Transcript 12 Years into TANF: Now What?

12 Years into TANF: Now What?
A Discussion of the Current System
and What Must Change
Liz Schott and Danilo Trisi
[email protected], [email protected]
California Symposium on Poverty
Sacramento, California
October 15, 2009
Brief History of TANF: The Early Years
• Dramatic caseload declines
• Increased employment of single mothers
– Share with job rose from 62% to 73%
• Drop in poverty, context of strong
economy, expanded work supports
– Increased child care funding, EITC expansion,
SCHIP, child support collection improvement
Brief History of TANF: The Early Years
• States had “excess” TANF dollars due to
sharp and quick caseload declines
– States found other programs in state budget for
using TANF or MOE funds and/or built reserves
• State flexibility to design work programs
– Heavy “Work-First” approach used
– Work participation rate not so big an issue because
of caseload decline and state flexibility
Brief History of TANF: The Middle Years
• Caseload decline continued despite 2001
downturn in economy
• Employment of single mothers lost 1/3 of
gains and child poverty rose
• Work program innovation stalled in many
states amidst reauthorization delays
• Funding continuing to be used in range of
state programs; reserves dwindling
Recent and Current Phase: DRA and
the aftermath
• DRA made work rates effectively higher and
harder for states to meet
– Program changes often more about meeting work
rates than improving outcomes
– States respond to DRA with technical and
structural changes and harsher program
requirements
• TANF caseloads continued to decline (by
another 20% for 2005-2007)
Less than 1/3 of TANF/MOE Funds
are Spent on Cash Assistance
Recent and Current Phase:
Response during Recession
• State fiscal shortfalls led to proposed cuts to
TANF programs; some did not happen (yet)
– ARRA Emergency Fund helped support increased
assistance costs and reduced state incentives to cut
basic assistance
• TANF response to recession is slow and late
and varied across states
In 2008 Child Poverty Reached
Highest Level Since 1997
Source: Census Bureau
Percent of Children Below Half the
Poverty Line 1995-2008 Official Measure
Source: Census Bureau
Steps from Official Poverty to
NAS Measure in CBPP Analysis
Numbers (and Percentages) in Poverty, 2005
CBPP analysis of CPS. Medical and work expenditures are from formulas supplied by Census and BLS staff.
Thresholds are what Census refers to as the “MIT-GA-CE” version of the NAS thresholds. Geographic adjustment
and housing assistance values calculated using HUD FMRs. “Stable” unmarried partners are those present in
household 12 months earlier.
Children Below Half the Poverty Line
Before and After Considering Family’s
Mean-Tested Benefit
Children Below Half the Poverty Line
Before and After Considering Family’s
Mean-Tested Benefit
Children Below Half the Poverty Line
Before and After Considering TANF
Source: CBPP analysis of the Current Population Survey; additional data from HHS TRIM model.
Children Below Half the Poverty Line
Before and After Considering TANF
Children Lifted Above Deep Poverty by
Major Means-Tested Benefits, 1995 & 2005
Participation in AFDC/TANF by Families
that Meet Program Eligibility
Requirements, 1992-2005
Source: U.S. Department of Health and Human Services, Indicators of Welfare Dependence, 2005
Ratio of TANF Child Recipients to
Poor Children: 1996 and 2006
By State, Ratio of TANF Child Recipients
to Poor Children: 1996 and 2006
Number of states whose ratio of TANF
child recipients to poor children was…
Disconnected Single Mothers and
Their Children, 1996-2005.
Source: CBPP calculations of 1996, 2001, and 2004 Survey of Income and Program Participation.
Nationwide Responsiveness of TANF
and Food Stamps to the Recession
Percent Increase
March 2008 - March 2009
Note: This graph is based on data we collected for 44 states + DC.
California Responsiveness of TANF
and Food Stamps to the Recession
Percent Increase
March 2008 - March 2009
By State, Responsiveness of TANF and
Food Stamps to the Recession
Between March 2008 - March 2009,
number of states whose caseloads…
Note: This graph is based on data we collected for 44 states + DC.
Caseload Decline Often Serves as
Measure of Success in TANF
The Structure of TANF Contributes
to the Push for Caseload Decline
• Fixed federal funding
– declining in real dollars by nearly 30%
• Work Participation Rate
– Lowering the denominator (e.g. caseload) is a way
to achieve higher rate of participation
– Caseload reduction credit: same amount of credit
whether family is employed or disconnected
• Political and ideological environment also big
part of the push for caseload decline
What Next? How to Change TANF?
• How to make TANF more effective as a safety
net for families?
• How to make TANF a more effective work
program?
• Are we measuring the right things?
– “If you don’t measure the right thing, you don’t do
the right thing.” (Joseph Stiglitz, NY Times)
• How to use any new federal dollars?
How to make TANF More Effective
as a Safety Net?
• TANF structure gives states incentives for
serving fewer families, not more families
– ARRA TANF Emergency Fund is exception
• Could we add a performance measure whereby
states are evaluated on how effective TANF is
in providing a safety net for poor families?
• What specific achievement to measure?
• What are the consequences for poor
performance?
How make TANF More Effective as a
Safety Net? (cont.)
• Possible measures could include:
– Take up rates: What share of poor children (or of a
proxy group) are served by TANF cash aid?
– Measuring extent to which TANF reduces poverty,
deep poverty, or poverty gap?
• Considerations include:
– What measure could a state or county monitor in
real (or near real) time, and impact?
– How to minimize administrative tracking burden?
How to Make TANF a More Effective
Work Program?
• States are measured on a very narrow set of
activities that increasingly drives program
design and limits state flexibility
• States do not get credit for many activities
– Limited credit for education or addressing barriers
– No partial credit even if substantial effort
• Resulting program focus often does not serve
those with disabilities or other barriers well
How to Make TANF a More Effective
Work Program? (cont.)
• How to measure outcomes over time and
whether family is on aid or exits?
– Eliminate caseload reduction credit?
• How to improve measure of engagement of
current recipients in work-related activities?
• How to increase (restore) state flexibility for
program innovation?
• Should states be able to use different measures
of progress for families with disabilities?
How Should Any New Money be
Allocated?
• New federal dollars will be limited, hard to get
• Use new funds for specific initiatives rather
than simply increase block grant amount?
– Limit new money to certain poverty-alleviation
activities?
– Use new money as reward rather than adding
penalties?
• Consider how to distribute new dollars
– Allocate based on # of children in poverty?