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Policy Brief: Cash Assistance Should Reach Millions More Families to Lessen Hardship

Families’ Access Limited by Policies Rooted in Racism

UPDATED
December 3, 2020

The Temporary Assistance for Needy Families (TANF) block grant is designed to provide temporary cash assistance to families in poverty — primarily those with no other means to meet basic needs — but its reach has shrunk considerably over time.[1] In 2019, for every 100 families in poverty, only 23 received cash assistance from TANF, down from 68 families when TANF was first enacted in 1996. This “TANF-to-poverty ratio” (TPR) is the lowest in the program’s history. (See Figure 1.) If TANF had maintained the same reach to families in poverty as its predecessor, Aid to Families with Dependent Children (AFDC), had in 1996, 3.1 million families would have received TANF in 2019, about 2 million more than reported for that year.

Our analysis finds that:

  • TANF provides temporary cash assistance to few poor families and its reach continues to shrink, both nationally and in nearly every state. State TANF caseloads have fallen in recent years due both to declines in the need for assistance and to state policy changes that make the program less accessible.
  • Black children are disproportionately likely to live in the group of states that have the lowest TPRs, compared to white children; as a result, Black children nationally are less likely than white children to have access to TANF assistance when they fall into crisis. The racial disparities in access to TANF assistance result from a history of racism in cash assistance programs.
  • TANF lifts far fewer families out of deep poverty (that is, incomes below half of the poverty line) than AFDC and has put poor children at risk of much greater hardship, with the potential for long-term negative consequences.

The states and the federal government have a critical role in ensuring that families with the lowest incomes have access to a minimum level of support to meet their basic needs. The TANF block grant shifted that responsibility to states, which — with no national standards to hold them accountable for providing assistance to families in need — acted in their own self-interest, not in the best interest of families in poverty and particularly of families of color.

TANF’s Reach Declining in Most States, Often Sharply

Generally, the TPR has declined over time because TANF caseloads have fallen much more than the number of poor families. That’s been the case over the past decade, for example: between 2006 and 2019, the number of families in poverty fell by 24 percent (from about 6 million to about 4.6 million), while the number of families receiving TANF fell by 44 percent (from 1.9 million to about 1 million).

The national TANF-to-poverty ratio misses the extreme — and growing — variation among the states. In 2019 the TPR ranged from 70 in California down to just 4 in Louisiana.[2] (See Table 1.) The TPR fell in a majority of states in recent years for several reasons: policy changes to restrict access and reduce costs during the Great Recession, adoption of more restrictive policies as part of a broader attack on economic security programs, and state responses to federal policy changes when TANF was reauthorized, among other factors.[3]

An especially troubling trend is the number of states with TPRs of 10 or less. In 2006, only three states (Idaho, Louisiana, and Wyoming) had such low ratios. The list grew during the Great Recession and has continued growing since then. In 2019, 14 states — Alabama, Arizona, Arkansas, Georgia, Idaho, Indiana, Kansas, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, Texas, and Wyoming — had TPRs of 10 or less.

Historical Racism Restricted Access to AFDC and TANF, Harming Black Families and Children; Unequal Access Persists Today

A history of racist policies that aimed to limit Black mothers’ access to family cash assistance programs continues to contribute to racial disparities in access to TANF today. Forty-one percent of the nation’s Black children live in states with TPRs of 10 or less, compared to 33 percent of Latino children and only 28 percent of white children.[4] Nationally, therefore, Black children are less likely than white children and somewhat less likely than Latino children to have access to TANF assistance when their families fall into crisis.

From its roots, the public cash assistance system has excluded Black families in need. Aid to Dependent Children (later named Aid to Families with Dependent Children), the first federally supported cash assistance program, gave states and localities broad freedom to control the program. This control led to much lower benefits in the Southern states, where most Black families lived. And policymakers conditioned benefits on conformity to certain behaviors through rules such as “suitable home” and “man-in-the-house” policies, which disproportionately diminished or cut off benefits for Black families.

The AFDC caseload grew through the 1960s and 1970s and, despite states’ efforts to limit Black families’ participation in the program, their numbers grew as well.[5] To ensure that Black families could access assistance, the National Welfare Rights Organization, led by Black mothers and their allies, sought to end discriminatory practices. During that period, an increased federal role in AFDC helped the program reach more families in poverty. Still, policymakers increased their attention on AFDC mothers’ work effort while participating in the program. Then, under a proliferation of waivers in the 1990s, states were allowed to bypass federal eligibility restrictions and began implementing more punitive policies.[6]

With the creation of TANF in 1996, the federal government eliminated federal minimum eligibility standards, granting states broad flexibility with respect to eligibility requirements and sanctions. States have taken advantage of this considerable freedom to implement policies that restrict access to the program, like full-family sanctions and time limits. These changes have led to a decline in the TPR nearly every year since TANF’s start.

Stronger Cash Assistance Would Improve Children’s Prospects

The decline in access to TANF benefits has left many of the families experiencing the deepest poverty without resources to meet their basic needs. TANF does far worse than AFDC in reaching families, particularly those with children and those in deep poverty. TANF benefits are not sufficient to lift families out of poverty in any state, and while AFDC lifted more than 2.9 million children out of deep poverty in 1995, TANF lifted only 260,000 children out of deep poverty in 2017.[7]

The evidence is clear that when families have more income, children do better in the future. Income support programs can improve children’s academic, health, and economic outcomes, the National Academies of Sciences’ report on reducing childhood poverty finds.[8] Even relatively small amounts of income make a difference. Among families with incomes below $25,000, children whose families received a $3,000 annual income boost when the children were under age 6 earned 17 percent more as adults and worked 135 more hours per year after age 25 than otherwise-similar children whose families didn’t receive the income boost, research finds.[9] That research suggests that TANF policy changes that cut families’ income, such as establishing harsher sanctions or shorter time limits or significantly reducing benefits, could harm young children now and in the future.

TANF Should Do More to Help Families Meet Basic Needs

TANF is overdue for significant improvements. State and federal policy changes should focus on serving more families that need assistance, alleviating the program’s deep racial disparities, and ensuring that adequate resources are available to achieve these goals. For example, states should lift income thresholds and asset tests, remove barriers to access, and stop cutting off families that are still struggling. Additionally, federal policymakers should hold states accountable for serving families in need, require states to direct a specific share of TANF resources to families receiving cash assistance, and increase the block grant and index it to inflation.

TABLE 1
State TANF-to-Poverty Ratios Over Time
  1995-96 2005-06 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 Ratio Change
'05-06 to '18-19
Alabama 32 17 12 11 10 9 8 8 -9
Alaska 132 32 29 30 27 20 20 22 -11
Arizona 42 27 8 7 6 6 6 6 -21
Arkansas 33 11 6 5 5 5 5 4 -7
California 101 66 65 65 66 65 68 70 4
Colorado 66 18 20 20 26 34 34 23 6
Connecticut 82 48 31 30 23 21 22 27 -21
Delaware 99 45 33 39 38 36 39 44 -1
Florida 55 20 12 11 12 13 12 13 -7
Georgia 82 16 6 5 5 6 5 5 -11
Hawai’i 108 71 50 40 38 38 34 35 -36
Idaho 32 8 7 7 7 8 8 9 1
Illinois 87 17 17 18 17 14 15 14 -3
Indiana 61 35 8 7 7 7 6 5 -30
Iowa 64 40 27 27 22 21 21 19 -21
Kansas 52 32 13 10 10 8 8 10 -22
Kentucky 55 29 19 19 20 24 21 21 -8
Louisiana 48 10 4 4 4 4 4 4 -6
Maine 91 52 30 24 22 19 18 19 -32
Maryland 97 32 29 27 30 39 33 25 -7
Massachusetts 81 46 38 34 38 38 34 40 -6
Michigan 88 40 18 16 14 12 11 11 -29
Minnesota 93 51 40 49 57 47 41 47 -4
Mississippi 39 14 10 8 7 6 6 4 -10
Missouri 118 38 28 29 19 14 13 11 -27
Montana 41 21 17 16 17 26 33 25 4
Nebraska 54 52 19 17 20 21 18 17 -35
Nevada 71 20 16 18 22 22 19 20 0
New Hampshire 100 62 24 25 25 28 30 46 -16
New Jersey 108 42 23 20 20 19 15 16 -26
New Mexico 44 32 22 22 22 21 21 24 -8
New York 79 41 39 40 43 42 42 42 1
North Carolina 74 14 7 7 7 7 6 7 -8
North Dakota 48 23 13 10 8 9 10 13 -10
Ohio 89 33 26 22 22 24 25 25 -8
Oklahoma 41 12 7 7 8 9 9 10 -2
Oregon 50 26 47 43 37 35 40 48 22
Pennsylvania 87 45 31 29 30 28 25 26 -19
Rhode Island 113 64 30 34 35 29 35 35 -29
South Carolina 40 21 12 11 11 10 10 10 -11
South Dakota 42 22 19 17 17 20 23 20 -2
Tennessee 67 51 25 25 23 23 22 18 -33
Texas 47 12 5 4 4 4 4 4 -8
Utah 59 21 9 9 9 9 10 11 -9
Vermont 80 79 78 54 47 55 50 49 -30
Virginia 56 31 25 23 19 18 16 15 -16
Washington 76 63 33 27 25 26 29 34 -29
West Virginia 68 27 18 17 16 17 16 18 -9
Wisconsin 81 23 26 24 20 20 23 23 0
Wyoming 45 3 5 5 5 6 6 7 4

Source: CBPP analysis of poverty data from the Current Population Survey and AFDC/TANF caseload data from Department of Health and Human Services and (since September 2006) caseload data collected by CBPP from state agencies

End Notes

[1] For more detail see Ife Floyd, “Cash Assistance Should Reach Millions More Families,” CBPP, updated March 4, 2020, https://www.cbpp.org/research/family-income-support/cash-assistance-should-reach-millions-more-families. See also “State Fact Sheets: Trends in State TANF-to-Poverty Ratios,” CBPP, updated March 4, 2020, http://www.cbpp.org/research/state-fact-sheets-trends-in-state-tanf-to-poverty-ratios.

[2] To improve the reliability of the state-level poverty data, we created two-year averages of the poverty numbers; we also transformed the caseload data into two-year averages to calculate the TPRs. The years cited here are for the latter of the two years.

[3] Analysis of TANF-to-poverty ratios and Census’ July 2017 population data.

[4] CBPP analysis of data from Columbia University Population Research Center and U.S. Census Bureau. Corrections for underreported government assistance from Health and Human Services/Urban Institute Transfer Income Model (TRIM). Calculations use Supplemental Poverty Measure (SPM) and 2016 SPM poverty line adjusted for inflation.

In earlier editions of this paper, CBPP used a different methodology to calculate these figures. These new estimates use the SPM and the latest available data from the Health and Human Services/Urban Institute TRIM.

[5] National Academies of Sciences, Engineering and Medicine, “A Roadmap to Reducing Child Poverty,” 2019, https://www.nap.edu/catalog/25246/a-roadmap-to-reducing-child-poverty.

[6] Greg J. Duncan and Katherine Magnuson, “The Long Reach of Early Childhood Poverty,” Pathways, Winter 2011, http://www.stanford.edu/group/scspi/_media/pdf/pathways/winter_2011/PathwaysWinter11_Duncan.pdf.