Last week I linked to an OK Policy post about “cliff effects” that reduce or disqualify people for benefits whenever they increase their earnings, sometimes leaving people even farther behind even as they get better jobs or benefits.
The Associated Press reports that ARRA, the stimulus legislation, is causing some cliff effects of its own, and giving the unemployed a little bit of boost and a little bit of bust:
Under the economic recovery plan, laid-off workers have seen a $25 weekly bump in their unemployment checks as part of a broad expansion of benefits for the poor. But the law did not raise the income cap for food stamp eligibility, so the extra money has pushed some people over the limit.
One unemployed man in Georgia was pushed over the limit by the bump, causing him to miss out on $300/month in food stamps assistance.
Since policymakers are becoming increasingly aware of the problems of cliff effects, they wouldn’t intentionally cause such dramatic consequences in entirely new, emergency relief programs, right? Wrong:
Lawmakers crafting the stimulus knew this would become a problem, said Stacy Dean, director of food assistance policy at Center on Budget and Policy Priorities, a liberal think tank. They could have headed it off by raising the income tax or declaring that the $25 stimulus checks would not affect food stamp eligibility. Both were expensive options that could have forced states to reprogram their computer systems.
But more importantly, hashing out those details would have taken time.
“People were aware of this but, as you recall, the stimulus was moving along and then it was passed in about a day,” Dean said. “There was not a lot of policy discussion on this.”