CWLA 2004 Children's Legislative Agenda
Temporary Assistance for Needy Families
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- Reauthorize the Temporary Assistance for Needy Families (TANF) block grant. Maintain state flexibility regarding the current work requirements, and reject additional work requirements that fail to move adults into self-supporting jobs.
- Incorporate the well-being of children into the TANF law. It is critical that the TANF program include improving the lives of children in its planning and focus.
- Support at least six months of rehabilitative services (substance abuse treatment and mental health services) to count as work activity, and allow states the option of additional months of treatment and services.
- Include a comprehensive family assessment, which would include an initial screening by a trained caseworker to identify and screen for barriers to work--such as substance abuse, physical and behavioral health problems, and domestic violence--and for risks to child safety.
- Ensure that TANF funding is adjusted for inflation, and maintain states' ability to use TANF funds as a significant source of funding for child welfare services.
- Allow states the option of using TANF funds to serve legal immigrants.
Congress will continue the debate to reauthorize the TANF block grant in 2004. TANF was created in 1996 as part of a federal effort to reform welfare. That law fundamentally changed the way the federal government provides assistance to low-income families with children.
Instead of providing an open-ended entitlement to parents with children, as existed under the former Aid to Families with Dependent Children (AFDC), TANF funding is capped and distributed from the federal government to states as a block grant. Under AFDC, states received automatic funding increases whenever the number of families and children eligible for AFDC increased. TANF funding, however, is capped at a set amount of $16.5 billion along with two small bonus funds. Although states are no longer required to provide matching state funds to draw down federal AFDC dollars, they do have to maintain a specific level of state spending, or maintenance-of-effort (MOE).
States are required to use TANF funds to serve families with children, but the law does allow states broad flexibility in administering the TANF program. For example, each state is allowed to set its own income eligibility standards. The regulations implementing TANF provide even greater flexibility, allowing states to spend federal TANF funds on a range of services in addition to cash assistance. States can establish different income eligibility standards for each program funded by the TANF block grant. The main requirement is that programs funded by TANF address one or all of the four purposes defined in the TANF law:
States have a great deal of flexibility with their TANF funds, including the ability to transfer up to 30% of their funds into the Child Care and Development Fund (CCDF) and 10% into the Social Services Block Grant (SSBG). The total transfer to those two block grants cannot exceed 30%. States must also spend 75% - 80% of what they were spending under AFDC. These state dollars must be spent on services and supports that are similar to those the state had provided under AFDC.
- providing assistance to needy families so children may be cared for in their own homes or the homes of relatives;
- ending dependence of needy parents on government benefits by promoting work and marriage;
- preventing and reducing out-of-wedlock pregnancies; and
- encouraging the formation and maintenance of two-parent families.
As a result of TANF spending flexibility, this block grant has become a major source of federal funding for child welfare services. In 2000, TANF provided 15% of federal funding for child welfare services. Of the $25.5 billion spent in state and federal TANF funds in FY 2001, states spent $12.2 billion on cash assistance payments and $13.3 billion on non-assistance or services such as child care, job training, and child welfare services.
The 1996 welfare reform law did establish a number of requirements and restrictions on state TANF programs. No adult may receive federally funded TANF assistance for more than five years in his or her lifetime. Adults qualifying for TANF must be enrolled in a work activity no later than two years after receiving assistance. Fifty percent of a state's TANF caseload must work at least 30 hours per week. If states provide assistance to two-parent families, then 90% of these families must be working. States do have the option of exempting up to 20% of their caseload from these requirements.
States are also barred from using federal TANF funds to assist most legal immigrants until they have been in the country at least five years. This restriction applies not only to cash assistance but also to TANF-funded work supports and services, such as child care, transportation, and job training. Before the 1996 welfare reform law, legal immigrants generally were eligible for benefits.
The 1996 welfare reform law also established a $100 million bonus for the top five states that reduce out-of-wedlock births, a supplemental TANF grant for 17 states that either experienced high population growth or received a lower federal amount of TANF funding, and a $200 million high-performance bonus rewarded to states that meet specific work targets.
The 1996 welfare reform law allows federally recognized American Indian tribes to apply to operate their own TANF programs. If a tribe or consortia of tribes operates its own program, a portion of TANF funds is taken from the state or states where a tribal plan is being implemented and given to the tribe(s). The applying tribe then negotiates directly with the U.S. Department of Health and Human Services (HHS) on the details of its TANF plan, including issues around work activity and time limits.
The 2002 - 2003 Debate
In 2002, the Administration proposed several changes to the current law that were incorporated into legislation that passed in the House of Representatives in both 2002 and 2003. The House bill funds TANF at the same level for the next five years, with no adjustment for inflation. It provides a $200 million increase in mandatory child care funds, increases the authorization level for discretionary child care funds, and mandates stricter work requirements.
Child well-being was included as a part of TANF's overall goals in the House bill. States are required to explain in their state plans how to accomplish child well-being and indicate performance measurements in this area, such as how a state would address youth development. The House bill also creates two new programs that provide $300 million a year to promote marriage.
The most significant changes to the current law contained in the House bill are changes to the work requirements under TANF. The House bill requires states to have 70% of their caseloads working, instead of the current 50%. States could continue to reduce this 70% requirement if they reduced the number of families on assistance--the caseload credit. Instead of this credit being based on declines since 1995, the credit would be based on more recent years.
Work requirements for two-parent families are aligned with the single-parent family work requirements. States must have 70% of their two-parent families working, instead of the current requirement to have 90% of two-parent families working. TANF recipients have to be engaged in "activities" of 40 hours per week rather than the current 30 hours. At least 24 hours of this total must be in activities defined by the federal government, such as an actual job or community service. The remaining 16 hours are to be in state-defined work activities, such as job training or education. States are allowed to count three months of substance abuse treatment as a work activity.
The Senate Finance Committee approved two different TANF reauthorization bills--one in 2002 during the 107th Congress, and a different bill late in 2003, the 108th Congress. The full Senate is expected to debate a TANF reauthorization bill early in 2004. The 2003 Senate Finance Committee - passed bill differs from the House bill on several work requirements.
The current Senate bill increases the percentage of a state's caseload that must be in work to 70%. Unlike the House version, a state could reduce this 70% requirement by receiving a credit for every person who leaves cash assistance for a paying job. The complex credit also allows states to reduce their 70% require-ment by receiving a partial credit for people who work less than the required number of weekly hours.
The Senate bill also sets up a more complex set of individual work requirements. A parent with a child younger than age 6 must work 24 hours instead of the current 20 hours. All other single parents must work 34 hours instead of the current 30 hours. Two-parent families must work a combined 39 hours instead of current 35 hours. As in existing law, two-parent families must work 55 hours if they are receiving a child care subsidy. The Senate bill allows states to count up to six months of substance abuse treatment and other "barrier removal" activities as a work activity if it is combined with work or work-readiness activities during that six months.
The Senate bill, like the House bill, included a $200 million increase in mandatory child care funding for FY 2004. Senate Finance Committee member Olympia Snowe (R-ME) conditioned her vote for the committee bill on an agreement to allow her to offer the first Senate floor amendment to the bill--an amendment she will cosponsor with Senator Christopher Dodd (D-CT) to increase child care funding between $5 billion and $6 billion.
The Effect of Welfare Reform
Although the effect of TANF on child maltreatment is not yet clear, TANF has become a major source of funding for child welfare services. TANF accounts for 15% of the $9.9 billion in federal funds that state child welfare agencies spend on child welfare. 1 States also use SSBG funds for child welfare services that are transferable from TANF.
TANF cash assistance caseloads dramatically declined from 1996 to 2002; many states experienced caseload reductions of more than 50%. By the summer of 2003, these numbers had either slowed or reversed course, with 31 states experiencing increases in TANF caseloads over the previous year. 2
Those who work after leaving TANF generally earn low wages and often remain poor. A 2001 review of studies on those who leave TANF concluded, "The picture…across the states is that even when TANF recipients leave state cash assistance programs and become employed, they face significant financial instability." 3 The review found that many of these adults are now in low-paying jobs, are often without health insurance, maintain irregular hours, and suffer serious hardships.
Most studies on welfare reform have assessed the financial well-being of those who leave TANF. Much less is known about the effect of welfare reform on children, yet children represent the largest part of the TANF caseload--4.055 million. In addition, earlier reports indicated that when child poverty rates were declining in the late 1990s, the number of children in poor working families had also grown by more than 650,000. 4 More recent information suggests this trend in children shifting from poor nonworking families to poor working families has reversed. The percentage of children in families where a parent or parents were working peaked at 43% in 2000 and is now declining. 5
Preliminary research suggests some evidence of negative effects for adolescents, including increases in high-risk behaviors and behavioral problems in school, and decreased school achievement. 6 These results require further study, but they raise concern about the effect of recent reforms on the adolescent population.
The more direct effects of TANF time limits and work requirements on child maltreatment are less clear. Despite the limited research, some important questions have been raised about key child welfare concerns. A review of AFDC waiver programs and the more recent TANF studies indicate that reductions in cash benefits resulting from sanctions and other cash welfare policy requirements may actually slow the rate of reunification for children in foster care. Other long-range studies indicate that the effect of various policy changes to the cash welfare system is complex, but these changes may increase rates of maltreatment. 7
- States received $16.5 billion in federal TANF funding each year from 1997 through 2003. More than $500 million was also available to certain states as a result of bonuses and supplemental funding. States are required to spend $10 billion - $11 billion in state MOE funds to qualify for federal TANF funds. The precise amount of state MOE is based on whether a state places enough adults in work. 8
- In 1996, the national welfare caseload included 12.2 million children, or 4.4 million families receiving cash assistance. By June 2003, the caseload had decreased 54% and included 4.9 million recipients, or 2.032 million families. 9
- Between June 2002 and June 2003, 31 states had caseload increases, 17 had decreases, and two experienced no change. Since the start of the recession in March 2001, 28 states have reported caseload increases, and 22 have reported decreases. 10
- Between June 2002 and June 2003, food stamp receipt went up 13%, while TANF caseloads fell by 0.3%. 11
- The TANF block grant had been providing an ever-increasing share of funding for child care. Since the recession, however, this trend has stopped. In 2000, states redirected $3.9 billion from their TANF block grants into child care. Since then, TANF funding for child care has declined to $3.4 billion. These TANF dollars are in addition to the $4.8 billion provided by CCDF. 12
- HHS estimates at least 460,000 families on welfare--about 1.2 million parents and children--are affected by substance abuse. 13 TANF caseworkers see substance abuse as perhaps the most intransigent of the barriers facing people trying to make the transition from welfare to permanent employment.
- A great deal of research indicates that parental substance abuse, domestic violence, and mental health problems have deleterious effects on children. Of youth ages 12 - 17, 29% were in special-education classes, and 20% had run away, had been in trouble with the law, were using drugs or drinking, had become pregnant, or were involved with gangs. 14
- In FY 2001, 787,000 child-only families, representing 1.391 million children, received cash assistance. A child-only family is one in which the child, not the parent, receives a cash benefit. 15
- Of the 1.391 million children in child-only TANF families, 21.8% were grandchildren of heads of households, and 10.4% were relatives of heads of households but not grandchildren. The remaining child-only TANF families may actually include a parent, but that parent is not considered part of the TANF family because he or she may be receiving Supplemental Security Income, is not eligible for TANF due to legal immigrant status, or may be disqualified from TANF assistance. 16
- The child-only TANF caseload has decreased from 978,000 in 1996 to 787,000 in 2001. Overall AFDC/TANF caseloads have decreased at a faster rate than the child-only caseload. While the actual number of child-only cases has decreased, therefore, the percentage of child-only TANF cases reflects an increase. Child-only cases represented 21.5% of the TANF caseload in 1996, and 37.2% in 2001. 17
- As of September 30, 2001, 34 tribal TANF plans had been approved, covering 172 tribes and Alaskan Native villages and serving 17,000 families. State governments were serving 34,000 Indian families. 18
- In FY 2000, 25% of tribal TANF families were considered child-only. 19
- Bess, R.; Andrews, C.; Jantz, A.; Russell, V.; & Geen, R. (2002). The cost of protecting vulnerable children III: What factors affect states' fiscal decisions? (Assessing the New Federalism Occasional Paper 61). Retrieved online, January 8, 2004. Washington, DC: The Urban Institute.
- Administration for Children and Families (ACF). (2003). Temporary Assistance for Needy Families (TANF): Fifth annual report to Congress. Retrieved online, January 8, 2004 Washington, DC: U.S. Department of Health and Human Services (HHS).
- Richer, E.; Savner, S.; & Greenberg, M. (2001). Frequently asked questions about working welfare leavers (Publication No. 01-30). Retrieved online, January 8, 2004. Washington, DC: Center for Law and Social Policy (CLASP).
- Wertheimer, R. (2001). Working poor families with children: Leaving welfare doesn't necessarily mean leaving poverty. Retrieved online, January 8, 2004. Washington, DC: Child Trends.
- Wertheimer, R. (2003). Poor families in 2001: Parents working less and children continue to lag behind. Retrieved online, January 8, 2004. Washington, DC: Child Trends.
- Hutson, R.Q. (2001). Red flags: Research raises concerns about the impact of "welfare reform" on child maltreatment (Publication No. 01-29). Retrieved online, January 8, 2004. Washington, DC: CLASP.
- Administration for Children and Families. (2002). Fact sheets: Temporary assistance for needy families. Retrieved online, January 8, 2004. Washington, DC: CLASP.
- Mezey, J. & Richie, B. (2003). Welfare dollars no longer an increasing source of child care funding: Use of funds in FY 2002 unchanged from FY 2001, down from FY 2000 (Publication No. 03-59). Retrieved online, January 8, 2004. Washington, DC: CLASP.
- Parra, G. (March 7, 2002). Welfare reform and substance abuse: Innovative state strategies (Issue Brief 771). Retrieved online, January 8, 2004. Washington, DC: National Health Policy Forum.
- CalWorks Project. (2002). Multiple risks threaten children of TANF recipients with alcohol or other drug, mental health, or domestic violence issues (CalWorks Project Policy and Practice Brief, 3). Retrieved online, January 8, 2004,. Sacramento: California Institute for Mental Health.
- ACF, Temporary Assistance for Needy Families (TANF): Fifth annual report to Congress.
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