WASHINGTON, D.C. - Today the Ways and Means Subcommittee on Income Security and Family Support held a hearing on the Temporary Assistance for Needy Families (TANF) program’s role in providing assistance to struggling families. At the hearing, Kay Brown, Director of Education, Workforce, and Income Security at the Government Accountability Office (GAO), released a new report illustrating the significant drop in TANF participation since the mid-nineties. The report revealed that 87 percent of TANF caseload decline between 1995 and 2005 was due to fewer very poor, eligible families participating in the program rather than due to a decrease in poverty.
“Right now, Temporary Assistance for Needy Families does far too little to actually help needy families," said Rep. Jim McDermott (D-WA), Chairman of the Subcommittee on Income Security and Family Support. “When we talk about TANF, we need to start by asking ourselves this question: do poor children deserve our help as their parents struggle to find or prepare themselves for employment? I would imagine that most of us would answer yes, and yet only 22 percent of poor children receive assistance from the TANF program. Too many of the people who trumpet the success of TANF are using caseload reduction as their measurement, not the number of people that rise out of poverty or who are able to find work. Providing temporary assistance to more families in great need will also mean engaging more parents in work-related services and activities. I hope we will take a close look at the program and make the fixes that will actually help families."
Highlights from GAO Report TANF: Implications of Changes in Participation Rates:
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87 percent of the decline in the TANF caseload between 1995 and 2005 was due to fewer very poor, eligible families participating in the program (as opposed to rising family incomes).
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The rate of TANF participation among eligible families steadily dropped from 84% in 1995 (under the former AFDC program) to 40% in 2005.
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If TANF participation had not dropped by this amount, 3.3 million poor or near poor families would experience a net increase in their income, and 800,000 children would be lifted out of extreme poverty (half the poverty line).
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However, higher participation would not significantly affect the total number of children living in poverty because many children in poverty still have too much family income to qualify for TANF and because TANF benefits are very low (the median State benefit equals less than one-third of the poverty level).
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GAO suggests the decline in TANF participation was in response to work requirements, diversion strategies, sanctions, other TANF program requirements, and low TANF benefit levels (average benefits declined by 17% in real terms between 1995 and 2005).
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Families that are eligible but not participating in TANF have on average somewhat higher, though still very low incomes compared to participating families ($15,000 a year compared to $9,600 a year). However, a subset of non-participating families (732,000 families in 2005) were both not working and not receiving any TANF or Supplemental Security Income (SSI) benefits, and subsequently had extremely low incomes ($7,020 median).
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In terms of more recent TANF trends, GAO surveyed 21 States about caseload changes between June 2008 and June 2009 and found that cash assistance increased in 12 of the 21 States. There was great variance between the States, ranging from a 22% increase in Nevada to a 9% decline in Texas.
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GAO found “no clear association" between a change in a State’s TANF caseload and its unemployment rate.
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All 21 surveyed States had applied for funds from the temporary TANF Emergency Contingency Fund (created by the Recovery Act) to respond to rising caseloads and/or to establish or expand subsidized employment programs.
