Temporary Assistance for Needy Families (TANF) represents a significant change in the federalism of welfare financing. It was enacted as part of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 and replaced Aid to Families with Dependent Children (AFDC). Under AFDC, the federal government reimbursed states for a portion of the welfare benefits they paid out according to a formula that ranged from 50 to 80 percent of the total, depending upon the income of the state. In addition, AFDC had to be used strictly to provide cash benefits. Under TANF, however, the federal government allocates to each state a fixed block grant for financing their state programs while giving states substantial discretion over the use of these funds.
TANF has been heralded as a milestone in a “devolution revolution” that turned back power from the federal government to the states. The extent to which this is true is ambiguous. First, strictly speaking, devolution involves the transfer of constitutional authority from a higher level of government to a lower level, and this did not happen with the 1996 law. Second, TANF actually increases federal power over state welfare programs by requiring them to meet quotas or suffer severe financial penalties for failing to move enough welfare recipients off the rolls. Third, the law limited to five years the time a recipient could receive federally funded TANF benefits, required work after two years of receiving TANF, and limited the time one could count training and education as work-related activities. States were given great latitude, however, in developing the rules and program features for moving recipients off the rolls. Beyond these substantive policy changes, the shift from AFDC to TANF funding also involved both increased federal power and increased state discretion. First, the law increased federal power when it abolished AFDC and replaced it with TANF because now states only received a fixed TANF block grant for financing their state programs and had to conform their programs to that amount or otherwise develop the additional financing on their own. At the same time, however, the block grant frees states to not have to match funding (as long as a state maintains its spending at a previous level), and it frees states to spend the block grant money largely however it wants even to the point of not providing cash benefits to families but instead using it to fund charitable services, including those offered by faith-based organizations.
With TANF, the welfare rolls have continued to decline precipitously from a high of 14.2 million recipients in 1993 to 5.3 million in March 2002—the lowest level in over thirty years. For this reason alone, many have heralded the program as a success in reducing what some have called the problem of “welfare dependency.” Others, however, have noted that the time limits, work requirements, and other punitive features of the program have pushed many of the female-headed families that had been on welfare off the rolls only to live in poverty while floundering in a labor market that affords them at best marginal support in the lowest-paying jobs.
Sanford F. Schram, Praxis for the Poor: Piven and Cloward and the Future of Social Science in Social Welfare (New York: New York University Press, 2002); Sanford F. Schram, Joe Soss, and Richard Fording, eds., Race and the Politics of Welfare Reform (Ann Arbor: University of Michigan Press, 2003); and Alan Weil and Kenneth Finegold, eds., Welfare Reform: The Next Act (Washington, DC: Urban Institute Press, 2002).