The Crisis is Exposing the Harm Structural Attacks on Anti-Poverty Programs Have Done

David Super

     Public spending programs consist of two main elements:  a structure, and a stream of money that is spent through that structure.  This is true of defense programs:  you need a decision that what you want to build is an aircraft carrier and then several years of funding while the carrier is built.  This is true of Social Security, which has a retirement age, relationship criteria for survivors’ benefits, and a standard for the severity of disabilities required to receive benefits on that basis as well as a dedicated funding stream. 

     This gives programs’ opponents two possible targets.  Those opposed to an arms race in space could try to prevent President Trump from establishing a coherent Space Force or seek to block its annual appropriations.  Opponents of a southern border wall erred many years back in agreeing to legislation authorizing it to be built, likely assuming that no one would be crazy enough to fund such a wasteful and ineffective undertaking.  The decarceration movement can seek to block or reduce prison sentences or hope that starving corrections budgets will create pressure for early releases.

     The same choices have always faced opponents of anti-poverty programs.  For those preferring to spend money on other things – tax cuts, spending programs popular with more-affluent voters, or whatever – the most natural move would seem to be cutting programs’ spending.  And cut we have on many occasions at both the federal and state levels.

     The savviest, most strategic opponents of these programs, however, have recognized that the long-term consequences of dismantling those programs’ structures were far greater.  Rather than pay the political price of defunding the Great Society directly, Richard Nixon attacked those programs’ structures by converting many of them to block grants.  Because state and local governments’ use of block grants rapidly diverges, and because some inevitably will do foolish things with some of the money, degrading the structures that target funding effectively will facilitate subsequent attacks on the programs’ funding.  Ronald Reagan similarly merged and block-granted numerous anti-poverty programs.  President Reagan also, however, also sought deep cuts in these programs to pay for his tax cuts and defense build-up. 

     House Speaker Newt Gingrich shifted the focus decisively toward destroying programs’ structures.  He sought to block-grant part or all of most major anti-poverty programs.  When this proved too much even for many of his committee chairs, he settled for deep cuts and more modest dismantlement of the structures of some programs.  For example, although he relented on block-granting food stamps, he insisted on deep benefit cuts that rose to almost one-fifth by the sixth year, eliminating five of the six inflation adjustments in the program’s eligibility and benefit formulas.  The 1996 welfare law that he spearheaded also removed the much of two substantial groups of low-income people, legal immigrants and childless working-age adults, from food stamps. 

     In the current crisis, these structural changes have proven particularly devastating.  Where a program was merely underfunded, increasing benefits is an option, albeit one that the Administration and Senate Republicans often have resisted.  Where, however, a program’s basic structure has been weakened or destroyed, no conduit is available for any funds Congress might wish to grant. 

    Thus, for example, many legal immigrants and childless adults are receiving no public benefits and hence have no connections with social service agencies.  Although in theory they could have their eligibility restored, getting the word out takes time and reestablishing their connection with agencies is difficult with offices shut down and demands for assistance skyrocketing. 

     Similarly, dogged resistance to updating Unemployment Compensation for the last half-century of changes to the workforce meant that we entered the crisis with only about 30% of the unemployed receiving UC.  The CARES Act dramatically expanded eligibility through a combination of tweaks to the current system and creating a new federal Pandemic Unemployment Assistance (PUA) program for those not qualifying for regular UC.  But because so many workers have been outside UC’s reach, states’ automated systems were not programmed, and staff are not trained, to assist them.  Two months into the crisis, many states have yet to make PUA operational, much less work through the huge backlog of applications (and people who were prevented from applying or turned down under old rules). 

     When the Supreme Court voided the Affordable Care Act’s expansion of Medicaid eligibility, many red states refused to implement it.  This resulted in many more uninsured people, many of whom had no contact with social service agencies.  This makes the provision of COVID-19 testing and treatment for them operationally very difficult.  Congress allowed states to establish a new category of Medicaid eligibility solely for COVID-19 testing, but to date only states that had already expanded Medicaid under the ACA have taken up the option.  It also has provided $176 billion for hospitals, largely as block grants but with some money to reimburse care for specific uninsured patients.  Lacking any structure for such a program, questions abound about what the block grants will accomplish and whether the hospitals with the greatest need will receive the funds. 

     Perhaps most strikingly, with social service agencies out of touch with so many low-income people, Congress assigned the Internal Revenue Service to distribute emergency relief checks.  The IRS did this based upon tax returns for prior years, an exceedingly bad proxy for need:  jobs held in 2018 may have been long-gone even before the crisis and the poorest of the poor are not required to file returns.  The IRS eventually succumbed to pressure and agreed to provide checks to recipients of Social Security, Railroad Retirement, Supplemental Security Income, and certain Veterans’ Administration benefits, but even here it has largely made unavailable the additional amounts Congress provided for dependents.  Persistent attacks on providing any assistance to low-income immigrants have resulted in denying relief checks to U.S. citizen children if their parents do not meet the Treasury Department’s immigration status test.

     That still left out another twelve million people too poor to be required to file income tax returns.  Nine million of those could have been reached if the Administration had worked to distribute relief checks to all those enrolled in the Supplemental Nutrition Assistance Program (SNAP, the successor to food stamps) and Medicaid.  The remaining three million have no connection with major human services agencies, largely because we have rendered them ineligible. 

     As a nation we will never agree on the level of support appropriate for low-income people.  Critics likely will feel these programs get too much; progressives will see them as underfunded.  But quite apart from spending levels, the relentless structural attacks on these programs have left us largely incapable of helping many of the poorest of the poor even when a temporary consensus forms in favor of doing so.  It would be naïve to hope that these programs will not face budget cuts in the future, but we should resolutely oppose persistent efforts to destroy these programs’ structures or to expand the ranks of those with whom the social service system refuses all contact.

     @DavidASuper1
Posted 11:51 AM by David Super [link]