Husted discusses burden of federal benefits cliff on workers, small businesses

“So that’s why I introduced the Upward Mobility Act, to try to solve that problem, to give people a shot at the American dream by not being trapped in this generational cycle of poverty.” View Husted’s remarks here . WASHINGTON – Sen. Jon Husted (R-Ohio) today delivered remarks at the U.S. Senate Committee on Small Business and Entrepreneurship’s hearing on how the federal benefits cliff traps Americans in a generational cycle of poverty and stifles job creation and productivity for our small businesses. A benefits cliff occurs when a person receiving public assistance earns more money through a raise, promotion or additional work hours that results in the partial or complete loss of federal benefits that normally totals significantly more than the increased wages. A single parent with two children in Dayton, Ohio could be offered a salary increase from $33,000 to $34,000. That $1,000 raise would make the family ineligible for $4,600 in food, housing, and child care costs. The $1,000 raise thus results in a nearly $4,000 negative, financial impact. Husted’s landmark legislation, the Upward Mobility Act , seeks to reform federal welfare programs to help ensure Americans are not penalized for pursuing higher wages, additional work and greater economic opportunity. The bill would create a pathway out of poverty for lower income earners. The Upward Mobility Act would establish a five-state pilot project. The participating states would receive their federal contribution in a single funding stream so states can design programs to smooth out their benefits cliff. It would also allow states to keep any savings generated and reinvest it in helping others out of poverty. Ohio Governor Mike DeWine has already volunteered Ohio as one of the pilot states. Fact sheets on how the federal benefits cliff hurts Americans in every state in the nation can be downloaded at www.Husted.Senate.gov/Upward . Key excerpts include: “I’m very passionate about this particular topic in Ohio. “This is probably the most bipartisan issue I know because over my time in public service, I have heard social services agencies tell me, ‘Please do something to eliminate the benefits cliff.’ I’ve heard businesses say to me, ‘Please do something to eliminate the benefits cliff.’” . . . “When we were trying to do something on this at the local level, we kept running into the fact, well, if somebody wants to get ahead and work more hours or get a raise, they lose more benefits than they gain in earnings.” . . . “Many employers say, ‘Hey, I wanted to hire somebody full time, or I wanted to give them a raise, but they wouldn’t take it because of the benefits cliff.’ “That’s what inspired me to take the appointment to the U.S. Senate so that I could work on this issue, because at the state level and the local level across this country, people who want to solve the problem can’t, because the federal government for 50 years has created a trap for people who would like to have upward mobility. . . . “Americans are the most generous people on Earth, but our public assistance programs are failing them, though, by trapping them in this generational cycle of poverty. The benefits cliff is the decades-old problem that I’ve seen firsthand that would give people a path to financial stability and a chance to join the middle class.” . . . “They would receive essentially a, you know, a $4,000 pay cut by earning $1,000 more, and a single parent who is living at the edge can’t afford to take that risk because they don’t have the stability that they need to take the risk of trying to move forward. So, they make a logical choice. They make a logical economic choice by forgoing that opportunity.” . . . “So that’s why I introduced the Upward Mobility Act, to try to solve that problem, to give people a shot at the American dream by not being trapped in this generational cycle of poverty. I greatly appreciate the opportunity to have this conversation today.”