On Eve of Welfare Reform's 10th Anniversary New Report 'Follows the Money'; Temporary Assistance No Longer 'Welfare,' But Many Policymakers Have Yet to Adjust to New Realities
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The Brookings Institution is releasing a national report on how states spend Temporary Assistance for Needy Families (Temporary Assistance) block grant funds.
The report is being issued on the eve of the 10th anniversary (August 22) of the 1996 federal law which established the block grant and followed other reforms, like the expansion of the Earned Income Tax Credit in 1993, that boosted supports for parents in low-wage jobs.
The national report and three separate state reports from Ohio, Pennsylvania, and Wisconsin find that Temporary Assistance is now a major funding source for benefits and services to parents in low-wage jobs.
Even cash assistance, once thought of as "welfare" for parents with little connection to the labor market, now has more in common with work supports like the Earned Income Tax Credit and unemployment insurance, often supplementing the income of working families or families temporarily between jobs.
The study also finds, however, that a surprisingly large share of Temporary Assistance funds-more than is spent on child care-are now spent on "social services."
Federal policymakers have no way to judge whether these funds are spent effectively, let alone determine whether it would be better to dedicate these funds to specific low-wage employment benefits or other community needs.
The Brookings Institution is a private nonprofit organization devoted to independent research and innovative policy solutions.
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