Keep Calm & Defend Work

#36 -- Five (5) quick points on the new Biden Dole

Five brief points (Axios-style!) now that Congress has passed the Covid relief bill containing a $100 billion-a-year dole-like “child allowance” plan.

1. Two themes of commentary are a) What a big deal this is: "I would put this up there with the ’35 Social Security Act in terms of its significance”--Sam  Hammond and b) How brilliant Biden was to sneak this in under cover of the Covid package while keeping quiet about it. But precisely because the Dems snuck it through, it has yet to really be judged by the public. That means it's not over. Child allowances are now only authorized for a year. Democrats will have to come back to Congress somehow -- presumably in another "reconciliation" vote -- to get them extended or made permanent. That may or may not be easy. Despite the polls on the popularity of the overall Covid package, and the confident, if not triumphalist talk from the give-everybody-cash crowd, we don't really know whether this long-gestated Democratic policy will survive contact with the electorate.

2. Re: Long-gestated: The give-them-cash solution to poverty is nothing new. It was conventional wisdom in Democratic Washington toward the end of the Johnson Administration. In 1968, a petition signed by 1,300 economists (including James Tobin and John Kenneth Galbraith) urged a “national system of income guarantees.” LBJ didn't like the idea, but when Richard Nixon became president Democratic holdovers in the Department of Health, Education and Welfare served him up a no-work-requirid cash-dispensing scheme that became Nixon’s 1969 Family Assistance Plan. It almost became law, failing after a fringe West Coast politician named Ronald Reagan called it a "megadole." (Two indispensable books that cover this subject are James Patterson, American's Struggle Against Poverty and Vincent and Vee Burke, Nixon's Good Deed.)

3. In the coming debate, it’s not clear who’ll play the role of Reagan.  Marco Rubio and Mike Lee seem to be the leaders of the opposition in the Senate, pressing their case for expanding child credits while limiting them to families with workers. But to beat the Biden allowance, epecially in a reconciliation bill (which only needs 50 votes), they will have to convince some Democrats to defect — which means in practice they have to convince them that welfare is still so unpopular that Democrats are in danger of losing their seats if they make the Biden’s dole permanent. That takes a national megaphone -- and the striking thing about the recent victory of Biden's dole is that no national Republican more prominent than Rubio emerged to oppose it. Where' is McConnell? Where’s Newt Gingrich? Or Donald Trump? Or Tucker Carlson? It’s bizarre. What good are national Republicans if they can't even oppose a massive Democratic reinstitution of welfare?

4. A lot of the debate around the plan focuses on economic studies -- what did the Negative Income Tax experiments of the 1970s show about work hours? What about the Greg Duncan data. But economists’ debates only take you so far. We care about what these check-mailing programs will do to the texture of poorer communities over a long term: We need sociological analyis, or rather sociological reporting. Specifically, will the child checks lead to an atrophying culture of work? Will young men improve their job skills or play video games or plot assaults on the U.S. Capitol? We had this necessary kind of reporting for the old AFDC welfare program. (See, e.g., here and here and here and here.) We won't have it for child allowances in time for the vote in a year -- nor would we expect all the important effects to show up so quickly. Cash is fast; culture is slower. But we might have an inkling soon enough. I recommend commissioning someone like Chris Arnade to be the Lorena Hickok of this experiment.

5. Let’s Drive South? Nicholas Lemann's Promised Land describes how the 1964 passage of a national Food Stamp benefit -- same in poor states as in rich states -- led some poorer African-Americans to reverse-migrate back to the South, where the benefits went further. You wonder if the same thing will happen after the child allowance, except maybe in a more pronounced way. Southern states traditionally have low welfare benefits (e.g. $170 a month for a family of three in Mississippi). But now there is now roughly a $13,000 fixed nationwide benefit ($7,200 in Biden’s child allowance, plus $6,400 in SNAP food stamps) plus Medicaid for a parent of two children, You get that $13,000 if you live in Chicago -- or if you live in rural Mississippi, no matter how stingy they were. It will go a lot further in Mississippi. Will millions of parents decide to move there, or to other low-cost states? Texas? And what of the sociology when small towns fill up, not with lone, out-of-work deplorables or retirees on disability, but younger moms with children -- moms who, thanks to the federal benefit, now don't have to work so much to get by?

I don't know. I suspect it won't be a net good for the nation, or even for those families. But we won’t find the answer in debates at the Niskanen Foundation.