Stop the Means-Testing

Universal programs are popular. Targeted ones are unpopular. Do the popular thing

Over at Mother Jones, Kevin Drum wonders “why don’t unemployment bonuses get more love?”

For some reason, headlines always focus on the value of one-time payments. Congress approves $600 stimulus checks! Trump wants $2,000!

But even the watered-down relief bill passed earlier this week provides a $300 unemployment bonus for 11 weeks. That’s $3,300, dwarfing the size of the stimulus checks. The CARES Act provided $600 for 16 weeks, or $9,600. But as near as I can tell, neither of these numbers ever made it into a headline.

It seems as though someone must have explained the bleeding obvious to him, because he later added an addendum:

The conventional wisdom, I gather, is that one-time checks are popular because everyone gets them. Conversely, unemployment bonuses are unpopular because they mostly get paid out to people who aren’t me. This is why no one really wants to train a spotlight on the unemployment payments

This doesn’t seem very difficult to understand. Universal programs are popular because they benefit everyone. Social Security and Medicare benefit most Americans (eventually), and as a result they are some of the most popular programs in the country. Other programs benefit fewer people and so are much less popular. This is not rocket science!

Democrats and self-styled “policy wonks” tend to favor targeted, means-tested programs based on the idea that programs are better if they direct resources only to where they are needed. But that ignores political considerations and, unsurprisingly, very few of these policies get implemented. The ability to get a program passed (and stay passed) is a necessary element of any proposed policy. Take a lesson from Obamacare. It was horribly unpopular in the years after it was passed because it was seen as a subsidy to poor people with few visible benefits to the majority. But its popularity grew as its advocates learned to relentlessly focus on its protections for pre-existing conditions - a universal protection that could potentially benefit anyone.

Democrats could learn from this and favor more universal policies like guaranteed paid vacation, employee protections, single-payer healthcare, paid family leave, and especially universal basic income. “We want to give you $1,000 per month” sounds a lot better than “we want to give some people an amount we will compute based on a formula if they meet the complicated eligibility requirements (which you won’t meet).”

Universal programs are, obviously, more expensive, but that’s what taxes are for! Giving someone $1,000 and taxing them $2,000 is functionally the same as taxing them $1,000, but taxes are confusing and money showing up in your bank account is not. If policy wonks want to make sure money is going where it’s needed, just give money to everyone and tax it back from the people who don’t need it. That ensures that the program will be popular, but also that will be targeted based on income (or wealth if a wealth tax is used). Giving with one hand and taking with the other will cause some bureaucratic leakage, but taxes need to be collected regardless and a program of sending out the same check to everyone requires a lot less bureaucratic overhead than a program that requires people to verify complicated eligibility requirements.

Popularity matters. Democrats should restructure their priorities so as to accomplish their policy goals in the way that is most palatable to the public, and that means ditching the obsession with preventing “the wrong people” from benefiting from their policies. Instead, structure the policies to benefit everyone and make up the difference with taxes.