A Stronger and More Effective Safety Net

Building off my previous “Inequality Busters” post, the other priority to fight inequality and give everyone a fair shot at pursuing the American Dream is to build a stronger and better safety net.

I have a Springsteen double feature to set the tone for this prong of the “We’re Better Than This” platform: We Take Care of Our Own and Waitin’ on a Sunny Day. As Bruce notes, hard times indeed can come to us all, and we can do a much better job as a country of taking care of our own to both protect people going through hard times and give a boost to people who are starting from behind due to poverty, systemic racism, and other circumstances.

A stronger safety net starts with ensuring everyone has real access to health care coverage and educational opportunity, covered in previous prongs of the platform. For other core needs like food, housing, and income support for people unable to work, there are concrete steps we can take to make these programs better cover the people who need them without major spending increases.

A streamlined, more efficient approach: The starting point is a radically simplified structure for people to get assistance with the core needs of food, housing, and income support. (Social Security has some distinct issues and is discussed more below).

  • For each of these three core areas outside of health care, there should be one program with one set of rules for applying for and receiving benefits. There currently are a litany of programs to cover the same needs that are needlessly complex, inefficient, and often inconsistent. The result is that many millions (and more likely billions) are wasted on needless administrative costs and many people in need get unfairly shut out.
  • For special populations like veterans and people with disabilities where there may be reasons to have distinct programs covering their needs, at a minimum the standards and requirements should be consistent with the core programs.
  • With one application, people should be able to learn which benefits they may qualify for, determine how much they are entitled to, and apply for those they qualify for and need.

For housing vouchers, the voucher should allow anyone eligible to receive it to use it throughout the rental market, and then require all landlords to take it unless they have a legitimate commercial reason to reject the tenant. As the program currently operates, there is a separate certification process for landlords to participate that is onerous, discourages participation, and distorts the rental housing market in a way that serves no one well. Local jurisdictions already have standards for rental housing and landlords should simply have to certify they meet those local requirements to participate rather than going through a whole separate federal process.

For SNAP benefits, once more commonly known as food stamps, there are reams of rules and procedures ostensibly aimed at ensuring healthier purchases but inconsistently applied in real life. This is a losing battle that makes the program much more complicated, inefficient, and costly than it should be. While there should be some broad guidelines that exclude alcohol and cigarettes, we should let the recipients use these benefits for anything that is classified as a grocery or farmers market purchase rather than trying to choose “winners” in the potato chip aisle in very flawed ways. To encourage healthier purchases, we should build on programs already out there that give bonus benefits to people who buy recommended amounts of fruits, vegetables, and proteins on the food pyramid.

A better way to promote accountability: While most will agree that an advanced country like ours should not let our fellow Americans go without food, shelter, and other basic needs, we also want to do that in a way that does not encourage sloth or fraud. However, in our zeal to guard against those problems, we have lost sight of human dignity and the very reason we have the programs in the first place.

To discourage sloth, we should make sure these programs are structured to make work pay. There always should be a meaningful incentive for people who are able to work to come out materially better when they do so. That can be done by allowing them to keep core food and housing benefits on a sliding scale as people earn more income; expanding the earned income tax credit will more than make up for the loss of income supports. So long as we do those things, we do not need to put everyone else through a soul-crushing ringer to account for the tiny fraction of people who would choose very basic public benefits over more lucrative work when they have the choice.

To discourage fraud in these programs, there are two things we can do. For cash benefits like unemployment compensation, where we are seeing high incidence of identity theft, we should strengthen identity confirmation requirements before approving payment.

For all other fraud in these programs, which occurs at a similar rate to other government programs (i.e., typically less than 2% of the recipients), we should do the same as we would in my scenario for all government contracts: a certification that the person meets the requirements and spot audits (like the IRS does) to hold bad actors accountable that come with real and certain consequences.   

A more flexible structure:

All public benefit systems need to account for “gig economy”: not everyone earns income through traditional employment. One good thing to come from the pandemic has been the expansion of unemployment benefits to cover independent contractors who have lost all or most of their income.

Building off this example, there should be ways for people to certify their income in the application process for these and other benefits that is not overly burdensome. That certification can be under penalty of perjury as with other government benefit programs, again with the spot audits for accountability.

A better safety net for crises and disasters: The pandemic-related shutdowns and resulting economic turmoil have tested our crisis safety net, and the people and businesses hit the hardest too often have become caught in the middle as politics complicate the Congressional response.

This sadly won’t be our last pandemic or other crisis that has severe economic fallout, and we should develop programs now for impacted people and businesses that can automatically kick in the next time we find ourselves in difficult times. That should include a streamlined version of the Paycheck Protection Program for small businesses and nonprofits and other larger businesses directly impacted by the crisis (e.g., the airlines during the pandemic), building off the lessons we have learned this past year for how it can be best targeted to those who really need it. It also should include a mechanism where the federal government can step in to assist with unemployment benefits, again building off our most recent experience.   

Social Security:

Last, but not least, is Social Security, one of the most popular and effective government programs ever. Social Security works well overall, we just need to shore up its finances and better account for people who don’t earn income from traditional employment.

It has proven politically difficult, but one key to shoring up the finances is gradually raising the retirement age for eligibility for people 55 and under. We need to come to grips that people are living longer and generally have longer work lives now than when the original formulas were set.  

Another politically controversial one that will help bolster the program is using a “chained” consumer price index to calculate benefit increases (this should be used for other government programs too). That will modestly restrain the growth of benefits over time but help ensure the program is there for the beneficiaries.

Only if we take those first two steps should we take this last one: boosting the income caps for the Social Security tax to a more sustainable level. That would be a not insignificant tax increase for affected employees and employers and should not be unlimited, but as part of a shared sacrifice it is a reasonable step to ensure the program is sustainable for the long haul.

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