About a week ago, we did our Wonky Word Wednesday on Temporary Assistance for Needy Families, or TANF. We mentioned that there has been some activity on the federal level to renew (or reauthorize) the TANF program. This is significant, because TANF has been surviving on short-term extensions for half a decade now.
To say the current TANF program has problems is a serious understatement. The TANF program – which replaced Aid to Families with Dependent Children (AFDC) – has served fewer and fewer families experiencing poverty and provides inadequate assistance for families trying to reach economic security.
Last year, the state put together a “steering committee” to talk about how we could make TANF a better program in the state. While states can set whatever policies they choose in TANF, as a practical matter, many states feel constrained by certain federal requirements. One key requirement is the “work participation rate” that states must meet or face a fiscal penalty.
The federal discussion draft on TANF may address some of these constraints, giving states more flexibility to help families facing poverty. You can find a detailed summary of the discussion draft here.
For example, we know that one of the most effective ways to access good-paying jobs is through education and training. But TANF limits the extent to which participation in education by an individual can count for the state to meet its TANF work participation requirements, and some states limit what type of educational activities it will allow a parent to participate in. In Montana, a parent can access TANF while participating in workforce training or other education, but only 12 months of participation in vocational education will count as a TANF activity. In other words, TANF can help an individual to receive training he or she needs to gain employment – including getting a GED diploma – but the individual is stuck with a difficult decision after 12 months: finish your program (but risk losing your TANF assistance) or drop out. These state limits on education and training, driven in part by federal work participation requirements, often set up unrealistic expectations and can further the cycle of poverty for many families.
The federal discussion draft proposes increasing this limit to 24 months. This is a great idea, because it allows a parent to attain the training he or she needs to find employment.
The discussion draft also looks at how we measure “success” in the TANF program. Right now, states are under pressure to meet the “work participation rate,” which fails to really look at how successful a TANF program is at helping families reach economic stability. In order to do this, you really need to look at what happens after someone exits the TANF program. Are they finding employment? Are they keeping this employment? And are they better positioned to move out of poverty?
The discussion draft proposes new outcome measures including employment after exiting TANF, as well as how earnings have changed over this period of time. We applaud the feds for considering better outcome measures, but we’re also cautious that we make sure the law does not incentivize states to create a program that only serves those that are in a position to easily find and keep employment. We must also ensure states are targeting resources to those that are facing serious barriers to economic stability – like, for example, homelessness, disability, or surviving domestic violence.
All in all, the TANF discussion draft is a step in the right direction. But we wish it went further.
Unfortunately, the discussion draft does nothing to change the funding structure of TANF. TANF will continue to be a block grant program, which limits states’ ability to address the increased number of families experiencing poverty. The proposal provides greater flexibility to states, but it doesn’t provide any new resources to help families.
Second, the discussion draft does not mandate that states serve the most vulnerable populations – by establishing a minimum percentage of funds that must go towards core programs, like basic assistance and child care. As we have mentioned before, TANF is serving fewer and fewer families experiencing poverty. In 2013, for every 100 families living in poverty in Montana, only 13 received assistance through TANF. That is half the national average. And it compares to 63 families who received assistance through AFDC in Montana in 1995. The discussion draft makes good headway at improving work programs, but this will do nothing to reduce the number of families in poverty, unless access to TANF assistance is improved.
Want to weigh in? The House Ways & Means Committee will be taking comments on the discussion draft until the 29th. And you can find more detailed comments from our allies at the Center on Budget & Policy Priorities and the Center for Law & Social Policy.
MBPC is a nonprofit organization focused on providing credible and timely research and analysis on budget, tax, and economic issues that impact low- and moderate-income Montana families.