States Are Hoarding Welfare Funds, Not Helping Poor Americans

When Congress passed welfare reform in 1996, states were given more autonomy over how they could use federal funding for aid to the poor. They could demand welfare recipients find work before receiving cash assistance. They could also use their federal “block grants” to fund employment and parenting courses or to subsidize childcare.

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Twenty-five years later, however, states are using this freedom to do nothing at all with large sums of the money, Hannah Dreyfus reported for ProPublica.

According to recently released federal data, states are sitting on $5.2 billion in unspent funds from the federal Temporary Assistance for Needy Families (TANF) program.

Nearly $700 million was added to the total during the 2019 and 2020 fiscal years, with Hawaii, Tennessee and Maine hoarding the most cash per person living at or below the federal poverty line.

The Center on Budget and Policy Priorities, a progressive think tank that analyzes the impact of federal and state policies, disputes the notion that TANF’s decreasing numbers indicate families no longer need assistance. The organization designed a metric to show how many people living in poverty are actually helped by welfare.

According to its “TANF to poverty ratio,” many states, including Tennessee, are largely failing to meet the needs of poor families. In 2019, the state-assisted only 18 out of 100 poor families with children, down from 67 when the program began in 1996, according to the analysis.

States have held on to more of this welfare money amid rising poverty. According to the U.S. Census Bureau, 16.1% of children under age 18 lived in poverty in 2020, up from 14.4% the year before. The poverty rate also ticked up for people aged 18 to 64, from 9.4% to 10.4%.

As unused TANF dollars have accumulated, applications to the cash assistance program have waned, though it’s not for a lack of need, say experts and people who have applied to the program.

Bonnie Bridgforth experienced the counterintuitive reality of a state, Maine, that is stockpiling more welfare money while using less to help those in need. Two weeks away from giving birth near the end of 2014, the stay-at-home mom was thrust into the role of sole income provider when her then-husband was convicted and sentenced to jail time for possession of child pornography. Her family of five was left without a regular paycheck.

The same year Bridgforth was kicked off TANF, Maine was sitting on $111 million in unspent welfare dollars. It spent only $45 million on the program that year. The following year — as Bridgforth “fought to keep a roof over my kids’ heads” — the unspent welfare money continued to pile up, reaching $141 million.

While its surplus has since declined, Maine continues to have one of the largest per-capita stockpiles of welfare money in the nation, $93 million as of fiscal year 2020. That comes out to $657 per person in poverty.

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