November 30, 2001

COMMENTS ON TANF REAUTHORIZATION
Submitted by the Center on Budget and Policy Priorities
November 30, 2001

INTRODUCTION

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TANF reauthorization is an opportunity to evaluate the strengths and weaknesses of the current federal TANF-related provisions and make changes based on the knowledge and experience gained over the past five years. At the broadest level, we have learned several things:

• A combination of a strong economy, strengthened supports for working families, and an increased emphasis on work within state TANF programs led to large numbers of single parents entering the workforce. Unfortunately, the relative importance of these factors — as well as the interactive effects among them — are difficult to disentangle.

• Caseload decline and increased employment rates among single parents outstripped the reduction in the extent and depth of poverty. While fewer families received TANF benefits and more families had earnings, the reduction in poverty was modest over the last five years due in large measure to the types of jobs many new workers were able to secure as well as the large reductions in the amount of cash assistance and food stamp benefits families received. Despite an overall increase in earnings and employment rates among single parents, some families are now poorer while some made only modest income gains.

• Because of significant caseload decline, states have had substantial resources to redirect from cash assistance to work programs and supports for low-income working families. These resources have been used in many ways, but a large portion have been directed toward increasing the availability of child care subsidies and other supports for working families. If resources dwindle over time in real terms and if states must increase funding for basic assistance due to the recession, states will not be able to maintain these important initiatives. Similarly, states with very low grants relative to their needy populations cannot invest in the same kinds of supports and programs as states with substantially higher TANF grants relative to their low-income population.

• The impacts of time limits vary substantially depending on extension and exemption policies. While families in some states — those that implemented time limits prior to 1996 (through the waiver process) and those that adopted time limits shorter than 60 months — have begun to reach the end of their time-limited eligibility, much is still unknown about the impact of time limit policies generally and the likely impact of the federal 60-month time limit. States with shorter time limits adopted a variety of extension and exemption policies. In many cases those policies meant that families that complied with requirements but could not find jobs remained eligible for assistance. In those states, time limits often affected families who were combining work and welfare — families whose supplemental benefits were ended when they reached the time limit. The impact of the federal 60-month time limit (the only time limit in 30 states) cannot be easily predicted based on the early experiences with state time limits.

• Many families in which the adult has barriers to employment were unable to secure stable employment. Research shows that barriers to employment are more common among TANF recipients than among persons in the general population. In many cases, such families have been subject to sanctions — often, full-family sanctions that have resulted in a loss of all cash assistance benefits. Some families that have not been sanctioned still may be receiving TANF benefits but often are not receiving the services they need to help them overcome barriers to employment and move forward in the labor market.

• Restrictions on benefits to immigrants have caused hardship. Recent research by George Borjas finds that food insecurity rose significantly among immigrant-headed households in the states that did the least to ameliorate the federal restrictions, while declining among immigrant-headed households in those states that provided more generous state-funded safety nets for immigrants. Over the past five years, the proportion of immigrants who lack health insurance has also increased. These early data should serve as warning signals of the hardship that is likely to be caused as the immigrant restrictions — already severe in the Food Stamp Program — begin to affect increasing numbers of immigrants who would otherwise be eligible for TANF, Medicaid, and SSI.

• Teen pregnancy rates have fallen, though the relationship of this trend to TANF policy is unclear. It is likely that a variety of factors other than TANF-related policies played a major role in this encouraging trend.

• Child support collections have risen, increasing the number of children supported financially by both parents. In too many cases, however, child support paid by noncustodial parents is used to offset welfare costs rather than to improve the financial well-being of the children on whose behalf the support was paid. Unfortunately, too little progress has been made in other areas such as providing assistance to two-parent families on the same basis as single-parent families and assisting low-income non-custodial parents so they can provide financial and parental support (when appropriate) to their children.

Based on what we have learned, the TANF reauthorization process offers an opportunity to build on the successes of the past five years and to address some of the serious problems that have arisen. The remainder of our comments focus on how to meet these two broad objectives by providing specific recommendations in the following areas:

• Focusing on poverty reduction;
• TANF and child care funding;
• Assisting families with barriers to employment;
• Helping families succeed at work;
• Restoring benefits to legal immigrants;
• Family relationships and support;
• Making the housing connection; and
• Research and data collection.

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