Apr 16

Apr 16 Trump Administration Probes Welfare Reform By Nicky Riordan

President Trump signed a new executive order last week instructing the departments of Treasury, Agriculture, Commerce, Labor, Health and Human Services, Housing and Urban Development, Transportation, and Education to examine and recommend changes to key safety net programs in an effort to overhaul welfare.

This no surprise on the heels of tax cuts and a spending bill that are estimated to bring the budget deficit to $804 billion in 2018 and just under $1 trillion next year. Republicans have signaled a desire to cut spending on welfare programs during President Trump’s first term.

Contrary to GOP claims that tax cuts would pay for themselves, a new report by the non-partisan Congressional Budget Office estimates that tax cuts will only add 0.7 percent to national economic output over the next decade. This will only partially offset the cost of the cuts, necessitating additional cuts to the federal budget through discretionary spending.

Adding work requirements to Medicaid have already been floated. The desire for additional reforms among Republican lawmakers has been a goal for many years.

The order lays out specific “Principles of Economic Mobility” that each department should use as a guide when recommending reforms. Some of the more promising language includes “addressing the challenges of populations that may particularly struggle to find and maintain employment” and “reducing the size of bureaucracy and streamlining services to promote the effective use of resources.”

At the same time, the order also calls on agencies to look into outdated ideas about work requirements and “state flexibility” that have proven disastrous in the past.

Although the administration is asking for innovation to improve outcomes, it appears to also be signaling they favor changes that will cut spending without necessarily improving outcomes as a main priority.

This became clear in the administration’s defense of the order, citing successes from the Temporary Assistance for Needy Families (TANF) overhaul in the 1990’s. State flexibility afforded by TANF reforms resulted in less federal money going to the programs it was intended for and more families going without the assistance they needed to become self-sufficient. Following the Great Recession, the number of families living in poverty rose above record levels in 2013, while TANF levels dropped below pre-recession levels.

The executive order also places great emphasis on the enforcement of work requirements, which tends to be a misleading signal of welfare abuse. Most people who can work on these programs do. For example, the Supplemental Nutrition Assistance Program (SNAP) has in place a requirement that non-disabled adults without children must find work or be enrolled in a training program within three months or risk losing their benefits.

According to the Center on Budget and Policy Priorities, “among SNAP households with at least one working-age, non-disabled adult, more than half work while receiving SNAP, and more than 80 percent work in the year before or after receiving SNAP.” Moreover, two-thirds of SNAP recipients are not expected to work because they are children, elderly, or disabled.

Some Republican representatives are suggesting this requirement be lowered to one month. Stricter enforcement of existing policies will not save the government much money at all.

If the Trump administration want to improve social safety net programs and economic outcomes for all Americans, greater emphasis on the streamlining of existing programs, and the strengthening of benefits for means-tested programs, would be a good place to start.

For instance, SNAP benefit calculations fall far behind inflation and market rates and there is proposed legislation to address that. Confusing applications and inefficient processes prevent families from getting help when they need it most. Disjointed self-sufficiency programs often waste time and money by not serving individuals in a collaborative way that provides sufficient support to get on your feet and comfortable again.

California recently proposed efforts to ensure that those leaving prison were already enrolled in SNAP and Medicaid upon release, so they could focus on finding work and becoming self-sufficient, instead of struggling to survive and falling further behind. These are the types of reforms needed to improve the social safety net, and constitute a much more efficient use of taxpayer dollars to address the issues low-income Americans are facing.

The agencies named in the order have 90 days to examine their policies and implementation efforts before submitting reform recommendations to the Trump Administration. Their responses over the next few months will provide insights about how what direction they intend to take welfare policy reform.

Nicky Riordan (@nriordan120), Political Analyst, Utica College Center of Public Affairs and Election Research