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TANF at 22: Cash Income Is Vital to Families Living on the Edge

Twenty-two years ago this week, on August 22, 1996, President Clinton signed a law creating the Temporary Assistance for Needy Families (TANF) block grant and radically restructuring cash assistance for families with children living in poverty. Our week-long blog series examines TANF’s role — and its performance — in helping parents work and in providing modest but crucial anti-poverty support. Today’s post looks at the importance of cash income for families struggling to afford basic goods.

For the millions of Americans struggling to afford the basics — such as food, medicine, and shelter — cash income is essential to averting extreme hardship and deprivation. Government economic security programs often don’t reach all families in need or provide adequate benefits. In particular, the reach of TANF, the nation’s core cash assistance program for families with children living in poverty, has significantly dwindled over its 22-year history.

Cash income enables people to afford the goods and services that help them survive and to live a decent life. For families living on the edge, cash is crucial to providing stability and preventing a downward spiral. They often have few or no assets to lean on in difficult times and need cash for a variety of basic needs: rent and utilities, personal care items such as toothpaste, laundry detergent, diapers, and gas or bus fare, among other things. Also, a family’s needs may change from one month to the next, and because TANF cash assistance provides direct cash rather than specific goods and services (such as health coverage or a housing voucher), it gives them flexibility to use the income in ways that best help their children. Further, having cash to cover the essentials can reduce poverty-related stress.

Families with children often turn to TANF cash assistance when a change in their circumstances places them in a particularly vulnerable situation, such as losing a job, giving birth, fleeing domestic violence, or experiencing a serious medical issue. Cash assistance is part of a broader set of economic security programs aimed at providing a basic level of protection to low-income people who are unable to work, between jobs, earning low wages, or living in crisis.  Moreover, studies have found that income support can help poor children succeed over the long term — that is, enable them to do better (and go further) in school, earn more as adults, and even live longer. Thus, TANF cash assistance can open doors of opportunity for the least well-off.

Unfortunately, TANF reaches far too few struggling families with children and provides very low benefits, as tomorrow’s post in this series will explain. Strengthening and expanding the reach of TANF is essential to providing modest protection to America’s most vulnerable.