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Millions of Dollars Designated for Poor Families Are Trapped in Washington D.C.

A relatively unknown section of the February 2009 Stimulus Package contains a $5 billion Emergency Fund for poor families. The fund allows states to receive millions of dollars to help their poor families during the economic recession. However, the funds will not necessarily be distributed to needy families across the U.S. unless certain requirements are met by each state.

What requirements? They basically include increased expenditures from the same quarter in 2007-2008 on eligible TANF programs like subsidized employment, rent and utility assistance, or back-to-school money for poor families. Since states are struggling to balance budgets, many cannot increase their spending to draw down federal stimulus funds. But the law gives the state an alternative for accessing the money. Third party private donors can give to the poor on behalf of the state. In essence, if a state spends $10 million to help poor families, 20% can be covered by private donations and 80% will be reimbursed by the federal government. So why does it look like millions and maybe even billions of dollars will never leave washington before the program fund expires on September 30, 2010?

Tags: Public Policy

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