Republicans use debt ceiling bill to push work requirements for millions receiving Medicaid and food stamps

By Tami Luhby, CNN

House Republicans are using the debt ceiling standoff to advocate for one of their longstanding goals — requiring more low-income Americans to work in order to receive government benefits, particularly food stamps and Medicaid.

They see work requirements as a twofer, allowing them to reduce government spending, while bolstering the nation’s labor force at a time when many businesses are still struggling to staff up.

Still, the controversial policy, included in House Speaker Kevin McCarthy’s package to increase the debt ceiling, is causing some consternation within the Republican conference, with hardliners wanting to include even stricter requirements and with moderate members in swing districts concerned they could face blow back over the issue.

If the House passes the legislation this week, as McCarthy hopes, it is certain not to advance since the White House and Senate Democrats fiercely oppose work requirements, along with other components of the bill. But it serves as a starting point for negotiations with the Biden administration over addressing the debt ceiling.

House GOP lawmakers, including some who grew up in families who depended on public assistance, argue that work requirements can lift people out of poverty and end their reliance on the government.

Critics, however, see the mandates as an attempt to shrink vital safety net programs without regard for the millions of people who could be left struggling to put food on the table and address their health care needs.

What’s in the plan

Under the package, childless, able-bodied adults ages 18 to 55 could get food stamps for only three months out of every three years unless they are employed at least 20 hours a week or meet other criteria. Currently, that mandate applies to those ages 18 to 49, though it has been suspended during the Covid-19 public health emergency, which expires next month.

Estimates on how many people this would affect vary. In an analysis released Monday, the Congressional Budget Office said that 275,000 folks, on average, would lose benefits each month because they fail to meet the requirement and are not otherwise exempt. Another 19,000 people would receive small benefits because of the new income they earn.

Others project a potentially larger impact. The provision would put about 900,000 folks between the ages of 50 and 55 at risk of losing their food assistance unless they work sufficient hours and record that employment with their state agencies, receive an exemption or live in an area where the mandate is waived, according to the left-leaning Center on Budget and Policy Priorities.

The debt ceiling package does not go as far as some Republicans would like. South Dakota Rep. Dusty Johnson floated a bill earlier this year that would mandate recipients up to age 65 and those with children age 7 and older to work. That legislation would have put at risk the food stamp benefits of more than 10 million people, including millions of children, the center found.

The debt ceiling package would also require certain adult Medicaid recipients to work, perform community service or participate in an employment program for at least 80 hours a month or earn a certain minimum monthly income. It would apply to those ages 19 to 55, but not those who are pregnant, parents of dependent children, physically or mentally unfit for employment or enrolled in education or in substance abuse programs, among others.

This largely targets low-income adults who qualify under Medicaid expansion, an Affordable Care Act provision.

Medicaid has never had a work requirement, but the Trump administration granted waivers to several states to impose such a mandate on certain enrollees. Litigation stopped or chilled states’ implementation of the effort, and the Biden administration subsequently withdrew the permissions — though a federal district court judge allowed the initiative to proceed in Georgia.

The provision would result in about 1.5 million adults, on average, losing federal funding for their Medicaid coverage, according to the CBO. But states would pick up the full tab for about 900,000 of them, leaving around 600,000 uninsured.

Plus, the debt ceiling bill would make changes to the work requirement provisions of the Temporary Assistance for Needy Families program, which was created out of the 1996 welfare reform package.

Fierce debate

The provision’s inclusion in the debt ceiling bill has reignited the debate over whether work requirements actually help improve the lives of low-income Americans.

Advocates, who see public assistance as a way to support work, and opponents, who consider it a disincentive, each point to data that support their views.

“Incentives matter. And the incentives today are out of whack,” McCarthy said in a speech last week at the New York Stock Exchange. “It’s time to get Americans back to work.”

Assistance programs are supposed to be temporary, he continued, arguing that the GOP plan will not hurt the nation’s social safety net for those who need it during hard periods in their lives.

There are almost 10 million open jobs across the US, and wages for many entry-level jobs have risen in recent years, said Tarren Bragdon, CEO of the Foundation for Government Accountability, a conservative think tank that advocates for work requirements. So this is a good time to implement work requirements. And when the economy sours, states can request waivers to temporarily suspend the mandates.

“Work requirements provide the deadline and incentives that we all need,” Bragdon said. “The alternative is that people are trapped in poverty for the long term.”

He pointed to Florida, which in 2016 restored the work requirement for certain adults in the Supplemental Nutrition Assistance Program, or SNAP, as food stamps are formally known. Enrollment among this population dropped 94% two years later. While the foundation’s analysis of state data shows that residents took jobs in more than 1,000 industries, it does not say what share of terminated enrollees found work nor how long it took them to land jobs.

There are differing figures on how many food stamp participants are employed, depending on the data source and time period examined.

Some 75% of childless, non-elderly, non-disabled adults who received food stamps did not work, according to a foundation analysis of US Department of Agriculture data from prior to the pandemic.

But looking longer term, about the same percentage of adults subject to the time limit worked in the year before or after the month they received food stamps, according to the Center on Budget and Policy Priorities. Most folks were likely to participate in the program during periods of joblessness.

Multiple studies have found that food stamps’ existing work requirement does not help recipients land employment or increase their earnings, said Ed Bolen, the center’s director of SNAP state strategies.

“We know in SNAP that it cuts people off and doesn’t get people jobs,” he said.

The CBO analysis found that expanding food stamps’ work requirement may prompt some recipients to work a little more, but that it would have little impact on average income because the loss in benefits would be equal to or exceed the additional earnings.

As for working-age Medicaid beneficiaries without disabilities, about 61% were working in 2021, according to KFF, formerly known as the Kaiser Family Foundation. But many hold low-wage jobs so they still qualify for the program in the states that have expanded Medicaid, where the income limit is just over $20,100 a year for an individual and $34,300 for a family of three.

A brief experience with Medicaid work requirements during the Trump administration showed that the mandate did not result in employment gains for recipients. Only Arkansas had the provision in effect long enough for residents to be affected before it was stopped by the courts.

During those seven months, more than 18,000 low-income Arkansans lost coverage — or nearly a quarter of those subject to the mandate. Some of those who were dropped were working but were unaware of the requirement or were not able to report their hours to the state agency.

The House GOP package would jeopardize the health coverage of about 21 million people, according to an analysis released Tuesday by the US Department of Health and Human Services. Though the vast majority of working-age Medicaid recipients work or qualify for an exemption, many could get dropped because of new reporting and administrative requirements.

Instituting a work requirement would result in a “very small increase” in employment, but it would also raise recipients’ medical expenses, according to CBO. However, it would reduce federal outlays on the safety net program by $135 billion over 10 years.

“These requirements are essentially a cut to Medicaid spending,” said Laura Harker, senior policy analyst on the center’s health team.

This story has been updated with additional information.

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