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Killing Expired Program Won’t Save Money

November 9, 2010 at 4:45 PM
BY
LaDonna Pavetti Ph.D.

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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