The U.S. needs a new safety net | Angela Rachidi

It's great to have you back on the show because there's been a lot of work and development in the social welfare reform space.

And most recently, there was a U.S. Senate committee hearing.

I think it's the Committee on Small Business and Entrepreneurship held a hearing on this issue that we've talked a lot about, on benefit cliffs and social safety net reform and the Upward Mobility Act.

And I wanted to have you on the show because you testified before the committee.

And first, I just want to ask you to kind of give our audience a summary of what your key message was to members of Congress on this issue.

Yes, of course.

Thanks.

And it was it was really a pleasure to be invited to to testify before that committee.

And I was very happily surprised maybe that they were focused on this topic because, you know, as as you know, and I'm sure many of your listeners know, You never can quite predict what topic areas some of these Senate committees are going to focus on.

And so the fact that the Small Business Committee wanted to focus on benefit cliffs, I personally thought made a lot of sense.

And it was just great that they did that.

And so the main theme that I was trying to argue in my testimony and why I think it makes sense for that committee to hold this hearing is, is that the issue of benefit cliffs is something that we hear a lot about from the perspective of the participants.

And so I was trying to make the argument, one, that benefit cliffs do exist, largely because of the structure of our safety net programs.

And also that they exist, but they affect participants' behaviors by discouraging them from possibly taking on additional work or accepting higher pay because they might lose benefits if they do that.

But then also the point, and again, why I thought the committee holding this hearing made a lot of sense, is that it not only affects participants, but it affects employers as well.

And small business employers are particularly when they are struggling to find workers.

The last thing that they need is an additional barrier preventing capable people from working for them.

The last thing they need is an additional barrier that's government created.

And so I tried to make that argument as well, is that this not only affects the individual households, which obviously is very important, but it also can affect those businesses and the broader economy.

Angela, one, as a quick refresher to our audience, when we talk about benefit cliffs, it's this idea that for families receiving government assistance of some kind, if their earned income increases, it can trigger a loss of the benefits they're getting that can, in some instances, outpace or even eclipse the new earnings.

It can actually make them worse off financially, or it eats up so much of those new gains that they feel like they're stuck in the same place.

And, you know, there's been a lot of great work from American Enterprise Institute.

We've obviously put out materials from Sutherland Institute on this topic.

One of the things that stood out to me from this hearing, Angela, is that there actually seemed to be this kind of consensus that they're real and they're a problem.

I don't recall hearing anyone saying that benefit cliffs do not exist or that they are not a problem.