NC Budget and Tax Center, TANF 20 Years Later

Redesigning TANF to lift more families out of poverty

The 1996 welfare law that created Temporary Assistance for Needy Families (TANF) has many shortcomings, as we’ve detailed in a blog series over the past week. Primarily, TANF fails to adequately support families with children who are poor through cash assistance and meaningful work activities—despite the law’s two core missions of providing a basic safety net and promoting work. The result has been grim, including a shocking spike in the number of destitute families living in crisis despite doing their best to get by.

Some folks ignore poor families’ lived experience over the past two decades and have declared that TANF has been a success overall. They often point to the impressive employment gains—often in low-wage jobs—among single mothers in the immediate years following the law’s implementation. Yet, they ignore the booming economy and the pro-work incentives built into an EITC expansion. Those benefits eroded in the aftermath of the 2007 economic downturn, which resulted in fewer jobs, deeper levels of poverty, and a sharp drop in TANF cash assistance. Economic context is key, and the uneven and weak economy has exposed the fault lines in the TANF design.

Overall, there is broad bi-partisan consensus that Congress needs to redesign the 1996 welfare law to strengthen TANF and support pathways to work that allow families to afford the basics. Big picture reforms should include ensuring that North Carolina and other states (1) serve a minimum level of families and children living in poverty and (2) set minimum levels for cash benefits. These floors would help prevent the drops in TANF’s reach that we experienced over the past 20 years, and, if set at a decent level, would restore some of the purchasing power that has since been lost. Congress should also require states to use more of their TANF dollars on core activities — work, work supports, and basic cash assistance. This reform would ensure that states use TANF to serve truly needy families, rather than supplant state funding and pay for tax cuts.

There are more ideas for reform, such as requiring individualized employment plans and reforming the incentive system in place that’s pushing states toward caseload reductions regardless of positive outcomes for families, as detailed in this report by the nation’s foremost experts on TANF.

Congress has the power to move the needle to reduce family and child poverty. It will take courage and an honest, substantive conversation about how people who are poor have the same hopes and humble dreams as people in the middle class. They want their kids to do better than them, to own a decent home, and to put money aside for a rainy day and retirement. While everyone’s well-being is tied together, U.S. politics have long operated on a strategy that seeks to divide the middle from the bottom—to justify poverty due to personal failures rather than bad policy and an uneven economy, to point fingers at people who are poor to justify the stagnation and woes of the middle class.

Slicing and dicing the “deserving” poor from the “undeserving” poor—as one of our own Tar Heel US Senators has called for—won’t move the needle on addressing poverty. But good policy will. We should encourage Congress to fix TANF’s failures.

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Twenty years later, TANF does little to relieve poverty and hardship

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