Direct Cash Assistance, the Temporary Assistance for Needy Families Block Grant, and Local Economic Growth

• In Event: Strengthening the U.S. safety net and transfer programs for low-income families

Abstract

The Temporary Assistance for Needy Families (TANF) Block Grant is the primary source of federal funds available to provide direct cash assistance to families with low incomes and experiencing poverty since it replaced Aid to Families with Dependent Children in 1996. Over the last 30 years, the program's funding provided by Congress has declined in real terms, and states have taken advantage of the Block Grant program's flexibility to fund programs that are not targeted to those with the greatest need. This has resulted in a fractured cash welfare program that provides too few dollars to too few families with demonstrated need to reduce deep poverty meaningfully. Today, roughly one in five individuals eligible for TANF receive it (HHS, 2023), leaving millions of families without the resources to meet their consumption needs and limiting their economic activity. To address this, we recommend reforms to the TANF program to improve the programs coverage, increase the portion of funding allocated to direct cash assistance, and improve the programs' ability to support families in deep poverty meet their consumption needs informed by the literature and interviews with recipients of direct cash assistance provided by state TANF programs.

Author

• Megan Rivera, Washington Center for Equitable Growth
  Presenting Author