The non-decision to implement a “hope no one shows up” non-policy, discussed in my prior post, is directly connected to the issue of standards, and to the cost of benefits per recipient. For every needs- and means-restricted benefit, there is a tradeoff between the number of beneficiaries that can be served and the amount that can be spent on each. This tradeoff is being made, generally without a direct acknowledgement that it is being made, in almost every major category of public service, from education to health care. And liberals and Democrats, in pushing to enact expensive benefits, often end up agreeing to serve some people but not others – others who are just as in need, or more in need, than those who receive the benefits. As the United States, with the most expensive health care in the world but also the most uninsured people in the developed world, finally acknowledges how bad its health care finance system is, the issue of standards will clearly move to the forefront. Clearly the U.S. can afford basic health care, even good health care, for everyone just by using what the government is already spending. But that would mean some beneficiaries would have to give up extravagant health care, and it is those with extravagant health benefits, not the uninsured, who have political power.
Housing assistance is, yet again, a good example. If the overall budget for federal housing assistance isn’t going to be increased, there are other ways for the queue of eligible non-recipients to be cleared. Given that many poor people pay 40 or even 50 percent of their income in rent, the share that Section 8 recipients are required to pay could be increased from 30 percent to 35 percent, or higher. That would ensure that only those forced to pay an even greater share – those worst off — would find the vouchers attractive, and remove others from the queue. But it would also require a reduction in aspirations for recipients’ standard of living. Liberals have been unwilling to give up the aspiration that some day, sufficient funding will become available so no one is required to pay more than 30 percent of their income for housing. So to preserve that aspiration some are allowed to pay less in rent with assistance, while others are left to pay far more in rent more without any help at all.
Most housing programs require that each recipient have their own housing unit, in good condition, with its own kitchen and bathroom. Many poor people, however, are forced to live doubled-up with friends and relatives, often in buildings in poor condition. In the New York area, that isn’t true of the poor alone. My parents were forced to live in their parent’s house, which was subdivided for this purpose, until I was ten, and when we were able to move out my aunt and uncle, newly married, moved in. A generation later, when I moved to my first apartment in the Bronx, I had to share it with three other friends. At least I had my own room – some college-educated people living in Manhattan have to share even that. And the city’s immigrants often subdivide a four-room apartment into four apartments, with one room per family and the kitchen and bathroom shared.
To clear the queue, instead of imposing a minimum standard for space per person, those receiving housing assistance could be forced to live with a maximum space per person, limiting the demand for assistance to the worst off – those who couldn’t do better on their own. But that would mean that subsidized housing programs would permit, even encourage, the worst off to live in neighborhoods they could otherwise not afford by accepting smaller spaces. Residents of such neighborhoods would likely object.
Of course, one could just eliminate housing assistance altogether, and add on an equal cash grant per person to the welfare payment or earned income tax credit in its place. Then all the poor would receive equal help, but none would be as well off as some believe they should be, and the dream of lifting all to the higher standards would be abandoned.
The conflict between housing benefit standards and housing benefit availability reaches the point of absurdity in the case of New York City’s homeless. An early 1980s consent decree, signed by the city after a lawsuit by activists, set forth the housing the City must provide to anyone classified as “homeless” in great detail. These standards required the City to provide better housing, at lower cost as a share of income (or for nothing), than a substantial share of the city’s poor people – even its working poor – actually had. It also permitted the homeless to turn down housing units that meet these standards, often several times, because they didn’t like the unit or neighborhood offered, all while residing in expensive transitional housing at city expense. Many homeless people turned down apartments because they are in neighborhoods that are too poor, with too many drug addicts — until one became available, at higher public cost, in a better neighborhood. And often, since the City was offering high rents in order to move families out of the expensive homeless system, landlords evicted poor families that did not receive housing assistance in order to rent to a “homeless” family that does. In short, in their zeal to get their version of justice for the poor, the city’s housing advocates have created a system of gross injustice among the poor. And while that consent decree has since been revoked, the problems it dealt with remain.
Housing assistance is concentrated in New York and other older cities, so the absurd results of housing non-policies do not affect most Americans. But the absurd result of health care non-policies does. Over the past 15 years, some states have made attempts to alter the Medicaid program to provide less-extensive, lower-quality health care to more people. The most notable examples are TennCare in Tennessee and the attempt to provide universal health care in Oregon. In each case, the state attempted to limit the type of medical care available while expanding coverage, but in each case the attempt fell short of universal coverage due to funding shortages and political demands that resources be diverted to provide better, more expensive treatment for those already in the system.
The same battle is gearing up around nursing home care, with advocates demanding a better quality of care to provide a better quality of life for the aged. Rising standards, however, will inevitably lead to fiscal stress, and attempts to limit the number of elderly people found to be disabled enough to qualify for care. All else equal, therefore, higher standards both increase the demand for benefits and limit the supply. And all else is not equal. Rising federal, state and local debts and pension costs, and an aging population, ensure that there will be less money around to settle the quality-availability tradeoff in the future.