Preventing Waste, Fraud, and Abuse in TANF Act
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The bill would cap eligibility for all TANF-funded assistance and services at twice the federal poverty level, require states to obligate and spend federal welfare funds within set deadlines, and bar states from using federal TANF dollars to replace their own welfare spending.
It would also apply federal improper-payment tracking standards to state TANF programs and require the Department of Health and Human Services to give Congress a 10-year plan for reducing fraud and improper payments, reshaping how states can use the federal welfare block grant.
What this bill would do
What it would do
The bill would amend the Temporary Assistance for Needy Families (TANF) provisions of the Social Security Act in several ways. It would set a national income eligibility ceiling — twice the federal poverty guidelines — for any assistance or service funded with a state's TANF family assistance grant, replacing the current system in which each state sets its own threshold. It would require states to obligate TANF funds by the end of the following fiscal year and spend them within two fiscal years, while allowing states to reserve up to 15% of funds (capped at 50% of the prior year's grant) for future use. It would also require states to certify that federal TANF funds supplement rather than replace state and local welfare spending, apply the Payment Integrity Information Act of 2019 to state TANF programs, and require HHS to submit a 10-year improper-payment reduction plan to Congress within one year. The bill does not change TANF's overall funding structure, the block grant formula, or other program requirements not addressed in these sections; its amendments take effect October 1, 2027.
Key provisions
- 1Would apply the Payment Integrity Information Act of 2019's improper-payment tracking standards to state TANF programs as if they were federal agencies
- 2Would require HHS to submit a 10-year plan to Congress for reducing or eliminating improper TANF payments by states
- 3Would limit TANF family assistance grants to families with income below twice the federal poverty guidelines
- 4Would require states to obligate TANF funds within one fiscal year and spend them within two, with a limited reserve exception
- 5Would prohibit states from using federal TANF funds to replace state or local welfare spending and require a supplementation certification
Who would be affected
State agencies that administer TANF programs, low-income families who currently qualify for TANF-funded assistance or services above twice the poverty level, the Department of Health and Human Services, and state chief executives who must certify compliance with the new anti-supplanting rule.
Why it matters
States that currently extend TANF-funded services to families above twice the poverty level would need to tighten eligibility, potentially cutting some families off from assistance. States would also face new deadlines for spending federal funds, limits on how much they can reserve, and new reporting burdens to track and reduce improper payments, changing how flexibly they can run their welfare programs.
What would change
Changes to existing law
Amends Social Security Act, Section 404 (42 U.S.C. 604) (Secs. 2-4)
Applies federal improper-payment law to states, sets a 200%-of-poverty eligibility ceiling, and imposes fund obligation/expenditure deadlines with a reserve limit
Amends Social Security Act, Section 402(a) (42 U.S.C. 602(a)) (Sec. 5)
Adds a required state certification that TANF funds will not replace state or local welfare spending
Amends Payment Integrity Information Act of 2019 (Sec. 2)
Extends its improper-payment measurement and reporting requirements to state-administered TANF programs
Agencies directed to act
Effective dates
- HHS report to Congress on a plan to reduce TANF improper payments
- All amendments made by the Act
Funding and costs
Congressional Budget Office estimate
CBO estimates that enacting H.R. 8872 would have no significant effect on the federal budget, with any net change in direct spending or the deficit totaling less than $500,000 over the 2026–2036 period.
CBO estimates that H.R. 8872 would affect direct spending by less than $500,000 over the 2026–2036 period and would have no effect on revenues, resulting in a negligible impact on the deficit. The bill would change how states obligate and spend their Temporary Assistance for Needy Families (TANF) block grants — for example, limiting unspent reserves and restricting assistance to families earning below 200% of the federal poverty level — but because the total amount of federal TANF funding would remain unchanged, states are expected to reallocate spending to offset any required adjustments. Spending subject to appropriation (discretionary spending) would also be less than $500,000 over the 2026–2031 period, mainly to cover the cost of an HHS report to Congress on reducing improper TANF payments. CBO found no intergovernmental or private-sector mandates as defined under the Unfunded Mandates Reform Act.
How implementation would work
States would need to redesign TANF eligibility screening to enforce the new 200%-of-poverty cap across all funded services, not just cash assistance, and would need financial systems to track obligation and expenditure deadlines and any reserved funds. States would adopt federal-style improper-payment measurement and reporting under the Payment Integrity Information Act, and chief executives would certify annually that federal funds are not replacing state spending. HHS would develop and submit a 10-year improper-payment reduction plan to Congress within a year of enactment, and would presumably issue guidance to states on complying with the new deadlines and eligibility rule before the October 2027 effective date.
Legislative status & sources
Latest action
POSTPONED PROCEEDINGS - Pursuant to clause 1(c) of rule XIX, the Chair announced further proceedings on H.R. 8872 is postponed.
Official CRS summary
Show the CRS summaryHide the CRS summary
This bill limits how and when states may use Temporary Assistance for Needy Families (TANF) funds and establishes an eligibility threshold for all TANF-funded assistance and services.
Currently, each state sets its own eligibility threshold for TANF-funded cash assistance. The bill establishes an upper limit on eligibility applicable to all assistance and services (including non-cash benefits) funded by TANF family assistance grants. Under this provision, only families with income under 200% of the federal poverty guidelines may receive TANF-funded assistance and services.
Further, the bill generally requires states to obligate TANF funds by the end of the fiscal year after they are paid and to spend funds by the end of the second fiscal year after they are paid. However, states may reserve a specified portion of their TANF funds for future use. (There is currently no requirement to use TANF funds within a specified period.)
The bill also explicitly requires states to use federal TANF funds to supplement, not replace, state and local funding for TANF-supported programs. (Current law requires states to spend a specified minimum amount on TANF-eligible activities and populations, known as the maintenance of effort requirement.)
States must also take specified steps to track and report on improper payments of federal funds (e.g., overpayments, underpayments, payments to ineligible recipients). Within one year of enactment, HHS must submit to Congress a plan to reduce or eliminate improper payments made by states under the TANF program within 10 years.
Legislative subjects
Congressional oversight; Government information and archives; Intergovernmental relations; Poverty and welfare assistance; Social Welfare; State and local finance; State and local government operations
Committee report
H. Rept. 119-670