In an ideal world, everyone who qualifies for an aid program should receive its benefits. But the reality is that this is often not the case. Before the pandemic, for example, About one-fifth of Americans Those eligible for food stamps did not receive them. actually, Millions of Americans Those who qualify for existing social welfare programs do not receive all the benefits they are entitled to.
As I wrote in a previous edition of this newsletter, a big part of the problem is the paperwork and bureaucratic hoops people have to jump through to participate in certain programs. But what often lies at the root of these barriers is an all-too-simple policy choice that lawmakers introduce: means testing—that is, establishing eligibility requirements (such as income or asset thresholds) for social programs.
Testing a given social program can mean good intentions: target spending toward those who need it most. After all, if middle- or high-income people who can afford their groceries or rent get federal assistance to pay for these things, wouldn’t there be less money to go around for those who actually need it?
The answer is not so simple.
How means testing can sabotage policy goals
Implementing strict eligibility requirements can be extremely tedious and have unintended consequences.
For starters, let’s look at one of the main reasons lawmakers advocate for means testing: saving taxpayers money. But this is not always the case. “While these are usually created as a way to curb government spending, means-tested benefits are often the norm more expensive To provide average rather than universal benefits, simply because of the administrative support required to examine and process applicants,” my colleague Li Zhou wrote in 2021.
More than that, means testing reduces how effective anti-poverty programs can be because many people are left out of benefits. As Zhou points out, determining who qualifies for welfare requires a lot of work from both the government and potential recipients, who must fill out arduous applications. The paperwork can be difficult and discourage people from applying. It can also result in errors or delays that can easily be avoided if a program is public.
There is also the possibility that creating an income threshold creates incentives for people to advance in their careers or take higher paying jobs. I interviewed a woman a few years ago, for example. told me That after she started working as a medical assistant and lost benefits like food stamps, it became difficult for her and her daughter to make ends meet. When lawmakers aggressively impose testing programs, people like her are often left behind, making it harder to move out of poverty.
Consequently, means testing can severely limit the feasibility of a welfare program. According to a report by the Urban Institute, for example, the United States could reduce poverty More than 30 percent Just by ensuring that everyone eligible for an existing program receives its benefits. One way to do this is for lawmakers to make more welfare programs universal rather than means-tested.
Why public programs are a good choice
There is sometimes an aversion to universal programs because they are seen as unnecessarily expensive. But universal programs are often the better choice because of one very simple fact: they are generally much easier to administer and less expensive. Two examples of this are: Some of the most popular social programs In the country: Social Security and Medicare.
Universal programs can also be Create fewer partitions How should taxpayers spend their money? Much of the opposition to welfare programs comes from the fact that some people simply don’t want to pay for programs that they don’t directly benefit from, so eliminating them can create more support for a given program.
In 2023, following a handful of other states, Minnesota implemented a universal school meal program in which all students receive free meals. This was the response to the problem when it arose Means testing goes a long way. Across the country, public school students pay for their meals depending on their family’s income. But there is this system tainted student Those who receive free food. According to one study, 42 percent of eligible households reported that their children were less likely to eat school meals because of the stigma surrounding it.
Minnesota’s program has proven popular so far: In September 2023, shortly after the program began, school breakfast and lunch amounts 30 percent and 11 percent increased Compared to the previous year, respectively.
While it may not be politically possible – or, in some cases, necessary – to get rid of all public subsidies through testing, free school meals also provide an example of what a compromise might look like at the national level. Although Congress did not make school meals free for all, it did pass a provision In 2010 which allows schools to provide free meals to all students in districts Where at least 25 per cent (originally 40 percent) are eligible. The program has shown that providing free meals to all low-income food insecure people, even among poor students who already qualify for free meals, removes stigma. (Community Eligibility Provisions Now serves about 20 million students.)
As for how public programs can be paid for, the answer is, yes, higher taxes. It may seem inefficient to give people a benefit if you’re going to take it back from them through taxes, but what you end up with is a more efficient program that’s easier to administer and leaves no one behind.
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