Understanding Temporary Assistance for Needy Families Caseloads After Passage of the Deficit Reduction Act of 2005

Published: September 21, 2009
Self-Sufficiency, Welfare & Employment
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Historically, public cash assistance caseloads have risen and fallen with changes in the economy and in response to federal and state policy changes. Researchers, policy makers, and program administrators track caseloads to better understand how people respond to policy and economic changes and to assess whether programs are reaching the people they are intended to serve. Under the Aid to Families with Dependent Children (AFDC) program, states had limited flexibility in how to design their programs, making it easy to track variations in state policies. In addition, the amount of funding a state received was based primarily on this caseload size making it easy to track the number of participants. The Temporary Assistance for Needy Families (TANF) block grant, created through the Personal Responsibility and Work Opportunity Act of 1996 (PRWORA), provided states with substantial flexibility to decide how to best address the needs of families with children. Taking advantage of this flexibility and building on earlier demonstration efforts, states enacted policies that they determined would best help them to achieve their short- and long-term goals. This flexibility has made it harder to track state policies and to link them to caseload changes. The Deficit Reduction Act of 2005 (DRA) instructed the Department of Health and Human Services (HHS) to develop regulations for states in a set of areas in which they previously had flexibility to make their own decisions. Still, states have considerable flexibility to decide how to best assist low-income families with children through their TANF and related programs.

Widespread interest in the outcomes of the 1996 federal welfare reform law spawned numerous studies that aimed to examine variations in state policies and economic conditions to better understand their relative contributions to changes in public assistance caseloads and employment (Grogger et al. 2002). An accurate accounting of how many families receive assistance, who is included on the caseload, and the ability to classify policies in meaningful ways is critical to these and other similar studies. While considerable attention was paid to policy changes and their influence on caseloads after the passage of PRWORA, less attention has been paid to caseload changes associated with policy and structural changes that were implemented in response to the DRA.