Research & Commentary: Wisconsin Could Provide Roadmap for Welfare Reform
In this Research & Commentary, Matthew Glans examines a series of welfare reform bills recently passed by Wisconsin’s state legislature that could serve as a model for other states to follow.
Welfare programs are only truly successful if they give recipients the tools and motivation to live a financially self-sufficient life, not if they simply alleviate material poverty. Far too often, though, welfare programs create dependency and discourage people from seeking long-term prosperity.
The series of welfare reform bills recently passed by Wisconsin’s state legislature, known as the Wisconsin Works for Everyone initiative, is an important step toward reducing dependency, combating fraud, and ensuring personal responsibility. The bills currently await the signature of Gov. Scott Walker (R), who announced he plans to sign the legislation.
In 2015, Wisconsin was given an “A” grade in Heartland’s Welfare Reform Report Card, and the additional changes offered as part of the Wisconsin Works for Everyone plan would help it remain one of the most innovative and reform-minded states in the country.
The Wisconsin Works bills would tackle several problem areas with Wisconsin’s welfare system. First, the bills would require the state to establish work requirements for the Supplemental Nutrition Assistance Program (SNAP), commonly called food stamps, at the maximum amount allowed under federal law. This would help move recipients through the system faster and encourages recipients to seek long-term work opportunities.
Work requirements have proven to be successful in the past when introduced in other entitlement programs. They reduce poverty by encouraging work and self-reliance. The work requirements now being considered in Wisconsin are modeled on similar work requirements that were adopted as part of the 1996 welfare reform legislation signed into law by President Bill Clinton. In a study examining the effect of the reform, the Manhattan Institute found the inclusion of work requirements led to substantial reductions in poverty nationwide.
Second, a separate bill that’s a part of the initiative would expand work training programs statewide for able-bodied adults with school-aged dependents.
Third, the bills would ensure limited welfare funds are given to those truly in need by creating asset restrictions for those participating in the FoodShare, Wisconsin Works, and Wisconsin Shares programs.
Fourth, the new reforms would also shift more support to the most successful welfare program, the earned income tax credit, by establishing a pilot program that would grant periodic payments of the earned income tax credit instead of a single payment made annually.
Fifth, the reforms would improve accountability within families by requiring child support compliance for those receiving Medicaid.
Sixth, the bills would catalyze innovation by allowing the use of health savings accounts in Wisconsin’s Medicaid program.
If passed, the Wisconsin Works for Everyone plan could be a model for welfare reform for other states looking to bring down costs, improve efficiency, and combat waste and abuse in their food stamp, welfare, and Medicaid programs.
In addition to the reforms outlined above, states should include time limits in their welfare programs for those choosing not to follow work requirements. One example of such a restriction is found in SNAP. Under current law, able-bodied adults without dependents are only able to receive SNAP for three years if they do not meet certain work requirements.
To receive SNAP benefits beyond this limit, able-bodied adult recipients who do not have dependents must work at least 80 hours per month, participate in qualifying education and training activities at least 80 hours per month, or comply with a state workfare program. Before 2009, most states enforced time limits, along with work requirements, but many states waived those requirements in 2009 and 2010. As a result, 44 percent of SNAP recipients are neither employed nor actively searching for work. States should create similar limits to prevent welfare program abuse, but the limit should be less than the three years required by federal rules.
The challenge of welfare reform is creating a true safety net that effectively lifts people out of poverty without creating incentives for dependency. Welfare shouldn’t be about establishing government programs that do something to people, but rather programs that do something for people. The real focus of welfare programs must be to provide temporary or supplemental assistance while encouraging work and independence.
The following articles examine welfare reform in greater detail.
Welfare Reform Report Card: A State-by-State Analysis of Anti-Poverty Performance and Welfare Reform Policies
In 2015, The Heartland Institute published an updated version of its Welfare Reform Report Card. This report card compiles extensive data on five “inputs” and five “outputs” of state welfare and anti-poverty programs and assigns a final grade to each state for its welfare policies.
Reforming the Food Stamp Program
https://www.heritage.org/hunger-and-food-programs/report/reforming-the-food-stamp-program Writing for The Heritage Foundation, Robert Rector and Katherine Bradley outline several areas where SNAP can be improved. The authors’ reforms would help return the program to its intended role of encouraging work and self-sufficiency. “Congress and the Administration should transform food stamps into a program that encourages work and self-sufficiency, close eligibility loopholes, and, after the recession ends, reduce food stamp spending to pre-recession levels,” they write.
Welfare Rules Database
The Urban Institute’s Welfare Rules Database provides a “comprehensive, sophisticated resource for comparing cash assistance programs between states” and for researching changes in cash assistance rules between states.
The Work Versus Welfare Tradeoff: 2013
The Cato Institute estimates the value of the full package of welfare benefits available to a typical recipient in each of the 50 states and the District of Columbia. The study found welfare benefits outpace the income most recipients can expect to earn from an entry-level job, and the income gap between welfare and work may actually have grown worse in recent years.
Comparing Program Participation of TANF and Non-TANF Families Before and During a Time of Recession
Shelley K. Irving examines whether participation in the Temporary Assistance for Needy Families program has increased and whether employment has decreased during the current economic recession. The study also compares participation in other assistance programs based on welfare and poverty status before and during the economic recession.
Implementing Welfare Reform: A State Report Card https://w
This 2004 study by Jenifer Zeigler of The Cato Institute offers an analysis of state welfare reform implementation in the present and can serve as a baseline for tracking welfare reauthorization program changes in the future.
Blueprint for a Prosperous Pennsylvania
In this 2014 report, the Commonwealth Foundation suggests a variety of spending reductions and reforms to keep Pennsylvania fiscally solvent while creating conditions for future prosperity. One major focus of the study, which the authors argue is contributing to the poverty trap, is welfare spending.
Top 10 Reasons Food Stamps Need to be Reformed
Andrew Montgomery of FreedomWorks examines serious flaws in current food stamp programs: “In recent years, food stamps have grown into a major financial obligation. Enrollment in SNAP has increased dramatically, rising from 26 million in 2007 (one in twelve Americans) to nearly 47 million in 2012 (one in seven Americans). Costs have increased dramatically as well, rising from $35 billion in 2007 to $80 billion in 2012, making it the second most expensive means-tested federal welfare program, behind only Medicaid.”
SNAP Rolls Continue to Increase as Program Ensnares Families in Dependency
In this Heartlander article, Jeff Reynolds discusses the increase in food stamp dependency and ways to reform the program.
A Survey of State Medicaid Expansion 1115 Waivers
Tara O’Neill Hayes of the American Action Forum examines several recent Section 1115 waiver proposals and discusses how they seek to reform Medicaid.
Research & Commentary: States Pursue Work Requirements for Medicaid
In this Research & Commentary, Senior Policy Analyst Matthew Glans examines efforts by several states to add work requirements to their Medicaid programs. “Implementing Medicaid work requirements would be a good first step for Medicaid-expansion and non-expansion states toward helping to limit the rising costs of Medicaid,” Glans wrote.
Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this and other topics, visit the Budget & Tax News website, The Heartland Institute’s website, and PolicyBot, Heartland’s free online research database.
The Heartland Institute can send an expert to your state to testify or brief your caucus; host an event in your state, or send you further information on a topic. Please don’t hesitate to contact us if we can be of assistance! If you have any questions or comments, contact John Nothdurft, Heartland’s director of government relations, at email@example.com or 312/377-4000.