In addition to establishing federal participation rate requirements,  PRWORA specified that the required rates are to be reduced if a state’s  TANF caseload declines. Since the implementation of welfare reform, states have  experienced strong economic growth and welfare caseloads have declined  dramatically, from 4.4 million in August 1996 to 2.1 million as of  September  2001, marking a 52 percent decline in the number of families  receiving cash welfare. However, once the caseload  reduction credit is taken into account, the target rates can be greatly  reduced. Twenty-two states exclude working families from time limits, either  through the federal 20 percent extension or by using state-only funds. While States Had Excluded 11 Percent of Families with Adults from Time Limits as of Fall 2001, This Percentage May Increase as More Families Reach Their Time Limits

States have excluded from time limits 11 percent of the approximately 1.4  million families with adults receiving federal- or state-funded cash  assistance. States’ Experiences with TANF Highlight Issues for Reauthorization

States’ experiences with implementing TANF time limits and work  requirements for families receiving cash assistance highlight key issues  related to reauthorization of TANF provisions.
What GAO Found

One-third of the 2.1 million cases of cash assistance provided under federal or state welfare programs in the fall of 2001 went to children. Because no adults in these families received either Temporary Assistance for Needy Families (TANF) or state maintenance-of-effort funds, work requirements and time limits did not apply. Welfare reform legislation passed in 1996 included a caseload reduction credit that reduces each state's mandated participation rate if its welfare caseload declines. Because of the dramatic declines in welfare caseloads since 1996, states have generally seen greatly reduced participation rates for TANF programs. After accounting for cases involving only children, states excluded 11 percent of the remaining 1.4 million families with an adult from federal or state time limits. States' experiences with work requirements and time limits highlight key issues Congress may wish to consider when reauthorizing TANF provisions, including the relatively few families who have reached their time limit so far and the future adequacy of the federal 20-percent extension.