[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
EXAMINING THE SNAP BENEFIT CLIFF
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON NUTRITION, OVERSIGHT, AND DEPARTMENT OPERATIONS
OF THE
COMMITTEE ON AGRICULTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
JULY 12, 2021
__________
Serial No. 117-12
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Agriculture
agriculture.house.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
46-164 PDF WASHINGTON : 2021
COMMITTEE ON AGRICULTURE
DAVID SCOTT, Georgia, Chairman
JIM COSTA, California GLENN THOMPSON, Pennsylvania,
JAMES P. McGOVERN, Massachusetts Ranking Minority Member
FILEMON VELA, Texas AUSTIN SCOTT, Georgia
ALMA S. ADAMS, North Carolina, Vice ERIC A. ``RICK'' CRAWFORD,
Chair Arkansas
ABIGAIL DAVIS SPANBERGER, Virginia SCOTT DesJARLAIS, Tennessee
JAHANA HAYES, Connecticut VICKY HARTZLER, Missouri
ANTONIO DELGADO, New York DOUG LaMALFA, California
BOBBY L. RUSH, Illinois RODNEY DAVIS, Illinois
CHELLIE PINGREE, Maine RICK W. ALLEN, Georgia
GREGORIO KILILI CAMACHO SABLAN, DAVID ROUZER, North Carolina
Northern Mariana Islands TRENT KELLY, Mississippi
ANN M. KUSTER, New Hampshire DON BACON, Nebraska
CHERI BUSTOS, Illinois DUSTY JOHNSON, South Dakota
SEAN PATRICK MALONEY, New York JAMES R. BAIRD, Indiana
STACEY E. PLASKETT, Virgin Islands JIM HAGEDORN, Minnesota
TOM O'HALLERAN, Arizona CHRIS JACOBS, New York
SALUD O. CARBAJAL, California TROY BALDERSON, Ohio
RO KHANNA, California MICHAEL CLOUD, Texas
AL LAWSON, Jr., Florida TRACEY MANN, Kansas
J. LUIS CORREA, California RANDY FEENSTRA, Iowa
ANGIE CRAIG, Minnesota MARY E. MILLER, Illinois
JOSH HARDER, California BARRY MOORE, Alabama
CYNTHIA AXNE, Iowa KAT CAMMACK, Florida
KIM SCHRIER, Washington MICHELLE FISCHBACH, Minnesota
JIMMY PANETTA, California JULIA LETLOW, Louisiana
ANN KIRKPATRICK, Arizona
SANFORD D. BISHOP, Jr., Georgia
______
Anne Simmons, Staff Director
Parish Braden, Minority Staff Director
______
Subcommittee on Nutrition, Oversight, and Department Operations
JAHANA HAYES, Connecticut, Chairwoman
JAMES P. McGOVERN, Massachusetts DON BACON, Nebraska, Ranking
ALMA S. ADAMS, North Carolina Minority Member
BOBBY L. RUSH, Illinois ERIC A. ``RICK'' CRAWFORD,
GREGORIO KILILI CAMACHO SABLAN, Arkansas
Northern Mariana Islands SCOTT DesJARLAIS, Tennessee
SALUD O. CARBAJAL, California VICKY HARTZLER, Missouri
AL LAWSON, Jr., Florida JAMES R. BAIRD, Indiana
ANN M. KUSTER, New Hampshire CHRIS JACOBS, New York
JIMMY PANETTA, California MICHAEL CLOUD, Texas
SEAN PATRICK MALONEY, New York KAT CAMMACK, Florida
JULIA LETLOW, Louisiana
Katherine Stewart, Subcommittee Staff Director
(ii)
C O N T E N T S
----------
Page
Bacon, Hon. Don, a Representative in Congress from Nebraska,
opening statement.............................................. 4
Hayes, Hon. Jahana, a Representative in Congress from
Connecticut, opening statement................................. 1
Prepared statement........................................... 3
Witnesses
Hardy, Ph.D., Bradley L., Associate Professor, Department of
Public Administration and Policy, School of Public Affairs,
American University, Washington, D.C........................... 7
Prepared statement........................................... 9
Gourrier, Ph.D., Al G., Assistant Professor, School of Public and
International Affairs, University of Baltimore; Faculty Fellow,
Schaefer Center for Public Policy, Baltimore, MD............... 12
Prepared statement........................................... 14
Brown, Tikki, Assistant Commissioner, Minnesota Department of
Human Services, Children and Family Services Administration,
Minneapolis, MN................................................ 16
Prepared statement........................................... 17
Submitted question........................................... 69
Supplementary information.................................... 69
Randolph, Erik, Director of Research, Georgia Center for
Opportunity, Peachtree Corners, GA............................. 21
Prepared statement........................................... 22
EXAMINING THE SNAP BENEFIT CLIFF
----------
MONDAY, JULY 12, 2021
House of Representatives,
Subcommittee on Nutrition, Oversight, and Department
Operations,
Committee on Agriculture,
Washington, D.C.
The Subcommittee met, pursuant to call, at 12:01 p.m. via
Zoom, Hon. Jahana Hayes [Chairwoman of the Subcommittee]
presiding.
Members present: Representatives Hayes, McGovern, Adams,
Rush, Sablan, Lawson, Kuster, Panetta, Bacon, Crawford,
DesJarlais, Baird, Jacobs, Cammack, and Letlow.
Staff present: Lyron Blum-Evitts, Chu-Yuan Hwang, Lisa
Shelton, Katherine Stewart, Caleb Crosswhite, Jennifer Tiller,
Erin Wilson, and Dana Sandman.
OPENING STATEMENT OF HON. JAHANA HAYES, A REPRESENTATIVE IN
CONGRESS FROM CONNECTICUT
The Chairwoman. Good afternoon, everyone. This hearing of
the Subcommittee on Nutrition, Oversight, and Department
Operations entitled, Examining the SNAP Benefit Cliff, will
come to order. Welcome, and thank you all for joining us here
today.
After brief opening remarks, Members will receive testimony
from our witnesses today, and then the hearing will be opened
to questions. Members will be recognized in order of seniority,
alternating between Majority and Minority Members and in order
of arrival for those Members who have joined us after the
hearing was called to order.
When you are recognized, you will be asked to unmute your
microphone and will have 5 minutes to ask your questions or
make a comment. If you are not speaking, I ask that you remain
muted in order to minimize background noise. In order to get to
as many questions as possible, the timer will stay consistently
visible on the screen. And, with that, I will start with my
opening remarks.
Good morning and welcome to the second hearing of the House
Committee of Agriculture Subcommittee on Nutrition, Oversight,
and Department Operations. Thank you to all the Members in
attendance today and a special thank you to our witnesses for
sharing your time and expertise.
This hearing entitled, Examining the SNAP Benefit Cliff, is
the result of discussions between myself and the Ranking
Member, Mr. Bacon, at the beginning of this Congress and
subsequently after. He shared his concerns that low-income
workers may abruptly lose support as they stabilize themselves
with employment and reach what we call the benefit cliff. I was
pleased to hear that, because I have a similar concern, and we
worked together to have this hearing today.
This conversation comes at a critical time. In the wake of
the COVID-19 pandemic, families across the country are still
struggling to put food on the table. They are still struggling
to find high-wage jobs. And they are anticipating the end of
emergency increases that sustained them through this extremely
difficult time.
During times of crisis and after, SNAP and other Federal
programs should adjust to allow workers to gradually ease off
of benefits until they are truly able to stand on their own.
These programs should allow for flexibility to ensure benefits
do not end abruptly and throw workers and their families back
into financial turmoil. Thankfully, we do have some built-in
flexibilities in SNAP that allow states to substantially reduce
the harmful effects of the benefit cliff.
Broad-based categorical eligibility is a critical tool that
allows recipients to save for the future, incentivizes work by
allowing recipients to earn more without losing access to
benefits, and substantially reduces administrative burdens for
states who participate.
However, not all states utilize broad-based categorical
eligibility, and there are always more improvements that need
to be made. We must ensure that no one in this country has to
make the heart-wrenching decision of accepting career
advancement or putting food on the table for their families.
During our last hearing, the impact of the benefit cliff
was profoundly demonstrated by our witnesses, who themselves
were participants in the SNAP program. Both of the witnesses
explained the financial constraints faced after the loss of
benefits due to a moderate rise in income. Our witnesses spoke
about the need to calculate every dollar earned to be sure they
did not exceed the exact maximum and lose hundreds of dollars
of increased emergency benefits that helped them to feed their
families through this difficult time.
Their stories highlighted the concerning realities many
families will be facing in the coming weeks. Millions of
families who benefited from SNAP benefits increases will see
them abruptly go away, no matter if their economic situation
has improved or not. In addition to the regular benefit cliff,
SNAP recipients will also have to adjust to an additional COVID
cliff as they attempt to recover from the last year.
I am pleased that Mr. Bacon has expressed an interest in
helping to address this problem and, together with this
Committee, we will work to craft solutions.
To continue with this discussion today, we have today's
panel of witnesses. We are fortunate to have four important
points of view, including that of an economist, Dr. Hardy, two
researchers, Dr. Gourrier and Mr. Randolph, and a SNAP
administrator, Assistant Commissioner Brown, to help us
understand the impact our decisions have on the Americans who
are receiving SNAP and their future as they navigate the web of
social programs that provide support in times of need.
As my colleague Mr. McGovern has noted before, this
combination of supports involves more than just SNAP and food
security programs that fall under our jurisdiction. The cost of
housing and childcare figure prominently into the long-term
security of low-income families.
Ensuring all Americans are able to attain sustainable
financial stability requires an all-of-government approach. At
the very least, it requires that we work diligently to
strengthen these programs. I look forward to hearing more from
our witnesses about the interplay between these vital supports
and the impact of our shared goal to create effective,
efficient Federal policy that truly supports Americans in need.
[The prepared statement of Mrs. Hayes follows:]
Prepared Statement of Hon. Jahana Hayes, a Representative in Congress
from Connecticut
Good afternoon and welcome to the second hearing of the House
Committee on Agriculture's Subcommittee on Nutrition, Oversight and
Department Operations.
Thank you to all the Members in attendance today and special thanks
to our witnesses for sharing their time and expertise.
This hearing, titled ``Examining the SNAP Benefit Cliff,'' is the
result of a discussion between myself and Ranking Member Bacon at the
beginning of this Congress about our shared concern that low-income
workers may abruptly lose the very support that helps propel them
toward financial stability.
This conversation comes at a critical time. In the wake of the
COVID-19 pandemic, families across the country are still struggling to
put food on the table. They are still struggling to find high-wage
jobs. And they are staring down the barrel of the end of emergency
increases that sustained them through this extremely trying time.
During times of crisis and after, SNAP--and every piece of our
Federal safety net--should adjust to increased income and savings to
allow workers to ease off benefits at the point when they are truly
able to stand on their own. And they should allow for flexibility to
ensure benefits do not run out at a time that throws workers and their
families back into financial turmoil or food insecurity.
Thankfully, we do have built-in flexibilities in SNAP that allow
states to substantially reduce the benefit cliff and its harmful
effects.
Broad-based categorical eligibility is a critical tool that allows
recipients to save for the future, incentivizes work by allowing them
to earn more without losing access to benefits, and substantially
reduces administrative burden for states and participants.
However, not all states utilize broad-based categorical
eligibility, and there are always more improvements to be made.
We must ensure that no one in this country has to make the heart-
wrenching choice between taking a promotion and putting food on the
table for their family.
During our last hearing, the impact of the benefit cliff was
profoundly demonstrated by our witnesses who were participating in
SNAP, Rachel Wilson and Odessa Davis.
Odessa Davis explained the financial constraints faced by her and
her son after she lost access to SNAP benefits due to a moderate rise
in income. Ms. Wilson spoke about the need to calculate every dollar
earned to be sure she does not exceed the exact maximum and lose
hundreds of dollars of increased emergency benefits that help feed her
family as she struggles to return to full employment following the
pandemic.
Ms. Wilson's story particularly highlights a concerning reality
families will be facing in the coming weeks. Millions of families who
benefitted from SNAP benefit increases will see them abruptly go away--
no matter if their economic situation has improved or not. On top of
the regular benefit cliff, SNAP recipients will have to adjust to an
additional ``COVID-cliff'' as they attempt to recover from the last
year.
I am so pleased that Mr. Bacon has expressed an interest in
addressing this problem, and hope to work together to craft a solution
for our constituents.
To continue this discussion, we have today's panel of witnesses.
We are fortunate to have four important points of view, including
that of an economist, Dr. Hardy, two researchers, Dr. Gourrier and Mr.
Randolph, and a SNAP administrator, Assistant Commissioner Brown, to
help us understand the impact our decisions have on Americans receiving
SNAP as they navigate the web of social service programs that provide
support in times of need.
As my colleague Mr. McGovern has noted, this combination of
supports involves more than just SNAP, which is within our
jurisdiction. The cost of housing and childcare figure prominently in
the long-term security of low-income families too. Ensuring all
Americans are able to attain sustainable financial stability requires
an all-of-government approach. At the very least, it requires that we
work diligently to strengthen the safety net programs already available
to our constituents.
I look forward to hearing more from our witnesses about the
interplay between these vital supports and the impact on our shared
goal to create effective and efficient Federal policy that truly
supports Americans in need.
The Chairwoman. I would like to welcome the distinguished
Ranking Member, Mr. Bacon, the gentleman from Nebraska, for his
opening remarks.
OPENING STATEMENT OF HON. DON BACON, A REPRESENTATIVE IN
CONGRESS FROM NEBRASKA
Mr. Bacon. Thank you, Madam Chairwoman.
I appreciate everybody calling in today. I appreciate our
panelists. I thank the Madam Chairwoman for taking this on. And
we agree we have a problem. We may diverge a little bit on what
the solutions are, but I think it is great that we are going to
have this conversation.
I am not convinced that broad-based categorical inclusion
is the right way to go. In fact, I see problems with that. I
see more of a potential here to once you hit a certain point,
instead of just pulling the plug on benefits, we decrement the
benefits down to help ease people off.
But this is the discussion we do need to have, and I really
appreciate the Chairwoman for scheduling this today. For at
least a generation, we have been talking about welfare cliffs.
It is going on 30, 40 years. We have been waging this war on
poverty, but with little progress beyond an expansive and at
times perverse web of programs and trillions in spending.
Unfortunately, if one was born in the system, the
statistics show the odds are stacked against them on whether or
not they can navigate their way out, and it has become
multigenerational.
So, we have to do more than just help folks--we have to do
more to help folks navigate out of poverty and not just sustain
them while in poverty. I think it is a duty for us to consider
how we do that.
As our witnesses will speak to, much of this cliff issue
spans from the fact that we have created a program to try to
fill every void, big or small, of a person's life, whether it
is healthcare, food assistance, childcare, utility assistance,
housing, education, unemployment, just to name a few.
And instead of creating mobility, we have inadvertently
crafted a massive suite of programs that, when stacked, create
a trap for many instead of a ramp, or a cliff instead of a lift
out of poverty.
And this Subcommittee, and as Madam Chairwoman just
mentioned, recently hosted two women who articulated the
disincentives and penalties within SNAP, how their families
were impacted by the very policies Congress has enacted and
various Administrations have regulated.
Both of them talked about their fear if they got full-time
work or if they got too many raises that they would immediately
lose all of their benefits and their eligibility to SNAP. That
is not what we want to do. We have to do something better.
I hope this has not just become a conversation solely
focused on expanding eligibility and increased benefits. We
have seen 50 years of evidence that shows us it just might not
be working as intended. There certainly are revenue-neutral
approaches to be considered here to help solve this problem.
I said in the last hearing, while work waivers granted
under the former and current Administrations were logical in
response to COVID, they are now clearly keeping employable
individuals idle and it reaps, in my view, significant negative
impacts on families who need to get back to work, and also
small businesses who are in dire need of workers.
We just saw today a recent report that like 40 percent of
businesses want to hire. So, as of 31 May, we have more than
nine million job openings, running the gamut from manufacturing
to health services to retail and local government. This week we
now have a record high number of job openings.
So, it is time to utilize the resources associated with
SNAP employment and training as well as state-based employment
readiness services to help get folks placed where they are
qualified and engaged in these industries.
We have a witness with us today, Mr. Erik Randolph, who was
before this very Subcommittee 6 years ago. A lot has happened
in the last 6 years, including a farm bill where Republicans at
least tried to soften the blow to SNAP recipients.
Unfortunately, those provisions were dropped out at conference.
But what has not happened is a shared effort to come together
as Congress and work through this issue both in SNAP and across
the more than 80 other programs in existence.
So, Madam Chair, we both see this as an opportunity. I will
say this again for the record. Our decisions and approaches
must reflect a multigenerational approach, but we are long past
trying and testing siloed programming.
So, with that, I look forward to hearing today's testimony
and our future work on this. I appreciate that we have commonly
identified a problem and that we are willing to try to tackle
this together.
Thank you and I yield back, Madam Chairwoman.
The Chairwoman. Thank you, Mr. Bacon. And I will just
acknowledge that yes, we do agree there is a problem and our
approaches may be different. But with all due respect, I have
to believe that there is mobility in these programs. I will say
it again, I went from being a welfare recipient and a SNAP
recipient and now I am Chair of this Committee. So, I guess I
have to disagree that there is no incentive here.
Mr. Bacon. I hear what you are saying. Many people have,
but we had two witnesses that were your guests that did say
they had problems getting out. We know it is a common problem.
The Chairwoman. I am pleased to welcome such a
distinguished panel of witnesses to our hearing today. Our
witnesses bring to our hearing a wide range of experiences and
expertise, and I thank you all for joining us today. I look
forward to hearing from you.
Our first witness today is Dr. Bradley Hardy. Dr. Hardy is
an Associate Professor at the School of Public Affairs in the
Department of Public Administration and Policy at American
University in DC.
He is also a senior fellow in economic studies at the
Brookings Institution, a research fellow with the Center for
Household Financial Stability at the Federal Reserve Bank of
St. Louis, and a research affiliate of both the University of
Wisconsin Institute for Research on Poverty and the University
of Kentucky Center for Poverty Research.
The focus of Dr. Hardy's current work is labor economics,
including economic instability and poverty policy, among other
emphases.
Our next witness is Dr. Al Gourrier, an Assistant Professor
and Director of Nonprofit Management and Social
Entrepreneurship Programs at the University of Baltimore in
Maryland.
Dr. Gourrier, his areas of academic research include
community banking and finance, social equity and community
development, with a recent examination of the minimum wage in
Maryland. Prior to his work in academia, Dr. Gourrier spent 19
years as a banker and was the founder and President of the
First Commerce Bank of North Las Vegas, Nevada.
Our third witness today is Ms. Tikki Brown. Ms. Brown is
the Assistant Commissioner of Children and Family Services for
the Minnesota Department of Health and Human Services. The
scope of her responsibilities for the State of Minnesota
include services and policies that promote adoption, foster
care, child protection, child support, childcare, refugee
services and cash and food support.
Before accepting the position as Assistant Commissioner,
Ms. Brown was the director of economic opportunity and
nutrition assistance for the state, where her duties
encompassed housing and shelter, food shelves, nutrition
education, outreach employment and training, community action
and the Supplemental Nutrition Assistance Program.
Our fourth and final witness is Mr. Erik Randolph. Mr.
Randolph is the Director of Research at Georgia Center for
Opportunity in Peachtree Corners, Georgia. Mr. Randolph's
experiences include serving as a senior fellow with the
Illinois Policy Institute and an economic lecturer for New York
College of Pennsylvania.
He specializes in developing economic models to assist with
the creation of public policy solutions through an
understanding of governmental structures. Included in his past
work are analyses of income from minimum wage workers for 23
states, systemic welfare reform, and work disincentives of
welfare policies.
Welcome to all of our witnesses today. We will now proceed
to hearing your testimony. You will each have 5 minutes. The
timer should be visible to you on your screen and will count
down to zero, at which point your time has expired. Again, I
welcome you all today.
We will begin with Dr. Hardy, and when you are ready you
may begin your testimony.
STATEMENT OF BRADLEY L. HARDY, Ph.D., ASSOCIATE
PROFESSOR, DEPARTMENT OF PUBLIC ADMINISTRATION AND POLICY,
SCHOOL OF PUBLIC AFFAIRS, AMERICAN
UNIVERSITY, WASHINGTON, D.C.
Dr. Hardy. Thanks. Chairwoman Hayes, Ranking Member Bacon,
and Members of the Subcommittee on Nutrition, Oversight, and
Department Operations, thank you for the opportunity to discuss
benefit cliffs in the SNAP program.
As you heard, I serve as an Associate Professor at American
University, and for 15 years I have been conducting research on
economic instability and social policy, looking into programs
like SNAP and the Earned Income Tax Credit and TANF. So, there
are several points I would like to emphasize today briefly.
Benefit cliffs are a concern for program participants who
are worse off on the margin, as we say, when their earnings
increase. These SNAP benefit cliffs appear to affect a
relatively small number of participants, however, once we
account for the social safety net programs and earnings are
accounted for.
So, in practice, these benefit cliffs are relatively rare.
They are problematic and, fortunately, they can be remedied.
One important offset of the SNAP benefit cliff for working
families are generous tax credits received via the Earned
Income Tax Credit as well as refundable child tax credits, many
of which are starting off this week.
In the instances where family earnings rise, leading to a
reduction or loss of SNAP benefits, we find that the overall
increased earnings and EITC payments represent a net gain for
most families.
Also worth noting, the structure of SNAP reduces benefits
less than dollar for dollar as earnings rise, and there is a 20
percent earnings disregard that further promotes earnings and
work.
Other well-known safety net programs can exacerbate benefit
cliffs, but they don't, because relatively few low-income
families receive benefits from programs such as TANF cash
assistance or housing assistance. Over calendar year 2019, for
every 104 families nationwide, roughly 23 received TANF cash
assistance. Similarly, only one in five families who qualify
for housing assistance receive it.
Moving along, SNAP and work participation are, in fact,
complementary. Most SNAP recipients are children, elderly, or
disabled, but most nondisabled adults on SNAP do work. The
decision to work, in my studies and studies across labor
economics, is determined by many inflexible forces, including
involuntary job loss, labor market mismatches, both regional,
for example, as skills change, as demands on skills change,
access to reliable transportation, disability, age, childcare
coverage, as well as discrimination.
Most nondisabled adult SNAP recipients do work, and they
may receive a combination of Federal and state Earned Income
Tax Credit benefits. Evidence demonstrates that the EITC
creates positive work incentives as well.
The increased pandemic-SNAP benefits, they shake out to
about roughly an additional $100 for a family of four. They do
help to reduce food hardship, but they are inadequate to make
up for lost employment.
And another point, families and children receiving SNAP
face difficult labor market conditions. SNAP plays a critical
role in supporting work at low wages and providing a buffer
against income volatility and job loss.
SNAP is among the most effective economic development tools
in the nation. The program reduces food hardship and
insecurity, and it also improves long-run economic and health
outcomes for the nation's children. It stimulates local
economies and small businesses, because SNAP dollars are spent,
not saved.
Continuing along this line, we can further reduce SNAP
benefit cliffs, because many families are going to be receiving
SNAP with child allowances delivered as tax credits within the
American Rescue Plan, which could be made permanent with an
American Families Plan. These credits could reduce child
poverty by as much as \1/2\. That is huge. This universal
policy is forecast to reduce overall Black poverty by 37
percent, Hispanic poverty by 40 percent, and poverty among
whites and Asians by about 24 percent. I mean, this is really
dramatic stuff. So, again, these allowances ranging from $3,000
to $3,600 are an additional offset for potential SNAP benefit
cliffs.
And so, finally, states can address SNAP benefit cliffs by
raising income and asset limits, using broad-based categorical
eligibility, as you just heard. This extends benefits to low-
income families who may otherwise lose benefits. For families
on the cusp of rising above 130 percent of the poverty line,
about $2,300, broad-based categorical eligibility enables
states to raise SNAP's income limit to 200 percent of the
poverty line or about that level. Roughly 35 states have
already done so. More could do it.
So, in closing, I just want to say that SNAP provides
crucial economic assistance for America's families, with a
really high economic return-on-investment. Labor market factors
have created more low-wage job opportunities and fewer solid
middle-class jobs, leaving many families in need of a
combination of SNAP and EITCs.
You heard testimony in May from folks like Odessa Davis
from my region in Montgomery County, Maryland, a teacher who
spoke of how SNAP provided an important buffer during time of
great need. And from my own hometown where I grew up in Durham,
North Carolina, I know many children who grew up with SNAP
benefits who have now looked back in an appreciative manner,
and they know that it contributed to their long-term outcomes.
So, there are long-term benefits to the nation's economy from
SNAP and income support programs.
I encourage continued support for a strong SNAP program. I
do think there are clear benefits to making the refundable
child tax credit payments permanent within the ARP. These
programs like SNAP are work supports. They help families and
children that experience low and volatile incomes.
So ultimately, many families rising out of poverty will do
so with a combination of work combined with help, both from
people of goodwill and from programs like SNAP, the Earned
Income Tax Credit, and child tax credits.
So thank you and I look forward to any questions you may
have.
[The prepared statement of Dr. Hardy follows:]
Prepared Statement of Bradley L. Hardy, Ph.D., Associate Professor,
Department of Public Administration and Policy, School of Public
Affairs, American University, Washington, D.C.
Chairwoman Hayes, Ranking Member Bacon, and Members of the
Subcommittee on Nutrition, I thank you for the opportunity to appear
before you today to discuss benefit cliffs in the Supplemental
Nutrition Assistance Program (SNAP) and related labor market challenges
affecting low-income families. My name is Bradley Hardy. I am an
Associate Professor of Public Administration and Policy at American
University. Outside of my role as a professor at American, I hold
several affiliations. I am a research affiliate of the University of
Wisconsin Institute for Research on Poverty, the University of Kentucky
Center for Poverty Research, and the Institute for Economic Equity at
the Federal Reserve Bank of St. Louis. The views expressed here are my
own, and do not represent official positions or policy viewpoints of
any organizations with which I work or affiliate. For the past 15
years, I have conducted research on economic instability,
intergenerational mobility, poverty policy, racial economic inequality,
and socioeconomic outcomes. My work has documented trends and sources
of income volatility and intergenerational mobility within the United
States, with a focus on socio-economically disadvantaged families,
neighborhoods, and regions. This work includes research on the role of
anti-poverty transfer programs such as SNAP, the earned income tax
credit, and TANF for improving economic well-being among low-income
individuals and families.
I have written twenty-five sole-authored or co-authored research
studies, fifteen of which are published or forthcoming in peer-reviewed
journals. I apply and share my expertise with a range of organizations
concerned with poverty and economic well-being. I currently serve as a
panel member of a National Academies of Sciences, Engineering, Medicine
Panel on Evaluation and Improvements to the Supplemental Poverty
Measure. I also serve as an advisory member for the Aspen Institute
Financial Security Program Benefits21 initiative, and recently
completed work on a year-long panel studying economic security in the
United States for the National Academy of Social Insurance. I also
serve as a co-editor at the Journal of Policy Analysis and Management
and Contemporary Economic Policy.
My testimony is drawn primarily from my work on the interaction of
SNAP with other social safety net programs, as well as on income
volatility and the protective role of social safety net programs such
as SNAP. I also draw upon my assessment of the broader research base
surrounding these issues. There are several points I will highlight,
and I expand upon these points in greater detail. To summarize:
Conceptually, benefit cliffs are of concern for program
participants who find themselves to be worse off ``on the
margin'' when their earnings increase. SNAP benefit cliffs
affect a relatively small number of participants, particularly
once other social safety net programs are accounted for. In
this way, these programs can combine to create a ``net''
marginal tax on earnings. In practice, these benefit cliffs are
rare, and can be remedied. One important offset of the SNAP
benefit cliff for working families are generous tax credits
received via the earned income tax credit (EITC) and the child
tax credit (CTC).
SNAP and work participation are complementary. Many studies
find that changes in the propensity to work--so-called labor
supply elasticities--are fairly small. Most nondisabled adults
on SNAP work. The decision to work is largely determined by
inflexible forces, including involuntary job loss, disability
status, age, and childcare coverage. Relatedly, preliminary
research on the effect of pandemic unemployment insurance
suggests that UI generosity did not reduce employment.\1\
---------------------------------------------------------------------------
\1\ Altonji, J., Contractor, Z., Finamor, L., Haygood, R.,
Lindenlaub, I., Meghir, C., O'Dea, C., Scott, D., Wang, L. and
Washington, E., (2020). Employment effects of unemployment insurance
generosity during the pandemic.
Families and children receiving SNAP face difficult labor
market conditions. SNAP plays a critical role in supporting
work at low-wages and providing a buffer against income
---------------------------------------------------------------------------
volatility and joblessness.
Further reducing any remaining SNAP benefit cliffs, many
families receiving SNAP also benefit from generous child
allowances enacted via tax credits within the American Rescue
Plan, which could be made permanent via the American Families
Plan. These credits could reduce child poverty by \1/2\.
States have tools to reduce SNAP benefit cliffs. Many states
have expanded SNAP benefits via broad based categorical
eligibility, which extends benefits for low-income families who
may otherwise lose benefits.
Low-Income Families and the Safety Net: SNAP and the EITC
Assessments of changes in worker well-being due to SNAP benefit
cliffs should incorporate the full package of earnings and social
safety net benefits that families on SNAP typically receive. In the
instances where family incomes rise--leading to a reduction and/or
subsequent loss in SNAP benefits, increased earnings and refundable tax
credit payments represent a net-gain for most families. In my own co-
authored work, I find that simultaneous participation in SNAP and the
EITC doubled throughout the 2000s.\2\ A similar relationship holds for
many individuals who receive higher earnings via higher state minimum
wages--the net effects of higher minimum wages alongside EITC benefits
typically represent a net-gain for these individuals and their
families.\3\ These benefits, along with higher earnings, will leave
most families better off as earnings rise. This is especially so for
families at very low earnings and low labor force attachment: in these
instances, the EITC provides incentives for these families to enter
into work. So, as it balances out, many households experience a
negative marginal tax rate; the opposite of losing resources, they
receive additional resources via tax credits that supplement their
higher earned income.
---------------------------------------------------------------------------
\2\ Hardy B., Smeeding T., Ziliak J.P. (2018). The changing safety
net for low-income parents and their children: Structural or cyclical
changes in income support policy? Demography. 55(1): 189-221.
\3\ Fahimullah, F., Geng, Y., Hardy, B., Muhammad, D. and Wilkins,
J., (2019). Earnings, EITC, and Employment Responses to a $15 Minimum
Wage: Will Low-Income Workers Be Better Off? Economic Development
Quarterly, 33(4), pp. 331-350.
---------------------------------------------------------------------------
It is also worth noting that the basic structure of SNAP reduces
benefits less than dollar-for-dollar, another feature that helps to
blunt the potential harm from a benefit cliff. In this sense, the SNAP
benefit cliff is smooth, more akin to a hill. There are aspects of the
safety net where benefit cliffs are starker--some state-level childcare
subsidies loom large as an example. Other well-known safety programs
that could ostensibly exacerbate benefit cliffs generally fail to do
so, though for the unfortunate reason that relatively few poor families
who qualify for benefits such as TANF and housing assistance actually
receive these benefits. Over calendar year 2019, for every 100 poor
families nationwide, roughly 23 received TANF cash assistance. Coverage
varies greatly across states--8 out of 100 poor families receive TANF
cash assistance in Alabama, while 34 out of 100 receive TANF cash
assistance in Washington state.\4\ Similarly, only one in five families
who qualify for housing assistance receive it.\5\ For example, a recent
news account out of Miami-Dade County reported that roughly 90,000
applicants are vying to be one of 5,000 that will be placed on a list
to receive housing vouchers.\6\
---------------------------------------------------------------------------
\4\ https://www.cbpp.org/research/family-income-support/state-fact-
sheets-trends-in-state-tanf-to-poverty-ratios.
\5\ https://housingmatters.urban.org/research-summary/housing-
choice-voucher-waiting-lists-disadvantage-households-facing-most.
\6\ https://www.local10.com/news/local/2021/07/01/90000-applicants-
only-5000-spaces-for-miami-dades-section-8-housing-and-no-guarantee/.
---------------------------------------------------------------------------
Work and Safety Net Participation Go Together
Most SNAP recipients are children, elderly, or disabled. Among the
subset of adults receiving SNAP who can work, most elect to do so.
Empirical evidence shows that SNAP is not a major determinant of
decisions surrounding work participation and hours worked. Several
studies find that these responses or ``elasticities'' of work to either
higher earnings or safety net benefits are generally low.\7\ There are
several reasons for this. First, the power to dictate scheduling tends
to skew heavily towards firms and away from workers, especially within
frontline and lower-wage employment opportunities. Thus, to the degree
that the discussion of SNAP benefit cliffs is at all connected to
concerns over work disincentives, there is not consistent empirical
evidence to support this concern. Moreover, work decisions tend to be
determined by other factors, including job mismatch, access to reliable
transportation, disability status, and access to affordable childcare.
A large proportion of non-disabled adult SNAP recipients work, and via
work participation they receive a combination of Federal and state EITC
benefits, as well as CTCs. Empirical evidence demonstrates that
features of the EITC create positive work incentives.\8\
---------------------------------------------------------------------------
\7\ Keane, M.P., 2011. Labor supply and taxes: A survey. Journal of
Economic Literature, 49(4), pp. 961-1075.
\8\ Nichols, A., & Rothstein, J. (2016). ``The earned income tax
credit'' In R.A. Moffitt (Ed.), Economics of mean-stested transfer
programs in the United States (Vol. 1, pp. 137-218). Chicago, IL:
University of Chicago Press.
---------------------------------------------------------------------------
Many families struggle to find pathways out of lower wage
employment and, as a result, they persist on a combination of earnings
alongside SNAP and EITC benefits.\9\ EITC receipt is conditioned on
work participation, and in the absence of market employment, neither
EITC nor SNAP--alone or together--would adequately cover food,
clothing, shelter, transportation, and utility expenses that families
typically face. Increased pandemic SNAP benefits, roughly an additional
$100 for a family of four,\10\ will help to reduce food hardship, but
are inadequate to make up for lost employment. Relatedly, preliminary
research suggests that UI generosity during the pandemic did not reduce
employment.\11\
---------------------------------------------------------------------------
\9\ Hardy, Smeeding, and Ziliak (2018).
\10\ https://www.usda.gov/sites/default/files/documents/arp-
national-factsheet.pdf.
\11\ Altonji, et al. (2020).
---------------------------------------------------------------------------
Work Conditions Among Low-Income Families
The nature of work among low-income families typically yields
income streams that are both low and volatile. Unstable, low-wage
employment is strongly associated with higher income volatility and,
accordingly, many socioeconomic groups that typically experience higher
levels of joblessness report higher levels of income volatility. For
example, families with lower incomes and Black families of all incomes
generally experience higher levels of income volatility as well as
those with fewer formal educational credentials and those headed by one
unmarried parent.\12\ Such families appear to be saddled with an
undesirable portfolio--economic resources and incomes that are both
qualitatively low and unpredictable. This is largely a feature of the
low-wage labor market, where workers change jobs more frequently and
firms adjust work schedules frequently.\13\
---------------------------------------------------------------------------
\12\ Hardy, B.L., (2017). Income instability and the response of
the safety net. Contemporary Economic Policy, 35(2), pp. 312-330.
\13\ Schneider, D. and Harknett, K., (2019). Consequences of
routine work-schedule instability for worker health and well-being.
American Sociological Review, 84(1), pp. 82-114.
---------------------------------------------------------------------------
SNAP, along with programs such as the EITC and unemployment
insurance, combine to lower income volatility for low-income families.
SNAP recipient families are more likely to transition in and out of
work, and SNAP provides important nutritional support and near-cash
benefits for these families and children. This support is linked to
improved long-term socioeconomic outcomes for children within these
households.\14\
---------------------------------------------------------------------------
\14\ Hoynes, H., Schanzenbach, D.W. and Almond, D., (2016). Long-
run impacts of childhood access to the safety net. American Economic
Review, 106(4), pp. 903-34.
---------------------------------------------------------------------------
The American Rescue Plan Further Reduces Existing Benefit Cliffs For
Families
Many low-income families that benefit from SNAP will also receive
child allowances from the American Rescue Plan (ARP). This plan will
substantially reduce overall poverty, including significant reductions
in child poverty across racial and ethnic minority groups. Poverty
reducing policies in the ARP, including child tax credits from $3,000
to $3,600, alongside enhanced SNAP benefits and pandemic unemployment
insurance, are forecasted to reduce poverty by 31 percent nationwide.
This universal policy reduces racial economic inequality as well; Black
poverty is forecasted to fall by 37 percent while Hispanic poverty is
forecasted to fall by 40 percent. Poverty among Whites and Asians is
forecasted to fall by roughly 24 percent. Poverty for White children
could fall by 63 percent, followed by forecasted child poverty
reductions for Black, Hispanic, and Asian children of 55, 53, and 46
percent, respectively.\15\ This expansion of the safety net further
offsets the impacts of SNAP benefit cliffs. SNAP households should
qualify for some, if not all, of the benefits of the ARP, especially
refundable child tax credit payments.
---------------------------------------------------------------------------
\15\ Parolin, Z., Collyer, S., Curran, M. and Wimer, C., (2021).
The Potential Poverty Reduction Effect of the American Rescue Plan (No.
20411). Center on Poverty and Social Policy, Columbia University.
---------------------------------------------------------------------------
Solutions to Assist Families Include Expansions of Safety Net Benefits
Via Broad-Based Categorical Eligibility
Broad-based categorical eligibility (BBCE) can reduce rarely
occurring benefit cliffs within SNAP. Such policy tools expand benefits
to low-income families that experience modest income growth. BBCE
extends benefits to families at the margin of qualifying for benefits.
For households with incomes rising above 130 percent of the poverty
line--$2,353--BBCE enables states to raise SNAP's income limit to up to
200 percent of the poverty line. Unfortunately, only about 35 states
take advantage of the option.
For example, a parent with two children working full time at $13.50
an hour would have income at 129 percent of the poverty level,
receiving roughly $123 a month from SNAP. If her hourly wage increased
by 50 --$87 a month--raising her income slightly above 130 percent of
poverty, the family becomes ineligible for SNAP. The loss of benefits
would more than cancel out the increased earnings, and they lose
approximately $36 in total resources. In a state that raises the income
cutoff via BBCE, this 50 raise would reduce the family's SNAP benefit
by only $31 per month, resulting in a monthly net-increase of about $56
per month.
Overall, The Safety-Net is Largely Centered Around Work
No consistent body of empirical evidence shows that these programs
reduce work. The safety net, including SNAP, provides crucial
assistance for America's families. Over past several decades, many
middle-skill jobs have been replaced by lower-paying employment
opportunities.\16\ As such, many families benefit from a combination of
SNAP and refundable tax credits,\17\ and most cannot realistically make
ends meet without combining work with these safety net benefits. Given
the weight of the social science evidence surrounding the long-term
socioeconomic benefits of income receipt and poverty reduction for
families and children, there are clear economic benefits associated
with making the refundable child tax credit payments within the ARP
permanent.\18\ These child allowances would help to support families
and children that experience low, volatile incomes from job
fluctuations, as well as expense volatility related to everyday
household expenses, including medical expenses and car repairs.\19\
Still, even with the relatively generous tax credits within the ARP,
families are forecasted to package work with these tax credits, using
the additional income to pay down household expenses and meet day-to-
day household needs.\20\
---------------------------------------------------------------------------
\16\ Jaimovich, N. and Siu, H.E., (2020). Job polarization and
jobless recoveries. Review of Economics and Statistics 102(1): 129-147.
\17\ Hardy, Smeeding, and Ziliak (2018).
\18\ Hardy, B., Hill, H.D. and Romich, J., (2019). Strengthening
social programs to promote economic stability during childhood. Social
Policy Report, 32(2), pp. 1-36.
\19\ Morduch, J. and Schneider, R., 2017. The financial diaries.
Princeton University Press.
\20\ Tach, L., and Halpern-Meekin, S. (2014). Tax code knowledge
and behavioral responses among EITC recipients: Policy insights from
qualitative data. Journal of Policy Analysis & Management 33: 413-439.
The Chairwoman. Thank you so much, Dr. Hardy, for your
opening statement.
We will now move on to Dr. Gourrier. Please unmute and
begin with your opening statement when you are ready.
STATEMENT OF AL G. GOURRIER, Ph.D., ASSISTANT
PROFESSOR, SCHOOL OF PUBLIC AND INTERNATIONAL
AFFAIRS, UNIVERSITY OF BALTIMORE; FACULTY FELLOW, SCHAEFER
CENTER FOR PUBLIC POLICY, BALTIMORE, MD
Dr. Gourrier. Good afternoon, ladies and gentlemen of the
Committee. In 2018, in my capacity as professor at the
university and faculty fellow with the Schaefer Center, we
began to explore existing research in terms of the benefit
cliff and its effects on working class population across the
country.
At that point, a number of other states had recently
produced reports highlighting the challenges of the benefit
cliff on their residents as well as addressing some of the
measures that prospective state legislatures were exploring.
We commenced on a 2 year research project to better
understand the impact of the cliff effects and the benefit
cliff phenomenon on Maryland residents, using the basis of the
United Way's universally accepted biannually produced ALICE
report, which stands for Asset Limited, Income Constrained,
Employed, which highlighted some of the overall economic
challenges and socioeconomic conditions of working class
families throughout the state.
Within the ALICE report, we were able to identify the
standards of a household survival budget, which establishes a
minimum basic need, budget adjusted, both geographically and
with inflation.
From there, we were able to create a three-family static
model consisting of a single individual household, a single
parent with two children, and a two-parent, two-children
household. We used an inventory of traditional state-supported
social service programs, of which SNAP has the largest share of
participation among the states' social programs.
The results of our study indicate that two-parent
households are penalized by the benefit cliff even if they
receive housing assistance, which is oftentimes unlikely, and
the maximum health insurance tax credit.
Two-parent families with one person working full time at
the minimum wage do not have enough resources to cover their
basic survival budget expenses. When both parents work minimum
wage jobs, the two-adult, two-children household is only
marginally better off.
Although the household earns an extra income when the
second adult works full time, the family only experiences a
marginal increase in net resources, because as the earned
income increases the eligibility for benefits such as SNAP
decreases.
However, our two-parent families were not the only group
negatively affected by the benefit cliff. Even with recent
increases in the minimum wage from $10.10 to $11 in Maryland as
of January 2020, single adults and single parents with two
children could not meet their basic survival budget needs if
they received housing assistance and health insurance tax
credits.
In analyzing our three constructed family types, we found
major disincentives built into the social service structures
which prevent the pursuit of upward mobility through work for a
large number of American families.
The challenges presented by cliff effects and the lack of
appropriate and/or accommodating eligibility requirements
without modifications proved to serve as a disadvantage for
many working families at or near the Federal poverty line.
In Maryland, SNAP provides benefits to more than 884,000
residents, or approximately 15 percent of the state population.
At the time of our study, one in three working households in
the state could not afford basic household expenses. Minimum
wage jobs, even combined with government assistance such as
SNAP, are often insufficient to meet their basic needs.
Female-headed households are overrepresented among the
states' impoverished population. The largest share of
households with incomes below the Federal poverty line are
African Americans, at 43 percent, who only make up 30 percent
of the state's population but make up 52 percent of SNAP
participants and are especially susceptible to the benefit
cliff, given their disproportionate representation.
Over the last year since the production of our study, the
country and our economy have experienced an unprecedented level
of social and economic challenges. The surge in unemployment
insurance claims, the demand for small businesses, the
disruption in our education system and the social impact on
struggling families is unparalleled.
However, our pre-pandemic data represents problematic
results and a longstanding impact created by the benefit cliff
phenomenon. Although the current economic data represents a
very unique paradox as a result of short-term macro-
governmental infusion with a predetermined expiration, it is my
opinion that post pandemic, the benefit cliff challenges
present pre-pandemic are still relevant and will continue to
remain a consistent challenge among American working class
families.
I thank you for the opportunity to speak with you this
afternoon to present our data, and I look forward to your
questions.
[The prepared statement of Dr. Gourrier follows:]
Prepared Statement of Al G. Gourrier, Ph.D., Assistant Professor,
School of Public and International Affairs, University of Baltimore;
Faculty Fellow, Schaefer Center for Public Policy, Baltimore, MD
Good afternoon, ladies and gentlemen of the Committee. My name is
Al Gourrier and I am an Assistant Professor of Public Finance at the
University of Baltimore and I am a Faculty Fellow with the Schaefer
Center for Public Policy in Baltimore. In 2018, in my capacity as
Professor at the University and Faculty Fellow with the Schaefer Center
we began to the explore existing research in terms of the benefit cliff
and its effects on the working-class population across the country. At
that point, a number of other states, such as Washington, Ohio,
Vermont, Massachusetts, and New Jersey to name a few, had recently
produced reports highlighting the challenges of the benefit cliff on
their residents, as well as addressing some of the measures their
perspective state legislatures were exploring to address the problem.
We commenced on a 2 year research project to better understand the
impact of cliff effects and the Benefit Cliff phenomenon on Maryland
residents. At the time, Maryland's Governor Larry Hogan's Two-
Generation (2Gen) Family Economic Security Commission and Pilot
Programs, which was charged with the responsibility of exploring
multigenerational poverty, and designed to improve the economic well-
being of Maryland Families, was producing its final report that set
some of the ground work for the need of a more comprehensive benefit
cliff study. Using the basis of the United Way's universally accepted
and highly respected biennial produced ALICE Report, which stands for
Asset Limited Income Constrained Employed, highlighted some of the
overall economic challenges and socioeconomic conditions of working
family throughout the state. Within the ALICE Report we were able to
identify a standard Household Survival Budget, which establishes a
minimal basic needs budget adjusted both geographically and with
inflation. From there we were able to create a three-family static
model consisting of a single individual household, a single parent with
two children household, and a two-parent with two children household.
We used an inventory of the traditional state supported social-service
programs of which the [SNAP] benefit has the largest share of
participation among the states social programs.
The results of our study indicate that two-parent households are
penalized by the benefit cliff--even if they received housing
assistance (which is oftentimes unlikely) and the maximum health
insurance tax credit. Two-parent families with one-person working full
time at the minimum wage do not have enough resources to cover their
basic survival budget expenses.
When both parents work minimum wage jobs, the two-adult two-
children household is only marginally better off. Although the
household earns an extra income when the second adult works full-time,
the family only experiences a marginal increase in net resources
because as the earned income increases, the eligibility for benefits
such as SNAP decreases.
However, our two-parent families were not the only group negatively
impacted by the benefit cliff. Even with recent increases in the
minimum wage from $10.10 to $11.00 in Maryland in January of 2020,
single adults (often referred to as ABAWD) and single parents with two-
children could only meet their basic survival budget needs if the
received housing assistance and health insurance tax credits.
In analyzing our three constructed family types, we found major
disincentives built into the social service structures as they
currently exist, which prevent the pursuit of upward mobility through
work for a large number of American families. The challenges presented
by the cliff effect and the lack of appropriate and/or accommodating
eligibility requirements, can prove to serve as a disincentive to many
working families at or near the Federal Poverty Line.
In our state, the Supplemental Nutrition Assistance Program (SNAP)
provides benefits to more that 884,000 residents or 14.7% of the state
population in 2018. At the time of our study, more than one in three
working households in the state could not afford basic household
expenses. Minimum wage jobs, even when combined with government
assistance such as SNAP are often insufficient to meet their basic
survival needs. Female-headed household are over-represented among the
state's impoverished. The largest share of households with incomes
below the Federal Poverty Line are African Americans at 43%, who only
make up 30% of the state's population, and make up 52% of SNAP
participants, are especially susceptible to the benefit cliff given
their disproportionate representation.
Over the last year, since the production of our study, the country
and our economy have experienced an unprecedented level of social and
economic challenges. The surge in unemployment insurance claims, the
demand on small businesses, the disruption to our education system and
the social impact on struggling families is unparalleled. However, our
pre-pandemic data represents problematic results and the long-standing
impact created by the by the benefit cliff phenomenon. Although, the
current economic data represents a very unique paradox as result of the
short-term macro-governmental infusion with a predetermined expiration.
It is my opinion that post-pandemic, the Benefit Cliff challenges
present pre-pandemic will still remain consistent among working class
families.
Benefit Cliff Phenomenon
The benefit cliff mostly impacts individuals and households at or
near the poverty level who are eligible for--but may not be receiving--
multiple government programs. Recent research indicates that families
with children often require an income up to 3\1/2\ times the Federal
Poverty Level in order to adequately cover the basic needs and living
expenses for a family. These households are often called the working
poor, referring to the fact that people in these households have jobs
but still remain at or near the poverty level. They are also known as
ALICE' households or families--they are Asset Limited,
Income Constrained, Employed. As discussed further below, ALICE is
based on cost of living in a specific jurisdiction, and households with
incomes under an ALICE Household Survival Budget are working but unable
to meet their basic needs.
For these individuals and families, government programs can be
essential for daily survival. However, many of these programs are
designed so that additional earnings, usually in the form of wages or
salaries, result in a decrease in benefits. This loss of benefits can
lead to individuals making decisions that are not always best for the
family or society, resulting in the Benefit Cliff phenomenon.
Principal Analytical Findings
In Maryland, 9.4 percent of the population lives on incomes
below 100 percent of the Federal Poverty Level (FPL) and
another 12.3 percent have incomes below 125 percent of the FPL.
While a majority of the state's overall population is White,
the largest share of those with incomes below FPL are African
American. There are an estimated 236,497 state residents who
are Black or African American with incomes below FPL.
Female-headed households are over-represented among
impoverished and ALICE households.
Two-parent households are penalized by the benefit cliff--
even if they receive housing assistance (unlikely) and the
maximum health insurance tax credit, two-parent families with
one-person working full time at the minimum wage do not have
enough resources to cover their basic survival budget expenses.
Even with the increase in the minimum wage to $11.00 per
hour on January 1, 2020, single adults and single parents with
two children could only meet their basic survival budget needs
if they received housing assistance and health insurance tax
credits.
When both parents work minimum wage jobs, the two-adult,
two-child household is only marginally better off. The
household earns an extra $1,760 when the second adult works
full-time, but the family actually only experiences an increase
in net resources of $320. This is because as earned income
increases, eligibility for benefits--specifically for food
stamps and medical assistance for the adults--decreases.
Al G. Gourrier, Ph.D., MBA,
University of Baltimore.
The Chairwoman. Thank you so much, Dr. Gourrier, for that
testimony.
I will now move to Ms. Brown for your testimony. When you
are ready, please unmute and begin.
STATEMENT OF TIKKI BROWN, ASSISTANT COMMISSIONER, MINNESOTA
DEPARTMENT OF HUMAN SERVICES, CHILDREN AND FAMILY SERVICES
ADMINISTRATION, MINNEAPOLIS, MN
Ms. Brown. Thank you for the opportunity to share
Minnesota's experience. I first want to share with you the
words of Minnesotans who have turned to SNAP. In the words of
Zoe, ``I get up every morning and provide for my daughter . . .
the more that you work, the more everything goes up . . . if we
try to make this amount of money to pay the rent that you just
boosted up; why is it that we lose [food] stamps because of
it?''
Another parent, JoJo, echoed that, saying, ``it is like the
government handicaps you so [you're] stuck in that part-time
job.''
Their words underscore some important points. First, Zoe
and JoJo work. That makes them very typical working-age SNAP
recipients. Almost 75 percent of the nondisabled working-age
adults turning to SNAP in Minnesota are employed or just
recently lost a job.
The majority of workers who rely on SNAP to supplement low
wages or to get them through a spell of unemployment are
concentrated in four industries: Retail, hotel and restaurants,
healthcare and social services, and temporary agencies. Workers
in these occupations are also the least likely to receive
unemployment benefits. In fact, even though low-wage workers
are 2\1/2\ times more likely to lose a job, they are only half
as likely as higher paid workers to receive unemployment
compensation.
The most important point that JoJo and Zoe make, work does
not provide enough money to meet needs as basic as having
enough food to feed their families.
Three important changes could make SNAP more effective at
increasing the number of people who sustain work and at making
it more possible for those workers to realize economic
stability. The power of these three changes is in their
combination, not as a menu: Number one, increase the earned
income disregard; number two, raise the gross income limit; and
number three, increase SNAP benefits. I am going to walk you
through a PowerPoint slide to illustrate the impact of these
combined policies and, hopefully, that should pop right up.*
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* Editor's note: the PowerPoint presentation referred to is an
animation of the graph entitled, SNAP allotments by earned income. The
animation is retained in Committee file.
---------------------------------------------------------------------------
All right. This sample is for a family of three. In the
graph, the SNAP household benefit amount is in the vertical
axis on the left, and the household's monthly earnings are in
the horizontal axis on the bottom.
Next. The first line shows what happens in Minnesota as
earnings increase under the current SNAP household benefit
amount without any COVID-19 enhancements and includes
Minnesota's current 20 percent earnings disregard and our 165
gross income test.
Next. The second line shows a 15 percent increase to SNAP
benefits. Next, please. With the 165 percent gross income test
that Minnesota has adopted under broad-based categorical
eligibility and SNAP's 20 percent earned income disregard. The
15 percent increase to benefits has pushed the cliff out
further, but the 20 percent earned income disregard has still
allowed a significant reduction in SNAP benefits while the
family is still below the poverty line.
Next. The third line shows how the cliff would move further
out if SNAP no longer used the 15 percent increase--that is the
COVID benefit--but used the same earned income disregard that
is applied in Minnesota's TANF program. Minnesota took this
disregard formula from the Federal Supplemental Security Income
Program. That sort of uniformity across Federal programs would
make sense. It pushes the cliff out further, but it is still a
sharp cliff.
Next. The fourth line shows the Social Security income
disregard, but also applies the 200 percent gross income limit,
the maximum allowed under broad-based categorical eligibility.
Now the cliff starts to soften to a slope.
Next. The fifth line shows what it would mean to continue
with the SNAP 15 percent increase, coupled with the Social
Security income disregard. Without the higher gross income
limit, the cliff is still steep.
Next. This final line shows the full combination of the 15
percent increase in SNAP benefits, the higher earned income
disregard, and the 200 percent gross income limit. We see the
greatest graduation in the cliff with this combination.
End PowerPoint, please.
There is one other critically important cliff to worry
about. That is what happens to the SNAP benefits of someone who
arrives to us in severe financial crisis, relying not only on
SNAP but also on cash assistance. SNAP helps us buy groceries.
Cash assistance pays the rent.
Both are necessary to get out of the crisis, but SNAP
counts every dollar of cash assistance against the food
benefits. SNAP should disregard cash assistance payments until
a household is above the poverty line. Broad-based categorical
eligibility has allowed states to demonstrate improved SNAP
policies, such as implementing the higher gross income limits
and waiving the asset limits.
The success of these efforts should be coupled with
federally initiated improvements, including increased benefits,
a more effective earned income disregard, and not offsetting
benefits against below poverty level cash benefits. Thank you
very much.
[The prepared statement of Ms. Brown follows:]
Prepared Statement of Tikki Brown, Assistant Commissioner, Minnesota
Department of Human Services, Children and Family Services
Administration, Minneapolis, MN
Thank you for the opportunity to share Minnesota's experience with
SNAP.
I first want to share with you the words of Minnesotans who have
turned to SNAP. They were among a number of people who spoke with
researchers from the Urban Institute in 2019 to help our state better
understand the intersection of low-wage work and public assistance.\1\
---------------------------------------------------------------------------
\1\ The Intersection of Low-Wage work and Public Assistance:
Workers' Experiences in Minnesota, Amelia Coffey, et. al., The Urban
Institute, July 2019.
---------------------------------------------------------------------------
In the words of Zoe:
I get up every morning and provide for my daughter . . . I
need to pay my rent and I need to pay for child care, but the
more that you do work, the more everything goes up like child
care and your rent and then on top of that diapers, etc. . . .
You lose your [food] stamps and stuff . . . so it just doesn't
add up to me . . . if we try to make this amount of money to
pay the rent that you just boosted up; why is it that we lose
[food] stamps because of it?
Another parent, JoJo, echoed that, saying:
I want to keep my child care, but I also want to make more
money, but I can't make too much because then they take away
food stamps and assistance and things like that. So, it's like
the government handicaps you so [you're] stuck in that part-
time job. And if I'm working and working full-time, then I'm
not making enough and I kind of need that extra help.
Their words underscore some important points.
First--Zoe and JoJo work. That makes them very typical working-age
SNAP recipients. In an average month, prior to COVID-19, half of the
households with non-disabled working-age adults had earnings from
work.\2\ In addition, our data shows that an average of 55% of the
adults who enroll in SNAP have a job or have lost a job in the same
quarter they are applying, and another 23% were employed in the quarter
before they applied.\3\ So, almost 75% of the non-disabled working-age
adults turning to SNAP in Minnesota are employed or just recently lost
a job.
---------------------------------------------------------------------------
\2\ Characteristics of People and Cases on the Supplemental
Nutrition Assistance Program, Minnesota Department of Human Services,
December 2018.
\3\ Unpublished analysis by The Minnesota Department of Employment
and Economic Development looking at more than 111,000 working age adult
enrollees in 2003, 2005, 2003, 2007 and 2009--years chosen because of
their diversity of labor market conditions.
---------------------------------------------------------------------------
The majority of workers who rely on SNAP to supplement low wages or
get them through a spell of unemployment are concentrated in four
industries:
Retail.
Hotel/restaurants.
Health care/social services.
Temporary agencies.
These are the workers that the pandemic made clear to us are
essential workers. They are the workers who make it possible for all of
us to buy food and essential supplies for our families; who care for us
when we are seriously ill, dying or too young to be on our own. But
they are also workers caught in occupations that have high turnover,
unpredictable and inconsistent hourly schedules, and jobs without
benefits like paid sick leave and health insurance.
Workers in these occupations are also the least likely to receive
unemployment benefits. In fact, even though low-wage workers are 2\1/2\
times more likely to lose a job, they are only half as likely as higher
paid workers to receive Unemployment Compensation.\4\
---------------------------------------------------------------------------
\4\ ``Unemployment Insurance: Low Wage Workers and Part-time
Workers Continue to Experience Low Rates of Receipt'', Report to the
Chairman, Subcommittee on Income Security and Family Support, Committee
on Ways and Means, House of Representatives, by Government
Accountability Office, August 2007. http://www.gao.gov/new.items/
d071147.pdf.
---------------------------------------------------------------------------
The second key point that lies behind JoJo's and Zoe's situation:
They so quickly fall behind in their rent and other bills when their
hours are reduced or they lose their jobs, because the low wages they
earn do not allow them to build a cushion of savings.
That is why setting asset limits for public assistance programs is
counter-productive: They do not change caseload numbers, but they
create significant administrative burden, taking time and focus away
from more productive work for SNAP recipients and eligibility workers.
Minnesota is one of 40 states that have used Broad-Based
Categorical Eligibility to eliminate the asset test. In 2011, our
department's analysis determined that less than 1% of the households
applying for SNAP or already receiving SNAP were affected by
eliminating the asset test a year earlier.\5\ This is consistent with
2012 analysis by the Congressional Budget Office and a 2010 analysis of
Maryland's experience,\6\ as well as other similar studies.
---------------------------------------------------------------------------
\5\ Increased Food Support Income Limits and Elimination of the
Asset Test: Effects on the Caseload, Minnesota Department of Human
Services, [Evaluation] Notes, Issue 23, August 2011. DHS-4064Y-ENG
(state.mn.us) (https://edocs.dhs.state.mn.us/lfserver/Public/DHS-4064Y-
ENG).
\6\ Fass Hiatt, Sarah and Newcomer, Abigail (July 2010). President
Obama's Asset Limit Proposal: Supporting Families and Promoting
Improved Coordination. Also available at: http://www.firstfocus.net/
sites/default/files/Obama%20Asset%20Paper%20FINAL1.pdf.
---------------------------------------------------------------------------
Those asset limits, however, create significant work for frontline
eligibility workers. In Minnesota, county and Tribal human services
agencies administer public assistance benefits under state supervision.
Counties had estimated that eligibility workers had been spending an
estimated 7-10% of their time requesting, reviewing and acting on
documentation of assets (that almost always did not affect
eligibility).\7\ A Government Accountability Office report in 2010
documented reduced error rates in SNAP when states took up options,
like eliminating asset tests, to simplify SNAP program
administration.\8\
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\7\ Report on Uniform Asset Limit Requirements, Minnesota
Department of Human Services, Children and Family Services
Administration, Legislative Report, January 2013, http://
www.leg.state.mn.us/lrl/lrl.asp.
\8\ Brown, Kay E. (2010). Supplemental Nutrition Assistance
Program: Payment Errors and Trafficking Have Declined, but Challenges
Remain. Washington, D.C.: Government Accountability Office. Also
available at: http://www.gao.gov/assets/130/125135.pdf.
---------------------------------------------------------------------------
The third and most important point that JoJo and Zoe make: Work
does not provide enough money to meet needs as basic as having enough
food to feed their families.
Three important changes could make SNAP more effective at
increasing the number of people who sustain work, and at making it more
possible for those workers to realize economic stability. The power of
these three changes is in their combination--not as a menu of options.
1. Increase the earned income disregard.
2. Raise the gross income limit.
3. Increase SNAP benefits.
I am going to walk you through two PowerPoint slides to illustrate
the impact of these combined policies.
This sample is for a family of three paying $800 a month in rent--a
hard-to-find bargain--and the standard deduction allowed for heating
and air conditioning costs. SNAP looks at income and it looks at costs
for shelter, heat and air conditioning and some other items. Any actual
case might have different numbers that differ slightly.
SNAP allotments by earned income
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
In this graph the SNAP household benefit amount is in the vertical
axis on the left, and the household's monthly earnings are in the
horizontal axis on the bottom.
This first (light blue) line shows what happens as earnings
increase under the current SNAP household benefit amounts (without any
COVID-19 enhancements) and SNAP's current 20% earnings disregard.
The second ([orange]) line shows the 15% increase to SNAP benefits
with the 165% gross income test that Minnesota has adopted under broad-
based categorical eligibility and SNAP's 20% earned income disregard.
The 15% increase to benefits has pushed the cliff out further, but the
20% earned income disregard has still allowed a significant reduction
in SNAP benefits while the family is still below the poverty line.
The third (bright blue) line shows how the cliff would move further
out if SNAP no longer used the 15% increased but used the same earned
income disregard that's applied in Minnesota's TANF program. Minnesota
took this disregard formula from the Federal Supplemental Security
Income program. It disregards the first $65 earned in a month, and then
50% of the remaining income that month. That sort of uniformity across
Federal programs would make sense. It pushes the cliff out further, but
it is still a pretty sharp cliff.
The fourth (navy blue) line shows using the SSI disregard but also
applies the 200% gross income limit, the maximum allowed under Broad-
Based Categorical Eligibility. Now the cliff starts to soften to a
slope.
The fifth ([orange]/brown) line shows what it would mean to
continue with the SNAP 15% increase coupled with the SSI disregard.
Without the higher gross income limit, the cliff is still steep.
The final (dark brown) line shows the full combination: the 15%
increase in SNAP benefits, the higher earned income disregard and the
200% gross income limit. We see the greatest graduation in the cliff
with this combination and therefore get the strongest impact from the
increased earned income disregard.
In the second slide, we can see where the household income amounts
come close to the Federal poverty line, the 130% of poverty that is the
current cut off, the 165% gross income limit Minnesota uses and the
200% gross income limit that Broad-Based Categorical Eligibility
allows.
SNAP allotments by earned income
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
There is another critically important cliff to worry about: That is
what happens to the SNAP benefits of someone who arrives to us in
severe financial crisis, relying not only on SNAP but also on cash
assistance. Work is not possible until the financial crisis is
relieved. People have to secure their housing, and have the lights
turned on so that their time and energy can be spent on work. But SNAP
counts every dollar of cash assistance against the food benefits.
SNAP helps buy groceries. Cash assistance pays the rent. Both are
necessary to get out of crisis. SNAP should disregard cash assistance
payments until a household is above the poverty line. The fact that it
does not has played an important role in cash assistance benefits
stagnating for the last 3 decades.
Broad-based categorical eligibility has allowed states to
demonstrate improved SNAP policies, such as higher gross income limits
and waiving asset limits. The success of those efforts should be
coupled with federally initiated improvements, including increased
benefits, a more effective earned income disregard and not offsetting
food benefits against below poverty-level cash benefits.
The Chairwoman. Thank you so much for your testimony, Ms.
Brown.
And I would now like to welcome our fourth and final
witness, Mr. Randolph. Thank you for being here. Welcome to the
Committee. When you are ready, you can unmute and begin your
opening statement.
STATEMENT OF ERIK RANDOLPH, DIRECTOR OF RESEARCH, GEORGIA
CENTER FOR OPPORTUNITY, PEACHTREE
CORNERS, GA
Mr. Randolph. Madam Chair, may I share my screen at this
time for a PowerPoint?
The Chairwoman. Committee, can we stop the clock just until
he figures out what he is going to do. Okay. Thank you.
Mr. Randolph. All right, thank you.
Thank you, Madam Chairwoman and Ranking Member Bacon, for
your comments. I really liked your comments to begin. And also,
I would like to thank the other witnesses--I was listening to
what you were saying--and all the Committee Members for this
opportunity to present testimony today.
My name is Erik Randolph, and I am the Director of Research
for the Georgia Center for Opportunity, GCO for short. We are a
nonpartisan, nonprofit organization that works to remove
barriers to ensure that every person, no matter their race,
past mistakes, or circumstances of their birth, have access to
quality education, fulfilling work, and a healthy family life.
Our work in the local communities--sorry, I have to keep up
with my slides. Our work in the local communities and with
other nonprofit organizations who serve underserved communities
teach us how to define our work and our research.
One such area where we have heard from clients, other
nonprofits, and employers is that of the unintended
consequences of safety net services. These include stories
about honest, hardworking individuals giving up higher pay in
fear of losing benefits, known, of course, as the benefit
cliff.
We, like many of you on the Subcommittee, understand the
need and value of safety net services, and, of course, SNAP is
among the most important ones, if not the most important one.
Many people whom we work with each day rely on these services
to meet their nutritional needs and to help make ends meet. We
would like to make sure that such services help as intended and
do not hinder a person's effort to improve their situation so
they can have better opportunities to thrive and flourish.
That is why we created and are continuously improving our
benefits model. Our benefits model is not a statistical model.
It is a computational model that converts program rules into
algorithms, tells us how much a family, based on its
characteristics, can receive in benefits from 14 major means-
tested assistance programs. These 14 programs represent 80
percent of all Federal funding for means [inaudible]. Which
anyone can access at benefitscliffs.org.
Here on this slide is one scenario that shows a SNAP
benefit cliff as well as a subsidized childcare cliff. In this
specific scenario, a single mom with two children would need at
least an additional 9.6 percent pay raise to overcome this SNAP
benefit cliff.
Safety net programs interact in unanticipated ways, which
makes it complicated. The more safety net programs we feed into
the model the more cliffs emerge over a range of earnings, and
some of the cliffs can be quite severe.
I had mentioned we have been receiving comments from
clients, other nonprofits, and employers about benefit cliffs.
Here is a story we feature on our website. It is of a single
mom unable to accept a pay raise, simply because it means she
wouldn't be able to maintain housing support for her and her
young son.
We believe that when the design of a program violates the
intent of the program itself, it needs to be fixed. And we
believe that when it interferes with the ability of persons to
get ahead, it is dehumanizing.
This slide gives another example. It shows the current
circumstances with the SNAP program where a family of four
faces a monthly loss of $782. This cliff is at least 27.5
percent of the family's earnings.
I have outlined in my written testimony a number of
observations and recommendations for you to consider. I will
now highlight two observations and two recommendations: One, I
have outlined--one, obviously, benefits must always taper off
consistently and gradually as income rises.
Two, not so obviously, starting benefit values when income
is zero that are too high make it much more difficult to find
solutions.
Three, you may want to consider reinforcing existing U.S.
Code on demonstration projects to address the SNAP benefit
cliff. Currently, GCO is collaborating with nonprofits in Texas
and Louisiana on solutions where we could use more Federal
flexibility, such as blending human services with workforce
services.
Four, consider also to reinvigorate SNAP work requirements
to help people improve their circumstances where they will no
longer require assistance.
To wrap up my comments, I would like to say that solving
benefit cliffs will not be easy, and I commend you for
undertaking this topic today.
We believe our research and modeling can help you
understand benefit cliffs and marriage penalties better and,
importantly, help you find solutions to these problems.
I look forward to answering any questions you may have.
[The prepared statement of Mr. Randolph follows:]
Prepared Statement of Erik Randolph, Director of Research, Georgia
Center for Opportunity,\1\ Peachtree Corners, GA
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\1\ Opinions stated within belong to the witness and are not
necessarily those of the Georgia Center for Opportunity
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Thank you for inviting me to testify today on this important topic.
My name is Erik Randolph, and I am the Director of Research for the
Georgia Center for Opportunity (GCO).
Our non-partisan, nonprofit organization works to improve the lives
of individuals and families by promoting quality education, fulfilling
work, and healthy family life. We work directly with targeted
populations, collaborate with other nonprofit organizations, provide
research for public policy, and advocate for changes to improve
people's lives, especially at the state level.
While our focus is mainly the State of Georgia, we have been
working with similar nonprofit organizations to help people find jobs
with career ladders and to find common solutions to problems that all
states face, especially regarding Federal policies that impact the
states.
GCO works in the community and collaborates with other nonprofit
organizations. Our goal is to help people improve their circumstances,
become successful in their lives, and flourish as fully-alive human
beings. We hear from clients, other community-based nonprofits, and
employers. Their input influences our programs and activities,
especially on what barriers we address to help people. Benefit cliffs
are one of the barriers we hear about all the time from clients, other
nonprofits, and employers.
Today is the second time I am testifying before this Subcommittee
on this topic. This first time was on June 25, 2015, when this
Subcommittee was known simply as the Subcommittee on Nutrition, and the
hearing was jointly held with the Subcommittee on Human Resources of
the Committee on Ways and Means.
An Anecdote and an Overview
To begin, I would like to share a real story about the impact of
benefit cliffs. We have made a video of her story that is available on
our website.\2\
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\2\ https://georgiaopportunity.org/story-joyelle-got-an-education-
a-job-and-a-promotion-she-never-expected-her-success-would-mean-this/.
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A young woman by the name of Joyelle moved to Georgia to escape a
physically abusive partner. While looking for work, she received
housing benefits to help her weather the transition. While she was
elated when she received a job offer from a state agency, she was
devastated to learn that taking this higher paying job would cause her
to lose her housing assistance, pushing her into homelessness once
again.
This anecdote is not an isolated story. We have heard many more. In
fact, the Georgia State Legislature took testimony from business
leaders who encountered similar situations.
From an analytical perspective, the story makes perfect sense given
the manner by which our social safety net system has grown over the
decades to include a vast web of more than 80 programs designed to help
people struggling to make ends meet.
Without a doubt, the safety net system has helped and continues to
help millions of people during times of need, as the programs were
intended. Unfortunately, the very same system has the unintended
consequences, known as benefit cliffs. Quite simply, a benefit cliff is
when gains in earnings do not offset the loss in net income and
benefits. When encountered, the benefit cliffs discourage and can
prevent individuals from leaving the system--by punishing them for
earning more money or deciding to marry, essentially imposing on them a
life of lower income and making the climb up the income ladder to a
higher standard of living more difficult.
Depending on the circumstances and where they are along the
earnings ladder, many recipients of safety-net programs may not
encounter a cliff. However, others do, and the cliffs can be severe. As
a matter of legislative and regulatory design, the system itself allows
for benefit cliffs, which can be encountered at several places along
the earnings ladder. When they do happen, the severity and extent of
these benefit cliffs vary from mild to severe, based on many factors,
such as family size, where they are on the earnings scale, which
programs they qualify for and receive, and even geography. When they
are mild, they can be overcome as individuals climb up the income
ladder. When severe, they can be a hard and sobering stoppage to
personal financial progress.
In general, the more programs a person qualifies for, the greater
the likelihood they will encounter a cliff as they work up the earnings
ladder.
On the other hand, marriage penalties are more pervasive and can be
more severe.
Today, in response to the parameters of this hearing, I will focus
my comments on the role of the Supplemental Nutrition Assistance
Program (SNAP) in regard to benefit cliffs and marriage penalties, but
keep in mind there is much interplay among the various programs that
can alter what SNAP benefits a household will receive. In fact, SNAP is
one of the more complicated programs to understand when it comes to
benefit cliffs.
What is the Computational Safety-Net Program Benefits Cliff Model?
The GCO Safety-Net Program Benefits Cliff Model is a computational
model that allows policy analysts and others to understand and
visualize what benefits a family can receive from fourteen major
safety-net programs and how earned income can impact benefit levels.
It is not a statistical model. Instead, it is a computational model
that converts statutory and regulatory tax and safety net program rules
into algorithms to tell us exactly what programs and how much in
benefits a family can receive based on inputted characteristics of the
family. It gives those results over a range of earnings that enable us
to see where benefit cliffs might and do occur.
Geographical and Family Structure Inputs
The current model uses the following inputs:
State and county.
``Mom'': age, pregnancy status, marital status.
``Dad'' or husband (when present): age, marital status.
Children (up to four children can be modeled): age, sex,
disability status, in school, childcare setting, and childcare
rating category.
The eight states and their counties--totaling 888--currently
modeled are:
Alabama.
Florida.
Georgia.
Louisiana.
Mississippi.
North Carolina.
Tennessee.
Texas.
Tax and Welfare Programs Modeled
Based on our calculation, the modeled programs account for 95% of
all Federal spending in the assistance areas of cash, nutrition,
health, childcare subsidies, and rental housing, or 80% of all Federal
welfare spending. Education assistance programs are not included in the
model.
Nine Federal agencies oversee the modeled programs, but four of
those agencies are under the U.S. Department of Health and Human
Services. The number of state agencies varies by state. In Georgia, it
involves seven state agencies plus public housing authorities and
schools.
The following taxes and programs are modeled:
FICA payroll taxes (social security & Medicare).
Federal income taxes (other than refundable tax credits).
state income taxes, Earned Income Tax Credit.
state matches to the Earned Income Tax Credit.
Additional Child Tax Credit (i.e., the refundable portion of
the Child Tax Credit).
Temporary Assistance for Needy Families (TANF) cash grants.
Supplemental Security Income (SSI).
Supplemental Nutrition Assistance Program (SNAP, a.k.a. food
stamps).
National School Lunch Program.
School Breakfast Program.
Special Supplemental Nutrition Program of the Women,
Infants, and Children (WIC) program.
Medicaid.
Children's Health Insurance Program.
Premium Tax Credit of the Affordable Care Act.
Childcare program subsidies.
Section 8 rental assistance.
Range of Earnings Modeled
For each inputted family structure, the model calculates the taxes
and benefits for 201 earning levels, starting with no earnings and
increasing in annual increments of $500 up to $100,000. An annual $500
increase is roughly a 24 increase in an hourly wage
Output Matrix and Flexibility for Analyst
The output of the model is flexible. The model gives a matrix of
net earnings and benefits for the inputted family structure for the
range of earnings from $0 to $100,000 for each program. The model also
simplifies the output by categorizing the assistance programs, such as
combining all the nutrition assistance programs into a single category.
The results can be viewed as charts or tables.
Additionally, the model allows researchers to view the outputs by
any combination of the tax and benefit programs. For example, the user
might want to see the impact of just the food stamp program, or the
food stamp program in combination with Medicaid. There are 17
categories currently available that the user can toggle on or off. The
total combinations that can be studied calculate to 131,017.
Structure of the Model
The model stores each program's factors and coefficients separately
in structured tables as databases. For example, the phase-in thresholds
for the Earned Income Tax Credits, which are revised every year, are
stored in a database table. In almost every case, the coefficients and
factors are precisely the same ones used by the agencies administering
the programs. In a few cases when the coefficients are not yet
available, they are extrapolated based on historical values using
standard statistical or other widely acceptable methods.
The calculation of eligibility and benefit amounts are performed
separately from the storage of the database values. The calculation
engine pulls up the proper coefficients and factors from the databases
for each program based on the inputs, e.g., the characteristics of
family structure, running them through an algorithm to determine
eligibility and, if eligible, the precise benefit amount.
Defaults
In some cases, the model must use default values for the
calculation to be completed. For example, the food stamp rules allow
for an excess shelter deduction in determining the amount of the food
stamp benefit. The model assumes the fair market rent as published by
the U.S. Department of Housing and Urban Affairs. The size of the
apartment is based on established rules for the Section 8 rental
assistance program. In a few cases, the default value can be
overridden. For example, it is assumed that a child starts school at
age 5. However, this default can be overridden by inputting a different
value.
Current Enhancements and Upgrades
Currently, GCO is upgrading the model to enhance performance and
flexibility. The model will allow more flexibility with the family
structure, such as adding a grandparent, a benefits calculator to
compare a precise wage with another wage, the outputs to include time
frames other than calendar year, and greater flexibility to override
default values. For example, it will allow inputting actual rental
costs as opposed to assuming the fair market rent for SNAP.
Additionally, we will be adding more states to the eight states we
currently have modeled. In fact, we are halfway through adding South
Carolina.
Website and Workbook
Currently, the model is available on our website https://
www.benefitscliffs.
org/, which has 2020 data. In about 1 month, the website will be
updated with 2021 data. Anyone can access this website to explore or
perform analysis. The website allows users to download the data into
CSV files for further analysis and to create their own tables and
charts.
We also have made an Excel workbook available for academic
researchers who want greater granularity and analytical flexibility,
provided they sign a non-disclosure agreement.
Collaboration with Researchers
Currently, we are aware of two academic researchers using our model
for analysis. We are actively looking for ways to collaborate with
others.
Observations on General Causes of the Cliffs
In general, below are some general causes of benefit cliffs. Some
of these are technical.
1. Hard Cut-offs that Do Not Taper--Primary Cause
The most common cause of benefit cliffs is when the benefit program
fails to adequately taper benefit levels before the recipient is cut
off from the program. This causes the situation where the loss in
benefits exceeds any reasonable increase in earnings.
2. Stacking of Benefits One on Top of the Other--Primary Cause
Sometimes the amount of the loss from a program is not sufficient
to disincentivize a recipient from accepting higher earnings. However,
when programs are stacked upon each other and the recipients stand to
lose benefits from more than one program, this combination can cause a
cliff.
3. Benefit Levels that Start Too High--Secondary Cause
When benefit levels start too high, it can cause cliffs in two
ways. First, high levels of benefits make it difficult to taper the
program adequately without breaking the bank. The required slope for
these programs to properly taper would reach into high income brackets.
This is called a secondary cause because it enables the primary cause
of hard cut-offs that do not taper.
Second, when benefit levels start high, it exacerbates the stacking
of benefits problem.
4. Exceptions to Eligibility Rules, e.g., Income Disregards--Secondary
Cause
When too many exceptions are made with income disregards, it can
allow recipients to receive higher benefits that can create a hard cut
off.
5. Unfavorable Factors for Married Couples
Program factors, especially in the U.S. Tax Code, treat married
couples differently than non-married couples in a way that can skew the
benefits in favor of non-married couples.
6. Program Disincentives to be Married
Conversely, programs can disincentivize couples from marrying
because they do the opposite of the U.S. Tax Code by not accounting for
marriage adequately.
SNAP Benefit Cliffs
Pre-Pandemic Program
Prior to the [COVID]-19 pandemic, the question of whether SNAP had
benefit cliffs depended on three basic factors.
If the household had no member who was disabled.
If the household could claim a deduction for housing.
If the household had childcare expenditures.
For example, if there is a disabled member in the household, there
is no SNAP benefit cliff due to earning more money. The reason is that
the gross income limit does not apply, allowing the household income to
taper off slowly without hitting a hard cut-off limit.
However, for all other households, there can be a cliff, but not
always.
If the non-disabled household receives Section 8 housing and
childcare services, then the SNAP benefit cliff is negligible and
easily made up with extra earnings. See chart 1 for an illustration.
Chart 1
Pre-Pandemic Stacked Earnings and Benefits in Georgia
Single Mom with an 8 Year Old Girl and a 2 Year Old Boy
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
However, if the person does not receive Section 8 Housing and must
rent their own apartment assuming the fair market rent per the U.S.
Department of Housing and Development, then there will be a cliff. In
the scenario used in Chart 2, the monthly loss would be $219, requiring
at least a pay raise of 9.6% to make up for the loss.
Most single moms do not have Section 8 housing vouchers. Therefore,
this scenario is more likely.
This benefit cliff can disincentivize someone, but it is not as
formidable as the benefit cliffs due to Medicaid or subsidized
childcare. However, it is unnecessary for the SNAP program also to
create such a cliff.
However, if we add the National School Lunch Program into the mix,
her 8 year old in this scenario would no longer qualify for a free
school lunch but would qualify for a reduced-price lunch, compounding
the SNAP benefit cliff.
Chart 2
Pre-Pandemic Stacked Earnings and Benefits in Georgia
Single Mom with an 8 Year Old Girl and a 2 Year Old Boy
Finally, if the single mom pays for childcare, then the benefit
cliff could double. However, it is not clear how often this would
happen due to the high cost of childcare.
P-SNAP Waivers
The Families First Coronavirus Response Act (P.L. 116-127) has a
provision allowing states to request waivers to give recipients the
maximum allotment for SNAP. Extended by the Continuing Appropriations
Act for 2021 (P.L. 116-159), the pandemic-SNAP waiver--P-SNAP for
short--means all households of the same size receive the exact same
food stamp allotment.
For example, an eligible single mom with one child who lives in one
of the 48 contiguous states or the District of Columbia currently
receives $430 a month in food stamp benefits. It does not matter if the
single mom has no income or makes $22,400 annually, which is below the
gross income limit. She will receive $430 each month.
Clearly, the single mom with $22,400 annual income is benefiting
more than the single mom with no income. It seems unfair to the much
poorer family that the family earning much greater income is drawing
the same benefits.
We can do the same comparison for the other families, such as the
eligible four-person household who currently receives $782 each month
no matter if the household has no income or $34,000 in income.
At some point, families just under the gross income limit will have
opportunities to earn more money, and they will face the potential
cliff. Even where state agencies are reluctant to terminate benefits
because the Food and Nutrition Service waived the states' agencies
responsibility to do so under pandemic rules, the decision is
essentially the same. Accepting the opportunity will eventually cause a
significant loss of benefits.
For example, consider the size of the potential benefit cliff in
Chart 3. A family of four just under the income threshold is getting
$782 a month, which equals $9,384 on an annual basis. The breadwinner
would need to receive a pay raise of more than 27.5% to avoid a SNAP
benefit cliff.
Chart 3
Four Person Household Monthly Food Stamp Benefit
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Marriage Penalties
We developed a computational model to test for marriage penalties.
Overall, the tax and welfare system has severe marriage penalties, and
they were far worse than we expected. The fundamental rule is that the
more safety net programs a person receives, the greater the extent and
more severe are the marriage penalties.
We did not test specifically for the SNAP by itself, but we
included SNAP in with safety net programs commonly received by SNAP
recipients, which include refundable tax credits and the school lunch
and breakfast program.
Chart 4 was produced by our computational model. It is a three
dimensional chart using 2016 data that shows the combination of those
basic benefits with SNAP on a matrix of earning levels of a mom and a
dad with two children. The areas in red show marriage penalties, and
the areas in blue are marriage bonuses.
Chart 4
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Absent taxes and this small set of safety-net programs, the chart
would be mostly blue as shown in Chart 5. In other words, there is
naturally a financial incentive for marriage, which is undermined by
tax and safety net programs.
Chart 5
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Although we did not isolate the SNAP program when we ran the
analysis, we do know that the structure of the maximum allotment tables
allows for a penalty. Table 1 gives the maximum monthly allotments
along with the marginal benefit by adding each person to the household.
With the exception of the sixth person, note that as the household
size expands, the marginal benefit decreases. The first person in the
household is worth an allotment of $234 per month, the second $196, the
third person $186, and so on.
This provides a disincentive for marriage that adds to the effect
we see in Chart 4. A married couple with two children has a maximum
allotment of $782. However, the couple is incentivized to be unmarried
and claim separate SNAP households where their allotment would be $850.
While this amount by itself may not be significant enough to
disincentivize marriage, in combination with the many other
disincentives in the tax and welfare system, it adds to the problem.
The goal should be to make it neutral or even incentivize marriage.
Although this is an unrelated issue, note that the marginal benefit
for the sixth person in the household increases to $185 instead of
decreasing. This is clearly a mathematical error, and it is being
carried over year to year, that should be corrected.
Table 1
------------------------------------------------------------------------
Maximum Monthly Marginal Benefit Per
Household size Allotment Additional Member
------------------------------------------------------------------------
1 $234 $234
2 $430 $196
3 $616 $186
4 $782 $166
5 $929 $147
6 $1,114 $185
------------------------------------------------------------------------
Specific SNAP Recommendations and Conclusions
As a matter of general policy, I recommend adopting the goal of
making sure SNAP does not contribute to benefit cliffs or marriage
penalties--either as a standalone program or in combination with other
programs. This goal recognizes that safety net programs do not operate
in isolation but interact with each other where the combination of
these programs can create more severe disincentives and penalties,
although some individual programs, such as Medicaid and subsidized
childcare, have severe disincentives all by themselves.
An important step forward would be to work on consolidating and
simplifying safety net programs. The more exceptions there are to the
rules, the more difficult the analysis is for legislators, their staff,
and policy wonks, like me. Similarly, the more complex the rules are,
the greater the likelihood that states will mismanage the program.
Additionally, higher complexity is associated with loopholes for
individuals to abuse the system.
The simplification of safety net programs will help with the
coordination with other programs. This is not only important for the
agencies administering the program, but, more importantly, it will make
life easier for people who need to negotiate the complex systems to
obtain benefits.
In this regard, SNAP should not be used as a tool to subsidize
childcare costs or housing. These needs should be addressed by programs
specifically designed for assistance in those areas. Therefore, the
SNAP income disregards for housing and childcare should be eliminated.
This simplification will go a long way to restoring the tapering of
benefits to avoid cliffs.
Giving everyone the same allotment regardless of income should not
be attempted again. Benefit amounts should be based on need, and those
on the bottom need the most help. Clearly, it is unfair to those
families on the bottom to get the same amount that a family just under
the income threshold receives. We need to use our limited resources
wisely, and by overcompensating, we expend more public resources, make
the benefit cliffs more severe and difficult to be overcome by the
families, and make it more difficult for legislators to roll benefit
levels. The sooner this can be restored, the sooner it will be fairer,
fiscally more prudent, and SNAP benefit cliffs eliminated.
As far as adopting a thrifty food plan, it is important to realize
that benefit amounts that start out too high pose difficulties in
preventing benefit cliffs. If this Subcommittee wants to increase the
level of the basic food plan, I suggest first consolidating other food
benefit programs into SNAP. This consolidation would be a great
benefit, and we have some ideas on how to do it.
I recommend reworking the SNAP allotment tables to eliminate
marriage penalties. A good way to approach this would be to create two
tables: one for married couples, and another for other households,
making sure that there is no marriage penalty because of SNAP. While
this may break new ground for SNAP, it is common with tax law.
As an alternative approach, or perhaps in conjunction with making
the changes outlined above, I recommend that Congress reinforces 7 U.S.
Code 2026 (Research, demonstration, and evaluations) to make it clear
to the Secretary of Agriculture that demonstration projects to test
innovative welfare reform strategies include projects to address the
SNAP benefit cliff. Making it easier for states to test solutions to
the benefit cliff in demonstration projections, and even requiring the
Secretary to solicit such demonstration projects, would provide
experience-based evidence to know what policies and practices would
work best.
I have one final observation on SNAP I would like to share. GCO
works directly with unemployed workers to help them connect with
employers for well-paying jobs that put these workers on a career
ladder for financial stability and growth. We collaborate with other
nonprofits and work with employers to engage individuals in this effort
and work to remove barriers to employment. Related to identifying those
barriers, we have spent time researching why the labor participation
rate has been declining among prime-working age individuals, which was
a major concern of the Council of Economic Advisors to President Barack
Obama as well as leaders of the Administration of President Donald
Trump. This is clearly an area where we can have bipartisan
cooperation. SNAP is one of the big three safety-net programs that
reaches a significant proportion of the U.S. population. We believe it
would make good public policy and be in the public interest to
reinvigorate the SNAP work requirements and education/training
components. Not only will SNAP enrollees and their families benefit,
but the more individuals reengage in the workforce, the stronger and
more productive the U.S. economy will become. It grows the pie bigger,
making everyone and society wealthier.
General Conclusions
Benefit cliffs and marriage penalties are real. Our computational
models demonstrate that this is so, which complements anecdotal
evidence.
Economic incentives matter. This is backed up with economic
reasoning and empirical evidence. Therefore, safety-net programs need
to be designed in ways that do not disincentivize individuals from
self-improvement. Economic incentives need to be aligned with safety-
net policy.
The anticipated benefits are many. These include greater
participation in the labor force, an expanded economy making society
wealthier, less poverty, more potential tax revenue for state and local
governments without raising rates, more economic opportunities for
individuals, and happier citizens.
Thank you for allowing me the opportunity to share our modeling
work, observations, and recommendations. I will do my best to answer
any of your questions, and I will be happy to provide you with any
additional information you may need or get back to you on any questions
I cannot answer.
PowerPoint Presentation
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The Chairwoman. Thank you. Thank you for your testimony.
Before we move on, I just want to make sure that Chairman
Scott and Ranking Member Thompson are not here and do not want
to be recognized at this time. I don't see them, so at this
time Members will be recognized for questions in order of
seniority, alternating between Majority and Minority Members.
You will be recognized for 5 minutes each in order to allow us
to get as many questions as possible. Please keep your
microphones muted until you are recognized, in order to
minimize background noises.
At this time, I will recognize the gentleman from
Massachusetts, Mr. McGovern, for your questions.
Mr. McGovern. Well, thank you, Chairwoman Hayes, for
calling today's hearing.
I want to thank the witnesses. As some of you know, at the
House Rules Committee we have launched a series of hearings and
roundtables focused on hunger, looking across Federal
departments and programs at ways safety net programs work
together to address hunger. And, as part of that effort, I
spent a lot of time during these last several months talking to
people living in poverty, people with lived experiences,
talking to people who rely on modest SNAP benefits to put food
on the table for their families.
And what I have learned is that people's lives are very
complicated. And do you know what I have not heard once? I have
not had a single person who has told me that they would rather
rely on SNAP and other government assistance programs instead
of a good-paying job. In fact, it is important to remind
everybody that we do know that the majority of people who are
able to work who are on SNAP right now actually do work.
We have heard some talk about a culture of dependency here
today resulting from SNAP, but the fact of the matter is it is
simply not true. The average person is on SNAP less than a
year, and \3/4\ of recipients work within a year of receiving a
SNAP benefit.
I think we can all agree that a good-paying job is one of
the surest ways out of poverty, but let's be clear here. There
isn't a shortage of Americans looking for work. There is a
shortage of Americans willing to work for low wages with no
benefits, no healthcare, no childcare and no protections,
especially during a pandemic. And for decades, America's
working families have been getting clocked by stagnant wages,
disappearing benefits, and shrinking savings.
If some workers are demanding jobs that treat them with
dignity and respect, jobs that actually allow them to get off
of government benefits for good, all I can say is, it is about
damn time.
In fact, what we have heard from the witnesses today is
that SNAP supports work. Broad-based categorical eligibility
helps to mitigate the SNAP cliff. And yes, we have heard that
while SNAP is well-designed, there can be further improvements
made, like increasing benefit levels and increasing income
limits to make the program even more effective.
So, one of the challenges we have is we need to look at
this issue holistically. And that is why I am calling for a
White House conference on food, nutrition, hunger, and health.
Because ending hunger will be a whole-of-government approach,
will require a whole-of-government approach, and a White House
conference will help us look beyond the jurisdiction of this
Committee and really help us explore the interplay between
Federal programs that Dr. Hardy spoke about.
So, I am hopeful that such a conference will be able to
help Congress get out of this mind-set where struggling people
and their struggles are disparaged and diminished. People with
lived experiences of hunger need to have a seat at the table in
developing a plan to end hunger once and for all.
Dr. Hardy, let me begin with you. Thanks for making the
strong connection between SNAP and work. Could you please
elaborate on your findings that support the complementary
nature of SNAP and work?
Dr. Hardy. Sure, two points: First of all, we do have
broader structural labor market issues where, as you said, our
economy has unfortunately produced a high share of very low-
paying jobs over the past several decades. So, it has become
increasingly polarized. Fewer are in the middle.
And so, I think that many of these households and families
rightly want to move up the economic ladder. There are
promising programs. WorkAdvance is one example that can try to
connect anchor employers with workers so that they can move up
that economic ladder.
But put simply, in the labor economics literature, when we
think about the whole host of factors that contribute to work
or labor supply or disincentivizing, we just simply don't find
that food assistance programs are a major contributor. It is
tiny, if not zero.
So, there are other things to look at. If we are thinking
about this as a hypothetical patient, SNAP does its job. It
provides economic assistance. And, again, Representative
McGovern, there are these long-term benefits for children that
show up in increased economic productivity.
Mr. McGovern. And let me just say SNAP is not some generous
benefit. The average benefit is about $1.40 per person per
meal. It has been increased as a result of the American Rescue
Plan.
But, Ms. Brown, can you please elaborate on your
recommendation that we increase SNAP benefits. And how would a
benefit increase plus an increase in the earned income
disregard and an increase in gross income limit help people
achieve greater financial stability?
Ms. Brown. Thank you. Yes, as was stated previously, the
SNAP benefit is a supplemental benefit. So, it isn't intended
to cover the full month's worth of food, and that does cause
families additional stress and strain.
And if we increase, as I mention in my recommendations,
what we are really focusing on are people who are working,
people that are on that verge, and it gives them just an
increased stability and additional support so that they can
make it long-term.
Mr. McGovern. And I know my time is up. I just want to
thank you. It is important that we dispel this narrative, this
false narrative out there that somehow people who are on this
benefit do not want to work. The bottom line is the majority
who are able to work are actually working, but wages are so low
and benefits are nonexistent that they have no choice. So, I
appreciate your testimony.
I yield back.
The Chairwoman. Thank you, Mr. McGovern.
Ranking Member Bacon, I want to apologize. I am so sorry.
When I decided I would go at the end, I think I just in my head
put you at the end as well. So, if you would like to be
recognized for your questions right now, I will recognize--I am
sorry--the gentleman from Nebraska. I apologize.
Mr. Bacon. That is all right, Madam Chairwoman. That is all
right. I have a very thick skin. I don't worry about those
things. So, I appreciate it. No problem.
I would acknowledge with what Mr. McGovern is saying. We
know people do want to work. But, yet every one of our
witnesses here, three in particular, talked about that there is
a real negative impact of the cliff effect. It has
disincentivized some. And I think we heard from Mr. Randolph, a
dollar, $1 earned more costs $700 in benefits. That is a real
factor there that real people have to deal with.
Dr. Hardy, thank you for your comments too. And I agree
with you, SNAP is a vital program. Do you see any value at all
with sloping the benefits down, as other panelists here said,
versus a direct cutoff? You talked a little about the EITC, but
are there benefits to sloping the benefits down?
Dr. Hardy. It is a great question, Representative. And, one
of the things I would point out is that, as we discuss this,
certainly there is what we call a benefit reduction rate. Right
now, statutorily, that is around 30 percent. And, you lose 30
for every dollar earned. But, in fact, that is an improvement.
So, on the arithmetic, just looking at SNAP alone, that is kind
of what we want.
Now, there are other alternatives you have. You can extend
the program out. That would raise costs. I am, in fact, in
favor of the sorts of interventions that Commissioner Brown
recommends.
My view is that we already do have this sort of downward
sloped hill. I think it is more of a hill, less than a cliff.
And my view is that we are trying to fight structural labor
market conditions, and so we see this adjustment occurring
right now both in Nebraska, North Carolina where I grew up,
Maryland where I currently am.
And so, the idea is that we do see this feature of the
program, that the benefits do slope downward. And if you want
to extend those benefits out, I think that is a promising
direction.
Mr. Bacon. Okay. Well, thank you. I know you focused on the
EITC, but I appreciate just getting your thoughts there.
Dr. Gourrier, thank you for seeing what you are seeing in
Maryland. It sort of validates the concern that we have, so I
appreciate your comments.
And, Ms. Brown, also, I appreciate showing what you are
seeing also in Minnesota, and you have said it really well
about needing a slope and not a cliff.
Mr. Randolph, did I get that right, $1 added cost, was it
over $700 in benefits? Did I catch that right in your slide?
Mr. Randolph. For a family of four, that is correct.
Mr. Bacon. I wanted to ask you too, in the last farm bill
we had, we extended transitional benefits. We also had some
increases to the earned income tax deduction. They were both
struck down at conference.
Do you think that these measures would have helped with the
cliff effect? Erik--or Mr. Randolph, excuse me.
Mr. Randolph. So, would you tell me what those measures
were again?
Mr. Bacon. Yes. We extended transitional benefits, and we
also increased some of the earned income tax deduction, but
they were stripped out at conference. I am just curious if you
thought those could have been value added to this discussion.
Mr. Randolph. Right. Traditional benefits is a common thing
we have had in programs for quite a while, and certainly it is
a tool that the states can use to help. So, I would have to
agree that is.
Now, you are referring to the earned deduction, the income
disregard.
Mr. Bacon. Right.
Mr. Randolph. And that most likely would--now, I would
actually personally like to test it, because there are some
other complicating factors in there. So, I would like to like
use our modeling and play with it and say, let's increase it
from 20 percent to let's say 40 percent and see what it overall
does. I think it is promising. It sounds like a good idea, but
I haven't really specifically tested it.
Mr. Bacon. Here is another one for you, Mr. Randolph: Do
you think it is logical to eliminate asset tests for SNAP
eligibility determinations? Why not incentivize earnings
through a raised limit?
Mr. Randolph. So, I like to actually call them excess
resource tests, because that is actually what a number of the
states call them. And when I worked at Pennsylvania's
Department of Public Welfare, for example, that is what we
called them, an excess resource test.
Because I think it kind of emphasizes it is not that you
are trying to penalize people for having assets. It is that
they are trying to find if you have excess assets beyond what
is standard that you might be trying to hide so that you are
not paying your thing.
Now, I believe that you are working on this, if I
understand it, that you would like to update the asset test,
because it hasn't been updated in a long time. But there is a
fundamental issue where if you get rid of the asset test or the
excess resource test, you still have to deal with the situation
where people have a lot of resources.
And I know that there has been, for example--there has been
some situations in the media highlighted where you have one
individual win a very large lottery winning and they are still
on food stamps. So that has happened.
But it actually occurs a lot more, because when I was at
the Department of Public Welfare, every month we would get the
winners for the lottery and we would run against the rolls of
the SNAP program. And, sometimes these winners might only get
$100,000, they might get tens of thousands, but we would always
find that there would be individuals that were still receiving
their food stamps. So, it was necessary for our department to
kind of keep up with that, and we participated in a number of
data exchanges to do that.
So, I mean, yes, the Subcommittee could decide to get rid
of the asset test, but I am thinking you need to replace it
with something, because not everybody out there lives just on
income. Now, we are talking about a small minority of people,
but you still have to be able to address that minority.
Mr. Bacon. Thank you, Mr. Randolph.
I have to yield back my time. Our time is short. I
appreciate your input and all the panelists' input. Thank you.
The Chairwoman. Thank you. Thank you for that, Ranking
Member Bacon.
At this time, I will recognize the gentleman from the
Northern Mariana Islands, Mr. Sablan. I don't know if you have
a question or if you are going to yield, as you said before. If
you do, I will take the time.
Mr. Sablan. All right. I yield to the Chairwoman my time,
although this is a very good hearing. Madam Chairwoman, I yield
my time to you.
The Chairwoman. Thank you, Mr. Sablan. And, again, thank
you so much for joining us. I am not sure what time of the
night it is in the Northern Mariana Islands, but the fact that
you are so invested in this work really speaks volumes. So
thank you for joining us.
And thank you to all of the witnesses for your testimony.
My question today, many low-income families participating
in SNAP are struggling to make ends meet and are unable to save
for the future. According to the Urban Institute, only roughly
half of SNAP households have a bank account at all, and for
those that do the average amount held in their bank accounts is
about $150.
My question is for Drs. Hardy and Gourrier. Can each of you
speak more about how broad-based categorical eligibility eases
the benefit cliff faced by SNAP recipients if they are able to
secure more work-hours or higher wages? Specifically, how does
raising the gross income limits and increasing or eliminating
the asset test allow recipients to achieve greater financial
stability?
We can start with Dr. Hardy and then go to Dr. Gourrier.
Dr. Hardy. Yes. And I will try to be relatively brief so
Dr. Gourrier can respond as well. What I would simply say is
that these sorts of policy interventions give these SNAP
families more in the way of space in order to move up the
economic ladder. These households are more likely to experience
both low incomes and very volatile incomes. So, they operate in
a part of the labor market where there is a lot of job
instability.
And so, when you think about broad-based categorical
eligibility and expanding the ability to have additional
assets, you are talking about ways to give these households
additional buffers. Those are buffers that can help them in
their day-to-day expenses. These are buffers that help families
provide the resources for their children to learn and
ultimately move out of poverty.
And importantly, these are the sorts of findings that we
have within the economic literature that programs like SNAP
have been causally linked to improving long-term economic
outcomes, precisely what we want in public policy
interventions. And so, this, as you suggest, Representative
Hayes, would be a boost.
Dr. Gourrier. And, along those same lines, when we talk
about broad-based categorical eligibility, Dr. Hardy talked
about the benefits of the recipient and the ability to pursue
greater employment opportunities, but it also provides greater
flexibility for the states.
We have seen the ability to provide greater limits when the
previous illustrations of the curves, the higher limits allow
for smoother cliffs, allowing recipients to increase their
benefits over a longer period of time. That allows them to make
greater transitions and pursue more work opportunities that
might not otherwise be there.
The broad-based categorical eligibility allows for some
degree of savings to be accumulated. That also creates a
stability. In our research, when we talk about the ability to
meet the sustainable or survival limit, that is a recipient
that has no ability to deal with any unexpected expenses that
occur.
So that broad-based categorical eligibility limit allows
for some degree of accumulation of savings that allows an
individual to transition some of those unexpected expenses as
they pursue work opportunities in the future.
The Chairwoman. Thank you. Thank you both for that.
And I will just add to that, I like that Dr. Hardy talked
about long-term economic outcomes, because for many families
that are making this decision, their decision is not based
solely on I don't want to work more hours because my benefits
will be cut. It is on the long-term economic stability of their
family and the fact that the analysis of having 2 or 3 more
hours at work means now you don't have money to buy groceries
for your children.
So, it is not as simple as, ``I don't want to work so that
I don't disrupt my benefits.'' So, this is about the long-term
economic stability of families.
Mr. Sablan, thank you again for yielding your time.
And, with that, I will end and move on to our next Member
on Minority side. Is Mr. Crawford with us?
Mr. Crawford. Yes, ma'am.
The Chairwoman. I now recognize Mr. Crawford. Thank you.
Please unmute and begin your questions.
Mr. Crawford. Thank you, Madam Chairwoman, I appreciate
that.
And to our panelists, thank you for being here. My
colleagues and I believe there is an awful lot more we can do
for those who are trapped in our social safety net programs,
but we are simply limited by the level of discourse in
Washington, which has essentially stymied any true reform on
this and many other important issues of concern to Americans.
Let's be honest about it. Higher enrollment equates to
higher program costs for both Federal and state governments,
and no one should equate that with helping people. Why not
preserve the program for those who need it and use those
savings to invest in job training, childcare, and other
necessary supports and services?
For any witness that wants to comment on this, why do we
see so many differences in program administration costs across
states? Can we assume that states are truly looking at their
populations and providing solutions that meet their needs, or
do we have any examples of where this may or may not be true?
Mr. Randolph. Sure. I will take a stab at answering that
question. So, thank you for that question. That is actually a
difficult question to answer, I believe.
I think, as far as the issue of the level of the amount of
funding, we leave that to the Members of Congress. I don't know
if we want to get involved as an organization to answer that.
However, what we are really focused on is smoothing out the
cliffs. And, as the Representative from Massachusetts has noted
before, when we talk about an individual running into a benefit
cliff, they are already working. And those individuals, they
have a job.
But we know that this happens because, I mean, not only do
we have the anecdotal stories, but we have the computational
analysis that show that these cliffs do exist on the one hand.
But on the other hand, we do know, as a minority, that there
are some individuals, such as the ABAWD population, who could
be working.
So, I mean, we are talking about millions of people on this
program, and it is really difficult to make any one single
statement that represents all of them. But we do know that
there are individuals that could actually work that are not
working.
So that's kind of why we have a recommendation to reinforce
the work requirement, a recommendation to focus on the
training. One of the things that we do at GCO is it is not just
trying to get people a job the first time, but we also try to
help them to move up the career ladder. So, if someone has a
job to help them kind of advance. But I think that kind of sets
kind of the perspective.
Of course, if you put more people on rolls, it is going to
cost more money, but I am a little bit of an optimist here. I
think that if we solve both the problems of the benefit cliff
and then we solve the problem of the marriage penalty in
combination, that we would actually see the rolls naturally
come down. So, I think maybe in the long run, it would save us
money, but I am optimistic. It is just speculation.
Mr. Crawford. Anybody else want to weigh in on that?
Madam Chairwoman, I appreciate the time. And if somebody
wants to comment, otherwise I will yield.
Ms. Brown. I can weigh in very briefly here. Thank you very
much.
I just wanted to make the point of, as was mentioned,
right, the SNAP program exists to expand and contract. And so
that flexibility is critically important so that when
individual states or labor markets experience difficulties, the
program is vital so that it is there for people during that
time. And as was stated before as well, people are on the
program for a short period of time. And so, we do want to
preserve that ability for people to come to the program when
they need it and then move off when they can be self-
sufficient.
Thank you very much.
Mr. Crawford. Thank you. Madam Chairwoman, I yield back.
The Chairwoman. Thank you. Thank you for your questions.
I now recognize--it looks like the gentlewoman from North
Carolina has returned. We will recognize Ms. Adams for your
questioning, if you want to unmute and begin.
Ms. Adams. Thank you, Madam Chairwoman, Ranking Member
Bacon. Thank you both for hosting the hearing today. And to our
witnesses, thank you for your testimony.
Right now, more than 42 million Americans are struggling
with food insecurity, including an estimated 13 million
children. Over 18 million Americans are receiving unemployment
benefits, and up to 40 million cannot afford rent and fear
eviction. In the richest nation in the world, this is
unacceptable.
As the temporary 15 percent SNAP increase and emergency
allotments come to an end, Congress must come up with a
solution to ease the COVID-19 relief cliff. The abrupt
reduction or loss of benefits can be very disruptive for low-
income Americans, which is why I introduced the Closing the
Meal Gap (H.R. 4077), to permanently increase benefits by 30
percent and eliminate certain eligibility limits.
Dr. Hardy, we are approaching September 30, which will mark
the end of the SNAP emergency allotments passed in the Families
First Coronavirus Act in March. So based on your work, looking
at the government's response to the pandemic via the Federal
safety net, will the end of these additional benefits create a
crisis for families, or will there be other programs that are
able to ease the burden as they go back to work and as kids go
back to school?
Dr. Hardy. Well, I appreciate the question. I admit that
this is absolutely complex. And, economists and others are
going to be monitoring this over the summer and the fall.
Now, you do have child allowances coming through the ARP
that are going to be quite helpful for many families with
children, $3,600 for younger kids, $3,000 otherwise. But that
is not a permanent solution. It will help some of these issues
of benefit cliffs.
I would just say, Representative Adams, that we have known
for a while now in research that low-wage workers, families
working the low-wage labor market have had increased expenses,
transportation expenses, for example, increased housing
expenses. And so, I do believe that proposals like those you
have put forth are going to be really viable and important to
think about whether it is time to consider a boost in those
SNAP benefits. They do respond to the business cycle, as
Commissioner Brown noted. And we do see folks who absolutely,
if they have the job, if they are making sufficiently high
earnings, they don't need the benefits in the first place. So,
I do think you have a situation where multiple things can be
true at once.
The programs can be helpful. People could prefer to not
need them and, ultimately, some might--may move off. But I
absolutely believe that in a time of a global pandemic, we were
aggressive, and that was the right move, but we still need to
make sure that families aren't left behind.
Ms. Adams. Thank you very much.
Ms. Brown, can you elaborate on your recommendation that
Congress increase the earned income, disregard--raise the gross
income and increase benefits?
Ms. Brown. Certainly. Thank you, Representative. Our
proposal is really looking to provide some stability to
families and provide some opportunity before some amount of
savings to occur, so that when unexpected expenses do occur
with families and low-wage workers, which we know they do, that
this would provide them some relief and some support.
And so, we know from speaking to our families and to our
individuals and to our low-wage workers that transportation,
for example, is always a strain, and you must maintain
transportation options so that you can maintain that job. And
so, having, for example, a little bit of savings in which you
could pay for that car repair are critically important. And so,
this combination is a really powerful solution, we think, to
really help provide some stability.
Ms. Adams. Thank you very much.
Dr. Gourrier, I was interested to see that your research
determines that the benefit cliff both before and after the
pandemic will cause problems for families. So, can you explain
that a little bit more? Are you saying that none of these will
have a lasting effect on a family's well-being?
Dr. Gourrier. No. What we are saying is that we expect that
as we move post-pandemic that we'll see comparable trends in
terms of the benefit cliff that we saw prior to pandemic era. I
mean, we saw just more recently trends in the 10 year Treasury
dipping, giving us speculation that we are kind of moving into
a different economic forecast. But all of our research
indicates that [inaudible] Cliff results that we saw pre-
pandemic will still be existing once we move through this
phase.
Ms. Adams. Thank you very much. Madam Chairwoman, I yield
back. Thank you very much for your responses.
The Chairwoman. Thank you, Representative Adams.
I now would like to recognize the gentleman from Tennessee,
Mr. DesJarlais. If you are--yes, I see you.
Mr. DesJarlais. I am. Thank you, Madam Chairwoman. Yes.
Thank you, Madam Chairwoman and Ranking Member Bacon. I
appreciate the witnesses being here.
I have a few questions for you, Mr. Randolph. In your
testimony, you discuss the decline in the labor participation
rate among prime working age individuals. This certainly is
consistent with what I am hearing from employers in my district
who are having increasingly difficult times staffing their
businesses. Can you discuss, from your perspective, the
importance of SNAP work requirements and education and training
components?
Mr. Randolph. Absolutely. Thank you for the question. This
is an area where labor force participation rates--and we are
talking primarily individuals who are the, what we call the
prime working age, especially among males, where we see, over
the decades, a fairly significant decline in the participation.
And so, it has been quite a challenge, quite honestly, of
trying to determine what all the causes are.
The Council of Economic Advisers to the Obama
Administration, for example, they had produced a major paper on
this, and there was quite a number of discussion. We have both
think tanks on the left and the right that have kind of focused
on this. We at GCO have actually done some work in this area
because, of course, it is the clientele that we serve. And one
of the things that these studies have pointed out is, the role
of safety net programs. And, knowing that we do have certain
kind of cliffs and that there may be certain things that we
actually have with the food stamp program, I don't think we can
eliminate that it is a possibility that the food stamp program,
we can at least--let me say it this way: We can at least use it
as a tool to try to help these individuals.
And, in fact, I believe that if we look at the experience
of Maine, the State of Maine, and the experience of the State
of Kansas, they had actually applied the ABAWD rules after the
Great Recession. They were the first two states to do it. And
there was measurable success. They actually kind of measured
the number of individuals that they got to be employed that
were the ABAWD population.
Mr. DesJarlais. And we tried, as you probably remember, to
do this in the last farm bill. And unfortunately, there was a
pretty good plan there that got stripped out. So maybe we can
revisit that at some point.
You also bring up pandemic-SNAP waivers, which allows
states to give recipients the maximum allotment for SNAP. In
your opinion, how do these waivers lead to SNAP benefit cliffs?
Mr. Randolph. Well, what the waiver allows is it allows the
states to give the maximum benefit to anyone who qualifies for
food stamps. And so that means that whoever loses it, loses
that maximum benefit amount. And that is why the one slide
showed that for a family of four, the monthly benefit is $782.
So that is the amount that they would lose. And I believe all
states actually sought waivers for this program, so it is
pretty much across the board.
Mr. DesJarlais. Okay. And your testimony also included a
series of recommendations specific to SNAP related to the
penalties associated with employment. Thinking more broadly,
what role do local and state governments play in moving
families towards equitable mobility.
Mr. Randolph. Yes. That is a great question. I would like
to focus maybe just on the state. We actually have some work
that we produced. We had a three-series report that talks about
how states can actually better safety net programs in general.
And one of the components is we recommend an integrated
eligibility system. Georgia has the Georgia Gateway, so we are
kind of halfway there. We are moving in that direction. A lot
of other states are moving in that direction. And we can use
more flexibility, quite frankly, from the Federal Government to
help us succeed.
Mr. DesJarlais. Okay. Well, certainly, I appreciate your
time, and I appreciate all the witnesses for being here today.
Hopefully we can work on ending these cliffs, because I do
think that that would be very beneficial. And I agree with our
Ranking Member, and, Madam Chairwoman, you as well. So, I will
yield back the balance of my time.
The Chairwoman. Thank you, Mr. DesJarlais, for your
questions.
I now recognize the gentlewoman from New Hampshire, Ms.
Kuster. If you want to unmute and begin your questioning.
Ms. Kuster. Great. Thank you very much, Madam Chairwoman.
As we begin to slowly emerge from the depths of the
pandemic, we have come away with a new appreciation for the
vital role that SNAP plays in our country. Millions who
suddenly lost their jobs or had their hours cut as our economy
shut down had to rely on SNAP for the modest benefit it
provides to help put food on the table for their families.
In 2019, the average SNAP benefit for recipients in my
State of New Hampshire was about $1.22 per meal. And even with
the 15 percent maximum increase allotted by the economic rescue
package, this is still anything about luxurious. As our economy
reopens and businesses are able to start hiring again, it is
more important than ever to help families on SNAP avoid the so-
called benefit cliff as their wages and hours rise. Abruptly
losing SNAP benefits when your income reaches 130 percent of
the poverty line can create a very rough transition for
families at a critical moment when they are trying to steady
their finances.
Thankfully, New Hampshire and the vast majority of states
have instituted broad-based categorical eligibility or BBCE, a
policy that allows families just getting by to continue
receiving SNAP benefits at a gradually reduced rate as their
incomes rise and stabilize. This helps folks, prevents folks
from falling off the benefit cliff at a critical tipping point.
And this policy also streamlines the application process for
those who qualify for help. In my mind, anything that helps cut
through costly red tape is a clear win.
On that note, Ms. Brown, you mentioned in your testimony
that Minnesota waived its SNAP asset test and this relieved
some administrative burdens that weren't relevant for the vast
majority of SNAP participants. Do you have a sense of how much
time that decision saves your department? And do you see other
opportunities to streamline administrative processes that will
also benefit--also help those who are facing the benefit cliff?
Ms. Brown. Thank you. Indeed, in 2010, Minnesota was able
to implement broad-based categorical eligibility. And our
department's analysis in 2011 determined that less than one
percent of the households applying for SNAP or already
receiving SNAP were affected by eliminating the asset test. So
that saved our county and Tribal eligibility workers seven to
ten percent of their time. It is an administrative burden that
is unnecessary, in our mind. I would also like to point out
that SNAP law does require people to report lottery and
gambling income as well.
And so broad-based categorical eligibility has been a great
flexibility for states to utilize and streamline the program
and make the program work for their state and help impact our
families.
We have approximately 50 percent of our population, our
children, and, again, when we reviewed our data, if we did not
have broad-based categorical eligibility, nearly 35,000
Minnesotans would not receive SNAP benefits, the majority of
them would be children.
Thank you.
Ms. Kuster. Thank you very much for the work that you do.
I also want to ask Dr. Gourrier about your research, which
highlighted the benefit cliff that faces families in Maryland
in which both parents work jobs at or near the minimum wage.
Maryland's minimum wage is over $11 per hour. How would those
difficulties be exacerbated in states with an even lower
minimum wage like here in New Hampshire's $7.25?
Dr. Gourrier. Yes. We would imagine that the benefit cliff
would be even sharper in those states. I will say that our data
does present cost-of-living adjustments for the State of
Maryland. But we initially tested it at $10.10. As I said, in
January 2020, that number moved from $10.10 to $11.00, and our
families in Maryland still could not meet the minimum threshold
to cover expenses, especially to two-adult two-children
households.
So, we would expect in states with significantly less
minimum wage levels that those impacts would be even greater
and that the variants, along with the family's basic survival
expenses versus income, would be even more significant, which
would make the benefit cliff even more impactful in those
households.
Ms. Kuster. Well, Madam Chairwoman, I just want to thank
you for this important hearing. Here in New Hampshire, I can
tell you that the people who have lost their jobs during COVID,
who are trying to make their way back into the workplace, this
benefit cliff really has a devastating impact. And we want our
children to grow up strong and healthy and to be learning and
working hard in school and to be wonderful employees in the
future to continue the comeback in our economy.
So, thank you. I appreciate this. And I yield back.
The Chairwoman. Thank you so much, Representative Kuster.
I now recognize the gentleman from Indiana, Mr. Baird.
Representative Baird, if you are ready, you can unmute and
begin your questions.
Mr. Baird. Thank you, Madam Chairwoman and Ranking Member,
for holding this hearing today. And I really appreciate all the
witnesses' testimony and their background and experience.
As Americans, we all want to help individuals, especially
the elderly and the children and the disabled, make sure that
they have access to adequate food and nutritious food. And, we
are talking about some 86 programs that are administered by
nine or so different agencies, and the challenges of trying to
meet all those requirements with that many different agencies
involved is significant. And I can appreciate that.
But I also want to reiterate that, in my district, I see
help wanted signs everywhere. And so, I want to know how we, as
a Member of this Subcommittee, and this Subcommittee, and the
witnesses and their testimony, how we do a better job of trying
to bridge that gap for those individuals and make sure that we
get our economy started back operating, and that takes
employees. And so, we want to try to make sure that we
encourage that kind of--and stimulate that kind of incentive
for some of our constituents.
So, I guess with that, Mr. Randolph, I am going to start
with you. Back in March of 2020, we had over $125 billion that
was allocated for nutrition-related relief. Now, that excluded,
according to my data, child nutrition programs like the schools
and WIC. But it did include the Pandemic-EBT. And there is an
ongoing discussion about continued increase in benefits,
including here today.
So, your testimony appears to add some question against the
outright increase in the benefits for reasons that make sense,
particularly higher benefit amounts across any program will
lead to more drastic penalties. So, can you share with me what
your recommendations are to how we counteract that?
Mr. Randolph. Absolutely. So, as far as the amount of the
benefit, I don't know exactly what the amount of the benefits
should be. I think what the best way to approach it is I would
base it on the science, clearly. And then also on the ability
of people to economically, with an economic budget to be able
to put together the resources to acquire their nutritional
needs. So, I mean, this is the way that the SNAP program has
done it historically. And I think it has been good, generally,
the way that they have come up with this with a Thrifty Food
Plan.
So, what I would do probably, if I were in the
Administration, is, I would have two panels. I would have one
that consisted mostly of nutritional scientists and have them
tell me, based on the most recent science, how can people meet
their nutritional needs. And then I would have a second panel
made up of maybe--maybe have a social worker, have a number of
individuals who lived on food stamps, and actually have them
come up with a plan of how to obtain those nutritional values.
And the Department provides guidelines.
The Department of Agriculture releases guidelines to help
people to figure out how to live within the amount of the food
stamps that they receive. So that is the one side of it.
The other side of it is, when we are talking about cliffs--
and I can demonstrate this. I can even do it in a diagram on my
screen. But the higher you have the starting value, the more
difficult it is to solve the cliff. And we have just got to
keep in mind the SNAP benefit cliff is just one piece of a
bigger puzzle. So, we have the SNAP thing, but then we have
like Earned Income Tax Credit, we have childcare services, we
have Medicaid. So, there are a lot of other kind of programs
that are out there.
So, as a general rule, each of the programs want to kind of
provide what is sufficient but not much beyond that, because if
you start building up higher starting values, you are going to
make it much more difficult. I think the general goal is to--
everybody seems to be in agreement we want to solve the cliff
problem. And now what I am talking about is what do you have to
do mathematically, in a sustainable way to do that.
Mr. Baird. Well, thank you, Mr. Randolph. And I see I am
about out of time. And so, I appreciate the other witnesses
being here as well.
So, with that, Madam Chairwoman, I guess I will let you--I
yield back.
The Chairwoman. Thank you. Thank you for that.
I think we are on to the gentleman from Florida, Mr.
Lawson.
Mr. Lawson. Okay. Thank you very much, Madam Chairwoman and
Ranking Member Bacon, for holding this hearing.
This is a very important hearing, and it is extremely
important to me because I have both urban and rural communities
in my district, quite a few that have SNAP benefits. It has
been a major concern for them.
And this is for all of the witnesses. Can you explain how
categorical eligibility can support households that are
struggling to put food on the table? Throughout COVID-19
pandemic, SNAP has been a lifeline for many Americans having
assured access to healthy food for many families.
But I will go back to the first part of the question again.
Can you explain how categorical eligibility can support
households that are struggling to put food on the table?
Dr. Hardy. Representative Lawson, I would like to take a
stab, and I also want to try to conserve for others.
Briefly, I would just say that absolutely category
eligibility is going to give families more flexibility
financially. Frankly, the bandwidth issue where if they are
thinking hard about being on that margin of benefits or no
benefits, there is more slack in that overall income budget. So
that is going to be hugely important for families that are
trying to work and make ends meet. And so that gives more
space, raising that income limit up to as much as 200 percent
of the poverty line.
I would just also add, however, that this is both a serious
problem and, on the arithmetic, a problem that does not affect
the typical SNAP families. So, both can be true, and you all
are problem solvers. But, you have about 25 percent of these
SNAP households that are somewhere between 100 and 130 percent
poverty. And then, when you account for the states that are
already doing broad-based categorical eligibility, that winnows
the set of families for whom this is an issue down a bit more.
So, you have to solve it, but you also have to keep in
mind, the program is doing a lot that works as it is. So, you
have to be careful in this conversation.
Mr. Lawson. Yes. Anyone else would like to say something in
regard to this issue?
Ms. Brown. Representative, if I may, just thinking about
our senior population, categorical eligibility allows us to
remove the asset limit. And in Minnesota, before we implemented
broad-based categorical eligibility, only 28 percent of our
low-income seniors received SNAP, and, today, almost 60 percent
of our low-income seniors receive SNAP. So, there is a direct
correlation with allowing people to have a little bit of
savings. And it particularly also impacts our low-wage workers
maybe who are recently unemployed and it allows them not to
deplete their savings in order to receive SNAP benefits.
Thank you.
Mr. Lawson. Okay.
Dr. Gourrier. And just to follow up, kind of a combination
of both of those, the two main benefits; one, the flexibility
to the recipients to not be as pinpoint in terms of their
benefit cliff, because it gives them a little bit more range in
terms of when their benefits fall off. It gives the state
greater flexibility to increase from that 130 percent to the
200 percent. And it gives flexibility in terms of the asset
test and savings accumulations to allow recipients to be able
to weather some of those unexpected expenses.
So those combinations that exist through the broad-based
categorical program allows for greater flexibility, both from
the recipient as well the states' administration perspective on
those.
Mr. Lawson. Okay. Thank you. And I would like to try to get
in another question before my time runs outs. This is very
important; I have a lot of students in the area. The question
is--and this is following--moving forward, how can Congress
increase SNAP eligibility for college students, veterans, and
individuals with disabilities?
Anyone want to take a crack at it?
Ms. Brown. I will take a first crack at it. When we look at
students, we have known traditionally students have had a
difficult time in accessing SNAP, in part because of the
struggle between working and going to school. We also know that
students have changed. There are less traditional students
nowadays, and the program has not kept up to speed with
thinking about students in different ways. And that is an
important piece that needs to be considered.
Thank you.
Mr. Lawson. Okay. So as was mentioned earlier, do you all
agree with the fact we ought to have a White House conference
on SNAP?
Dr. Hardy. I don't know if you are asking me, but I
absolutely agree.
Mr. Lawson. Okay. Because I know how people are struggling
now.
Ms. Brown, in your testimony, you highlighted the
importance allowing recipients to earn up to 200 percent of the
Federal poverty guideline. If my home State of Florida was to
move to 200 percent requirement, what would you expect to see
with this change?
The Chairwoman. I am sorry, Ms. Brown, I am going to have
to ask you if you would submit the answer to that question to
the Committee. The gentleman's time has expired.
[The information referred to is located on p. 69.]
Mr. Lawson. I yield back.
The Chairwoman. And the question, we will get it to you so
that you can answer that.
But I support a White House conference on hunger, actually.
My colleague, Mr. McGovern, and I are calling for one so that
we can bring all of these voices to the table, much like we are
doing today, to really come up with long-term solutions to this
problem.
Thank you so much, Representative Lawson.
I now recognize the gentlelady from Louisiana,
Representative Letlow. Yes, I see you. If you would unmute and
begin your questions.
Ms. Letlow. Thank you, Chairwoman Hayes.
To all the witnesses, thank you for your time and
participation in this hearing today.
As I am sure many of my colleagues can share similar
experiences in their home states, when traveling throughout the
Fifth District of Louisiana, I come across numerous hiring
signs and hear the concerns from small business owners of not
being able to find enough individuals willing to go to work.
These same small businesses are the backbone of our local
economies, supplying essential goods and services to the
surrounding communities and providing opportunities for gainful
employment for the unemployed.
As our nation continues to recover and makes promising
strides in moving past the pandemic, we should be doing all we
can to encourage and help families return to work. Mr. Randolph
said it best as part of his written testimony: The more
individuals reengage in the workforce, the stronger and more
productive the U.S. economy will become.
In turn, we in Congress, and on this Subcommittee, should
look to provide the right balance of benefits, ensuring that
Federal programs aren't designed to disincentivize self-
prosperity and preserve the Supplemental Nutrition Assistance
Program for those truly in need.
My question is for you, Mr. Randolph. Your testimony speaks
to the Georgia Center for Opportunity's work with other
nonprofit organizations to help people find well-paying jobs
with the opportunity of career progression. Can you tell the
Committee more about this work, including the career ladders
individuals embark upon and your organization's rate of
success?
Mr. Randolph. Absolutely. And just to mention, the Pelican
Institute in Louisiana is one of the organizations that we have
been working with.
Ms. Letlow. I know.
Mr. Randolph. And so, you may be familiar with them.
What we are doing generally is we actually have--we work
with an array of other nonprofits, including Goodwill in
Georgia. We actually have two programs, one based out of
Gwinnett County, Georgia, and another out of the City of
Columbus, Georgia. And what we do is we develop mentors and
then we work with mentors. We have a platform on a website that
people can go to. We work directly with employers. It is
actually a fantastic program to look at, it would be a great
one some time in the future to get even individually or as a
group that we can show you the platform. But basically, to help
them find jobs. You know, it has an array of things. Like, it
will tell them such things as, what kind of skills they need,
et cetera, to do it. But, basically, that is what it is.
We have only been doing it for about 2 years. So we haven't
had a whole lot of data yet on the success. But we are really
encouraged about where we have gone so far over these past 2
years.
Ms. Letlow. Awesome. Thank you.
As this Subcommittee moves forward in examining the SNAP
program, one of the areas we should review and address is
providing opportunities for individuals to pursue independence
through meaningful employment and training programs.
Mr. Randolph, in relation to your work, can you further
expand on what changing this policy would look like, and how we
can address improving access to these programs?
Mr. Randolph. Would you state again exactly which program
of access to that you referred to? I am sorry.
Ms. Letlow. Examining the Supplemental Nutrition Assistance
Program.
Mr. Randolph. Oh, you mean gaining additional access to the
program?
Ms. Letlow. Correct.
Mr. Randolph. Maybe by a broad-based eligibility? Is that
kind of what you are thinking?
Ms. Letlow. Yes.
Mr. Randolph. Okay. I actually have a suggestion that I
believe is the better solution than broad-based categorical
eligibility. And that is, in our recommendations, we really are
promoting the idea of an integrated eligibility system across
all programs. Georgia has developed the Georgia Gateway, for
example. And if states move in this direction, it really would
make, I believe, obsolete the idea of broad-based eligibility.
So, I would encourage the Subcommittee to consider that as
another option to it.
And just one other thing I would like to say. The way they
are using broad-based eligibility appears to be different than
what it was traditionally. And so I would like to find out more
about the flexibility they built into the system. Originally,
it was a system like, for example, if someone was on a TANF
Program, then they would, we already vetted them for assets and
income. And so, they would automatically qualify for SNAP,
because there was no communications between the TANF Program
and the SNAP program.
So, prior to integrated eligibility, it kind of made sense.
But as you develop your systems, it really doesn't make as much
sense. But it sounds like, from the other testimonies, that
they are doing something different with it. And I would like to
actually learn a little bit more about it and maybe analyze it
a little bit more.
Ms. Letlow. Thank you so much, Mr. Randolph, for sharing.
It is encouraging to hear the great work you are all doing to
help individuals get on a path of financial stability and
growth.
I yield back my time. Thank you.
The Chairwoman. Thank you, Representative Letlow.
I now recognize the gentleman from Illinois, Mr. Rush.
Mr. Rush. I want to thank you, Madam Chairwoman, for this
very outstanding and provocative and informative hearing.
My question is directed to Ms. Brown.
Ms. Brown, I am working to reintroduce my bill to
strengthen SNAP by increasing the daily allotment in allowing
for hot and prepared foods to be purchased as part of the
program. In your opinion, would these changes be helpful? And
what other policies would you suggest that I include to
strengthen SNAP and to ensure food security for the most
vulnerable among us?
Ms. Brown. Thank you. I agree that adding some additional
flexibilities for the purchasing of hot foods with SNAP would
be greatly beneficial. We know that in Minnesota our homeless
population, 30 percent of which are working, I will note, they
often have difficulties in finding food that they can prepare
in homeless shelters or in other situations. So, having some
flexibility with the types of hot foods that can be prepared
will greatly support that population.
Mr. Rush. Thank you.
Dr. Hardy, from your testimony, I believe that you will
agree that SNAP is extremely important for workers in low-wage
jobs who often lack benefits, such as paid sick leave, and lack
stable hours, and are disproportionately people of color. Do
you agree that SNAP work requirements just lead to families
that are going to bed hungry? Can you expand upon how SNAP is a
vital resource for supporting working families? And on the
issue of work requirements in SNAP, how can Congress really
effectively, proactively deal with this particular issue?
Dr. Hardy. Well, I appreciate the question. And what I
would say is that my view of the program design and the
evidence is that SNAP work requirements, in my view, undermine
the functioning and the efficiency of the program. The program
actually does ebb and flow with the business cycle. When we
have high job loss, we see greater SNAP use. When the economy
improves, we see SNAP use go down. And so, this is a really
nice feature of the program.
So, I appreciate that question. I think work requirements
in SNAP are the wrong way to go. But I also want to speak to
the economic situation we face.
My colleagues and I think a lot about this. Everyone on
this Committee is concerned about it. I think that is one
uniform area of agreement. We see an adjustment occurring right
now in the U.S. labor market, perhaps long overdue. There were
quite flat relatively low wages for less educated workers,
workers in certain retail and food services sectors. And, right
now, even in my own conversations with business owners,
actually in Georgia. Many moons ago, I was a student at
Morehouse College, and I know business owners in Georgia. And,
many of them have said it was a challenging situation. And at
the same time, it is a market. And so, they have adjusted. They
have raised wages. They are looking at automation. It is not to
say that this is easy. We are coming out of a pandemic. We are
going to be probably dropping some of these economic relief
payments. Other things might persist.
But I think the broad point is that we are in the middle of
an adjustment. Anchor employers are going to begin showing up
in larger numbers. Our 4 year and 2 year universities are going
to have more students on the ground. That will have a
stimulative effect for the economy as well, more foot traffic.
And so, I think that this is really a wait and see situation.
So, absolutely, there are shortages, but we are also in a
market, we are in an adjustment. And I think we are seeing
adjustments that make quite a bit of sense.
Mr. Rush. Thank you.
Dr. Gourrier, Congress is well on its way to approving what
we call the Child Tax Credit. Is SNAP and the Child Tax Credit
on a colliding course? How can they be used cooperatively to
increase in the total well-being of American citizens who
certainly would rely on both of these programs?
Dr. Gourrier. Yes. Just to address briefly, because I know
we are running out of time. A big part of our particular
research talks about the coordination of benefits and
resources, not just SNAP, but complementary resources that also
exist.
I believe Mr. Randolph talked about the Gateway in Georgia.
In Maryland, we have the 2Gen Program. And all of these
programs are designed to coordinate eligibility and benefits
for the greater benefit of the recipient.
Mr. Rush. Thank you, Madam Chairwoman. I yield back.
The Chairwoman. Thank you so much, Congressman Rush.
And now I will recognize the gentlelady from Florida,
Representative Cammack. If you are on, you can unmute and begin
your questions.
Mr. Bacon. Kat, are you on deck.
The Chairwoman. I heard that she was waiting and her camera
was just off. So, Representative Cammack, if you are available
to begin your questions.
Okay. So, with that, I will yield myself 5 minutes for my
questions.
We have heard a lot today in this hearing--thank you so
much to all of the witnesses on the panel for joining us--and
it shows that flexibility is even more critical in the context
of COVID. I hope that as a Congress we are not using
traditional metrics, or doing things the way we have always
done them, when we have seen how detrimental it has been for
families and how life sustaining emergency pandemic benefits
have been for so many people. We have a responsibility to
legislate in the now, not in the same way that we have done for
the last 50 years.
In the coming weeks, SNAP recipients are also preparing for
another benefit cliff, the COVID cliff. At the end of
September, recipients will potentially face an abrupt end to
increased SNAP benefits provided by Congress in our emergency
relief efforts. This is particularly concerning for low-income
Americans, who are among the hardest hit by COVID-19 and are
still struggling to find high-wage employment and shield their
families from food insecurity.
We have heard a lot about help wanted signs and jobs that
have openings. But in many states, the minimum wage is less
than $10, and these are low-income, entry level service jobs,
many of those people were not even eligible for unemployment
benefits. So, there is no money grab here. It is not a
situation where people are choosing not to work to benefit
themselves.
My question is for Ms. Brown. In Minnesota, you and
Governor Walz have worked closely with USDA to ensure this
important pandemic relief does not end for recipients before
they are able to get back on their feet. Can you tell me more
about why emergency allotments and the 15 percent increase to
SNAP have been and continue to be so critical for people in
Minnesota? And what are your concerns as we face a sudden end
in September?
And I will just add, before I turn it over to you, that on
this Committee we have been working on legislation that will
support caregivers and foster parents so that--it is H.R. 3997,
the CARE for Kids Act (Caregivers, Access, and Responsible
Expansion for Kids Act of 2021) that the Ranking Member
cosponsored with me--to make sure that families who are caring
for children that are not their own will have automatic
redetermination eligibility and that is not--and kids will eat
in school. That is deeply personal for me, because hungry kids
do not learn. So, I was happy that the Ranking Member joined me
in this legislation. And we are working to make sure that we
are identifying gaps and working to close them.
So, can you just tell us about how the 15 percent increase
has helped people in your state?
Ms. Brown. Certainly. Thank you very much. And thank you
for your comments.
In Minnesota, we have seen just a great relief with the
pandemic supports that have been provided to our citizens.
Certainly, it required a lot of information. It is a little bit
confusing when there are multiple programs coming out. But the
majority of our recipients have been so grateful. With the
pandemic, with the uncertainty that has been put in place with
people, with the additional food needs that people have needed
to do, with regards to their children not being in daycare, in
school, with work being closed; just a lot of instability has
occurred. And so, these benefits have been extremely critical.
And we hear every day how grateful people are to be receiving
them.
The Chairwoman. [inaudible.]
Mr. Bacon. Madam Chairwoman, you are on mute.
The Chairwoman. Sorry about that. Yes.
Thank you for that, Ms. Brown.
Dr. Randolph, you mention in your testimony that you
believe SNAP deductions for housing and childcare should be
eliminated, and that those needs should be addressed by
programs specifically designed for assistance in those areas. I
am troubled by this recommendation because, as you know, unlike
SNAP, many other Federal safety net programs are not guaranteed
to low-income families and are notoriously difficult to access.
The devastating year's long waiting list for housing assistance
across the country are well known. Last week, Miami Dade
announced that they had 5,000 available spaces for housing and
90,000 applicants. Many localities have long waiting lists that
have grown longer through this pandemic.
Why would you recommend that we expand or guarantee to
access to Federal housing and other safety net programs--I am
sorry. Would you recommend that we expand or guarantee Federal
housing and other safety net programs to low-income Americans
in need of assistance?
Mr. Randolph. I thank you for your question. And I am not a
doctor, so I just want to clarify that, so people don't think I
have a Ph.D. I do not have one.
So, my point is that when we are looking at--we have a--we
actually have a proposal out there for how to more or less
transform the welfare system so it becomes more rational. And I
think one of the principles that you want to adhere to is you
want to kind of keep it simpler, as opposed to more complex.
So, in a way, the SNAP program actually can subsidize other
needs by having sort of income disregards.
So the idea is that, as we kind of go down this path of
trying to make it a more rational system, we should in fact
have--let's just have the SNAP program fund the needs of
nutrition. And then on top of that, I mean, I would--just with
the Pandemic-EBT program, for example, this is giving us an
indication that we could actually probably consolidate other
programs into SNAP, because now we are having some experience.
And I think that would be a step forward so that we could
actually have maybe a beefed up SNAP program, but by--through
consolidation, not necessarily by increasing the amount of
money that is needed for that.
And for the childcare and the housing, we actually have
some proposals on how to reconfigure it. I would not recommend
expanding the Section 8 Program as it is. I think there are a
lot of problems with the Section 8 Program. It is probably
beyond the scope of this hearing, and as well the childcare.
There are certainly some issues with the childcare program as
well.
The Chairwoman. Thank you for those remarks. I have so much
to say, but my time has expired. And I yield back.
I will recognize the gentlelady from Florida. I think she
is back.
Representative Cammack, if you would like to ask your
questions, please unmute and ask your questions now.
Mrs. Cammack. Thank you, Madam Chairwoman. I appreciate it.
Thank you so much for your patience. And it is very good to see
my colleagues. It has been a while. I look forward to seeing
you all next week.
I appreciate our witnesses and your testimony here today.
I am going to basically summarize my remarks quickly and
jump right into questions.
Several of our small business owners across my district
have come to me here recently with the same problem in the last
few months: labor. Positions remain unfilled, job openings
remain open, and the shortage of labor continues on. Now, I
hazard a guess to say that many others in this hearing today
have heard similar concerns from their constituents.
Now, we all know that changes made to SNAP amid the
pandemic helped Americans through an unprecedented time and
challenges in our country. However, I am very deeply concerned
that unless a serious effort is made to return SNAP to its
original intended purpose, we are moving into an era of
lifelong dependence on Federal programs where it is accepted
and even encouraged, and incentives to help people get back to
work and on their feet are set aside.
Now, in the spirit of moving our economy forward and
helping Americans get out of dependence and back to work, I
submitted an amendment earlier this year as part of the budget
reconciliation that would appropriate $3 billion to SNAP
employment and training rather than to continue the increases
in benefits. Now, sadly, the amendment failed to a wave of
spirited noes from my colleagues in the Majority.
Now, I have heard it said by a number of my colleagues on
both sides of the aisle that programs like SNAP are not a
handout, they are a hand up. And to that, I wholeheartedly
agree. Prolonged welfare dependency is no way to rebuild an
economy. If any fixes to SNAP should be made, they should be
made in the spirit of helping Americans get back to work,
accrue savings, and exit the program as productive, successful
members of society.
Now, Ms. Brown, I had a question for you here. And I want
to thank you for your testimony here today. I was looking on
the screen, in the grid, of where you are at. You are up in the
upper right-hand corner. So, as I am sure you are aware, and I
know you talk a little about this today, both through the state
and this Committee's own conversation, a gentleman in Minnesota
was able to receive a more than nominal SNAP benefit for many
months due to Minnesota's use of broad-based categorical
eligibility. Now, I say this not to garner personal attacks on
the man but to further demonstrate how sometimes solutions
cause more problems.
In Minnesota, any and all households within 165 percent of
poverty level are provided with the Domestic Violence Brochure,
regardless of what households that that household's
circumstances are. And while we constantly hear of the
necessity of services and support that meet the household
needs, we have a patchwork of 44 state policies that provide 44
different funded pieces of paper that never truly meet or
really strive to understand that particular family's needs. So,
it appears that we may need an overhaul, at least across a
handful of programs well beyond SNAP. I would like to hear your
thoughts on that.
Ms. Brown. Thank you. I would agree that the overwhelming
paperwork can be difficult. Right? With the multiple, different
reports that need to be turned in, different timing, that can
be very burdensome, both for our eligibility workers for state
offices and also for participants themselves. However, I stated
before, only one percent of people were impacted in Minnesota
by our asset test when we reviewed it in 2011, shortly after we
implemented in 2010.
I would also agree that additional improvements need to be
made on a continuous basis, and some of those have occurred,
with the inclusion of states to review lottery winnings, for
example. But I do believe that the overall impact of 35,000
Minnesotans being able to receive SNAP far outweighs the one
percent or less of individuals who perhaps are not being
entirely truthful with all the information that they are
sharing. But this is part of our program. And this is part of
what we need to do, is just continuously look at what we are
doing and how to improve and how to move forward to better
serve.
Thank you.
Mrs. Cammack. And, Ms. Brown, I appreciate your response.
Being in the position that you are, we mentioned multiple
states have different programs. Is there a conversation that
you have with your colleagues in other states about best
practices and models that we can apply and adopt practices?
Ms. Brown. Absolutely. That is in ongoing conversation. And
I do think, after 10 years or 11 years of utilizing broad-based
categorical eligibility, there is a time to look to see can we
make some uniformity across all of the states. We have a lot of
evidence and a lot of information from all of the states who
have implemented, 40 states,* I believe, across the nation,
that have taken this effort.
---------------------------------------------------------------------------
* Editor's note: The list of states using categorical eligibility
is retained in Committee file, and is also available here: https://fns-
prod.azureedge.net/sites/default/files/resource-files/
BBCE%20States%20Chart%20(July%202021).pdf.
---------------------------------------------------------------------------
Mrs. Cammack. Excellent. Thank you.
And I know, with that, my time has expired. Madam
Chairwoman, thank you so much for your patience and graciously
allowing me to ask my questions and submit a statement. Thank
you.
The Chairwoman. Thank you. We are happy to have you and all
the other Members who have joined.
That actually concludes all of our Member questions. I
thank the panel so much for your time and your expertise in
this area.
Before we adjourn, I invite the Ranking Member to share any
closing statements he might have.
Mr. Bacon. Thank you, Madam Chairwoman.
And I do appreciate the panelists today. It was very
educational. And I also appreciated the great questions from
our colleagues.
What I think I heard today was three of the four panelists
made a pretty clear case there is a cliff effect. And maybe a
fourth said there is a little bit of it. But, between at least
three today made a pretty clear case. Also, our two panelists
we had a month or 2 ago that were guests of the Majority made a
strong case as well. So I think we are on to something. And I
appreciate that.
No offense to discussions on broad-based categorical
classification. And I understand it could relieve some staff
pressures, cut through some of the red tape. Not common
incidences, but they are too common enough where someone has
lots of assets, to include a million dollars in assets. I think
when it happens, it undercuts the public's confidence of the
SNAP program. It undermines the confidence that our
constituents have when they see and hear when this happens. So
there have to be some controls put on that.
Increasing benefits or expanding eligibility in one program
here does nothing to solve the more egregious cliff effects
across housing, childcare, and cash assistance. So, my point
being there are like 80 of these programs. So, this is a start
where we are going to have like a [inaudible]. Hopefully, we
can look at it in a more broad picture in Congress itself.
USDA takes a look at characteristics of recipients. The
recently released 2019 report,* the most recent data that we
have, and it was done during an economic boom, showed that as
it relates to earnings, 29 percent of total SNAP households had
earnings in 2019. Further analysis revealed that 54 percent of
households with children had income from earnings, while six
percent of SNAP households that included hourly individuals had
income. About 71 percent, though, of households with adults
ages 18 to 49 without disabilities, the childless households,
ABAWDs in other words, had no earned income. I make this point
that there is work to be done to reengage families in the
workforce. I think those stats tell a compelling story.
---------------------------------------------------------------------------
* Editor's note: the report referred to is retained in Committee
file, and can be accessed at https://www.fns.usda.gov/sites/default/
files/resource-files/Characteristics2019.pdf.
---------------------------------------------------------------------------
While I am on the topic, because you have been talking
about minimum wage and other things, data also shows that
someone who is making $27 an hour, that these very
disincentives that cause the cliff effects still rears its
head. Frankly, it means if you can navigate your way on to
enough benefits, it doesn't matter whether or how much you
work. Look at what has been going on in our unemployment
insurance system. It exceeds earnings from work and massive
amounts of child allowance to even non-workers. So there has to
be some cutoffs here.
Interestingly, there was some talk about the Thrifty Food
Plan today. I must share that I have heard alarming statements
from folks across the spectrum related to the Department's
handling of this process, from discrepancies in methodologies
to outrageous measures of time and effort. I can only hope that
these are simply inside-the-beltway rumors. However, if true,
we could be staring at an unprecedented increase to SNAP
benefits that far exceeds what was done in the midst of the
pandemic. I see that this is presenting a dramatic and
continuing impact on SNAP beneficiaries. It seems like an
unrealistic precedent to set.
I would be remiss, finally, to say if I didn't mention the
fact that we did not hear about any revenue neutral solutions
today. We should have some opportunities to do that. Nor did we
hear about how to better coordinate our 80+ different programs.
Though I know this is in our food jar here, I know in the end,
Congress is going to have to take a holistic look at this.
So, Madam Chairwoman, I really appreciate you scheduling
this today. And, with that, I yield back.
The Chairwoman. Thank you, Ranking Member Bacon.
I also want to thank my colleagues and our witnesses, once
again, for your participation in today's hearing. Your input
and expertise will help us in shaping our policy priorities and
legislation that may be considered on this Subcommittee.
We have heard much we can learn from today. It is even
clearer to me how critical SNAP is in helping low-income
Americans to put food on the table and how important state
options for flexibilities like broad-based categorical
eligibility are to easing the benefit cliff participants will
likely face.
Today's witnesses reinforced what we have heard, or at
least what I have heard in my communities and shed light on how
the concerning upcoming COVID relief fund may impact those who
are still most in need of continued support as our nation works
to recover from the dire economic straits of this pandemic.
Congress offers government assistance to many sectors of
our economy: farmers, the finance district, housing,
manufacturers, small businesses. And we don't worry about the
long-term impact of government welfare or programs that support
our economy. I would just like to see us prioritize the same
level of investment in hungry people. SNAP is the most
efficient Federal program for boosting local economies.
I want to thank each of our witnesses again and to all the
Members who joined. Your time and knowledge are extremely
valuable. And I look forward to all we will be able to continue
to achieve together in the 117th Congress.
I also want to note it is not lost on me that when I took
over as the Chairwoman of this Subcommittee, and even at the
end of the 116th Congress, every Member of Congress,
Republicans and Democrats alike, were heartbroken and appalled
by the long lines that we saw on highways, at food banks,
people who had lost their jobs and for the first time in their
lives were facing food insecurity. I hope we don't forget those
images and move forward in a way that does not acknowledge that
we have a problem with hunger in this country. So, to return to
business as usual and the status quo is not what I am going to
do on my watch. We have work to be done. We have a
responsibility to make sure that in the United States of
America in 2021 we don't have long lines that are miles long at
food banks or families that are worried about not being able to
feed their children.
So again, I thank you all for your work today. And, with
that, this hearing is adjourned.
Under the Rules of the Committee, the record of today's
hearing will remain open for 10 calendar days to receive
additional material and supplemental written responses from the
witnesses to any questions posed by a Member.
This hearing of the Subcommittee on Nutrition, Oversight,
and Department Operations is adjourned.
[Whereupon, at 2:01 p.m., the Subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
Supplementary Material Submitted by Tikki Brown, Assistant
Commissioner, Minnesota Department of Human Services, Children and
Family Services Administration
Mr. Lawson. . . .
Ms. Brown, in your testimony, you highlighted the importance
allowing recipients to earn up to 200 percent of the Federal
poverty guideline. If my home State of Florida was to move to
200 percent requirement, what would you expect to see with this
change?
The Chairwoman. I am sorry, Ms. Brown, I am going to have to
ask you if you would submit the answer to that question to the
Committee. The gentleman's time has expired.
Thank you for your question, Mr. Lawson. Based on our initial
analysis, we estimate that fewer than 20% of cases that are closed or
denied due to the gross income test (currently set at 165% FRL) would
be able to receive SNAP benefits in Minnesota if the gross income test
were raised to 200% FPL. About 80% of cases would either still be above
the gross income test, or would not meet the net income test. So, we
anticipate the expansion would be modest, but that it would be one
important element in helping low wage workers.
This is why we believe it's so important to take these suggested
changes to the SNAP benefit calculation as a whole. Increasing the
gross income test to 200% FPL, increasing the SNAP allotment amounts
(which we applaud USDA for doing with the reevaluation of the thrifty
food plan), and enhancing the earned income disregard to match the
Federal SSI program implemented in combination are all critical to
ensuring that SNAP supports work by helping low wage workers whose
earnings are not enough to meet all their basic needs. In addition, we
believe it's key to not count cash assistance benefits (TANF) that are
below the poverty line against SNAP benefits.
______
Submitted Question
Response from by Tikki Brown, Assistant Commissioner, Minnesota
Department of Human Services, Children and Family Services
Administration
Question Submitted by Hon. Don Bacon, a Representative in Congress from
Nebraska
Question. Ms. Brown, thank you for taking the time to testify
before the Committee on July 12, 2021. Your testimony mentioned, ``That
is why setting asset limits for public assistance programs is counter-
productive: They do not change caseload numbers, but they create
significant administrative burden, taking time and focus away from more
productive work for SNAP recipients and eligibility workers.'' Your
testimony then went on to describe how the state of Minnesota is one of
over 40 states that use BBCE to eliminate the asset test for SNAP.
Are you aware that the State of Minnesota has used automated asset
verification systems within the Aged, Blind, and Disabled population of
Medicaid for the past 2 years? That it has actually cut the
administrative burden of the program as the system is fully automated
between the state and financial institutions and cuts out fraud and
abuse before it can occur to the tune of saving tens of millions of
dollars for the state per year, ensuring that those truly eligible have
the benefits they need and deserve? Evidence shows this system actually
allows applicants to receive benefits much quicker if they are deemed
eligible by the state, as most asset checks are automatically checked
and returned within 24 hours and any remaining are returned within 3
days.
If you were provided the opportunity to utilize this tool within
your state SNAP program, would you do so for the application process,
similar to states like West Virginia and Mississippi?
Answer. Minnesota's Asset Verification System operates under the
title of ``Account Validation Service'' (AVS). In the 2 years Minnesota
has operated the AVS, unfortunately, it has not reduced administrative
burden. This is mainly because the service does not provide all details
needed to accurately determine asset eligibility for Minnesota's
Medicaid program known as Medical Assistance. In addition, Minnesota's
Medical Assistance program allows applicants to reduce excess assets
within the application processing period and become eligible for the
program. This means in most cases Minnesota cannot use the AVS reported
balance of countable assets as of the first moment of the month.
The service is not entirely automated. Most smaller local banks
have employees manually look up data and respond by entering the
information in a web exchange (60% of the state's network) or send the
information by fax or paper mail (37% of the state's network). Due to
the delay in mostly manual responses, the AVS portal is configured to
wait 10 calendar days after a request was made before it displays any
results. Because of the processing delay, the inability of the AVS to
return information about all known assets, and the inability to use the
information about assets in the first month, all applicants must still
provide paper documentation of assets with their applications. Using
the AVS is therefore an additional administrative processing step and
does not reduce administrative burden on either frontline eligibility
workers or applicants for verifying assets.
Minnesota uses the AVS primarily to identify financial accounts
that were not reported by applicants. However, Minnesota financial
institutions are not mandated to respond to the request and the service
does not query all possible financial institutions in the United
States. In the 2 years Minnesota has operated the AVS, the state has
submitted 55,74 requests for financial account information on 51,798
cases. Eligibility workers found 811 accounts that had not been
disclosed by the applicant, with an average account balance of
$6,428.28. Undisclosed accounts do not always result in ineligibility.
Applicants have the ability to dispute ownership and balance details
provided by AVS, and some accounts are jointly held or otherwise
excluded by program rules. Therefore it is difficult to evaluate how
many savings were actually realized.