With the enactment of the Personal Responsibility
and Work Opportunity Reconciliation Act of 1996 (PRWORA), the
Congress made sweeping changes to federal policy for needy
families. PRWORA ended the Aid to Families with Dependent Children
(AFDC) program and created the Temporary Assistance for Needy
Families (TANF) block grant to states.
The Department of Health and Human Services (HHS)
oversees the TANF block grant program, which provides grants to
states totaling up to $16.5 billion each year and requires states
to maintain a historical level of state spending on welfare reform
programs. Under TANF, states have greater flexibility and face
greater uncertainty than they did under AFDC. States have greater
flexibility to design, finance, and implement programs for
low-income families, including determining who is to be served and
what services to provide. TANF also emphasizes the transitional
nature of assistance and the importance of employment for welfare
recipients.
Because the amount of the TANF block grant is
fixed, as caseloads decline as they did in all states through the
late 1990s'states have had additional resources that they have
used to expand their programs, achieve some budgetary savings, and
create reserves; however, states bear most of their TANF program's
fiscal risks if their programs' costs rise as a result of higher
caseloads or other factors.
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