Another Extension For TANF

October 2005

TANF Extension

As part of a relief package for victims of Hurricane Katrina, the House and Senate passed another temporary extension for the Temporary Assistance for Needy Families (TANF) program. This is the 11th extension of TANF since the program expired back in 2002. The 10^th extension was passed during the summer and expired Sept. 30^th. In addition to extending the current program through the end of the year, the TANF Emergency Response Recovery Act of 2005 also waives some of the work requirements and time limits for families affected by the hurricane and allows any state to access the TANF Contingency Fund to provide nonrecurring short-term cash benefits to victims of Hurricane Katrina.

Background

The Temporary Assistance for Needy Families Program (TANF) was created in 1996 as part of a movement to “reform” the federal welfare program. TANF replaced the federal welfare entitlement, Aid to Families with Dependent Children (AFDC), with an annual $16.5 billion block grant distributed to states, established time limits for assistance, and emphasized connecting families that received public assistance to work through new work requirements. The reforms of 1996 also significantly expanded federal funding for child care to assist parents moving into the workforce and expand subsidies for low-income working families.

Debate continues over how successful the TANF program has been. Caseloads dropped dramatically and during the economic boom of the mid-to-late 1990s many welfare recipients were able to leave assistance for work. Many states used the savings from lower caseloads to expand work supports for these welfare leavers and other low-income working families. Poverty rates also declined in the late 1990s.

However, with the economic downturn in 2001, employment rates declined and poverty began to rise again. Many of the welfare leavers hired during the economic boom were often the first fired and those that remained employed were often stuck in low-wage jobs that offered few benefits and little opportunity for advancement because of lack of education and low skills. In addition, the fiscal downturn hit states particularly hard such that those that had built up reserves as result of earlier caseload declines began tapping those reserves to meet increased need and eventually began making cuts in services, particularly to child care assistance for low-income working families. Immigrant families have also been particularly hard hit by the changes since 1996 which bar lawfully present immigrants from receiving federal benefits for their first 5 years in the country.

… 6 ½ years after welfare reform, about half of all women worked in jobs that did not pay enough to keep a family of three out of poverty, even though they accumulated an average of 54 months of work experience. And almost two-fifths of all respondents had no job. Danziger, Shelton and Rucker C. Johnson. “From Welfare to the Low-Wage Labor Market,” (Russell Sage Foundation Forum on the Future of Work, May 2004.

Former welfare recipients are likely to be among the first laid-off, as many have shorter employment histories than other workers. And when they do lose their jobs, these workers will certainly have a more difficult time finding employment than they did when the economy was booming in the late 1990s. Heather Boushey and David Rosnick, “For Welfare Reform to Work, Jobs Must be Available” (Washington, DC: Center for Economic and Policy Research, April 2004)

Since 2001, the number of families receiving child care assistance has declined as states have made cutbacks in eligibility. Federal funding for the Child Care and Development Block Grant (CCDBG), the main source of support for child care, has not only declined due to inflation, but has actually dropped in absolute terms over the past several years. Shculman, Karen and Helen Blank, “Child Care Assistance Policies 2005” and “In Their Own Voices: Parents and Providers Struggling with Child Care Cuts” (Washington, DC: National Women’s Law Center, September 2005.

The poverty rate has risen each of the last 4 years, but fewer families eligible for TANF assistance are actually receiving it. Less than 50% of families who qualify for TANF are receiving assistance. Though the reasons for this are numerous, many point to the strict penalties, time limits, and unresponsiveness of the system as major causes. Sherman, Arloc et. al. “Employment Rates For Single Mothers Fell Substantially During Recent Period Of Labor Market Weakness” (Washington, DC: Center on Budget and Policy Priorities, June 2004)

· Despite higher levels of poverty and hardship—including living in overcrowded housing and having trouble affording food—immigrant families participate at a substantially lower level than their native counterparts in such benefit programs as TANF, food stamps, and housing assistance, partly because the 1996 reforms restricted legal immigrants’ eligibility for these programs. “Assessing The New Federalism Eight Years Later” (Washington, DC: Urban Institute, 2005)

Legislative Landscape

The debate over the success of TANF has led to very different approaches to reauthorizing the program. The President and Congressional leadership have focused on the caseload declines and work participation rates to argue that stricter work requirements are needed to push more welfare recipients into the workforce. These proposals include little new funding, narrow the focus of work activities, and include controversial marriage promotion and “superwaiver” provisions. Other members of Congress, along with human needs advocates point to the continuing vulnerability of welfare leavers and have argued for a reauthorization that includes additional investments in child care, education, and work supports so that families moving off welfare can move toward self-sufficiency.

These differences have led to a stalemate in Congress for the past three years. TANF was originally scheduled to be reauthorized by the end of fiscal year 2002, but has been operating on temporary extensions of current law since then. The House has repeatedly passed legislation similar to the proposals offered by the President, but the more closely divided Senate has yet to bring a bill to the floor for a final vote, though the Senate Finance Committee reported legislation back in March. A summary of the House and Senate bills can be found here.

Frustration over the stalemate led some in the House to push for TANF’s inclusion in the budget reconciliation process this year. However, in the aftermath of the hurricanes along the Gulf Coast, Congress has postponed action on reconciliation. Republican leaders have indicated that they intend to proceed with budget reconciliation by the end of October, but whether the budget cuts will pass or TANF will be included remains unclear. Reauthorizing TANF through budget reconciliation would mean no new investments and could lead to cuts in the block grant. However, some advocates also fear that proceeding with a stand alone TANF bill in the current environment would lead to harmful program changes even if new investments are included for child care.

NAC Position

That so many people are poor in a nation as rich as ours is a social and moral scandal that we cannot ignore. Economic Justice for All (#16), U.S. Catholic Bishops

The National Advocacy Center continues to hope and advocate for a welfare bill that truly addresses the needs of low-income families by providing the services and resources to help them overcome barriers to employment, provide quality care for their children, and attain the skills needed for jobs that help them move out of poverty and live lives of dignity. To do this, a TANF reauthorization bill must:

Make poverty reduction an explicit focus of TANF
Maintain current work requirements and participation rates, especially for single parents with children.
Significantly increase child care funding
Increase access to education and training and give states the flexibility to expand what counts as work (care-giving, counseling, treatment) to address barriers to employment
Allow states to provide benefits to lawfully present immigrants
Reject the “superwaiver” proposal that would allow government to waive important protections in programs that serve people with low-incomes

The welfare system is one of the important avenues through which government attempts to meet its responsibilities to provide for the common good, promote equal opportunity for all, and ensure that the basic needs of its citizens are met. It provides a critical, though fragile, safety net for low-income and other vulnerable families. The devastation of Hurricane Katrina should force Congress to take a harder look at how the current safety net is failing vulnerable families. With fewer people accessing services and more people living in poverty, TANF needs to be reworked to make its services more accessible and responsive, not more restrictive and punitive. It is time for a fresh look at TANF that makes the real need of low-income families the top priority.

Past Updates

March 2005 – TANF Stalled

February 2005 – TANF Moving Again

For More Information

A Brief Guide to TANF Reauthorization - Center on Budget and Policy Priorities

Economic Success Clearinghouse (formerly Welfare Information Network)

Faith Principles for TANF Reauthorization (PDF file)