Mandatory Spending
Function 600 - Income Security
Increase the State Family Assistance Grant for TANF to Account for Inflation
CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.
Temporary Assistance for Needy Families is a federal program that provides cash assistance, work support, and other services to some low-income families. Almost all of the federal government’s funding for that program takes place through a block grant called the state family assistance grant (SFAG). Under this option, the amount of funding that each state received through the SFAG in the future would be linked to the consumer price index—the same index that some means-tested programs and Social Security use to adjust their benefits to account for the rising cost of living. Indexing the SFAG by means of the consumer price index would cost about $0.3 billion in 2016, and the cost would grow to roughly $4.2 billion by 2025, for a total of $22 billion over 10 years.