TANF Provided a Weak Safety Net During and After Recession
Temporary Assistance for Needy Families (TANF), which provides basic assistance to families with little or no income, responded only modestly to the severe recession that began in December 2007, exposing its inadequacy as a safety net, as we explain in a new paper.
We found that:
- Nationally, the TANF caseload rose only modestly during the downturn and began to decline while need remained high. The caseload did not begin to grow until seven months after the recession started, and it rose only 16 percent before peaking in December 2010 (see chart). In contrast, the number of unemployed individuals rose 88 percent over this period. Over the course of 2011, the caseload fell 5 percentage points from that peak, while the unemployment rate remained at or above 8.5 percent throughout the year.
- Changes in states’ caseloads varied widely. Forty-five states’ caseloads grew between December 2007 and December 2009 but by widely differing amounts, ranging from 2 to 48 percent; in more than half of these states, the increase was 14 percent or less. After the recovery began, caseloads continued to grow in some states but fell sharply in others. Between December 2009 and December 2011, 21 states’ caseloads rose from 2 to 56 percent; in 30 states, caseloads fell from 1 to 56 percent. From December 2007 to December 2011, caseload changes ranged from Oregon’s 81 percent increase to Arizona’s 54 percent decline.
- Variations in unemployment do not fully explain the variation in state caseload changes. There is no overlap between the ten states with the largest percentage increases in the number of unemployed workers and the ten states with the largest percentage increases in TANF caseloads. The three states with the largest TANF caseload increases — Oregon, Colorado, and Illinois — ranked 28, 14, and 30, respectively, in the percentage increase in the number of unemployed. Meanwhile, the three states with the largest TANF caseload decreases — Arizona, Indiana, and Rhode Island — ranked 5, 16, and 23, respectively, in the increase in unemployed workers.
- In most states, TANF provides a weaker safety net now than it did before the recession. The number of families with children served by TANF for every 100 such families living in poverty fell in 35 states between 2006-2007 and 2010-2011, while it rose in just five states.
- State actions had a significant impact on TANF caseloads. In response to budget pressures, several states cut TANF benefit levels, shortened or tightened time limits, or made other cutbacks during the recession, contributing to substantial caseload declines.
Our paper on which this post is based is the second in a series on changes in TANF caseloads since the start of the economic downturn. Click here to read the paper in full, here to read the state-by-state fact sheets, and here to read the first paper in the series.