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

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]