GOP challenge: Reforming widely accepted 'safety net' programs

As safety-net programs have expanded, there is more political pressure to keep those benefits – even as fiscal pressure is mounting to reduce the cost.

The failure of Senate Republicans to close ranks on health-care reform this week put on display an old challenge: How conservatives can reform social safety-net programs when there’s a growing acceptance of them – even among Republican voters.

Chastened, some GOP lawmakers are talking about trying to pivot toward other issues, notably tax reform, after failing to fulfill their pledge to “repeal and replace” Obamacare.

Yet the safety-net challenge won’t go away. If anything, the health-care debate is a reminder of its staying power, and of how the politics of social welfare have been shifting within the Republican Party.

The party of rugged individualism and free markets hasn’t traditionally seen government-led programs for the poor or middle class as its stock-in-trade. Yet as safety-net programs have expanded, there is more political pressure to keep those benefits – even as fiscal pressure is mounting to reduce the cost of entitlement programs. 

Politically, the party’s own base of voters increasingly includes people who have a personal stake not just in Social Security or Medicare but also in antipoverty programs like Medicaid and food stamps. Often GOP proposals involve reform ideas that critics and even fellow Republicans cast as callous or heartless.

“Facts on the ground have changed many Republicans’ views of what we do with safety-net programs,” says Steve Bell, a former senior Senate aide on Republican budget plans, now at the Bipartisan Policy Center in Washington. “I think you saw people on the health-care vote say, ‘Wait a minute, we cannot be the party that decides we're going to throw a lot of people off of Medicaid.’ ”

Pointing to House Republicans’ just-released budget plan for 2018 fiscal year, he says proposed steep cuts to social programs could again prove politically toxic.

“This current budget resolution in its present form I do not believe will be able to pass the House,” Mr. Bell says. “I certainly do not think it can pass the Senate.”

GOP's role in social-welfare programs

The moral of the story, though, isn’t that Democrats will forever have their way when it comes to health-care policy, welfare, Social Security, and the like. Far from it.

Both major political parties have historically played a role on social-welfare programs, and that appears certain to continue.

Social Security and Medicare, although not masterminded by Republicans, passed with bipartisan support. Enduring changes or reforms of those programs, moreover, have generally had bipartisan collaboration.

Those programs became broadly popular in part because they defy a “handout” label, says Brian Riedl, a senior fellow at the conservative Manhattan Institute.

“The genius of Franklin Delano Roosevelt was designing Social Security as a social insurance that requires payroll taxes to be paid in,” says Mr. Riedl, also a former Senate aide on economic issues. “That creates the view of earned benefits that are not welfare.... A voter gets angry when Social Security and Medicare are even referred to as ‘entitlements.’ ”

Some more narrowly targeted programs, aimed at reducing poverty, have been created under the watch of Republican presidents. The Earned Income Tax Credit, created under Gerald Ford and expanded under Ronald Reagan, is a prominent case in point. The refundable tax credit puts cash in the pockets of low-income households without discouraging work.

2018 budget cuts

But the GOP has long been torn between trying to shape safety-net programs with conservative ideas and paring them back in the name of small government, fiscal responsibility, or tax cuts.

That dynamic took center stage in the Republican debate on health care – which may not be over.

“It’s pretty obvious we’ve had difficulty in getting 50 votes to proceed,” Senate majority leader Mitch McConnell (R) of Kentucky said on Wednesday. “But what I want to disabuse any of you of is the notion that we will not have that vote next week. We’re going to vote on the motion to proceed to the bill next week.”

And that dynamic could resurface in considering a House Budget Committee proposal for 2018 that includes at least $203 billion in cuts to entitlement spending over 10 years.

Traditionally, cuts to anti-poverty programs have been less politically sensitive than those to Social Security or Medicare. That’s still true, but to some extent it’s changing – partly because of Republicans’ own success as engineers of reform.

In the 1996 bipartisan reform of welfare, time limits and work mandates resulted in a program (Temporary Assistance for Needy Families) that fewer Americans stigmatize as “the dole.” So it’s harder to make the case today that such a program needs to be pared back.

Meanwhile, the voter base of America’s conservative party has been evolving.

For all the party’s avowed dislike of Obamacare, 41 percent of Republicans say their party should work with Democrats to improve the Affordable Care Act, versus 54 percent who favor “repeal and replace” – according to an early July poll by the Kaiser Family Foundation.

Lower-income Republicans are especially supportive of the federal government playing a role in helping people get out of poverty. A 2015 Pew Research Center survey found that fully 53 percent of “red” voters in the under-$30,000 income group were in favor of such government support, more than twice the level of upper-income Republicans.

“To a certain degree the welfare state is here to stay,” Riedl says. “It’s more effective for Republicans to promote work and family formation than to try to tear down the welfare state.”

Some leading voices in the conservative movement have been sounding that note for some years.

“We have to declare peace on the safety net,” Arthur Brooks, president of the conservative American Enterprise Institute in Washington, said at a 2013 event.

Impetus for bipartisan action is growing

On the left as well as the right, many policy experts say that, although the climate for bipartisan action is harsh at present, it’s only a matter of time before the two sides must work together.

“Any major change in the architecture of [safety-net] policy is only durable if you do it on a bipartisan basis,” says Will Marshall, president of the center-left Progressive Policy Institute in Washington.

The impetus for bipartisan action is growing as baby boomers retire. “The closer we get to the crunch points in Medicare and Social Security, the more urgent the case for action is,” Mr. Marshall says.