Trump is freezing funds for small but key welfare program. Here’s what TANF does

By Tami Luhby, CNN

(CNN) — As part of its claims of widespread fraud in the federal safety net, the Trump administration is halting $10 billion in funding for several programs in five Democrat-led states.

The biggest chunk that’s being paused is $7 billion in Temporary Assistance for Needy Families block grants for California, Colorado, Illinois, Minnesota and New York. Known as TANF, the program provides cash assistance and other support to low-income households.

It’s not clear why TANF is getting caught up in the administration’s probe into potential fraud in federal child care funding in Minnesota. The US Department of Health and Human Services declined to respond to CNN’s query on the issue but said in a statement that Democratic-led states have been “complicit in allowing massive amounts of fraud to occur under their watch.”

Created by the 1996 federal welfare reform law, TANF is dwarfed by better-known safety net programs such as food stamps and Medicaid, which help tens of millions of low-income Americans.

By contrast, just under 1 million families — with a total of 2.7 million people, most of them children — received cash assistance from TANF in fiscal year 2024, and there’s no tally of how many receive TANF-funded services, said Elizabeth Lower-Basch, a TANF policy expert and social services consultant. Beneficiaries receiving cash assistance have extremely low incomes with little other sources of support.

“It’s a relatively small number of families, but it’s ones who would likely be destitute without it,” she said, noting the freeze could result in families being evicted and unable to pay for basic necessities, including food.

What is TANF?

TANF replaced the Aid to Families with Dependent Children program, which was broadly known as welfare. But unlike its predecessor, TANF is a fixed block grant to states — with an annual allocation of $16.5 billion annually since its inception. That means inflation has taken a toll — the value of the block grant has fallen by half, according to The Center for Law and Social Policy, a left-leaning advocacy group. Also, the block grant has not been adjusted for population growth.

States typically kick in some of their own funds to meet the law’s so-called “maintenance of effort” requirement.

Under the law, states should use their block grants to provide assistance to needy families so children can be cared for in their homes or with relatives; end the dependence of needy parents on government benefit by promoting job preparation, work or marriage; reduce out-of-wedlock pregnancies; and encourage two-parent families.

But states have a lot of discretion over how to spend the money and who receives assistance. About a quarter of funds was used for cash assistance in fiscal year 2023, though the figure varies widely by state. That share has fallen drastically from 71% in fiscal year 1997, largely because the number of people receiving TANF aid has plummeted because of the program’s work mandate and time limits.

Conservative lawmakers and policy analysts have celebrated the trend, saying the 1996 law has helped put people on the road to self-sufficiency rather than government dependence. But advocates for low-income families say TANF does not provide much-needed support, especially in economic downturns.

States also use the block grants for child care subsidies, child welfare services and work-related needs, including job training and search, buying uniforms or covering transportation costs, among other supports.

TANF has a work requirement, but it’s not a mandate on individuals. Instead, states are supposed to have a 50% work participation rate among families with non-disabled adults receiving cash assistance or face a penalty. (Many states have reduced their required share by shrinking their caseloads.)

Families with adult recipients that receive cash assistance are subject to a 60-month lifetime limit, though states can extend that period for some households based on hardship or by using their own funds. Some states have imposed stricter limits.

Just how states will cope with the funding freeze remains to be seen. Colorado said it remains committed to supporting its families, while New York Gov. Kathy Hochul threatened to take the Trump administration to court.

“We’ll fight this with every fiber of our being because our kids should not be political pawns in a fight that Donald Trump seems to have with blue-state governors,” she said at a news conference on Tuesday.

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