Policy Brief: TANF Reaching Few Poor Families

The Temporary Assistance for Needy Families (TANF) block grant, created by the 1996 welfare law, is designed to provide a temporary safety net to poor families — primarily those with no other means to meet basic needs — but its reach has shrunk considerably over time.^[1] In 2017, for every 100 families in poverty, only 23 received cash assistance from TANF, down from 68 families when TANF was first enacted. This “TANF-to-poverty ratio” (TPR) reached its lowest point in 2014 and has remained there. (See Figure 1.)

States’ experience with TANF provides strong evidence that punitive work requirements and block granting exacerbate, rather than reduce, deep poverty (that is, incomes below half of the poverty line) and should not be extended to other programs, as some policymakers have proposed.

• TANF provides a temporary safety net to few poor families and its reach continues to shrink, both nationally and in nearly every state. Black families are disproportionately likely to live in the group of states that have the lowest TPRs, compared to white families; as a result, black families nationally are less likely than white families to have access to TANF assistance when they fall into crisis.
• 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. The biggest caseload declines, however, have occurred in states with major policy changes.
• TANF lifts far fewer families out of deep poverty than its predecessor, Aid to Families with Dependent Children (AFDC), and has put poor children at risk of much greater hardship, with the potential for long-term negative consequences.

The federal government has a critical role in ensuring that low-income families have access to a minimum level of support to meet their basic needs. The TANF block grant handed that responsibility over 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 the most vulnerable members of society.

Figure 1

&nbs;&nbs;

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 2017, the number of families in poverty fell by 8 percent (from about 6 million to about 5.6 million), while the number of families receiving TANF fell by 34 percent (from 1.9 million to less than 1.3 million).

The national TANF-to-poverty ratio misses the extreme — and growing — variation among the states. In 2017 the TPR ranged from 65 in California down to just 4 in Louisiana.^[2] (See Table 1.) The TPR fell in a majority of states between 2006 and 2017 for several reasons: increases in the number of families living in poverty during and immediately following the recession, the failure of state TANF programs to respond to increased need during and after the recession, and state policy and administrative changes that made TANF less accessible, among other factors.

An especially troubling trend is the growing number of states with TPRs of 10 or less. In 2006, only two states (Idaho and Wyoming) had such low ratios. The list grew during the Great Recession and has continued growing since then. In 2017, 16 states — Alabama, Arizona, Arkansas, Georgia, Idaho, Indiana, Kansas, Louisiana, Mississippi, North Carolina, North Dakota, Oklahoma, South Carolina, Texas, Utah, and Wyoming — had TPRs of 10 or less.

The wide variation among state TPRs also exacerbates disparities among racial groups in access to TANF. Nearly 40 percent of the nation’s black population lives in states with TPRs of 10 or less, compared to only 28 percent of the white population.^[3] Historically, a significant share of the black population lived in states with lower-than-average access to direct financial assistance under AFDC. However, under TANF’s extensive state flexibility, the reach of these programs has dramatically declined.

State Policy and Administrative Changes Drive Big Caseload Declines

TANF caseloads in most states have reached their lowest levels in the program’s history in the past decade and are much lower than when TANF was last reauthorized (by the Deficit Reduction Act, which took effect in 2006). In 34 states, caseloads fell by more than 20 percent between 2006 and 2017.

Caseloads fall for two reasons: the need for assistance goes down or states make changes that make the program less accessible. Both have occurred in the past ten years, but the biggest declines have occurred in states with major policy changes. Some states shortened or otherwise changed their time limits, cutting off families that remained in need. Others made it harder for families to qualify for benefits, such as by imposing more stringent applicant requirements. For example, between 2009 and 2015, Arizona cut benefits, shortened time limits to 12 months (the shortest in the country), and imposed other eligibility restrictions. These changes account for most of the nearly 80 percent drop in Arizona’s TANF caseload between 2006 and 2017, which lowered its TPR from 27 to just 6.

Moreover, emerging evidence from a few states shows that many families leaving TANF due to restrictive state policies are worse off. A report from Washington State found that families cut off from the program due to time limits were more likely than other families leaving TANF to have barriers preventing them from entering the labor market and had higher rates of homelessness. A report reviewing data from Kansas found that most families leaving TANF due to stricter work sanctions did not find steady work or earn enough to lift their families out of deep poverty.

TANF Lifts Far Fewer Children Out of Deep Poverty Than AFDC

The decline in access to TANF benefits has left many of the poorest families without resources needed to meet their basic needs. TANF has failed to maintain the standard set by 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 2.5 million children out of deep poverty in 1995, TANF lifted only 349,000 children out of deep poverty in 2015.^[4]

Two well-known poverty researchers, Greg J. Duncan and Katherine Magnuson, have shown that poverty among young children not only slows them in school but also shrinks their earnings as adults. Work-first programs and other anti-poverty experiments “suggest that income plays a causal role in boosting younger children’s achievement” in preschool and elementary school, they note.

They also found that among families with incomes below $25,000, children whose families received a $3,000 annual income boost when the children were under age 6 worked more and earned more in adulthood than otherwise-similar children whose families didn’t receive the income boost. TANF is often a critical income source for the most vulnerable families with young children, and the Duncan-Magnuson findings suggest that TANF policy changes that cut income, such as establishing harsher sanctions or shorter time limits or significantly reducing benefits, could harm young children now and into the future.^[5]