The Death of Reaganomics - and the Need for Dems to Get Serious on Job Guarantees
Upshot of the budget deal is how scared GOP now is of big budget cuts, but obsession on work requirements show opening for Dems to take job guarantee programs seriously
The budget deal is generally a crap sandwich, which is to be expected with the GOP in the House.
And what’s notable is what’s NOT even part of cuts in the deal and how modest even proposed cuts are in safety net programs compared to the devastation of Reagan era budget cuts.
After being razzed on national TV by Biden during the State of the Union for attacks on entitlement programs, the GOP leaders publicly pledged not to touch Medicare, Social Security and Medicaid, thereby removing most of the budget from the any discussion of budget cuts. And in the end, the most serious attack on the safety net, aside from the cuts a freeze will impose as inflation increases, are work requirements on older adults without kids.
The ideological collapse of the GOP is highlighted when you compare this deal to the massive cuts in social program imposed in the budget deals under Ronald Reagan.
Increased payroll taxes on workers, including self-employed workers paying a far higher rate than in the past
Taxation of social security payments for the first time
Increase in retirement age from 65 to 67
Deductible increased 50% and premiums for Part B covering out-of-hospital care increased 25%
States allowed to knock far more people off Medicaid for not being “poor enough”, even as federal reimbursements to states cut severely.
Reimbursements to patients for a range of procedures reduced, adding to the rise of copays, and the loss of revenue for hospitals to cover the poor not directly covered by Medicaid.
** Safety Net Programs (Food stamps and income assistance programs)
Food stamp and nutrition programs slashed by 6 to 10 percent, with estimated 800,000 to 1 million people losing food stamps
442,000 families lost all AFDC welfare payments and 290,000 more saw reduced payments. This loss also meant losing eligibility for Medicaid for most of those families.
Overall, non-housing programs for low-income families were 29 percent lower in 1988 than they would have been under rules in place before Reagan took office.
This doesn’t mean the pain of the current deal won’t be real for those impacted by the cuts, but the sharp contrast with the ambitions of Reaganomics is dramatic. The modern GOP is still dedicated to massive tax cuts for their billionaire donors - and the cut in IRS enforcement funds is a version of that - but the party has substituted virulent culture war hate for the substantive budgetary attacks on the poor that was once their ideological core.
Still, it’s worth emphasizing the substantial ideological inroads progressives have made such that the GOP is so afraid to publicly be identified with most attacks on social programs these days.
Why a Job Guarantee is the Political Jujitsu Dems Need
That the GOP held out rhetorically for imposing work requirements on social safety net programs - albeit modestly only for older food stamp recipients - does show both a political weakness for progressives and an opportunity.
The weakness is the appeal of such attacks with voters, as shown by the success of the GOP in killing the expanded child tax credit in 2021, mostly on the strength of rhetoric complaining about the non-working poor receiving it. As I wrote then:
Just depressing, sobering poll on the refundable child tax credit out today, showing extremely low support for making the Child Tax Credit permanent…The fact that progressives couldn’t defend the Pandemic UI program against political attacks and saw it dumped unceremoniously on Labor Day is another data point indicating that Yang-like UBI programs are political losers…But the whole host of progressive social policies - day care, food stamps, housing supports and child tax credits - are all far more popular and sustainable when attached to jobs.
That’s the weakness but the opportunity is for progressives to be far more aggressive in responding to demands for work requirements with a counter-demand that the government provide a job guarantee to anyone needing one. This is calling the Right’s bluff that the problem is people not wanting to work, since if there are plenty of jobs available, a government job guarantee would be easy and cheap to implement, since it would just involve unemployment offices acting as more effective match makers with employers seeking employees.
But if the problem is lack of available jobs for many employees because of lack of required skills or other factors- as we know is true for most on public programs - that would make a job guarantee a far more meaningful mandate for the government to itself create jobs that would in the end be a far more substantial help to families needing aid.
The killer political part is that job guarantees are wildly popular with the public, as this poll reflects.
If every time the GOP proposed work requirements, Democrats responded with proposals for a federal job guaranteed job, the GOP would find themselves in a losing ideological debate.
In the end, a job guarantee would be an expensive proposition precisely because there aren’t enough jobs for most who want them, particularly during times of recession, but it would actually be one of the most important policies to pursue, both because it is better for most of the unemployed poor and, for those who actually can’t work, it would permanently disable the kinds of political attacks that the current “work requirements” mania taps.