Congress didn’t just miss the deadline on Monday night to pass a continuing resolution that would keep the government open. It also missed the deadline to reauthorize the Temporary Assistance for Needy Families (TANF) program, formally known as welfare.
The TANF block grant that the federal government gives to states to share the cost of welfare programs was scheduled for reauthorization in 2010, but rather than reauthorizing it then Congress instead extended it multiple times. The most recent extension was part of a continuing resolution passed in March that funded the government through the end of September 2013, so it expired Monday night along with all other government funding.
That means that as of Tuesday, states stopped receiving the funds from the block grant. This shouldn’t impact beneficiaries, however — at least in theory. Benefits are typically paid on the first of the month. According to the advocacy organization CLASP, states have funds that they can use to cover the cash assistance and other programs until the block grant is reauthorized. “In practice, there’s nothing that should stop the benefits from going out,” Elizabeth Lower-Basch, policy coordinator at CLASP, told ThinkProgress. Most actually float the money, paying out benefits and then requesting the money from the federal government afterward.
But there is no federal requirement that they use state funds to keep paying benefits and rather than cover the costs until they can be reimbursed by the government, some states could potentially simply “push the button and say stop,” she said. “It is possible that in some states the benefits will not go out.” CLASP is trying to touch base now with all states to find out what they decided to do. “We haven’t gotten an answer from all states,” she said. “We’re hearing some yeses. We haven’t heard any definite nos yet.”
States should also be able to weather the gap for a good amount of time. “In every state, for at least a month or so you could run with just the state funds,” Lower-Basch said, and most have even more room. But “after a month states would start to get nervous.” Most that are using their own funds likely don’t feel too at risk right now on the assumption that the lapse will only last a few weeks, but that mindset may change if things drag on past the month mark. And the picture looks really dire if this extends indefinitely. “A state could not do everything it does with the block grant all year without it,” she said.
TANF plays a role in reducing poverty, which would be 0.3 percent higher without the benefits. It lifted 650,000 children out of deep poverty in 2005. Yet the value of benefits have declined since welfare reform, so it is reaching fewer and doing less to alleviate poverty than it used to.