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New GAO Report Highlights Loophole States Use to Meet TANF Requirements

March 10, 2016

WASHINGTON, D.C. – House Ways and Means Human Resources Subcommittee Chairman Vern Buchanan (R-FL) and Congresswoman Kristi Noem (R-SD) responded to a Government Accountability Office (GAO) report released today on state spending in the Temporary Assistance for Needy Families (TANF) program. The report revealed that one-third of states are using a loophole in current law that allows them to circumvent the financial requirements necessary to receive federal TANF funding.

Under current law, states must invest their own funds in TANF programs in order to qualify for federal support. Despite the law’s original intent, the GAO found in recent years states have taken advantage of a provision allowing them to claim the value of third-party spending (i.e. the value of food donated to a food bank) or even volunteer time as state spending in TANF. As a result, many states are investing less money in TANF programs and helping fewer welfare recipients find work, grow their careers, and escape poverty.

Chairman Buchanan requested the report. Upon its release, he said:

“One of the keys to the success of the 1996 Republican welfare reforms was a strong federal-state partnership where states could design their own programs as long as they moved welfare recipients into work and partnered with the federal government to finance the program. Unfortunately, this GAO report reveals that many states are not paying their fair share. That’s why we continue to pursue improvements to TANF so more people can get the help they need to find jobs, escape poverty, and move up the economic ladder.”

Representative Kristi Noem, who has introduced the TANF Accountability and Integrity Improvement Act (H.R. 2959) to address the issue GAO identified, said the following:

“Our nation’s welfare programs shouldn’t just end poverty, they should expand opportunity as well. Unfortunately, some states have taken advantage of TANF rules in ways that reduce the program’s effectiveness in helping families find jobs and get ahead. By restoring the federal-state partnership created in the successful 1996 welfare reforms, the TANF Accountability and Integrity Improvement Act can ensure more families achieve financial independence.”

To read the full GAO report, click here.

In 1996, Congress reformed the nation’s welfare system to better support and reward states for helping people out of poverty and into the workforce. In exchange for giving states flexibility in designing their welfare programs, TANF established requirements for states to help welfare recipients find jobs, as well as match federal funding for the program, to ensure a strong federal-state partnership in in reducing poverty. As a result of this and other reforms, the number of families receiving welfare assistance under TANF fell by more than 50 percent, child poverty declined, and employment rates of welfare recipients increased substantially. Today, the TANF program provides millions of families with the support they need to get back on their feet.

Ways and Means Republicans are working to strengthen TANF and other welfare programs to ensure that they help more Americans get back to work, escape poverty, and climb the economic ladder.