Congress Cuts TANF Funding To Struggling States

About four weeks ago, Congress extended the Temporary Assistance for Needy Families program till the end of this fiscal year.

I breathed a sigh of relief because technically TANF had already expired. So if Congress hadn’t acted, the U.S. Department of Health and Human Services couldn’t have spent one more thin dime in support of states’ TANF programs.

Turns out I should have sighed differently. Because, as the Center on Budget and Policy Priorities reports, the reauthorizing legislation will mean nearly $3 billion less in federal funding for TANF this fiscal year.

States will get, on average, 15% less than in Fiscal Years 2009-10. Twenty-four states will probably lose more. The District of Columbia will lose an estimated 16% — about $92 million.

These figures include loss of the funds states received from the TANF Emergency Contingency Fund. Congress had already let this temporary program expire by the time it acted on the basic reauthorizing legislation.

It could have retroactively extended the program, but decided instead to save a couple of billion dollars. Or rather, Republicans in the Senate decided. Gotta attack that deficit, you know — except when the issue is tax cuts.

States will incur further losses due to a cutback in the Fiscal Year 2011 appropriation for the regular TANF Contingency Fund. This fund has been part of TANF ever since Congress created the program. Basically, it provides a pool of money states can claim when their costs increase during economic downturns.

Congress had appropriated $506 million for the Contingency Fund as part of the continuing resolution it passed in September, i.e., its short-term substitute for the regular appropriations it hadn’t passed. The reauthorizing legislation took back all the funds HHS hadn’t already committed.

At the same time, it took a whack at supplemental grants that certain states have always received to compensate for inequities in the statutory block grant funding formula.

It extended these grants only through June instead of for the whole fiscal year and without a separate line item. So they have to be funded out of the same pot as the contingency fund.

HHS has already committed well over half the appropriate funds to states with contingency claims. This means that states entitled to supplemental grants will get only two-thirds of what they’ve previously received. These states include some of the poorest and some with extraordinarily high unemployment rates, e.g., Louisiana, Mississippi, Nevada and Florida.

Bottom line is that most states and the District will have no federal funding beyond the basic block grant for the remainder of this fiscal year. And they’re hardly prepared to fill in with their own funds.

CBPP tells us that at least 46 states have already closed Fiscal Year 2011 budget gaps totaling $130 billion. Like the District, 11 have already identified mid-year gaps. These, I take it, do not factor in the newest losses in federal TANF funding.

No jurisdiction will have anything close to what it needs to provide a reasonable level of cash assistance, meaningful job training and other supports for the rising number of families that qualify under its existing rules.

At the very least, we can expect long-term program deficiencies to continue. But cuts of one sort or another are likely.

As many of you know, the District has decided to phase out benefits for poor families that haven’t achieved sustained self-sufficiency by the end of five years in its TANF program.

Some states have taken similar and even more drastic actions. For example:

  • South Carolina has decided to cut all cash benefits by 20%, leaving a family of three with a maximum of $216 per month.
  • Washington state will reduce cash income for single-parent TANF families, i.e., a large majority of all TANF families, by holding on to the portion of child support it’s been passing through to them.
  • California has, at least temporarily, eliminated child care subsidies, effectively denying many TANF “graduates” the ability to continue working.

These, I fear, are portents of things to come — unless Congress does an about-face when it gets down to the business of actually reauthorizing TANF. If you think that’s likely, I’ve got a bridge I’d like to sell you.

The federal “partner” has scrimped on what should be its share of TANF funding for a long time. But it’s never before failed to fully fund the supplemental grants.

It’s never before cut off appropriated funds to help states cope with rising family poverty during hard economic times. Indeed, it established the Emergency Contingency Fund specifically to keep assistance flowing when the regular Contingency Fund ran dry.

Now states and the District are left to preserve the frayed safety net when they’re least able to do so.

5 Responses to Congress Cuts TANF Funding To Struggling States

  1. kathee says:

    THATS B.S. !!!!!!

  2. […] Congress extended TANF last year, it provided funds for the supplemental grants only through June 2011. It also capped them below […]

  3. […] Congress extended TANF last year, it provided funds for the supplemental grants only through June 2011. It also capped them below […]

  4. […] 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 […]

  5. […] 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 […]

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