Move out and call CPS as you leave. Protect yourself and your child. 

Okay, so she fails a drug test. What SPECIFICALLY is your wife going to do? Is the going to help find a treatment center? Is the baby daddy using too? If not, he needs to handle his kids. Drug addiction is a terrible thing, but enablers are even worse. Your wife is conveying to her daughter that she will be there to pick up the pieces with the kids, financially and physically. What motivation would SD ever have if she knows she always has mommy with her?

I honestly think you should reconsider being in this marriage? Is it worth the financial and emotional ruin? What person gets into a marriage thinking they will immediately be grandparents? Not just fun grandparents, but FULL TIME caretakers? Don't ruin your own personal life and put your happiness at your wife, SD, and grandchild's expense. It's just not worth it. It's not what you signed up for. 

P.S. - You DO have a say! And I would say "I'm getting the hell out of here!"

My situation wasn't as drastic as yours but I fully understand what you are going thru.  My SD, then 54, had to move in with us.  Long story why but she'd bern evicted from 2 apartments, had no job or money and was using drugs.  The 10 months she was here was the worst of my life with the scary drug use, lying, theft and night creeping.  Luckily, all 3 of her kids were launched so we didn't have the horrible situation you have with the little ones.  I started to have stess-related health problems and realized one of us would have to go.  DH couldnt and wouldn't address it.  Our solution, which probably isn't appropriate for you, was to move her out and subsidize living expense.  But the impirtant things that came out of it were: 1)  i told DH if he ever let her move in again, Id leave him (a cancer patient) and he knows I mean it and 2) we separated our finances and her subsidization comes out of his $.  I've also disengaged much more from her (don't call or answer calls, little conversation, etc).

I'm going into detail because i realize how serious your situation is, more so because of your BD.  No advice since all cases are different but deep empathy for you.

Your wife is an enabler and it doesn't sound like she is ready to seek her own help for having a child who is an addict.  
options for you:

1. Split your finances and don't contribute anything to your SDs drug habit.

2.  Seek your own counseling to deal with this whole situation.  A fresh perspective might help you find a way to either deal or leave.

3. Always protect your child, let DW know they if your child is there SD cannot be...its your home too and you have a right to protect your child.

4. Set boundaries and stick to them, such as mandatory drug testing, if SD fails she's out until she can test clean, SD needs to contribute financially as well or she's out.

stand your ground this is your home and life, you do not have to allow SD to drag you and DW down with her.  Above all if you feel unsafe or fear for your daughters safety LEAVE!  Never compromise your morals and values to suit others just because they want you to enable their dysfunction. 

Drug user has to leave asap...wtf she lives with you?! Money to drug user has to stop asap. 

You mentioned ran you through the ringer financially (and emotionally). Seriously, you have your own minor to support and provide for. Definately your resources should go there before your wife's adult drug using daughter (and also before your wife's grandkids). Adding 2 more people to care for is a lot - might as well assume you are going to raise those two kids to adulthood. How is that affecting your daughter? How is that going to affect your ability to save for retirement? 

I'm sorry, but all this chaos and extra money and worry would have been waaaaaaay more than I would be willing to deal with. You are modeling home life and relationships to your daughter. Do you want her to feel like this is all ok to accept? 

Yikes man, cut bait. 

ETA: If I was your daughter's bm and found out a METH USER living there, I would definitely take you to court to pull back custody. 

ETA2: How are YOU ok with a METH USER living with your daughter? 

Move out

That's not as easy as doing... I mean it is but it's just not.

No, it's not easy but a lot of things we have to do in life are not easy. You have your own child to think about, not just what happens when she is there, but your emotional well being does, and will, affect your child.

By doing nothing, you are just enabling your wife, who enables her daughter, so you are also an enabler.

Either the addict goes, and your wife goes to nar-anon, or you move out and convince your wife to go to nar-anon if she wants to save the marriage. Or she moves out, whatever is most appropriate. Whose house is it? Yours, hers, or both?

You putting up with the same 'ol, same 'ol is not going to make the problem go away. Your wife has a choice to make.

I know, it's not an easy choice, it's her daughter and her grandbabies but enabling her daughter is not going to work long term. Not for her daughter, and not for the marriage.

I get it, I enabled my little sister for a long time, thinking I was helping her. My life was hell, her ex-boyfriend was literally stalking me and wanted to kill me. I finally had to say, "No more". It wasn't easy, I love her, but she didn't want to help herself (she's doing good, now, by the way).

Me dealing with all of that was bad enough, but I didn't have a kid in the mix. Thank God, 'cuz the asshole ex-boyfriend showed up at my apartment with a gun.

im so sick of having no say

You do have a say. Again, not easy, but you do have a choice.

I'm sorry that you are going through this. I'm sorry that your wife is going through this. I know how hard it is.

I can't see your enabler wife insisting on SD moving out - she probably feels a lot of responsibility towards her grandchildren  - but actually the way she is going about it is not helping them as she is supporting rather than challenging her daughter's drug habit.   She needs to tell SD to leave and inform social services about her grandchildren, but I can't see her doing it. This being the case, you need to make a decision about what to do for your own welfare and that of your child.  It is not only exposure to the chaotic addict that is affecting her - it is exposure to your stress and frustration as well - so for a more peaceful life I think you know what has to be done. 

WARNING: SUICIDE AND DRUGS

My SD33 has been using drugs since she's hooked up with baby daddy #3. She texted DH a week ago that SGS15 has run away and stole $1,000 in cash from her roommate.  Apparently the police are looking for him and she wants us to take him off her hands. Never going to happen. 

Yesterday she texted DH that her ex baby daddy #2, no idea if they ever followed through with the actual divorce or if they're still legally married, but he hung himself yesterday. He's the father of SGS13. 

With these people it's always something.  

The first time DH told me that SD33 asked him to take SGS15 off her hands so she could go party it up with her new dude he said that he hated to ask it of me because I never had kids. I said what do you mean?  You'd be the one taking care of him, getting him to school, doing his homework, cooking, laundry.  I'll just be living in the same house but he'd be 100% your responsibility,  not mine. So obviously DH told her no. 

I agree that your primary responsibility is to your own daughter and being around this is really detrimental for her.  If it were me SD would be out so fast her head would spin. And if DW didn't like it she could go with her. 

Addiction is a terrible thing. Of course you wife wants to help her daughter. She just doesn't know how, so she does what she knows. And it's not working.

Your DW needs almost as much help as the addict so that she has support in making hard decisions. Al-Anon or similar. Even better is individual counseling with someone who specializes in addiction issues. Your situation won't change without this type of outside support and knowledge  

You have a responsibility to your own daughter, and you can certainly set some hard boundaries around that. 

IMHO you have no choice but to call the police on the meth head and call CPS to come get her kids.

If you don;t this is all your fault. You are enabling and facilitating it all.

If DW bitches, tell her to pack her shit and go.

Zero tolerance works. So enforce zero tolerance.