (TANF; see section 7). The welfare reform law authorized States to transfer up to 30 percent of their TANF allotments to title XX or to the Child Care and Development Block Grant (CCDBG). However, as originally enacted, Public Law 104-193 required that, for every dollar transferred to title XX, States must transfer $2 to the CCDBG. This provision was revised by the Balanced Budget Act of 1997 (Public Law 105-33) so that States are allowed to transfer up to 10 percent of their TANF allotment to title XX, regardless of how much, if any, they transfer to the CCDBG. The welfare reform law stipulates that any TANF funds transferred to title XX must be used for families with incomes no higher than 200 percent of the Federal poverty guidelines, and may be used to provide vouchers for families who are not eligible for cash assistance under TANF because of time limits, or for children who are denied cash assistance under TANF because they were born into families already receiving benefits for another child.   

Beginning in fiscal year 2001, under provisions of the Transportation Equity Act, signed into law June 9, 1998 (Public Law 105-178), the percentage amount of their annual TANF allotment that States can transfer into title XX is scheduled to be reduced from 10 percent to 4.25 percent. This legislation also permanently reduces the entitlement ceiling to $1.7 billion beginning in fiscal year 2001.

Public Law 97-35, which created the title XX block grant, gave States the authority to transfer up to 10 percent of their annual allotment to one or any combination of the three health care block grants and the Low-Income Home Energy Assistance Program (LIHEAP). (The three health care block grants are: the Preventive Health and Health Services Block Grant; the Maternal and Child Health Services Block Grant; and the Alcohol, Drug Abuse, and Mental Health Services Block Grant.) In turn, most other block grant statutes allow States to transfer funds to the title XX program. However, the Augustus F. Hawkins Human Services Reauthorization Act of 1990 eliminated the authority to transfer LIHEAP funds to other block grants, beginning for fiscal year 1994.    SOCIAL SERVICES IN EMPOWERMENT ZONES AND ENTERPRISE COMMUNITIES   

The Omnibus Budget Reconciliation Act of 1993 (Public Law 103-66) made $1 billion available on an entitlement basis under title XX for the Secretary of DHHS to make grants to States for social services in qualified empowerment zones and enterprise communities (the legislation also provided certain tax incentives for zones and communities). On December 21, 1994, President Clinton selected 105 designees to participate in this program (6 urban and 3 rural empowerment zones, 60 urban and 30 rural enterprise communities, 2 supplemental empowerment zones and 4 enhanced enterprise communities). These funds remain available for expenditure for 10 years. The Taxpayer Relief Act of 1997 (Public Law 105-34) authorized a second round of enterprise zone and community designations, but no title XX funding was included for the second round.   

An empowerment zone or enterprise community is qualified for purposes of the title XX grant if it has been designated a zone or community under part I, subchapter U, chapter I of the Internal Revenue Code of 1986 and if its strategic plan (required in an application for designation under the Internal Revenue Code) is qualified.   

A qualified plan is a plan that: (1) includes a detailed description of the activities proposed for the area that are to be funded with the grant; (2) contains a commitment that the funds provided will not be used to supplant Federal or non-Federal funds for services and activities which promote the purposes of the grant; (3) to the extent a State does not use the funds on certain program options, explains the reasons why not; and (4) explains how the plan was developed in cooperation with the local government or governments with jurisdiction over the zone or community.   

With respect to each empowerment zone, the Secretary was required to make one grant ($50 million if urban, $20 million if rural) to each State in which the zone lies on the date of its designation, and a second grant of the same amount on the first day of the following fiscal year. With respect to each enterprise community, the Secretary made one grant of up to $3 million to each State in which the community lies on the date of its designation. States have up to 10 years from the date of their designation in which to expend these additional title XX funds, although they must be obligated within the first 2 years.    States, in conjunction with the local governments with jurisdiction over the zone or community, have broad discretion in the use of grant funds. Funds must be used for social services directed at three goals of the basic title XX grant program: achieving or maintaining economic self-support to prevent, reduce or eliminate dependency; achieving or maintaining self-sufficiency, including reduction or prevention of dependency; or preventing or remedying neglect, abuse, or exploitation of children and adults unable to protect their own interests, or preserving, rehabilitating or reuniting families. The funds also must be used in accordance with the strategic plan and on activities that benefit residents of the zone or community.   

Despite the similar purposes for which funds may be used, the range of allowable services is narrower in some respects, and broader in others, under the title XX empowerment zone provisions relative to the basic title XX program. For example, the basic title XX program includes a broader range of purposes than those outlined above for the empowerment zone program. On the other hand, certain restrictions of the basic title XX program (e.g., restrictions that limit drug treatment services to initial detoxification, and restrictions on the use of funds for the payment of wages) are waived under the empowerment zone program, in order to carry out certain specified program options.

LEGISLATIVE HISTORY   

Although $2.8 billion was the permanently authorized entitlement ceiling at the time, Congress appropriated only $2.381 billion for title XX in fiscal year 1996 (Public Law 104-134). The Personal Responsibility and Work Opportunity Reconciliation Act (Public Law 104-193) subsequently set the annual entitlement ceiling for title XX at $2.38 billion in each of fiscal years 1997-2002. Under this legislation, the entitlement ceiling was scheduled to return to the permanent level of $2.8 billion in fiscal year 2003. (Enactment of Public Law 105-178 in 1998 would subsequently lower this ceiling--see below.) Despite the newly established ceiling of $2.38 billion, Congress appropriated $2.5 billion for title XX in fiscal year 1997 (Public Law 104-208).

In June 1998, the Transportation Equity Act (TEA, Public Law 105-178) was enacted, including a provision which schedules the title XX ceiling to be reduced to $1.7 billion beginning in fiscal year 2001. This will result in reductions of $680 million in each of fiscal years 2001 and 2002 (from the previously scheduled ceiling of $2.38 billion), and annual reductions of $1.1 billion beginning in fiscal year 2003 (from the previously scheduled entitlement ceiling of $2.8 billion). In addition to reducing the ceiling, the TEA reduces the percentage of a State's annual TANF allotment that it may transfer to title XX, beginning in fiscal year 2001, from 10 percent to 4.25 percent.

The fiscal year 1998 appropriations measure (Public Law 105-178) decreased title XX funding to $2.299 billion, once again below the $2.38 billion ceiling established under the welfare reform law of 1996. In explaining the reduction, the Senate Appropriations Committee noted that funding is provided for social services through other Federal programs. The House Appropriations Committee expressed concern that DHHS lacked information on the effectiveness of SSBG-funded activities. Funding for title XX continued to decline with a $1.909 billion appropriation under the Omnibus Consolidated Appropriations Act for fiscal year 1999 (Public Law 105-277). For fiscal year 2000, the Consolidated Appropriations Act (Public Law 106-113) set title XX funding at $1.775 billion, of which $425 million may not be obligated to States until September 29, 2000.

This document is not necessarily endorsed by the Almanac of Policy Issues. It is being preserved  in the Policy Archive for historic reasons.

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