Opinion | Mississippi welfare scandal reveals deep flaws in social safety net

Mississippi auditors found in 2020 that $94 million in federal welfare funds were subject to fraud, abuse or waste. An independent audit in 2021 confirmed most of these findings and set the figure at $77 million in misused welfare spending. Thanks to the tireless efforts of reporter Anna Wolfe and the nonprofit journalism outlet Mississippi Today, we know where the state funneled this cash. 

John Davis, the former director of the Mississippi Department of Human Services, pleaded guilty to two federal charges and 18 state counts of embezzling federal welfare funds. He distributed millions of dollars in welfare funds from the Temporary Assistance for Needy Families and The Emergency Food Assistance Program for his “personal use and benefit.”   

He was also indicted in the spring on state charges for misusing welfare money. According to Mississippi Today, prosecutors accused Davis of upping grants to Mississippi Community Education Center, a nonprofit run by Nancy New, in exchange for payments to a luxury rehab facility where his friend and retired professional wrestler Brett DiBiase received treatment in 2019. New kicked even more money back to her and Davis’ friends and family, including $400,000 to Davis’s nephew to create “coding academies” and $600,000 to his brother-in-law for a nonexistent job. New also pleaded guilty in April.  

The most well-known example of illicit TANF dealing is that of Pro Football Hall of Fame player Brett Favre, who solicited more than $5 million from former Mississippi Gov. Phil Bryant for a new volleyball court for the University of Southern Mississippi, where his daughter played volleyball.

Castigating those involved in the fraud as greedy criminals is easy, yet it misses the bigger picture. We must dive deeper into the issues surrounding TANF and question how the U.S. can ensure states spend welfare dollars appropriately.

The solutions to TANF flaws lie in its broad and outdated structure. To avoid future frauds and abuses of TANF funds, the federal government must evaluate the last two decades of failures in TANF implementation. Furthermore, it must update the program to reflect the needs of the American poor and erect stricter guidelines for state usage of these funds. 

TANF is a federal block grant that replaced the former welfare program, which provided cash assistance to families with children in poverty. Each state uses the funds from the block grant, which has remained at a fixed rate since its enactment in 1996, to operate their own poverty-assistance programs. These programs must serve one of the four broad goals of the original law, such as preventing pregnancies among unmarried people and promoting job preparation and work. 

As states determine how their programs meet these objectives, the allocation of TANF funds doesn’t always go to the “needy,” a term each state defines subjectively. This lack of a federal standard of “needy” can lead to states setting eligibility thresholds too low to exclude certain needy individuals in the name of keeping caseloads down. Each state can redirect millions of dollars to nonprofits that serve purposes tangential to TANF goals. States use TANF to fill budget holes, fund anti-abortion clinics and pay for private college scholarships. Or, in Mississippi’s case, funds can construct university volleyball courts — because that’s always been a proven anti-poverty mechanism. 

Nationwide, 20% of TANF funds go toward basic assistance for needy families, with the rest going to child care programs, work support and training activities and program management costs. However, this percentage of funding varies from state to state. 

During the fiscal year in 2020, Mississippi spent only 5% of TANF funds on basic assistance, which is often the most effective intervention for poverty reduction. In Pennsylvania, only 12% of TANF funds go toward basic assistance, still far below the national average. States determine how much monthly cash assistance qualified families get, which also varies tremendously. In 2020, a single parent with one child in Mississippi received $146 a month in assistance. Cost of living in Mississippi is admittedly less than most states, but even qualified TANF recipients in comparable states like Oklahoma and Alabama receive almost $100 more per month. 

Even if needy individuals qualify for TANF benefits, accessing TANF is no walk in the park. TANF eligible individuals often wrestle with onerous paperwork and requirements to get on and stay on the program. In most states, people with felony drug convictions — including marijauna convictions, even though the drug may be legal in other states — can’t access TANF benefits. If applicants qualify for TANF, they also risk losing any child support from a noncustodial parent. And finally, TANF applicants must deal with the stigma of asking for and receiving TANF. These barriers to accessing much needed assistance have contributed to declining TANF caseloads nationally. This isn’t necessarily a good thing. 

For starters, the number of families with children in poverty has remained high despite decreasing caseloads. TANF incentivizes states to keep case numbers down through caseload reduction credits and punishes states that do not meet federal work participation rates. As a result, states are incentivized to create harsh rules on who gets TANF assistance. Unallocated TANF funds accumulate in state coffers each year due to the disincentivization of providing help to the poor. Today, less people in poverty receive TANF benefits than they did when the government enacted the law. This is especially stark in Mississippi, where poverty afflicts a fifth of the state. 

In 1996, the welfare program in Mississippi served more than 30,000 adults. In 2020, it served 208. Racial minorities suffer the most from diminishing TANF caseloads due to systemic racial inequalities in the welfare system and because many poor African Americans live in states like Mississippi that sit on millions of unused welfare funds each year. There aren’t significantly fewer poor people. There are just significantly fewer people getting the help they need.

Fixing the flaws in TANF is necessary to repair the safety net eroded by decades of an overly broad policy with limited oversight. The federal government can start with narrowing the focus of the TANF block grant to target anti-poverty solutions. It can set minimum standards for the percent of TANF funds — say 25% — dedicated toward cash assistance so the most vulnerable populations can receive income support directly. No longer would states like Mississippi spend only 5% of yearly TANF dollars on basic assistance, helping to ensure that funds are not abused. 

The federal government should define work requirements and time limits for benefits. State entities should work toward making TANF assistance more accessible to the impoverished. Beyond that, the federal government must hold states accountable to using TANF as intended. It must heavily scrutinize funds sent to nonprofits and contracting agencies to avoid a massive fraud of Mississippian proportions. The government must cease to incentivize states to keep caseloads down. This simply does not eradicate poverty or the need for welfare — it only masks it. 

The Mississippi welfare scandal reveals harsh yet important realities about our welfare system. Thankfully, auditors and journalists uncovered the abuses of the rich at the expense of the poor. 

Imagine how much good that $77 million could have done for the poor in Mississippi. Imagine how many people TANF could help if funds went directly to those in need — either in the form of cash assistance, work supports or child care services that impact their daily lives. Imagine the good our state can do, as Pennsylvania sits on nearly $500 million in unspent TANF block grant funds. With targeted reforms and federal oversight of the TANF program, these changes can happen. Until then, states will languish on millions of unused welfare dollars just like the “welfare queens” for which they’ve long feared. 

Grant Van Robays writes primarily about international affairs, social issues and basic human rights. Write to him at grv11@pitt.edu.