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.

Congress Set To Slash Fund For Public Housing Maintenance

November 7, 2011

Public housing has gotten a bad rap — in some cases, deservedly so. We’ve all read, I suppose, about notorious warehouses of the poor like Chicago’s crime-ridden, dilapidated Cabrini-Green.

But, as the U.S. Department of Housing and Urban Development reminds us, public housing comes in many sizes and types — from single-family dwellings to apartment complexes.

For about 1.2 million low-income seniors, families and individuals with disabilities, public housing means home and community.

It’s an endangered affordable housing option — and has been for some time.

HUD Secretary Shaun Donovan says that 105,000 affordable units have been lost through demolition or sale since 1995. Paul Boden of the Western Regional Advocacy Project puts the figure at closer to 280,000.

Many reasons for this, including public policies that favor mixed-income developments and dispersal of the poor. These have probably contributed to the egregious neglect of many still-standing public housing facilities.

According to the latest assessment for HUD, public housing has an estimated $25.6 billion backlog of capital needs for repairs and renovations.

Yet Congress seems poised to slash the Public Housing Capital Fund, which provides grants that help local housing authorities keep (or make) their public housing livable.

Last spring, Congress approved just over $2 billion for the Fund — a miniscule down payment on backlogged and ongoing repair and rehab needs. This was a cut of nearly $500 million compared to Fiscal Year 2010.

The President requested about $4 million more for this fiscal year. Our spending-cutters in Congress would have none of it, as this table from the National Low Income Housing Coalition shows.

The House Appropriations Subcommittee for Transportation/HUD decided to cut the proposal by 25%, leaving the Capital Fund with $508 million less than it’s got now.

The Senate Appropriations Committee did just a bit better, with a cut of 22% or $165.1 million.

The full Senate recently approved this as part of a mini-omnibus budget bill, i.e., a package of three multi-agency appropriations bills, including Transportation/HUD.

What will happen next is hard to predict, but only from a process perspective.

Ordinarily, the full House Appropriations Committee and then the House itself would vote on the Subcommittee’s Transportation/HUD bill. Then House and Senate representatives would work out a compromise, which would go back to both chambers for final votes.

Or the majority leaders would decide they couldn’t possibly get all unfinished appropriations bills passed on time and instead roll them all up into one huge omnibus budget bill.

But these aren’t ordinary times.

The House Republican leadership is reportedly unenthusiastic about omnibus bills. And it might have difficulty getting its Tea Party wing to vote for one, even if it tried.

On the other hand, even its most right-wing members understand that the federal government must be funded at some level. And it won’t be unless Congress passes something — or some things — by November 18, when the current continuing resolution expires.

One way or the other, it’s hard to imagine that public housing won’t get shortchanged, as it has in the past.

And hard to imagine that we won’t see more public housing losses.

As everyone knows, housing deteriorates if its not maintained. Costs of repairing the damage grow exponentially. A leak in the roof turns into spreading rot. Faulty electrical wiring causes a fire. (Take it from one who knows.)

So, as in the past, public housing authorities are likely to decide to demolish neglected dwellings or sell them off to private parties who’ve got no obligation to restore them or replace them with housing that’s affordable for low-income renters.

Two years ago, 7.1 million very low-income households had what HUD terms “worst case needs.” In other words, they paid more than half their income for rent, lived in severely substandard housing or both.

This represents an increase of nearly 42% since 2001. We obviously need more federal funding to preserve public housing stock — and more federal housing vouchers too.

Congress has underfunded affordable housing programs for some time. Now it seems set to create even more worst cases.

More homelessness too.

NOTE: This is the second in a series on Fiscal Year 2012 HUD appropriations. The first — on housing voucher cuts — is here.

More Than 40,000 Low-Income Families Could Lose Housing Vouchers

October 27, 2011

Nearly 650,000 people were homeless last January, according to the U.S. Department of Housing and Urban Development’s Annual Homelessness Assessment report.

As I’ve noted before, this is undoubtedly an undercount. Still, it indicates a rising trend — one that will probably continue at least until the labor market generates many millions of new decent-paying jobs.

Now whatever the real homelessness number is seems likely to rise more than it would have otherwise, thanks to budget cuts pending in Congress.

Several pots of money are at issue, including Tenant-Based Rental Assistance and the Public Housing Capital Fund. I’ll deal with the first here and the other in a followup posting.

What the federal budget refers to as Tenant-Based Rental Assistance funds several kinds of housing vouchers, plus some employment services for participating families.

By far and away the largest portion goes to fund Housing Choice vouchers — the kind that recipients use to rent housing in the private market. Vouchers generally cover whatever portion of the rent is more than 30% of their income.

Anyone who’s ever rented an apartment on a year-to-year basis knows that rents go up. Vouchers thus always cost somewhat more than they did the year before — even if recipients don’t experience income losses, as many probably have.

For the past two fiscal years, the President proposed increases just large enough to cover the estimated costs of renewing existing vouchers — even though waiting lists for housing assistance were long many years before the foreclosure and jobs crises boosted need.

Again this year, he proposed what HUD estimated it would cost to renew the 2.1 million or so vouchers now in use.

He also asked for a no-cost contingency policy that would essentially allow HUD to shift some funds so that housing authorities with scant reserves could renew all the vouchers they’ve issued if the estimated renewal cost proved too low.

The House Appropriations Subcommittee for Transportation/HUD cut the proposed renewal funds by about $100 million and rejected the contingency proposal.

In the Senate, which is further along, the full Appropriations Committee approved what the President proposed for voucher renewals.

But, as the Center on Budget and Policy Priorities explains, its appropriation includes $750 million for the contingency fund rather than treating it separately.

So the Senate Committee’s bill, like the House Subcommittee’s bill, doesn’t provide nearly enough new funding to renew all existing vouchers.

CBPP estimates that more than 40,000 low-income households would lose their vouchers under the House Subcommittee’s bill. More than 25,000 would lose them under the Senate Committee’s bill.

No way these households would be able to cover the full costs of the units they’re renting.

Their annual incomes average only $12,600 — well below the federal poverty line for a family of two. Without vouchers, says CBPP, their housing costs would double or triple.

See what I mean about prospects for an increase in homelessness?

More bad news on the HUD budget in this table from the National Low Income Housing Coalition — and, as promised, in another posting.

Low-Income Energy Assistance Gets The Ax

February 14, 2011

Some of us recently get a brief taste of what it means to have your electricity shut off in the dead of winter. As the hours go by, it get cold … and colder. Also very dark.

So you bundle up, scrabble around to find a flashlight, light a fire in the fireplace if you’ve got one, maybe trek over to a friend’s house where the power is still on. Still, you know the discomfort is temporary.

But what if your electricity — or your gas, for that matter — is shut off because you’ve fallen behind in your payments? What if you’re told it will be, but you can’t come up with the cash? What if you’ve got one of those old-time furnaces and can’t afford any more heating oil?

Seems that you’ll have to … well, I don’t know what. Because both the House Appropriations Committee and the Obama administration have decided to demonstrate their deficit-reduction bona fides in part by cutting back on funding for LIHEAP (the Low Income Home Energy Assistance Program).

The Appropriations Committee’s spending cut list includes a cut in the LIHEAP Contingency Fund — $390.3 million less than what was approved for Fiscal Year 2010 and $590 million less than what the President requested for the current fiscal year.

The Contingency Fund is a pot of money that the U.S. Department of Health and Human Services may release to states and other recipients, including the District of Columbia, when needs for home energy assistance rise due to a spike in prices, a natural disaster or some other “emergency,” including unusually cold weather.

Last year, HHS used the entire $590 million that had been budgeted. The Appropriation Committee’s cut would bring the appropriation down to $200 million. Virtually all of it has already been spent.

Meanwhile, the President’s proposed Fiscal Year 2012 budget cuts the regular LIHEAP block grant by about 50%. This, says an unnamed administration official, would bring total program funding, “in real terms” to what it was during the Clinton administration. Why the booming days of the mid-1990’s should be an appropriate measure is anybody’s guess.

I can’t help wondering why LIHEAP has been targeted for any cut at all. In terms of the total $3.73 trillion budget, the savings would be miniscule. The impact on low-income households wouldn’t be.

According to the National Energy Assistance Directors’ Association, 8.3 million households benefited from LIHEAP last year, when the program was funded at $5.1 billion.

Yet only one in five eligible Americans received help from the program because the money wasn’t there for the rest — this according the National Conference of State Legislators and allies, including NEADA.

With funding at $4.1 billion — the level in the current continuing resolution — NEADA expects the average grant to cover only 42% of home heating costs and the number of households served to drop by about a million.

Another unnamed source, presumably in the administration, says that “energy prices are well below their levels … when Congress decided to increase LIHEAP funding to $5.1 billion.”

But average home heating costs are forecast to increase this year, especially in the chilly Northeast. And it’s fair to guess that the number of people in poverty is still at or near the record level the Census Bureau reported for 2009.

No reason I can see to think that energy prices will revert to pre-recession levels or that significantly fewer households will have to choose between heating and eating. No one expects the economy to start generating enough more jobs to put the majority of unemployed people back to work any time soon.

Even if it did, millions of households would still need help with their home energy bills — low-wage workers with families to support, seniors and younger severely disabled people who rely on Social Security, etc.

Matthew Cooper at the National Journal floats a couple of theories on why the President has zeroed in on a small popular program that keeps vulnerable people from freezing — or dying from extreme heat because they can’t pay to keep their air conditioners or fans running.

He’s trying to show that he’s really tough on the deficit, to reposition himself for the next election, to generate fear that will galvanize allies to fight against bigger spending cut threats.

I’ve no idea what’s motivating the President. All I can say is that we’ve got more than enough politicians telling us what tough choices they’re making when they slash spending that’s a life and death matter for the poorest Americans.

Tough on whom?