Maine Musings: Our Safety Net

Did you know…The child poverty rate did fall in the years following TANF’s creation, though that decline was likely driven more by the strong economy and reforms to the Earned Income Tax Credit and Child Tax Credit than by the welfare law.  At the same time, a dwindling share of families in need received TANF benefits, inflation eroded the benefit levels, and states diverted limited TANF block grant funds away from basic income assistance.  As a result, careful assessments indicate that TANF has fueled a notable increase in “deep poverty” — that is, in the share of Americans who live below half of the poverty line. ~ Arloc Sherman –CBPP.org

Next Monday, August 22, 2016, marks the 20th anniversary of “welfare reform” in America. Congress created the Temporary Assistance for Needy Families (TANF) block grant through the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, as part of a federal effort to “end welfare as we know it.”

Prior to welfare reform there was Aid to Families with Dependent Children or AFDC which served as the nation’s major cash welfare program.
AFDC was established in 1935, as part of the New Deal. It provided financial support for single mothers and children living in poverty.

Under TANF, the federal government provides a block grant to the states, which use these funds to operate their own programs.  In order to receive federal funds, states must also spend some of their own dollars on programs for needy families (they face severe fiscal penalties if they fail to do so).  This state-spending requirement, known as the “maintenance of effort” (MOE) requirement, replaced the state match that AFDC had required.

States can use federal TANF and state MOE dollars to meet any of the four goals set out in the 1996 law:  “(1) provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives; (2) end the dependence of needy parents on government benefits by promoting job preparation, work, and marriage; (3) prevent and reduce the incidence of out of wedlock pregnancies and establish annual numerical goals for preventing and reducing the incidence of these pregnancies; and (4) encourage the formation and maintenance of two parent families.”

States have used their TANF funds for a variety of services and supports, including:  income assistance (including wage supplements for working-poor families), child care, education and job training, transportation, aid to children at risk of abuse and neglect, and a variety of other services to help low-income families.  Since the four TANF goals are extremely general, states can use TANF funds much more broadly than the core welfare reform areas of providing a safety net and connecting families to work; some states use a substantial share of funding for these other services and programs.
~ Source: Center on Budget and Public Policy Priorities

The 1996 law authorized TANF funding through federal fiscal year 2002.  After several short-term extensions, Congress reauthorized TANF for another five years in the Deficit Reduction Act of 2005 and made some modifications to the program.  Since October 2010, Congress has again continued to extend TANF with short-term extensions rather than a full reauthorization.

The TANF program is long overdue for reform. The basic TANF block grant has been set at $16.5 billion each year since 1996; as a result, its real value has fallen by one-third due to inflation.

Back then we really didn’t know how living in poverty impacted children. Now we do. Researchers have found that the consequences of living in poverty and economic uncertainty for children and youth is especially harsh and could linger for years. Numerous studies have shown that children who grow up poor are more likely to suffer from poor health, developmental delays, behavioral problems, and lower academic achievement. Even temporary spells of poverty can have negative long-term effects on child development.

So the question is: Has TANF worked?

Some policymakers have pointed to TANF as a model for reforming other programs, but the facts suggest otherwise. TANF provides a greatly weakened safety net that does far less than AFDC did to alleviate poverty and hardship, as the Center on Budget and Public Policy Priorities’ LaDonna Pavetti and Liz Schott point out in their newly released report:

TANF at 20: Time to Create a Program that Supports Work and Helps Families Meet Their Basic Needs

TANF’s combination of nearly unfettered state flexibility, fixed block grant funding, narrowly defined work requirements, and time limits has created a system that provides a safety net to very few families in need and does little to prepare low-income parents for success in today’s labor market.  Federal policymakers can address these problems by adopting policy changes in three broad areas:  providing an effective safety net to poor families with children, creating effective work programs to help parents prepare for work, and ensuring adequate resources are available for achieving these goals.

Twenty years’ experience under TANF has provided more than enough information to see that the program is not working as intended and is leaving many children worse off than they were under AFDC. States certainly could have done a better job to further TANF’s twin goals of providing a safety net and connecting parents to work, but the law itself is a large part of the problem. It contains poorly designed incentives and requires no state accountability for providing a safety net. It does not promote effective work programs or hold states accountable for creating them. States have used TANF’s flexibility to spend the money in ways Congress never imagined, with less than a third of the funds going to providing a safety net or effective work programs. Given states’ dismal track record, federal law should change to hold states accountable in these key areas.

You can read the full report Here.

Writing in a blog post for The Hill, Melissa Boteach, Vice President of the Poverty to Prosperity Program, and Rebecca Vallas, Managing Director for the Poverty to Prosperity Program at the Center for American Progress (CAP) said this about the TANF program:

While a robust economy in the late 1990s, along with expansions in tax credits for working families and childcare investments initially helped spur a dramatic reduction in poverty, once the economy slowed down, TANF’s flaws began to surface.

The program was not designed to respond to recessions. Indeed, during the worst economic downturn since the Great Depression, many states actually cut back on assistance while unemployment and hardship were quickly rising. States began diverting TANF funds to plug budget holes, leaving just one in every four TANF dollars for income support to struggling families.

The result? Today, just one-quarter of poor families with children are helped by TANF, and assistance is so meager that in no state are benefits for a family of three enough to make rent on a two-bedroom apartment. In fact, TANF’s ineffectiveness at mitigating hardship has directly contributed to the rise in deep poverty.

In addition, a wealth of evidence now demonstrates that TANF’s work requirements are ineffective at boosting employment. That’s not surprising, given such requirements do nothing to address the lack of good jobs or barriers to work like childcare and transportation.

…..Without vital programs such as Social Security, nutrition assistance, and tax credits for working families, our nation’s poverty rate would be nearly twice as high as it is today. Moreover, these investments not only mitigate poverty today, they boost economic mobility tomorrow, improving children’s health, education, and employment outcomes in adulthood.

Ensuring an adequate safety net is something we all have a stake in. Job loss, low wages, ill health, and the birth of a child are the most common triggers of poverty spells in the U.S. More than half of Americans will experience at least a year of poverty or teetering on the economic brink during their working years, and fully 70 percent will need to turn to the safety net at some point.

We must take steps to strengthen the program so it can protect kids and families from hardship. Benefit adequacy, meaningful accountability, and reforms to support TANF recipients in obtaining the education and skills they need to get ahead are key priorities.

But we cannot stop there. To dramatically reduce poverty and expand opportunity, we must also pursue a bold agenda to build an economy that works for everyone—not just those at the top of the income ladder. This includes supporting job-creating investments in infrastructure, research, and education, and pathways to good jobs such as apprenticeships and subsidized employment. It’s long past time to raise the federal minimum wage so it ceases to be a poverty wage, and to adopt paid leave and paid sick days so working parents are not forced to choose between work and caregiving.

We should also protect and strengthen key investments in nutrition, housing, income security, and healthcare—including women’s reproductive healthcare and rights—to ensure basic living standards for all families. And we must invest in the next generation by ensuring affordable high-quality childcare, pre-K for all, and access to higher education.

Twenty years later, it’s not just time to fix TANF; it’s time to enact an agenda that will dramatically bolster family economic security once and for all.

We agree.

Mainely Kids

From our friends at Maine Equal Justice Partners.

It’s Time to End Child Poverty in Maine

More children in Maine are living in deep poverty.  While other parts of the country have shown improvement in fighting poverty and hunger over the last five years, things are getting worse here.  More children and parents are uninsured.  More households don’t have enough to eat.

Growing up in poverty has lifelong consequences for individuals and their communities, including poor school attendance, increased contact with the criminal justice system and a weaker connection to the labor market.  These trends are a troubling direct consequence of policy decisions that punish poor families.  They do not bode well for our future.

There are policy solutions that would ensure that Maine children have food to eat and places to call home.

Policymakers can bring about real reform so that families can lift themselves out of poverty.  They can replace Maine’s one-size-fits-all approach to welfare, provide housing help for families at risk of homelessness, and create systems that hold government accountable when things don’t work.  The funds are available to make this happen.  The funds are available to make this happen.  Existing federal TANF funds intended to help poor children are currently going unspent.

Some quick facts on child poverty in Maine:

  • According to the most recent data available, approximately 48,000Maine children are living in poverty – about $20,000 a year for a family of 3.
  • Between 2010 and 2014, Maine saw the sharpest increase of any state in the country in the rate of children living in extreme poverty, defined as less than half the federal poverty line, or about $10,000 for a family of three.  While Maine’s rate increased by 50%, it remained flat in the rest of nation.
  • In 2014, while 23,000 children were living in extreme poverty, only 10,082 children were receiving Temporary Assistance for Needy Families (TANF) to help meet their basic needs.
  • One in three kids “…live in households where parents lack secure employment. That is 82,000 children in Maine — more than the entire populations of Bangor, Augusta and Biddeford combined.”
  • “The Annie E. Casey Foundation this year ranked Maine 17th in the nation for overall child well-being, down five slots from its No. 12 ranking the previous year.  In New England, only Rhode Island had a lower rank.”

Maine’s Safety Net for Children is Woefully Inadequate.

Temporary Assistance for Needy Families (TANF) is intended to provide aid to impoverished families so that they are able to meet their most basic needs.  Unfortunately, fewer and fewer poor children are benefiting from the program in Maine.  In 2011, the state imposed a lifetime limit on assistance and stricter sanction policies.  Over the last five years, approximately 16,600 children have lost access to the help that TANF provides.  Among families with children eligible for TANF, only half as many (31 percent) received the help they needed from that program as in 2010 (60 percent).

A study conducted by the University of Maine on the consequences of families losing assistance due to the five-year time limit revealed harsh consequences for families.  Among other hardships, families experienced increased hunger and homelessness, often leading to separation of parents from children.

While more and more children in Maine live in deep poverty, the TANF fund balance continues to grow.  These are federal dollars intended to help poor children and they are going unspent.  When it became clear earlier this year that Maine’s Department of Health and Human Services (DHHS) had accrued a 110 million dollar balance in the state’s TANF program, DHHS claimed it had a plan to spend the money.  But since that time, Maine’s TANF balance has grown to a staggering 155.5 million dollars in unspent federal funds, while Maine’s children continue to suffer.

More Maine Children are going without Health Care.

Since the 2010 Affordable Care Act, Maine is the only state that has NOT seen an increase in the percentage of people with health insurance.  In fact, the number of uninsured children has steadily risen over the past four years, with 16,000 Maine children without health care coverage in 2014, up from 11,000 in 2010.”  This is a direct result of Maine refusing federal dollars to expand Medicaid, something that was prescribed in the historic health reform law as a way to increase access to health care for some of the nation’s most vulnerable populations.

More Maine Children are Going Hungry.

Maine families are also experiencing increased hunger.  While food insecurity has declined in the rest of the nation as a whole, the percentage of people in Maine who face food insecurity increased from 2009 to 2014.  Maine currently has the third highest ranking in the U.S. for very low food security and the highest rate of child food insecurity in New England.  Between 2010 and 2016, the percentage of public school students eligible for free and reduced-price lunches grew from 43 to 48 percent, according to the MaineDepartment of Education. While Maine schools have fewer students, more of them are poor and need help with meals.

The Time to Act is Now! 

Too many Mainers today lack good jobs and lack hope.  They are trying to find decent jobs that pay well, but even people working 40 hours a week can’t always make enough to provide for their families.  Many of the jobs are part time with unreliable hours and unpredictable schedules.  Fixing the welfare system is important, but we also need to fix the larger economy.   Providing more opportunities for education and training will help parents get good jobs and move out of poverty.  A better outlook for parents opens up better prospects for their children into the future.

Welfare and poverty reduction have become unnecessarily divisive issues, and Maine’s children are paying the price. Regardless of our political views, most of us believe that government has a responsibility to make sure that children do not go without basics like food, shelter, or medicine.  Government officials and policymakers need to put politics aside and protect the welfare of Maine’s poorest children.  The future of nearly 50,000 Maine children depends on it.