Key points
- The Upward Mobility Act of 2026 proposes to transform federal antipoverty policy by allowing five states to run pilot projects that will revise and streamline their safety net systems.
- This bill will permit states to pilot Empowerment Accounts. These accounts will combine funds from several existing safety net programs into one monthly stipend that gives recipients both flexibility and agency when using the funds.
- The Alliance for Opportunity recommends pairing Empowerment Accounts with a work expectation and required financial literacy training.
- The proposed reform will reduce redundant administrative costs for the states, help beneficiaries achieve self-sufficiency, and minimize the risk of benefits cliffs.
On January 6, Senator Jon Husted introduced the Upward Mobility Act of 2026 (S.3583) in Congress. The legislation is set to transform federal antipoverty policy by allowing five states to run pilot projects that will streamline delivery and reduce inconsistent eligibility requirements across 10 safety net (welfare) programs. This, in turn, will reduce benefits cliffs (welfare cliffs) and increase employment.
The Alliance for Opportunity applauds Senator Husted for drawing attention to our currently broken safety net and the urgent need to make changes to the system. The Alliance has also sent a letter to Congress, signed by leaders representing nine think tank leaders, offering assistance regarding this proposed welfare reform.
The bill will dramatically shift the way most policymakers think about the welfare system. Government assistance programs will no longer be flawed tools for simply managing long-term poverty. Instead, states can design safety net programs to become pathways to stable employment, financial independence, and upward mobility.
The participating states will have the chance not only to reform policy, but also to change the lives of individuals, families, and communities for the better by restoring dignity and opportunity to the nation’s safety net.
Implementation of the new pilot projects
The Upward Mobility Act will promote a safety net that encourages human flourishing by allowing states to design unique benefit structures; gain flexibility in how they spend funds; and leverage resources from the private, nonprofit, and local government sectors to eliminate benefits cliffs.
It will also provide the option to create Empowerment Accounts (EAs) for pilot project participants. These accounts can combine funds from several existing safety net programs—including the Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF), Section 8 housing vouchers, and child care subsidies—into one monthly stipend.
EAs will equip beneficiaries with more flexibility but also greater agency when they use the funds. The accounts encourage thoughtful financial management and budgeting. Recipients will only be able to use their payments for government-approved items, but they can put the money toward their greatest needs. For example, if a family requires less financial assistance for housing but more for food or child care, they can adjust their spending accordingly.
To qualify for the pilot projects, people will have to work, train, or take part in an educational program. They will also have to participate in financial literacy training. The states must ensure improved employment outcomes, maintain auditable records, and prevent the fraudulent use of benefits.
Barriers to upward mobility in the current safety net system
The Upward Mobility Act’s proposed pilot projects will confront some of the most significant barriers in the current welfare system.
At present, the federal safety net includes approximately 80 programs. The programs are disconnected from one another, and none of them, on their own, address the full range of an individual’s or family’s needs.
In fact, these well-intentioned programs actually reinforce cycles of poverty by trapping people in a complex web of formulas and rules that prevents them from accepting and keeping promising jobs that would lead to a better future.
When low-income workers do try to take steps forward, they often experience benefits cliffs. In these disheartening situations, a small increase in earnings leads to a sudden and sharp decrease in, or even a total loss of, essential benefits. This leaves people worse off financially, despite doing everything right to get ahead.
The transformative impact of Empowerment Accounts
EAs have the potential to play an invaluable role in reforming the nation’s welfare system by consolidating several existing safety net programs into one, more effective program. Empowering safety net recipients by giving them much greater flexibility in how they use their government assistance payments can help them meet their current needs while setting them up for self-sufficiency later. Lower administrative burdens for the states will also make it possible for more resources to go directly to beneficiaries and the community organizations helping them.
In addition, states will be given the authority to design a public assistance structure that reduces the risk of steep benefits cliffs for welfare recipients. And when people are less afraid of benefits cliffs, they can take the critical steps of finding meaningful work and accepting job promotions. These opportunities enable individuals and families to truly thrive.
With successful implementation and management, EAs could replace some, if not all, safety net programs in the future. This would pave the way for a much more effective system to help lift people out of poverty and encourage work.
A vision of the safety net’s potential
The Upward Mobility Act provides a vision of what the safety net can become. The pilot projects will not only assist low-income individuals when they struggle, but also prepare them for work-based self-sufficiency. And by enabling states to implement welfare structures that minimize the risk of benefits cliffs, the pilots open doors to opportunity and upward mobility.
The nation needs a safety net that recognizes the inherent dignity, potential, and purpose of every person, and the Upward Mobility Act lays the groundwork to make that possible. It demonstrates a promising new commitment to supporting and empowering vulnerable community members, breaking cycles of poverty, and forever changing lives and futures.