As Congress and the Trump administration turn their attention toward entitlement reform, they should focus on innovation and incentives. The last time there was meaningful reform was in 1996 when Congress passed the bipartisan Personal Responsibility and Work Opportunity Reconciliation Act (PWORA). But nearly 21 years later, the national poverty rate is about the same, yet spending on these programs has surpassed a trillion dollars. It is time to take a fresh look at what we have learned to determine the best path forward.
During my time working for Tennessee’s Department of Human Services, I found that there are more than 80 different federal programs comprised of either direct benefits or services for low-income individuals. Each program has its own set of rules and regulations for eligibility and requirements. As the programs have been updated throughout the years, new regulations have been slapped on to existing programs, resulting in a hodgepodge of policies. This complex and often conflicting web of services doesn’t work for anyone. It doesn’t work for the states trying to administer the programs, it doesn’t work for the taxpayers who fund them, and it doesn’t work for the individuals needing these services.
We know that poverty has often impacted multiple generations, and in order to create a new cycle of success, we need to focus on the whole family through a two-generation approach. Tennessee and a few other states have already started looking at their programs in this way, but there is only so much state leaders can do since many of the regulations are federal.
In order to overhaul the system, we need to change the way we approach welfare programs with four guiding principles:
1. Work should always be incentivized.
2. Education should always count towards satisfying requirements.
3. Benefits should be tailored to fit the individual’s or family’s needs rather than one-size-fits-all.
4. Outcomes should be measured, and states should be incentivized to reach benchmarks and create innovative pilot projects.
First, Congress should remove areas of duplication and streamline eligibility across programs. Similar programs serving the same population currently have different requirements. For example, able bodied adults without dependents receiving Supplemental Nutrition Assistance or SNAP benefits (formerly known as food stamps) are required to work 20 hours per week, but families with children receiving Temporary Assistance for Needy Families or cash benefits are required to work 30 hours per week. The programs should work together to create a safety net that can be used as a trampoline to propel individuals toward self-sufficiency, not as a sticky spider web of conflicting and confusing regulations.
Second, work or education requirements should exist for those who can work, but they should make sense. If a person increases his or her income, benefits should gradually taper off rather than being immediately cut off creating a fiscal cliff. For example, if a single working mother receives a $1 an hour raise in wages, but immediately loses more than that in benefits, it doesn’t make sense for her to take the raise or increase the number of hours she is working. If a person goes back to school, that should count toward work requirements as well, because in the long run, an increase in a person’s education level has a direct impact on his or her income over time.
Third, benefits should be tailored to the individual’s or family’s needs. If a family only needs help with childcare, but doesn’t need cash benefits (which includes childcare assistance), they should be able to receive just the childcare portion of the benefit. This would be like going to the store and all you need is a gallon of milk, but in order to purchase the milk, you are required to also buy eggs, cheese, and bread. Tailoring benefits to meet a family’s actual need will save money and reduce waste. Congress should remove rigid rules and regulations that reduce flexibility and cost taxpayers more money for services that are not needed.
Fourth, outcomes should be realistically measured, but there should be incentives for states to reach certain benchmarks. States should be able to create innovative pilot projects with specific outcomes and have flexibility in operating them.
As Congress and the Trump administration start the new year with a much-needed focus on entitlement reform, these guiding principles will ensure that welfare programs work for everyone — the states administering them, the taxpayers paying for them and the recipients relying on them.
Stephanie Whitt is the executive vice president of the Beacon Center of Tennessee, the state’s free market think tank. She previously served as an assistant commissioner at the Tennessee Department of Human Services.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.