The House Committee on Ways and Means hosted a Subcommittee hearing on July 13, 2023 titled “‘Where is All the Welfare Money Going?’ Reclaiming TANF-Non-Assistance Dollars to Lift Americans Out of Poverty.” The hearing examined Temporary Assistance for Needy Families (TANF) funds in light of recent reports of misuse by states. Prominent speakers included Chairman Darin LaHood [R-IL] and Ranking Member Danny Davis [D-IL]. Witnesses included Clarence Carter, Commissioner for the Tennessee Department of Human Services; Shad White, Mississippi State Auditor; Robert Knodell, Director of the Missouri Department of Social Services; Kristi Putnam, Director of the Arkansas Department of Human Services; and Dr. Aisha Nyandoro, CEO of Springboard to Opportunities.
There was bipartisan agreement that TANF funds have been used improperly and that more transparency and accountability are needed. In his opening statement, Chairman LaHood focused on the lack of oversight on states’ usage of TANF funds, coupled with the provisions in the law that allow states to use the funds for initiatives other than direct cash assistance to families. “Current TANF law lacks basic financial safeguards, included in most other federal programs, making it easy for states to divert funds, and increasing the risk of fraud and abuse,” he said. He also emphasized that the law permits states to use federal grants in “any manner that is reasonably calculated” to achieve one of TANF’s four purposes: to provide assistance to needy families; independence of needy parents on government assistance; reduce pregnancies of unmarried persons; and promote the formation of two-parent families. The witnesses shared examples of such liberties taken by states. Mississippi’s recent scandal, in which TANF funds were grossly misused, was cited numerous times, with lawmakers on both sides of the aisle looking for reforms to ensure that this type of fraud does not happen again.
Ranking Member Davis focused his opening statement on the proven benefits of cash assistance to families, including decreasing the likelihood that a family will interact with Child Protective Services. Congressman Davis also noted that the current work requirements in TANF make it difficult for states to get this assistance to the people who need it. Instead, states opt to spend the money in other ways, such as on child care or child welfare services, thereby providing broad support to families in need to achieve the purposes of the program but consequently providing less direct cash assistance that would assist families out of poverty. In fact, 42 states used $2.6 billion in federal and state TANF funds for child welfare services in FY2020. This represents 8 percent of total national TANF spending and 9 percent of spending in those states.
Dr. Nyandoro shared that her nonprofit serves many families who are TANF-eligible, yet choose not to go through the approval process because it could strip them of other state benefits upon which they depend. “If I had the power to reimagine TANF, I would reimagine it with the families at the center,” she said. “We keep talking about having an audit, and doing an audit, of financial spending—how about we actually do an audit of what families’ needs are?”
After the March 29th hearing on TANF Work Requirements, CWLA submitted comments for the record, noting that TANF fall short as an anti-poverty program and recommending the following policy changes should the committee decide to take up a TANF reauthorization:
- Inclusion of poverty reduction as one of the core purposes of the program.
- Elimination of the caseload credit.
- Improvements in how and what qualifies as work, such as partial work credits and a broader definition of work, including removing the cap on vocational education.
- Redirecting penalties assessed on states into program improvement plans.
- Elimination of the current blanket prohibition on assistance to anyone with a past conviction of a drug related crime.
- Elimination of the separate and too rigorous work requirements/standards for married families.
By Kati Mapa, with Jacqueline Glenn, Policy Intern