There long has been a debate among social policy advocates and politicians over which makes better policy and is more politically sustainable: universal programs like Social Security and Medicare or targeted ones like Medicaid and food stamps.
The assumption is that universal programs fare better as, by definition, they have more beneficiaries. Conventional wisdom has it that during the Ronald Reagan and George H.W. Bush presidencies, programs focused on the poor were shredded, while universal programs escaped unscathed.
In a major study for the Hamilton Project and Brookings Institution, Bob Greenstein, the Michelangelo of social programs to lift people out of poverty going back to the 1970s, reports this conventional wisdom is essentially wrong. Over 40 years, after adjusting for inflation and population, he found that programs targeted by income rose at an annual rate of 3.39 percent, while universal programs rose an average of 2.36 percent a year.
There’s a reason, he concludes. “Policy makers effectively developed a new model for targeted programs aimed at poor families, extending them to families well above the poverty level even into middle class,” he told me.
Greenstein takes issue with critics who say this is just universal “lite,” with programs like SNAP, the Supplemental Nutrition Assistance Program, or food stamps, or the Earned Income Tax Credit or Medicaid. “Almost all the benefits go to people below the median income level in the country, and most of the benefits go to people in the bottom quintile.”
The Greenstein paper found that from 1979 to 2019, Medicare — which mainly serves the elderly — annually rose a robust 4.12 percent after adjusting for inflation and population. Medicaid, once seen as just for the poor, grew at an even faster 4.94 percent as eligibility expanded.
There are more than 82 million Americans enrolled in Medicaid, less than half living below the poverty level, and almost half of all births are covered by Medicaid.
That explains the Republicans’ political failure to cut Medicaid, which is funded mainly by the federal government with states kicking in a share. Obamacare offered extended benefits, but a number of Republican-led states rejected that. However, when proponents put it on the ballot as a referendum, it won in deeply red states like Oklahoma, Utah and Missouri. This summer, South Dakota voters resoundingly rejected a proposal by Republican legislators to make it more difficult to approve a Medicaid expansion initiative.
In his research, Greenstein cited overall qualities that make programs more sustainable, including: when tied to work; when also serving families significantly above the poverty line, even into middle class; when federally financed and administered; when providing in-kind assistance — not cash — either directly or through the tax code, and when they focus on children, the elderly or those with disabilities.
Welfare — what used to be called AFDC and now TANF (temporary assistance for needy families) — fared poorly, being repeatedly cut. But supplemental nutrition assistance programs have flourished, either through stamps or electronic transfers, providing food assistance to families, in good and bad times.
The modern food stamp program was devised in the 1970s by a diverse set of influential legislators: Rep. Tom Foley, who later became Speaker, and Sens. Bob Dole, a conservative, and liberal George McGovern. They put the measure in the farm bill, winning support from rural lawmakers who wanted farm subsidies, and urban liberals then backed the agricultural programs.
Assistance that goes through the tax code is easier to garner political support. The Earned Income Tax Credit for the working poor has been enormously successful and popular. So has the child tax credit, which provides a credit of up to $2,000 for children up to 17.
The credit was temporarily boosted during the pandemic — but wasn’t extended in the big domestic bill Democrats just passed. Hopefully it might be next year — and made refundable, so it could help the really poor who pay little or no taxes while reducing the eligibility threshold. Now a couple making as much as $450,000 can get some of the credit. That’s well beyond middle class.
Most any new universal programs are doomed because of the cost. In the recent congressional legislation, House Democrats scrapped a plan to include dental and vision benefits under Medicare because of the price tag. The dream of some liberals for a universal basic income will remain a dream. So will any hope for a single-payer health care plan; advocates will have to focus on expanding Obamacare.
The tax increases needed to support universal programs are unattainable — even though, as Greenstein notes, the United States is a low-tax country. A couple years ago, according to the Organisation for Economic Co-operation and Development (OECD), tax revenue in the U.S. equaled 25 percent of gross domestic product. In Western European countries that rate ranged between 33 percent and 47 percent.
There will be competing claims for any domestic initiatives. Both Social Security and Medicare need to be financially bolstered in this decade. Even after an expansive agenda enacted in this Congress, there are unmet needs, especially for children.
One possibly helpful step may be a little-noticed executive order that President Biden signed last December directing federal agencies to better coordinate in cutting through red tape and bureaucratic overlap in some of these initiatives.
“This has the potential to be a big deal,” Greenstein says. “It can build on the progress that has been made in making it easier to apply and remain enrolled in these programs without impairing program integrity.”
Al Hunt is the former executive editor of Bloomberg News. He previously served as reporter, bureau chief and Washington editor for The Wall Street Journal. For almost a quarter century he wrote a column on politics for The Wall Street Journal, then The International New York Times and Bloomberg View. He hosts Politics War Room with James Carville. Follow him on Twitter @AlHuntDC.
Source: TEST FEED1
