Going, Going, Almost Gone

Time is running out for the highly successful subsidized jobs programs that states have created with the TANF Emergency Fund.

The House has voted twice to extend the fund, a 2009 Recovery Act program that will help place an estimated 240,000 low-income parents and youth in subsidized private- or public-sector jobs by its September 30 expiration. The costs of the House extensions were fully offset so they wouldn’t add a penny to the deficit. But in the Senate, an extension has been part of larger bills that have stalled due to conflicts over provisions unrelated to the fund. What happens if Congress fails to act before the fund expires?

• Tens of thousands of people will lose their jobs. The impact will be felt across the nation, in urban and rural areas alike, but will be especially great in the places with the largest programs and above-average unemployment rates. In Illinois, for example, about 20,000 participants could lose their jobs, which by itself could increase the unemployment rate from 10.4 to 10.7 percent. In Los Angeles, as many as 10,000 individuals could lose their jobs, potentially raising unemployment from 12.3 to 12.5 percent.
• Most state programs will largely or totally shut down. Most of the 37 states operating subsidized employment programs created them to respond to the recession, and all of these states agree that the programs are still needed. Yet many of the programs — including most of the largest ones — will have to close their doors on September 30 if Congress doesn’t extend the fund; others plan to greatly scale back operations (see map).

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To prepare, some programs have already stopped taking applications and making new job placements, and many more plan to do so in coming weeks. The negative impact of Congress’ inaction will be most evident in mid-September, when workers begin receiving their last paychecks.