In Focus: State TANF Policies and Data

Aug 22, 2014  |  PERMALINK »

TANF Came Up Short in Response to the Recession

By Elizabeth Lower-Basch

A recent Brookings blog post poses a provocative question: “was the TANF welfare program's response to the Great Recession adequate?”  While the blog post asserts that it was, the answer is actually a resounding “no.”  As our colleagues at the Center on Budget and Policy Priorities (CBPP) have shown, while state programs varied in their response to the recession, TANF (Temporary Assistance for Needy Families) cash assistance overall failed to keep pace with sharp increases in unemployment and poverty.

The blog draws on a new Brookings paper (authored by Ron Haskins, Vicky Albert, and Kimberly Howard) that claims TANF largely met increased need during the recession.  But Brookings’ two major arguments are extremely flawed and don’t hold up to scrutiny.

TANF’s Responsiveness to Recession Unemployment Compared to the Old Program

Brookings argues that TANF is more responsive to unemployment during recessions than its predecessor program, Aid to Families with Dependent Children (AFDC), which was replaced by TANF in 1996.  While that’s technically true, it ignores important context.   Under TANF, poor single mothers are expected to work whenever possible.  AFDC had no such expectation, even when jobs were available.  Therefore, it’s not surprising that there was little correlation between AFDC single-mother caseloads and unemployment rates.  The number of families receiving cash assistance fell sharply when TANF replaced AFDC; even in the states where TANF grew the most in response to the recession, caseloads remained well below their AFDC levels.  Too often, low-income single mothers who lost their jobs in the recession often received neither TANF cash assistance nor unemployment benefits.

How to Measure TANF’s Growth During Increased Unemployment

Brookings asserts that because the recent recession hit states at somewhat different times, analyzing TANF growth during the period recognized as the “national recession” (as CBPP’s report did) does not fully capture the program’s responsiveness to increased unemployment.  Brookings offers two alternative measures: one that captures changes in a state’s TANF caseload during a period of rising unemployment, and another that captures caseload increases relative to their lowest level during the recession (completely ignoring the fact that caseloads declined in many states even as unemployment levels climbed). The first alternative is somewhat reasonable; the second is absurdly weighted in favor of caseload growth.

With its second measure, Brookings categorizes states based on whether they had higher- or lower-than-median percentage increases in unemployment rates and higher- or lower-than-median increases in TANF rolls.  Their analysis concludes that only seven states were unresponsive and problematic: Arizona, Georgia, Indiana, New Jersey, North Carolina, Rhode Island, and Tennessee.  But many of the states that they describe as “status quo”—lower than average in both categories—still had extremely high unemployment rates.  For instance, Michigan is considered a “status quo” state because its 109 percent growth in unemployment during its state-level recession was slightly less than the national average, even though  its unemployment rate climbed towards 15 percent.  That’s why it’s extremely misleading that the authors cite South Dakota, which peaked with 6 percent unemployment, as the illustrative example of a “status quo” state.   By using the median to determine a state’s responsiveness to the recession, Brookings is (by definition) asserting that just 25 states experienced high increases in unemployment—a claim with which almost no one would agree.

Michigan's total TANF family caseloads and unemployment rates from 2007 to 2011.

Having obfuscated TANF’s weakness with misleading statements, the  report then shifts to the safety net as a whole, concluding: “all in all, the American system of balancing work requirements and welfare benefits worked fairly well, even during the most severe recession since the Depression of the 1930s.”  This is true—but not thanks to TANF.  The elasticity of the safety net is largely owed to SNAP (the Supplemental Nutrition Assistance Program – formerly called Food Stamps), Unemployment Insurance, the Earned Income Tax Credit, and the Child Tax Credit—all of which respond automatically to recession and received additional boosts as part of the American Recovery and Reinvestment Act.  This distinction is critically important because some politicians, such as Congressman Paul Ryan (R-WI), want to use TANF as a model for other programs—a change that would severely undermine the safety net success of which Haskins and his co-authors cite. On the 18th anniversary of TANF, its impact on “ending welfare as we know it” remains to be seen.

Jul 1, 2014  |  PERMALINK »

A Step in the Right Direction, Minnesota Expands Access to TANF Education and Training Activities

By Lavanya Mohan

The state of Minnesota is taking steps towards increasing access to education activities for poor adults receiving TANF. Signed into law by Governor Mark Dayton (D-MN), bill HF2458, which was sponsored by state Senator Jeff Hayden (D-MN) and Representative Susan Allen (D-MN), expands access to adult basic education (ABE), General Educational Development (GED), English as a Second Language (ESL) and postsecondary education for participants receiving cash assistance from the Minnesota Family Investment Program (MFIP), the state administered TANF program. The legislation, which takes effect July 1, 2014, allows MFIP participants unlimited participation in these education activities as part of their employment plan without requiring enrollment in other work activities.

Almost 40% of MFIP adults have not earned a high school diploma or GED. Prior to the new law’s passage, an MFIP participant who wanted to pursue a degree or credential had to jump through a number of procedural hoops in order to have these activities included in their work plans and could be required to participate in other countable work activities in addition to their studies. This legislation removes these barriers by easing time and hour limitations on education and training work activities and by alleviating the burden of documentation previously required to participate in ABE, ESL or post-secondary activities. Furthermore, MFIP participants will now have the opportunity to pursue four-year degree programs while receiving TANF benefits, and caseworkers must inform participants with a high school diploma or GED that they have the opportunity to participate in postsecondary education or training while receiving TANF. Poor parents, who are MFIP participants, can now pursue educational activities without harsh restrictions.

Another component of the Minnesota legislation allows all participants 12 weeks to pursue job search activities, rather than the previously allowable 6 weeks of job search. This flexibility will provide MFIP participants more opportunity to secure a well-paying job. The changes in the legislation will affect the nearly 70,000 parents – and their children – in the state of Minnesota who receive TANF benefits.

This legislation was promoted by a broad coalition of state advocates in a campaign called “Prosperity for All.”  The campaign highlighted that these changes to the MFIP rules would be good for employers and the economy, as well as participants and their children:

  • Increased educational attainment will lead to increased earnings for parents. In Minnesota, wages for those who have four-year and advanced degrees have risen while wages for high school graduates have stagnated and fallen, making it hard for poor families to make ends meet.
  • As mothers pursue postsecondary education activities, children also fare better academically.
  • Minnesota is facing a skills gap – two out of three employers cannot find skilled employees. Allowing MFIP participants to acquire skills through credentials and degrees will help meet employers’ needs. By 2018, about 70% of jobs in Minnesota will require some postsecondary education.

Arbitrary restrictions on education and training for TANF recipients are poorly matched to the demands of today’s economy, and trap TANF families in poverty. CLASP applauds the success of Prosperity for All and Minnesota lawmakers in expanding access to education and training activities and urges other states, and the federal government, to follow suit.  

Jun 30, 2014  |  PERMALINK »

TANF, SNAP Improvements Come to New York City

By Lavanya Mohan and Elizabeth Lower-Basch

In May, Steven Banks, the new Commissioner under Mayor de Blasio of the Human Resource Administration (HRA), the city’s social services agency,  announced key initiatives that will improve access to income supports and training, thereby reducing barriers to self-sufficiency for poor people. In the past, New York City has pioneered innovative anti-poverty programs, such as a pilot that expands the Earned Income Tax credit (EITC) for low-income childless workers, including non-custodial parents.  However, the city has not previously focused on improving access to Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF).

One of these key HRA initiatives is accepting a federal waiver to ease restrictions for receipt of Supplemental Nutrition Assistance Program (SNAP) benefits by Able-Bodied Adults Without Dependents (ABAWDs) due to high unemployment rates. Without the federal waiver, ABAWDs are subject to strict eligibility rules – only receiving SNAP benefits for three months out of every three years if they are not employed at least 20 hours per week or in a qualifying work activity (for more information, see SNAP Works: SNAP Work Requirements and Time Limits). Childless workers, including non-custodial parents, often do not qualify for any other safety net benefits. The change in rules will affect 40,000 SNAP recipients in New York City who fall within this category. 

Another important reform that HRA plans to adopt will allow TANF recipients the opportunity to meet their work requirements by attending school leading to a four-year college degree.  This does not remove the time limit on full-time education and training, but lifts the arbitrary limit on the type of degrees that may be counted. TANF recipients will also be able to count school, homework and work-study hours in their employment plan. This reflects a corresponding change in the state rules passed as part of the New York State budget earlier this year.

Along with these reforms, additional measures aim to improve agency follow-up and engagement with SNAP applicants and recipients.  The final approved budget met HRA’s request of $9.7 billion, an increase of $195 million from the previous year. The budget will also provide universal free school meals for all students at public middle schools in New York City.  CLASP applauds these efforts that decrease barriers poor individuals face as they strive to secure employment and become self-sufficient.

site by Trilogy Interactive