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Behind Trump’s plan to target the federal safety net

Under the banner of welfare reform, the administration is eyeing changes to health care, food stamps, housing and veterans programs.

By ANDREW RESTUCCIA, SARAH FERRIS and HELENA BOTTEMILLER EVICH

The Trump administration and Republicans in Congress are hoping to make the most sweeping changes to federal safety net programs in a generation, using legislation and executive actions to target recipients of food stamps, Medicaid and housing benefits.

The White House is quietly preparing a sweeping executive order that would mandate a top-to-bottom review of the federal programs on which millions of poor Americans rely. And GOP lawmakers are in the early stages of crafting legislation that could make it more difficult to qualify for those programs.

In the meantime, the Trump administration has already begun making policy shifts that could have major ramifications.

Federal health officials are encouraging states to impose work requirements on able-bodied adults on Medicaid — a major philosophical shift that would treat the program as welfare, rather than health insurance.

The Agriculture Department said last week that it would soon give states greater control over the food stamp program, potentially opening the door to drug testing or stricter work requirements on recipients of the $70 billion program long targeted by fiscal conservatives.

Another initial move has already backfired — the Veterans Affairs Department announced it would redirect hundreds of millions of dollars from a program for homeless veterans to local VA centers, but it reversed course after fierce blowback from advocates.

While candidate Donald Trump pledged to protect some safety net programs, conservatives have long wanted to devolve control of social programs to the states and impose stricter work and drug testing rules. Now that they control both ends of Pennsylvania Avenue, Republicans believe they have a once-in-a-generation opportunity to overhaul those programs, which they have long argued are wasteful, are too easily exploited and promote dependency.

“People are taking advantage of the system and then other people aren't receiving what they really need to live, and we think it is very unfair to them,” Trump said in October.

The president is expected to sign the welfare executive order as soon as January, according to multiple administration officials, with an eye toward making changes to health care, food stamps, housing and veterans programs, not just traditional welfare payments.

To be sure, many of the changes are still in the talking stages, and it remains to be seen when and how they are actually implemented and at what political cost. And there remains internal debate in the administration over how to balance other priorities like an infrastructure bill.

The White House's leading advocate for a welfare overhaul, Domestic Policy Council Deputy Director Paul Winfree, is slated to leave the administration on Friday, according to a person familiar with the move. But two administration officials said Winfree's departure won't hobble the welfare push, as the White House has already completed much of the groundwork on the issue.

Defenders of the safety net programs, meanwhile, fear the effort could rob Americans — including many Trump voters — of a vital lifeline.

“It would be a recipe for massively exacerbating poverty and inequality in America in violation of all of Trump’s campaign promises,” said Rebecca Vallas, managing director of the Center for American Progress’ poverty program.

“The poor are under attack,” said National Community Reinvestment Coalition President John Taylor, who accused Republicans of “rigging the system” for the top 1 or 2 percent at the expense of the middle class and poor.

“Most Americans, if they really understood what was going on, would not support it,” he said.

Although the effort to reshape the country's welfare system is all but guaranteed to produce powerful political backlash, it appears to have broad backing from conservative congressional Republicans, who are already coordinating with the White House on a legislative agenda to complement expected executive actions.

White House Domestic Policy Council staff, who are working closely with congressional Republicans on legislation, are slated to meet this week with House Ways and Means Committee and Senate Finance Committee staff.

The exact provisions of the pending bill are unknown, but a conservative group closely aligned with lawmakers said Republicans intend to pass broadly focused legislation.

“They’re thinking about welfare reform in a large, all-encompassing way, not a program way,” said Jason Turner, executive director of the Secretaries’ Innovation Group, a group of conservative officials who run state-level social programs and met with Ways and Means Committee Republicans on the Hill last week.

Turner said he expects Republican leaders will seek to combine their ideas with House Speaker Paul Ryan’s vision in his “A Better Way” plan to create a “mega-idea” for reform with a focus on work.

“In terms of scope, that is part of the discussions that we are having with the committees,” White House spokesman Raj Shah said. “We are still running options through the interagency process and consultations with Congress.”

Ryan spokesman Doug Andres declined to offer more details, adding that Republicans would discuss the issue at their January retreat.

In recent days, Ryan said he hopes to embark on entitlement and welfare reform next year. He has said entitlement reform — an overhaul of programs like Medicare and Medicaid that has been his priority since his days as Budget chairman — is essential for tackling the debt, which is set to surge by $1 trillion under the Republican tax reform bill, according to the Joint Committee on Taxation.

“We have a welfare system that’s basically trapping people in poverty and effectively paying people not to work, and we’ve got to work on that,” he said in a recent radio interview.

Democrats immediately pounced on Ryan’s comments. “Paul Ryan just admitted that after providing $1 trillion in tax breaks to the top 1% and large corporations, Republicans will try to cut Social Security, Medicare, Medicaid and help for the most vulnerable Americans,” Sen. Bernie Sanders (I-Vt.) wrote on Twitter.

It is unclear whether Republicans will take aim at Medicare given Trump’s campaign promise not to touch it. Trump also promised not to cut Medicaid or Social Security, the latter of which is trickier for lawmakers to change because of procedural rules designed to protect the program.

If Republicans steer clear of Medicare, they say they will need to cut deeper into programs like food stamps and Medicaid. Despite Trump’s campaign vow on Medicaid, the GOP already placed the health insurance program for the poor on the chopping block earlier this year as part of its failed push to repeal Obamacare, proposing to siphon nearly $800 billion from the program over a decade.

With strong Democratic opposition a certainty, GOP leaders will need to rely on a budget tool that allows them to jam bills past their Democratic counterparts. That tactic, known as budget reconciliation, allowed Republicans to pursue their successful push on tax reform this year, as well as an unsuccessful one on health care.

But unlocking reconciliation will require Republicans to almost unanimously agree to a budget blueprint — unity that took months of wrangling by GOP leaders this year even on their longtime priority of tax reform. That unity may be even more difficult to achieve in an election year.

Ways and Means Chairman Kevin Brady (R-Texas) recently confirmed to a small group of D.C. conservatives that welfare reform would be the focus of the 2019 budget.

But the reception wasn’t what he expected. Several people in attendance were shocked, according to one person familiar with the conversation — because they read it as Republicans abandoning their push for Obamacare repeal.

“Not that we don't need welfare reform,” the person said. “But if you're looking to get something accomplished through 2018 and through the Senate, even on reconciliation, it’s hard to see how welfare is that policy.”

But Rep. Rob Woodall (R-Ga.), a longtime Budget Committee member, told POLITICO last week that he’s leaning toward using the reconciliation process for welfare reform.

“When we're using reconciliation instructions, we should deal with the hard stuff,” Woodall added. “The easy things, people have done already. What's left is hard, and it's hard when you're dealing with food stamp programs, for example.”

On the executive side, the Trump administration is moving ahead on its own even before Republicans work out the details of their legislative push.

Food stamp changes

One of the biggest programs that could be in the administration’s cross hairs is food stamps, or the Supplemental Nutrition Assistance Program, a $70 billion program that helps one in eight Americans buy groceries each month.

The Department of Agriculture has said it’s developing a policy that could make it easier for states to impose stricter work requirements or drug testing on recipients — things that states like Wisconsin and Florida have long tried to do, but have been blocked by either courts or USDA.

On Tuesday, USDA issued a vague announcement highlighting the principles around encouraging self-sufficiency, pledging to give more flexibility and “local control” to states administering SNAP in the coming weeks.

“SNAP was created to provide people with the help they need to feed themselves and their families, but it was not intended to be a permanent lifestyle,” said Agriculture Secretary Sonny Perdue.

Many states already limit SNAP benefits to three months for able-bodied adults who don’t care for young children or an elderly parent, and who aren’t working or enrolled in a job training or volunteer program. Nearly half of all SNAP recipients are children.

Handing over more control to states is loathed by Democrats and anti-hunger advocates who fear that Republicans will eventually try to block-grant SNAP, much like they did with the Temporary Assistance for Needy Families program during welfare reform in the 1990s — a change that led to a big drop in the rolls but, critics argue, didn’t actually reduce poverty.

SNAP serves a vastly larger population than TANF and has been shown to reduce hunger and improve health outcomes.

There’s also now renewed concern that more states could try to follow Wisconsin Gov. Scott Walker’s push to impose drug screening on all able-bodied adults who apply for SNAP, which critics argue stigmatizes the program and costs many times more than it will save taxpayers.

Medicaid work requirements

Work requirements are just one of several new coverage restrictions federal health officials are expected to grant to red states trying to reduce enrollment in a program that now covers one in five Americans.

Other proposals include imposing higher costs on enrollees, and strict disenrollment penalties for not following certain rules.

But work requirements have generated the most ire from Democrats and advocates for low-income people, who argue that they do nothing to advance Medicaid's core purpose of providing health coverage to the poor.

Ten Republican-led states are seeking the Trump administration’s permission to require certain enrollees to work or participate in other job-related activities as a condition of receiving health coverage.

The restrictions, which were repeatedly rejected by the Obama administration, are primarily targeted at low-income adults who gained coverage under Obamacare's expansion of Medicaid. Yet other red states that never implemented that expansion — including Kansas, Maine and Mississippi — are also interested.

Top health officials have actively encouraged states to enact work rules, saying the proposals are designed to reduce government dependency as Medicaid has grown to cover able-bodied adults rather than primarily serving the disabled, pregnant women and children.

"The thought that a program designed for our most vulnerable citizens should be used as a vehicle to serve working-age, able-bodied adults does not make sense," Centers for Medicare and Medicaid Services Administrator Seema Verma said in a November speech to state officials.

Housing

At the Department of Housing and Urban Development, Secretary Ben Carson has made clear his philosophy that welfare fosters dependency and has said government should be focused on the business of getting people out of public housing.

HUD will be “significantly involved” in Trump’s welfare reform efforts, Carson told POLITICO. “Our objective is to empower people, to give people opportunity.

“Housing and affordable housing is supposed to be something we provide for the elderly, the disabled and for work-able people. It should be a steppingstone toward self-sufficiency,” Carson said. “Obviously, that has not been the case for decades. We need to change that. But to change it, we need to be able to provide opportunities.”

On Thursday, he launched his EnVision Center project, a multi-agency effort to create job training and educational opportunity hubs near public-assisted housing with the goal of self-sufficiency. HUD will track people using the center to see how many find long-term jobs, attain education and start a business.