We’ve hit the point in the legislative process where, even though the energy and the numbers are on the side of going big, centrist members of the Democratic caucus are starting to hedge. As a result, there’s been an uptick in Congress of two of the worst words in American politics: “means testing.”
Centrist Democrats are trying to shave the total cost of President Joe Biden’s proposed $3.5 trillion investment in key domestic priorities over the next decade, even though it’s less than half of what will be invested in the Pentagon in the same time frame. One of the most touted proposals in the Build Back Better Act has been two years of free community college for every American paid by the U.S. government — the very definition of a universal benefit.
But now Sen. Tim Kaine, D-Va., tells Business Insider reporter Joseph Zeballos-Roig that he could see the program’s being reduced to being accessible only to lower-income Americans.
On the surface, that sounds great. You save taxpayer dollars and make sure that only poor Americans can use the programs. Win-win, right? Well, no.
For those unfamiliar with the phrase, “means testing” is the art of limiting the possible.
For those unfamiliar with the phrase, “means testing” is the art of limiting the possible. Say you want to establish a government program to provide free lunches for students, which is proven to be especially beneficial for kids from low-income families. The easiest way to make it happen is to do just that: provide free lunches for all students at public schools through federal funding. Or you could provide lunches only to some students who are most in need. And to determine which students requires adding steps to the process.
That could look like requiring parents to fill out paperwork documenting their annual incomes and the numbers of children they have in school. It could involve having school districts apply a formula for the number of kids per household for every tax bracket to decide whether each student qualifies. Then you have to keep track of every kid in the system and account for every reduced-price or free lunch that is given out. Most likely, you’ll need all of those steps and more — just to make sure some kid whose parents make a bit too much money or who qualifies but never filled out the form doesn’t get access to the school-provided lunch.
The justification for means testing is that it helps keep costs down for programs that are, in theory, paid for with higher taxes. This is done by ensuring that only the “right” people have access to federal aid, the argument goes. “Means testing,” then, is a nicer way of saying, “We want to add more hoops for people to jump through so fewer people can get help.”
If that sounds harsh, consider how social safety net programs were winnowed down as Republicans convinced white Americans that “welfare queens” in the Black community were abusing the system. Also, the participation rates for government programs meant to help those who are eligible are nowhere near 100 percent:
When we look at the participation rates of means-tested programs in the U.S., we typically find that around one in five eligible people are not receiving the benefits they are owed.
The overall participation rate of the food stamp program is 85 percent and is only 75 percent for the working poor who likely have a harder time proving their eligibility to the welfare office. The participation rate of Medicaid is 94 percent for children, 80 percent for parents, and around 75 percent for childless adults. The participation rate of the Earned Income Tax Credit (and also presumably the Child Tax Credit) is 78 percent. The low participation in the EITC cuts the poverty-reducing effect of the program by around 33 percent, according to the Census Bureau, meaning that mainstream estimates of the EITC’s impact (e.g. those produced by CBPP) overstate the effectiveness of the program by at least 50 percent.
To repeat, a major factor in this disparity is the administrative hurdles Americans are forced to overcome just to prove that they qualify for assistance. The Atlantic’s Annie Lowry spelled out this year just how burdensome these bureaucratic requirements can be for people who are already struggling to make ends meet:
Government programs exist. People have to navigate those programs. That is how it goes. But at some point, I started thinking about these kinds of administrative burdens as the “time tax” — a levy of paperwork, aggravation and mental effort imposed on people in exchange for benefits that putatively exist to help them. This time tax is a public policy cancer, mediating every American’s relationship with the government and wasting countless precious hours of people’s time.
The issue isn’t that modern life comes with paperwork hassles. The issue is that American benefit programs are, as a whole, difficult and sometimes impossible for everyday people to use. Our public policy is crafted from red tape, entangling millions of people who are struggling to find jobs, failing to feed their kids, sliding into poverty or managing disabling health conditions.
On and on down the list of Democratic initiatives you can see what Lowry describes as a “love of too-complicated-by-half, means-tested policy solutions” creeping into place as the Build Back Better Act takes shape. New Medicare benefits that would, for the first time ever, cover vision, dental and hearing costs? “We have to have means-testing to bring it in,” Rep. Henry Cuellar, D-Texas, told Bloomberg News.
A proposed instant tax credit when buying electric cars, a major initiative to fight climate change? There might be an income cap for that, too, even though the whole point is to get as many people as humanly possible to switch from fossil fuel-powered vehicles.
What Democrats need to understand is that they’re dealing with a binary situation: There’s universal and there’s not.
Who would benefit from this? Well, the lobbying groups pushing centrist members of Congress to reduce the tax hikes on corporations and wealthy individuals that Democrats want to include in the package. If you cut those revenue increases, then suddenly the bill is no longer “fully paid for,” which means cutting down on the spending side to balance it back out.
These centrists also think they’re set to reap political benefits for backing these changes. I’m highly skeptical. First, there’s less cachet in seeming to be fiscally conservative than they’re assuming, especially when everyone benefits from the federal spending in question. Second, the parts of the bill that they’re most against are the ones that are the most popular with Americans, as The New York Times’ David Leonhardt and Ian Prasad Philbrick noted Wednesday.
What Democrats need to understand is that they’re dealing with a binary situation: There’s universal and there’s not. It’s easier and cheaper and better politics to say “this is for all Americans” than to try to explain that you’re now helping only some people. Otherwise, you’re not only paying more for the privilege of failing to meet your goals, but also giving the GOP fodder for criticisms of your ineffective programs.
