Temporary Assistance for Needy Families (TANF) is the means-tested income support program that replaced Aid to Families with Dependent Children (AFDC) in 1996. Unlike AFDC, TANF is behavior rather than benefits oriented, has multiple goals and targets and a dynamic, longitudinal, and complex focus with an emphasis on outcomes.

TANF replaced the entitlement for low-income children and their caretakers with block grants to states for income support, services, or job training. It established a five-year federal lifetime cap on receipt of benefits. Although states retained their authority to determine eligibility requirements and benefit levels, they must meet work participation requirements or lose part of their block grants. States must deny benefits to families in which a member is a fugitive felon, probation or parole violator, or has been convicted of a drug felony; operate programs to reduce out-of-wedlock births; encourage the formation of two-parent families; set aside at least 10 percent of their grants for "faith-based" organizations; and restrict services to immigrants. Considerable variations among states persist in benefit levels and earnings disregards (the amount of wages that public assistance recipients could earn without having that amount deducted from their public assistance--e.g., AFDC grant) and in the strictness of sanctions, time limits, and overall work incentives. States also differ significantly in the nature and extent of support services. TANF's effects have been decidedly mixed.

Supporters point to dramatic declines in caseloads as evidence of success. Critics counter that caseloads began to decline before 1996 and continued to drop in the late 1990s. They argue that poverty rates have not declined since 1996 and that extreme poverty has increased, especially among African Americans. A family that receives a TANF grant and food stamps (the amount of which varies depending on the size of the family and the family's income) will receive combined assistance whose total value ranges from 37 to 71 percent of the official poverty threshold established by the federal government. The reason for the wide variation is that different states provide vastly different amounts of aid to families who are eligible for TANF. Critics also assert there is no way to determine whether recipients left welfare for employment or are still employed.

By terminating entitlements and restricting benefits, TANF undermined the concept of assistance in the Social Security Act. It further devolved policy responsibility from the federal government to the states and, within states, to local governments and the private sector. In many states TANF's implementation increased the burden on community-based nonprofit organizations without providing them with needed resources. Many small organizations, which primarily serve TANF recipients or persons of color, are at risk of closing.

TANF also had a serious impact on states' budgets. During the late 1990s, states benefited from TANF's funding formula, which linked block grants to 1994's relatively high caseloads. When caseloads fell and tax revenues surged in the late 1990s, some states used surpluses to expand services. Since 2001, increasing caseloads have exacerbated states' fiscal crises. In the future, it remains unclear how states will respond to more stringent work requirements and sanctions, caseload increases during future recessions, the impact of lifetime benefit caps on the growing proportion of African American and Latino recipients, and the deterioration of community support systems.

References:

1) Gilbert, Neil. 2002. The Transformation of the Welfare State: The Silent Surrender of Public Responsibility. New York: Oxford University Press.

2) Katz, Michael B. 2001. The Price of Citizenship: Redefining the American Welfare State. New York: Holt.

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