Changes in the TANF Policy

¶ … TANF?

The Congress was exasperated with the AFDC's (Aid to Families with Dependent Children) cost, nature and scope, and thus decided to put an end to it. In 1994, a record number of families (5 million, with over 1/8th of American children) were enrolled in the program. Over 50% of the kids enrolled were born out of wedlock, and around 75% had a physically-fit parent not living with them (Blanche, 1995). Nearly 50% of the enrolled families received program benefits for over 5 years (including repeat spells). In the 1994 financial year, benefit costs reached their peak (22.8 billion dollars, with 12.5 billion dollars from Federal funds and 10.3 billion dollars from local/State funds). Some legislators pressed for curbing AFDC coffers for controlling expenses, while others believed that permanent help offered to the needy kids from single-parent households helped encourage family breakups, allowed births out of wedlock, and promoted long-run dependency.

The traditional AFDC program appeared to trap several welfare recipients in nearly-permanent reliance on governmental support. Welfare reform sought to tackle this issue by instituting time limits for ensuring that governmental welfare doesn't become the way of life for such families. The 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) established a federal 5-year limit; states, nevertheless, had the authority to shorten time limits further if they desired. An explosion of welfare activities in the form of novel urban programs, healthcare, job training, etc., occurred simultaneously in the 60's with additional AFDC expansions. 4.3 million individuals were receiving AFDC by 1965; the figure rocketed to almost 10 million by 1972. A swift expansion of welfare rolls was seen, despite the era being characterized by low unemployment and general economic progress (Benjamin and Kerry, 2009; Alfred, 2007).

How Important Have These Problems Been Historically?

It has been widely acknowledged that a proper safety net initiative delivers benefits to a greater number of individuals during times of unemployment growth and difficulty in finding work. The term "safety" implies that people are, at the least, partly protected from privation, and sometimes even destitution that accompanies employment and income loss. Federal welfare constituted an open-ended privilege, encouraging long-term reliance. It was widely agreed to be a serious failure, neither contributing to poverty reduction, nor assisting the poor in becoming self-sufficient. Rather, the program fostered births outside marriage and damaged work ethic, prompting these pathologies to endure across generations (Blanche, 1995).

The 1996 welfare reforms were significant; however, the U.S. federal government continues to run numerous detrimental yet expensive welfare programs. Federal government's involvement in initiatives like TANF (Temporary Assistance for Needy Families) must be phased out; low-income support programs must be bequeathed to state authorities or private sector agencies. The same amount of diversity and flexibility that private charities provide cannot be delivered by governmental welfare programs. Private welfare agencies understand better that charity, in essence, begins with people bettering their life choices. Federal government's participation in the field has provoked a costly clutter of paperwork, rules and official procedures while hardly contributing to long-term poverty reduction (Benjamin and Kerry, 2009; Alfred, 2007).

How the Problem Was Previously Handled

Prior to 1996, the federal aid represented an open-ended privilege, contributing to long-term dependence; it was agreed by most that the program was an abysmal failure, neither alleviating poverty nor encouraging self-sufficiency in the poor. Work ethic was weakened and there was a rise in number of kids born out of wedlock, and these pathologies endured across generations (Blanche, 1995; Alfred, 2007). ADC (Aid to Dependent Children) was the first federal aid program developed under the 1935 New Deal of President Roosevelt, with an aim to complement pre-existing state support ventures for widows, as well as offer support to households wherein the head of the family was absent, deceased, or incapable of working.

Though initially meant to be a small-scale venture, ADC underwent rapid expansion. By 1938, nearly 250,000 households were enrolled in it. ADC enrolment continued rising in spite of quick economic progress, and decreasing poverty levels in the 50's. More than 600,000 families received federal benefits by 1956. Fixed block grants were granted to each state, based principally on pre-reform federal funding of their respective AFDC programs. This, however, caused states which had provided greater benefits to obtain a much larger amount of federal funds per poor household compared to other states (Blanche, 1995).

What is the Historical Background of the TANF?

TANF was created in 1996 by Congressional legislation, signed by the then-President Clinton. PRWORA created TANF from the earlier AFDC program, created through Congressional legislation under the Social Security Act, 1935 (Benjamin and Kerry, 2009). PRWORA signified the most significant AFDC-restructuring since its initiation. Key elements restructured include: (a) transference with key program design components and block-grant funding to each state individually; (b) enforcement of stringent work requirements for being entitled to federal welfare; and (c) lifetime ceilings on number of benefit-receipt years, payable from federal resources (Benjamin and Kerry, 2009; Alfred, 2007).

When Did TANF Originate?

TANF was developed by Congress via the 1996 PRWORA in an endeavor to put an end to the existing welfare system. AFDC, launched in 1935, and offering benefits to poor households with dependent children ever since, was replaced by TANF. TANF, as well as state requirements (including rules pertaining to time limits, work requirements, immigrant entitlement and child support) was instituted under the welfare law of 1996. Under the law's work provisions, states should mandate recipients to work, levy sanctions (through termination/reduction of benefits) for recipients refusing to work, and attain work-participation levels consistent with law-specified provisions (Strom-Gottfried, 2008).

How Was the Original Policy (AFDC) Changed Over Time?

Title of Legislation

Main Provision

1935

Social Security Act (SSA)

Instituted AFDC initiative for single-parent, low-income households

1961

Amendments to SSA

Established AFDC-Unemployed Parent (AFDC-UP) initiative for dependent children in households with unemployed breadwinner

1967

Amendments to SSA

Decreased rate of benefit reduction to 2/3rd; established WIN (Work Incentive) program

1981

Omnibus Budget Reconciliation Act

Raised rate of benefit reduction to 1; enforced gross income cap; included stepparents' income; increased waiver authority

1988

Family Support Act

Established the Job Opportunities and Basic Skills (JOBS) training program to educate, provide skills training, assist with job search, etc.; created Medicaid and transitional childcare programs; AFDC-UP made mandatory for all states

1996

Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA)

Put an end to AFDC, with the creation of TANF

John F. Kennedy assumed the mantle of U.S. President in 1960 at a time of growing concerns regarding poverty in the nation. However, his only contribution to the welfare sphere was changing ADC's name to AFDC, and inclusion of dual-parent households with unemployed fathers. His general support towards extending welfare to poor people did, however, pave the way for the Great Society program of Lyndon Johnson. Following Kennedy's assassination, Lyndon Johnson decided to reform society and the government, via the Congress, proclaiming that the State would battle against poverty; the Johnson administration put forth a broad collection of novel subsidy schemes for citizens and local/state governments. This was the first time since the 1935 New Deal that the U.S. witnessed a governmental expansion of such magnitude or such an explosion of anti-poverty ventures. Head Start, Medicare and Medicaid are the key initiatives launched by the Johnson administration (LaDonna, 2000; Blank, 2002; Benjamin and Kerry, 2009).

After Johnson, Washington witnessed a bipartisan agreement to uphold as well as expand Johnson's legacy. The Presidents that followed --Richard Nixon, Gerald Ford, and Jimmy Carter -- all contributed new programs to alleviate poverty. From 1965-1975, AFDC's expenditure tripled. A string of court rulings establishing welfare-recipient rights fired the growth of spending. Though welfare growth rate slackened after 1975, it still moved in an upward direction. President Reagan, after taking office in 1981, presented strong views with regards to decreasing welfare funding, which in fact, unfortunately, grew in the two terms Reagan served as President. He was, however, successful in shifting financing emphasis between welfare programs. AFDC funding, for instance, reduced by 1% in Reagan's tenure, but Earned Income Tax Credit spending increased two-fold (Blank, 2002; Benjamin and Kerry, 2009).

A widespread national consensus was reached regarding the failure of the long-established open-ended welfare system, by 1993, when Clinton became president, spurring state-government experiments in regard to welfare inside of federal-government-established constraints. A number of these experiments (especially time-limit and work requirements) went on to get included in the 1996 federal welfare modification. The PRWORA -- the biggest federal welfare revision in over three decades -- was signed by Clinton in August of the same year. This reform, by one key measure, proved extremely successful. A drastic 67% decline in number of citizens on welfare took place (12.6 million (1996) to 4.2 million (2009)) (LaDonna, 2000; Benjamin and Kerry, 2009).

Numerous significant transformations in welfare provision methods were made by the 1996 reform bill. AFDC had offered cash benefits to households with dependent children, wherein parents were either deceased, absent, unemployed or incapacitated. Both state and federal funds (federal contribution varying from 50-80%) funded the program; states established benefit levels, while federal authorities fixed eligibility requirements. Individual states were induced to enhance benefit levels for drawing in more federal funding. Also, recipients could remain enrolled for years together. AFDC was replaced by the PRWORA, through creation of TANF (Benjamin and Kerry, 2009).

What is the Legislative History of TANF?

PRWORA was passed in August of 1996, following 3 years of discussion; it repealed the AFDC program that was in operation for 61 years, replacing it with the TANF block grant initiative. Under the PRWORA, states are eligible for pre-set block grants (16.5 billion dollars yearly) through the 2002 financial year, for operating self-designed programs. However, minimum rates of work participation, lifetime benefit-limits, and work-trigger limits were imposed. Within these limits, states could reduce personal expenditure for needy children. PRWORA also steeply enhanced childcare funding (Benjamin and Kerry, 2009).

Constant Congressional efforts since the 60's, for lowering welfare usage and fostering self-sufficiency, were generally discouraging. Restructuring measures encompassed work requirements and rewards; "rehabilitative" services; support services like childcare; education and skills training; paternity established of out-of-wedlock kids; and enforcement of child support enforcement. The 1988 Family Support Act emphasized welfare recipients' and government's mutual responsibility of promoting self-sufficiency in AFDC recipients. Many states, during the early 90's, were granted permission, via AFDC federal waivers, for testing personal reform ideas like special behavioral policies, penalties, rewards, and welfare-to-work plans (Benjamin and Kerry, 2009).

Several governors, at the start of 1995, called for a block grant in order to liberate them from the rules established by AFDC. This pre-set block-grant idea, which enabled states to utilize grants for work-conditioned and temporary self-designed programs, was integrated into passed-but-vetoed reform bills in 1995, as well as in the PRWORA. At the time when TANF was passed, 4.4 million households were enrolled in AFDC. TANF's mandatory date of commencement was 1st July, 1997; however, a majority of states adopted it earlier. TANF integrated into one peak-year two connected programs - JOBS and EA (Emergency Assistance) for needy families, and federal funding measures for AFDC administration and benefits (Strom-Gottfried, 2008).

Policy Analysis

Are the Goals of the Policy Legal?

There are 4 formal aims of TANF: 1) aiding needy families to enable their children to receive care at home with their parents, 2) decrease government-dependency of poor families by fostering job-related education/training, marriage and work, 3) stop births outside marriage, and 4) support dual-parent family structures. TANF's purpose, in simple terms, is reducing individuals' governmental-reliance for welfare. Federal law stipulates that the majority of conditions laid down by TANF only apply to aid-recipients. Moreover, there are different TANF conditions applicable to households receiving aid within 'separate state initiatives' vs. 'state TANF initiative'. The former denotes state-financed programs whose spending is counted towards TANF Maintenance of Effort (MOE), but considered by the state as separate from its 'TANF program'. Thus, the goals of TANF policy are legal (Benjamin and Kerry, 2009; Strom-Gottfried, 2008).

Are the Goals of the Policy Just and Democratic?

TANF's four aims cover what is generally believed to be conventional monetary support, plus work-related activities to families. But they also empower states to utilize funds for various services and benefits for welfare, and low-income households with dependent children. States utilize TANF funds for supporting work for poor families, via provisions of transport assistance or childcare. States also exercise their authority to offer aid for childcare in relatives' homes for supporting children at risk or currently suffering abuse or neglect, and placed in a relative's care (e.g., uncle, aunt or grandparent). TANF funds are also employed in services and programs aiming to accomplish TANF's "family formation" objective, and putting an end to dependence via marriage (Strom-Gottfried, 2008; Casciano and Massey, 2008).

Secondly, the TANF system of block grants accorded states the flexibility to develop programs on their own, within federal limitations; consequently, all states created unique programs depending on their own philosophy. A number of these initiatives are grounded on state-government-piloted waiver programs. One advantage of TANF is that it allows local-level innovation and control over public assistance. Its shortcoming is the fact that program decentralization led to varying rules in different areas of the nation. Still, the policy can be said to be democratic and just (Blanche, 1995).

Do the Goals of the Policy Contribute to the Greater Social Equality?

According to the law, individual states can utilize their family support grant in all reasonably calculated ways for promoting any of TANF's four objectives. Expenses with regards to the first and second aim should be made in aid of needy households, while expenses towards the remaining aims (non-marital-child reduction and dual-parent family promotion) can be directed at non-needy households, as well (Benjamin and Kerry, 2009). Further, states can utilize TANF funds for continuing other activities (unrelated to TANF objectives), which they could carry out in individual programs under AFDC, JOBS or EA. They can transfer TANF finances (up to a maximum of 30%) to the Social Service Block Grant (maximum 10% transfer), and Child Care and Development Block Grant. TANF finances (within total transfer limits) can further be utilized in the form of matching finances for grants pertaining to job access (Strom-Gottfried, 2008).

It has been clearly outlined in the law that states can utilize TANF funds for carrying out a venture to finance separate development accounts created by TANF-eligible persons. TANF, evidently, denotes a funding source for various authorized purposes, and isn't merely a cash welfare program (Casciano and Massey, 2008). An unlimited amount of TANF funds can be carried forward from one financial year to the next; the carried-over money, however, can only be used for "assistance." While assistance isn't defined, DHHS (Department of Health and Human Services) regulations limit "assistance" to those benefits which are aimed at meeting the ongoing basic requirements of a family (such as, food, shelter, clothing, household items, utilities, general incidental spending, and personal care products), in addition to support services (like childcare and transportation for unemployed families). Non-assistance funds (directed towards short-term, non-recurrent benefits, supportive services, and work subsidies for employed families) have to be obligated before the financial year ends (for which the benefits are granted), and expended before the next year's end (Casciano and Massey, 2008).

Do the Goals of the Policy Help in the Redistribution of Income, Resources, Rights, Entitlements, Rewards, Opportunities and Status?

No, TANF works for facilitating economic independence in program participants via paid work. PRWORA necessitates participation in work activities by an increasing number of public aid recipients, as well as funds' supports, such as transport aid and childcare to ensure that poor families reach this goal. Though TANF is considerably different from AFDC's focus on offering revenues to families, whose earning lies below a particular level, the former signified the next phase in a continuing process to transform public assistance goals. ADFC, until the 60s, was small-scale, and founded on a social-casework paradigm. A large number of eligible families couldn't get aid because of disproportionate law implementation (Blanche, 1995; Alfred, 2007).

Black women were most prone to being denied assistance. Civil rights and welfare rights activities during the 60s strove to obliterate this inequality, thereby vastly enlarging welfare rolls, as well as enhancing the number of Black people enrolled in AFDC. Still, most AFDC recipients prior to TANF implementation were Whites. As a response to the welfare receipts expansion, a shift was seen in state welfare organizations' frontline employee goals, from casework to determination of income eligibility. Consequently, frontline posts were routinized and deskilled (Blanche, 1995; Blank, 2002).

Do the Goals of the Policy Contribute to a Better Quality of Life for the Target Population?

The initial five years following TANF's enactment proved the program to be a success, through dramatic reduction of nationwide welfare caseloads. Presidential proposal reported a 56% drop in welfare caseloads following TANF's enactment. Some analysts, however, propose that the decrease in caseload stems primarily from economic boom. Poor-people's advocates and local and state government authorities voice concerns with regards to TANF time limits and funding levels potentially causing hardships for poor households as well as local governments. In spite of this picture of poor families utilizing public aid in the form of long-term support because of lack of work experience, welfare-use researches before TANF enactment reveal that a small share of recipients of ADFC continued using the program for over 5 years at a time. Most recipients were shown to move off and back on to the program (Strom-Gottfried, 2008).