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Monday, January 9, 2012

The Temporary Assistance for Needy Families Block Grant: An Introduction

Gene Falk
Specialist in Social Policy

The Temporary Assistance for Needy Families (TANF) block grant provides grants to states, Indian tribes, and territories for a wide range of benefits, services, and activities that address economic and social disadvantage for families with children. TANF is best known for funding state cash welfare programs for needy families with children, and it was created in the 1996 welfare reform law. However, TANF is not synonymous with cash welfare. In FY2009, only 28% of federal and state TANF dollars were for cash welfare. TANF also funds child care; programs that address child abuse and neglect; various early childhood initiatives, including prekindergarten programs; earnings supplements for workers in low-income families; emergency and short-term aid; pregnancy prevention programs; responsible fatherhood programs; and initiatives to encourage healthy marriages.

The bulk of federal TANF funding is in a fixed block grant, which has been set at $16.5 billion since FY1997. The basic block grant is not adjusted for inflation, or for changes in the circumstances of a state such as its cash welfare caseload, population, or number of children in poverty. States are also required to spend a specified minimum of $10.4 billion in state funds on TANF-related activities and populations. This amount also has not changed since FY1997.

TANF cash welfare programs today reflect a long history (going back to the early 1900s) and much controversy. States set their own cash welfare benefit levels. In 2009, cash benefits in all states represented a fraction of poverty-level income. In New York, the state with the highest benefit among the 48 contiguous states, the maximum TANF cash benefit for a family of three was $721, which translates to 47% of poverty-level income. Families with adult recipients (and certain nonrecipient parents) come under work participation rules. Federally funded aid is also time-limited for such families.

The cash welfare caseload has declined dramatically from its pre-welfare-reform high of 5.1 million families in 1994 to 1.7 million families in July 2008. The cash welfare caseload increased during the recession, standing at 1.9 million families in December 2010. The cash welfare caseload has traditionally consisted of families headed by a nonworking parent, usually a single mother. However, in FY2008, less than half of the TANF cash caseload fit this description. The TANF cash caseload is very diverse, with more than half the caseload having different characteristics than the historical traditional cash welfare family.

TANF is not a program per se, but a flexible funding stream used to provide a wide range of benefits and services that address the effects of, and the root causes of, disadvantage among families with children. TANF is currently funded through February 29, 2012. Decisions on extending TANF funding in the 112th Congress will be made in the context of both the lingering effects of the 2007-2009 recession and longer trends that were evident even before the recession that showed an increasing percentage of children living in poverty and born into circumstances associated with economic disadvantage.

Date of Report: December 28, 2011
Number of Pages: 19
Order Number: R40946
Price: $29.95

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