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Introduction

Labor force participation in our country has fallen to 63 percent. Millions of working-age Americans, particularly males between the ages of 25 and 54, are neither working nor seeking work. The laws, regulations, and administration of safety net, workforce, and related programs discourage work – especially when individuals and households benefit from more than a program. Yet as Pope Francis has noted, “Work is a necessity, part of the meaning of life on this earth, a pathway to growth, human development, and personal fulfillment. Helping the poor must always be a provisional solution in in the face of pressing needs. The broader objective should always be to allow them a dignified life through work.”

Our country’s safety net, workforce, and related programs are poorly coordinated, do an inadequate job of helping poor people, and often discourage employment and earnings and waste tax dollars. Federal, state, and local governments should work together to mend our intergovernmental safety net and build our workforce: reducing welfare dependency and increasing employment and earnings.

Background

Safety net, workforce, and related programs include:

• The Department of Health and Human Services Temporary Assistance for Needy Families block grant program (which replaced the Aid to Families with Dependent Children entitlement program), the Community Services Block Grant program, child care programs, and permanent supportive housing programs
• The Department of Agriculture Supplemental Nutrition Assistance Program (formerly the Food Stamp program) and housing assistance programs
• The Social Security Administration Disability Insurance and Supplemental Security Income programs
• The Department of Veterans Affairs Temporary Disability Individual Unemployability program, Veterans Employment and Training, and permanent supportive housing programs
• The Department of Labor Adult, Dislocated Worker, and Youth programs
• State Unemployment Insurance programs (which usually are not counted among “safety net” programs)
• The Department of Education Adult Education and Literacy, Vocational Rehabilitation, and Career and Technical Education (vocational education) programs as well as Pell grants
• The Department of Housing and Urban Development programs for homeless people, public housing, housing vouchers (formerly the Section 8 program) and other rent supplement programs, and the Community Development Block Grant program
• The Internal Revenue Service Earned Income Tax Credit, Child Care Tax Credit, and Low Income Housing Tax Credit programs
• State earned income tax credit programs.

Though these programs are often helpful, it can be difficult and time-consuming for potential recipients to establish and maintain eligibility.

Summary

America’s intergovernmental safety net is poorly coordinated. It does an inadequate job of helping low-income people and often discourages employment and wastes tax dollars. The laws and regulations governing safety net and related programs produce high implicit tax rates in these programs – especially when individuals and households benefit from more than one program. Individually and in combination, many of these programs discourage recipients from seeking to join or rejoin the labor force. Federal and state regulatory reforms and administrative actions should be taken to remove impediments and increase work incentives in safety net, workforce, and related programs. In many cases, actions by Congress and state legislatures will be required.

This paper presents research findings on major disability programs and on the Earned Income Tax Credit program to illustrate what could be done to reform safety net, workforce, and related programs – and put more Americans back to work. We recommend five actions that federal, state, and local governments should take to reform and better manage America’s safety net, workforce, and related programs to reduce welfare dependency and increase employment and earnings. Some of the needed reforms could save tax dollars.

Recommendations

1. The federal government should act to remove impediments and increase work incentives through reforms in – and better management of – safety net, workforce, and related programs: thus increasing employment and earnings. State and local governments should be consulted in crafting these federal-level reforms.
2. The federal government should stimulate similar reforms in state and local programs. Governors and state legislatures should act to remove impediments and increase work incentives through reforms in – and better management of – safety net, workforce, and related programs: thus increasing employment and earnings. Cities and counties should be consulted in crafting these state-level reforms.
3. Federal agencies and state and local governments should use waiver authority to merge funding streams, remove impediments, and increase work incentives in safety net, workforce, and related programs: thus increasing employment and earnings.
4. The federal government should increase work incentives through reform and expansion of the federal Earned Income Tax Credit program and should better publicize the EITC program. State governments should take related actions in their own earned-income tax credit programs.
5. Federal, state, and local governments should use strategic planning, performance management, and performance partnerships to reform and better manage safety net, workforce, and related programs – and thus reduce welfare dependency and increase employment and earnings.

All content was extracted from the full report, "Mending Our Safety Net: Building Our Workforce" by Joe Wholey.