This bill limits how much states can spend on administrative costs for the Temporary Assistance for Needy Families (TANF) program, which provides cash assistance to low-income families. The legislation reduces the allowable percentage of TANF funding that states can use for administrative expenses from 15 percent to 10 percent, while clarifying that case management services to help individuals develop work plans remain eligible. States that fail to comply with this new spending limit will face a penalty of up to 5 percent reduction in their federal TANF grants the following year. The changes take effect on October 1, 2026, giving states time to adjust their budgets. The bill aims to redirect more federal dollars away from bureaucracy and directly toward families receiving assistance.
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