Apr 13, 2017

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TANF’s cautionary tale about block grants

by | Apr 13, 2017

Temporary Assistance for Needy Families, TANF, is the block-grant created by Congress in the 1996 welfare reform legislation. Designed “to end welfare as we know it,” TANF replaced Aid to Families with Dependent Children (AFDC) which had provided cash assistance to the nation’s neediest families since 1935. The TANF block grant amount has not changed since 1996 and states have considerable flexibility on spending those dollars.

As a result, TANF provides far less assistance to far fewer struggling families today than before the program was reconstituted as a block grant. Recent analysis by the Center for Budget and Policy Priorities examines this dramatic decline. As shown in the graph above, in Colorado, for every 100 families in poverty, less than 20 receive cash assistance from TANF—down from 66 families out of every 100 in 1996.

The precipitous post-1996 drop of needy families being helped by TANF illustrates the hazards of block granting important pieces of our nation’s social safety net. That cliff-like drop is not a function of fewer families needing assistance. Rather, TANF’s declining reach reflects its block grant structure — an allocation frozen in time — and state flexibility that has severely diluted the program’s historical focus on lifting families with children out of poverty.

Other critical parts of our safety net, like food (SNAP) and health care (Medicaid), are responsive to changes in our economy that result in more people needing assistance—even for short periods of time. As the need rises, as it did during the Great Recession, SNAP and Medicaid caseloads also increase to provide those critical supports to a larger population.

This is no longer the case with basic cash assistance provided by TANF. As seen in the graph below, as the number of families living in poverty in Colorado has increased over the past 15 years, TANF caseloads have remained mostly flat over that same period. Today, we have twice as many Colorado families living in deep poverty — families with incomes below $2 per person per day — than we did in 1996. TANF reaches only a fraction of those needy families and those who do receive TANF cash assistance receive too little to be lifted out of poverty. In fact, TANF benefits today fall short of lifting families out of poverty in every state.

Why is adequate cash assistance an important part of the social safety net? Because, fundamentally, having access to cash to meet our most basic needs is critical to our health and well-being. The amount of money we make is one of the primary drivers of health. Higher income is associated with better overall health and longer life expectancy. In Colorado, the highest earning men and women in the state live 6 to 10 years longer than those at the bottom of the income spectrum. A recent study concluded that poverty poses a greater societal health burden than any other risk factor.

And most tragically, research has shown that growing up poor can have life-long consequences by impairing brain function and mental health and limiting future earning potential. Recently, pediatricians have called for classifying childhood poverty as a disease and cited the importance of a robust social safety net in lifting children out of poverty.

It’s important to acknowledge that for most families, assistance provided by income and work support programs is temporary — needed only for a short time to overcome an unexpected job loss, a medical crisis, or some other significant life event.

But that assistance, even if it is short-lived, is critically important. A recent report issued by Brookings summarized the growing body of research on how cash transfers to low-income families with children yields long-term benefits such as improved health, well-being and earnings as adults. Given that, the authors suggest shifting our thinking about government programs that provide assistance to needy families. If government transfers improve outcomes for poor children so that they become productive tax-paying adults, these programs should be treated similarly to other important public investments that yield community-wide benefits, such as a road project or a government-funded scientific breakthrough.

The experience with TANF makes a strong case for the importance of protecting investments in our social safety net and how block granting those investments can threaten responsiveness to changing needs, dilute the purpose, and severely restrict the reach of these critical programs.

– Michelle Webster

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To maintain health and well-being, people of all ages need access to quality health care that improves outcomes and reduces costs for the community. Health First Colorado, the state's Medicaid program, is public health insurance for low-income Coloradans who qualify. The program is funded jointly by a federal-state partnership and is administered by the Colorado Department of Health Care Policy & Financing.

Benefits of the program include behavioral health, dental services, emergency care, family planning services, hospitalization, laboratory services, maternity care, newborn care, outpatient care, prescription drugs, preventive and wellness services, primary care and rehabilitative services.

In tandem with the Affordable Care Act, Colorado expanded Medicaid eligibility in 2013 - providing hundreds of thousands of adults with incomes less than 133% FPL with health insurance for the first time increasing the health and economic well-being of these Coloradans. Most of the money for newly eligible Medicaid clients has been covered by the federal government, which will gradually decrease its contribution to 90% by 2020.

Other populations eligible for Medicaid include children, who qualify with income up to 142% FPL, pregnant women with household income under 195% FPL, and adults with dependent children with household income under 68% FPL.

Some analyses indicate that Colorado's investment in Medicaid will pay off in the long run by reducing spending on programs for the uninsured.


Hunger, though often invisible, affects everyone. It impacts people's physical, mental and emotional health and can be a culprit of obesity, depression, acute and chronic illnesses and other preventable medical conditions. Hunger also hinders education and productivity, not only stunting a child's overall well-being and academic achievement, but consuming an adult's ability to be a focused, industrious member of society. Even those who have never worried about having enough food experience the ripple effects of hunger, which seeps into our communities and erodes our state's economy.

Community resources like the Supplemental Nutrition Assistance Program (SNAP), formerly known as Food Stamps, exist to ensure that families and individuals can purchase groceries, with the average benefit being about $1.40 per meal, per person.

Funding for SNAP comes from the USDA, but the administrative costs are split between local, state, and federal governments. Yet, the lack of investment in a strong, effective SNAP program impedes Colorado's progress in becoming the healthiest state in the nation and providing a better, brighter future for all. Indeed, Colorado ranks 44th in the nation for access to SNAP and lost out on more than $261 million in grocery sales due to a large access gap in SNAP enrollment.

See the Food Assistance (SNAP) Benefit Calculator to get an estimate of your eligibility for food benefits.


Every child deserves the nutritional resources needed to get a healthy start on life both inside and outside the mother's womb. In particular, good nutrition and health care is critical for establishing a strong foundation that could affect a child's future physical and mental health, academic achievement and economic productivity. Likewise, the inability to access good nutrition and health care endangers the very integrity of that foundation.

The Special Supplemental Nutrition Program for Women, Infants and Children (WIC) provides federal grants to states for supplemental foods, health care referrals, and nutrition information for low-income pregnant, breastfeeding and non-breastfeeding postpartum women and to infants and children up to age five who are found to be at nutritional risk.

Research has shown that WIC has played an important role in improving birth outcomes and containing health care costs, resulting in longer pregnancies, fewer infant deaths, a greater likelihood of receiving prenatal care, improved infant-feeding practices, and immunization rates

Financial Security:
Colorado Works

In building a foundation for self-sufficiency, some Colorado families need some extra tools to ensure they can weather challenging financial circumstances and obtain basic resources to help them and their communities reach their potential.

Colorado Works is Colorado's Temporary Assistance for Needy Families (TANF) program and provides public assistance to families in need. The Colorado Works program is designed to assist participants in becoming self-sufficient by strengthening the economic and social stability of families. The program provides monthly cash assistance and support services to eligible Colorado families.

The program is primarily funded by a federal block grant to the state. Counties also contribute about 20% of the cost.


Child care is a must for working families. Along with ensuring that parents can work or obtain job skills training to improve their families' economic security, studies show that quality child care improves children's academic performance, career development and health outcomes.

Yet despite these proven benefits, low-income families often struggle with the cost of child care. Colorado ranks among the top 10 most expensive states in the country for center-based child care. For families with an infant, full-time enrollment at a child care center cost an average of $15,140 a year-or about three-quarters of the total income of a family of three living at the Federal Poverty Level (FPL).

The Colorado Child Care Assistance Program (CCCAP) provides child care assistance to parents who are working, searching for employment or participating in training, and parents who are enrolled in the Colorado Works Program and need child care services to support their efforts toward self-sufficiency. Most of the money for CCCAP comes from the federal Child Care and Development Fund. Each county can set their own income eligibility limit as long as it is at or above 165% of the federal poverty level and does not exceed 85% of area median income.

Unfortunately, while the need is growing, only an estimated one-quarter of all eligible children in the state are served by CCCAP. Low reimbursement rates have also resulted in fewer providers willing to accept CCCAP subsidies.