The Temporary Assistance for Needy Families (TANF) Block Grant

[Excerpt] The Temporary Assistance for Needy Families (TANF) block grant was created in the 1996 welfare reform law (the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, P.L. 104-193). That law was the culmination of a series of legislative changes that altered the rules for providing benefits and services to needy families with children

The Earned Income Tax Credit (EITC): An Overview

The Earned Income Tax Credit (EITC or EIC) began in 1975 as a temporary program to return a portion of the Social Security tax paid by lower-income taxpayers (the credit was, and remains, calculated as a percentage of earned income, with no direct link to Social Security taxes paid by the tax filer), and was made permanent in 1978. In the 1990s, the program became a major component of federal efforts to reduce poverty, and is now the largest need-tested, anti-poverty cash entitlement program. Childless adults in 2011 (the latest year for which data are available) received an average EITC of $264, families with one child received an average EITC of$2,199, families with two children received an average EITC of $3,469, and families with three or more children received an average EITC of$3,750. A low-income worker must file an annual income tax return to receive the EITC and meet certain requirements for income and age. A tax filer cannot be a dependent of another tax filer and must be a resident of the United States unless overseas because of military duty. The EITC is based on income and whether the tax filer has a qualifying child. The EITC interacts with several nonrefundable federal tax credits to the extent lower-income workers can use the credits to reduce tax liability before the EITC. Income from the credit is not used to determine eligibility or benefits for need-tested programs. The maximum earned income amounts, phase-out income levels, disqualifying investment income level, and maximum credit amounts are adjusted annually to reflect inflation. The actual amount of the credit a tax filer receives is determined by the tax filer’s earned income and number of qualifying children using these inflation adjusted parameters

The Temporary Assistance for Needy Families (TANF) Block Grant: A Legislative History

[Excerpt] The Temporary Assistance for Needy Families (TANF) block grant was created by the 1996 welfare reform law, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L. 104-193). It replaced the program of cash assistance for needy families that dated back to the New Deal, Aid to Families with Dependent Children (AFDC), and some of its related programs. The enactment of the 1996 welfare reform law was the culmination of a debate about how to overhaul programs providing cash assistance to needy families with children— specifically, those headed by single mothers—that spanned four decades: from the 1960s to the 1990s. Most of the legislative activity on TANF over the past 15 years has been to temporarily extend the program funding and financing authority for TANF. The 1996 welfare law provided both program authority and funding (appropriations) for TANF through the end of FY2002. Since then, with the exception of one long-term extension, TANF funding has been extended at various times on a short-term basis. Most of these extensions did not change TANF policy, though policy changes were included in extensions enacted in 2006, 2010, and 2012. The Consolidated Appropriation Act, 2017 (P.L. 115-31) extended TANF funding through the end of FY2018 and altered certain provisions related to research on TANF and its outcomes. This report will begin with a brief overview of the history of the AFDC program and the welfare reform debates of the 1960s to the 1990s. That overview will be followed by a summary of the 1996 welfare reform law and the changes made since 1996. The report concludes with a detailed chronology of TANF legislation

The Temporary Assistance for Needy Families (TANF) Block Grant: A Primer on TANF Financing and Federal Requirements

[Excerpt] The Temporary Assistance for Needy Families (TANF) block grant provides federal grants for a wide range of benefits and activities. It is best known as the major source of funding for cash welfare for needy families with children. However, federal law allows TANF funds to be used for other benefits and services that provide economic help to low-income families with children and to support the goals of reducing out-of-wedlock pregnancies and promoting two-parent families.The TANF block grant was created in the 1996 welfare reform law (P.L. 104-193). At the federal level, TANF is administered by the Department of Health and Human Services (HHS). TANF programs operate in all 50 states, the District of Columbia, Puerto Rico, Guam, and the Virgin Islands. American Samoa is eligible to operate a TANF program, but has not opted to do so.1 The Social Security Act designates all these jurisdictions as “states,” and thus that term will be used for them in this report.2 Federally recognized Indian tribes may also operate TANF programs. Tribal TANF programs are funded through allocations made from the TANF basic block grant to the state in which the tribe offers TANF benefits and services. It is the states and the tribes that provide TANF benefits and services to families and individuals. This report provides an overview of TANF financing and rules for state programs, describing federal TANF grants and state funds under a “maintenance-of-effort” (MOE) requirement; how federal TANF and state MOE funds may be used to help achieve the purpose and goals of the TANF block grant; rules that apply when TANF or MOE funds are used to provide “assistance” to needy families with children; rules that apply when TANF or MOE funds are used for benefits and services other than assistance; certain accountability requirements, including requirements that states submit plans and report data to the federal government; and provisions of TANF law not directly related to grants to states, such as competitive grants for promoting healthy marriage and responsible fatherhood, and tribal TANF provisions

The Temporary Assistance for Needy Families (TANF) Block Grant: Responses to Frequently Asked Questions

This report provides responses to frequently asked questions about the Temporary Assistance for Needy Families (TANF) block grant. It is intended to serve as a quick reference to provide easy access to information and data. This report does not provide information on TANF program rules

Temporary Assistance for Needy Families: Welfare Waivers

[Excerpt] The Department of Health and Human Services (HHS) announced that it is willing to waive certain federal work participation standards under the Temporary Assistance for Needy Families (TANF) block grant to permit states to experiment with “alternative and innovative strategies, policies, and procedures that are designed to improve employment outcomes for needy families.” The work participation standards are numerical performance standards that each state must meet or risk being penalized through a reduction in its block grant. These are standards that apply to the states, not directly to individuals, though they may influence how states design their welfare-to-work programs. Such waivers will be the first “new” waivers to test welfare-to-work strategies in more than 15 years. The waiver initiative would permit states that undertake an alternative welfare-to-work strategy to assess their programs using measures different from those in the current standards. HHS announced this policy through the release of an Information Memorandum on July 12, 2012. State requests for waivers will have to be approved by HHS and the Office of Management and Budget (OMB), and meet specified criteria. Under the 1996 law that created TANF, states had the authority to operate programs created under waivers of pre-1996 welfare law until their scheduled expiration. The last such waiver expired in 2007. Additionally, the Administration of President George W. Bush made a legislative proposal to create new “superwaiver” authority that would, among other things, have allowed for the waiver of the federal TANF work participation standards. That proposal passed the House three times between 2002 and 2005. A scaled-back version of this proposal was reported from the Senate Finance Committee, but not approved by the full Senate, twice during that period. This report discusses • the current TANF work participation standards; • the HHS initiative to waive TANF work participation standards; • pre-1996 welfare waivers, including how they were treated under TANF; and • the “superwaiver” proposal. This report is not a legal analysis of the Secretary’s authority to waive TANF work participation standards. Rather, it describes and provides context for this HHS initiative

The Temporary Assistance for Needy Families (TANF) Block Grant: Subsidized Employment Demonstration Proposal: In Brief

[Excerpt] The proposed Accelerating Individuals into the Workforce Act (H.R. 2842) would provide $100 million in FY2018 funding under the Temporary Assistance for Needy Families (TANF) block grant for demonstrations to test two approaches—subsidized employment and “career pathways” programs—to help disadvantaged individuals. These funds would be provided in addition to the TANF basic block grant to the states. The$100 million cost of the proposal would be financed by reserving funds from the FY2018 appropriation for the TANF contingency fund. Subsidized employment programs are those where public funds are used to pay all or part of the wages, benefits, and other costs of employing an individual. Career pathways are a workforce development approach that combines education, training, and other services to help individuals enter or advance within a specific occupation or occupation grouping. The bill was ordered reported from the House Ways and Means Committee on June 15, 2017. It is scheduled for House floor consideration the week of June 19, 2017

Extension of the Temporary Assistance for Needy Families (TANF) Block Grant in the Consolidated Appropriations Act: In Brief

[Excerpt] The pending FY2017 Consolidated Appropriations Act (the proposed House amendment to the Senate amendment to H.R. 244) would extend funding for the Temporary Assistance for Needy Families (TANF) block grant for the remainder of FY2017 and for FY2018. The bill would also revise the financing and activities of TANF-related research and evaluation. The changes to TANF-related research and evaluation are substantially the same as in a 2016 House-passed bill (H.R. 5170; 114th Congress). The TANF block grant is best known for providing monthly assistance (often called “welfare”) for needy families with children. However, TANF is a broad-purpose block grant to states, tribes, and territories that provides funds for a wide range of benefits and services to ameliorate and/or address the root causes of childhood economic disadvantage. In addition to monthly assistance, TANF provides funding for work and job preparation activities for needy parents and youth; child care subsidies; earnings supplements, including refundable tax credits; early childhood development programs; and programs for families where children are at risk of, or have been subjected to, abuse and neglect

Temporary Assistance for Needy Families (TANF): Issues for the 110th Congress

Enactment of the Deficit Reduction Act of 2005 (DRA, P.L. 109-171) ended more than four years of congressional debate on “reauthorizing” the block grant of Temporary Assistance for Needy Families (TANF). The DRA extended funding for most TANF grants through FY2010, except TANF supplemental grants which expire after FY2008. Supplemental grants go to 17 states that have high population growth or low historic funding in TANF’s predecessor programs per poor person. TANF is best known as the funding source for welfare benefits for low-income families with children. In 2005, about two million families per month received TANF cash welfare, down from the historical high of five million families receiving cash welfare in the mid-1990s. In 2005, about three in ten poor children were in families that received TANF cash welfare. However, TANF funds a wide range of “nonwelfare” benefits and services for needy families with children. In FY2005, spending on activities related to traditional cash welfare accounted for a little more than half of total TANF funding, while other “nonwelfare” activities accounted for the remainder. Still, most issues that Congress has debated in the past, and will potentially consider in the 110th Congress, relate to TANF cash welfare. The DRA revised the rules relating to TANF work participation standards for families receiving welfare, by requiring states to either increase participation in activities or reduce their welfare caseloads to meet these numerical performance standards. Many states had to act quickly to avoid failing these standards, which were effective in FY2007. Further, states must engage 90% of their two-parent welfare caseload in activities — a fairly high standard that President Bush’s FY2008 budget seeks to eliminate. The DRA also required the Department of Health and Human Services (HHS) to issue regulations defining the specific activities that may be counted toward the participation standards. The regulations, published June 29, 2006, clarified that the participation standards focus on work or short-term job preparation. This raises old issues of whether a “work-first” orientation is best for those who have barriers to employment, such as very low levels of educational attainment or disabilities. Congress might consider proposals left over from TANF reauthorization proposals, but not included in DRA, to loosen some rules for nonwelfare spending, such as allowing carry-over funds to be used for nonwelfare benefits and services and to consider any TANF child care or transportation benefits “nonwelfare” and not subject to the rules associated with welfare benefits. Congress might also consider improving the information available on how TANF funds are used for nonwelfare benefits. Additionally, legislation that affects foster care, child welfare services for abused and neglected children, and child care funding would have an effect on TANF, since large amounts of TANF “nonwelfare” dollars are used to supplement dedicated federal and state funding for these programs. This report will be updated as legislative events warrant

Research Evidence on the Impact of Work Requirements in Need-Tested Programs

[Excerpt] Congress is again debating work requirements for programs providing need-tested assistance to low-income families and individuals. Need-tested programs provide benefits and services to individuals and families based on financial need (usually low income). This is in contrast to social insurance programs such as Social Security and Unemployment Insurance, which base their benefits on past work. Work requirements for cash assistance for parents in needy families with children receiving public benefits have been part of policy debates since the 1960s. Those debates culminated in the 1996 welfare reform law (P.L. 104-193), which created the Temporary Assistance for Needy Families (TANF) block grant to replace the pre-1996 cash assistance program of Aid to Families with Dependent Children (AFDC). Since the enactment of the 1996 law, extending work requirements to other need-tested programs has sometimes been raised in policy debates about need-tested programs. Legislation before the 115th Congress—the House-passed version of H.R. 2—would expand work requirements in the Supplemental Nutrition Assistance Programs (SNAP). H.R. 5861, reported to the House from the Ways and Means Committee, would alter some of TANF’s rules regarding work. In addition, the Trump Administration is currently granting demonstration waivers for states to implement work requirements for certain recipients of Medicaid, and has proposed expanded work requirements for housing assistance programs. Work requirements for recipients of government assistance seek to achieve a variety of policy goals. They can attempt to offset work disincentives in government assistance programs and promote a culture of work over dependency on government benefits. Work requirements can also reduce the assistance caseloads, leading to government savings. They can screen out those who decide that the benefit of receiving assistance is not worth the cost of complying with a work requirement. They can also be used to remove from the assistance programs those who do not comply with the societal norm of work.1 In general, the economic status of most individuals is tied to work—either current work, past work, or the work of another family member. Thus, requiring work can be seen as a means of improving the economic status of individuals and families, as it is the primary means of lifting them out of poverty. What does the research evidence indicate about the impact of work requirements in meeting these policy goals? Most of the research that addresses this issue comes from a set of experiments, conducted prior to the 1996 welfare reform, on alternative approaches to the work and education provisions in TANF’s predecessor program, AFDC. This report summarizes the findings from the pre-1996 welfare-to-work experiments as well as the limits of applying those findings to the current policy debate around work requirements