State TANF Spending Raises Red Flags As Republicans (Again) Ponder New Block Grants

The latest reports on Temporary Assistance for Needy Family’s spending are a timely reminder of what happens when states receive insufficient federal funds and a lot of flexibility in what they can do with them.

Basically, we expect TANF to do two things — serve as a safety net for poor families with children and enable the parents to get jobs that pay enough to make them more self-sufficient. Not necessarily enough to cover all their family’s basic needs, but at least enough to make cash benefits unnecessary.

The Center on Budget and Policy Priorities, which analyzes the annual spending reports, translates these expectations into three core purposes — cash assistance, work activities and child care.

The last of these supports the second in that it frees parents to participate in a job training program and/or other activities that will prepare them for work, look for a job and, in the best of cases, actually work for pay.

The latest analysis, for 2015, gives us new numbers that tell the same old story. States, as a whole, spent barely more than half their share of the federal block grant, plus the funds they must spend to get it on these core purposes.

The remainder went for all sorts of things — some closely linked to a core purpose, e.g., Head Start and Pre-K, some to programs and services that don’t benefit only poor families, e.g., child welfare.

States may have used TANF funds to expand such programs, the Center says. In other cases, they merely used them cover rising costs — or even to replace what they’d been spending out of their own funds.

What they invested in core purposes varied enormously. For example, seven states spent less than 10% of their TANF funds on cash assistance, while eleven spent more than 30%.

Twenty-eight states spent less than 10% on work activities and related supports, e.g., transportation. Only five topped 20%. And twenty states spent less than 10% on child care. while nine spent more than 30%.

One might think that states spent less on one core purpose so they could spend more on another. Not altogether so. Two states — Arizona and Texas — spent less than 10% on each of the core activities.

We know how Arizona managed to free up so much of its TANF funds for other purposes. By 2015 it had cut its TANF time limit three times, kicking families out of its program after they’d participated for 24 months. That’s 36 months less than the time limit on their using federal funds for all participating families.

Arizona has since cut its time limit to a mere 12 months, gaining even more funds to cover budget shortfalls — a predictable need because the state has been cutting taxes for years.

The state realized further savings by reducing cash benefits below the low level paid when TANF replaced welfare as we knew it. The maximum a parent with two children can get now is $202 a month — about 12% of the federal poverty line.

An extreme case perhaps, but not altogether unique. The Center reports that Louisiana spent only 11% of its TANF funds on core purposes. Its very low cash benefits — $230 a month for a three-person family — went to only four of every one hundred poor families in the state.

Tempting as it is to trash on these states (and some others), the fault lies with the federal law, which permits states to economize at the expense of their very poor residents.

In a way, it virtually forces them to do this by holding the block grant at the same funding level as when TANF was created in 1996. It’s lost more than a third of its real-dollar value since. So states that want to do the right thing would have to spend far more of their own funds than the partial match the law requires.

We don’t see that in the spending figures. We instead see that states have used TANF as a slush fund — the term that a prolific conservative critic of the program recently used to rebut claims that welfare reform succeeded.

That claim is hardly new. It’s survived a barrage of evidence to the contrary. That’s because proponents in our Congress don’t actually seek to strengthen the safety net and put very poor people on a pathway to steady, decent-paying work.

Nor, for that matter, do they aim to give states flexibility so that they can develop more effective ways to do this. One need only recall the outcries from the right when the Department of Health and Human Services invited states to request waivers in order to test alternatives to the regular TANF work activity rules.

The House Republicans’ block-granting plans are all about cutting federal spending on non-defense programs, especially those that make up our safety net.

This is why we’re bracing for legislation to block grant SNAP and/or Medicaid. Republicans need to find significant savings as offsets for the tax cuts they’ve promised, plus those they’ll achieve by eliminating the Affordable Care Act.

TANF is a harbinger of things to come — unless supporters can galvanize grassroots opposition. This seems to me doable, though difficult.

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