for Needy Families has lifted fewer and fewer children out of deep poverty.
Sixteen years ago, TANF provided cash assistance to 68 of every 100 families with children living in poverty. In 2010, it provided cash assistance to only 27 of 100 such families. The two researchers refer to this as the TANF-to-poverty ratio. In the late 1990s, that ratio fell as welfare caseloads dropped because of a short-lived prosperity when many people who previously couldn't find jobs did so. But the caseload has also fallen during the hard years that followed, particularly of the most recent recession. That latter fact indicates a serious disjuncture between the needs of the poor and one of the key programs being provided to raise them out of poverty.
While we justifiably talk about the damage done to the middle class by tax and spending policies favoring Americans at the top of the heap, we've almost stopped mentioning what's happened to the poor. They have been a match for the cliché: They are getting poorer. And a big contributor is TANF, which replaced AFDC to "end welfare as we know it," as noted in the famous campaign slogan of Bill Clinton, who signed the reform bill in 1996.
Getting low-income Americans out of a welfare-dependency cycle and into jobs was an important objective of some of the more well-intentioned backers of the reform effort. The system was definitely broken. But the five-year lifetime limit on how long a person could receive TANF funds, the conversion of federal money for the program into block grants for the states that they can spend "flexibly" and stringent work participation requirements have all contributed to making it more difficult for families in need to obtain assistance. The situation was already worsening as early as 2001, but it accelerated with the advent of the 2007 recession.
While the number of families on welfare went from 4.7 million in 1995 to 2.0 million in 2010, that doesn't mean that someone in those 2.7 million households suddenly off the rolls found work. In fact, many did not. But because of changes made in 2005, states get a federal credit in their TANF block grants for every percentage decrease in their welfare caseload. But that credit isn't calculated with any attention paid to why someone goes off welfare. Thus, in all the states, but some far more than others, reducing the welfare caseload regardless of the consequences to the individuals affected has become standard operating policy. Those reductions have allowed states to "flexibly" move money from the federal TANF block grant into other areas of their budgets.
Results? The number of families with children in poverty has risen 17 percent, from 6.2 million to 7.3 million. "The number of families with children in deep poverty increased by 33 percent between 1995 and 2010, from 2.4 million to 3.2 million. But TANF failed to respond to the increase in need: between 1995 and 2010, the number of families that received TANF declined by 58 percent."
This is no small matter:
Two well-known poverty researchers, Greg J. Duncan and Katherine Magnuson, have shown why this trend is so troubling, providing evidence that poverty among young children not only slows them in school but also shrinks their earnings as adults. Welfare-to-work programs and other anti-poverty experiments “suggest that income plays a causal role in boosting younger children’s achievement” in preschool and elementary school, they note. [...] They also found that among families with incomes below $25,000, children whose families received a $3,000 annual income boost when the children were under age 6 earned 17 percent more as adults, and worked 135 more hours per year after age 25, than otherwise-similar children whose families didn’t receive the income boost. The same effect was not found among families making over $25,000, for whom a $3,000 boost in income increased young children’s later earnings by only 2 percent.Trisi and Pavetti have made several recommendations to improve the program. Key among them are making the work participation requirements more realistic and flexible, requiring states to spend a minimum percentage of their block grants on assistance to the poor and conducting a thorough federal review of TANF's role in lifting families with children out of deep poverty.
Flexible block grants, with reduced funding, have become a right-wing mantra for "reform." Rep. Paul Ryan's budget proposals, for instance, would fund Medicaid and the food stamp program (SNAP) with capped, flexible block grants. This is a license for the states to transfer funds to budget areas that whoever is in power favors. In the current political climate in many states, such capped grants are also a guarantee that impoverished Americans will be worse off after the changes are made.