5 Ways to Strengthen TANF

The Temporary Assistance for Needy Families (TANF) block grant provided a cash safety net to just 23 of every 100 poor families nationwide in 2014, and policymakers should now take steps to hold states, which administer TANF, accountable for helping more poor families in need. 

Using their flexibility under TANF’s block grant — and effectively encouraged by some of its other features — states have made policy, process, and budget decisions that substantially weakened TANF’s role as a safety net.  As the President and Congress consider reauthorizing TANF, they should strengthen it by taking the following five steps:

• Create an accountability measure that encourages states to serve more needy families.  TANF includes an accountability measure around work (the work participation rate or WPR), but there’s no accountability measure around providing assistance to families in need.  Policymakers should add such a measure, and they could require states that fail to meet a particular standard to spend additional resources on cash assistance or work activities or lose access to additional funds like the TANF Contingency Fund.                                                                            
• Eliminate the caseload reduction credit.  This credit rewards states for denying or ending aid to needy families without regard to whether the adult in the family is employed or employable.  Policymakers should encourage states to serve families in need because, currently, the WPR and caseload reduction credit give them an incentive not to.   
• Hold states accountable for employment outcomes, not participation in work activities.  The primary measure of TANF’s success should be whether families leave the program with a job and a path to earn enough to provide for their families, not simply whether they participate in a pre-defined set of activities that may or may not prepare them for work and help them move out of poverty.  The measure should capture employment and earnings outcomes and align TANF with other workforce programs under the recently enacted Workforce Innovation and Opportunity Act.  
• Require states to spend a specified share of federal and state resources on TANF’s core purposes.  TANF’s purposes are broad, giving states the flexibility to spread TANF funds throughout their budgets.  To direct more TANF resources to the program’s core purposes — cash assistance, employment assistance, and work supports — policymakers could require states to spend a specific share, e.g., 50 percent, of their state and federal TANF funds on these core purposes.
• Increase the TANF block grant to account for its decline in value, and index it to inflation in future years.  The TANF block grant is worth 30 percent less than when President Clinton and Congress created it in 1996.  Without additional funds, states won’t likely spend more to provide a cash safety net for more families.  Policymakers should restrict any additional funds to TANF’s core purposes. 
  

Read more about TANF’s declining safety net role and these recommendations in our updated paper.