New research shows that the $8.7 billion Temporary Assistance for Needy Families (TANF) block grant is a failure, serving few poor families with children, providing an inadequate safety net and offering no poverty off-ramp for the impoverished, experts say.
TANF (CFDA 93.086), created by the 1996 welfare reform law, has been a monumental disappointment, according to experts at the Center on Budget and Policy Priorities (CBPP).
Although TANF is supposed to focus on work, in reality states invest few TANF funds in preparing parents for work or helping them obtain good jobs. State efforts related to work activities often focus on documenting and measuring participation in a limited set of activities — those that often are a mismatch for the skills employers need and the training and education that could help TANF families most.
CBPP recommended that HHS re-focus its funding efforts on the core welfare reform purposes.
A key argument for TANF’s block-grant design was that states needed greater flexibility over the use of the federal funds than the funding structure of Aid to Families with Dependent Children, TANF’s predecessor, provided. Under a block grant, proponents argued, states could shift the funds freed up when families left welfare for work to child care or other work supports, where need would increase. States also could invest more in work programs to reflect the increased emphasis on welfare being temporary and work-focused. This trio of basic assistance, child care, and work activities form the core areas of welfare reform spending. Yet, these core areas now account for only half of state and federal TANF spending. Moreover, the share of spending on core welfare reform activities varies widely across states; eight states spend less than 25% of their TANF funds on these three core activities, CBPP said.
States instead are using their TANF funds for a range of purposes that may be permissible under the broadly drafted law but that are not furthering work or opportunity for poor families, CBPP said. Congress should require states to use more of the funding for core welfare reform purposes, and it should add a minimum floor, such as 50 percent, for spending on these core purposes. Also, Congress should require states that fail to meet performance measures — such as new access or outcome measures or the work participation rate — to increase investments in the core purposes, CBPP said. Rather than taking funds away from states when they fail to invest successfully in families, Congress should limit state flexibility on use of the funds, CBPP said.