One Little-Known Program Could Help Lift Millions Out of Poverty

The House of Representatives has elected a speaker, and now that the political jockeying is over, it’s time to get down to the work of governance.

At its best, the day-to-day work of Congress should be focused on investing in the little-known programs and initiatives that have a real effect on Americans in their lives. Far too often, these programs are not well known by legislators or the public — but these programs make a real difference for families.

One such program is the Family Self-Sufficiency program, created in 1990 with bipartisan support and run by the Department of Housing and Urban Development.

Here’s how the Family Self-Sufficiency program works: Whenever someone receiving HUD’s Choice Voucher or Project-Based Housing assistance begins to earn more money, their rent automatically increases. This often prevents them from saving money, disincentivizes them from getting a better job, and penalizes them for taking steps to get ahead.

But for the people enrolled in the Family Self-Sufficiency program, the difference of the proportional rent increase is placed in an interest-bearing escrow account every month. These savings build over time and can be used for emergency savings, education or skill-building, to move to market-based rental housing, to buy a car or a home, or even to start a small business.

Family Self-Sufficiency participants also work closely with a dedicated case manager to develop an individualized plan tailored to the specific needs and aspirations of the family, serving as their roadmap toward self-sufficiency.

When administered well, the program has a strong record of success, with graduating households building more than $8,000 in savings on average while increasing their annual earned income by more than $10,000.

There is just one major problem: the Family Self-Sufficiency program is incredibly underused. Only 57,000 households participate out of 2.2 million that could benefit from the program.

There are many reasons for this, but one of the reasons I hear the most is that many eligible families are unaware that the program exists. When they do find out, many believe it is “too good to be true.”

That’s not the case, and there is a simple fix that Congress can make: automatically enrolling eligible families into the Family Self-Sufficiency program.

That is the same way that workplace retirement programs have functioned for years. By making enrollment in Family Self-Sufficiency automatic, we can eliminate many of the administrative barriers and reach more families, giving them the support they deserve to move up the ladder of economic success.

Automatic enrollment also makes logistical sense. It would streamline the allocation of resources, making the program more cost-effective. Traditional programs where people have to “opt-in” often incur additional administrative expenses related to outreach efforts and processing applications.

To preserve the voluntary nature of the Family Self-Sufficiency program, families or individuals who decide it is not for them would maintain the right to opt out of it at any time.

These are the kinds of programs that Congress should be identifying and investing in. While it may not be a headline-grabbing program, it can make a real difference for millions.

It’s time for Congress to work on behalf of the American people and ensure that families at the lowest level of the economic scale don’t get left behind. I encourage Congress to pass legislation encouraging every eligible individual to be automatically enrolled in the Family Self-Sufficiency program.

That’s what real governance often looks like — small adjustments that can make a big difference.

Aracely Panameño is the director of policy for Compass Working Capital.

Reprinted with Permission from DC Journal – By Aracely Panameño