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Podcast: The Need for Extending the TANF Emergency Fund

In this podcast we’ll discuss the Emergency Fund of the Temporary Assistance for Needy Families program – also known as TANF. I’m Michelle Bazie and I’m joined by the Director of the Center’s Welfare Reform and Income Support Division, Dr. LaDonna Pavetti.

1. Donna, what is the TANF Emergency Fund?

It’s part of the TANF program that was created in the 1996 welfare reform law. The Emergency Fund was included in last year’s Recovery Act with the purpose of providing states with extra resources to meet the increased need for assistance during a recession. The Fund gives states the ability to put money in the hands of people who will spend it, which helps lessen the damage that the recession would have otherwise done to the economy and especially to vulnerable populations. Basically, it helps the economy recover in an extraordinarily efficient manner – it’s excellent bang for the buck. But unfortunately the Fund is set to expire on September 30th even though unemployment is still very high and hardship continues to grow.

2. The economy is still very weak and the recovery seems to be very slow to take hold. Are states using the Fund?
Absolutely. 47 states plus the District of Columbia, the Virgin Islands, and Puerto Rico have used the fund to help needy families. And 36 states and the District of Columbia have used the Fund to create subsidized jobs for unemployed parents and their teenage children. It has wide, bi-partisan support and it has a highly successful track record: it creates jobs, stimulates the economy, and reduces hardship during this very difficult economic time.

3. So, the Emergency Fund gives states extra resources right when they need it. But how does it help to stimulate the economy?

Nationwide, states estimate that they will place more than 200,000 individuals in jobs subsidized by the Fund by the time it expires on September 30th. If it wasn’t for these jobs, most, if not all, of these individuals would be unemployed – and not contributing to their local economies. Through the Emergency Fund, states can also provide basic cash assistance to the increasing number of poor families with children, including workers who exhaust their unemployment benefits. Even this basic assistance is a job creator because the families receiving it spend almost all of it immediately to meet their basic necessities, which, as I mentioned before, ends up boosting local economies.

4. What are some examples of how states are using the TANF Emergency funds?

The Fund has been successful in states throughout all regions of the country.

In the east, New York has mounted an initiative to create “green jobs,” expand health care outreach, and provide longer-term transitional jobs to families who have the most difficulty finding jobs, even when the economy is strong.

Out west, California is creating subsidized employment programs in nearly all of its 52 counties. The state expects to place about 20,000 adults and 25,000 youth in subsidized jobs. Los Angeles alone has placed nearly 10,000 adults in jobs and plans to provide summer jobs to 15,000 young people.

In the Midwest, Illinois is placing about 500 people in jobs every day. With more than 20,000 people already placed, they have far exceeded – almost doubled, in fact – their original estimate of 12,000 placements.

Finally, in the south, Oklahoma (which has a smaller program) expects to place 900 people in jobs by the end of September. Many of those who have participated in the program in that state have now been hired permanently by the employers who initially agreed to provide them with a job in exchange for a gradually declining wage subsidy.

5. So, the Fund is currently set to expire on September 30th. That’s rapidly approaching. What’s at risk if the Fund isn’t extended?

It’s likely that the opposite of what the country needs will happen: jobs will evaporate and unemployed mothers and fathers will struggle to make ends meet.

6. What can policymakers do?

With unemployment expected to remain high for the next few years, policymakers need to extend the TANF Emergency Fund at least for another year. Both the economy and America’s families need it.

Thanks for joining me, Donna.