Can states better deploy federal safety net funds amid this crisis?

The coronavirus will burden our social safety net in unprecedented ways. Congress and the administration have responded by expanding the safety net, but as more Americans lose their jobs and look for ways to make ends meet until the economy rebounds, we must get creative about additional solutions. In the next round of stimulus, policymakers now seem to have settled on sending cash to families to lessen the blow, but this will not be enough. Many people will need more help paying for food, housing, child care, and transportation that the cash infusion will not fully cover.

One way to provide additional help would be to immediately grant states new flexibility to combine federal resources in ways that can better help people make ends meet. States are now calling for this sort of flexibility. During a coronavirus briefing last week, New Jersey Lieutenant Governor Sheila Oliver noted that her state has “existing funding from the federal government” but is “hampered and hand tied by regulation,” adding that she will begin “to see if we can work towards waivers to give us flexibility to use those funds other than a very specific defined population.”

Congress should provide such flexibility by passing a law that would waive federal restrictions on a host of social safety net programs throughout the duration of the crisis. The federal government already commits more than $166 billion each year to fund programs providing cash assistance, child care, housing support, education, job training, and other related human services. The problem, however, is that these programs are administered by multiple agencies with different, and often competing, requirements. That does not make much sense in good times, much less in the current crisis. Congress could easily allow governors to combine these funds in customized ways to better help the people in need in their states.

There is already a template for this idea. Back in 2002, the administration proposed, and the House passed, “super waiver” legislation that would lift the restrictions in multiple federal assistance programs. The proposal died because of politics and competing priorities. Today, however, the country is in emergency mode, and governors and mayors need the flexibility to target assistance to support workers most affected by the pandemic. We need a waiver that will grant maximum flexibility for states to coordinate funding in different programs, so the people closest to the problem can provide the assistance most needed by those they are serving.

As long as this crisis lasts, such a coordination waiver would allow states to focus on funds from programs such as Temporary Assistance to Needy Families, housing assistance, job training, and child and student nutrition programs to help families make rent, cover child care costs, or have food on the table without having to worry about current federal guidelines and restrictions that are too inflexible for the needs that states are now facing in this crisis. We suggest leaving the Supplemental Nutrition Assistance Program, or food stamps, out of a coordination waiver given its purpose and capability of growing to meet demand during these times.

But flexibility with other programs would give governors stronger tools to address the current crisis in the best way for their state. There is no good reason to deprive workers and families of what they most need because of program rules written years ago to serve different objectives at a different time. This flexibility should be available as a state option throughout the duration of the crisis and then be rigorously evaluated after the crisis has passed to learn lessons beneficial to policymakers in the future.

If done right, the coordination waiver would be another powerful tool to help governors across the country mitigate the effects of the coronavirus on the economy and the population. As we are all aware, we need every tool at our disposal to get through this health and financial crisis.

Ryan Streeter is director of domestic policy studies and Matt Weidinger is the Rowe Fellow in poverty studies with the American Enterprise Institute.