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TANF Extension Leaves Many Poor States Out in the Cold

For the first time since creating the Temporary Assistance for Needy Families (TANF) program in 1996, Congress last week extended the program without including funding for TANF Supplemental Grants aimed at 17 mostly poor states (see table).  It did so even as the Census Bureau was releasing data showing very high levels of poverty and “deep poverty” (incomes below half the poverty line) in many of those 17 states.


Congress created the Supplemental Grants as part of the original welfare reform law to give poorer states and states with growing populations a better opportunity to achieve the goals of the 1996 welfare law.  The grants reduce the large disparity between poorer and wealthier states in TANF funding per poor child under the basic TANF block grant funding formula (see chart).

The Supplemental Grants ran out earlier this year after Congress cut funding in December.  The bill passed last week extends TANF for only three months, but the bill’s omission of Supplemental Grant funding makes it unlikely that Congress will include the grants in future TANF extensions.

The 17 states that will lose funding include:

  • Eleven states in which poverty or deep poverty increased significantly between 2009 and 2010 Alabama, Arizona, Florida, Georgia, Louisiana, New Mexico, Nevada, North Carolina, Tennessee, Texas, and Utah.
  • The two states with the nation’s highest deep poverty rates in 2010 — Mississippi and New Mexico.
  • The state with the largest increase in deep poverty since the start of the recession — Nevada, where the rate rose from 4.6 percent in 2007 to 7.0 percent in 2010.
  • The five states with the highest child poverty rates in 2010 — Mississippi, New Mexico, Alabama, Arkansas, and Louisiana.
  • Three of the four states with the largest increases in child poverty since the start of the recession — Florida, Nevada, and Utah, where the child poverty rate went up by more than 40 percent.

These 17 states, many of which are already struggling to maintain a safety net for very poor families at a time of rising need, will now have an even harder time doing so.  In most of these states, the Supplemental Grants account for 9 or 10 percent of TANF funding.

If Congress is unwilling to restore Supplemental Grant funding, another option would be to redesign TANF’s Contingency Fund so that more states can qualify.  I’ll write more about this in an upcoming blog post.