Senior Policy Analyst
President Trump’s budget would cut the Temporary Assistance for Needy Families (TANF) block grant and Contingency Fund — which provide funds to states for short-term income assistance, work programs, and other crucial supports for poor families with children — by $22 billion over ten years. Such cuts conflict sharply with the purported goals, as stated in the budget, of reducing poverty and providing work opportunities to poor families.
For 2018, the budget would cut the TANF block grant by 10 percent, from $16.5 billion to $14.9 billion, and eliminate the Contingency Fund, which provides extra help to states in hard economic times — bringing the total 2018 cut to $2.2 billion.
TANF has already lost more than a third of its inflation-adjusted value since 1996, meaning the President’s budget would exacerbate the harmful trends that are already reducing TANF’s ability to address economic hardship and boost opportunity. The basic TANF block grant has been frozen at $16.5 billion a year since its inception, with no adjustment for inflation. Now, just 23 of every 100 poor families with children receive cash benefits through TANF, down from 68 of every 100 poor families in 1996 under the old Aid to Families with Dependent Children program, which TANF replaced. TANF would reach even fewer needy families under the President’s budget, putting families and children at risk of much greater hardship.
The President claims that his TANF cut mirrors his decision to eliminate the Social Services Block Grant (SSBG), another flexible funding source that helps states meet the specialized needs of their most vulnerable populations. The SSBG is a $1.7 billion-a-year grant whose value also has eroded over time. It has lost 73 percent of its value since 1982, the first year of its implementation, due to inflation, funding freezes, budget cuts, and sequestration.
Because states have used their flexibility to transfer a small part of their TANF dollars into SSBG services and programs, the President claims that cutting a similar portion in TANF will let states “choose to focus a greater share” on work opportunity programs. That defies logic: less funding will mean fewer opportunities for low-income people, not more, by putting more pressure on state budgets that have to serve all vulnerable communities. When states faced budget shortfalls during the recession, a number of them diverted funding from cash assistance and other core services like employment assistance and child care to backfill state budget holes — even though the need for assistance increased.
The President claims that his budget lays a foundation for “American Greatness,” but cutting programs for low-income families with children, like TANF, misses the mark. Poverty conditions can harm children’s cognitive development, but even small income boosts can have a positive effect on the long-term outcomes of very poor children. TANF block grant cuts mean that fewer children will receive those critical resources that could help them thrive now and in the future. Rather than cutting programs for the neediest Americans to help pay for tax breaks for the wealthy, lawmakers should reinvest in TANF to ensure that low-income families have access to a minimum level of support to meet their basic needs.