John Hood: Welfare Reforms Create Good Problems
RALEIGH — When Congress passed its budget-reconciliation bill last summer, it created a bunch of problems for North Carolina policymakers — thank goodness!
No, really. Federal law now imposes work requirements on able-bodied adults enrolled in Medicaid and removes some exceptions to similar requirements for the Supplemental Nutrition Assistance Program (SNAP), once called food stamps. Federal law now also requires North Carolina and other states to shoulder more of SNAP’s administrative costs.
Both reforms correct perverse incentives. When Congress appropriates the vast majority of funding for a program to be administered by states or localities, the latter have little fiscal motivation to resist program expansion or police fraud. And when any level of government offers public assistance to poor, non-disabled adults, it runs the risk of disincentivizing work, marriage, and other choices that promote human flourishing.
When the North Carolina General Assembly reconvenes next month for its 2026 session, one subject on the table will be how best to apportion an additional $85 million in SNAP administrative costs between the state and its counties. Under the current formula, the distribution would be $16 million and $69 million, respectively.
Recognizing the fiscal constraints on many counties, state lawmakers may well decide to slice that pie differently. What lawmakers neither wish nor possess the power to do, however, is to shirk this new responsibility. One outcome, I hope, will be broader reforms to streamline eligibility determination and case management for all public-assistance programs.
Similarly, while I believe most legislators welcome tougher work requirements, even those who feel differently about them should accept not only that the reconciliation bill is now the law of the land but also the fact that requiring work in exchange for welfare benefits is very popular. It has been for decades.
Indeed, I think Congress ought to expand the concept to encompass another welfare category: housing assistance. Whether beneficiaries reside in government-owned housing projects or receive vouchers to rent private units, those without severe disabilities or young children ought to be required to work or perform community service as a condition for retaining their benefits.
North Carolina policymakers may soon be able to implement a version of this idea even without congressional action. Kevin Corinth, deputy director of the Center on Opportunity and Social Mobility at the American Enterprise Institute, reports that a new rule proposed by the U.S. Department of Housing and Urban Development would allow local governments to impose time limits and work requirements on federal housing assistance.
Corinth argues that the two conditions would be mutually reinforcing. “While time limits mitigate work and marriage disincentives over the long run,” he writes, “in the short run families would still face the prospect of losing a portion of their current housing subsidy by earning more money. Work requirements can mitigate this disincentive by requiring at least some base level of work to maintain full assistance. In addition, encouraging sustained attachment to the labor market can help families transition to greater self-reliance when their time-limited housing subsidy expires.”
Offering workfare instead of welfare is a good example of the Biblical adage that “there is nothing new under the sun.” The English philosopher and statesman John Locke, namesake of the North Carolina think tank with which I am affiliated, spent the latter part of his public service as a commissioner on the Board of Trade in London. In 1697, he drafted reforms to combat both indigence and indolence.
Dividing the poor into three categories — those who “can do nothing at all towards their support,” those who “cannot maintain themselves wholly” but are “able to do something towards it,” and those able to “maintain themselves by their own labor” — he proposed unconditional aid for the first group, supplemental aid for the second, and employment only for the third.
The “true and proper relief of the poor,” Locke wrote, “consists in finding work for them” so that the able-bodied “do not live like drones upon the labor of others.” True then, true now.
John Hood is a John Locke Foundation board member. His books Mountain Folk, Forest Folk, and Water Folk combine epic fantasy with American history (FolkloreCycle.com).
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