SECTION 7. TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF) CONTENTS Brief Summary and History Basic Outline of Program Purpose Allowed Uses of Block Grants Major Conditions Attached to TANF Grants Benefits Child Care Interaction with Other Major Benefit Programs Privatization/Charitable Choice Enforcement of Penalties Against States State TANF Programs State Plan Requirements Brief Summary of TANF State Programs Funding of TANF Basic Family Assistance Grants State Spending Requirement (MOE) Supplemental Grants to States with High Population Growth and/or Low AFDC-Related Federal Spending Per Poor Person Welfare-to-Work Grants Contingency Fund Loan Fund Bonus Funds TANF for Indians AFDC/TANF Data Highlights Caseloads Benefits Break-Even Levels Uses of TANF Funds Expenditures Work Activities and Participation Characteristics of AFDC/TANF Families Composition of Families, 1969-98 Marital Status of Parents Race and Ethnicity of AFDC/TANF Adults Educational Attainment of TANF Adults Living Arrangements of TANF Children Welfare-to-Work (WTW) Grant Program Welfare Dynamics Duration Findings Exits and Returns to AFDC/TANF Selected Provisions of State TANF Programs Legislative History References BRIEF SUMMARY AND HISTORY Enacted in August 1996 after 2 years of debate, the Personal Responsibility and Work Opportunity Reconciliation Act (Public Law 104-193) repealed the 61-year-old program of Aid to Families with Dependent Children (AFDC; see Committee on Ways and Means, 1998, pp. 401-405) and created the Block Grant Program of Temporary Assistance for Needy Families (TANF) in its place. The law entitles States to fixed block grants ($16.5 billion annually) for 6 years to operate programs of their own design, but imposes time limits on receiving welfare without working, lifetime benefit time limits, and minimum work participation rates. Within limits, it allows States to reduce their own spending on behalf of needy children. The 1996 law also sharply expands funding for child care. Frustration with the character, size, and cost of AFDC rolls contributed to the decision by Congress to ``end welfare as we know it'' in 1996. Enrollment had soared to an all-time peak in 1994, covering 5 million families and more than one- eighth of U.S. children. More than half of AFDC children were born outside marriage, and three-fourths had an able-bodied parent who lived away from home. Almost half of the families had received benefits for more than 5 years, counting repeat spells. Benefit costs peaked in fiscal year 1994 at $22.8 billion ($12.5 billion in Federal funds, $10.3 billion in State/local funds). Some policymakers urged that Congress put a cap on AFDC funds to control costs. Some maintained that offering permanent help for needy children in single-parent families had encouraged family breakup, enabled nonmarital births, and fostered long-term dependency. Repeated efforts by Congress dating back to the 1960s to reduce welfare use and promote self-sufficiency generally had been discouraging. Reform measures had included ``rehabilitative'' services; work requirements, work rewards; education and training; support services including child care; child support enforcement; and provisions to establish paternity of nonmarital children. In 1988, Congress enacted the Family Support Act, which stressed the mutual obligation of government and welfare recipient to promote self-sufficiency of AFDC families. In the early 1990s many States received permission, through waivers from one or more AFDC Federal rules to test their own reform ideas--special behavioral rules, rewards, penalties, and welfare-to-work (WTW) strategies. By early 1995, many Governors pressed for a cash welfare block grant to free them from AFDC rules. The concept of a fixed block grant that States could use for temporary and work- conditioned programs of their own design was included in reform bills passed by Congress in 1995 and 1996; both were vetoed. But a third bill that included changes discussed during the 2 years of debate was enacted by Congress in July 1996 and was signed by President Clinton on August 22, 1996. By the time of TANF's passage, AFDC enrollment had decreased to 4.4 million families. The mandatory start date for TANF was July 1, 1997, but most States made the transition from AFDC earlier. TANF combined into a single block grant peak-year Federal funding levels for AFDC benefits and administration and two related programs--Emergency Assistance to Needy Families (EA) and the Job Opportunities and Basic Skills Training Program (JOBS). TANF entitles each State to an annual family assistance grant equal to the largest yearly amount paid by the Federal Government to the State for AFDC benefits and administration, EA, and JOBS during the fiscal year 1992-95 period. From their own funds, States are required to spend on needy families at least 75 percent of their ``historic'' level, defined as fiscal year 1994 spending on programs replaced by TANF, including AFDC-related child care. This is known as the maintenance-of- effort (MOE) rule. (If a State fails to achieve a required work participation rate, its MOE rises to 80 percent.) The 1996 welfare law also provided supplemental grants for some States with above-average population growth and below- average fiscal year 1994 Federal welfare spending per poor person, bonus funds for reducing nonmarital birth rates while also reducing abortion rates, bonus funds for high performance, and a contingency fund for States with failing economies. In 1997, Congress added to TANF a special WTW Program of matching formula grants and some competitive grants, with funding for fiscal years 1998 and 1999 only. The TANF law makes family assistance grants available to the outlying areas of Guam, Puerto Rico, and the Virgin Islands, all of which participated in AFDC. American Samoa was eligible for AFDC but did not operate the program; it could participate in TANF under special rules that provide a 75 percent Federal match. It also permits Indian tribes, defined to include Alaska Native organizations, to conduct their own tribal family assistance programs. Indian tribes had been excluded from operating AFDC, although some tribes conducted their own JOBS Program. Major differences between TANF and AFDC include: --Entitlement.--TANF expressly denies entitlement to individuals. Under AFDC, States were required to aid all families eligible under State income standards. --Funding.--TANF law preappropriates a fixed family assistance grant for each State, plus some extra funds. To avoid fiscal penalties, States may not reduce their own spending by more than 20-25 percent (MOE rule). States must provide matching funds for WTW grants. AFDC law provided unlimited matching funds for AFDC and EA, but put a ceiling on matching funds for JOBS. --Time limit for benefits.--TANF sets a 5-year limit on federally funded aid, with a 20 percent hardship exemption. AFDC had no time limit. --Work trigger.--TANF requires work (defined by the State) after a maximum of 2 years of benefits. AFDC had no work trigger. --Work requirement.--TANF requires a specified and rising percentage of the total caseload to engage in work activities listed in the law. The JOBS Program had participation requirements, but participation did not require work and about half the caseload was exempted. --Eligibility.--TANF allows States to decide what categories of families to aid. AFDC prohibited aid for children in two-parent families unless the second parent was incapacitated or unemployed. --Treatment of earnings.--Under TANF, States decide whether to disregard some earnings as a work incentive, and, if so, how much. AFDC law set rules about treatment of earnings. Two basic program features of AFDC were retained by TANF. States decide how needy families must be to receive aid, and States establish maximum benefit levels (Burke, 1999). BASIC OUTLINE OF PROGRAM Purpose Section 401(a) of the Social Security Act says that the purpose of TANF is to increase flexibility of States in operating a program designed to: 1. Provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives; 2. End the dependence of needy parents on government benefits by promoting job preparation, work, and marriage; 3. Prevent and reduce the incidence of out-of-wedlock pregnancies and establish annual numerical goals for preventing and reducing the incidence of these pregnancies; and 4. Encourage the formation and maintenance of two-parent families. Allowed Uses of Block Grants The law provides that States may use their family assistance grant ``in any manner reasonably calculated'' to promote any of the four goals above. Expenditures for the first two goals must be made on behalf of needy families, but spending aimed at the latter two goals--reduction of nonmarital pregnancies and promotion of two-parent families--may be made for nonneedy families. States also may use TANF funds to continue other activities not related to the four program objectives that they were authorized to undertake in individual State plans under AFDC, EA, or JOBS. They may make limited transfers of TANF funds (totaling 30 percent) to the Child Care and Development Block Grant (CCDBG) and the Social Services Block Grant (title XX), with the title XX transfer no greater than 10 percent (4.25 percent effective October 1, 2000). They may use TANF funds (within overall transfer limits) as matching funds for job access grants.\1\ The law also explicitly permits States to use TANF funds to fund individual development accounts established by persons eligible for TANF assistance. Clearly, TANF is a funding stream for a variety of allowed purposes, not just a program of cash welfare aid. --------------------------------------------------------------------------- \1\ Authorized by Public Law 105-277, job access grants are matching grants to local governments and nonprofit organizations for transportation services, including reverse commuter projects for welfare recipients and other low-income persons (U.S. General Accounting Office, 1999). --------------------------------------------------------------------------- TANF funds may be carried over from fiscal year to fiscal year without limit. However, carried over funds may be spent only for ``assistance.'' The law does not define assistance, but final regulations adopted by the U.S. Department of Health and Human Services (DHHS) restrict it to benefits designed to meet a family's ``ongoing basic needs'' (that is, for food, clothing, shelter, utilities, household goods, personal care items, and general incidental expenses) plus supportive services such as transportation and child care for families who are not employed. Funds used for nonassistance (including nonrecurrent, short-term benefits, work subsidies, and supportive services to employed families) must be obligated by the end of the fiscal year for which they are awarded, and expended by the end of the next year. TANF funds cannot be used to: fund activities required under the State plans of child support enforcement or foster care and adoption assistance; finance the construction or purchase of buildings; finance a funding deficiency in another Federal program; provide medical services other than prepregnancy family planning services; or assist a family that includes a person who, as an adult or minor household head, has received 60 months of assistance. Administrative costs may not exceed 15 percent except in the case of expenditures for information technology and computerization needed for tracking or monitoring. Major Conditions Attached to TANF Grants TANF sets some eligibility/ineligibility conditions; it imposes work rules and sets a 5-year time limit for federally funded benefits; it requires States to spend certain sums of their own funds on needy families--MOE rule; it allows waiver from its rules under restricted conditions; and it requires States to report certain expenditure data and some data on recipient families. Eligibility/ineligibility A State may give TANF assistance to a family only if it includes a minor child or pregnant person. To be eligible, families must assign child/spousal support rights to the State. Ineligible are unwed mothers under 18 and their children unless they live in an adult-supervised arrangement (for good cause the State may waive this rule) and (if a high-school dropout) attend school once their youngest child is 12 weeks old. Ineligible for 5 years are noncitizens who enter the United States after the Personal Responsibility and Work Opportunity Reconciliation Act's August 22, 1996 enactment. States that use their own funds to help legal immigrants and minor parents not living in an adult-supervised setting may count this spending toward their required MOE. Also ineligible are fugitive felons and violators of probation/parole and, unless the State opts out by State law, persons convicted of a drug-related felony for conduct occurring after the law's 1996 enactment. Work rules TANF law sets work trigger time limits, requires States to achieve minimum rates of work participation, requires States to penalize work infractions by recipients, and sets fiscal penalties for States that fail to achieve participation rates. The Labor Department has ruled that the Fair Labor Standards Act (which governs hours and wages) applies to most ``workfare'' programs in which TANF recipients participate in exchange for their benefit. Work trigger rule (State definition of work).--In their TANF plans, States must outline how they intend to require parents and other caretaker relatives who receive TANF assistance to engage in work, as defined by the State, after a maximum of 24 months of benefits or earlier. More than half of the States have adopted the Federal maximum of 24 months as their work trigger time limit. More than a dozen say they require immediate work activity, such as job search. In many States the TANF recipient who takes a paid job remains eligible for a reduced TANF benefit until reaching the State's absolute benefit cutoff; this is especially likely if the work is part time and the wage rate is relatively low. TANF law also sets a 2-month community service trigger, with tasks and required hours to be decided by States, for recipients not engaged in or exempt from work, but allows States to opt out by notification of the Governor to DHHS. Only four States (Michigan, New Mexico, South Dakota, and Wisconsin) use this 2-month workfare trigger; the others have opted out. However, some other States specify that after a longer period unemployed TANF recipients will receive aid only if they perform community service or other work in exchange for their benefits. For instance, California allows aid beyond 18 months for those not otherwise working only if the county determines that a job is unavailable and the recipient participates in community services. Delaware and Pennsylvania have similar requirements. Minimum work participation rates (Federal definition of work).--States must achieve minimum rates of participation by adult recipients (or teen parent recipients) of TANF assistance in one or more of 12 activities listed in the statute. The statutory rates, which began in fiscal year 1997 at 25 percent for all families and 75 percent for two-parent families, rose by stages to 40 percent and 90 percent, respectively, in fiscal year 2000; the all-family rate is to climb to a final peak of 50 percent in fiscal year 2002. However, the law requires DHHS to reduce a State's required participation rates if average monthly caseloads are below those of fiscal year 1995. For each percentage point drop in the caseload not attributed to State policy changes, the required work rate is lowered by 1 percentage point. The caseload dropped so sharply between fiscal year 1995 and fiscal year 1997 that all States exceeded their adjusted all-family target rates, which in some cases plunged to zero. However, 15 jurisdictions failed the higher two-parent work rate, even after adjustment (table 7-21). A State's monthly participation rate, expressed as a percentage, equals: (1) the number of families receiving ``assistance'' that include an adult or minor head of household who is engaged in creditable work for the month, divided by (2) the number of all families receiving assistance that include an adult or minor household head recipient (but excluding families subject that month to a penalty for refusal to work, provided they have not been penalized for more than 3 months in the preceding 12 months; and excluding families with children under 1, if the State exempts them from work). The same method is used to calculate participation rates of two-parent families. Creditable work activities.--The creditable work activities can be grouped by priority. In the first priority group are nine activities: (1) unsubsidized employment; (2) subsidized private employment; (3) subsidized public sector employment; (4) work experience; (5) on-the-job training; (6) job search and job readiness assistance (6 weeks maximum of job search, with 12 weeks allowed under certain unemployment conditions); (7) community service programs; (8) vocational educational training (12 months maximum); and (9) providing child care for a community service participant. In the second priority group are three activities: (1) job skills training directly related to employment; (2) education directly related to employment (high school dropout only); and (3) satisfactory attendance at secondary school or in an equivalent course of study (high school dropout only). Not more than 30 percent of families may be credited with work activity by reason of vocational education training or, if teens without a high school diploma, by reason of secondary school attendance or education directly related to employment. Required hours of work participation.--To be counted as a work participant, a TANF recipient generally must be engaged in one of the above creditable activities for at least 30 hours per week, on average, in fiscal years 2000-2002 (fewer hours were required in earlier years), and 20 of those hours must be in one of the nine high-priority activities. The law provides two exceptions to this rule: (1) if a TANF recipient is the only parent or caretaker relative of a child under age 6, she need work only 20 weekly hours, all in high-priority activities; and (2) if a TANF recipient is a single teen household head or married teen without high school diploma, he may receive work credit by maintaining satisfactory high school attendance, or, for an average of at least 20 hours weekly, by engaging in schooling directly related to work. Special rules apply to two-parent families. They must work at least 35 hours weekly, with at least 30 hours in high-priority activities (the two parents may share the work hours). If the family receives federally funded child care and an adult in the family is not disabled or caring for a severely disabled child, the shared work requirement rises to 55 hours, of which 50 hours must be in first priority activities. If the second parent in a two- parent family is disabled, the State must treat it as a single- parent family. Penalties to enforce work rules.--TANF law prescribes penalties against States that fail participation rates, and it requires States to penalize recipients for work refusal. If a State falls short of the required participation rate for a fiscal year, its family assistance grant for the next year is reduced by 5 percent (first failure). For subsequent years of failure, annual penalties rise by 2 percentage points (thus, 7 percent in second year, 9 percent in third, etc.) with a maximum penalty of 21 percent in any one year. However, the law says that grant reductions shall be based ``on the degree of noncompliance,'' and the Secretary may reduce the penalty if noncompliance was due to a specified high rate of unemployment or to ``extraordinary circumstances, such as a natural disaster or regional recession.'' Before assessing a penalty, the Secretary must notify the State of its violation and allow it to enter into a corrective compliance plan. DHHS has indicated that most States that failed fiscal year 1997 or 1998 two- parent work participation rates have filed corrective action plans. If an adult recipient of assistance refuses to engage in work, the law requires the State to reduce aid to the family ``pro rata'' (or more, at State option) with respect to the period of work refusal, or to discontinue aid, subject to good cause and other exceptions that the State may establish. However, a State may not penalize a single parent caring for a child under age 6 for refusal to work if the parent cannot obtain needed child care for a reason listed in the law. The law does not define ``pro rata'' reduction, and the regulations do not prescribe a method. States have adopted various penalties for failing to comply with work requirements: about one-third end the family's benefit for a first violation; most make a partial benefit cut (removing the adult from the grant); penalties are increased in size or duration for repeat violations. TANF law also explicitly permits a State to reduce a family's benefit, by an amount the State considers appropriate, if a family member fails without good cause to comply with an individual responsibility plan that she has signed. Most State TANF plans include use of individual responsibility plans that establish an employment goal, set forth obligations of the recipient, and describe services to be provided by the State. Nondisplacement.--A TANF recipient may fill a vacant position, but may not be assigned to a position from which a worker has been laid off. Lifetime federally funded benefit time limit A State may not use any part of its family assistance grant to provide assistance to a family that includes a person, who as an adult (or minor household head) has already received 60 months of assistance. However, States may exempt 20 percent of the caseload from the Federal time limit for ``hardship'' reasons or because the family includes a person who has been ``battered or subjected to extreme cruelty.'' If a State uses its own funds for families that have reached the Federal time limit, it may count the expenditures toward its MOE requirement. States may establish their own time limits (within 60 months) for use of Federal funds and (without limit) for use of their own funds. Almost half the States have adopted limits shorter than 60 months. Some permit extensions, some provide exemptions (months that do not count toward the time limit), and some continue children's benefits indefinitely (Falk, 1998). Family violence waivers The 1996 law allows States to certify in their TANF plans that they have adopted standards to screen and identify TANF recipients with a history of domestic violence, refer them to services, and waive program requirements (including time limits and work rules) in some cases. DHHS regulations allow a State that has adopted the family violence option to receive ``reasonable cause'' exceptions to penalties for failing work and time limit rules if the State had granted domestic violence waivers that meet certain standards. Data reporting Regulations covering data reporting rules of the 1996 law took effect October 1, 1999. Before then, an Emergency TANF Data Report was used. The 1996 law requires States to collect on a monthly basis, and report on a quarterly basis, certain case-by-case information about families \2\ receiving assistance (defined by regulation as benefits for ongoing basic needs plus support services for nonemployed families) under the State program funded by TANF. Reports must provide some data for each family, each family member, and each adult. Required data include amount of assistance and type, type of family, cash resources, child support received (family data); race/ ethnicity, educational status, citizenship status (for each family member); and marital status, employment status and earnings, and disability status (for each adult). Under DHHS regulations, if a State wishes to receive a high-performance bonus or qualify for a caseload reduction credit (to lower its required work participation rate), it must also file a similar quarterly case-by-case report on families receiving assistance under separate State programs (SSPs), financed with MOE funds. Disaggregated (case-by-case) data also must be reported about families no longer receiving assistance. Reports about closed cases are to show data for the last month of assistance; States are not expected to track ex-recipient families for these reports. --------------------------------------------------------------------------- \2\ TANF law does not define ``family.'' Instructions to the TANF regulations say that for reporting purposes family means all persons who receive assistance as part of the family under the State TANF Program or the separate State program plus (if not included in the foregoing recipient group) parent(s), caretaker relative(s) and minor siblings of any child recipient, and anyone whose income or resources would be counted in determining the family's eligibility for or amount of aid. --------------------------------------------------------------------------- Also required are quarterly reports providing aggregated numerical totals, which may be based on sampling about families applying for, receiving, and no longer receiving assistance under the State TANF Program. In addition, if the State wants to qualify for a high-performance bonus or a caseload reduction credit, it must submit quarterly reports on the State MOE Program. Other required reports from States include: an annual report on State TANF and separate State MOE Programs; a quarterly report on expenditures; and, for States competing for an annual high-performance bonus, a quarterly report on measures of job entry and success in the work force. Benefits Most States have continued pre-TANF maximum benefit schedules, although some have reduced benefits for families expected to work (tables 7-9 to 7-13). Some States have increased benefits, including California, West Virginia, Mississippi, and Idaho. Two have adopted bonuses, Oregon for cooperation with its work program and West Virginia for marriage. Wisconsin and Idaho have ceased adjusting benefits for family size. Most States have increased asset limits and work incentives (the portion of earnings disregarded in calculating benefits). Under TANF more than 20 States have adopted formal policies to divert applicants from enrollment. These States pay welfare diversion or welfare avoidance grants to help families meet temporary emergencies. The grants are generally lump-sum payments, usually with a maximum equal to several months of TANF benefits. Child Care Unlike AFDC, which required States to guarantee child care for recipients who needed it to work or study, TANF has no child care guarantees. However, the 1996 welfare law expanded the Child Care and Development Block Grant to pay for care for low-income families. Appropriated for this new block grant was $13.9 billion over 6 years, more than $4 billion above spending levels estimated by the Congressional Budget Office for the repealed AFDC-related child care programs. The law required States to integrate these mandatory funds with CCDBG discretionary funds and authorized $1 billion annually for fiscal years 1996-2002 for discretionary funding. DHHS has designated the combined mandatory/discretionary child care grants as the Child Care and Development Fund (CCDF). For more information, see the chapter on child care (Section 9). Interaction with Other Major Benefit Programs Medicaid Although the 1996 law repealed AFDC, it preserved AFDC eligibility limits for Medicaid use. States must provide Medicaid coverage and benefits to children and family members who would have been eligible for AFDC as it existed on July 16, 1996. States may lower AFDC income and resource standards to those in effect on May 1, 1988 (continuing a provision of old law) and may increase them by the percentage rise since July 16, 1996 in the Consumer Price Index for All Urban Consumers; they also may adopt more liberal methods of determining income and resources (for example, more generous disregard of earnings). In general, if a State's TANF eligibility limits are the same as or more restrictive than those of AFDC on July 16, 1996, all TANF children and adults must receive Medicaid. Also, all children born since September 30, 1983 are eligible for Medicaid if their family income falls short of the Federal poverty level. The law permits States to end Medicaid for adults who refuse TANF work requirements, but requires continued Medicaid for their children. The law also requires 12 months of medical assistance to children and adults who lose TANF eligibility because of earnings that lift counted income above the July 16, 1996, AFDC eligibility limit. Despite these provisions, an Urban Institute study found that from fiscal year 1995 to fiscal year 1997, when the average monthly number of AFDC/TANF families declined by 19 percent, the number of AFDC/TANF children and adults enrolled in Medicaid fell by 20 and 24 percent, respectively (Ku, 1999). The study, which defined Medicaid enrollment as the unduplicated number of persons signed up for Medicaid at any time in the fiscal year, showed that the number of children enrolled in Medicaid dropped by 2.3 million over the 2 years (to 9 million). In the same period the average monthly number of children enrolled in AFDC/TANF fell by 2 million (to 7.3 million). On December 6, 1999, DHHS announced in the Federal Register (p. 69202) that it proposed to add three new nonwork measures (including Medicaid coverage) to factors used to determine high-performance TANF bonus awards to States. Food assistance TANF recipients not living with others automatically are eligible for food stamps; States can opt to operate a simplified Food Stamp Program under which they may apply many of their TANF rules to determination of food stamp benefits for TANF families, so long as the program does not increase Federal costs. TANF recipients disqualified for violating TANF rules may be disqualified also for food stamps. If a TANF household's cash benefits are reduced for noncompliance with TANF rules, the State may also reduce its food stamp allotment by 25 percent, and may not increase food stamp benefits to offset the cash loss. TANF children automatically are eligible for free school meals and other child nutrition programs. Women, infants, and children enrolled in TANF automatically are income-eligible for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC). These provisions continue AFDC policy. Food stamp coverage is the second nonwork high-performance bonus measure proposed by DHHS. Effective in bonus year 2001, DHHS plans to base awards, in part, on the increase in the percentage of low-income working families with children who receive food stamps. An Urban Institute study reports that only 42 percent of eligible former cash welfare families received food stamps in 1997; their participation rate was similar to the traditionally low rate of working poor families (Zedlewski, 1999). Earned income credit (EIC) States have authority to decide whether to count EIC payments received by TANF recipients as income (the 1996 welfare law is silent on this issue). However, Public Law 105- 34 prohibits EIC payments for TANF recipients whose earnings are derived from work experience or community service. Privatization/Charitable Choice The 1996 law authorizes States to administer and provide TANF services (and those under Supplemental Security Income) through contracts with charitable, religious, or private organizations, a provision which often is called ``charitable choice.'' It authorizes States to pay recipients by means of certificates, vouchers, or other disbursement forms redeemable with these organizations. Any religious organization with a contract to provide welfare services must retain independence from all units of government and may not discriminate against applicants on the basis of religion. Furthermore, States must provide an alternative provider for a beneficiary who objects to the religious character of the designated organization. The charitable choice/privatization provision of the 1996 welfare law also covers food stamps and Medicaid, but it has not been implemented because food stamp and Medicaid law effectively require eligibility to be determined by a public official. For background and discussion of selected legal issues raised by charitable choice, see Ackerman (1999). Enforcement of Penalties Against States Penalties for any quarter cannot exceed 25 percent of the basic grant; unrecovered penalties must be carried forward into subsequent years. Penalty amounts are withheld from Federal block grant payments to the State; States must replace withheld Federal funds with their own funds. Here is an overview of the major penalties specified in the 1996 law: --Failure to maintain a certain level of historic State spending. If a State fails to maintain State spending equal to at least 75 percent of spending in 1994, the Secretary must reduce the following year's TANF grant by the shortfall in MOE spending. In addition, if the State received WTW grant funds for the year, the Secretary must reduce the following year's TANF grant by the amount of those WTW funds. --Failure to timely repay a loan from the Federal loan fund. The Secretary must reduce the TANF grant for the next quarter by the outstanding loan amount, plus the interest owed. --Failure to comply substantially with child support enforcement requirements. The Secretary must reduce the TANF grant for each quarter of noncompliance as follows: first finding of noncompliance, by 1-2 percent; second consecutive finding, 2-3 percent; and third and later findings, 5 percent. --Failure to replace Federal penalty funds with State funds. The Secretary may reduce the next year's TANF grant by the sum of 2 percent of the grant and the amount of State funds equal to the earlier grant reduction. --Failure to maintain 100 percent of historic State spending under the State TANF Program during a year in which the State received contingency funds. The Secretary must reduce the next year's TANF grant by the total amount of contingency funds paid to the State. In the case of some violations of TANF law, the Secretary may allow States to enter into corrective compliance plans or may allow a penalty exemption on grounds of reasonable cause for the violation. Here are the violations that permit corrective compliance or exemption: --Failure to comply with the 5-year TANF benefit limit (5 percent maximum); --Failure to enforce penalties required by the child support agency against TANF recipients who fail to cooperate with the Child Support Program (5 percent maximum); --Failure to submit a required report (4 percent; rescinded if the State submits the report before the end of the next fiscal quarter); --Failure to participate in the income and eligibility verification system (2 percent maximum); --Use of TANF funds in violation of the law (reduction of the next year's TANF grant by the amount of funds wrongfully used; if the violation is found to be intentional, an additional 5 percent); --Misuse of competitive WTW grants (an amount equal to the misused funds); --Failure to maintain aid for a single parent who cannot obtain care for a child under 6 (5 percent maximum); --Failure to reduce TANF aid for recipients who refuse without good cause to work (not less than 1 percent or more than 5 percent). STATE TANF PROGRAMS State Plan Requirements To be eligible for a family assistance grant, States must submit each 2 years a TANF plan that contains required elements. The plan must outline how the State intends to: (1) conduct a program that provides cash assistance to needy families and that provides parents with work and support services; (2) require a parent or caretaker recipients to engage in work, as defined by the State, after a maximum of 24 months; (3) comply with the requirement for participation in creditable work activities by certain percentages of adult recipients; (4) take steps to restrict the use and disclosure of information about TANF recipients; (5) establish goals and take action to prevent and reduce the incidence of nonmarital pregnancies; and (6) conduct a program providing education and training on the problem of statutory rape. Also, the document must indicate whether the State intends to treat families moving into the State differently from State residents, whether it intends to provide aid to noncitizens, and if so, provide an overview of the aid. The plan must contain certain certifications, including that the State will operate a Child Support Enforcement Program and a Foster Care and Adoption Program, that it will provide equitable access to TANF for Indians who are not eligible for aid under a tribal plan, and that it has established and is enforcing standards and procedures against program fraud and abuse. The plan may certify that the State has established and is enforcing standards and procedures to screen and identify recipients with a history of domestic violence and will refer them to services and waive some program requirements for them in certain cases. The law does not require the State plan to provide eligibility rules for aid, benefit levels paid, the content of work programs, or numerous other details. However, regulations that took effect October 1, 1999 stipulate that in order for State expenditures to count toward the MOE requirement, the families aided must be financially eligible according to the appropriate income and resource (when applicable) standards established by the State and contained in its TANF plan. The preamble to the regulations states that in order for a plan to be deemed complete, it must contain the financial eligibility criteria for eligible families in the State's TANF Program and all State or local MOE Programs and a brief description of the corresponding benefit provided under the TANF Program with MOE funds. The Workforce Investment Act of 1998 (Public Law 105-220) allows a State to submit a ``unified'' plan to the ``appropriate Secretaries'' covering one or more Workforce Investment Act activities or vocational education activities plus one or more work activities authorized under TANF, food stamps, or numerous other programs. The Secretary with jurisdiction over a program is authorized to approve the portion of the State unified plan dealing with that program (applying its plan requirements). A State with an approved unified plan cannot be required to submit a separate plan for the covered activity. Brief Summary of TANF State Programs On the basis of State Temporary Assistance for Needy Families (TANF) plans, State welfare laws, and data collected under interim reporting rules, the range of State programs is shown to be broad. As noted earlier, many of the States have adopted time limits shorter than the Federal 60-month limit. In 1999, many State legislatures liberalized some TANF rules, allowing more TANF recipients to engage in postsecondary education, receive transportation support, and so forth. Some States increased maximum benefit levels. These changes were facilitated by abundant TANF funds and by the dramatic cut in caseload numbers, which has sharply reduced effective work participation rates required for all families. Table 7-33 shows major provisions of TANF Programs, State by State. For other summaries of TANF State Programs, see the State Policy Document Project of the Center for Law and Social Policy and the Center on Budget and Policy Priorities (http:// www.spdg.org), the TANF annual report (U.S. Department, 1999), and the National Governors' Association (1999). FUNDING OF TANF Basic Family Assistance Grants TANF's basic block grant is the State family assistance grant, which entitles the 50 States and the District of Columbia to a total of $16.5 billion annually through fiscal year 2002. The 1996 law preappropriated these funds. Distribution of the funds among States is based on record high Federal payments made in immediately preceding years for Aid to Families with Dependent Children (AFDC), EA, and JOBS. The law entitles States to the largest of required Federal payments to States for these three programs for: --Fiscal years 1992-94, annual average; --Fiscal year 1994, plus 85 percent of the amount by which EA payments for fiscal year 1995 exceeded those for fiscal year 1994 if the State amended its EA plan in fiscal year 1994; or --Fiscal year 1995. Table 7-1 (column 2) shows the basic annual family assistance grant for the 50 States and the District of Columbia. Puerto Rico, Guam, and the Virgin Islands also are eligible to operate TANF and receive a family assistance grant, but they operate under special funding rules and are not shown in the table (Section 12). American Samoa, which never implemented AFDC, although eligible, could receive TANF funds at the old AFDC matching rate of 75 percent under section 1108 of the Social Security Act. However, as of early 2000, it had not taken this option. TABLE 7-1.--FAMILY ASSISTANCE GRANTS AND REQUIRED STATE SPENDING UNDER TANF [In thousands of dollars] ---------------------------------------------------------------------------------------------------------------- Maximum child care spending Minimum spending Family 75 percent 80 percent that can be on needy families State assistance of historic of historic ``double- that cannot be grant State State counted'' toward double counted spending \1\ spending \1\ both the CCDF and for MOEs of both TANF MOE CCDF and TANF ---------------------------------------------------------------------------------------------------------------- Alabama.......................... $93,315 $39,214 $41,828 $6,896 $32,318 Alaska........................... 63,609 48,942 52,205 3,545 45,398 Arizona.......................... 222,420 95,028 101,363 10,033 84,995 Arkansas......................... 56,733 20,839 22,228 1,887 18,952 California....................... 3,733,818 2,732,406 2,914,566 85,593 2,646,813 Colorado......................... 136,057 82,871 88,396 8,986 73,885 Connecticut...................... 266,788 183,421 195,649 18,738 164,683 Delaware......................... 32,291 21,771 23,222 5,179 16,592 District of Columbia............. 92,610 70,449 75,146 4,567 65,882 Florida.......................... 562,340 370,919 395,647 33,416 337,503 Georgia.......................... 330,742 173,369 184,926 22,183 151,186 Hawaii........................... 98,905 72,981 77,847 4,972 68,010 Idaho............................ 31,938 13,679 14,591 1,176 12,503 Illinois......................... 585,057 429,021 457,622 56,874 372,147 Indiana.......................... 206,799 113,525 121,093 15,357 98,168 Iowa............................. 131,525 61,963 66,094 5,079 56,885 Kansas........................... 101,931 61,750 65,866 6,673 55,077 Kentucky......................... 181,288 67,418 71,913 7,275 60,144 Louisiana........................ 163,972 55,415 59,109 5,219 50,196 Maine............................ 78,121 37,778 40,296 1,750 36,028 Maryland......................... 229,098 176,965 188,763 23,301 153,664 Massachusetts.................... 459,371 358,948 382,877 44,973 313,974 Michigan......................... 775,353 468,518 499,753 24,411 444,107 Minnesota........................ 267,985 179,745 191,728 19,690 160,055 Mississippi...................... 86,768 21,724 23,173 1,715 20,009 Missouri......................... 217,052 120,121 128,129 16,549 103,572 Montana.......................... 45,534 15,689 16,735 1,314 14,375 Nebraska......................... 58,029 28,971 30,903 6,499 22,472 Nevada........................... 43,977 25,489 27,188 2,580 22,908 New Hampshire.................... 38,521 32,115 34,256 4,582 27,533 New Jersey....................... 404,035 303,956 324,219 26,374 277,581 New Mexico....................... 126,103 37,450 39,947 2,895 34,555 New York......................... 2,442,931 1,710,795 1,824,848 101,984 1,608,811 North Carolina................... 302,240 154,176 164,454 37,927 116,248 North Dakota..................... 26,400 9,069 9,674 1,017 8,052 Ohio............................. 727,968 390,551 416,588 45,404 345,147 Oklahoma......................... 148,014 61,250 65,334 10,630 50,620 Oregon........................... 167,925 92,255 98,405 11,715 80,540 Pennsylvania..................... 719,499 407,126 434,267 46,629 360,497 Rhode Island..................... 95,022 60,367 64,392 5,321 55,046 South Carolina................... 99,968 35,839 38,229 4,085 31,754 South Dakota..................... 21,894 8,774 9,359 803 7,971 Tennessee........................ 191,524 82,810 88,331 18,976 63,834 Texas............................ 486,257 235,725 251,440 34,681 201,043 Utah............................. 76,829 25,291 26,977 4,475 20,816 Vermont.......................... 47,353 25,653 27,364 2,666 22,987 Virginia......................... 158,285 128,173 136,718 21,329 106,844 Washington....................... 404,332 272,061 290,198 38,708 233,353 West Virginia.................... 110,176 32,701 34,881 2,971 29,730 Wisconsin........................ 318,188 169,229 180,511 16,449 152,779 Wyoming.......................... 21,781 10,665 11,376 1,554 9,112 ------------------------------------------------------------------------------ Total........................ 16,488,667 10,434,961 11,130,625 887,607 9,547,354 ---------------------------------------------------------------------------------------------------------------- \1\ Fiscal year 1994 spending on AFDC, EA, JOBS, and AFDC-related child care. Source: Table prepared by the Congressional Research Service based on information from the U.S. Department of Health and Human Services. State Spending Requirement (MOE) To avoid a loss of TANF funds, States must maintain their own spending on families with children who are needy under State financial standards. The specified level is 75 percent of expenditures made from State funds in fiscal year 1994 for AFDC, EA, JOBS, and AFDC-related child care (80 percent if a State fails to meet work participation minimums). Table 7-1 (columns 3 and 4) shows the 75 and 80 percent maintenance-of- effort (MOE) levels by State. At the 75 percent level, required spending by States totals $10.4 billion; at the 80 percent level, $11.1 billion. Countable toward the MOE requirement are expenditures on cash assistance, child care, education specifically for TANF recipients and not the general population, administrative costs, and any other spending on activities that further the goals of TANF. These expenditures can be made under the State's TANF Program or an SSP not subject to TANF work and time limit rules. However, for spending not authorized under a State's pre-TANF Programs, a new spending test applies; countable toward MOE are only expenditures above the fiscal year 1995 level. To count toward the TANF MOE, the State expenditure cannot be made as a condition of receiving funds from any Federal program such as Medicaid. A special exception to this rule applies to child care expenditures. State spending for child care is countable toward the TANF MOE so long as the funds are not used as the State match for the CCDF. To be eligible for CCDF matching funds, States must first meet an MOE requirement for CCDF. Column 5 of table 7-1 shows that a maximum of $0.9 billion in State child care expenditures can be counted toward the TANF MOE as well as the CCDF MOE. Column 6 shows that a minimum of $9.5 billion in State expenditures on needy families (the difference between columns 3 and 5) cannot be counted toward both the TANF MOE and the CCDF MOE. States that maintain child care spending at the higher of their 1994 or 1995 spending on the replaced programs are entitled also to extra funds at the Medicaid match rate. Supplemental Grants to States with High Population Growth and/or Low AFDC-Related Federal Spending Per Poor Person For fiscal years 1998-2001, the TANF law appropriated a total of $800 million for supplemental grants to States with high population growth and/or low fiscal year 1994 Federal spending per poor person on programs ended by TANF. For fiscal year 1998, the supplemental grant has been computed as 2.5 percent of the amount required to be paid to the State under AFDC, Emergency Assistance to Needy Families (EA), JOBS, and AFDC-related child care in fiscal year 1994. In subsequent years, it is computed as the prior year's supplemental grant plus 2.5 percent of the sum of fiscal year 1994 base expenditures and the prior year's supplemental grant. Automatic qualification The law qualifies certain States automatically for supplemental funds for each year from fiscal year 1998 to fiscal year 2001 on the basis of historical data. These are States that meet at least one of two conditions: (1) fiscal year 1994 Federal expenditures per poor State resident on AFDC, EA, JOBS, and AFDC-related child care (poverty count based on the 1990 census) were below 35 percent of the corresponding national spending per poor person; or (2) the State's population grew more than 10 percent from April 1, 1990 to July 1, 1994. DHHS has determined that 11 States automatically qualify for supplemental funds for each year: Alabama, Alaska, Arizona, Arkansas, Colorado, Idaho, Louisiana, Mississippi, Nevada, Utah, and Texas. Annual qualification Other States may qualify only by meeting each of two conditions: (1) Federal welfare expenditures per poor State resident (poverty count based on the 1990 census) in the current year on programs ended by TANF are below fiscal year 1994 national average comparable expenditures per poor person; and (2) during the most recent year with available data, the State's population grew at a rate above the national average. Further, to qualify for supplemental funds on these grounds, States must have met the qualification criteria in fiscal year 1998. DHHS has determined that six additional States qualified on these grounds in fiscal year 1998: Florida, Georgia, Montana, New Mexico, North Carolina, and Tennessee. If a State does not meet these annual criteria in fiscal years 1999-2001, it will continue to receive its prior year supplemental grant, but that grant will not increase. In fiscal years 2000 and 2001, Montana and New Mexico do not qualify for an increase in supplemental funds because their 1997-98 population growth rate failed to exceed the national population growth rate. Table 7-2 shows annual supplemental grants for fiscal year 1998 and projections of supplemental grants for fiscal years through 2001.\3\ Under current projections, the $800 million appropriation will be sufficient to pay each State's full supplemental grant in fiscal year 2001. However, current law provides no supplemental grant for fiscal year 2002, the last year for which basic TANF Block Grants are funded. As the table shows, more than half of the 17 supplemental grantee States are in the South. Not qualifying are the remaining 34 States. Further, the law makes the territories ineligible. --------------------------------------------------------------------------- \3\ The projections for fiscal year 2001 assume that all States that qualified for an increase in the supplemental grant from fiscal year 1999 to fiscal year 2000 will qualify for an increase in the supplemental grant from fiscal year 2000 to fiscal year 2001. This differs from the projections made by the U.S. Department of Health and Human Services (DHHS) (see Information Memorandum TANF-ACF-IM-99-4), which assumes that only the States that automatically qualify for supplemental grants will receive an increase in fiscal year 2001. --------------------------------------------------------------------------- Welfare-to-Work Grants The basic TANF Block Grant earmarks no funds for any program component. In response to a Presidential budget proposal, the 1997 Balanced Budget Act established welfare-to- work (WTW) grants (Sec. 403(a)(5)) as a component of TANF (for details, see below). TABLE 7-2.--ESTIMATED SUPPLEMENTAL GRANTS TO STATES WITH HIGH POPULATION GROWTH AND/OR RELATIVELY LOW FEDERAL AFDC AND RELATED PROGRAM EXPENDITURES PER POOR PERSON, FISCAL YEARS 1998-2001 [In thousands of dollars] ------------------------------------------------------------------------ State 1998 1999 2000 2001 ------------------------------------------------------------------------ Alabama..................... $2,671 $5,410 $8,216 $11,093 Alaska...................... 1,659 3,359 5,102 6,888 Arizona..................... 5,762 11,667 17,720 23,925 Arkansas.................... 1,497 3,032 4,606 6,218 Colorado.................... 3,268 6,617 10,051 13,570 Florida..................... 14,547 29,457 44,740 60,406 Georgia..................... 8,978 18,181 27,614 37,283 Idaho....................... 842 1,706 2,591 3,498 Louisiana................... 4,100 8,303 12,611 17,027 Mississippi................. 2,176 4,406 6,692 9,036 Montana..................... 1,133 1,133 1,133 1,133 Nevada...................... 899 1,821 2,765 3,734 New Mexico.................. 3,236 6,553 6,553 6,553 North Carolina.............. 8,696 17,609 26,745 36,110 Tennessee................... 5,193 10,516 15,973 21,565 Texas....................... 12,693 25,703 39,039 52,708 Utah........................ 2,096 4,245 6,447 8,704 ------------------------------------------- Total................... 79,447 159,720 238,599 319,450 ------------------------------------------------------------------------ Source: Table prepared by the Congressional Research Service based on data from the U.S. Department of Health and Human Services and the Census Bureau. For fiscal years 1999-2001, estimates assume that States that qualified for annual increases in grants in fiscal year 2000 also qualify for an annual increase in fiscal year 2001. Contingency Fund The contingency fund provides capped matching grants for States that experience high and increasing unemployment rates or increased food stamp caseloads. A total of $1.960 billion is appropriated to the contingency fund for fiscal years 1997- 2001; the 1996 welfare reform law actually provided $2 billion in contingency funds, but the $2 billion was reduced by $40 million in Public Law 105-89. To qualify for contingency funds, a State must meet one of two criteria of ``need'': (1) its seasonally adjusted unemployment rate averaged over the most recent 3-month period must be at least 6.5 percent and at least 10 percent higher than the rate in the corresponding 3-month period in either of the previous 2 years; or (2) its food stamp caseload over the most recent 3-month period must be at least 10 percent higher than the adjusted food stamp caseload was in the corresponding 3-month period in fiscal years 1994 or 1995. For this purpose, fiscal years 1994 and 1995 food stamp caseloads are adjusted by subtracting noncitizens that would have been ineligible for benefits had the Personal Responsibility and Work Opportunity Reconciliation Act's ban on food stamp eligibility for noncitizens been in effect in those years. To qualify for the contingency fund, a State must meet a special high MOE requirement. The required State spending level is higher (100 percent of fiscal year 1994 spending on AFDC, EA, and JOBS) than for the regular TANF MOE, and the categories of countable spending are more restrictive. For the contingency fund MOE, State spending on SSPs are not countable; spending must be on the TANF Program. Further, TANF expenditures on TANF child care are excluded from contingency fund countable spending (and from the historic spending level base). If a State fails to maintain 100 percent of historic State expenditures under its TANF Program during a year in which it receives contingency funds, DHHS must reduce the State's family assistance grant for the next year by the amount of contingency funds. The maximum sum available to a State from the contingency fund is 20 percent of its State family assistance grant, and in each month that it qualifies, a State may receive up to one- twelfth of its maximum contingency grant. The State's full year entitlement is calculated by: (1) multiplying its countable expenditures above the 100 percent MOE level by the Medicaid matching rate and then (2) multiplying the result by the proportion of the year (for example, one-twelfth for 1 month; one-half for 6 months) that the State met the needy State criteria. A State's full year entitlement to contingency funds can be determined only after the close of the fiscal year. It is based on its countable expenditures, including those financed from contingency fund advance payments; the number of months it qualified; and its matching rate during the fiscal year. If a State received more in advances than its full year entitlement, it must remit overpayments to the Treasury. Remittance of overpayments must be made within 1 year after the State has not met the needy State criteria for 3 consecutive months. These remittances are also increased by an adjustment. This adjustment reflects a provision of Public Law 105-89 (the Adoption and Safe Families Act of 1997) that reduced the contingency fund appropriation by $40 million and correspondingly increased required remittances by a maximum $2 million in fiscal year 1998, $9 million in fiscal year 1999, $16 million in fiscal year 2000, and $13 million in fiscal year 2001. Under this provision, each State's remittance is increased by the lesser of its percentage share of total contingency fund entitlements multiplied by that year's increase in the required remittance or its contingency fund entitlement. Loan Fund TANF also provides a $1.7 billion revolving loan fund. States may receive loans of maturities of up to 3 years, which must be repaid with interest. The interest rate for the loans is the current average market yield on outstanding marketable obligations of the Federal Government. A State is ineligible for a loan if it is subject to a penalty for misspending TANF funds. Bonus Funds Nonmarital birth rate reduction The 1996 welfare reform law appropriates $100 million annually for 4 years, fiscal years 1999-2002, for bonuses to a maximum of five States (or outlying areas) that make the largest percentage reduction in the nonmarital birth rate while also reducing abortion rates. Awards are based on the most recent 2-year data available from the National Center for Health Statistics, compared with that for the previous 2-year period. Initial awards were made in 1999 to five jurisdictions (Alabama, California, District of Columbia, Massachusetts, and Michigan), each of which received $20 million for achieving the largest percentage reductions in out-of-wedlock birth rates between 1994-95 and 1996-97. For further information about nonmarital birth rates and the illegitimacy bonus, see Appendix M. High performance bonus The 1996 law appropriated $1 billion for bonuses averaging $200 million for each of 5 years to ``high performing'' States. It defined a high performing State as one whose TANF performance score for the previous year at least equaled a threshold set for that year by the DHHS Secretary. It stipulated that State performance was to be measured by a formula to be developed by the Secretary in consultation with the National Governors' Association and the American Public Welfare Association (since renamed the American Public Human Services Association). The law said the formula was to measure success in achieving ``the goals'' of TANF. DHHS subsequently announced that the high-performance bonus formula for performance years fiscal years 1998-99 would be based on State rankings (absolute and relative) on two work-related measures: rates of job entry and success in the work force (job retention and earnings gain). In late December 1999, DHHS announced that 27 States had been selected to share the first high-performance bonus of $200 million. At the time the Department said that beginning in performance year fiscal year 2001, it planned to add three new performance measures to the bonus formula: ``family formation''--improvement in the percentage of children below 200 percent of poverty living in married couple families, enrollment in Medicaid or the Children's Health Insurance Program (CHIP), and enrollment in food stamps. Winners of the first high-performance bonus, shown in table 7-3, ranked among the top 10 States in at least one of the four categories. Bonuses ranged from $0.5 million in South Dakota for improvement in job entry to $45.5 million in California for both absolute and relative success in the work force. The States that ranked the highest in each category were Indiana (job placement), Minnesota (job retention and earnings), Washington (biggest improvement in job placement), and Florida (biggest improvement in job retention and earnings). TABLE 7-3.--HIGH-PERFORMANCE BONUS AWARDS, FISCAL YEAR 1999 [In thousands of dollars] ---------------------------------------------------------------------------------------------------------------- 1998 performance 1998 performance ------------------------- improvement State Total bonus ------------------------ Job entry Work force Work force success \1\ Job entry success \1\ ---------------------------------------------------------------------------------------------------------------- Arizona.......................................... $2,707.7 .......... $1,981.5 .......... $726.1 California....................................... 45,454.2 .......... 33,264.4 .......... 12,189.8 Connecticut...................................... 2,376.8 .......... 2,376.8 .......... ........... Delaware......................................... 1,614.5 $943.7 ........... $670.8 ........... Florida.......................................... 6,845.7 .......... 5,009.9 .......... 1,835.9 Hawaii........................................... 881.1 .......... 881.1 .......... ........... Illinois......................................... 21,571.9 19,661.9 ........... .......... 1,910.0 Indiana.......................................... 8,792.2 6,949.9 1,842.4 .......... ........... Iowa............................................. 1,171.8 .......... 1,171.8 .......... ........... Louisiana........................................ 3,770.2 .......... ........... 3,770.2 ........... Massachusetts.................................... 10,562.2 .......... ........... 10,562.2 ........... Michigan......................................... 2,531.3 .......... ........... .......... 2,531.3 Minnesota........................................ 9,424.1 .......... 2,387.5 6,161.7 874.9 Nevada........................................... 2,198.8 1,285.2 ........... 913.6 ........... New York......................................... 7,975.4 .......... ........... .......... 7,975.4 North Dakota..................................... 887.2 887.2 ........... .......... ........... Oklahoma......................................... 3,403.2 .......... ........... 3,403.2 ........... Pennsylvania..................................... 24,180.1 24,180.1 ........... .......... ........... Rhode Island..................................... 2,495.0 .......... ........... 2,184.8 310.2 South Carolina................................... 1,217.0 .......... 890.6 .......... 326.4 South Dakota..................................... 503.4 .......... ........... 503.4 ........... Tennessee........................................ 6,436.5 6,436.5 ........... .......... ........... Texas............................................ 16,341.5 16,341.5 ........... .......... ........... Utah............................................. 2,582.0 2,582.0 ........... .......... ........... Washington....................................... 10,616.7 .......... ........... 9,296.7 1,320.0 West Virginia.................................... 2,533.3 .......... ........... 2,533.3 ........... Wyoming.......................................... 926.1 732.0 194.1 .......... ........... -------------------------------------------------------------- Total........................................ 200,000.0 80,000.0 50,000.0 40,000.0 30,000.0 ---------------------------------------------------------------------------------------------------------------- \1\ To determine success in the work force, measures of job retention and earnings gain were weighted, combined, and then reranked. Source: Table prepared by the Congressional Research Service based on information from the U.S. Department of Health and Human Services. TANF FOR INDIANS The 1996 welfare law gave federally recognized Indian tribes (defined to include certain Alaska Native organizations) the option to design and operate their own cash welfare programs for needy children \4\ with funds subtracted from their State's TANF Block Grant. In mid-February 2000, 22 tribal TANF plans were in operation, covering approximately 4,480 families in 12 States, and 22 plans were pending that would cover 78 more tribes and villages and raise the total number of families served by tribal plans to 17,800. The 1996 welfare law also appropriated $7.6 million annually for 6 years, fiscal years 1997-2002, for work and training activities to tribes in 24 States that operated the repealed JOBS Programs (the replacement program is called Native Employment Works (NEW)), authorized direct Federal funding to recognized Indian tribes for operation of Child Support Enforcement Programs, and set aside a share of child care funds for Indian tribes. Further, the 1997 Balanced Budget Act (Public Law 105-33), which established a 2-year program of WTW grants to serve TANF recipients with impediments to work, reserved $30 million of its formula grants for Indian programs. --------------------------------------------------------------------------- \4\ Before enactment of TANF, American Indians or Alaska Natives (Indians, Inuit [Eskimos] or Aleuts) received AFDC on the same terms as other families in their State, with benefits and income eligibility rules set by the State and costs paid by Federal and State funds. --------------------------------------------------------------------------- Tribal TANF Programs have several distinctive features, including: --Work participation rates and time limit rules are set by the Secretary of DHHS with participation of the tribe. The 1996 law exempts from the 60-month TANF benefit time limit any month of aid during which the recipient lived on a reservation (or in an Alaska Native village) of at least 1,000 persons in which at least 50 percent of adults were unemployed; --Tribal plans are for 3 years (rather than 2, as for States), and contain many fewer required elements than State plans; --DHHS has ruled that State funds contributed to an approved tribal plan may be counted toward the TANF MOE level; --The law gives explicit permission for State TANF Programs to use money from a new loan fund for aid to Indian families that have moved out of the area served by a tribal plan; and --Tribal TANF regulations, issued February 18, 2000, and effective June 17, 2000, permit 35 percent of a tribal grant to be used for administrative costs in the first year, 30 percent in the second year, and 25 percent thereafter. State TANF Programs, however, may spend no more than 15 percent of their grants on administration (with the exception of computerization expenses for tracking and monitoring.) Data compiled by the Division of Tribal Services show that only four tribal plans adopted the statutory work participation rate of 35 percent for fiscal year 1999. The others set lower participation rates, ranging from 15 to 30 percent. However, most tribal plans adopted the TANF 60-month lifetime benefit limit (two set a limit of 24 months within an 84-month period, and one, a limit of 24 consecutive months within 60 months). DHHS reports that in fiscal year 1998, more than 4,000 adults in tribal programs entered employment; another 4,000 achieved other program goals, such as earning a high school diploma or general education degree or completing a training program A tribe's TANF grant equals Federal payments made to the State for fiscal year 1994 for AFDC, EA, and JOBS that are attributable to Indians in its service area. A tribe's grant is smaller than the sum spent on AFDC Indian children in fiscal year 1994 because it lacks the State matching share. Although the existence of a tribal program within a State reduces the State's potential TANF caseload, States are not required to help fund the tribal plan. However, some nine States do so for at least some of the tribal plans within their borders (Alaska, Arizona, California, Idaho, Minnesota, Montana, Oregon, Washington, and Wyoming). South Dakota says it provides transition funds and training. In 1999, Congress amended the law to permit tribal TANF Programs, like State programs, to reserve TANF funds for assistance (aid for basic ongoing needs) in any future year (Public Law 106-169). Final regulations for tribal TANF Programs were issued February 18, 2000 (Federal Register, 2000). AFDC/TANF DATA Highlights Since Congress ended the entitlement of eligible families with children to cash aid in August 1996, AFDC/TANF rolls have continued to shrink, and work by families still on the rolls has doubled. To promote work, State TANF Programs employ tough work sanctions, generous work rewards, ``work first'' policies, and welfare avoidance (diversion) payments. Data reported by States indicate that higher average earnings for those remaining on the rolls apparently have more than offset a slight drop in average benefits (chart 7-6), that the percentage of welfare children cared for by a nonrecipient (child-only cases) has increased, but that otherwise the composition of TANF families resembles that of AFDC families (table 7-27), and that the share of welfare adults who are nonwhites apparently has increased (table 7-28). National data are not available about families who have left TANF, but studies indicate that in some States from 50 to 65 percent of persons who leave TANF have jobs then or a short time later (compared with a general work exit rate of almost 50 percent before TANF), that the jobs generally pay wages slightly above the minimum, and that about one-fifth or more of ex-recipients return to the rolls within several months. (See Appendix L for review of TANF research.) Caseloads Historical national trends As table 7-4 shows, enrollment in family welfare, which soared to an all-time peak in fiscal year 1994, has fallen to the lowest level since the early 1970s. Some of the decline in the reported caseload since 1996 represents families who were moved into separate State programs (SSPs) not subject to TANF rules. The proportion of U.S. children enrolled in AFDC/TANF hovered between 11 and 12 percent throughout the 1970s and 1980s and then soared above 14 percent in 1993-94. Since then the share has been cut in half, to an estimated 6.9 percent in September 1999. Chart 7-1 shows that the number of AFDC families began climbing in fiscal year 1990, reached a record peak in spring 1994 and then plunged to 2.5 million in September 1999. More than one-fourth of this decline occurred before passage of TANF. Food stamp enrollment also dropped sharply, by more than 10 million persons, from spring 1994 to October 1999. TABLE 7-4.--HISTORICAL TRENDS IN AFDC/TANF ENROLLMENTS, FISCAL YEARS 1970-99 ---------------------------------------------------------------------------------------------------------------- Average monthly number (in thousands) Total child Percent --------------------------------------- population all Fiscal year (under age children on Families Recipients Children 18) \1\ AFDC/TANF ---------------------------------------------------------------------------------------------------------------- 1970........................................... 1,909 7,415 5,494 69,759 7.9 1971........................................... 2,532 9,556 6,963 69,806 9.9 1972........................................... 2,918 10,632 7,698 69,417 11.1 1973........................................... 3,124 11,038 7,965 68,762 11.6 1974........................................... 3,170 10,845 7,824 67,984 11.5 1975........................................... 3,357 11,094 7,952 67,164 11.8 1976........................................... 3,575 11,386 8,054 66,250 12.2 1977........................................... 3,593 11,130 7,846 65,461 12.0 1978........................................... 3,539 10,672 7,492 64,773 11.6 1979........................................... 3,496 10,318 7,197 64,106 11.2 1980........................................... 3,642 10,597 7,320 63,754 11.5 1981........................................... 3,871 11,160 7,615 63,213 12.0 1982........................................... 3,569 10,431 6,975 62,813 11.1 1983........................................... 3,651 10,659 7,051 62,566 11.3 1984........................................... 3,725 10,866 7,153 62,482 11.4 1985........................................... 3,692 10,813 7,165 62,623 11.4 1986........................................... 3,748 10,997 7,300 62,865 11.6 1987........................................... 3,784 11,065 7,381 63,056 11.7 1988........................................... 3,748 10,920 7,325 63,246 11.6 1989........................................... 3,771 10,934 7,370 63,457 11.6 1990........................................... 3,974 11,460 7,755 63,942 12.1 1991........................................... 4,374 12,592 8,513 65,069 13.1 1992........................................... 4,768 13,625 9,226 66,075 14.0 1993........................................... 4,981 14,143 9,560 66,963 14.3 1994........................................... 5,046 14,226 9,611 67,804 14.2 1995........................................... 4,879 13,659 9,280 68,438 13.6 1996........................................... 4,552 12,644 8,671 69,023 12.6 1997........................................... 3,947 10,954 7,781 69,528 10.5 1998........................................... 3,179 8,770 6,330 70,229 8.9 1999........................................... 2,648 7,203 \2\ 5,114 70,548 7.2 ---------------------------------------------------------------------------------------------------------------- \1\ Census Bureau estimates of the resident child population (under age 18) as of July 1 each year. Figures for 1998 and 1999 are ``middle series'' projections. \2\ Rough estimate, based on ratio of children to total recipients in 1998. Note.--Family, recipient, and child data, fiscal years 1970-96 are from DHHS AFDC baseline book (table 2.1); and for 1997-98 are from DHHS Second Annual Report on indicators of welfare dependence. Source: Table prepared by the Congressional Research Service on the basis of data from the U.S. Department of Health and Human Services. Many factors have helped to shrink the caseload, including the new ``work first'' culture, the improved economy, tougher work sanctions, the existence of a lifetime limit for federally funded benefits, and widespread adoption of diversion practices. Under TANF, not only are recipients departing from welfare at a faster rate, but fewer persons are joining the rolls to replace them. An August 1999 report by the Council of Economic Advisors (pp. 2 and 4) estimates that about one-third of the 1996-98 caseload drop was due to Federal and State welfare policy changes, from 8 to 10 percent to the strong economy, 10 percent to the higher minimum wage, and from 1 to 5 percent to the lower real value of cash welfare benefits. CHART 7-1. AFDC/TANF FAMILIES, 1982-99 Source: Chart prepared by the Congressional Research Service on the basis of the U.S. Department of Health and Human Services data. State caseload trends By fiscal year 1999, the national average Aid to Families with Dependent Children (AFDC)/TANF monthly caseload had plunged 48 percent (almost 2.4 million families) below its all- time peak of 5 million families in fiscal year 1994. Table 7-5 shows that decreases occurred in all jurisdictions except Guam. Rates of decline varied, changing the distribution of welfare families across States. For example, the share of welfare families in California and New York, the two largest AFDC/TANF States, rose from 27 percent in fiscal year 1994 to 34.7 percent in fiscal year 1999. In addition, the percentage of the caseload residing in inner cities has increased (Allen & Kirby, 2000). As noted earlier, the fiscal year 1995 caseload has special significance; required work participation rates are reduced for States whose caseload is below the 1995 base level. The national caseload in fiscal year 1999 was down 45.7 percent from 1995; in 38 of the 54 TANF jurisdictions, the caseload reduction appeared large enough to reduce the required fiscal year 2000 overall work rate from the statutory level of 40 percent to zero. TABLE 7-5.--AFDC/TANF FAMILIES, MONTHLY AVERAGE BY FISCAL YEAR [Families in thousands] -------------------------------------------------------------------------------------------------------------------------------------------------------- Percent change: fiscal year 1999 from State 1994 1995 1996 1997 1998 1999 ------------------------- 1995 1994 -------------------------------------------------------------------------------------------------------------------------------------------------------- Alabama......................................... 50.3 46.0 42.4 34.5 23.3 20.3 -56.0 -59.7 Alaska.......................................... 12.8 12.4 12.3 12.0 10.2 8.5 -31.9 -33.7 Arizona......................................... 72.0 69.6 63.4 54.7 39.6 34.1 -51.0 -52.6 Arkansas........................................ 26.0 24.3 22.7 20.9 13.8 11.9 -50.9 -54.1 California...................................... 909.0 919.5 896.0 815.9 707.0 624.1 -32.1 -31.3 Colorado........................................ 41.6 38.6 35.4 29.9 21.2 14.3 -63.0 -65.7 Connecticut..................................... 59.2 61.0 58.1 55.8 48.1 33.9 -44.4 -42.7 Delaware........................................ 11.5 10.8 10.4 9.8 7.2 6.2 -42.1 -45.5 District of Columbia............................ 27.1 26.8 25.7 24.1 21.1 19.1 -28.8 -29.7 Florida......................................... 247.1 230.8 212.0 170.5 108.0 82.0 -64.5 -66.8 Georgia......................................... 141.5 139.1 130.4 105.9 75.0 62.2 -55.3 -56.0 Guam............................................ 1.9 2.1 2.1 2.3 2.1 2.5 20.7 34.8 Hawaii.......................................... 20.4 21.7 22.0 21.3 16.8 16.0 -26.2 -21.7 Idaho........................................... 8.7 9.1 9.0 6.5 1.9 1.4 -84.8 -84.1 Illinois........................................ 240.3 236.2 224.1 198.9 169.7 122.8 -48.0 -48.9 Indiana......................................... 73.8 65.6 52.9 44.7 40.1 36.7 -44.0 -50.3 Iowa............................................ 39.6 36.5 32.8 28.8 25.2 22.0 -39.8 -44.5 Kansas.......................................... 30.1 28.2 25.1 20.2 14.1 12.8 -54.5 -57.3 Kentucky........................................ 79.8 75.4 71.8 65.3 52.9 42.6 -43.4 -46.6 Louisiana....................................... 86.9 79.8 70.6 56.5 48.2 39.4 -50.7 -54.7 Maine........................................... 22.9 21.7 20.5 18.5 15.7 13.5 -37.9 -41.3 Maryland........................................ 80.1 80.4 74.1 59.2 47.4 34.7 -56.8 -56.6 Massachusetts................................... 111.8 100.9 88.4 78.0 66.5 54.5 -46.0 -51.3 Michigan........................................ 223.9 201.7 178.0 151.6 123.7 95.2 -52.8 -57.5 Minnesota....................................... 63.0 61.3 58.3 53.3 48.3 42.5 -30.8 -32.6 Mississippi..................................... 56.8 52.5 48.0 38.5 23.7 16.6 -68.3 -70.7 Missouri........................................ 92.1 89.3 82.7 71.8 60.0 50.9 -43.0 -44.7 Montana......................................... 11.9 11.5 10.8 8.9 6.4 4.8 -58.0 -59.5 Nebraska........................................ 15.9 14.8 14.2 13.9 13.0 11.3 -23.5 -28.9 Nevada.......................................... 14.2 15.7 14.8 11.9 10.4 8.0 -48.9 -43.3 New Hampshire................................... 11.5 10.8 9.5 8.1 6.9 6.4 -41.0 -44.5 New Jersey...................................... 122.4 118.9 112.0 95.4 80.5 62.2 -47.6 -49.2 New Mexico...................................... 33.6 34.4 33.9 27.0 21.1 25.5 -26.0 -24.2 New York........................................ 455.0 456.9 431.7 384.4 336.9 294.4 -35.6 -35.3 North Carolina.................................. 131.2 125.5 113.1 98.9 78.0 59.3 -52.7 -54.8 North Dakota.................................... 5.9 5.2 4.9 4.2 3.3 3.1 -40.6 -47.3 Ohio............................................ 250.2 228.2 206.7 191.4 151.5 113.8 -50.1 -54.5 Oklahoma........................................ 47.0 44.8 38.8 30.3 24.5 20.1 -55.2 -57.3 Oregon.......................................... 42.1 39.3 33.4 24.1 18.2 16.9 -57.0 -60.0 Pennsylvania.................................... 210.2 204.8 190.3 163.6 127.7 105.7 -48.4 -49.7 Puerto Rico..................................... 58.8 54.8 50.9 47.7 41.9 36.2 -34.0 -38.5 Rhode Island.................................... 22.7 22.2 21.2 19.8 19.3 18.0 -19.0 -20.6 South Carolina.................................. 51.9 49.0 45.8 34.2 25.3 18.4 -62.5 -64.6 South Dakota.................................... 6.9 6.3 6.0 5.1 3.8 3.2 -48.7 -53.4 Tennessee....................................... 110.8 104.0 99.1 70.4 57.4 57.6 -44.6 -48.0 Texas........................................... 283.7 273.0 255.0 209.0 145.3 114.1 -58.2 -59.8 Utah............................................ 17.8 16.6 14.8 12.2 10.7 9.8 -41.1 -44.9 Vermont......................................... 9.9 9.6 9.1 8.3 7.4 6.6 -31.5 -33.1 Virginia........................................ 74.8 72.1 64.9 53.9 43.3 37.0 -48.7 -50.5 Virgin Islands.................................. 1.1 1.3 1.4 1.3 1.1 1.0 -26.6 -12.5 Washington...................................... 103.0 101.9 98.9 93.0 79.4 62.6 -38.6 -39.2 West Virginia................................... 40.7 38.4 36.6 33.6 19.7 11.4 -70.2 -71.9 Wisconsin....................................... 77.2 72.4 60.1 38.9 12.8 19.1 -73.6 -75.2 Wyoming......................................... 5.7 5.2 4.7 2.8 1.3 0.8 -84.4 -85.9 ------------------------------------------------------------------------------------------------------- Total....................................... 5,046.3 4,879.0 4,551.7 3,941.8 3,178.7 2,648.1 -45.7 -47.5 -------------------------------------------------------------------------------------------------------------------------------------------------------- Source: Table prepared by the Congressional Research Service based on data reported by States to the U.S. Department of Health and Human Services. Benefits Average benefits In 20 of 52 jurisdictions with available data (California and Minnesota are missing), average monthly TANF benefits in 1998 rose above 1997 levels, but elsewhere they continued the general downward trend from previous years. As table 7-6 shows, benefits fell short of fiscal year 1994 levels except in Kentucky, Montana, Nebraska, Nevada, New Mexico, South Dakota, Tennessee, Texas, Utah, West Virginia, Wisconsin, and the Virgin Islands. As noted earlier, employment rates of AFDC/ Temporary Assistance for Needy Families (TANF) adults more than tripled from 1994 to 1998, and higher earnings resulted in some decline in average welfare payments paid. TABLE 7-6.--AVERAGE MONTHLY BENEFIT FOR AFDC/TANF FAMILIES, FISCAL YEARS 1994-98 ---------------------------------------------------------------------------------------------------------------- State 1994 1995 1996 1997 1998 ---------------------------------------------------------------------------------------------------------------- Alabama.................................................. $148.48 $146.13 $144.21 $142.10 $139.58 Alaska................................................... 805.26 822.90 769.01 NA 669.00 Arizona.................................................. 299.27 299.57 291.11 290.03 278.76 Arkansas................................................. 177.71 177.65 169.70 170.92 166.68 California............................................... 551.72 558.16 538.51 526.25 NA Colorado................................................. 315.20 313.97 302.36 304.10 300.48 Connecticut.............................................. 563.73 515.32 463.10 465.67 462.35 Delaware................................................. 297.41 296.00 304.35 280.74 270.52 District of Columbia..................................... 393.86 392.48 384.00 350.80 345.68 Florida.................................................. 254.20 255.50 250.42 229.89 228.45 Georgia.................................................. 245.56 244.63 242.62 242.74 236.82 Guam..................................................... 504.77 494.60 548.80 527.29 502.30 Hawaii................................................... 665.54 671.64 668.11 613.17 519.78 Idaho.................................................... 282.16 269.75 265.88 287.74 256.78 Illinois................................................. 314.82 306.12 295.17 289.18 280.74 Indiana.................................................. 257.29 255.46 244.52 233.00 229.34 Iowa..................................................... 359.21 340.97 336.95 326.52 329.62 Kansas................................................... 345.68 335.91 319.59 311.40 296.90 Kentucky................................................. 207.58 202.97 222.90 223.19 219.64 Louisiana................................................ 163.28 159.62 153.10 157.20 159.13 Maine.................................................... 418.28 403.84 393.79 390.97 367.95 Maryland................................................. 315.53 315.76 309.46 303.14 310.60 Massachusetts............................................ 544.42 531.80 523.65 473.84 504.94 Michigan................................................. 429.23 415.58 405.87 396.30 357.37 Minnesota................................................ 477.69 479.75 470.28 477.85 NA Mississippi.............................................. 119.72 123.00 116.95 117.51 101.15 Missouri................................................. 261.37 260.71 257.45 251.67 243.68 Montana.................................................. 343.80 344.00 349.25 348.29 367.84 Nebraska................................................. 319.39 308.88 310.58 320.13 323.14 Nevada................................................... 283.83 284.82 279.38 274.23 288.09 New Hampshire............................................ 467.30 467.82 466.26 459.14 417.12 New Jersey............................................... 361.01 355.41 345.61 332.28 342.72 New Mexico............................................... 325.21 343.13 352.13 342.24 382.99 New York................................................. 495.43 494.04 487.14 478.50 479.85 North Carolina........................................... 229.37 226.97 222.86 218.72 219.56 North Dakota............................................. 355.43 352.73 353.23 355.62 338.29 Ohio..................................................... 308.46 305.18 301.91 291.52 306.25 Oklahoma................................................. 292.14 279.85 258.36 252.62 217.22 Oregon................................................... 394.67 394.49 339.51 401.37 380.99 Pennsylvania............................................. 379.69 379.48 373.71 372.95 364.83 Puerto Rico.............................................. 101.79 100.47 99.69 101.95 98.33 Rhode Island............................................. 495.11 510.40 485.89 490.56 477.20 South Carolina........................................... 175.31 180.34 176.45 162.21 157.60 South Dakota............................................. 293.10 292.58 301.72 285.44 294.23 Tennessee................................................ 168.65 170.71 172.35 163.74 169.91 Texas.................................................... 162.50 157.60 155.95 159.96 164.49 Utah..................................................... 341.60 356.51 347.66 346.16 354.40 Vermont.................................................. 525.63 502.31 450.18 442.75 460.60 Virginia................................................. 259.33 251.29 248.18 247.18 245.74 Virgin Islands........................................... 264.51 268.23 256.91 285.65 334.15 Washington............................................... 492.65 498.13 489.02 476.38 464.08 West Virginia............................................ 236.44 230.16 228.13 225.33 239.80 Wisconsin................................................ 463.01 457.28 432.54 422.37 565.70 Wyoming.................................................. 300.01 299.47 286.91 263.06 218.50 ---------------------------------------------------------------------------------------------------------------- NA--Not available. Source: Table prepared by the Congressional Research Service based on data reported by States to the U.S. Department of Health and Human Services. Maximum benefits Table 7-7 presents maximum benefit levels (amounts paid to those without income) for families of three. The last column shows that between July 1994 and January 2000, the real value of maximum benefits decreased in most States. Most States did not change maximum benefits (with the result that their inflation-adjusted value fell by almost 11 percent). Sixteen States increased benefits, but only seven jurisdictions raised benefits enough to more than offset price inflation: Guam, Kentucky, Mississippi, Montana, New Mexico, West Virginia, and Wisconsin. Table 7-8 shows maximum TANF benefits, by State, for a single-parent family from one to six persons, with no earned income, as of January 1, 2000. Table 7-9 shows maximum combined TANF and food stamp benefits, by State and family size, for single-parent families who have no earnings. Table 7-10 shows AFDC/TANF maximum benefits for three persons in nominal dollars over the long term (1970-2000) for selected years: July 1970, July 1975, July 1980, July 1985, January 1990, January 1995, January 2000, with the last column showing the percent change in real dollars from 1970 to 2000. TABLE 7-7.--MAXIMUM COMBINED AFDC/TANF BENEFITS FOR A FAMILY OF THREE (PARENT WITH TWO CHILDREN), JULY 1994- JANUARY 2000 ---------------------------------------------------------------------------------------------------------------- Percent real change from State July July July January July 1994- 1994 1996 1998 2000 January 2000 ---------------------------------------------------------------------------------------------------------------- Alabama....................................................... $164 $164 $164 $164 -10.7 Alaska........................................................ 923 923 923 923 -10.7 Arizona....................................................... 347 347 347 347 -10.7 Arkansas...................................................... 204 204 204 204 -10.7 California.................................................... 607 596 565 626 -7.9 Colorado...................................................... 356 356 356 357 -10.5 Connecticut................................................... 680 636 636 636 -16.5 Delaware...................................................... 338 338 338 338 -10.7 District of Columbia.......................................... 420 415 379 379 -19.5 Florida....................................................... 303 303 303 303 -10.7 Georgia....................................................... 280 280 280 280 -10.7 Guam.......................................................... 330 673 673 673 82.0 Hawaii: Work exempt............................................... 712 712 712 712 -10.7 Nonexempt................................................. 712 712 570 570 -28.5 Idaho......................................................... 317 317 276 293 -17.5 Illinois...................................................... 377 377 377 377 -10.7 Indiana....................................................... 288 288 288 288 -10.7 Iowa.......................................................... 426 426 426 426 -10.7 Kansas........................................................ 429 429 429 429 -10.7 Kentucky...................................................... 228 262 262 262 2.6 Louisiana..................................................... 190 190 190 190 -10.7 Maine......................................................... 418 418 439 461 -1.6 Maryland...................................................... 373 373 388 417 -0.2 Massachusetts: Work exempt............................................... 579 579 579 579 -10.7 Nonexempt................................................. 579 565 565 565 -12.9 Michigan: Washtenaw County.......................................... 489 489 489 489 -10.7 Wayne County.............................................. 459 459 459 459 -10.7 Minnesota..................................................... 532 532 532 532 -10.7 Mississippi................................................... 120 120 120 170 26.5 Missouri...................................................... 292 292 292 292 -10.7 Montana....................................................... 416 438 461 469 0.6 Nebraska...................................................... 364 364 364 364 -10.7 Nevada........................................................ 348 348 348 348 -10.7 New Hampshire................................................. 550 550 550 575 -6.7 New Jersey.................................................... 424 424 424 424 -10.7 New Mexico.................................................... 381 389 489 439 2.8 New York: New York City............................................. 577 577 577 577 -10.7 Suffolk County............................................ 703 703 703 703 -10.7 North Carolina................................................ 272 272 272 272 -10.7 North Dakota.................................................. 431 431 440 457 -5.4 Ohio.......................................................... 341 341 362 373 -2.4 Oklahoma...................................................... 324 307 292 292 -19.6 Oregon........................................................ 460 460 460 460 -10.7 Pennsylvannia................................................. 421 421 421 421 -10.7 Puerto Rico................................................... 180 180 180 180 -10.7 Rhode Island.................................................. 554 554 554 554 -10.7 South Carolina................................................ 200 200 201 204 -9.1 South Dakota.................................................. 430 430 430 430 -10.7 Tennessee..................................................... 185 185 185 185 -10.7 Texas......................................................... 188 188 188 201 -4.6 Utah.......................................................... 414 416 451 451 -2.8 Vermont....................................................... 650 633 656 708 -2.8 Virgin Islands................................................ 240 240 240 240 -10.7 Virginia...................................................... 354 354 354 354 -10.7 Washington.................................................... 546 546 546 546 -10.7 West Virginia................................................. 253 253 253 328 15.7 Wisconsin: Community service......................................... 517 517 673 673 16.2 W2 transition............................................. 517 517 628 628 8.4 Wyoming....................................................... 360 360 340 340 -15.7 Median State.............................................. 381 415 421 421 -10.5 ---------------------------------------------------------------------------------------------------------------- Note.--The Consumer Price Index for All Urban Consumers inflation adjustment factor for converting July 1994 dollars to January 2000 dollars is 1.1203. Source: Table prepared by the Congressional Research Service on the basis of data from the U.S. Department of Health and Human Services. TABLE 7-8.--MAXIMUM MONTHLY TANF BENEFIT FOR FAMILIES OF ONE TO SIX PERSONS, JANUARY 1, 2000 \1\ ---------------------------------------------------------------------------------------------------------------- Family size State ----------------------------------------------- 1 \2\ 2 3 4 5 6 ---------------------------------------------------------------------------------------------------------------- Alabama......................................................... $111 $137 $164 $194 $225 $252 Alaska.......................................................... 514 821 923 1025 1127 1229 Arizona......................................................... 204 275 347 418 489 561 Arkansas........................................................ 81 162 204 247 286 331 California: Region 1.................................................... 310 505 626 746 849 953 Region 2.................................................... 294 481 596 710 808 907 Colorado........................................................ 214 281 357 432 513 591 Connecticut..................................................... 402 513 636 741 835 935 Delaware........................................................ 201 270 338 407 475 544 District of Columbia............................................ 239 298 379 463 533 627 Florida......................................................... 180 241 303 364 426 487 Georgia......................................................... 155 235 280 330 378 410 Guam............................................................ 420 537 673 776 874 985 Hawaii: Work exempt................................................. 418 565 712 859 1006 1153 Nonexempt................................................... 335 452 570 687 805 922 Idaho........................................................... 293 293 293 293 293 293 Illinois........................................................ 212 278 377 414 485 545 Indiana......................................................... 139 229 288 346 405 463 Iowa............................................................ 183 361 426 495 548 610 Kansas.......................................................... 267 352 429 497 558 619 Kentucky........................................................ 186 225 262 328 383 432 Louisiana....................................................... 72 138 190 234 277 316 Maine........................................................... 219 345 461 581 698 815 Maryland........................................................ 185 328 417 503 583 641 Massachusetts: Work exempt................................................. 392 486 579 668 760 854 Nonexempt................................................... 383 474 565 651 741 832 Michigan: Washtenaw County............................................ 305 401 489 593 689 822 Wayne County................................................ 276 371 459 563 659 792 Minnesota....................................................... 250 437 532 621 697 773 Mississippi..................................................... 110 146 170 194 218 242 Missouri........................................................ 136 234 292 342 388 431 Montana......................................................... 278 374 469 564 659 754 Nebraska........................................................ 222 293 364 435 506 577 Nevada.......................................................... 229 289 348 407 466 525 New Hampshire................................................... 439 506 575 638 698 779 New Jersey...................................................... 162 322 424 488 552 616 New Mexico...................................................... 281 360 439 519 598 677 New York: New York City............................................... 352 468 577 687 800 884 Suffolk County.............................................. 446 576 703 824 949 1038 North Carolina.................................................. 181 236 272 297 324 349 North Dakota.................................................... 271 363 457 549 642 735 Ohio............................................................ 223 305 373 461 539 600 Oklahoma........................................................ 180 225 292 361 422 483 Oregon.......................................................... 310 395 460 565 660 755 Pennsylvannia................................................... 215 330 421 514 607 687 Puerto Rico..................................................... 132 156 180 204 228 252 Rhode Island.................................................... 327 449 554 634 714 794 South Carolina.................................................. 121 162 204 245 286 328 South Dakota.................................................... 304 380 430 478 528 578 Tennessee....................................................... 95 142 185 226 264 305 Texas........................................................... 84 174 201 241 268 308 Utah............................................................ 261 362 451 528 601 663 Vermont......................................................... 503 604 708 792 881 940 Virginia........................................................ 220 294 354 410 488 534 Virgin Islands.................................................. 120 180 240 300 360 420 Washington...................................................... 349 440 546 642 740 841 West Virginia................................................... 224 276 328 387 435 488 Wisconsin: Community service........................................... 0 673 673 673 673 673 W2 transition............................................... 0 628 628 628 628 628 Wyoming......................................................... 195 320 340 340 360 360 ---------------------------------------------------------------------------------------------------------------- \1\ Calculations assume a single-parent family with no earned income and use normal rounding rules. \2\ A family size of one represents a pregnant woman or a child-only case. Colorado and Texas have separate payment schedules for the two groups; the table shows amounts for pregnant women. Maximum child-only benefits are smaller; $117 in Colorado and $68 in Texas. Source: Table prepared by the Congressional Research Service on the basis of a telephone survey of States. TABLE 7-9.--MAXIMUM COMBINED TANF AND FOOD STAMP \1\ BENEFIT FOR FAMILIES OF ONE TO SIX PERSONS, JANUARY 1, 2000 \2\ ---------------------------------------------------------------------------------------------------------------- Family size State ----------------------------------------------- 1 2 3 4 5 6 ---------------------------------------------------------------------------------------------------------------- Alabama......................................................... $238 $370 $490 $602 $703 $823 Alaska.......................................................... 558 904 1,101 1,285 1,456 1,652 Arizona......................................................... 310 466 618 758 888 1,039 Arkansas........................................................ 208 387 518 639 746 878 California: Region 1.................................................... 384 627 813 988 1,140 1,314 Region 2.................................................... 373 610 792 963 1,111 1,282 Colorado........................................................ 316 471 625 768 905 1,060 Connecticut..................................................... 448 633 820 984 1,130 1,301 Delaware........................................................ 307 463 611 751 878 1,028 District of Columbia............................................ 334 482 640 790 919 1,086 Florida......................................................... 293 442 587 721 844 988 Georgia......................................................... 275 438 571 697 810 934 Guam............................................................ 498 717 942 1,131 1,303 1,510 Hawaii: Work exempt................................................. 531 800 1,061 1,305 1,533 1,794 Nonexempt................................................... 473 721 962 1,185 1,392 1,632 Idaho........................................................... 372 479 580 671 751 852 Illinois........................................................ 315 468 639 756 885 1,028 Indiana......................................................... 264 434 576 708 829 971 Iowa............................................................ 295 526 673 812 929 1,074 Kansas.......................................................... 354 520 675 814 936 1,080 Kentucky........................................................ 297 431 558 695 814 949 Louisiana....................................................... 199 370 508 630 740 868 Maine........................................................... 320 515 697 872 1,034 1,217 Maryland........................................................ 296 503 667 818 954 1,095 Massachusetts: Work exempt................................................. 441 614 780 933 1,078 1,245 Nonexempt................................................... 435 606 770 921 1,064 1,229 Michigan: Washtenaw County............................................ 380 554 717 881 1,028 1,222 Wayne County................................................ 360 533 696 860 1,007 1,201 Minnesota....................................................... 358 629 789 934 1,061 1,207 Mississippi..................................................... 237 376 494 602 698 816 Missouri........................................................ 262 438 579 705 817 948 Montana......................................................... 361 536 703 861 1,007 1,175 Nebraska........................................................ 322 479 630 770 900 1,051 Nevada.......................................................... 327 476 618 751 872 1,014 New Hampshire................................................... 474 628 777 912 1,034 1,192 New Jersey...................................................... 280 499 672 807 932 1,078 New Mexico...................................................... 363 526 682 829 964 1,121 New York: New York City............................................... 413 601 779 947 1,106 1,266 Suffolk County.............................................. 479 677 867 1,043 1,210 1,373 North Carolina.................................................. 293 439 565 674 773 891 North Dakota.................................................... 356 528 695 850 995 1,161 Ohio............................................................ 323 487 636 788 923 1,067 Oklahoma........................................................ 293 431 579 718 841 985 Oregon.......................................................... 384 550 697 861 1,008 1,175 Pennsylvania.................................................... 317 505 669 826 971 1,128 Puerto Rico \3\................................................. 206 296 379 453 522 601 Rhode Island.................................................... 396 588 763 910 1,046 1,203 South Carolina.................................................. 248 387 518 637 746 876 South Dakota.................................................... 380 540 676 800 915 1,051 Tennessee....................................................... 222 373 504 624 731 860 Texas........................................................... 211 396 515 634 733 862 Utah............................................................ 349 527 690 835 966 1,111 Vermont......................................................... 519 697 870 1,020 1,162 1,305 Virginia........................................................ 321 480 623 753 887 1,021 Virgin Islands.................................................. 308 511 703 878 1,038 1,230 Washington...................................................... 411 582 757 915 1,064 1,235 West Virginia................................................... 324 467 604 737 850 988 Wisconsin: Community service........................................... (\4\) 745 846 937 1,017 1,118 W2 transition............................................... (\4\) 713 814 905 985 1,086 Wyoming......................................................... 303 498 613 704 798 899 ---------------------------------------------------------------------------------------------------------------- \1\ Food stamp calculations assume that the family does not receive an excess shelter deduction. In very low benefit States, combined benefits shown reflect the maximum food stamp allotment for the family size, but in some States the excess shelter deduction would increase food stamps (by up to $83 monthly--more in Alaska and Hawaii). \2\ Calculations assume a single-parent family with no earned income and use normal rounding rules. \3\ Puerto Rico does not have a standard Food Stamp Program, but it operates a program of nutritional cash assistance under a block grant. The table shows TANF benefits plus amounts from the Nutritional Cash Assistance Program. \4\ Wisconsin has no one-person families in its regular W-2 (TANF) Program. Pregnant women without children are ineligible and ``child-only'' recipients have been moved into special programs. Source: Table prepared by the Congressional Research Service. Benefits for minimum wage workers Table 7-11 shows annual earnings net of payroll taxes, plus TANF, the earned income credit (EIC), and food stamps (January 2000 levels) for a minimum wage worker with two children who works half time all year round. (This and subsequent tables should not be taken to imply that all workers actually receive these benefits.) Table 7-12 shows the same thing for a full-time, year-round minimum wage worker. Table 7-10 shows maximum Aid to Families with Dependent Children (AFDC)/TANF benefits for a three-person family by State for selected years from July 1970 to January 2000. Over the three decades, the real value of cash payments declined in all States. In 25 jurisdictions the decline was 50 p