April 19, 2018

The 2018 Farm Bill is a recipe for a massive “workfare” bureaucracy

The 2018 Farm Bill (pdf) moving through Congress contains substantial reforms to the Supplemental Nutrition Assistance Program (SNAP), commonly known as food stamps. While SNAP is in dire need of modernization, the bill as currently constructed ignores much of the cumulative empirical literature on how SNAP could be improved in favor of familiar ideological tropes. The result is a recipe for creating more bureaucracy that, far from promoting self-sufficiency, will only further burden the lives of the poor.

Work Requirements

The biggest change to SNAP within the 2018 Farm Bill is a significant tightening of work requirements for “Able Bodied Adult Without Dependents” between the ages of 18 and 59. If enacted, SNAP recipients will be required to work or participate in employment and training programs for a minimum of 20 hours per week, while verifying their work status with their local SNAP office each and every month. Individuals who fail to meet the new work and monthly reporting requirements will be sanctioned by losing SNAP eligibility for one year on the first offense, and three years every time thereafter, forcing recipients to reapply. This will represent a substantial increase in both the paperwork burden placed on low income households and the administrative costs borne by states.

More fundamentally, the proposed work requirements undermine SNAP’s role as an income support for precisely those individuals and households that face employment and income volatility. Income supports differ from traditional unemployment insurance by insuring against shocks to individual productivity rather than job destruction, per se. According to a CBPP analysis of census data, one in four SNAP participants experience at least one month per-year in which hours worked fall below the proposed 80 hour per-month minimum. Rather than helping such households smooth consumption in the face of volatility, tougher work requirements would amplify income volatility by removing SNAP benefits during the very months when other sources of income are ebbing.

The assumption that SNAP reduces work effort is itself questionable. Analysis by the economist Gareth Olds, for instance, found that the expansion of food stamps in the mid-2000s, which increased enrollment by 3–5 percentage points, added the equivalent of 1.1 million additional workers to the labor force by relaxing household credit constraints. Newly eligible households were also 20 percent more likely to start their own business, independent of whether they opted to receive the benefit—exactly what one would expect if food stamps acted as insurance against income volatility.

Opponents of work requirements are justified in their suspicions that they largely represent a pretext for cutting enrolment. When similar reforms to Illinois’s Medicaid system required annual “redeterminations” of whether recipients were eligible, 25 percent of all Medicaid clients were disenrolled in one year. As a study of the incident notes, “a larger number were in fact eligible but simply failed to comply with administrative requirements in a timely way.” A monthly verification requirement in SNAP is likely to cause even more problems.

When the dust-settles, the main beneficiaries of work requirements are not the poor, nor the general public, but instead the handful of private companies with exclusive contracts to provide and operate increasingly ubiquitous verification and case management systems. The biggest of these is MAXIMUS, which, according to the most recent filings, spent $180,000 in 2017 lobbying congress, the White House, and USDA on “SNAP; flexibility to contract services; and welfare reform.” Money well spent.

Employment and Training Supports

In addition to work requirements, the proposed 2018 Farm Bill includes a major, three-fold increase in federal funding for employment and training (E&T) programs, totaling $1 billion per year. This is a welcome change from the usual “welfare reform” formula that sees work requirements mandated without corresponding work supports. And, importantly, the bill requires access to E&T programs to be guaranteed. Criticism of the new overall work requirement provision has eclipsed just how significant of a policy shift this represents for a Republican-led bill.

That said, the E&T provisions as currently written are set up for failure. States are mandated to provide minimum services, including comprehensive intake assessments and progress monitoring. Implementing a national work program with as many as 3 million people will require hiring a substantial number of new caseworkers and greatly expanding the capacity of existing training centers and colleges. While more support for E&T is clearly needed, the proposed spending increase is simply not commensurate to the increase in up-take that will likely result ($30 per trainee per month by one estimate), nor is the two-year transition period for the expansion realistic.

The pilot programs created under the 2014 Farm Bill illustrate the problem with trying to implement training programs quickly and with limited resources. The bill authorized $200 million for 10 state-level E&T pilot programs, but as the researchers’ most recent report to Congress noted, implementation has repeatedly suffered due to significant staff turnover, bureaucratic miscoordination, and low rates of stable participation. In the Fresno California pilot program, for example, placements in subsidized employment positions didn’t truly begin until fiscal year 2017, largely because “staff often focused on the demands of recruitment and assessment during the initial stages of the pilot” instead.

As I’ve argued in the past, job training and “career readiness” programs have a limited track record at promoting genuine skill acquisition, but a great track record at growing bureaucracies. The E&T expansion in the farm bill should be taken as an opportunity to reduce bureaucracy by de-emphasizing labor intensive case management and time consuming assessments. Employment subsidies (pdf) are a promising option, in particular, because they enable on-the-job training with minimal oversight beyond the initial due diligence of determining eligible employers.  

Going Forward

There’s little argument that SNAP needs modernization: EBT cards are based on outdated payment technology; SNAP benefits cannot be used to purchase groceries online; and many states are behind the curve in integrating database systems across various public assistance programs, just to name a few potential areas for improvement.

Yet instead of building on current efforts to streamline SNAP and relax the administrative burden for states and low income households, the 2018 Farm Bill threatens to create a massive new welfare bureaucracy. This will undermine SNAP’s role in providing insurance to households with volatile incomes, and push many recipients into underfunded job training programs with dubious effectiveness.