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The case against means testing

Programs that use it can impose inordinate burdens on the people they’re trying to help.

Sens. Kyrsten Sinema (D-AZ) and Joe Manchin (D-WV) board an elevator after a private meeting between the two of them on Capitol Hill on September 30, 2021, in Washington, DC.
Jabin Botsford/Washington Post/Getty Images
Li Zhou is a politics reporter at Vox, where she covers Congress and elections. Previously, she was a tech policy reporter at Politico and an editorial fellow at the Atlantic.

As Democrats weigh what to include — and what to cut — in their budget reconciliation bill, lawmakers are grappling with an existential question: who should qualify for vastly expanded social services.

Sen. Joe Manchin (D-WV) is among the moderate Democrats who have pushed to prevent the well-off and wealthy from receiving benefits like universal pre-K or free community college, as lawmakers try to get the $3.5 trillion bill closer to $2 trillion. “I cannot accept our economy or basically our society moving to an entitlement mentality,” Manchin said in late September.

But this call for means testing, policy parlance for limiting eligibility for social programs based on income, overlooks a few problems, experts say. Means-tested benefits can actually be more expensive to provide, harder to sell politically, and less effective than universal social programs, and they can place both a social stigma and discouraging bureaucratic requirements on Americans in need.

Means testing have also long been associated with a moral argument that some segments of the population are deserving of government benefits, while others are not. This idea undercuts the belief that a social safety net is intended to help support those broadly in need, and shifts the burden onto individuals to prove that they’re worthy of getting basic help.

“From an effectiveness standpoint, we have a lot of evidence that more universal programs are better for a host of reasons including for helping very low-income people,” says Shawn Fremstad, a senior policy fellow at the Center for Economic and Policy Research. “It has to do with not being so burdensome, not having so much paperwork to do. There’s also a way in which more universal programs are less divisive politically.”

Despite how popular programs like Social Security and Medicare can be once implemented, getting new, nearly universal programs passed is an uphill political battle, to say the least. Republicans — and more moderate Democrats — have historically viewed universal programs as excessive.

In the end, opponents of more means testing emphasize that the fight for more universal programs is as much about simplifying access to social services as it is about building solidarity and reframing how we think about social spending.

“We can choose to strengthen the bond Americans have to one another by proposing universal social insurance benefits that broadly benefit all Americans, or we can pursue complicated methods of means testing that the wealthy and powerful will use to divide us with false narratives about ‘makers’ and ‘takers,’” leaders in the Congressional Progressive Caucus wrote in a letter to House Speaker Nancy Pelosi on Wednesday.

What could be means-tested in the reconciliation bill

The actual contents of the reconciliation bill are still in flux, but a few programs have already been suggested for additional means testing. Some policies like the expanded child tax credit include phaseouts by income to begin with.

The bill’s free community college program, universal pre-K, and an electric vehicle tax credit are all possible provisions that could be capped further, according to a Reuters report. Here’s a rundown of some of the measures that could be tied to income:

  • The expansion of the child tax credit: There’s already a means test for the expanded child tax credit — the full amount is only accessible to couples with an adjusted gross income of $150,000 or less, or single heads of household with an adjusted gross income of $112,500 or less. Families that qualify receive an annual benefit of $3,600 for every child under age 6, and $3,000 for each child between the ages of 6 and 17. Those who make more are able to access an additional credit, too, though it gets reduced as people’s income levels get higher.

Manchin has said he’d like to lower the income caps on the expanded child tax credit even further, though he has yet to propose a number. “I have got people that are making combined 200 and 300 and more, up to 400 [thousand], saying they’re getting checks,” he’s previously griped.

  • Expansion of Medicare coverage for dental, vision, and hearing: In the existing proposal, additional Medicare coverage for dental, vision, and hearing needs would be available to all seniors in the program regardless of income. Some industry groups and centrist lawmakers have argued that these benefits should be limited to lower-income individuals, making no more than 300 percent of the federal poverty line, or $39,000 a year.

“There are those who can’t afford this right now, let’s focus it on them,” Rep. Kurt Schrader (D-OR) told Bloomberg regarding dental coverage. “It’s less costly to the taxpayer and it gives help to the people who really need it.” Sen. Bernie Sanders (I-VT) has countered by noting that many older adults in the middle class are also struggling to cover such expenses.

  • Free community college: Democrats’ current proposal would provide two years of free community college to anyone who’s interested, but the White House and others, including Sen. Tim Kaine (D-VA), have suggested that this benefit could be limited based on income.

There are other existing higher education programs that are means-tested, like Pell grants, which are only available to students who can demonstrate need based on their family’s annual contribution to tuition.

  • Universal pre-K: Democrats’ universal early education push would guarantee funding for all 3- and 4-year-olds to access prekindergarten. But this, too, might get limited based on income.
  • Universal child care: The current proposal includes subsidies for child care that guarantee no household spends more than 7 percent of its annual income on child care costs. Any spending over that 7 percent threshold would be covered by the program, a provision that effectively ensures that wealthier households won’t receive as much aid as lower-income ones.

Previously, some more centrist lawmakers had proposed that these subsidies should only be available to families that make 150 percent or less of their region’s median income.

Means testing makes it harder to access programs

There are some serious costs associated with means testing. Though they’re usually framed as ways of curbing government spending, means-tested benefits are often more expensive to provide, on average, than universal benefits, simply because of the administrative support needed to vet and process applicants.

And then there’s the burden means testing puts on those in need. Take the applications for SNAP, or food aid, for example. The most complicated state programs require individuals to meet a specific income threshold and complete certain asset tests. Individuals need to show that they don’t currently make more than 130 percent of the poverty line, or $16,744 for an individual, and have assets worth more than $2,500 (a requirement that varies based on age). According to mRelief, a nonprofit that assists SNAP recipients, the average applicant needs to either fill out a 17-page form or participate in a 90-minute interview, in addition to providing as many as 10 documents about their assets. Even the prospect of this can push people away.

“One hundred percent of the poverty line, 200 percent of the poverty line — that’s not how people think. I always have to go back to a chart to figure it out,” says Ellen Vollinger, a legal director at the Food Resource and Action Center, about how people determine eligibility. “They think, sure, we only want it to go to this cohort of people. But they forget there are large amounts of people who can’t cope with this.”

Progressives like Rep. Alexandria Ocasio-Cortez (D-NY) have cited “bureaucracy, red tape, [and] waste” as key reasons means testing can be problematic, and that’s been borne out in the research as well.

According to Georgetown University political scientists Pamela Herd and Don Moynihan, the administrative costs for programs like SNAP, the family assistance program known as TANF, and the Supplemental Nutritional Program for Women, Infants, and Children can range from 15 to 40 cents of each dollar of benefits distributed in the programs. That includes money used to interview people, check the documentation they provide, and ensure that their claims of need are valid.

In other words, even though the intention of means testing is to help people most in need, imposing strict qualification requirements can actually make it tougher for individuals who are eligible to get past the application process.

As Matt Bruenig writes for the People’s Policy Project, a progressive think tank, these administrative barriers have hurt uptake rates of programs like SNAP and Medicaid, none of which fully serve all the people who qualify for them:

The overall participation rate of the food stamp program is 85 percent and is only 75 percent for the working poor who likely have a harder time proving their eligibility to the welfare office. The participation rate of Medicaid is 94 percent for children, 80 percent for parents, and around 75 percent for childless adults. The participation rate of the Earned Income Tax Credit (and also presumably the Child Tax Credit) is 78 percent. The low participation in the EITC cuts the poverty-reducing effect of the program by around 33 percent, according to the Census Bureau, meaning that mainstream estimates of the EITC’s impact (e.g. those produced by CBPP) overstate the effectiveness of the program by at least 50 percent.

Additionally, researchers have found that means testing stigmatizes people who are eligible for these programs, further reducing participation in them and fomenting biases toward low-income people.

Conversely, universal programs including Social Security and Medicare have much higher uptake rates of 97 percent and 96 percent among older adults, though they aren’t without their own administrative hurdles. Filing claims for Social Security benefits or enrolling in Medicare can be extremely confusing and time-consuming as well.

Finally, there’s the political argument. Programs that apply to a broader swath of people tend to have much greater political buy-in — think Medicare, for example. “In the same way that we’re not here to try to pit programs against each other, we’re also not here to pit people against each other,” Sen. Elizabeth Warren (D-MA) told reporters on Tuesday.

Interestingly, some moderate House members have been inclined to back more universal versions of programs, like child care, because they want to ensure their constituents aren’t left out. “New Jersey already pays more than $10 billion in taxes than we receive in federal spending and I will not let another federal program pay less to New Jersey tax payers than it does to all other Americans,” Rep. Mikie Sherrill (D-NJ), a House Democrat in a battleground district previously told the New York Times.

A pitfall that universal programs are able to avoid, too, is choosing a cutoff that fails to adequately estimate need. For instance, the income threshold for SNAP is $28,550 for a family of three. Because of this cap, people who make slightly more money than the cutoff are left out of the program — even if they could also use this support.

Negotiations on the reconciliation bill will be about trade-offs

In the end, reducing the overall costs of the reconciliation bill will be about trade-offs. Progressive lawmakers thus far have not signaled an interest in further targeting any programs. Instead, they’ve pushed for fewer years of funding for social programs in the bill.

“If there are fewer dollars to spend, there are choices to be made,” Speaker Pelosi said in a press conference on Tuesday, adding that shortening the length of programs is a key mechanism that Democrats are eyeing. “Mostly we’d be cutting back on years and something like that.”

As Rep. Ro Khanna (D-CA) explained in an MSNBC interview, the approach that lawmakers take is likely to vary by program. He signaled an openness to discussing the income cap for the expanded child tax credit, for example, but emphasized that additional restrictions on universal pre-K would be a much harder sell.

“It’s reasonable for certain things: If you’re saying that the earned income tax credit should go to working families and not the rich, I agree,” Khanna has said. “But if you’re saying that we shouldn’t have universal pre-K or universal community college, I say no. ... I’m glad that K-12 education isn’t means-tested in this country.”

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