Testimony: Reforming the Welfare ‘Cliff’
Testimony in Support of LD 1448: “An Act to Change the Temporary Assistance for Needy Families Program Requirements by Reducing Benefits Commensurate with a Recipient’s Salary, Reducing the Special Housing Allowance and Limiting Eligibility for 2-parent Families”
Senator Baldacci, Representative Meyer, and the distinguished members of the Committee on Health and Human Services, my name is Nick Murray and I serve as director of policy for Maine Policy Institute. We are a free market think tank, a nonpartisan, non-profit organization that advocates for individual liberty and economic freedom in Maine. Thank you for the opportunity to testify on LD 1448.
This bill seeks to provide a solution to the phenomenon known as “the welfare cliff,” a situation in which someone on welfare loses the entirety of their benefits after working enough to earn a certain level of income. This naturally disincentivizes people on welfare programs to continue working and earning more. Instead, they may try to not work too much in order to avoid the “cliff” that results in lost benefits.
LD 1448 would smooth out this transition by phasing down the level of one’s benefits over the following year starting at the third consecutive month of working, to 75% of the benefit level, through the ninth consecutive month of employment, and to 50% after that. As long as Maine continues to reject work requirements for these benefits in the first place, this bill provides a reasonable translation period for workers on the TANF bubble.
To make up for these extended benefits, the bill also reduces the special housing allowance offered to those on TANF, and tightens eligibility requirements to ensure that single-parent households receive benefits first. We understand that these inclusions are not part of the sponsor’s intent, but we see them as appropriate reforms in service of a more accountable system that prioritizes the truly needy.
Please deem LD 1448 “Ought To Pass” to ensure greater accountability in our welfare system, and provide Mainers on welfare a path to meaningful work and independence. Thank you for your time and consideration.