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A not-so-Happy Anniversary

Today marks the 15th anniversary of the Temporary Assistance for Needy Families (TANF) block grant, also known as “welfare reform”.

In 1996, under the Personal Responsibility and Work Opportunity Reconciliation Act (PWRORA), TANF replaced such welfare programs as Aid to Families with Dependent Children (AFDC) and ended federal entitlement to assistance.

The idea behind welfare reform at the time, of course, was to end families’ dependence on AFDC and create a program that would move families into work and economic security.  TANF was established in the form of a block grant that provides states, territories, and tribes federal funds each year, with the majority of funds in North Carolina going towards programs like child care, foster care, and adolescent pregnancy prevention.

The remaining TANF funds go to North Carolina’ Work First program, the only remaining cash assistance program post-Welfare Reform.  Work First was established to assist extremely low-income families in becoming economically self-sufficient through basic services, a small cash grant, and short-term training.

Now, as we reflect back over the last fifteen years, it appears that TANF has achieved one of its major goals—that of dramatically decreasing the number of low-income families on traditional public assistance. [1]

Yet, it has generally failed in its second and more important goal—helping families escape poverty and build economic security.

There’s no more telling indicator of this than looking at how TANF has responded to The Great Recession.

As a recent report from The Urban Institute [2] shows, North Carolina’s unemployment rate has jumped by 97 percent since 2007, a sure sign of the great stress that the current recession has put on our state’s economy and families.

Yet during the same time period, the number of North Carolina families receiving TANF -Work First has actually declined by 4 percent.

In good economic times, a declining TANF caseload could be taken to indicate greater economic well-being.  That is, fewer families would appear to be in poverty and therefore eligible for or enrolled in a program like TANF-Work First.

But with unemployment at 10.1 percent in North Carolina and likely to go up mor [3]e, we’re obviously not in good times and a lot of people are hurting.

One of the main reasons TANF has played such a limited role in building economic security and particularly serving as a life-line during the Great Recession is that for the program to work, there must be jobs.

To be eligible for Work First, recipients must be pursuing work, either in the form of receiving job training and/or by embarking on an extensive job search.  And after a limited amount of time, the cash benefits run out.  With the assumption being that once Work First recipients complete the program, get on their feet with a new set of skills, they’ll be able to find a job and will no longer need public assistance.

That model doesn’t work so well when it’s not just the very-poor struggling to find work.  North Carolina has lost more than 320,000 jobs [4] from December 2007 to February 2010, when unemployment hit its lowest mark.
Moreover, TANF’s flaws aren’t just evident in hard times.  Poverty has actually gone up since Welfare Reform was implemented.  And deep poverty has especially increased. [1]

Which all begs the question—shouldn’t we change TANF and find a better way to build economic security and decrease poverty?

If you think so, better contact your member of Congress.  That’s where the conversation will have to start.