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Now the Administration Is Legislating on Welfare, Too

AEIdeas

October 12, 2023

Last week the Department of Health and Human Services issued a proposed rule related to the Temporary Assistance for Needy Families (TANF) program. TANF is the cash welfare block grant Congress created in the 1996 welfare reform law, which was central to that legislation’s efforts to promote more work and less welfare receipt. For a capital already familiar with the Biden administration’s legislating via “executive action” on student loansenergy regulation, and more, the new TANF regulation offers another example of this administration willfully treading on Congress’ legislative turf.

The creation of TANF marked the first time Congress ended a major New Deal program, in this case replacing it with a new one with decidedly different features. In place of the open-ended entitlement and many federal rules included in the former Aid to Families with Dependent Children (AFDC) program, Congress designed TANF as a block grant paid to states, which determine eligibility for program benefits. Federal TANF funds are fixed, meaning they don’t rise with growing caseloads (or theoretically fall with shrinking ones, as almost never occurred under AFDC). The proposed rule disapprovingly describes how “TANF’s annual funding has never been adjusted for inflation in its 27-year history and is now worth almost 50 percent less than when the program was created,” even as enrollment dropped from 12.6 million in 1996 to under 2.0 million today. Congress regularly passes bipartisan bills extending that fixed funding. And while AFDC was characterized by lengthy dependence on welfare checks, TANF has resulted in smaller caseloads, including by expecting adult recipients to work or engage in education and training to collect cash benefits.

Nearly all Republicans and more than half of Democrats in Congress supported the 1996 reforms, which Democratic President Bill Clinton signed into law. In exchange for the increased risk of fixed federal funding, Congress gave states significantly expanded flexibility in operating the new TANF program. The authors of the proposed rule acknowledge as much, saying “We are mindful that the TANF statute sought to ‘increase the flexibility of states’,” even as they include changes restricting the flexibility Congress granted. The rule defensively suggests that it “encompasses a package of reforms to ensure TANF programs are designed and funds are used in accordance with the statute.”

Some of the rule’s seven proposed reforms are highly technical. For example, the fourth is designed to ensure that Juneteenth is considered an “excused holiday” for TANF work requirements.

But the real focus is on the first three proposed reforms, which occupy over 80 percent of the section-by-section summary’s 10,000 words. The three proposals would (1) restrict TANF benefits to households under 200 percent of poverty, (2) narrow the degree to which program funds can be spent on child welfare and other activities deemed not “reasonably calculated to accomplish a TANF purpose,” and (3) limit states’ ability to count third-party spending toward state maintenance of effort requirements.

For those who follow TANF policy, each will sound familiar, and even bipartisan, since similar policies were included in Republican-proposed TANF reauthorization legislation in each of the prior two congresses. But the furthest that legislation ever advanced was through the House Ways and Means Committee over five years ago. Since then, short-term, bipartisan TANF extensions have continued, accompanied only by modest changes in TANF work requirements included in the “Fiscal Responsibility Act” enacted in May.

If anything, the final three highly technical proposals may chip away at the modest changes achieved in the “Fiscal Responsibility Act.” For example, the sixth proposal would create a new “significant progress” criterion that would reduce penalties for states that don’t satisfy all their work participation requirements. That should raise suspicions coming immediately after Congress passed hard-fought legislation that seeks to stiffen those requirements for the first time since 2005.

TANF requires improvements, but members of Congress in both parties have proposed that those changes be made in law. As the proposed rule makes clear, the proper targeting of billions of state and federal dollars is at stake. It’s a task for another day to compare the differences between recent congressional and the new administration proposals on all these counts. In the end, those distinctions matter far less than the bigger picture, which is that this proposed rule treads much of the same legislative ground as recent congressional reauthorization proposals. That should trouble members of Congress in both parties who value their institutional role as lawmakers—not administration regulation-followers.