The voices of Urban Institute's researchers and staff
October 30, 2015

Why isn’t TANF helping those who need it most?

October 30, 2015

The Senate Finance Committee heard testimony Thursday about the flaws of one of the country’s biggest block grant programs: Temporary Assistance for Needy Families. The use of block grants to distribute social safety net funds has been a hot topic of late, particularly given newly elected House speaker Paul Ryan’s proposal to turn Medicaid into a block grant program.

At Thursday’s hearing on Welfare and Poverty in America, Urban Institute researcher Pam Loprest told the committee that although the number of families receiving TANF benefits has declined 30 percent since 2000, the share of families living in poverty has grown. This means many eligible families aren’t receiving benefits. In fact, the proportion of families receiving TANF benefits relative to the number of eligible families dropped from 79 percent in 1996 to 32 percent in 2012.

This low participation rate is often the result of a lack of information. Panelist H. Luke Shaefer, an associate professor at the University of Michigan and the coauthor of $2.00 a Day: Living on Almost Nothing in America, said that, in researching his book, he asked people if they had considered applying for TANF. One mother, who was living in a homeless shelter at the time, replied, ‘”they just aren’t giving that out anymore.’”

Aretha Jackson, who is a disabled veteran, mother of two, and TANF recipient, told senators a similar story of confusion. She was living in Maryland when she first tried to apply for TANF benefits, but found the process too complicated.

“The program in Maryland told me of all the regulations and requirement I had to meet, but did not offer a plan of action to accomplish these unrealistic goals,” Jackson said.

It wasn’t until about a decade later that Jackson truly got back on her feet. By that time, she had moved to Washington, DC, where she was required to attend the America Works employment program as a condition of receiving TANF. That program, she said, helped her realize her own self-worth—and land a stable job.

Many other single, poor mothers like Jackson are unable to find work, Loprest told the committee, and many also struggle to find steady jobs. Often, this is because they struggle to find affordable child care. Many also suffer from physical and mental illness. And for these single mothers without work, the work-based safety net program isn’t much help, Loprest said.

The panelists agreed that the vast majority of TANF recipients were like Jackson: they wanted to work, but couldn’t always find steady employment. “None of the families in our study thought of TANF as a viable lifeline,” Schaefer said.

The question among both senators and witnesses, then, was whether the block grant structure of TANF, which gives states discretion in spending the funds, was tenable. The flexibility inherent in the block grant means TANF programs vary widely from state to state in regard to benefit levels, the length of time families can receive benefits, and work requirements.

“We have already seen how damaging block grants to states can be for providing basic assistance to those most in need,” said Sen. Robert Menendez (D-NJ), referring to the TANF program. “You can have innovation and greater efforts of proven programs that can move to self-sufficiency without necessarily block granting.”

Schaefer said the block grant program had been a failure—a view that has also been expressed by one of the architects of the 1986 welfare reform plan, a proposal whose popularity helped the 1996 TANF legislation gain support. But Loprest said there was still hope for making reforms within the current system.

“The block grant structure is difficult to make workable, but I do think also that Congress has not abdicated all its ability to provide some incentives encouragement and structures around what you can do with a block grant,” she said.

In her testimony, Loprest cited research from the Center on Budget and Policy Priorities that shows that currently, only 8 percent of TANF funds are spent on work activities and 16 percent on child care.

“Even within the block structure,” Loprest said, “you can make changes that will encourage more spending on cash assistance, encourage more spending on work.”

Pamela Loprest, senior fellow at the Urban Institute, testifies before the Senate Finance Committee in Washington, D.C. on Oct. 29, 2015. Photo by Matthew Johnson/Urban Institute.

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