[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]



 
                    EXAMINING THE SNAP BENEFIT CLIFF

=======================================================================

                                HEARING

                               BEFORE THE

    SUBCOMMITTEE ON NUTRITION, OVERSIGHT, AND DEPARTMENT OPERATIONS

                                 OF THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 12, 2021

                               __________

                           Serial No. 117-12
                           
                           
                           
 [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]      
 
                           


          Printed for the use of the Committee on Agriculture
                         agriculture.house.gov                      
                         
                         
                         
                          ______                       


             U.S. GOVERNMENT PUBLISHING OFFICE 
46-164 PDF            WASHINGTON : 2021 
                          
                         


                        COMMITTEE ON AGRICULTURE

                     DAVID SCOTT, Georgia, Chairman

JIM COSTA, California                GLENN THOMPSON, Pennsylvania, 
JAMES P. McGOVERN, Massachusetts     Ranking Minority Member
FILEMON VELA, Texas                  AUSTIN SCOTT, Georgia
ALMA S. ADAMS, North Carolina, Vice  ERIC A. ``RICK'' CRAWFORD, 
Chair                                Arkansas
ABIGAIL DAVIS SPANBERGER, Virginia   SCOTT DesJARLAIS, Tennessee
JAHANA HAYES, Connecticut            VICKY HARTZLER, Missouri
ANTONIO DELGADO, New York            DOUG LaMALFA, California
BOBBY L. RUSH, Illinois              RODNEY DAVIS, Illinois
CHELLIE PINGREE, Maine               RICK W. ALLEN, Georgia
GREGORIO KILILI CAMACHO SABLAN,      DAVID ROUZER, North Carolina
Northern Mariana Islands             TRENT KELLY, Mississippi
ANN M. KUSTER, New Hampshire         DON BACON, Nebraska
CHERI BUSTOS, Illinois               DUSTY JOHNSON, South Dakota
SEAN PATRICK MALONEY, New York       JAMES R. BAIRD, Indiana
STACEY E. PLASKETT, Virgin Islands   JIM HAGEDORN, Minnesota
TOM O'HALLERAN, Arizona              CHRIS JACOBS, New York
SALUD O. CARBAJAL, California        TROY BALDERSON, Ohio
RO KHANNA, California                MICHAEL CLOUD, Texas
AL LAWSON, Jr., Florida              TRACEY MANN, Kansas
J. LUIS CORREA, California           RANDY FEENSTRA, Iowa
ANGIE CRAIG, Minnesota               MARY E. MILLER, Illinois
JOSH HARDER, California              BARRY MOORE, Alabama
CYNTHIA AXNE, Iowa                   KAT CAMMACK, Florida
KIM SCHRIER, Washington              MICHELLE FISCHBACH, Minnesota
JIMMY PANETTA, California            JULIA LETLOW, Louisiana
ANN KIRKPATRICK, Arizona
SANFORD D. BISHOP, Jr., Georgia

                                 ______

                      Anne Simmons, Staff Director

                 Parish Braden, Minority Staff Director

                                 ______

    Subcommittee on Nutrition, Oversight, and Department Operations

                 JAHANA HAYES, Connecticut, Chairwoman

JAMES P. McGOVERN, Massachusetts     DON BACON, Nebraska,  Ranking 
ALMA S. ADAMS, North Carolina        Minority Member
BOBBY L. RUSH, Illinois              ERIC A. ``RICK'' CRAWFORD, 
GREGORIO KILILI CAMACHO SABLAN,      Arkansas
Northern Mariana Islands             SCOTT DesJARLAIS, Tennessee
SALUD O. CARBAJAL, California        VICKY HARTZLER, Missouri
AL LAWSON, Jr., Florida              JAMES R. BAIRD, Indiana
ANN M. KUSTER, New Hampshire         CHRIS JACOBS, New York
JIMMY PANETTA, California            MICHAEL CLOUD, Texas
SEAN PATRICK MALONEY, New York       KAT CAMMACK, Florida
                                     JULIA LETLOW, Louisiana

             Katherine Stewart, Subcommittee Staff Director

                                  (ii)
                                  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Bacon, Hon. Don, a Representative in Congress from Nebraska, 
  opening statement..............................................     4
Hayes, Hon. Jahana, a Representative in Congress from 
  Connecticut, opening statement.................................     1
    Prepared statement...........................................     3

                               Witnesses

Hardy, Ph.D., Bradley L., Associate Professor, Department of 
  Public Administration and Policy, School of Public Affairs, 
  American University, Washington, D.C...........................     7
    Prepared statement...........................................     9
Gourrier, Ph.D., Al G., Assistant Professor, School of Public and 
  International Affairs, University of Baltimore; Faculty Fellow, 
  Schaefer Center for Public Policy, Baltimore, MD...............    12
    Prepared statement...........................................    14
Brown, Tikki, Assistant Commissioner, Minnesota Department of 
  Human Services, Children and Family Services Administration, 
  Minneapolis, MN................................................    16
    Prepared statement...........................................    17
    Submitted question...........................................    69
    Supplementary information....................................    69
Randolph, Erik, Director of Research, Georgia Center for 
  Opportunity, Peachtree Corners, GA.............................    21
    Prepared statement...........................................    22


                    EXAMINING THE SNAP BENEFIT CLIFF

                              ----------                              


                         MONDAY, JULY 12, 2021

                          House of Representatives,
      Subcommittee on Nutrition, Oversight, and Department 
                                                Operations,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 12:01 p.m. via 
Zoom, Hon. Jahana Hayes [Chairwoman of the Subcommittee] 
presiding.
    Members present: Representatives Hayes, McGovern, Adams, 
Rush, Sablan, Lawson, Kuster, Panetta, Bacon, Crawford, 
DesJarlais, Baird, Jacobs, Cammack, and Letlow.
    Staff present: Lyron Blum-Evitts, Chu-Yuan Hwang, Lisa 
Shelton, Katherine Stewart, Caleb Crosswhite, Jennifer Tiller, 
Erin Wilson, and Dana Sandman.

  OPENING STATEMENT OF HON. JAHANA HAYES, A REPRESENTATIVE IN 
                   CONGRESS FROM CONNECTICUT

    The Chairwoman. Good afternoon, everyone. This hearing of 
the Subcommittee on Nutrition, Oversight, and Department 
Operations entitled, Examining the SNAP Benefit Cliff, will 
come to order. Welcome, and thank you all for joining us here 
today.
    After brief opening remarks, Members will receive testimony 
from our witnesses today, and then the hearing will be opened 
to questions. Members will be recognized in order of seniority, 
alternating between Majority and Minority Members and in order 
of arrival for those Members who have joined us after the 
hearing was called to order.
    When you are recognized, you will be asked to unmute your 
microphone and will have 5 minutes to ask your questions or 
make a comment. If you are not speaking, I ask that you remain 
muted in order to minimize background noise. In order to get to 
as many questions as possible, the timer will stay consistently 
visible on the screen. And, with that, I will start with my 
opening remarks.
    Good morning and welcome to the second hearing of the House 
Committee of Agriculture Subcommittee on Nutrition, Oversight, 
and Department Operations. Thank you to all the Members in 
attendance today and a special thank you to our witnesses for 
sharing your time and expertise.
    This hearing entitled, Examining the SNAP Benefit Cliff, is 
the result of discussions between myself and the Ranking 
Member, Mr. Bacon, at the beginning of this Congress and 
subsequently after. He shared his concerns that low-income 
workers may abruptly lose support as they stabilize themselves 
with employment and reach what we call the benefit cliff. I was 
pleased to hear that, because I have a similar concern, and we 
worked together to have this hearing today.
    This conversation comes at a critical time. In the wake of 
the COVID-19 pandemic, families across the country are still 
struggling to put food on the table. They are still struggling 
to find high-wage jobs. And they are anticipating the end of 
emergency increases that sustained them through this extremely 
difficult time.
    During times of crisis and after, SNAP and other Federal 
programs should adjust to allow workers to gradually ease off 
of benefits until they are truly able to stand on their own. 
These programs should allow for flexibility to ensure benefits 
do not end abruptly and throw workers and their families back 
into financial turmoil. Thankfully, we do have some built-in 
flexibilities in SNAP that allow states to substantially reduce 
the harmful effects of the benefit cliff.
    Broad-based categorical eligibility is a critical tool that 
allows recipients to save for the future, incentivizes work by 
allowing recipients to earn more without losing access to 
benefits, and substantially reduces administrative burdens for 
states who participate.
    However, not all states utilize broad-based categorical 
eligibility, and there are always more improvements that need 
to be made. We must ensure that no one in this country has to 
make the heart-wrenching decision of accepting career 
advancement or putting food on the table for their families.
    During our last hearing, the impact of the benefit cliff 
was profoundly demonstrated by our witnesses, who themselves 
were participants in the SNAP program. Both of the witnesses 
explained the financial constraints faced after the loss of 
benefits due to a moderate rise in income. Our witnesses spoke 
about the need to calculate every dollar earned to be sure they 
did not exceed the exact maximum and lose hundreds of dollars 
of increased emergency benefits that helped them to feed their 
families through this difficult time.
    Their stories highlighted the concerning realities many 
families will be facing in the coming weeks. Millions of 
families who benefited from SNAP benefits increases will see 
them abruptly go away, no matter if their economic situation 
has improved or not. In addition to the regular benefit cliff, 
SNAP recipients will also have to adjust to an additional COVID 
cliff as they attempt to recover from the last year.
    I am pleased that Mr. Bacon has expressed an interest in 
helping to address this problem and, together with this 
Committee, we will work to craft solutions.
    To continue with this discussion today, we have today's 
panel of witnesses. We are fortunate to have four important 
points of view, including that of an economist, Dr. Hardy, two 
researchers, Dr. Gourrier and Mr. Randolph, and a SNAP 
administrator, Assistant Commissioner Brown, to help us 
understand the impact our decisions have on the Americans who 
are receiving SNAP and their future as they navigate the web of 
social programs that provide support in times of need.
    As my colleague Mr. McGovern has noted before, this 
combination of supports involves more than just SNAP and food 
security programs that fall under our jurisdiction. The cost of 
housing and childcare figure prominently into the long-term 
security of low-income families.
    Ensuring all Americans are able to attain sustainable 
financial stability requires an all-of-government approach. At 
the very least, it requires that we work diligently to 
strengthen these programs. I look forward to hearing more from 
our witnesses about the interplay between these vital supports 
and the impact of our shared goal to create effective, 
efficient Federal policy that truly supports Americans in need.
    [The prepared statement of Mrs. Hayes follows:]

 Prepared Statement of Hon. Jahana Hayes, a Representative in Congress 
                            from Connecticut
    Good afternoon and welcome to the second hearing of the House 
Committee on Agriculture's Subcommittee on Nutrition, Oversight and 
Department Operations.
    Thank you to all the Members in attendance today and special thanks 
to our witnesses for sharing their time and expertise.
    This hearing, titled ``Examining the SNAP Benefit Cliff,'' is the 
result of a discussion between myself and Ranking Member Bacon at the 
beginning of this Congress about our shared concern that low-income 
workers may abruptly lose the very support that helps propel them 
toward financial stability.
    This conversation comes at a critical time. In the wake of the 
COVID-19 pandemic, families across the country are still struggling to 
put food on the table. They are still struggling to find high-wage 
jobs. And they are staring down the barrel of the end of emergency 
increases that sustained them through this extremely trying time.
    During times of crisis and after, SNAP--and every piece of our 
Federal safety net--should adjust to increased income and savings to 
allow workers to ease off benefits at the point when they are truly 
able to stand on their own. And they should allow for flexibility to 
ensure benefits do not run out at a time that throws workers and their 
families back into financial turmoil or food insecurity.
    Thankfully, we do have built-in flexibilities in SNAP that allow 
states to substantially reduce the benefit cliff and its harmful 
effects.
    Broad-based categorical eligibility is a critical tool that allows 
recipients to save for the future, incentivizes work by allowing them 
to earn more without losing access to benefits, and substantially 
reduces administrative burden for states and participants.
    However, not all states utilize broad-based categorical 
eligibility, and there are always more improvements to be made.
    We must ensure that no one in this country has to make the heart-
wrenching choice between taking a promotion and putting food on the 
table for their family.
    During our last hearing, the impact of the benefit cliff was 
profoundly demonstrated by our witnesses who were participating in 
SNAP, Rachel Wilson and Odessa Davis.
    Odessa Davis explained the financial constraints faced by her and 
her son after she lost access to SNAP benefits due to a moderate rise 
in income. Ms. Wilson spoke about the need to calculate every dollar 
earned to be sure she does not exceed the exact maximum and lose 
hundreds of dollars of increased emergency benefits that help feed her 
family as she struggles to return to full employment following the 
pandemic.
    Ms. Wilson's story particularly highlights a concerning reality 
families will be facing in the coming weeks. Millions of families who 
benefitted from SNAP benefit increases will see them abruptly go away--
no matter if their economic situation has improved or not. On top of 
the regular benefit cliff, SNAP recipients will have to adjust to an 
additional ``COVID-cliff'' as they attempt to recover from the last 
year.
    I am so pleased that Mr. Bacon has expressed an interest in 
addressing this problem, and hope to work together to craft a solution 
for our constituents.
    To continue this discussion, we have today's panel of witnesses.
    We are fortunate to have four important points of view, including 
that of an economist, Dr. Hardy, two researchers, Dr. Gourrier and Mr. 
Randolph, and a SNAP administrator, Assistant Commissioner Brown, to 
help us understand the impact our decisions have on Americans receiving 
SNAP as they navigate the web of social service programs that provide 
support in times of need.
    As my colleague Mr. McGovern has noted, this combination of 
supports involves more than just SNAP, which is within our 
jurisdiction. The cost of housing and childcare figure prominently in 
the long-term security of low-income families too. Ensuring all 
Americans are able to attain sustainable financial stability requires 
an all-of-government approach. At the very least, it requires that we 
work diligently to strengthen the safety net programs already available 
to our constituents.
    I look forward to hearing more from our witnesses about the 
interplay between these vital supports and the impact on our shared 
goal to create effective and efficient Federal policy that truly 
supports Americans in need.

    The Chairwoman. I would like to welcome the distinguished 
Ranking Member, Mr. Bacon, the gentleman from Nebraska, for his 
opening remarks.

   OPENING STATEMENT OF HON. DON BACON, A REPRESENTATIVE IN 
                     CONGRESS FROM NEBRASKA

    Mr. Bacon. Thank you, Madam Chairwoman.
    I appreciate everybody calling in today. I appreciate our 
panelists. I thank the Madam Chairwoman for taking this on. And 
we agree we have a problem. We may diverge a little bit on what 
the solutions are, but I think it is great that we are going to 
have this conversation.
    I am not convinced that broad-based categorical inclusion 
is the right way to go. In fact, I see problems with that. I 
see more of a potential here to once you hit a certain point, 
instead of just pulling the plug on benefits, we decrement the 
benefits down to help ease people off.
    But this is the discussion we do need to have, and I really 
appreciate the Chairwoman for scheduling this today. For at 
least a generation, we have been talking about welfare cliffs. 
It is going on 30, 40 years. We have been waging this war on 
poverty, but with little progress beyond an expansive and at 
times perverse web of programs and trillions in spending.
    Unfortunately, if one was born in the system, the 
statistics show the odds are stacked against them on whether or 
not they can navigate their way out, and it has become 
multigenerational.
    So, we have to do more than just help folks--we have to do 
more to help folks navigate out of poverty and not just sustain 
them while in poverty. I think it is a duty for us to consider 
how we do that.
    As our witnesses will speak to, much of this cliff issue 
spans from the fact that we have created a program to try to 
fill every void, big or small, of a person's life, whether it 
is healthcare, food assistance, childcare, utility assistance, 
housing, education, unemployment, just to name a few.
    And instead of creating mobility, we have inadvertently 
crafted a massive suite of programs that, when stacked, create 
a trap for many instead of a ramp, or a cliff instead of a lift 
out of poverty.
    And this Subcommittee, and as Madam Chairwoman just 
mentioned, recently hosted two women who articulated the 
disincentives and penalties within SNAP, how their families 
were impacted by the very policies Congress has enacted and 
various Administrations have regulated.
    Both of them talked about their fear if they got full-time 
work or if they got too many raises that they would immediately 
lose all of their benefits and their eligibility to SNAP. That 
is not what we want to do. We have to do something better.
    I hope this has not just become a conversation solely 
focused on expanding eligibility and increased benefits. We 
have seen 50 years of evidence that shows us it just might not 
be working as intended. There certainly are revenue-neutral 
approaches to be considered here to help solve this problem.
    I said in the last hearing, while work waivers granted 
under the former and current Administrations were logical in 
response to COVID, they are now clearly keeping employable 
individuals idle and it reaps, in my view, significant negative 
impacts on families who need to get back to work, and also 
small businesses who are in dire need of workers.
    We just saw today a recent report that like 40 percent of 
businesses want to hire. So, as of 31 May, we have more than 
nine million job openings, running the gamut from manufacturing 
to health services to retail and local government. This week we 
now have a record high number of job openings.
    So, it is time to utilize the resources associated with 
SNAP employment and training as well as state-based employment 
readiness services to help get folks placed where they are 
qualified and engaged in these industries.
    We have a witness with us today, Mr. Erik Randolph, who was 
before this very Subcommittee 6 years ago. A lot has happened 
in the last 6 years, including a farm bill where Republicans at 
least tried to soften the blow to SNAP recipients. 
Unfortunately, those provisions were dropped out at conference. 
But what has not happened is a shared effort to come together 
as Congress and work through this issue both in SNAP and across 
the more than 80 other programs in existence.
    So, Madam Chair, we both see this as an opportunity. I will 
say this again for the record. Our decisions and approaches 
must reflect a multigenerational approach, but we are long past 
trying and testing siloed programming.
    So, with that, I look forward to hearing today's testimony 
and our future work on this. I appreciate that we have commonly 
identified a problem and that we are willing to try to tackle 
this together.
    Thank you and I yield back, Madam Chairwoman.
    The Chairwoman. Thank you, Mr. Bacon. And I will just 
acknowledge that yes, we do agree there is a problem and our 
approaches may be different. But with all due respect, I have 
to believe that there is mobility in these programs. I will say 
it again, I went from being a welfare recipient and a SNAP 
recipient and now I am Chair of this Committee. So, I guess I 
have to disagree that there is no incentive here.
    Mr. Bacon. I hear what you are saying. Many people have, 
but we had two witnesses that were your guests that did say 
they had problems getting out. We know it is a common problem.
    The Chairwoman. I am pleased to welcome such a 
distinguished panel of witnesses to our hearing today. Our 
witnesses bring to our hearing a wide range of experiences and 
expertise, and I thank you all for joining us today. I look 
forward to hearing from you.
    Our first witness today is Dr. Bradley Hardy. Dr. Hardy is 
an Associate Professor at the School of Public Affairs in the 
Department of Public Administration and Policy at American 
University in DC.
    He is also a senior fellow in economic studies at the 
Brookings Institution, a research fellow with the Center for 
Household Financial Stability at the Federal Reserve Bank of 
St. Louis, and a research affiliate of both the University of 
Wisconsin Institute for Research on Poverty and the University 
of Kentucky Center for Poverty Research.
    The focus of Dr. Hardy's current work is labor economics, 
including economic instability and poverty policy, among other 
emphases.
    Our next witness is Dr. Al Gourrier, an Assistant Professor 
and Director of Nonprofit Management and Social 
Entrepreneurship Programs at the University of Baltimore in 
Maryland.
    Dr. Gourrier, his areas of academic research include 
community banking and finance, social equity and community 
development, with a recent examination of the minimum wage in 
Maryland. Prior to his work in academia, Dr. Gourrier spent 19 
years as a banker and was the founder and President of the 
First Commerce Bank of North Las Vegas, Nevada.
    Our third witness today is Ms. Tikki Brown. Ms. Brown is 
the Assistant Commissioner of Children and Family Services for 
the Minnesota Department of Health and Human Services. The 
scope of her responsibilities for the State of Minnesota 
include services and policies that promote adoption, foster 
care, child protection, child support, childcare, refugee 
services and cash and food support.
    Before accepting the position as Assistant Commissioner, 
Ms. Brown was the director of economic opportunity and 
nutrition assistance for the state, where her duties 
encompassed housing and shelter, food shelves, nutrition 
education, outreach employment and training, community action 
and the Supplemental Nutrition Assistance Program.
    Our fourth and final witness is Mr. Erik Randolph. Mr. 
Randolph is the Director of Research at Georgia Center for 
Opportunity in Peachtree Corners, Georgia. Mr. Randolph's 
experiences include serving as a senior fellow with the 
Illinois Policy Institute and an economic lecturer for New York 
College of Pennsylvania.
    He specializes in developing economic models to assist with 
the creation of public policy solutions through an 
understanding of governmental structures. Included in his past 
work are analyses of income from minimum wage workers for 23 
states, systemic welfare reform, and work disincentives of 
welfare policies.
    Welcome to all of our witnesses today. We will now proceed 
to hearing your testimony. You will each have 5 minutes. The 
timer should be visible to you on your screen and will count 
down to zero, at which point your time has expired. Again, I 
welcome you all today.
    We will begin with Dr. Hardy, and when you are ready you 
may begin your testimony.

        STATEMENT OF BRADLEY L. HARDY, Ph.D., ASSOCIATE 
  PROFESSOR, DEPARTMENT OF PUBLIC ADMINISTRATION AND POLICY, 
              SCHOOL OF PUBLIC AFFAIRS, AMERICAN 
                  UNIVERSITY, WASHINGTON, D.C.

    Dr. Hardy. Thanks. Chairwoman Hayes, Ranking Member Bacon, 
and Members of the Subcommittee on Nutrition, Oversight, and 
Department Operations, thank you for the opportunity to discuss 
benefit cliffs in the SNAP program.
    As you heard, I serve as an Associate Professor at American 
University, and for 15 years I have been conducting research on 
economic instability and social policy, looking into programs 
like SNAP and the Earned Income Tax Credit and TANF. So, there 
are several points I would like to emphasize today briefly.
    Benefit cliffs are a concern for program participants who 
are worse off on the margin, as we say, when their earnings 
increase. These SNAP benefit cliffs appear to affect a 
relatively small number of participants, however, once we 
account for the social safety net programs and earnings are 
accounted for.
    So, in practice, these benefit cliffs are relatively rare. 
They are problematic and, fortunately, they can be remedied. 
One important offset of the SNAP benefit cliff for working 
families are generous tax credits received via the Earned 
Income Tax Credit as well as refundable child tax credits, many 
of which are starting off this week.
    In the instances where family earnings rise, leading to a 
reduction or loss of SNAP benefits, we find that the overall 
increased earnings and EITC payments represent a net gain for 
most families.
    Also worth noting, the structure of SNAP reduces benefits 
less than dollar for dollar as earnings rise, and there is a 20 
percent earnings disregard that further promotes earnings and 
work.
    Other well-known safety net programs can exacerbate benefit 
cliffs, but they don't, because relatively few low-income 
families receive benefits from programs such as TANF cash 
assistance or housing assistance. Over calendar year 2019, for 
every 104 families nationwide, roughly 23 received TANF cash 
assistance. Similarly, only one in five families who qualify 
for housing assistance receive it.
    Moving along, SNAP and work participation are, in fact, 
complementary. Most SNAP recipients are children, elderly, or 
disabled, but most nondisabled adults on SNAP do work. The 
decision to work, in my studies and studies across labor 
economics, is determined by many inflexible forces, including 
involuntary job loss, labor market mismatches, both regional, 
for example, as skills change, as demands on skills change, 
access to reliable transportation, disability, age, childcare 
coverage, as well as discrimination.
    Most nondisabled adult SNAP recipients do work, and they 
may receive a combination of Federal and state Earned Income 
Tax Credit benefits. Evidence demonstrates that the EITC 
creates positive work incentives as well.
    The increased pandemic-SNAP benefits, they shake out to 
about roughly an additional $100 for a family of four. They do 
help to reduce food hardship, but they are inadequate to make 
up for lost employment.
    And another point, families and children receiving SNAP 
face difficult labor market conditions. SNAP plays a critical 
role in supporting work at low wages and providing a buffer 
against income volatility and job loss.
    SNAP is among the most effective economic development tools 
in the nation. The program reduces food hardship and 
insecurity, and it also improves long-run economic and health 
outcomes for the nation's children. It stimulates local 
economies and small businesses, because SNAP dollars are spent, 
not saved.
    Continuing along this line, we can further reduce SNAP 
benefit cliffs, because many families are going to be receiving 
SNAP with child allowances delivered as tax credits within the 
American Rescue Plan, which could be made permanent with an 
American Families Plan. These credits could reduce child 
poverty by as much as \1/2\. That is huge. This universal 
policy is forecast to reduce overall Black poverty by 37 
percent, Hispanic poverty by 40 percent, and poverty among 
whites and Asians by about 24 percent. I mean, this is really 
dramatic stuff. So, again, these allowances ranging from $3,000 
to $3,600 are an additional offset for potential SNAP benefit 
cliffs.
    And so, finally, states can address SNAP benefit cliffs by 
raising income and asset limits, using broad-based categorical 
eligibility, as you just heard. This extends benefits to low-
income families who may otherwise lose benefits. For families 
on the cusp of rising above 130 percent of the poverty line, 
about $2,300, broad-based categorical eligibility enables 
states to raise SNAP's income limit to 200 percent of the 
poverty line or about that level. Roughly 35 states have 
already done so. More could do it.
    So, in closing, I just want to say that SNAP provides 
crucial economic assistance for America's families, with a 
really high economic return-on-investment. Labor market factors 
have created more low-wage job opportunities and fewer solid 
middle-class jobs, leaving many families in need of a 
combination of SNAP and EITCs.
    You heard testimony in May from folks like Odessa Davis 
from my region in Montgomery County, Maryland, a teacher who 
spoke of how SNAP provided an important buffer during time of 
great need. And from my own hometown where I grew up in Durham, 
North Carolina, I know many children who grew up with SNAP 
benefits who have now looked back in an appreciative manner, 
and they know that it contributed to their long-term outcomes. 
So, there are long-term benefits to the nation's economy from 
SNAP and income support programs.
    I encourage continued support for a strong SNAP program. I 
do think there are clear benefits to making the refundable 
child tax credit payments permanent within the ARP. These 
programs like SNAP are work supports. They help families and 
children that experience low and volatile incomes.
    So ultimately, many families rising out of poverty will do 
so with a combination of work combined with help, both from 
people of goodwill and from programs like SNAP, the Earned 
Income Tax Credit, and child tax credits.
    So thank you and I look forward to any questions you may 
have.
    [The prepared statement of Dr. Hardy follows:]

  Prepared Statement of Bradley L. Hardy, Ph.D., Associate Professor, 
   Department of Public Administration and Policy, School of Public 
             Affairs, American University, Washington, D.C.
    Chairwoman Hayes, Ranking Member Bacon, and Members of the 
Subcommittee on Nutrition, I thank you for the opportunity to appear 
before you today to discuss benefit cliffs in the Supplemental 
Nutrition Assistance Program (SNAP) and related labor market challenges 
affecting low-income families. My name is Bradley Hardy. I am an 
Associate Professor of Public Administration and Policy at American 
University. Outside of my role as a professor at American, I hold 
several affiliations. I am a research affiliate of the University of 
Wisconsin Institute for Research on Poverty, the University of Kentucky 
Center for Poverty Research, and the Institute for Economic Equity at 
the Federal Reserve Bank of St. Louis. The views expressed here are my 
own, and do not represent official positions or policy viewpoints of 
any organizations with which I work or affiliate. For the past 15 
years, I have conducted research on economic instability, 
intergenerational mobility, poverty policy, racial economic inequality, 
and socioeconomic outcomes. My work has documented trends and sources 
of income volatility and intergenerational mobility within the United 
States, with a focus on socio-economically disadvantaged families, 
neighborhoods, and regions. This work includes research on the role of 
anti-poverty transfer programs such as SNAP, the earned income tax 
credit, and TANF for improving economic well-being among low-income 
individuals and families.
    I have written twenty-five sole-authored or co-authored research 
studies, fifteen of which are published or forthcoming in peer-reviewed 
journals. I apply and share my expertise with a range of organizations 
concerned with poverty and economic well-being. I currently serve as a 
panel member of a National Academies of Sciences, Engineering, Medicine 
Panel on Evaluation and Improvements to the Supplemental Poverty 
Measure. I also serve as an advisory member for the Aspen Institute 
Financial Security Program Benefits21 initiative, and recently 
completed work on a year-long panel studying economic security in the 
United States for the National Academy of Social Insurance. I also 
serve as a co-editor at the Journal of Policy Analysis and Management 
and Contemporary Economic Policy.
    My testimony is drawn primarily from my work on the interaction of 
SNAP with other social safety net programs, as well as on income 
volatility and the protective role of social safety net programs such 
as SNAP. I also draw upon my assessment of the broader research base 
surrounding these issues. There are several points I will highlight, 
and I expand upon these points in greater detail. To summarize:

   Conceptually, benefit cliffs are of concern for program 
        participants who find themselves to be worse off ``on the 
        margin'' when their earnings increase. SNAP benefit cliffs 
        affect a relatively small number of participants, particularly 
        once other social safety net programs are accounted for. In 
        this way, these programs can combine to create a ``net'' 
        marginal tax on earnings. In practice, these benefit cliffs are 
        rare, and can be remedied. One important offset of the SNAP 
        benefit cliff for working families are generous tax credits 
        received via the earned income tax credit (EITC) and the child 
        tax credit (CTC).

   SNAP and work participation are complementary. Many studies 
        find that changes in the propensity to work--so-called labor 
        supply elasticities--are fairly small. Most nondisabled adults 
        on SNAP work. The decision to work is largely determined by 
        inflexible forces, including involuntary job loss, disability 
        status, age, and childcare coverage. Relatedly, preliminary 
        research on the effect of pandemic unemployment insurance 
        suggests that UI generosity did not reduce employment.\1\
---------------------------------------------------------------------------
    \1\ Altonji, J., Contractor, Z., Finamor, L., Haygood, R., 
Lindenlaub, I., Meghir, C., O'Dea, C., Scott, D., Wang, L. and 
Washington, E., (2020). Employment effects of unemployment insurance 
generosity during the pandemic.

   Families and children receiving SNAP face difficult labor 
        market conditions. SNAP plays a critical role in supporting 
        work at low-wages and providing a buffer against income 
---------------------------------------------------------------------------
        volatility and joblessness.

   Further reducing any remaining SNAP benefit cliffs, many 
        families receiving SNAP also benefit from generous child 
        allowances enacted via tax credits within the American Rescue 
        Plan, which could be made permanent via the American Families 
        Plan. These credits could reduce child poverty by \1/2\.

   States have tools to reduce SNAP benefit cliffs. Many states 
        have expanded SNAP benefits via broad based categorical 
        eligibility, which extends benefits for low-income families who 
        may otherwise lose benefits.
Low-Income Families and the Safety Net: SNAP and the EITC
    Assessments of changes in worker well-being due to SNAP benefit 
cliffs should incorporate the full package of earnings and social 
safety net benefits that families on SNAP typically receive. In the 
instances where family incomes rise--leading to a reduction and/or 
subsequent loss in SNAP benefits, increased earnings and refundable tax 
credit payments represent a net-gain for most families. In my own co-
authored work, I find that simultaneous participation in SNAP and the 
EITC doubled throughout the 2000s.\2\ A similar relationship holds for 
many individuals who receive higher earnings via higher state minimum 
wages--the net effects of higher minimum wages alongside EITC benefits 
typically represent a net-gain for these individuals and their 
families.\3\ These benefits, along with higher earnings, will leave 
most families better off as earnings rise. This is especially so for 
families at very low earnings and low labor force attachment: in these 
instances, the EITC provides incentives for these families to enter 
into work. So, as it balances out, many households experience a 
negative marginal tax rate; the opposite of losing resources, they 
receive additional resources via tax credits that supplement their 
higher earned income.
---------------------------------------------------------------------------
    \2\ Hardy B., Smeeding T., Ziliak J.P. (2018). The changing safety 
net for low-income parents and their children: Structural or cyclical 
changes in income support policy? Demography. 55(1): 189-221.
    \3\ Fahimullah, F., Geng, Y., Hardy, B., Muhammad, D. and Wilkins, 
J., (2019). Earnings, EITC, and Employment Responses to a $15 Minimum 
Wage: Will Low-Income Workers Be Better Off? Economic Development 
Quarterly, 33(4), pp. 331-350.
---------------------------------------------------------------------------
    It is also worth noting that the basic structure of SNAP reduces 
benefits less than dollar-for-dollar, another feature that helps to 
blunt the potential harm from a benefit cliff. In this sense, the SNAP 
benefit cliff is smooth, more akin to a hill. There are aspects of the 
safety net where benefit cliffs are starker--some state-level childcare 
subsidies loom large as an example. Other well-known safety programs 
that could ostensibly exacerbate benefit cliffs generally fail to do 
so, though for the unfortunate reason that relatively few poor families 
who qualify for benefits such as TANF and housing assistance actually 
receive these benefits. Over calendar year 2019, for every 100 poor 
families nationwide, roughly 23 received TANF cash assistance. Coverage 
varies greatly across states--8 out of 100 poor families receive TANF 
cash assistance in Alabama, while 34 out of 100 receive TANF cash 
assistance in Washington state.\4\ Similarly, only one in five families 
who qualify for housing assistance receive it.\5\ For example, a recent 
news account out of Miami-Dade County reported that roughly 90,000 
applicants are vying to be one of 5,000 that will be placed on a list 
to receive housing vouchers.\6\
---------------------------------------------------------------------------
    \4\ https://www.cbpp.org/research/family-income-support/state-fact-
sheets-trends-in-state-tanf-to-poverty-ratios.
    \5\ https://housingmatters.urban.org/research-summary/housing-
choice-voucher-waiting-lists-disadvantage-households-facing-most.
    \6\ https://www.local10.com/news/local/2021/07/01/90000-applicants-
only-5000-spaces-for-miami-dades-section-8-housing-and-no-guarantee/.
---------------------------------------------------------------------------
Work and Safety Net Participation Go Together
    Most SNAP recipients are children, elderly, or disabled. Among the 
subset of adults receiving SNAP who can work, most elect to do so. 
Empirical evidence shows that SNAP is not a major determinant of 
decisions surrounding work participation and hours worked. Several 
studies find that these responses or ``elasticities'' of work to either 
higher earnings or safety net benefits are generally low.\7\ There are 
several reasons for this. First, the power to dictate scheduling tends 
to skew heavily towards firms and away from workers, especially within 
frontline and lower-wage employment opportunities. Thus, to the degree 
that the discussion of SNAP benefit cliffs is at all connected to 
concerns over work disincentives, there is not consistent empirical 
evidence to support this concern. Moreover, work decisions tend to be 
determined by other factors, including job mismatch, access to reliable 
transportation, disability status, and access to affordable childcare. 
A large proportion of non-disabled adult SNAP recipients work, and via 
work participation they receive a combination of Federal and state EITC 
benefits, as well as CTCs. Empirical evidence demonstrates that 
features of the EITC create positive work incentives.\8\
---------------------------------------------------------------------------
    \7\ Keane, M.P., 2011. Labor supply and taxes: A survey. Journal of 
Economic Literature, 49(4), pp. 961-1075.
    \8\ Nichols, A., & Rothstein, J. (2016). ``The earned income tax 
credit'' In R.A. Moffitt (Ed.), Economics of mean-stested transfer 
programs in the United States (Vol. 1, pp. 137-218). Chicago, IL: 
University of Chicago Press.
---------------------------------------------------------------------------
    Many families struggle to find pathways out of lower wage 
employment and, as a result, they persist on a combination of earnings 
alongside SNAP and EITC benefits.\9\ EITC receipt is conditioned on 
work participation, and in the absence of market employment, neither 
EITC nor SNAP--alone or together--would adequately cover food, 
clothing, shelter, transportation, and utility expenses that families 
typically face. Increased pandemic SNAP benefits, roughly an additional 
$100 for a family of four,\10\ will help to reduce food hardship, but 
are inadequate to make up for lost employment. Relatedly, preliminary 
research suggests that UI generosity during the pandemic did not reduce 
employment.\11\
---------------------------------------------------------------------------
    \9\ Hardy, Smeeding, and Ziliak (2018).
    \10\ https://www.usda.gov/sites/default/files/documents/arp-
national-factsheet.pdf.
    \11\ Altonji, et al. (2020).
---------------------------------------------------------------------------
Work Conditions Among Low-Income Families
    The nature of work among low-income families typically yields 
income streams that are both low and volatile. Unstable, low-wage 
employment is strongly associated with higher income volatility and, 
accordingly, many socioeconomic groups that typically experience higher 
levels of joblessness report higher levels of income volatility. For 
example, families with lower incomes and Black families of all incomes 
generally experience higher levels of income volatility as well as 
those with fewer formal educational credentials and those headed by one 
unmarried parent.\12\ Such families appear to be saddled with an 
undesirable portfolio--economic resources and incomes that are both 
qualitatively low and unpredictable. This is largely a feature of the 
low-wage labor market, where workers change jobs more frequently and 
firms adjust work schedules frequently.\13\
---------------------------------------------------------------------------
    \12\ Hardy, B.L., (2017). Income instability and the response of 
the safety net. Contemporary Economic Policy, 35(2), pp. 312-330.
    \13\ Schneider, D. and Harknett, K., (2019). Consequences of 
routine work-schedule instability for worker health and well-being. 
American Sociological Review, 84(1), pp. 82-114.
---------------------------------------------------------------------------
    SNAP, along with programs such as the EITC and unemployment 
insurance, combine to lower income volatility for low-income families. 
SNAP recipient families are more likely to transition in and out of 
work, and SNAP provides important nutritional support and near-cash 
benefits for these families and children. This support is linked to 
improved long-term socioeconomic outcomes for children within these 
households.\14\
---------------------------------------------------------------------------
    \14\ Hoynes, H., Schanzenbach, D.W. and Almond, D., (2016). Long-
run impacts of childhood access to the safety net. American Economic 
Review, 106(4), pp. 903-34.
---------------------------------------------------------------------------
The American Rescue Plan Further Reduces Existing Benefit Cliffs For 
        Families
    Many low-income families that benefit from SNAP will also receive 
child allowances from the American Rescue Plan (ARP). This plan will 
substantially reduce overall poverty, including significant reductions 
in child poverty across racial and ethnic minority groups. Poverty 
reducing policies in the ARP, including child tax credits from $3,000 
to $3,600, alongside enhanced SNAP benefits and pandemic unemployment 
insurance, are forecasted to reduce poverty by 31 percent nationwide. 
This universal policy reduces racial economic inequality as well; Black 
poverty is forecasted to fall by 37 percent while Hispanic poverty is 
forecasted to fall by 40 percent. Poverty among Whites and Asians is 
forecasted to fall by roughly 24 percent. Poverty for White children 
could fall by 63 percent, followed by forecasted child poverty 
reductions for Black, Hispanic, and Asian children of 55, 53, and 46 
percent, respectively.\15\ This expansion of the safety net further 
offsets the impacts of SNAP benefit cliffs. SNAP households should 
qualify for some, if not all, of the benefits of the ARP, especially 
refundable child tax credit payments.
---------------------------------------------------------------------------
    \15\ Parolin, Z., Collyer, S., Curran, M. and Wimer, C., (2021). 
The Potential Poverty Reduction Effect of the American Rescue Plan (No. 
20411). Center on Poverty and Social Policy, Columbia University.
---------------------------------------------------------------------------
Solutions to Assist Families Include Expansions of Safety Net Benefits 
        Via Broad-Based Categorical Eligibility
    Broad-based categorical eligibility (BBCE) can reduce rarely 
occurring benefit cliffs within SNAP. Such policy tools expand benefits 
to low-income families that experience modest income growth. BBCE 
extends benefits to families at the margin of qualifying for benefits. 
For households with incomes rising above 130 percent of the poverty 
line--$2,353--BBCE enables states to raise SNAP's income limit to up to 
200 percent of the poverty line. Unfortunately, only about 35 states 
take advantage of the option.
    For example, a parent with two children working full time at $13.50 
an hour would have income at 129 percent of the poverty level, 
receiving roughly $123 a month from SNAP. If her hourly wage increased 
by 50--$87 a month--raising her income slightly above 130 percent of 
poverty, the family becomes ineligible for SNAP. The loss of benefits 
would more than cancel out the increased earnings, and they lose 
approximately $36 in total resources. In a state that raises the income 
cutoff via BBCE, this 50 raise would reduce the family's SNAP benefit 
by only $31 per month, resulting in a monthly net-increase of about $56 
per month.
Overall, The Safety-Net is Largely Centered Around Work
    No consistent body of empirical evidence shows that these programs 
reduce work. The safety net, including SNAP, provides crucial 
assistance for America's families. Over past several decades, many 
middle-skill jobs have been replaced by lower-paying employment 
opportunities.\16\ As such, many families benefit from a combination of 
SNAP and refundable tax credits,\17\ and most cannot realistically make 
ends meet without combining work with these safety net benefits. Given 
the weight of the social science evidence surrounding the long-term 
socioeconomic benefits of income receipt and poverty reduction for 
families and children, there are clear economic benefits associated 
with making the refundable child tax credit payments within the ARP 
permanent.\18\ These child allowances would help to support families 
and children that experience low, volatile incomes from job 
fluctuations, as well as expense volatility related to everyday 
household expenses, including medical expenses and car repairs.\19\ 
Still, even with the relatively generous tax credits within the ARP, 
families are forecasted to package work with these tax credits, using 
the additional income to pay down household expenses and meet day-to-
day household needs.\20\
---------------------------------------------------------------------------
    \16\ Jaimovich, N. and Siu, H.E., (2020). Job polarization and 
jobless recoveries. Review of Economics and Statistics 102(1): 129-147.
    \17\ Hardy, Smeeding, and Ziliak (2018).
    \18\ Hardy, B., Hill, H.D. and Romich, J., (2019). Strengthening 
social programs to promote economic stability during childhood. Social 
Policy Report, 32(2), pp. 1-36.
    \19\ Morduch, J. and Schneider, R., 2017. The financial diaries. 
Princeton University Press.
    \20\ Tach, L., and Halpern-Meekin, S. (2014). Tax code knowledge 
and behavioral responses among EITC recipients: Policy insights from 
qualitative data. Journal of Policy Analysis & Management 33: 413-439.

    The Chairwoman. Thank you so much, Dr. Hardy, for your 
opening statement.
    We will now move on to Dr. Gourrier. Please unmute and 
begin with your opening statement when you are ready.

         STATEMENT OF AL G. GOURRIER, Ph.D., ASSISTANT 
         PROFESSOR, SCHOOL OF PUBLIC AND INTERNATIONAL 
  AFFAIRS, UNIVERSITY OF BALTIMORE; FACULTY FELLOW, SCHAEFER 
            CENTER FOR PUBLIC POLICY, BALTIMORE, MD

    Dr. Gourrier. Good afternoon, ladies and gentlemen of the 
Committee. In 2018, in my capacity as professor at the 
university and faculty fellow with the Schaefer Center, we 
began to explore existing research in terms of the benefit 
cliff and its effects on working class population across the 
country.
    At that point, a number of other states had recently 
produced reports highlighting the challenges of the benefit 
cliff on their residents as well as addressing some of the 
measures that prospective state legislatures were exploring.
    We commenced on a 2 year research project to better 
understand the impact of the cliff effects and the benefit 
cliff phenomenon on Maryland residents, using the basis of the 
United Way's universally accepted biannually produced ALICE 
report, which stands for Asset Limited, Income Constrained, 
Employed, which highlighted some of the overall economic 
challenges and socioeconomic conditions of working class 
families throughout the state.
    Within the ALICE report, we were able to identify the 
standards of a household survival budget, which establishes a 
minimum basic need, budget adjusted, both geographically and 
with inflation.
    From there, we were able to create a three-family static 
model consisting of a single individual household, a single 
parent with two children, and a two-parent, two-children 
household. We used an inventory of traditional state-supported 
social service programs, of which SNAP has the largest share of 
participation among the states' social programs.
    The results of our study indicate that two-parent 
households are penalized by the benefit cliff even if they 
receive housing assistance, which is oftentimes unlikely, and 
the maximum health insurance tax credit.
    Two-parent families with one person working full time at 
the minimum wage do not have enough resources to cover their 
basic survival budget expenses. When both parents work minimum 
wage jobs, the two-adult, two-children household is only 
marginally better off.
    Although the household earns an extra income when the 
second adult works full time, the family only experiences a 
marginal increase in net resources, because as the earned 
income increases the eligibility for benefits such as SNAP 
decreases.
    However, our two-parent families were not the only group 
negatively affected by the benefit cliff. Even with recent 
increases in the minimum wage from $10.10 to $11 in Maryland as 
of January 2020, single adults and single parents with two 
children could not meet their basic survival budget needs if 
they received housing assistance and health insurance tax 
credits.
    In analyzing our three constructed family types, we found 
major disincentives built into the social service structures 
which prevent the pursuit of upward mobility through work for a 
large number of American families.
    The challenges presented by cliff effects and the lack of 
appropriate and/or accommodating eligibility requirements 
without modifications proved to serve as a disadvantage for 
many working families at or near the Federal poverty line.
    In Maryland, SNAP provides benefits to more than 884,000 
residents, or approximately 15 percent of the state population. 
At the time of our study, one in three working households in 
the state could not afford basic household expenses. Minimum 
wage jobs, even combined with government assistance such as 
SNAP, are often insufficient to meet their basic needs.
    Female-headed households are overrepresented among the 
states' impoverished population. The largest share of 
households with incomes below the Federal poverty line are 
African Americans, at 43 percent, who only make up 30 percent 
of the state's population but make up 52 percent of SNAP 
participants and are especially susceptible to the benefit 
cliff, given their disproportionate representation.
    Over the last year since the production of our study, the 
country and our economy have experienced an unprecedented level 
of social and economic challenges. The surge in unemployment 
insurance claims, the demand for small businesses, the 
disruption in our education system and the social impact on 
struggling families is unparalleled.
    However, our pre-pandemic data represents problematic 
results and a longstanding impact created by the benefit cliff 
phenomenon. Although the current economic data represents a 
very unique paradox as a result of short-term macro-
governmental infusion with a predetermined expiration, it is my 
opinion that post pandemic, the benefit cliff challenges 
present pre-pandemic are still relevant and will continue to 
remain a consistent challenge among American working class 
families.
    I thank you for the opportunity to speak with you this 
afternoon to present our data, and I look forward to your 
questions.
    [The prepared statement of Dr. Gourrier follows:]

   Prepared Statement of Al G. Gourrier, Ph.D., Assistant Professor, 
 School of Public and International Affairs, University of Baltimore; 
    Faculty Fellow, Schaefer Center for Public Policy, Baltimore, MD
    Good afternoon, ladies and gentlemen of the Committee. My name is 
Al Gourrier and I am an Assistant Professor of Public Finance at the 
University of Baltimore and I am a Faculty Fellow with the Schaefer 
Center for Public Policy in Baltimore. In 2018, in my capacity as 
Professor at the University and Faculty Fellow with the Schaefer Center 
we began to the explore existing research in terms of the benefit cliff 
and its effects on the working-class population across the country. At 
that point, a number of other states, such as Washington, Ohio, 
Vermont, Massachusetts, and New Jersey to name a few, had recently 
produced reports highlighting the challenges of the benefit cliff on 
their residents, as well as addressing some of the measures their 
perspective state legislatures were exploring to address the problem.
    We commenced on a 2 year research project to better understand the 
impact of cliff effects and the Benefit Cliff phenomenon on Maryland 
residents. At the time, Maryland's Governor Larry Hogan's Two-
Generation (2Gen) Family Economic Security Commission and Pilot 
Programs, which was charged with the responsibility of exploring 
multigenerational poverty, and designed to improve the economic well-
being of Maryland Families, was producing its final report that set 
some of the ground work for the need of a more comprehensive benefit 
cliff study. Using the basis of the United Way's universally accepted 
and highly respected biennial produced ALICE Report, which stands for 
Asset Limited Income Constrained Employed, highlighted some of the 
overall economic challenges and socioeconomic conditions of working 
family throughout the state. Within the ALICE Report we were able to 
identify a standard Household Survival Budget, which establishes a 
minimal basic needs budget adjusted both geographically and with 
inflation. From there we were able to create a three-family static 
model consisting of a single individual household, a single parent with 
two children household, and a two-parent with two children household. 
We used an inventory of the traditional state supported social-service 
programs of which the [SNAP] benefit has the largest share of 
participation among the states social programs.
    The results of our study indicate that two-parent households are 
penalized by the benefit cliff--even if they received housing 
assistance (which is oftentimes unlikely) and the maximum health 
insurance tax credit. Two-parent families with one-person working full 
time at the minimum wage do not have enough resources to cover their 
basic survival budget expenses.
    When both parents work minimum wage jobs, the two-adult two-
children household is only marginally better off. Although the 
household earns an extra income when the second adult works full-time, 
the family only experiences a marginal increase in net resources 
because as the earned income increases, the eligibility for benefits 
such as SNAP decreases.
    However, our two-parent families were not the only group negatively 
impacted by the benefit cliff. Even with recent increases in the 
minimum wage from $10.10 to $11.00 in Maryland in January of 2020, 
single adults (often referred to as ABAWD) and single parents with two-
children could only meet their basic survival budget needs if the 
received housing assistance and health insurance tax credits.
    In analyzing our three constructed family types, we found major 
disincentives built into the social service structures as they 
currently exist, which prevent the pursuit of upward mobility through 
work for a large number of American families. The challenges presented 
by the cliff effect and the lack of appropriate and/or accommodating 
eligibility requirements, can prove to serve as a disincentive to many 
working families at or near the Federal Poverty Line.
    In our state, the Supplemental Nutrition Assistance Program (SNAP) 
provides benefits to more that 884,000 residents or 14.7% of the state 
population in 2018. At the time of our study, more than one in three 
working households in the state could not afford basic household 
expenses. Minimum wage jobs, even when combined with government 
assistance such as SNAP are often insufficient to meet their basic 
survival needs. Female-headed household are over-represented among the 
state's impoverished. The largest share of households with incomes 
below the Federal Poverty Line are African Americans at 43%, who only 
make up 30% of the state's population, and make up 52% of SNAP 
participants, are especially susceptible to the benefit cliff given 
their disproportionate representation.
    Over the last year, since the production of our study, the country 
and our economy have experienced an unprecedented level of social and 
economic challenges. The surge in unemployment insurance claims, the 
demand on small businesses, the disruption to our education system and 
the social impact on struggling families is unparalleled. However, our 
pre-pandemic data represents problematic results and the long-standing 
impact created by the by the benefit cliff phenomenon. Although, the 
current economic data represents a very unique paradox as result of the 
short-term macro-governmental infusion with a predetermined expiration. 
It is my opinion that post-pandemic, the Benefit Cliff challenges 
present pre-pandemic will still remain consistent among working class 
families.
Benefit Cliff Phenomenon
    The benefit cliff mostly impacts individuals and households at or 
near the poverty level who are eligible for--but may not be receiving--
multiple government programs. Recent research indicates that families 
with children often require an income up to 3\1/2\ times the Federal 
Poverty Level in order to adequately cover the basic needs and living 
expenses for a family. These households are often called the working 
poor, referring to the fact that people in these households have jobs 
but still remain at or near the poverty level. They are also known as 
ALICE' households or families--they are Asset Limited, 
Income Constrained, Employed. As discussed further below, ALICE is 
based on cost of living in a specific jurisdiction, and households with 
incomes under an ALICE Household Survival Budget are working but unable 
to meet their basic needs.
    For these individuals and families, government programs can be 
essential for daily survival. However, many of these programs are 
designed so that additional earnings, usually in the form of wages or 
salaries, result in a decrease in benefits. This loss of benefits can 
lead to individuals making decisions that are not always best for the 
family or society, resulting in the Benefit Cliff phenomenon.
Principal Analytical Findings

   In Maryland, 9.4 percent of the population lives on incomes 
        below 100 percent of the Federal Poverty Level (FPL) and 
        another 12.3 percent have incomes below 125 percent of the FPL.

   While a majority of the state's overall population is White, 
        the largest share of those with incomes below FPL are African 
        American. There are an estimated 236,497 state residents who 
        are Black or African American with incomes below FPL.

   Female-headed households are over-represented among 
        impoverished and ALICE households.

   Two-parent households are penalized by the benefit cliff--
        even if they receive housing assistance (unlikely) and the 
        maximum health insurance tax credit, two-parent families with 
        one-person working full time at the minimum wage do not have 
        enough resources to cover their basic survival budget expenses.

   Even with the increase in the minimum wage to $11.00 per 
        hour on January 1, 2020, single adults and single parents with 
        two children could only meet their basic survival budget needs 
        if they received housing assistance and health insurance tax 
        credits.

   When both parents work minimum wage jobs, the two-adult, 
        two-child household is only marginally better off. The 
        household earns an extra $1,760 when the second adult works 
        full-time, but the family actually only experiences an increase 
        in net resources of $320. This is because as earned income 
        increases, eligibility for benefits--specifically for food 
        stamps and medical assistance for the adults--decreases.

Al G. Gourrier, Ph.D., MBA,
University of Baltimore.

    The Chairwoman. Thank you so much, Dr. Gourrier, for that 
testimony.
    I will now move to Ms. Brown for your testimony. When you 
are ready, please unmute and begin.

  STATEMENT OF TIKKI BROWN, ASSISTANT COMMISSIONER, MINNESOTA 
  DEPARTMENT OF HUMAN SERVICES, CHILDREN AND FAMILY SERVICES 
                ADMINISTRATION, MINNEAPOLIS, MN

    Ms. Brown. Thank you for the opportunity to share 
Minnesota's experience. I first want to share with you the 
words of Minnesotans who have turned to SNAP. In the words of 
Zoe, ``I get up every morning and provide for my daughter . . . 
the more that you work, the more everything goes up . . . if we 
try to make this amount of money to pay the rent that you just 
boosted up; why is it that we lose [food] stamps because of 
it?''
    Another parent, JoJo, echoed that, saying, ``it is like the 
government handicaps you so [you're] stuck in that part-time 
job.''
    Their words underscore some important points. First, Zoe 
and JoJo work. That makes them very typical working-age SNAP 
recipients. Almost 75 percent of the nondisabled working-age 
adults turning to SNAP in Minnesota are employed or just 
recently lost a job.
    The majority of workers who rely on SNAP to supplement low 
wages or to get them through a spell of unemployment are 
concentrated in four industries: Retail, hotel and restaurants, 
healthcare and social services, and temporary agencies. Workers 
in these occupations are also the least likely to receive 
unemployment benefits. In fact, even though low-wage workers 
are 2\1/2\ times more likely to lose a job, they are only half 
as likely as higher paid workers to receive unemployment 
compensation.
    The most important point that JoJo and Zoe make, work does 
not provide enough money to meet needs as basic as having 
enough food to feed their families.
    Three important changes could make SNAP more effective at 
increasing the number of people who sustain work and at making 
it more possible for those workers to realize economic 
stability. The power of these three changes is in their 
combination, not as a menu: Number one, increase the earned 
income disregard; number two, raise the gross income limit; and 
number three, increase SNAP benefits. I am going to walk you 
through a PowerPoint slide to illustrate the impact of these 
combined policies and, hopefully, that should pop right up.*
---------------------------------------------------------------------------
    * Editor's note: the PowerPoint presentation referred to is an 
animation of the graph entitled, SNAP allotments by earned income. The 
animation is retained in Committee file.
---------------------------------------------------------------------------
    All right. This sample is for a family of three. In the 
graph, the SNAP household benefit amount is in the vertical 
axis on the left, and the household's monthly earnings are in 
the horizontal axis on the bottom.
    Next. The first line shows what happens in Minnesota as 
earnings increase under the current SNAP household benefit 
amount without any COVID-19 enhancements and includes 
Minnesota's current 20 percent earnings disregard and our 165 
gross income test.
    Next. The second line shows a 15 percent increase to SNAP 
benefits. Next, please. With the 165 percent gross income test 
that Minnesota has adopted under broad-based categorical 
eligibility and SNAP's 20 percent earned income disregard. The 
15 percent increase to benefits has pushed the cliff out 
further, but the 20 percent earned income disregard has still 
allowed a significant reduction in SNAP benefits while the 
family is still below the poverty line.
    Next. The third line shows how the cliff would move further 
out if SNAP no longer used the 15 percent increase--that is the 
COVID benefit--but used the same earned income disregard that 
is applied in Minnesota's TANF program. Minnesota took this 
disregard formula from the Federal Supplemental Security Income 
Program. That sort of uniformity across Federal programs would 
make sense. It pushes the cliff out further, but it is still a 
sharp cliff.
    Next. The fourth line shows the Social Security income 
disregard, but also applies the 200 percent gross income limit, 
the maximum allowed under broad-based categorical eligibility. 
Now the cliff starts to soften to a slope.
    Next. The fifth line shows what it would mean to continue 
with the SNAP 15 percent increase, coupled with the Social 
Security income disregard. Without the higher gross income 
limit, the cliff is still steep.
    Next. This final line shows the full combination of the 15 
percent increase in SNAP benefits, the higher earned income 
disregard, and the 200 percent gross income limit. We see the 
greatest graduation in the cliff with this combination.
    End PowerPoint, please.
    There is one other critically important cliff to worry 
about. That is what happens to the SNAP benefits of someone who 
arrives to us in severe financial crisis, relying not only on 
SNAP but also on cash assistance. SNAP helps us buy groceries. 
Cash assistance pays the rent.
    Both are necessary to get out of the crisis, but SNAP 
counts every dollar of cash assistance against the food 
benefits. SNAP should disregard cash assistance payments until 
a household is above the poverty line. Broad-based categorical 
eligibility has allowed states to demonstrate improved SNAP 
policies, such as implementing the higher gross income limits 
and waiving the asset limits.
    The success of these efforts should be coupled with 
federally initiated improvements, including increased benefits, 
a more effective earned income disregard, and not offsetting 
benefits against below poverty level cash benefits. Thank you 
very much.
    [The prepared statement of Ms. Brown follows:]

 Prepared Statement of Tikki Brown, Assistant Commissioner, Minnesota 
      Department of Human Services, Children and Family Services 
                    Administration, Minneapolis, MN
    Thank you for the opportunity to share Minnesota's experience with 
SNAP.
    I first want to share with you the words of Minnesotans who have 
turned to SNAP. They were among a number of people who spoke with 
researchers from the Urban Institute in 2019 to help our state better 
understand the intersection of low-wage work and public assistance.\1\
---------------------------------------------------------------------------
    \1\ The Intersection of Low-Wage work and Public Assistance: 
Workers' Experiences in Minnesota, Amelia Coffey, et. al., The Urban 
Institute, July 2019.
---------------------------------------------------------------------------
    In the words of Zoe:

          I get up every morning and provide for my daughter . . . I 
        need to pay my rent and I need to pay for child care, but the 
        more that you do work, the more everything goes up like child 
        care and your rent and then on top of that diapers, etc. . . . 
        You lose your [food] stamps and stuff . . . so it just doesn't 
        add up to me . . . if we try to make this amount of money to 
        pay the rent that you just boosted up; why is it that we lose 
        [food] stamps because of it?

    Another parent, JoJo, echoed that, saying:

          I want to keep my child care, but I also want to make more 
        money, but I can't make too much because then they take away 
        food stamps and assistance and things like that. So, it's like 
        the government handicaps you so [you're] stuck in that part-
        time job. And if I'm working and working full-time, then I'm 
        not making enough and I kind of need that extra help.

    Their words underscore some important points.
    First--Zoe and JoJo work. That makes them very typical working-age 
SNAP recipients. In an average month, prior to COVID-19, half of the 
households with non-disabled working-age adults had earnings from 
work.\2\ In addition, our data shows that an average of 55% of the 
adults who enroll in SNAP have a job or have lost a job in the same 
quarter they are applying, and another 23% were employed in the quarter 
before they applied.\3\ So, almost 75% of the non-disabled working-age 
adults turning to SNAP in Minnesota are employed or just recently lost 
a job.
---------------------------------------------------------------------------
    \2\ Characteristics of People and Cases on the Supplemental 
Nutrition Assistance Program, Minnesota Department of Human Services, 
December 2018.
    \3\ Unpublished analysis by The Minnesota Department of Employment 
and Economic Development looking at more than 111,000 working age adult 
enrollees in 2003, 2005, 2003, 2007 and 2009--years chosen because of 
their diversity of labor market conditions.
---------------------------------------------------------------------------
    The majority of workers who rely on SNAP to supplement low wages or 
get them through a spell of unemployment are concentrated in four 
industries:

   Retail.

   Hotel/restaurants.

   Health care/social services.

   Temporary agencies.

    These are the workers that the pandemic made clear to us are 
essential workers. They are the workers who make it possible for all of 
us to buy food and essential supplies for our families; who care for us 
when we are seriously ill, dying or too young to be on our own. But 
they are also workers caught in occupations that have high turnover, 
unpredictable and inconsistent hourly schedules, and jobs without 
benefits like paid sick leave and health insurance.
    Workers in these occupations are also the least likely to receive 
unemployment benefits. In fact, even though low-wage workers are 2\1/2\ 
times more likely to lose a job, they are only half as likely as higher 
paid workers to receive Unemployment Compensation.\4\
---------------------------------------------------------------------------
    \4\ ``Unemployment Insurance: Low Wage Workers and Part-time 
Workers Continue to Experience Low Rates of Receipt'', Report to the 
Chairman, Subcommittee on Income Security and Family Support, Committee 
on Ways and Means, House of Representatives, by Government 
Accountability Office, August 2007. http://www.gao.gov/new.items/
d071147.pdf.
---------------------------------------------------------------------------
    The second key point that lies behind JoJo's and Zoe's situation: 
They so quickly fall behind in their rent and other bills when their 
hours are reduced or they lose their jobs, because the low wages they 
earn do not allow them to build a cushion of savings.
    That is why setting asset limits for public assistance programs is 
counter-productive: They do not change caseload numbers, but they 
create significant administrative burden, taking time and focus away 
from more productive work for SNAP recipients and eligibility workers.
    Minnesota is one of 40 states that have used Broad-Based 
Categorical Eligibility to eliminate the asset test. In 2011, our 
department's analysis determined that less than 1% of the households 
applying for SNAP or already receiving SNAP were affected by 
eliminating the asset test a year earlier.\5\ This is consistent with 
2012 analysis by the Congressional Budget Office and a 2010 analysis of 
Maryland's experience,\6\ as well as other similar studies.
---------------------------------------------------------------------------
    \5\ Increased Food Support Income Limits and Elimination of the 
Asset Test: Effects on the Caseload, Minnesota Department of Human 
Services, [Evaluation] Notes, Issue 23, August 2011. DHS-4064Y-ENG 
(state.mn.us) (https://edocs.dhs.state.mn.us/lfserver/Public/DHS-4064Y-
ENG).
    \6\ Fass Hiatt, Sarah and Newcomer, Abigail (July 2010). President 
Obama's Asset Limit Proposal: Supporting Families and Promoting 
Improved Coordination. Also available at: http://www.firstfocus.net/
sites/default/files/Obama%20Asset%20Paper%20FINAL1.pdf.
---------------------------------------------------------------------------
    Those asset limits, however, create significant work for frontline 
eligibility workers. In Minnesota, county and Tribal human services 
agencies administer public assistance benefits under state supervision. 
Counties had estimated that eligibility workers had been spending an 
estimated 7-10% of their time requesting, reviewing and acting on 
documentation of assets (that almost always did not affect 
eligibility).\7\ A Government Accountability Office report in 2010 
documented reduced error rates in SNAP when states took up options, 
like eliminating asset tests, to simplify SNAP program 
administration.\8\
---------------------------------------------------------------------------
    \7\ Report on Uniform Asset Limit Requirements, Minnesota 
Department of Human Services, Children and Family Services 
Administration, Legislative Report, January 2013, http://
www.leg.state.mn.us/lrl/lrl.asp.
    \8\ Brown, Kay E. (2010). Supplemental Nutrition Assistance 
Program: Payment Errors and Trafficking Have Declined, but Challenges 
Remain. Washington, D.C.: Government Accountability Office. Also 
available at: http://www.gao.gov/assets/130/125135.pdf.
---------------------------------------------------------------------------
    The third and most important point that JoJo and Zoe make: Work 
does not provide enough money to meet needs as basic as having enough 
food to feed their families.
    Three important changes could make SNAP more effective at 
increasing the number of people who sustain work, and at making it more 
possible for those workers to realize economic stability. The power of 
these three changes is in their combination--not as a menu of options.

  1.  Increase the earned income disregard.

  2.  Raise the gross income limit.

  3.  Increase SNAP benefits.

    I am going to walk you through two PowerPoint slides to illustrate 
the impact of these combined policies.
    This sample is for a family of three paying $800 a month in rent--a 
hard-to-find bargain--and the standard deduction allowed for heating 
and air conditioning costs. SNAP looks at income and it looks at costs 
for shelter, heat and air conditioning and some other items. Any actual 
case might have different numbers that differ slightly.
SNAP allotments by earned income

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    In this graph the SNAP household benefit amount is in the vertical 
axis on the left, and the household's monthly earnings are in the 
horizontal axis on the bottom.
    This first (light blue) line shows what happens as earnings 
increase under the current SNAP household benefit amounts (without any 
COVID-19 enhancements) and SNAP's current 20% earnings disregard.
    The second ([orange]) line shows the 15% increase to SNAP benefits 
with the 165% gross income test that Minnesota has adopted under broad-
based categorical eligibility and SNAP's 20% earned income disregard. 
The 15% increase to benefits has pushed the cliff out further, but the 
20% earned income disregard has still allowed a significant reduction 
in SNAP benefits while the family is still below the poverty line.
    The third (bright blue) line shows how the cliff would move further 
out if SNAP no longer used the 15% increased but used the same earned 
income disregard that's applied in Minnesota's TANF program. Minnesota 
took this disregard formula from the Federal Supplemental Security 
Income program. It disregards the first $65 earned in a month, and then 
50% of the remaining income that month. That sort of uniformity across 
Federal programs would make sense. It pushes the cliff out further, but 
it is still a pretty sharp cliff.
    The fourth (navy blue) line shows using the SSI disregard but also 
applies the 200% gross income limit, the maximum allowed under Broad-
Based Categorical Eligibility. Now the cliff starts to soften to a 
slope.
    The fifth ([orange]/brown) line shows what it would mean to 
continue with the SNAP 15% increase coupled with the SSI disregard. 
Without the higher gross income limit, the cliff is still steep.
    The final (dark brown) line shows the full combination: the 15% 
increase in SNAP benefits, the higher earned income disregard and the 
200% gross income limit. We see the greatest graduation in the cliff 
with this combination and therefore get the strongest impact from the 
increased earned income disregard.
    In the second slide, we can see where the household income amounts 
come close to the Federal poverty line, the 130% of poverty that is the 
current cut off, the 165% gross income limit Minnesota uses and the 
200% gross income limit that Broad-Based Categorical Eligibility 
allows.
SNAP allotments by earned income

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    There is another critically important cliff to worry about: That is 
what happens to the SNAP benefits of someone who arrives to us in 
severe financial crisis, relying not only on SNAP but also on cash 
assistance. Work is not possible until the financial crisis is 
relieved. People have to secure their housing, and have the lights 
turned on so that their time and energy can be spent on work. But SNAP 
counts every dollar of cash assistance against the food benefits.
    SNAP helps buy groceries. Cash assistance pays the rent. Both are 
necessary to get out of crisis. SNAP should disregard cash assistance 
payments until a household is above the poverty line. The fact that it 
does not has played an important role in cash assistance benefits 
stagnating for the last 3 decades.
    Broad-based categorical eligibility has allowed states to 
demonstrate improved SNAP policies, such as higher gross income limits 
and waiving asset limits. The success of those efforts should be 
coupled with federally initiated improvements, including increased 
benefits, a more effective earned income disregard and not offsetting 
food benefits against below poverty-level cash benefits.

    The Chairwoman. Thank you so much for your testimony, Ms. 
Brown.
    And I would now like to welcome our fourth and final 
witness, Mr. Randolph. Thank you for being here. Welcome to the 
Committee. When you are ready, you can unmute and begin your 
opening statement.

   STATEMENT OF ERIK RANDOLPH, DIRECTOR OF RESEARCH, GEORGIA 
               CENTER FOR OPPORTUNITY, PEACHTREE 
                          CORNERS, GA

    Mr. Randolph. Madam Chair, may I share my screen at this 
time for a PowerPoint?
    The Chairwoman. Committee, can we stop the clock just until 
he figures out what he is going to do. Okay. Thank you.
    Mr. Randolph. All right, thank you.
    Thank you, Madam Chairwoman and Ranking Member Bacon, for 
your comments. I really liked your comments to begin. And also, 
I would like to thank the other witnesses--I was listening to 
what you were saying--and all the Committee Members for this 
opportunity to present testimony today.
    My name is Erik Randolph, and I am the Director of Research 
for the Georgia Center for Opportunity, GCO for short. We are a 
nonpartisan, nonprofit organization that works to remove 
barriers to ensure that every person, no matter their race, 
past mistakes, or circumstances of their birth, have access to 
quality education, fulfilling work, and a healthy family life.
    Our work in the local communities--sorry, I have to keep up 
with my slides. Our work in the local communities and with 
other nonprofit organizations who serve underserved communities 
teach us how to define our work and our research.
    One such area where we have heard from clients, other 
nonprofits, and employers is that of the unintended 
consequences of safety net services. These include stories 
about honest, hardworking individuals giving up higher pay in 
fear of losing benefits, known, of course, as the benefit 
cliff.
    We, like many of you on the Subcommittee, understand the 
need and value of safety net services, and, of course, SNAP is 
among the most important ones, if not the most important one. 
Many people whom we work with each day rely on these services 
to meet their nutritional needs and to help make ends meet. We 
would like to make sure that such services help as intended and 
do not hinder a person's effort to improve their situation so 
they can have better opportunities to thrive and flourish.
    That is why we created and are continuously improving our 
benefits model. Our benefits model is not a statistical model. 
It is a computational model that converts program rules into 
algorithms, tells us how much a family, based on its 
characteristics, can receive in benefits from 14 major means-
tested assistance programs. These 14 programs represent 80 
percent of all Federal funding for means [inaudible]. Which 
anyone can access at benefitscliffs.org.
    Here on this slide is one scenario that shows a SNAP 
benefit cliff as well as a subsidized childcare cliff. In this 
specific scenario, a single mom with two children would need at 
least an additional 9.6 percent pay raise to overcome this SNAP 
benefit cliff.
    Safety net programs interact in unanticipated ways, which 
makes it complicated. The more safety net programs we feed into 
the model the more cliffs emerge over a range of earnings, and 
some of the cliffs can be quite severe.
    I had mentioned we have been receiving comments from 
clients, other nonprofits, and employers about benefit cliffs. 
Here is a story we feature on our website. It is of a single 
mom unable to accept a pay raise, simply because it means she 
wouldn't be able to maintain housing support for her and her 
young son.
    We believe that when the design of a program violates the 
intent of the program itself, it needs to be fixed. And we 
believe that when it interferes with the ability of persons to 
get ahead, it is dehumanizing.
    This slide gives another example. It shows the current 
circumstances with the SNAP program where a family of four 
faces a monthly loss of $782. This cliff is at least 27.5 
percent of the family's earnings.
    I have outlined in my written testimony a number of 
observations and recommendations for you to consider. I will 
now highlight two observations and two recommendations: One, I 
have outlined--one, obviously, benefits must always taper off 
consistently and gradually as income rises.
    Two, not so obviously, starting benefit values when income 
is zero that are too high make it much more difficult to find 
solutions.
    Three, you may want to consider reinforcing existing U.S. 
Code on demonstration projects to address the SNAP benefit 
cliff. Currently, GCO is collaborating with nonprofits in Texas 
and Louisiana on solutions where we could use more Federal 
flexibility, such as blending human services with workforce 
services.
    Four, consider also to reinvigorate SNAP work requirements 
to help people improve their circumstances where they will no 
longer require assistance.
    To wrap up my comments, I would like to say that solving 
benefit cliffs will not be easy, and I commend you for 
undertaking this topic today.
    We believe our research and modeling can help you 
understand benefit cliffs and marriage penalties better and, 
importantly, help you find solutions to these problems.
    I look forward to answering any questions you may have.
    [The prepared statement of Mr. Randolph follows:]

  Prepared Statement of Erik Randolph, Director of Research, Georgia 
            Center for Opportunity,\1\ Peachtree Corners, GA
---------------------------------------------------------------------------
    \1\ Opinions stated within belong to the witness and are not 
necessarily those of the Georgia Center for Opportunity
---------------------------------------------------------------------------
    Thank you for inviting me to testify today on this important topic. 
My name is Erik Randolph, and I am the Director of Research for the 
Georgia Center for Opportunity (GCO).
    Our non-partisan, nonprofit organization works to improve the lives 
of individuals and families by promoting quality education, fulfilling 
work, and healthy family life. We work directly with targeted 
populations, collaborate with other nonprofit organizations, provide 
research for public policy, and advocate for changes to improve 
people's lives, especially at the state level.
    While our focus is mainly the State of Georgia, we have been 
working with similar nonprofit organizations to help people find jobs 
with career ladders and to find common solutions to problems that all 
states face, especially regarding Federal policies that impact the 
states.
    GCO works in the community and collaborates with other nonprofit 
organizations. Our goal is to help people improve their circumstances, 
become successful in their lives, and flourish as fully-alive human 
beings. We hear from clients, other community-based nonprofits, and 
employers. Their input influences our programs and activities, 
especially on what barriers we address to help people. Benefit cliffs 
are one of the barriers we hear about all the time from clients, other 
nonprofits, and employers.
    Today is the second time I am testifying before this Subcommittee 
on this topic. This first time was on June 25, 2015, when this 
Subcommittee was known simply as the Subcommittee on Nutrition, and the 
hearing was jointly held with the Subcommittee on Human Resources of 
the Committee on Ways and Means.
An Anecdote and an Overview
    To begin, I would like to share a real story about the impact of 
benefit cliffs. We have made a video of her story that is available on 
our website.\2\
---------------------------------------------------------------------------
    \2\ https://georgiaopportunity.org/story-joyelle-got-an-education-
a-job-and-a-promotion-she-never-expected-her-success-would-mean-this/.
---------------------------------------------------------------------------
    A young woman by the name of Joyelle moved to Georgia to escape a 
physically abusive partner. While looking for work, she received 
housing benefits to help her weather the transition. While she was 
elated when she received a job offer from a state agency, she was 
devastated to learn that taking this higher paying job would cause her 
to lose her housing assistance, pushing her into homelessness once 
again.
    This anecdote is not an isolated story. We have heard many more. In 
fact, the Georgia State Legislature took testimony from business 
leaders who encountered similar situations.
    From an analytical perspective, the story makes perfect sense given 
the manner by which our social safety net system has grown over the 
decades to include a vast web of more than 80 programs designed to help 
people struggling to make ends meet.
    Without a doubt, the safety net system has helped and continues to 
help millions of people during times of need, as the programs were 
intended. Unfortunately, the very same system has the unintended 
consequences, known as benefit cliffs. Quite simply, a benefit cliff is 
when gains in earnings do not offset the loss in net income and 
benefits. When encountered, the benefit cliffs discourage and can 
prevent individuals from leaving the system--by punishing them for 
earning more money or deciding to marry, essentially imposing on them a 
life of lower income and making the climb up the income ladder to a 
higher standard of living more difficult.
    Depending on the circumstances and where they are along the 
earnings ladder, many recipients of safety-net programs may not 
encounter a cliff. However, others do, and the cliffs can be severe. As 
a matter of legislative and regulatory design, the system itself allows 
for benefit cliffs, which can be encountered at several places along 
the earnings ladder. When they do happen, the severity and extent of 
these benefit cliffs vary from mild to severe, based on many factors, 
such as family size, where they are on the earnings scale, which 
programs they qualify for and receive, and even geography. When they 
are mild, they can be overcome as individuals climb up the income 
ladder. When severe, they can be a hard and sobering stoppage to 
personal financial progress.
    In general, the more programs a person qualifies for, the greater 
the likelihood they will encounter a cliff as they work up the earnings 
ladder.
    On the other hand, marriage penalties are more pervasive and can be 
more severe.
    Today, in response to the parameters of this hearing, I will focus 
my comments on the role of the Supplemental Nutrition Assistance 
Program (SNAP) in regard to benefit cliffs and marriage penalties, but 
keep in mind there is much interplay among the various programs that 
can alter what SNAP benefits a household will receive. In fact, SNAP is 
one of the more complicated programs to understand when it comes to 
benefit cliffs.
What is the Computational Safety-Net Program Benefits Cliff Model?
    The GCO Safety-Net Program Benefits Cliff Model is a computational 
model that allows policy analysts and others to understand and 
visualize what benefits a family can receive from fourteen major 
safety-net programs and how earned income can impact benefit levels.
    It is not a statistical model. Instead, it is a computational model 
that converts statutory and regulatory tax and safety net program rules 
into algorithms to tell us exactly what programs and how much in 
benefits a family can receive based on inputted characteristics of the 
family. It gives those results over a range of earnings that enable us 
to see where benefit cliffs might and do occur.
Geographical and Family Structure Inputs
    The current model uses the following inputs:

   State and county.

   ``Mom'': age, pregnancy status, marital status.

   ``Dad'' or husband (when present): age, marital status.

   Children (up to four children can be modeled): age, sex, 
        disability status, in school, childcare setting, and childcare 
        rating category.

    The eight states and their counties--totaling 888--currently 
modeled are:

   Alabama.

   Florida.

   Georgia.

   Louisiana.

   Mississippi.

   North Carolina.

   Tennessee.

   Texas.
Tax and Welfare Programs Modeled
    Based on our calculation, the modeled programs account for 95% of 
all Federal spending in the assistance areas of cash, nutrition, 
health, childcare subsidies, and rental housing, or 80% of all Federal 
welfare spending. Education assistance programs are not included in the 
model.
    Nine Federal agencies oversee the modeled programs, but four of 
those agencies are under the U.S. Department of Health and Human 
Services. The number of state agencies varies by state. In Georgia, it 
involves seven state agencies plus public housing authorities and 
schools.
    The following taxes and programs are modeled:

   FICA payroll taxes (social security & Medicare).

   Federal income taxes (other than refundable tax credits).

   state income taxes, Earned Income Tax Credit.

   state matches to the Earned Income Tax Credit.

   Additional Child Tax Credit (i.e., the refundable portion of 
        the Child Tax Credit).

   Temporary Assistance for Needy Families (TANF) cash grants.

   Supplemental Security Income (SSI).

   Supplemental Nutrition Assistance Program (SNAP, a.k.a. food 
        stamps).

   National School Lunch Program.

   School Breakfast Program.

   Special Supplemental Nutrition Program of the Women, 
        Infants, and Children (WIC) program.

   Medicaid.

   Children's Health Insurance Program.

   Premium Tax Credit of the Affordable Care Act.

   Childcare program subsidies.

   Section 8 rental assistance.
Range of Earnings Modeled
    For each inputted family structure, the model calculates the taxes 
and benefits for 201 earning levels, starting with no earnings and 
increasing in annual increments of $500 up to $100,000. An annual $500 
increase is roughly a 24 increase in an hourly wage
Output Matrix and Flexibility for Analyst
    The output of the model is flexible. The model gives a matrix of 
net earnings and benefits for the inputted family structure for the 
range of earnings from $0 to $100,000 for each program. The model also 
simplifies the output by categorizing the assistance programs, such as 
combining all the nutrition assistance programs into a single category. 
The results can be viewed as charts or tables.
    Additionally, the model allows researchers to view the outputs by 
any combination of the tax and benefit programs. For example, the user 
might want to see the impact of just the food stamp program, or the 
food stamp program in combination with Medicaid. There are 17 
categories currently available that the user can toggle on or off. The 
total combinations that can be studied calculate to 131,017.
Structure of the Model
    The model stores each program's factors and coefficients separately 
in structured tables as databases. For example, the phase-in thresholds 
for the Earned Income Tax Credits, which are revised every year, are 
stored in a database table. In almost every case, the coefficients and 
factors are precisely the same ones used by the agencies administering 
the programs. In a few cases when the coefficients are not yet 
available, they are extrapolated based on historical values using 
standard statistical or other widely acceptable methods.
    The calculation of eligibility and benefit amounts are performed 
separately from the storage of the database values. The calculation 
engine pulls up the proper coefficients and factors from the databases 
for each program based on the inputs, e.g., the characteristics of 
family structure, running them through an algorithm to determine 
eligibility and, if eligible, the precise benefit amount.
Defaults
    In some cases, the model must use default values for the 
calculation to be completed. For example, the food stamp rules allow 
for an excess shelter deduction in determining the amount of the food 
stamp benefit. The model assumes the fair market rent as published by 
the U.S. Department of Housing and Urban Affairs. The size of the 
apartment is based on established rules for the Section 8 rental 
assistance program. In a few cases, the default value can be 
overridden. For example, it is assumed that a child starts school at 
age 5. However, this default can be overridden by inputting a different 
value.
Current Enhancements and Upgrades
    Currently, GCO is upgrading the model to enhance performance and 
flexibility. The model will allow more flexibility with the family 
structure, such as adding a grandparent, a benefits calculator to 
compare a precise wage with another wage, the outputs to include time 
frames other than calendar year, and greater flexibility to override 
default values. For example, it will allow inputting actual rental 
costs as opposed to assuming the fair market rent for SNAP. 
Additionally, we will be adding more states to the eight states we 
currently have modeled. In fact, we are halfway through adding South 
Carolina.
Website and Workbook
    Currently, the model is available on our website https://
www.benefitscliffs.
org/, which has 2020 data. In about 1 month, the website will be 
updated with 2021 data. Anyone can access this website to explore or 
perform analysis. The website allows users to download the data into 
CSV files for further analysis and to create their own tables and 
charts.
    We also have made an Excel workbook available for academic 
researchers who want greater granularity and analytical flexibility, 
provided they sign a non-disclosure agreement.
Collaboration with Researchers
    Currently, we are aware of two academic researchers using our model 
for analysis. We are actively looking for ways to collaborate with 
others.
Observations on General Causes of the Cliffs
    In general, below are some general causes of benefit cliffs. Some 
of these are technical.
1. Hard Cut-offs that Do Not Taper--Primary Cause
    The most common cause of benefit cliffs is when the benefit program 
fails to adequately taper benefit levels before the recipient is cut 
off from the program. This causes the situation where the loss in 
benefits exceeds any reasonable increase in earnings.
2. Stacking of Benefits One on Top of the Other--Primary Cause
    Sometimes the amount of the loss from a program is not sufficient 
to disincentivize a recipient from accepting higher earnings. However, 
when programs are stacked upon each other and the recipients stand to 
lose benefits from more than one program, this combination can cause a 
cliff.
3. Benefit Levels that Start Too High--Secondary Cause
    When benefit levels start too high, it can cause cliffs in two 
ways. First, high levels of benefits make it difficult to taper the 
program adequately without breaking the bank. The required slope for 
these programs to properly taper would reach into high income brackets. 
This is called a secondary cause because it enables the primary cause 
of hard cut-offs that do not taper.
    Second, when benefit levels start high, it exacerbates the stacking 
of benefits problem.
4. Exceptions to Eligibility Rules, e.g., Income Disregards--Secondary 
        Cause
    When too many exceptions are made with income disregards, it can 
allow recipients to receive higher benefits that can create a hard cut 
off.
5. Unfavorable Factors for Married Couples
    Program factors, especially in the U.S. Tax Code, treat married 
couples differently than non-married couples in a way that can skew the 
benefits in favor of non-married couples.
6. Program Disincentives to be Married
    Conversely, programs can disincentivize couples from marrying 
because they do the opposite of the U.S. Tax Code by not accounting for 
marriage adequately.
SNAP Benefit Cliffs
Pre-Pandemic Program
    Prior to the [COVID]-19 pandemic, the question of whether SNAP had 
benefit cliffs depended on three basic factors.

   If the household had no member who was disabled.

   If the household could claim a deduction for housing.

   If the household had childcare expenditures.

    For example, if there is a disabled member in the household, there 
is no SNAP benefit cliff due to earning more money. The reason is that 
the gross income limit does not apply, allowing the household income to 
taper off slowly without hitting a hard cut-off limit.
    However, for all other households, there can be a cliff, but not 
always.
    If the non-disabled household receives Section 8 housing and 
childcare services, then the SNAP benefit cliff is negligible and 
easily made up with extra earnings. See chart 1 for an illustration.
Chart 1
Pre-Pandemic Stacked Earnings and Benefits in Georgia
Single Mom with an 8 Year Old Girl and a 2 Year Old Boy

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    However, if the person does not receive Section 8 Housing and must 
rent their own apartment assuming the fair market rent per the U.S. 
Department of Housing and Development, then there will be a cliff. In 
the scenario used in Chart 2, the monthly loss would be $219, requiring 
at least a pay raise of 9.6% to make up for the loss.
    Most single moms do not have Section 8 housing vouchers. Therefore, 
this scenario is more likely.
    This benefit cliff can disincentivize someone, but it is not as 
formidable as the benefit cliffs due to Medicaid or subsidized 
childcare. However, it is unnecessary for the SNAP program also to 
create such a cliff.
    However, if we add the National School Lunch Program into the mix, 
her 8 year old in this scenario would no longer qualify for a free 
school lunch but would qualify for a reduced-price lunch, compounding 
the SNAP benefit cliff.
Chart 2
Pre-Pandemic Stacked Earnings and Benefits in Georgia
Single Mom with an 8 Year Old Girl and a 2 Year Old Boy


    Finally, if the single mom pays for childcare, then the benefit 
cliff could double. However, it is not clear how often this would 
happen due to the high cost of childcare.
P-SNAP Waivers
    The Families First Coronavirus Response Act (P.L. 116-127) has a 
provision allowing states to request waivers to give recipients the 
maximum allotment for SNAP. Extended by the Continuing Appropriations 
Act for 2021 (P.L. 116-159), the pandemic-SNAP waiver--P-SNAP for 
short--means all households of the same size receive the exact same 
food stamp allotment.
    For example, an eligible single mom with one child who lives in one 
of the 48 contiguous states or the District of Columbia currently 
receives $430 a month in food stamp benefits. It does not matter if the 
single mom has no income or makes $22,400 annually, which is below the 
gross income limit. She will receive $430 each month.
    Clearly, the single mom with $22,400 annual income is benefiting 
more than the single mom with no income. It seems unfair to the much 
poorer family that the family earning much greater income is drawing 
the same benefits.
    We can do the same comparison for the other families, such as the 
eligible four-person household who currently receives $782 each month 
no matter if the household has no income or $34,000 in income.
    At some point, families just under the gross income limit will have 
opportunities to earn more money, and they will face the potential 
cliff. Even where state agencies are reluctant to terminate benefits 
because the Food and Nutrition Service waived the states' agencies 
responsibility to do so under pandemic rules, the decision is 
essentially the same. Accepting the opportunity will eventually cause a 
significant loss of benefits.
    For example, consider the size of the potential benefit cliff in 
Chart 3. A family of four just under the income threshold is getting 
$782 a month, which equals $9,384 on an annual basis. The breadwinner 
would need to receive a pay raise of more than 27.5% to avoid a SNAP 
benefit cliff.
Chart 3
Four Person Household Monthly Food Stamp Benefit

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Marriage Penalties
    We developed a computational model to test for marriage penalties. 
Overall, the tax and welfare system has severe marriage penalties, and 
they were far worse than we expected. The fundamental rule is that the 
more safety net programs a person receives, the greater the extent and 
more severe are the marriage penalties.
    We did not test specifically for the SNAP by itself, but we 
included SNAP in with safety net programs commonly received by SNAP 
recipients, which include refundable tax credits and the school lunch 
and breakfast program.
    Chart 4 was produced by our computational model. It is a three 
dimensional chart using 2016 data that shows the combination of those 
basic benefits with SNAP on a matrix of earning levels of a mom and a 
dad with two children. The areas in red show marriage penalties, and 
the areas in blue are marriage bonuses.
Chart 4
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    Absent taxes and this small set of safety-net programs, the chart 
would be mostly blue as shown in Chart 5. In other words, there is 
naturally a financial incentive for marriage, which is undermined by 
tax and safety net programs.
Chart 5
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    Although we did not isolate the SNAP program when we ran the 
analysis, we do know that the structure of the maximum allotment tables 
allows for a penalty. Table 1 gives the maximum monthly allotments 
along with the marginal benefit by adding each person to the household.
    With the exception of the sixth person, note that as the household 
size expands, the marginal benefit decreases. The first person in the 
household is worth an allotment of $234 per month, the second $196, the 
third person $186, and so on.
    This provides a disincentive for marriage that adds to the effect 
we see in Chart 4. A married couple with two children has a maximum 
allotment of $782. However, the couple is incentivized to be unmarried 
and claim separate SNAP households where their allotment would be $850.
    While this amount by itself may not be significant enough to 
disincentivize marriage, in combination with the many other 
disincentives in the tax and welfare system, it adds to the problem. 
The goal should be to make it neutral or even incentivize marriage.
    Although this is an unrelated issue, note that the marginal benefit 
for the sixth person in the household increases to $185 instead of 
decreasing. This is clearly a mathematical error, and it is being 
carried over year to year, that should be corrected.

                                 Table 1
------------------------------------------------------------------------
                              Maximum Monthly      Marginal Benefit Per
     Household size              Allotment           Additional Member
------------------------------------------------------------------------
                1                      $234                    $234
                2                      $430                    $196
                3                      $616                    $186
                4                      $782                    $166
                5                      $929                    $147
                6                    $1,114                    $185
------------------------------------------------------------------------

Specific SNAP Recommendations and Conclusions
    As a matter of general policy, I recommend adopting the goal of 
making sure SNAP does not contribute to benefit cliffs or marriage 
penalties--either as a standalone program or in combination with other 
programs. This goal recognizes that safety net programs do not operate 
in isolation but interact with each other where the combination of 
these programs can create more severe disincentives and penalties, 
although some individual programs, such as Medicaid and subsidized 
childcare, have severe disincentives all by themselves.
    An important step forward would be to work on consolidating and 
simplifying safety net programs. The more exceptions there are to the 
rules, the more difficult the analysis is for legislators, their staff, 
and policy wonks, like me. Similarly, the more complex the rules are, 
the greater the likelihood that states will mismanage the program. 
Additionally, higher complexity is associated with loopholes for 
individuals to abuse the system.
    The simplification of safety net programs will help with the 
coordination with other programs. This is not only important for the 
agencies administering the program, but, more importantly, it will make 
life easier for people who need to negotiate the complex systems to 
obtain benefits.
    In this regard, SNAP should not be used as a tool to subsidize 
childcare costs or housing. These needs should be addressed by programs 
specifically designed for assistance in those areas. Therefore, the 
SNAP income disregards for housing and childcare should be eliminated. 
This simplification will go a long way to restoring the tapering of 
benefits to avoid cliffs.
    Giving everyone the same allotment regardless of income should not 
be attempted again. Benefit amounts should be based on need, and those 
on the bottom need the most help. Clearly, it is unfair to those 
families on the bottom to get the same amount that a family just under 
the income threshold receives. We need to use our limited resources 
wisely, and by overcompensating, we expend more public resources, make 
the benefit cliffs more severe and difficult to be overcome by the 
families, and make it more difficult for legislators to roll benefit 
levels. The sooner this can be restored, the sooner it will be fairer, 
fiscally more prudent, and SNAP benefit cliffs eliminated.
    As far as adopting a thrifty food plan, it is important to realize 
that benefit amounts that start out too high pose difficulties in 
preventing benefit cliffs. If this Subcommittee wants to increase the 
level of the basic food plan, I suggest first consolidating other food 
benefit programs into SNAP. This consolidation would be a great 
benefit, and we have some ideas on how to do it.
    I recommend reworking the SNAP allotment tables to eliminate 
marriage penalties. A good way to approach this would be to create two 
tables: one for married couples, and another for other households, 
making sure that there is no marriage penalty because of SNAP. While 
this may break new ground for SNAP, it is common with tax law.
    As an alternative approach, or perhaps in conjunction with making 
the changes outlined above, I recommend that Congress reinforces 7 U.S. 
Code  2026 (Research, demonstration, and evaluations) to make it clear 
to the Secretary of Agriculture that demonstration projects to test 
innovative welfare reform strategies include projects to address the 
SNAP benefit cliff. Making it easier for states to test solutions to 
the benefit cliff in demonstration projections, and even requiring the 
Secretary to solicit such demonstration projects, would provide 
experience-based evidence to know what policies and practices would 
work best.
    I have one final observation on SNAP I would like to share. GCO 
works directly with unemployed workers to help them connect with 
employers for well-paying jobs that put these workers on a career 
ladder for financial stability and growth. We collaborate with other 
nonprofits and work with employers to engage individuals in this effort 
and work to remove barriers to employment. Related to identifying those 
barriers, we have spent time researching why the labor participation 
rate has been declining among prime-working age individuals, which was 
a major concern of the Council of Economic Advisors to President Barack 
Obama as well as leaders of the Administration of President Donald 
Trump. This is clearly an area where we can have bipartisan 
cooperation. SNAP is one of the big three safety-net programs that 
reaches a significant proportion of the U.S. population. We believe it 
would make good public policy and be in the public interest to 
reinvigorate the SNAP work requirements and education/training 
components. Not only will SNAP enrollees and their families benefit, 
but the more individuals reengage in the workforce, the stronger and 
more productive the U.S. economy will become. It grows the pie bigger, 
making everyone and society wealthier.
General Conclusions
    Benefit cliffs and marriage penalties are real. Our computational 
models demonstrate that this is so, which complements anecdotal 
evidence.
    Economic incentives matter. This is backed up with economic 
reasoning and empirical evidence. Therefore, safety-net programs need 
to be designed in ways that do not disincentivize individuals from 
self-improvement. Economic incentives need to be aligned with safety-
net policy.
    The anticipated benefits are many. These include greater 
participation in the labor force, an expanded economy making society 
wealthier, less poverty, more potential tax revenue for state and local 
governments without raising rates, more economic opportunities for 
individuals, and happier citizens.
    Thank you for allowing me the opportunity to share our modeling 
work, observations, and recommendations. I will do my best to answer 
any of your questions, and I will be happy to provide you with any 
additional information you may need or get back to you on any questions 
I cannot answer.
                        PowerPoint Presentation
                        
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    The Chairwoman. Thank you. Thank you for your testimony.
    Before we move on, I just want to make sure that Chairman 
Scott and Ranking Member Thompson are not here and do not want 
to be recognized at this time. I don't see them, so at this 
time Members will be recognized for questions in order of 
seniority, alternating between Majority and Minority Members. 
You will be recognized for 5 minutes each in order to allow us 
to get as many questions as possible. Please keep your 
microphones muted until you are recognized, in order to 
minimize background noises.
    At this time, I will recognize the gentleman from 
Massachusetts, Mr. McGovern, for your questions.
    Mr. McGovern. Well, thank you, Chairwoman Hayes, for 
calling today's hearing.
    I want to thank the witnesses. As some of you know, at the 
House Rules Committee we have launched a series of hearings and 
roundtables focused on hunger, looking across Federal 
departments and programs at ways safety net programs work 
together to address hunger. And, as part of that effort, I 
spent a lot of time during these last several months talking to 
people living in poverty, people with lived experiences, 
talking to people who rely on modest SNAP benefits to put food 
on the table for their families.
    And what I have learned is that people's lives are very 
complicated. And do you know what I have not heard once? I have 
not had a single person who has told me that they would rather 
rely on SNAP and other government assistance programs instead 
of a good-paying job. In fact, it is important to remind 
everybody that we do know that the majority of people who are 
able to work who are on SNAP right now actually do work.
    We have heard some talk about a culture of dependency here 
today resulting from SNAP, but the fact of the matter is it is 
simply not true. The average person is on SNAP less than a 
year, and \3/4\ of recipients work within a year of receiving a 
SNAP benefit.
    I think we can all agree that a good-paying job is one of 
the surest ways out of poverty, but let's be clear here. There 
isn't a shortage of Americans looking for work. There is a 
shortage of Americans willing to work for low wages with no 
benefits, no healthcare, no childcare and no protections, 
especially during a pandemic. And for decades, America's 
working families have been getting clocked by stagnant wages, 
disappearing benefits, and shrinking savings.
    If some workers are demanding jobs that treat them with 
dignity and respect, jobs that actually allow them to get off 
of government benefits for good, all I can say is, it is about 
damn time.
    In fact, what we have heard from the witnesses today is 
that SNAP supports work. Broad-based categorical eligibility 
helps to mitigate the SNAP cliff. And yes, we have heard that 
while SNAP is well-designed, there can be further improvements 
made, like increasing benefit levels and increasing income 
limits to make the program even more effective.
    So, one of the challenges we have is we need to look at 
this issue holistically. And that is why I am calling for a 
White House conference on food, nutrition, hunger, and health. 
Because ending hunger will be a whole-of-government approach, 
will require a whole-of-government approach, and a White House 
conference will help us look beyond the jurisdiction of this 
Committee and really help us explore the interplay between 
Federal programs that Dr. Hardy spoke about.
    So, I am hopeful that such a conference will be able to 
help Congress get out of this mind-set where struggling people 
and their struggles are disparaged and diminished. People with 
lived experiences of hunger need to have a seat at the table in 
developing a plan to end hunger once and for all.
    Dr. Hardy, let me begin with you. Thanks for making the 
strong connection between SNAP and work. Could you please 
elaborate on your findings that support the complementary 
nature of SNAP and work?
    Dr. Hardy. Sure, two points: First of all, we do have 
broader structural labor market issues where, as you said, our 
economy has unfortunately produced a high share of very low-
paying jobs over the past several decades. So, it has become 
increasingly polarized. Fewer are in the middle.
    And so, I think that many of these households and families 
rightly want to move up the economic ladder. There are 
promising programs. WorkAdvance is one example that can try to 
connect anchor employers with workers so that they can move up 
that economic ladder.
    But put simply, in the labor economics literature, when we 
think about the whole host of factors that contribute to work 
or labor supply or disincentivizing, we just simply don't find 
that food assistance programs are a major contributor. It is 
tiny, if not zero.
    So, there are other things to look at. If we are thinking 
about this as a hypothetical patient, SNAP does its job. It 
provides economic assistance. And, again, Representative 
McGovern, there are these long-term benefits for children that 
show up in increased economic productivity.
    Mr. McGovern. And let me just say SNAP is not some generous 
benefit. The average benefit is about $1.40 per person per 
meal. It has been increased as a result of the American Rescue 
Plan.
    But, Ms. Brown, can you please elaborate on your 
recommendation that we increase SNAP benefits. And how would a 
benefit increase plus an increase in the earned income 
disregard and an increase in gross income limit help people 
achieve greater financial stability?
    Ms. Brown. Thank you. Yes, as was stated previously, the 
SNAP benefit is a supplemental benefit. So, it isn't intended 
to cover the full month's worth of food, and that does cause 
families additional stress and strain.
    And if we increase, as I mention in my recommendations, 
what we are really focusing on are people who are working, 
people that are on that verge, and it gives them just an 
increased stability and additional support so that they can 
make it long-term.
    Mr. McGovern. And I know my time is up. I just want to 
thank you. It is important that we dispel this narrative, this 
false narrative out there that somehow people who are on this 
benefit do not want to work. The bottom line is the majority 
who are able to work are actually working, but wages are so low 
and benefits are nonexistent that they have no choice. So, I 
appreciate your testimony.
    I yield back.
    The Chairwoman. Thank you, Mr. McGovern.
    Ranking Member Bacon, I want to apologize. I am so sorry. 
When I decided I would go at the end, I think I just in my head 
put you at the end as well. So, if you would like to be 
recognized for your questions right now, I will recognize--I am 
sorry--the gentleman from Nebraska. I apologize.
    Mr. Bacon. That is all right, Madam Chairwoman. That is all 
right. I have a very thick skin. I don't worry about those 
things. So, I appreciate it. No problem.
    I would acknowledge with what Mr. McGovern is saying. We 
know people do want to work. But, yet every one of our 
witnesses here, three in particular, talked about that there is 
a real negative impact of the cliff effect. It has 
disincentivized some. And I think we heard from Mr. Randolph, a 
dollar, $1 earned more costs $700 in benefits. That is a real 
factor there that real people have to deal with.
    Dr. Hardy, thank you for your comments too. And I agree 
with you, SNAP is a vital program. Do you see any value at all 
with sloping the benefits down, as other panelists here said, 
versus a direct cutoff? You talked a little about the EITC, but 
are there benefits to sloping the benefits down?
    Dr. Hardy. It is a great question, Representative. And, one 
of the things I would point out is that, as we discuss this, 
certainly there is what we call a benefit reduction rate. Right 
now, statutorily, that is around 30 percent. And, you lose 30 
for every dollar earned. But, in fact, that is an improvement. 
So, on the arithmetic, just looking at SNAP alone, that is kind 
of what we want.
    Now, there are other alternatives you have. You can extend 
the program out. That would raise costs. I am, in fact, in 
favor of the sorts of interventions that Commissioner Brown 
recommends.
    My view is that we already do have this sort of downward 
sloped hill. I think it is more of a hill, less than a cliff. 
And my view is that we are trying to fight structural labor 
market conditions, and so we see this adjustment occurring 
right now both in Nebraska, North Carolina where I grew up, 
Maryland where I currently am.
    And so, the idea is that we do see this feature of the 
program, that the benefits do slope downward. And if you want 
to extend those benefits out, I think that is a promising 
direction.
    Mr. Bacon. Okay. Well, thank you. I know you focused on the 
EITC, but I appreciate just getting your thoughts there.
    Dr. Gourrier, thank you for seeing what you are seeing in 
Maryland. It sort of validates the concern that we have, so I 
appreciate your comments.
    And, Ms. Brown, also, I appreciate showing what you are 
seeing also in Minnesota, and you have said it really well 
about needing a slope and not a cliff.
    Mr. Randolph, did I get that right, $1 added cost, was it 
over $700 in benefits? Did I catch that right in your slide?
    Mr. Randolph. For a family of four, that is correct.
    Mr. Bacon. I wanted to ask you too, in the last farm bill 
we had, we extended transitional benefits. We also had some 
increases to the earned income tax deduction. They were both 
struck down at conference.
    Do you think that these measures would have helped with the 
cliff effect? Erik--or Mr. Randolph, excuse me.
    Mr. Randolph. So, would you tell me what those measures 
were again?
    Mr. Bacon. Yes. We extended transitional benefits, and we 
also increased some of the earned income tax deduction, but 
they were stripped out at conference. I am just curious if you 
thought those could have been value added to this discussion.
    Mr. Randolph. Right. Traditional benefits is a common thing 
we have had in programs for quite a while, and certainly it is 
a tool that the states can use to help. So, I would have to 
agree that is.
    Now, you are referring to the earned deduction, the income 
disregard.
    Mr. Bacon. Right.
    Mr. Randolph. And that most likely would--now, I would 
actually personally like to test it, because there are some 
other complicating factors in there. So, I would like to like 
use our modeling and play with it and say, let's increase it 
from 20 percent to let's say 40 percent and see what it overall 
does. I think it is promising. It sounds like a good idea, but 
I haven't really specifically tested it.
    Mr. Bacon. Here is another one for you, Mr. Randolph: Do 
you think it is logical to eliminate asset tests for SNAP 
eligibility determinations? Why not incentivize earnings 
through a raised limit?
    Mr. Randolph. So, I like to actually call them excess 
resource tests, because that is actually what a number of the 
states call them. And when I worked at Pennsylvania's 
Department of Public Welfare, for example, that is what we 
called them, an excess resource test.
    Because I think it kind of emphasizes it is not that you 
are trying to penalize people for having assets. It is that 
they are trying to find if you have excess assets beyond what 
is standard that you might be trying to hide so that you are 
not paying your thing.
    Now, I believe that you are working on this, if I 
understand it, that you would like to update the asset test, 
because it hasn't been updated in a long time. But there is a 
fundamental issue where if you get rid of the asset test or the 
excess resource test, you still have to deal with the situation 
where people have a lot of resources.
    And I know that there has been, for example--there has been 
some situations in the media highlighted where you have one 
individual win a very large lottery winning and they are still 
on food stamps. So that has happened.
    But it actually occurs a lot more, because when I was at 
the Department of Public Welfare, every month we would get the 
winners for the lottery and we would run against the rolls of 
the SNAP program. And, sometimes these winners might only get 
$100,000, they might get tens of thousands, but we would always 
find that there would be individuals that were still receiving 
their food stamps. So, it was necessary for our department to 
kind of keep up with that, and we participated in a number of 
data exchanges to do that.
    So, I mean, yes, the Subcommittee could decide to get rid 
of the asset test, but I am thinking you need to replace it 
with something, because not everybody out there lives just on 
income. Now, we are talking about a small minority of people, 
but you still have to be able to address that minority.
    Mr. Bacon. Thank you, Mr. Randolph.
    I have to yield back my time. Our time is short. I 
appreciate your input and all the panelists' input. Thank you.
    The Chairwoman. Thank you. Thank you for that, Ranking 
Member Bacon.
    At this time, I will recognize the gentleman from the 
Northern Mariana Islands, Mr. Sablan. I don't know if you have 
a question or if you are going to yield, as you said before. If 
you do, I will take the time.
    Mr. Sablan. All right. I yield to the Chairwoman my time, 
although this is a very good hearing. Madam Chairwoman, I yield 
my time to you.
    The Chairwoman. Thank you, Mr. Sablan. And, again, thank 
you so much for joining us. I am not sure what time of the 
night it is in the Northern Mariana Islands, but the fact that 
you are so invested in this work really speaks volumes. So 
thank you for joining us.
    And thank you to all of the witnesses for your testimony.
    My question today, many low-income families participating 
in SNAP are struggling to make ends meet and are unable to save 
for the future. According to the Urban Institute, only roughly 
half of SNAP households have a bank account at all, and for 
those that do the average amount held in their bank accounts is 
about $150.
    My question is for Drs. Hardy and Gourrier. Can each of you 
speak more about how broad-based categorical eligibility eases 
the benefit cliff faced by SNAP recipients if they are able to 
secure more work-hours or higher wages? Specifically, how does 
raising the gross income limits and increasing or eliminating 
the asset test allow recipients to achieve greater financial 
stability?
    We can start with Dr. Hardy and then go to Dr. Gourrier.
    Dr. Hardy. Yes. And I will try to be relatively brief so 
Dr. Gourrier can respond as well. What I would simply say is 
that these sorts of policy interventions give these SNAP 
families more in the way of space in order to move up the 
economic ladder. These households are more likely to experience 
both low incomes and very volatile incomes. So, they operate in 
a part of the labor market where there is a lot of job 
instability.
    And so, when you think about broad-based categorical 
eligibility and expanding the ability to have additional 
assets, you are talking about ways to give these households 
additional buffers. Those are buffers that can help them in 
their day-to-day expenses. These are buffers that help families 
provide the resources for their children to learn and 
ultimately move out of poverty.
    And importantly, these are the sorts of findings that we 
have within the economic literature that programs like SNAP 
have been causally linked to improving long-term economic 
outcomes, precisely what we want in public policy 
interventions. And so, this, as you suggest, Representative 
Hayes, would be a boost.
    Dr. Gourrier. And, along those same lines, when we talk 
about broad-based categorical eligibility, Dr. Hardy talked 
about the benefits of the recipient and the ability to pursue 
greater employment opportunities, but it also provides greater 
flexibility for the states.
    We have seen the ability to provide greater limits when the 
previous illustrations of the curves, the higher limits allow 
for smoother cliffs, allowing recipients to increase their 
benefits over a longer period of time. That allows them to make 
greater transitions and pursue more work opportunities that 
might not otherwise be there.
    The broad-based categorical eligibility allows for some 
degree of savings to be accumulated. That also creates a 
stability. In our research, when we talk about the ability to 
meet the sustainable or survival limit, that is a recipient 
that has no ability to deal with any unexpected expenses that 
occur.
    So that broad-based categorical eligibility limit allows 
for some degree of accumulation of savings that allows an 
individual to transition some of those unexpected expenses as 
they pursue work opportunities in the future.
    The Chairwoman. Thank you. Thank you both for that.
    And I will just add to that, I like that Dr. Hardy talked 
about long-term economic outcomes, because for many families 
that are making this decision, their decision is not based 
solely on I don't want to work more hours because my benefits 
will be cut. It is on the long-term economic stability of their 
family and the fact that the analysis of having 2 or 3 more 
hours at work means now you don't have money to buy groceries 
for your children.
    So, it is not as simple as, ``I don't want to work so that 
I don't disrupt my benefits.'' So, this is about the long-term 
economic stability of families.
    Mr. Sablan, thank you again for yielding your time.
    And, with that, I will end and move on to our next Member 
on Minority side. Is Mr. Crawford with us?
    Mr. Crawford. Yes, ma'am.
    The Chairwoman. I now recognize Mr. Crawford. Thank you. 
Please unmute and begin your questions.
    Mr. Crawford. Thank you, Madam Chairwoman, I appreciate 
that.
    And to our panelists, thank you for being here. My 
colleagues and I believe there is an awful lot more we can do 
for those who are trapped in our social safety net programs, 
but we are simply limited by the level of discourse in 
Washington, which has essentially stymied any true reform on 
this and many other important issues of concern to Americans.
    Let's be honest about it. Higher enrollment equates to 
higher program costs for both Federal and state governments, 
and no one should equate that with helping people. Why not 
preserve the program for those who need it and use those 
savings to invest in job training, childcare, and other 
necessary supports and services?
    For any witness that wants to comment on this, why do we 
see so many differences in program administration costs across 
states? Can we assume that states are truly looking at their 
populations and providing solutions that meet their needs, or 
do we have any examples of where this may or may not be true?
    Mr. Randolph. Sure. I will take a stab at answering that 
question. So, thank you for that question. That is actually a 
difficult question to answer, I believe.
    I think, as far as the issue of the level of the amount of 
funding, we leave that to the Members of Congress. I don't know 
if we want to get involved as an organization to answer that.
    However, what we are really focused on is smoothing out the 
cliffs. And, as the Representative from Massachusetts has noted 
before, when we talk about an individual running into a benefit 
cliff, they are already working. And those individuals, they 
have a job.
    But we know that this happens because, I mean, not only do 
we have the anecdotal stories, but we have the computational 
analysis that show that these cliffs do exist on the one hand. 
But on the other hand, we do know, as a minority, that there 
are some individuals, such as the ABAWD population, who could 
be working.
    So, I mean, we are talking about millions of people on this 
program, and it is really difficult to make any one single 
statement that represents all of them. But we do know that 
there are individuals that could actually work that are not 
working.
    So that's kind of why we have a recommendation to reinforce 
the work requirement, a recommendation to focus on the 
training. One of the things that we do at GCO is it is not just 
trying to get people a job the first time, but we also try to 
help them to move up the career ladder. So, if someone has a 
job to help them kind of advance. But I think that kind of sets 
kind of the perspective.
    Of course, if you put more people on rolls, it is going to 
cost more money, but I am a little bit of an optimist here. I 
think that if we solve both the problems of the benefit cliff 
and then we solve the problem of the marriage penalty in 
combination, that we would actually see the rolls naturally 
come down. So, I think maybe in the long run, it would save us 
money, but I am optimistic. It is just speculation.
    Mr. Crawford. Anybody else want to weigh in on that?
    Madam Chairwoman, I appreciate the time. And if somebody 
wants to comment, otherwise I will yield.
    Ms. Brown. I can weigh in very briefly here. Thank you very 
much.
    I just wanted to make the point of, as was mentioned, 
right, the SNAP program exists to expand and contract. And so 
that flexibility is critically important so that when 
individual states or labor markets experience difficulties, the 
program is vital so that it is there for people during that 
time. And as was stated before as well, people are on the 
program for a short period of time. And so, we do want to 
preserve that ability for people to come to the program when 
they need it and then move off when they can be self-
sufficient.
    Thank you very much.
    Mr. Crawford. Thank you. Madam Chairwoman, I yield back.
    The Chairwoman. Thank you. Thank you for your questions.
    I now recognize--it looks like the gentlewoman from North 
Carolina has returned. We will recognize Ms. Adams for your 
questioning, if you want to unmute and begin.
    Ms. Adams. Thank you, Madam Chairwoman, Ranking Member 
Bacon. Thank you both for hosting the hearing today. And to our 
witnesses, thank you for your testimony.
    Right now, more than 42 million Americans are struggling 
with food insecurity, including an estimated 13 million 
children. Over 18 million Americans are receiving unemployment 
benefits, and up to 40 million cannot afford rent and fear 
eviction. In the richest nation in the world, this is 
unacceptable.
    As the temporary 15 percent SNAP increase and emergency 
allotments come to an end, Congress must come up with a 
solution to ease the COVID-19 relief cliff. The abrupt 
reduction or loss of benefits can be very disruptive for low-
income Americans, which is why I introduced the Closing the 
Meal Gap (H.R. 4077), to permanently increase benefits by 30 
percent and eliminate certain eligibility limits.
    Dr. Hardy, we are approaching September 30, which will mark 
the end of the SNAP emergency allotments passed in the Families 
First Coronavirus Act in March. So based on your work, looking 
at the government's response to the pandemic via the Federal 
safety net, will the end of these additional benefits create a 
crisis for families, or will there be other programs that are 
able to ease the burden as they go back to work and as kids go 
back to school?
    Dr. Hardy. Well, I appreciate the question. I admit that 
this is absolutely complex. And, economists and others are 
going to be monitoring this over the summer and the fall.
    Now, you do have child allowances coming through the ARP 
that are going to be quite helpful for many families with 
children, $3,600 for younger kids, $3,000 otherwise. But that 
is not a permanent solution. It will help some of these issues 
of benefit cliffs.
    I would just say, Representative Adams, that we have known 
for a while now in research that low-wage workers, families 
working the low-wage labor market have had increased expenses, 
transportation expenses, for example, increased housing 
expenses. And so, I do believe that proposals like those you 
have put forth are going to be really viable and important to 
think about whether it is time to consider a boost in those 
SNAP benefits. They do respond to the business cycle, as 
Commissioner Brown noted. And we do see folks who absolutely, 
if they have the job, if they are making sufficiently high 
earnings, they don't need the benefits in the first place. So, 
I do think you have a situation where multiple things can be 
true at once.
    The programs can be helpful. People could prefer to not 
need them and, ultimately, some might--may move off. But I 
absolutely believe that in a time of a global pandemic, we were 
aggressive, and that was the right move, but we still need to 
make sure that families aren't left behind.
    Ms. Adams. Thank you very much.
    Ms. Brown, can you elaborate on your recommendation that 
Congress increase the earned income, disregard--raise the gross 
income and increase benefits?
    Ms. Brown. Certainly. Thank you, Representative. Our 
proposal is really looking to provide some stability to 
families and provide some opportunity before some amount of 
savings to occur, so that when unexpected expenses do occur 
with families and low-wage workers, which we know they do, that 
this would provide them some relief and some support.
    And so, we know from speaking to our families and to our 
individuals and to our low-wage workers that transportation, 
for example, is always a strain, and you must maintain 
transportation options so that you can maintain that job. And 
so, having, for example, a little bit of savings in which you 
could pay for that car repair are critically important. And so, 
this combination is a really powerful solution, we think, to 
really help provide some stability.
    Ms. Adams. Thank you very much.
    Dr. Gourrier, I was interested to see that your research 
determines that the benefit cliff both before and after the 
pandemic will cause problems for families. So, can you explain 
that a little bit more? Are you saying that none of these will 
have a lasting effect on a family's well-being?
    Dr. Gourrier. No. What we are saying is that we expect that 
as we move post-pandemic that we'll see comparable trends in 
terms of the benefit cliff that we saw prior to pandemic era. I 
mean, we saw just more recently trends in the 10 year Treasury 
dipping, giving us speculation that we are kind of moving into 
a different economic forecast. But all of our research 
indicates that [inaudible] Cliff results that we saw pre-
pandemic will still be existing once we move through this 
phase.
    Ms. Adams. Thank you very much. Madam Chairwoman, I yield 
back. Thank you very much for your responses.
    The Chairwoman. Thank you, Representative Adams.
    I now would like to recognize the gentleman from Tennessee, 
Mr. DesJarlais. If you are--yes, I see you.
    Mr. DesJarlais. I am. Thank you, Madam Chairwoman. Yes. 
Thank you, Madam Chairwoman and Ranking Member Bacon. I 
appreciate the witnesses being here.
    I have a few questions for you, Mr. Randolph. In your 
testimony, you discuss the decline in the labor participation 
rate among prime working age individuals. This certainly is 
consistent with what I am hearing from employers in my district 
who are having increasingly difficult times staffing their 
businesses. Can you discuss, from your perspective, the 
importance of SNAP work requirements and education and training 
components?
    Mr. Randolph. Absolutely. Thank you for the question. This 
is an area where labor force participation rates--and we are 
talking primarily individuals who are the, what we call the 
prime working age, especially among males, where we see, over 
the decades, a fairly significant decline in the participation. 
And so, it has been quite a challenge, quite honestly, of 
trying to determine what all the causes are.
    The Council of Economic Advisers to the Obama 
Administration, for example, they had produced a major paper on 
this, and there was quite a number of discussion. We have both 
think tanks on the left and the right that have kind of focused 
on this. We at GCO have actually done some work in this area 
because, of course, it is the clientele that we serve. And one 
of the things that these studies have pointed out is, the role 
of safety net programs. And, knowing that we do have certain 
kind of cliffs and that there may be certain things that we 
actually have with the food stamp program, I don't think we can 
eliminate that it is a possibility that the food stamp program, 
we can at least--let me say it this way: We can at least use it 
as a tool to try to help these individuals.
    And, in fact, I believe that if we look at the experience 
of Maine, the State of Maine, and the experience of the State 
of Kansas, they had actually applied the ABAWD rules after the 
Great Recession. They were the first two states to do it. And 
there was measurable success. They actually kind of measured 
the number of individuals that they got to be employed that 
were the ABAWD population.
    Mr. DesJarlais. And we tried, as you probably remember, to 
do this in the last farm bill. And unfortunately, there was a 
pretty good plan there that got stripped out. So maybe we can 
revisit that at some point.
    You also bring up pandemic-SNAP waivers, which allows 
states to give recipients the maximum allotment for SNAP. In 
your opinion, how do these waivers lead to SNAP benefit cliffs?
    Mr. Randolph. Well, what the waiver allows is it allows the 
states to give the maximum benefit to anyone who qualifies for 
food stamps. And so that means that whoever loses it, loses 
that maximum benefit amount. And that is why the one slide 
showed that for a family of four, the monthly benefit is $782. 
So that is the amount that they would lose. And I believe all 
states actually sought waivers for this program, so it is 
pretty much across the board.
    Mr. DesJarlais. Okay. And your testimony also included a 
series of recommendations specific to SNAP related to the 
penalties associated with employment. Thinking more broadly, 
what role do local and state governments play in moving 
families towards equitable mobility.
    Mr. Randolph. Yes. That is a great question. I would like 
to focus maybe just on the state. We actually have some work 
that we produced. We had a three-series report that talks about 
how states can actually better safety net programs in general. 
And one of the components is we recommend an integrated 
eligibility system. Georgia has the Georgia Gateway, so we are 
kind of halfway there. We are moving in that direction. A lot 
of other states are moving in that direction. And we can use 
more flexibility, quite frankly, from the Federal Government to 
help us succeed.
    Mr. DesJarlais. Okay. Well, certainly, I appreciate your 
time, and I appreciate all the witnesses for being here today. 
Hopefully we can work on ending these cliffs, because I do 
think that that would be very beneficial. And I agree with our 
Ranking Member, and, Madam Chairwoman, you as well. So, I will 
yield back the balance of my time.
    The Chairwoman. Thank you, Mr. DesJarlais, for your 
questions.
    I now recognize the gentlewoman from New Hampshire, Ms. 
Kuster. If you want to unmute and begin your questioning.
    Ms. Kuster. Great. Thank you very much, Madam Chairwoman.
    As we begin to slowly emerge from the depths of the 
pandemic, we have come away with a new appreciation for the 
vital role that SNAP plays in our country. Millions who 
suddenly lost their jobs or had their hours cut as our economy 
shut down had to rely on SNAP for the modest benefit it 
provides to help put food on the table for their families.
    In 2019, the average SNAP benefit for recipients in my 
State of New Hampshire was about $1.22 per meal. And even with 
the 15 percent maximum increase allotted by the economic rescue 
package, this is still anything about luxurious. As our economy 
reopens and businesses are able to start hiring again, it is 
more important than ever to help families on SNAP avoid the so-
called benefit cliff as their wages and hours rise. Abruptly 
losing SNAP benefits when your income reaches 130 percent of 
the poverty line can create a very rough transition for 
families at a critical moment when they are trying to steady 
their finances.
    Thankfully, New Hampshire and the vast majority of states 
have instituted broad-based categorical eligibility or BBCE, a 
policy that allows families just getting by to continue 
receiving SNAP benefits at a gradually reduced rate as their 
incomes rise and stabilize. This helps folks, prevents folks 
from falling off the benefit cliff at a critical tipping point. 
And this policy also streamlines the application process for 
those who qualify for help. In my mind, anything that helps cut 
through costly red tape is a clear win.
    On that note, Ms. Brown, you mentioned in your testimony 
that Minnesota waived its SNAP asset test and this relieved 
some administrative burdens that weren't relevant for the vast 
majority of SNAP participants. Do you have a sense of how much 
time that decision saves your department? And do you see other 
opportunities to streamline administrative processes that will 
also benefit--also help those who are facing the benefit cliff?
    Ms. Brown. Thank you. Indeed, in 2010, Minnesota was able 
to implement broad-based categorical eligibility. And our 
department's analysis in 2011 determined that less than one 
percent of the households applying for SNAP or already 
receiving SNAP were affected by eliminating the asset test. So 
that saved our county and Tribal eligibility workers seven to 
ten percent of their time. It is an administrative burden that 
is unnecessary, in our mind. I would also like to point out 
that SNAP law does require people to report lottery and 
gambling income as well.
    And so broad-based categorical eligibility has been a great 
flexibility for states to utilize and streamline the program 
and make the program work for their state and help impact our 
families.
    We have approximately 50 percent of our population, our 
children, and, again, when we reviewed our data, if we did not 
have broad-based categorical eligibility, nearly 35,000 
Minnesotans would not receive SNAP benefits, the majority of 
them would be children.
    Thank you.
    Ms. Kuster. Thank you very much for the work that you do.
    I also want to ask Dr. Gourrier about your research, which 
highlighted the benefit cliff that faces families in Maryland 
in which both parents work jobs at or near the minimum wage. 
Maryland's minimum wage is over $11 per hour. How would those 
difficulties be exacerbated in states with an even lower 
minimum wage like here in New Hampshire's $7.25?
    Dr. Gourrier. Yes. We would imagine that the benefit cliff 
would be even sharper in those states. I will say that our data 
does present cost-of-living adjustments for the State of 
Maryland. But we initially tested it at $10.10. As I said, in 
January 2020, that number moved from $10.10 to $11.00, and our 
families in Maryland still could not meet the minimum threshold 
to cover expenses, especially to two-adult two-children 
households.
    So, we would expect in states with significantly less 
minimum wage levels that those impacts would be even greater 
and that the variants, along with the family's basic survival 
expenses versus income, would be even more significant, which 
would make the benefit cliff even more impactful in those 
households.
    Ms. Kuster. Well, Madam Chairwoman, I just want to thank 
you for this important hearing. Here in New Hampshire, I can 
tell you that the people who have lost their jobs during COVID, 
who are trying to make their way back into the workplace, this 
benefit cliff really has a devastating impact. And we want our 
children to grow up strong and healthy and to be learning and 
working hard in school and to be wonderful employees in the 
future to continue the comeback in our economy.
    So, thank you. I appreciate this. And I yield back.
    The Chairwoman. Thank you so much, Representative Kuster.
    I now recognize the gentleman from Indiana, Mr. Baird.
    Representative Baird, if you are ready, you can unmute and 
begin your questions.
    Mr. Baird. Thank you, Madam Chairwoman and Ranking Member, 
for holding this hearing today. And I really appreciate all the 
witnesses' testimony and their background and experience.
    As Americans, we all want to help individuals, especially 
the elderly and the children and the disabled, make sure that 
they have access to adequate food and nutritious food. And, we 
are talking about some 86 programs that are administered by 
nine or so different agencies, and the challenges of trying to 
meet all those requirements with that many different agencies 
involved is significant. And I can appreciate that.
    But I also want to reiterate that, in my district, I see 
help wanted signs everywhere. And so, I want to know how we, as 
a Member of this Subcommittee, and this Subcommittee, and the 
witnesses and their testimony, how we do a better job of trying 
to bridge that gap for those individuals and make sure that we 
get our economy started back operating, and that takes 
employees. And so, we want to try to make sure that we 
encourage that kind of--and stimulate that kind of incentive 
for some of our constituents.
    So, I guess with that, Mr. Randolph, I am going to start 
with you. Back in March of 2020, we had over $125 billion that 
was allocated for nutrition-related relief. Now, that excluded, 
according to my data, child nutrition programs like the schools 
and WIC. But it did include the Pandemic-EBT. And there is an 
ongoing discussion about continued increase in benefits, 
including here today.
    So, your testimony appears to add some question against the 
outright increase in the benefits for reasons that make sense, 
particularly higher benefit amounts across any program will 
lead to more drastic penalties. So, can you share with me what 
your recommendations are to how we counteract that?
    Mr. Randolph. Absolutely. So, as far as the amount of the 
benefit, I don't know exactly what the amount of the benefits 
should be. I think what the best way to approach it is I would 
base it on the science, clearly. And then also on the ability 
of people to economically, with an economic budget to be able 
to put together the resources to acquire their nutritional 
needs. So, I mean, this is the way that the SNAP program has 
done it historically. And I think it has been good, generally, 
the way that they have come up with this with a Thrifty Food 
Plan.
    So, what I would do probably, if I were in the 
Administration, is, I would have two panels. I would have one 
that consisted mostly of nutritional scientists and have them 
tell me, based on the most recent science, how can people meet 
their nutritional needs. And then I would have a second panel 
made up of maybe--maybe have a social worker, have a number of 
individuals who lived on food stamps, and actually have them 
come up with a plan of how to obtain those nutritional values. 
And the Department provides guidelines.
    The Department of Agriculture releases guidelines to help 
people to figure out how to live within the amount of the food 
stamps that they receive. So that is the one side of it.
    The other side of it is, when we are talking about cliffs--
and I can demonstrate this. I can even do it in a diagram on my 
screen. But the higher you have the starting value, the more 
difficult it is to solve the cliff. And we have just got to 
keep in mind the SNAP benefit cliff is just one piece of a 
bigger puzzle. So, we have the SNAP thing, but then we have 
like Earned Income Tax Credit, we have childcare services, we 
have Medicaid. So, there are a lot of other kind of programs 
that are out there.
    So, as a general rule, each of the programs want to kind of 
provide what is sufficient but not much beyond that, because if 
you start building up higher starting values, you are going to 
make it much more difficult. I think the general goal is to--
everybody seems to be in agreement we want to solve the cliff 
problem. And now what I am talking about is what do you have to 
do mathematically, in a sustainable way to do that.
    Mr. Baird. Well, thank you, Mr. Randolph. And I see I am 
about out of time. And so, I appreciate the other witnesses 
being here as well.
    So, with that, Madam Chairwoman, I guess I will let you--I 
yield back.
    The Chairwoman. Thank you. Thank you for that.
    I think we are on to the gentleman from Florida, Mr. 
Lawson.
    Mr. Lawson. Okay. Thank you very much, Madam Chairwoman and 
Ranking Member Bacon, for holding this hearing.
    This is a very important hearing, and it is extremely 
important to me because I have both urban and rural communities 
in my district, quite a few that have SNAP benefits. It has 
been a major concern for them.
    And this is for all of the witnesses. Can you explain how 
categorical eligibility can support households that are 
struggling to put food on the table? Throughout COVID-19 
pandemic, SNAP has been a lifeline for many Americans having 
assured access to healthy food for many families.
    But I will go back to the first part of the question again. 
Can you explain how categorical eligibility can support 
households that are struggling to put food on the table?
    Dr. Hardy. Representative Lawson, I would like to take a 
stab, and I also want to try to conserve for others.
    Briefly, I would just say that absolutely category 
eligibility is going to give families more flexibility 
financially. Frankly, the bandwidth issue where if they are 
thinking hard about being on that margin of benefits or no 
benefits, there is more slack in that overall income budget. So 
that is going to be hugely important for families that are 
trying to work and make ends meet. And so that gives more 
space, raising that income limit up to as much as 200 percent 
of the poverty line.
    I would just also add, however, that this is both a serious 
problem and, on the arithmetic, a problem that does not affect 
the typical SNAP families. So, both can be true, and you all 
are problem solvers. But, you have about 25 percent of these 
SNAP households that are somewhere between 100 and 130 percent 
poverty. And then, when you account for the states that are 
already doing broad-based categorical eligibility, that winnows 
the set of families for whom this is an issue down a bit more.
    So, you have to solve it, but you also have to keep in 
mind, the program is doing a lot that works as it is. So, you 
have to be careful in this conversation.
    Mr. Lawson. Yes. Anyone else would like to say something in 
regard to this issue?
    Ms. Brown. Representative, if I may, just thinking about 
our senior population, categorical eligibility allows us to 
remove the asset limit. And in Minnesota, before we implemented 
broad-based categorical eligibility, only 28 percent of our 
low-income seniors received SNAP, and, today, almost 60 percent 
of our low-income seniors receive SNAP. So, there is a direct 
correlation with allowing people to have a little bit of 
savings. And it particularly also impacts our low-wage workers 
maybe who are recently unemployed and it allows them not to 
deplete their savings in order to receive SNAP benefits.
    Thank you.
    Mr. Lawson. Okay.
    Dr. Gourrier. And just to follow up, kind of a combination 
of both of those, the two main benefits; one, the flexibility 
to the recipients to not be as pinpoint in terms of their 
benefit cliff, because it gives them a little bit more range in 
terms of when their benefits fall off. It gives the state 
greater flexibility to increase from that 130 percent to the 
200 percent. And it gives flexibility in terms of the asset 
test and savings accumulations to allow recipients to be able 
to weather some of those unexpected expenses.
    So those combinations that exist through the broad-based 
categorical program allows for greater flexibility, both from 
the recipient as well the states' administration perspective on 
those.
    Mr. Lawson. Okay. Thank you. And I would like to try to get 
in another question before my time runs outs. This is very 
important; I have a lot of students in the area. The question 
is--and this is following--moving forward, how can Congress 
increase SNAP eligibility for college students, veterans, and 
individuals with disabilities?
    Anyone want to take a crack at it?
    Ms. Brown. I will take a first crack at it. When we look at 
students, we have known traditionally students have had a 
difficult time in accessing SNAP, in part because of the 
struggle between working and going to school. We also know that 
students have changed. There are less traditional students 
nowadays, and the program has not kept up to speed with 
thinking about students in different ways. And that is an 
important piece that needs to be considered.
    Thank you.
    Mr. Lawson. Okay. So as was mentioned earlier, do you all 
agree with the fact we ought to have a White House conference 
on SNAP?
    Dr. Hardy. I don't know if you are asking me, but I 
absolutely agree.
    Mr. Lawson. Okay. Because I know how people are struggling 
now.
    Ms. Brown, in your testimony, you highlighted the 
importance allowing recipients to earn up to 200 percent of the 
Federal poverty guideline. If my home State of Florida was to 
move to 200 percent requirement, what would you expect to see 
with this change?
    The Chairwoman. I am sorry, Ms. Brown, I am going to have 
to ask you if you would submit the answer to that question to 
the Committee. The gentleman's time has expired.
    [The information referred to is located on p. 69.]
    Mr. Lawson. I yield back.
    The Chairwoman. And the question, we will get it to you so 
that you can answer that.
    But I support a White House conference on hunger, actually. 
My colleague, Mr. McGovern, and I are calling for one so that 
we can bring all of these voices to the table, much like we are 
doing today, to really come up with long-term solutions to this 
problem.
    Thank you so much, Representative Lawson.
    I now recognize the gentlelady from Louisiana, 
Representative Letlow. Yes, I see you. If you would unmute and 
begin your questions.
    Ms. Letlow. Thank you, Chairwoman Hayes.
    To all the witnesses, thank you for your time and 
participation in this hearing today.
    As I am sure many of my colleagues can share similar 
experiences in their home states, when traveling throughout the 
Fifth District of Louisiana, I come across numerous hiring 
signs and hear the concerns from small business owners of not 
being able to find enough individuals willing to go to work. 
These same small businesses are the backbone of our local 
economies, supplying essential goods and services to the 
surrounding communities and providing opportunities for gainful 
employment for the unemployed.
    As our nation continues to recover and makes promising 
strides in moving past the pandemic, we should be doing all we 
can to encourage and help families return to work. Mr. Randolph 
said it best as part of his written testimony: The more 
individuals reengage in the workforce, the stronger and more 
productive the U.S. economy will become.
    In turn, we in Congress, and on this Subcommittee, should 
look to provide the right balance of benefits, ensuring that 
Federal programs aren't designed to disincentivize self-
prosperity and preserve the Supplemental Nutrition Assistance 
Program for those truly in need.
    My question is for you, Mr. Randolph. Your testimony speaks 
to the Georgia Center for Opportunity's work with other 
nonprofit organizations to help people find well-paying jobs 
with the opportunity of career progression. Can you tell the 
Committee more about this work, including the career ladders 
individuals embark upon and your organization's rate of 
success?
    Mr. Randolph. Absolutely. And just to mention, the Pelican 
Institute in Louisiana is one of the organizations that we have 
been working with.
    Ms. Letlow. I know.
    Mr. Randolph. And so, you may be familiar with them.
    What we are doing generally is we actually have--we work 
with an array of other nonprofits, including Goodwill in 
Georgia. We actually have two programs, one based out of 
Gwinnett County, Georgia, and another out of the City of 
Columbus, Georgia. And what we do is we develop mentors and 
then we work with mentors. We have a platform on a website that 
people can go to. We work directly with employers. It is 
actually a fantastic program to look at, it would be a great 
one some time in the future to get even individually or as a 
group that we can show you the platform. But basically, to help 
them find jobs. You know, it has an array of things. Like, it 
will tell them such things as, what kind of skills they need, 
et cetera, to do it. But, basically, that is what it is.
    We have only been doing it for about 2 years. So we haven't 
had a whole lot of data yet on the success. But we are really 
encouraged about where we have gone so far over these past 2 
years.
    Ms. Letlow. Awesome. Thank you.
    As this Subcommittee moves forward in examining the SNAP 
program, one of the areas we should review and address is 
providing opportunities for individuals to pursue independence 
through meaningful employment and training programs.
    Mr. Randolph, in relation to your work, can you further 
expand on what changing this policy would look like, and how we 
can address improving access to these programs?
    Mr. Randolph. Would you state again exactly which program 
of access to that you referred to? I am sorry.
    Ms. Letlow. Examining the Supplemental Nutrition Assistance 
Program.
    Mr. Randolph. Oh, you mean gaining additional access to the 
program?
    Ms. Letlow. Correct.
    Mr. Randolph. Maybe by a broad-based eligibility? Is that 
kind of what you are thinking?
    Ms. Letlow. Yes.
    Mr. Randolph. Okay. I actually have a suggestion that I 
believe is the better solution than broad-based categorical 
eligibility. And that is, in our recommendations, we really are 
promoting the idea of an integrated eligibility system across 
all programs. Georgia has developed the Georgia Gateway, for 
example. And if states move in this direction, it really would 
make, I believe, obsolete the idea of broad-based eligibility. 
So, I would encourage the Subcommittee to consider that as 
another option to it.
    And just one other thing I would like to say. The way they 
are using broad-based eligibility appears to be different than 
what it was traditionally. And so I would like to find out more 
about the flexibility they built into the system. Originally, 
it was a system like, for example, if someone was on a TANF 
Program, then they would, we already vetted them for assets and 
income. And so, they would automatically qualify for SNAP, 
because there was no communications between the TANF Program 
and the SNAP program.
    So, prior to integrated eligibility, it kind of made sense. 
But as you develop your systems, it really doesn't make as much 
sense. But it sounds like, from the other testimonies, that 
they are doing something different with it. And I would like to 
actually learn a little bit more about it and maybe analyze it 
a little bit more.
    Ms. Letlow. Thank you so much, Mr. Randolph, for sharing. 
It is encouraging to hear the great work you are all doing to 
help individuals get on a path of financial stability and 
growth.
    I yield back my time. Thank you.
    The Chairwoman. Thank you, Representative Letlow.
    I now recognize the gentleman from Illinois, Mr. Rush.
    Mr. Rush. I want to thank you, Madam Chairwoman, for this 
very outstanding and provocative and informative hearing.
    My question is directed to Ms. Brown.
    Ms. Brown, I am working to reintroduce my bill to 
strengthen SNAP by increasing the daily allotment in allowing 
for hot and prepared foods to be purchased as part of the 
program. In your opinion, would these changes be helpful? And 
what other policies would you suggest that I include to 
strengthen SNAP and to ensure food security for the most 
vulnerable among us?
    Ms. Brown. Thank you. I agree that adding some additional 
flexibilities for the purchasing of hot foods with SNAP would 
be greatly beneficial. We know that in Minnesota our homeless 
population, 30 percent of which are working, I will note, they 
often have difficulties in finding food that they can prepare 
in homeless shelters or in other situations. So, having some 
flexibility with the types of hot foods that can be prepared 
will greatly support that population.
    Mr. Rush. Thank you.
    Dr. Hardy, from your testimony, I believe that you will 
agree that SNAP is extremely important for workers in low-wage 
jobs who often lack benefits, such as paid sick leave, and lack 
stable hours, and are disproportionately people of color. Do 
you agree that SNAP work requirements just lead to families 
that are going to bed hungry? Can you expand upon how SNAP is a 
vital resource for supporting working families? And on the 
issue of work requirements in SNAP, how can Congress really 
effectively, proactively deal with this particular issue?
    Dr. Hardy. Well, I appreciate the question. And what I 
would say is that my view of the program design and the 
evidence is that SNAP work requirements, in my view, undermine 
the functioning and the efficiency of the program. The program 
actually does ebb and flow with the business cycle. When we 
have high job loss, we see greater SNAP use. When the economy 
improves, we see SNAP use go down. And so, this is a really 
nice feature of the program.
    So, I appreciate that question. I think work requirements 
in SNAP are the wrong way to go. But I also want to speak to 
the economic situation we face.
    My colleagues and I think a lot about this. Everyone on 
this Committee is concerned about it. I think that is one 
uniform area of agreement. We see an adjustment occurring right 
now in the U.S. labor market, perhaps long overdue. There were 
quite flat relatively low wages for less educated workers, 
workers in certain retail and food services sectors. And, right 
now, even in my own conversations with business owners, 
actually in Georgia. Many moons ago, I was a student at 
Morehouse College, and I know business owners in Georgia. And, 
many of them have said it was a challenging situation. And at 
the same time, it is a market. And so, they have adjusted. They 
have raised wages. They are looking at automation. It is not to 
say that this is easy. We are coming out of a pandemic. We are 
going to be probably dropping some of these economic relief 
payments. Other things might persist.
    But I think the broad point is that we are in the middle of 
an adjustment. Anchor employers are going to begin showing up 
in larger numbers. Our 4 year and 2 year universities are going 
to have more students on the ground. That will have a 
stimulative effect for the economy as well, more foot traffic. 
And so, I think that this is really a wait and see situation. 
So, absolutely, there are shortages, but we are also in a 
market, we are in an adjustment. And I think we are seeing 
adjustments that make quite a bit of sense.
    Mr. Rush. Thank you.
    Dr. Gourrier, Congress is well on its way to approving what 
we call the Child Tax Credit. Is SNAP and the Child Tax Credit 
on a colliding course? How can they be used cooperatively to 
increase in the total well-being of American citizens who 
certainly would rely on both of these programs?
    Dr. Gourrier. Yes. Just to address briefly, because I know 
we are running out of time. A big part of our particular 
research talks about the coordination of benefits and 
resources, not just SNAP, but complementary resources that also 
exist.
    I believe Mr. Randolph talked about the Gateway in Georgia. 
In Maryland, we have the 2Gen Program. And all of these 
programs are designed to coordinate eligibility and benefits 
for the greater benefit of the recipient.
    Mr. Rush. Thank you, Madam Chairwoman. I yield back.
    The Chairwoman. Thank you so much, Congressman Rush.
    And now I will recognize the gentlelady from Florida, 
Representative Cammack. If you are on, you can unmute and begin 
your questions.
    Mr. Bacon. Kat, are you on deck.
    The Chairwoman. I heard that she was waiting and her camera 
was just off. So, Representative Cammack, if you are available 
to begin your questions.
    Okay. So, with that, I will yield myself 5 minutes for my 
questions.
    We have heard a lot today in this hearing--thank you so 
much to all of the witnesses on the panel for joining us--and 
it shows that flexibility is even more critical in the context 
of COVID. I hope that as a Congress we are not using 
traditional metrics, or doing things the way we have always 
done them, when we have seen how detrimental it has been for 
families and how life sustaining emergency pandemic benefits 
have been for so many people. We have a responsibility to 
legislate in the now, not in the same way that we have done for 
the last 50 years.
    In the coming weeks, SNAP recipients are also preparing for 
another benefit cliff, the COVID cliff. At the end of 
September, recipients will potentially face an abrupt end to 
increased SNAP benefits provided by Congress in our emergency 
relief efforts. This is particularly concerning for low-income 
Americans, who are among the hardest hit by COVID-19 and are 
still struggling to find high-wage employment and shield their 
families from food insecurity.
    We have heard a lot about help wanted signs and jobs that 
have openings. But in many states, the minimum wage is less 
than $10, and these are low-income, entry level service jobs, 
many of those people were not even eligible for unemployment 
benefits. So, there is no money grab here. It is not a 
situation where people are choosing not to work to benefit 
themselves.
    My question is for Ms. Brown. In Minnesota, you and 
Governor Walz have worked closely with USDA to ensure this 
important pandemic relief does not end for recipients before 
they are able to get back on their feet. Can you tell me more 
about why emergency allotments and the 15 percent increase to 
SNAP have been and continue to be so critical for people in 
Minnesota? And what are your concerns as we face a sudden end 
in September?
    And I will just add, before I turn it over to you, that on 
this Committee we have been working on legislation that will 
support caregivers and foster parents so that--it is H.R. 3997, 
the CARE for Kids Act (Caregivers, Access, and Responsible 
Expansion for Kids Act of 2021) that the Ranking Member 
cosponsored with me--to make sure that families who are caring 
for children that are not their own will have automatic 
redetermination eligibility and that is not--and kids will eat 
in school. That is deeply personal for me, because hungry kids 
do not learn. So, I was happy that the Ranking Member joined me 
in this legislation. And we are working to make sure that we 
are identifying gaps and working to close them.
    So, can you just tell us about how the 15 percent increase 
has helped people in your state?
    Ms. Brown. Certainly. Thank you very much. And thank you 
for your comments.
    In Minnesota, we have seen just a great relief with the 
pandemic supports that have been provided to our citizens. 
Certainly, it required a lot of information. It is a little bit 
confusing when there are multiple programs coming out. But the 
majority of our recipients have been so grateful. With the 
pandemic, with the uncertainty that has been put in place with 
people, with the additional food needs that people have needed 
to do, with regards to their children not being in daycare, in 
school, with work being closed; just a lot of instability has 
occurred. And so, these benefits have been extremely critical. 
And we hear every day how grateful people are to be receiving 
them.
    The Chairwoman. [inaudible.]
    Mr. Bacon. Madam Chairwoman, you are on mute.
    The Chairwoman. Sorry about that. Yes.
    Thank you for that, Ms. Brown.
    Dr. Randolph, you mention in your testimony that you 
believe SNAP deductions for housing and childcare should be 
eliminated, and that those needs should be addressed by 
programs specifically designed for assistance in those areas. I 
am troubled by this recommendation because, as you know, unlike 
SNAP, many other Federal safety net programs are not guaranteed 
to low-income families and are notoriously difficult to access. 
The devastating year's long waiting list for housing assistance 
across the country are well known. Last week, Miami Dade 
announced that they had 5,000 available spaces for housing and 
90,000 applicants. Many localities have long waiting lists that 
have grown longer through this pandemic.
    Why would you recommend that we expand or guarantee to 
access to Federal housing and other safety net programs--I am 
sorry. Would you recommend that we expand or guarantee Federal 
housing and other safety net programs to low-income Americans 
in need of assistance?
    Mr. Randolph. I thank you for your question. And I am not a 
doctor, so I just want to clarify that, so people don't think I 
have a Ph.D. I do not have one.
    So, my point is that when we are looking at--we have a--we 
actually have a proposal out there for how to more or less 
transform the welfare system so it becomes more rational. And I 
think one of the principles that you want to adhere to is you 
want to kind of keep it simpler, as opposed to more complex. 
So, in a way, the SNAP program actually can subsidize other 
needs by having sort of income disregards.
    So the idea is that, as we kind of go down this path of 
trying to make it a more rational system, we should in fact 
have--let's just have the SNAP program fund the needs of 
nutrition. And then on top of that, I mean, I would--just with 
the Pandemic-EBT program, for example, this is giving us an 
indication that we could actually probably consolidate other 
programs into SNAP, because now we are having some experience. 
And I think that would be a step forward so that we could 
actually have maybe a beefed up SNAP program, but by--through 
consolidation, not necessarily by increasing the amount of 
money that is needed for that.
    And for the childcare and the housing, we actually have 
some proposals on how to reconfigure it. I would not recommend 
expanding the Section 8 Program as it is. I think there are a 
lot of problems with the Section 8 Program. It is probably 
beyond the scope of this hearing, and as well the childcare. 
There are certainly some issues with the childcare program as 
well.
    The Chairwoman. Thank you for those remarks. I have so much 
to say, but my time has expired. And I yield back.
    I will recognize the gentlelady from Florida. I think she 
is back.
    Representative Cammack, if you would like to ask your 
questions, please unmute and ask your questions now.
    Mrs. Cammack. Thank you, Madam Chairwoman. I appreciate it. 
Thank you so much for your patience. And it is very good to see 
my colleagues. It has been a while. I look forward to seeing 
you all next week.
    I appreciate our witnesses and your testimony here today.
    I am going to basically summarize my remarks quickly and 
jump right into questions.
    Several of our small business owners across my district 
have come to me here recently with the same problem in the last 
few months: labor. Positions remain unfilled, job openings 
remain open, and the shortage of labor continues on. Now, I 
hazard a guess to say that many others in this hearing today 
have heard similar concerns from their constituents.
    Now, we all know that changes made to SNAP amid the 
pandemic helped Americans through an unprecedented time and 
challenges in our country. However, I am very deeply concerned 
that unless a serious effort is made to return SNAP to its 
original intended purpose, we are moving into an era of 
lifelong dependence on Federal programs where it is accepted 
and even encouraged, and incentives to help people get back to 
work and on their feet are set aside.
    Now, in the spirit of moving our economy forward and 
helping Americans get out of dependence and back to work, I 
submitted an amendment earlier this year as part of the budget 
reconciliation that would appropriate $3 billion to SNAP 
employment and training rather than to continue the increases 
in benefits. Now, sadly, the amendment failed to a wave of 
spirited noes from my colleagues in the Majority.
    Now, I have heard it said by a number of my colleagues on 
both sides of the aisle that programs like SNAP are not a 
handout, they are a hand up. And to that, I wholeheartedly 
agree. Prolonged welfare dependency is no way to rebuild an 
economy. If any fixes to SNAP should be made, they should be 
made in the spirit of helping Americans get back to work, 
accrue savings, and exit the program as productive, successful 
members of society.
    Now, Ms. Brown, I had a question for you here. And I want 
to thank you for your testimony here today. I was looking on 
the screen, in the grid, of where you are at. You are up in the 
upper right-hand corner. So, as I am sure you are aware, and I 
know you talk a little about this today, both through the state 
and this Committee's own conversation, a gentleman in Minnesota 
was able to receive a more than nominal SNAP benefit for many 
months due to Minnesota's use of broad-based categorical 
eligibility. Now, I say this not to garner personal attacks on 
the man but to further demonstrate how sometimes solutions 
cause more problems.
    In Minnesota, any and all households within 165 percent of 
poverty level are provided with the Domestic Violence Brochure, 
regardless of what households that that household's 
circumstances are. And while we constantly hear of the 
necessity of services and support that meet the household 
needs, we have a patchwork of 44 state policies that provide 44 
different funded pieces of paper that never truly meet or 
really strive to understand that particular family's needs. So, 
it appears that we may need an overhaul, at least across a 
handful of programs well beyond SNAP. I would like to hear your 
thoughts on that.
    Ms. Brown. Thank you. I would agree that the overwhelming 
paperwork can be difficult. Right? With the multiple, different 
reports that need to be turned in, different timing, that can 
be very burdensome, both for our eligibility workers for state 
offices and also for participants themselves. However, I stated 
before, only one percent of people were impacted in Minnesota 
by our asset test when we reviewed it in 2011, shortly after we 
implemented in 2010.
    I would also agree that additional improvements need to be 
made on a continuous basis, and some of those have occurred, 
with the inclusion of states to review lottery winnings, for 
example. But I do believe that the overall impact of 35,000 
Minnesotans being able to receive SNAP far outweighs the one 
percent or less of individuals who perhaps are not being 
entirely truthful with all the information that they are 
sharing. But this is part of our program. And this is part of 
what we need to do, is just continuously look at what we are 
doing and how to improve and how to move forward to better 
serve.
    Thank you.
    Mrs. Cammack. And, Ms. Brown, I appreciate your response. 
Being in the position that you are, we mentioned multiple 
states have different programs. Is there a conversation that 
you have with your colleagues in other states about best 
practices and models that we can apply and adopt practices?
    Ms. Brown. Absolutely. That is in ongoing conversation. And 
I do think, after 10 years or 11 years of utilizing broad-based 
categorical eligibility, there is a time to look to see can we 
make some uniformity across all of the states. We have a lot of 
evidence and a lot of information from all of the states who 
have implemented, 40 states,* I believe, across the nation, 
that have taken this effort.
---------------------------------------------------------------------------
    * Editor's note: The list of states using categorical eligibility 
is retained in Committee file, and is also available here: https://fns-
prod.azureedge.net/sites/default/files/resource-files/
BBCE%20States%20Chart%20(July%202021).pdf.
---------------------------------------------------------------------------
    Mrs. Cammack. Excellent. Thank you.
    And I know, with that, my time has expired. Madam 
Chairwoman, thank you so much for your patience and graciously 
allowing me to ask my questions and submit a statement. Thank 
you.
    The Chairwoman. Thank you. We are happy to have you and all 
the other Members who have joined.
    That actually concludes all of our Member questions. I 
thank the panel so much for your time and your expertise in 
this area.
    Before we adjourn, I invite the Ranking Member to share any 
closing statements he might have.
    Mr. Bacon. Thank you, Madam Chairwoman.
    And I do appreciate the panelists today. It was very 
educational. And I also appreciated the great questions from 
our colleagues.
    What I think I heard today was three of the four panelists 
made a pretty clear case there is a cliff effect. And maybe a 
fourth said there is a little bit of it. But, between at least 
three today made a pretty clear case. Also, our two panelists 
we had a month or 2 ago that were guests of the Majority made a 
strong case as well. So I think we are on to something. And I 
appreciate that.
    No offense to discussions on broad-based categorical 
classification. And I understand it could relieve some staff 
pressures, cut through some of the red tape. Not common 
incidences, but they are too common enough where someone has 
lots of assets, to include a million dollars in assets. I think 
when it happens, it undercuts the public's confidence of the 
SNAP program. It undermines the confidence that our 
constituents have when they see and hear when this happens. So 
there have to be some controls put on that.
    Increasing benefits or expanding eligibility in one program 
here does nothing to solve the more egregious cliff effects 
across housing, childcare, and cash assistance. So, my point 
being there are like 80 of these programs. So, this is a start 
where we are going to have like a [inaudible]. Hopefully, we 
can look at it in a more broad picture in Congress itself.
    USDA takes a look at characteristics of recipients. The 
recently released 2019 report,* the most recent data that we 
have, and it was done during an economic boom, showed that as 
it relates to earnings, 29 percent of total SNAP households had 
earnings in 2019. Further analysis revealed that 54 percent of 
households with children had income from earnings, while six 
percent of SNAP households that included hourly individuals had 
income. About 71 percent, though, of households with adults 
ages 18 to 49 without disabilities, the childless households, 
ABAWDs in other words, had no earned income. I make this point 
that there is work to be done to reengage families in the 
workforce. I think those stats tell a compelling story.
---------------------------------------------------------------------------
    * Editor's note: the report referred to is retained in Committee 
file, and can be accessed at https://www.fns.usda.gov/sites/default/
files/resource-files/Characteristics2019.pdf.
---------------------------------------------------------------------------
    While I am on the topic, because you have been talking 
about minimum wage and other things, data also shows that 
someone who is making $27 an hour, that these very 
disincentives that cause the cliff effects still rears its 
head. Frankly, it means if you can navigate your way on to 
enough benefits, it doesn't matter whether or how much you 
work. Look at what has been going on in our unemployment 
insurance system. It exceeds earnings from work and massive 
amounts of child allowance to even non-workers. So there has to 
be some cutoffs here.
    Interestingly, there was some talk about the Thrifty Food 
Plan today. I must share that I have heard alarming statements 
from folks across the spectrum related to the Department's 
handling of this process, from discrepancies in methodologies 
to outrageous measures of time and effort. I can only hope that 
these are simply inside-the-beltway rumors. However, if true, 
we could be staring at an unprecedented increase to SNAP 
benefits that far exceeds what was done in the midst of the 
pandemic. I see that this is presenting a dramatic and 
continuing impact on SNAP beneficiaries. It seems like an 
unrealistic precedent to set.
    I would be remiss, finally, to say if I didn't mention the 
fact that we did not hear about any revenue neutral solutions 
today. We should have some opportunities to do that. Nor did we 
hear about how to better coordinate our 80+ different programs. 
Though I know this is in our food jar here, I know in the end, 
Congress is going to have to take a holistic look at this.
    So, Madam Chairwoman, I really appreciate you scheduling 
this today. And, with that, I yield back.
    The Chairwoman. Thank you, Ranking Member Bacon.
    I also want to thank my colleagues and our witnesses, once 
again, for your participation in today's hearing. Your input 
and expertise will help us in shaping our policy priorities and 
legislation that may be considered on this Subcommittee.
    We have heard much we can learn from today. It is even 
clearer to me how critical SNAP is in helping low-income 
Americans to put food on the table and how important state 
options for flexibilities like broad-based categorical 
eligibility are to easing the benefit cliff participants will 
likely face.
    Today's witnesses reinforced what we have heard, or at 
least what I have heard in my communities and shed light on how 
the concerning upcoming COVID relief fund may impact those who 
are still most in need of continued support as our nation works 
to recover from the dire economic straits of this pandemic.
    Congress offers government assistance to many sectors of 
our economy: farmers, the finance district, housing, 
manufacturers, small businesses. And we don't worry about the 
long-term impact of government welfare or programs that support 
our economy. I would just like to see us prioritize the same 
level of investment in hungry people. SNAP is the most 
efficient Federal program for boosting local economies.
    I want to thank each of our witnesses again and to all the 
Members who joined. Your time and knowledge are extremely 
valuable. And I look forward to all we will be able to continue 
to achieve together in the 117th Congress.
    I also want to note it is not lost on me that when I took 
over as the Chairwoman of this Subcommittee, and even at the 
end of the 116th Congress, every Member of Congress, 
Republicans and Democrats alike, were heartbroken and appalled 
by the long lines that we saw on highways, at food banks, 
people who had lost their jobs and for the first time in their 
lives were facing food insecurity. I hope we don't forget those 
images and move forward in a way that does not acknowledge that 
we have a problem with hunger in this country. So, to return to 
business as usual and the status quo is not what I am going to 
do on my watch. We have work to be done. We have a 
responsibility to make sure that in the United States of 
America in 2021 we don't have long lines that are miles long at 
food banks or families that are worried about not being able to 
feed their children.
    So again, I thank you all for your work today. And, with 
that, this hearing is adjourned.
    Under the Rules of the Committee, the record of today's 
hearing will remain open for 10 calendar days to receive 
additional material and supplemental written responses from the 
witnesses to any questions posed by a Member.
    This hearing of the Subcommittee on Nutrition, Oversight, 
and Department Operations is adjourned.
    [Whereupon, at 2:01 p.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
      Supplementary Material Submitted by Tikki Brown, Assistant 
  Commissioner, Minnesota Department of Human Services, Children and 
                     Family Services Administration
          Mr. Lawson. . . .
          Ms. Brown, in your testimony, you highlighted the importance 
        allowing recipients to earn up to 200 percent of the Federal 
        poverty guideline. If my home State of Florida was to move to 
        200 percent requirement, what would you expect to see with this 
        change?
          The Chairwoman. I am sorry, Ms. Brown, I am going to have to 
        ask you if you would submit the answer to that question to the 
        Committee. The gentleman's time has expired.

    Thank you for your question, Mr. Lawson. Based on our initial 
analysis, we estimate that fewer than 20% of cases that are closed or 
denied due to the gross income test (currently set at 165% FRL) would 
be able to receive SNAP benefits in Minnesota if the gross income test 
were raised to 200% FPL. About 80% of cases would either still be above 
the gross income test, or would not meet the net income test. So, we 
anticipate the expansion would be modest, but that it would be one 
important element in helping low wage workers.
    This is why we believe it's so important to take these suggested 
changes to the SNAP benefit calculation as a whole. Increasing the 
gross income test to 200% FPL, increasing the SNAP allotment amounts 
(which we applaud USDA for doing with the reevaluation of the thrifty 
food plan), and enhancing the earned income disregard to match the 
Federal SSI program implemented in combination are all critical to 
ensuring that SNAP supports work by helping low wage workers whose 
earnings are not enough to meet all their basic needs. In addition, we 
believe it's key to not count cash assistance benefits (TANF) that are 
below the poverty line against SNAP benefits.
                                 ______
                                 
                           Submitted Question
Response from by Tikki Brown, Assistant Commissioner, Minnesota 
        Department of Human Services, Children and Family Services 
        Administration
Question Submitted by Hon. Don Bacon, a Representative in Congress from 
        Nebraska
    Question. Ms. Brown, thank you for taking the time to testify 
before the Committee on July 12, 2021. Your testimony mentioned, ``That 
is why setting asset limits for public assistance programs is counter-
productive: They do not change caseload numbers, but they create 
significant administrative burden, taking time and focus away from more 
productive work for SNAP recipients and eligibility workers.'' Your 
testimony then went on to describe how the state of Minnesota is one of 
over 40 states that use BBCE to eliminate the asset test for SNAP.
    Are you aware that the State of Minnesota has used automated asset 
verification systems within the Aged, Blind, and Disabled population of 
Medicaid for the past 2 years? That it has actually cut the 
administrative burden of the program as the system is fully automated 
between the state and financial institutions and cuts out fraud and 
abuse before it can occur to the tune of saving tens of millions of 
dollars for the state per year, ensuring that those truly eligible have 
the benefits they need and deserve? Evidence shows this system actually 
allows applicants to receive benefits much quicker if they are deemed 
eligible by the state, as most asset checks are automatically checked 
and returned within 24 hours and any remaining are returned within 3 
days.
    If you were provided the opportunity to utilize this tool within 
your state SNAP program, would you do so for the application process, 
similar to states like West Virginia and Mississippi?
    Answer. Minnesota's Asset Verification System operates under the 
title of ``Account Validation Service'' (AVS). In the 2 years Minnesota 
has operated the AVS, unfortunately, it has not reduced administrative 
burden. This is mainly because the service does not provide all details 
needed to accurately determine asset eligibility for Minnesota's 
Medicaid program known as Medical Assistance. In addition, Minnesota's 
Medical Assistance program allows applicants to reduce excess assets 
within the application processing period and become eligible for the 
program. This means in most cases Minnesota cannot use the AVS reported 
balance of countable assets as of the first moment of the month.
    The service is not entirely automated. Most smaller local banks 
have employees manually look up data and respond by entering the 
information in a web exchange (60% of the state's network) or send the 
information by fax or paper mail (37% of the state's network). Due to 
the delay in mostly manual responses, the AVS portal is configured to 
wait 10 calendar days after a request was made before it displays any 
results. Because of the processing delay, the inability of the AVS to 
return information about all known assets, and the inability to use the 
information about assets in the first month, all applicants must still 
provide paper documentation of assets with their applications. Using 
the AVS is therefore an additional administrative processing step and 
does not reduce administrative burden on either frontline eligibility 
workers or applicants for verifying assets.
    Minnesota uses the AVS primarily to identify financial accounts 
that were not reported by applicants. However, Minnesota financial 
institutions are not mandated to respond to the request and the service 
does not query all possible financial institutions in the United 
States. In the 2 years Minnesota has operated the AVS, the state has 
submitted 55,74 requests for financial account information on 51,798 
cases. Eligibility workers found 811 accounts that had not been 
disclosed by the applicant, with an average account balance of 
$6,428.28. Undisclosed accounts do not always result in ineligibility. 
Applicants have the ability to dispute ownership and balance details 
provided by AVS, and some accounts are jointly held or otherwise 
excluded by program rules. Therefore it is difficult to evaluate how 
many savings were actually realized.