The welfare initiative signed into law in August 1996 replaces Aid to Families with Dependent Children (AFDC) with Temporary Assistance to Needy Families (TANF). The federal responsibility to match state expenditures on cash assistance to low-income families with children has become a fixed block grant to states with requirements that focus on a new emphasis on work rather than dependency. This brief depicts the diversity of state AFDC programs before passage of the new legislation as a guide to assessing the potential impact of TANF for different states. The higher the historic spending level of a state, the more generous TANF benefits will be and the more leeway the state will have. States that have already used waivers to make progress in replacing welfare with work will have less trouble meeting TANF's time limits and work requirements in the short term. States that have a relatively large share of child-only cases will find it easier to meet work participation requirements because these cases are excluded from work target calculations. The most important message of this review is that states with low current benefit levels will have the hardest time responding to the new legislation. In the initial implementation, states that have moved the farthest forward with replacing welfare with work will find reaching targets easier. Later, however, their early success will leave them with larger shares of hard-to-employ adults, making it harder to reach the TANF work participation requirements. (Contains one chart and three tables.) (SLD)