Safety nets are supposed to catch people when they fall so they don’t crash to the ground. So too with what we call safety net programs. We’ve created them so that people don’t land in desperate poverty.
We’d thus expect safety net programs to catch more people when the economy tanks, as it did in late 2007. We’d expect them to provide enough aid to serve their basic purpose, i.e., ensuring that needy people have enough to eat, a roof over their heads, essential medical care, etc.
By this modest measure, the Temporary Assistance for Needy Families program has egregiously failed — no surprise, given past performance.
A new brief from the Center on Budget and Policy Priorities confirms this with two updated perspectives on the TANF safety net — what portion of poor families with children is it catching and how much is it helping those caught to meet their basic needs.
TANF was created in 1996 to replace AID to Families with Dependent Children – a program under which the federal government provided states with matching funds based on what benefits were costing and need.
“Welfare reform” converted this scheme to a fixed-sum block grant, plus a Contingency Fund states could draw on during hard economic times — until the Fund ran dry.
At the time, AFDC was providing cash assistance to 68% of poor families with children. Participation rates have been steadily falling — and not because fewer families were poor enough to need aid.
TANF did expand slightly — by 13% — after the recession set in. But in 2009, only 27% of families in poverty received any cash assistance from the program.
TANF cash benefits started out low — an average of about $395.50 a month for a family of three.
As of 2008, 28 states and the District of Columbia had increased the nominal value of the benefits they provided, but fewer than half enacted increases big enough to even keep pace with inflation.
Since then, inflation has continued to make dollars worth less. But most states have frozen benefit levels. Six states and the District have actually cut them.*
A perfect storm of reasons for this — mostly attributable to federal policies. Most important perhaps are the year-after-year failure to increase funding for the block grant and rules that allow states to use TANF funds for more politically-popular programs.
Add to these two recent decision by our penny-pinching Congress.
The first was to let the TANF Emergency Contingency Fund die, thus denying states more of the extra funding the Recovery Act had provided to help them cope with recession-related pressures.
The second, more recent denied 17 mostly poor states supplemental funds they’d been receiving since TANF was created and, at the same time, cut back what had already been approved for the regular Contingency Fund.
I don’t want to let states — or the District — off the hook here. They’ve been choosing to economize on TANF cash benefits for a long time. Even in tough economic years like these, budgets are choices.
Nevertheless, the federal partner has been shirking its share of responsibility for maintaining the TANF safety net — and allowing states to shirk theirs as well.
End result is that:
- TANF cash benefits are worth less now than in 1996 in all but two states.
- They’ve declined by at least 20% in 34 states and the District.
- No state provides benefits that lift a family of three out of extreme poverty, i.e., above 50% of the federal poverty line.
- In 29 states and the District, benefits for the family are below 30% of the FPL.
- They’re below 20% in 14 states, nine of which have lost their supplemental grants.
This unfortunately may not be the worst of the bad news.
As CBPP earlier reported, a number of states have already projected budget shortfalls for Fiscal Year 2013.
They could face gaps they hadn’t expected due to the automatic spending cuts the debt ceiling/deficit reduction deal will trigger — or cuts Congress may pass to avert them.
* Unlike most of the state cuts, the District’s cut applies to families who’ve participated in TANF for a total of more than five years. And it’s progressive — first 20% less, then 25% less till there’s nothing left. The DC Council deferred the second round of cuts, but they’re scheduled to resume in 2013.