One of the most contentious issues in the recent debt ceiling negotiations was putting more work requirements into government benefits.
In the final bill that President Biden signed into law, requirements for a slew of benefit programs ranging from cash welfare to food stamps were updated. Among the modifications was a rise in the maximum age range from 49 to 54.
The work requirements may have been politically necessary to raise the debt ceiling, but what do they mean for people who actually receive benefits? To find out, Marketplace’s Sabri Ben-Achour spoke with Krissy Clark, Marketplace’s senior correspondent who also hosts the investigative podcast “The Uncertain Hour.”
The following is an edited transcript of their conversation.
Sabri Ben-Achour: So how is the debt ceiling law gonna affect work requirements in government welfare programs?
Krissy Clark: So let’s start with cash welfare, also known as Temporary Assistance to Needy Families. That program already had work requirements. But the big change is that many states are going to have to prove to the Feds that more parents on welfare are doing a certain number of hours of federally-approved work activities and have the documentation to prove that. Having a paying job can count but also things like searching for jobs, doing unpaid work experience, taking classes about how to dress and interview for a job, and certain kinds of short-term vocational training, just to name a few.
Ben-Achour: What’s the evidence on what effect these work activities have?
Clark: Study after study shows that broadly, they don’t have much effect on employment or earnings in the long run, and don’t move most people into family-sustaining jobs. And with this new law, welfare programs will need to be even more focused on these work activities and making sure people are doing them.
Ben-Achour: That’s cash welfare, people getting cash, but there were also new work requirements put into food stamps. So what do we know about the changes there?
Clark: Before this bill, there were already work reporting requirements for 18 to 49-year-olds who were considered able-bodied and didn’t live with dependents. After three months of receiving food stamps, they had to prove that they were working or in some sort of employment or training program at least 20 hours a week on average. And the new law will gradually apply that work reporting requirement to older people as well, up to 54 years old. And this worries anti-hunger advocates who say that older people might have trouble finding a job within three months, maybe because of health problems are setting in, or there’s age discrimination. And so many of them could be cut off from food assistance at a time when food costs are especially high.
Ben-Achour: If you add all this up, how does it balance out in terms of outcomes and costs?
Clark: So the Congressional Budget Office estimates that given both these things, there will actually be a small increase in people who have access to food stamps and therefore a small increase to government spending. But it’s hard to tell at this point. And one thing that we do know is that on the whole, work requirements and food stamps lead to more people losing benefits.
