A host of bold policies have been proposed by some of the 2020 Democratic presidential candidates. In recent weeks, however, a debate has arisen over the advantages and disadvantages of universal versus means-tested programs. A universal program is one that is available to everyone and provides the same benefits to everyone, regardless of income. Means-tested programs are provided to only those people who fall below a certain income level.
The argument for means-tested programs says that it makes no sense that certain welfare policies should be given out to everyone. Why should millionaires be able to receive these benefits? They have enough money to survive on their own, means-tested proponents say. We should not waste taxpayer money on giving out benefits to individuals who do not need them. From a standpoint of pure economics, this argument of efficiency seems sensible. However, such an economic argument breaks down when you consider political and social reality.
First of all, the economic argument for means-tested programs is not as solid as it first appears. When you have means-tested programs, you have to introduce a far more complicated process wherein someone must calculate who gets benefit payments, and how much those particular payments should be in each case. Even in an age when computers can do many tasks for us, a means-tested program still requires significantly more staff members to administer and expensive IT costs to operate. The costs of running this new bureaucracy can eliminate the cost savings that the means-tested program was supposed to generate in the first place.
In addition, since one often must apply for means-tested programs, there are many individuals who qualify for the benefits but do not claim them for one of three reasons. First, they may be unaware of the program in the first place. Second, they may view the application process as a burden that is not worth the effort. Third, they may be too ashamed of the stigma that comes with accepting benefits programs to take the money that they are eligible for. Thus, means-tested programs often do not even fully cover the part of the population they are designed for.
Furthermore, means-tested programs are often exploited by politicians to create class divisions. Since means-tested programs must have arbitrary cutoffs for who can and cannot receive benefits, there are people in society who are in dire financial straits who are, for various reasons, ineligible for benefits programs. Politicians are able to foment hatred of those on benefits programs, because such individuals are portrayed as freeloaders who get free money at the expense of the hard-working public. Such an argument is often effective among the working and middle-class individuals who are not eligible for benefits payments. Since such resentment is stirred up over the existence of people on means-tested programs, those programs are vulnerable to drastic spending cuts. Such a sudden elimination in benefits further harms impoverished individuals and traps them deeper in a cycle of poverty.
Universal programs, on the other hand, are in no danger of being used as political weapons to prevent class solidarity. People tend to view universal programs as rights rather than handouts. Everyone agrees that the benefits given to people by these programs are services that everyone in a civilized society should have. In the United States, look at Medicare and Social Security. Both of these programs are universal and are the most popular in the country. Although in an era of rampant neoliberal policies, some politicians talk about cutting or privatizing certain elements of Medicare and social security, efforts to take away these benefits from the people have been unsuccessful. Why? Because no one views these programs as handouts to the “undeserving.” They are a right that comes with living in the US. In a way, they contribute to a sort of national identity.
Another disadvantage of means-tested programs is that they create a two-tiered system in society. When everyone receives the same services, there is an incentive to make those services high-quality so that the wealthy receive the same caliber of program as the poor. With means-tested programs, however, there is little incentive to have high-quality services. This reality reflects the fact that so many people believe that the poor are lucky to get any assistance at all and should be happy with whatever they get. Such an idea is particularly relevant to medical services. When everyone gets the same healthcare, then it is more likely that the distribution of experienced doctors and medical equipment is more even. The poor are less likely to be relegated to a second-rate healthcare experience. Of course, regional differences are still possible and do exist, especially in a large country such as the United States. A universal healthcare system, however, is one important step to take in ensuring quality healthcare for all.
One final factor to consider: politicians often claim that they are trying to cut the welfare state in the name of equality and fairness. But whenever cuts have taken place in the past, is the money ever redistributed for a good purpose? No. The cuts are usually accompanied by tax cuts for the rich, and the entire population is worse off afterwards. Watch out for arguments of fairness from people calling for means-tested programs. Such individuals often have little interest in making society more egalitarian or just.
Green Humanist 