Social services for recipients of public aid were not funded under the original Social Security Act of 1935, although it was later argued that cash alone would not address the needs of the poor. State social services expenditures for welfare recipients became eligible for 50 percent Federal funding in 1956, but many States chose not to participate. In 1962, States were given additional incentive to provide social services, especially preventive and rehabilitative services, to poor families when Congress increased the Federal matching rate to 75 percent. The 1962 amendments also expanded eligibility for social services to both former and potential welfare recipients. No limit was placed on the Federal expenditure level (Spar, 1981).
In 1967, the Social Security Act again was amended to authorize funding for so-called ``hard'' social services, such as job training and child care, in a more aggressive effort to move people from welfare to work. The new legislation also required States to establish a single organizational unit in the State agency responsible for administering social services, and provided an enhanced match of 85 percent for social services provided during the first year after the law took effect.
Administration of the Federal Social Services Program was formally separated from administration of the Federal Cash Assistance Program in 1967, as part of a reorganization within the Department of Health, Education, and Welfare. In 1972, States were required by regulation to separate the administration of cash assistance and social services.
Federal spending for social services increased from $281.6 million in fiscal year 1967 to $1.688 billion in fiscal year 1972, prompting legislation (Public Law 92-512) which placed a ceiling on Federal expenditures for social services of $2.5 billion and directed that funds be divided among States according to their relative populations. The law also limited to 10 percent the amount of funds that could be spent on services to former or potential welfare recipients.
Legislation signed into law on January 4, 1975 established title XX of the Social Security Act. Under title XX, the $2.5 billion ceiling on Federal social services expenditures was retained, along with the population-based allocation formula. The legislation was designed to give maximum flexibility to the States in designing their social services programs, but included public participation planning requirements, limitations on the use of funds for certain activities, and certain eligibility requirements.
By fiscal year 1981, the entitlement ceiling for the Title XX Social Services Program was $2.9 billion. An additional $16.1 million was available apart from title XX for social services expenditures by the territories, and $75 million was available to the States for staff training costs related to title XX activities, bringing the total for all Federal social services expenditures to $2.991 billion. Under Public Law 96- 272, enacted in 1980, the title XX entitlement ceiling was scheduled to increase to $3 billion for fiscal year 1982, and by $100 million a year until it reached $3.3 billion in fiscal year 1985.
However, the Omnibus Budget Reconciliation Act (OBRA) of 1981 (Public Law 97-35) amended title XX to establish a block grant, under which funding for social services and for staff training for those providing social services were combined. The legislation also reduced the title XX entitlement ceiling to $2.4 billion for fiscal year 1982 and provided for increases to $2.45 billion for fiscal year 1983, $2.5 billion for fiscal year 1984, $2.6 billion for fiscal year 1985 and $2.7 billion for fiscal year 1986 and years thereafter. The law also eliminated Federal mandates regarding priority recipients, and eliminated provisions relating to the targeting of services to low-income individuals and families.
The emergency jobs bill (Public Law 98-8), enacted in March 1983, appropriated an additional $225 million for the title XX block grant for fiscal years 1983-84. These additional funds were allocated to the States on the basis of a formula intended to respond to the needs of the unemployed served by the jobs bill. Half of the funds were allocated on the basis of population; one-third based on the number of unemployed individuals in the State; and one-sixth among States with an average unadjusted unemployment rate from June 1982 through November 1982 of 9.4 percent or higher. In October 1983, as part of legislation to extend the Federal Supplemental Compensation Program (Public Law 98-135), the title XX ceiling was increased by $200 million for fiscal year 1984 to $2.7 billion and by $100 million for fiscal year 1985 to $2.8 billion.
Because of Congressional concern about reports of child sexual abuse in day care centers, a $25 million increase in title XX funding for fiscal year 1985 was appropriated for use by the States in providing training of child day care staff, State licensing and enforcement officials, and the parents of children in child day care. The earmarked funds were included in the continuing resolution for fiscal year 1985 (Public Law 98-473). States were required to have in effect by September 30, 1985, procedures for screening and conducting background and criminal history checks of child care staff, or one-half of the day care training allotment was to be deducted from the regular State title XX allocation in fiscal year 1986 or 1987. According to HHS, only six States enacted such procedures by the required date. As required by Public Law 98-473, in January 1985, the Secretary of HHS distributed to States a Model Child Care Standards Act that addressed staff training and supervision, employment history checks, and parent visitation.
The 1987 Budget Reconciliation Act (Public Law 100-203) included a $50 million increase in the title XX entitlement ceiling for fiscal year 1988, but these funds were not appropriated.
The Medicare and Medicaid Patient and Program Protection Act of 1987 (Public Law 100-93) amended title XX to exclude individuals and entities that committed acts of fraud or abuse under the Medicaid, Medicare, Maternal and Child Health, or the Title XX Programs from receiving title XX funds.
OBRA 1989 (Public Law 101-239) included a permanent $100 million increase in the title XX entitlement ceiling to $2.8 billion, beginning for fiscal year 1990.
OBRA 1993 (Public Law 103-66) made $1 billion available to states under title XX for those places designated as qualified empowerment zones or enterprise communities.