CHN's TANF Reauthorization Recommendations to the Department of Health and Human Services


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The upcoming reauthorization of the Temporary Assistance to Needy Families (TANF) Program provides Congress and the Administration with an invaluable opportunity to better support working families in the United States. Although TANF has been instrumental in providing many low-income Americans with the support services and income supplements necessary to move from welfare to work, millions of poor and low-wage working people are not getting the assistance they need to escape poverty and achieve true economic security. The Coalition on Human Needs strongly urges policymakers to use this opportunity to transform the TANF program into a more effective tool for promoting financial security and reducing poverty in this country. To do so, we recommend the following changes:

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Make Poverty Reduction the Primary Goal of TANF

A main objective of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) is to end welfare "dependency" and promote self-sufficiency among low-income Americans. While many point to the dramatic 50 percent decline in welfare caseloads as proof that this goal has been achieved, the evidence itself suggests otherwise. Data from across the 50 states indicate that large numbers of former recipients who have left the rolls and entered the labor force do not receive adequate wages, job security, health insurance, child care assistance or other forms of assistance essential to obtaining economic security and supporting a family.

As a result, poverty rates across the states have not declined nearly as fast as caseload levels. In fact, the Children’s Defense Fund reports that nearly half of all families who have left the welfare rolls live in poverty – a fact that is particularly startling given the unprecedented period of economic growth this country witnessed in the later half of the 1990s.

To transform TANF into a better vehicle for achieving economic security, poverty reduction must be made an explicit goal of the program. As an incentive to achieving this goal, federal bonus grants should be provided to states that implement policies effective in reducing child and adult poverty rates.

Provide Adequate TANF Funding

While the sharp drop in welfare rolls occurred during an economic boom, the country now faces a recession. The consequences of an economic downturn are particularly devastating for poor and low-income families. Concentrated at the bottom of the labor market, often in part-time or temporary positions, low-wage workers are among the first fired and last hired when the economy contracts. Therefore, states can expect to see a number of former recipients who entered the low-wage labor market lose their jobs and return to the rolls. At the same time, those currently on the rolls will have difficulty finding jobs in this weak economy.

The numbers are already grim: the unemployment rate jumped to 5.4 percent in October - the largest one-month increase in over 21 years - and caseloads are creeping back up in many states. The Council of Economic Advisors estimates that caseloads will increase by 5 to 7 percent for every one percent increase in the unemployment rate (National Campaign for Jobs and Income Support 2001).

Given the current circumstances, it is imperative to reject the argument that the dramatic caseload reduction witnessed across the country in the late 1990s is reason to reduce TANF spending in upcoming years. Instead, to meet the growing needs of low-income Americans, TANF funding must, at minimum, be increased annually for inflation. This will boost the real value of the block grant, which has fallen by 13.5 percent since 1996. Moreover, the TANF Contingency Fund must be improved and expanded so that states have access to adequate funding during an economic recession. In addition, supplemental TANF grants to relatively poor or fast-growing states should be extended so that low-income families in those locations are more adequately served.

Improve Access to Benefits and Services for All Families in Need

One of the most troubling consequences of the sweeping changes to the welfare system enacted in 1996 has been the de-linking of benefits to various populations in need. By eliminating the federal guarantee of assistance to poor Americans, PRWORA has left millions of vulnerable adults and children with no social safety net to fall back on during hard times. Some groups, including thousands of legal immigrants, were stripped of their eligibility for benefits outright. Thousands more remain eligible but are not accessing services due to cumbersome application processes and a lack of information sharing on the part of states and local welfare agencies. Still others face severe barriers to employment, but are not getting the services they need to overcome obstacles and obtain employment. Finally, many of those in desperate need of assistance do not qualify because they live in two-parent families.

Immigrant Benefits Restoration: Recent figures show that at least 116,000 immigrant families meet income eligibility criteria, but cannot apply for TANF assistance because they entered the United States after 1996 (National Campaign for Jobs and Income Support 2001). The vast majority of these immigrants participate in the workforce and pay taxes, but experience poverty rates that are higher than the national average. Many immigrant laborers are concentrated in the service industry and other employment sectors hit particularly hard by the current recession, but are not covered by unemployment insurance. Access to welfare benefits would provide a lifeline to these families as they struggle to stay on their feet during the economic crisis. Eligibility for TANF, food stamps, Medicaid, SSI and cash assistance must be restored to all legal immigrants.
Food Stamps, Medicaid and other Benefits: Although PRWORA has arguably expanded the number of support services available to individuals transitioning from welfare to work, too many families are not receiving the assistance they need. The Urban Institute found that over 50 percent of families who have left welfare are not receiving Medicaid and 69 percent are not receiving food stamps (Loprest 1999). To enhance support for working families, states must do a better job of publicizing available benefits and linking clients to the services for which they are eligible. Resources must be included in the reauthorization package for state outreach efforts. States and localities should also be offered federal incentives to improve access to needed services. Specifically, these incentives should encourage the simplification of application processes, the availability of evening and weekend office hours, the use of multi-lingual materials where necessary, and streamlined referral services.
Severe Barriers to Employment: Some individuals confront physical and/or mental challenges that make employment impossible without comprehensive services and attention. Support services under TANF must be strengthened to address significant barriers to employment such as domestic violence, homelessness, physical disability, mental illness, and/or substance abuse. To achieve this goal, states must train caseworkers to properly identify barriers among recipients and to link those clients to the support services they need. If these services are not available, states should be barred from sanctioning recipients. At the same time, states must be allowed to exempt families facing severe barriers to employment from TANF time limits, and allow states' total number of hardship exemptions to exceed 20 percent of the caseload.
Two-Parent Families: A primary goal of the 1996 welfare law is to promote the formation of married, two-parent families. Unfortunately, many states have preserved AFDC policies that bar two-parent families from receiving benefits. Under TANF reauthorization, states must be required to remove rules that make it difficult for two-parent families to qualify for benefits. However, states should not be mandated to shift TANF block grant monies to specific family formation projects since they already have the flexibility to implement these types of programs. Any new initiatives designed to promote marriage must not deplete funds now available to single-parent families.

Modify or Eliminate Time Limits and Sanctions

While ostensibly designed to promote work and reduce welfare "dependency," certain provisions of PRWORA are bringing unnecessary hardship to many families. Time limits on the receipt of assistance and strict sanction policies can be particularly harmful, pushing people from the rolls before they can make ends meet.

Time Limits: Evidence suggests that a significant portion of those families remaining on the rolls face severe barriers to employment. Many of these families are approaching their five-year, lifetime TANF eligibility limit at a time when jobs are scarce and the unemployment rate is skyrocketing. Meanwhile, many individuals who left the program will be forced back into it by the faltering economy. States will undoubtedly confront a growing number of requests for both time-limit extensions and emergency assistance for families who have exhausted their benefits but remain in need of food and shelter aid as well as other types of support.

Therefore, states must be allowed to grant exemptions from time limits to families confronting severe employment barriers, even if the total exempted exceeds 20 percent of the caseload. Time limits must also be forgiven in states with high unemployment levels. In addition, those recipients who are caring for young or sick children, or children or relatives with disabilities should be exempted from time limits. Finally, the federal time limit clock should stop for families who “play by the rules” and are in compliance with work requirements.
Sanctions: Although the effect of sanctions on caseload reduction tends to be obscured in welfare reform debates, it is important to recognize that the rolls have dropped the most dramatically in states that impose the toughest sanctions (Rector and Youseff 1999). In these states, a recipient's first infraction of program rules results in the reduction or elimination of benefits for the entire family. Missing work to care for a sick child or breaking an appointment at the welfare agency because of work obligations can be considered infractions that warrant sanction. From 1997 to 1999, approximately 540,000 families lost their entire TANF check due to sanctions (Goldberg and Schott 2000).

Moreover, policymakers must address the fact that, relative to white families, African-American families are disproportionately likely to participate in state welfare programs that employ full-family sanctions (Soss et al 2001). In addition, recipients of color are more likely than their white counterparts to leave the rolls because of sanctions. Based on a review of evidence from available state-level studies, Elizabeth Lower-Basch (2000) reports, “those studies which examined reason for exit found that minorities were generally more likely than Whites to have their cases closed due to sanctions rather than earnings.”

Reauthorization legislation should eliminate racial disparities in the application of sanction policies and protect all families from arbitrary and unjust sanctions. Families facing severe barriers to employment should not be sanctioned, nor should parents who do not have access to safe and affordable child care. Furthermore, states must make a good faith effort to have a face-to-face interview with clients before terminating their benefits, and must have fair hearing processes in place for families who feel they have been improperly sanctioned.

Improve Work Opportunities and Supports

While large numbers of welfare recipients have joined the labor force since 1996, many are in jobs that do not pay enough to make ends meet. The Urban Institute reported that nearly 50 percent of families who have left welfare have incomes so low that they were unable to purchase food at times; another 39 percent did not always have the money to pay rent or utilities (Loprest 1999). The Urban Institute also found that a majority of recipients moving into jobs were not provided with work supports: 81 percent did not receive child care assistance, 89 percent did not receive help with expenses, and 85 percent received no aid in finding or training for a job (Loprest 1999).

Wages and Work Supports: To truly enable families to obtain economic security, all workers, including those who participate in TANF-funded employment programs, must receive a combination of decent wages and work supports. Adequate resources need to be invested in support services such as child care and transportation assistance. Federal incentives such as high performance bonus grants should be used to reward states for providing needed work supports.
Education and Training: Quality education and training programs can substantially enhance a recipient’s chances of securing employment that pays a family-supporting wage and offers room for advancement. Therefore, reauthorization legislation must repeal current restrictions on education and training. Specifically, the 30 percent cap on states’ education and training participation rates should be lifted, and these endeavors need to qualify as a recipient’s work activity for purposes of meeting state work participation rates.
Public Jobs: Individuals with few job skills and other barriers to employment must have options available to them when they cannot secure work. In addition, families should not be penalized when the economy fails to provide job opportunities. Therefore, a public jobs program should be established to serve those with limited employment experience and to guarantee work and training opportunities to communities during economic hard times.

Improve Program Accountability

The enactment of PRWORA has accelerated the trend in this country toward privatizing the delivery of welfare benefits and services, with some troubling results. Some private corporations operating local TANF programs have misused taxpayer dollars that are intended to serve the poor. In Milwaukee, Wisconsin, for example, Maximus Inc. was fined for spending TANF funds on holiday parties, staff bonuses, and efforts to secure business in other parts of the country. Goodwill Industries lost their TANF contract in Milwaukee for engaging in similar practices.

People over Profits: Administrators of TANF programs must be held accountable for the proper management of resources and delivery of services and benefits to families in need. Contracts to administer TANF programs should not simply reward caseload reduction, but must contain performance goals designed to promote family well-being. Moreover, the contracting process itself must be transparent, and those operating TANF programs must face penalties for non-compliance or misuse of welfare funds.
Data Collection: Program accountability can also be improved through the routine collection and analysis of data on TANF families. The National Academy of Sciences and others have noted that current data are insufficient for measuring the effects of TANF on families. To obtain a clear assessment of the program’s impacts on poverty levels and family well-being, states must be required to provide policymakers and the public with accurate information about how TANF funds are being used and how welfare leavers are faring. Data should be broken down by race and ethnicity to ensure that services and benefits are being distributed equitably.

We urge the inclusion of these recommendations in TANF reauthorization. By adopting these changes, the TANF program can become a true avenue for families to escape poverty and achieve economic security. Only when these goals are accomplished can we safely label welfare reform a "success."

November 28, 2001

References

Goldberg, Heidi and Liz Schott. 2000. A Compliance-oriented Approach to Sanctions in State and County TANF Programs. Washington, DC: Center on Budget and Policy Priorities.

Loprest, Pamela. 1999. Families Who Left Welfare and How They Are Doing. Washington, DC: Urban Institute.

Lower-Basch, Elizabeth 2000. “Leavers” and Diversion Studies: Preliminary Analysis of Racial Differences in Caseload Trends and Leaver Outcomes. Washington, DC: U.S. Office of the Assistant Secretary for Planning and Evaluation. http://aspe.hhs.gov/hsp/leavers99/race.htm

National Campaign for Jobs and Income Support. 2001. A Recession Like No Other: New Analysis Finds Safety Net in Tatters as Economic Slump Deepens. Washington, DC.

Rector, Robert E. and Sarah E. Youssef. 1999. The Determinants of Welfare Caseload Decline. Report no. 99-04. Washington, DC: Heritage Center for Data Analysis, Heritage Foundation.

Soss, Joe, Sanford F. Schram, Thomas P. Vartanian, Erin O’Brien. 2001. "Setting theTerms of Relief: Explaining State Policy Choices in the Devolution Revolution." American Journal of Political Science 45(2): 378-95.

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