Improve Transparency and Stability for Families and Children Act

This bill sets clear deadlines for how states use federal TANF funds (cash aid and related services for low‑income families) and lets states build a “rainy day” cushion. States must commit the money by the end of the next fiscal year and actually spend it by the end of the second year after they get it, so funds don’t sit unused. It also allows states to set aside a limited portion for future needs, with guardrails to prevent large stockpiles. These changes aim to make help more timely in normal years while keeping some savings for tough times.

Key points:

• Who is affected: State TANF programs and the low‑income families they serve.
• What changes: States must obligate funds by the next year and spend them by the second year; they may reserve up to 15% of current funds, but total reserves can’t be more than half of last year’s grant; states must notify the federal government if they plan to reserve funds.
• When: Takes effect October 1, 2026.