Federalism and Social Welfare Policy--The Case Study of TANF

By: Brad Forenza, MSW

Temporary Assistance for Needy Families (TANF) exemplifies a block grant program, whereby funding for a generalized purpose is provided through the federal government but the specificity and distribution of services happens locally. This federal-state partnership is an important one for social workers to understand, as many social policies (community development, housing, mental health, and others) are implemented similarly. The current debate about gun control—national pressure for anti-gun laws versus the pro-gun values of focal states—also illustrates the woes of federalism. Should the federal government carry the burden of addressing, imposing, and regulating social welfare and civil rights policies so that all constituents encounter them equally, or should policies be enacted and adopted on a state-by-state basis to address local needs? The former extreme is vulnerable to critiques of fascism, while the latter extreme suggests a loosely affiliated union of 50 sovereign territories. To that end, this article examines issues of federalism raised by the TANF block grant program.

TANF Background

TANF is a cash assistance program for poor families with dependent children. Its predecessor, the Aid to Families with Dependent Children (AFDC) program, was part of President Franklin Delano Roosevelt’s Social Security Act of 1935. The original intent of AFDC was to protect widows from poverty. Two-parent families and families with out-of-wedlock children were excluded. Over time, though, AFDC enrollment became less stringent. In 1960, there were almost one million AFDC beneficiaries; by 1996, there were almost five million (USDHHS, 2009). Similarly, the percentage of poor women receiving AFDC jumped from 5% in 1962 to 36% in 1994 (Casciano & Massey, 2008).

In the waning years of the 20th century, AFDC’s vitality as an entitlement program was a political hotbed. As the liberal candidate for President, Bill Clinton (1992) announced his intention to “end welfare as we know it.” Four years later—with the aid of a conservative Congress—Clinton signed the Personal Responsibility and Work Opportunity Act (PRWORA) into law. The act abolished AFDC and established TANF as the new program for poor families (colloquially, both programs are often referred to as “welfare”).

Perhaps the most significant difference between AFDC and TANF is the inclusion of time limits for TANF utilization; similarly, federal guidelines include a “welfare-to-work” component that was not part of AFDC. Under TANF, adult beneficiaries must segue from TANF to employment in a time specified by the implementing state or risk termination of their funding. Since its inception, from a “numbers only” perspective, TANF has been successful in moving families off the public welfare rolls. According to data from the U.S. Department of Health and Human Services (2009), national enrollment in TANF dropped from almost five million in 1997 to less than two million in 2006. Less is known, however, about how families have fared in the absence of TANF.

Federalism and TANF

Less is also known about how uniform or streamlined the TANF program is across all 50 states. We assume that, since it is implemented locally, programmatic elements (like time limits, eligibility, and work requirements) will be inconsistent from state to state. The U.S. Administration for Children and Families (2009) notes that TANF has four main goals: (1) to reduce the dependency of needy parents by promoting job preparedness, work, and marriage, (2) to prevent out-of-wedlock pregnancies, (3) to encourage the formation and maintenance of two-parent families, and (4) to assist needy families so that children can be cared for in their own homes. How states actualize these broad federal guidelines will vary according to local trends and politics.

Here, we examine TANF trends in three states: Mississippi, Indiana, and New Jersey, which were chosen because of their placement on the income spectrum (low, medium, and high income, respectively).

According to data from the U.S. Census Bureau (2011), Mississippi is the least wealthy (AKA “poorest”) state in our nation. Its average median household income for 2007-2011 was $38,718 per year, which is $14,044 below the median income of the entire United States ($52,762). 21.6% of Mississippi’s population—more than one fifth—is said to be living in poverty. From a population perspective, Mississippi is also the smallest of focal states (2,984,926 residents).

Ohio’s income profile is, by and large, on par with the nation. Its median household income was $48,071, which falls just $4,691 shy of the median national income. 14.8% of Ohio residents live below poverty levels.

Finally, the Census identifies New Jersey as among the wealthiest states. At $71,180, New Jersey’s median household income was $18,418 more than the nation’s. 9.4% of its entire population was said to live in poverty.

As evidenced by these brief statistics, there is an inverse relationship between the median household income of a state and its percentage of constituents in poverty: as median household income increases, the percentage of individuals living in poverty decreases.

Equality and Adequacy

A benefit of implementing a policy federally (like the Old Age Insurance component of Social Security) is that it is implemented with fidelity and uniformity throughout all 50 states. In a block grant schema, states can tailor programs to meet local needs, which is a strength in itself, though policies will be experienced differently across state lines. Our three focal states (Mississippi, Ohio, and New Jersey) all allow a family to receive TANF for a lifetime maximum of 60 months (five years); however, there are permutations in other aspects of implementation. For example: Mississippi does not extend the benefit to qualified aliens; Ohio does not have a provision to address the special needs of pregnant women; New Jersey has not increased its maximum monthly benefit since 1996 (USDHHS, 2012).

In a block grant schema, the ways in which states will “reduce the dependency of needy parents by promoting job preparedness, work, and marriage,” will depend on the character and politics of each state, so equality (uniform treatment of eligible people) is a perennial concern. Whereas one state may deemphasize the promotion of two-parent families, another may overemphasize funding for childcare. Because block grants allow states to set guidelines that are consistent with local trends, however, the economics of focal states can factor heavily into eligibility criteria (this is less true for a policy like the federal minimum wage, in which Mississippi employers may be forced to pay more for hourly work and New Jersey employers may be permitted to pay less than market rate, in the absence of a state minimum wage law). To this end, beneficiaries of block grants like TANF may not benefit equally from state to state, although what is considered adequate—or “in sync”—with a state’s economy will receive local considerations. The opposite may be true for categorical grants, which would set a national precedent to be implemented equally across state lines. However, some states may wind up paying more and others less, in such a schema. For example: initial eligibility thresholds in each of our focal states can be set according to local economic trends. For this reason, Mississippi’s threshold is appropriately lower than Ohio’s and New Jersey’s. This is also true for the maximum amount of earnings a TANF beneficiary can receive while still maintaining enrollment (USDHHS, 2012).

Conclusion

Bill Clinton took office 20 years ago, in 1993. TANF is the actualization of his 1992 campaign promise to “end welfare as we know it.” In addition to the Patient Protection and Affordable Care Act of 2010 (AKA “Obamacare”), TANF is—perhaps—the most potent illustration of contemporary social welfare. Its block grant schema/federal-state partnership approach recognizes our country’s obligation to help vulnerable constituencies in a way that is tailored (and politically feasible) to address local needs.

References

Casciano, R., & Massey, D. (2008). Neighborhoods, employment, and welfare use: Assessing the influence of neighborhood socioeconomic composition. Social Science Research, 37 (2008), 544-558

Clinton, W. J. (1992, May). Campaign message on welfare reform.

United States Administration for Children and Families. (2009). Goals of the TANF program. Washington, D.C.: U.S. Government Printing Office.

United States Census Bureau. (2011). American community survey. Washington, D.C.: U.S. Government Printing Office.

United States Department of Health and Human Services. (2009). TANF eighth annual erport to Congress. Washington, D.C.: U.S. Government Printing Office.

United States Department of Health and Human Services. (2012). Welfare rules databook: State TANF policies as of July 2011. Washington, D.C.: U.S. Government Printing Office.

Brad Forenza, MSW, is a doctoral candidate at the Rutgers University School of Social Work, where his research focuses on social policy, civil society, and youth development. Career highlights include: (1) direct social work practice at several youth & family development agencies, (2) applied research/program evaluation for clients in the human services, (3) public policy analysis and advocacy, and (4) university teaching.