States Hoard $5.2 Billion in Assistance Meant for People in Need

A mother and daughter in front of their housing project in Cairo, Illinois. (Image Credit: William Widmer)

An investigation by Propublica published in Dec. 2021 reported that over $5.2 billion in Temporary Assistance for Needy Families (TANF) is being hoarded by some states and not being distributed to people in need. At the same time the states withheld these funds, childhood poverty went from 14.4% to 16.1% and from 9.4% to 10.4% in people aged 18 to 64. Hawaii, Tennessee and Maine are the states that are hoarding the most cash per person living at or below the federal poverty line.

The welfare reform act of 1996 provided federal block grants to the states for distribution to the poor. Part of this act was the Temporary Assistance for Needy Families (TANF) program. This program, promoted by President Clinton, was intended to force welfare recipients, usually women with children, to take low-paying jobs or they would lose government payments. The program put recipients, already in terrible situations, between a rock and a hard place. In addition, this program doesn’t distribute the money directly to those in need, but to the states to administer, meaning that state governments get their cut, even if they hold on to the money. The states determine what specific criteria need to be met for eligibility. Many states reject applications based upon arbitrary rules, ignoring actual need.

The need is clear. The money is available, but applications for aid are being turned down.

These funds could be used to assure that many of the children living in the wealthiest country in history not go to bed cold or hungry.

This is a recurrent failure of capitalism to meet people’s basic needs. Even the social programs developed supposedly to help the poorest in this society are constructed so that they manage to set up obstacles with the result that aid remains beyond reach of the people who need it. It’s morally repulsive. Check out the Propublica study for examples of individuals who’ve been excluded.