Making TANF More Than Very Temporary Assistance for Some Very Needy Families

My last post dove into the thorny thicket of the work participation requirements that the Temporary Assistance for Needy Families law and rules impose on states.

Both the WPRs and the escape hatch for states that don’t meet them help explain why TANF has generally failed to do more than very temporarily assist some very needy families.

Both the House draft bill and the Senate bill I’ve focused on would address these and some other problems. But they’d leave one untouched (or virtually so). Here then is more about what they’d do — and not.

New Purpose(s)

You’d think that a work-focused program for needy families would have poverty reduction as a purpose. But TANF doesn’t. The closest the law comes, as I remarked before, is reducing dependency.

The House draft would make reducing poverty a purpose — not generally, but by moving more parents into the workforce, with better prospects there than has often been the case. The Senate bill would add something similar, but link it to reducing both child poverty and deep child poverty, i.e., the percent of children in families with incomes below 50% of the federal poverty line.

Both new purposes provide a partial basis for the outcome measures and related reports the bills would require. They also serve as a rationale of sorts for the tighter limits on state spending that both impose.

Shift in Success Measures

The current law holds states accountable for having their enrolled TANF parents engaged in work-related activities. And it effectively rewards them for getting families out of their programs. They needn’t concern themselves with results.

And the fact that we know very little about what happens to families after they leave TANF, however they leave, shows that most don’t. They’ve no compelling reason to invest in the tracking and analyses that would require.

Both the House draft and the Senate bill would give them one. They’d have to develop outcome measures and publicly report results.

Both bills specify the employment rates and earnings of former TANF parents. The Senate bill includes indicators related to the rest of the new program purpose it would establish. States would also have to track and report child food insecurity.

They’d still have some flexibility. So we might lack comparable data. And some outcome measures could give states another incentive to “cream” their caseloads, as CLASP experts have warned.

But what we don’t know can — and does — hurt poor families with children. So we do clearly need outcome measures reflecting what our welfare program ought to do.

Curbs on State Spending

States have enormous flexibility in how they may use their share of the TANF block grant, plus their maintenance of effort, i.e., funds they must spend to get their share. We see the results in the annual reports they must file with the federal agency that administers TANF.

They all spend some money for cash benefits, programs to get parents into the workforce and child care, which both parents preparing for work and those who’ve found it need. But nearly half spend less than 50% of their combined TANF funds on these. Ten spend less than 25%.

Major advocacy organizations have recommended a minimum spending level for the aforementioned three items — commonly referred to as core activities. The House drafters left the question of minimum spending open. The Senate bill sets a 60% minimum level, phased in over a five years. So still a lot of flexibility, but considerably less.

The bill also restricts block grant spending to aid for families with incomes no greater than 200% of the federal poverty line. The House draft does something similar. Tells us something about where this anti-poverty money is going.

Federal Funding Shortage

Neither the House draft nor the Senate bill remedies a problem that’s partly responsible for others — the continually shrinking value of the block grant.* It’s been flat-funded ever since Congress created it.

This, as I (and many others) have said, means it’s worth about a third less now. Likewise states’ required MOEs. At the same time, many have more needy families.

Not, however, in their TANF caseloads. Even states that resist other perverse incentives, understandably feel they can’t afford to provide all poor families with the benefits and services that would even just lift them out of poverty.

Nor to pay all the caseworkers truly individualized plans would require, though both the House draft and the Senate bill set new standards for these.

The President’s proposed budget — DOA, of course — would increase the block grant by $8 million over the next five years. That would require states to increase their MOE spending.

The block grant increase, however, would only “partially address its erosion in value,” the Department of Health and Human services says. And we’ve got about 5.2 million more poor families now than in 1996.

But even a fully restored block grant, with all funds channeled to families below the poverty line would seem less than needed. How much less is hard to say because we can’t know how much inflation will again erode it. Nor how many families will need assistance in upcoming years.

The proposed budget does, however, look ahead to the next recession — or recessions. It would build a reserve for infusions during economic downturns, with a trigger to release them.

So extra help for states and the needy families they should serve would no longer depend entirely on the whims of Congress. The premature demise of the Recovery Act’s Emergency Contingency Fund shows why an automatic, economy-sensitive alternative is preferable.

In not-so-short, the next Congress and President will have proposals to work with if they decide, at long last, to reauthorize TANF. They’re fairly modest proposals, but they’d give us a much better “welfare” program than what we’ve got.

* The House draft would increase the block grant by $25 million for each of the five years it covers. This is a fraction of the real-dollar loss to date.



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