TANF State Expenditure Integrity Act of 2025
- Sponsor
- Rep. Davis, Danny K. [D-IL-7]
- Committees
- Ways and Means Committee (primary)
- Last action
- Mar 14, 2025
Bottom line
This bill aims to enhance federal oversight and accountability of Temporary Assistance for Needy Families (TANF) funds by creating a dedicated integrity unit and imposing financial penalties on states for intentional misuse by subrecipients, redirecting those funds to direct aid for low-income families.
What it actually does
This bill amends the Social Security Act to establish a TANF Program Integrity Unit within the Administration for Children & Families, tasked with developing a framework to monitor subrecipient use of TANF funds to identify intentional misuse. It appropriates an additional $10 million annually to fund this unit and imposes an enhanced penalty on states for intentional misuse, requiring them to expend an equivalent amount on direct cash assistance to families with incomes below 100% of the poverty line.
Proponents argue
Proponents argue that this bill is crucial for safeguarding taxpayer money and ensuring that TANF funds reach their intended beneficiaries: families in need. They emphasize that the creation of a dedicated integrity unit and enhanced penalties will deter fraud and misuse, improving the effectiveness and public trust in the TANF program, especially in light of past instances of alleged misuse by subrecipients.
Opponents contend
Opponents might argue that existing audit mechanisms, such as single State audits, are sufficient, and that creating a new federal unit adds unnecessary bureaucracy and cost. They may also contend that the additional penalty on states could disproportionately burden states already struggling to meet the needs of their low-income populations, potentially diverting funds from other critical services if misuse occurs.
The bill is very short and uses clear language, allowing for quick comprehension by any informed reader.
Section 2(a), amending Section 417(b)(1) and (2) of the Social Security Act
Creation of TANF Program Integrity Unit and Subrecipient Monitoring Framework
This provision directs the Secretary of Health and Human Services to establish a TANF Program Integrity Unit within the Administration for Children & Families. This unit will develop a framework to monitor how subrecipients use TANF funds, specifically to identify intentional misuse, complementing existing single State audits. The Secretary may also set State plan requirements and reporting mandates to support this monitoring effort, enhancing federal oversight of subrecipient expenditures.
Supporters argue
Supporters argue this unit is essential to proactively prevent and detect fraud and misuse of TANF funds by subrecipients, ensuring accountability and protecting vulnerable populations by ensuring funds reach their intended purpose.
Critics contend
Critics might argue that this creates another layer of bureaucracy, potentially duplicating efforts of existing audit structures, and could lead to overreach in state program administration, hindering state flexibility.
Tradeoffs
This provision balances the need for robust federal oversight and accountability in the use of public funds against potential administrative burdens on states and the federal government.
Section 2(a), amending Section 417(b)(2)(B) of the Social Security Act
Dedicated Appropriation for Program Integrity Unit
This provision increases the annual appropriation for the TANF program by $10,000,000. This additional funding is specifically earmarked for the staffing and operations of the newly created TANF Program Integrity Unit and its related functions. This ensures the unit has dedicated resources to fulfill its mandate without diverting funds from other existing TANF programs.
Section 2(b), amending Section 409(a)(1)(B) of the Social Security Act
Additional State Expenditure Requirement for Intentional Misuse
This provision introduces an additional remedy when the Secretary finds intentional misuse of subrecipient TANF funds. In addition to any existing penalties, the state involved will be required to expend an amount equal to the misused funds on direct cash assistance to families with incomes below 100% of the poverty line. This aims to ensure that misused funds are ultimately redirected to vulnerable populations.
Section 2(c) and (d)
Implementation Timeline for New Provisions
This provision sets a deadline of two years after enactment for the Secretary of Health and Human Services to publish a notice of rulemaking to implement the bill's amendments. It also specifies that the amendments will take effect on the later of the first day of the fifth calendar quarter after enactment or the first day of the first federal fiscal year that begins after such date of enactment. This provides a clear schedule for the transition to the new oversight regime.
Clarifies that the new subrecipient monitoring framework does not limit the Secretary's existing authority to conduct single State audits under chapter 75 of title 31, United States Code.
Section 2(a), amending Section 417(b)(1)(B)
Why it matters:This is standard legislative practice to ensure that new authorities do not inadvertently nullify or supersede existing ones, maintaining the full scope of federal oversight.
Case for: Ensures comprehensive oversight by maintaining existing audit powers while adding targeted subrecipient monitoring, thereby strengthening the overall integrity framework.
Case against: No direct case against, as it preserves existing law and prevents unintended legal consequences.
Estimated impact: Ensures continuity of existing federal audit powers over state expenditures, complementing the new monitoring efforts rather than replacing them.
Defines 'poverty line' for the purpose of directing additional cash assistance as 'the poverty line (as defined in section 673(2) of the Omnibus Budget Reconciliation Act of 1981, including any revision required by such section, applicable to a family of the size involved)'.
Section 2(b), amending Section 409(a)(1)(B)(ii)(II)
Why it matters:This is standard legislative practice to avoid reprinting lengthy definitions and to ensure consistency with existing federal definitions and established poverty thresholds.
Case for: Ensures a consistent and established definition of poverty is used for targeting assistance, preventing arbitrary or inconsistent application across states or programs.
Case against: No direct case against, as it relies on a widely accepted and established federal definition.
Estimated impact: Ensures that any additional cash assistance resulting from penalties is directed to families meeting a federally recognized standard of poverty, promoting equitable distribution.