Policy Brief: TANF Reaching Few Poor Families
April 5, 2017
The Temporary Assistance for Needy Families (TANF) block grant, created by the 1996 welfare law, provides a temporary safety net to few poor families — including those with no other means to meet basic needs — and its reach has shrunk considerably over time. In 2015, for every 100 families in poverty, only 23 received cash assistance from TANF — down from 68 families when TANF was first enacted. This “TANF-to-poverty ratio” (TPR) reached its lowest point in 2014 and remained there in 2015. (See Figure 1.)
TANF provides strong evidence that block granting exacerbates, rather than reduces, poverty.TANF provides strong evidence that block granting exacerbates, rather than reduces, poverty and should not be extended to other programs:
- TANF provides a temporary safety net to few poor families and its reach continues to shrink, both nationally and in nearly every state.
- Most state TANF programs did not expand in response to increased need during the Great Recession of 2007-09. In fact, a number of states cut or reduced access to their programs during and after the downturn for budgetary and ideological reasons.
- TANF does less to lift families out of deep poverty than its predecessor, Aid to Families with Dependent Children (AFDC), and has put poor children at risk of much greater hardship, with the potential for long-term negative consequences.
The federal government has a critical role in ensuring that low-income families have access to a minimum level of support to meet their basic needs. The TANF block grant handed that responsibility over to states, which — with no national standards to hold them accountable for providing assistance to families in need — acted in their own self-interest, not in the best interest of the most vulnerable members of society.
Weak Safety Net Getting Weaker
During TANF’s early years, when the economy was strong and employment among never-married mothers rose, TANF caseloads fell more than the number of poor families, causing the TPR to drop. More recently, the continued decline in the TPR reflects growth in the number of families in poverty without a parallel rise in the number of families receiving TANF. Nationwide, the number of families in poverty rose by 7 percent between 2006 and 2015, while the national TANF caseload fell by 21 percent (from 1.9 million families to 1.5 million).
The national TANF-to-poverty ratio misses the extreme — and growing — variation among the states. In 2014-15 the TPR ranged from a high of 65 in California to a low of 4 in Louisiana. The TPR fell in 45 states between 2006 and 2015 due to increases in the number of families living in poverty, the failure of state TANF programs to meet increased need during and after the recession, and state policy and administrative changes that made TANF less accessible.
An especially troubling trend is the growing number of states with TPRs of 10 or less. In 2006, only two states, Idaho and Wyoming, had such low ratios. The list grew during the recession and has continued growing in its aftermath. In 2015, 14 states — Arizona, Arkansas, Georgia, Idaho, Indiana, Kansas, Louisiana, Mississippi, North Carolina, North Dakota, Oklahoma, Texas, Utah, and Wyoming — had TPRs of 10 or less.
State Policy and Administrative Changes Drive Big Declines
In December 2015, 38 states’ caseloads were below their December 2006 levels — in the case of Indiana, 79 percent below. Although many families’ need for cash assistance increased during and after the recession, a number of states have made major TANF policy and administrative changes that made TANF less available and significantly reduced their TANF caseloads. Some states shortened or otherwise changed their time limits. Others made administrative changes that made it harder for families to qualify for benefits, such as more stringent applicant requirements. States made these changes for both budgetary and ideological reasons.
States experienced budgetary shortfalls as a direct result of the recession and, in some states, tax cuts that substantially reduced state revenues. During the recession, states’ TANF block grants did not expand when need increased — the annual TANF grant has been frozen since 1996 and has lost more than 30 percent of its value due to inflation — and states were unable to reclaim the TANF dollars they had diverted from helping poor families and used for other programs. TANF’s flexibility and lack of minimum federal standards allowed states to tap TANF’s resources to fill other state budget holes, for example in child welfare where caseloads were also rising.
These circumstances led a number of states to make significant program cuts that lessened TANF’s reach. For example, Arizona cut benefits, shortened time limits, and imposed other eligibility restrictions starting in 2009 to help address its budget problems. These changes account for the majority of the nearly three-quarters drop in Arizona’s TANF caseload between December 2006 and December 2015. The state’s TPR fell from 27 in 2005-06 to 7 in 2014-15.
Even after the budgetary issues and caseload pressures resulting from the recession subsided, several states made TANF programs less accessible for ideological reasons. Indiana, for example, made administrative and procedural changes, including instituting job search requirements for applicants and toughening sanctions penalties. Between December 2006 and December 2015, Indiana’s caseload dropped by 79 percent. Its TPR fell from 35 in 2006 to 7 in 2015.
TANF Lifts Far Fewer Children out of Deep Poverty Than AFDC
Decreased access to TANF benefits has left the poorest families without resources needed to meet their basic needs. AFDC played a significant role in reaching families, particularly those with children and those in deep poverty; TANF has failed to maintain that standard. TANF benefits are not sufficient to lift families out of poverty in any state, and TANF does far less than AFDC did to lift families out of deep poverty. While AFDC lifted more than 2 million children out of deep poverty in 1995, TANF lifted only 635,000 children out of deep poverty in 2010.
Two well-known poverty researchers, Greg J. Duncan and Katherine Magnuson, have shown that poverty among young children not only slows them in school but also shrinks their earnings as adults. Welfare-to-work programs and other anti-poverty experiments “suggest that income plays a causal role in boosting younger children’s achievement” in preschool and elementary school, they note. (TANF is often a critical source of income for the most vulnerable families with young children.)
Duncan and Magnuson also found that among families with incomes below $25,000, children whose families received a $3,000 annual income boost when the children were under age 6 earned 17 percent more as adults and worked 135 more hours per year after age 25 than otherwise-similar children whose families didn’t receive the income boost. This suggests that TANF policy changes that cut income, such as establishing harsher sanctions or shorter time limits or significantly reducing benefits, could harm young children now and into the future.
|State TANF-to-Poverty Ratios Over Time|
'05-06 to '14-15
 For more detail see Ife Floyd, LaDonna Pavetti, and Liz Schott, “TANF Reaching Few Poor Families,” CBPP, updated March 30, 2017, http://www.cbpp.org/research/family-income-support/tanf-reaching-few-poor-families. See also “State Fact Sheets: Trends in State TANF-to-Poverty Ratios,” CBPP, updated March 30, 2017, http://www.cbpp.org/research/state-fact-sheets-trends-in-state-tanf-to-poverty-ratios.
 To improve the reliability of the state-level poverty data, we created two-year averages of the poverty numbers; we also transformed the caseload data into two-year averages to calculate the TPRs. The years cited here are for the latter of the two years.
 CBPP analysis of the Current Population Survey with additional data from the Department of Health and Human Services TRIM model. This analysis uses the most recent data available.
 Greg J. Duncan and Katherine Magnuson, “The Long Reach of Early Childhood Poverty,” Pathways, Winter 2011, http://www.stanford.edu/group/scspi/_media/pdf/pathways/winter_2011/PathwaysWinter11_Duncan.pdf.