Killing Expired Program Won’t Save Money

November 9, 2010 at 4:45 pm

Yesterday, the Republican Study Committee issued a press release announcing one of its first ideas for tackling spending:  eliminating the TANF Emergency Fund, which the RSC says would save $25 billion over the next decade “by restoring welfare reform.”  There are so many problems with this proposal that it’s hard to know where to begin.   Here are the facts:

  • The TANF Emergency Fund no longer exists.  It expired on September 30.  You can’t achieve savings by ending a program that has already ended.
  • Nobody has ever proposed spending $25 billion on the fund.  Earlier this year the House passed a bill to extend it for one year, at a cost of $2.5 billion — one-tenth of the savings that the RSC claims.
  • The TANF Emergency Fund is welfare reform.  In fact, the fund represents welfare reform at its best:  it has enabled states to expand work-focused programs within TANF despite high unemployment and a weak economy.  Using the fund, states placed about 250,000 low-income parents and youth in subsidized jobs, mostly in the private sector.

As we’ve explained before, the RSC’s claim that the TANF Emergency Fund “incentivizes states to increase their welfare caseloads” is simply wrong.  States didn’t have to increase their caseloads to qualify for money from the fund.  In fact, some states whose caseloads had sharply declined despite the recession used money from the fund to help create subsidized jobs or provide one-time assistance to families in crisis (such as help paying a back rent or utility bill for a family facing eviction).

In addition, people receiving TANF assistance funded through the Emergency Fund had to meet the same stringent work requirements imposed on other TANF recipients. They had 12 weeks to find a job — an extremely difficult task in today’s labor market — after which they had to meet their work requirement through other work activities, such as unpaid work. A limited number of recipients were permitted to pursue short-term education and training.

The TANF Emergency Fund reduced unemployment in communities across the nation that were hard hit by the recession, and it brought businesses, non-profits, and government agencies together to provide jobs for people who were eager to work to support their families.  When it ended on September 30th, tens of thousands of people lost their jobs — and more will lose their jobs by the end of the year as states scale back or close down their subsidized jobs programs.  That, of course, is the exact opposite of what the economy needs right now.

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More About LaDonna Pavetti

LaDonna Pavetti

Dr. LaDonna Pavetti is the Vice President for Family Income Support Division at the Center on Budget and Policy Priorities.

Full bio | Blog Archive | Research archive at CBPP.org

2 Comments Add Yours ↓

Comments are listed in reverse chronological order.

  1. 1

    Will you issue a retraction given that this is entirely false?

    Please visit the Health and Human services government site, where they clearly explain the program.

    You can read their PDF explaining it here, showing clearly that 2.5 billion per year is scheduled until 2019 — Making 25 billion dollars.

    http://www.hhs.gov/recovery/reports/plans/tanf_emergencyfund.pdf

    The part that ‘ended’ was an extra 5 billion as part of the stimulus package. The 25 billion is still being spent…

    You should be ashamed of yourself.

    • 2

      The statement we issued on our blog is correct. The document that you point to provides exactly the same set of facts that we do. We think that you are reading the chart incorrectly. The first column, titled “Program Level,” gives the total funds that were allocated for the TANF Emergency Fund, $5 billion. The second column, “FY 2009,” gives the amount allocated for FY 2009, $2.5 billion. The last column, “FY2010-FY2019,” provides the total allocated for that period, which is $2.5 billion. It is not $2.5 billion per year, just $2.5 billion which that was available in FY 2010. If you add the columns together, $2.5 billion +$2.5 billion, you get the total of $5 billion. The fund ended on September 30th and all of the $5 billion was spent before that. The TANF Emergency Fund no longer exists and no money is currently being spent for this purpose. The Fund did not exist prior to ARRA — it was created as an emergency measure to help low-income families with children weather the recession and that is exactly what it did, by providing jobs for 250,000 unemployed parents and youth, by providing one-time non-recurrent payments to help families deal with the sudden loss of income that many families experienced, and to provide basic assistance to families who had no other resources to draw upon. You can check directly with any state or with HHS if you would like further confirmation of the facts.



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