Welfare and food stamp program changes may affect local economies, and economic changes may affect local program partici­pation. In this paper we outline a model of these interactions. First we highlight key changes in the programs and report recent program and labor market participation patterns in metro and non-metro portions of the Midwest and the state of Iowa. Then we describe computable general equilibrium (CGE) model equations that formalize the types of choices being made and discuss the regional economic impacts that can be simu­ lated. In the process, we raise several related research questions.