Is the War on Poverty Really Over?

The Council of Economic Advisers recently released a report that began with the startling statement that the War on Poverty is over and has ended in victory. Properly measured, says the CEA, the poverty rate has fallen to just 3 percent.

Can such a low poverty rate, less than a quarter of the official measure (12.7 percent for 2017), be in any way credible? The answer turns out to be both “yes” and “no.”

There are, in fact, many different measures of the poverty rate. In addition to the official measure, the Census Bureau also publishes a modernized version called the Supplemental Poverty Measure, estimated at 13.97 percent for 2016. The Organization for Economic Cooperation and Development, a club of 36 middle- and high-income democratic countries, defines poverty as earning less than half of a country’s median income. By that definition, the U.S. poverty rate is 16.8 percent, the third highest in the OECD. Only Israel and Turkey have higher poverty rates.

Work Requirements Are the Newest Front in the War on the War on Poverty

On July 12, President Trump’s Council of Economic Advisers released a report titled “Expanding Work Requirements in Non-Cash Welfare Programs” in response to an April 2018 executive order on reducing poverty in America.

The CEA’s basic argument is simple: The war on poverty has been won — properly measured, the poverty rate is just 3 percent, a historic low. However, victory has left an ever-increasing number of able-bodied working-age adults dependent on in-kind welfare, especially on Medicaid, SNAP (formerly food stamps), and housing assistance. This problem can best be addressed by expanding work requirements for non-cash welfare programs. Work requirements will encourage self-sufficiency, strengthen the economy, and ultimately benefit the welfare recipients themselves.

The CEA is right, at least in part, in its critique of current in-kind public assistance programs. However, the picture it draws is misleading in a number of ways, and the case it makes for work requirements is unconvincing. There are better ways to address the weaknesses of the current welfare system. Here are some questions that need to be addressed before undertaking a wholesale expansion of work requirements.

Is Single-Payer the Right Way Forward for Health Care?

America’s progressives are right when they say we need a health care system that guarantees everyone affordable access to essential care, asks everyone to pay their fair share of the cost, but not more, and makes health care transparent, efficient, and consumer-friendly. But are the also right about the best way to get there?

They ask, why don’t we just adopt a single-payer health care system like every other rich democratic country has? Why can’t the government just pay everyone’s medical bills and be done with it?

These are understandable questions, but they oversimplify. If we look closely at the world’s top-rated health care systems – those in countries like the UK, Australia, and the Netherlands – we find that they are not true single-payer systems. Compared with proposals like Bernie Sanders’ Medicare for All, other countries’ health care systems are much more decentralized, and stop well short of paying for all care for everyone.

To get a health care system that is universal, affordable, fair, and efficient, the United States needs to learn from other countries’ experience and adapt it to specific American circumstances. Universal catastrophic coverage offers a more plausible model than an idealized single-payer system that exists nowhere else.

For a full discussion, check out the slideshow of my July 5^th presentation to the Cracker Barrel Society of Northport, Michigan.