The Unfinished Agenda: Two Years after TANF

For more than six decades, the Aid to Families with Dependent Children (AFDC) program was the entryway poor families walked through to gain access to a concatenation of federal benefit programs. Under the AFDC program, families were eligible for food stamps, Medicaid, child support, child care, and, in some instances, federal housing and energy assistance. Over time, AFDC and other federal entitlement programs were inextricably entwined, bound together by a complex set of federal regulations, funding streams, and policies. Since the enactment of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 that repealed AFDC, we have begun to fully appreciate those intricate interconnections. Today, we know that those intricate interconnections that once worked well (in a system the nation grew to despise) now threaten the long-term success of welfare reform. Welfare reform marked the end of an era of an individual entitlement to cash and child care assistance in this country and the beginning of a new era of time-limited, work-focused assistance and services. The Temporary Assistance for Needy Families (TANF) block grant that replaced AFDC provides states with a fixed amount of federal funds and permits broad flexibility in setting eligibility levels by disregarding earned income and assets and by providing families with a wide array of cash and supportive work services. In response, states are adopting a variety of innovative policies and strategies which allow families on welfare to keep more of their earned income and to accumulate assets. These policies and strategies also provide families with short-term, lump-sum assistance aimed at reducing dependence on welfare. More states are granting a mix of cash, benefits, and services tailored to meet the individual needs and circumstances of eligible families. Unlike the previous system administered primarily by human service agencies, today states are changing the way they deliver services to TANF families by devolving resources and responsibilities to new public, private, and not-for-profit partners. The five-year federal lifetime limit on the receipt of TANF assistance has created a new imperative to move clients into employment as quickly as possible and to support their transition into the world of Work. Food stamps, Medicaid, child care, and housing are key components of state job retention strategies for these new low-income workers. Over time, families may increase their earnings such that they no longer require this assistance; however, in the short-run, these critical programs provide families the stability they need to stay in the workforce and off of welfare. As TANF has diverged from the rigid rules of the former AFDC program, its link to the remaining federal entitlement programs has produced new and unanticipated challenges for program administrators as they implement welfare reform measures. In reviewing the first two years of implementing TANF, we find the interactions between program rules and policy objectives of TANF and such federal programs as Food Stamps and Medicaid, for example, no longer make sense in the post-AFDC world and threaten the long-term success of welfare reform. This unfinished agenda of welfare reform will require significant federal statutory and regulatory change in order to untangle the conflicting policy and program conflicts described below. The Food Stamp Program The strict regulations governing the administration of the federal Food Stamp program pose serious obstacles to states' strategies to reduce dependence on welfare and increase the employment of TANF clients. The clash between the TANF and Food Stamp programs is historic, costly, and complex. State administrators see the conflicts of the two programs on a daily basis because the TANF and Food Stamp programs are often administered by the same human service agency charged with moving welfare clients off assistance and into employment. …