Current Events > At a center-left policy conference; lots of means-tested vs universal discussion

(+) Yeah! (+)

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The way I interpret this is that the budget fights (such as they will be) within the new Democratic caucus will be over what extent to make programs universal (to make them politically popular and easier to administer) vs. means-tested (to make them cost less and to use scarce resources on the most vulnerable/lowest income)

What are your thoughts on that argument? I can see both sides. I typically prefer means-tested programs because otherwise you're using a lot of money to subsidize people who don't need subsidy, but if being more universal actually translates into being more popular then that makes sense to me too.

I'm just not sure it's actually true that universal programs are more politically popular. We don't have many so that might be why it's hard to say
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How often is means-testing more expensive than just making something universal? I'm reminded of when Florida wanted to drug-test foodstamp recipients and it ended up costing more to do that than to just eat the cost of some people getting foodstamps when they shouldn't.

CornBarn posted...

How often is means-testing more expensive than just making something universal? I'm reminded of when Florida wanted to drug-test foodstamp recipients and it ended up costing more to do that than to just eat the cost of some people getting foodstamps when they shouldn't.

ah, that's not what I mean when I say means-tested. In this context, that just means programs where there is a cutoff for eligibility at some income level -- so for instance, SNAP benefits are only available to people who make less than X dollars per Y family members
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the only examples of universal programs we have in the USA that I can think of are Medicare and Unemployment Insurance, but even those are tied to income and employment in a way that many proposed universal programs (e.g., free college for all, medicare for all) would not be
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Why not the best of both worlds? Have it be means tested but reduce the benefit as you scale in income. So that someone who is barely above the cut-off doesn't get utterly shafted.

CornBarn posted...

Why not the best of both worlds? Have it be means tested but reduce the benefit as you scale in income. So that someone who is barely above the cut-off doesn't get utterly shafted.

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That's more or less already how means-tested programs work. The problem is its really difficult to design a cliff that doesn't feel like a cliff, even if it's rather modest.
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CornBarn posted...

Why not the best of both worlds? Have it be means tested but reduce the benefit as you scale in income. So that someone who is barely above the cut-off doesn't get utterly shafted.

Funding these programs with progressive taxation would have this effect. To the extent that it seems unfair to give out free healthcare or college to Donald Trump's kids, (always the example used by Clinton during the 2016 campaign), know that Trump's kids will be paying much more into it than they likely get out of it. Likewise, free public college isn't going to make the Rockefellers send their kids to state schools.

Balrog0 posted...

the only examples of universal programs we have in the USA that I can think of are Medicare and Unemployment Insurance,

K-12 education, though obviously it's a bit more of a patchwork with the various districts and funding models.
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Antifar posted...

K-12 education, though obviously it's a bit more of a patchwork with the various districts and funding models.

yeah that is the obvious one, good point
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Antifar posted...

Funding these programs with progressive taxation would have this effect. To the extent that it seems unfair to give out free healthcare or college to Donald Trump's kids, (always the example used by Clinton during the 2016 campaign), know that Trump's kids will be paying much more into it than they likely get out of it. Likewise, free public college isn't going to make the Rockefellers send their kids to state schools.

I don't know about this logic, though. Federal taxes are already progressive, so this is already true even with means-tested programs. Not sure how it addresses the concern about cost or political feasibility.
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Balrog0 posted...

Federal taxes are already progressive, so this is already true even with means-tested programs.

But means tested programs, because they have cliffs and aren't universal, tend to breed resentments towards recipients that create political pressures to reduce or eliminate the programs. Programs for the poor become poor programs.
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Antifar posted...

But means tested programs, because they have cliffs and aren't universal, tend to breed resentments towards recipients that create political pressures to reduce or eliminate the programs. Programs for the poor become poor programs.

What's your evidence of this, though? Medicare and UI are universal, but have faced program cuts either directly (UI) or through new quasi-means testing (Medicare raising the age of retirement)

Meanwhile, SNAP has been one of the fastest growing anti poverty programs despite being means tested.
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I support tons of money being spent on infrastructure. I don't support much additional federal spending beyond that. Locally I support means tested spending on the homeless issue.

What sort of programs are looking popular down the pipeline though?
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KILBOTz posted...

I support tons of money being spent on infrastructure. I don't support much additional federal spending beyond that. Locally I support means tested spending on the homeless issue.

What sort of programs are looking popular down the pipeline though?

Democrats are going to push to expand funding for child care assistance and low-income housing programs, with some of the farther left members looking to make the programs actual entitlements meaning that everyone who qualifies is guaranteed to get assistance, the way SNAP works now.

There's really very little heart for raising revenue, though. I dunno what they're going to do on taxes.
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If it's means-tested, the dropoff must be quite slow and gradual, otherwise it incentivises people to stay below that point.

If you're receiving $150 in welfare a week, and your welfare gets cut off if you earn over $200, you're going to stop working once you hit $199 for the week so you still get that $150 topup. On the other hand, this incentive to stop mostly disappears if instead, it's something like "for every dollar you earn over $200, your welfare is reduced by 20c". The downside being of course, that it would take a LOT to reach the point at which the payment is zero, so this could get costly (using the same example figures, they'd have to earn $950 in a week before their welfare payment hits zero, although I'd assume in practice there'd be some direct cutoff point too to avoid messing around with really small payments - but this would have to either be quite low, or be somewhere beyond what anyone who qualifies for welfare would be likely to earn in a week anyway, or else the incentive to stop working comes back).
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I think it's a shame that something at least somewhat objective and based on empirical analysis like means-tested may seriously be replaced by universal on the grounds that, honestly, it'll sell better. Although if I'm being blunt, I'd bet the decision is more one of self preservation because nobody wants to be the one tagged with making the hard decisions about who does and doesn't "need" something. So hopefully means-tested prevails as the most rational of the two options, as I think it's also the most practical in application.
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DarkTransient posted...

If it's means-tested, the dropoff must be quite slow and gradual, otherwise it incentivises people to stay below that point.

If you're receiving $150 in welfare a week, and your welfare gets cut off if you earn over $200, you're going to stop working once you hit $199 for the week so you still get that $150 topup. On the other hand, this incentive to stop mostly disappears if instead, it's something like "for every dollar you earn over $200, your welfare is reduced by 20c". The downside being of course, that it would take a LOT to reach the point at which the payment is zero, so this could get costly (using the same example figures, they'd have to earn $950 in a week before their welfare payment hits zero, although I'd assume in practice there'd be some direct cutoff point too to avoid messing around with really small payments - but this would have to either be quite low, or be somewhere beyond what anyone who qualifies for welfare would be likely to earn in a week anyway, or else the incentive to stop working comes back).

I agree with a lot of this.

What's the overhead for this like though? I'm sure it costs a lot of money to keep track of how much each person gets, to handle all these cases, to calculate the rates and their reductions, to handle edge cases, etc.

It seems like at some point it would be cheaper to just make it universal.

s0nicfan posted...

I think it's a shame that something at least somewhat objective and based on empirical analysis like means-tested may seriously be replaced by universal on the grounds that, honestly, it'll sell better.

thatspoliticsbitch.itsalwayssunnygif
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Also, are we finally at the point where the universal option is the more politically popular one? I know that something like 2/3rds of Americans support universal healthcare (or at least one poll said so).

I might cry of happiness if that's true.

I dunno, that's the argument at least. I'm personally usually skeptical of public opinion polls on policy preferences so I haven't looked into it on that basis
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bump
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I'm not sure CE is the best place for a booming discussion on this.

It is a nice topic though.

Balrog0 posted...

bump

Any thoughts on the second half of my post that you cut when you quoted me?

Although if I'm being blunt, I'd bet the decision is more one of self preservation because nobody wants to be the one tagged with making the hard decisions about who does and doesn't "need" something. So hopefully means-tested prevails as the most rational of the two options, as I think it's also the most practical in application.

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Well, I mean, I seriously doubt that's the motivation. The argument in favor of universality mostly comes from the grassroots from my perspective. It is broadly popular among leftists especially wonkier ones, so I don't think it's being driven by politicians who are worried about getting dinged politically if that's what you mean.

Meanwhile the people in favor of means-testing are more likely to be the beltway establishment liberal types.
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Balrog0 posted...

Well, I mean, I seriously doubt that's the motivation. The argument in favor of universality mostly comes from the grassroots from my perspective. It is broadly popular among leftists especially wonkier ones, so I don't think it's being driven by politicians who are worried about getting dinged politically if that's what you mean.

Meanwhile the people in favor of means-testing are more likely to be the beltway establishment liberal types.

Yea, that's what I was thinking. A politician could support some new entitlement program and expect to get a net positive response, only to suddenly end up in drama because a special interest group wants to know why "their constituents" aren't below the cutoff. It's far easier to just say "everyone gets it" because you'll never have people in the "don't get it" camp angry that you excluded them. Even if means-testing produces more effective policy with less cost waste, you're always taking the risk of someone outside the limit being angry with you.
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Balrog0 posted...

Antifar posted...

But means tested programs, because they have cliffs and aren't universal, tend to breed resentments towards recipients that create political pressures to reduce or eliminate the programs. Programs for the poor become poor programs.

What's your evidence of this, though? Medicare and UI are universal, but have faced program cuts either directly (UI) or through new quasi-means testing (Medicare raising the age of retirement)

Meanwhile, SNAP has been one of the fastest growing anti poverty programs despite being means tested.

What of welfare(currently Temporary Assistance to Needy Families a.k.a. TANF)? It got decimated from its previous form(Aid to Families with Dependent Children a.k.a. AFDC) because Republicans demonized welfare recipients and lucked into an opportunistic Democratic president.
Another good example is Medicare vs. Medicaid. The former is basically a sacred cow second only to Social Security, but the latter is state-administered and basically non-existent(by design) in many places. I think there's plenty of evidence that means-tested programs are more vulnerable to political attacks and thus cuts to funding and therefore tend to be less effective.

Balrog0 posted...

ah, that's not what I mean when I say means-tested. In this context, that just means programs where there is a cutoff for eligibility at some income level -- so for instance, SNAP benefits are only available to people who make less than X dollars per Y family members

The obvious flaw there is in creating welfare cliffs, which then create dependency cycles.

or, as already covered much better:
DarkTransient posted...

If it's means-tested, the dropoff must be quite slow and gradual, otherwise it incentivises people to stay below that point.

If you're receiving $150 in welfare a week, and your welfare gets cut off if you earn over $200, you're going to stop working once you hit $199 for the week so you still get that $150 topup. On the other hand, this incentive to stop mostly disappears if instead, it's something like "for every dollar you earn over $200, your welfare is reduced by 20c". The downside being of course, that it would take a LOT to reach the point at which the payment is zero, so this could get costly (using the same example figures, they'd have to earn $950 in a week before their welfare payment hits zero, although I'd assume in practice there'd be some direct cutoff point too to avoid messing around with really small payments - but this would have to either be quite low, or be somewhere beyond what anyone who qualifies for welfare would be likely to earn in a week anyway, or else the incentive to stop working comes back).

ElatedVenusaur posted...

I think there's plenty of evidence that means-tested programs are more vulnerable to political attacks

Which makes sense. You've got people who don't get any of it to potentially back a repeal effort when the entitlements are targeted. The "I can't use it why am I paying for it" crowd. The danger (and strength) of universal programs is they're almost impossible to eliminate because everyone loses out when you remove it, so you create a much larger pool of people willing to fight to keep it.

That doesn't make them better, BTW. Simply more permanent.
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_Rinku_ posted...

DarkTransient posted...

If it's means-tested, the dropoff must be quite slow and gradual, otherwise it incentivises people to stay below that point.

If you're receiving $150 in welfare a week, and your welfare gets cut off if you earn over $200, you're going to stop working once you hit $199 for the week so you still get that $150 topup. On the other hand, this incentive to stop mostly disappears if instead, it's something like "for every dollar you earn over $200, your welfare is reduced by 20c". The downside being of course, that it would take a LOT to reach the point at which the payment is zero, so this could get costly (using the same example figures, they'd have to earn $950 in a week before their welfare payment hits zero, although I'd assume in practice there'd be some direct cutoff point too to avoid messing around with really small payments - but this would have to either be quite low, or be somewhere beyond what anyone who qualifies for welfare would be likely to earn in a week anyway, or else the incentive to stop working comes back).

I agree with a lot of this.

What's the overhead for this like though? I'm sure it costs a lot of money to keep track of how much each person gets, to handle all these cases, to calculate the rates and their reductions, to handle edge cases, etc.

It seems like at some point it would be cheaper to just make it universal.

Well, admittedly, that would be pretty tricky under the self-reporting (and maybe audited sometimes) US system.

Over here, unless you're self-employed, all your income / tax is reported by your employer, so the information from that could be used to quickly calculate the entitlement. The biggest issue would be that there's usually a delay in the reporting, meaning they'd most likely have to apply the caps a week or two in arrears.
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ElatedVenusaur posted...

What of welfare(currently Temporary Assistance to Needy Families a.k.a. TANF)? It got decimated from its previous form(Aid to Families with Dependent Children a.k.a. AFDC) because Republicans demonized welfare recipients and lucked into an opportunistic Democratic president.

Yep, that's true.

ElatedVenusaur posted...

Another good example is Medicare vs. Medicaid. The former is basically a sacred cow second only to Social Security, but the latter is state-administered and basically non-existent(by design) in many places. I think there's plenty of evidence that means-tested programs are more vulnerable to political attacks and thus cuts to funding and therefore tend to be less effective.

But Medicaid has obviously been expanded and continues to expand in many places, even places where it is supposedly political impractical, like now Utah and Maine. In fact, pretty much every coverage expansion in recent memory has been targeted -- for example, in the same time frame we lost AFDC we vastly expanded childrens health coverage through CHIP.

Meanwhile, Medicare has not gotten a significant bump in funding except when it has been paired with improvements to the Medicaid FMAP, which seems to indicate that Medicaid is driving the improvements rather than Medicare?

Is that the extent of your evidence? because if so I think the story is pretty mixed and doesn't indicate either kind of program is better than the other
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s0nicfan posted...

The danger (and strength) of universal programs is they're almost impossible to eliminate because everyone loses out when you remove it, so you create a much larger pool of people willing to fight to keep it.

The larger danger in universal programs is sustainability.
Sit on your ass and live okay, vs. work your ass off and live slightly better than okay, leaves a pretty large band-gap to tunnel through (to borrow concepts from quantum physics).

That itself is pretty much a welfare cliff, except universal. If anything there's a very strong chance of exacerbating income inequality.

Questionmarktarius posted...

s0nicfan posted...

The danger (and strength) of universal programs is they're almost impossible to eliminate because everyone loses out when you remove it, so you create a much larger pool of people willing to fight to keep it.

The larger danger in universal programs is sustainability.
Sit on your ass and live okay, vs. work your ass off and live slightly better than okay, leaves a pretty large band-gap to tunnel through (to borrow concepts from quantum physics).

That itself is pretty much a welfare cliff, except universal. If anything there's a very strong chance of exacerbating income inequality.

The solution would be that the universal one is only just enough to reasonably survive, but few if any luxuries; and that even just part-time work would would significantly increase your standard of living.
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DarkTransient posted...

The solution would be that the universal one is only just enough to reasonably survive, but few if any luxuries; and that even just part-time work would would significantly increase your standard of living.

Which is the hard part nobody wants to actually address when they push for universal anything: doing the leg work of deciding what is and isn't necessary. Can you imagine the outrage if a politician pushed for UBI but based that decision on assuming no smart phones, only basic cable, one used car shared among family, no high speed internet, cooking all your own meals, one child max, and rental prices vs home ownership?
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DarkTransient posted...

Questionmarktarius posted...

s0nicfan posted...

The danger (and strength) of universal programs is they're almost impossible to eliminate because everyone loses out when you remove it, so you create a much larger pool of people willing to fight to keep it.

The larger danger in universal programs is sustainability.
Sit on your ass and live okay, vs. work your ass off and live slightly better than okay, leaves a pretty large band-gap to tunnel through (to borrow concepts from quantum physics).

That itself is pretty much a welfare cliff, except universal. If anything there's a very strong chance of exacerbating income inequality.

The solution would be that the universal one is only just enough to reasonably survive, but few if any luxuries; and that even just part-time work would would significantly increase your standard of living.

That's how it would likely start, yes...
But, when you've got a large amount of people who are essentially paid to just exist, they tend to have a lot of free time for protesting.

means-tested has always proven to be a waste of money as it costs more to test than you save by blocking the programs by those who don't meet the means.

Obviously there needs to be some basic screening that can be done on a tax basis. If a person becomes under arrest for a violation, the police can be tasked with a minor audit to make sure they're not violating the clauses needed to obtain said benefit.
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Questionmarktarius posted...

That's how it would likely start, yes...
But, when you've got a large amount of people who are essentially paid to just exist, they tend to have a lot of free time for protesting.

s0nicfan posted...

Which is the hard part nobody wants to actually address when they push for universal anything: doing the leg work of deciding what is and isn't necessary. Can you imagine the outrage if a politician pushed for UBI but based that decision on assuming no smart phones, only basic cable, one used car shared among family, no high speed internet, cooking all your own meals, one child max, and rental prices vs home ownership?

Case in point.
None of those things are "basic". Maybe the cable package, but even basic cable isn't "basic".
Water, food, sanitation, shelter, heat, and maybe modest lighting. Anything beyond is a luxury.

ALSO, to the Medicaid vs Medicare end, one of the fights back when they were trying to repeal the ACA and were holding up CHIP reauthorization to do so was a fight over Medicare cost sharing

the AARP held up CHIP reauthorization because house republicans wanted to implement cost sharing on people who had incomes over 500k annually and the AARP would not let that go through

so I certainly see the argument in favor of universal programs given their broad popularity, I just don't see it playing out in practice the way that I'm often told it will play out in fact

for instance it would be a much more progressive policy to implement cost sharing for rich medicare recipients than to raise the age of retirement for everyone, even poor people, but it's a lot easier, though still hard, to get that kind of thing done while it's impossible to implement cost sharing even on the very rich

so I see a different but related problem with universal programs and access
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Questionmarktarius posted...

Case in point.
None of those things are "basic". Maybe the cable package, but even basic cable isn't "basic".
Water, food, sanitation, shelter, heat, and maybe modest lighting. Anything beyond is a luxury.

Even Julius "Declare myself dictator for life" Caesar felt that entertainment was a necessity and he made sure the common folk had access to it.
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Tyranthraxus posted...

Questionmarktarius posted...

Case in point.
None of those things are "basic". Maybe the cable package, but even basic cable isn't "basic".
Water, food, sanitation, shelter, heat, and maybe modest lighting. Anything beyond is a luxury.

Even Julius "Declare myself dictator for life" Caesar felt that entertainment was a necessity and he made sure the common folk had access to it.

Alright. Let's run coax and RJ45 into each home and apartment. Now what?
Are a TV and PC also entitlements?

none of what you listed is an entitlement currently except... well, food
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Balrog0 posted...

none of what you listed is an entitlement currently except... well, food

RIght, but we're talking about UBI. Someone somewhere has to determine the formula that will be used to decide what "basic income" is for an area, which means someone somewhere has to decide what is and isn't a necessity. Given that, on paper, UBI is also designed to replace a bunch of other entitlements, people are going to be very invested in what their income is designed to achieve.
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Questionmarktarius posted...

Questionmarktarius posted...

That's how it would likely start, yes...
But, when you've got a large amount of people who are essentially paid to just exist, they tend to have a lot of free time for protesting.

s0nicfan posted...

Which is the hard part nobody wants to actually address when they push for universal anything: doing the leg work of deciding what is and isn't necessary. Can you imagine the outrage if a politician pushed for UBI but based that decision on assuming no smart phones, only basic cable, one used car shared among family, no high speed internet, cooking all your own meals, one child max, and rental prices vs home ownership?

Case in point.
None of those things are "basic". Maybe the cable package, but even basic cable isn't "basic".
Water, food, sanitation, shelter, heat, and maybe modest lighting. Anything beyond is a luxury.

In the US today, transportation and internet are pretty close to required.
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Questionmarktarius posted...

Alright. Let's run coax and RJ45 into each home. Now what?
Are a TV and PC also entitlements?

first of all, for the most part, coax is already there. And you don't need to wire the homes with RJ45 you can just use the coax for a modem with a RJ45 socket like everyone else does.

as for the TV, yes. It's a necessity as it's the main avenue to get news and political knowledge. If you can't afford a TV, you should be leased a TV for nothing. Leased in the sense that you can't sell it and have to give it back if you drop the program. Medicare already does this with things like CPAP machines so it'd work the same way.

Same goes for the computer. They can be given a Chromebook or other discounted computer as a no money lease.
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booboy posted...

In the US today, transportation and internet are pretty close to required.

Which is why Questionmarktarius said this:
Questionmarktarius posted...

That's how it would likely start, yes...
But, when you've got a large amount of people who are essentially paid to just exist, they tend to have a lot of free time for protesting.

Tell people UBI doesn't cover their internet and you'll find a lot of people who suddenly think internet is a universal basic necessity.
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s0nicfan posted...

booboy posted...

In the US today, transportation and internet are pretty close to required.

Which is why Questionmarktarius said this:
Questionmarktarius posted...

That's how it would likely start, yes...
But, when you've got a large amount of people who are essentially paid to just exist, they tend to have a lot of free time for protesting.

Tell people UBI doesn't cover their internet and you'll find a lot of people who suddenly think internet is a universal basic necessity.

yeah but his wild speculations have even less basis in reality than the arguable idea that universal programs are politically popular

like, we've had low income housing subsidies for decades and the fight hasn't been over whether or not to expand the program to give people better houses the fight has been whether or not everyone who is poor enough can get the subsidy and the perpetual answer is 'no they cannot' so idgi
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Tyranthraxus posted...

as for the TV, yes. It's a necessity as it's the main avenue to get news and political knowledge. If you can't afford a TV, you should be leased a TV for nothing. Leased in the sense that you can't sell it and have to give it back if you drop the program. Medicare already does this with things like CPAP machines so it'd work the same way.

Same goes for the computer. They can be given a Chromebook or other discounted computer as a no money lease.

Okay, so they get an old standard definition 32" tube TV, and the computer is just fast enough to browse the web (also is internet now part of this UBI package? And if so is it just dial up?). And that's being generous because if your concern is "news" then you could give them a free subscription to the newspaper of their choice and cut out the TV.
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Balrog0 posted...

yeah but his wild speculations have even less basis in reality than the arguable idea that universal programs are politically popular

like, we've had low income housing subsidies for decades and the fight hasn't been over whether or not to expand the program to give people better houses the fight has been whether or not everyone who is poor enough can get the subsidy and the perpetual answer is 'no they cannot' so idgi

Sure, but low income housing isn't universal. It's means-tested, which I've already said is superior because it avoids a lot of these fights. In your example, the fight is over where exactly the cutoff is, which is fundamentally different than when you're offering something to everyone.
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s0nicfan posted...

Sure, but low income housing isn't universal. It's means-tested, which I've already said is superior because it avoids a lot of these fights. In your example, the fight is over where exactly the cutoff is, which is fundamentally different than when you're offering something to everyone.

so I think I see the problem here, there are two separate concepts we're dealing with

SNAP is also means-tested but it is an entitlement, i.e., everyone who qualifies gets it

low income housing is means-tested but isn't an entitlement, i.e., it is first come first serve based on the funding that is available for the program
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Balrog0 posted...

so I think I see the problem here, there are two separate concepts we're dealing with

SNAP is also means-tested but it is an entitlement, i.e., everyone who qualifies gets it

low income housing is means-tested but isn't an entitlement, i.e., it is first come first serve based on the funding that is available for the program

Well yea, that's a totally different practical challenge, which is what do you do when you create a program based on existing supply and demand and the demand far outstrips the supply, but you don't (or can't) force the suppliers to make more. There's enough food supply for SNAP to work, but you can't force builders to make low income housing and it's rarely worth the cost which creates a supply side problem the government can't fix without socializing the building process.
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Eh I don't want to get too caught up on a particular program, my point is that this idea that there is benefits creep driven by program participants seems very speculative. Are there any examples of that happening in practice? It seems to me most things get pared back, whether universal or means-tested, with very few exceptions.
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