Sen. Joe Manchin

Sen. Joe Manchin (D-W.Va.) departs after the day's proceedings in the impeachment trial of former President Donald Trump at the U.S. Capitol on February 10, 2021 in Washington, D.C.

(Photo: Joshua Roberts-Pool via Getty Images)

Progressives Warn Democrats Against Means Testing Reconciliation Bill to Death

"Raising taxes on the rich is much more efficient than means testing benefits and accomplishes exactly what the spending hawks claim to be concerned about!"

Progressives are once again sounding the alarm about the pitfalls of means-testing amid new reports suggesting that--in order to reduce the size of the $3.5 trillion reconciliation bill--congressional Democrats may impose stricter income caps on several proposed programs.

Discussions about potentially placing additional income limits on items in the Build Back Better Act, first reported Monday by Reuters, come as Democrats--who can afford no defections in the evenly split Senate and just three in the House--are attempting to appease Sens. Joe Manchin (W.Va.), Kyrsten Sinema (Ariz.), and other right-wing Democrats, some of whom have pushed for a smaller safety net and climate package after receiving a flood of campaign cash from Big Pharma and Big Oil.

As David Faris wrote Tuesday in The Week:

Progressives have long derided means-testing--phasing out benefits above a certain income threshold--as a practice that undermines social solidarity and forces the government to create expensive and confusing bureaucratic machinery. It also just so happens that the most popular and enduring programs operated by the federal government (Medicare and Social Security) aren't phased out above any income level.

While Biden earlier this year called for "free community college, expanded child tax credits, and universal preschool for any U.S. citizen," Reuters noted, "Democrats are now considering whether to cap eligibility based on income," according to two unnamed officials familiar with ongoing discussions among lawmakers and the White House.

In addition, Faris wrote, "congressional Democrats are talking about applying means-testing to a critical climate idea: tax breaks for the purchase of electric vehicles (EVs)." As Faris pointed out, "most electric vehicles are prohibitively expensive, and consumers can only claw that up-front money back over time with existing tax credits, and reduced fuel and maintenance costs."

"House Democrats proposed a tax break of up to $12,500, deducted at the point of purchase, rather than forcing buyers to wait for a tax rebate as they must with the existing EV program," he added. "But it looks like moderates hoping to decrease the price tag of the reconciliation package are set to gut this provision by imposing more stringent income thresholds for EV subsidies, lowering the income cutoff from $400,000 to $100,000."

On social media, progressives sharply criticized Democrats' openness to shrinking the reconciliation bill through means-testing, with one observer describing it as evidence that the party is "addicted to losing."

Given that making public benefits less accessible increases the likelihood that qualifying low-income recipients will be stigmatized and causes administrative costs to surge, New York state Sen. Julia Salazar (D-18) argued that means-testing hurts the popularity and effectiveness of social programs.

New York Times columnist Jamelle Bouie, meanwhile, added that the only beneficiaries are conservative lawmakers who derive satisfaction from excluding ostensibly "undeserving" people.

"Means testing," he tweeted, "makes programs worse and more expensive for no appreciable benefit other than that the centrists can feel like they aren't helping someone who doesn't 'deserve' it."

Political observer Ben Spielberg argued that lawmakers could maintain universal programs while improving fairness through progressive taxation.

"Raising taxes on the rich is much more efficient than means-testing benefits and accomplishes exactly what the spending hawks claim to be concerned about!" he tweeted.

Journalist David Sirota of The Daily Poster, meanwhile, pointed out that Democrats who decry the supposed unfairness of wealthy households using universal programs routinely defend tax provisions whose benefits flow overwhelmingly to the top 1% while the bottom 80% are hardly affected.

Journalist David Dayen of The American Prospect drew attention to the absurdity of trying to prevent relatively wealthy households from taking advantage of EV subsidies, which incentivize the necessary decarbonization of the transportation sector.

In his column, Faris acknowledged that "the wealthy, of course, don't need government support for their electric vehicle purchases."

"Yet the other, far more important goal," he continued, "is a transition away from gas-powered vehicles by whatever means are necessary. And means-testing is anathema to that project, because all but the wealthiest Americans are sensitive to prices. Yes, giving rich people a tax break to climb into a $90,000 Tesla feels unfair, but if it helps smooth the way to a world free of internal combustion engines, it is well worth it."

Notably, both Manchin and Sinema--two of the so-called "spending hawks" responsible for the reported means-testing push--are expected to vote for this year's $778 billion military budget. That would authorize more than twice as much annual spending as what is proposed in the reconciliation bill, which would invest an average of $350 billion per year over a decade in healthcare, child care, education, housing, and clean energy.

In light of this contradiction, journalist Mehdi Hasan argued that "there is no 'pacifying' spending hawks because they're not really spending hawks and that's not what's really driving them."

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