This country has long debated how best to meet the needs of the poor. Some argue that income supplements that allow families to participate in the consumer market are the most effective and efficient means for the government to ensure that the basic needs of the poor are met. Others argue that poor people cannot effectively participate in the free market for a variety of reasons beyond income, and, as a result, society has a responsibility to provide them with the goods and services they need to survive. The social welfare programs run by the federal government have shifted from time to time in their relative emphasis on providing cash welfare versus subsidizing the costs of goods and services. Looking at the changes in welfare and housing programs over time helps to illustrate this tension. During and after the Great Depression, the government created a number of programs that provided both cash welfare and subsidized goods and services to the poor. The Social Security Act of 1935 offered grants to states to help fund cash aid for three groups of needy persons: children (Aid to Dependent Children), aged persons (Old-Age Assistance), and blind persons (Aid to the Blind). The Housing Act of 1937 created a federal construction program both to create jobs and to stimulate the economy, as well as to build low-cost housing for the poor. By the late 1930s and early 1940s, the federal government was providing surplus food to the poor in select cities. In 1964, the Food Stamp program was enacted both to eliminate surplus food as well as supplement the food needs of the poor. In 1965, the Medicaid program, which provided access to health care for the poor was created. By the late 1960s, the children's cash welfare program (renamed Aid to Families with Dependent Children (AFDC)) had become the target of widespread criticism. Some argued that cash welfare programs for single mothers promoted out-of-wedlock childbirth and dependency while discouraging work. At the same time, critics attacked federal housing programs, citing rising crime in publicly constructed housing developments and chronic fraud and abuse in their management. In 1969, President Nixon proposed a radical change to the federal social welfare system, a guaranteed minimum income in the form of a negative income tax. Nixon's plan was not adopted, but some reforms were made to the cash welfare program. By 1973, Nixon declared a moratorium on all federal housing construction programs. In their place, a number of programs were developed, the largest being a system of rental subsidies which families could use in the private market. Since the 1970s, federal social welfare policies have not resolved the debate between cash and services. Instead, a hybrid of both has developed and been maintained. The Earned Income Tax Credit (EITC) was created in the late 1970s and provides income supplements to working families. Market-based housing vouchers have grown to the point where more people are now served by vouchers than live in public housing. AFDC was abolished in 1996 and replaced by a state block grant called Temporary Assistance to Needy Families (TANF). This last change, from AFDC to TANF, has been one of the most dramatic. Whereas AFDC provided ongoing cash payments for poor families, TANF was designed to provide families with a temporary cash benefit while they transitioned into work. Under TANF, states have new flexibility, which, paired with a large reduction in the welfare caseload in the mid-1990s, has made it possible for them to use their TANF funds to provide a wide range of services including child care and job-search assistance. Spending on services now accounts for a larger portion of TANF spending than does spending on cash benefit payments. Given the array of federal support for both cash aid and goods and services, questions can be raised as to whether the existing programs are well-coordinated for the purposes of effectiveness and efficiency. This paper explores the overlapping areas of housing assistance and welfare, their areas of alignment and disconnect and proposals that have been made to encourage coordination between them. Enacted as a part of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) ( P.L. 104-193 ) as a replacement for the former welfare program, Aid to Families with Dependent Children (AFDC), TANF provides fixed grants to states for time-limited and work-conditioned aid for low-income families. The goals of TANF are to: Aid needy families so that children may be cared for in their homes or those of relatives; End dependence of needy parents upon government benefits by promoting job preparation, work, and marriage; Prevent and reduce out-of-wedlock pregnancies and establish goals for preventing and reducing their incidence; and Encourage the formation and maintenance of two-parent families. States have the flexibility to use their TANF grants not only for cash assistance, but for a wide range of services that seek to advance any of the goals of the program. States have used that flexibility to fund, for example, child care, transportation, job search assistance, and, in some cases, even housing assistance. States have implemented their TANF programs very differently and some states provide a wider array of services than others. In addition to greater flexibility in using funds, the conversion to TANF has brought a combination of policies to promote work, including stronger sanctions for nonparticipation in work, "Work First" policies and financial work rewards. Since TANF was enacted, the goal of moving families off of cash assistance and into employment has been largely met, as caseloads now are one-half their historic peak size. However, it is less clear whether the incomes of the families who have left the caseloads (or not entered them) provide "self-sufficiency." Studies indicate that most families who have left cash assistance still require some form of public assistance. According to studies funded by the Department of Health and Human Services (HHS), about two-thirds of families who leave welfare receive food stamps within the first year and three out of five adults leaving welfare and 60-90% of their children are enrolled in Medicaid. Funding for the TANF block grant was originally set to expire on September 30, 2002, but it has been renewed through a series of short-term legislative actions. Several bills were introduced in the 108 th Congress to reauthorize TANF through FY2008. The House passed the Personal Responsibility, Work, and Family Promotion Act of 2003 ( H.R. 4 ), on February 13, 2003. The Senate Finance Committee reported the Personal Responsibility and Individual Development for Everyone (PRIDE, H.R. 4 ) on October 3, 2003. Both bills contained proposals similar to the Administration's welfare reauthorization proposals, such as requiring states to engage more families in work, and requiring families to work more hours. Neither was enacted before the end of the 108 th Congress. The argument for some form of subsidy to offset housing costs for certain families is often justified by looking at the percentage of income that these families pay for housing. The general rule used by HUD is that housing is "affordable" if it costs no more than 30% of a low-income family's annual gross income. Many low-income families pay much more than 30% of their incomes towards housing costs. According to the 2003 State of the Nation's Housing, released by the Harvard Joint Center for Housing Studies, there were over 14 million households who were severely rent-burdened, meaning that they paid more than half of their income towards rent. Almost 75% of these 14 million severely rent-burdened households were in the bottom income quintile. The poorest are the most rent burdened, with almost half of all households in the bottom income quintile facing a severe rent burden. Many argue that "affordable" housing is simply unavailable for low-income families. The National Low Income Housing Coalition conducted research looking at wages and housing costs and found that, in most major cities, it is highly unlikely that households with earnings from the minimum wage of $5.15 per hour up to nearly $10 per hour could find an "affordable" apartment. In order to address the need for "affordable housing," a number of direct housing assistance programs have been developed. These programs are administered by the Department of Housing and Urban Development (HUD) and authorized under the Housing Act of 1937 ( P.L. 93-383 ), as amended. According to the 1937 Act: It is the policy of the United States ... that our Nation should promote the goal of providing decent and affordable housing for all citizens through the efforts and encouragement of Federal, State and local governments, and by the independent and collective actions of private citizens, organizations, and the private sector. The three major forms of direct housing assistance currently administered by HUD are: the low-rent Public Housing program, the Housing Choice Voucher program and project-based assistance programs. Public Housing is rental housing that was constructed using federal funds and is publicly owned and managed by local, quasi-governmental Public Housing Authorities (PHAs). Low-income families who live in public housing pay approximately 30% of their incomes for rent. The costs of maintaining the buildings, beyond what can be supported by tenant rents, are subsidized by the federal government. In FY2003, there were 1.2 million public housing units under management. Originally referred to as the Section 8 voucher program, the Housing Choice Voucher program provides federally funded subsidies, administered by local PHAs, to low-income families and individuals to lease housing from private landlords. Families who receive vouchers pay between 30% and 40% of their incomes towards rent and the federal government subsidizes the remainder. In FY2003, there were approximately 2.2 million authorized vouchers. Project-based rental assistance programs include privately-owned buildings for which the tenant rents, and in some cases construction costs, are subsidized by HUD.