Big government lobbyists and CF don’t agree on much with welfare, but funnily enough, even they acknowledge that Pennsylvania’s welfare system keeps people in poverty.
It [a food stamp asset test] encourages poor people to avoid building up their savings, and to spend down their assets in order to stay on food stamps.
They’re right on the overall effects of welfare, but wrong on what an asset test does. The newly announced higher asset limits for food stamps and the long list of exemptions give beneficiaries plenty of opportunities to build wealth while still receiving benefits. But as a whole, welfare programs encourage dependence. When families earn more their total income declines because as their salary increases, their benefits (which are worth more than their raise) are reduced.
Basically, there are two solutions to the problem of perpetual poverty. One solution is to expand food stamps to everyone so no one is needy. Or we can look at reforms that encourage independence and employment. Work requirements, time limits, and restructuring Medicaid to give patients the freedom to choose their own health care insurance are just a few ways to reorient the system.
The welfare trap doesn’t just harm the poor, it’s also bankrupting today’s taxpayers. Welfare spending in the commonwealth is out of control, growing 52% since 2002-03. If we ever hope to reduce poverty levels and balance the budget, we must completely overhaul the welfare system to encourage work and restore individual dignity.