30 Senators Push for Extension of TANF Emergency Fund

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Dear Majority Leader Reid and Chairman Baucus:

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We appreciate the many months you have spent working to pass legislation that would provide critical tax cuts and support for American workers. Thanks to your leadership, the United States Senate has passed key provisions from the American Jobs and Closing Tax Loopholes Act of 2010, including an extension of expiring unemployment insurance benefits, an extension of expiring FMAP assistance, and an extension of the Medicare physician payment rates.

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As you continue your efforts to bolster the economy and create jobs, we ask that you include a one-year extension of the Temporary Assistance for Needy Families (TANF) Emergency Contingency Fund in any upcoming legislative packages. We further request $2.5 billion to ensure the TANF Emergency Contingency Fund is adequately funded through fiscal year 2011; the original $5 billion appropriated for 2009 and 2010 is nearly exhausted.

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As you know, the American Recovery and Reinvestment Act of 2009 (ARRA) created a new Emergency Contingency Fund under the TANF block grant. States have used this fund to create subsidized jobs in the private and public sectors. By the time it expires at the end of September, the fund will have created approximately 250,000 jobs for low-income individuals (parents and older youth) who would otherwise be unemployed. States are also using this fund to provide basic cash assistance and short-term benefits to increasing numbers of poor families with children as unemployment remains high and more workers exhaust their unemployment benefits.

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The TANF Emergency Contingency Fund is set to expire on September 30, 2010 and states are in the process of eliminating their employment programs and considering reductions in assistance for very poor families. As states continue to struggle with the recession, we believe the extension of the TANF Emergency Contingency Fund would create jobs in the near term and stimulate the economy. At least thirty-six states (including the District of Columbia) have received approval to receive TANF Emergency Funds for new or expanded subsidized employment programs. And the number of unemployed parents and older youth in subsidized jobs would grow even more substantially if states had an additional year to operate the program.

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We have just a few weeks before the successes of the TANF Emergency Contingency Fund experienced across the country are reversed. Without immediate Congressional action, tens of thousands of jobs will be lost in the coming days and weeks. Job losses in the states and counties with the large subsidized employment programs could see substantial increases in their unemployment rate. Small businesses that have relied on the fund to expand during the recession and rehire laid-off employees will once again face financial uncertainty. And states may implement reductions in cash assistance, assistance which is effective in stimulating the economy because the poor families receiving it spend virtually every cent in their local economy immediately to meet basic needs.

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History tells us that even as the economy begins to grow again, it takes time for jobs to follow. Allowing the TANF Emergency Contingency Fund to expire is simply not a viable option for our current economy. We once again ask for your help to immediately extend the TANF Emergency Contingency Fund which will bolster job creation, keep much-needed income in local economies, support local businesses, and make it possible for low-income parents to cover basic expenses.

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Thank you for your important work to help American families who are struggling amid this historic recession. We look forward to working with you to ensure that state governments have the necessary resources to assist poor families with employment programs and other basic needs.