States Are “Hoarding” $5.2 Billion in Welfare Funds Meant for the Poor

States are sitting on $5.2 billion in unspent welfare funds even as the need for government assistance grows amid the pandemic, ProPublica reports.

Congress in 1996 gave states more autonomy to determine how to distribute funds from the Temporary Assistance for Needy Families program, or TANF. The move allowed states to impose work requirements or allocate the funds to childcare or parenting courses instead. But ProPublica found that some states are doing nothing at all and “hoarding the money.”

States currently have $5.2 billion in unspent TANF funds, with an additional $700 million added to the total in 2019 and 2020.

Hawaii, Tennessee, and Maine are hoarding the most funds per person living below the poverty line.

The hoarding comes as poverty continues to rise. The Census Bureau reported that the number of children in poverty rose from 14.4% to 16.1% in 2020. Poverty for adults rose from 9.4% to 10.4%.

Funds keep accumulating:

Tennessee has the largest amount of unspent TANF funding at $790 million.

Hawaii has about $364 million in unspent cash, which translates to $2,923 per person living in poverty.

Oklahoma has $264 million, nearly twice its annual $138 million TANF budget.

“Fluctuations in caseload and decreased participation in the state’s TANF program resulted in a surplus of TANF funds accumulating over a period of several years,” a spokesman for the Tennessee Department of Human Services told ProPublica.

“Maine’s TANF caseload rapidly declined from 13,522 in January of 2012 to 4,320 in January of 2018,” a spokeswoman for Maine’s DHHS told the outlet. “This reduction in the number of people served by the program in turn led to an increase in Maine’s TANF block grant balance.”

Poverty on the rise:

The national poverty rate saw its biggest increase in history, rising from 2.4% to 11.7% between June and November of 2020.

While other social aid programs expanded amid the pandemic, TANF actually helped fewer people.

States like Texas, Mississippi, Arkansas, and Nebraska denied about 90% of applicants last year.

“During the COVID pandemic, when unemployment rates and hunger rates were skyrocketing nationwide, TANF funds were still sitting unused,” Ashley Burnside, a policy analyst at the Center for Law and Social Policy, told ProPublica. The devastation wrought by the pandemic “is as much of a ‘rainy day’ as states could have had. If funds are still left unused, it makes me question what states are waiting to use this money for.”


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