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Wednesday, February 22, 2012

The Temporary Assistance for Needy Families (TANF) Block Grant: Issues for the112th Congress

Gene Falk
Specialist in Social Policy

P.L. 112-78 funded TANF through February 29, 2012. It funds TANF basic block grants (the state family assistance grant), healthy marriage and responsible fatherhood grants, and certain other funds at their FY2011 funding. The House has twice approved measures that would fund TANF through the end of FY2012. The measures also would restrict access to TANF cash at certain establishments as well as include a provision to revise TANF data reporting standards. These provisions first passed as part of legislation (H.R. 3630) that passed the House on December 13, 2011, as part of a measure to extend the 2011 payroll tax reduction and unemployment benefits. They passed the House a second time as a stand-alone TANF measure, H.R. 3659, on December 15, 2011.

The short-term extension of TANF defers major budget and policy decisions related to the block grant. Most federal TANF policy focuses on historical concerns related to cash assistance for needy families with children, which led to the 1996 welfare law. However, TANF has evolved into a funding stream that funds a wide range of economic aid and human services that address economic and social disadvantage for families with children. In FY2010, only 30% of all federal TANF and associated state dollars were used for basic monthly cash assistance.

The recent recession was the first long and deep one since the enactment of the 1996 welfare law. TANF’s contingency fund, established in 1996 to provide extra grants during recessions, was exhausted in early FY2010. Congress created a $5 billion temporary Emergency Contingency Fund (ECF) for FY2009 and FY2010 that provided extra funding to help pay for increased cash assistance caseloads, short-term aid, and subsidized employment. The ECF expired on September 30, 2010. Congress might consider policy alternatives to provide states with extra funding during the next economic downturn.

A TANF-funded activity that was substantially expanded during the recent economic downturn was subsidized employment. The ECF provided $1.3 billion for subsidized employment for an estimated 262,500 slots during the lifetime of the fund. TANF-funded subsidized employment can be for those on the assistance rolls as well as other low-income parents, caretakers, or youth. Congress might consider ways to encourage states to continue subsidized employment activities, including providing dedicated funding for this activity and/or considering participation in subsidized employment for individuals not receiving ongoing assistance when assessing state TANF performance.

Additionally, most traditional welfare reform issues have focused on families headed by a single mother. Current law provides TANF grants to community-based organizations, for initiatives to promote both healthy marriage and responsible fatherhood. However, poor noncustodial fathers, like their poor single mother counterparts, tend to have low levels of educational attainment, weak attachment to work, and health barriers to employment. They might also have a criminal record. Congress might examine ways to expand TANF-funded work and employment services for disadvantaged noncustodial fathers.

Date of Report:
January 31, 2012
Number of Pages:
Order Number: R41
Price: $29.95

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