The Temporary Assistance for Needy Families (TANF) five-year reauthorization ran out in FY 2010 and has been extended through a series of short term extensions ranging from a few months to a year at a time. In this year’s budget, for the first time, the Administration proposes several changes and enhancements. There appears to be some interest in reviving the reauthorization discussions that had gained some traction in the House of Representatives last summer.
In total the Administration’s TANF proposal would increase funding from $16.5 billion to $17.6 billion with a change in the contingency fund and other funds to address workforce, poverty and intergenerational strategies. The TANF block grant, created in 1996 has lost more than 30 percent of its value due to inflation.
If there is interest on Capitol Hill in a full reauthorization it is not clear whether such support would extend to increases in the block grant but there could be other areas of improvement that could happen. The Administration endorsed several proposals that had garnered some bipartisan support in the House last summer. These proposals include adding the reduction of poverty to the purposes of the TANF Act and restricting how states calculate third-party contributions as part of their maintenance-of-effort state spending requirements.
Last July the House Ways and Means Subcommittee on Human Resources held a hearing on a reauthorization with both sides expressing a willingness to work together on extending the cash assistance block grant. Before the hearing the subcommittee issued a draft reauthorization bill for comment and testimony. It included several changes in terms of work requirements on adults, it tightens state spending requirements and realigned work requirements on how states calculate whether they are meeting work participation by adults. It also gives states more flexibility in some instances in how they craft their work and training programs for adults on assistance.
There were also a series of House Republican bills that carved out parts of the Subcommittee draft { See member newsletter for listing and description of those bills}
Two issues that emerged with a consensus during the July hearing was the issue of the marriage penalty and state spending. The marriage penalty refers to the fact that when a family on assistance includes two parents they (and the state) must meet tougher work requirements, so tough that states have not been able to meet the targets and as a result are discouraged from providing such assistance. The irony is the fact that the 1996 Act was intended to encourage marriage in some ways but it was a conservative requirement that if two parents were going to be on assistance they would have to meet a much tougher work requirement. Those standards were made even tougher in the next reauthorization in 2006 and have had the impact of penalizing states that allow families on assistance. In at least some instances these two parent families may live in areas where work is limited or they may be families facing disabilities issues within the family that restrict the ability to have both parents meeting the work hours required.
The second issue was the need to tighten state spending requirements. States have been required to spend between 75 to 80% of what they spent under the old AFDC program before 1996. The original 1996 law only allowed states to count a narrow range of states spending such as on cash assistance and child care. Approximately five or six years later and as a result of the last reauthorization in 2006 the spending requirements were loosened in how states count their state spending with states having the ability to count outside money such as charitable in-kind contributions. That has had the effect in some states of actually allowing states to reduce the amount of state spending to draw down the federal block grant funds. The Administration signaled some receptivity to this issue in their budget.
One area the committee sought feedback was a bipartisan idea about directing states to spend a specific percentage of their block grant on key services such as cash assistance, workforce activities and child care. Some states are now spending very little on cash assistance. In 2013 only 30 percent of combined federal and state funds ($29 billion) was spent on cash assistance to poor families. The Administration has said in their budget that at least 55 percent should be dedicated to cash assistance, child care and work activities.
TANF has become a major source of funding for child welfare but not necessarily for wrap around or intervention services. A large portion of flexible funding in some instances is used by states for foster care funding and services and kinship placements. CWLA submitted comments to the subcommittee. The CWLA comments focused mainly on the proposed changes the draft is advancing. The emphasis of the comments was on seeing TANF not just as a source of funding for child welfare services but as an important program as a safety net. In part the letter said:
“While the link between child welfare and welfare assistance is clear in financial terms we also recognize that the TANF block grant is vital in another significant way that is sometimes overlooked. TANF is significant in its role to assist some of the most vulnerable families in our country, especially those families in poverty and deep poverty. This is important if we are to make continued progress in reducing child maltreatment and in increasing permanency for the more than 600,000 children who experience out of home placements during the year.”
The letter then outlined a number of areas in the draft bill. The draft legislation realigns work requirements on how states calculate whether they are meeting work participation by adults but it also gives states more flexibility in some instances in how they craft their work and training programs for adults on assistance. There is a bipartisan consensus that states haven’t done enough to aggressively move people into jobs through better training and job placement activities.
