Americans have heard plenty about how, effective November 1, the federal government shutdown suspended regular food stamp payments to 42 million individuals. Food stamps are important welfare benefits paid to low-income families—or in recent weeks not paid. For all that attention on food stamps, however, almost no one has mentioned what once was the nation’s most prominent welfare program, in large part because it continued to pay full benefits as scheduled. The reasons why offer important policy lessons for how lawmakers could make food stamps and other benefit programs more secure and sustainable if the federal government becomes an increasingly unreliable benefit provider in the years ahead.
The nation’s food stamp program (officially called the Supplemental Nutrition Assistance Program or SNAP) is one of a blizzard over 80 low-income federal benefit programs. The largest is Medicaid, which combined with the Children’s Health Insurance Program covered medical care for nearly 78 million low-income individuals in June 2025. In fiscal year 2024, Medicaid alone cost taxpayers over $900 billion, with federal taxpayers picking up about two-thirds of that enormous tab. Food stamps cost about $100 billion last year.
Those and dozens of other programs that dispense cash, food, medical, housing, energy, transportation, and other assistance specifically to millions of low-income individuals and families are often dubbed “welfare.” But in recent history there has been one program more connected with the term “welfare” than any other: Temporary Assistance for Needy Families (TANF).
The 1996 welfare reform law, drafted by congressional Republicans and signed into law by President Bill Clinton, created TANF as a replacement for the former Aid to Families with Dependent Children (AFDC) program. AFDC had its roots in FDR’s New Deal and was the “welfare” in Clinton’s famous pledge to “end welfare as we know it.”
Despite that prominent place in social policy history, TANF has been widely ignored on the political left for most of the program’s existence. As they continue to reject expanding work requirements in other welfare programs, Democrats don’t want a debate that reminds Americans that work-based TANF reforms led to higher earnings, lower poverty rates, far smaller caseloads, and significant taxpayer savings, among other gains. Rather than engage in a pyrrhic struggle to undo TANF, they have instead trained their policy attention on expanding food stamps, child tax credit payments, and other benefits as a proxy for reviving work-free welfare checks.
The TANF program has been time-limited since its creation, requiring Congress to regularly vote to continue its federal funding. Democrats are so eager to avoid TANF debates that over 60 times they have quietly provided near-universal support for bills extending the program on a short-term basis. Unmentioned is the fact that each bill resulted in a small but steady erosion in the real value of federal TANF funding, which hasn’t been adjusted for inflation since 1996.
Votes on the continuing resolution that the House passed in September, which includes the latest short-term extension of TANF, are a notable exception. In the House, among Democrats only Rep. Liam Golden (D-ME) supported that legislation, and he has since announced his retirement. As of November 7, the Senate had rejected the House bill 14 times, with only a handful of Democrats joining Republicans, collectively falling short of the 60-vote margin needed for passage. As a result, federal funding for TANF has stopped.
Yet despite that stoppage in new federal funds, three key program features allow TANF to continue providing full benefits, in sharp contrast with the shutdown’s damaging effects on food stamp recipients.
First, TANF is a fixed block grant, unlike open-ended entitlement programs like food stamps and AFDC. As a result, federal funding has remained the same (at over $16 billion per year) regardless of caseload size. Some Democrats decry the 50 percent decline in the real value of the TANF block grant due to its lack of an inflation adjustment, yet they ignore the fact that the TANF caseload has fallen even faster. As I reviewed in congressional testimony last fall, compared with prior AFDC levels, the TANF caseload declined an average of 85 percent nationwide through fiscal year 2023. Fixed TANF funding means that, even after accounting for inflation, real AFDC/TANF funding per recipient has soared by nearly 250 percent.
The contrast with the food stamp program is stark. As shown in Figure 1, while the TANF caseload fell by 85 percent in the three decades since reform, food stamp caseloads grew by over 50 percent:
Figure 1. AFDC/TANF and Food Stamp Recipients, Fiscal Years 1980-2024
Source: Department of Health and Human Services and USDA.
Federal funding for food stamp benefits nearly doubled in real terms during the same period. One could argue that the roughly 30 percent growth in the US population over the past three decades has driven much food stamp caseload and spending growth. But that only makes the simultaneous decline in caseloads and real federal funding for TANF even more remarkable. In practice, food stamps have replaced TANF’s welfare checks for many individuals, promoted by SNAP’s open-ended entitlement design, which subsidizes more dependence and, as a result, places millions more in jeopardy during a shutdown.
Those dynamics amplify a second key difference between TANF and both AFDC and food stamps: TANF allows states to save unspent federal funds from one year to the next, creating a pool of savings that can be tapped during emergencies. TANF savings are both significant and growing. The nonpartisan Government Accountability Office reported in December 2024 that unspent TANF balances increased from $4 billion in 2015 to $9 billion in 2022, when “a total of 45 states and the District of Columbia had an unspent balance.”
Figure 2. Temporary Assistance for Needy Families (TANF) Total Unspent Balances by All States, Fiscal Year 2015 to Fiscal Year 2022
Source: Government Accountability Office
As Figure 2 displays, while the shutdown means states do not receive new federal TANF funds, they collectively have billions in unspent funds from prior years they can use to meet immediate needs. The most recent $9 billion unspent balance across all states for 2022 is roughly half of the $16 billion annual federal block grant.
A third key feature that differentiates TANF from food stamps is its shared funding by federal and state taxpayers. For states to claim their full share of the federal block grant, they need to maintain their own spending on TANF assistance under what are called Maintenance of Effort or MOE rules. That state funding offers an additional source of support, which becomes even more important when federal funding is disrupted. In 2023 states reported almost $18 billion in their own spending on TANF and separate state programs. That exceeds federal TANF funding, while providing a significant reserve whenever a shutdown disrupts the provision of new federal funds.
Experts confirm that these features contributed to the TANF program’s resilience during past shutdowns. In 2019, Elizabeth Lower-Basch of the liberal Center for Law and Social Policy summarized the factors affecting the availability of TANF benefits during the lengthy 2018-19 shutdown, which she noted “halted federal spending for the Temporary Assistance for Needy Families (TANF) block grant.” She spotlighted that, despite the halt in federal TANF spending,
This does not mean that there will be interruptions in TANF benefits. TANF is funded through a mixture of federal funds and state “maintenance of effort” (MOE) funds, so states can continue to provide benefits and services using state funds or unspent previously appropriated federal funds.
In guidance provided to states in advance of the October 2013 shutdown, the Obama administration’s Department of Health and Human Services seconded that TANF features—like those of the Child Care and Development Fund (CCDF)—allow it to carry on its programmatic mission during a shutdown:
A number of jurisdictions have unspent TANF and CCDF funds from prior years. If legislation extending funding for these programs is not enacted before October 1, 2013, states, DC, territories, and tribes will be permitted to use their unspent federal TANF funds from prior years for expenditures allowable under the TANF statute….
Moreover, each year, states, DC, and territories are required to spend non-federal funds to meet the TANF maintenance-of-effort (MOE) requirement, and to meet CCDF matching and MOE requirements. If legislation extending funding for TANF and CCDF is not enacted before October 1, 2013, TANF MOE and CCDF State Match and MOE funds can be used during the period between October 1, 2013, and the date an extension is enacted to provide benefits and services.
The food stamp program lacks the same financial protection. Absent TANF’s ability to save federal funds and call on state funds, tens of millions of food stamp recipients are and will remain at risk of benefit disruption during federal shutdowns. As Romina Boccia and Tyler Turman of the CATO Institute recently argued,
Federal dominance over SNAP funding has made the program hostage to Washington’s shutdown fight. Now, the fate of millions of families’ SNAP benefits depends on the whims of an overly partisan budgeting process.
Democrats’ insistence on unrelated policy riders has shut down the federal government for well over a month. That’s a role reversal from previous shutdowns when Republicans insisted on policy riders involving budget cuts, Obamacare, and the border wall. Having once opened that door, there is a better chance lawmakers will do it again, especially if they think their side is winning the shutdown.
For millions of benefit recipients, however, that prospect holds little appeal. Federal budget pressures threaten to make shutdowns more frequent as lawmakers vie over increasingly scarce resources in the coming years. While it appears this shutdown is about to end, those hoping to insulate needy individuals against future shutdowns have their work cut out for them. The good news is that some of the same TANF policies that have successfully promoted more work and earnings and less poverty and dependence offer a roadmap for how to protect recipients of other benefits against the small, but likely growing, risk of disruption in future shutdowns. We can add that to an already long list of reasons arguing for program reforms.