Mississippi Should Use TANF to Improve Financial Stability for Families Experiencing Poverty

Update, October 13: We’ve updated this post.

Cash assistance provided through Temporary Assistance for Needy Families (TANF) helps families with no or very low income meet some of their basic needs, but due to TANF's design flaws many states' programs provide low benefit levels and reach few families. Mississippi is one of these states, and it’s also dealing with a TANF controversy first unearthed in a May 2020 state auditor’s report that “identified extensive fraudulent activity conducted by the programs designed to serve its most vulnerable citizens.” Mississippi (and other states) should use this moment of increased attention to reassess how TANF serves children and families with low incomes — and take necessary steps to strengthen its TANF program by providing more cash to more families.

The federal TANF rules provide states with significant flexibility and little federal oversight, which gives states opportunities to divert funds away from the low-income families TANF is intended to help and instead toward other uses. That includes fraudulent uses, as the auditor’s report suggests was the case in Mississippi, but it also includes legal but unwise choices. States make important policy choices that impact the lives of families who have insufficient resources to meet their basic needs; some decisions make TANF programs more responsive to these families’ needs, and some far less so.

The importance of strong economic assistance policies became clear again recently when the latest annual Census data (for 2021) showed that an increase in governmental support to families helped drive child poverty to a record low. This was due in significant part to the additional cash benefits provided to families in the second half of 2021, through the expanded Child Tax Credit and economic impact payments. Driving down poverty has long-term positive impacts: the evidence is clear that when families have more income, children have improved outcomes in areas such as academic performance and future employment.

Even relatively small amounts of income make a difference. 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, research finds.

Providing cash to families also reinforces their dignity by ensuring them the autonomy to make decisions on how best to address their family’s needs. Cash assistance is particularly vital to families facing crisis situations such as domestic violence or job loss. Further, a responsive cash assistance program that meets families’ needs can begin to rectify racial and health- and disability-related inequities in housing, education, and employment that make people of color, disabled people, and others likelier to qualify for assistance in the first place.

In Mississippi and elsewhere, the amount of TANF cash assistance provided to families isn’t enough to meet the basic needs of families experiencing financial crises. Benefits are at or below 60 percent of the poverty line in every state and below 14percent in Mississippi. In Mississippi a single-parent family of three with no other income receives just $260 a month in TANF cash assistance.

Low benefit levels have a long and racist history, particularly in the South, where policymakers in the 20th century believed that low assistance levels were necessary to ensure that cash assistance wouldn’t interfere with the ability to coerce Black people into the agricultural sector. State control over the amount of cash assistance provided to families ensured benefits were either unavailable entirely during planting and harvest seasons, or the amount provided didn’t exceed what program participants could make doing agricultural work — a sector where many Black people worked at the time due to occupational segregation.

Cash assistance policies in the intervening years have had similarly racist intents or effects. The result is that states with larger shares of Black residents tend to spend smaller shares of their TANF funds on basic assistance. A majority (52 percent) of Black children live in a state with benefits at or below 20 percent of the poverty line, compared to 41 percent of Latinx children and 37 percent of white children. According to the most recent Census data available, the share of people in Mississippi who are Black or African American alone (this is Census terminology) is 38 percent, the highest of any state. Southern states have consistently had the lowest TANF benefit amounts compared to the Midwest, West, and Northeast throughout the history of cash assistance.

TANF can and should do more to support families experiencing poverty, across the country and especially in Mississippi. The state implemented a $90 benefit increase last year, resulting in $260 per month for a family of three with no other income — a strong foundation to build on, even if Mississippi remains one of the lowest-benefit states. At least 20 states and D.C. have raised TANF benefits levels since July 2020. States should use the flexibility the program gives them to improve the lives of low-income families. Mississippi, for example, is also one of the states with the highest share of cost-burdened renters, and the state’s policymakers could choose to reduce this burden for families receiving TANF.

A supportive TANF program should be redesigned using the “Black Women Best” framework, which “argues that if Black women — who, since our nation’s founding, have been among the most excluded and exploited by the rules that structure our society — can one day thrive in the economy, then it must finally be working for everyone.” Centering Black women in TANF policy would help undo racist policies and benefit families of all races and ethnicities who need cash assistance. All states and especially Mississippi should:

• Increase benefits pegged to a percentage of the federal poverty line or adjusted annually using a cost-of-living adjustment. Higher benefits for all families in poverty, especially in states with larger Black populations, would have a meaningful impact on children’s futures and families’ ability to access basic needs such as food, shelter, and personal care products like diapers. Increasing benefits regularly ensures that TANF benefits keep pace with increased costs.
• Provide TANF cash assistance to more families who need help. For every 100 families living in poverty in Mississippi, only 4 receive TANF cash assistance. Historically this number has been as high as 71. Nationally only 21 out of 100 such families receive TANF, down from 68 in the first year of the program and from as high as 82 for its predecessor, Aid to Families with Dependent Children (AFDC). If TANF had the same reach as AFDC, nearly 26,736 more families in Mississippi would be receiving cash assistance today.