Julio Cortez/AP Photo
A Transportation Security Administration employee stands at a booth to learn about a food stamp program at a food drive at Newark Airport, January 23, 2019, in Newark, New Jersey.
In the wake of the State of the Union address, writers at the Prospect have praised President Biden for his agenda for building the middle class, for reviving public investment, and for rejecting the recent Democratic compulsion toward austerity. All of these are things worth celebrating. None of them specifically refers to expansion of the social safety net, a preoccupation among past Democratic administrations.
The Biden administration opened with grand ambitions on the welfare state, and succeeded in a stealth fashion under the cover of the American Rescue Plan (ARP). This advanced, extended, or institutionalized some pandemic supports that at the time bolstered the U.S. welfare state significantly, sustaining the country through the crisis. But all of those elements, starting with the CARES Act and continuing with the ARP, were temporary.
For example, the anti-poverty enhancements of the Child Tax Credit for 2021 did not carry forward, and now we’re hoping that a couple of states can fill that gap. Rental assistance was a chaotically implemented but eventually successful program to protect shelter for tenants that mostly vanished when the money dried up, outside of cities that kept the program alive like Los Angeles. Paid leave programs set up in the pandemic and extended in the ARP expired as well (and were of middling benefit because they were voluntary tax credit programs).
But even further under the radar, welfare-state programs were tied to the continuation of the national and public-health emergencies around COVID-19. And with the Biden administration announcing that the emergencies will end on May 11, those programs to which millions of poor people have become accustomed for years will also fade away, leaving us at almost the same position on the welfare state as the meager place we were at in 2019.
Because the same populations use multiple sets of these benefits, they will be doubly hammered in May, in a way that will increase suffering at the low end of the scale. A focus on the middle class, while certainly a step above past Democratic administrations’ focus on corporate and financial elites, always runs the risk of neglecting the truly poor. Their plight reveals how the paradigm shift in the Democratic Party still needs to be perfected.
One pandemic-era program was already targeted for termination even before the end of the national emergency. In the end-of-year omnibus passed in December, Congress scheduled a phaseout of the Medicaid continuous enrollment provision. This program gave extra matching funds to states to maintain their Medicaid rolls, which as a result swelled by nearly 20 million since the start of the pandemic—much more than the total number of Americans on the Obamacare insurance exchanges. But starting in April, states will be able to cut their rolls, and the federal funding will decline before evaporating at the end of the year.
States still have to follow certain rules to comply with the phaseout, but there’s no question that many poor Medicaid recipients are going to lose their coverage—between 5 and 14 million, according to the Kaiser Family Foundation. That’s compounded by the fact that 16 million food stamp beneficiaries in 35 states (who are likely to overlap with Medicaid recipients) will also see their benefits slashed by an average of roughly $90 a month per person, starting in March. This was also decided in the December omnibus, and will result in something like a $36 billion cut to anti-poverty measures over the next 12 months.
A focus on the middle class always runs the risk of neglecting the truly poor.
The Department of Agriculture did adjust the Supplemental Nutrition Assistance Program (SNAP) to increase the base benefit last year, but that increase does not make up for the loss of pandemic support. So someone eligible for pandemic-era enhancements in food stamps who was also on the Medicaid rolls thanks to the continuous coverage provision will get hit twice.
On top of this are the changes after the COVID national and public-health emergencies end on May 11. Work requirements for SNAP in the states that required them, for example, will return, so on top of the lower benefit, eligibility will be conditioned on an income test, as it was in around half the states before the pandemic. Streamlined administrative rules to apply for SNAP also will phase out.
There will be higher out-of-pocket payments for virtually everything related to COVID, including tests, vaccines, and treatments. People with no insurance will have to bear the full cost, which was previously picked up by the government. Vaccine manufacturers are also planning to drastically increase the price of the shots. People seeking mental health or substance use care will have a more difficult time getting controlled substances without an in-person doctor’s visit. The Medicare prescription drug benefit, which was enhanced with a cap on insulin through the Inflation Reduction Act, will now tighten rules for extended supplies of other drugs. And hospitals that received a higher share in Medicare payments for treating people with COVID diagnoses will no longer get them, which could lead to denials of care or tighter restrictions.
I don’t think anyone believes that the COVID emergencies should have lasted forever for the purpose of maintaining these relatively improved welfare provisions. The problem is that they never should have been temporary. The promise of Biden’s early presidency was that the pandemic was an awakening to the need to permanently enhance programs for the poor, so that they are not caught short in the next economic or health crisis. That was the entire thrust behind Build Back Better.
The reasons that didn’t succeed are legion, with much of the blame placed at the feet of a small handful of malcontents in the narrow Democratic majority. But it didn’t happen. The hopes of a welfare-state New Deal crashed, and really the only major program still standing is the increased subsidies on the Obamacare insurance exchanges. This important measure comes close to fulfilling the rhetorical promise of the Affordable Care Act by making people eligible for subsidies regardless of income, and exchange enrollment hit 16.3 million this year. (That’s still fewer than the additional people who went on Medicaid during the pandemic.)
However, the improved exchanges are still just a patch to a system that doesn’t provide universal coverage, as it leaves Americans in 11 states that haven’t expanded Medicaid (around two million people) out in the cold. And the enhanced subsidies only last until 2025, when the fight can resume all over again.
The Biden administration has been more successful on things like industrial policy, where common ground with Republicans could be forged, and competition policy, where much of the action could happen at the administrative agency level, than on welfare policy. Its major legislation had no permanent expansions of the welfare state. Even in states where Democrats control both the legislature and the governorship and thus do expand welfare, the policy design has been poor.
Legacy advocates for a stronger welfare state have been reduced to protecting meager gains, and more aggressive advocates haven’t been able to get a hearing in the corridors of power. It’s a problem that needs much more work, to foster a paradigm shift in how Democratic elites recognize and prioritize poverty. As for now, it’s just a disappointment.
