Government Aid and Self-Reliance

by Allen Leigh, contributor

The Deseret News has an interesting article about people receiving government aid for food (food stamps). The couple outlined in the article would like to get off government aid, and they are saving towards that end. However, their savings are greater than that allowed by the government, and they were told they will no longer receive government aid.

Welfare is federally funded, but it is up to each state to determine how to administer the programs, including SNAP [food stamps], Medicaid and Temporary Assistance for Needy Families. Shortly after welfare reform, some states recognized that assets tests didn’t make sense anymore. Since 1996, 35 states eliminated assets tests for SNAP benefits. Five states (Nebraska, Pennsylvania, Texas, Michigan and Idaho) increased the amount of assets beneficiaries can hold from $2,000 to between $5,000 and $25,000. Ten states (including Utah, Wyoming, Virginia and Alaska) use the federal government’s $2,000 assets threshold.

This article brings out a serious problem: how to provide government (federal and state) aid without providing reasons and motivation for people to stay on welfare indefinitely. I don’t know how to solve this problem, but I think the problem exists and needs to be solved. Should the assets-tests be increased, eliminated, or kept at the same values? Should government definition of income and assets be changed to consider savings accounts income but not assets? How about wealthy retirees who live in states without asset-tests and receive government aid even though they have large savings accounts and could afford their lifestyle? Should governments have a limit as to how large families can be and still receive aid? How can governments give aid to those who really need it but not to those who don’t need it but take advantage of loop-holes to receive aid?

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