Senate Approves Extension of TANF Program

On November 19, the Senate approved a one-year extension of the Temporary Assistance for Needy Families (TANF) program, a federally funded block grant program to provide families in need with a combination of financial assistance and work opportunities. Coined “Welfare to Work,” TANF limits the amount of a time an individual can receive assistance with a goal to move families in poverty to work. To help these families move off welfare and into employment, they receive assistance for job training and job skills, and to reduce barriers to employment they receive assistance with transportation and childcare.

The bill now moves to the House, which is expected to pass the extension when they return from the Thanksgiving recess. The TANF program is currently operating under a two-month extension of the program to prevent its scheduled expiration in September.

The bill does not include an extension the TANF Emergency Contingency Fund (ECF)―passed as part of the American Recovery and Reinvestment Act of 2009―which expired September 30, 2010.  Almost forty states, including South Carolina, used the ECF to support subsidized employment programs, offering vital job opportunities for low-income parents and youth and decreasing the TANF caseload. In partnership with the state workforce agency, the South Carolina Department of Social Services’ (DSS)  developed a subsidized jobs program that helps businesses get back on their feet while helping parents go back to work.  DSS has referred more than 1,000 people to this program, putting them in jobs and keeping them off welfare. The agency also assists parents with transportation, child care, work uniforms and required on-the-job tools, providing what is needed to move families off welfare and back to work. However, with the lack of funding, DSS will be forced to shut down these efforts.

As passed by the Senate, the legislation would limit funding for the regular TANF Contingency Fund and cancel out a provision under the continuing resolution Congress passed this fall that provided $506 million for the Contingency Fund through the end of Fiscal Year (FY) 2011. The measure would extend authorization of TANF supplemental grants to eligible states through June 2011, but would limit funding to an amount equal to $490 million less the amount used to cover Contingency Fund obligations. Thus, marking the first time Congress has not fully funded the supplemental grant program.

What’s more, the bill imposes a 4% penalty for failure to submit two new required reports. Currently states are not required to track some of the data included in the new reports. Therefore, states will be expected to undertake significant additional administrative burdens at a time of limited resources and staff time.

As you may know the Sisters of Charity Foundation of South Carolina has been advocating for TANF reauthorization. Prior to TANF, funds were allocated based on a formula which required states to provide matching dollars to draw down federal funds. Thus, states with a higher tax base could draw down more federal funding. TANF is to help families TANF is to help families move from welfare to work; therefore, TANF funding should be based on need. Next year, our hope is that Congress re-examines the TANF program and alters funding to a distribution formula based on poverty. It would target federal dollars where they are most needed – to states with high poverty. A formula that equalizes the payments to states based on the percentage of each state’s population living in poverty would benefit 33 of the 50 states, including South Carolina. A formula based on poverty best matches the original intent of the TANF legislation, and is the most unbiased way to allocate new federal funds.

The Sisters of Charity Foundation of South Carolina will continue to watch this legislation and work with our Congressional delegation to be a voice for the underserved and those that serve the underserved. It is one way the Foundation can achieve its vision that South Carolina families have the resources to live out of poverty.

Brooke Bailey is the director of communications and public policy for the Sisters of Charity Foundation of South Carolina

Congress Needs to Reauthorize TANF and Change the Distribution Formula; But Right Now Replenish the Contingency Fund

The Sisters of Charity Foundation of South Carolina, along with other Southeastern Council of Foundations members, continue to raise awareness on the impact of Temporary Assistance for Needy Families (TANF) funding in our states and advocate for TANF reauthorization.

TANF funding is critical to all states in the Southeastern Council of Foundations (SECF), and the Sisters of Charity Foundation of South Carolina is advocating for Congress to reauthorize TANF, and once this occurs to change the funding distribution formula to one that is based on a state’s need. If the amount of funding is increased using the consumer-price index, states making up the SECF would receive a total over $1.5 billion, in addition to current funding, if a formula based on poverty is implemented. A formula that equalizes the payments to states based on the percentage of each state’s population living in poverty would benefit 33 of the 50 states.

Understanding TANF reauthorization may likely be pushed back a year, to 2011, the Foundation believes that there is a more immediate and pressing need, that of the TANF Contingency Fund. 

When TANF replaced the old Aid to Families with Dependent Children (AFDC) program in 1996, Congress appropriated $2.5 billion to a TANF Contingency Fund. Congress created this fund to accommodate states’ increased caseload during a major economic downturn. In order to access this fund states had to have had an increase in needy families in the state as measured by families receiving food stamps (more than 10% increase for the same period in the prior year). The state was also required to invest additional state dollars on needy families. With the economic downturn in 2008, many states qualified for the fund and the fund was completely depleted in 2009.

Many states depend on this money to take people out of poverty and into work. According to information on the federal fiscal year that ended in September 2009, Arkansas will lose $36,260,975, Maryland will lose $38,183,005, North Carolina will lose $60,447,900, Tennessee will lose $38,304,759 and South Carolina will lose $40,000,000. (Some states may have drawn down dollars in 2010, but that information is not published yet.)

To get a better idea of how the TANF Contingency Fund affects South Carolina, read Sisters of Charity Foundation of South Carolina President Tom’s Keith guest column, The Real Welfare Crisis, that appeared in last Sunday’s (May 23, 2010) The State newspaper. You can also tune into the following SC ETV radio stations or online at Your Day Thursday, May 27 from noon-1 p.m. to hear an interview with Tom Keith and South Carolina Department of Social Services State Director Dr. Kathleen Hayes on this very issue.

Last year, the American Recovery and Reinvestment Act of 2009 (ARRA) created a new Emergency Fund under the Temporary Assistance for Needy Families (TANF) block grant. Congress provided $5 billion for the Emergency Fund in ARRA. However, this Emergency Fund is set to expire on September 30, 2010.

As you can see the, there is an immediate need for Congress to replenish the original TANF Contingency Fund or extend the TANF Emergency Fund. Since most southern states’ elected leaders do not support stimulus funding, the best approach is to ask Congress to replenish the original TANF Contingency Fund. This funding source was created for use in a down economy, and this is clearly a time when states need access to these funds. As advocates for the underserved in South Carolina, the Sisters of Charity Foundation is working with the South Carolina Department of Social Services, other organizations, foundations and elected officials to figure out how to get this much needed funding to South Carolina and all southern states.

The Sisters of Charity Foundation of South Carolina and other foundations comprising the Southeastern Council of Foundations are all familiar with the poverty that exists in the states they serve. It is a condition we all work hard to change every day. We know the enormous difference this funding can make in our states for families in poverty, and how detrimental it can if we don’t receive it. United, the Southeastern Council of Foundations can act to help our states get an equitable share of any new TANF funding. Working with the state TANF agency, the Governor’s office and our Congressional delegations we can make sure this issue gets the attention it deserves and results in equity for our states.


Brooke Bailey is the director of communications and public policy for the Sisters of Charity Foundation of South Carolina

It's Time to Remove South Carolina's Handicap: Why TANF Reauthorization is Crucial

How much is a child in South Carolina worth? Not nearly as much as a child in Connecticut according to the federal program designed to alleviate poverty. The federal government provides the state of Connecticut with $1,052 a year for each child in poverty. The same federal fund values poor children in South Carolina at $179 per child. And it’s not just in South Carolina; it seems children throughout the South are worth less than their counterparts in other parts of the nation.

Apart from our underfunded school systems or our high unemployment rates, federal welfare reform legislation hinders the many southern states like South Carolina from achieving its desired results. South Carolina gets less federal money to lift families out of poverty than almost any other state.

Before welfare was reformed in 1996, funds were allocated based on a formula which required states to provide matching dollars to draw down federal funds. Thus, states with higher per capita incomes, and therefore a higher tax base, could draw down more federal funding. States with small tax bases, like South Carolina, had few dollars to invest and, therefore, got few dollars back.

When welfare reform was passed, a new program called Temporary Assistance for Needy Families (TANF) was established. The goal of TANF is to move families from welfare to work. To achieve this, these families receive assistance in job training and job skills and assistance to reduce the barriers they face in obtaining and maintaining employment, like transportation and childcare. Most of South Carolina’s families receiving TANF assistance are single parents with one or two children. Currently our state has only enough funds to serve 25% of the families eligible for childcare assistance. And it has even fewer dollars to address a family’s need for transportation and training.

The most difficult part of this new welfare reform bill was figuring out how to distribute the block grant to states. Naturally, high-income states sought to continue getting the big federal dollars they received under the old program, while low-income states desired a new formula based on the number of families in poverty living in each state. This time, like many times before, the high-income states, often with larger delegations, won the fight and received the lion’s share of the money. Federal funds were allocated to states based on the average amount of funds received for the prior three-year period, which was under the old program. Low-income states were left with the task of implementing new programs and new federal requirements with very little money.

Some poor states were thrown a bone, “a supplemental payment,” in exchange for their votes to pass the welfare reform legislation. Seventeen states qualified for this bone, because their level of spending per poor person was less than 35% of the national average or they had more than a 10% increase in population from 1990 through 1994. With spending per poor person at 37.66% of the national average and only a 5% increase in population during the given time period, South Carolina just missed the mark to receive supplemental funding.

What’s more, when the supplemental funding was formed, it was frozen so that no other states could be added and the original seventeen would not lose the funding. Thus, even though a state like South Carolina qualified for supplemental funding the second year, it could not receive the additional funding. In fact, South Carolina was the only state in deep poverty that did not get any extra help. States like Kentucky, South Carolina and Virginia were held to the same federal requirements, which cost a lot more, as every other state, and were given less money with which to meet those requirements.

The law that created welfare reform, the TANF Act, is up for reauthorization next year. States are planning to ask Congress to take a look at the funding for the program and add some new dollars to make up for the buying power lost to inflation over the past 13 years. Based on the consumer-priced index, this would be approximately an additional $5 billion nationally. The new money needs to be distributed using a new formula - one based on poverty. A formula that equalizes the payments to states based on the percentage of each state’s population living in poverty would benefit 33 of the 50 states, the majority of states. It would target federal dollars where they are most needed - to states with high poverty. And South Carolina would receive a fair and equal share of the new money.

Over the last 13 years, it is estimated that South Carolina has lost approximately $150 million in TANF funding. This is money that did not go to South Carolina families moving from poverty to self sufficiency. If the amount of funding is increased using the consumer-priced index South Carolina would receive $32 million under the current formula. The amount would increase to $93 million if funds were distributed using the suggested new formula based on need. A formula based on poverty leads to an additional $61 million. This would make a significant impact on our state, and it’s now time to get our fair share of funding.

The Sisters of Charity Foundation of South Carolina envisions families in South Carolina with the resources to live out of poverty. The current funding is based on the amount a state received 13 years ago under a different program. It is an injustice to continue to use this formula, as states with the largest number of citizens in poverty will receive the smallest amount of funding. As a Foundation we feel that we must bring this to light and fight for those who cannot fight for themselves. Our state has been short-changed in TANF funding and we feel that it is time for South Carolina to receive its fair share.

The old money ($16 billion) would still use the old formula that allots for more funding for high-income states that can draw down more federal funding. Everyone wins. Everyone gets more money. TANF is designed for people out of work, and with the current economy, now is the time for Congress to reauthorize TANF.

A formula based on poverty best matches the original intent of the TANF legislation, and is the most unbiased way to allocate new federal funds. The Sisters of Charity Foundation of South Carolina is planning to do all that we can to make sure South Carolina and other southern states get an equitable share of any new TANF funding. We want to make sure Congress gets it right this time, so that South Carolina no longer has to work under a handicap. Just think of what an additional $93 million for South Carolina’s low-income families would mean.


Tom Keith is the president for the Sisters of Charity Foundation of South Carolina