The Washington Post reported yesterday that the IRS expects the per-child subsidies that passed in the American Rescue Plan in March are expected to start going out in July:
The Internal Revenue Service on July 15 will start delivering a monthly payment of $300 per child under 6 and $250 per child 6 or older for those who qualify. The monthly benefits will be deposited directly in most families’ bank accounts on the 15th of every month — or the closest day to that date, if the 15th falls on a holiday or weekend — for the rest of the year, without any action required. (my emphasis added)
For roughly 88% of eligible beneficiaries, there is no administrative burden beyond being surprised at the bank account being higher on the 15th of the month than it otherwise would be and trying to figure out why.
No action is required for money to show up via a social welfare program. This is markedly different than the maze of paperwork and validation steps that most of our other social welfare programs require. For the vast majority of recipients of this benefit, there is no administrative burden. Instead, the federal government which has the data, expertise and deep institutional knowledge of how to read the law and determine eligibility is taken on the cost of figuring out who is eligible and who is not. This approach means that far more people who are eligible for the benefit will receive the benefit.
Structuring public programs so that it is easy or hard to access can greatly determine both the success and failures of those programs as well as the political support for those programs. Social Security is a program where the federal government takes on the vast majority of the burden of tracking income and determining the size of checks for eligible participants. Conversely, Medicaid is a program where the individual is expected to routinely navigate a thicket of eligibility requirements on a recurring basis to determine eligibility even if the individual has filed relevant information to other arms of the government in the same time frame.
Decreasing administrative burden can be critical to improving program experience.
Kay
I’m pleased and it’s true it reduces administration burden (and replication of submitting the same information over and over) but it’s also a bigger idea in the Democratic Party. It’s a move towards universal programs and away from means testing. It’s a move away from over-drafting and adding qualifier after qualifier so we ended up with programs like public service student loan forgiveness, which has an entire Facebook group of people who help one another navigate the program. That’s a poorly drafted program. That’s a failure.
A lot of people know about this 300 a month. They understand it. They’ll get it. Then they’ll support programs like this going forward. Needs to be BROAD. You’re not helping poor people when you stick them into a little silo with other poor people. They’re vulnerable then. Democrats knew it with Social Security – that universality strengthens public and political support- and we need to relearn it.
Albatrossity
When the GOP establishes administrative hurdles that prevent or discourage people from getting benefits that they are entitled to, they are helping set up the scenario that government doesn’t work. When people finally understand that government doesn’t work because the wrong people are in charge of the government, we can make progress in this country.
Sadly, they have tooted that propaganda machine so loud and so long that many are indeed convinced that government is the problem.
Kay
Also- if you want to “encourage work” – which is a fine goal in my opinion I generally think people should work- then you don’t add “work requirements” to welfare programs. You broaden the programs so they don’t exclude people who are working.
The cut offs to means-tested programs enrage people too, because they seem arbitrary. If you’re making 30k a year and you don’t qualify for any government subsidies but someone who makes 25k a year does that seems unfair to you- and it is unfair. We probably want to avoid the situation where working and lower middle class people feel they are subsidizing very low income people when they are barely making it themselves. Might as well set up a “resentment generator” and gas it up. The way to add equity is not to cut off working class and lower middle. That’s just a lower median.
Kay
Too, a lot of the means testing and targeting ends up feeling and sounding patronizing and controlling.
Why is someone who wants to be an accountant or a salesperson or a graphic artist less “deserving” of a student loan break than a social worker? Why are we telling them where to work? Why demand this pound of flesh? Isn’t the payoff for the rest of us a vibrant society full of prosperous taxpayers who can then give the next rung a hand up?
There will be “hard cases”. There will be media reports of people spending the 300 a month on hookers and blow but you don’t design something that applies to 70 million children around .1%. That’s just “buying lobster with food stamps”, liberal version.
mali muso
As a parent of a 4 year old, I am curious to see how this rolls out. And also trying to figure out if I need to make any adjustments to my dependent FSA withholding for the year. Even though my husband and I are fully employed and don’t “need” the assistance, we can definitely use the extra wiggle room in our budget. Our monthly daycare bill is about $850, so this will cover about a third of it.
sab
@Kay: Yes! Just give it to people when they need it,and if it bothers us to subsidize the rich then capture it back in taxes next April.
Enhanced Voting Techniques
Oddly I was just talking with some friends about this; it’s really strange how with wide spreed concern left and right about fertility rates how as a society we treat having children as some hobby not a civic necessity.
gvg
@Enhanced Voting Techniques:
Well, I don’t think there is widespread concern about fertility. some people are concerned, but not a lot. I am not. Of course I think we should have more legal immigration. But I don’t know anyone who brings it up. I also don’t think most people really think about why they don’t plan on having more children such as money and how society is structured and childcare. They just internalize it and decide not to have more.
Kay
@sab:
I have gotten more questions about this in the office than I ever have about any other program. For some reason it penetrated down immediately to the “normies” :)
It’s kind of amusing because there’s so little coverage of it. That disconnect again.
Can you imagine if it really “halves” child poverty? Wow.
Big R
David,
I would recommend that you read Elizabeth Cohen’s The Political Value of Time. Lots and lots of stuff that gives ways to operationalize administrative burden in a host of environments.
(It’s also very readable, so I recommend it to all the jackals who are interested in this stuff.)
My review of the book is available here: http://www.lpbr.net/2019/11/the-political-value-of-time-citizenship.html
Betsy
This is very encouraging news, and thank you for posting about this development and its importance.
David Anderson
Just requested the book from the Duke University library system.
Fake Irishman
Worth pointing out here that one of the huge under the radar reforms of the ACA was streamlining the application and retention processes for Medicaid for all states (eg no wrong door, self assessment of income, the ability to apply via paper, phone, internet, in person) some of the Trump 1115 waivers chipped away at this, but it is still a watershed.
Fake Irishman
@Big R:
on my reading list now. Thanks for the rec!