Cost of MAGA Default: Experts Find McCarthy’s Work Requirements “Don’t Work”, Deny Care and Expensive to Implement

WASHINGTON, DC — Just days away from a catastrophic default crisis that all but guarantees a deep recession, the fringe-right Freedom Caucus of the MAGA House Majority still insist they will not accept anything less than the extreme House default plan passed last month that punishes millions of low-income veterans, seniors and children while undermining public safety and costing 8 million Americans their jobs. Meanwhile, House Speaker Kevin McCarthy has drawn his own unreasonable “red line” that any default deal must include ineffective work requirements that fail to put people to work while leaving many more uninsured. The Speaker’s warped priorities follow his endorsement last month of the Republican House bill that makes permanent Trump-era tax breaks that overwhelmingly benefit the wealthy and big corporations, which the Congressional Budget Office found would add $3.5 trillion to debt over the next 10 years.

Today in focus: The onerous barriers to benefits like SNAP and TANF proposed by Speaker McCarthy and the House MAGA majority would be ineffective for boosting employment rates and could prevent up to one million people from accessing nutrition support. 

Highlights from CBS News: GOP is pushing work requirements in debt-limit talks — but experts say they don’t work

Among Republican lawmakers’ list of demands in their debt-ceiling negotiations with the Biden Administration is a push to add more work requirements for the food-stamp, Medicaid and Temporary Assistance for Needy Families (TANF) programs.

One big problem, experts say, is that there’s little evidence that such rules actually help people get back to work. 

The Supplemental Nutrition Assistance Program, the formal name for the food-stamp program, already has work requirements for many recipients, which Republican lawmakers want to expand to cover more low-income and older Americans. But the existing rules haven’t had much of an impact on getting people back to work, and adding more regulations risks bumping struggling families from the program’s rolls, experts say.

Work requirements “don’t accomplish what they are supposed to accomplish, which is increasing employment and income,” Shawn Fremstad, director of law and political economy and senior adviser at the Center for Economic and Policy Research, a left-leaning think tank, told CBS MoneyWatch. “There are negative effects, like losing benefits even though you aren’t replacing it with income.”

Highlights from The Conversation: GOP’s proposed expansion of SNAP work requirements targets many low-income people in their early 50s – but many of them already work

The GOP bill is grounded in a belief that people who get SNAP benefits and aid through other assistance programs are not employed but capable of working, and that enforcing work requirements can increase employment and earnings.

But that’s a misconception. This measure and several others like it are part of a package that would raise the debt limit to avert a potential U.S. default and a global economic crisis.

Our findings support widespread concerns that expanding SNAP work requirements would sever food assistance benefits for an estimated 275,000 low-income people between the ages of 50 and 55, including many with health conditions and who care for others.

That’s troubling because the cost of professional child care and elder care, as well as the care for the disabled, is very high in the U.S.

It’s reasonable to expect that the new work requirements would force many people to make hard choices between the caregiving arrangements for their loved ones and keeping their benefits. Also, since people who have poor health may not be able to work, they may find themselves unable to put food on the table if they lose SNAP benefits.

Highlights from Center for American Progress: Work Requirements Are Expensive for the Government To Administer and Don’t Lead To More Employment

Work requirements are built on a false premise, as most program participants who can work already do so. For example, nearly three-quarters of adults who participated in the Supplemental Nutrition Assistance Program (SNAP) before the pandemic worked within a year of program participation. Work requirements do not lead to better financial outcomes for individuals; rather, they cost governments—which must monitor work or work-search documentation—millions of dollars. This is clearly demonstrated by new research out of a state-level plan to introduce additional administrative hurdles and costs in Iowa.

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a work requirement that Arkansas imposed on Medicaid beneficiaries in 2018—which is similar to but less strict than the federal proposal from McCarthy—did not boost employment. Arkansas’ Department of Human Services reported that almost 16,000 people lost health coverage out of the 60,680 people who were subject to the requirement. Yet only 1,232 lost coverage because they actually did not meet the work requirements; the vast majority of those who lost their coverage had cases closed for paperwork reasons or relocation.

Despite projections that stricter requirements would save the state money, the policy cost the state and federal government $26.1 million to implement without achieving its purported employment goals. Research found that significant costs were incurred trying to notify beneficiaries of new rules and that reporting information about eligibility online was complicated. As a result, thousands lost health coverage and incurred more medical debt, and Arkansans ages 30 to 49 showed no significant changes in employment, community engagement status, or the number of hours worked.

BACKGROUND: Accountable.US’ ‘Cost of MAGA Default’ project puts a daily spotlight on specific harms the MAGA Majority’s default plan and brinkmanship will bring for Main Street and Wall Street alike – from tanking markets, frozen credit, lost jobs, disruptions to critical benefits like Social Security, and soaring interest rates on everything from car loans to mortgages. While the MAGA Majority claims they are holding the economy hostage over supposed debt ‘concerns,’ they insist on harmful cuts – crafted by the far-right House Freedom Caucus – aimed at average Americans while protecting and even expanding debt ballooning tax breaks for billionaires and big corporations that profiteer and ship U.S. jobs overseas. The clock is ticking. The MAGA majority should stop playing dangerous political games with American lives and the economy and responsibly pass a clean bill that allows the nation to pay its bills. The sooner they do, the less damage will be inflicted on Americans of all walks of life.

The extreme MAGA House Majority is threatening to manufacture a catastrophic default crisis and economic collapse. To hold the economy hostage, the House passed a long list of hugely unpopular and extreme ransom demands that promise pain for millions of average Americans including veterans, seniors, students, children, workers, and the food insecure. They voted to ship 100,000 high paying manufacturing jobs overseas while going out of their way to protect wealthy tax cheats. The MAGA Majority’s proposed cuts are untenable, unworkable, and unreasonable, especially as they leave in place costly tax breaks for billionaires and big corporations. With the nation now projected to run out of money as early as June 1st, Accountable.US’ Cost Of MAGA Default’ project continues to underscore the catastrophic consequences of a MAGA default that grows closer by the day.