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

January 17, 2017

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.


My Blog Turns Five, Looks Back and Forward

December 9, 2013

Today is my blog’s fifth birthday — not an event that would have been part of my long-range plan, if I’d had one.

I’ll spare you the back story. Let’s just say that I got impatient with a blog administrator who left my time-sensitive posts languishing in the queue — so impatient that one day I said to myself, [expletive deleted] I’ll start my own blog.

I had no idea that it would become so important to me as a structure for learning — and an avenue to people who know a whole lot more than I do and achieve far more than I could ever hope to.

As I said last year on this auspicious date, I’m grateful for them, the discipline the blog provides and you who read what I post.

But this is all personal stuff. So let me share a broad-brush of what I think when I look at my earliest posts in light of what I’m following — and sometimes writing about — now.

My very first post took the DC Council to task for hurriedly cutting funds for affordable housing and, at the same time, rescinding a modest increase in benefits for families in the Temporary Assistance for Needy Families program.

Both were prompted by a projected drop in revenues — a problem state and local governments across the country were grappling with because we were sunk in the Great Recession.

No one then, I think knew how bad the recession would be — or that the labor market would remain in such bad shape for so long after it was officially over.

The District’s revenue stream has more than recovered, however. And happily, we who advocate for the interests of low-income residents no longer have to expend all our energies protesting imminent spending cuts.

Yet the source of the steady revenue increases has, in some ways, made life tougher for them because it’s due largely to an influx of high-earners. Their housing demands — and decisions to accommodate them — have driven up housing costs, especially for low-income renters.

And the District — understandably perhaps — is far readier to invest in things that will make high-earning taxpayers and business interests happy than to provide a secure, sufficient safety net and other income supports for residents who, for a variety of reasons, can’t afford basic living costs.

True, the DC Council recently put more money into affordable housing — $9.75 million more for vouchers this fiscal year. And it’s approved the Mayor’s one-time $100 million commitment to affordable housing construction and preservation. How much the latter will benefit the very lowest-income residents remains to be seen.

The Council is now considering a benefits increase for TANF families — about $16 more, in real dollars, than the one it pulled back, but still not enough to lift a families of three out of severe poverty.

In the meantime, it’s set in motion benefits cuts, leading to zero for most families who’ve been in the program for more than five years, even if the parents can’t find jobs that pay enough to sustain themselves and their children — a likely prospect for many, given what it costs “to get by” in D.C.

The District nevertheless isn’t engaged in more safety-net cutting. Not something one can say for some of the “red” states like Kansas.

Nor, like them, has it refused to expand its Medicaid program — a political decision on their parts that leaves a total of more than 4.8 million of their poorest residents without health insurance.

So on the local front, things could be better, from a poverty policy perspective, but a whole lot worse too.

Turning now to nearby Capitol Hill, I don’t know what to say that you don’t already know. But I feel I must say something to round out this selective review. So …

The economy was a whole lot worse when my blog was born, but I believe many of us had hope for positive change when President Obama was sworn in less than two months later.

And we did, in fact, soon get a package of measures to mitigate the personal hardships and other harms the recession was causing, while at the same time, kick-starting a recovery.

But there’s been a huge ground shift since then, due largely to right-wing Republican victories in the 2010 Congressional elections — and the Democrats’ defensive reactions.

No one, to my knowledge, believes we’ll see any genuine job-creating investments now — or additional investments in training and education that could improve prospects for some of the many millions of jobless workers.

Even an extension of the pared-back unemployment benefits for long-term jobless workers is reportedly iffy, though not to the point we should throw in the towel.

Another of the 2009 measures — the temporary SNAP (food stamp) benefits boost — has already prematurely bitten the dust.

And House and Senate negotiators are trying to strike a deal that would, at the very least, cut benefits further for well over half a million families — a compromise that House Majority Leader John Boehner reportedly won’t accept.

Other negotiators are trying to find common ground for a budget plan that would afford some relief from sequestration.

But no one at the table is looking to reverse earlier cuts to key affordable housing programs — let alone fund them and homeless assistance grants at levels consistent with rising costs and needs.

And the best we can hope for TANF, it seems, is another extension of the never-increased block grant, which is now worth 32% less than when the program was created.

To borrow from several blogging wits, our federal leaders are afflicted by deficit attention disorder.

And so long as that’s true, neither the District nor other state and local governments can effectively meet the diverse needs of their poor and near-poor residents, even if they want to.

Not a happy birthday thought. But I know I’m prone to gloom, as well as impatience.


House Republicans Defend Counterproductive TANF Work Rules

March 25, 2013

House Republicans will again try to block any and all waivers of the work participation requirements in the Temporary Assistance for Needy Families program.

They passed a bill to this effect in mid-March. And we find the equivalent tucked into Congressman Paul Ryan’s budget plan as well.

As I’ve written before, the U.S. Department of Health and Human Services told states that they could get waivers only if they presented plans that seemed likely to improve employment outcomes, plus measures to track success.

The Republicans are still up in arms. Congressman Dave Camp, who chairs the House Ways and Means Committee, again asserts that the waivers are illegal — and should be because they will undermine the purported success of the TANF program.

The work requirements were central to this success, he says, and thus helped lead to “more work, more earnings, less welfare dependence, and less poverty among low-income Americans.”

No one would argued that the touted reforms haven’t drastically reduced dependence on “welfare.” In 1996, when TANF was created, 68% of poor families with children received cash assistance. In 2010, only 27% did.

Meanwhile, the number of families with children poor enough to fall below the very low poverty thresholds increased by 17%.

For single-mother families — the large majority of those TANF serves — the latest reported poverty rate is 40.7%. These undoubtedly include families in the program, since no state provides cash benefits equal to even 50% of the federal poverty line.

It’s nevertheless true that many single mothers entered the workforce in the late 1990s. Experts give the TANF work requirements some credit for this, but note also the importance of other factors.

Two seem especially important because they help explain not only the sharp uptick in single-mother employment, but the downward slide since, as well as the disproportionately high rate of poverty among single-mother families.

The labor market in the late 1990s was unusually tight. And the demand for low-wage workers in particular was unusually high.

So it was relatively easy for TANF parents to get hired. Generally not for jobs that paid enough to support them and their children, however.

Nor to move up to better-paying jobs that offered some modicum of stability and essential benefits, e.g., paid leave, health insurance.

Which brings us back to the issue of the work participation requirements. They are, indeed, a core part of the TANF program we’ve got.

But they’re also the core of the program’s failure to help poor parents move from welfare to work that ends not only their dependency on, but their need for government benefits — one of the main goals Congress defined when it created TANF.

The work participation requirements fly in the face of a basic good management principle. They hold states accountable for process, not outcomes, as a new brief from the Center on Budget and Policy Priorities explains.

Process, in this case, means that states must have set percents of the parents in their caseloads engaged for a set number of hours in one or more of a set of activities defined in the law.

At the same time, states can avoid penalties for failing to hit their required participation rate by reducing their caseloads — in any manner they choose.

Both the “countable” activities limit and the caseload reduction option encourage agencies to push TANF parents into the first job they can find — or to direct their contractors to gear their services to this “work first” approach.

On top of this, the law effectively prevents states from achieving the best long-term employment outcomes because it imposes several different limits on how much they can count participation in education programs as part of work activities. For example:

  • They can count hours spent in these programs for only 30% of the parents in their caseloads — and then only for 20 hours a week, counting homework, if supervised.
  • Vocational education training is okay, but only for a lifetime total of 12 months.
  • Coursework leading to a four-year or advanced degree is not countable at all.

At the same time, the work participation requirements constrain states from fully addressing severe, relatively common barriers to work, e.g., mental health and/or substance abuse problems.

Parents with these problems generally can’t perform countable work activities on an ongoing basis — at least not for the average per week hours required.

But their participation in programs designed to help them resolve such problems is countable for only four consecutive weeks and for a total of only six — or in some cases, twelve — weeks a year.

So some states create hurdles to keep these parents out of their programs, as Elizabeth Lower-Basch at CLASP recently testified. States that want to help must pay for separate programs* or risk penalties.

Finally, states get no credit for parents who perform countable work activities for fewer than the required number of hours. This, among other things, punishes them for accommodating limits related to disabilities, as federal law requires.

One result of all these rules and restrictions is that agency staff spend an inordinate amount of their time determining and recording countable hours.

This is time that’s not available to work with TANF parents so that they get — and stay — employed. (Such figures as we have suggest considerably more success in job finding than job keeping.)

No matter, so far as the law is concerned.

As CBPP says, “TANF is the only employment program in which getting participants into paid work is not a key success measure” — or so far as I can tell, a measure states need concern themselves with at all.

This is what House Republicans hope to protect from experiments that could help produce an enlightened reform of welfare reform.

* Some states — apparently not many — also use these programs to support parents in postsecondary education programs.


Where Did All the Welfare Money Go?

September 17, 2012

We all know that Republican policymakers view Temporary Assistance for Needy Families as a resounding success.

Look, they say, at how caseloads fell after Congress ended welfare as we knew it — and President Clinton signed off on the deal. We should turn more programs into block grants like TANF — Medicaid and SNAP (the food stamp program) for starters.

Caseloads did indeed fall. And they barely rose when the Great Recession set in.

Only 27% of poor parents with children got any TANF cash benefits in 2010 — 41% fewer than the year TANF was born.

And those benefits were woefully paltry — for a family of three, less than 30% of the federal poverty line in all but eight states.

A new analysis by the Center on Budget and Policy Priorities tells us why.

It’s not just because Congress has never increased the block grant funds states get as the federal government’s share, thus letting them lose at least 28% of their value.

Nor because Congress cut — and then wiped out — supplemental grants that some states had always received to compensate for ways the block grant formula short-changed them.

It’s because states are spending large chunks of their block grant funds and/or the funds they’ve got to put up as a partial match* on programs that aren’t only — or even mainly — for TANF families.

In other words, because they’re creatively exercising the much-vaunted flexibility that block grants like TANF provide.

Last year, for example, states spent, on average, only 29% of their TANF funds on cash assistance.

Another 9.4% went for services that help move families from welfare to work, e.g., education, job training, transportation assistance.

Child care subsidies accounted for another 17%. They too help move families from welfare to work, but they don’t necessarily go only to TANF and former TANF families.

What about the rest of the money?

Well, some of it paid for states’ refundable Earned Income Tax Credit, some for programs to promote marriage and discourage out-of-wedlock births and some for other legally-authorized purposes, e.g., programs states had spent money on before TANF was created.

The expenditures “authorized under prior law” don’t have to meet any of the goals Congress established for TANF. Many states, for example, claim child welfare spending as part of their match, though their programs rightly address child neglect and abuse at all income levels.

States also, CBPP reports, have claimed spending on their pre-K programs and on higher education grants for students with incomes way above the TANF eligibility level.

Such spending apparently gets lumped into an “other non-assistance” spending category in their reports to the U.S. Department of Health and Human Services.

Child welfare services may get reported this way, as may various other services, e.g., for domestic violence, mental health and substance abuse, payments to third parties for food assistance and/or shelter.

Bottom line is that states have been using TANF funds to replace funds they’d previously budgeted for these diverse purposes — or would have had to budget, using funds from other sources.

This, of course, frees up funds for other programs that have nothing whatever to do with the safety net or helping low-income families toward self-sufficiency.

There’s lots of variation among states, however. CBPP provides summaries for each and the District of Columbia.

So we learn that, in 2011, the District spent:

  • No more of its TANF funds on cash assistance than it did 10 years before — $67 million. True level funding, i.e., with adjustments for inflation, would have called for somewhat over $85 million.
  • Just $1 million more on work-related activities — again, as compared to 2001. This means about $6.2 million less when we account for inflation.
  • $5 million more on child care, but less in inflation adjusted dollars.

Spending in all these categories declined as a percent of the District’s total TANF spending. The biggest drop was for cash assistance — down by 9%.

Contrariwise, both the percent and absolute dollar value of the combined AUPL/non-assistance category jumped — from $4 million (2%) to $39 million (15%).

Sure would like to know where that money went.

* Under federal rules, states may count third-party spending, both cash and in-kind, as part of their maintenance of effort, i.e., their required match. Thirteen states did in 2011, CBPP’s end-year for spending comparisons.

NOTE: I have made a few wording changes in this post to correct for a misinterpretation of CBPP’s figures on the District’s TANF spending.