President Trump’s Plan for Welfare May Require More Work

Analysts say that proposed federal work requirements could have some merit, but a greater need is addressing the bureaucratic disincentives to building wealth through work and marriage.

Workers who are employed at a fast-food restaurant part time and then add a job at a superstore, such as Walmart, may see a reduction in government benefits.
Workers who are employed at a fast-food restaurant part time and then add a job at a superstore, such as Walmart, may see a reduction in government benefits. (photo: 2018 photo, QualityHD / Shutterstock.com)

WASHINGTON — Work requirements for government-assistance programs form a key part of President Donald Trump’s March 11 budget proposal to Congress, with the White House arguing that tying food assistance, housing and medical insurance to work will lift able-bodied adults and their families out of poverty.

For the past year, the Trump administration has allowed U.S. states to impose work requirements for these non-cash government-assistance programs, through executive order. But the administration would need Congress’ approval to mandate work requirements across the board.

However, the proposal has drawn concern from both Catholics and pro-family social conservatives. They contend that the administration’s solution does not address the real ways in which government regulations place substantial burdens on poor families’ momentum to work their way out of poverty into the middle class. That threatens loss of benefits for working too much, saving too much and getting married.

The Trump administration has proposed to establish consistent work requirements for federally funded government assistance programs, such as food assistance (Supplemental Nutrition Assistance Program, or SNAP), Medicaid, cash allowances (Temporary Assistance to Needy Families, or TANF) and housing assistance that would require that “able-bodied, working-age individuals find employment, train for work, or do community service in order to receive welfare benefits.”

The administration proposes that these changes would coordinate several government agencies in the fight against poverty, improve the financial well-being of those on government assistance, and ensure the most vulnerable populations have access to these programs. The White House also argues that it can refocus TANF’s and SNAP’s ability to serve needy populations and spend less money for these programs. Approximately $21 billion would be cut from TANF and $220 billion over 10 years from SNAP.

But Catholic agencies that work to bring families out of poverty and into the middle class indicate the White House could substantially improve the ability of men and women to escape poverty and enter the middle class by focusing more on the “benefits cliff,” where low-income people start losing government-assistance programs before they achieve financial security that can replace their dependence on these programs.

Shannon Rosedale, opportunity assessment project coordinator for Catholic Charities Fort Worth, Texas, told the Register that work requirements do not hurt people, but how work requirements are managed or handled can have negative effects.

“We believe that work is important. And It’s not just us — our clients are continually telling us that,” she said. “They come in here because they want a job — it’s one of their biggest goals — because they want to be self-sufficient, earning money and successful. But they don’t always know how to, or have the opportunity to.”

Rosedale said their Catholic Charities uses a “case management” model in which they work closely with their clients to get them out of poverty. Their efforts have drawn bipartisan praise, with former House Speaker Paul Ryan making an on-site visit and praising the model’s success for empowering individuals.

 

Cliffs and Cracks

But Rosedale explained their clients face an enormous amount of government obstacles to get out of poverty, because they soon fall into a gap where they lose their benefits and have not reached an income level where they can be self-sufficient.

“People start earning more, and they instantly get a reduction in their benefits,” she said. A person who works at a fast-food restaurant part time and then gets a job as a Walmart cashier may make a dollar more per hour, but it ends up costing “hundreds of dollars a month in public benefits.”

Rosedale said people in poverty also get penalized for saving. If the government sees that more than $1,000 is in their bank accounts, they can lose their public assistance.

“And we mostly see people hitting this benefit cliff when they are not employed and get a minimum-wage job,” she said.

Rosedale said one client they helped became an X-ray technician, but she could not afford child care. However, child care was a benefit she could access with TANF, but only if she worked 10 hours or less a week. The client ended up losing her job trying to balance both requirements. Catholic Charities Fort Worth had to start over with her to find a new path to self-sufficiency.

The Trump administration’s budget proposal does have elements that could address indirectly some of these issues: It proposes six weeks of paid family leave for new mothers and fathers of newborns or adopted children, stimulating employers to invest in child care, and the elimination of zoning requirements that prevent businesses from establishing in-house child care for their employees.

Rosedale said it would be better to have a case manager determine when to dial back benefits because the client no longer needs them and is self-sufficient. Rosedale said her organization’s metric for self-sufficiency considers whether clients are earning a living wage (meaning a wage on which they can support themselves and their family without government assistance), are putting six months of income into savings, reducing net asset debt, and getting off government assistance.

Catholic Charities Fort Worth is currently advocating a bipartisan bill in the Texas Legislature to address the benefits cliff.

“We want people working alongside us to get rewarded for working, not penalized for it,” she said.

 

The Vision of Work

Matthew Weidinger, a fellow in poverty studies at the American Enterprise Institute, told the Register that work plays a vital role in getting people out of poverty.

“As a general matter, work requirements can be effective, and have been effective, in increasing the degree to which recipients are working,” he said, between when the requirement was not there and when it was put in place.

He referenced the White House’s Council of Economic Advisors (CEA) report from July 2018 that indicated people on government-assisted programs with work requirements worked more than those who lacked such requirements.

The council’s report argued in particular that the welfare reform of the 1990s “reduced dependence and increased work for single mothers with children, and they did so with little evidence of harm and some evidence of benefit to their children.”

Weidinger said the government, however, needs to be “judicious” in its approach.

Acknowledging that there is a problem with how government programs are handled, Weidinger said there is an argument to be made for simplifying the benefits process, rather than forcing the poor to interact with more than 80 federal agencies and fulfill their own requirements. But he indicated that the mindset needs to change so that government is not dictating which boxes people in poverty need to “fit,” but, rather, is giving back freedom to act to individuals, families and communities by asking them, “What do you think is the best way to help you?”

Lyman Stone, a research fellow at the Institute for Family Studies, told the Register that the government’s focus on work requirements is not taking into account the long-term consequences for family stability and its trajectory out of poverty.

Stone agreed that work requirements seem to work in the short term to get more people out of poverty. But Stone said there are other studies with some evidence that work requirements can worsen a child’s home environment, leading to more criminality, teenage pregnancy and other delinquent behaviors, because parents do not spend enough time at home with their children to devote the love and attention children need for their development.

The government’s strict enforcement policy, Stone explained, penalizes people in poverty who are doing the right thing for a child’s development, such as entering into marriage or at least living with the father or mother of their children.

“No person should lose any benefit for getting married,” he said.

Stone said the Trump administration’s budget proposal indicates there will be exceptions to able-bodied adults who are caregivers. But he questioned how that care-giving exception would be enforced, since most people on government assistance who do not work are involved in some form of care.

“Once you account for children, that’s 60% of poverty in America,” he said.

He suggested that most of the child-focused support programs be consolidated into a child allowance that is either universal or does not phase out until “the middle, or upper-middle income level.”

Stone said the American Family Act (AFA), authored by Sens. Michael Bennet, D-Colo., and Sherrod Brown, D-Ohio, proposes a number of ideas that start to move in this direction, such as allocating $90 billion annually for a $3,000-$3,600 child tax credit that is pre-fundable for low-income families and refundable for middle-income families on their tax returns.

The bill is co-sponsored by a majority of the Democratic caucus, but Stone said the AFA addresses not only poverty, but social-conservative priorities, to strengthen families and support them in the choice to have more children.

In his view, the bill largely avoids the perils of the benefits cliff by phasing out at a high income level, but needs other tweaks to address its flaws: For one thing, the phase-out threshold does not double for married households and could impact some higher-earning families as a marriage penalty.

Overall, Stone said, the bill offers a reasonable approach. “We want to have a society built on stable families,” he said.

 

Integral Development

The White House’s CEA report from July 2018 also cited a desire to restore the “American work ethic, the motivation that drives Americans to work longer hours each week and more weeks each year than any of our economic peers” as a reason for implementing work requirements, saying this ethic “is a long-standing contributor to America’s success.”

As the U.S. Conference of Catholic Bishops notes on its website, the Church emphasizes that the dignity of work is a central human need and a “form of continuing participation in God’s creation.” But Lucas Swanepoel, the social policy director for Catholic Charities USA, told the Register that the Church’s teaching holds that work is important as a means to other ends, such as living a wholesome life and raising a healthy family, and not an end in itself.

Swanepoel indicated that making work requirements uniform across individual agencies could reduce the discouraging “labyrinthine maze” of paperwork people in poverty are forced to undergo. He said adding work requirements poses serious risks if it leads to people losing government assistance because there are neither jobs nor job training programs available to certain parts of the country’s population.

“Most states do not have a robust education and jobs-training program,” Swanepoel said, noting that it would be ideal for the government and nonprofits to partner together to provide job-training programs that actually work, as the U.S. has “invested too little in vocational or jobs training.”

“We as Catholics believe in integral development,” he said, explaining that there are opportunities for government agencies to partner with charities and nonprofits to achieve entrepreneurial solutions to poverty, particularly in helping incarcerated persons learn skills, set up a business or enter a union, and create a work history that opens up other opportunities.

“The purpose of dignified work is to found and build your family,” he said. “Work gives you a sense of dignity and purpose and allows you to contribute to the common good.”

Peter Jesserer Smith is a Register staff writer.

This story has been updated.