Analysis of TANF Reauthorization Issues

In 1996, to the dismay of much of the religious community, Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act.  This legislation did away with the old Aid to Families with Dependent Children program -- the federal welfare program for poor families created in the 1930s -- replacing it with a new plan called Temporary Assistance to Needy Families (TANF).  Over the years, it has become clear that the emphasis has been more on “Temporary” than on “Assistance” or on “Needy Families”.

The legislation assumed that all adults are able to work and will do so if compelled to.  Therefore, it set a time limit of two years after the date on which one qualifies for welfare, by which time any adult receiving assistance was to be at work and no longer receiving benefits.  Aware that even with the best of intentions, it is sometimes necessary for people who leave welfare to return to it, Congress established a five year lifetime limit on adult eligibility.  States were given limited flexibility to grant exemptions from the time limits for people with special needs that made it difficult or impossible for them to work.

The TANF program gives states maximum control over how their welfare programs operate, with the result that in some states it has been operated in an essentially humane way, investing in the futures of low-income people, while other states have been punitive and tight-fisted.  The program gives each state an annual block grant to run its program, based on the state’s welfare caseload in 1994, a year when the rolls were particularly high.

Because of both the strong economy in recent years and the pressure provided by TANF to leave welfare, most states have not needed to spend their entire grant for cash benefits.  Some have chosen to use the surplus funds for supportive services to TANF recipients such as education, mentoring, job training and placement.  Others have used the funds to assist those leaving TANF with child care, transportation, extended health care coverage, and other types of assistance to help they become and remain employed.  Many states have chosen to put part of their grants, as permitted by the 1996 law, in a “rainy day” fund so that they would have resources to help more people in the event of an economic downturn.  Still others, unfortunately, have diverted TANF funds to pay for things that would normally have come out of the state budget, thus conserving state funds but doing nothing to help TANF participants.

As Congress begins deliberations on TANF reauthorization, which must be done in 2002, several issues have emerged as key to the debate.  Among them are:  funding; the purpose of TANF; time limits and sanctions; supportive services; out-of-wedlock births and marriage; education and employment issues; and immigrants.

FUNDING: 

The states currently receive $16.5 billion yearly in block grants for TANF.  With an economic downturn looming, it is reasonable to assume that states will need more funds for their TANF programs in the future than they have in the past. 

A great many of the jobs that have disappeared recently, particularly in the wake of the September 11 tragedy with its severe impact on the hospitality industry, have been the kind that normally employ TANF leavers -- low-wage, entry level positions that require little training and provide few benefits.  Thus, it is likely that many people who complied with program requirements and left TANF within the two-year time limit will need to return to TANF. 

At the same time, others who lose jobs either to terrorism or to recession will need to be on TANF for the first time.  They will also need the supportive services of other programs such as Medicaid and Food Stamps, all of which face funding struggles in Congress.  There is likely to be pressure in some quarters to reduce the TANF grants to states.  Anti-poverty advocates support increasing the funds at least for inflation.

PURPOSE: 

The religious community feels strongly that reducing poverty should be the primary goal of TANF, although that was not one of the purposes listed in the 1996 legislation.  Congress focused instead on reducing welfare caseloads, increasing work, and reducing out-of-wedlock births.  A robust economy made achievement of the first two goals a reality, but there is no evidence that government programs have succeeded in reducing out-of-wedlock births or increasing marriage.  Making poverty reduction the focus of TANF will require more attention to the needs of those who cannot work as well as more supportive service for those who leave welfare for work, so that they can retain and grow in their employment.

TIME LIMITS AND SANCTIONS:

Anti-poverty advocates, including those in the religious community, feel that the time limits “clock” should run only when TANF recipients are not going to school, participating in job training, actively but unsuccessfully seeking work, or working at a job that pays them so little that they are still eligible for cash assistance.  In other words, the clock should stop for those who are complying with program requirements. 

Given the vulnerability of jobs generally available to TANF leavers, it is often necessary for them to cycle on and off welfare many times, so that the five-year lifetime limits also need to be flexible.  States now have the option of exempting up to 20% of their caseloads from sanctions and time limits, but the National Council of Churches and other advocates contend that states need more flexibility and that the only people who should be forced off TANF by time limits are those who refuse to cooperate with the program requirements.

SUPPORTIVE SERVICES: 

The TANF law provided a brief period of transitional Food Stamp and Medicaid benefits for those leaving the welfare rolls, but many states have not made these benefits available to eligible people.  The result is that Food Stamp participation is down significantly and many poor people are not getting needed health care.  Some states have chosen to provide Medicaid beyond the required time.  There have been efforts in the past to convert both programs to block grants, a move opposed by most religious groups.

Child care is another key issue.  The Child Care and Development Block Grant must be reauthorized in 2002.  The NCC supports increased funding for this program in order to expand supply, improve quality, and provide subsidies to low-income working parents.  An argument against increased funding will be made, however, that states can use their unspent TANF funds if they want to provide more child care.  This would be a short-sighted move, in view of the likely increase in need for TANF itself.

There will be attention also to the issue of child support.  The 1996 law overhauled federal child support enforcement efforts, putting increased pressure on non-custodial parents to contribute to the support of their children.  Collection of funds from these parents has increased considerably in recent years, but the states have kept most of the money collected to offset welfare costs, rather than passing it on to the children.  At issue will be the extent to which funds are shared with families.

FAMILY FORMATION:

Although reducing out-of-wedlock births was a stated goal of TANF, there is little evidence to suggest that anyone really knows what government can do to achieve that purpose.  Most advocates feel that the best prevention is giving young people a sense of purpose about their futures so that they strive towards positive goals such as education and career.  TANF provides little substantive help in that area, although some states have created helpful models.  TANF awards bonuses to states with the best records in deterring pregnancies and promoting marriage, but the birthrate has declined very little, and there is no agreement on whether government has any  role in encouraging marriage.

There may be efforts in Congress to push programs aimed at mentoring and educating young men so that they will be employable and equipped to function well as parents.  Welfare advocates would favor such programs as long as they are not funded by reducing TANF grants, which primarily serve women and children.

EDUCATION AND EMPLOYMENT:

Job retention and advancement are clearly desirable outcomes for TANF leavers, but there is great disagreement on how to get there.  The TANF law promoted a “work first” approach in which people are required to go to work immediately, without taking time for education and training.  The experience of working is thought to be enough to motivate them toward success.  The reality is that workers without skills and education tend to leave or lose jobs more often than those who are trained for their work.  There will be a variety of proposals for ways to motivate states to help workers retain and advance in jobs.  The religious community believes that time limits should not apply to people seeking job training, and it further supports counting participation in post-secondary education programs as an allowable work activity.

IMMIGRANTS:

Nearly half of the funds saved by enactment of the TANF law came from depriving current and future legal immigrants of cash benefits, Food Stamps, and Medicaid.  Congress subsequently reinstated benefits for those who were in the country prior to 1996, but anyone who has arrived since August 1996 is still ineligible.  The religious community supports restoring all benefits to immigrants regardless of when they arrived in the US.  Congress may consider at least opening up Medicaid to pregnant women and their children who arrived after 1996.

-- Mary Anderson Cooper