Today a small but highly effective provision of the American Recovery and Reinvestment Act (ARRA) expired. The Temporary Assistance for Needy Families Emergency Contingency Fund (TANF-ECF) accounted for a tiny proportion of ARRA dollars — a mere three-fifths of one percent — yet it created a quarter of a million jobs and kept countless families from hunger and homelessness.
The benefits of these types of programs ripple throughout the economy. Food stamps, for example, create a whopping $1.73 of activity for every dollar of state investment. The equivalent multiplier for corporate tax cuts is a measly .30.
In New York, TANF-ECF created over 4,000 jobs, mostly through a transitional jobs program that placed low income people in private companies and public agencies.
Take James Graham, a Brooklyn native. For years he participated in the City’s Work Experience Program, which puts welfare recipients to work in unpaid jobs. The lack of pay and training opportunities frustrated him, so he joined Community Voices Heard, a grassroots group that organizes with low-income people for good jobs.
Last June, James’ fortune seemed to turn. He secured a parks maintenance job for $9.21 an hour. The position, like all jobs created by the TANF-ECF, is temporary. In a better economy, James could use his new skills to secure permanent employment. But he is pessimistic that the sluggish job market will afford him real opportunities.
Though the US House of Representatives passed an extension of TANF-ECF twice, the Senate is unlikely to follow suit. Many states are ramping down their programs, dismantling infrastructure that took months to build.
According to the NYS Office of Temporary and Disability Assistance, New York has managed to extend its program through December with regular TANF funds. Come January, people like James will have even less of a chance of finding jobs.
This is a real shame. With 800,000 residents officially unemployed – and countless more under-employed or too discouraged to search for work — New York is facing a jobs crisis of mammoth proportions. And we can’t count on Washington to rescue us.
In light of New York’s revenue shortfall, a projected $14 billion in 2011, it may seem like slashing the safety net and capping spending is our only option. That isn’t so.
Last spring, the Center for Working Families issued a proposal for a temporary tax on high-end Wall Street bonuses that would generate between $4.7 and $6.9 billion without harming the finance industry — more than enough to extend New York’s TANF-ECF programs.
That’s not the only option for revenue generation. We could partially roll back the rebate on the stock transfer tax which currently benefits wealthy, high volume traders, bringing in at least $3 billion.
And of course we must also save by eliminating real waste. Getting rid of state contracts with private employers who perform work that can be completed in-house at less cost is one place to start.
The fate of TANF-ECF lies with decision makers Washington DC. But New Yorkers can apply its lessons. Next year, when our elected leaders convene in Albany to make difficult spending choices, we should join James and his peers in reminding them that the way to recovery is through high quality jobs programs and supports for struggling families.