« The Weeds

The scourge of the “time tax”

2022-05-17

Dylan Matthews and Dara Lind are joined by Annie Lowrey (@annielowrey), a staff writer at the Atlantic, to talk about why it’s so hard for people to get government benefits. Frequently called the “time tax,” the administrative burden of applying for and distributing government benefits leads to thousands of people not getting the aid they qualify for. 

References:

Annie Lowrey on Code America’s efforts to fight the Time Tax

Pamela Herd and Don Moynihan's book on administrative burden

Why Is It So Hard to Make a Website for the Government? from the New York Times

White paper — Program Recertification Costs: Evidence from SNAP

A sudden change to SSI eligibility had huge, lasting negative consequences

Hosts:

Dylan Matthews (@dylanmatt), senior correspondent, Vox

Dara Lind (@dlind), Weeds co-host, Vox

Credits:

Sofi LaLonde, producer and engineer

Libby Nelson, editorial adviser

Amber Hall, deputy editorial director of talk podcasts

Sign up for The Weeds newsletter each Friday: vox.com/weedsletter 

Want to support The Weeds? Please consider making a donation to Vox: bit.ly/givepodcasts

Learn more about your ad choices. Visit podcastchoices.com/adchoices

This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
- Support for this podcast comes from Planned Parenthood. It's hard to imagine a world where we leave future generations with fewer rights and freedoms. Since the Supreme Court's decision to overturn Roe v. Wade, politicians in nearly every state have introduced bills aimed at blocking people from getting the essential sexual and reproductive care they need, including abortion. Planned Parenthood believes everyone deserves access to care and with supporters like you, they can reclaim our rights and protect and expand access to abortion care. Visit plannedparenthood.org/future to learn more and support their cause.
So to pounds, euros to yen, Wwise can help you manage your money in different currencies. With Wwise, you can send money to your cousin in Australia with ease. Travel internationally without having to brave an airport currency exchange desk and take away the guesswork that goes along with converting currencies. Wwise lets you send and spend money worldwide at the real time mid market exchange rate, all without any hidden fees. Join 16 million customers already using Wwise worldwide. To learn more about how a Wwise account could work for you, download the app or visit wwise.com. That's Wwise, W-I-S-E.com. Wwise.com. Hello and welcome to another episode of The Weeds. I'm your host, Dylan Matthews, and I'm joined today by my regular co-host, Dara Lind. Hello.
Special guest, the Atlantic staff writer and author of Give People Money, Annie Lowery. Hey! A big fan of Annie's work for many years, going back at least to her work at the Washington Independent, may it rest in peace. And this week, we're going to be talking about some of her -- most recent reporting at The Atlantic, which is on the way the US provides aid to people who are struggling and the way the US structures its welfare state. She's been writing a lot about this problem she calls the time tax. And rather than have me kind of muddle through a definition, this is. When you need something from the government, so like maybe a SNAP benefit or, you know, a federally financed student loan, you tend to have to apply for it. And you tend to... To have to in the case of welfare benefits, you have to maintain the benefits. So every six months
To go back and verify your income and explain why you need this and deserve this. And what this does is it shifts the burden of paperwork, the paperwork burden from the government onto individual and it can be really really really burdensome. Some benefits in the United States are really hard to maintain. And apply for so much so that people don't bother doing it. But I think you can kind of step back and ask how hard is it to get stuff writ large in the United States? Because it's also it's not just welfare state. So you know, here I am in San Francisco, which has probably the worst housing crisis in the United States right now. Housing is extremely expensive. It's virtually impossible here to
To like add a second story and add an apartment to your own home. That kind of thing. That's a time tax. After I wrote this big piece about it in The Atlantic last year, I got a ton of reader emails and my favorite one was from this guy who was like, You're telling me, have you ever tried to... Move a horse across the international border. It takes months of paperwork. Have you Annie? I haven't. I haven't. And so you know, in terms of Healthcare, education benefits, starting a small business. It's just everywhere. It's just this clutch and it's miserable and it really, really affects people's lives and it's kind of, I would even now understudied, under-theorized, and the government has paid very little attention to it except to use it to stop people from getting stuff. So it's really interesting to hear… You describe this in a way that kind of broadens out from the traditional focus of administrative burden on like safety net programs and on, you know, the relationship between the government.
And someone who in theory the government is trying to help, which is to say someone who the government thinks is currently in a marginalized or less fortunate position. If you think about that relationship kind of has this implicit, you know, politics. Picks to it that if we have a welfare state, clearly we've decided that people deserve help and also in a kind of An implicit like account of how it got so bad, right? This is, you know, the Don Moynihan and Pamela Hurd who are the, you know, kind of the gurus of administrative burden on the academic side and whose work, you know, I think both of us rely on a great deal, you know, have this account of, well, there's There's a political argument for means testing that then results in this administrative burden downstream. There's a political argument for making programs more restrictive that means that the state legislators who put these things into a Don't necessarily understand just how much worse they're making it, but they understand that they're making it worse. What you're talking about...
Seems to be a lot closer to kind of general eye-rolling reaction that you get whenever you talk about bureaucracy generally. And I think that one of the reasons I've been a trapper is because I've been a trapper for a long time. To administrative burden as a concept is that it kind of takes the the kind of universality of, Oh, we all have to deal with crappy bureaucracy out of it. And it's like, no, actually, there is a meaningful difference between you and A person who like has to go to the DMV every few years to get your license renewed and some but who is responsible every single month for making sure that they haven't been kicked off the wick rolls. Talk a little bit about what you kind of think the distributive politics of this are and why you're thinking about this in a broader way than that kind of traditional welfare state focus.
A regressive filter on every progressive policy. It is regressive. If we were talking 30 or 40 years ago, we might say by having a means test and by having a kind of paperwork burden that you have to go through in order to To access a program, that's going to make sure that only people who really need it get it. It's efficient. It does a job. So people who aren't getting SNAP benefits or food stamps, Because it's not worth it for them to go through the hassle. They don't really need them So it's not really a problem if in the pool of people who might Qualify for these benefits, you know, there's a large portion Who aren't getting them, maybe we're undercounting their income, maybe they're doing just fine, whatever. We now know that... That is not true and in fact is kind of dementedly opposite. Things the most, who are the most worse off, struggle the most to access these programs.
And so it's not the case that the harder you make it, it kind of acts as a little test so that only the people who get it know, no, no, no, this is regressive. And there's a lot of reasons that that's true. There's kind of the sort of. Straightforward like do you have a computer or a smartphone? Do you have access to the internet or a data plan? Can you search to find out what's out there? Right? Like there's a huge like public piece to this. There's all this research now about the cognitive load of poverty, that it just makes you worse at doing stuff like this because you're tired. And you have other things to worry about. So that's part of why I think that we see this as. Being crucially understood as being regressive, which is not something that I think that I don't even think now it's fully sunken in for progressives, right? You still see folks trying to means test every—
anything, and not realizing that that's going contrary to what you're trying to do with the means test itself, right? It has this weird, like, ouroboros to it. You're completely right that discourse about what is effectively the time tax but isn't described as such... Back really far in analysis of the welfare state. So like you can look at like Francis Fox Piven and Richard Cloward's work like 50 years ago and they're talking about this very same thing. You know, you cited Moynihan and Hurd who are amazing. You know, there's a lot of understanding of this. For the welfare state, but I think that you actually see it across government policies. And so like one place where I've been thinking about it a lot is like higher education and the way that we instead of just providing school for
and paying for it. We make them go into these kind of like neoliberal financing schemes. And you know, that's not part of the welfare state, but this all interacts. And there's really come to be means testing all over the place in government, though, critically not for certain things. Things that high income people like like 529 college savings plans. But I really do think that it can sometimes be hard to extricate. Like we have a really clear understanding of what this means for welfare benefits, but all these things are affecting people in the same way and so that's part of the reason that I like to step back and you know like um should we burden people who are trying to bring horses across international borders? It's the pressing policy question that I ask myself every day. I think part of what's interesting about the time tax is sometimes when people will like identify big sweeping problems in how the government spends money or administers programs.
To be against the thing in the abstract and hard to get into the nitty gritty. Like, uh, it's easy to complain about corporate welfare and harder to like tell someone that they're like defense project that helps their specific industry. Congressional district is bad. Part of what was interesting about so much of your work on this is you're very clear about the political pressures. That come into this. Um, so you had a recent piece on, on sort of some efforts that Code for America is doing to, to fight it. And just like going through the list of things you have to say, if you're a mom in Louisiana trying to get food stamp benefits, like you have to, um, show that you are not going to spend anything on a cruise ship or at a psychic. You have to read about drug court and all that. Alternatives to abortion, all these things, like, I can understand the state legislator that led to that. Probably a series of bills passed in a series of state legislative sessions so that nobody was actually thinking, What are we already asking of them?
But yeah, I guess I just wanted to hear your thoughts on like the overall political economy of the time tax. Where does it come from? What seems to be motivating it? I'm not a big fan of both sides saying... In policy reporting, but this is a place where both sides have done something and it's worth identifying the pressures that both of them are under. So on the Republican side, you see a pretty straightforward effort to make things harder to access through administrative means. So if you look at Moynihan and Hurd, they point out that this is like true for welfare programs, right? We're going to make these things, these hoops so hard to jump through that nobody's going to get this stuff. But it's also true in terms of like voter suppression, right? We're going to make it harder to vote in order to...
To reduce the number of people who vote. It's true in terms of, like, abortion access, right, where they'd be like, Maybe we don't want to legislate that, but we're going to make it really, really hard, and we're going to put all of these rules on clinics and, you know, waiting periods and blah, blah, blah, blah, blah, and you end up making it much harder to access. So there's that. Also tend to have, although Democrats share in this, so I wouldn't say it's just them, but they have a lot of concerns about programmatic integrity in terms of fraud. So if, like, one person is getting a benefit and they're scamming the government -- This is a really big problem and there are multiple systems put into place to prevent this from happening that also kick out a bunch of other people. And you know, Democrats are responsive to that too. Fraud happens in every safety net program. It tends to be isolated cases. It doesn't tend to be that big of an issue.
Fraud and error rate tends to be pretty low. There's some issues with the UI systems, which I would sort of segregate out as seeing, you know, there seems to be some actual issues there. But like in terms of like Medicare, Medicaid, all of the fraud is happening on the provider side. It's not usually individuals like lying It does happen, but you know, and I do think that there's an efficiency thing, right? How many people are you going to, who deserve the program, quote unquote, are you going to kick off in order to find the one person who doesn't? And again, this isn't like such a big issue. I'd also note that there's There's this issue around like who is administering these programs. One thing that I do think that you see on the Republican side also
Is that they're like, well, like the government is terrible about administration, we're going to give these contracts to firms, like for profit firms to administer these programs, but because they're not the government themselves, they tend to be on these long contracts are very clunky, literally just how do you apply for things is this like kind of eternal problem. So then on, on the democratic side, there's this obsession with means testing. And I think that that in part comes from being in a high inequality. Economy, right? If you want to have a lot of policy that is shuffling money to lower income folks, you need some mechanism for doing that. So they apply a means test to everything. You can see that they're trying to do it with student loan forgiveness, and it's a giant mess because the Department of Education doesn't have access. To the IRS data for this. You can try to make it such that you're only forgiving student loans on the basis of other economic characteristics, but it's actually pretty hard to do. Second thing is that there's this kind of
Like snowballing effect where it's really easy to add stuff and it's really hard to take it away. And there's no real process for sort of having a state or the federal government step back and look at the process and say, okay, how can we like streamline And so some states do it themselves, but like it doesn't happen naturally is something that I would say. Also, you know, there's just this, one of the many issues here is that we don't have programs managed by centralized authority. And very often one hand is not even talking to the other. So my favorite example of this is that income is determined in different ways by different programs. There's not a single standard of income and different programs ask for different things Have you made in the last 30 days versus what was your income in the month, two months before or whatever it is.
But in other economies, other countries, they have these kind of like more centralized things where the government just already has this data because it has your income data, and then they can kind of tell you what you qualify for. Structure here and the lack of sort of centralization that doesn't happen. So that's a very long answer to your question of kind of like how we got here and how you end up with this like sludge in these applications. I want to pull out, for the purposes of thinking about the political Of this. Something that you mentioned in the middle of that about you described it as efficiency I think of it as as kind of like the balance equities on, you know, fraud versus lack of uptake because it's just it's... It seems to me that that is a problem that the elected branches of government face generally, right? You do not... Elected politicians talking honestly about trade-offs. They tend to identify one thing that they want to... Set to zero and other costs that are required to set that to zero totally fall by the wayside.
Ends up meaning, just as you described, is it's not just that there isn't a lot of attention to who are we pushing out of this program who could be benefiting from it, but that That if you do deserve the program, that the cost of compliance for you is zero. That there's no cost, that there's like, hurt you at all to have to spend a lot of your time doing this. And I think that that's based especially for Democrats in this idea that if we can just That everyone who is using this program is deserving, stigma and some of the skepticism and some of the political headwinds will fall away because everyone will acknowledge that this isn't a vehicle for fraud. And instead what ends up happening is into investigating and lifting up fraud in these programs, the message that gets sent is that these programs are rife with fraud and so... It does seem like in addition to kind of all of the things that aren't considered part of the calculus, like, you know, which people that we want in theory want to be.
Benefiting aren't able to take advantage of it, it ends up weakening the political welfare state instead of what it's in theory supposed to do which is strengthen it. That's a really good point. You know, in terms of the kind of like nitty-gritty of how this happens, the federal government tends to hold states that are administering programs responsible for fraud cases. So they keep an eye on fraud and the federal government might penalize a state for having too much fraud in a program. What they do not penalize... State for is having a high rate of procedural denials, which is when somebody applies and they should get the program, like they should get their SNAP benefit or they should get their WIC and they don't get it because they can't finish the paperwork or there's some paperwork problem. And so, you know, in terms of things that the government could do to make this work better, it could
Tell the states to get better data on procedural denials and it could hold them responsible for denying people benefits because they screw up on their paperwork, which happens all the time because the paperwork is really, really, really. Really confusing and the states are not great about like administering it and doing their part either. So that's that's like one thing that they could do to start to kind of balance those pressures a little bit more. I'd also note that there's no standard for what's fraud in these programs. What is fraud? is a really hard question to answer. There's not a standard definition that applies across programs. Just like what is fraudulent versus mistaken activity? People often don't know. Like how to answer these questions. If I just asked you, you know, without looking at your pay stub, how much money did you make last month? People forget things. And so I think that often we ascribe a certain intentionality to folks when they're actually just kind of trying to get the paperwork done.
The lives are messy in a way that is hard to capture in paperwork. So one thing that comes up... Over and over and over again. And Kathy Eden has great research on this, is that like the question of whether a child lives or a non-custodial, or lives with a grandparent or something, who is getting the benefits for that kid can become really complicated because kids often shuffle between houses. And so you get these cases of quote unquote fraud in which multiple people... Or claiming or something. But it's actually just like life is messy. Very often people are like moving between houses and kids get shuffled around and partnerships form and break up. And that's just, it's just life, but it's hard to sort that out on a piece of paper. Yeah, we did an episode a few weeks ago on tax prep and Libby and I were talking about sort of how this comes up in like volunteer tax prep in DC. And the definition of child is by far the biggest thing.
Like the definition is different for head of household status versus the child tax credit versus the EITC versus the old dependent. An exemption when that was a thing. And that's just within the tax code. Like, I imagine SNAP and Medicaid and all these other programs have their own definition of who's whose child. Absolutely. And it can often be hard, right? Like, who has a bank account to receive payments or a stable address to get, you know, money that comes by check? All of these things are really, really, really difficult. And, you know, it's, it's like folks working in nonprofits very often who become sort of experts at navigating this on behalf of people, or, you know, social workers in schools, social workers at hospitals. Do a lot of this. It's just really messy. We're going to take a quick break, but when we come back, we're going to talk a bit about some approaches to remedying the time tax and how to make government simpler for people. So stay tuned.
Support for the show comes from Washington Wise, an original podcast from Charles Schwab. Decisions made in Washington affect your portfolio every day. But what policy changes should investors be watching? Washington Wise, an original podcast for investors from Charles Schwab, tracks the stories making news right now and breaks them down for the average investor. Host Mike Townsend, Charles Schwab's managing director for legislative and regulatory affairs, takes a nonpartisan look at the stories that matter most to investors. He explores topics like policy initiatives for retirement savings, taxes and trade, inflation fears, the Federal Reserve, and how regulatory developments can affect companies, sectors, and even the entire market. In every episode, Mike and his guests offer their perspectives on how policy changes could affect what you do with your portfolio. Download the latest episode and follow at Schwab.com/WashingtonWise or wherever you listen.
Wise is the app that makes using different currencies easy. Need to send dollars to your cousin in Bali fast? Getting paid in another currency and don't want to lose out because of inflated exchange rates? travel money without having to slog through the currency exchange kiosk? Then Wwise might just be your answer. From pesos to pounds, euros to yen, Wwise takes the guesswork out of converting currencies. You can send and spend money worldwide at the real-time mid-market exchange rate with no markups and no hidden fees.
People sent over $100 billion worldwide with WISE. What's more, over half of those transfers got to their destination in less time than it takes to listen to this ad. Whether you're traveling, sending money abroad, or doing business, let WISE help you manage your money in different currencies with ease. Join 16 million customers already using WISE worldwide. To learn more about how a WISE account could work for you, download the app or visit wise.com. That's WISE, W-I-S-E.com. WISE.com. And we're back. So Annie has walked us through sort of the time tax, where it came from. Sort of how this becomes a major burden, particularly on low-income families. Piece was on Code for America and their approach to the time tax and trying to lower burdens for low-income people to access programs. Tell me a bit about that. Their strategy and sort of how, how successful it is and how much you can actually just sort of do as programmers.
America. It's interesting because they start, you know, it was like, gosh, more than a decade ago now. And they're doing these kind of like neat municipal programs. So like one of the first things they do is this like adopt a fire hydrant, dig out your local fire hydrant like community type thing. Like an administrative burden-focused social justice organization. And they create really nice, generally web-native tools, often mobile-first tools, to help folks navigate the government. So to do things like if you have a criminal record that could be cleared, they'll do kind
of like automatic clearing, which will make it easier for you to get housing, a job, that kind of thing. And people often don't do it for themselves, despite the benefits. Or they'll create really great interfaces so that it's easy to sign up for like the child tax credit, that kind of thing. And two things that I really like about them. One is that they have a hiring initiative so that they get people who've used these programs actually work there and they try to stay really close to end users. So they're constantly running surveys and talking to people, including folks who are unhoused or homeless or very low income about like, Okay, what do you not understand about this? How are you going to get that? And the second thing is they understand that actually web-based and mobile-based tools are not going to work for everybody. So like if you're a 54-year-old person who's just not very web-savvy and doesn't have the internet in your house and you don't have a laptop and you still have a flip phone, it's going to work a lot better for you, for you to like get on the
The actual landline telephone and talk to somebody. And so the sort of theory behind Code for America is, okay, if we can get the people who can use web tools to use web tools, states will have more resources to devote to those people that need that higher touch experience, and that works better for them and is in fact more efficient, even if we can get a social worker or somebody out to that person, that kind of thing. You know, there's great promise to this. And the problem though, is that like they can't change the underlying guts of anything. They cannot rewrite forms that are sort of set out by a regulatory process with rules that come from the states and the federal government. They're kind of like that, they sit on top of the problem, I think is one issue. And the second is that, you know, I think that they're moving in this direction, but they're very often not the vendor.
Who is administering or creating the web forms and the backend for the state either. Again, they sort of sit in this middle layer in between. So there's a lot that they can do and they've started to do, I think, a lot more advocacy for, you know, like. Fixing things at the root. So it's this funny thing where I think that there is a lot of promise, but I think that they'd be the first to tell you that... If you really want to make a lot of change, you got to vote this stuff in and you have to change the administrative process up at the top. Strike me as kind of the core of a solutions discussion because like it's something that is that I don't want to understate but at the same time in That I've had with vendors who are very thoughtful about this stuff with people who are in or who have been in government, who are very thoughtful about this stuff. I think what they're really worried about is that the message that it can't be fixed unless...
Political branches fix it can get overstated when in fact it's not just like tinkering around the edges. And I think that something that you mentioned in the first segment is really relevant here because when you have not just the split between in the legislators and chief executive who enacted the policy and the regulators who are supposed to be enforcing it, but also, you know, farming it out to contractors, the Are given a set of how to administer the program that is itself distinct from the regulations and so they you know end up with more of an ossified sense of what the program can and should be than even the regulation ends up, you know, would have required. And that can make it hard to change things in a way that is difficult to tell whether it's because the statute requires it or Just because it's the way it's always been done like it can be hard for the people at the user interface, whether that's institutions layering themselves over the thing like code for...
America or whether it's vendors to know what the distinction is, but like oftentimes, and I think more so with vendors than with Code for America kind of coming in as like an additional party, you can figure that out, right? And like you can figure out what the space is of things that people are going to be resistant to changing. Because they think of them as being required, but in fact are just the way things have always been done. -I think that there's a lot of opportunity for reducing this like there's tons of low hanging fruit here and it exists on all sorts of different branches. So like there's hard stuff. So like I'm a big advocate of the idea that there shouldn't be work requirements in any program. I recognize that that's not going to happen for a lot of reasons, but work requirements are the source of a ton of clutch. Because they're really hard to comply with. And we could talk endlessly about whether they actually get people to work or not, but
way or another it's on the margin and you know, you tell me why we need to have a work requirement in a nutrition program. So there's stuff like that, like you know, work requirements and acid tests I would just get rid of entirely. They're just completely pointless in my mind. Or, you know, not pointless. They have a point, but they're hard. But then there's all sorts of stuff about like, can you get the backends talking to Or a little bit more. So a lot of states, they do these kind of like single portal type things where You know, you'll apply and at least the big programs will kind of be in concert. So, you know, if you're getting Medicaid, they'll make sure that you're also getting SNAP. They do this a lot if you have kids, which is really, really important. I think like doing that sort of like, let's set a standard of income. Let's like fiddle with the requirements on the back end such that they match each other so that we'll know what you should get. Because there's tons of
tons of safety net programs, but actually really, SNAP is a big one, Medicaid is a big one. Something like TANF cash welfare is really tiny, right? So if you just get the big programs talking to each other, that's gonna do a lot of good. But then, like, can you just make the applications nicer? Bunch of states have done this and it's worked out really, really great. A bunch of states are actually in the process of doing this. Can you make states responsible for like wait times denials, that kind of stuff. Again, there's just lots of ways to make this simpler. Can you make it so that the states are required to have a web and a mobile first application for people? Because again, that means that like People can do it themselves and that gives you more resources to actually get to the folks who can't do it themselves.
Of whom there are also a lot. And, you know, I think that there's also ways to do better public information, to make people aware of things, and to take more of the burden on the government itself to help people access these benefits. It's one of these places where, gosh, if you put your shoulder in, you could really make a lot of changes. One other thing I would just say is that, you know, the federal data collection is awful here. To the OIRA website. And because of the Paperwork Reduction Act, they're supposed to be collecting data on how long it takes people to get this stuff. And the estimates are awful. They're garbage. They only apply to certain types of things. Of federal paperwork, government has no idea how long it takes to get stuff. That's an easy problem to fix. Just like run some surveys. You do this, right? So that's that's one thing too. Migo and Ira do some more work. They love paperwork. I
There are some really inspiring sort of examples of civic tech being used for this. Your piece goes through some of them. A really great piece about six years ago by Yiren Liu in the Times Magazine about the creation of a new CalFresh website to get food stamps in California. I really recommend it since it's like your coverage is very. About the problems, but it's just the story of these guys who are used to coding apps for like normal companies and they They come up with a website where you can apply to get food stamps. And that's really easy. Like they re they know how to do that, um, to make some. That has nice CSS and is well designed and looks like a nice startup. All of their trial and tribulations were weaving through the thicket of legislative dictates. Making sure they weren't offending relevant staffers, getting money to do it, and having to choose whether to get money from philanthropies, which is kind of icky to have these rich donors
government service versus like applying for an IT contract and like the IT procurement setup is wow. We messed up. I really recommend it as just like a naive go to Sacramento story. And my friend Dave Gorino is one of the programmers, so I'm biased. But it was a good reminder that sort of all of their work is really important. And I really admire what Code for America is doing. You do at some level need legislators to step up and. And like, uh, un-unknot the ties that they've put for people. - I think to pull the really big— Levers, you need Congress and then you need a new kind of regulatory process to come out of that. I was hopeful that when the child tax credit happened and now seems to be perished that there might be more focus on kind of beefing up the IRS as a benefits administrator, which I know is something that Janet Yellen is very interested in doing, since so much stuff just gets run through the tax code now.
And the IRS is not a very adept benefits administrator, but they do have all this data, so they could be a very good one. I think if you were doing sort of like blue sky thinking, you just want to make, like if you were starting from scratch, you would just want to, I think, federalize everything and run it through the Social Security Administration. So that's a free idea for a friendly legislator in Congress, if you really, I guess except for the health programs probably you wouldn't want to do that. But yeah. The thing about starting from scratch is what I always end up. Arriving at when I'm thinking about this stuff because it's not really just about having the bill in Congress that strips Out the kind of means testing and the other political and policy obstacles that you've identified. Every subsequent Congress from then saying, you know what, there was this really high-profile case of fraud because the non-custodial parent was applying for things and then the two parents were like, you know, splitting the difference.
Blah blah, and so we're going to add this test. And so in the next Congress, you know, there's someone going to add another test and like, it requires not just that kind of constant vigilance on the part of the branches but even more than that a willingness to see the the status quo of a program as like yes okay this wasn't Something that was designed all at once, but we have to think of it as something that exists all at once now and actually do a three-sixth. And take stock of what we have and all of the ways that it's affecting people, because even though this is not what anyone would have designed, it is the complete system that we have right now. And I think that there's a real resistance to doing that because... For most government programs that everyone thinks are broken on some level, which is to say most government programs, like it it can kind of seem self-evident that they're broken and that they should be fixed, and so taking them as they are and saying, What exactly does this do? And can we see this as a single operating organ, even if we didn't really want it to?
work that way is something that people just aren't, they'd much rather spend their energy thinking about ways to improve it than taking stock of what's going on. I think that that's absolutely correct. And I think that just starting to think about what is the time tax associated with this as we pass it is a question that I think that legislators could ask themselves. So I think all the time about the Sarah Clift story that she wrote, this is probably like 10 years ago now, about folks who got their insurance through the exchanges and were jealous of folks who got Medicaid and they felt like it was unfair. And in part that was because Medicaid pay for more stuff more cheaply, right? Because with Medicaid, you don't have a ton of copays and that kind of thing. But it was also because like Medicaid, you just got it and then you just were insured. You didn't have to go through the...
Whole like giant Rube Goldberg process to get your insurance. And so obviously, we want to relitigate how Obamacare happened. Nobody thought it was like beautiful when it was passing. But I think it was underestimated how much people would hate having to like actually procure their own insurance. And then notably, like the American medical system, we have not talked about this that much, is like the greatest, most annoying...
Source of the time tax for people where everybody is like their own insurance administrator and you have to argue to get things covered with your insurer and with your hospital. And it's just a giant, giant black hole time suck that really contributes to cost in the medical system also. But yeah, I think that you're exactly right. Think about like how we could have things and then also stopping and saying like, how annoying is this going to be for people to do? I remember there's like some small program that would, the point was to get people broadband, but it was like a $50 tax credit. And it's like, who is going to bother with this? Some small number of people, just provide broadband, just provide broadband. Do things directly because you're not going to get it to people and it's just really annoying when you do it that way. And again, I think the Democrats have a little bit to answer for when they're like, Okay, we'll set up a complicated tax financing system.
Scheme to make sure that only these folks and blah, blah, blah, blah, blah. And it's just really hard. Yeah. Well, and I think that that... It's kind of a culture in some sort of left of center organizations where sort of any expansion is good and you're in the political process. And so it's going to be messy, but it's a win. Like I used to... More about like EITC and this stuff than they do now and I would sometimes bring proposals to like simplify it or make it easier to get to folks at the Center on Budget and Policy Priorities and I love this. On budget and policy priorities. They do a lot of great work for low income people, but they're very much like, let's make the tweak to SNAP that will Get like 100,000 more people, like $25 more in benefits. They're not like big systematic. People. And so I think they have sort of an initial fight or flight reaction to any kind of change to programs like this because it might be a threat. It might be a right-wing scheme to like cut and undermine the program.
And you need all these people, you need the people in the weeds and the people thinking blue sky, but... There was not always an acknowledgement that getting the little incremental win also incrementally makes all this vastly more complicated for people on the user end. One big theme I think that comes through... My work is like government should do more work and people should do less. So it should be the government's job to make sure that people get the EITC. Like if people should be getting the EITC and they're not, like that's a government problem. Like the tax authorities should be able to. Figure that one out. 'Cause right, it's like one in six. One in six people doesn't get the EITC and it's thousands of dollars, thousands of dollars. And again, we know perfectly well that those are mostly people, not who are like at the very high end of the--
strata for getting EITC, they're down to the bottom. And so once you start looking through this lens, there's just no number of policies that you wouldn't think about changing in a way that just let people get them easily and made the government work so that not everything was like the DMV. Although hilariously, a lot of DMVs have gotten a lot better in terms of Customer service. Yeah, like not to jinx it, but the DC DMV is pretty nice in my experience. It's much better than the California. California, I've not had the greatest experiences. DC DMV I always thought was like actually Pretty good. Pretty good. I had a nice controlled experiment in this as a teenager because I grew up as In New Hampshire. New Hampshire is not really a state that has laws and so they don't do learner's permits. Allowed to drive at 15 and a half and and but I wanted to drive in Vermont because we lived on the border and so I had to go
Get a Vermont learner's permit. So I got to deal with both DMVs and the Vermont DMV was just like the nicest human beat. Like I want to be friends with Carl. He was so nice and so helpful. And like the New Hampshire DMV, everyone was underpaid and angry and wanted you to die. It's amazing what investing in good civic services can get you. I know everybody hates bureaucrats in the United States. The US could use a bigger and better funded bureaucracy. It really could. I talk to folks who work in these state offices all the time, and they would love it. Just like a computer that works and to make a living wage without having to like waitress or do Uber on the weekend. And like, I get why this is a really heavy lift, but like. Spend more money on this stuff and you just make people's lives easier. I really, really, really do. And you make it such that you don't have to have all these like legal Societies and homeless shelters and hospitals doing all this work for the state on behalf of people who are just like perplexed. I also I like the idea that
you're the only young person in Vermont. And that was why, yeah, just our gentocratic Vermont was like, wow, we have a kid. - Hi, Taylor. - We have to raise him well. - It takes a village to raise Dylan Matthews. Get him in a Subaru. We're going to take one more break. But when we come back, we have a hot NBR paper on administration. Of burden and some of the real life damage that high burdens can do. So stay with us. Hi, this is...
Of Prodigy Markets, your go-to podcast for all things money. Every Monday we provide brash, unfiltered analysis on market moving news, high-flying stocks, growing sectors, stupid boardroom decisions, and master of the universe CEOs. And on Thursdays we speak with some of the world's greatest finance professors, Wall Street insiders, and industry experts to keep you informed without getting bored. So if you want to understand money and how you can get more of it, you have to talk about money and we're here to help you do that. On YouTube or wherever you get your podcasts to automatically receive new episodes every Monday and every Thursday. - That's right, the good news is we know how to get you economic security. The bad news is the answer is slowly. We'll tell you how on Property Markets. Lifetime.
All right. So we are back and this week's white paper is a couple of years old, but it's an oldie but a goodie and it's called Program Recertification. Costs evidence from SNAP. It's by Tatiana Hominov and Jason Somerville, two economists. Doing here is looking at the process for sort of eligibility determinations for SNAP or food stamps that a lot of people go on and off food stamps during. Sort of hard economic times. There's a lot of churn in the program and there are processes to ensure annually that people are still eligible, that they still fall below the income threshold. And they wanted to see what That kind of burden of recertifying does to the program. And they have a pretty clever strategy to sort of like isolate the effect of the burden, which is people who are.
The later interview dates to get recertified have less time to reschedule if they miss the interview. And so they might be likelier to get kicked off of the program if the process goes wrong. And that's exactly what they find. It totally randomly, people who randomly get later assignments to interviews to get their lose about $600 in benefits on average the next year. And in many of these cases, they find that people just get re-enrolled. It's sometimes just a mistake. They get back on. They've missed some benefits, which is awful, but they're not. And they're not totally lost, but about a quarter remain off for an entire year, including main cases where people qualify. It's just, this is a major administrative burden that's getting people off of a program they could really use.
I thought this was just a very nice clean example of the dynamics we've been talking about. I'm curious if you do have thoughts on some of the work here. something that the authors talk through is that, you know, One of the frontiers of administrative burden work is improving public information and as you kind of laid out a couple of times, and making sure That people are aware that they're eligible for things. The great thing about focusing on recertification is it totally takes that set of questions out of the equation because definitionally, already know that this program exists and that they're eligible for it. So it takes away one of the kind of easy talking points I think. Policymakers generally tend to describe policy failures as communications failures, and it takes that set of uses totally away. The other thing it does is make it clear that it's not about people choosing not to participate. Okay, you don't have to, just because you're eligible for a public program doesn't mean that you have to use it, but like, if you
who are already eligible and you have a later interview date and you're getting kicked off the rolls for the next month whereas somebody with an earlier interview date isn't. That's not because like you took the-- Of having those three more weeks to think before your interview and decided that you're philosophically opposed to continuing to receive benefits, you know. So focusing on certification in particular kind of it boils the problem down to a few sub parts in That makes it a little easier to focus on solutions. - That's a great point. And one of the other things that this kind of brought up for me is... Why do we do interviews at all? Right? Why do we do them? There's, I think, two answers to that question. So first, it's just, you know, if you talked about
Folks who are applying to these programs, very often the government will tell you, like a social worker will tell you, just apply and we'll sort it out in the interview because it's really confusing. Just get your stuff on paper and then we'll fix it once we do the in-person interview portion. And as you pointed out, right, they do tell you about other stuff, they connect you with other. Services, you know, these interviews can be useful for people. But then there's this whole like fraud prevention. I'm you know, this is a place where racial bias comes in. This is really. Really intimidating for people. And in a lot of states, there's a way to kind of get past the In person interview depending on certain life circumstances that you might have, but like what if it's just really intimidating?
to go or embarrassing to go down to like this office, like a welfare office and talk about yourself and like bring a bunch of documentation and you gotta find somebody to watch your kids, you have to get there. And in-person interviews were suspended in a lot of places during the pandemic. And it wasn't like they saw a giant increase in fraud related to the suspension of the interview. So I think this is one of these places where like the cost benefit Strikes me as really questionable. And, um, you know, would there be a huge amount of pushback if, if this was just suspended permanently? What if it was made a lot easier so you could just call? all with your information and you could like do FaceTime or something like that or even just like have a phone conversation instead of this kind of thing. So these places where you read this paper.
You're like, Why are we doing this at all? Why are we doing this at all? And, you know, to your point of stepping back and just asking, right, like, What's the point here? It takes a tremendous amount of state resources to do this, too. It's not like it's easy on the state, either, to have to, like, do all of these. In person or phone interviews and then do them for recertification also. It's a lot of work. >> It's a lot of work. Yeah. Well, and I think this gets to some of the points you've been making about information sharing that you could. In theory, you have a system where it's not based on your present year income, but your past year income to deal with sort of the fact that people's incomes change over the year. The security administration knows what everyone made. At the very least, it knows like taxably what people made. Had some sort of self-employment income on top of that, the IRS knows about that, or should know about it if they filed an accurate tax-- return. But the information sharing between that and these state agencies is quite bad.
And a lot of it is like breaking down those bureaucratic barriers that I... Understand like from a path dependence perspective why they exist, but don't seem to be serving like the beneficiaries of these programs at all. This is like one of my spicier opinions that not a lot of people in government share, but say that you're getting something and. Your income goes up and you no longer qualify. Very often there's this clawback and the clawbacks are really painful and they put people in a really precarious position. And this is like the heart, right? I'm like, just never claw anything back. Just forget about it. Just don't do it. And it would be a lot more efficient that way. You know, if somebody meets the income threshold and they graduate out of the program, great,
But just forget about it. And I think that that would be pretty unpopular. I can only imagine that you might actually get a little bit of blowback for that kind of thing. But yeah, start from a position of trust and saying, We don't want people not to have this. On prior year income and then if something changes you tell us, right? And if we find out something changes then we'll stop giving you the program. There's just like lots of ways you could think about that working. It's politically hard, but I think that the just pure policy question, again, if you're coming from this position of like, we really want these people to have this, we know they're Life is hard. We want to make it as easy as possible on them. What does it look like when you start thinking that way? Absolutely. I also... Just papers like this always remind me of how much good social science comes from. Totally dysfunctional public programs, that this is about the dysfunction. And that's kind of a rarity in economics literature in that often you'll
a paper that is using the dysfunction to make another point. So a recent paper I liked that was a lot like this was Manasi Deshpande and Michael Muller Smith had a paper on. And supplemental security income. Sort of a disability income program. Notably, people under 18 can get it unlike sort of social security, disability insurance, which you have to earn. There was like a sudden change to how likely people were to be reviewed for eligibility upon turning 18 in the '96 welfare reform law that There was just like a sudden and totally random shift in how likely you were to get called in to evaluated and maybe lose your benefits. And they've learned a lot of interesting things from that, like not getting SSI makes you 20 percent more likely to get charged with a criminal offense.
Gut punch finding for me was that youth are twice as likely to be charged with an illicit income-generating offense than they are to maintain steady employment at $15,000 a year or more in the labor market. And that's like... Devastating and an important thing to know about disability insurance, but also like the whole process Led to that finding is a disaster. Like we should have not had these sharp cutoffs and like who's eligible for what. Right, you end up with this with a body of work- the benefits to people of the welfare state based on people who deserve welfare benefits falling out of the welfare state. Yes, on a basic scientific ethics level, it's not that unfamiliar to be like, oh, okay, is it moral to withhold a benefit from a control group? But this isn't that, this is just...
Maybe government should be a slightly less rich source of natural experiments in this regard. It's like, again, going back to like the kind of blue sky thinking, it's like, what if everybody did have a Fed bank account? And what if there was like some kind of income supporting measures such that if you fell between, you know, below some threshold, you just automatically got boosted up, right? It's not impossible to imagine doing income support in a much more dynamic, immediate way. But, you know, that stuff gets really, really unpopular. And instead, we have this great system for running really cruel natural experiments. And we let lots of people remain poor.
Sophie Lalonde, Libby Nelson is our editorial advisor. Amber Hall is the deputy editorial director for Talk Podcasts, and I am your host, Dilip. Matthews. If you have not signed up for a newsletter, please go to vox.com/weedsletter. Has been writing it. There's some good ones. You should get into it. We will be back in your feeds next week with an episode recorded at Trucon by Dara, Zach Beauchamp, and Jen Kirby. That's going to be great, so stay tuned. The Weeds is part of the Vox Media Podcast Network. More to-dos, less time, and an infinite number of tools to keep track of. Sometimes doing business has never felt harder, but you don't need a miracle to hit your goals. You can just use HubSpot. Because their all-in-one customer platform can make growing your business infinitely easier. Imagine this, high quality leads.
Fast closing deals, wildly happy customers, and more benchmark-breaking quarters. It's not a miracle, it's HubSpot. Visit HubSpot.com to get started today.
Transcript generated on 2024-05-29.