On Wednesday, July 15 the House Ways and Means Subcommittee on Human Resources held a hearing on a reauthorization of the Temporary Assistance for Needy Families (TANF) block grant. One of the most significant factors that was clear at the hearing was the bipartisan tone of the discussion. Both sides expressed a willingness to work together on extending the cash assistance block grant. The Friday before the hearing the subcommittee issued a draft reauthorization bill for comment and testimony. That draft bill includes several changes in terms of work requirements on adults and the states and tightens state spending requirements. The proposed draft 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. There is also consensus that states have evaded some of the state spending, maintenance-of-effort (MOE) requirements.
The committee heard testimony from Kristen Cox, Office of Management and Budget, Utah, Lt. Colonel David Kelly, Salvation Army, Boyd Brown, Employment and Training, Goodwill Easter Seals Minnesota, LaDonna Pavetti, Center on Budget and Policy Priorities, Grant Collins, Workforce Development and Executive Director, WeCARE, FedCap. The testimony was generally positive about the draft bill.
In question and answer portion of the hearing, Republican members of the subcommittee highlighted bills they had introduced shortly before the bill draft was released. All those bills have been included in the bill draft.
The bills include H.R. 2952, that would reserve a portion of the TANF block grant to provide incentive payments to states based on their success in helping former TANF recipients enter, retain, and advance in employment; H.R. 2967, directs HHS to catalogue successful approaches used to help welfare recipients move into work; H.R. 2968, provides up to $300 million annually to states to test ways to better serve welfare beneficiaries by improved case management, better coordinated benefits, and a choice of service providers; H.R. 2969, ends the separate and higher work requirement for two-parent families on welfare; H.R. 2966, adds a new fifth purpose to TANF to include “reducing poverty by increasing the employment entry, retention, and advancement of welfare recipients;” H.R. 2959, increases the share of adults on welfare expected to work or prepare for work by preventing states from receiving credit for reducing its overall cash assistance caseload; H.R. 2990, provides up to $100 million to states to test whether subsidizing TANF recipients’ wages can be an effective in increasing work; and H.R. 2991, attempts to encourage states to engage more recipients in activities leading to self-sufficiency and simplify the current work participation requirement each state must meet.
Somewhat ironically, two issues that have emerged with consensus is 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 in 1996 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.
A second issue gaining consensus with members of both parties is 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.
One area the committee is seeking feedback on is a bipartisan idea about directing states to spend a specific percentage of their block grant on key services such as cash assistance 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.
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.