Tara Watson, the Director of the Center for Economic Security and Opportunity at Brookings, joins Rosemarie Miller on ‘Forbes Talks’ to discuss the evolution of each state’s safety net programs.
Category
📚
LearningTranscript
00:00 Hi everyone, I'm Rose Marie Miller here with Tara Watson, the Director of Center for Economic
00:07 Security and Opportunity at Brookings, here to tell us about the generosity of each state's
00:13 safety net programs.
00:15 Thank you so much for joining me today, Tara.
00:17 My pleasure.
00:19 So Tara, can you explain how state and federal program policies interact to determine eligibility
00:25 and benefit levels in the context of safety net programs for single parent families?
00:31 Sure.
00:32 In this country, we don't just have one big safety net program.
00:36 We have a complex network, patchwork if you will, of overlapping programs.
00:42 Some of them are funded by the federal government, some of them are funded by states, and some
00:46 of them are a combination of the two, and there are also programs at the local level.
00:52 And these programs are all serving somewhat overlapping populations and have somewhat
00:57 different purposes.
00:58 They pull together this sort of stew of supports for low income people in the country.
01:06 So we have a few programs that we think of as the most important programs in the safety
01:12 net for single parent families.
01:14 These include the earned income tax credit, which is a federal credit for workers with
01:21 low incomes that is primarily geared at workers with children.
01:26 We also have a state level version of that same program in many states.
01:33 There is also the temporary assistance for needy families program, which is a traditional
01:37 cash welfare program that came out of welfare reform and still provides some cash assistance
01:44 but has been declining over time.
01:47 In addition, there are food assistance programs that are very important to families.
01:52 >> So your article mentioned that safety net expenditures can conflate need and program
01:58 design.
01:59 How does the study address this issue and what methods are used to isolate the generosity
02:04 of safety net program rules?
02:08 >> Thanks for the question.
02:09 This is an important distinction because if we just look at how much gets spent on a given
02:13 program, we don't know for sure whether that's because there's a lot of poverty in an area
02:20 or at a given time or because the program rules are designed to be generous.
02:25 So in the study that we released yesterday, what we tried to do is really narrow in on
02:33 what the program rules say.
02:35 So when the same person goes to get benefits in a given state in a given year, what are
02:42 they likely to walk away with compared to that same person if they're in a different
02:46 state or at a different time period?
02:48 So to do this, we really had to dissect the rules for all 50 states and D.C. and determine
02:55 if we look at someone with a given level of earnings, the given family structure, what
03:01 could they get for each of the programs that we looked at, sum that all together, and that's
03:05 our generosity index.
03:08 And there are some variations based on the states, right?
03:13 How are these variations calculated?
03:16 Why are there variations?
03:18 Yeah, so there's a mix of federal and state program rules that actually affect the state
03:24 level differences in generosity.
03:26 So for example, the earned income tax credit program that I mentioned before, there's a
03:34 federal version of the program which applies equally across all states, but many states
03:38 have added on to that state, that federal program with a state through top up that's
03:45 usually operationalized as a percentage of the federal credit.
03:50 And so as states enter the fray of providing the state EITC, they become differentially
03:58 generous to their low income workers.
04:01 Similarly, the TANF program, part of what happened with welfare reform is it went from
04:06 being an entitlement that was organized at the national level to a program that had a
04:12 lot of state discretion, has a lot of state discretion in how money is spent.
04:16 In fact, much of the TANF spending doesn't even go to cash assistance at all anymore.
04:21 But even the part that does, states have a lot of flexibility in the benefit levels,
04:25 who is eligible, and that leads to a lot of differences across states in how much a family
04:33 is likely to get in those benefits.
04:35 >> Do you think political affiliations that states have, does that affect the variations
04:40 we see?
04:41 >> Yes, there is a correlation there in that red states tend to have lower TANF programs.
04:48 The state EITC programs are less clear cut in terms of their political affiliation because
04:53 those programs both support low income families, but they also are thought to promote work.
04:59 And so that can be appealing to both sides of the political aisle.
05:04 >> And how did COVID affect the generosity index?
05:09 >> So if you were to go to our website and look at our graphs that we have up there,
05:15 you'll see just a real aberration that happened during the COVID period.
05:20 The safety net became much more generous for a short while.
05:24 So most notably, this came from the expansion of the child tax credit, and also some expansions
05:31 in the SNAP program, which is the food assistance program that we looked at.
05:35 There are of course also many other supports coming out of the federal government which
05:38 aren't even captured in our safety net index.
05:41 But even just focused on these programs that are the standard big picture safety net programs,
05:47 we see huge changes from say 2019 to 2021.
05:53 Most of that has disappeared by now.
05:55 So the child tax credit has gone back to its 2019 levels roughly, and the SNAP benefit
06:02 has retreated a fair amount as well.
06:06 There are still some states that have as of 2022, which is the last year we looked at,
06:12 still had some extra generous SNAP benefits, but those have now phased out with the end
06:17 of the pandemic boost that they had.
06:20 So this was a short term boost that actually made a big difference to families.
06:26 That has largely gone away.
06:28 There will still be probably a slightly more generous safety net overall than there was
06:32 prior to the pandemic.
06:35 And Tara, I just kind of want your personal opinion on this.
06:39 Is the tax system an appropriate venue for addressing social issues?
06:47 That's a great question.
06:48 There's a big tension in the policy space about whether it's better to do this type
06:53 of redistributive policy through the tax system or to do it through more of a traditional
06:58 transfer system.
07:01 One nice thing about doing it through the tax system is that it tends to be more accessible.
07:07 So there are a lot of burdens with going to a welfare office or a series of welfare offices
07:13 for different transfer programs.
07:15 And to the extent that most people file taxes and there are systems in place to help people
07:21 file taxes, it can be easier for people to get benefits when they're operationalized
07:26 through the tax code.
07:27 So I do see that as an advantage.
07:29 However, one limitation is that many of the programs that we do have through the tax code
07:35 are restricted to people who work.
07:38 And so for families where the parents are unable to find work, they're really left out
07:45 in the cold.
07:46 And as we move more to this tax-supported safety net, I worry that the people with the
07:53 most disadvantage are going to get left behind.
07:57 And finally, Tara, is there anything on your radar regarding safety net programs that you
08:01 believe should be on ours?
08:04 Well, the 2021 expansion of the CTC was a huge policy experiment.
08:11 So not only did the child tax credit expand in generosity, but it was for the first time
08:18 made available to those non-workers that I just talked about.
08:22 And so we saw in doing that that we reduced child poverty almost in half for that one-year
08:29 period where it was in place.
08:31 And now the child poverty rate has gone back up roughly to where it was before the pandemic.
08:36 And so we saw through that experiment that these policies really do make a difference
08:43 to families and to children.
08:45 And so I hope we can take some of that momentum and use it to think about what we should be
08:50 doing going forward for safety net policy in this country.
08:54 Thank you so much for joining me today.
08:57 Thank you.
08:58 Thank you.
08:58 Thank you.
08:59 Thank you.
09:00 Thank you.
09:01 Thank you.
09:02 Thank you.
09:03 Thank you.
09:04 Thank you.
09:05 Thank you.
09:06 Thank you.
09:07 Thank you.