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1 1 (February 25, 2016)

handle is hein.crs/govcdwp0001 and id is 1 raw text is: 01;0i E.$~ & February 25, 2016 Temporary Assistance for Needy Families and Related Programs: The President's FY2017 Budget Proposal s' uK) duc tQ Qfo Temporary Assistance for Needy Families (TANF) is a broad-purpose block grant to states, Indian tribes, and certain territories to address the effects and root causes of child economic and social disadvantage. It was created in the 1996 welfare reform law and is best known for helping states finance their cash assistance programs for low- income families with children, but there is broad discretion in how funds are spent. President Obama's Fiscal Year (FY) 2017 budget proposes an increase in TANF funding from current levels and a number of other policy changes. This report provides some background on TANF and a description of the President's FY2017 budget proposals for TANF and related programs. The debates preceding the 1996 law focused on whether providing cash assistance, mostly to single mothers, created welfare dependency, lessened work effort, and led to an increase in the number of children living in single parent families. (Research generally confirmed lessened work effort; results were more mixed for the impact of welfare on family structure). In March of 1994, the cash assistance rolls had reached their historic peak of 5.1 million families. Following the enactment of the 1996 law, the cash assistance caseload declined rapidly, reaching levels that had not been seen since the 1960s (see Figure 1). The caseload rose slightly in response to the recession, but then fell to stand at 1.6 million families in March 2015. Figure I. Number of Families Receiving Cash Assistance: 1959-2015 Millions of Farniies MAR 19_94 Historic Peak: 6 5.1 million families 4 --.MAR 2015 . 1.6 million 2 ...... families 1959 1974 1989 2004 2015 PERODS OF RECESSION Source: Congressional Research Service (CRS), based on data from the U.S. Department of Health and Human Services (HHS). Notes: Shaded months denote periods of recession. The decline in the caseloads in the late 1990s occurred during a period of declining child poverty. Child poverty began to increase after 2000 (even before the 2007-2009 recession). Despite this, the cash assistance caseload continued to fall. T ' ,,NF R-., ci'<,0', The 1996 welfare reform law froze federal and state funding for TANF. The federal block grant is based on federal funding for TANF's predecessor programs in the early to mid-1990s and totals $16.5 billion per year for the 50 states and the District of Columbia; the required minimum amount of state spending, under what is known as the maintenance of effort (MOE) provision, is 75% of what states spent in FY1994. The minimum state MOE dollar amount is $10.4 billion per year. The 1996 law also established a contingency fund to provide extra funding in the event of a recession. Basic TANF funding has not been adjusted for changes in circumstances (inflation, child poverty, cash assistance caseload) that have occurred since the enactment of the 1996 law. Further, the contingency fund has not always responded to changes in economic conditions. (See CRS Report R44188, Temporary Assistance for Needy Families (TANF): Financing Issues.) In the years after welfare reform, states shifted TANF funding from cash assistance to other types of benefits and services (Figure 2). From FY1995 to FY2014, the share of expenditures on basic (cash) assistance fell from $22.8 billion (71% of the total) to $8 billion (26% of the total). Some expenditures were shifted to increase the amount spent on child care and work activities and supports. However, in FY2014, $11 billion (34% of total expenditures) were in the broad other category which included services such as pre-kindergarten programs; programs for disadvantaged youth; and benefits and services for families with children who have suffered, or are at risk of, abuse and neglect. Figure 2. TANF and Predecessor Program Federal and State Expenditures, FY1995, FY2000, and FY2014. $Billions $35 . . . . . . . . . . . . . ~Other 'tr :135~ i~i~i~i~i~il ................... . Care iiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiii A dm inistration S0 . ~~sss~~sss~~~sss~~sss~ ss~~sss~~~sss~~sss~~~ss sssA ssistances~~~sss~~s As ita c EY1995 EY20OO EY20I4 Source: Congressional Research Service (CRS) based on data from the U.S. Department of Health and Human Services (HHS). In FY20 15, federal outlays for TANE totaled $16.7 billion, or 0.5% of total federal outlays. Under federal budget rules, .O 'T p\w gnom ggmm mppm qq\ a , q 'S I 11LULANJILiN,

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