Block Granting Social Safety Net Programs Would Erode Their Value Deprive Low-income Families of Aid

http://www.epi.org/publication/block-granting-social-safety-net-programs/

Block Granting Social Safety Net Programs Would Erode Their Value and Deprive Low-income Families of Critical Aid

In his new plan, House Budget Committee Chairman Paul Ryan (R-Wis.) proposes consolidating 11 separate federal anti-poverty programs into one block grant. Each state would be given a fixed amount of funding for the year and great leeway to use it as they see fit. Though Rep. Ryan claims that this proposal is not a means to slash the budget, turning social safety net programs into block grants erodes their value over time, and, worse, renders them less responsive to economic downturns.

In 1996, President Clinton signed welfare reform into law, which replaced the Aid to Families with Dependent Children (AFDC) program—a federal benefit for low-income families—with the new Temporary Assistance for Needy Families (TANF) program—a block grant for states to administer their own anti-poverty measures. The figure below shows that this transition ushered in a cash-assistance program much less able to increase its caseloads in the aftermath of recessions—when the number of people living in poverty increases and when more Americans are in need of financial support.



Although the law required the federal government and states to maintain a significant portion of pre-1996 funding levels, inflation ate away more than 30 percent of the value of the program between 1997 and 2012. Further, the emergency contingency funds in the program—intended to bolster state TANF spending during economic downturns—barely moved the needle in terms of funding during the Great Recession, when a robust social safety net was needed most.

By contrast, the Supplemental Nutrition Assistance Program (SNAP, or food stamps) has not been block-granted and has been responsive to economic changes. During economic downturns, particularly the Great Recession (when SNAP was further strengthened by provisions in the Recovery Act), automatic increases in SNAP funding have aided millions of people. Conversely, since AFDC was turned into TANF, traditional cash-assistance welfare has been unresponsive to such changing conditions. Block-granting programs like SNAP would have a similar effect.