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The American people are not getting the government benefits they need. Many of the benefit programs designed to alleviate poverty are complicated to figure out, insufficiently funded, and understaffed. Applying for benefits is often overly bureaucratic and can take vast amounts of time to do. A phone call to Social Security, for example, can easily take over an hour. Many people also are unaware that they are qualified for benefits.
As a recent Huffington Post article states, fewer than half of those eligible for Medicaid are signed up for it. More than half of those who are eligible for unemployment insurance did not apply because they did not know they were eligible. And almost a third of those eligible for food stamps did not receive them.
What would happen in the United States if everyone who was eligible for benefits received them? And what would happen if all these programs got the funding they needed? The Urban Institute looked into a hypothetical situation where this was the case. They describe their process as the following: "We use the Analysis of Transfers, Taxes, and Income Security (ATTIS) microsimulation model to hypothetically create a situation in which everyone who is eligible for benefits from these programs receives them." (Urban Institute, 8-15-23)
For their model, the Urban Institute considered seven different means-tested programs:
- Supplemental Security Income (SSI)
- The Supplemental Nutrition Assistance Program (SNAP), commonly known as food stamps
- The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC)
- Temporary Assistance for Needy Families (TANF)
- Child care subsidies supported by the Child Care and Development Fund (CCDF)
- The Low Income Home Energy Assistance Program (LIHEAP)
- Public and subsidized housing
The Urban Institute examined the results of their simulation in terms of aggregate benefit dollars and reductions in poverty as measured by the Supplemental Poverty Measure (SPM), both nationally and at the state level. They also looked at the results by age group and by race and ethnicity.
(It is worth noting that Medicaid is not mentioned above, so this would probably drastically change the results if they included Medicaid.)
What did the Urban Institute find?
They found that U.S. families in aggregate are currently receiving slightly less than half of the total value of benefits they could receive if all seven key safety net programs were fully funded and if everyone eligible for the programs participated. Under the hypothetical scenario of full funding and 100 percent participation, aggregate annual benefits would increase by $227 billion. The poverty rate would decline by 31 percent overall, and by 44 percent for children. An estimated 14.9 million people—including 4.8 million children—would receive enough additional support to have their families’ resources rise above the SPM poverty level. There would be a widespread reduction in poverty across all states and across all racial groups.
The Biden Administration has made some effort to try and make these benefits easier to obtain. In an executive order issued in 2021, President Joe Biden directed agencies to reduce burdens and improve customer experience for government benefit programs with the aim of helping everyone who is eligible access benefits.
A policy report released in 2023 by the White House describes what steps have been taken to help reduce the "time tax," or in other words, the vast amounts of time it can take to apply for needed benefits.
However, it's not clear if these actions are working. And as a finer point, if the administration of a benefits program is being done by the states, then there are limits to what this executive federal order can accomplish.
In conclusion, more needs to be done.
RELATED LINKS
How Much Would Poverty Decline if Benefits Increased?
A Safety Net with 100 Percent Participation: How Much Would Benefits Increase and Poverty Decline? (Urban Institute, 8-15-23)
You can also download their report from the link above.
FACT CHECK: Medicare for All Would Save the U.S. Trillions (Public Citizen, 2-21-20)
Medicare for all could cover everyone, save money and end medical debt.
Problems with the Current Social Safety Net
America’s Safety Net Isn’t Working (Bloomberg, 9-18-23)
Anti-poverty programs are needlessly complicated and too hard for beneficiaries to navigate.
Executive Action
The Biden Administration Attempts to Make it Easier to Apply for Benefits (Huffington Post, 9-16-23)
The Biden Administration makes an effort to reduce the “time tax” spent on accessing government benefits.
It also aims to make them more accessible and to reduce inequality.
Tackling the Time Tax (White House Report)
A report on how the federal government is attempting to reduce burdens to accessing critical benefits and services.
Funding of Benefit Programs
Federal Spending on Benefits and Services for People with Low Income: FY2008-FY2020 REPORT (Congressional Research Service)
The report above states that in 2020, government benefit programs were receiving over $1 trillion in funding.
However, it is worth noting that this included funding that got cut in 2023 after the Public Health Emergency ended.