Coalition letter written to President Bush regarding TANF and the FY'05 budget

November 16, 2003

President George W. Bush
The White House
1600 Pennsylvania Ave., N.W.
Washington, DC 20500

Dear Mr. President:

As you prepare your budget for the fiscal year 2005, we are writing to ask that your budget preserve and strengthen programs and services for some of America’s most vulnerable families and children – those who are receiving Temporary Assistance for Needy Families (TANF).

We are entering a critical phase of welfare reform. Poverty has increased for the second year in a row, food insecurity is on the rise, and joblessness continues to plague our cities and rural areas. Nearly every state in the country is facing a deep budget crisis and many are cutting TANF and child care programs. States reported that fewer TANF recipients were engaged in work activities last year and new findings from the Urban Institute reveal that families who left the rolls in 2002 are less likely to be employed than those who left in 1999. For families trying to leave the TANF caseloads, this is troubling news.

Your budget must provide a strong federal commitment to make welfare reform a success, even in this shaky economic climate. We strongly encourage you to include the following proposals as part of your fiscal year 2005 budget so families can have access to a range of supports they desperately need to move successfully from welfare to work. Congress is now considering some version of many of these proposals but we include them here and ask that they be part of your budget, as it is unlikely Congress will finish its work on TANF reauthorization this year.

TANF Block Grant
Because the basic TANF block grant has remained unchanged since 1997, the real value of the grant has fallen 14.6 percent. Maintenance of effort requirements for state spending have also declined by the same amount. By 2008, the purchasing power of the block grant will be 23 percent below its 1997 level. The need for more TANF resources exists even before accounting for costs associated with increased work participation requirements, which are part of both the House and Senate Finance Committee reauthorization proposals.

Both the House and Senate reauthorization bills cut the TANF high performance bonus funds from its current level of $200 million per year to $100 million per year. The bonus funds have been widely distributed among states, and states are allowed to spend the money on any TANF expenditures. We encourage you to include $1 billion over five years for the TANF high performance bonus funds (the current level) in your fiscal year 2005 budget.

The Senate Finance Committee bill makes significant improvements to the contingency fund that would make it easier for states facing fiscal hardship to qualify for the money. The Senate Finance Committee version should be funded at the $2 billion level your budget provided last year.

Child Care
We ask that your budget include a substantial increase in the Child Care and Development Block Grant. Thousands of families are on waiting lists for help right now, including 28,000 in Texas, 48,000 in Florida and 35,000 in New York City. According to Health and Human Services data from 2000, fewer than one in seven children eligible for federal child care assistance received help. We agree with Senator Olympia Snowe, who has pledged to offer an amendment to add $5 to $6 billion in mandatory child care funds to the $1 billion included in the TANF reauthorization bill, that child care is a critical component to help low-wage families avoid TANF and to help families receiving TANF to move off the rolls. Your own budget for fiscal year 2004 noted that without additional child care funds, as many as 200,000 children will lose their child care in the next five years. The Center for Law and Social Policy and the Center on Budget and Policy Priorities estimate that even if $1 billion for child care is added over five years (as in the Senate Finance and House bills) the still inadequate funding would cause 430,000 children to lose their assistance by 2008.

Child Support
Please include funding to make important changes in child support distribution reforms and other child support improvements, as outlined in the Senate Finance Committee’s TANF Reauthorization proposal. The Senate Finance Committee provisions are currently scored at $522 million over five years. For the poor families who receive it, child support payments represent an average of 30 percent of the family’s income, according to the Urban Institute. Current child support rules allow the government to keep a portion of the child support paid by noncustodial parents that would otherwise go to their low-income children.

Transitional Medicaid
Last year your budget included extension and improvements to the Transitional Medical Assistance (TMA) program to help families leaving welfare continue to receive Medicaid. The Senate Finance Committee agreed to these improvements – which included state options to extend eligibility and simplify reporting – as well as others during its consideration of TANF reauthorization. We congratulate you for recognizing the importance of this critical program and ask that your fiscal year 2005 budget again include TMA extension and all of the improvements agreed to by the Finance Committee.

Immigrant Children’s Health Improvement Act (ICHIA)
Current law prohibits states from providing health coverage to legal immigrant children and pregnant women who have been in the United States for less than five years. The Immigrant Children’s Health Improvement Act (ICHIA, S. 845) sponsored by Sen. Bob Graham (D-FL) would lift this ban. There is strong bipartisan support for ICHIA and it was included in the Senate-approved version of the Medicare prescription drug bill that is being considered in conference committee. Both the National Governors Association and the National Conference of State Legislators favor allowing states to use federal funds to serve legal immigrants and we strongly encourage you to include ICHIA in your fiscal year 2005 budget.

Social Services Block Grant
States use the Social Services Block Grant (SSBG) to provide services to more than 13 million individuals in need, including many who are TANF recipients. But Congress slashed funding for the program in the original TANF bill from $2.8 billion to $2.38 billion, with a promise to restore funding later. Congress has not kept this promise and cut funding further to its current level of $1.7 billion. As the real value of the TANF block grant erodes, states have even fewer resources to serve TANF recipients. Your budget should restore SSBG funding to $2.8 billion per year.

Transitional Jobs
We also encourage you to include funds for states to work with families who have been unemployed because of barriers, for a proposal similar to the “Business Links Act” sponsored by Senators Bingaman, Rockefeller, and Breaux. The funds would encourage states to work with businesses to expand linkages between work and job training for low-income participants. Funds should also be available to create subsidized or unsubsidized transitional jobs to provide temporary work with real wages and benefits that can enable parents to gain work experience.

Your fiscal year 2005 budget presents an opportunity to provide real help for some of those who need it most. Please consider our recommendations as you prepare for the next year.


Alliance for Children and Families
Americans for Democratic Action
American Baptist Churches USA
American Federation of State, County and Municipal Employees (AFSCME)
American Friends Service Committee
Association of Jewish Family and Children’s Agencies
Association of Maternal & Child Health Programs
Call to Renewal
Center for Community Change
Center for Law and Social Policy
Center for Women Policy Studies
Chicago Jobs Council
Child Welfare League of America
Children’s Defense Fund
Church Women United
Coalition for Child Support Enforcement
Coalition on Human Needs
Colorado Center on Law and Policy
Colorado Progressive Coalition
The Episcopal Church, USA
Erie County Commission on Homelessness, New York
Evangelical Lutheran Church in America
Family Violence Prevention Fund
FIP Legal Clinic at the Homeless Persons Representation Project
Goodwill Industries International, Inc.
Greater Upstate Law Project, New York
Human Services Council in Norwalk
International Association of Jewish Vocational Services
Jewish Council for Public Affairs
Kids Public Education and Policy Project
Los Angeles Coalition to End Hunger and Homelessness
Michigan League for Human Services
National Advocacy Center of the Sisters of the Good Shepherd
National Association of Social Workers
National Council of Churches of Christ in the USA
National Council of Jewish Women
National Employment Law Project
National Women’s Law Center
NETWORK, A National Catholic Social Justice Lobby
9to5, National Association of Working Women
9to5 Colorado
Northern Colorado Social Legislation Network of Catholic Charities
NOW Legal Defense and Education Fund
Office of Justice and Peace, Catholic Diocese of Richmond
People Encouraging People, Inc.
Presbyterian Church (USA) Washington Office
Public Justice Center, Maryland
Rebecca Project
Reform TANF/Tri-State Coalition
Religious Action Center for Reform Judaism
Union for Reform Judaism
United Church of Christ, Justice and Witness Ministries
United Jewish Communities
United Methodist Church - General Board of Church and Society
Utah Issues Center for Poverty Research and Action
Welfare Law Center, New York
Women Employed
The Workforce Alliance
YouthBuild USA