	Introduction

The block grant of Temporary Assistance for Needy Families (TANF) is best known as a funding source for cash welfare for low-income families with children. However, the block grant also funds a wide range of benefits and services for economically disadvantaged families. The Deficit Reduction Act of 2005 (DRA, P.L. A decision on whether and how to extend TANF supplemental grants, which go to 17 states in the South and West on the basis of low historic levels of welfare funding and high population growth, beyond September 30, 2008, is the only "must-do" task related to TANF in the 110 th Congress. As shown, the cash welfare caseload plummeted from nearly 5 million to 1.9 million families over this period. The ratio of the average monthly number of children in families receiving cash welfare to the total number of children in poverty declined from about six out of ten in 1995 to less than three out of ten in 2006. Figure 1 shows the uses of TANF and MOE funds in FY2006. It shows that the categories typically associated with a traditional cash welfare program—cash benefits, administrative costs, and work activities—accounted for only a little more than half of total TANF funds. 109-171 ) ended more than four years of congressional debate on "reauthorizing" the TANF block grant. Extension of Funding

The DRA extended most TANF funding through FY2010. Federal law lists 12 categories of activities that count toward the participation standards, but regulations promulgated during the Clinton Administration from the Department of Health and Human Services (HHS) explicitly allowed states to define the specific activities counted in these categories. Unless Congress acts to extend supplemental grants, the FY2009 TANF grant awards, beginning October 1, 2008, would be reduced for the 17 states that receive supplemental grants. The DRA extended supplemental grants at $319 million per year until the end of FY2008. A one-year extension of supplemental grants through FY2009 is included in H.R. 6331 , a Medicare bill. Potential Legislative Issues for the 110th Congress Related to Families Receiving Welfare

Though "welfare" now accounts for only a little more than half of all TANF and MOE funding, most issues the 110 th Congress might consider, other than financing issues, relate to families receiving welfare. Meeting TANF Work Participation Standards

The change in the caseload reduction credit—beginning in FY2007, providing credit only for caseload reduction from FY2005—means that many states had to either quickly raise participation in activities or reduce their caseloads to meet TANF's work participation standards. What Activities Count Toward the Participation Standards? For adults, education and training other than vocational educational training counts only in conjunction with other activities more closely related to work. However, in its final regulations published on February 5, 2008, HHS reversed this policy, allowing states to count all college as vocational educational training. Under HHS regulations, participation in a GED program, adult basic education, and English as a Second Language (ESL) activities are counted in two ways. That is, they could transfer these families from the TANF cash aid caseload to the foster care caseload. A 2006 GAO report found that "reporting and oversight mechanisms have not kept pace with the evolving role in TANF budgets, leaving information gaps at the national level related to the numbers served and how states use funds to meet welfare reform goals...."
Second, on the basis of what is known, a great deal of TANF's "nonwelfare" spending goes to two other federal-state program areas: child care and child welfare. Reporting on "Nonwelfare" Benefits and Services

TANF's detailed reporting requirements focus on families receiving cash welfare. Legislation affecting child welfare funding would also have an impact on TANF.
Enactment of the Deficit Reduction Act of 2005 (DRA, P.L. 109-171) ended more than four years of congressional debate on "reauthorizing" the block grant of Temporary Assistance for Needy Families (TANF). The DRA extended funding for most TANF grants through FY2010, except TANF supplemental grants that expire at the end of this year (FY2008). Supplemental grants go to 17 states that have high population growth or low historic funding in TANF's predecessor programs per poor person. H.R. 6331, a Medicare bill enacted over President Bush's veto on July 15, 2008, extends supplemental grants for one year, through FY2009.
TANF is best known as the funding source for welfare benefits for low-income families with children. In 2006, 1.9 million families per month received TANF cash welfare, down from the historical high of five million families receiving cash welfare in the mid-1990s. In 2006, less than three in ten poor children were in families that received TANF cash welfare. However, TANF funds a wide range of "nonwelfare" benefits and services for needy families with children. In FY2006, spending on activities related to traditional cash welfare accounted for a little more than half of total TANF funding, while other "nonwelfare" activities accounted for the remainder.
Though cash welfare is a shrinking part of what TANF funds, many of the issues Congress might consider in the 110th Congress (beside supplemental grants) focus on families receiving cash welfare, particularly the work participation standards that apply to these families. The DRA made changes that require states to either increase participation among families receiving cash welfare in work or job preparation activities or reduce their welfare caseloads to meet these numerical performance standards. The DRA also required the Department of Health and Human Services (HHS) to issue rules regulations defining what specific activities count toward the participation standards. HHS final regulations, published on February 5, 2008, allow states to count participation in a four-year college degree program toward the participation standards and provide for limited counting of rehabilitative activities. However, the regulations also limit counting activities such as adult basic education (ABE), pursuing a General Educational Development (GED) credential, and English as a Second Language courses, generally requiring them to be counted only in conjunction with activities more closely related to work.
In terms of "nonwelfare" spending from TANF, Congress might consider proposals left over from TANF reauthorization proposals, but not included in DRA, to loosen some rules for nonwelfare spending. Congress might also consider improving the information available on how TANF funds are used for "nonwelfare" benefits and services, since relatively little is known about this half of TANF funding. Additionally, legislation that affects foster care, child welfare services for abused and neglected children, and child care funding would have an effect on TANF, since large amounts of TANF "nonwelfare" dollars are used to supplement dedicated federal and state funding for these programs. This report will be updated as legislative events warrant.