To Maximize the Reforms in the One, Big, Beautiful Bill, Blue States Must Be Held Accountable
Key Findings
- Welfare enrollment and costs have exploded over the past two decades.
- President Trump spearheaded the One, Big, Beautiful Bill, which delivered generational welfare reform.
- Lessons from the 1996 cash welfare reform show that states must fully implement the reforms to realize the most impact.
- In 1995, blue states made up 53 percent of all adults receiving cash welfare, but by 2024, their share had skyrocketed to 87 percent.
- To take full advantage of the welfare reforms in the One, Big, Beautiful Bill, all states must fully implement the reforms without delay.
Overview
Welfare programs like food stamps and Medicaid have been on an unsustainable growth path, with both enrollment and costs skyrocketing. Food stamp spending has soared from $17 billion in 2000 to $110 billion in 2025.1 Meanwhile, Medicaid costs have increased nearly fivefold from 2000 to 2024, from $206 billion to $964 billion.2
This dramatic surge in costs has been fueled by increased enrollment in both programs. Food stamp enrollment has risen from 17 million in 2000 to 42 million in 2025, while Medicaid enrollment has nearly tripled.3-4 Much of the growth in both programs can be attributed to able-bodied adults—the majority of whom do not work—flooding the programs.5-6
President Trump and congressional Republicans have worked to change these programs’ growth trajectories with the welfare reforms found in the One, Big, Beautiful Bill.7 But lessons from the 1996 cash welfare reform show that the administration’s work is not done. That reform resulted in massive differences between red states and blue states in how they reduced enrollment in cash welfare.
The Trump administration must hold blue states accountable for fully implementing the reforms without delay to maximize their impact.8-10
The One, Big, Beautiful Bill can improve welfare like no other reform before
With the One, Big, Beautiful Bill, President Trump and congressional Republicans delivered generational welfare reform.11 The reforms are built on ensuring that those who can work, train, or volunteer do so and incentivizing states to shore up program integrity issues.
Through the One, Big, Beautiful Bill, Congress and President Trump have delivered real work requirements in welfare programs. The legislation expanded work requirements to include more able-bodied adults on food stamps and introduced work requirements for able-bodied adults on Medicaid for the first time ever.12-13
Work requirements have a proven track record of successfully moving millions of able-bodied adults from welfare to work, increasing incomes, and growing the economy.14 Able-bodied adults subject to work requirements have seen their incomes double within a year and triple within two years across more than 1,000 different industries, setting them on the path to self-sufficiency.15-20
The One, Big, Beautiful Bill also requires states to manage their excessive payment error rates in food stamps or pay for a portion of their benefit costs.21 States with payment error rates of six percent or higher must now cover a percentage of the costs of their error rates, ranging from five to 15 percent.22
For Medicaid, the One, Big, Beautiful Bill incentivizes states to implement program integrity measures by prohibiting federal reimbursement to states with eligibility error rates exceeding three percent.23 The law also requires more frequent eligibility reviews for some populations.24
The One, Big, Beautiful Bill has the potential to be the most meaningful welfare reform in the country’s history. But lessons from the last major welfare reform show that all states must fully implement the reforms to realize the most impact.
Cash welfare reform has resulted in huge differences between red states and blue states
In 1996, bipartisan legislation was passed to reform the country’s cash welfare program.25 The law replaced Aid to Families with Dependent Children with Temporary Assistance for Needy Families (TANF), the cash welfare system that still exists today.
The new TANF program had a few key differences from the previous system of cash welfare. It implemented work requirements to receive cash welfare, and, like the One, Big, Beautiful Bill, had a goal of transitioning people on welfare to work.26 It also limited how long individuals could receive cash welfare.27 Finally, it distributed money through block grants, granting states greater freedom to administer the program.28
States took three different approaches to implementing the work requirements.29 While each group of states reduced their cash welfare caseloads, the more stringent states reduced their caseloads at a much more successful rate.30
Now, 30 years later, the effects of state implementation can still be seen when contrasting red states, those that voted for President Trump in 2024, with blue states, those that voted for former Vice President Kamala Harris.
Before the 1996 reform, blue states enrolled 2.2 million adults on cash welfare, while red states enrolled a comparable two million adults.31 But by 2024, red states had reduced their adult caseload to below 100,000, whereas blue states still enrolled 700,000 adults.32 Where pre-reform adults were evenly matched between red states and blue states, blue states now account for more than 87 percent of the adult population on cash welfare.33 To match their red state counterparts, blue states would have to remove a staggering five out of six of their remaining adult recipients.
While blue states have failed to reduce their caseload at the rate of red states, they have also increased cash welfare costs by nearly triple the amount of red states from 1995 to 2024.34
The caseload and cost differences are not the result of blue states increasing their population faster than red states over the last three decades. In fact, red states have both grown more quickly and added 25 million more people than blue states over this period.35
Lessons can be learned from the cash welfare reform of the 1990s, which was beneficial but could have been more impactful with fuller implementation across the country.
For maximum impact, hold blue states accountable for reforms
The One, Big, Beautiful Bill offers the promise of generational welfare reform by moving able-bodied adults to the workforce, preserving resources for the truly needy. But as previous cash welfare reform shows, to reach its potential, the reforms must be implemented fully by both red and blue states.
The Trump administration should be prepared to address blue states not implementing the required welfare reforms since no Democratic elected official voted for the bill, and many blue state governors came out against the reform package.36-39
The administration should stick to deadlines despite states’ foot-dragging and delay tactics. Federal agencies should not approve waiver requests for delayed implementation or alternative methods to calculate food stamp payment error rates or Medicaid improper payment rates. Federal agencies must also prevent states from exploiting loopholes like the medical frailty exemption that would undermine the work requirement’s effectiveness.40 Finally, the administration should vigorously defend the law from any and all lawsuits.
Since many blue states have large populations and a high number of welfare recipients, taking these steps is necessary to ensure the reforms have maximum impact.
Just like cash welfare in 1995, the food stamp and Medicaid programs have comparable enrollment and costs between red states and blue states. To ensure the reforms’ success, it cannot play out where red states reduce their caseloads drastically while blue states lag behind.
For example, there are 20 million expansion enrollees in the Medicaid program and roughly 17 million will likely be subject to the new work requirements.41 In blue states, the expansion population likely subject to work requirements numbers roughly 11 million.42
If three-quarters of the total number of individuals subject to work requirements were able to move from welfare to the workforce, that would be nearly 13 million lives changed. But if red states implement the necessary reforms while blue states are allowed to drag their feet, millions would be left behind in the welfare trap.
The Bottom Line
To ensure the most impact from the One, Big, Beautiful Bill’s welfare reforms, the Trump administration must hold blue states accountable for implementing them.
Welfare growth has been out of control, and the One, Big, Beautiful Bill offers a tremendous opportunity to change this growth trajectory.
But earlier cash welfare reform has taught that a good quality federal reform is only as effective as the states implementing it. Blue state TANF caseload reduction has lagged behind red states.
To get the most out of the reforms to food stamps and Medicaid, the administration must ensure that blue states implement the required reforms without delay. Doing so will help move millions of able-bodied adults from welfare to the workforce.
