Gene Falk
Specialist in Social Policy
The Temporary Assistance for Needy Families (TANF) block grant funds a wide range of benefits and services for low-income families with children. TANF was created in the 1996 welfare reform law (P.L. 104-193). This report responds to some frequently asked questions about TANF; it does not describe TANF rules (see, instead, CRS Report RL32748, The Temporary Assistance for Needy Families (TANF) Block Grant: A Primer on TANF Financing and Federal Requirements, by Gene Falk).
TANF Funding. TANF provides fixed funding to states, the bulk of which is provided in a $16.5 billion-per-year basic block grant. States are required in total to contribute, from their own funds, at least $10.4 billion under a maintenance-of-effort (MOE) requirement. The basic block grant is not adjusted for inflation or changes in the cash welfare caseload (see “Cash Welfare Caseload,” below). It has lost 26% of its value to inflation from FY1997 through FY2010. P.L. 111-291 funds TANF through the end of FY2011. President Obama’s FY2012 budget proposal would continue TANF funding, except contingency funds, at its FY2006 through FY2010 levels through FY2012.
State Spending. Though TANF is best known for funding cash welfare payments for needy families with children, the block grant and MOE funds are used for a wide variety of benefits and activities. In FY2009, expenditures on basic assistance (cash welfare) totaled $9.3 billion—28% of total federal TANF and MOE dollars. TANF also contributes funds for child care and services for children who have been, or are at risk of being, abused and neglected.
Cash Welfare Caseload. In September 2010, the number of families receiving TANF cash welfare was 1.9 million families, consisting of 4.6 million recipients, of which 3.4 million were children. The cash welfare caseload is very heterogeneous. The type of family historically thought of as the “typical” cash welfare family—one with an unemployed adult recipient—accounted for less than half of all families on the rolls in FY2008. Additionally, 15% of cash welfare families had an employed adult, while almost half of all families had no adult recipient. Child-only families include those with disabled adults receiving Supplemental Security Income (SSI), adults who are nonparents (e.g., grandparents, aunts, uncles) caring for children, and families consisting of citizen children and ineligible noncitizen parents.
Cash Welfare Benefits. TANF cash benefits are set by states. In July 2009, the maximum monthly benefit for a family of three ranged from $923 in Alaska to $170 in Mississippi. Benefits in all states represent a fraction of poverty-level income. In the median state (Kansas), the maximum monthly benefit of $429 for a family of three represents 28% of poverty-level income.
Cash Welfare Work Requirements. TANF requires states to engage 50% of all families and 90% of two-parent families in work activities. However, these standards are reduced by caseload reduction from FY2005. Further, states may get an extra credit against these standards by spending more than required under the TANF MOE. In FY2008, states achieved an all-family participation rate of 29.4% and a two-parent rate of 27.6%. That year, nine jurisdictions failed the all-family standard, and six jurisdictions failed the two-parent standard. States that fail to meet work standards are at risk of being penalized by a reduction in their block grant.
Date of Report: February 16, 2011
Number of Pages: 36
Order Number: RL32760
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Marc Labonte
Specialist in Macroeconomic Policy
The Federal Reserve’s (Fed’s) current statutory mandate calls for it to “promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.” Some economists have argued that the current mandate should be replaced with a single mandate of price stability. Often the proposal for a single mandate is paired with a more specific proposal that the Fed should adopt an inflation target. Under an inflation target, the goal of monetary policy would be to achieve an explicit, numerical target or range for some measure of price inflation. Inflation targets could be required by Congress or voluntarily adopted by the Fed as a way to pursue price stability, or a single mandate could be adopted without an inflation target. Alternatively, an inflation target could be adopted under the current mandate.
For at least the past two decades, bills have been introduced in Congress to switch the Fed’s current mandate to a single mandate of price stability. In the 112th Congress, Representative Pence introduced H.R. 245, which would strike the goal of maximum employment from the mandate; it does not include an inflation target. Were a single mandate to be adopted in the United States, it would follow an international trend that has seen many foreign central banks adopt single mandates or inflation targets in recent decades.
Arguments made in favor of a price stability mandate are that it would better ensure that inflation was low and stable; increase predictability of monetary policy for financial markets; narrow the potential to pursue monetary policies with short-term political benefits but long-term costs; remove statutory goals that the Fed has no control over in the long run; limit policy discretion; and increase transparency, oversight, accountability, and credibility. Defenders of the current mandate argue that the Fed has already delivered low and stable inflation for the past two decades, unemployment is a valid statutory goal since it is influenced by monetary policy in the short run, and discretion is desirable to respond to unforeseen economic shocks. A case could also be made that changing the mandate alone would not significantly alter policymaking, because Fed discretion, transparency, oversight, and credibility are mostly influenced by other factors, such as the Fed’s political independence.
Discontent with the Fed’s performance in recent years has led to calls for legislative change. It is not clear that a single mandate would have altered its performance, however. Some of the criticisms, including lax regulation of banks and mortgages and “bailouts” of “too big to fail” firms, were authorized by statute unrelated to the Fed’s monetary policy mandate. The criticism that the Fed was responsible for the depth and length of the recession leads to the prescription that monetary policy should have been more stimulative; it does not follow that more stimulus would have been pursued under a single mandate. Whether or not the Fed allowed the housing bubble to inflate, it is not clear that a single mandate would have changed matters since the housing bubble did not result in indisputably higher inflation. Some economists believe that the Fed’s recent policy of “quantitative easing” (large-scale asset purchases) will result in high inflation. Since inflation has not increased to date, a single mandate would not have prevented quantitative easing. The Fed has discretion to pursue policies it believes are consistent with its mandate, and it has argued that quantitative easing was necessary to avoid price deflation. It could still make this argument under a single mandate.
This report discusses a number of implementation issues surrounding an inflation target. These include what rate of inflation to target, what inflation measure to use, whether to set a point target or range, and what penalties to impose if a target is missed.
Date of Report: February 25, 2011
Number of Pages: 23
Order Number: R41656
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Garrett Hatch
Analyst in American National Government
The Financial Services and General Government (FSGG) appropriations bill includes funding for the Department of the Treasury, the Executive Office of the President (EOP), the judiciary, the District of Columbia, and 26 independent agencies. Among the independent agencies funded by the bill are the General Services Administration (GSA), the Office of Personnel Management (OPM), the Small Business Administration (SBA), the Security and Exchange Commission (SEC), and the United States Postal Service (USPS).
On February 14, 2011, President Obama issued his FY2012 budget request. The request included a total of $49.68 billion for agencies funded through the Financial Services and General Government (FSGG) appropriations bill, an increase of $3.25 billion, or 7.0%, over FY2010 enacted appropriations. For each title of the regular FSGG appropriations bill, Table 1 lists the enacted amounts for FY2010 and the President’s FY2011 and FY2012 requests. Throughout this fact sheet, FY2011 enacted data are not provided, because the government is operating on a shortterm continuing resolution (CR), and full-year data are not available.1 This fact sheet will be updated to reflect full-year FY2011 appropriations when they are enacted.
Date of Report: February 24, 2011
Number of Pages: 9
Order Number: R41655
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Maggie McCarty
Specialist in Housing Policy
“Public housing” is often used as a generic term to refer to all publicly assisted housing, but the term “public housing” actually refers to a specific federal program. Created in 1937, the low-rent public housing program was the first major federal rental housing assistance program. The program initially subsidized the construction, and later the ongoing operation and maintenance, of multifamily rental housing properties for low-income families. While public housing is a federally created and funded program, the properties are owned and managed at the local level by quasi-governmental public housing authorities (PHAs) under contract with the federal government. Given this unique federal-local relationship, the program is governed in part by federal rules and regulations and in part by policies set at the local level.
The public housing program serves some of the poorest families in the nation, including persons who are elderly, persons who are living with disabilities, and other families with and without children. Families who live in public housing generally pay rent equal to 30% of their adjusted gross income; average rents paid by public housing families lag substantially behind private market rents paid by similar families.
Public housing properties themselves can be high-rise buildings, low-rise buildings, scattered site properties, and even part of mixed-income housing developments. Construction and acquisition of new public housing units effectively ended after the federal government stopped funding new development in the mid-1990s, although they began significantly decreasing much earlier as other models of providing housing assistance grew in popularity. As public housing properties have fallen into disrepair and been demolished, the number of public housing units has begun to decrease. Today, there are roughly 1.2 million units under contract and receiving federal funding, down from over 1.4 million units at the program’s peak. Federal funding comes from two main formula grants—the Public Housing Capital Fund and the Public Housing Operating Fund— which are meant to supplement the rents collected by PHAs to meet the operation, maintenance, and capital needs of public housing. There have also been several competitive grant programs that provide additional funding to PHAs, including the HOPE VI program. In recent years, regular annual appropriations for public housing have generally been in the range of $6 billion to $7 billion per year, with an additional $4 billion provided by the 2009 economic stimulus legislation.
In response to concerns about the adequacy of federal funding levels—paired with federal restrictions on tenant rents—to meet the capital needs of public housing, proposals have been introduced to promote private investment in public housing in order to preserve the existing stock. An increasing number of PHAs have pursued private financing to meet their capital needs in recent years. However, recent proposals calling for an expansion in the role of private finance in public housing have been met with concerns about the potential for the “privatization” of public housing and a loss of affordability. As the program continues to decline in terms of the number of families it serves, questions are arising about the role the program plays, and should play in the future, in terms of federal housing policy.
This report is meant to serve as an introduction to the federal public housing program. It provides information on the history of the program, how it is administered and funded, and the characteristics of public housing properties and the households they serve. While it introduces current policy issues, a full analysis of those issues and discussion of current legislation is not included in this report.
Date of Report: February 24, 2011
Number of Pages: 44
Order Number: R41654
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Linda Levine
Specialist in Labor Economics
Congress in recent years passed a number of bills intended in part to jump-start a recovery in the labor market from the recession that began in December 2007. Members of the 112th Congress are interested in the labor market’s response to these measures to help them decide how well the legislation has worked and whether additional job creation as well as retraining legislation may be warranted in light of the pace and composition of job growth since the recession’s official end in June 2009.
One way to assess the extent and nature of recovery in the labor market is to compare employment data from the end of the recession with more recent data gathered in surveys that the government regularly conducts. Accordingly, to determine if and how much job growth has occurred thus far in the recovery, this report examines the change in the number of jobs between the recovery’s start in June 2009 and January 2011. (January was the latest month for which data were available at the time of the report’s preparation.) To provide historical context, the results are compared with job growth during the 10 prior recoveries. Data for January 2011 are compared with December 2007, as well, to discern how close the number of jobs has come to the level at the recession’s onset. Employment data by job and individual characteristics for December 2007, June 2009, and January 2011 also are analyzed to ascertain how different sectors and demographic groups have fared during the recession and recovery.
A “jobless recovery” prevailed across employers in the private nonfarm sector until March 2010. That is to say, after the latest recession’s end in June 2009 the number of jobs generally continued to fall until nine months into the recovery. The recovery was jobless until October 2010, 16 months into the recovery, across all employers. At that point, net job growth began not because government employment started to rise but because it fell more slowly while private sector employment continued to grow. By January 2011, the number of jobs in the private sector had surpassed its level at the recovery’s start. At the rate that job growth recently has been occurring at private sector employers, however, it likely will take quite a few years to recoup the almost 7.7 million jobs lost during the recession.
In two of the industry groups hardest hit by the recession—construction and manufacturing— employment was lower in January 2011 than in June 2009, when the recovery began. Some of the states with the most depressed housing markets as well as manufacturing-dependent states have experienced relatively large job losses (Arizona, California, Florida, Indiana, Michigan, Nevada, Ohio). Smaller job losses among women than men during the recession are partly explained by construction and manufacturing having predominantly male workforces. Further job losses among women during the recovery compared to a small gain among men are partly explained by women’s substantial presence in the occupations (e.g., teachers) that account for much of local and state government workforces. The employment of Hispanic workers is returning fairly quickly to its level at the recession’s start, despite the ethnic group’s employment concentration in the hard-hit construction industry. Hispanic employment also is concentrated in the leisure and hospitality industry group which, as of January 2011, had recouped over 96% of jobs lost during the recession. Workers with at least a bachelor’s degree fared better than less educated workers during the recession and recovery, having regained all their job losses by late 2010.
Date of Report: February 17, 2011
Number of Pages: 15
Order Number: R41434
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