Means testing is a policy failure.
Secretary Wilbur Cohen was the legendary cabinet secretary who helped architect both FDR’s New Deal as well as LBJ’s Great Society as secretary of Health, Education, and Welfare (precursor to the modern Health and Human Services). Having helped build some of the most impactful pieces of social legislation in U.S. history, he understood something profound: “A program that deals only with the poor will end up being a poor program.”
I wish Senator Joe Manchin understood it too. As a condition for his support, Manchin is demanding that many of the most impactful programs being proposed under the budget reconciliation package be limited only to people earning below a certain income, called “means-testing” by policy wonks.
Means-testing sounds obvious, at first. After all, why should we be spending money to offer benefits to people already earning hundreds of thousands of dollars a year? But the reality isn’t that simple.
All policy is political — initiating and maintaining a policy requires political will. And if you want a policy to succeed, the most politically powerful people have to be bought in. Because they also tend to be the highest income, means-testing excludes the most powerful people from the benefit of a policy.
But it’s not just that they don’t have skin in the game, it’s that they think they’re paying for everyone else’s. Even though, in America, the richest people routinely get away without paying their fair share in taxes, the scepter of having to pay taxes to support benefits for someone else is enough to dismantle those programs. Indeed, that has essentially been Republican logic for decades. That’s particularly true when the beneficiaries of those programs are Black, as Heather McGhee so effectively argues in her recent book The Sum of Us. In the book, she writes about how policymakers often appealed to racism among whites to argue against pro-poor policies that would have helped them, too.
Think about the legacy of the New Deal and the Great Society. The programs that have survived — like Medicare and Social Security — are universal. The ones that have eroded — like welfare and Medicaid — are not. Why? Conservatives have weaponized racism and individual agency in the form of tropes like the “welfare queen” to convince both Democrats and Republicans to vastly curtail them.
Means-testing social benefits fundamentally defines them as programs for the poor. That sets up an inherent tension between those who receive them and those who think they’re paying for them. But when everyone partakes, those same benefits transform into part of the social contract the government makes with its people. Suddenly, they are venerated as politically untouchable.
Means-testing programs can also disincentivize pursuing opportunities for those who receive them. If more income means you’ll have to pay for healthcare and childcare because you no longer qualify for public benefits, more income may, indeed, mean less money left over. Conservatives have wielded this as a bludgeon against providing critical public benefits to anyone. Rather, it suggests we should provide all of our critical public benefits to everyone. It’s not the benefits that disincentivize new opportunities, it's the means-testing.
Conditioning programs like paid family leave, childhood tax credits, universal pre-K, childcare, or free community college on income sets them up to fail. But maybe that’s Manchin’s point.