We Need to Strengthen Work Requirements in SNAP and Other Safety Net Programs

The drama with the debt limit continues. The deadline to deal with the debt ceiling is in about two months. Biden wants a no-strings-attached increase of the debt limit, but the Republicans are playing hardball with a series of proposed reforms called Limit, Save, Grow. One of the reforms in this proposal is strengthening work requirements for food stamps, also known as Supplemental Nutrition Assistance Program (SNAP). 

The proposal raises the top age for the able-bodied adults without dependents, or ABAWD, category from 48 to 56. Looking at USDA data, that would affect around 1 million SNAP recipients. According to the bipartisan Committee for a Responsible Federal Budget (CRFB), the work requirements for SNAP, Medicaid, and Temporary Assistance for Needy Families (TANF) in Limit, Save, Grow will save $100 billion over the next ten years. If passed, all the reforms would reduce debt over the next decade from a debt-to-GDP of 118 percent to 107 percent (CRFB). While this country has a ways with reigning in its debt issues, it highlights the importance of work requirements in safety net programs.

Opponents of work requirements view work requirements as punitive, especially for the needy. In 2016, I wrote about why SNAP benefits need work requirements. One reason why I supported and still support work requirements is because it helps with the longevity of the program. In 2021, the Biden administration ended the work requirement policies that the Trump administration put into place. The American Enterprise Institute estimates that not enforcing SNAP work requirements costs us $20 billion per annum. As we see with the CRFB projections, having lax requirements seeks to drive debt. 

In the Road to Serfdom (p. 148), Frederich Hayek advocated for some provision of a social safety. To channel Hayek: if there is going to be a safety net, it should go to those who are neediest and should be temporary. Although a temporary, minimal safety net can be a net social positive, having a safety net for too long can create a disincentive to get back to work. As the American Enterprise Institute points out, we do not have definitive conclusions about work requirements for SNAP or Medicaid due to data limitations. There is some information from the Upjohn Institute that shows marginal effects on employment for SNAP recipients (Harris, 2018).

If we want to get a better idea of how work requirements could impact employment, we can use another safety net program as a proxy: TANF. A working paper from the Congressional Budget Office (CBO) shows that work requirements in TANF are effective at offsetting the work disincentives (Falk, 2022). This CBO finding has been consistent with other research on the topic (e.g., Hamilton et al., 2001). Similarly, data show that unemployment insurance creates disincentives to go back to work. 

Finally, long-term unemployment is bad for the unemployed. This is more than a matter of long-term employment prospects or lifetime earnings. As the Left-leaning Urban Institute illustrates, it can reduce life expectancy by a year and a half (Nichols et al., 2013). In its recent analysis, the Right-leaning Heritage Foundation gets into some of the benefits on not being long-term unemployed. 

Increasing work requirements for social safety net programs such as SNAP will help with debt reduction. It will help the macroeconomy given that we are facing a labor shortage. It will also help SNAP recipients that are ABAWD because in the long-run, working is better for physical and mental health than being on welfare. Increasing the work requirements only scratches the surface on what could be done for safety net reform, but it is a good start.