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Home > Advocacy > Temporary Assistance for Needy Families (TANF) > Summary of the Senate Finance Committee-passed TANF and Child Care Reauthorization


Temporary Assistance for Needy Families

Summary of the Senate Finance Committee-passed TANF and Child Care Reauthorization

The Personal Responsibility and Individual Development for Everyone (PRIDE) Act of 2003 (Senate Substitute to H.R. 4)
September 10, 2003

On September 10, 2003, the Senate Finance Committee approved a five-year reauthorization of the Temporary Assistance for Needy Families (TANF) block grant (Title IV-A of the Social Security Act) and the mandatory funding part of the federal child care block grant, the Child Care and Development Fund (CCDF). This bill does not have its own Senate bill number and is referred to as the Senate Substitute to H.R. 4 (the House-passed TANF bill). The Senate bill will be combined with the child care reauthorization bill (S. 880), as adopted by the Senate Committee on Health, Education, Labor, and Pensions (HELP) on April 10, 2003, when it is voted on by the full Senate. That vote is likely to occur early in 2004.

TANF Reauthorization

TANF Funding
  • The current TANF funding level is maintained at $16.5 billion through FY 2008. Continues to provide $319 million a year in supplemental grants to 17 states.

  • The Senate bill continues to provide up to $2 billion in a contingency fund to address increased demands or a recession. For the most part, this existing contingency fund has gone unused by states since 1997, in part due to various requirements states must meet to be eligible for these dollars. It redesigns the two triggers to access these funds by lowering both the level of increases in food stamp caseloads and unemployment rate a state must reach to qualify for these contingency funds. It also allows states to access funds by maintaining their current "maintenance-of effort" (MOE) or state spending requirements rather that having to increase the level of state spending in TANF. The House-passed TANF bill maintains current law, but allows a state to count its state spending in child care toward the higher MOE requirement. The Administration has proposed allowing states to access these funds for child welfare if a state accepted a five year cap, or block grant, on Title IV-E foster care funding. Neither the Senate or House TANF bills addresses this proposal.

  • The High Performance Bonus is reduced to $100 million and is redesigned into a bonus to reward employment of TANF recipients. The bonus is rewarded based on a complex formula to measure job placement, job advancement, and access to certain support services, such as child care.

  • The $100 million out-of-wedlock bonus fund is eliminated. This fund had been awarded to the top 4 or 5 states that reduced the out-of-wedlock birth rates for the entire state population. This bonus is changed to a new $100 million matching grant fund for "healthy marriage promotion." Funds can be used for: 1) ad campaigns on the value of marriage and the skills needed to have a stable and healthy marriage; 2) high school classes on the value of marriage, relationship skills, and budgeting; 3) marriage skill classes for non-married women or men; 4) training for engaged couples; 5) training for married couples; and 6) divorce reduction, marriage mentoring, and programs to reduce disincentives to marriage in means-tested programs. To receive funds under this new program, a state must provide a 50% match and can use its federal TANF funds for the match.

  • The Senate bill creates a third fund of $100 million per year to be used for various competitive research and demonstration projects on activities that promote marriage.

  • A new authorized fund is created: $20 million for fatherhood demonstration programs conducted by states; $30 million for competitive grants are awarded to other entities; $20 million for state media campaigns on fatherhood; and $5 million for national campaigns.
Child Well-Being
  • Current TANF law includes four purposes that determine how states can spend federal and state TANF funds: (1) provide assistance to needy families so that children may be cared for in their own homes or the homes of relatives; (2) end the dependence of needy parents on government benefits by promoting job preparation, work, and marriage; (3) prevent and reduce the incidence of out-of-wedlock pregnancies and establish numerical goals for prevention and reducing the incidence of these pregnancies; and (4) encourage the formation and maintenance of two-parent families. The Senate bill amends the fourth purpose to emphasize "strengthening healthy two-parent married families and encourage responsible fatherhood."

  • The Senate bill requires states to include measurable performance objectives. States would be required to describe the methodology to measure these objectives and indicate how they address each of the purposes of the TANF law. The state plan must describe strategies for employment retention, advancement, reduction in teenage pregnancies, and services for "noncompliant and struggling" families. The state plan must describe how a state intends to encourage equitable treatment of healthy, married two-parent families.
State TANF Maintenance-of-Effort
  • The current TANF Maintenance-Of-Effort (MOE) requirement that states spend 75% to 80% of what that state had spent under the previous Aid to Families with Dependent Children (AFDC) program is broadened. Current state spending requirements are based on the services the state covered under the old AFDC program. Under the Senate bill, states would be allowed to include in their annual spending total expenditures made by the state under any state programs that address purposes three and four of TANF. This would allow states to count spending for the reduction and prevention of out-of-wedlock pregnancies, programs to promote and encourage responsible fatherhood, and programs to promote two-parent families and marriage.

  • The Senate bill continues to require states to spend between 75% to 80% of their state spending level based on the old AFDC program. States must spend 80% if they fail to meet their work requirements. This requirement that states spend at least 80% if they cannot meet their work rates will be based on last fiscal year's work rates, not the current fiscal year work rates as the existing law now requires.
  • Unlike the House-passed TANF bill, the Senate bill does not require states to impose what is referred to as a full "check" sanction-which are, in effect, "full-family" sanctions. Under the House version, if individuals fail to meet certain work and TANF requirements, the entire family benefit must be eliminated, at least for a period of time. This "full family" sanction provision requires states that currently impose a partial sanction on families (reducing their monthly cash assistance) for refusal to meet certain TANF requirements, to cut-off all benefits to the sanctioned family. Under the Senate bill, the state can still carry out these full-family sanctions or "cut-offs" as under current law, but a review of the self-sufficiency plan must be done before imposing a sanction. The state must describe in their state plan the steps to take to provide services for "struggling" and "noncompliance" families.
Work Requirements
  • Current law requires states to have 50% of their TANF caseload engaged in federally-defined work. In addition, if a state chooses to serve two-parent families, these families are calculated separately, and a state must have 90% of these families in federally defined work. Under current law, states can reduce both of these work requirements when they receive a caseload credit. That credit has been based on how much a state's cash assistance caseload had dropped since 1995.

  • The Senate bill, similar to the House version, increases the 50% work requirement by 5% a year until it reaches 70% in FY 2008. For example, in 2005 states will be required to have 55% of their caseload in work, in 2006 the figure rises to 60%, in 2007 65%, and in 2008 a state will be required to have 70% of their TANF adults working. No separate calculation is required for two-parent families.

  • Unlike the House-passed TANF bill, the Senate bill replaces the current caseload credit. Instead of the current caseload reduction credit that allows a state to reduce the percentage of adults required to be in work based on the number of people who have left TANF, the Senate bill allows a state to reduce the required work percentages by the number of adults who leave TANF for a paying job.

  • The House-passed TANF bill maintains the caseload reduction credit and updates it. Instead of states reducing their required percentages based on the number of people who have left assistance since 1995, it will now be based on the number of people who leave assistance since 2002. (For greater detail, see the House bill description on CWLA's website at

  • The Senate bill also creates a series of "partial" work credits. This allows a state to count adults who are working less than the minimum hours when calculating which adults are meeting their work requirements. The existing law allows states to count adults as working only if they work a minimum number of hours. The Senate bill changes this by counting some adults who work less hours than required. For example, under the Senate bill, if a single mother has a child under six, she must work 24 hours to be counted as one adult working. If she works 20 to 23 hours she is counted as .675 of a person. Similarly for individuals who have older children, they must be working 34 hours to be counted as one person working. If that adult works 24 to 29 hours they count as .75 of a person. Sample calculation: Two adults in two different TANF families. Both have children over age six. If these two adults each worked 29 hours per week, these two adults would count as one and a half people working under TANF law (Two working adults as .75 of a person multiplied by 2 = 1.5 people).

  • The work credits break out as follows:
    • For single parents, an adult with a child under age 6 receives 1 credit if they work 24 hours; .675 credit if they work between 20-23 hours. An adult with a child over age 6 receives 1 credit for working 34 hours; .75 credit if they work 24-29 hours; .875 credit if they work 30-33 hours.

    • Two-parent families receiving child care services would receive full credit if they work a combined 55 hours; .75 credit if they work a combined 45-50 hours; and .875 credit if they work 51-54 hours. Two-parent families without child care would receive full credit if they work a combined 39 hours; .675 credit if they work a combined 30-34 hours; and .875 credit if they work a combined 35-38 hours.

  • Like the House-passed TANF bill, the Senate bill increases the work requirements beyond what is current law. The changes in required work hours in the Senate bill are not as great as those required in the House bill. In the Senate bill, an individual meets this goal only if they are engaged in activities that are defined as "work." The Senate bill alters the definitions and the hours of required work by requiring a mother with children under six to work at least 24 hours, instead of the current 20 hours. It also increases the work hours for all other individuals from 30 hours to 34 hours. Two-parent families without child care must work 39 hours. Two parent families with child care must work 55 hours.

  • To be counted as "working," the House version requires TANF recipients to be engaged 40 hours a week in work and work activity. Twenty-four hours of that 40-hour total must be in work. Substance abuse treatment, rehabilitation services, work-related education or training, or job search for three months over a two-year period can be counted as work. For the remaining 16 of the 40 hours, an individual must be engaged in activities defined by the state. There will no longer be a reduced work week (of 20 hours) for mothers with children under age six.

  • The Senate bill builds on current law definitions and allows for the restricted use of certain "barrier removal" activities, including substance abuse treatment, adult literacy, and other barrier removal activities as defined by the state. States may count these barrier removal activities for up to six months in a 24-month period as long as they are combined with other work activities.

  • Current law allowing states to exempt 20% of their caseload from the work requirements continues.
Universal Engagement and Family Self-Sufficiency Plans
  • The Senate bill changes current law so that the requirement to have an individual assessment is replaced with a requirement that every "family" have a self-sufficiency plan developed by the state. This requires a parent, caretaker, or family to engage in activities in accordance with the plan.

  • The Family Self-Sufficiency Plan requires the state to assess, in a manner deemed appropriate by the state, skills, work experience, and employability of each work-eligible individual. The plan would specify appropriate activities, including direct work activities; require, at a minimum, each member of the family who is work-eligible to participate in these activities; monitor the participation of these family members; regularly review the self-sufficiency plan; and revise the plan as appropriate. The Senate bill, unlike the House version, requires this assessment to include the services a family is eligible to receive. The plan will also assess well-being of children and include activities to improve child well-being.
TANF Time Limits
  • The Senate bill proposes no changes to the current law, which dictates that no adult may receive more than 5 years of federally-funded TANF assistance.
Super-Waiver Authority
  • Currently, the Senate bill allows the U.S. Department of Health and Human Services (HHS) to waive the rules and laws regarding the TANF block grant, the Social Services Block Grant, and mandatory child care funding. This is narrower than waiver provisions in the House-passed TANF bill because the Senate Finance Committee only has jurisdiction over programs in HHS. The House version also extends waiver authority to these programs in the U.S. Departments of Labor, Housing and Urban Development, and Agriculture. The Senate bill may be expanded in this way prior to consideration by the full Senate. Both bills would allow Cabinet Secretaries broad authority and discretion in waiving and enforcing current law in these programs.

Child Welfare

  • The Senate bill includes a section on child welfare that extends HHS's waiver authority to approve demonstration projects that are likely to promote the objectives of child welfare programs authorized under Title IV-B and Title IV-E. This waiver authority is extended through FY 2008. The authority had expired in 2002 and has since received short-term extensions. The current Senate bill does not expand the waivers in the same way as the House version. The House bill allows states to have more than one waiver and allows more than one state to apply for the same type of waiver.

  • The Senate bill does not make changes to the current eligibility link between AFDC standards (as of July 16,1996) and Title IV-E Foster Care and Adoption Assistance. To determine Title IV-E eligibility, a state must use the AFDC eligibility rules that existed on July 16, 1996. Over time, this has become not just a burdensome process for administrators, but it gradually reduces the number of children eligible under the Title IV-E system. Current data from a recently released report by the Urban Institute estimates that only 57% of children in out-of-home placements now qualify for Title IV-E funding.

Child Care Reauthorization

CCDF Funding
  • Similar to the House bill, the Senate bill reauthorizes the Child Care and Development Fund (CCDF) mandatory funding through FY 2008. It increases these funds by 9.3% in the first year and then freezes funding for the last 4 years. These federal mandatory ("guaranteed") funds would increase from $2.7 billion to $2.9 billion in 2004 and remain at that same level through 2008. These funds are provided to each state as two separate funding streams:
    • States receive a "mandatory" fund, which is based on their pre-1997 federal AFDC child care funding. States are not required to either match or maintain current child care spending to receive these funds.

    • The remainder of the federal mandatory funds are provided to each state contingent on a state maintaining their child care spending based on pre-1997 spending levels and requiring that a state match the federal spending at the Medicaid matching rate.

    • Approximately $1.1 billion will be provided to states as their mandatory funds, while the remaining $1.8 billion will be provided as matching child care funds.
Transfer and Use of TANF Funds for Child Care
  • The Senate bill clarifies that child care that is paid directly out of TANF is not considered "assistance." Under current law, child care paid for with TANF funds had been considered assistance, which was then counted against a TANF recipient's 5-year limit on benefits. If a state spends TANF funds on child care, there is no requirement to include a set-aside of funds for quality initiatives as required under CCDF.

  • The Senate bill clarifies that any TANF funds a state or a Tribe carries over from the previous fiscal year can be spent on either assistance or services. Current regulations limit TANF funds carried over from previous fiscal years to be spent only on assistance.

  • With these two changes included (definition of "assistance" and the ability to spend previous fiscal year TANF funds on assistance or non-assistance), states will have an incentive to spend TANF funds directly on child care. By doing so, they may avoid the current child care law requirement to set-aside 4% for quality or the child care requirement that funds be spent within 3 years.

Social Services Block Grant

  • Funding for the Social Services Block Grant (SSBG) remains at its current level of $1.7 billion. The Senate bill will restore state's ability to transfer 10% of their federal TANF funds into SSBG.

  • In 1996, SSBG was cut from $2.8 billion to $2.38 billion as a way to offset the costs of the 1996 TANF act. Under that 1996 law, SSBG funding was to be restored to $2.8 billion by 2003. However, Congress has consistently reduced funding in recent years and SSBG is currently funded at $1.7 billion.

Abstinence Education

  • The Senate bill permanently extends Section 510 of the Maternal and Child Health Block Grant, the abstinence-unless-married education program.

  • Current funding for this abstinence education program is $50 million for FY 2002. To receive funding under this program, only an abstinence-unless-married curriculum can be taught. States are restricted from using these funds to teach both abstinence and contraception.

Child Support

  • Currently, states reimburse the federal government for a share of child support that is collected for families on TANF assistance. Under current law, when states collect past child support for a family on assistance, the recovered child support must be used (in part) to reimburse the federal government for past assistance costs. States also take a share of the recovered child support to reimburse their expenses. States can "pass through" a minimal amount to the family on assistance without being required to reimburse the federal government.

  • The House version allows states to increase the amount of child support funds they pass through to a family from $50 to $100 without requiring states to share any of the $100 in child support recoveries with the federal government. The Senate bill allows states to increase this pass-though to $400 for one child and $600 for families with two or more children. To qualify, a state must disregard the increased child support passed through to the family in calculating a family's assistance grant level-not reduce the assistance grant by the amount of increased child support received by the family.

  • States are also encouraged to pass through all child support to families that have left TANF. The federal government will share in this cost. The Senate bill also includes numerous provisions to allow greater intercepts or recoupment of past due child support through changes to the immigration, veterans, and Social Security systems.

Transitional Medical Assistance

  • The Senate bill allows for a five-year extension of the transitional medical assistance program (TMA) through FY 2008. TMA provides temporary health care coverage to families who have become ineligible for Medicaid, usually due to the move from welfare to self-sufficiency.
For more information, contact John Sciamanna, CWLA Senior Government Affairs Associate, at 202/639-4919 or

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