Washington needs targeted investment in Temporary Assistance for Needy Families

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Washington needs targeted investment in Temporary Assistance for Needy Families

Investments in families with lower incomes would alleviate the economic pressure of COVID-19

By - August 4, 2020

As eviction bans and extended unemployment insurance expire across the country, there is growing pressure on families to meet the costs of rent, utilities, and other basic needs. At the same time, families are also facing mounting financial strain as school and child care closures continue to grow and job losses increase. And this pressure is not being felt equally – Black, Indigenous, and Latinx communities in Washington and across the United States are experiencing the worst health, economic, and housing impacts.

The federal government must provide relief to the growing number of families facing economic hardship, including undocumented people and families who have been excluded from support through emergency recovery funding. Federal investment in the Temporary Assistance for Needy Families (TANF) program and the Pandemic TANF Assistance Act (introduced by Senator Ron Wyden this past spring) is necessary to meet the urgent needs of Washington’s residents.

The Pandemic TANF Act would help meet the unprecedented need of children and families

The large increases in unemployment due to COVID-19 have triggered increased reliance upon public support programs. In Washington state, applications have nearly doubled for WorkFirst/TANF since this time last year. When families experience economic hardship, WorkFirst/TANF provides much-needed cash assistance.

With Washington and other states expecting large budget shortfalls over the next few years, there is urgent need for federal assistance that targets children and families, who are more likely to get left behind in recovery efforts.

The current economic moment requires significant federal dollars to help states provide cash benefits to families and to leverage the limitations of balancing the state’s budget. The Pandemic TANF Assistance Act would benefit children and families by providing $10 billion in emergency grant funding to states and tribal nations and removing restrictions to help recipients more easily access the program to remain healthy during the pandemic. The Center on Budget and Policy Priorities has outlined three key features of the Act:

  • Families with the lowest incomes will qualify;
  • States can use their grant funding in ways that best meet their populations’ needs; and,
  • States can access funding easily by submitting a letter of intent for funding that would then be distributed within 30 days and allow people to receive income assistance more quickly.

TANF failed to respond to peoples’ needs during the Great Recession

During the Great Recession, other public support programs proved to be more helpful in stabilizing families’ basic needs than the TANF program, particularly the Supplemental Nutrition Assistance Program (SNAP), Unemployment Insurance, and tax credit programs such as the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) programs. Since TANF legislation financially incentivizes states to keep caseloads low, some states did not increase their TANF spending to assist families.[i] In Washington state, lawmakers enacted state legislation that significantly decreased TANF caseloads, even as the number of families with children experiencing poverty remained about the same.

The economic impacts of the Great Recession were long-lasting for many families, particularly families that qualify for TANF. After the Great Recession, unemployment rates remained higher for Black women and Latinas under age 40 who were more likely to qualify for TANF but struggled to meet its work requirements as a result.

While Washington’s WorkFirst/TANF program was significantly weakened by state lawmakers in the wake of the Great Recession, some important investments were made at the federal level, however. The TANF Emergency Fund was enacted as part of the American Recovery and Reinvestment Act (ARRA) and gave states $5 billion to provide additional one-time cash assistance, extend benefits to more families in need, and increase work supports as unemployment increased. State and federal responses should once again provide an infusion of TANF dollars and invest more money and resources into the communities hit hardest by COVID-19 without increasing barriers to accessing financial assistance.

Bolstering federal investments and adjusting TANF requirements can help stabilize families

Congress must pass the Pandemic TANF Assistance Act. Investments in this program will help families pay for essentials – particularly as the majority of U.S. adults spent their stimulus checks on food, rent, mortgages, and utility bills according to data from the Census Bureau.

Furthermore, Washington state lawmakers must keep in place the adjustments they’ve made to TANF requirements to meet the heightened needs of recipients and reduce barriers to access. They must stay in effect throughout duration of the COVID-19 pandemic. State lawmakers should also put pressure on Congress to build on the legislative efforts that have already been enacted to meet the growing need for health insurance as well as housing, food, and other financial assistance.

Critical investment today will help stabilize families now and support their well-being beyond this crisis. The instability brought to Washingtonians by COVID-19 requires deep, robust, and equitable financial assistance from the federal government that is based in dignity, compassion, and inclusion – so that all families in Washington experience recovery, security, and stability together.

[i] CRS Reports explain that when states experience a year with fewer families on the caseload from an earlier year, states can receive a caseload reduction credit that “gives states a one percentage point reduction in their statutory work participation standard [of 50% for families overall and 90% for two-parent households] for each 1% decline in their caseload.” If a state does not meet caseload reduction, then states are penalized by receiving less federal dollars in the following grant year.