The current legislative authority for the TANF block grant is from the Deficit Reduction Act of 2005 (Public Law 109-171). Enacted in February 2006, the Act reauthorizes the original 1996 legislation at an annual funding level of $16.5 billion and continues to require each state to have at least 50 percent of its work eligible families participating in meaningful work activities. However, prior to this Act, a caseload reduction credit allowed states to reduce their work requirement by their caseload declines since 1995. As most states experienced dramatic caseload declines, the credit had virtually eliminated the work participation requirements for most states. Starting with FY 2007, the Deficit Reduction Act recalibrates the base year for calculating the caseload reduction credit to 2005, effectively re-implementing a meaningful performance guideline.
Also starting in FY 2007, the Deficit Reduction Act expands the work participation calculations to include adults in certain welfare programs funded out of state funds countable toward the maintenance of effort (MOE) requirement. Under the original legislation, these adults were excluded from the calculations. This change was implemented because there was some concern that states were moving work-eligible TANF adults into non-TANF programs with similar program structures, in part, to avoid federal work participation standards.2 In addition, new regulations from the Department of Health and Human Services create consistent definitions of the activities that count toward federal work requirements and provide new flexibility for states to count adults who miss scheduled hours due to holidays and excused absences. The new regulations also provide more detailed instructions to states as to which families they are to include in their work participation rate calculations. In some circumstances states are required to include adults that have been removed from the assistance unit because of failing to comply with program rules. In addition, the new regulations allow states to include adults receiving federal disability benefits on a case by case basis, and to exclude parents caring for disabled family members.
The Deficit Reduction Act also provides $100 million per year to support programs designed to promote healthy marriages, and up to $50 million annually for programs designed to encourage responsible fatherhood. In addition, the new law increased mandatory child care funding to states to $2.9 billion annually.