Welfare reform or retrenchment?

catoAnd so things like drug testing, things like work requirements —  strengthening them as these programs go forward. –Tom Reed

Tom Reed says he “and the House Ways and Means Committee passed three bipartisan welfare reform bills last week.” I believe this is misleading–neither Reed or the House Ways and Means Committee can pass bills. The Ways and Means committee only passed these three bills on to subcommittees where such bills go to die.

Tom Reed says he supports legislation reforming what he says is a broken welfare system in the U.S. How the welfare system is broken, Reed doesn’t say. We get an idea of his meaning from the three bills:

  • H.R. 5170, The Social Impact Partnerships to Pay for Results Act –encourages private sector involvement in social service programs, with the government only paying if the program is successful in moving individuals from welfare to work
  • H.R. 2990, Accelerating Individuals Into the Workforce Act — would subsidize half of wages to encourage companies to hire low-income employees.
  • H.R. 2959, Temporary Assistance for Needy Families Accountability and Integrity and Improvement Act — keeps states from inflating spending related to temporary assistance for needy families.

So Reed would reform welfare by putting more people to work, subsidizing employers who hire low wage workers, and limiting what states spend combating poverty. Reforms should reflect improvement; these bills don’t improve the delivery of services to those in need.

For H.R. 5170, no CRS summary is yet available. Here is what Congressman John Delany (D-MD) says about it:

The Social Impact Partnerships to Pay for Results Act empowers states, local governments, nonprofits, and the private sector to scale up evidence-based interventions that address the nation’s most pressing challenges. It fosters the creation of public-private partnerships that harness philanthropic and other private-sector investments to expand and replicate scientifically-proven social and public health programs. Because social impact partnerships are focused on achieving results, government dollars are paid out only when desired outcomes are met. 

This seems not to benefit the needy directly if at all. To the extent that it intends to substitute private charity for public assistance, it reflects an idea that Tom often seems to favor. Tom conveniently ignores the fact that private charity is sure to be inadequate.

Here is the CRS summary for H.R. 2990:

This bill amends part A (Temporary Assistance for Needy Families) (TANF) of title IV of the Social Security Act to direct the Department of Health and Human Services to make grants to states to conduct demonstration projects designed to implement and evaluate strategies that provide wage subsidies to enable low-income individuals to enter into and retain employment.

Low income employment doesn’t promise to reduce poverty. Subsidizing low wages is counter-productive; if we must pay employers to do right, let’s pay them to raise wages. This again matches Tom’s desire restrict assistance to those who might be encouraged to find low-income work.

Here is the CRS summary for H.R. 2959:

This bill amends part A (Temporary Assistance for Needy Families) (TANF) of title IV of the Social Security Act to exclude third party contributions from qualified state expenditures used in determining whether a state maintains a certain level of historic state expenditures or else faces an associated penalty with a reduction in the state TANF grant.

The formula for determining the amount of the exclusion graduates from:

  • the amount (if any) for FY2016 by which the value of all goods and services provided by a source other than the state or a local government during the fiscal year exceeds the value of all goods and services claimed by the state as qualified state expenditures for FY2015, and
  • the amount (if any) for FY2017 by which such third party contributions exceed 50% of the value of all such goods and services claimed by the state as qualified state expenditures for FY2015, to
  • the value of all such third party contributions during any fiscal year after FY2017.

Qualified state expenditures shall not include any amount expended for medical services.

Here is another explanation from the W&M committee:

H.R. 2959, the TANF Accountability and Work Activity Improvement Act, introduced by Rep. Kristi Noem (R-SD), would increase the share of adults on welfare expected to work or prepare for work by preventing states from receiving certain “credits” that today reduce the number of adults on welfare expected to do so in exchange for their benefits.

The highlighted words make the intent of the bill clear.

Reed calls these bills “commonsense reforms.” However, they make sense only if the goal is to reduce public expense without much aiding those living in poverty.

Our welfare system indeed needs reform. It is crazy to subsidize employers who pay low wages by providing their employees with needed public assistance. A real solution to poverty is higher wages for work.

https://www.congress.gov/bill/114th-congress/house-bill/2990

https://www.congress.gov/bill/114th-congress/house-bill/5170

https://www.congress.gov/bill/114th-congress/house-bill/2959

https://reed.house.gov/media-center/press-releases/reed-cares-impoverished-families

Ways and Means Members Introduce Bills to Help People Move from Welfare to Work

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About whungerford

* Contributor at NewNY23rd.com where we discuss the politics, economics, and events of the New New York 23rd Congressional District (Allegany, Cattaraugus, Chautauqua, Chemung, (Eastern) Ontario, Schuyler, Seneca, Steuben,Tioga, Tompkins, and Yates Counties) Please visit and comment on whatever strikes your fancy.
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4 Responses to Welfare reform or retrenchment?

  1. Deb Meeker says:

    The mantra is “get a job” no matter whether that job pays your needs for basic living, and do not expect your government to believe you deserve a hand up – even though we continue to prevent job creation. Further, if you can’t get enough jobs to sustain you, you must humiliate yourself to get government assistance.

  2. josephurban says:

    The core issue has never (and probably will never) be addressed. For a capitalist economy to work there is a need for a flexible work force. Which means there is a need for unemployment for a certain percentage of workers. Full employment means high wages because the employer must compete for labor. High unemployment means lower wages because workers compete for jobs.
    The government has always been subsidizing capitalism through food stamps, unemployment insurance and other forms of temporary welfare. A guaranteed job undercuts corporate profits. This is why the GOP , while bemoaning high unemployment refuses to create public service jobs. It would drive up the cost of labor to corporations. And why the GOP, bemoaning “illegal immigration”, does nothing to punish corporations who hire illegals. It would drive up the cost of labor to the food processing and other industries.
    Unless the US government is willing to admit that, by its nature, “successful” capitalism demands a 5-10% unemployment rate , nothing will change.
    And we have found that giving federal grants to states continues to be the most corrupt and inefficient use of federal dollars.

  3. Anne says:

    If Reed happens to have The Google on any of his computers, it’s a simple enough thing to look up the results from the various places that have used mandatory drug testing for welfare recipients. (Hint: it’s wildly expensive, and a complete waste of time.) Oh wait: expensive and pointless seem to be Reed’s favorite things.

  4. whungerford says:

    I believe “drugs” is code for people, presumably Democrats, who Reed and his supporters disrespect. The message won’t be lost on Reed’s base. It is no accident that Reed is now focused on drug abuse–he makes a political statement.

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