Monday, August 22 represents something of an anniversary. It will be twenty years since the enactment of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, PL 104-193, more commonly referred to as “TANF.” TANF (Temporary Assistance for Needy Families) converted the Aid to Families with Dependent Children (AFDC) program, which had provided an individual entitlement to cash assistance to adults with children if they met a federally-driven state eligibility standard, into a state-entitlement block grant.
The debate over the next week and perhaps months will be whether the swap of a fixed state allocation of funding (block grant) to each state in exchange for broader ability to use funds beyond just cash assistance was successful and was it lasting.
Republican members of the House Ways and Means Committee have been touting the decrease in cash assistance caseloads that took place and the increase in employed mothers. Critics highlight the fact that in 1996 cash assistance covered approximately 70 percent of poor families and today only 26 percent of poor families are covered by cash assistance payments (2013).
TANF has been reauthorized only once since its inception (2006) despite the fact that it was scheduled for reauthorization on a five-year time frame. The lack of reauthorizations has left a number of issues for debate that remain unresolved. One issue is the fact that the $16.5 billion in federal TANF funds (states have to spend a little under $13 billion to get the federal funds) has lost more than 33 percent of its value by most estimates. There has also been discussion about the fact that assistance caseloads did not go up during the height of the Great Recession until the Obama Administration added some temporary emergency funding for both assistance and subsidized work.
For child welfare communities, TANF is likely identified with three key elements: the AFDC eligibility link that limits foster care coverage, the use of TANF child-only placements to support kinship care and the use of flexible TANF funds for a range of child welfare services.
Twenty years after passage, Title IV-E foster care and subsidized guardianships are still linked to a state’s 1996 AFDC income eligibility. While adoption assistance link to AFDC is being gradually phased-out, it still remains for foster and kinship care. Because Title IV-E funding had been tied to AFDC, during the 1995-96 welfare debates there was fear that linking IV-E eligibility to the new TANF block grant would reduce coverage of foster care and adoption assistance. Critics feared that states would be in a “race-to-the-bottom” to reduce TANF income eligibility. That actually never occurred as state maintained their cash assistance eligibility. Regardless, the AFDC link to the July 1996 AFDC standard (TANF passed Congress in July 1996) was really considered a place-holder for future replacement. That never happened.
Most states use their TANF funds to provide “child-only” grants. These child-only grants generally cover three types of families: families where the parent is on SSI, families where the parent is an immigrant and not eligible, and families headed by a relative, usually a grandparent. States vary with their use of TANF for kinship care. Generally, these grants are higher than what the other child-only families receive. Even when AFDC existed there had been these kinship-child-only families. States have operated a dual track of some kin covered by Title IV-foster care (and now subsidized guardianships) and kinship support for families with the child usually not in state custody and in an informal family care arrangement. In October 2015, 46 percent of families were child-only families. That is 598,000 child-only families out of 1,280,000 families on assistance. One of the challenges today is that inflation is eroding the value of the TANF funds and in some states it could be a choice between supporting parent-headed households and relative care families.
The use of TANF funds for child welfare became a little clearer recently with the release of new data by HHS on the use of TANF funds. That data described in State TANF Spending in FY 2015, indicates that in addition to using only 25 percent ($7.7 billion) of their TANF funds (both federal and state funds) for basic cash assistance, states are using over seven percent ($2.3 billion) on child welfare services including some foster care.
The most recent TANF reauthorization ran out in 2010. Since that point Congress has passed a series of short term extensions usually a year at a time. While the Administration offered some more specific details on a reauthorization in this year’s budget, for the most part they have passed on any substantive proposals since 2010. Last summer the House Ways and Means Committee considered a number of bills that had some bipartisan consensus (making poverty reduction a purpose of the law, easing up on some of the harsher 2006 work requirements, tightening the state spending requirements) but those ran into conservative opposition and flack despite sponsorship by some Republicans.
It is too late for significant reforms in this Congress. That will now await a new Administration and a new Congress.