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Michigan’s Mis-Timed TANF Cut

August 31, 2011 at 12:22 PM
Liz Schott

A report from the Port Huron Times Herald this week noted that, to help reduce the state’s budget shortfall, Michigan Gov. Rick Snyder is expected to sign legislation to reduce the time that individuals can receive Temporary Assistance for Needy Families (TANF), or welfare, assistance.  The new 48-month limit is expected to cause more than 11,000 people to lose benefits at the October 1 start of the fiscal year.

Meanwhile, Michigan has enacted large tax cuts that will cost more than $1 billion in 2012 alone. Michigan is among 12 other states with budget shortfalls to enact tax cuts, most of them benefitting corporations and high-income individuals. Thus, Michigan is cutting programs for the poor, as a prolonged downturn has significantly hurt struggling families, while giving tax breaks to the wealthy.

Snyder’s expected signature on TANF cuts comes just as my colleague, Donna Pavetti, has explored TANF’s record in providing assistance to needy families all across America a full 15 years after it was created as part of the 1996 welfare reform law.

In a four-part series on our blog, Pavetti noted that while the poverty rate initially declined when the economy was booming and unemployment was extremely low, it started increasing in 2000 and now exceeds its 1996 level. At the same time, the national TANF caseload has declined by 60 percent.

These opposing trends — TANF caseloads going down while poverty is going up — mean that a much smaller share of poor families are receiving the critical assistance that they need as the economy continues to struggle.

In light of these daunting statistics, it is even more unfortunate that states across the country are continuing to make some of the harshest cuts in history to this vital safety net for America’s poorest families.

While budget shortfalls in states must be addressed, budgets should not be balanced on the backs of the most vulnerable.