Housing and Urban Development Secretary Ben Carson proposed far-reaching changes to federal housing subsidies Wednesday, tripling rent for the poorest households and making it easier for housing authorities to impose work requirements.
The ambitious effort to shrink federal assistance has been dubbed “Welfare Reform 2.0’’, after Bill Clinton’s overhaul of the welfare system in 1996. The proposals — affecting housing, food stamps and Medicaid — would require congressional approval.
Trump earlier this month signed an executive order directing federal agencies to expand work requirements for low-income Americans receiving Medicaid, food stamps, public housing benefits and welfare. The agencies are supposed to issue recommendations to the White House within 90 days.
Just last week, House Republicans advanced a plan to strengthen work requirements for the Supplemental Nutrition Assistance Program, commonly known as food stamps, as part of the 2018 Farm Bill. Housing and Urban Development Secretary Ben Carson proposed far-reaching changes to federal housing subsidies Wednesday, tripling rent for the poorest households and making it easier for housing authorities to impose work requirements.
The proposal approved by the House Agriculture Committee would expand work initiatives, mandating that most adult recipients under 60 work part-time or enroll in a state-run training program. It would apply to as many as 7 million adults.
The Trump administration has also started allowing states to impose work requirements on residents enrolled in Medicaid.
The initiative unveiled by Carson Wednesday would raise the rent for tenants in subsidized housing to 35 percent of gross income (or 35 percent of their earnings working 15 hours a week at the federal minimum wage), up from the current standard of 30 percent of adjusted income. About half of the 4.7 million families receiving housing benefits would be affected, HUD officials said.
The cap on rent for the poorest families would rise to about $150 a month — three times higher than the existing $50 ceiling. About 712,000 households would see their monthly rents rise to $150, the officials said.
“There is one inescapable imperative driving this reform effort,” Carson said in a call with reporters. “The current system isn't working very well. Doing nothing is not an option.”
The HUD secretary said government spending on housing increases every year — without reaching the vast majority of those who qualify for aid. Only 1 in 4 eligible families receive housing benefits, he said. The rest remain on the waiting list for years and may never receive help.
“Every year, it takes more money, millions of dollars more, to serve the same number of households,” Carson said. “It's clear from a budget perspective and a human point of view that the current system is unsustainable.”
He added that decades-old rules on rent calculations are “far too confusing,” often resulting in families who earn the same income paying vastly different rent “because they know how to work the system.”
HUD wants to scrap rules allowing deductions for medical and child-care costs when determining rent, which Carson said gave some tenants an unfair advantage.
“They know how to include certain deductions that other people may not be aware of,” Carson said. “We really want to level the playing field and make it much more even for everyone.”
Housing advocates criticized the HUD proposals as “cruel hypocrisy,” coming on the heels of tax breaks to wealthy Americans and corporations.
“When we are in the middle of a housing crisis that’s having the most negative impact on the lowest-income people, we shouldn’t even be considering proposals to increase their rent burdens,” said Diane Yentel, president of the National Low Income Housing Coalition.
Carson’s proposed bill would also allow public housing authorities to impose work requirements. Currently, only 15 out of 3,100 housing authorities across the country require some sort of work or job training in return for benefits, HUD officials said.
In Atlanta and Charlotte, at least one adult needs to work 30 hours a week for a household to receive housing benefits. Chicago requires able-bodied beneficiaries to work 20 hours a week.
Seniors over the age of 65 and individuals with disabilities would be exempt from the rental increases for the first six years. They would also be exempt from any work requirements. HUD officials said that group makes up more than half of the 4.7 million families receiving subsidies.
The proposal would also move to verify tenants’ household income every three years instead of annually, which Carson said would encourage residents to work more without immediately facing a rent increase.
The Trump administration has long signaled through its budget proposals that it aims to raise the bar for federal assistance, in large part through expanding work requirements.
On food stamps, Republicans have pitched new work requirements as a way to help people out of poverty while focusing assistance on those most in need. About 42 million Americans depend on food stamps.
Democrats and anti-hunger advocates say the proposed work requirements could force as many as 1 million people off the program over the next 10 years, citing estimates from the Congressional Budget Office. They have also expressed doubts about the proposed expansion of state job training programs for recipients.
“Food is coming off the table to pay for this vast bureaucracy,” Stacy Dean, the vice president for food assistance at the Center on Budget and Policy Priorities said.
Separately, the Agriculture Department is reevaluating work requirements in areas that had been exempted because of high unemployment during the economic downturn.
Trump’s budget proposal also included a controversial suggestion to replace half of families’ cash benefits with a box of nonperishable, government-sourced goods.
After failing to repeal the Affordable Care Act through Congress in 2017, the Trump administration has started allowing states to impose work requirements on residents enrolled in Medicaid — a first in the history of the 53-year health care program.
Three states — Kentucky, Indiana, and Arkansas — have enacted Medicaid work requirements. Seven additional states have applied to do the same.
Kentucky says the changes will lead 95,000 people to lose Medicaid coverage over the next five years.
The Trump administration also gave states permission to impose much higher premium payments and kick people off Medicaid for failing to pay. The Obama administration had permitted more limited versions of these policies for states during the expansion of Medicaid, but Trump officials approved changes aimed solely at reducing enrollment.
“There’s a retrenchment of the policies passed under the Affordable Care Act that helped people stay enrolled on Medicaid,” said MaryBeth Musumeci, associate director of the Kaiser Family Foundation’s program on Medicaid and the uninsured.
Carson laid out the administration’s housing plans in a press call about an hour before a House Financial Services subcommittee hearing on rent reform.
“Changes that are made to the rental structure ultimately have to be approved by Congress,” Carson said. “These are the suggestions that we are making.”