Shrinking the Safety Net

Jeanie Donovan, M.P.A., M.P.H.

Turning safety net programs into “block grants” has historically been a way for the federal government to cut program funding under the guise of increasing flexibility and innovation among states. The problem for those in Congress who are proposing block grants now is that many Americans, including governors on both sides of the political aisle, are familiar with this tired tactic and are unwilling to be duped.[1] What’s more, cutting programs that benefit the poor runs counter to the principles of most faith traditions, including Catholic social teaching.
Since the Trump administration took office and Congress returned to Washington in January, there has been growing discussion about turning Medicaid and the Supplemental Nutrition Assistance Program (SNAP) into block grants. Although these discussions are occurring in the context of a new administration, they are anything but new. Elected officials concerned with trimming federal spending have long advocated for turning entitlement programs into block grants. In some instances, they have been successful. By analyzing data and outcomes from programs converted into block grants in years past, one can project what might happen to existing entitlement programs should they meet the same fate.[2]

The Aid to Families with Dependent Children (AFDC) program offers the most illustrative example of what happens when an entitlement program is turned into a block grant. Congress converted AFDC to a federal block grant in 1996 and renamed it Temporary Assistance for Needy Families (TANF). The mission of AFDC was to provide financial relief to poor, singleparent families by guaranteeing cash assistance to all families who fell below a certain income threshold. In 1994, in a typical state, a one-parent family of three was eligible for TANF if they earned below $938 per month.[3] The average benefit level for a family of three was $366 per month, the equivalent of $566 today.4 In 1996 AFDC served 4.[4] million families, and 68 of every 100 families who lived below the poverty line received AFDC cash assistance.[5]

Today TANF is a shell of the once robust and responsive safety net program that was AFDC. In 2014 TANF provided cash assistance to only 1.6 million families, despite higher rates of poverty than when the block grant was created.[6] In 2015 just 23 of every 100 families living in poverty received TANF and the average monthly benefit was just $429 per month.[7]