Welfare Reform 2.0

February 16, 2018
Steven Wagner sitting at a conference table

By Steven Wagner, Acting Assistant Secretary for Children and Families

Reducing poverty, encouraging work, and changing the culture of dependence on government assistance are high priorities of the Trump Administration, reflected in the president’s proposed Fiscal Year 2019 budget request for HHS’ Administration for Children and Families. The outcome of these goals would be greater personal economic independence, responsibility, and empowerment through employment.

Since enactment of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), the Temporary Assistance for Needy Families (TANF) program has slowly drifted away from its key focus on employment, and TANF is no longer living up to its full potential as a work-focused program.

In order to grow the capacity of vulnerable individuals and break the cycle of dependency, we have proposed a number of key TANF reforms. The first of these, already undertaken a few months ago, involved rescinding a policy that encouraged state waivers from TANF work requirements. The next step is working with Congress to pass changes to federal law that would strengthen the focus on work in TANF and foster a rejuvenation of state and local innovation in the delivery of safety net services.

The president’s budget proposes to strengthen work by creating a minimum spending floor on work preparation for TANF funds and state contributions to make certain that states sufficiently invest in work activities and work supports for needy families with children. Currently, states only spend nine percent of TANF and state shares on work, education, and training.

The budget also recommends strengthening TANF's primary performance measure related to work engagement by replacing the caseload reduction credit with an employment credit that rewards states for moving TANF recipients to work; collapsing the two-parent work participation rate into the one standard rate for all families, thereby eliminating the marriage penalty; and counting partial credit toward the work participation rate to incentivize states to engage all TANF recipients.

Lastly, the president’s budget proposes the promotion of a holistic approach to serving low-income Americans on their path to self-sufficiency through new welfare-to-work projects. These demonstration projects would allow for the redesign of public assistance programs to create a coordinated service delivery system focused on fostering employment, reducing welfare dependency and promoting child well-being. And these demonstrations will be rigorously evaluated to build the evidence base of best practices.

By strengthening the focus on work and encouraging integrated approaches to helping families achieve self-sufficiency, we hope to put the work back into the state-administered welfare-to-work programs the federal government funds and oversees.