The explosive growth in the federal budget allocated to means-tested benefit programs is unsustainable. The Secretaries' Innovation Group argues that the federal government must return key program and budget authority to states as exemplified by the successful 1996 law which reformed welfare and created TANF. An effective, secure safety net can be built around clearly delineated federal objectives that include work, economic self-sufficiency and healthy family life.
The food stamp program was unaffected by the welfare reforms of the 1990s and currently functions as a straight income transfer program. It does little to promote self-sufficiency as it lacks work requirements comparable to TANF. Nor are there sufficient limitations or incentives in place to promote the purchase of healthy food, so it cannot properly be characterized as a nutrition program. SNAP is the second most costly means-tested government assistance program after Medicaid, and fundamental reform is needed to control costs, ensure that limited resources are used to benefit those truly in need, and to focus the program on promoting employment and self-sufficiency for able-bodied, working-age recipients. The best way to accomplish these goals is by converting the program to a fixed state allocation, altering eligibility rules, adding work requirements comparable to TANF, and allowing states significant flexibility in operations.
Disability program expenditures are rising at an uncontrollable pace. Together, SSI and SSDI enrollment has brought too many lives of those who could work in full or part capacity instead into lives of permanent dependency. Once enrolled, disability recipients only rarely exit the program and return to the labor force. Unlike the pro-work incentives inherent in welfare as reformed through TANF, the work-discouraging incentives embedded in the federal SSDI/SSI system are in need of reform. The Secretaries' Innovation Group recommends a transition to a state-managed SSI and SSDI system for new applicants and recipients, with the principle objective to maximize full or partial work from those with health limitations.
There has been little innovation in the basic structure of the unemployment insurance system (UI) since it was set in law in 1935. Current circumstances call for a re-evaluation of the basic stagnant UI structure. Under current law, federal rules constrain the ability of states to manage their program to maximize the return of work of the unemployed. With the examples of worker’s compensation and welfare, the Secretaries' Innovation Group calls for states to have an option to create and manage their own unemployment insurance system for new enrollees.
The law creating the Temporary Assistance for Needy Families (TANF) program in 1996 is the single greatest social policy achievement since the War on Poverty began significantly improving social health across a range of important indicators. Yet TANF, along with its critical work activation mission, found itself under stress after HHS granted itself authority to “waive compliance” with all the work provisions in the TANF program. The Secretaries' Innovation Group calls for TANF not to be weakened; and that States be given new authorities which, combined with current law, will strengthen the program and lead to still greater employment outcomes and reductions in dependency.