What is the most effective safety net?

There has long been a debate among social policy advocates and politicians about what makes better policy and is more politically sustainable: universal programs like Social Security and Medicare or targeted programs like Medicaid and food stamps.

The assumption is that universal programs do better because, by definition, they have more beneficiaries. Conventional wisdom holds that during the presidencies of Ronald Reagan and George HW Bush, pro-poor programs were destroyed, while universal programs escaped unscathed.

In a major study for the Hamilton Project and the Brookings Institution, Bob Greenstein, the Michelangelo of social programs to lift people out of poverty since the 1970s, reports that this conventional wisdom is fundamentally wrong. Over 40 years, after adjusting for inflation and population, he found that income-targeted programs grew at an annual rate of 3.39%, while universal programs grew an average of 2.36%. % per year.

There is a reason, he concludes. “Policymakers have effectively developed a new model of targeted programs for poor families, extending them to families well above the poverty line, even in the middle class,” he told me.

Greenstein disagrees with critics who say it’s just universal “lightweight,” with programs like SNAP, the Supplemental Nutrition Assistance Program, or food stamps, or the earned income or Medicaid. “Almost all benefits go to people below the median income level in the country, and most benefits go to people in the bottom quintile.”

Greenstein’s article found that from 1979 to 2019, Medicare — which primarily serves the elderly — grew by 4.12% annually after adjusting for inflation and population. Medicaid, once considered only for the poor, grew at an even faster rate of 4.94% as eligibility widened.

There are more than 82 million Americans enrolled in Medicaid, less than half living below the poverty line, and nearly half of all births are covered by Medicaid.

That explains Republicans’ political failure to cut Medicaid, which is funded primarily by the federal government, with states kicking in a share. Obamacare offered sweeping benefits, but a number of Republican-led states rejected it. However, when supporters put him on the ballot as a referendum, he won in deeply red states like Oklahoma, Utah and Missouri. This summer, voters in South Dakota overwhelmingly rejected a proposal by Republican lawmakers to make it harder to approve a Medicaid expansion initiative.

In his research, Greenstein cited general qualities that make programs more sustainable, including: when they are work-related; when they also serve families well above the poverty line, even in the middle class; when funded and administered by the federal government; when they provide in-kind – not cash – assistance either directly or through the tax code, and when they focus on children, the elderly or people with disabilities.

Welfare – what used to be called AFDC and now TANF (Temporary Aid for Needy Families) – fared poorly, being cut repeatedly. But supplementary nutritional assistance programs have flourished, either through stamps or electronic transfers, providing food assistance to families, in good times and bad.

The modern food stamp program was conceived in the 1970s by a diverse set of influential lawmakers: Rep. Tom Foley, who later became president, and Senator Bob Dole, a conservative and liberal George McGovern. They put the measure in the farm bill, winning support from rural legislators who wanted farm subsidies, and urban liberals later backed farm programs.

Aid that goes through the tax code is easier to get political support. The working poor earned income tax credit has been hugely successful and popular. The same goes for the Child Tax Credit, which provides a credit of up to $2,000 for children up to age 17.

The credit was temporarily increased during the pandemic — but was not extended in the big nationwide bill Democrats just passed. Hopefully it will be next year – and made refundable, so it can help the very poor who pay little or no tax while lowering the eligibility threshold. Now a couple earning up to $450,000 can get part of the credit. It is well beyond the middle class.

Most of the new universal programs are doomed because of their cost. In recent congressional legislation, House Democrats scrapped a plan to include dental and vision benefits as part of Medicare due to price. Some liberals’ dream of a universal basic income will remain a dream. So will any hope for a single-payer health care plan; supporters 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 few years ago, according to the Organization for Economic Co-operation and Development (OECD), tax revenue in the United States was equivalent to 25% of gross domestic product. In Western European countries, this rate varied between 33 and 47%.

There will be competing demands for any national initiative. Social security and health insurance must be financially strengthened during this decade. Even after a broad agenda promulgated at this Congress, there are unmet needs, especially for children.

A perhaps helpful step could be a little-noticed executive order President Biden signed last December directing federal agencies to better coordinate to reduce red tape and bureaucratic duplication in some of these initiatives.

“It has the potential to be a big deal,” says Greenstein. “It can build on the progress made to make it easier to apply for and maintain enrollment in these programs without undermining the integrity of the program.”

Al Hunt is the former editor of Bloomberg News. He previously served as a Washington reporter, bureau chief and editor for The Wall Street Journal. For nearly a quarter of a century, he wrote a political column 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.

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