Analysis & Comment

Opinion | The Welfare Debate Stalling the Debt Talks

To hear House Speaker Kevin McCarthy talk, Republicans are doing poor people a favor by seeking to impose or expand work requirements for recipients of social welfare programs. He and others argue that recipients who are pushed out of their comfort zones will get jobs and put themselves on the road to the middle class. “Assistance programs are supposed to be temporary, not permanent,” he said in a speech at the New York Stock Exchange in April. “A hand up, not a handout. A bridge to independence, not a barrier.”

Opponents of tough work requirements see things differently, of course. To them, the conditions are just a cruel way to reduce spending that will cut off deserving aid recipients without meaningfully increasing employment.

(As reported by The Times, House Republicans passed a bill in April that would toughen work requirements on able-bodied adults without dependents who receive food benefits. They would be subject to the work requirements until age 55, up from 49 currently. Medicaid recipients ages 19 to 55 who are able-bodied and don’t have dependents would have to work, do community service or participate in training for at least 80 hours per month. Work requirements for Temporary Assistance for Needy Families would also increase.)

The rhetoric for and against the Republican proposal is predictable. What are the facts? There’s been a lot of academic research on the effects of work requirements. My conclusion from reading some of it is that in certain cases, work requirements have increased employment, as congressional Republicans hope. But the cost is high. Among the victims are people who can’t manage the paperwork to stay on the rolls and people who have to put in so many hours to qualify that the benefits per hour wind up being well below the minimum wage.

It’s impossible to survey all of the vast literature here, so I’ll zoom in on one mini-debate. It’s between Angela Rachidi and Matt Weidinger, senior fellows at the center-right American Enterprise Institute who favor stronger work requirements, and Peter Germanis, a self-described conservative who worked for Presidents Ronald Reagan and George H.W. Bush as well as the A.E.I. and the Heritage Foundation but breaks from Republican orthodoxy in questioning stronger work requirements for aid recipients.

Last month the American Enterprise Institute posted an article by Rachidi and Weidinger that read, “Research has shown that work requirements can increase employment levels, which benefits individuals and families.”

The scholars led with two studies to support their position, both by reputable organizations. One, from 2001, was by M.D.R.C., a social policy research organization, which summarized the long-term effects of 11 mandatory welfare-to-work programs on welfare recipients and their children and found that “nearly all programs helped single parents work during more quarters of the follow-up and earn more than they would have in the absence of a program.” It added, “Moreover, all programs decreased welfare receipt and expenditures over the five years.”

Rachidi and Weidinger also cited a 2023 working paper from the nonpartisan Congressional Budget Office by the analyst Justin Falk that looked at the effects of changes in work requirements in Alabama for recipients of Temporary Assistance for Needy Families. The paper found that extending the work requirement to parents of 6-to-11-month-olds — instead of just children 1 year or older — “leads to an increase of 11 percentage points in their employment rate during the months they are in TANF.”

That seems like strong support for McCarthy’s position. But Germanis — who goes by Peter the Citizen on his website — concluded otherwise. He works as a national expert for the Administration for Children and Families, a unit of the Department of Health and Human Services, but doesn’t represent the agency in the papers posted on his website.

In a response to Rachidi and Weidinger posted on his website, Germanis said the programs evaluated in the M.D.R.C. study began before 1996, when TANF began, so the experience with them can’t be directly applied to today. Moreover, he wrote, “the results suggested small to modest impacts on employment that faded out over time and showed little impact on ‘measured income’ and poverty status.” As for the C.B.O. study, he said the results of that particular tweak in Alabama can’t be generalized. He noted that since 1996, the year President Bill Clinton signed the welfare-to-work law, caseloads nationally fell 80 percent but employment did not rise correspondingly.

“If TANF were successful in promoting employment, one would expect the number of families eligible to receive benefits (the takeup rate) to decline in tandem with the caseload itself. That’s not what happened,” Germanis wrote.

Rachidi and Weidinger wrote that the positive impact of work requirements in TANF “suggests that the same positive effects could result from taking a similar approach in SNAP and Medicaid.” (SNAP is the Supplemental Nutrition Assistance Program, also known as food stamps.) Germanis replied that “it is irresponsible to generalize from one program to other programs with different funding and programmatic structures, target populations and that differ with respect to the details of work requirements themselves.”

I asked Rachidi for her response to Germanis. In a phone interview, she cited her credentials. She said that her doctoral dissertation was on TANF and that she worked from 2007 to 2015 as the deputy commissioner for policy research and evaluation in the New York City Department of Social Services. She said it’s indisputable that the work requirements of TANF increased employment.

That’s true, but the question is how much and at what cost. Whether work requirements for SNAP and Medicaid would also increase employment is “an open question,” she acknowledged. Then there’s the harm to deserving people who are thrown off the rolls because they failed to jump through the right bureaucratic hoops. A study in Arkansas found that more than 95 percent of beneficiaries who were subject to a new state work requirement in 2018 “already met the state’s Medicaid work requirements or should have been eligible for an exemption,” and that barriers to reporting — not the requirements themselves — were the main cause of coverage losses.

“There are certainly people who fall through the cracks,” Rachidi said. She said her agency worked hard to make sure that didn’t happen with TANF. “Other states, to the extent they’re not doing that, could do that. I put it on the states.”

In a follow-up email, Rachidi wrote: “The interesting question in my mind is why are so many prime-age able-bodied adults not working when jobs are plentiful. What are they doing when not working and how is SNAP holding them back?” She also wrote: “In the past benefit recipients responded to work requirements in the way economic theory suggests they would. It is even more likely that able-bodied prime-age adults without children would respond to employment incentives and disincentives in a similar way.” She added, “We can poke holes in every one of Peter’s arguments.”

The Republican argument that able-bodied people should work if they can is reasonable and certainly politically popular. But when you get down to individual cases, the picture is murkier. It turns out that the vast majority of those people already are working or seeking a job or have a legitimate reason they can’t. (Depending, of course, on one’s idea of what’s legitimate.) Tightening the requirements further and extending them to other programs would in many cases be more punitive than motivating.

Outlook: Benjamin Engen and Michael Englund

Sales of new homes probably declined around 4.8 percent in April from their March pace to a seasonally adjusted annual rate of 650,000, the economists Ben Engen and Michael Englund of Action Economics in Boulder, Colo., estimated recently. Sales are down from early 2022 because of “the steep mortgage rate climb and recession fears,” they wrote on their website. In a follow-up email, Englund wrote that builders’ profit margins are still good because their price cuts are tracking declines in their costs for labor, materials and buildable land.

The Census Bureau will release the official data on Tuesday.

Quote of the Day

“Whit Meynell was a sociologist; he had got into an intellectual muddle early on in life and never managed to get out.”

Iris Murdoch, “The Philosopher’s Pupil” (1983)

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