May 30, 2020

Congress on the dole

Other states may voluntarily surrender welfare money to House GOP members looking for handouts to balance the budget, but Maine’s response isn’t going to be welcomed in Washington. And there’s a good chance the state won’t be the only one to hold onto its money.

For the second time in two years, House Republicans have floated the idea of asking governors to give back some of the money they were allotted for Temporary Assistance for Needy Families (TANF). They hope to get some $6 billion to meet budget caps. Last year, the idea died because governors couldn’t stop laughing about it. This year, it stands only a slightly better chance. Not in Maine, though. The state has committed all of its TANF money so hasn’t any to give back.

Committed might be too strong a word. Maine receives about $80 million a year in federal contributions to TANF and has set aside $3.3 million in each of the last three years to accumulate a surplus of approximately $10 million, to be used if its caseload increases. That is unlikely to happen this year – the state has 13,000 families receiving aid this month, a drop of 91 from last month and a huge decline from the early 90s. Human Services Commissioner Kevin Concannon says Maine hasn’t seen numbers this low since the 1970s.

Given surplus money and the low caseload, should Maine help its friends in Congress? Especially under the current system, no.

First, lower caseloads don’t mean that states are doing all that is needed to help people get off welfare. Job training, child care and transportation support would help but are expensive. Second, the deal under the ’96 reform devolves the risks and rewards of the welfare system to the states. With the economy doing well generally, many states have made the intelligent decision to put away a little of their federal money against the next recession. To give that away means to rely on Congress during a downturn to make a special exception for a particular state and send more money. That’s quite a risk.

In fact, now that Congress has raised the issue, it might be a good time for states to ask that Washington do a little more of the devolution it is so proud of. Currently, the federal government holds onto unused welfare money, making it easy to keep track of how much states have accumulated, denying states interest on the money and retaining control of a system it said it wanted to pass along.

So when governors are asked to give up some of their welfare money, they might reply, Not until Congress truly hands over authority to the states. And that should end the conversation right there.

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