As Congress considers the debt ceiling deal negotiated by President Joe Biden and House Speaker Kevin McCarthy, here’s what you need to know about the work requirements in it.

Temporary Assistance for Needy Families

The Temporary Assistance for Needy Families (TANF) provisions are harmful and counterproductive. They actually weaken the existing work requirements, overturn the design of the original reform bill, and move the entire TANF program in a liberal direction. 

The key to strengthening work requirements in TANF is to greatly reduce the number of work-capable recipients who receive cash aid, but are idle and not currently required to work or engage in mandatory job search, job preparation, or training that spur work. But the bill does not significantly reduce the number of idle, work-free recipients; therefore, it will not seriously reduce caseloads or dependence. It will not increase employment or shrink child poverty.

The original premise of the TANF program was that imposing work requirements on cash welfare would substantially reduce the utility of being on welfare. In consequence, the number of individuals who wished to enroll in welfare and the length of time spent on welfare would shrink dramatically. Caseloads would fall, employment would surge, and child poverty would plummet. 

That model of reform was dramatically successful. Caseloads and child poverty plummeted while employment surged.

The original model of reform also greatly strengthened marriage.  Pre-reform welfare served as a competitor or alternative to fathers in the home.  But reducing the ultility of welfare encouraged single mothers to rely more on fathers and marriage. Following the reform model, welfare reform and the TANF halted the rapid decline in married two-parent families, slashed non-marital teen pregnancies and births, and resulted In roughly 10 million fewer abortions.  

The TANF provisions of the Biden-McCarthy deal, particularly Sections 302 (pilot programs) and 304 (work outcomes) jettison the core principles that led to the success of the original TANF legislation. These new provisions would redesign TANF into an extremely expensive job-training program for single parents. 

Under the new design, enrollments would be increased and recipients would be given training to increase future wages. This is an old, liberal approach, which has a 50-year track record of failure. This approach will actually increase dependence and undermine family structure. It is the antithesis of the original reform.  

The text that is intended to end the “small-checks scheme,” Section 303, appears to contain a drafting error that would make the problem worse, by explicitly allowing receipt of any TANF-funded benefits whatsoever or at least $35 of state funds to qualify that family to count toward the work-participation rate.

That actually significantly weakens the TANF work requirement, rather than tightening the requirement, so that a family must receive at least $35 of TANF funds to be counted each month, as intended.

Section 301, which updates the base year for the calculation of the caseload-reduction credit to 2015 is a minor improvement over current law (2005), but not as good as the Limit, Save, Grow Act (2022), as there was a caseload reduction of approximately 400,000 between 2015 and 2022. (Section 301).

Supplemental Nutrition Assistance Program

The Supplemental Nutrition Assistance Program provisions in the Fiscal Responsibility Act are nothing major, but are somewhat better than those in the House-passed Limit, Save, Grow Act.

The lowering of the state-level discretionary exemption rate in Section 312 from 12% to 8% of the caseload is a positive development (and the limiting of banking to one year’s worth of exemptions was already an improvement over current law).

The temporary increase to 55 for the age limit on work requirements for able-bodied adults without dependents and the exclusion of the homeless, veterans, and foster children in Section 311 are acceptable, although it would be better to make the new age limit permanent.

The new reporting requirement for the information related to state applications for geographic-area waivers in Section 314 is a minor improvement, but may provide additional information that is helpful for arguing against those waivers in the future.

Medicaid

The removal of the work requirements for able-bodied adults in Medicaid that were in the Limit, Save, Grow Act is a missed opportunity and disappointing.

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