The 1985 Federal deficit-reduction measure included a $45 million initiative to help older youths in foster care make the transition to independent living. Congress supported this initiative out of recognition that youths leaving foster care were currently likely to need public assistance or to experience other problems requiring public resources. The Independent-Living Initiative provides funds for education and training, counseling, service coordination, outreach programs, and case planning. Funds cannot be used for services funded elsewhere in Title IV-E of the Social Security Act. States receiving funds must develop plans and have them approved by the Department of Health and Human Services (DHHS). However, DHHS has tried repeatedly to thwart the implementation of the program. Nevertheless, all 50 states and the District of Columbia submitted grant applications by the May 1987 deadline and have received their funds. The program in Illinois shows how one State is pursuing efforts in this area. The Federal initiative covers only 1987 and 1988. Continued support for the initiative will depend on the success of States' activities. Thus, States need to establish tracking and evaluation systems. Congress should also consider several changes to increase the program's effectiveness. Table and 9 references. (Author abstract modified)