Code Blue For TANF Emergency Contingency Fund

September 12, 2010

Back in March, I wrote about the need to extend the TANF Emergency Contingency Fund. It seemed at the time that the extension stood a good chance of passing as part of the then-latest version of the jobs/tax break extender bill — the American Jobs and Tax Loopholes Closing Act (H.R. 4213).

The House had twice passed an extension — once in March as part of the Small Business Jobs and Infrastructure Act (H.R. 4849) and again in May as part of H.R. 4213. But the small business bill is still hung up in the Senate. And the big jobs/tax break bill was ultimately whittled down to just a temporary extension of expanded unemployment benefits.

So here we are nearing the third week of September, with the Fund due to expire at the end of the month.

Republicans seem dead set against more stimulus spending. The Obama administration seems reluctant to step up to the plate, though Jared Bernstein, the Vice President’s Chief Economic Advisor, has blogged in support of an extension.

Hard to know whether the Democratic leadership in Congress will tee up the extension again or focus on high-stakes fights, e.g., the expiring Bush tax cuts, the energy/oil spill legislation, must-pass appropriations and maybe (given the egg recall) the long-pending bill to strengthen the federal food safety system.

Some of the major liberal research and advocacy organizations are trying to get the extension on the agenda — notably, CLASP, the Center on Budget and Policy Priorities and the Center for American Progress. But this is not a typical liberals versus conservatives issue.

Kevin Hassett, an economist at the quite conservative American Enterprise Institute, told the Senate Finance Committee that a major expansion of at least the subsidized employment provisions of the Fund would be a good idea, if focused “as much as possible” on private-sector jobs.

Beyond the Beltway, the bipartisan National Governors Association, National Conference of State Legislators and National Association of Counties have all come out in favor of an extension. Governor Haley Barbour of Mississippi, former Chairman of the Republican National Committee and now  Chairman of the Republican Governors Association, wants an extension too.

At least two West Coast nonprofits are drumming up grassroots support. One — Mission Neighborhood Centers — is a social services provider in San Francisco. The other — Internet Archives — offers free access to digitized books and other resources.

What’s brought these strange bedfellows together are the subsidized jobs programs that state and local agencies have created or expanded using Emergency Contingency Funds.

Those who follow this blog know that I’ve got serious reservations about the District’s use of these funds for its Summer Youth Employment Program. I’ve none at all about programs like San Francisco’s Jobs Now!, which has placed more than 3,600 unemployed and underemployed low-income parents in temporary jobs that build workplace skills and experience.

Or Mississippi’s STEPS, which also focuses on low-income parents and provides phased-out wage reimbursements intended to promote regular hires. Or Tennessee’s program, which has focused on a rural county where the unemployment rate shot up to 25% after an auto plant closed.

All-told, 36 states are operating subsidized jobs programs. A new CBPP brief indicates that they’ve placed more than 250,000 parents and teens.

Only four states will indefinitely continue their year-round programs at the current level if the Emergency Contingency Fund isn’t extended. Twelve will immediately terminate their programs, and three will continue operations only till their current funding runs out.

This will be bad for the many thousands of people who will be thrown out of work and for those who would be eligible for future placements. It will be bad for small businesses that have managed to stay afloat and, in some cases, expand because they’ve had subsidized workers. It will be bad for our economy as a whole, which, as we know, needs more consumer spending.

Close to home, the District could claim nearly $27.8 million if Congress passes the extension that’s been under consideration. It could use the funds for a broad range of purposes, including support and training for its TANF participants, homeless services for families and (dare one hope?) a robust, well-targeted subsidized jobs program.

So if you live outside the District, I urge you to sign my petition (a new one) in support of an extension of the Emergency Contingency Fund. And if you’re disenfranchised like me, please pass the word along.


More Light And A Lot More Heat On DC Summer Youth Employment Program

August 5, 2010

Monday’s hearing on the District’s troublesome Summer Youth Employment Program lasted more than eight hours. Many witnesses — most of them SYEP participants who, I gather, had been rounded up and possibly coached. Also invited government witnesses and some top-flight advocates for homeless and other poor D.C. residents.

Many pleas for the requested seven-day extension — a chance to earn more, learn more and have something to do besides hang out on the streets and get into trouble.

Cogent opposition from the Brookings Institution’s Martha Ross and the advocates, whose principal concern was the diversion of funds from homeless services, cash assistance and better job training for TANF participants and a swifter, more accurate case management system.

A blast from the DC auditor on the administration’s chronic practice of ignoring SYEP budget constraints. “Irresponsible … a threat to other vital District programs and the District’s fiscal stability.” Violations of the federal and District anti-deficiency laws, which, among other things, prohibit agencies from authorizing spending in excess of approved budgets.

An account of the run-up to this year’s raid on the TANF Emergency Contingency Fund from the Associate Chief Financial Officer. A raking over the coals for keeping the Council in the dark.

A strong defense of the SYEP from Joe Walsh, Director of Employment Services. The largest program in two decades. The largest in the country, in fact. Most participants from the three wards with the highest unemployment rates. About 30% of them from families who receive public assistance. The usual enumeration of benefits to participants. Diverse administrative improvements.

Considerable distress and frustration on the part of Councilmembers, who rightly felt jammed by the last-minute extension request and, more importantly, the administration’s utter disregard for the budget process.

Seems they thought the $22.7 million appropriated for the SYEP was what the administration was supposed to spend, not a minimum that could be freely augmented from other accounts without so much as a heads-up to the oversight committee.

Seems that Councilmember Tommy Wells, Chairman of the Human Services Committee, believed that the Department of Human Services would spend the TANF Emergency Contingency funds according to the allocations submitted during this year’s budget deliberations. Blindsided by the department’s transfer of $8.4 million to DOES.

But there really wasn’t much the committee could do — or the full Council either. Back in May, DOES had met with CFO staff about the costs of a program enrolling 21,000 participants for seven and a half weeks, rather than the authorized six. CFO staff told DOES it had funds for at most four weeks of wages. DOES then identified the TANF funds as the way to close the gap.

It assured CFO staff that the Emergency Contingency funds could be used because 80% of participants had addresses indicating they were eligible for TANF. Apparently no one in the CFO’s office questioned this dubious methodology.

So now SYEP participants are owed about two weeks of wages that can only be paid by tapping a source outside the approved budget. And since the Council found out about this only days ago, it hardly had time to go back through the budget and find another way to cover the overrun.

But it did what it could. It soundly defeated the proposed extension. This reportedly leaves $4.3 million in TANF funds that ought to go back to DHS.

It also leaves some big issues on the table. Where will DHS find the additional funds to provide shelter or other housing for the District’s many homeless families? Will it use any of the funds passed back to provide emergency relief to the families who’ve got no place to stay? What will happen with its TANF job training and other initiatives?

And what can the Council do to ensure that whoever directs the SYEP doesn’t again commit to a larger, longer program than the budget can cover?


Fenty Raids TANF Funds To Shore Up Summer Youth Jobs Budget

August 1, 2010

Once again, the District’s Summer Youth Employment Program faces a budget shortfall. And, once again, Mayor Fenty has decided that the program shouldn’t have to adhere to the funding level set by the DC Council.

Two years ago, the administration spent about $40.5 million more than was originally budgeted. Last year, another cost overrun. And here we go again, but with a new twist.

The approved budget for this summer’s program is $22.7 million. The Council limited enrollment to 21,000 youth and capped the length at six weeks. The Department of Employment Services, which administers the program, has reportedly kept enrollment below the cap.

But, as the Washington Post reports, the Chief Financial Officer determined that the approved funding wouldn’t cover six full weeks of wages — perhaps because $10 million had to be spent on contractors to place as many youth as the Council was willing to allow. Not only that, but as DOES Director Joe Walsh testified last month, the administration wanted to extend the program to somewhat more than seven weeks.

So it was clearly in a bind. DOES could, of course, have cut back enrollment to eliminate the projected shortfall. It could have reduced participants’ work hours. The mayor could have gone back to the Council with a request for the additional funds needed to run the program he wanted.

Instead, he decided to reprogram $8.4 million that Clarence Carter, head of the Department of Human Services, had assured the Council would be used to bring total funding for homeless services up to the Fiscal Year 2009 level. Either that or the mayor is taking funds that are urgently needed to serve the very low-income families in the District’s TANF program.

At this point, we don’t know, though we may find out at a hearing the Housing and Workforce Development Committee has scheduled for tomorrow morning. But the mayor may think he doesn’t need to account for the supplement to the SYEP appropriation because, technically, the additional funds aren’t in the District’s budget.

They come from the District’s share of the TANF Emergency Contingency Fund — a pot of money Congress appropriated as part of the economic recovery act to help states cope with recession-related spending increases for TANF and/or short-term benefits to help families who would otherwise enroll in TANF.

The District had claimed $46 million. These funds weren’t in the proposed Fiscal Year 2011 budget because the U.S. Department of Health and Human Services hadn’t approved payment. Carter told the Council he was quite sure it would. And he was obviously right.

But because the funds weren’t in the budget, the mayor apparently feels free to use them for any of the broad purposes the Emergency Contingency Fund can cover, prior commitments and pressing needs notwithstanding.

An internal document prepared in April shows that DHS planned to use $8.1 million of the Emergency Contingency funds to make up the Fiscal Year 2010 homeless services shortfall and $15 million for the projected shortfall in Fiscal Year 2011. The remainder was to go to the TANF program itself — $7.9 million for cash assistance and the rest for improved job training and other initiatives.

The mayor claims that what he’s doing is altogether appropriate. “The Obama administration,” he says, “has made it a priority to use federal stimulus funds to put young people to work this summer.”

Perhaps he’s referring to the $1.2 billion that were in the economic recovery act for youth employment and training programs. Perhaps to the additional $1 billion that’s still pending in Congress.

What’s sure as can be is that neither the President nor any of his people ever suggested leaving homeless families out on the streets so that some kids can have summer-long subsidized jobs that could have gone to poor jobless parents.

UPDATE: At yesterday’s hearing, DOES Director Joe Walsh clarified the mayor’s reference to the Obama administration’s priority on subsidized summer jobs for youth. Several months ago, he said, the U.S. Departments of Labor and Health and Human Services sent a letter to state agencies encouraging them to address the high rate of youth unemployment.

They were encouraged to explore all funds available and provided guidance on how TANF funds could be used. The departments asked as many as possible to take advantage of potentials for partnering their Work Investment Act and TANF programs.

According to this account, the departments said nothing to suggest that summer jobs for youth should have a higher priority than providing shelter and other essential services for very low-income families, including meaningful job training for the parents.


Surviving, But Endangered Jobs Measures

June 7, 2010

I was so worked up about what got axed from the recently-passed House jobs/tax cut extender bill that I passed over two of the surviving provisions that will save and create jobs. One of them should also help mitigate further damage to our fraying safety net.

That one is an extension of the TANF Emergency Contingency Fund through the end of Fiscal Year 2011, with an additional $2.5 billion to be spent in the new fiscal year.

The Center on Budget and Policy Priorities reports that the extension will support more than 185,000 existing and planned subsidized jobs. It will also help states cope with their rising TANF caseloads and provide further short-term benefits to families with emergency needs.

Without the extension, the Emergency Contingency Fund will expire at the end of September. I’ve heard that states will not receive reimbursements the U.S. Department of Health and Human Services has approved, but not cut checks for.

The House bill takes care of this problem. It would make funds already appropriated available through the end of this fiscal year for any of the authorized reimbursement categories. Funds for subsidized jobs in which individuals are placed during this fiscal year would be available through the end of FY 2011.

The other provision would provide $1 billion for youth work-related activities, including summer youth employment programs. According to the bill summary, it would support more than 300,000 summer jobs for 16-14 year olds.

When the Senate was considering its version of the jobs/tax cut extender bill, Senators John Kerry (D-MA) and Patty Murray (D-WA) offered an amendment to add both the Emergency Contingency Fund extension and $1.3 billion for summer youth jobs.

As Half in Ten’s Melissa Boteach explains, it was blocked on a technical point relating to the number of years it would take for the amendment to be fully paid for, i.e, offset by reduced spending and/or revenue increases.

Now the Senate has another chance at the bill. If it doesn’t pass the Emergency Fund extension PDQ, states will begin closing down their subsidized jobs programs. And they’ll surely put plans for new subsidized jobs on hold. Summer youth employment programs will have to open with fewer slots–or not open at all.

Hard to know what will happen. The two provisions, along with the tax cut extensions and some other spending, are paid for by changes in the tax code that would close some remunerative loopholes. Affected parties and their lobbyists are hard at work to preserve these loopholes. To the extent they succeed, the spending provisions will have to be cut back–assuming that a critical mass of Senators still insist on the offset rules. I’m guessing they will.

Then too, we’re hearing a lot these days about the debts we’re leaving our children. And spending cuts seem to be a popular campaign platform. The TANF Emergency Contingency Fund in particular has been subject to gross distortion as part of an online project House Republicans cooked up “to defeat the permissive culture of runaway spending in Congress.”

Not a good environment for investments that would give poor parents and teens a pathway to gainful work. But maybe not toxic either.