There is a need to develop performance measures that ask whether states are effectively committing their block grant and MOE resources to promote workforce participation by low income parents and to enhance the economic well-being of low income families. States already have substantial flexibility in time limit design because federal time limits do not apply to state-funded assistance. But the flexibility is not well-understood, and is sometimes seen as a gimmick or loophole. If Congress wants to signal that states have this flexibility, the signal needs to be more explicit. And, even if there is broad flexibility with state funds, MOE funds represent a much smaller share of TANF-related spending in those states that had had the most favorable federal matching rates.
Different issues arise for two-parent rate and overall participation rates.
States express that such a rate creates a disincentive against assisting two-parent families in the TANF program. States may terminate assistance for any reason except inability to meet work requirements due to lack of needed child care. One consequence of more stringent requirements and full-family sanctions is that some of those families with the most severe barriers to employment fall out of the public system altogether. In the current structure, when a family is failing to engage in required activities, there is no clear signal that Congress wants states to work with the family and try to engage the parent. Terminating assistance is an equally permissible result, and there is an implicit fiscal incentive to do so.