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This rule would improve the effectiveness and integrity of the Temporary Assistance for Needy Families (TANF) program as a safety net program by clarifying allowable uses of TANF funds and reducing administrative burden. The rule takes into account concerns from Members of Congress from both parties who are focused on ensuring TANF funds are serving their intended purpose, and advances the Biden-Harris Administration’s priority for economic growth through investment in American families. The rule aims to ensure TANF funds are used in accordance with the statute, focusing on services that support families to meet their basic needs, get access to opportunities in the job market, and remain together.

Statement of Need:

In fiscal year (FY) 2020, combined federal TANF and state maintenance-of-effort (MOE) expenditures and transfers totaled $31.6 billion. Of that amount only 22 percent was spent on basic assistance, compared to 71 percent in FY 1997. As a result, TANF currently serves less than 25 percent of eligible families across the country, as compared to 1997 when TANF served almost 70 percent of eligible families. The rule aims to address these shortcomings and would align with the Administration’s efforts to increase opportunities for economic mobility for low-income families.  The NPRM may consider changes around use of funds, eligible families, state MOE spending, and work flexibilities.

Summary of the Legal Basis:

The proposed regulations will relate to allowable spending, eligible work activities and penalties, and administrative simplification. The NPRM would be issued under the Secretary’s authority to issue regulations where Congress has charged the Department with enforcing penalties, 42 U.S.C. 609.

Alternatives:

In the absence of these regulatory changes, states will not experience any relief in their administrative burden to operate the TANF program and these changes will improve program integrity and access to services. 

Anticipated Costs and Benefits:

This NPRM imposes no costs on the Federal government nor does it change overall funding amounts for States, territories, and tribes, as TANF is a fixed block grant.  We anticipate a benefit in the transfer of funding toward critical supports to families experiencing economic hardships.

Risks:

While we expect more low-income families to receive TANF benefits and receive more effective work-related services, this action may result in states having to increase their own spending to fund activities previously funded by federal TANF dollars or previously counted as state MOE spending.