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TANF at 23: Cash Income Matters to Children’s Lives

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In replacing the Aid to Families with Dependent Children (AFDC) program with the Temporary Assistance for Needy Families (TANF) block grant 23 years ago, policymakers promised all families living in poverty a better economic future by providing temporary financial support, along with job preparation and work support. TANF has fallen far short in fulfilling this promise, particularly in states where Black families are likelier to live. It can, and must, do better. Our week-long blog series examines TANF’s role — and its performance — in providing modest but crucial anti-poverty support.

Families experiencing poverty need cash to afford the essentials so that parents can care for themselves and their children, helping to both meet short-term needs and provide children with lasting positive impacts. TANF cash assistance can help in both ways, but it reaches very few families in poverty.

Income supports like TANF during early childhood can improve the lives of children in poverty, clear evidence now shows. With adequate cash benefits, families can pay for essentials like diapers, personal care products, clothes, gas, utilities, and rent. Giving more income to families in poverty relieves the stress that results from a scarcity of resources, which research has linked to lasting consequences for children’s brain development and physical health. In addition, income support programs can improve children’s academic, health, and economic outcomes, the National Academies of Sciences’ report on reducing childhood poverty finds. Even small infusions of cash, like those from TANF, can make a difference.

TANF gives families more flexibility than other federal programs to use cash assistance to cover unmet basic needs that may change month to month. Refundable tax credits such as the Earned Income Tax Credit provide cash to families only once a year. Food assistance, housing vouchers, and medical assistance are critical to family well-being but don’t offer the same flexibility as cash.

But, in this key purpose of providing financial support for families in poverty, TANF is largely failing. Its reach has dramatically declined since its creation in 1996, and those who do manage to access the program often receive very low benefits.

The evidence that economic security programs can improve child development shows the importance of providing more income to families with children. TANF can and should do more to reach more families in poverty and give them more income. Federal policymakers should change the incentives to encourage states to expand their programs. States, meanwhile, don’t have to wait: given TANF’s flexibility, every state — especially those with the weakest TANF programs — should act now to improve how it serves families with the greatest needs.

Ife Floyd

Director of TANF Research and Analysis