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Hillary Clinton’s quiet revolution

Nobody's noticed, but she's running on an ambitious plan to remake the American social compact.

Vox / Javier Zarracina

Hillary Clinton often gets described as an incrementalist, with a relatively modest agenda. This makes sense, given that she spent the past two years or so running against a literal democratic socialist and Donald Trump.

But this depiction misleads more than it informs. Amid her blizzard of plans and white papers, the scope and ambition of Clinton’s program often gets missed. Just imagine, for a second, what a world in which it all became law would look like.

The vast majority of families would be able to send children to public colleges and universities tuition-free. Four-year-olds would have universal access to pre-K, and child care would be massively subsidized so as to cap costs at 10 percent of a family’s income. All workers would get 12 weeks paid family leave and 12 weeks paid medical leave, in case they need to care for a new child, a sick family member, or themselves. The child tax credit would be doubled for families with young children and made available to poor families with little earnings.

Eleven million undocumented immigrants would gain a pathway to citizenship. Medicare would be expanded to people as young as 55, and allowed to negotiate down drug prices with pharmaceutical companies, and every state would have a robust public option. All states would expand Medicaid coverage to anyone living underneath the poverty line, and subsidies for health care on the exchanges would be more generous. The government would cover out-of-pocket health costs through the tax code. Federal money would be able to pay for abortions for people with government-paid insurance. Social Security benefits would increase. The minimum wage would be at least $12, maybe $15 an hour, and firms could unionize through card check rather than having to go through elections.

There would be an injection of $500 billion — $275 billion of which comes from federal coffers — into rebuilding roads, highways, mass transit, airports, seaports, broadband networks, electrical grids, water pipes, and other forms of infrastructure. This would be the largest public works push from the federal government since the building of the interstate highway system in the 1950s. Much of that money would go to directly hiring workers, particularly youth in minority communities. The Clinton campaign estimates that the $500 billion would create about 6.5 million jobs, more than half of which come from public money.

And to pay for it all, the rich would face a top income tax rate of 43.6 percent and a top estate tax rate of 65 percent, each of which is the highest since Ronald Reagan. Investors would face a new tax on financial transactions.

Put together, this is not quite a plan for full social democracy, like the one Bernie Sanders cobbled together to mixed results in the primaries. But, to borrow a Silicon Valley term, it’s a plan for a minimal viable product of social democracy. It extends the promise of the American safety net from cradle to grave, covering major gaps that currently exist here and not abroad for the first time in American history.

“I think a lot of Clinton’s proposals are very much a step in the direction of a Nordic-style or social democratic welfare state,” Lane Kenworthy, a sociologist at the University of Arizona and author of Social Democratic America, says.

The result would leave the United States’ safety net far less generous than that of, say, Sweden. Hospitals aren’t nationalized. Parental leave is 12 weeks, not 480 days per couple. There isn’t a child allowance paid to all families, no strings attached.

But a world in which Clinton’s agenda passed is one in which it would be the stated responsibility of government to ensure everyone can afford health care, child care, and college. It would radically expand the boundaries of the American welfare state, probably for good.

This is not incrementalism.

On every dimension that counts, Clinton would make America more social democratic

Stockholm: An Alternative View
Sunny Stockholm.
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There are a lot of structural differences between the US and Nordic social democracies. They tend to raise 40 to 50 percent of GDP in taxes; in the US, across state, local, and national governments, it’s more like 26 percent. Many of the benefits provided through the government in Scandinavia, like health care insurance, are primarily provided through employers here. And because the US doesn’t run unemployment insurance through the unions, like Scandinavian countries do, we see a much lower rate of union membership.

But when it comes to what government actually does, there are four principal ways in which the US falls short of Nordic-style comprehensiveness:

  1. The US does not have universal health coverage.
  2. The US does not have universal pre-K or child care.
  3. The US does not have paid family and medical leave.
  4. The US does not provide adequate support to poor families.

Clinton does not get the US up to European standards on any of these four points. But on each one, she moves the ball forward in a meaningful way.

Her health care plan, for instance, includes a wide array of policies that would each play an important role in expanding coverage to the 8.6 percent of Americans who still don’t have it. She would pay for 100 percent of the cost of state Medicaid expansion for the first three years a state signs up, an offer that could bring a number of holdouts to the table; people in the “coverage gap” in states that haven’t expanded account for about 9 percent of the remaining non-elderly uninsured, according to the Kaiser Family Foundation.

She would add a Medicare buy-in for people 55 and older, giving them access to cheaper, more comprehensive care than they can find on the private market and further expanding Medicare’s size and clout. She would expand Obamacare subsidies to entice more people to sign up; many of the remaining uninsured cite policies on the exchanges’ excessive price tags, something bigger subsidies and a public option could help with. Finally, immigration reform could actually have a huge impact here, as about 15 percent of the remaining non-elderly uninsured are undocumented immigrants ineligible for Medicaid or exchange health plans.

It’s doubtful that these reforms would get to 100 percent universal coverage. But that goal is closer than you might think; about the half of the non-elderly uninsured, according to Kaiser, are eligible for Medicaid, SCHIP, or premium subsidies already. The remaining task is largely a matter of implementing the ACA aggressively and filling in its gaps, as Clinton has proposed to do.

Clinton would not create the universal day cares you see in countries like France or Sweden. But she promises to cap child care expenses at 10 percent of income by expanding existing subsidies and tax credits. Given that families below the poverty line getting child care pay more than a third of their income, on average, and families between 100 and 200 percent of the line pay more than 20 percent, her proposal would be a massive relief to millions of families. Her plan for universal pre-K for 4-year-olds is almost the definition of a half-measure, as it leaves out 3-year-olds — but it’s one year closer to a full pre-K program all the same.

Clinton’s plan for family and medical leave promises 12 weeks. That’s nowhere near the 480 days that Sweden lets couples split between the two of them, but it’s a hell of a lot more than the current zero days. And it provides a policy that future presidents and senators and House members can campaign on expanding further and further.

And Clinton would take an important step toward making the child tax credit a real cash program that helps the poor, similar to child allowances in other countries. She fails to make the credit fully refundable, a significant downside, but she expands its reach among poor families that currently don’t get it, and she doubles its size and makes it phase in faster for families with young kids. Fourteen million families would benefit from the proposal, including 5.2 million living in deep poverty.

A starter home for a complete welfare state

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This is not a full social democratic welfare state. It doesn’t get the US to European standards. But it resets the parameters of what kinds of functions the welfare state is supposed to perform. In Nordic states, there’s an assumption that the government will support its citizens through all stages of life: a child allowance, child care, and pre-K through college education for children; unemployment insurance and income support for working-age people; pensions and long-term care for the elderly; and health care for all.

Hillary Clinton does not share Denmark and Sweden’s approach to cradle-to-grave welfare provision. But she does share a belief in cradle-to-grave welfare provision as a goal, and is proposing policies that establish that as an expectation the government must fulfill. She’s creating a starter home for the welfare state, one that her successors can renovate to better fulfill the promises it makes.

“I see a lot of her proposals as moving in the direction of a more expansive welfare state, covering more types of risk and also more generous types of programs,” Kenworthy says.

That’s why arguably the most important parts of the whole package are the pledges on child care and family leave. The Affordable Care Act is epochally important not just because it expanded coverage but because, while it does not provide truly universal coverage, it establishes universal coverage as the goal and responsibility of government. It reshaped the parameters of what the American welfare state was expected to achieve. Before March 2010, it was not expected to provide universal coverage. Today, it is.

Health care reform was such a longstanding goal of American progressives, going back at least to Teddy Roosevelt’s 1912 presidential bid, that its passage prompted some discussion of the possibility that the welfare state was … done. Sure, there would be fights about proper funding and the like, but its contours were set. It was just a matter of making existing promises more or less generous, and how to keep them. Indeed, Clinton herself is proposing ways to renovate the ACA’s starter home version of universal health care into a system that covers more, better, at a lower cost.

But there’s a final, major missing item on the agenda, separating the US from most other developed countries. That item is family policy. The lack of family leave, universal child care/pre-K, and a child allowance combine to make having children a considerably more expensive endeavor, especially for poor families, in the US than abroad. For the US to have a welfare state that compares at all favorably with that of our peers, that piece needs to be present. It makes sense that the nation’s likely first woman president would be particularly sensitive to the importance of this piece.

Clinton’s policies go a long way toward establishing that pole of the welfare state as a crucial component for the first time in history. The 10 percent of income cap for child care expenses is a really big deal as much for the policy implications as for the statement it sends: This is a proper province of policy, and the US safety net will include child care affordability as an important domain within its purview. Adding two truly universal programs, for pre-K and family leave, not only amplifies that message but goes a long way toward achieving the goal it sets.

A kludgeocratic welfare state, for what it’s worth

A kludgey solution Rube Goldberg

The sheer ambition of Clinton’s agenda gets lost, partly because it really did pale in scale to that of her primary opponent, but in large part because the mechanisms it uses are generally small-scale and technocratic. A tax credit here, a state-federal matching program there, maybe some rule fixes on a couple of things.

That really does set Clinton’s plan apart from most welfare states. Her plan is full of what Johns Hopkins’s Steven Teles calls “policy kludges”: somewhat hacked-together attempts to address a particular problem through tweaks of existing policy rather than through big overhauls that simplify the institutions involved.

You can definitely argue that this is poor design from a purely policy perspective; I’d likely agree. Among other things, it seems to be more legally fragile than some other approaches to expanding the welfare state, as the frequent, somewhat successful litigation against the ACA suggests. And when some problems arise, as with recent premium spikes in Obamacare, American politics makes plugging the leak later on difficult.

But it’s also the only way the safety net has been expanded in America in the past 50 years. If you look at the major expansions of the federal welfare state since LBJ, you find things like the earned income and child tax credits, Medicare Part D, the Affordable Care Act’s premium subsidies and Medicaid expansion, and the periodic boosts given to food stamps, which has grown substantially relative to its past size. None of these are big, simple programs like Medicare or Social Security. They’re kind of kludgy, because that’s the sort of thing that gets through Congress. And Clinton will probably have a left-of-center Supreme Court that won’t disrupt her plans the way the Roberts Court cut off millions of people from Obamacare’s Medicaid expansion.

It’s also less unusual, internationally, than some might think. “People often think, ‘Other countries do it better, so that must imply their systems are more coherent and clean and effective, that they have fewer programs working at cross-purposes,” Kenworthy says. “I’m not really convinced that that’s the case.” While the US definitely stands out for its use of the tax credit, lots of countries have EITC-style programs, and many help kids through the tax code the way the US does. “We’re probably less distinctive in that respect than a lot of American lefties think,” Kenworthy concludes.

Clinton’s agenda is also characterized by a strong preference for means-testing programs so the poor receive much more than the rich. The traditional leftie view is that programs limited to people with modest incomes are doomed to failure. Universal programs have a large constituency to defend them, but poor people are much less politically active, meaning that “programs for the poor are poor programs” and thus are routinely cut, or even eliminated.

But recent experience suggests the opposite. Robert Greenstein, who as founder and president of the Center on Budget and Policy Priorities spends more time advocating for expanding programs for low-income Americans than just about anyone else alive, is a prominent exponent of this view. As he noted in an interview with me this past summer, food stamps and the earned income tax credit, the two most important means-tested safety net programs, have been routinely and significantly expanded in recent decades. By contrast, Social Security, the most famous universal program, got a 14 percent across the board cut in the early ’80s.

“If, for example, you compare universal social insurance programs that are tied to work to means-tested programs that are tied to work, like the earned income tax credit, you’d have to come to the conclusion that in recent decades, the means-tested programs have done much better politically than the universal programs,” Greenstein says.

Kenworthy also thinks the universalism versus means-testing distinction is overplayed. “With the Scandinavian welfare state, a lot of people think what’s distinctive is the universalism of the policies as opposed to means-testing that we make use of,” he says. “I think the most important difference is simply the scope and generosity of benefits.”

Where Clinton falls short

Hillary Clinton Campaigns Across Florida, Encourages Early Voting Justin Sullivan/Getty Images

There are definitely areas where Clinton’s agenda does not expand the scope of America’s welfare state to Nordic levels. Kenworthy points out three areas in particular:

  1. She wouldn’t expand mandatory paid time off, which amounts to five to seven weeks a year in countries like Sweden and Denmark.
  2. She would do some, but not enough, for the extreme poor with very little or no cash income left behind by welfare reform.
  3. She, like basically every other politician in the developed world, lacks a real agenda for getting wages growing in a sustainable, long-term way again. Kenworthy suggests a massively expanded EITC as one option, but usual suspects like tougher trade policy and policies to encourage unions wouldn’t do nearly enough.

It’s also true that Clinton has a somewhat less realistic set of pay-fors than real social democracies use. Scandinavia, and also smaller welfare states like Canada and Australia, makes a heavy use of consumption taxes, the conservative policy writer and analyst Reihan Salam notes. “She wants a substantial increase in spending (on labor-intensive services, by and large) and she wants to finance it entirely through taxes on high earners,” Salam says. “Most social democracies rely on broad-based consumption taxes, and they do so for a reason. Contra Clinton, the middle class is where the money is.” Salam’s right — the left really needs to stop worrying and love VATs.

All of which confirms that as ambitious as her agenda is, Clinton is, at root, a pragmatist who is focused on making the most of the current political atmosphere rather than pinning her hopes on transforming that atmosphere to make more expansive change possible. She works within the system. She doesn’t propose totally overhauling the way it does taxation; she proposes tweaks and nudges and expansions of existing programs.

But it’s important not to mistake her pragmatism for a lack of ambition or vision. Clinton’s agenda is plenty ambitious. It’s a serious attempt to adapt a comprehensive welfare state to the demands of American politics, to overcome the particular flaws of America’s political system to create a cradle-to-grave safety net. That’s an important vision, and one that both her supporters and opponents should grapple with seriously.


Watch: Understanding how Hillary Clinton would govern