First Movers Will Set Older Youth Agenda

Legacy programs facing new pressures

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This week, we explore how programs built for a different fiscal and political era are hitting friction today.

We track underutilized supports for older youth, the growing policy implications of rising debt, and new analysis of the reconciliation bill’s economic impact.

The through line: longstanding child and family policies designed in another era are colliding with unanticipated economic and political realities.

Let’s get after it, Wonks.

House Hearing Highlights Older Youth Policy: “Aging Out is Not a Plan”

At a June 12 hearing of the U.S. House Ways and Means Subcommittee on Work and Welfare, lawmakers examined how federal programs meant to support young people aging out of foster care often fall short.

Policy in Focus: the Chafee Program,¹ which funds independent living support, employment services, and Education and Training Vouchers (ETVs) for postsecondary costs.

What the Hearing Surfaced: Chronic underutilization. In FY22 alone, states returned $8.9 million in unused funds, largely due to administrative hurdles and low youth awareness.

Who Testified:

• Ramond Nelson– Lived Experience Leader, Foster Club

• Lisa Guillette– Executive Director, Foster Forward

• Maggie Stevens, Ed.D.– President and CEO, Foster Success

• Kimberely Webb– Youth in Foster Care in Farmington, Missouri

Wonk Out and Go Deeper: Catch the full hearing or dive into witness testimony here.

Contributor Policymaking Analysis

First Movers Will Set the Terms for Future Chafee Reforms

By Doug Steiger, MPP

Last week’s Ways and Means hearing opened the window for Chafee reform, with Republicans signaling bipartisan interest. The question now is who will shape and set the terms of that process.

Child welfare policy is deeply important to those working on it, and rarely registers with lawmakers. This dynamic drives the policymaking process; bipartisanship is a central ingredient for enacting legislation on issues that do not hold the daily headlines.

The key early sign to watch for is public overtures toward bipartisanship. We saw that from Republicans at last week’s hearing, which suggests interest in working with Democrats.

Whether it’s possible in this specific moment is the wrong question; the right one is what it looks like to be well-positioned when the odds improve after larger legislative battles settle next year.

Those invested in the Chafee program would be well-served to express their views to bipartisan lawmakers and policy partners soon to define the next policy debate.

What Chafee Does

Chafee is the main federal program for older foster youth. It provides states with flexible funding for supports like educational assistance, employment help, and life skills training.

It is designed for youth likely to “age out” of foster care.

Depending on the state, youth currently or formerly in foster care aged 14 to 23 may be eligible for Chafee services.

Why Some Chafe at Chafee

The Chafee program is not reaching many eligible young people, and it’s unclear how much it's helping those it does reach.

An estimated 47 percent of eligible young people ever receive even one of the services Chafee covers.

Evidence on the effectiveness of those services is also limited, though the Department of Health and Human Services’ Administration for Children and Families (ACF) has funded a project to improve that knowledge base.

Where the Debate May Go

One key issue at the hearing: unused Education and Training Voucher (ETV) Program funds. The ETV helps current and former foster youth cover the cost of college or vocational training—up to $5,000 per year.

Too often, ETV goes untapped due to red tape, lack of outreach, or eligibility barriers that don’t match the realities on the ground.

One proposal is to allocate funds by a state’s share of Chafee-eligible youth, rather than all foster youth, to better target resources. A GAO report on this issue is here.

While this sounds simple, wonks hear “formula revision” and gird for battle: funding shifts inevitably create “winners” and “losers.” That distribution rarely falls neatly along partisan lines, creating complex regional politics.

Several other aspects of Chafee came up at the hearing, all of which have been places of recent bipartisan policy discussion: employment, housing, mental health, expanded eligibility, access to driver’s licenses, and mentorship programs.

Conditions for Expanding Flexibility

The Chafee program offers states flexibility to choose among a variety of services.

A perpetual challenge for policymakers is balancing a desire to support the most effective approaches with state discretion to adapt programs to the needs of individuals and local conditions.

In a Chafee bill, Congress could limit services to those believed to lead to the best outcomes. Or it could expand the allowable services to give those on the ground more tools.

The latter is more likely – a shorter menu draws opposition from those who support the activities being dropped.

Given unmet need and a host of policy ideas, Congress could choose to increase funding for Chafee. However, that seems unlikely in the current climate.

What Comes Next

The House Republicans appear open to a bipartisan Chafee bill, but there aren’t many incentives or pressures for Democrats to negotiate yet.

To date, the Trump Administration has made no major proposals on the Chafee program. A potential wild card is the possibility the First Lady will take an interest, making it more of a priority for Republicans.

The White House credited her with championing a $25 million HUD proposal for youth aging out of care last month.

Given the needs of the Chafee population, some could argue a bold rethinking of the program is in order, such as structural redesign. A more likely scenario is a set of tweaks to the current program, like what it covers and for who.

Judging from the House hearing, there’s no clear consensus yet on a new direction for Chafee.

If you have a fresh idea, now’s the time to surface it; before the boundaries of deliberation emerge.

Those already crafting memos, honing ideas, and cultivating relationships to highlight what’s working and what’s not will be the first movers to frame the debate.

Finding the right mix of provisions to garner bipartisan support for a child welfare bill often takes time. This hearing may have been the start; don’t get caught flat-footed.

Doug Steiger is a public policy consultant. He served as a Counselor to the HHS Secretary during the Obama Administration and was a Senate staffer for 12 years.

Wonkatizers: Quick Hits

What Debt Pressure Means for Child and Family Policy

Warnings of a bond market crisis are no longer coming from the fringes.

Hedge fund giants, former budget directors, and green eyeshade types across the ideological spectrum are all pointing to the same thing: federal debt math is increasingly unsustainable.

What’s Happening: Interest payments on the debt are exceeding $1T annually; more than federal spending on Medicaid, SNAP, and disability insurance—combined.

What Happened Before: The U.S. has dodged enough fiscal cliffs to defy deficit doubts. Growth post Great Recession via low interest rate-fueled borrowing undermined concerns.

Because debt is central to policy-directed spending, deficits and debt are inherently political; those in power often dismiss deficits while those outside it decry them. That risks missing a shift.

What Could Be Different Now: The baseline debt level is higher, inflation is pushing interest rates higher, and geopolitical uncertainty is undermining long-held assumptions of U.S. finance.

If borrowing costs keep rising, the pressure will reach states. Flexible programs, like those serving children and families, will be the first to feel it.

Why it Matters: This isn't just budget theory. It’s a structural tension with real-world stakes.

This matters for child and family policy: economic growth matters both for families’ financial stability and the tax receipts that drive domestic spending. Now is a chance to think ahead.

As these pressures rise, discussions that start in Excel files on Wall Street will shift to those in state budget passbacks. That could translate to fewer staff serving fewer families.

CBO Sees Shifting Incomes in Big Beautiful Bill’s Bottom Line

According to the U.S. Congressional Budget Office, the House-passed budget reconciliation bill’s² net effect on families annual income differs significantly by income.

Those with the lowest incomes would see reduced annual income, while the highest income families would see a net increase.

Reminder on Reconciliation: Our reconciliation overview explains how this fast-track simple-majority legislative process works.

What’s New: CBO has a new analysis examining how the bill affects annual income, finding:

• The lowest income families would see $1,600 less, nearly 4 percent of their income.

  • Cuts to Medicaid and the Supplemental Nutrition Assistance Program (SNAP) are the core explanatory drivers for this shift.

• The highest income families would see $12,000 more.

  • Tax policy changes are the core explanatory driver for this shift.

Why it Matters: Much media coverage is highlighting impacts on program access, the debt, and deficit. That excludes second-order economic shifts that could impact families and systems.

What it Means: Safety net policies typically counterbalance economic shock. Systems don’t typically plan to have fewer resources for struggling families right as economic risk rises.

What to Watch: This is a critical week in the Senate process, with likely text to drop later today.

The larger debt sustainability conversation is also deeply intertwined here. Wonks don’t just watch budgets; bond yields also signal trends that matter for child and family policy.

Details Emerge on FY 26 Budget Request

The ACF has released its FY 2026 Congressional Justification, the detailed version

What a CJ is: We previously highlighted the Trump Administration’s “skinny budget.” The CJ is where the details live.

What this CJ Proposes: Aligned with the broader budget, this proposes mostly level funding or slight reductions for child welfare programs, while reorganizing HHS more broadly around them.

• Child Abuse Prevention and Treatment Act

  • Title I State Grants– $105M, level with FY25

  • Title II Community-Based Child Abuse Prevention– $60.7M, a $10M cut from FY25

• Title IV-B

  • Subpart I Discretionary– $269M, level with FY25

  • Subpart II Discretionary– $63M, a $10M cut from FY25

• Chafee Education and Training Vouchers

  • $44M, level with FY25

What Comes Next: This is one part of the broader appropriations process. As Doug Steiger pointed out last week, it’s possible we may be facing a shutdown, so this is not yet settled.

That’s it for this week, Wonks.

1. Formally titled the “John H. Chafee Foster Care Program for Successful Transition to Adulthood.” It is named for the late Senator Chafee (R-RI), a key legislator on child welfare issues during his Senate service. A comprehensive Congressional Research Service report on the program is here.

2. H.R. 1, the One Big Beautiful Bill Act