Document date: August 17, 2011
Released online: August 17, 2011
Temporary Assistance for Needy Families (TANF), the nation's cash assistance program for poor families with children, has not played much of a countercyclical role during the current recession. As unemployment has risen, TANF caseloads nationally have grown much more slowly and state TANF caseloads have not tracked state unemployment growth. Program rules and financing structures limit the responsiveness of TANF in a downturn. As TANF reauthorization is considered, this brief details some relatively small changes that could improve the program's effectiveness in future recessions.
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Temporary Assistance for Needy Families (TANF), the nation's cash assistance program for poor families with children, has not played much of a countercyclical role during the current recession (figure 1). Since the start of the recession in 2007 through 2010, the unemployment rate increased by 88 percent while national TANF caseloads increased by only 14 percent. This pattern contrasts with the response of welfare before passage of TANF when caseloads rose as unemployment increased. While we don't know precisely why the response to rising unemployment has been modest, some reasons likely include the following:
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