The anti-poverty hokey-pokey, part 2

For those just joining us, I’m in the process of considering various legislative proposals to help the poor and working poor in Vermont. Part 1 explored the obvious political horse-trade by Democratic leaders: minimum wage increase in, paid sick leave out. Only one, apparently, can be allowed to pass.

Now, we turn to three separate bills designed to fix some issues with Vermont’s social safety net. None of them are radical in any way, but each would be a step forward. In a time when the poor, working class and middle class are under stress and opportunity seldom seems to knock, these relatively minor measures will provide some indication of the Democrats’ stomach for facing the bigger issues. Or, to be more precise, if these bills fail, it’s hard to see the Dems tackling any of the really tough battles.

All three cleared the House Human Services Committee last week, but supporters must navigate some choppy waters to steer them to ultimate passage. (At least they’re not up a creek without a paddle.)

House bill 620 would make the state liable for overpayments to 3SquaresVT (food stamp) recipients caused by the state’s own mistakes. As you may recall, Vermont’s food stamp program has had a high error rate which led to federal fines and the requirement to pay back any excess benefits. Imposing that burden on recipients seems awfully harsh since (1) they committed no fraud, and (2) repayment would be a challenge for people on public assistance.

The bill would require $640,000 in state funds. Ann Pugh, chair of the House Human Services Committee, has said she favors the bill but doesn’t know where the money will come from.

Which, c’mon, really? Every year there are unexpected costs and crises are foretold, but somehow the state always seems to find the money. And this would be a one-time expense, not an ongoing commitment. I do know this for a fact: it’d be a lot easier for the state to find $640,000 than for 3Squares clients to collectively do so. And the overpayments were the state’s fault.

The bill passed Pugh’s committee on a lopsided vote, but if it fails because lawmakers can’t find the cash, this would be a big FAIL on their ledger.

After the jump: easing “benefits cliffs” in temporary shelter and Reach Up.

House bill 699 would eliminate a requirement that homeless Vermonters eligible for “temporary shelter” pay half their income towards housing costs in order to receive continued shelter. This is a good example of the “benefits cliff” phenomenon, in which a program effectively punishes someone for finding work.

As Chris Curtis of Vermont Legal Aid points out, “This is a bad policy that ‘traps’ people in the motels, leaves them with little or no income to get out …It makes more sense to allow homeless Vermonters to save every dime they get and use it to save up for longer term (hopefully permanent and affordable) housing options.”

H. 699 as passed by Pugh’s committee would reduce the 50% requirement to “no more than 30%.” Which is better than the status quo. But we’ll see how it fares in the full House and Senate.

Finally, H.790 addresses the “benefits cliff” in the Reach Up program which, again, discourages employment. The bill would do two things: double the asset limit for Reach Up recipients, and increase the “earned income disregard.” For those unschooled in the language of social services:

The asset test requires recipients to have no more than $2,000 in assets. H.790 would increase that to $5,000. According to Curtis, very few recipients actually exceed the asset limit. “Illinois eliminated its asset test last year and discovered in all the tens of thousands of cases they have only 8 were over the asset threshold.” That state had been spending far more on staff time to check up on clients’ assets than it saved by enforcing the limit.

As for the “earned income disregard,” Reach Up recipients begin to lose benefits as their incomes rise. Currently, the disregarded income is the first $200 of earnings plus 25% of earnings. Recipients lose very little in entry-level jobs, but when they make a move up the ladder they see their benefits drop. Often, the lost benefits are worth more than the additional income. That’s what you call a disincentive to work.

The original H.790 would have provided a 100% disregard for the first six months, with stepdowns to 75% for three months and 50% thereafter. If the aim of Reach Up is to get people back on their feet and into career paths — and we now have lifetime caps on Reach Up benefits —  the higher disregards would go a long way to helping folks permanently escape poverty.

A House committee reduced H.790; the current bill creates a disregard of $300 plus 50%, which is a significant step in the right direction.

But there’s a worm in the apple. The Committee chose to fund the bill by effectively robbing Peter to pay Paul. VPR’s Peter Hirschfeld:

The House bill raises the funds by instituting an across-the-board reduction in welfare benefits for all of the approximately 4,700 families on the program. Spread out over such a large number, the cut isn’t huge.

It would be, in fact, about $16 for the average Reach Up family. As Curtis told VPR, it “may not sound like much to some people, but for many low income families, that may be diapers and milk for the week.” Curtis and other poverty advocates are trying to find other ways to pay for the program — but given lawmakers’ extreme disinclination to add items to the budget, the advocates have an uphill battle.

Lawmakers who support the current iteration of H.790 say that recipients wouldn’t have to work much to gain back in the disregard what they’d lose in the across-the-board benefit cut. Which is easy for them to say, and harder for recipients to accomplish. Again, we’ll see whather this or any other version of H.790 makes it across the finish line.

Conclusion. These are three good ideas for improving the functionality of our social safety net without significant additional cost. As I wrote above, this is something of a test for the Democratic majority: if they can’t find the courage (and the money) to enact these rather moderate and common-sense ideas, it’s hard to be optimistic about real efforts to improve the lot of the poor and working poor.

We shall wait and see.  

One thought on “The anti-poverty hokey-pokey, part 2

  1. According to the Republican Party since 1980, helping the poor people in any way at all is anti-American radicalism, or as they call it, ‘socialism’.  The only people the government should be helping is the obscenely wealthy getting even more rich.  Apparently that is called ‘capitalism’.

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