Off the Charts Blog | Center on Budget and Policy Priorities

Cash assistance for the nation’s poorest families with children fell again in purchasing power in 2012, we detail in our annual update of state benefit levels under the Temporary Assistance for Needy Families (TANF) program.  Most states left their benefit levels unchanged last year, so benefits continued to erode by inflation.

In 37 states, and after adjusting for inflation, benefits are now at least 20 percent below their levels of 1996 — the year policymakers created TANF.

For all states, as of July 1, 2012, benefits for a family of three with no other cash income were below half of the federal poverty line, measured as a share of the Department of Health and Human Services poverty guidelines for 2012 (see map).  Benefits were below 30 percent of the poverty line in the majority of states.

On the other hand, no states cut benefit levels in 2012, and a few took the opportunity to increase the benefit level or to follow through on past commitments to modestly raise benefits or adjust them for inflation.  TANF benefits increased, in nominal dollars, in New York, Ohio, South Dakota, Texas, and Wyoming.

TANF provides a safety net to relatively few poor families:  in 2011, just 27 families received TANF benefits for every 100 poor families, down from 68 families receiving TANF for every 100 in poverty in 1996.  But for the families that participate in the program, it often is their only source of support and without it, they would have no cash income to meet their basic needs.

It’s time for states to halt the erosion of TANF benefits and slowly regain some of the purchasing power that they’ve lost over the past 16 years.

Click here to read the full paper.

Former Senator Rick Santorum argues in today’s Wall Street Journal that gaining work skills through better access to education and skills training should be an essential part of welfare reform.

We agree — but these are exactly the kind of improvements that the Obama Administration’s recent announcement about waivers for Temporary Assistance for Needy Families (TANF), which Mr. Santorum harshly criticizes, is designed to promote.

Current TANF rules discourage states from encouraging recipients to pursue skills training or education that will help them qualify for better jobs.  States face a financial penalty if they do not have a specified percentage of their TANF caseload in work activities, and there are narrow limits on when participation in education or training can count toward that federal target.

For example, states can count vocational education toward their federal work requirement only for 12 months in a recipient’s lifetime, even though many industry-focused training and community college programs last from 18 months to two years.  Similarly, completing high school or a GED as a full-time activity counts toward the federal work requirement only for people under age 20, even though it’s very hard for anyone without these credentials to find a job these days.

Some states allow TANF recipients to participate in certain education activities even if they don’t count toward the state’s federal work requirement.  For example, Nebraska passed a law this year to allow completion of high school or a GED as a full-time work activity for TANF parents up to age 24.  But the new law also states that the option will be suspended if Nebraska risks not meeting its federal work requirement.

Fixing rules that discourage states from helping TANF families get education and skills training should be a top priority for Congress when it renews the welfare law.  In the meantime, the Administration has said it will consider granting waivers from certain provisions of the law for states that want to test whether there are more effective ways to meet TANF’s work goals — such as by allowing a longer period of vocational education in order to improve employment outcomes.  A state like Nebraska could seek a waiver so it could continue its approach of allowing recipients to complete high school or get a GED as a stand-alone work activity without risking fiscal penalty.

“We need to help clear a path for poor and low-income Americans to achieve their dreams,” Mr. Santorum writes.  That’s exactly right, and by allowing states to look for better ways to connect families to employment, the Administration has taken a step in the right direction.

In a new paper, we’ve studied how states have used their federal and state funds under the Temporary Assistance to Needy Families (TANF) program since it — and its structure as a block grant — replaced Aid to Families with Dependent Children in 1996.

That analysis revealed some troubling national trends, as I explained yesterday.  It’s important to remember, though, that states vary widely beneath those national, top-line numbers.  For example, national spending on basic assistance fell from 70 percent of combined federal and state TANF funds at TANF’s start to only about 29 percent in 2011.  But a state-by-state look shows that there’s more than a 50-point difference separating the states that spent the greatest and least shares of their state and federal TANF funds on basic assistance in 2011.  Nine states spent less than 15 percent, while seven others spent 40 percent or more (see chart).

We’ve prepared individual fact sheets for each state and the District of Columbia as well as an overall fact sheet on total U.S. spending trends to explain these variations in greater detail.  Each sheet includes:

• The amount of the state’s 2011 federal TANF allocation and own spending obligation;
• State-specific trends in spending between 1997 and 2011, including shifts in how the state has used its state and federal TANF funds over time; and
• Detailed comparison of a state’s TANF spending in five key areas between 2011 and a decade earlier.

Click here to access the fact sheets. Interested readers can also download a spreadsheet with detailed, annual state-by-state data here.

Some policymakers, such as House Budget Committee Chairman Paul Ryan, have suggested that the government restructure a variety of federally funded programs for low-income families — including Medicaid and SNAP (formerly known as food stamps) — similar to the way the 1996 welfare law converted the Aid to Families with Dependent Children (AFDC) program to the Temporary Assistance for Needy Families (TANF) block grant.

We’ve taken a close look at how states have used their federal and state funds under TANF in a new paper.  Our findings provide a cautionary tale about the dangers of converting basic safety-net programs to block grants.

We found that:

• Spending on basic assistance now accounts for a relatively small share of federal and state TANF expenditures. At TANF’s onset, states used 70 percent of their combined TANF funds for basic assistance for poor families.  That figure fell to only about 29 percent in 2011.  Nine states spent less than 15 percent of their combined TANF funds on basic assistance in 2011.

• States initially shifted some resources from cash assistance to child care and work-related activities, but spending in these areas has remained generally flat for the last decade and has dropped somewhat in recent years.  States now spend only about a quarter of their TANF dollars on child care and work activities.
• States are using a significant and growing share of TANF funds to support other state services, including child welfare; they also have diverted substantial funds formerly used to assist poor families to other purposes. In some cases, states’ use of TANF funds for other services has enabled them to expand useful existing services.  In other cases, states have used the dollars to replace existing state funds, thereby freeing those state funds for purposes unrelated to providing a safety net or work opportunities for low-income families.

When the recession hit in late 2007, many states could not — for fiscal or political reasons — reclaim those dollars to address the substantial increases in need for cash assistance among the growing numbers of poor families; instead, facing budget shortfalls, many states cut already-low TANF benefit amounts further, shortened TANF time limits, or took other actions to shrink caseloads or keep them from rising much in the face of mounting need.

As policymakers consider TANF’s future — and how they might reform other safety-net programs — they should heed these lessons.  For states, block grants may look enticing because they offer flexibility.  But, it ultimately leaves them worse off over time.

The block grant structure isn’t a winning one for the federal government, either.  As we’ve seen under TANF, it can lead to less accountability, less federal direction and oversight, and state spending of federal funds in ways that Congress did not intend.

In an upcoming post, we’ll take a closer look at some of the state-by-state details behind the national numbers.

Click here to read the full paper and the related state fact sheets.

Pennsylvania ended cash assistance today for very poor residents who cannot work and don’t qualify for other assistance, joining many other states that have scaled back or eliminated their General Assistance programs even as the need has grown.

Roughly 60,000 childless adults (and the adult heads of some families) whom the state considers unemployable because of a disability or for certain other reasons — they are elderly, escaping domestic violence, or caring for a disabled family member, for example — got about $200 a month from the program.

These modest benefits helped many residents avoid or escape homelessness, get needed medical care, and otherwise meet basic daily needs.  You can hear some of their stories in this brief video, which a coalition of groups produced as part of an unsuccessful effort to save the program.

Nationally, the erosion in General Assistance programs has been proceeding for more than two decades, as our major report last fall detailed.   These cutbacks continued during and after the recent severe recession, despite high unemployment and the growing number of people who have run out of unemployment insurance without finding a job.

Almost every state that didn’t eliminate its General Assistance program provides lower benefits now than in 1998, after adjusting for inflation, as this chart from our 2011 report shows.  Benefits are worth less than one-quarter of the poverty line in most states.

By and large, the federal government has left it up to states to provide basic assistance to childless adults who need it.  States have never provided much support for this group, and the continued weakening of General Assistance programs means that more of the nation’s most vulnerable people are going to face severe hardship.