Federal safety net programs are interconnected. When funding stops, states can’t bridge the gap

The ongoing federal government shutdown has impacted many social safety net programs, from the Supplemental Nutrition Assistance Program (SNAP), to the Women, Infants and Children program (WIC), to Head Start and Temporary Assistance for Needy Families (TANF).

For a lot of Arizonans, those programs are interrelated: recipients of one are, in many cases, recipients of others.

So, what does the funding disruption and uncertainty mean for those residents who rely on these programs? And is there a better way to administer them and help lift people out of poverty?

Thom Reilly, a professor in the School of Public Affairs at Arizona State University, joined The Show to answer those questions and more, beginning with what all of the uncertainty surrounding these social safety-net programs does to the recipients of those programs.

Full conversation

THOM REILLY: Well, that uncertainty creates an incredible amount of distress, obviously, because all of these programs they kind of intersect together where many individuals are receiving multiple programs. So those that perhaps are on Medicaid are on SNAP. If they have small children or infants, they're on WIC. They're getting assistance with their heating and energy.

So when we look at this cutting, all these types of programs kind of coming together, those that are perhaps even not on Medicaid but are receiving ACA premiums — those are targeted to increase — you have a large impact on a significant number of at-risk individuals.

I mean, let's just take SNAP. One in 9 Arizonans receive SNAP benefits, so we're not talking about a small portion. And those individuals that receive SNAP benefits are on other multiple programs too.

MARK BRODIE: Well, so what does that do for the state and maybe for the — in addition to the, sort of, individuals' or their family's economy — for the state's economy, to have all that, as you describe it, distress?

REILLY: Well, what has been a staple since we've developed our safety-net programs, is the federal government has funded it, and we've moved more towards state administration. But that's kind of been a staple, right? To make an abrupt shift, to pass the financial burden to the state or to local nonprofits, can occur overnight, even if it could ever occur.

But you can't have an abrupt stoppage of programs that have, for a long period of time, been funded by the federal government and that has been a significant responsibility to them, and then all of a sudden stop. Because you do not have the capability, states can't respond, the nonprofit sector can't respond. And I think that's what we're seeing here.

BRODIE: Do you get the sense that this shutdown — and maybe what we've seen during it — could that lead to other changes in the way what we call "social safety-net programs" are administered, or funded, or run, or maybe even whether or not they exist going forward?

REILLY: Well, you know, we've always kind of struggled with how we treat safety net programs in the United States, right? So we've gone back and forth from expansion to retrenchment. Since 2010, clearly we have moved away from kind of these traditional cash welfare, towards more in-kind, work-supported or programs are actually not run through our traditional welfare programs, but run through the IRS.

BRODIE: Yeah, like tax credit kind of things.

REILLY: Yeah. To address their tax burden or to boost wages of low income workers.

So we've always kind of seen this fundamental shift and, you know, we very well might be looking to continue on that pathway, to develop a lot of our safety-net programs through programs like the IRS, where they're tied into income, they're tied into work requirements, but they have less stigma perhaps than associated with a traditional Department of Human Services, or economic security or welfare program.

BRODIE: Would that be a more effective way to help folks? Because after all, that is the goal of all these programs, right, is to help folks who don't have enough money to buy the things they need, to be able to buy the things they need and, in theory, make it sustainable so that they don't need the assistance going forward?

REILLY: Well, the earned income tax credit, and the child tax credit — and under COVID, the expanded child tax credit — had the most significant impact on child poverty in the United States. The research on these programs clearly is impressive as far as if we're looking at the overall goal of reducing child poverty. Both these programs are run through the IRS.

The earned income tax program is available to families with children and non-children, although it's more generous with the issue of children. It's geared towards boosting wages of low income earners and it phases out once you get to a certain phase. The child tax credit, obviously, is only for families with children, but it's basically to lessen the tax burden of families.

So both these programs, the way they operate right now, at least at the federal level, is that you get the refund or the credit when you submit your taxes.

And they also have bipartisan support. For different reasons, Republicans and Democrats like it, but one is that they're basically tied into some type of earned income, right? They phase out, and they're run through the IRS. They're not run through the traditional programs, so there's less stigma on it.

But like everything else, it's how much you support and expand these programs.

BRODIE: Given the success that you cited of these two programs, would it make sense to maybe look to, either further expand them, or maybe create new programs like that that could, in theory, even replace SNAP, or LIHEAP or some of these other safety net programs?

REILLY: You know, I think so. You know, so basically how these programs operate — through the IRS, through receiving actually refundable tax credits — the family decides how best to use those. So I said earlier we've kind of moved away from cash assistance programs. So what we've kind of seen is this increase of — 30 years ago, we never talked about work requirements. That is a given. Both Democrats and Republicans accept that, that whether it's Medicaid or whether it's any type, if you're able-bodied, you should work.

So these type of programs operate real well there. However, you know, let's take the SNAP population: 1 in 9 individuals on it, 1 in 4 are children.

BRODIE: In Arizona.

REILLY: Yeah, In Arizona. One in 3 are elderly, and there's a sizable number who are disabled.

BRODIE: Right.

REILLY: Right. So we're still dealing with a population that either can't work or are not eligible to work, and you can't tie in that work requirement of it too. So where these work requirement programs that are based upon taxes and income and run through the IRS are very, very, very successful, even for children with their parents, there still is a need for a population, perhaps that can't work or still need benefits, that need to be administered.

What I will say is that what we've seen as a staple is that the federal government has continued to fund these programs. Now they've changed to more state-administered, but there has been kind of the staple of that has been the role of federal government.

And that's why, going back to your initial point, is that the federal government can't just stop doing all this without some type of transition. Because there is not the capacity from a revenue standpoint, or just a capacity of delivering the services at the nonprofit or faith-based group.