On June 5, the Senate Finance Committee held a hearing, “Combating Poverty: Understanding New Challenges for Families.” The hearing explored the major causes of poverty in the U.S. and the federal government’s role in reducing the number of families living in poverty.
Chair Max Baucus (D-MT) highlighted the importance of one federal program aimed at reducing poverty in his opening statement: “Nearly 50 million Americans are currently living in poverty. That includes 16 million children. In 2009, more than 31 percent of working families were in poverty. That’s more than 10 million people. Our safety net is designed to give those in poverty a fighting chance. Temporary Assistance for Needy Families – or TANF – is one of its bedrocks. TANF gives people access to job training and education, and it helps fight the evil of poverty. Today, we will look at TANF and the new challenges facing Americans in poverty.” He continued, “TANF did not respond to the recession as many of us would have hoped. Other safety net programs expanded to make sure families were properly fed and had access to medical care. TANF, however, did not. Some states actually cut caseloads, but people were not rising out of poverty. Fewer than two million families received cash assistance through TANF last year. That’s far less than in previous years. While we of course want to see the numbers of TANF recipients decrease, we want it to be for the right reason – because people are finding work. We need to make sure it’s not because people are falling through the cracks without assistance or without a job. And we need to learn from the lessons of the recession. TANF works well when there are jobs open for people to fill. But when there are millions of people looking for work, the program doesn’t respond as well as it should. Our goal should be to craft a system that works, regardless of the economic climate. TANF expires on September 30. We have an opportunity to strengthen it as we work toward a reauthorization, and we need to keep our core principles in mind through that process. The United States must have a strong social safety net, and it’s not just for the sake of having one. The American people are our greatest national resource. As a nation, we cannot afford to leave anyone behind. Leaders can’t lead if they’re hungry. Inventors can’t invent if they’re homeless. So let us prepare for a full reauthorization of TANF.”
In his opening statement, Ranking Member Orrin Hatch (R-UT)also discussed the future of the TANF program: “Poverty is an incredibly complicated issue — one that the federal government can only address within the bounds of a federal system that reserves most of these policy decisions to the states. There will continue to be a robust discussion on the role of the federal government as it relates to poverty.” He continued, “Unfortunately, the programs under the jurisdiction of our committee designed to address poverty do not work well together, even though they are essentially serving the same families. The most salient example of this is TANF. TANF is a block grant to states for their use in ending dependence on government benefits and more broadly, to promote child well-being. Over time, the focus of TANF has shifted from working with job-ready adults and preparing them for work, to a funding stream largely dedicated to purposes unconnected to job readiness. Based on the spending and the composition of the caseload, one can argue that TANF — as a robust welfare-to-work program — has all but diminished and, in large part, has been replaced by the emergence of TANF as a child welfare program. The authorization for the TANF programs expired at the end of FY2010…If this committee decides to reauthorize TANF next year, members will need to decide whether or not to recalibrate the program back to a welfare-to-work program. Instead, if members acknowledge and accept that TANF spending and much of cash assistance is directed to low-income children, then we need to address the fact that this TANF spending is largely unaccounted for and that TANF agencies do not coordinate their spending and services with child welfare agencies. I hope that the next few years will usher in much needed reforms to the child welfare system. As I believe we will learn today, the TANF block grant will have to be a part of that conversation.”
Kay Brown, director of income security at the U.S. Government Accountability Office, discussed TANF program performance in her testimony, saying, “I will focus on the role of the TANF block grant in helping low-income families with children. As you know, the federal government significantly changed federal welfare policy in 1996 when it created TANF, a $16.5 billion annual block grant provided to states to operate their own welfare programs within federal guidelines…Examining TANF’s past performance can help shed light on the challenges facing low-income families and the role of the federal government in combating poverty.” She continued, “The federal-state TANF partnership makes significant resources available to address poverty in the lives of families with children. With these resources, TANF has provided a basic safety net to many families and helped many parents step into jobs. At the same time, there are questions about the strength and breadth of the TANF safety net. Many eligible families—some of whom have very low incomes—are not receiving TANF cash assistance. Regarding TANF as a welfare-to-work program, the emphasis on work participation rates as a measure of state program performance has helped change the culture of state welfare programs to focus on moving families into employment. However, features of the work participation rates as currently implemented undercut their effectiveness as a way to encourage states to engage parents, including those difficult to serve, and help them achieve self-sufficiency. Finally, states have used TANF funds to support a variety of programs other than cash assistance as allowed by law. Yet, we do not know enough about this spending or whether this flexibility is resulting in the most efficient and effective use of funds at this time.”
Ron Haskins, co-director of the Center on Children and Families at the Brookings Institution, testified in support of policies aimed at increasing work rates and work supports: “An individual or family in the U.S. whose only source of income is welfare benefits cannot escape poverty. It follows that an effective anti-poverty strategy would be to increase work rates. This was precisely the goal of the welfare reform legislation enacted in 1996 [P.L. 104-193], which replaced the Aid to Families with Dependent Children program with the TANF program. Passed on a strong bipartisan basis, and signed by Democratic President Bill Clinton, the new law required individuals to meet work requirements in order to qualify for welfare benefits. Mothers on welfare had to participate in state-designed welfare-to-work programs that provided training, job search assistance, or actual work experience.” He continued, “After passage of the 1996 reforms, poor mothers entered the workforce in unprecedented numbers. Between 1995 and 1999, for example, there was an increase of more than 40 percent in the number of never-married mothers, the poorest of the poor, who found employment. In large part due to this increased employment of never-married mothers, poverty among all single mothers and their children fell by 30 percent, from a 1991 peak of 47.1 percent to 33.0 percent in 2000, its lowest level ever…This example demonstrates what is possible if government policy encourages and even pressures adults to go to work and then subsidizes the incomes of those who earn low wages. The combination of work requirements and earned public benefits has the appearance of an approach to reducing poverty that has strong bipartisan overtones.”
In her testimony, Laura Lein, dean of the School of Social Work at the University of Michigan, discussed the need for a multifaceted approach to decrease poverty: “Programs for families in poverty are at the intersection of three related sets of programs: workforce and economic development programs, child welfare and early education programs, and means-tested income assistance programs. Work in this area is not new, of course, but our current recession is testing programs’ efficiency and effectiveness. As poverty rates rise, it becomes more important to recognize that families experience many different pathways into poverty, and that the supports necessary to stabilize families and encourage their full participation in our economy and in our civil society are multifaceted. Such supports care for both children in poverty – the parents and workers of the future – and for the current workers and parents. We need to expand basic education and workforce development. We need to make quality early childhood education and child care widely available to low-income families. We need assistance programs that can protect families and their children from near-destitution.” She continued, offering specific policy suggestions: “While paid work is the core of family stability, it is enabled by work-supportive services: a robust EITC [Earned Income Tax Credit] is a critical support, given the inadequacy of wages for family support; TANF remains a significant bridging program for those families in difficulties; access to child care and health insurance are keys to family stability; and encouragement of ‘best practices’ in employment can help employed parents sustain their families while acting as responsible employees.”
