DESPITE A RISE IN POVERTY, STATES ARE SITTING ON BILLIONS IN UNSPENT FUNDS MEANT TO AID THE POOR

It’s been more than two decades since President Clinton signed The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA, P.L. 104-193). As he signed the Act, the President was surrounded by two Black women who were former “welfare recipients,” Lillie Harden and Penelope Howard. Harden and Howard, in turn, were surrounded by a group of powerful White folk, clearly pleased with a policy that promised to move women who looked like Harden and Howard from welfare to work, from supposed indolence to industriousness.

One of the core aspects of the PRWORA was the jettisoning of AID to Families With Dependent Children (AFDC)—the program that symbolized “welfare” in the mind of the public— and its replacement with Temporary Assistance to Needy Families (TANF). Under TANF, the federal government provides the states fixed block grants—lump sums of money—that they can use to operate their own programs.

Under TANF, federal assistance to “needy families” was folded into block grants—lump sums of allocated money— that states could use to operate their own programs such that they meet any of the four purposes outlined in the PRWORA: 1) providing assistance to needy families so that children can remain in the home; 2) reducing “dependency” of needy parents on government through work, job preparation, and marriage; 3) reducing out-of-wedlock pregnancies and births; and 4) promoting the formation and maintenance of two-parent families. States possess considerable freedom to design programs that purport to meet these goals and, by the way, which includes the liberty to define what constitutes a “needy” family.

This freedom, by the way, includes the freedom of states to decide not to spend all—or any— of their allotted TANF funds in any year. States, in other words, are perfectly free to decide not to spend a current allotment but, instead, can carry it forward. Apparently, that’s something that can be done ad infinitum.

And that’s a problem, and here’s why.

STATES STACKING UP TANF FUNDS

The problem-or at least a problem— is that states are collectively sitting on billions of dollars in unspent or “unobligated” TANF funds. As noted by one recent report, states have stacked up $6.2 billion in “unspent” or “unobligated” TANF funds.

In 2021, Texas— the state where I reside— was estimated to be sitting on $364 million in unspent Tanf funds. And as large as that sounds, it’s lower than the $405 million in unspent funds sitting on Hawaii’s ledger and pales in comparison—big time!— to the almost $1 billion that Tennessee had clocked in unspent Tanf coins.

This is morally outrageous, especially when you take into such as factors as:

• Since 1997, the amount of money that the nation has spent on TANF has been increasingly eroded by inflation: Adjusted for inflation, the monetary value of basic block grants has dropped by a whopping 45%. In real terms (i.e. inflation adjusted), the nation is spending less, not more, money to aid impoverished families via TANF.

• Collectively, states are only devoting one out of every five TANF dollars—just 20%— to “basic services”— that is, cash that helps impoverished families with children to meet such basic needs as rent, clothing, and utilities.

• TANF is reaching fewer and fewer poor families with children: In 1996, for every 100 families in poverty, 68 received AFDC. By 2021, things had taken a decided turn for the worse: Out of every 100 families in poverty with children, only 21 received assistance from TANF.

And then there’s this:

• After hitting a record low of 7.8% in 2021, a new report by the Census Bureau finds that the supplemental poverty rate (SPM) took off like a rocket and now stands at 12.4%. That’s the first increase in the SPM in ten years and, in absolute numbers, it translates into an additional 15 million persons entering the ranks of poverty between 2021 and 2022.

And this:

The increase in the child poverty rate is off the charts. Between 2021 and 2022, the child poverty rate went bananas, rising from 5.2% to 12.4%. And while there was an increase in child poverty rates across the board, the SPM is particularly high for Black, Latino, and American Indian/Alaska Native kids.

• The poverty rate for Black kids jumped from 8.3% to 18.3%

• The poverty rate for Latino children rocketed from 8.4% to 19.5%

• The poverty rate for American Indian/Alaska Native zoomed from 7.4% to 25.9%

• The poverty rate for White Kids climbed from 2.7% to 7.2%.

Overall, there are now almost 9 million kids mired in poverty, and that’s five million greater than in 2021.

WRAPPING UP

So, on top of all of this— the recent increase in poverty, the dwindling amount of money spent on TANF, the relatively low amount of TANF funds devoted to helping cover the basic needs of families on TANF, the decline in the reach of TANF, and the disproportionate suffering of Black, Brown, and American Indian/Alaska Native kids—states have the audacity to be holding onto over $6 billion in TANF funds.

And let’s be clear about this: There’s nothing that makes this inevitable or “natural.” This is not the result of some supposedly iron law of economics. It’s not something that we simply have to accept.

This exist because far too many of us—especially those who hold the reins of power— have decided to make peace with poverty. It exist because far too many of us have come to accept the narrative that people get what they deserve— that poor people are poor because of some personal flaw and providing them with aid is to encourage indolence.

And it’s compelling evidence of the need for a strong and sustained movment that’s committed to doing what Dr. King (and others ) called for—namely, “the total, direct, and immediate abolition of poverty.”