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HHS FY 2017 Budget in Brief - ACF - Mandatory


Administration for Children and Families (ACF): Mandatory

Administration for Children and FamiliesThe Administration for Children and Families promotes the economic and social well-being of children, youth, families, and communities, focusing particular attention on vulnerable populations such as children in low income families, refugees, and Native Americans.

ACF Budget Overview

(Dollars in millions)

Current Law Budget Authority 2015 2016 2017 2017
+/- 2016
Child Care Entitlement to States 2,917 2,917 2,917
   Child Care and Development Fund (non-add) /1 5,352 5,678 5,678
Child Support Enforcement and Family Support 4,158 4,088 4,311 +223
Children's Research and Technical Assistance /2 47 49 39 -10
Foster Care and Permanency 7,386 7,755 8,067 +312
LIHEAP Contingency Fund
Promoting Safe and Stable Families (mandatory only) /3 445 472 495 +23
Social Services Block Grant 1,661 1,669 1,785 +116
Temporary Assistance for Needy Families (TANF) 16,737 16,737 16,739 +2
TANF Contingency Fund /4 608 608 608
Subtotal, TANF (non-add) 17,345 17,345 17,347 +2
Total, Current Law Budget Authority 33,959  34,295  34,961  +666

 

Proposed Law Budget Authority 2015 2016 2017 2017
+/- 2016
Child Care Entitlement to States 2,917 2,917 6,582 +3,665
    Child Care and Development Fund (non-add) /1 5,352 5,678 9,544 +3,866
Child Support Enforcement and Family Support 4,158 4,088 4,342 +254
Children's Research and Technical Assistance(mandatory only) 47 49 88 +39
Foster Care and Permanency 7,386 7,755 8,572 +817
LIHEAP Contingency Fund 769 +769
Promoting Safe and Stable Families (mandatory only) 445 472 478 +6
Social Services Block Grant /5 1,661 1,669 2,085 +416
TANF 16,737 16,737 17,489 +752
TANF Contingency Fund/6 608 608 25 -583
Pathways to Jobs 473 +473
Two-Generation Demonstration 100 +100
TANF Program Improvement 10 +10
TANF Economic Response Fund 2,000 +2,000
    Subtotal, TANF (non-add) 17,345 17,345 20,107 +2,762
Emergency Aid and Service Connection Grants 40 +40
Total, Proposed Law Budget Authority  33,959 34,295 43,053 +8,758

Table Footnotes

1/ The Child Care and Development Fund includes mandatory funding from the Child Care Entitlement to States and discretionary funding from the Child Care and Development Block Grant.

2/ Includes $15 million in mandatory funds transferred from the TANF Contingency Fund for Welfare Research in FY 2015 and FY 2016.

3/ The total for Promoting Safe and Stable Families (PSSF) includes Abstinence Education, the Personal Responsibility Education Program, and PSSF mandatory funding. In addition, there is a discretionary appropriation of $60 million for PSSF in FY 2015 and FY 2016 and $80 million in FY 2017.

4/ The Consolidated and Further Continuing Appropriations Act, 2015, appropriated $608 million for the Contingency Fund in fiscal years 2015 and 2016, reserving in FY 2015 $15 million for Welfare Research funds and $10 million for a U.S. Census Bureau study. The Consolidated Appropriations Act, 2016 appropriated $608 million for the Contingency Fund in FY 2017 and reserved $15 million for Welfare Research funds and $10 million for a U.S. Census Bureau study from amounts appropriated for FY 2016.

5/ The proposed law reflects the reauthorization of the Health Profession Opportunity Grants and a new Upward Mobility proposal.

6/ The proposal to repurpose the TANF Contingency Fund would continue to reserve $15 million for Welfare Research and $10 million for a U.S. Census Bureau study in FY 2017.

ACF Mandatory Programs and Services

The FY 2017 Budget request for the Administration for Children and Families mandatory programs is $43.1 billion.  ACF serves the nation’s most vulnerable populations, including those living in deep poverty at just over $12,000 for a family of 4, through mandatory programs including Temporary Assistance for Needy Families (TANF), Child Care Entitlement to States, Child Support Enforcement, Foster Care, Adoption Assistance, Guardianship Assistance, Independent Living, and Promoting Safe and Stable Families.

The Budget guarantees access to high-quality child care for low income working families with young children; encourages the use of evidence-based interventions to improve outcomes for children in foster care; focuses on preventing the removal of children from their families; limits the use of institutional settings and group homes for foster care placements; increases the child support that is paid directly to families; promotes fathers’ involvement in the lives of their children; advances human services interoperability by investing in human services information system; and proposes to provide assistance to low-income families to help them become self-sufficient.

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Child Care Entitlement to States

The Budget proposes a historic and necessary investment in child care to close the gap between the cost of high-quality care and what families can afford while expanding the availability of child care that is not only safe, but supports children’s healthy development and their future academic achievement and success.
The Budget provides $82 billion over 10 years to expand child care assistance to all eligible families with children under age 4 by 2026. This investment will ensure that all low-income families with incomes below 200 percent of the poverty line with children ages 3 and under have access to high-quality child care so that parents can work, attend school, or participate in training.

With the Child Care and Development Fund caseload currently at the lowest point since the creation of the program in 1996, this investment will expand access to high-quality care for approximately 1.15 million additional infants and toddlers at the end of 10 years. In 2026, over 2.6 million children will be served by the Child Care and Development Fund, including nearly 1.8 million infants and toddlers.

The Budget also supports the critical role that teachers and caregivers play in providing safe, supportive, and quality learning environments for young children. The proposal would support important and tangible investments in quality improvements, including investments to improve the skills, competencies, and training of the child care workforce and a higher subsidy rate for higher quality care. This increase in the subsidy rate, paired with investments in workforce development, will improve the quality of care that children receive, in part by allowing for more adequate compensation of child care workers.

New Initiative

Guaranteeing Access to Child Care to Support Working Families and Children

A continually growing body of evidence suggests early and continuous exposure to high-quality child care is beneficial for child development and is most impactful for children from disadvantaged backgrounds. High-quality, stable, and reliable child care can improve children’s cognitive and social outcomes and reduce later costs to society.  In addition to increasing the likelihood children will be in safe nurturing learning environments, access to high-quality child care also benefits children by helping parents increase their employment and earnings, thereby reducing financial hardship and possibly parental stress.  The FY 2017 Budget continues to make a historic commitment to improving access to high-quality, affordable child care for low income children and addressing prohibitively high child care costs for working families by investing $82 billion in mandatory funds in the Child Care and Development Fund over 10 years. The Budget commits to providing child care assistance to more than 2.6 million children by 2026, nearly tripling the number of infants and toddlers to 1.8 million. In creating a child care guarantee for children ages 0 through 3 years old in families with incomes up to 200 percent of the federal poverty level, this historic investment will help draw into the labor force primary caregivers of young children, in particular young mothers, who have seen disproportionate declines in labor force participation since 2008.

The Budget’s landmark investment in the Child Care Entitlement complements investments to provide universal preschool education in the Department of Education; expand access to preschool through the
Preschool Development Grants in HHS; extend and expand the Maternal, Infant, and Early Childhood Home Visiting program; and increase the number of children attending Head Start full school day and year programs. Together, these are the key elements of the Administration’s broader education agenda, designed to ensure a cohesive and well-aligned continuum of early learning for children from birth to age five, which supports continuity of care, healthy development, learning, and stability for children in the critical years before school.

Of total funding for the Child Care and Development Fund of $9.54 billion in FY 2017, the Budget includes an additional $200 million in discretionary funds for child care above FY 2016.  These funds will help states implement the new statutory requirements of the reauthorization and include $40 million for pilots that will test innovative strategies to address the child care needs of working families, such as care during on-traditional hours and in rural areas.

Child Support Highlights

The Child Support program continues to make strong gains in establishing child support orders and increasing child support collections.  In FY 2014:

  • Child support collections increased modestly to $28.2 billion.
  • 1.5 million paternities were established and acknowledged.
  • Paternity was established for 96 percent of Title IV-D non-marital births, exceeding the target of 94 percent.
  • Child support orders were established for 85 percent of child support cases, which surpassed the target of 80 percent.
  • For every dollar invested in the program, $5.25 in child support was collected, which exceeded the performance target of $5.00.
  • Six tribal programs became comprehensive, fully operational program service providers, bringing the total number of comprehensive Tribal Child Support Programs to 57.

Child Support Enforcement and Family Support Programs

Child Support is a joint federal, state, tribal, and local partnership that seeks to ensure financial and emotional support for children from both parents by locating non-custodial parents, establishing paternity, and establishing and enforcing child support orders.

The Budget request is $4.3 billion in budget authority in FY 2017 for Child Support Enforcement and Family Support Programs.

The Budget promotes strong families and responsible parenting by ensuring that children benefit when parents pay support, promoting parenting time arrangements, replacing state computer systems, and improving enforcement tools.  The Budget includes $2.3 billion in net costs over 10 years for an initiative to modernize the Child Support Program and to promote responsible parenting.  Of those net 10 year costs, $2.8 billion impacts the Child Support Program; Supplemental Security Income and the Supplemental Nutrition Assistance Program realize savings of $1.1 billion collectively, while there are $162 million in costs for Medicaid, and $492 million in costs for Foster Care.

The Budget also includes funding specifically to encourage states to pass through child support payments directly to families, making sure more child support collections reach children rather than being retained by the federal and state governments, and a child support research fund to encourage state Title IV-D programs to test and implement family-centered approaches.

The Budget proposes a technology enhancement and replacement fund to build child support model systems and applications to be made available for any state to use to respond to the significant need to replace aging state child support systems.  This fund is estimated to save $467 million over 10 years due to efficiencies these model systems would create in the process of replacing multiple legacy state child support systems.

The Budget provides $10 million annually for grants to states to facilitate non-custodial parents’ access to and visitation with their children.  Research shows that non-custodial parents are more likely to pay child support when they can see their children.

Other family support programs funded in this account include Payments to Territories and the Repatriation program.  Payments to Territories fund approximately $33 million in assistance for eligible aged, blind, and disabled residents of Guam, Puerto Rico, and the Virgin Islands.

Children’s Research and Technical Assistance

The Budget request includes $37 million for activities in two areas: $12 million for child support training and technical assistance and $25 million to support the operation of the Federal Parent Locator Service, which assists states in locating absent parents.

New Initiative

Focus on Child Welfare

ACF, in partnership with states, consistently strives to improve the lives of children and families through child welfare programs. The new proposals in the Budget focus on three main areas:

  1. Assist foster youth as they transition out of care and enable them to become successful adults.
    • Redistribute any unobligated Chafee formula grant funds.
    • Expand eligibility for the Chafee Foster Care Independence Program to youth through age 23 in states that allow youth to remain in foster care beyond age 18.
    • Support funding for research and development to test innovative models to support youth aging out of foster care.
  2. Strengthen the ability of title IV-E Tribes to effectively serve children, youth, and families in the child welfare system.
    • Provide enhanced start-up funding for Tribes seeking to implement their own child welfare programs.
    • Provide an enhanced match rate for tribal child welfare workers.
  3. Enhance workforce development to ensure caseworkers and other professionals have the right training and skills to best meet the needs of children, youth, and families in the child welfare system.
    • Provide title IV-E funding for Bachelor’s or Master’s Degree of Social Work education.
    • Offer an enhanced match rate for highly trained caseworkers.

The Budget proposes to extend access to the rich data in the National Directory of New Hires, a component of the Federal Parent Locator System, to multiple agencies to improve efficiencies and strengthen program integrity while maintaining the integrity and privacy of the data in the directory.

The Budget includes $250 million over 5 years in mandatory funds complemented by a $10 million discretionary investment in FY 2017 to advance human services interoperability.  The mandatory investment would establish a Statewide Human Services Data System grant program to provide grants and related technical assistance to states in support of the design, development, and implementation of statewide integrated data systems and related analytic tools.  The discretionary investment would lay the groundwork for advancing interoperability efforts, including establishing a Systems Innovation Center that would design and build IT elements to be shared with states and Tribes in support of integrated health and human services eligibility and enrollment systems.

Funding for Welfare Research, which was previously funded in this account at $15 million, is requested as part of the TANF Contingency Fund. Support for the National Survey of Child and Adolescent Well-Being, previously funded in this account, is requested in ACF’s discretionary budget.

Foster Care and Permanency

The Budget request for the Foster Care, Adoption Assistance, Guardianship Assistance, and Independent Living programs is $8.6 billion in FY 2017 budget authority.  These programs, authorized by title IV­-E of the Social Security Act, support safe living environments for vulnerable children and prepare older foster youth for independence.

The Budget includes an investment of $505 million above baseline in FY 2017 for a suite of proposals designed to improve permanency services so children are less likely to need foster care placement in the future; strengthen Tribal child welfare programs; foster successful transitions from foster care to adulthood; and improve the quality of child welfare services provided to children through better trained staff and stronger information technology systems.

The Budget requests $616 million over 10 years in matching funds for permanency and post-permanency services included as part of a child’s case plan.  Most of the services funded must be evidence-based or evidence-informed.  Prevention and permanency interventions can reduce the likelihood that a child will have to be removed from a family and can increase the likelihood that recently established permanency arrangements can be sustained.  The Budget also includes savings of $68 million over 10 years to promote family-based foster care for children with behavioral and mental health needs, as an alternative to congregate care, and provides increased oversight of congregate care when such placements are necessary.

To strengthen the ability of title IV-E Tribes to effectively serve children, youth, and families in the child welfare system, $241 million over 10 years is included in the Budget to provide enhanced start-up funding for Tribes seeking to implement their own child welfare programs and to provide an enhanced match rate for tribal child welfare workers.

The Budget provides $1.8 billion over 10 years for an initiative to help child welfare caseworkers secure Bachelor’s or Master’s Degrees of Social Work and to support an enhanced match rate for highly trained caseworkers to ensure that those serving our most vulnerable children have the right training and skills to help children and families engaged in the child welfare system thrive.  Children who have caseworkers with this specialized training have better outcomes, including shorter time in out-of-home care, increased adoptions, and a lower likelihood of being removed from their homes.

The Budget provides $131 million over 10 years for an enhanced match for Title IV-E administrative costs related to IT systems development in child welfare. This proposal promotes the efficient replacement of aging child welfare state systems to increase innovation, system security, and efficiency to better serve children and families in the child welfare system.

The Budget continues to request mandatory funding in ACF to support a collaborative demonstration project with the Centers for Medicare & Medicaid Services (CMS) to address the over-prescription of psychotropic medications to children in foster care.  This investment includes $250 million in mandatory funding over 5 years in ACF, paired with $500 million in new performance-based incentive funds in CMS.

The Budget also includes $46 million in FY 2017 and $492 million over 10 years to require that child support payments made on behalf of children in foster care are used in the best interests of the child rather than being retained by the state.

The FY 2017 Budget includes $5.2 billion in budget authority to support the Foster Care program, including maintenance payments to children.  This amount is a $493 million increase above FY 2016.  The proposed level of funding will provide assistance and support to an estimated 174,500 children each month, which is approximately 8,000 more children than in FY 2016. The proportion of all children in foster care who are title IV-E eligible continues to decline, however.  This decrease is due in large part to the declining income eligibility standards used in the program, which are tied to eligibility rules in effect in 1996 for the Aid to Families with Dependent Children program.  The federal title IV-E participation rate for maintenance payments stood at approximately 51.8 percent of all children in foster care in FY 2000, while in FY 2015, the federal title IV-E participation rate was approximately 42 percent of all children in foster care nationally.

The Budget includes $2.8 billion in budget authority for the Adoption Assistance program, an increase of $106 million above FY 2016.  An estimated average of 467,500 children per month, an increase of 13,000 children from FY 2016, will qualify for this assistance in FY 2017.

The Budget includes $152 million for the Guardianship Assistance Program, an increase of $17 million above the FY 2016 enacted level of $123 million.  The program is continuing to grow, and there will be an increase in the number of children participating in the Guardianship Assistance Program as new states and Tribes begin programs and established states expand the implementation of their programs.  Under this program, state title IV-E agencies provide a subsidy on behalf of a child to a relative who has been granted legal guardianship of that child.  The goal of the program is to keep children with relatives, rather than in foster care, when a relative’s home is a safe and appropriate placement.  An estimated average of 29,300 children per month, an increase of 3,000 children from FY 2016, will participate in FY 2017.

The Budget also includes $144 million for the Chafee Foster Care Independence Program, an increase of $4 million over FY 2016.  This program funds services for youth who are likely to remain in foster care until they turn 18 and current or former foster children between the ages of 18 and 21.  The Budget proposes to allow those states that provide foster care up to age 21 to use these funds for current or former foster children through age 23 to prevent an abrupt end to services when children age out of foster care in those states.  The Budget also proposes $4 million for research that will identify and develop innovative, evidence-based models for independent living services.  To assist foster youth as they transition out of care and enable them to successfully make the transition to adulthood, the Budget includes a proposal to redistribute any unobligated Chafee formula grant funds available at the end of the two-year expenditure period to jurisdictions that indicate an interest in receiving those funds.

The Foster Care, Adoption Assistance, Guardianship Assistance, and Independent Living programs demonstrated success in improving safety, permanency, and well-being of children in FY 2014, the latest year for which complete performance data are available.  These programs support the goal of minimizing disruptions to the continuity of family and other relationships for children in foster care by decreasing the number of placement settings for a child in care.  In FY 2014, over 85 percent of children who had been in care less than 12 months had 2 or fewer placement settings, which exceeded the Department’s target of 80 percent.  Research shows that placement stability is necessary for children and youth to be able to form and maintain consistent relationships with caretakers and other adults, which is a core skill for life long success.

LIHEAP Contingency Fund

To help address unexpected demands on the program, the Budget includes $769 million in FY 2017 and $1.0 billion over 10 years to establish a contingency fund, which will provide additional mandatory funds triggered by significant increases in the number of eligible low-income households, the price of fuel, or extreme weather.

Promoting Safe and Stable Families

The Budget includes $478 million for the mandatory portion of the Promoting Safe and Stable Families account.  Of this amount, $385 million supports the Promoting Safe and Stable Families Program, $75 million supports the Personal Responsibility Education Program, and $15 million supports the reauthorization of the Family Connection Grants.  The Budget proposes to reauthorize the Promoting Safe and Stable Families Program and the Family Connection Grants through FY 2021 and the Personal Responsibility Education Program through FY 2022.

The Child and Family Services Improvement and Innovation Act of 2011 previously reauthorized the Promoting Safe and Stable Families Program through FY 2016.  Under the last reauthorization, states were required to address trauma that children in the child welfare system have experienced during their lives and to have explicit protocols for oversight and monitoring of psychotropic medications.  Funding in FY 2017 and beyond will continue support for a variety of state child welfare activities, including family preservation services, community-based family support services, time-limited reunification services, and adoption promotion and support services that address the impacts of trauma.

The $385 million for Promoting Safe and Stable Families includes an expansion of the Regional Partnership Grants from $20 million to $60 million annually to improve the well-being of children and families affected by substance abuse.  Based on 2014 data, parental substance abuse contributed to 30 percent of foster care placements.  Consistent with parental addiction, the rate of infants entering child welfare has also increased from a rate of 10.8 per 1,000 infants in 2013 to 11.4 per 1,000 infants in 2014. Moreover, child welfare agencies across the country have reported increases in opioid, heroin, and methamphetamine addiction and a lack of effective treatment services as significant contributing factors to the uptick in the numbers of children entering foster care.  (See the SAMHSA Chapter for a discussion on opioid abuse.)  Families who participated in previous Regional Partnership Grants projects experienced enhanced outcomes, including successful recovery, increased number of children remaining at home, increased reunification rates, decreased recidivism, and dramatic differences in the rate of children who returned to out-of-home care as compared to families who did not participate in the Regional Partnership Grants projects.

In FY 2014, the adoption placement rate for children from foster care moving into permanent homes was 12.1 percent (50,644 children adopted), falling just short of the target of 12.3 percent.  By monitoring the adoption rate, ACF is helping to ensure there is a focus on placing children in a permanent home.  While adoption is the goal for many children in foster care, the target for this measure is cognizant of the fact that many children in foster care are best served by returning to their biological parents.

The Budget also includes $22 million over 10 years to expand the Tribal Court Improvement Program to strengthen the capacity of tribal courts to exercise jurisdiction in Indian Child Welfare Act cases and to adjudicate child welfare cases in tribal court.

Social Services Block Grant (SSBG)

The Social Services Block Grant is an appropriated entitlement which provides flexible grants to the 50 states and the District of Columbia, based on each state’s population relative to all other states, for the provision of social services ranging from child care to residential treatment.  States have broad discretion over the use of these funds.  Social Services Block Grants support a variety of initiatives to support services for low-income and vulnerable individuals such as adult protective services, special services to persons with disabilities, adoption services, case management, health-related services, transportation support, foster care, substance abuse services, home-delivered meals, independent and transitional living, and employment-related services.

The Social Services Block Grant is funded at $2.1 billion for FY 2017.  The Budget recommends setting aside up to one and a half percent of the funds for the Social Services Block Grant for purposes related to research, evaluation and demonstrations.  Included in this set‑aside is $10 million to fund a small diaper pilot project, which will enable government agencies or nonprofits to test approaches to provide low‑cost diapers to low‑income families with infants and toddlers.  While higher‑income families may benefit from having greater access to broadband connectivity and more accessible bulk purchase options for diapers, low‑income families do not always have the same access to low-cost diaper options.  This pilot project will test new approaches to reduce the substantial cost of this crucial item for low-income families, and mitigate health risks that can arise when low‑income families do not have an adequate supply of diapers for infants and toddlers.

The Budget also includes $1.5 billion in additional funding for the Social Services Block Grant, over five years, to support the Upward Mobility Project. The Project will allow up to 10 states, localities, or consortia of states and communities more flexibility to use funds from up to 4 federal block grants—HHS’ Social Services Block Grant and Community Services Block Grant and the Department of Housing and Urban Development’s Community Development Block Grant and HOME Investment Partnerships Program—for efforts designed to promote self-sufficiency, improve educational and other outcomes for children, and enhance communities’ ability to provide opportunities for families. Projects will rely on evidence‑based programs or be designed to test new ideas and will have a significant evaluation component. The funding will be awarded competitively by ACF, in consultation with the Department of Housing and Urban Development.

The Budget supports a five-year reauthorization of the Health Profession Opportunity Grants Program and proposes to allow grantees to use these funds for subsidized employment as part of their overall efforts.  Reauthorization would provide $85 million per year through FY 2022 for these grants.

Temporary Assistance for Needy Families (TANF)

TANF provides $17.3 billion annually to states, territories, and eligible Tribes to assist low‑income families and improve employment and other outcomes.  TANF grant funding has not increased since the program’s inception 20 years ago. For FY 2016, the Consolidated Appropriations Act, 2016 extended all TANF grants through September 30, 2016 and provided $608 million annually for the TANF Contingency Fund in FY 2016 and FY 2017. From the amounts appropriated for FY 2016 for the Contingency Fund, it transferred $15 million for Welfare Research, previously funded through Children’s Research and Technical Assistance, as well as a $10 million transfer for the Census Bureau’s Survey of Income and Program Participation.

TANF was designed to provide states with more flexibility while requiring them to engage recipients in work activities, but there is strong evidence that the program can do more to help families get back on their feet and work toward self-sufficiency. Currently, some states use only a small share of their TANF funds to provide assistance to very poor families or to help parents find jobs. A large share of poor families with children do not get any help from TANF, even when the parents are out of work and the family has no regular source of income. A particularly troubling indicator is the decline in the TANF-to-poverty ratio since TANF’s inception: in 1996, for every 100 families in poverty, 68 received TANF assistance; by 2014, that number had dropped to just 23. Currently, just 32 percent of families that meet state eligibility requirements for TANF (such as income and asset rules) actually receive income assistance.  And when families do not receive income assistance, they also typically lose access to the employment services that TANF programs provide.

One contributing factor to this drop in help for poor families is the fact that TANF funding has remained frozen since it was created in 1996, losing about one‑third of its value due to inflation.  And, even with the resources available, too few TANF dollars are spent on the core purposes of supporting destitute families and helping them find jobs.  In nearly half the states, less than half of federal TANF and state maintenance of effort funds are spent on basic income assistance to poor families, work programs, and child care.  In addition, some federal rules limit state flexibility in a way that hinders the effectiveness of TANF employment programs.

The Budget strengthens the TANF program to make it a more effective safety net and employment opportunity program for those who need help.  The Budget increases funding for the TANF Family Assistance Grants by $8 billion over 5 years, to partially address its erosion in value since 1996, and requires states to spend at least 55 percent of all funding, including state maintenance-of-effort funding, on core benefits services within TANF, defined as cash assistance, child care, and work activities.  The required share of funding for core benefits and services would increase as total TANF funding increases, and would reach 60 percent by 2021.

The Budget also proposes expanding the purposes of TANF to include reducing child poverty and directs HHS to publish national and state measures related to this new purpose as a means of holding states accountable for child poverty outcomes.

Some additional policy proposals include prohibiting states from claiming nongovernmental third party expenditures as state maintenance-of-effort funding requirements and requiring that all federal TANF and maintenance of effort funding be directed towards benefits and services supporting families below 200 percent of the federal poverty line.

Finally, the Budget recognizes that the current structure of work participation requirements is overly prescriptive and can hinder states’ efforts to help parents find jobs.  The Administration would like to work with Congress to provide states with more flexibility to design effective work programs in exchange for states being held accountable for the outcome that really matters—helping parents find jobs.

Temporary Assistance for Needy Families Economic Response Fund

The current Contingency Fund does not serve as a meaningful countercyclical mechanism for TANF, nor is it structured in a way that assists states during periods of economic distress. These reasons are why during the Great Recession, Congress and the Administration had to create the temporary TANF Emergency Fund (now expired) to ensure that states had the resources required to meet the increased need.  Building off the success of the Emergency Fund, the Budget establishes a TANF Economic Response Fund that uses a more straightforward and effective trigger to provide targeted funding for states to invest in efforts that address the needs of families during economic downturns.  The Budget proposes $2 billion in funding over 5 years for this Fund, though an analysis of economic forecasts results in estimated outlays of $636 million over this period.

Chart 1: Children in Poverty and Children Receiving AFDC/TANF, 1990-2013

Temporary Assistance for Needy Families Contingency Fund

The current TANF Contingency Fund is not structured in a way that effectively assists states during periods of economic distress, as it is unnecessarily complicated and also fails to help states meet increased demands for cash assistance during economic downturns.  The Budget proposes to repurpose this funding for demonstrations that will better serve low-income families.

The $473 million Pathways to Jobs initiative, would support work opportunities through subsidized employment for low‑income parents, guardians, and youth.  Pathways to Jobs will target individuals who are either eligible for TANF cash assistance or who are below 200 percent of federal poverty level and face other barriers to employment.  The program would permit up to 100 percent coverage for wages, workplace benefits, training, and administrative costs through the first 90 days of employment for eligible individuals, including eligible summer employment.  Partial subsidies are also allowable after the first 90 days.  State subsidized employment efforts through Pathways to Jobs would be required to satisfy one or more of the four statutory purposes of the TANF program and to comply with requirements prohibiting displacement of other workers.

The two-generation demonstration projects, funded by repurposing $100 million of the Contingency Fund, will help TANF agencies implement and build the evidence base for strategies that coordinate existing services, engage new partners, leverage additional resources, and supplement services to low-income families under 200 percent of the federal poverty line. The demonstration projects will focus on workforce development to help parents succeed in high demand jobs; the provision of high‑quality early education and childhood development programs designed to prepare children for school success; and families’ development of social capital and support networks with schools, workplace, and community organizations.

In addition, the Budget would repurpose $10 million of the Contingency Fund, to support improvements in TANF programs through technical assistance for state and tribal programs, monitoring, research, and evaluation.  The Budget also includes a general provision to transfer $15 million from the Contingency Fund to support Welfare Research and $10 million for Survey of Income and Program Participation, consistent with the FY 2016 appropriations funding.

Emergency Aid and Service Connection Grants

The Budget proposes a new program—the Emergency Aid and Service Connection Grants—that will test approaches to helping families facing a financial crisis.

A growing number of families with children now live on less than $2 of cash income per person per day.  In 1996, 1.7 percent of all households with children were under the $2-a-day threshold.  By 2011, the number of families had grown to 4 percent, representing 1.5 million families with about approximately 3 million children.1

The Budget provides $2 billion over a five-year period for a robust round of pilots to help families facing financial crisis. For some financially stressed families, a needed car repair or a week of missed work due to the flu can bring a family to the brink of financial collapse, including loss of a job or even homelessness. Some families have already hit bottom, living in extreme poverty without help. The pilots will test new approaches to providing emergency aid for these families. This initiative will include both short-term financial assistance, such as help paying a rental security deposit or for a car repair, and for those who need longer term assistance, connection to supports, such as TANF, employment assistance, Supplemental Nutrition Assistance Program, child care, or Medicaid, that can help persons receiving assistance find jobs, stabilize their families, and become more financial secure.

The Budget allocates $40 million in FY 2017 for a planning year for grantees, followed by $490 million annually from FY 2018 through FY 2021 to assist hundreds of thousands of families and support a strong evaluation.

/1/ $2.00 a Day by Kathryn Edin and Luke Shaefer

50-Year Poverty Trends and Safety Net Impacts

Researchers at Columbia University have translated the federal government’s supplemental poverty measure from 2012 back to 1967 to assess the full impact of the social safety net.1 Poverty is lower now than five decades ago, declining from 25.6 percent in 1967 to 16.0 percent in 2012. Trends show the most progress in reducing poverty occurred in two distinct periods, from 1967 to 1973 and from 1993 to 2000, periods of sustained economic growth.  In 1967, 25.6 percent of the population lived in poverty and the rate fell to 19.2 percent by 1973 following the economic expansions in the 1960s and early 1970s. In 1993, 20.7 percent of the population was poor and the rate fell to 14.4 percent in 2000 following the sustained economic growth of the 1990s. The supplemental poverty rate has again begun to decline with the economic recovery following the most recent recession, falling from 16.0 percent in 2012 to 15.3 percent in 2014.2 

The federal safety net has improved the economic circumstances of low-income children and families since 1967, substantially reducing the level of poverty and hardship in the United States by providing food and housing assistance, child support for families, health care coverage, direct economic support, and benefits that enable work. The share of Americans lifted out of poverty each year by government programs has increased tenfold since the 1960s, cutting the poverty rate nearly in half in 2012 from 28.7 percent to 16.0 percent. In 2012, the poverty rate for all Americans would have been 12.7 percentage points higher if current safety net benefit programs didn’t exist. This compares to a poverty rate that would have been 1.2 percentage points higher without safety net transfers in 1967.

The supplemental poverty measure includes tax credits and noncash benefits when measuring a family’s income and thus allows for an analysis of the poverty reduction impact of individual programs within the safety net. Program-by-program estimates show the particularly strong poverty reduction impact of refundable tax credits (including the EITC and the Additional Child Tax Credit) and SNAP. In 2014:

  • Refundable tax credits lifted 9.8 million people out of poverty; and
  • SNAP benefits lifted 4.7 million people out of poverty. 

Some programs reach a much smaller subset of the population but have a strong poverty reduction impact among those who receive benefits. For example, among program recipients in 2014:

  • TANF cash assistance benefits reduced the annual poverty rate among those receiving TANF cash assistance by 11.3 percentage points.  However, because TANF cash assistance programs serve less than one-third of families eligible for assistance, the program’s overall impact on poverty is modest.
  • Child Support payments received reduced the annual poverty rate among recipients by 6.3 percentage points. Child support services are available to all who request them, but not all children receive significant child support because some noncustodial parents are unable to pay due to their own financial circumstances, are only able to pay a small amount, or do not make payments they can afford.

Impact of Select Safety Net Programs on Annual Supplemental Poverty, 2014

Number of individuals lifed out of poverty by program (in millions). 9.8 Tax Credits, 4.7 SNAP, 3.8 SSI, 2.8 Housing, 0.6 TANF (cash), 0.9 Child Support (received).

Percentage point decrease in poverty by program for those in families receiving program benefits. 12.8% Tax Credits, 11.2% SNAP, 25.9% SSI, 27.5% Housing, 11.3% TANF (cash), 6.3% Child Support (received)


Note: Figures compiled by ASPE; forthcoming in Poverty in the United States: 50-Year Trends and Safety Net Impacts.
Source: Unpublished tabulations by the U.S. Census Bureau, Social, Economic and Housing Statistics Division; Current Population Survey, Annual Social and Economic Supplement, 2015.

1 Analysis of the full impact of the safety net is not possible with the official poverty measure. The Columbia University poverty trends presented here are “anchored” in 2012.  See Wimer, Christopher, Liana Fox, Irwin Garfinkel, Neeraj Kaushal, Jane Waldfogel. 2013. “Trends in Poverty with an Anchored Supplemental Poverty Measure,” available at: http://cupop.columbia.edu/publications/2013.
2 Because the Columbia University data are not available after 2012, the poverty rate comparison between 2012 and 2014 is based on the federal government’s supplemental poverty measure.

 

FY 2017 ACF Mandatory Outlays

(Dollars in millions)

Current Outlays 2015

 

2016

 

2017

 

2017
+/− 2016
Current Outlays        
Child Care Entitlement to States 2,821 2,949 2,938 -11
    Child Care and Development Fund (non-add) /1 5,134 5,746 5,735 -11
Child Support Enforcement and Family Support 4,040 4,167 4,290 +123
Children's Research and Technical Assistance 46 56 43 -13
Foster Care and Permanency 7,314 7,478 7,805 +327
LIHEAP Contingency Fund
Promoting Safe and Stable Families (mandatory only) /2 461 446 462 +16
Social Services Block Grant 1,653 1,675 1,772 +97
Sandy Supplemental /3 179 96 64 -32
Temporary Assistance for Needy Families (TANF) 15,942 16,393 16,439 +46
TANF Contingency Fund 730 556 615 +59
Subtotal, TANF (non-add) 16,672 16,949 17,053 +104
Total, Current Law Outlays 33,186 33,816 34,428 +612

 

Proposed Law Outlays 2015

 

2016 2017 2017
+/− 2016
Child Care Entitlement to States 2,821 2,949 5,907 +2,958
Child Care and Development Fund (non-add) /1 5,134 5,746 8,789 +3,043
Child Support Enforcement and Family Support 4,040 4,167 4,320 +153
Children’s Research and Technical Assistance (mandatory only) 46 56 48 -8
Foster Care and Permanency 7,314 7,478 8,058 +580
LIHEAP Contingency Fund -- -- 560 +560
Promoting Safe and Stable Families (mandatory only) 461 446 463 +17
Social Services Block Grant /4 1,653 1,675 2,072 +397
Sandy Supplemental /3 179 96 64 -32
Temporary Assistance for Needy Families (TANF) 15,942 16,393 17,024 +631
TANF Contingency Fund /5 730 556 25 -531
Pathways to Jobs -- -- 473 +473
Two-Generation Demonstration -- -- 100 +100
TANF Program Improvement     8 +8
TANF Economic Response Fund -- -- 28 +28
Subtotal, TANF (non-add) 16,672 16,949 17,668 +719
Emergency Aid and Service Connection Grants -- -- 1 +1
Total, Proposed Law Outlays 33,186 33,816 39,151 +5,335

Table Footnotes

1/ The Child Care and Development Fund includes mandatory funding from the Child Care Entitlement to States and discretionary funding from the Child Care and Development Block Grant.

2/ The total for Promoting Safe and Stable Families (PSSF) includes Abstinence Education, the Personal Responsibility Education Program, and PSSF mandatory funding.  In addition, there is a discretionary appropriation of $60 million for PSSF in FY 2015 and FY 2016 and $80 million in FY >2017.

3/ The Disaster Relief Appropriations Act provided $500 million in funding for Social Services Block Grant to aid in the recovery from Hurricane Sandy.

4/ The proposed law reflects the reauthorization of the Health Profession Opportunity Grants and Upward Mobility proposal.

5/ The proposal to repurpose the TANF Contingency Fund would continue to transfer $15 million for Welfare Research and $10 million for a U.S. Census Bureau study in FY 2017.

FY2017 ACF Mandatory Legislative Proposals

(Dollars in millions)

Proposed Law Outlays

2017 2017 - 2021 2017 - 2026
Child Care Entitlement 2,969 23,728 78,327
Child Support Enforcement and Family Support Programs 1/ 9 337 1,639
Children’s Research and Technical Assistance 5 162 250
Foster Care and Permanency 253 1,372 3,525
LIHEAP Contingency Fund 560 1,000 1,000
Promoting Safe and Stable Families 1 286 739
Social Services Block Grant 300 1,713 1,925
Temporary Assistance for Needy Families (TANF) 593 7,279 8,095
TANF Contingency Fund Repurposed /2 598 2,990 5,980
TANF Economic Response Fund 28 636 636
Emergency Aid and Service Connection Grants 1 1,369 2,000
Total Outlays, ACF Legislative Proposals 5,317 40,872 104,116

Table Footnotes

1/ The Child Support outlays in this table are net of estimated savings in the Supplemental Nutrition Assistance Program ($959 million over 10 years) and the Supplemental Security Income Program ($162 million over 10 years), which would result from this proposal. These outlays include the cost of $963 million over 10 years from Federal Offsetting Collections. The impact on Medicaid ($162 million over 10 years) is displayed in the Medicaid table.

2/ The outlays for this proposal are offset by repurposing the TANF Contingency Fund and do not reflect new outlays.

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Content created by Office of Budget (OB)
Content last reviewed on February 16, 2016