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States, Kids, Feel Impact of Federal Budget Cuts
Press Release

September 10, 2012

Contact:
Ed Walz
(202) 657-0685 (office)

Washington — With updated poverty statistics scheduled for release this week, a new report illustrates the human and state fiscal consequences of federal budget cuts to anti-poverty initiatives. Costly Consequences: The Real Impact of Congress's Elimination of the TANF Supplemental Grants, released today by First Focus, compiles data and commentary from state government officials responsible for administering federal Temporary Assistance for Needy Families (TANF) Supplemental Grants. It shows that Congress’ decision to end this federal anti-poverty funding for states has resulted in state cuts to critical supports for struggling families.

“Child poverty’s at the highest level in decades, and Congress responds by eliminating a critical anti-poverty investment,” said First Focus President Bruce Lesley. “If budgets are about priorities, that shortsighted and coldhearted choice shows Congress’ priorities are all wrong.”

Seventeen states were affected by the termination of TANF Supplemental Grants: Alabama, Alaska, Arizona, Arkansas, Colorado, Florida, Georgia, Idaho, Louisiana, Mississippi, Montana, Nevada, New Mexico, North Carolina, Tennessee, Texas, and Utah. First Focus looked at a cross-section of eight states (Alabama, Arkansas, Florida, Georgia, Mississippi, Nevada, New Mexico, and Utah), finding that states – already facing tight budgets and constitutional budgeting constraints – have passed the loss of federal funding on to families, by making cuts in three broad areas:

  1. Income Supports for Families – New Mexico has already cut cash support for poor families with children by 15 percent, a cut of more than $800 for families with incomes below the $23,000 (for a family of four) federal poverty level. Alabama is considering the elimination of cash support altogether, unless voters approve a September 2012 referendum.
  2. “Welfare-to-Work” Investments – Arkansas has cut “Work Pays” wage subsidies for residents who leave TANF for work. Utah is terminating its “Back to Work” initiative, which provides incentives for businesses to hire unemployed Utahans. Florida has cut $60 million in employment services for TANF-eligible Floridians. And several states have cut transportation subsidies, substance abuse initiatives, and other initiatives to move TANF recipients to family-supporting jobs.
  3. Child Abuse and Neglect Prevention and Response – Georgia has cut more than $8 million from child abuse prevention and response. Nevada has cut more than $800,000 from emergency child protective services and cut payments to foster parents by 25 percent. Several other states have cut initiatives designed to make it easier for foster parents to meet the health and other needs of children affected by abuse or neglect.

“It’s ironic that politicians are talking about work requirements on the campaign trail, after they’ve eliminated a critical investment in moving people from welfare to work,” said Lesley. “And when parents have neither income support nor work, it’s the kids who suffer.”

The analysis provides a timely illustration of the perils posed by current proposals to turn Medicaid and the Supplemental Nutrition Assistance Program (SNAP, formerly Food Stamps) into block grants. TANF’s current block grant structure replaced an entitlement program – Aid to Families with Dependent Children – as part of the 1996 welfare debate. Because Congress failed to index TANF funding to inflation, TANF funding has eroded as costs have risen. And because Congress never made poverty reduction an explicit TANF objective, states need not show that their TANF initiatives actually reduce child poverty.

“Fifteen years after Congress created the TANF block grant, funding’s dwindled and the original mission’s faded. If they block grant Medicaid and SNAP, we’ll look back in fifteen years and see the same mistakes,” said Lesley.

TANF will end in October, unless Congress passes an extension upon return from its August recess. First Focus urged lawmakers to take advantage of this opportunity to restore funding and reform TANF, by indexing funding to inflation and making the reduction of child poverty an explicit objective of TANF funding.

“This is the time to act, before more kids and families fall back into poverty,” said Lesley.

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First Focus is a bipartisan advocacy organization dedicated to making children and families a priority in federal policy and budget decisions. For more information, visit www.firstfocus.net.

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