Block Grants – Success or Failure? You Be the Judge – Say Ahhh! A Children’s Health Policy Blog

Whether you view something as a success or failure often
depends upon which side of the field you are standing.  

On one side of the block-granting
field, we have low-income families who lost the helping hand they needed during
tough economic times as the block-granted TANF program failed to respond to the
recession.   They have a lot
of so-called “skin in the game” as they have nowhere else to turn when they are
out of work and out of options. 
From their perspective, block-granting looks like a failed policy that
has shifted responsibility from the federal government to states ill-equipped
or unwilling to respond to the increased demand during the latest recession.  It has led to more families and children
living in deep poverty with nowhere to turn to for help. 

On the other side of the field, the
team of pro-block-granting budget cutters are patting themselves on the backs
for cutting costs and caseloads with seemingly no regard for the aftermath of
those policy changes.   In
fact, they are so happy with the results, they would like to replicate it by
block-granting more programs starting with the Supplemental Nutrition
Assistance Program (SNAP-formerly known as Food Stamps) and Medicaid. 

To determine whether block-granting the former Aid to
Families with Dependent Children program into TANF was a success that should be
replicated or a destructive policy that failed low-income Americans just when
they need it the most, let’s look at the facts. 

During the “stress test” of the recession, did the
block-granted TANF program live up to its intended purpose of providing a
lifeline to low-income families?

Poverty increased substantially during the recession,
from 12.5 percent in 2007 to 15.1 percent in 2010.  TANF’s purpose is to help those falling into poverty, but
according to research by the Center on Budget
and Policy Priorities, it came up short in fulfilling its intended
purpose.  In 2010, over 7 million
families with children were living in poverty but less than 2 million of them
received welfare assistance through TANF. 
CBPP estimates thatTANF serves only 27 families for every 100 families
in poverty, down from 68 families for every 100 families in poverty before
welfare reform.  With TANF funds being diverted by states to other
purposes and no additional TANF funds available from the federal government to
help states respond to the large increase in the number of impoverished
families and immense state budget pressures, most states froze benefits in 2011
and 7 states actually cut TANF cash assistance. 

How well did TANF serve its purpose in comparison to
programs that have not succumbed to the block-granters whims such as Medicaid
and SNAP?

SNAP and Medicaid faced the same economic pressures
during the recession as TANF, however, they were far more successful in
fulfilling their missions according to research by CCF and CBPP.  As more people found themselves in
poverty and the poor became poorer during the recession, SNAP responded
effectively and kept many families out of poverty and  lessened the severity of poverty for millions of

Medicaid also performed extraordinarily well under
pressure with only two states reducing coverage and 29 states
actually taking steps to improve coverage last year.  This thanks to the responsiveness of Medicaid’s financing
and the health reform law’s requirement that states hold steady in
their coverage of Medicaid and CHIP. 
As childhood poverty increased by 14% during the recession, the rate of
uninsured children fell to record lows, with Medicaid (and CHIP) stepping in to
fill the gap left by declining employer-sponsored insurance [link to ACS
brief].  (Medicaid was not as
successful in meeting the needs of uninsured parents and childless adults as
many of them are excluded from participation under current rules but that will
change when the Affordable Care Act takes full effect in 2014.)

There was one other important factor in the success of
Medicaid and SNAP in serving their intended purpose during the recession.  Both Medicaid and SNAP are
cost-effective programs with federal standards in place to ensure funds are
used to help low-income families and individuals.  On the other hand, the “flexibility” of the block-granted
TANF program has allowed states to divert as much as 44% of block grant funds
from helping the poor to such unrelated purposes as road repairs or closing
state budget holes. 

So you be the judge – does block-granting important
public programs work?

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