July 18, 2023

ICYMI: At Finance Subcommittee Hearing, Senator Warren Pushes Back On Republican Efforts to Weaponize Work Requirements for Child Tax Credit, Medicaid, Critical Assistance Programs

Warren: “Work requirements don’t actually promote work, but they do cost millions of Americans their benefits, and cost the government hundreds of millions of dollars to administer.”

Video of Hearing (YouTube)

Washington, D.C. — Last week, during a hearing of the Senate Finance Subcommittee on Taxation and IRS Oversight, Senator Elizabeth Warren (D-Mass.) questioned President and Executive Director for the Center for Law and Social Policy, Indivar Dutta-Gupta, on the cruelty and wastefulness of work requirements for the Child Tax Credit (CTC), as well as Medicaid and other critical government assistance. 

During the hearing, Mr. Dutta-Gupta agreed with Senator Warren that work requirements are a tool used by Congressional Republicans to prevent working people and individuals in need from accessing benefits. The pair also agreed that in addition to the tremendous amount of government waste produced from the implementation of these requirements, the only party that does benefit from work requirements are private contractors who profit off the pain of the American people. Senator Warren concluded by emphasizing the need to focus on policies that actually help struggling families and invest in the economy, including restoring the expanded CTC.

Transcript: Assessing 25 Years of the Child Tax Credit (1997-2022)
U.S. Senate Finance Subcommittee on Taxation and IRS Oversight
Thursday, July 13, 2023

Senator Elizabeth Warren: Thank you, Mr. Chairman. So, too many young families walk a tightrope to make ends meet and that is why Congress established the Child Tax Credit, to try to help families pay for essentials like diapers and daycare. 

During the pandemic, Democrats increased the value of the CTC and expanded access to more low-income families. The result was one of the most effective anti-poverty programs ever. A record 3 million children lifted out of poverty. Child poverty slashed nearly in half within the space of a single year.

But Congressional Republicans continue to insist on what they call “work requirements” for the CTC and other critical programs.  I call these “unworkable requirements” – this is an old trick of using a maze of red tape to try to deny families the help they need while not actually promoting employment.  

Now, Mr. Dutta-Gupta, you’re the director of the Center for Law and Social Policy and an expert on poverty.

So, tell me, have work requirements – when applied to the CTC, or Medicaid, SNAP, and TANF and whenever they’ve been applied – actually helped families find good jobs and escape poverty?

Mr. Dutta-Gupta: No. Data shows that the CTC refundability doesn't stop parents from working. I just want to remind folks, it's completely different than the old pre-TANF/AFDC program. It does not phase out dollar-for-dollar at some point. You do not have less access to health coverage after a year as you did then. And so, look, the main effect here for work requirements is to make it harder for people to access benefits. We tried this in Arkansas, with Medicaid under the Trump administration. And there was no impact on unemployment. But they did kick one in four adults off of health coverage, even though 95% were either already working or qualified for an exemption.

Senator Elizabeth Warren: So say that again. So, they put work requirements in place. And the consequence was not to boost the number of people who were working, at all. But you did lower the rolls of people who got the benefits that they were legally qualified for. And you said, what portion lost their benefits?

Mr. Dutta-Gupta: One-in-four adults. 

Senator Elizabeth Warren: One-in-four. So, all of this red tape has not helped people find work. But it has cost millions of people the help that they need, and wasted the time of millions more. And it's not just families that get buried under this mountain of paperwork. The government actually has to administer it, and that’s not free. 

So, Mr. Dutta-Gupta, in addition to costing families their benefits, what do work requirements cost the government?

Mr. Dutta-Gupta: Yes. You’re right, Senator Warren, administering these complex rules inevitably costs money. 

So again, if we look at when the Trump Administration tried to apply work requirements to Medicaid, the Georgetown Center for Children and Families estimated costs for states that were interested, or in the case of Arkansas, actually implemented the program. And they found that the cost varied from tens of millions a year to hundreds of millions a year in just implementing the work requirement. So this is not a path toward simplifying. 

Senator Elizabeth Warren: Okay, so work requirements don’t actually promote work, but they do cost millions of Americans their benefits, and cost the government hundreds millions of dollars to administer. 

But there is one group that actually profits from these work requirements. Obviously not the government’s, obviously not the people who need the help. But instead, it’s the for-profit contractors who are hired to administer it.  Maximus, for example, has contracts in more than half of the states to administer eligibility rules for Medicaid, SNAP, and TANF, and they have raked in billions of dollars shoving families off their benefits when they can’t run through the maze.

So. Mr. Dutta-Gupta, in your opinion, do work requirements help anyone besides the private contractors that get paid to administer them?

Mr. Dutta-Gupta: Overwhelmingly, no. They distract from a lot of the things that actually boost incomes, improve health and other outcomes. We talk about the 90’ often, the ‘96 welfare law. Well, we need to acknowledge the big boost in the Earned Income Tax Credit childcare spending, raising minimum wage, running a tight labor market, all of which I think were much more effective. Yes, private contractors are paid millions of dollars to administer these programs and have been busy lobbying Congress and states to expand the requirements in order to increase demand for their services. That money could be far better spent directly supporting families.

Senator Elizabeth Warren: I agree with you. We need to stay focused on policies that actually help struggling families and invest in our economy. And that means restoring an expanded Child Tax Credit and opposing Republican efforts to try to tear another hole in America's safety net and use a maze of red tape that has been proven a failure every time it's been tried. Families need us to get this right. So I hope we can get this done. Thank you, Mr. Chairman.