On March 11, the House Ways and Means Subcommittee on Income Security and Family Support held a hearing, “TANF’s Role in Providing Assistance to Struggling Families.”
Chair Jim McDermott (D-WA) said, “The number of households receiving food stamps, which are now known as SNAP [Supplemental Nutrition Assistance Program] benefits, went up by close to 6 million. The number of individuals receiving unemployment benefits increased by nearly 8 million. But the number of families receiving TANF [Temporary Assistance for Needy Families] has increased by less than one-quarter of a million since the start of the recession. We will likely hear today a host of reasons for this very low participation rate, but I believe the main underlying cause is the presumption that declining caseloads always equal success. Specific features of the TANF program, such as the caseload reduction credit, not to mention over a decade of rhetoric from every level of government, have driven this contention. We all want TANF caseloads to go down because more parents are moving into good jobs. But if caseloads go down or stay flat, even as unemployment and poverty go way up, that should never be anyone’s definition of success. If it is, we might as well completely eliminate the TANF program right now. We would then have a caseload of zero a perfect success.”
Ranking Member John Linder (R-GA) said, “In last year’s stimulus bill, our colleagues provided $5 billion in new welfare funds, including if states increased their welfare rolls. But according to the latest HHS [Department of Health and Human Services] figures, states have tapped less than a third of that $5 billion, mostly because they didn’t want to spend more of their own money. Washington can fix that. So now Democrats propose billions more in welfare funds for states, and making that money 100 percent federally funded…As we will hear from Robert Rector of the Heritage Foundation, Democrats have two real goals here. First, accelerate spending on welfare in the name of ‘stimulus.’ And second, repeal the successful 1996 welfare reforms, which led to less welfare dependence and poverty, through more work and earnings…Instead of bribing states to increase welfare rolls, or fund make-work jobs that will go away as soon as the funding ends, we should help more low-income parents train for, look for, find, and keep real jobs to support their families. That’s what the 1996 welfare reforms [Personal Responsibility and Work Opportunity Reconciliation Act (P.L. 104-193)] did. Returning to the previous failed system will lead to more poverty and despair, not less. We shouldn’t do it.”
During her testimony, Rep. Gwen Moore (D-WI) discussed the “feminization of poverty” and made several recommendations for reauthorization of the Temporary Assistance for Needy Families program. Addressing domestic violence, Rep. Moore recommended that Congress, “support TANF recipients who have escaped domestic violence.” She said, “Now that all states have implemented the Family Violence Option (FVO) or an equivalent policy, we must now address the differences that exist between states when it comes to access, waiving of time limits, training of domestic violence counselors and staff, and domestic violence screening, and the administering of FVO programs.” She continued, “The U.S. Department of Health and Human Services (HHS) has not specifically advised state TANF programs through official guidance or memoranda on best practices regarding domestic violence screening. All TANF recipients who are victims of domestic violence should be able to receive the same high quality of services from state to state. I want to work with the committee and the Department of Health and Human Services to examine the best practices and help states to better assist victims of domestic violence.”
Rep. Moore also addressed lifting restrictions on low-income women and children, saying, “Now that we know that TANF was not designed to work in a recession, we must consider suspending TANF requirements during times of economic crisis, high unemployment, when states run out of funding for child care, and for at least six months after the birth of a child. Current federal TANF rules set a 60–month lifetime limit on [receipt of] TANF and allow states to set a shorter limit, as about a fourth of the states do. I oppose terminating assistance to needy women and children solely because they have been poor too long. But assuming that time limits should be permitted when jobs are readily available, Congress should examine suspending TANF requirements including time limits and work requirements during times of economic crisis and high unemployment…I also support suspending requirements for at least six months after the birth of a child. This would allow mothers enough time to care for their children at home without the stress have having to manage work with a newborn child. Unemployment rates for single mothers were about a third higher than for all adult women, and poverty rates for families headed by single mothers are projected to exceed 40 percent in 2009. The six month suspension of TANF requirements would give mothers time to find employment as well as access affordable child care if not provided by the state.”
“Between 1993 and 2000, the child poverty rate declined from 22.7 percent to 16.2 percent; the employment rate of single mothers rose from 58 percent to 73 percent and for single mothers with children under age three the employment rate increased from 36 percent to 60 percent; and TANF caseloads declined from about 5 million families to about 2.3 million families a drop of 54 percent,” said Carmen Nazario, assistant secretary for Children and Families at the Department of Health and Human Services (HHS). She continued, “Unfortunately, since 2000 these positive trends have not been sustained. By 2008, and well before the recession had fully impacted the economy, the child poverty rate had risen to 19 percent and the employment rate of single mothers had dropped to 69 percent. However, the TANF caseload continued to fall to a 40-year low of 1.7 million cases. Of concern, between 1995 and 2006, the percentage of poor children receiving assistance fell from 61.5 percent to 27 percent. The percentage of families that met the eligibility criteria for TANF assistance in their state and actually received that assistance fell from 84 percent to 40 percent between 1995 and 2005. The percentage of poor single mothers that did not work and did not receive assistance increased from 16 percent in 1995 to 35 percent in 2008. Well over half of the decline in the caseload since 1995 is due to a reduction in the proportion of poor families receiving assistance rather than a drop in the number of poor families with children.”
Assistant Secretary Nazario discussed the role of the American Recovery and Reinvestment Act (P.L. 111-5) in addressing these statistics: “This legislation impacted the TANF program in several key ways, including the establishment of a new $5 billion Emergency Contingency Fund for States, Territories, and Tribes. This emergency fund was structured recognizing that there are multiple ways to help families during an economic downturn by expressly providing additional funding for basic assistance, short-term needs, and subsidized employment. The TANF emergency fund provides up to $5 billion in FY2009 and FY2010 to reimburse states, territories, and tribes that have an increase in expenditures in any of three categories: (1) basic assistance (provided the state’s caseload has increased); (2) non-recurrent, short-term benefits; and (3) subsidized employment…As of March 5, 2010, 41 states and 12 tribes have received emergency funds exceeding $1.5 billion. While it has taken almost a year to obligate these funds, we anticipate a much swifter expenditure rate during the remainder of this fiscal year based on the applications we now are receiving from states.” She added that the president’s FY2011 budget would provide $500 million for a newly established, one-year initiative called the Fatherhood, Marriage, and Families Innovation Fund.
Kay Brown, director of Education, Workforce, and Income Security at the Government Accountability Office (GAO), testified about the GAO’s report on changes in TANF participation rates. Among other issues, the report focused on the factors that have contributed to the decline in the number of families receiving TANF cash assistance since the 1990s. She said, “The strong economy of the 1990s, TANF’s focus on work, and other factors, such as increases in the minimum wage and the Earned Income Tax Credit contributed to increased family incomes, which in turn led to a decline in the number of families eligible for TANF cash assistance. We also found that changes to eligibility rules, such as restrictions on immigrants and the 60-month time limit, had a small impact on the number of eligible families.” Ms. Brown continued, “According to our research, the decline in participation reflected, among other things, families’ responses to changes in state welfare programs, including mandatory work activities, declining cash benefit levels, and time limits as well as state diversion strategies and sanctions for non-compliance with work and other program requirements. According to a research synthesis conducted for HHS, mandated work activities may have caused declines in the caseload, as families chose not to apply rather than be expected to fulfill the requirement to work. Other families may have found it difficult to apply for or continue to participate in the program, especially those with poor mental or physical health or other characteristics that make employment difficult, as we noted in previous work…Research also suggests that, in response to lifetime limits on the amount of time a family can receive cash assistance, eligible families may hold off on applying for cash assistance and ‘bank’ their time, a practice that could contribute to the decline in families’ use of cash assistance. In addition, fewer families may have applied or completed applications for TANF cash assistance because of state policies and practices for diverting applicants from cash assistance; nearly all states have at least one type of diversion strategy, such as the use of one-time nonrecurring benefits instead of monthly cash assistance. Finally, some studies and researchers noted that full sanctions for families’ noncompliance those that cut off all benefits for a period of time are associated with declines in the number of families receiving cash assistance, although more research is needed to validate this association. While there is a general consensus that these factors played a role in contributing to the decline in the number of families receiving cash assistance, there is not agreement on the relative weight of each factor, according to researchers and other experts we interviewed.”
“Annual means-tested welfare spending is more than sufficient to eliminate poverty in the United States,” said Robert Rector, senior research fellow at the Heritage Foundation. He continued, “The U.S. Census Bureau, which is in charge of measuring poverty and inequality in the nation, defines a family as poor if its annual income falls below official poverty income thresholds. If total means-tested welfare spending were simply converted into cash benefits, the sum would be nearly four times the amount needed to raise the income of all poor families above the official poverty line.” Mr. Rector added, “In FY2011, total means-tested spending will be $950 billion. About half of this spending ($475 billion) will go to families with children. If the $475 billion in welfare spending were divided equally among the lowest income one third of families with children (around 14 million families), the result would be around $33,000 per low-income family with children. In addition, most of these lower-income families have earned income. Average earnings within the whole group are typically about $16,000 per year per family, though in the midst of a recession, earnings will be lower. If average welfare aid and average earnings are combined, the total resources [are] likely to come to between $40,000 and $46,000 for each lower-income family with children in the U.S. It is very difficult to reconcile this level of spending with conventional claims that millions of lower-income families are chronically hungry, malnourished, or ill-housed.”
Mr. Rector added, “The proposed extension of the TANF emergency fund not only appears unnecessary in light of the dramatic increase in overall means-tested spending on behalf of families with children it is objectionable on two other grounds. First, the TANF emergency fund overturns the fundamental principles of welfare reform. One of the core concepts of welfare reform was that the federal government should stop its historic practice of financially rewarding states to increase welfare caseloads and dependence. The TANF emergency fund reverses this and explicitly returns to the pre-reform system of paying states more if they increase their welfare caseloads. (The current fund, created in the stimulus bill, pays states 80 cents on the dollar for each added case that falls into three defined categories.) Second, the demand for this additional funding appears limited. The stimulus bill offered states up to $5 billion in added emergency funds starting in the spring of last year and continuing through FY2010. But, so far, only $1.5 billion of these funds have been spent…The nation simply cannot afford the current level of spending. In this context, the call for even more TANF funding is unsupportable.”
Russell Sykes, chairman of the National Association of State TANF Administrators, and Peter Edelman, a professor at Georgetown University Law Center, also testified.