Social policy proponents and politicians have long disagreed over which programs—universal ones like Social Security and Medicare or targeted ones like Medicaid and food stamps—make better policy and are more politically viable.
The presumption is that universal programs perform better because they by definition serve a larger population of people. According to conventional knowledge, during the administrations of Ronald Reagan and George H.W. Bush, universal programs were unaffected while those that served the poor were destroyed.
Bob Greenstein, the Michelangelo of social programs to raise people out of poverty dating back to the 1970s, says that this popular thinking is basically incorrect in a significant research for the Hamilton Project and Brookings Institution. He discovered that over a 40-year period, income-targeted programs increased at an average annual rate of 3.39 percent whereas universal programs increased at an average annual rate of 2.36 percent after accounting for inflation and population.
There’s a purpose, he says. He explained to me that policymakers had successfully created a new model for targeted programs aimed at disadvantaged families, expanding them to families that were well beyond the poverty line and even into the middle class.
With programs like SNAP, the Supplemental Nutrition Assistance Program, or food stamps, or the Earned Income Tax Credit, or Medicaid, critics who claim that this is just universal “light” have a point, according to Greenstein. “Most of the advantages go to persons in the bottom quintile, and almost all of the benefits go to people below the country’s median income level.”
According to the Greenstein report, Medicare, which mostly serves the elderly, increased annually by a substantial 4.12 percent between 1979 and 2019 after accounting for inflation and population growth. As eligibility was widened, Medicaid, which was formerly thought to be only for the poor, rose even faster, 4.94 percent.
Nearly half of all births in the United States are covered by Medicaid, which is used by more than 82 million people, with less than half of them living in poverty.
That explains why the Republicans were unable to slash Medicaid politically. Medicaid is financed mostly by the federal government, plus contributions from the states. Extended benefits were provided by Obamacare, but several states with Republican governors rejected them. However, it was successful in heavily Republican states like Oklahoma, Utah, and Missouri when supporters put it on the ballot as a referendum. South Dakota voters soundly rejected a Republican legislators’ idea to make it more challenging to pass a Medicaid expansion referendum this summer.
According to Greenstein’s research, programs are more likely to be sustainable when they are linked to employment, serve families that are significantly above the poverty line and even in the middle class, are financed and run by the federal government, offer in-kind assistance rather than cash either directly or through the tax code, and are geared toward children, the elderly, or people with disabilities.
Welfare, once known as AFDC and now known as TANF (temporary aid for needy families), did poorly and was frequently slashed. However, programs for supplemental nutrition support have thrived, either through stamps or computerized transfers, giving families food assistance in both good and poor times.
Rep. Tom Foley, who subsequently rose to the position of Speaker, as well as the liberal George McGovern and the conservative Bob Dole created the present food stamp program in the 1970s. Rural MPs who desired farm subsidies supported the proposal when it was included in the farm bill, and liberal urbanites later supported the agricultural initiatives.
Political support for aid that is provided through the tax code is easier to get. For working poor people, the Earned Income Tax Credit has been wildly successful and well-liked. The child tax credit, which offers a credit of up to $2,000 for kids up to age 17, has also changed.
During the pandemic, the credit was briefly increased; however, it was not extended in the significant domestic legislation the Democrats just passed. Hopefully, it will be available next year and will be made refundable to help the extremely poor who pay little to no taxes while also lowering the eligibility requirement. A couple earning up to $450,000 can now receive some of the credit. That is significantly above middle class.
Due to the expense, the majority of new universal programs are doomed. Due of the cost, House Democrats dropped a proposal to incorporate dental and vision coverage under Medicare in the most recent congressional legislation. A universal basic income will remain the pipe dream of some liberals. Any hope for a single-payer healthcare system will also be dashed; proponents must concentrate on boosting Obamacare.
Despite the fact that, as Greenstein points out, the United States is a low-tax nation, the revenue hikes required to sustain universal services are not attainable. The Organization for Economic Co-operation and Development (OECD) estimates that tax income in the United States represented 25% of GDP a few years ago. This rate varied between 33 and 47 percent in Western European nations.
Any domestic undertaking will be the subject of conflicting claims. In this decade, Social Security and Medicare both require financial support. Even though this Congress passed a broad agenda, there are still unfulfilled needs, particularly for children.
A little-noticed executive order that President Biden signed in December encouraging federal agencies to better coordinate in cutting through bureaucratic overlap and red tape in some of these programs may be one potentially useful move.
This might be a significant thing, according to Greenstein. Without compromising the integrity of the programs, it can build on the advancements made in making it simpler to apply for and continue to be enrolled in these programs.
Former executive editor of Bloomberg News is Al Hunt. He formerly worked for The Wall Street Journal as a reporter, bureau chief, and Washington editor. He penned a political column for The Wall Street Journal, The International New York Times, and Bloomberg View for nearly 25 years. Along with James Carville, he is the host of Politics War Room. Follow him @AlHuntDC on Twitter.
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