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   GAO Report Shows the Number of Families Served by the Welfare-to-Work Program Is Greatly Underestimated

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GAO Report Shows the Number of Families Served by the Welfare-to-Work Program Is Greatly Underestimated

A Report from the Office of Congressman Benjamin L. Cardin
(D.-3rd District, MD)

The welfare caseload is changing, not shrinking. While fewer people are receiving cash assistance, more people are receiving child care, employment services, vocational training and other assistance designed to promote work.

(Washington, DC) Rep. Benjamin L. Cardin has released a General Accounting Office (GAO) report that suggests that at least 830,000 families and potentially as many as 2 million families served with funds from the Temporary Assistance for Needy Families (TANF) program are not counted in the official TANF caseload because they receive work and family support services, rather than direct cash assistance. The study has immediate implications for the upcoming reauthorization of the TANF program.

Cardin, the leading Democrat on the House Human Resources Subcommittee, requested the GAO report so that the caseload situation could be clarified during the budget reauthorization process. In response to the GAO report, he said: "Some have suggested there is no need to ensure that funding for our primary welfare-to-work program keeps pace with inflation because the number of people receiving assistance has dropped dramatically since the 1996 welfare law was enacted. However, this report clearly illustrates that the welfare caseload is changing more than it is shrinking. There are certainly fewer people receiving cash assistance, but there also are more people receiving child care, employment services, vocational training and other assistance designed to promote work."

He pointed out that the number of families served by TANF may be twice as high as the official caseload estimate, which only counts people receiving cash assistance. "If we fail to allow TANF funding to at least maintain pace with inflation, work supports for those who have made the transition from welfare to employment could be threatened," said Cardin. "This is especially true if the need for cash assistance continues to climb because of the downturn in the economy, or if Congress imposes additional participation requirements on the States for individuals who remain on the welfare rolls."

The General Accounting Office reported the TANF program now spends much more money on work supports and family services than it does on cash assistance. Welfare spending on cash assistance declined from 71% in FY 1995 to 43% in FY 2000. The GAO study found that at least 830,000 families are served with TANF funds that are not counted in the TANF caseloads. (These are families not receiving cash assistance, but who are receiving TANF-funded services, especially child care.)

The GAO suggests this calculation, which equals 46% of the counted TANF caseload (those receiving cash), underestimates the number of families served due to data limitations. In the three states in which GAO received the most complete data (Indiana, North Carolina and Wisconsin), the number of families receiving TANF-funded work and family supportive services was equal to or greater than the number of families receiving cash assistance.

While cash assistance has become a shrinking portion of TANF spending over the last six years, GAO also reports that cash caseloads have begun to creep up over the last six months because of the recession. During the second half of 2001, TANF cash caseloads went up in 17 of the 23 states surveyed. Furthermore, most of those states without increases are serving more recipients in state-funded programs.

Six of the eight states specifically asked about how they would respond to rising cash caseloads said they were contemplating "shifting resources from work supports to cash grants" to cover the increase in the cash caseload.


A copy of the report can be obtained from the Ways and Means Committee Democratic Staff; call 202-225-4021.


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This story was published on April 4, 2002.
  
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