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Testimony:

Before the Subcommittee on Income Security and Family Support, 
Committee on Ways and Means, House of Representatives:

United States Government Accountability Office: 
GAO:

For Release on Delivery: 
Expected at 10:00 a.m. EST:
Thursday, March 11, 2010:

Temporary Assistance For Needy Families:

Implications of Changes in Participation Rates:

Statement of Kay E. Brown, Director: Education, Workforce, and Income 
Security:

GAO-10-495T:

Mr. Chairman and Members of the Subcommittee:

I am pleased to have the opportunity to participate in today's 
discussion of the role of the Temporary Assistance for Needy Families 
(TANF) program in providing assistance to low-income families. My 
remarks to you are based on our report, released today, entitled 
Temporary Assistance for Needy Families: Fewer Eligible Families Have 
Received Cash Assistance Since the 1990s, and the Recession's Impact 
on Caseloads Varies by State.[Footnote 1] As you know, as a result of 
sweeping changes made to federal welfare policy in 1996 with the 
creation of TANF, welfare changed from a program entitling eligible 
families to monthly cash payments under Aid to Families with Dependent 
Children (AFDC) to a capped block grant that emphasized employment and 
work supports for most adult participants who receive such assistance. 
With the creation of TANF, the number of families who received cash 
assistance fell significantly, from 4.8 million families on average 
each month in 1995--just prior to the creation of TANF--to 1.7 million 
in 2008. During this time frame, poverty among all children initially 
fell, from about 21 percent in 1995 to about 16 percent in 2000, and 
then rose thereafter to 19 percent in 2008. Most families receiving 
cash assistance are single mothers with children, and children in such 
families have historically experienced high rates of poverty. 
Furthermore, the recession, which began in late 2007 and deepened 
nationally in 2008, put additional pressures on families living in 
poverty, especially families with children, who are particularly 
vulnerable.

Under the TANF block grant program, created by the Personal 
Responsibility and Work Opportunity Reconciliation Act of 1996 
(PRWORA), states receive federal funds to design and operate their own 
welfare programs within federal guidelines. The Department of Health 
and Human Services (HHS) administers the TANF program, which provides 
states with up to about $16.5 billion each year in TANF block grant 
funds, and each state must contribute a specified level of its own 
funds to qualify for the grant. In addition, under TANF, states must 
involve a minimum percentage of their adult TANF cash assistance 
recipients in work activities for a required number of hours each 
week. They must also restrict most families to a lifetime limit of 60 
months of federally funded TANF cash assistance. Within certain 
limitations, states set their own eligibility limits and benefit 
levels for cash recipients. States also impose financial consequences, 
or sanctions, on families that do not comply with TANF work or other 
requirements, and many states have also implemented programs or 
strategies intended to divert families from cash assistance. To help 
states in an economic downturn, PRWORA created a TANF contingency fund 
of up to $2 billion, and most recently, the American Recovery and 
Reinvestment Act of 2009 made an additional $5 billion available to 
states for fiscal years 2009 and 2010 through a new Emergency 
Contingency Fund.

In light of these issues, my remarks today--based on our February 2010 
report--will focus on the following issues: (1) the factors that have 
contributed to the decline in the number of families receiving TANF 
cash assistance since the 1990s; (2) the characteristics of 
participating and nonparticipating eligible families; (3) the impact 
of higher participation in TANF cash assistance on child poverty; and, 
more recently, (4) the changes states are experiencing in caseloads 
and TANF-related spending in the current recession.

To develop our findings for this report, we used multiple 
methodologies. These included using microsimulation analyses conducted 
for us by the Urban Institute using a model known as TRIM3; analyzing 
relevant federal laws and regulations; and reviewing relevant research 
on the factors affecting the decline in the number of cash recipient 
families.[Footnote 2] When we conducted our work, 2005 was the most 
recent year of publicly available TRIM3 data. We also interviewed TANF 
officials in 21 selected states; analyzed federal data on cash 
assistance caseloads and spending; and interviewed researchers, 
federal officials at HHS, and other experts. We assessed the data we 
received from TRIM3 and from state agencies for data reliability and 
concluded that the data were sufficiently reliable for the purposes of 
our report.

We conducted our work from November 2008 to February 2010 in 
accordance with all sections of GAO's Quality Assurance Framework that 
are relevant to our objectives. The framework requires that we plan 
and perform the engagement to obtain sufficient and appropriate 
evidence to meet our stated objectives and to discuss any limitations 
in our work. We believe that the information and data obtained, and 
the analysis conducted, provide a reasonable basis for any findings 
and conclusions in this product.[Footnote 3]

Because our report is now released, my written remarks today will be 
brief and very summarized.

Factors Contributing to the Decline in the Number of Poor Families 
Receiving Cash Assistance:

First, with regard to the decline in the number of poor families 
receiving cash assistance from 1995 to 2005, we found that the changes 
reflect declines on two fronts--both in the number of eligible 
families and in the number of eligible families who participated in 
the program. The strong economy of the 1990s, TANF's focus on work, 
and other factors such as increases in the minimum wage and the Earned 
Income Tax Credit contributed to increased family incomes, which in 
turn led to a decline in the number of families eligible for TANF cash 
assistance. We also found that changes to eligibility rules, such as 
restrictions on immigrants and the 60-month time limit, had a small 
impact on the number of eligible families. In total, about 420,000 
fewer families were eligible for cash assistance in 2005 than were 
eligible in 1995, according to HHS data. However, most of the decline 
in the cash assistance caseload--about 87 percent--resulted from fewer 
eligible families participating in the program. In 1995, about 84 
percent of eligible families participated, but over the decade, 
participation in cash assistance fell dramatically, to about 40 
percent of eligible families in 2005.[Footnote 4] Correspondingly, the 
number of families who were eligible but not participating rose 
substantially in this time period to about 3.14 million in 2005. (See 
figure 1.) 

Figure 1: Families Estimated as Eligible for and Participating in 
These Cash Assistance Programs, Monthly Average, by Calendar Year, 
1995 through 2005:

[Refer to PDF for image: multiple line graph] 

Year: 1995; 
Eligible for AFDC or TANF Cash Assistance Programs: 5,690,000; 
Participating in AFDC or TANF Cash Assistance Programs: 4,800,000; 
Eligible, but not participating: 890,000. 

Year: 1996; 
Eligible for AFDC or TANF Cash Assistance Programs: 5,600,000; 
Participating in AFDC or TANF Cash Assistance Programs: 4,430,000; 
Eligible, but not participating: 1,170,000. 

Year: 1997; 
Eligible for AFDC or TANF Cash Assistance Programs: 5,400,000; 
Participating in AFDC or TANF Cash Assistance Programs: 3,700,000; 
Eligible, but not participating: 1,700,000. 

Year: 1998; 
Eligible for AFDC or TANF Cash Assistance Programs: 5,470,000; 
Participating in AFDC or TANF Cash Assistance Programs: 3,050,000; 
Eligible, but not participating: 2,465,000. 

Year: 1999; 
Eligible for AFDC or TANF Cash Assistance Programs: 5,070,000; 
Participating in AFDC or TANF Cash Assistance Programs: 2,650,000; 
Eligible, but not participating: 2,405,000. 

Year: 2000; 
Eligible for AFDC or TANF Cash Assistance Programs: 4,440,000; 
Participating in AFDC or TANF Cash Assistance Programs: 2,300,000; 
Eligible, but not participating: 1,140,000. 

Year: 2001; 
Eligible for AFDC or TANF Cash Assistance Programs: 4,560,000; 
Participating in AFDC or TANF Cash Assistance Programs: 2,190,000; 
Eligible, but not participating: 2,370,000. 

Year: 2002; 
Eligible for AFDC or TANF Cash Assistance Programs: 4,550,000; 
Participating in AFDC or TANF Cash Assistance Programs: 2,190,000; 
Eligible, but not participating: 2,360,000. 

Year: 2003; 
Eligible for AFDC or TANF Cash Assistance Programs: 4,770,000; 
Participating in AFDC or TANF Cash Assistance Programs: 2,180,000; 
Eligible, but not participating: 2,590,000. 

Year: 2004; 
Eligible for AFDC or TANF Cash Assistance Programs: 5,220,000; 
Participating in AFDC or TANF Cash Assistance Programs: 2,190,000; 
Eligible, but not participating: 3,030,000. 

Year: 2005; 
Eligible for AFDC or TANF Cash Assistance Programs: 5,270,000; 
Participating in AFDC or TANF Cash Assistance Programs: 2,130,000; 
Eligible, but not participating: 3,140,000. 

Source: GAO analysis of data from HHS's Indicators of Welfare 
Dependence, based on the TRIM3 model. 

[End of figure]

According to our research, the decline in participation reflected, 
among other things, families' responses to changes in state welfare 
programs, including mandatory work activities, declining cash benefit 
levels, and time limits as well as state diversion strategies and 
sanctions for non-compliance with work and other program requirements. 
According to a research synthesis conducted for HHS, mandated work 
activities may have caused declines in the caseload, as families chose 
not to apply rather than be expected to fulfill the requirement to 
work. Other families may have found it difficult to apply for or 
continue to participate in the program, especially those with poor 
mental or physical health or other characteristics that make 
employment difficult, as we noted in previous work.[Footnote 5] A 
decline in average cash benefits may have contributed to the decline 
in participation. Average cash benefits under 2005 TANF rules were 17 
percent lower than they were under 1995 AFDC rules, according to our 
TRIM3 estimates, as cash benefit levels in many states have not been 
updated or kept pace with inflation. Research also suggests that, in 
response to lifetime limits on the amount of time a family can receive 
cash assistance, eligible families may hold off on applying for cash 
assistance and "bank" their time, a practice that could contribute to 
the decline in families' use of cash assistance. In addition, fewer 
families may have applied or completed applications for TANF cash 
assistance because of state policies and practices for diverting 
applicants from cash assistance; nearly all states have at least one 
type of diversion strategy, such as the use of one-time nonrecurring 
benefits instead of monthly cash assistance. Finally, some studies and 
researchers noted that full sanctions for families' noncompliance-- 
those that cut off all benefits for a period of time--are associated 
with declines in the number of families receiving cash assistance, 
although more research is needed to validate this association. While 
there is a general consensus that these factors played a role in 
contributing to the decline in the number of families receiving cash 
assistance, there is not agreement on the relative weight of each 
factor, according to researchers and other experts we interviewed.

Characteristics of Nonparticipating Eligible Families Compared with 
TANF Families:

In examining the characteristics of eligible nonparticipants and TANF 
participants, we found that eligible families not participating in 
TANF had higher annual incomes on average than TANF participants in 
2005, but that a small but distinct subgroup of non-participants had 
lower incomes than TANF participants.[Footnote 6] While all families 
who were eligible to receive TANF cash assistance in 2005 had low 
incomes, eligible families who did not participate in TANF in any 
month in 2005 generally worked more and had relatively higher incomes 
and higher education levels than TANF families and were less likely to 
receive other public supports. However, a subgroup of families who 
were eligible but did not participate in TANF (732,000 families in 
2005) did not work or receive Supplemental Security Income (SSI) 
benefits--a cash assistance program for low-income people with 
disabilities. This subgroup of more disadvantaged nonparticipants 
accounted for 11 percent of all families who were eligible for TANF 
cash assistance in 2005, according to our TRIM3 analysis. They had 
incomes lower than those of families participating in TANF--a median 
of $7,020 compared to $9,606--and a smaller portion of this subgroup 
received benefits from the Supplemental Nutrition Assistance Program 
(SNAP) and subsidized housing. (See figure 2.) 

Figure 2: Estimated Eligible Nonparticipating Families as a Share of 
Total Eligible Families in 2005, Annual Basis:

[Refer to PDF for image: pie-chart] 

Participating in TANF: 40% (2.7 million); 
Not participating in TANF, but employed or receiving SSI: 49% (3.2 
million); 
Not participating in TANF, not employed, and not receiving SSI: 11% 
(732,000). 

Source: GAO analysis of TRIM3 microsimulation model data. 

[End of figure]

Impact of Participation on Child Poverty:

With regard to child poverty, we found that if the percent of eligible 
families participating in TANF in 2005 was 84 percent--the rate of 
participation in AFDC in 1995--rather than about 40 percent, an 
estimated 3.3 million families would gain TANF benefits and experience 
an increase in their net income. According to our TRIM3 analysis, this 
higher participation would have resulted in 800,000 fewer children in 
extreme poverty--defined as those with incomes below half the federal 
poverty threshold.[Footnote 7] However, some families would remain in 
extreme poverty even with TANF benefits, such as those with no earned 
income or with low earned incomes who receive the maximum cash benefit 
in their state. Higher participation also would not significantly 
change the number of children in poverty overall. This is partly 
because many children in poverty are not poor enough to be eligible 
for TANF--since the majority of states set TANF eligibility standards 
at less than half of the federal poverty guidelines--and also TANF 
cash benefits are typically too low to raise the incomes of 
participating families above the federal poverty threshold.

Changes in State Caseload and TANF-Related Spending in the Current 
Recession:

In terms of more recent TANF trends, the number of families receiving 
TANF cash assistance increased in 12 of the 21 states we reviewed 
between June 2008 and June 2009, although the recession's impact on 
cash assistance caseloads varied widely by state, according to state- 
provided data. For instance, over this time period, the number of 
families receiving TANF cash assistance increased by 22 percent in 
Nevada and decreased by 9 percent in Texas. (See figure 3.) 

Figure 3: Percent Change in the Number of Families Receiving TANF Cash 
Assistance, by State, June 2008 through June 2009:

[Refer to PDF for image: map of the United States] 

Arizona: 7% increase; 
California: 12% increase; 
Colorado: 15% increase; 
District of Columbia: 19% increase; 
Florida: 14% increase; 
Georgia: 3% decrease; 
Illinois: 2% increase; 
Iowa: 7% increase; 
Massachusetts: 3% decrease; 
Michigan: 3% decrease; 
Mississippi: 1% decrease; 
Nevada: 22% increase; 
New Hampshire: 38% increase; 
New Jersey: 3% decrease; 
New York: 1% decrease; 
North Carolina: 10% increase; 
Ohio: 17% increase; 
Pennsylvania: 1% increase; 
Rhode Island: 10% decrease; 
Texas: 9% decrease; 
Washington: 18% increase; 
Other states were not surveyed. 

Source: GAO analysis of state-provided data. 

[End of figure]

We found no clear association between the change in the number of 
families receiving cash assistance in a state and its unemployment 
rate in this time frame, although the impact of expiring extensions of 
unemployment insurance (UI) on state caseloads is hard to predict. For 
example, although Illinois, Florida, Georgia, and the District of 
Columbia all had similar unemployment rates of between 10 and 11 
percent in June 2009, cash assistance caseloads rose to varying 
degrees in three of these states while falling in Georgia. (See table 
1.) Unemployment is one of many factors--including the state's 
eligibility and asset limits, the state's application process, and 
other state-specific program characteristics--that may affect a 
state's caseload. Officials from eight states believed that the number 
of families receiving cash assistance in their states had not 
increased, or had not increased as much as might have been expected, 
because families were still collecting UI benefits. If jobs are still 
not available when UI benefits end, these families may turn to TANF 
for cash assistance. However, two experts we interviewed said that 
many TANF-eligible single mothers would not likely meet state criteria 
for UI receipt.

Table 1: Cash Assistance Caseload Changes and Unemployment Information 
in Selected States, June 2008 through June 2009: 

State: Arizona; 
Percent change in caseload, June 2008 to June 2009: 7.25%; 
Unemployment rate June 2009: 8.7%; 
Change in unemployment rate June 2008 to June 2009: 3.2%. 

State: California; 
Percent change in caseload, June 2008 to June 2009: 11.51%; 
Unemployment rate June 2009: 11.6%; 
Change in unemployment rate June 2008 to June 2009: 4.5%. 

State: Colorado; 
Percent change in caseload, June 2008 to June 2009: 33.29%; 
Unemployment rate June 2009: 7.6%; 
Change in unemployment rate June 2008 to June 2009: 2.8%. 

State: District of Columbia; 
Percent change in caseload, June 2008 to June 2009: 8.44%; 
Unemployment rate June 2009: 10.9%; 
Change in unemployment rate June 2008 to June 2009: 4.1%. 

State: Florida; 
Percent change in caseload, June 2008 to June 2009: 14.25%; 
Unemployment rate June 2009: 10.7%; 
Change in unemployment rate June 2008 to June 2009: 4.7%. 

State: Georgia; 
Percent change in caseload, June 2008 to June 2009: -2.50%; 
Unemployment rate June 2009: 10.1%; 
Change in unemployment rate June 2008 to June 2009: 4.0%. 

State: Illinois; 
Percent change in caseload, June 2008 to June 2009: 3.82%; 
Unemployment rate June 2009: 10.3%; 
Change in unemployment rate June 2008 to June 2009: 3.7%. 

State: Iowa; 
Percent change in caseload, June 2008 to June 2009: 6.65%; 
Unemployment rate June 2009: 6.2%; 
Change in unemployment rate June 2008 to June 2009: 2.1%. 

State: Massachusetts; 
Percent change in caseload, June 2008 to June 2009: -1.91%; 
Unemployment rate June 2009: 8.6%; 
Change in unemployment rate June 2008 to June 2009: 3.5%. 

State: Michigan; 
Percent change in caseload, June 2008 to June 2009: -1.71%; 
Unemployment rate June 2009: 15.2%; 
Change in unemployment rate June 2008 to June 2009: 7.1%. 

State: Mississippi; 
Percent change in caseload, June 2008 to June 2009: -0.83%; 
Unemployment rate June 2009: 9.1%; 
Change in unemployment rate June 2008 to June 2009: 2.2%. 

State: Nevada; 
Percent change in caseload, June 2008 to June 2009: 21.66%; 
Unemployment rate June 2009: 11.9%; 
Change in unemployment rate June 2008 to June 2009: 5.5%. 

State: New Hampshire; 
Percent change in caseload, June 2008 to June 2009: 23.39%; 
Unemployment rate June 2009: 6.8%; 
Change in unemployment rate June 2008 to June 2009: 3.1%. 

State: New Jersey; 
Percent change in caseload, June 2008 to June 2009: -2.61%; 
Unemployment rate June 2009: 9.2%; 
Change in unemployment rate June 2008 to June 2009: 4.0%. 

State: New York; 
Percent change in caseload, June 2008 to June 2009: -0.28%; 
Unemployment rate June 2009: 8.7%; 
Change in unemployment rate June 2008 to June 2009: 3.4%. 

State: North Carolina; 
Percent change in caseload, June 2008 to June 2009: 9.96%; 
Unemployment rate June 2009: 11.0%; 
Change in unemployment rate June 2008 to June 2009: 4.9%. 

State: Ohio; 
Percent change in caseload, June 2008 to June 2009: 16.54%; 
Unemployment rate June 2009: 11.1%; 
Change in unemployment rate June 2008 to June 2009: 4.7%. 

State: Pennsylvania; 
Percent change in caseload, June 2008 to June 2009: 0.68%; 
Unemployment rate June 2009: 8.4%; 
Change in unemployment rate June 2008 to June 2009: 3.1%. 

State: Rhode Island; 
Percent change in caseload, June 2008 to June 2009: -21.27%; 
Unemployment rate June 2009: 12.4%; 
Change in unemployment rate June 2008 to June 2009: 4.7%. 

State: Texas; 
Percent change in caseload, June 2008 to June 2009: -8.51%; 
Unemployment rate June 2009: 7.5%; 
Change in unemployment rate June 2008 to June 2009: 2.7%. 

State: Washington; 
Percent change in caseload, June 2008 to June 2009: 17.76%; 
Unemployment rate June 2009: 9.2%; 
Change in unemployment rate June 2008 to June 2009: 4.0%. 

Source: GAO analysis of state-provided data and data from U.S. Bureau 
of Labor Statistics. 

Note: In addition to TANF block grant funds, caseload data here 
include two kinds of cash assistance provided by states--funds that 
count towards state contributions that are required to qualify for the 
TANF grant and funds that states provided through solely state-funded 
programs. 

[End of table]

Finally, to offset higher costs of cash assistance, few states 
reported reducing TANF-related spending on family and/or work supports 
during this time period, but instead used funding sources such as the 
Emergency Contingency Fund that was created by the American Recovery 
and Reinvestment Act of 2009. According to HHS data, as of October 
2009, all 21 surveyed states had applied for funds from the temporary 
Emergency Contingency Fund to respond to rising caseloads and/or to 
establish or expand subsidized employment programs. Since June 2009, 
state and local fiscal conditions have continued to deteriorate, and 
the effect of the changes in the economic climate on TANF cash 
assistance programs is unknown.

We provided a draft of the report we released today to HHS for its 
review, and a copy of the agency's written response is in appendix II 
of the report. In its comments, HHS said that the report was 
informative and the department did not disagree with our findings. HHS 
also provided technical comments on the draft report; in response to 
the comments, we made changes where appropriate.

Mr. Chairman, this concludes my statement. I would be pleased to 
respond to any questions you or other Members of the Subcommittee may 
have.

GAO Contacts and Acknowledgments:

For questions about this statement, please contact Kay E. Brown at 
(202) 512-7215 or brownke@gao.gov. Contact points for our Offices of 
Congressional Relations and Public Affairs may be found on the last 
page of this statement. Individuals who made key contributions to this 
statement include Alexander G. Galuten, Kathryn A. Larin, Deborah A. 
Signer, Shana B. Wallace, and Monique B. Williams.

[End of section]

Related GAO Products:

Temporary Assistance for Needy Families: Fewer Eligible Families Have 
Received Cash Assistance Since the 1990s, and the Recession's Impact 
on Caseloads Varies by State. [hyperlink, 
http://www.gao.gov/products/GAO-10-164] (Washington, D.C.: February 
23, 2010).

Poverty in America: Consequences for Individuals and the Economy. 
[hyperlink, http://www.gao.gov/products/GAO-07-343T]. Washington, 
D.C.: January 24, 2007.

Welfare Reform: Better Information Needed to Understand Trends in 
States' Uses of the TANF Block Grant. [hyperlink, 
http://www.gao.gov/products/GAO-06-414]. Washington, D.C.: March 3, 
2006.

Welfare Reform: More Information Needed to Assess Promising Strategies 
to Increase Parents' Incomes. [hyperlink, 
http://www.gao.gov/products/GAO-06-108]. Washington, D.C.: December 2, 
2005.

Welfare Reform: HHS Should Exercise Oversight to Help Ensure TANF Work 
Participation Is Measured Consistently across States. [hyperlink, 
http://www.gao.gov/products/GAO-05-821]. Washington, D.C.: August 19, 
2005.

Means-Tested Programs: Information on Program Access Can Be an 
Important Management Tool. [hyperlink, 
http://www.gao.gov/products/GAO-05-221]. Washington, D.C.: April 11, 
2005.

TANF AND SSI: Opportunities Exist to Help People with Impairments 
Become More Self-Sufficient. [hyperlink, 
http://www.gao.gov/products/GAO-04-878]. Washington, D.C.: September 
15, 2004.

Welfare Reform: Information on Changing Labor Market and State Fiscal 
Conditions. [hyperlink, http://www.gao.gov/products/GAO-03-977]. 
Washington, D.C.: July 15, 2003.

Welfare Reform: Former TANF Recipients with Impairments Less Likely to 
Be Employed and More Likely to Receive Federal Supports. [hyperlink, 
http://www.gao.gov/products/GAO-03-210]. Washington, D.C.: December 6, 
2002.

Welfare Reform: Outcomes for TANF Recipients with Impairments. 
[hyperlink, http://www.gao.gov/products/GAO-02-884]. Washington, D.C.: 
July 8, 2002.

Welfare Reform: With TANF Flexibility, States Vary in How They 
Implement Work Requirements and Time Limits. [hyperlink, 
http://www.gao.gov/products/GAO-02-770]. Washington, D.C.: July 5, 2002.

Welfare Reform: States Provide TANF-Funded Work Support Services to 
Many Low-Income Families Who Do Not Receive Cash Assistance. 
[hyperlink, http://www.gao.gov/products/GAO-02-615T]. Washington, 
D.C.: April 10, 2002.

Welfare Reform: States Are Using TANF Flexibility to Adapt Work 
Requirements and Time Limits to Meet State and Local Needs. 
[hyperlink, http://www.gao.gov/products/GAO-02-501T]. Washington, 
D.C.: March 7, 2002.

Welfare Reform: Progress in Meeting Work-Focused TANF Goals. 
[hyperlink, http://www.gao.gov/products/GAO-01-522T]. Washington, 
D.C.: March 15, 2001.

Welfare Reform: Moving Hard-to-Employ Recipients into the Workforce. 
[hyperlink, http://www.gao.gov/products/GAO-01-368]. Washington, D.C.: 
March 15, 2001.

Unemployment Insurance: Role as Safety Net for Low-Wage Workers Is 
Limited. [hyperlink, http://www.gao.gov/products/GAO-01-181]. 
Washington, D.C.: December 29, 2000.

[End of section] 

Footnotes: 

[1] GAO, Temporary Assistance for Needy Families: Fewer Eligible 
Families Have Received Cash Assistance Since the 1990s, and the 
Recession's Impact on Caseloads Varies by State, [hyperlink, 
http://www.gao.gov/products/GAO-10-164] (Washington, D.C.: Feb. 23, 
2010).

[2] TRIM3 is maintained and developed at the Urban Institute under 
primary funding from HHS, Office of the Assistant Secretary for 
Planning and Evaluation. Using TRIM3 for these analyses required our 
input on assumptions and/or interpretations about economic behavior 
and the rules governing federal programs. Therefore, the conclusions 
presented in this testimony are attributable only to GAO. 

[3] For more detailed information on our methodology, see appendix I 
of our report (GAO-10-164). 

[4] This analysis of the share of eligible and participating families 
is based on trend data for an average month by calendar year in HHS's 
Indicators of Welfare Dependence: Annual Report to Congress, 2008 
(Washington, D.C.: 2008), which uses TRIM3 to model estimates of the 
TANF participation rate. In reporting participants, the data includes 
families receiving cash assistance through both TANF and separate 
state programs (SSP) using state MOE funds. TRIM3 does not model 
certain aspects of program eligibility, such as sanctions from a 
family's failure to comply with work rules or child support rules. It 
also does not model state diversion strategies such as the use of one-
time, non-recurring benefits, or families' behavioral responses to 
TANF program rules, such as staying off TANF to conserve eligibility 
for time-limited assistance. 

[5] GAO, Welfare Reform: Moving Hard-to-Employ Recipients into the 
Workforce, [hyperlink, http://www.gao.gov/products/GAO-01-368] 
(Washington, D. C: Mar. 15, 2001).

[6] The TRIM3 estimates in this analysis are based on annual data. In 
comparing the characteristics of cash recipients and eligible 
nonrecipients, differences are statistically significant at the 95 
percent confidence level unless otherwise noted.

[7] Poverty is measured in the United States using the federal poverty 
threshold, which is calculated annually by the U.S. Census Bureau. 
Persons or families having income below this threshold amount are, for 
statistical purposes, considered to be living in poverty. The poverty 
threshold varies by family size and composition but does not vary by 
geographic location. Extreme or deep poverty is defined as income 
below 50 percent of the federal poverty threshold for a given family. 
Poverty is also measured through the poverty guidelines, which are 
published annually by HHS and are used by some federal programs in 
determining the income eligibility of individuals and families for 
need-based assistance. The poverty guidelines are a simplified version 
of the Census poverty thresholds. 

[End of section] 

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