The Battle Over Work and Welfare

States are fighting back against the Biden drive to use the pandemic to increase dependency.

The Biden Administration is using the pandemic to expand the class of Americans who are permanent government dependents. Some GOP-led states are trying to exit this road to serfdom, and Georgia recently won its lawsuit against the Administration to impose Medicaid work requirements for low-income, able-bodied adults. This is a major fault line between the parties and deserves more attention.

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Georgia’s saga began when the Trump Centers for Medicare and Medicaid Services approved its pilot program to expand Medicaid eligibility to individuals making up to 100% of the federal poverty line ($13,590 for singles) while conditioning benefits on working, going to school or volunteering 80 hours a month. The state’s current Medicaid income limit is 35% of the poverty line.

Enter Team Biden, which rescinded the Trump approval. Georgia sued, and a federal judge in August ruled the rescission was arbitrary and capricious because it could result in less Medicaid coverage. The Administration chose not to appeal last month, perhaps because it feared it would lose at the Eleventh Circuit Court of Appeals. If other states seek to emulate Georgia’s program, an appellate-court precedent could make it harder for the Administration to defend rejecting their plans.

Progressives are now trying to deter GOP states from imposing work requirements by flogging the compliance costs. “The systems being set up for work requirements are very costly to implement for states,” a left-leaning Center on Budget and Policy Priorities analyst told MedPage Today. Suddenly progressives care about costs to taxpayers?

For the past two years, the Administration has repeatedly extended the national public-health emergency for no ostensible purpose other than to expand the welfare rolls. President Biden in September declared the pandemic over, but the Health and Human Services Department says it plans to extend the emergency until at least mid-April.

The Families First Coronavirus Response Act of 2020 increased federal Medicaid funding to states on the condition that they don’t kick ineligible beneficiaries off their rolls as long as a public-health emergency is in effect. The law also increased food-stamp benefits and waived work requirements for able-bodied, working-age adults during the emergency.

Since February 2020, Medicaid enrollment has ballooned by 23 million to an all-time high of 97 million. By comparison, Medicaid grew by 14 million between 2013, just before the ObamaCare expansion took effect, and the start of the pandemic. About 21 million Medicaid recipients don’t currently meet eligibility requirements, according to the Foundation for Government Accountability.

As long as the emergency is in effect, Georgia can’t remove able-bodied adults on Medicaid who don’t comply with its work requirements—or if it does, it may have to give up hundreds of millions in federal funds. The emergency is a Faustian bargain for states, delivering some $130 billion in additional Medicaid funds to date while restricting their ability to manage their programs.

The same is true for food stamps whose rolls have swelled by nearly five million nationwide, or about 13%, during the pandemic owing chiefly to the emergency suspension of work requirements, even as unemployment has reached pre-pandemic levels. Anyone who wants a job can get one, but expanded transfer payments have reduced the incentive to look.

Monthly federal food-stamp spending has more than doubled during the emergency to $9.3 billion owing to the sweetened pandemic benefits and a Department of Agriculture regulatory change last year. Benefits are set to increase another 12.5% this fall with an inflation adjustment. Transfer payments fueled inflation, and now the reverse is happening.

States may forgo the enhanced food stamps by ending their own Covid emergencies or disaster declarations. About 20 mostly Republican-led states have done so, including Florida, Tennessee, Iowa and South Dakota. But the lure of “free” federal money has discouraged most, including Texas and Utah.

Most of the growth in food-stamp benefits and enrollment has been driven by these other states. Food-stamp spending modestly increased in Florida ($55 million) and Tennessee ($25 million) between January 2020 and this past September (the latest available data). But spending increased $753 million in California and $409 million in New York.

Several GOP-led states such as Ohio and Arkansas have sought to require able-bodied food-stamp recipients to register for work training. But the Administration has hindered them by insisting that they set aside funding for all able-bodied adults that could possibly be assigned to work training. Most can’t afford that.

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After the bipartisan welfare reform of the 1990s, labor participation rose, notably among single mothers. Too many politicians of both parties today want to expand government dependency. A top priority for House Republicans in the next Congress should be to reverse the pandemic inflation of the welfare rolls.