“I am looking for a sound means which I can recommend to provide at once security against several of the great disturbing factors in life–especially those which relate to unemployment and old age. I believe there should be a maximum of cooperation between States and the Federal Government. I believe that the funds necessary to provide this insurance should be raised by contribution rather than by an increase in general taxation.”
– Franklin D. Roosevelt, June 8, 1934.
Steve Randy Waldman of the interfluidity blog pulls me back into Universal Basic Income (UBI) land. I appreciate the compliments, but let’s get to the cheddar.
I share his foreboding of a political future without a labor movement. It’s unpleasant to imagine how bad things could get, even aside from that whole destruction of the planet thing. In troubled times, there is a natural conflict between trying to preserve old, embattled forms of social protection and casting about for new, more viable ones.
In general I have no problem with providing unconditional cash money to the poor rather than in-kind benefits. The problem of course is that we have in-kind benefits for food and housing because of the historic, political weakness of free-standing cash assistance. So we need a political environment that would be conducive to some kind of conversion.
The Supplemental Nutrition Assistance Program (SNAP), formerly known as “Food Stamps,” got its political boost from agri-business interests, support which is waning. Rep. Ryan wants to turn SNAP into a block grant, a type of death sentence. Not the sort of conversion we want. (With the advent of payment cards, SNAP benefits are more like cash.) By contrast, there is a very good reason for in-kind benefits in the form of health insurance. You don’t want to cast people into an individual market with some kind of voucher. I’m puzzled by SRW’s suggestion that public provision of health care has become infeasible, though later he seems to say it isn’t.
I believe SRW’s characterization of the libertarian impulse is wrong. At its root I would say is not some desire for minimal bureaucracy and free choice, but a drive to drown a whittled-down welfare state in the bathtub. If you don’t like bureaucracy, try not to spend much time dealing with private health insurance companies. The Koch-fueled libertarians use UBI to trash existing programs and advocate a wholesale trade. Big government for all its flaws provides some measure of protection from predators that abound in the private sector.
SRW says the UBI is social insurance. It’s America, and we are all entitled to our own definitions. So what exactly is social insurance? It’s not clear. SRW claims the support for a program depends on the extent to which its benefits are general to the politically-enfranchised. Well sure, but what was it about the program that won the support of the politically-enfranchised in the first place? I still think it’s the contributory rubric. FDR thought so too.
Of course the public has no clue as to the actuarial connection between any social insurance benefits and payments. The thing that matters, however, is that they think there is one. The popular sense of a difference between the dole and “stuff I paid for myself” is strong. Underlying this is the general approval, however unethical, for benefits in excess of any contributions for the deserving. The deserving are those who work or who acquire by fair means or foul some reward for private sector activity. (An exception is the bank bailouts.) I didn’t say this is fair. I only claim it has durable political salience.
Steve claims the UBI is a bridge from the U.S. to welfare states that are more effective in addressing poverty. By this criterion the U.S. certainly ranks comparatively low. The question is where such a bridge would lead. Existing, more effective welfare states are built on big social insurance, not UBIs.
The preference for big, universal programs over narrow, targeted ones to reduce poverty is well-taken. It is usually advanced for the promotion of social insurance, not UBIs. For the reasons I’ve proposed, contributory social insurance is the best existing vehicle. The basis for solidarity is mutual recognition of ‘desert,’ and such recognition rests on contribution. That’s my story.
On a liberal plain, UBI does look better than targeting and means-testing. The tricky problem here comes down to specifics. I noted this in previous posts. Something that sounds good in the abstract can founder when it is spelled out. This actually was the fate of negative income tax proposals in the 70s. They enjoyed bipartisan support, including from Richard Nixon, but the proposals blew up when Congress considered some relevant numbers.
If we are talking about a swap of UBI for means-tested benefits (SNAP, Temporary Assistance for Needy Families, Supplemental Security Income, housing subsidies, and the EITC are the big ones), the money formerly used to finance these benefits, once spread out over the entire UBI-eligible population, brings huge hits to existing beneficiaries. Of course there are other possible, supplemental sources of funds. We need to imagine ways to get at them that have some political plausibility — where losers don’t overwhelm winners. It isn’t easy.
One sort of compromise between our positions lies in the universalization-by-socialization of certain types of services. Mickey Kaus used to write about this, before he went insane. Universal pre-K, for instance, is a variation on the theme of UBI that enjoys some support. But notice, in the realm of universal K-12 there are huge distributional struggles, for a function with a constitutional foundation that enjoys widespread approval. In practice, K-12 is substantially financed on a quasi-contributory basis through grossly unequal local property taxes. But by all means, let’s push for free pre-K, free mass transit, a public option within ObamaCare, etc.
Another potential area of mutual interest is TANF. On what basis could TANF be moved closer to a national not-U basic income? Take it back to the Federal budget, minimize benefit reduction rates, cut back on annoying behavioral requirements, raise the benefit floors in the states of Jesusland. What to call it? Family allowance, children’s allowance, I don’t know. I do know that’s where the most deprivation can be found.
It would be great if some enterprising persons could set up a well-designed poll to test the fundamental political question in this debate: does support for benefits hinge on universality or on ‘desert’ based on contribution. An historical analysis would be revealing as well, though as always, past performance does not guarantee future returns.