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TANF at 20, Part 4: Addressing TANF’s Failures

As we approach the 20th anniversary of the Temporary Assistance for Needy Families (TANF) block grant on August 22, this blog series will outline key facts about the program. 

TANF’s combination of nearly unfettered state flexibility, fixed block grant funding, narrowly defined work requirements, and time limits provides a safety net to very few families in need, and it doesn’t prepare parents for today’s labor market.  Federal policymakers can address these problems through policy changes in three broad areas. 

1.  Provide an effective safety net to poor families with children.  An effective safety net helps families meet their basic needs when they can’t work and avoid a downward spiral when they face hard times.  To ensure that TANF provides an effective safety net for such families, policymakers should:

  • Require states to provide aid for some minimum share of poor or deeply poor families to help them meet basic needs.
  • Set minimum benchmarks for benefit levels — which are so low today that even families that receive TANF cash assistance have trouble meeting basic needs or remaining stably housed — and eligibility requirements.
  • Create and fund an emergency fund to help states with high unemployment respond to more need during recessions.

2.  Create effective work programs.  Most states do little to help prepare TANF recipients for work.  To ensure that TANF effectively connects parents to job opportunities that can help them escape poverty, policymakers should:

  • Replace TANF’s core work measure (the work participation rate), which assesses whether parents participate in a narrowly defined set of work activities, with one that assesses whether parents find a job and are on track to earn enough to provide for their families.
  • Align TANF work requirements with other employment and training programs by encouraging participants to improve their education and skills, rather than simply requiring them to find a job as quickly as possible.
  • Create a competitive grant program to encourage states to experiment with new approaches for helping parents with serious personal or family challenges succeed in the labor market.

3.  Provide adequate resources for safety net and work programs.  States by and large haven’t used their flexibility under TANF to create a strong safety net or run effective work programs.  To ensure that states devote sufficient resources to these areas, policymakers should:

  • Require all states to spend at least 60 percent of their state and federal TANF funds on the core welfare reform areas of basic assistance, child care, and work. 
  • Raise funding for basic assistance and work programs by adding an automatic inflation adjustment to the block grant — which has lost about a third of its value due to inflation — and by creating a basic assistance and work fund equaling 10 percent of the current block grant (about $1.6 billion per year), with an annual inflation adjustment. 

We should no longer accept a situation in which about 2 million children live in deep poverty — with incomes below half of the poverty line — largely due to TANF’s failure to help the neediest families.  TANF’s performance doesn’t offer much to celebrate on its 20th anniversary, but policymakers can change this course.