Top priority for Nebraska’s TANF funds should be direct cash assistance

November 2, 2023 3:00 am

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Imagine Nebraska’s economy as a big ladder that reaches from poverty to prosperity. Most of us like to believe that we got to our place on the ladder through our own hard work, and we want to believe that others closer to the ground are perfectly capable of climbing as high as they would like.

But the reality is that we don’t all start climbing this ladder from the same place, and its rungs are not equally maintained. Our government has an important role to play in maintaining the rungs of our shared ladder, but instead has neglected — and sometimes intentionally removed — the rungs in the middle and at the bottom, while reinforcing the rungs at the top.

This means that, for those at the top of the ladder (the wealthiest people and corporations in our society), the system is set up for their benefit. At the same time, the people on the middle rungs of the ladder need to stretch themselves to climb even a little bit higher — and the people on the ground floor can barely reach the ladder at all.

Nebraska’s Aid to Dependent Children (ADC) program, which provides direct cash assistance to Nebraska’s lowest income families with children, is one crucial rung at the bottom of that ladder. As described in commentary published by the Nebraska Examiner earlier this year, we’re really talking about families starting out at the ground floor.

For example, think of a former foster youth in a rural community without a support network, trying to raise two kids on an income of less than $1,003 per month. After complying with rigorous work requirements, that young parent could receive up to $552 per month in ADC benefits, along with access to other resources and income supports. Unfortunately, many of the parents who try to take a step up the ladder find that bottom rung isn’t there to support them after all. As the Reader reported last year, less than one out of every 10 Nebraskans who applied for ADC in 2020 received it.

There were several options in front of the Legislature this session that would have directed more of Nebraska’s $56 million annual Temporary Assistance for Needy Families (TANF) block grant toward direct cash assistance through improvements in ADC. These changes would also have spent down a portion of Nebraska’s $130 million TANF rainy day fund.

As outlined in a recent blog post from Nebraska Appleseed, the Legislature did take action this session to spend a greater portion of our TANF funds … but not in a way that will directly benefit the state’s lowest income families with children.

On Oct. 27, the Appropriations Committee’s interim study hearing on Legislative Resolution 167 examined the fiscal sustainability and most effective uses of Nebraska’s federal TANF funds. Nearly a year after a similar hearing, DHHS finally publicly released a proposed plan for the remainder of Nebraska’s TANF rainy day funds. Unfortunately, the department’s plan doesn’t address a major issue raised at the hearing – the state taking child support money away from families in extreme poverty – and the plan doesn’t include any meaningful increase in spending on direct cash assistance (ADC).

Why is that such a big deal? Because a growing body of research has shown that direct cash assistance has an immediate and long-lasting positive impact for families, by enabling families to better access resources and address their own basic needs. To continue the ladder analogy, ADC closes the gap between the ground floor and those first few rungs of the ladder. By contrast, the department’s proposed plan would add a few rungs here and there, and build some expensive new ladders that may or may not go anywhere. Some of them aren’t even ladders – they are classes about how to climb a ladder!

If we won’t spend the money to make sure the ladder reaches all the way to the ground, then we shouldn’t be paying someone else to teach low-income families how to climb the ladder.

How will the TANF spending plan benefit Nebraska’s lowest income families?

The proposed TANF spending plan still doesn’t include any justification for prioritizing non-cash assistance programs as a more beneficial use of TANF funds than ADC. If there were evidence of a more beneficial use of TANF funds than direct cash assistance, Nebraska Appleseed would support it. In the meantime, a long-awaited increase in ADC eligibility and benefit levels should be the top priority for Nebraska’s TANF spending.

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