Changes in the TANF Policy

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TANF?

The Congress was exasperated with the AFDC's (Aid to Families with Dependent Children) cost, nature and scope, and thus decided to put an end to it. In 1994, a record number of families (5 million, with over 1/8th of American children) were enrolled in the program. Over 50% of the kids enrolled were born out of wedlock, and around 75% had a physically-fit parent not living with them (Blanche, 1995). Nearly 50% of the enrolled families received program benefits for over 5 years (including repeat spells). In the 1994 financial year, benefit costs reached their peak (22.8 billion dollars, with 12.5 billion dollars from Federal funds and 10.3 billion dollars from local/State funds). Some legislators pressed for curbing AFDC coffers for controlling expenses, while others believed that permanent help offered to the needy kids from single-parent households helped encourage family breakups, allowed births out of wedlock, and promoted long-run dependency.

The traditional AFDC program appeared to trap several welfare recipients in nearly-permanent reliance on governmental support. Welfare reform sought to tackle this issue by instituting time limits for ensuring that governmental welfare doesn't become the way of life for such families. The 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) established a federal 5-year limit; states, nevertheless, had the authority to shorten time limits further if they desired. An explosion of welfare activities in the form of novel urban programs, healthcare, job training, etc., occurred simultaneously in the 60's with additional AFDC expansions. 4.3 million individuals were receiving AFDC by 1965; the figure rocketed to almost 10 million by 1972. A swift expansion of welfare rolls was seen, despite the era being characterized by low unemployment and general economic progress (Benjamin and Kerry, 2009; Alfred, 2007).

How Important Have These Problems Been Historically?

It has been widely acknowledged that a proper safety net initiative delivers benefits to a greater number of individuals during times of unemployment growth and difficulty in finding work. The term "safety" implies that people are, at the least, partly protected from privation, and sometimes even destitution that accompanies employment and income loss. Federal welfare constituted an open-ended privilege, encouraging long-term reliance. It was widely agreed to be a serious failure, neither contributing to poverty reduction, nor assisting the poor in becoming self-sufficient. Rather, the program fostered births outside marriage and damaged work ethic, prompting these pathologies to endure across generations (Blanche, 1995).

The 1996 welfare reforms were significant; however, the U.S. federal government continues to run numerous detrimental yet expensive welfare programs. Federal government's involvement in initiatives like TANF (Temporary Assistance for Needy Families) must be phased out; low-income support programs must be bequeathed to state authorities or private sector agencies. The same amount of diversity and flexibility that private charities provide cannot be delivered by governmental welfare programs. Private welfare agencies understand better that charity, in essence, begins with people bettering their life choices. Federal government's participation in the field has provoked a costly clutter of paperwork, rules and official procedures while hardly contributing to long-term poverty reduction (Benjamin and Kerry, 2009; Alfred, 2007).

How the Problem Was Previously Handled

Prior to 1996, the federal aid represented an open-ended privilege, contributing to long-term dependence; it was agreed by most that the program was an abysmal failure, neither alleviating poverty nor encouraging self-sufficiency in the poor. Work ethic was weakened and there was a rise in number of kids born out of wedlock, and these pathologies endured across generations (Blanche, 1995; Alfred, 2007). ADC (Aid to Dependent Children) was the first federal aid program developed under the 1935 New Deal of President Roosevelt, with an aim to complement pre-existing state support ventures for widows, as well as offer support to households wherein the head of the family was absent, deceased, or incapable of working.

Though initially meant to be a small-scale venture, ADC underwent rapid expansion. By 1938, nearly 250,000 households were enrolled in it. ADC enrolment continued rising in spite of quick economic progress, and decreasing poverty levels in the 50's. More than 600,000 families received federal benefits by 1956. Fixed block grants were granted to each state, based principally on pre-reform federal funding of their respective AFDC programs. This, however, caused states which had provided greater benefits to obtain a much larger amount of federal funds per poor household compared to other states (Blanche, 1995).

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What is the Historical Background of the TANF?

TANF was created in 1996 by Congressional legislation, signed by the then-President Clinton. PRWORA created TANF from the earlier AFDC program, created through Congressional legislation under the Social Security Act, 1935 (Benjamin and Kerry, 2009). PRWORA signified the most significant AFDC-restructuring since its initiation. Key elements restructured include: (a) transference with key program design components and block-grant funding to each state individually; (b) enforcement of stringent work requirements for being entitled to federal welfare; and (c) lifetime ceilings on number of benefit-receipt years, payable from federal resources (Benjamin and Kerry, 2009; Alfred, 2007).

When Did TANF Originate?

TANF was developed by Congress via the 1996 PRWORA in an endeavor to put an end to the existing welfare system. AFDC, launched in 1935, and offering benefits to poor households with dependent children ever since, was replaced by TANF. TANF, as well as state requirements (including rules pertaining to time limits, work requirements, immigrant entitlement and child support) was instituted under the welfare law of 1996. Under the law's work provisions, states should mandate recipients to work, levy sanctions (through termination/reduction of benefits) for recipients refusing to work, and attain work-participation levels consistent with law-specified provisions (Strom-Gottfried, 2008).

How Was the Original Policy (AFDC) Changed Over Time?

Title of Legislation

Main Provision

1935

Social Security Act (SSA)

Instituted AFDC initiative for single-parent, low-income households

1961

Amendments to SSA

Established AFDC-Unemployed Parent (AFDC-UP) initiative for dependent children in households with unemployed breadwinner

1967

Amendments to SSA

Decreased rate of benefit reduction to 2/3rd; established WIN (Work Incentive) program

1981

Omnibus Budget Reconciliation Act

Raised rate of benefit reduction to 1; enforced gross income cap; included stepparents' income; increased waiver authority

1988

Family Support Act

Established the Job Opportunities and Basic Skills (JOBS) training program to educate, provide skills training, assist with job search, etc.; created Medicaid and transitional childcare programs; AFDC-UP made mandatory for all states

1996

Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA)

Put an end to AFDC, with the creation of TANF

John F. Kennedy assumed the mantle of U.S. President in 1960 at a time of growing concerns regarding poverty in the nation. However, his only contribution to the welfare sphere was changing ADC's name to AFDC, and inclusion of dual-parent households with unemployed fathers. His general support towards extending welfare to poor people did, however, pave the way for the Great Society program of Lyndon Johnson. Following Kennedy's assassination, Lyndon Johnson decided to reform society and the government, via the Congress, proclaiming that the State would battle against poverty; the Johnson administration put forth a broad collection of novel subsidy schemes for citizens and local/state governments. This was the first time since the 1935 New Deal that the U.S. witnessed a governmental expansion of such magnitude or such an explosion of anti-poverty ventures. Head Start, Medicare and Medicaid are the key initiatives launched by the Johnson administration (LaDonna, 2000; Blank, 2002; Benjamin and Kerry, 2009).

After Johnson, Washington witnessed a bipartisan agreement to uphold as well as expand Johnson's legacy. The Presidents that followed --Richard Nixon, Gerald Ford, and Jimmy Carter -- all contributed new programs to alleviate poverty. From 1965-1975, AFDC's expenditure tripled. A string of court rulings establishing welfare-recipient rights fired the growth of spending. Though welfare growth rate slackened after 1975, it still moved in an upward direction. President Reagan, after taking office in 1981, presented strong views with regards to decreasing welfare funding, which in fact, unfortunately, grew in the two terms Reagan served as President. He was, however, successful in shifting financing emphasis between welfare programs. AFDC funding, for instance, reduced by 1% in Reagan's tenure, but Earned Income Tax Credit spending increased two-fold (Blank, 2002; Benjamin and Kerry, 2009).

A widespread national consensus was reached regarding the failure of the long-established open-ended welfare system, by 1993, when Clinton became president, spurring state-government experiments in regard to welfare inside of federal-government-established constraints. A number of these experiments (especially time-limit and work requirements) went on to get included in the 1996 federal welfare modification. The PRWORA -- the biggest federal welfare revision in over three decades -- was signed by Clinton in August of the same year. This reform, by one key measure, proved extremely successful. A drastic 67% decline in number of citizens on.....

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