Stimulus spending.

P&P: What are the biggest opportunities and challenges for human service agencies as they implement the Recovery Act?

Greenberg: In this recession, the nation's unemployment rate is already higher than at any time since the early 1980s. Human service agencies face greater needs than they have experienced in at least a generation.

[ILLUSTRATION OMITTED]

[ILLUSTRATION OMITTED]

The Recovery Act provides much-needed resources and new policy opportunities. Among its provisions, the act allow states to broaden food stamp assistance; expand child care assistance and improve child care quality; prevent cuts to child support enforcement; increase the number of children benefiting from Head Start and Early Head Start; and expand basic assistance, subsidized employment, and short-term emergency help through TANF.

Opportunities for human service agencies go beyond the provisions that agencies directly administer. By broadening unemployment insurance, states can help families and reduce burdens on human service systems. Expanded Workforce Investment Act funding comes with a requirement to prioritize services to low-income people and public assistance recipients. New funding for summer jobs can be melded with human service resources to develop more comprehensive approaches. The weatherization provisions offer both job opportunities and the capacity to help lower energy costs in low-income communities. States and localities can target a portion of newly created jobs to needy groups and tie job creation to apprenticeships and training to ensure that the neediest workers and families benefit from these provisions.

The challenge is that states face enormous pressure to spend Recovery Act funds quickly, transparently, carefully, thoughtfully, and where possible, in ways that transform existing systems. These multiple demands are in some tension with each other. Moreover, states face large and growing budget deficits, staffing and information systems are often far short of what is needed, and there is often pressure to use funds simply to fill holes, despite mounting needs. And, even with expanded resources, our current "work-based safety net" is not well-designed to address sustained, long-term unemployment.

Haskins: The most important goal of the stimulus money is to, well, stimulate the economy. Taxpayers are out $789 billion because economic theory says government spending will induce recovery when the economy is in recession. So goal one is to spend the money--quickly.

Goal two should be to use the money in a way that the spending can be stopped after two years without causing huge withdrawal pains. Unfortunately, no one knows which programs will be continued and which halted. Take the $2 billion in child care spending. If states use their share of the money during 2009 and 2010 to boost day care slots, and if the additional money ends in 2011--as it well might--states will have to reduce their spending on day care or fill in with state dollars. Two years from now, many or even most states will not be in a financial position to fill in the dollars. Thus, states need a better plan. Part of the plan could be to expend the stimulus funds so that enough 5-year-olds will leave the program in 2010 to attend public school so that no family getting a subsidized slot that year will be forced to lose their subsidy. This approach will probably not work for expenditures such as those on teachers and facilities, which are more fixed than child attendance. So states will need additional planning for how to cover the potential loss. But the point is to think through these expenditures now before a funding crisis arrives in two years.

A third goal is to actually do some good by helping the poor and afflicted. One of my top candidates for helping the poor would be covering more destitute people under the TANF program. Congress was especially wise to allow the new money to be spent on TANF work programs. It would not be good--either for welfare clients or for state programs--to just start again giving welfare money away on a noncontingent basis. Better to involve people in constructive activities and make them earn their money. Few states now have large-scale work programs, but they need them to avoid taking a chance on increasing dependency by bringing lots of new people on the welfare rolls without asking them to do anything. The key as always is for states to conduct a cash welfare program that puts as much pressure as necessary on able-bodied adults to find a job while providing cash for those who cannot find a job and are temporarily destitute. If states simply give money to people, they could be creating a financial problem for themselves in two years and weakening the exemplary progress they have made over the past decade in reducing welfare dependency.

In short, states should spend the money now and spend it wisely, all the while planning how they will respond if the money ends in two years.

P&P: What's the short- and long-run impact of federal budget deficits on human services?

Greenberg: For the foreseeable future, program reauthorizations and initiatives will occur in the context of severe federal budgetary pressure. The principal causes of the current budget deficit do not stem from new Obama administration domestic initiatives. Rather, the biggest policy drivers were initially the tax cuts and spending initiatives of the prior administration, and in the last year, the lost revenues and costs of legislation to address the severe recession and financial crisis. In the short run, the nation has no serious alternative to running substantial deficits in efforts to stimulate economic growth and reduce unemployment. In the long run, we face a serious structural budget gap, of which the biggest contributor, by far, is the continuing growth in health care spending. The high and growing costs despite nearly 50 million uninsured Americans underscores the need for major health care legislation. At the same time, the nation has not recovered from the lost revenues resulting from the 2001 and 2003 tax cuts, and a serious approach to restoring fiscal balance needs to prevent further erosion of the federal tax base and face the need for increased revenues.

In budget debates, there is a risk that the easiest targets for spending reductions are the most vulnerable populations. Human service agencies should be active voices against reducing effective and needed programs, and to the extent possible, should advocate for the adequate revenue base essential to addressing the nation's human service needs.

Haskins: I have been active for several years in activities to bring public attention to the exploding federal budget deficit. In a word, the deficit is unsustainable. Current and projected deficits represent one of the great failures of our democratic form of government. We're now running annual deficits of a trillion dollars a year--and that's before retirement of the biggest part of the baby-boom generation. And yet, Congress and the president--like Congresses and presidents before them--continue to spend money like it's actually ours. A shocking percentage of the money they're spending belongs to our children and grandchildren. They, after all, are getting the bill for our profligacy. Either the political system is going to wake up in time to do something about the deficit or a financial catastrophe--such as the government no longer being able to borrow enough money to cover its debt--will force the federal government into bankruptcy, with consequences that no one can predict. In both scenarios, however, one prediction is certain--the federal government will cut spending and raise taxes. When the day of the budget long knives arrives, social programs in general and children's programs in particular will not be able to avoid some cutting. The question is how much cutting will social programs sustain. As compared with the lobbies for defense and for the elderly, to pick two examples, the lobby for social programs may not fare particularly well.

The best course to balance the federal budget would be to start reducing spending and increasing taxes now. Under this approach, it would still be necessary to cut spending on children's programs, but the cuts would be more planned, orderly, and less deep than under an emergency scenario. A particularly serious problem of waiting until a crisis arrives is that when Congress is in a rush, it often does things under the cover of darkness that don't become public knowledge until after the legislation is passed. Given this grim possibility, it would be relatively easy to cut social programs--including children's programs. Far better to have an open and orderly process in which lobbies, including the American Public Human Services Association, fight it out. May the best child win.

It is against the genetic makeup of members of APHSA to support spending reductions, but it's going to happen now or later. Take your choice.

P&P: Will there be TANF reauthorization in 2010? What should states be doing to prepare?

Greenberg: TANF reauthorization is scheduled for 2010. Given the last experience, no one can guarantee that reauthorization will be completed in a timely way, but there is a clear need to revisit the law's provisions. In reauthorization, Congress will likely reexamine the prescriptive participation rate rules. States will argue--appropriately, I believe--that the last reauthorization resulted in process-driven federal micro-requirements that make it harder to provide individualized services that promote long-term stable employment. States should begin now to build this case. But, the reauthorization agenda needs to be broader than addressing the mechanics of participation rates. It should reflect an effort to shift the federal emphasis from process to outcomes, and focus on the contribution that TANF can make to the broader goals of reducing overall and extreme poverty, promoting family-supporting employment, and ensuring that programs of last resort are effectively available to those in need.

One important way to both help families and prepare for reauthorization is through states' use of the Recovery Act TANF funds to provide basic assistance, emergency services and subsidized employment. TANF caseloads generally remained flat or near-flat in the last recession, and at least initially showed little sign of responding to this one, as the share of poor children and eligible families receiving TANF assistance has continued to fall. In reauthorization, policymakers are likely to ask whether and to what extent TANF has responded to dramatically increased needs. If states use Recovery Act funds effectively, they can build the case for other program improvements; if the funds are not used or not used effectively, it will be vastly harder to do so.

Haskins: Years of watching Congress operate has convinced me that it is impossible to predict whether any given piece of legislation will be reauthorized on time. Reauthorization is often unpredictable because it opens settled legislative statutes to possible reform at the committee level, on the floor of either house, and in the House-Senate conference committee. Reauthorizations are also usually time-consuming and often provide the occasion for partisan fights, something the TANF reauthorization seems likely to do. Congress can avoid all these actual and potential difficulties by simply continuing the law as currently written. Especially if the majority party already has a full agenda, as Democrats are likely to have in 2010, putting routine reauthorizations off for a year or two is often the preferred course. The Democratic Congress, for example, put off the No Child Left Behind reauthorization last year. Even without reauthorization, however, both the House and the Senate could have hearings on TANF, Supplemental Security Income for children and addicts, welfare for immigrants, the child care block grant, child support enforcement, or any of the other programs included in the 1996 welfare reform legislation. Members of the House and Senate might also introduce legislation. Thus, states should be prepared and should decide in advance what their priorities will be and they should begin over the Christmas and New Year holidays talking with committees and sending letters about their priorities.

Here are some possibilities. The TANF block grant, which is the nation's most important program for reducing welfare dependency by encouraging work while also serving as a part of the safety net, has lost value every year since TANF enactment in 1996 because of inflation. If I were leading the states, I would place a very high priority on getting some type of inflation adjustment in the TANF block grant. Although money is tight and getting tighter, interest groups will continue pressing Congress for more funding; so why should APHSA be an exception? It would be ideal to have some consideration for the one-third of the 1996 value already lost to inflation, but at minimum an annual future adjustment in line with the CPI should be a priority for states.

Another important idea is that states should seek additional funding to work more intensively with mothers who have difficulty staying in the labor force. Rebecca Blank of the Commerce Department has recommended a grant program that allows states to provide special services, including mental health services and intensive case management for these programs. It might make sense to try to get around $500 million per year for five years to mount competitive grant programs and to allow states to form demonstration coalitions with research firms or universities to test their programs.

Whatever the state goals for TANF reauthorization might be, APHSA should begin now to establish its priorities, to form coalitions with other organizations such as the National Governors Association and the National Conference of State Legislatures, and to begin talking with senior staffers and members on the Hill to test the waters of what might be achievable.

Editor's Note: Policy & Practice interviewed Mark Greenberg, director of the Georgetown Center on Poverty, Inequality and Public Policy, and Ron Haskins, senior fellow of economic studies and co-director of the Center on Children and Families at the Brookings Institution, on the stimulus package and wide-ranging social policies.