The return of welfare reform

Sitting between Republicans and tax reform is a brewing debate over a second push for welfare reform.

Congressional conservatives see an opportunity to push for more than $200 billion in cuts to welfare programs, including Temporary Assistance for Needy Families (TANF) and food stamps (SNAP), that serve as a safety net for the nation’s most vulnerable population — on top of cuts already being pursued in the health care bill.

This group of conservatives, the House Freedom Caucus, recently emboldened by extracting key concessions from Trump in order to pass his health care bill through the House last month, is feeling the strength of its leverage over the party — it knows that without its members’ votes, the budget resolution is doomed, and with it, for the next year at least, any hope of passing tax reform through the Senate on a strictly party-line vote.

Looking for ways to pay for a budget that that will undoubtedly see dramatic increases in defense spending and would lead to tax cuts, they are proposing welfare reforms that could result in hundreds of billions in cuts to food stamps, Medicaid, and other safety net programs.

“There is a sizable population that would, based on this scenario, likely be destitute,” James Ziliak, University of Kentucky’s Center for Poverty Research director, said. “Arguably they already are.”

Republican leadership is open to giving in to at least some of the Freedom Caucus’s demands — just not to the extent they are calling for. But it may be the only way to get a budget resolution passed to move on to bigger legislative priorities. If the Freedom Caucus holds firm, GOP leaders might have no choice.

What the Freedom Caucus wants to do

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The Freedom Caucus is adamant about framing these cuts as “savings,” drawn from pushing more people into the workforce.

Rep. Jim Jordan (R-OH) has proposed reforms to TANF and SNAP that could cut upward of $214 billion, according to estimations by the conservative group Heritage Foundation, by harshening eligibility requirements to receive food aid and temporary assistance, adding additional layers of work requirements, and increasing the burden on impoverished families. The Heritage Foundation has also thrown its support behind Rep. Garret Graves’s (R-LA) bill, which would also expand work requirements.

Their demands would reduce government aid for the poorest Americans, in order to help fund tax cuts that are projected to primarily benefit the very rich. If this proposal goes through, fewer people would receive benefits, and not necessarily because they don’t need them.

Jordan’s office pushes back against the idea that these work requirements would cause hardship for the poor. "If an individual leaves the SNAP program without getting a job, then they must either have not needed the benefits in the first place or have found another way of obtaining the benefits they need,” said Darin Miller, Jordan’s spokesperson, explaining the Congress member’s position. “Either way, we are saving money without hurting anyone."

Experts refute this. Ask Peter Germanis, a Reagan-era White House adviser who has been involved with conservative groups like the Heritage Foundation and the American Enterprise Institute, has been extremely critical of the proposal.

“The bill would create a byzantine structure for TANF and SNAP work requirements that few states could actually implement,” Germanis wrote in a working paper. “Its provisions are so unreasonable and harsh that if actually enacted, it would likely destroy the safety net for needy families with children.”

Food stamp recipients are mostly children and elderly or disabled people. The number of able-bodied adults without dependents is slim, and not nearly enough to make up the numbers in savings that the projections for this proposal indicate. Waste and fraud in the program is also relatively inconsequential.

The Freedom Caucus knows the projected savings in Jordan’s bill are politically impossible for the budget resolution, but they have some leverage to get assurances on some of these reforms: By withholding their votes for the budget resolution, they effectively derail Republican plans to move on to tax reform — for which the budget is a prerequisite. So far, unable to reach a deal, the Budget Committee has already relinquished its wish to mark up a resolution before the July 4 recess. Republican leadership has begun to soften to their demands, but haven’t given in — instead, they say they will resume negotiations after the break.

The tight schedule only raises the stakes. Representatives will likely have to deal with the debt ceiling, possibly reconsider a Senate health care bill, and start talks on spending when the get back. Already Budget Committee Chair Rep. Diane Black (R-TN) has increased her “savings” level offer from $150 billion to $200 billion — which still wasn’t enough.

These safety net programs are the last resort for millions of Americans

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Republicans have long demanded reforms to the American welfare system, decrying bloated federal handout programs that they claim disincentivize Americans from working. They argue that additional work requirements would encourage more people to get out of the cycle of poverty.

There is strong evidence that SNAP reduces food insecurity and improves health outcomes, especially among children, who make up the majority of SNAP beneficiaries. But the evidence from randomized studies of work requirements shows that they have little or no effect on poverty — and leave many people who aren't induced to work without a safety net.

“It’s a false narrative,” Ziliak said of the proposal. “The evidence shows that the program actually works. Not all programs work. But SNAP actually is one of those that does what it is supposed to be doing.”

As is, SNAP and TANF, which provide services like child care or income assistance, already have work requirements for able-bodied adults without dependents. They are often waived when the economy is doing poorly and reinstated when the job market is more stable. Jordan’s bill would make these eligibility requirements harsher, tightening the window individuals have to find a job from three months to one month, increasing the number of hours they have to work per month from 80 hours to 100, and extending the requirements to able-bodied adults with dependents.

Miller pointed to states like Alabama that have recently reinstated work requirements and seen dramatic declines in the number of people on the federal food stamp roll. That’s not an indication of much, other than that the federal government is spending less: Unemployment has gone down nationally, and being off the roll doesn’t necessarily mean people found work. The bill does offer volunteering and educational options that have been lauded as more effective ways to pull people out of poverty, and multiple reports have suggested it would redirect half a billion dollars to such programs, vastly underestimating how much those services typically cost (upward of $10 billion).

“If you want to reduce people from the roll, [Jordan’s bill] is a good way to do it,” Luke Shaefer, a poverty expert at the University of Michigan, said. “If you want to increase hardship, especially for people with kids, this is a good way to do it. But if you want to increase work, I’m not sure.”

This is a vision of welfare reform that’s drawing from an already underfunded program

Those in support of these kinds of conservative welfare reforms — layering on harsher work requirements — often paint a rosy picture of President Bill Clinton’s 1996 reforms to TANF. Those reforms added work requirements to TANF and fundamentally adjusted how the program’s funding worked, giving money to states in a lump sum and allowing the states to allocate their funding as they saw need. In the early years, Clinton’s TANF reforms were extremely popular.

“The purpose of welfare is to catch individuals when they need a safety net and then help those folks break out of their current situation to lead more self-sufficient lives. The 1996 welfare reform plan proved that work is a valuable tool to helping achieve that,” a conservative congressional aide said in defense of Jordan’s bill.

This is just an extension of Clinton’s entitlement reform, Jordan told me. He cited 2006 testimony from Ron Haskins, a senior fellow at the Brookings Institution and former welfare policy adviser to President George H.W. Bush. “If the 1996 reforms had their intended effect of reducing welfare dependency, a leading indicator of success would be a declining welfare caseload. Between 1994 and 2005, the caseload declined about 60 percent,” Haskins said then.

But over the past decade, poverty experts have reached consensus that TANF no longer works, because states stopped using the money for the safety net programs. “TANF is not an effective program,” Ziliak said — it’s served fewer and fewer families over the years.

Ask Haskins today, and he has changed his tune: “States did not uphold their end of the bargain. So why do something like this again?”

“It doesn’t make sense to talk about expanding the work requirement,” Haskins tells me. It would only complicate the eligibility standards, he said. “The best reform is to require block grants only be able to used for work support programs for low-income families ... [and] coordinate the work requirements across process.”

The conservative vision doesn’t do either of those things.

This is to pay for tax reform and defense spending

There are two ways to look at the conservative pitch on welfare reform. One is as a longstanding concern about a bloated SNAP program, with a growing number of American families dependent on government aid. The other way to look at it is that Republicans really want tax cuts and defense spending, and cuts to social welfare programs are an offset.

Jordan insists it’s the former. “This is about helping people that have been stuck in some of our social welfare programs helping them get to a better life. This is something the vast majority of the American people think is good common sense. If people are getting help from the American taxpayers, there should be a work component.”

This is the “commonsense” case conservatives make to the American public. But House Republicans aren’t shy about the bigger role welfare reform plays in the Republican agenda: It’s paying for tax cuts and what are shaping up to be massive hikes in defense spending.

It’s hard to avoid this point, as the Freedom Caucus is literally proposing to tie welfare reform to tax reform. Jordan himself has hinted at it, calling it “reverse-engineering”: whatever you can “save” from cutting these programs can be reallocated to other party priorities. Ideally, he doesn’t want to stop at SNAP and TANF.

“There are tons of different means-tested welfare entitlement programs that we can work at achieving savings in. Obviously Medicaid work requirements — expanding what’s already in the health care bill. There’s real money there,” Jordan told Vox in mid-June, in a revealing moment about how conservatives are approaching poverty-related policy. And this is one of the only ways conservatives will sign on to the budget resolution.

“Maybe we as the Freedom Caucus can live with a higher budget number if in fact we do real welfare reform on the tax bill — work requirements, time limits on able-bodied adults [are] part of that package,” Jordan said.

But poverty experts cast doubts about this approach to welfare reform. “There is no policy improvement that gets you to those numbers [in savings],” said Stacy Dean, vice president for food assistance policy with the Center on Budget and Policy Priorities. “The trade-off is a very serious concern — targeting TANF and SNAP for budget-cutting exercises instead of having a serious discussion of tackling some of the issues.”

Some conservatives acknowledge these aren’t great optics. Trump made a campaign promise that Social Security and Medicare would be left untouched, and the result has been sweeping cuts to safety net programs that Rep. Mark Sanford (R-SC) pointed out could perpetuate some suspicions about the Republican Party:

“The idea of saying that we are only going to address entitlement reform when it comes to poor people is not exactly what most economists think about when they think about entitlement reform,” Sanford, who is a member of the Freedom Caucus, told Vox. “It cannot be reduced to power politics and constituency politics of oh, you didn’t vote for me, now you are going to pay the price. The numbers aren’t big enough, and it probably perpetuates the suspicions that some have about the Republican Party of are you for or against poor people.”

As it stands, the House still has a long way to go to reach an agreement. So far, proposals from the Budget Committee don’t give assurances that SNAP and TANF would be reformed. It all comes down to how hard a line Freedom Caucus members will take on the numbers.

“It’s clearly something that matters to the caucus,” Sanford said. “The big question is are you going to jeopardize tax reform for it.”

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