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This proposed solution to the debt ceiling could make the poor poorer while lining government contractors’ pockets.
As the deadline to raise the national debt ceiling and avoid a default approaches, President Biden is reportedly considering a proposal from Republicans to require people who receive certain types of federal assistance to prove that they have jobs. It’s a horrible idea. Biden supported such work requirements when he voted for then-President Clinton’s welfare reform package as a senator in 1996. Those changes were disastrous.
As we have reported for years, work requirements have been pushed as helping alleviate poverty in the 1990s, often discounting a boom in the Clinton years fostered by specific economic circumstances—new technology, globalization, low interest rates—that were hailed at the time, but that laid the groundwork for a modern economy with its own raft of problems. After the boom, the reforms’ effects were made clear: they had gashed a hole in the safety net, helping fuel poverty with little effect on unemployment.
House Speaker Kevin McCarthy (R-Calif.) says work requirements are crucial to reaching a deal, while House Democratic Leader Hakeem Jeffries says the idea is a non-starter. Biden has not yet made his opinion clear on all programs, but he implied on Wednesday he would not impose them on Medicaid recipients, something that had been discussed in initial reporting. “I’m not going to accept any work requirements that’s going to impact on medical health needs of people,” Biden said. “I’m not gonna accept any work requirements that go much beyond what is already [there]—I voted years ago for the work requirements that exist, but it’s possible there could be a few others, but not anything of consequence.”
While McCarthy has characterized work requirements as necessary to ensure that poor people gain independence from government assistance, they often make it more difficult for people to access the benefits they need not only to survive but to be able to work.
In 2019, Mother Jones reported on a woman who was employed, but who lost her Medicaid health coverage because she filed incomplete paperwork when her state instituted a work requirement. Taking away benefits like health care, the article notes, makes it harder for people to get jobs by allowing their health to deteriorate to the point that they can’t work. A certain percentage of people who receive cash assistance under Temporary Assistance for Needy Families are already required to show that they work, and able-bodied adults ages 18 to 49 can only receive benefits under the Supplemental Nutrition Assistance Program for three months out of three years unless they work at least 20 hours a week.
Instituting work requirements requires a lot of paperwork, which winds up being burdensome on poor people and lucrative to the companies that administer it. The company Maximus makes billions in annual revenue to administer public assistance programs and root out nearly nonexistent fraud.
Our government needs to reach an agreement on the debt ceiling—but it can do so in ways that don’t involve the rich getting richer at the expense of the poor. Work requirements do not do much except inflame a misguided idea: that the problem with poverty in America is that people are lazy.