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August 22, 2006 marks the tenth anniversary of the passage into law of Temporary Assistance for Needy Families (TANF). The law made big policy changes: a lifetime limit of no more than five years of assistance for most families; more stringent work requirements, far more authority to states to change policies; and federal funding that remains flat whether caseloads go up or down. Caseloads went down dramatically – in March of 2006, there were over 8 million fewer parents and children receiving assistance than in August 1996 when TANF began, a drop of nearly two-thirds. How to judge this massive shift? If parents are working at decent pay with benefits and if child well-being is enhanced through adequate income, health coverage, and child care and/or early childhood education, their lives have demonstrably improved.. But this kind of success is elusive for large numbers of families leaving TANF. An Urban Institute study found that although 71 percent of parents were employed at some point in the year after leaving TANF, only 37 percent were employed in all four quarters of that year.
Child poverty began a most welcome decline in 1993, declining from 22.7 percent then to 16.2 percent in 2000. Since 2000, child poverty rose every year through 2004, back up to 17.8 percent. TANF’s proponents point to the overall decline in poverty over the past decade. A more balanced view acknowledges that there are multiple causes of the decline in poverty through 2000. TANF’s policy changes contributed, but no one should underestimate the significance of a very strong economy in the 1990s. As the ten-year retrospective by the Center on Budget and Policy Priorities below documents, employment rates of single mothers shot up from just below 62 percent in 1995 to 73 percent in 2000. But by 2005, employment among single mothers had dropped back to 69 percent. TANF changes almost certainly played a role in the increased work – but TANF without the help of an economy strong enough to reach the poor is not enough to sustain employment or to prevent a rise in poverty. Further, a close look at the policies that contributed to improved outcomes must give prominence to increases in the Earned Income Tax Credit, increased income from child support collections and TANF aid to supplement low-paid work, more child care assistance, and more help with job preparation. These work supports, combined with the good economy, are likely to account for much of the progress that did occur.
Looking ahead, how can we help more families to rise out of poverty? It would be nice to think that states would have learned effective strategies to help poor parents find and keep jobs, and would continue using TANF resources to reach more families with those successful approaches. But an analysis by the Center on Budget and Policy Priorities shows that TANF is reaching fewer and fewer poor families. In the early 90s, 80 percent of poor and eligible families received cash assistance; by 2002, the proportion was precipitously down to 48 percent. Instead of helping families to overcome barriers to employment, in 2003 there were one million moms and two million children with neither work nor welfare, prone to more hunger, illness, and other hardships.
Several analyses below map out effective forms of assistance that should be made available to low-income parents so they can find and keep good jobs and nurture and protect their children. A comprehensive set of job preparation activities, tailored to the specific needs of the adult, can improve skills, lead to useful credentials, help overcome barriers like lack of English, and culminate with effective job search. Regrettably, the Bush Administration’s interpretation of the TANF changes newly enacted by Congress is overly rigid and does not allow a package of activities most suited to lead to work. Working parents also need good quality and affordable child care and other supports such as transportation help, child support enforcement, and cash supplements to low earnings. Further, parents with disabilities or caring for children with disabilities need accommodations for their special circumstances. When these supports are in place, families can make genuine progress. That should be our goal.
On August 29, we will learn if poverty has finally stopped rising, after years of unshared prosperity. On the same day that the Census Bureau releases poverty, income, and health insurance data for 2005, the nation will observe the one-year anniversary of Hurricane Katrina. The August 29 Census data are not expected to capture what has happened to the tens of thousands of families affected by the devastation, although linked below is a special Census survey with estimates of employment, income, and many other characteristics of the affected Gulf Coast communities in Louisiana, Alabama, and Mississippi. The sources below give at least a partial picture of the impact. It is a somber one. According to the Brookings Institution, the New Orleans metropolitan area has lost 190,000 workers. Overall, 278,000 workers remain displaced from the hurricane-struck region, and they suffer an unemployment rate of 23 percent – depression levels.
In 2004, poverty in the U.S. remained a very disproportionate burden on people of color. Nearly one-quarter of all African Americans were poor, as were nearly 22 percent of Latinos. In contrast, 8.6 percent of whites were poor. Any serious proposals to alleviate poverty must address these disparities.
Below are resources – articles and reports, events, websites, and important advocacy steps – that provide background information on the state of poor families after TANF and Katrina and to look at policy strategies and solutions for addressing poverty in the richest nation in the world.
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