The Temporary Assistance for Needy Families Program: Time for Improvements

• Published date: 01 November 2019
• Date: 01 November 2019
• DOI: http://doi.org/10.1177/0002716219881628
• Subject Matter: Means-Tested Transfer Programs

286 ANNALS, AAPSS, 686, November 2019

DOI: 10.1177/0002716219881628

The Temporary

Assistance for

Needy Families

Program: Time

for

Improvements

By

RON HASKINS

and

MATT WEIDINGER

881628ANN THE ANNALS OF THE AMERICAN ACADEMYTANF: TIME FOR IMPROVEMENTS

research-article2019

The 1996 welfare reforms imposed major changes on

the nation’s means-tested benefits, including a require-

ment that states place at least half of their cash welfare

caseload in work or related activities. Congress also

increased both cash and in-kind subsidies for low-

income working families. Between the mid-1990s and

2000, work and wages among low-income women

increased and poverty declined. The recessions of 2001

and 2007–2009 caused rising employment to falter, but

after 2014, women’s employment rose again, and pov-

erty declined. The impacts of welfare reform on these

outcomes have been disputed, with many on the Left

charging that states have used welfare funds inappro-

priately and many on the Right arguing that welfare

reform played a major role in the improvements in

work, wages, and poverty. We review reforms that have

been proposed by one or both parties in recent years,

including focusing spending on benefits and work. We

conclude with lessons of these reform experiences for

future reforms of entitlement programs.

Keywords: Temporary Assistance for Needy Families;

work requirements; labor force participa-

tion rate; supplemental poverty rate; wel-

fare dependency; Earned Income Tax

Credit

After a long and sometimes bitter debate, on

August 22, 1996, President Clinton signed

bipartisan legislation that repealed the Aid to

Families with Dependent Children (AFDC)

program, originally enacted during the New

Deal, and replaced it with the Temporary

Assistance for Needy Families (TANF) program

Ron Haskins is a senior fellow and holds the Cabot

Family Chair in Economic Studies at the Brookings

Institution, where he codirects the Center on Children

and Families.

Matt Weidinger is a resident fellow in poverty studies at

the American Enterprise Institute (AEI), where his

work is focused on safety net policies, including cash

welfare, child welfare, disability benefits, and unem-

ployment insurance.

Correspondence: rhaskins@brookings.edu

TANF: TIME FOR IMPROVEMENTS 287

(Haskins 2006; DeParle 2004). There have now been a host of excellent reviews of

the nature of reforms introduced by TANF as well as the impacts of the legislation

associated with an array of outcomes, including employment, wages, child well-

being, and many others (Ziliak 2016; Bitler and Hoynes 2010; Blank 2002; Blank

and Haskins 2001; Grogger and Karoly 2005). There is agreement among review-

ers about many of these impacts, especially on employment, earnings, and poverty

and especially before the recessions of 2001 and 2007–2009. Here we first sum-

marize the changes in cash welfare policy introduced by TANF and then turn to a

review of its impacts. We then examine problems with the TANF program before

reviewing proposals now being made to reform the program.

TANF Program Description

The purposes of the TANF program are to (1) provide assistance to needy fami-

lies so children can be cared for at home, (2) end the dependence of families on

government assistance, (3) reduce nonmarital pregnancies, and (4) promote the

formation and maintenance of two-parent families. To accomplish those tasks,

states have broad flexibility in spending TANF funds (Falk 2019).

In 2017, the average household receiving TANF included three persons and was

headed by a single mother. Benefits vary by state but average $425 per month

nationwide. As of January 2019, of the roughly 1.2 million households on TANF,1

429,000 were in California and 128,000 were in New York. These figures on case-

load size are somewhat misleading because many states conduct what are called

separate state programs (SSP) that are supported solely with state and local funds

and thus operate under less rigorous rules than their regular TANF programs that

are supported with federal funds. Further complicating matters is that TANF

spending on families can be divided into assistance and nonassistance. Assistance is

cash and cash equivalents, some child care funds, and payments for transportation

and job search for an unemployed family. Nonassistance includes nonrecurrent

short-term benefits, case management, employment-related services that do not

provide basic income support, and other services. Under the Department of

Health and Human Services (HHS) regulations, state reports on TANF, including

work participation rates, include only families receiving assistance.

The TANF program is a $16.5 billion per year block grant, meaning annual

federal funding is fixed and not subject to change as open-ended entitlement

programs are. In contrast, the prior AFDC program—like other major means-

tested benefit programs including Medicaid, food stamps, and Supplemental

Security Income—provided open-ended federal funds, resulting in significant

increases in federal funding as caseloads increased over time.

To receive their full share of federal block grant funds, states must satisfy

“maintenance-of-effort” (MOE), or state spending, requirements that collec-

tively total about $10.3 billion per year. The basic MOE requirement is 80 per-

cent of the annual state block grant but is reduced to 75 percent if the state meets

its work requirement (see below).