The Center's work on 'Welfare Reform / TANF' Issues

Arizona Experience Shows Risks of Further Expanding State Role in Helping Poor

March 11, 2015 at 2:37 pm

Update, March 11:  We’ve made corrections to this post.

To save $9 million a year beginning in July 2016, Arizona policymakers have cut families’ time limit for cash assistance from Temporary Assistance for Needy Families (TANF) to 12 months in a lifetime, the shortest in the country.  Shortening time limits hurts the very families that need this assistance the most, research shows — those with limited work experience, low levels of education, and other barriers to employment.

The move also exemplifies the risk of further expanding states’ already considerable responsibility for assisting the poor, such as by block-granting programs like Medicaid and SNAP (food stamps) or allowing states to experiment with alternative strategies for providing assistance to the poor, as House Ways and Means Committee Chairman Paul Ryan proposed in his Expanding Opportunity in America plan last summer.

The cut, part of a budget deal that lawmakers passed last weekend and Governor Doug Ducey supports, continues Arizona’s pattern of plugging budget holes with funds previously used to support the poorest families.  In 2009, Arizona cut the monthly TANF benefit for a family of three from $347 to $278 and in 2010 it shortened the time limit from 60 to 36 months.  The next year, it shortened the time limit to 24 months.  The state also applied these time-limit changes to grandparents raising their grandchildren — the only state that has done so.

These changes have led to a dramatic decline in the number of families with cash assistance, from 33,000 in 2010 to just 12,000 families (including 20,000 children) in January 2015.

These cuts have occurred even as the number of poor Arizona families has risen, making Arizona’s cash safety net one of the country’s weakest.  For every 100 Arizona families in poverty, just nine receive cash benefits from TANF — down from 55 families before the 1996 welfare law, which gave states more flexibility for how to use funds previously used primarily to provide cash assistance to families.  (See chart.)

A State-by-State Look at TANF

November 19, 2014 at 4:23 pm

This interactive map provides a wealth of information on state Temporary Assistance for Needy Families (TANF) programs, which — as CBPP analyses have documented — have weakened significantly as a safety net since TANF’s creation in the 1996 welfare law.

Not only does TANF reach many fewer needy families than it used to, but TANF benefits have lost a fifth of their value since 1996 in most states and leave families far below the poverty line, making it extremely difficult for them to meet basic needs.

The map gives state-specific data on these issues (click on one of the three gray boxes at the top to choose which version of the map to display) and links to fact sheets with more details on each state’s caseload and spending.

State Welfare Benefits Continue Shrinking

October 31, 2014 at 2:00 pm

Temporary Assistance for Needy Families (TANF) cash benefits for the nation’s poorest families with children fell again in purchasing power in 2014 and are now at least 20 percent below their inflation-adjusted 1996 levels in 38 states, our new report explains.  As the country moves past the economic downturn and state revenues recover, states should halt the erosion of TANF benefits and begin restoring the purchasing power lost since TANF’s creation in 1996.

While eight states raised benefits between July 2013 (the start of fiscal year 2014 in most states) and July 2014, the remaining states didn’t, allowing inflation to continue to erode the benefits’ value.  As of July 2014:

  • The purchasing power of benefits for 99 percent of recipients nationally was below 1996 levels, after adjusting for inflation.
  • In every state, TANF benefits for a family of three with no other cash income were below 50 percent of the poverty line.  Most states’ benefits were below 30 percent of the poverty line.  (See interactive map below.)
  • In every state, benefits for a family of three with no other cash income were below the Fair Market Rent (the federal government’s estimate of the rent and utility costs of modest housing) for a two-bedroom apartment.  In 29 states, they covered less than half of the Fair Market Rent.
  • In every state except Alaska, the combination of SNAP (formerly food stamps) and TANF benefits for families receiving both falls below 75 percent of the poverty line.

Of the eight states that raised benefits in the past year (California, Connecticut, Maryland, Ohio, South Carolina, South Dakota, Texas, and Wyoming), all but California did so through annual or periodic adjustments that limit erosion due to inflation.  Other states should consider adopting this approach — as well as benefit increases to make up at least some of the lost ground since 1996.

TANF recipients have a limited time on benefits, and most must participate in work or work-preparation activities.  During this time-limited, work-focused window, TANF benefits need to better enable families to meet basic needs so they can focus on finding work and/or increasing their skills in order to leave welfare.

Data Show TANF Didn’t Respond Adequately to Need During Recession, Contrary to New Study’s Claims

September 10, 2014 at 2:56 pm

A recent study from researchers at the Brookings Institution and the University of Nevada concludes that the Temporary Assistance for Needy Families (TANF) program responded to increased need during the Great Recession in the majority of states as a good safety net program would.  This conclusion, however, is based on seriously flawed analysis, as we explain in a new paper.

A number of assertions made by the authors — Ron Haskins and Kimberly Howard of the Brookings Institution and Vicky Albert of the University of Nevada — wilt under scrutiny.  Consider, for example, one such claim: that TANF responded to a greater degree in the 2000 and 2007 recessions than the Aid to Families with Dependent Children program (AFDC), TANF’s predecessor, did in previous recessions.  But this claim rests on inappropriate use of data.

The authors arrive at this conclusion by averaging the percentage increase (or decrease) in the AFDC “caseload” (families who received benefits) during the 1980, 1981, and 1990 recessions and comparing that to the average percentage change in the TANF caseload during the 2000 and 2007 recessions.  This metric produces highly skewed results, however.

The AFDC caseload at the start of all three of the early recessions was much larger than the TANF caseload at the start of the 2000 and 2007 recessions, making a percentage-change comparison highly misleading.  From the beginning to the end of the 1990 recession, the number of unemployed individuals rose by 1.7 million, while the AFDC caseload increased by 350,000 families.  From the beginning to the end of the 2007 recession, the number of unemployed individuals rose by 7 million, while the TANF caseload increased by just 124,000 families.

Put another way, during the 1990 recession, the AFDC caseload increased by 21 families for every 100 additional unemployed individuals, while the comparable figure for the TANF caseload during the 2007 recession was an increase of only two families for every additional 100 unemployed individuals (see chart).

We’ve monitored TANF carefully since the start of the recession and have a far less sanguine assessment of the program’s responsiveness to the recent recession than Haskins, Howard, and Albert do.  We conclude that the program fell well short of how we would expect such a basic safety net program to respond during tough economic times.

In spite of its shortcomings, TANF is often held up as a model for altering other safety net programs.  The Haskins, Howard, and Albert study is likely to be cited as evidence that TANF performs fine in recessions, so other programs (such as SNAP) can be changed to a similar block-grant structure.  But that would be a highly inappropriate conclusion based on flawed use of data.

Click here to read our full paper.

TANF at 18: A Weakened Role and Not a Model for Safety Net Reform

August 22, 2014 at 10:08 am

Eighteen years ago today, President Clinton signed into law the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 — commonly known as “welfare reform.”  A key component was its creation of the Temporary Assistance for Needy Families (TANF) block grant to replace Aid to Families with Dependent Children (AFDC).

Since then, TANF has played a shrinking role as a safety net for poor families (see chart), serving a small share of poor families and lifting many fewer families out of “deep poverty” (with incomes below half the poverty line) than AFDC did, as we explain and illustrate in our revised chart book.

A close look at TANF’s track record makes it clear that the program needs retooling to ensure that a strong safety net and sufficient employment assistance is available when people need them most.

Yet some policymakers claim that welfare reform was such an extraordinary success that we should use it as a model for reforming other safety net programs.  But the facts don’t make that case.  For example, in TANF’s 18-year history, never-married mothers with a high school education or less made substantial gains in employment in only the first four years — largely due to the roaring economy of the late 1990s — and those gains have almost entirely eroded in the subsequent 14.  It is wishful thinking to assume that we could see the same employment gains we saw in TANF’s early years in today’s sluggish labor market.

The safety net (other than TANF) plays an extremely important role in reducing poverty and deep poverty in this country — a role that should be maintained.  The evidence from TANF suggests that applying TANF-like reforms to other safety net programs would likely cause more families to join the ranks of the deeply poor and cause some who are already deeply poor to become even poorer.

TANF reform is long overdue.  We should fix its problems before embarking on reforms that will repeat its failures.

Click here for the full chart book.