CHN: Budget Politics Intrude on TANF

Budget politics has intruded upon congressional efforts to reauthorize Temporary Assistance for Needy Families. After the Senate Finance Committee approved its PRIDE bill on a bipartisan basis (see the April 1 Human Needs Report ), Senate Budget Chairman Judd Gregg (R-NH) threatened to derail further work on the legislation because the costs were higher than limits he had in mind for the legislation. He is asking for spending cuts to offset more of the increases contained in the legislation. The Finance Committee had operated under the assumption that it could act much as it had last year – finding offsets for the amount increased for child care beyond $1 billion over 5 years, but not needing to pay for other increases in the bill.
House members had also objected to the bill’s costs, prompting Finance Committee Chairman Charles Grassley (R-IA) to make a strong defense of the PRIDE bill’s provisions. In a statement released April 8, Chairman Grassley said “Child care is critical for families making the transition from welfare to work. It’s very simple – if we want young, single moms with little kids at home to go out into the workplace and earn a living, we have to provide adequate and affordable child care for their children. I don’t understand why some are so opposed to this common-sense work support for single moms.” He also pointed out that the PRIDE bill includes just over $4 billion to extend Transitional Medical Assistance (TMA) for families leaving welfare for work for 5 years, one of the big costs in the bill. This is a more honest statement of expenditures than either the Senate budget resolution or the House TANF bill (H.R. 240), which only provide one year for TMA although it has been repeatedly extended without an offset over the past three years.

It is likely that Budget Chairman Gregg would prefer to postpone Senate floor action on the TANF bill until after a budget resolution is passed. That would strengthen his hand in reducing “new” TANF expenditures.

The new funding is modest. Child care is increased by $5.5 billion over 5 years, of which $4.5 billion was to be paid for by other reductions. (Part of the cost was to be offset by changes that deny EITC refunds for certain immigrant families, a change that has been opposed by immigrant advocates and many groups. Work has been underway to find other sources to pay for child care. See the April 1 Human Needs Report .) Other important 5-year increases that do not have offsets include $1 billion in new dollars for the Social Services Block Grant; $1 billion for transitional jobs and employment placement linked to business needs; $628 million in additional child support dollars distributed to families; about $300 million in supports for tribal TANF and child welfare services; $150 million for domestic violence prevention; and $125 million for car ownership grants for low-income families. The PRIDE bill, like the House TANF legislation, increases funding for marriage promotion, paying for it by reducing certain bonuses now received by states with good outcomes in their TANF programs.

Concerns over TANF funding is in notable contrast to the House’s willingness to repeal the estate tax (see article in this issue).

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Temporary Assistance for Needy Families