About Those “Devastating” Welfare Caseload Reductions

Newly elected President Barack Obama famously lectured opposition leaders that “elections have consequences.” That’s never been more apparent than in recent Republican-crafted changes projected to shrink welfare caseloads in the coming years. Democrats vilify the changes as “devastating,” never mentioning they will mostly shrink still-bloated welfare caseloads closer to pre-pandemic levels. And by focusing some of the biggest reductions on illegal aliens and able-bodied adults who may be unwilling to work, the reforms stand a strong chance of earning popular support.

Welfare expanded rapidly during the pandemic, and significant caseload expansions have continued even after it ended. Medicaid and the Children’s Health Insurance Program exploded from a pre-pandemic 71 million recipients to 94 million in March 2023, when pandemic-driven policy expansions started to unwind. While down, current caseloads remain over 78 million, still 10 percent above pre-pandemic levels. Food stamp caseloads similarly spiked, rising sharply from 37 million to over 43 million in the first months of the pandemic. Today’s caseload remains just off that peak and still 14 percent above the pre-pandemic level. 

New reforms are projected to notably reduce both Medicaid and food stamp caseloads, returning them closer to pre-pandemic levels. The biggest reductions are projected to result from expanded work requirements included in the Republicans’ One Big Beautiful Bill (OBBB). Work requirements are widely supported by the public and have contributed to remarkable results in the past. For example, Republican welfare reforms signed into law by Bill Clinton featured work requirements for welfare checks that contributed to more parents working, poverty falling, and cash welfare caseloads plummeting 85 percent.

The OBBB dusts off that playbook by applying similar “community engagement requirements” to able-bodied adults on Medicaid, expecting them to perform 80 hours of work, education, or community service in at least two months per year. Nondisabled childless adults on Medicaid spend an average of 125 hours per month watching TV or playing video games, so most should have ample time. The Congressional Budget Office estimates this part-time, part-year requirement will save taxpayers $325 billion over the next decade while removing 4.8 million able-bodied adults from the Medicaid rolls. The new law similarly strengthens work requirements for food stamps, saving another $70 billion while reducing that caseload by three million able-bodied adults.

Other recent changes focus on specific groups, such as the Trump administration’s July 10 regulations ending illegal alien access to Head Start and postsecondary education subsidies. Additional changes in the OBBB will end child tax credit payments to households headed solely by illegal aliens.

Medicaid and food stamps were not the only programs that expanded significantly during the pandemic. Several other massive temporary programs and benefit expansions have come and gone, even as Democrats call for reviving them in the future. One fraud-riddled program paid unemployment checks for the first time to 15 million out-of-work independent contractors and self-employed individuals. Another provided unprecedented $600-per-week unemployment supplements to tens of millions, leaving two-thirds better off not working. And child tax credits were temporarily expanded for 39 million households, including those headed by nonworking adults, for the first time. One liberal supporter branded that change simply “Goodbye, Clinton welfare reform. Hello, child tax credit.”

Combined, those temporary programs reflect Democrats’ vision for the future of much bigger caseloads and benefit checks, payable even to those who never worked to earn them. That vision of “guaranteed income” suffered a body blow last month, when the New York Times reviewed a rigorous study of guaranteed income checks paid in several states on a trial basis to parents of young children. Liberals have long touted such no-strings-attached welfare as a cure-all, while rarely admitting the trillion-dollar cost of a new nationwide program. Meanwhile, the study “found that years of monthly payments did nothing to boost children’s well-being, a result that defied researchers’ predictions and could weaken the case for income guarantees.” As study author Greg Duncan of the University of California, Irvine, bluntly summarized, “The money did not make a difference.”

It’s no surprise when Democrats who support massive welfare expansions attack Republicans over policies designed to reduce benefit dependence, even just back to former levels. But hardworking taxpayers in both parties often take a very different view. To them, reducing benefit receipt by requiring work by able-bodied adults or ending benefits for illegal aliens makes perfect sense, especially in an era of outsized dependence and fast-growing debt. That suggests Republicans’ caseload-shrinking policies stand a good chance of being embraced by the public, just as past welfare reforms have been.

Matt Weidinger is a senior fellow and Rowe Scholar in opportunity and mobility studies at the American Enterprise Institute (AEI), where his work is focused on safety-net policies, including cash welfare, child welfare, disability benefits, and unemployment insurance.

Reprinted with Permission from AEI.org – By Matt Weidinger

The opinions expressed by columnists are their own and do not necessarily represent the views of AMAC or AMAC Action.