FAQ: Rep. Garret Graves’ Supplemental Nutrition Assistance Program Reform Act of 2017 (H.R. 2996)
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What does this bill do?
This bill ensures the food stamp program (SNAP) has meaningful work requirements for able-bodied adults without dependents (ABAWDs) by:
- eliminating statewide or partial waivers from the ABAWD work requirement;
- shortening the three-month rule, which permits ABAWDs to receive food stamps without working or participating in other work activity, to one month;
- lowering the 15 percent exemption rule, which permits states to exempt 15 percent of ABAWDs each month from the work requirement, to 5 percent; and
- adding supervised job search as an activity that satisfies the work requirement (minimum 8 hours per week).
What are the goals of this reform?
The goals of this reform are threefold: to promote fairness, to promote self-support, and to prevent fraud.
- Fairness in the welfare system is based on the principle of reciprocity between taxpayers and welfare system: welfare should never be a one-way handout. Aid should always be given to those in need, but constructive behavior should be required in exchange.
- By requiring work or constructive “work activities” in exchange for food stamp benefits, this policy aims to increase self-support among able-bodied recipients without dependent children.
- Many ABAWDs have discretionary incomes that are often used for counterproductive or non-essential purposes. For example, recent data shows that over 50 percent of ABAWDs on food stamps smoked cigarettes during the past 30 days, at an average cost of around $111 per month. The available evidence also indicates that many ABAWDs have high levels of unreported income. Having an unreported or off-the-books job enables a recipient to receive the maximum food stamp benefits without regard to actual earnings received. Requirements to engage in work activity interfere with the recipient’s informal employment and will often push the individual to leave the assistance rolls.
As President Ronald Reagan eloquently put it: “Welfare needs a purpose: to provide for the needy, of course, but more than that, to salvage these, our fellow citizens, to make them self-sustaining and, as quickly as possible, independent of welfare. We should measure welfare’s success by how many people leave welfare, not by how many are added.”
What requirements currently exist for ABAWDs on food stamps?
- Under federal policy, ABAWDs are limited to three months of food stamp benefits in a 36-month period, unless they are working or are involved in a “work activation” program at least part-time.
- However, under the 1996 welfare reform law, a state could request waivers from the ABAWD work requirement for the entire state or parts of the state if the state or area has higher unemployment rates or a “lack of sufficient jobs.”
- In 2009, the Obama Administration also applied a blanket waiver to the ABAWD work requirement as part of the American Recovery and Reinvestment Act (ARRA), suspending the entire requirement through FY 2010 for all states. The number of ABAWDs on food stamps increased from 1.9 million in FY 2008 to almost 4 million in FY 2010.
- States are still able to receive statewide or area-specific waivers from the ABAWD work requirement based on high unemployment or “lack of sufficient jobs.” As of late 2016, eight states and the District of Columbia have statewide ABAWD work waivers, 26 states have a partial waiver, and roughly 1,500 counties are “labor surplus areas” as designated by the Department of Labor. Due to the large number of exempted counties, the current ABAWD work requirement is virtually meaningless.
- The number of ABAWDs on food stamps remains high at around 4.2 million.
Will this policy save taxpayers money?
An ABAWD work requirement similar to the proposed legislation was implemented in the state of Maine in December 2014. The result was an almost immediate 80 percent drop in ABAWD caseload. Based on the experience of ABAWD work requirements in Maine and other states, the nationwide work requirement provided in this bill could save taxpayers nearly $10 billion per year.
Is this policy controversial?
This policy codifies in SNAP the principle of fairness between taxpayers and welfare recipients. There is broad support among the public for this principle. Polls show:
- Nearly 90 percent of the public agree that “able-bodied adults that receive cash, food, housing, and medical assistance should be required to work or prepare for work as a condition of receiving those government benefits.” (Source: Heritage Foundation poll)
- Support for work requirements in welfare is consistent across party lines, with 87 percent of Democrats and 94 percent of Republicans agreeing with this statement. (Source: Heritage Foundation poll)
- Similarly, 83 percent of American adults favor work requirements for welfare recipients, while just 7 percent oppose such requirements. (Source: Rasmussen poll)
Won’t this change increase hunger among ABAWD recipients?
Under the legislation, an ABAWD will have his benefits terminated only if he refuses to perform a small amount of community service or other constructive activity. The recipient can have his benefits continued or restored simply by performing the required activity. Individuals who are truly at risk of hunger will choose to perform rather than refuse the required activity.
Isn’t the real issue that welfare is discouraging upward mobility through welfare cliffs?
- There are no welfare cliffs with respect to ABAWDs.
- There are no welfare cliffs in the welfare system generally.
- Multiple randomized controlled experiments show that it is not welfare cliffs or phase-out rates in welfare programs that discourage work, but rather the anti-work incentives that come from giving something for nothing.
- Seeking reductions in “welfare cliffs” by lessening benefit phase-down rates can only greatly expand the welfare state and substantially increase welfare dependence by needlessly making millions of additional people eligible for welfare. These are long-time staple liberal policies.
- By contrast, requiring work or other constructive activities was the core of the successful welfare reform in the 1990’s; the historical record shows this policy reduces welfare costs, dramatically reduces welfare dependence, increases employment, and reduces poverty.
Shouldn’t promoting federalism through state flexibility be the main goal for any welfare reform, including food stamp reform?
- While promoting federalism and maintaining state flexibility is important, the priority of welfare reform should be to free Americans from poverty and government dependence by encouraging work and self-support. This priority was at the core of welfare reform 20 years ago.
- True federalism would turn fiscal responsibility for operating and funding the SNAP program over to state governments. True federalism does not mean taxing citizens at the federal level and then turning the revenue over to states to spend as they choose. This policy has always resulted in wasteful spending; historical experience shows that state governments spend their own money far more prudently than they spend federal funds.
- In 2016, means-tested spending on cash, food, and housing assistance was over $350 billion; the federal government provided over 90 percent of these funds. Similarly, the federal government provides over 90 percent of all SNAP funding. As long as the federal government is paying for SNAP or any other welfare program, federal legislators have an obligation to ensure the funds are spent according to conservative principles: specifically, aid should not be a one-way handout, but should be given in a manner that promotes work and marriage and reduces unnecessary dependence.
- States that wish to provide food stamps to ABAWDs without a work requirement can do so by creating a separate state aid program with state revenue.
Will this bill increase a state government’s administrative costs?
A work activation program can operate at a fairly low cost.
- For example, a rigorous, closely supervised 16-week job search program would cost about $250 per recipient. In one year, ten million work-capable food stamp recipients could receive this type of program at an annual cost of around $2.5 billion. This would cover all current work-eligible recipients who are non-working or underemployed, as well as many new work-eligible enrollees.
- In addition, administrative costs would be lower than expected because most ABAWDs will likely drop off the rolls. Maine, for example, expected large numbers of ABAWDs to enroll in its training and community service programs, but most ABAWDs refused to participate despite vigorous outreach efforts by the state government to encourage participation. This indicates that these individuals had other means of supporting themselves, such as unreported income.
- To cover to the small administrative costs of the program, states would be free to use SNAP Employment and Training (E&T) funds or Social Service Block Grant funds. Under current law, states could also use a portion of their Temporary Assistance to Needy Families (TANF) funds; these funds are supposed to be used to promote work and marriage, but most states redirect a substantial portion of the funding to unrelated activities.
Looking at the bigger picture, it is important to understand that welfare spending is growing out of control, not because of administrative costs, but because the current system provides very generous benefits to tens of millions of Americans.
- On average, administrative costs associated with federal welfare programs are less than 10 percent of means-tested cash, food, housing, and medical spending. More than 90 percent of this spending reaches low-income households as benefits.
Where has this policy been successful before?
- 80 percent of ABAWDs on food stamps left the rolls after Maine implemented a work requirement for ABAWDs. A preliminary report published by the Maine government found a 114 percent increase in total wages for ABAWDs who left the food stamp rolls, less dependency for those who remained on the rolls, and between $30 million and $40 million dollars in annual taxpayer savings.
- Kansas saw a 75 percent reduction in its ABAWD food stamp caseload after reinstituting its work requirement. ABAWDs who left the food stamp rolls “saw their incomes increase by an average of 127 percent, and roughly half of those who left the rolls were employed with reported incomes above the poverty level.”
- Alabama saw a caseload reduction of 85 percent in the 13 counties that participated.
Have the states who have instituted these changes seen an uptick in their local work force participation?
Yes. For example, once the state of Kansas established work requirements, thousands of food stamp recipients moved into the workforce, promoting income gains and decreases in poverty. Forty percent of the individuals who left the food stamp ranks found employment within three months, and about 60 percent found employment within a year.