In response to the coronavirus pandemic, policymakers approved almost $6 trillion in spending to combat the once-in-a-century public health emergency, support those who lost their incomes, and stimulate the economy. They intend to spend even more money to rebuild the economy in the pandemic’s wake: in addition to the $1 trillion bipartisan infrastructure deal that the Senate recently passed, Congress is deliberating a $3.5 trillion budget blueprint that would invest in the nation’s human infrastructure. As Democrats determine the final size and scope of this package, they should prioritize modernizing the social safety net, which the pandemic severely strained.
Rebuilding these systems will require more than just expanding benefits. Federal lawmakers should require states to administer federal-state benefit programs such as unemployment insurance and food assistance more efficiently. Improving benefit administration would both help struggling people pay their bills and help mitigate any anxiety that taxpayers may feel about expanding effective social programs.
The pandemic made clear the importance of functional aid programs. The Urban Institute estimates that government benefits will keep nearly 50 million Americans out of poverty this year alone. After stimulus checks, which also spent considerable amounts of money on people who were not financially distressed, the programs that reduced poverty the most were the Supplemental Nutrition Assistance Program (SNAP) and unemployment insurance (UI). These two programs, which are both administered by the states in partnership with the federal government, lifted 7.9 million and 6.7 million people from poverty, respectively. The largest poverty reduction impacts were in households with children and Black and Hispanic families.
However, SNAP and UI struggled to fulfill their potential during the pandemic. As millions lost their jobs, many state systems failed to respond quickly to the rush in claimants or the benefit changes Congress passed in response to the crisis. As a result, 7 months after unemployment first surged, only 3 states met federal timeliness standards for delivering new unemployment benefits. Despite an increase in SNAP benefits during the pandemic, food insecurity increased dramatically for many households, suggesting that benefits and administrative systems were still inadequate to meet unprecedented need.
Fixing the administrative issues that caused these problems would ensure no beneficiary fails to pay their bills or feed their families as they wait on bureaucracy. It would also show taxpayers that Democrats are spending money wisely. 69% of voters polled in swing districts expressed concerns that spending on infrastructure could hurt the economy, and Republicans are capitalizing on this anxiety to paint these programs as “reckless” spending and to stir panic on inflation ahead of the midterm elections. Democrats overcome this skepticism by demonstrating to voters that they are ensuring that all social programs use their resources as well as possible.
First, states should simplify the application and renewal process for benefits. Working families are forced to jump through lengthy, bureaucratic applications to get benefits from programs such as Medicaid, UI, and SNAP. Creating one application for multiple benefits would reduce barriers on eligible populations. This idea is central to the Health, Opportunity, and Personal Empowerment (HOPE) Act, which would fund state and local pilot programs that would allow low-income people to apply for multiple benefits at once without running a bureaucratic gauntlet. In the shorter term, states should update their income and contact information for Medicaid enrollees using more up-to-date records from SNAP. Congress prohibited Medicaid from dropping beneficiaries while the federal public health emergency declaration is in effect, but updating information on enrollees now could minimize the administrative burden of determining who should remain covered after the emergency declaration expires.
Second, states should upgrade existing IT infrastructure and use modern, flexible administration systems to deliver benefits and interact with beneficiaries. For example, the Biden administration should encourage the U.S. Department of Agriculture to invest in innovative payment systems beyond Electronic Benefit Transfer (EBT) that will let SNAP recipients use mobile wallets and chip cards to buy food. The current EBT system can be prone to outages, especially in rural communities, which can leave families in “food deserts” without any stores to use their benefits. States should also use money made available by the American Rescue Plan Act to overhaul the outdated, inflexible computer systems they use to administer UI. Those systems were unable to base benefits on each beneficiaries’ lost wage, as Congress initially wanted to do during the pandemic and should do in the future, and still struggled to administer the simpler flat benefit increases that ultimately passed.
Third, states can cut through reams of red tape by eliminating undue restrictions on how beneficiaries can use their benefits. For example, there’s no good reason to deny SNAP recipients the ability to use their benefits for hot and prepared meals. Rather than enforce onerous restrictions, policymakers should incentivize recipients to use the benefits for nutritious foods, using lessons learned from pilot programs such as the USDA’s Health Incentives Pilot in Massachusetts.
Fourth, Congress should reinforce UI and SNAP as “automatic stabilizers” so that they can react faster in future economic downturns. The size and duration of benefits should rise when an economic indicator such as the unemployment rate passes a threshold, signaling economic distress. Automatically expanding benefits during downturns would put money in the hands of those who are most likely to stimulate the economy by spending it.
Progressives should seize the opportunity that the budget agreement presents to show that spending money smartly is good policy and politics. Making these programs work better during future crises and showing voters that they are improving the administration of social benefits would both serve their most at-risk constituents well and strengthen public support for that service.
