Do the very poor have an ample safety net?

Mitt Romney got lots of attention last week for saying he’s “not concerned about the very poor” because they have an “ample safety net.” Someone on reddit’s r/moderatepolitics asked what people thought of that, and I commented but was late to the discussion and didn’t get any votes or replies. I don’t think many saw it, so I have expanded and improved my thoughts here.

What kind of safety net do the poor in America have anyway? There are food stamps. There is housing assistance. There are unemployment benefits. For health, there is Medicaid. For high school education, there are free public schools. For college education, there is financial aid.

And that’s just the government safety net – people often forget that there are voluntary communities as well, with food shelters, homeless shelters, churches, and a slew of organizations and organizers who consider it their primary mission to serve the poor, along with millions of other Americans and businesses who contribute money and time to these organizations.

Now obviously all of the opportunities mentioned above aren’t available to every one who is poor. You may run out of certain benefits, or you may not qualify for them in the first place. Additional voluntary services may not be available in your area. The demand for these services is also uneven: Some poor may simply lack opportunity or be “down on their luck,” but there are the severely handicapped or severely addicted who are unable to make wise decisions or escape their situation, and they may need more help than others. But in general a large number of the poor have a myriad of options for assistance for all of their basic needs regarding food, shelter, medical care, education, and more.

The challenge with providing all of these services is that it’s extremely difficult to provide them only to those who need them. At the lowest levels of the safety net, where only the completely destitute are covered, it’s easy (and the costs are low). But of course you will find slightly less needy people who still need help. You find people who are too weak or disabled or uneducated to achieve independence. So you expand the program. Maybe you include people at a certain income level because you can’t get by like that living in California with two kids and a bad knee. But now you’ve also just adjusted the incentives for someone at the same income level who lives in Missouri with no kids and is perfectly healthy. The first person may not pursue a higher-paying job because he is not strong enough for it, but the second may not pursue it because he doesn’t feel like it and is getting by just fine with his current benefits. You can try to adjust for these factors to reduce abuse, but you’re inevitably going to end up with a complicated web of arbitrary rules that end up helping some people who don’t need as much help as others. The more inclusive you make your program, the more people will take advantage of it. The question is simply where you believe the increasing marginal costs of abuse are still worth the diminishing returns of helping truly needy people.

I think our safety net is comprehensive enough based on the amount of waste that we already see. Forty-six million Americans are on food stamps, yet one-third of Americans are obese (and it’s the worst at the lowest income levels). I know there are factors of education and healthy food availability, but we are clearly not erring on the side of a hunger crisis! (Also, junk food isn’t really cheaper.) I’m sure you could still find a hungry child to argue for an increase in the food stamp program, but at the marginal cost of subsidizing how many more overweight lifestyles?

We also have plenty of evidence that significant percentages of low-income families have disposable income. I’ve written before how I strongly question the notion that poverty in America is getting worse. According to Heritage, 97.7% of the “poor” have TVs. You might argue that computers (40%) or cell phones (55%) are almost essential these days, but what about video game consoles (29.3%)? Or the 63.7% that can apparently afford a monthly cable or satellite bill? Obviously everyone who is poor isn’t can’t afford these things, but clearly there are large numbers of people who are considered poor and yet have plenty of money left over after assistance to spend on non-essentials.

Now there’s nothing inherently wrong with helping the poor to afford some nice things in life, but flattening the bottom rungs of the ladder by this much comes with side effects. If you make more money, you get less assistance – and it might be uneven. You might not qualify for food stamps anymore and have to pay for your own food. You might make too much money to qualify for financial aid but you still can’t afford to send your kids to college. This probably dampens the incentives to try to become less dependent on assistance, but it also breeds resentment among those get less or no assistance.

Someone in the middle class may put off buying something that she wants due to extra expenses and no government assistance. She may see someone poorer buy that thing even though he is getting government assistance. The¬†middle-class person may feel like she is working harder and sacrificing while someone else gets to blow disposable income thanks to government assistance she doesn’t qualify for. She feels like the government is taking from her and giving to someone else.

Incidentally, this is where cries of socialism come. When conservatives get worked up about our “socialist” government, liberals often mock them for not understanding what socialism means and asking if they don’t like roads and firemen and other public goods. But conservatives are not upset about public goods that help everyone. They’re upset about some poor getting additional specific handouts from the government and still appearing to have more disposable income than some in the middle class who get no additional specific handouts. If I give my brother money because he says he can’t afford groceries, I’m going to be upset if I discover he’s still paying for cable! This is why I believe Romney says he is more concerned about the middle-class than the very poor.

Now maybe you think I’ve painted a rosy picture about what things are available and how the poor are doing. That’s fine, but if the current safety nets don’t cover enough people, you need to explain how much larger you think the safety nets need to be, or what they should look like, and how you are going to do this without worsening the flattening effects and all of the incentives and consequences that come with it (nevermind the direct costs). Let’s say 50% of those below some level of income have an ample safety net and 50% do not. How do you increase the safety net for the un-ample 50% without simply increasing the disposable income for the other 50%, while all the while the “struggling” middle-class sees people getting more handouts while they just pay taxes and get “nothing”?

Maybe you have an optimistic technocratic view that the government can reform the programs to eliminate the abuse. My bias says the government isn’t capable of that much efficiency. Real-world politics get in the way; just look at the mudslinging that occurs when Republicans say they want to use drug-testing for certain benefits. Sure, maybe the Republicans have hypocritical or partisan interests at stake, but when you try to touch benefits you’re going to see this kind of opposition and controversy regardless of motives. And even if you had full control of the reins, you’re just not smart enough. Inflation, gas prices, mortgage rates, the costs of living in different areas, the availability of different kinds of jobs, the health claims of different kinds of food – these things and a thousand others are constantly in flux, and the more you try to account for them, the harder it is to keep up. Of course we should still try to attack the low-hanging fruit of inefficiency and abuse, but let’s not be naive about how much mileage we are going to get out of them.

It’s always going to be extremely difficult to tell the difference between people that need poverty programs to endure and people that use them to enable a lifestyle with fewer responsibilities. (If you think people don’t exist in both kinds, you’re a demagogue who doesn’t know enough poor people.) The more cushy you make the safety net, the less attractive you make middle-class life. It makes your program more expensive, and it makes poverty harder to escape. It’s easy to say we need a bigger safety net because you are more “concerned about the very poor.” It’s a lot harder to look at the consequences of a bigger safety net and decide whether or not we need one.