Congressman Blake Moore Introduces Legislation to Empower States to End Benefits Cliffs
WASHINGTON — Congressman Blake Moore introduced legislation providing states with the flexibility to innovate new ways to end benefits cliffs for their populations in order to incentivize career growth and financial independence.
The Upward Mobility Act creates a five-year pilot program for five states to combine funding from multiple federal anti-poverty programs into a single funding stream to eliminate benefits cliffs. This allows states to utilize savings from reduced bureaucracy, as well as resources from non-profit and private sectors, to design and invest in programs that prevent benefits cliffs while providing for the immediate needs of vulnerable populations.
Senator Jon Husted (R-OH) introduced companion legislation in the U.S. Senate.
"Yet again, Utah is leading the nation with our one-stop-shop model for benefit programs designed to provide families with necessities and promote self-reliance. However, further innovation to streamline the distribution of benefits is limited due to federal red tape, resulting in benefits cliffs that disincentivize seeking higher pay," Congressman Moore said. "The Upward Mobility Act allows states the flexibility to design combined programs that meet the unique needs of their populations and would allow Utah to continue leading the way in helping families transition to financial independence without the fear of losing coverage.”
“Government assistance is not the dream for any American, but right now, it is the reality for too many hardworking people. Americans trapped behind a benefits cliff are disincentivized from pursuing higher-paying jobs. A new system that empowers, instead of entraps, people can create a path to achieve financial independence and a more hopeful future,” Senator Husted said. “The key word here is freedom. My bill would free states from bureaucratic rules that limit flexibility and allow them to invest those savings in reforms that eliminate benefits cliffs. It would free state governments to blend the public and private sectors to create a system that works best for their people. And it would free states to respond to the specific challenges confronting their population, ultimately giving Americans the freedom to pursue better jobs."
“Utah is a national leader in streamlining government programs through state innovation, evidenced by our one-door model for public assistance and workforce programs and our best-in-the-nation upward mobility. Even so, federal rules limit how we can further innovate to clear the path for families eager to escape poverty while reducing government dependence. The Upward Mobility Act allows states the ability to craft innovative programs that work best for families transitioning into work and greater self-sufficiency. I’m grateful to our Congressman Moore and Ohio Senator Husted for introducing this bill. We need to usher in a new era of state-led innovation, and this bill helps do that,” Utah Governor Spencer Cox said.
“Responsible state innovation is an untapped resource in our nation’s fight against poverty. We need to restore an era of federalism in social welfare policy that will lead to better outcomes, stronger fiscal responsibility, and improved upward mobility for all by removing work disincentives inadvertently built into the safety net. The Upward Mobility Act takes a vital step forward in that goal,” said Nic Dunn, Vice President of Strategy and Senior Fellow, Sutherland Institute.
“The Upward Mobility Act takes important steps toward helping low-income Americans move up the economic ladder and achieve independence by reducing the penalties that the current welfare system imposes on work and marriage. In addition, by combining state experimentation with rigorous third-party evaluation, the Upward Mobility Act provides a template for determining what works. This is the sort of compassionate welfare reform that should draw bipartisan support,” said Michael Tanner, Senior Fellow at the Foundation for Research on Equal Opportunity.
“The Upward Mobility Act reflects a transformative shift in federal antipoverty policy—creating a safety net that advances the inherent dignity, potential and purpose of every person. For decades, outdated programs have created barriers that trap individuals and families in cycles of dependency. This legislation offers a path forward that prioritizes work, opportunity, and upward mobility as the true measures of a successful safety net,” said leaders from The Alliance for Opportunity in a letter to Senate leaders John Thune (R-N.D.) and Chuck Schumer (D-N.Y.).
“Waivers from one-size-fits-all federal bureaucratic requirements enabled a few pioneering states to lead the way toward a successful national welfare reform effort in the 1990s. Similarly, today, Senator Husted's Upward Mobility Act will encourage a handful of states to conduct rigorous experiments with innovative programs and partnerships to better promote opportunity for the next generation of American citizens,” said Jamie Bryan Hall, Director of Data Analysis, Ethics and Public Policy Center.
Background:
Benefits cliffs occur when a small increase in income leads to a significant or complete loss of federal benefits, leaving families financially worse off than they were before a wage increase.
The Upward Mobility Act creates a pilot program for five states to combine funding from 10 anti-poverty programs and design solutions that help families move up the economic ladder. Funding previously dedicated to regulatory compliance, administrative requirements, or ineffective programmatic functions could be used for individual case management, collaboration with local and non-government actors, and benefit structures that eliminate benefits cliffs and boost employment and earnings.
Programs Included: The Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF), Section 8 Housing Vouchers, Section 521 Rural Rental Assistance Payments, Section 8 Tenant-Based Assistance, Public Housing Capital and Operating Funds, Child Care and Development Funding, Low-Income Energy Assistance Program (LIHEAP), Community Development Block Grant, Workforce Innovation and Opportunity Act (WIOA) Dislocated Workers Funding.
The Department of Health and Human Services (HHS) Administration for Children and Family Services (ACF) will oversee and facilitate the pilot program. The ACF will select state proposals that demonstrate progress in removing benefits cliffs and helping people become self-sufficient. That means rewarding projects that are most likely to reduce benefits cliffs, reduce direct assistance through higher levels of employment and earnings among beneficiaries.
Pilot funding is capped at the prior year’s spending levels for the 10 programs, with only inflation adjustments allowed. States can also test limited projects covering at least 10% of their program funding. This limit on funding growth ensures that taxpayer dollars are targeted to those who need them. States selected for the program are permitted to tap into anti-poverty program contingency funds in cases of natural disaster or unprecedented need.
Full bill text can be found here.
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