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Job-Creating TANF Program Running Out of Funds

This summer, Democrats pushing for additional stimulus have seemed to focus almost exclusively on extended unemployment benefits, blocked by Senate Republicans for two months. But the American Recovery and Reinvestment Act created dozens of stimulus programs whose funding is fading. And Congressional Democrats have thus far failed to extend or create funds for dozens of initiatives — including teachers’ jobs, summer jobs programs, Medicaid funding for states, state fiscal aid, Build America Bonds and many others.

Today, LaDonna Pavetti at the Center on Budget and Policy Priorities focuses on the Temporary Assistance for Needy Families Emergency Fund — a supplemental pool of money tacked onto TANF by the stimulus. TANF does not just provide welfare benefits for low-income parents with children, but also runs numerous jobs programs. The Emergency Fund helped employ 240,000 people by providing jobs subsidies — and became so successful that President Obama requested an extension of the program, and $2.5 billion for it for the next fiscal year. Pavetti writes:

The House has voted twice to extend the fund, a 2009 Recovery Act program …. The costs of the House extensions were fully offset so they wouldn’t add a penny to the deficit. But in the Senate, an extension has been part of larger bills that have stalled due to conflicts over provisions unrelated to the fund. What happens if Congress fails to act before the fund expires?

Tens of thousands of people will lose their jobs. ** The impact will be felt across the nation, in urban and rural areas alike, but will be especially great in the places with the largest programs and above-average unemployment rates. In Illinois, for example, about 20,000 participants could lose their jobs, which by itself could increase the unemployment rate from 10.4 to 10.7 percent. In Los Angeles, as many as 10,000 individuals could lose their jobs, potentially raising unemployment from 12.3 to 12.5 percent.**

Most state programs will largely or totally shut down. Most of the 37 states operating subsidized employment programs created them to respond to the recession, and all of these states agree that the programs are still needed. Yet many of the programs — including most of the largest ones — will have to close their doors on September 30 if Congress doesn’t extend the fund; others plan to greatly scale back operations (see map).

Point being, while the unemployment extension passed, dozens of other programs have not — meaning less stimulus funding, and lost jobs.

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