Congressional Research Service Issues In Focus White Paper on Temporary Assistance for Needy Families Block Grant
Here are excerpts:
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The Temporary Assistance for Needy Families (TANF)
Introduction
The Temporary Assistance for Needy Families (TANF) block grant was created in the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA, P.L. 104-193). That law was the culmination of a series of legislative changes that altered the rules for providing benefits and services to needy families with children.
Brief History
Public cash assistance to needy families with children has its origin in the early 1900s state and locally financed "mother's pension" programs that aided single mothers (often widows) so that children could be raised in their own homes rather than institutionalized. The Social Security Act of 1935 provided federal funding for these programs with the explicit goal to aid mothers so they would not have to work and could stay home to raise their children.
Post-1935 changes altered the context in which programs for needy families with children operated. In 1939, survivors' benefits were added to
The TANF Block Grant
PRWORA and the creation of TANF altered the federal rules that applied to states for their cash assistance programs. It also ended dedicated funding for cash assistance to needy families. Federal funding for such assistance was folded into a broad-purpose block grant. The TANF block grant's overall purpose is to "increase the flexibility of states" to meet four statutory goals: (1) provide assistance to needy families so that children may remain in their homes; (2) end the dependence of needy parents on government benefits through work, job preparation, and marriage; (3) reduce out-of-wedlock pregnancies; and (4) promote the formation and maintenance of two-parent families.
Federal Grants and State Funds
TANF provides grants to the 50 states, the
The TANF block grant has not been increased since the enactment of the 1996 welfare law. There has been no adjustment for inflation or population change. From 1997 to 2022, the basic TANF block grant has lost 45% of its value to inflation. During TANF's history, states have at times received TANF funds in addition to the basic block grant. Since 2011, some states have routinely tapped a "contingency fund," that was originally intended to provide extra funding during economic recessions.
In addition to federal funding, states are required to contribute a minimum amount of nonfederal funds on the TANF-related populations and TANF-related activities. This amount is also based on historical expenditures in preTANF programs and is known as the "maintenance of effort" (MOE) requirement. Some states spend more than the minimum.
Use of TANF Funds
States may use federal block grant and MOE funds in any manner that is "reasonably calculated" to achieve TANF's statutory purpose and goals. In FY2021, a total of
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Figure 1. Uses of Federal TANF and State MOE Funds, by Category, FY2021 ($ in billions)
Source: CRS, based on data from the
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State TANF Cash Assistance Programs
Federal law requires that a family aided by TANF cash assistance have a dependent child, and limits to five years federally funded aid to families with an adult recipient. States set most TANF rules that apply to recipient families.
States determine the TANF benefit amounts. In
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Figure 2. Maximum Monthly TANF Cash Assistance Benefit by State,
Source: CRS, based on data from the
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In
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Figure 3. Number of Families Receiving Cash Assistance, July 1959-September 2022
Source: CRS, based on data from the
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Much of the post-1994 decline in the cash assistance caseload resulted from a reduction in the share of eligible families receiving benefits, rather than a reduction in the number of families meeting states' definitions of being a needy family. In 1994, an estimated 79% of individuals eligible for cash assistance actually received benefits; in 2018, an estimated 26% of persons in families that met states' eligibility requirements actually received benefits.
Work Requirements
Current TANF rules for engagement of assistance recipients in work are in the context of meeting the minimum work participation rate (WPR). The minimum WPR is a performance standard for the state; it does not apply directly to individual recipients. States that do not meet the minimum WPR are at risk of a reduction in their federal TANF funds. To meet the current TANF work participation standard, a state must have 50% of "all families" and 90% of families with two parents either working or engaged in activities. A state may lower these statutory percentages by reducing its caseload from FY2005 levels. Work in an unsubsidized job and participation in job preparation activities count toward meeting the standard. There are rules for the minimum hours per week of participation required for a family to be counted toward meeting the state's minimum WPR.
In FY2021, all jurisdictions except 3 (
Issues
Most TANF policies date back to PRWORA and 1996. Generally,
* Both the overall level of funding and its distribution among the states date back to spending in pre-TANF programs in the early-to-mid 1990s.
* Proposals have been made in the past to target a specified percentage of funding to certain activities, such as providing assistance and activities related to employment. Additionally, proposals have been made to require all TANF spending to be for families with income no greater than 200% of the federal poverty level.
* The almost continuous decline in the number of families receiving assistance since the mid-1990s, along with a decline in the percentage of eligible families who receive assistance, has raised questions about whether it is meeting the needs of low-income families.
* For those receiving assistance, there has been interest in altering state incentives to engage additional recipients in work activities.
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The white paper is posted at: https://crsreports.congress.gov/product/pdf/IF/IF10036
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