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Letter from Douglas Holtz-Eakin, Director CBO Regarding Potential Additional Costs for the TANF 1 (February 2005)

handle is hein.congrec/cbo10554 and id is 1 raw text is: CONGRESSIONAL BUDGET OFFICE Douglas Holtz-Eakin, Director U.S. Congress Washington, DC 20515 February 9, 2005 Honorable Jim McDermott Ranking Member Subcommittee on Human Resources Committee on Ways and Means U.S. House of Representatives Washington, DC 20515 Dear Congressman: At the request of your staff, CBO has estimated the potential additional costs that states could incur to implement the work participation requirements specified in H.R. 240 for those receiving Temporary Assistance for Needy Families (TANF). H.R. 240, the Personal Responsibility, Work, and Family Promotion Act of 2005, would require states to engage an increasing proportion of families receiving TANF in work activities. CBO estimates that the potential additional cost to states (including child-care expenses) of a work program that meets the proposed requirements would reach $2.9 billion in 2010 and total $8.3 billion over the 2006-20 10 period (see Table 1). This estimate illustrates the costs if states chose to meet the new requirements by funding more activities for recipients, such as work experience programs. Actually, CBO expects states would instead partially or fully avoid these costs by moving families to separate state programs or averting the requirements by some other means. TABLE 1. ESTIMATE OF THE POTENTIAL ADDITIONAL COSTS TO STATES FOR MEETING THE WORK PARTICIPATION REQUIREMENTS IN H.R. 240 By Fiscal Year, in Billions of Dollars 5-Year 2006 2007 2008 2009 2010 Total Work Costs 0.2 0.4 0.9 1.2 1.5 4.2 Child-Care Costs 0.2 0.4 0.9 1.2 1.5 4.1 Total 0.4 0.8 1.7 2.4 2.9 8.3 NOTE: Components may not sum to totals because of rounding. www.cbo.gov

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