TANF Safety Net Keeps Fraying

December 19, 2011

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 Enrollment

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.

Cash Benefits

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.


Mayor Gray Takes Balanced/Unbalanced Approach To DC Budget

April 4, 2011

I, along with many others, have been advocating for a balanced approach to balancing the District’s Fiscal Year 2012 budget. Now I see that there’s more than one way to take an unbalanced approach.

What we meant was that the budget should be balanced by a reasonable mix of spending cuts and new revenue-raisers. Mayor Gray did a relatively good job on this score.

“Relatively” because, according to the mayor’s own summary, spending cuts account for $187 million, while the revenue-raising proposals would bring in a projected $135 million.

But the spending cuts are egregiously unbalanced. As the DC Fiscal Policy Institute reports, human services programs would lose $130 million — more than two and a half times their share of the locally-funded budget.

The mayor deserves credit for backing off his opposition to any increase in income taxes. He proposes a new, slightly higher top rate for residents with adjusted incomes over $200,000 — 0.4% higher than what they’re paying now.

According to the Chief Financial Officer’s letter certifying the budget as balanced, the new bracket, plus some unspecified limit on itemized deductions, would yield $35.4 million next year — somewhat over a third of what the plan advocated by Save Our Safety net and allies would bring in.

But at least it’s a step in the right direction — maybe even an indication that the mayor attended to the feedback he asked for.

Other smart revenue-raisers include an extension of the sales tax to live theater tickets, an overdue hike in the off-street parking tax, an increase in the modest minimum business franchise tax and, I infer, the final legislation needed to prevent multi-state corporations from legally evading the local corporate tax.

But the proposed budget is nonetheless, to use the old cliche, balanced on the backs of the poor.

We’ll undoubtedly be learning more about the cuts to human services programs in days to come. So let me just pick out three of the big ones here.

Homeless Services. The proposed budget would reduce funding for homeless services by $11 million — this when the current funding shortage has led the Department of Human Services to deny shelter to homeless families who’ve got no place to stay.

IDA. Local funding for the Interim Disabilities Assistance program would be cut by 75%, leaving only $875,000 for stipends to low-income severely disabled residents who are waiting for the Social Security Administration to act on their claims for Supplemental Security Income.

Last year, SSA had a backlog of more than 705,300 disability claims hearings. Now it’s unable to speed up resolution time because the budget impasse in Congress has meant no additional funding. So it seems that no one on the IDA waiting list will get a stipend for a very long time, if ever.

TANF Benefits. Funding to provide cash assistance to families enrolled in the Temporary Assistance for Needy Families program would be cut by an additional $7.9 million.

I understand that $4.9 million of this cut represents the mayor’s reversion to his earlier plan to totally phase out benefits to families who’ve been in the program for more than five years.

The initial 20% cut that’s already been imposed leaves a family of three with $342 per month — 21% of the very low federal poverty line. Imagine what this means to the children whose future the mayor claims to be so concerned about.

Imagine what it will mean when the family gets even less and then less until there’s no cash income at all. And this almost certainly will happen to some families because many long-term TANF recipients face formidable, multiple barriers to work.

The remaining $3 million will be “saved” by imposing full family sanctions, i.e., cut-offs of all cash assistance when the participating parents don’t comply with the requirements in the job preparation/job search plan that’s been developed for them.

We’ve seen something like this before — in former Mayor Fenty’s 2009 budget-gap closing plan.

As I remarked at the time, it creates a perverse incentive to find TANF parents in noncompliance, minimize efforts to resolve problems and get sanctions in place as quickly as possible because that’s the only way sanctions can save as much as the budget assumes.

In his recent State of the District address, Mayor Gray asked us to share his vision for the District and its government. “Above all,” he said, “it is a compassionate government — one that takes as its most urgent task the welfare of the least fortunate among us.”

I don’t see that in his proposed budget. Do you?

UPDATE: I was too optimistic about prospects for disabled residents on the IDA waiting list. DCFPI analysts report that Mayor Gray’s budget would suspend the program. This means that no more eligible residents would get benefits. Instead, vacant slots would be eliminated until the program ceased to exist.


DC Council Cuts TANF Benefits, Approves Full Cut-Offs

December 26, 2010

Our lawmakers on the DC Council had decided to wrap up lawmaking for the year on December 21. They had a long agenda and, with Christmas fast approaching, probably shopping to finish up, parties to get to, etc.

So they decided to vote on a revised Budget Support Act* that they’d seen for the first time less than a day before. Decided not to worry that they wouldn’t have a second chance to vote, since Council Chairman Vincent Gray had introduced it as emergency legislation.

Gray had obviously had second thoughts about the impending cuts in cash benefit to families in the District’s Temporary Assistance for Needy Families program. Also third thoughts, since the final TANF provisions were significantly different from those I’d seen in a version of the substitute BSA circulated several days before.

For poor families dependent on TANF, there’s some tentative good news about cash benefits. Also some news that very ominous — both about cash benefits directly and about sanctions that will henceforward put families at risk of no benefits at all.

Cash Benefits

As I earlier wrote, the Council voted in early December to phase out benefits for TANF families who’d been in the program for a total of more than five years. This would have meant a 20% cut each year until 2015, when benefits would have been zeroed out.

The final version of the BSA imposes a 20% reduction on these families’ benefits after February 2011, but specifies no further reductions. In other words, it reverts to Mayor Fenty’s budget gap closing proposal.

However, the final BSA allows the mayor to adjust the level of TANF assistance payments through the rulemaking process. It thus opens the door to further benefits reductions.

We’ve got some evidence that Gray has his eye on them. The prior draft of his substitute BSA imposed an across-the-board 12% reduction. For a family of three, this would have meant a maximum of $377 a month — less than 25% of the federal poverty line.

Councilmembers got wind of this, thanks to some swift and effective advocacy. Gray apparently got enough pushback to opt for a strategic retreat. But I think it’s prudent to view further benefits reductions as dormant, not dead.

Sanctions

The final BSA apparently authorizes full family sanctions, i.e., termination of all cash assistance when a participating parent fails to comply with some program requirement.

I say “apparently” because the relevant provision doesn’t expressly authorize full family sanctions. But Chairman Gray referred to them in summarizing the BSA changes, and no one else on the Council piped up to challenge him.

As some of you may recall, Mayor Fenty’s mid-2009 budget gap closing proposal included full family sanctions. The Council rejected them — and wisely.

An Urban Institute study found that many District TANF recipients who’d been sanctioned faced serious challenges that might hinder not only their ability to comply with the work requirements, but even to understand them. Studies of TANF participants in other jurisdictions have raised similar concerns.

Yet the Council has decided to let the Department of Human Services move forward with a three-phase sanctions plan, ending in a total benefits cut-off for any failure to “participate [in] or complete an Individual Responsibility Plan,” i.e., the program of activities the participant is supposed to follow.

The final BSA directs the mayor to submit proposed sanctions policy rules to the Council by April 1. They’ll become effective 45 business days later unless the Council officials disapproves them.

But DHS has until September 30 to fully implement its TANF program reform plan. It can thus begin imposing full family sanctions before it has improved assessments, referral processes, training or other services.

Does it make any sense to punish recipients based on their failure to comply with an Individual Responsibility Plan that may be egregiously inappropriate? Because they haven’t received the services they’d need to comply?

What’s the big rush here anyway?

We know that DHS and some Councilmembers are very concerned about the high percentage of District TANF families who’ve been in the program for more than five years — close to 45%, according to recent testimony by DHS Director Clarence Carter.

How many of them could “graduate” if they’d just buckle down to their required job preparation and/or search activities is an open question. Full family sanctions supporters imply the answer is a lot of them. They just need a greater incentive than the partial sanctions already used.

During the Council’s discussion of the BSA, Chairman Gray said that we “need to encourage people to go to work,” implying that harsher sanctions will do that. But he also linked the new sanctions provision to his decision to, at least temporarily, limit the benefit reduction for long-term participants.

Councilmember Marion Barry, who supported the sanctions provision, noted that the existing appeals process will probably delay completion of the 20% reductions until the end of next year. In other words, not much by way of immediate savings from them.

But when Mayor Fenty proposed the reductions, they were supposed to contribute $4.6 million to closing the budget gap.

That could explain the rush.

As Legal Momentum recently reported, full family sanctions have contributed to large TANF caseload reductions. And states have financial incentives to impose them rather than rely on partial sanctions that preserve assistance for the children in a family.

With full family sanctions, states can avert penalties for failing to meet the federal work participation standard — something the District has struggled with. They can also free up funds for a variety of programs and services available to non-TANF families, e.g., child care, early childhood education.

So is the Council really hoping to bring a lot more families into compliance? Or is it banking on the savings DHS will realize by getting jobless families out of the TANF program?

Could it be hoping to mitigate budget constraints by having additional TANF funds for programs more politically popular than “welfare?”

* The Budget Support Act is one of two pieces of legislation needed to enact or make changes in the District’s budget. It makes whatever changes in existing legislation are necessary for the executive branch to carry out the spending directions in the Budget Request Act, i.e., the actual budget. Like most District legislation, it ordinarily must be passed by the Council twice.


Mayor Fenty Wants Five-Year Lifetime Limit On Full TANF Benefits

November 29, 2010

I thought the proposed five-year lifetime limit on TANF benefits and other D.C. public assistance was dead.

Councilmember Tommy Wells, Chairman of the Human Services Committee, said he wouldn’t move it forward. Councilmember Marion Barry, who cosponsored and apparently initiated the bill, said he wouldn’t vote for it anyway.

“Imperfect and incomplete,” he called it. Really just all about starting “a dialogue on how to break the cycle of generational poverty, government dependency and economic disparity in the city.”

But the time limit has resurfaced in a different form in Mayor Fenty’s plan to close what’s now a $188 million gap in the current budget.

Scrolling through many lines I find inscrutable, I see that the Department of Human Services intends to reduce funding for TANF cash assistance by more than $4.6 million “to more closely align with federal policy.”

The proposed Budget Support Act, which would make District laws consistent with the gap-closing plan, shows that the purported alignment means an across-the-board 20% cut in the maximum TANF cash benefits available to participants who’ve been in the program for a total of more than five years.

This would mean that a District family of three could receive, at most, $342.40 per month — about 77% below the federal poverty line. This when the current maximum leaves the family short $133 per month, even if it has one of those scarce housing vouchers, plus all other standard forms of assistance.

We’ve been cautioned by Council Chairman Vincent Gray not to object to a budget cut unless we’re offering ideas for balancing the budget. Don’t know if the new top tax bracket I’ve joined in supporting would count. The latest letter that Save Our Safety Net has drafted for us says it would raise at least $65 million.

Still, a plan for using the new revenues to protect all under-funded safety net and other core programs is well beyond my expertise. So I’ll confine myself here to noting that nothing in federal policy suggests — let alone mandates — a TANF benefits cut at the end of five years.

States can set their own benefits levels wherever they choose. The federal government’s five-year lifetime limit sets the standard for the caseload that can be partially funded by the block grant. States may exempt up to 20% of their caseload from this limit without financial penalty based on “hardship or domestic violence.” They are also free to use their own funds for a higher percentage.

No exemption whatever in the benefits reduction section the Budget Support Act would add to the District’s public assistance law. Rather, a guarantee that families who, for a variety of reasons, haven’t become — or remained — fully self-sufficient will be plunged into even greater hardship than they are now.

Mayor Fenty tells us that “we cannot afford to ask [residents] to shoulder a bigger financial burden” in these “tough economic times.” I guess poor parents constrained to rely on TANF don’t count.