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Comparing the New (TANF) with the Old (AFDC) - Federal Spending On Afdc And Tanf

expenditures billion programs related

Table 7.1 shows the federal and state shares of the money spent on AFDC and related programs (1996 and earlier), and TANF (1997 and later). Prior to the enactment of TANF, the federal government reimbursed states for a portion of AFDC, the related expenditures for Emergency Assistance (EA), and Job Opportunity and Basic Skills (JOBS). Federal funds paid from 50 to 80 percent of the state AFDC benefit costs, depending on per capita income. In addition, the federal government paid 50 percent of the administrative costs for the programs. Of the $24.5 billion spent on TANF in 2001, federal funds accounted for 60 percent ($14.8 billion), while state funds made up the remaining 40 percent ($9.8 billion).

States were required to end the AFDC program and begin TANF by July 1, 1997, but many began the new system earlier. The federal block grant for TANF ($16.5 billion per year from 1997 through 2002) is based on each state's peak level of federal expenditures for AFDC and related programs; for most, this was the 1994 level. Federal conditions apply to the federally funded TANF, such as work-participation requirements, five-year time limits, child-support assignment and distribution, and aid to only those unwed minor parents living in an adult-supervised setting.

Though TANF is called a block-grant program, it combines seven different grants, each having federal funding caps (limited maximums):

  • State family-assistance grant—the $16.5 billion grant based on historic state welfare expenditures.
  • Bonuses to reward decreases in illegitimacy—$20 million grant to each of the five states with the largest reduction in out-of-wedlock birth rates combined with a decline in abortion rates.
  • Supplemental grants for population increases in certain states—formula grants to states with above-average population growth and below-average federal spending per poor person in AFDC and related programs.
  • Bonuses to reward high-performance states—bonus funds for states meeting the goals of the TANF program.
  • Welfare-to-work formula grants—matching grants to states to fund welfare-to-work initiatives targeting long-term welfare recipients, with an 85 percent pass-through of funds to localities (Job Training Partnership Act Service Delivery areas).
  • Welfare-to-work competitive grants—grants competitively awarded to private industry councils and cities or counties with welfare-to-work projects.

TABLE 7.1
Total, federal, and state expenditures for Temporary Assistance for Needy Families and predecessor programs (Aid to Families with Dependent Children, Emergency Assistance, and Job Opportunities and Basic Skills Training), fiscal years 1990–2001

Fiscal year Total Federal State
Actual (current) dollars
1990 22,018 11,953 10,066
1991 24,133 13,169 10,964
1992 26,606 14,567 12,039
1993 27,037 14,790 12,247
1994 28,854 15,686 13,168
1995 30,091 16,173 13,918
1996 28,193 15,067 13,126
1997 23,179 12,494 10,686
1998 21,513 11,286 10,227
1999 21,728 11,323 10,405
2000 22,607 12,483 10,124
2001 24,543 14,785 9,757
Percent change: 1995–2001 (change from peak spending) 18.4 8.6 29.9
Constant (inflation-adjusted) 2001 dollars
1990 30,154 16,370 13,785
1991 31,465 17,170 14,295
1992 33,673 18,436 15,237
1993 33,212 18,168 15,044
1994 34,535 18,775 15,761
1995 35,035 18,830 16,205
1996 31,931 17,065 14,867
1997 25,569 13,782 11,788
1998 23,473 12,314 11,159
1999 22,747 11,854 10,893
2000 23,335 12,885 10,450
2001 24,543 14,785 9,757
Percent change: 1995–2001 (change from peak spending 29.9 21.5 39.8
Note: State TANF expenditures exclude child care expenditures that can be "double counted" toward maintenance-of-effort requirements of both the CCDF and TANF.
SOURCE: "Table 7-18. Total, Federal, and State Expenditures for TANF and Predecessor Programs (AFDC, EA, and JOBS), Fiscal Years 1990–2001," in The Green Book U.S. House of Representatives, Committee on Ways and Means, 2003 [Online] http://waysandmeans.house.gov/media/pdf/greenbook2003/Section7.pdf [accessed January 28, 2004]
  • Contingency—fund-matching grants to states that experience high unemployment rates or increased food stamp caseloads.

Almost all of the TANF program funds the state family-assistance grant. This grant is capped at $16.5 billion for fiscal years 1997 through 2002 and was $1.5 billion more than the federal share of the AFDC and related programs in 1996.

Table 7.2 compares the federal and state shares of AFDC funding in 1995 and TANF funding in 2001. During this period, federal expenditures dropped by $1.3 billion and state spending dropped by $4.1 billion. In 2002 the federal share was $14.8 billion, a lower amount than the AFDC expenditures for each year from 1991 to 1996.

TABLE 7.2
Federal and state expenditures on Aid to Families with Dependent Children (AFDC) /Temporary Assistance for Needy Families (TANF) and related programs, by state, fiscal years 1995 and 2001
(millions of dollars)

1995 2001 Change in expenditures
State Federal State Federal share (%) Federal State Federal share (%) Federal State
Alabama $84.6 $46.1 64.7 $65.9 $33.1 66.6 −$18.7 −$13.0
Alaska 60.7 60.0 50.3 38.2 44.4 46.2 −22.5 −15.6
Arizona 214.2 119.7 64.1 183.5 90.3 67.0 −30.7 −29.3
Arkansas 48.0 23.3 67.3 67.9 20.7 76.6 19.9 −2.6
California 3,708.2 3,701.1 50.0 3,715.8 2,738.2 57.6 7.6 −962.9
Colorado 131.2 118.1 52.6 120.2 67.9 63.9 −11.0 −50.2
Connecticut 277.2 273.8 50.3 224.1 87.7 71.9 53.1 −186.1
Delaware 35.4 34.4 50.7 31.0 8.9 77.7 −4.4 −25.5
District of Columbia 83.9 81.6 50.7 92.0 70.7 56.5 8.1 −10.8
Florida 549.0 446.6 55.1 557.9 334.2 62.5 8.9 −112.4
Georgia 317.0 208.4 60.3 299.1 152.3 66.3 −17.9 −56.1
Hawaii 101.3 99.0 50.6 91.0 57.2 61.4 −10.3 −41.8
Idaho 33.0 19.1 63.3 32.5 11.9 73.2 −0.5 −7.2
Illinois 595.4 580.1 50.7 551.5 382.5 57.2 −83.9 −197.6
Indiana 168.6 113.0 59.9 230.8 105.7 68.6 62.2 −7.3
Iowa 126.7 85.0 59.8 96.6 62.0 60.9 −30.1 −23.0
Kansas 91.8 68.9 57.1 74.1 69.0 51.8 −17.7 0.1
Kentucky 156.9 81.1 65.9 139.3 71.3 66.1 −17.6 −9.8
Louisiana 140.1 76.4 64.7 73.1 49.6 59.6 −67.0 −26.8
Maine 74.1 45.9 61.7 52.9 45.7 53.6 −21.2 −0.2
Maryland 235.4 230.4 50.5 218.5 177.1 55.2 −16.9 −53.3
Massachusetts 411.2 401.8 50.6 181.8 217.4 45.5 −229.4 −184.3
Michigan 713.0 558.0 56.1 762.6 462.4 62.3 49.6 −95.6
Minnesota 253.6 217.3 53.8 238.7 171.5 58.2 −14.9 −45.9
Mississippi 82.3 29.8 73.5 91.8 18.6 83.2 9.5 −11.2
Missouri 210.4 151.6 58.1 193.1 132.3 59.3 −17.3 −19.3
Montana 45.5 22.5 66.9 36.1 13.5 72.8 −9.4 −9.0
Nebraska 59.3 46.6 56.0 34.1 22.2 60.6 −25.2 −24.5
Nevada 44.7 40.0 52.8 35.9 23.9 60.0 −8.8 −16.1
New Hampshire 38.0 37.7 50.2 31.3 27.7 53.0 −6.7 −10.0
New Jersey 397.5 387.4 50.6 254.8 273.8 48.2 −142.7 −113.6
New Mexico 130.4 53.5 70.9 112.0 36.3 75.5 −18.4 −17.2
New York 2,532.0 2,499.8 50.3 2,023.3 1,679.5 54.6 −508.7 −820.3
North Carolina 320.3 213.9 60.0 275.7 155.2 64.0 −44.6 −58.7
North Dakota 26.1 16.6 61.2 27.9 8.1 77.5 1.8 −8.5
Ohio 629.8 434.8 59.2 738.5 374.5 66.4 108.7 −60.4
Oklahoma 134.6 69.5 65.9 63.4 50.5 55.7 −71.2 −19.1
Oregon 164.1 113.6 59.1 169.2 109.7 60.7 5.1 −3.9
Pennsylvania 798.9 702.5 53.2 567.6 360.5 61.2 231.3 −342.0
Rhode Island 92.9 76.6 54.8 94.5 37.3 71.7 1.6 −39.3
South Carolina 97.1 48.8 66.5 91.9 31.8 74.3 −5.2 −17.0
South Dakota 20.5 11.4 64.2 12.4 7.9 61.0 −8.1 −3.5
Tennessee 183.6 112.7 62.0 194.8 69.3 73.8 11.2 −43.3
Texas 474.4 318.6 59.8 501.5 223.7 69.2 27.1 −94.9
Utah 71.5 35.5 66.8 64.2 20.1 76.2 −7.3 −15.5
Vermont 46.2 31.3 59.6 34.0 24.7 57.9 −12.2 −6.6
Virginia 143.8 140.9 50.5 127.0 106.9 54.3 −16.8 −34.1
Washington 397.8 364.8 52.2 386.1 236.1 62.0 −11.7 −128.3
West Virginia 96.6 38.0 71.8 175.2 26.7 86.8 78.6 −11.2
Wisconsin 306.0 217.8 58.4 331.9 145.9 69.5 25.9 −71.9
Wyoming 18.1 12.7 58.9 18.1 8.9 67.2 0.0 −3.9
Total 16,173.2 13,917.9 53.7 14,785.4 9,757.5 60.2 −1,387.6 −4,160.2
SOURCE: "Table 7-19. Federal and State Expenditures in AFDC/TANF and Related Programs by State, Fiscal Years 1995 and 2001," in The Green Book, U.S. House of Representatives, Committee on Ways and Means, 2003 [Online] http://waysandmeans.house.gov/media/pdf/greenbook2003/Section7.pdf [accessed January 28, 2004]

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