States Should Build on Momentum to Boost TANF Benefits

Fourteen states and the District of Columbia raised their Temporary Assistance for Needy Families (TANF) benefits between July 2018 and July 2019, our updated report shows. (See table.) That’s good news, because studies show that income matters: when Black, brown, and white families struggling to meet their basic needs get more income, their children have a better chance of growing up healthy and with an opportunity to thrive. TANF, the main cash assistance program for families living in poverty, can play a key role in ensuring that they have enough income for food, rent, clothing, and other necessities.

Yet states need to do much more for TANF to fulfill its core purpose of providing cash assistance to help families meet basic needs. TANF benefits are low and have lost considerable value since the President and Congress created the program in 1996. This disproportionately hurts Black children, who are likelier than white children to live in the states with the lowest benefits. Consider:

• TANF benefits leave families below half of the poverty line in every state except New Hampshire. In 18 states, benefits are at or below 20 percent of the poverty line — that is, $356 a month or less for a family of three. Over half (55 percent) of the country’s Black children live in these 18 states, compared to 40 percent of white children. Many of these states had some of the lowest benefits under TANF’s predecessor, Aid to Families with Dependent Children, and have made little progress since then.
• Benefits have shrunk since 1996 by 20 percent or more in 33 states in inflation-adjusted terms. Fourteen states had the same nominal benefits in July of 2019 as in 1996, so their benefits have fallen by 39 percent after inflation.
• Although TANF benefit levels overall have risen slightly, housing costs in most areas are also rising, substantially in some areas. In every state, the monthly TANF benefit for a family of three is well below the Fair Market Rent — the Department of Housing and Urban Development’s estimated cost of a modest two-bedroom apartment and utilities. It’s less than half of the estimated Fair Market Rent in 30 states and Washington, D.C., compared with only eight states in 1996. TANF benefits cover an especially small share of housing costs in states where Black children are likelier to live. Some 46 percent of Black children live in states where benefits cover less than one-third of the Fair Market Rent, compared to 27 percent of white children.

States should do more to support families. In particular, states with extremely low benefits should boost them significantly, which (among other things) would help ensure that Black children aren’t left behind their white counterparts.

With many states’ TANF caseloads reaching their lowest levels ever, states should start by reinvesting the federal and state savings in basic assistance. As part of this reinvestment, states should at a minimum restore the full value of benefits lost since 1996 and reverse any cuts that states made during the Great Recession, even if that requires incremental increases over several years. Then states should establish mechanisms to prevent benefits from eroding in the future. Adjusting TANF benefits yearly in step with inflation can maintain families’ purchasing power and help them meet basic needs.