TANF at 20: Time for Reform

TANF at 20: Time for Reform

The Temporary Assistance for Needy Families (TANF) block grant, established 20 years ago today, is overdue for reform. TANF currently provides a safety net for very few families in need and does little to prepare low-income parents for success in today’s job market.  

A Weak Safety Net

TANF provides cash assistance to a shrinking number of poor families, even though the need remains high. Nationwide, for every 100 poor families, just 23 received TANF cash assistance in 2014. That’s down from 68 such families that received cash assistance in 1996 under TANF’s predecessor, Aid to Families with Dependent Children. 

The TANF-to-poverty ratio — the number of families receiving TANF for every 100 poor families with children — varies widely among states, ranging from four in Louisiana to 78 in Vermont. In 12 states, the ratio is 10 or less. In 1996, no state had a ratio that low. 

The 1996 welfare law greatly expanded states’ control over welfare policy on the theory that they could better address the needs of poor families. Instead, state policy choices have helped fuel an increase in the number of children in deep poverty, with incomes below half of the poverty line, and left the vast majority of the poorest families to fend for themselves.

Work Requirements: Limited Investments and Results

A key reason for creating TANF was to give states more flexibility to help cash assistance recipients find and maintain work so they’d no longer need assistance. If states had more flexibility, welfare reform proponents argued, they could take funds previously used for cash grants and use them to help recipients find jobs and to cover the costs of work supports such as child care and transportation assistance. But states haven’t lived up to this expectation.

First, states devote very few TANF dollars to work. States spent only 7 percent of their state and federal TANF funds on work activities in 2015 and only 17 percent on child care assistance to enable parents to work. Some spent even less: Eighteen states spent less than 5 percent of their TANF funds on work activities, and 14 spent less than 5 percent on child care assistance.

Second, TANF reaches few nonworking families. Some 3.95 million single mothers were unemployed at some point during 2014, yet only 1.63 million families received TANF in an average month (see graph). This means that most single mothers who needed help finding jobs didn’t have access to the employment opportunities and work supports that TANF is supposed to provide.

 

Finally, parents who leave TANF generally don’t fare well in the labor market over the long term. Welfare reform proponents claim that TANF has a strong track record in moving families to work, but the little recent data available show that most former TANF recipients don’t get stable employment or raise their earnings.

A recent study of almost 5,000 Maryland families found that in the fifth year after leaving TANF, almost half didn’t work at all or worked in just one quarter of the year, up from 39 percent with little or no work in the first year after leaving TANF. The share of former recipients with no job rose from 27 percent in the first year to 37 percent in the fifth year. And only 8 percent of former recipients had earnings above the poverty line for a family of three in all five years.

Despite the rhetoric about the success of the 1996 welfare law that created TANF, the facts show otherwise. We should no longer accept a situation where some 2 million children live in deep poverty, largely due to TANF’s failure to provide assistance to the families most in need of assistance.

The good news is that TANF can improve with changes to the law. Policymakers should focus on strengthening TANF as a safety net, making it a more effective work program, and ensuring that money is directed to TANF’s core activities — work, work supports, and basic cash assistance.

Donna Pavetti is Vice President for Family Income Support Policy at the Center on Budget and Policy Priorities.

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