In the Washington Post’s Wonkblog today, Ezra Klein asks whether Republican lawmakers can make substantial cuts in federal funding with little in the way of adverse consequences by simply converting those programs into block grants. Klein uses the track record of federal welfare reform funding (TANF) to challenge the notion that block grants can be the fiscal equivalent of a silver bullet that will allow Congress to simultaneously slash taxes for the rich and reduce the federal deficit.
TANF is the acronym for Temporary Assistance for Needy Families, which is the federal block grant that was created about 15 years ago to replace the old welfare system (Aid to Families with Dependent Children). TANF has been getting a bit more attention in recent weeks because Paul Ryan and other Republicans are citing it as a huge success that justifies block granting other key social services for disadvantaged families, such as Medicaid and food stamps. Klein’s analysis shows the disconnect between that argument and the actual effects of block granting during the recession.
Klein says that Romney, Ryan and other Republicans have a fiscal and political problem that has led to a heightened interest in block grants:
"Their budget promises don’t add up. They’ve committed to new tax cuts. They’ve proposed spending more on defense. They’ve promised they won’t change retirement programs for the current generation of seniors. But they’ve also promised to cut the deficit, and fast. That’s left them with one option: deep cuts to programs for the poor."Klein notes that cutting programs for the poor isn’t popular, so politicians use the TANF game plan (which Bill Clinton helped develop), of calling the cuts by other names, such as “reforms,” “repairs,” or “fixes.” Ryan’s lengthy budget summary discusses block-granting and cutting programs for the poor in a section titled “Repairing the Social Safety Net,” in which he expresses the concern that “the welfare reforms of the 1990s, despite their success, were never extended beyond cash welfare to other means-tested programs.” Romney and other GOP candidates for President have been making the same argument.
Klein explores the record of the TANF block grant, from its apparent success in the early years when the economy was booming, to its failure to combat the rapid rise in poverty during the latest recession. Even if you aren’t inclined to read the text, Wonkblog often has a very interesting and informative graph, and today’s post is a case in point.
The Wonkblog post reinforces some of the themes of an excellent article by Jason DeParle in Sunday’s New York Times: “Welfare Limits Left Poor Adrift as Recession Hit.” That article examines the TANF spending trends in Arizona and the effects on families there, after that state cut its welfare caseloads in half during the recession.
For the most part, Klein's post doesn't wade into the contentious debate over spending versus taxes, or regarding which parts of the federal budget should be cut and which should be protected. Instead, he
rebuts the notion that the TANF experience demonstrates that block granting is a painless solution for cutting federal spending. For more on this topic, another very good source is a recent paper by the Center on Budget and Policy Priorities, “TANF Weakening as a Safety Net for Poor Families.”