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North Carolina is only state to push stop button on processing welfare applications

It appears that North Carolina is the only state to stop processing applications for the Temporary Assistance for Needy Families (TANF) program, formerly known as welfare, due to the federal government shutdown. This news comes just days after the Governor’s Administration was the only one in the nation to turn away low-income mothers and infants from food assistance via the WIC program. [1] Fortunately, state officials quickly reversed course last week and accepted federal contingency funding to keep WIC assistance for hungry families.

In a new editorial, the Charlotte Observer rightly points out that it is “unnecessary” for the Governor’s administration to push the stop button on applications [2] because North Carolina can float the money, continue assistance and services, and then request reimbursement by the federal government thereafter:

“Last month, the U.S. Health and Human Services Family Assistance Office wrote a pre-shutdown letter to states, promising to reimburse money states had to spend to cover federal TANF benefits. That’s probably why so few states have yet to talk about shutting down their TANF programs.

North Carolina, however, seems comparatively eager to do so. We hope it doesn’t come to that, but if the shutdown continues into November, Wos and DHHS should reconsider the decision to stop TANF assistance that the feds would eventually reimburse. For now, DHHS should continue to process Work First applications, as other states are doing, so that low-income North Carolinians don’t have an unnecessary wait for money their families need.”

While the value of North Carolina’s share of TANF funding—and its anti-poverty impact—has  declined over the years [3], it remains a lifeline for very poor North Carolinians who are trying to gain a hold on the economic ladder but need help paying for basic needs in the meantime. Fortunately, the very poor families who receive TANF benefits will continue to get assistance through the end of October. But unless a deal is reached to reopen the federal government by tomorrow, the Governor’s Administration will begin to work with County Departments of Social Services on a plan to notify TANF participants on the “status” of their benefits, according to a memo issued last week [4]. In other words, families will be notified that they won’t receive their benefits in November.

States have funds that they can use to cover the programs funded by TANF until the block grant is reauthorized, according to CLASP, an anti-poverty organization based in DC [5]. One option is to use funding left over from the last fiscal year—which is probably being used now to keep the program afloat through the end of the month. Alternatively, states (or counties) could be reimbursed for their TANF-eligible expenditures when new federal funds become available. There is a very tiny risk that states won’t be reimbursed but CLASP says that this is “extremely unlikely.” There is also a TANF Contingency Fund but it is unclear at this point if North Carolina officials have submitted a request for such funds.

Based on their track record, it is unlikely that the Governor’s Administration or state lawmakers will choose to foot the bill upfront. The News and Record put it this way [6]: “When it comes to programs that help the poor, the answer in Raleigh is frequently ‘we can’t.’”

With that said, there is no question that the blame for this hurt falls solely on the shoulders of federal lawmakers in the U.S. House who are putting state policymakers and families in a tough spot. With each passing day, it is becoming clearer that problems for low-income North Carolinians continue to mount as the federal government shutdown lengthens. The U.S. House needs to end the shutdown and pass a budget for 2014, without conditions, that includes a responsible mix of new revenue and smart spending cuts that doesn’t grow poverty. Otherwise, low-income North Carolinians, and Americans across the country, will continue to pay the price.