America on the Dole

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After Congress passed the American Recovery Plan, Joe Biden’s $2 trillion economic relief legislation, the president proposed roughly $4 trillion in further spending. The American Jobs Plan, also known as the president’s infrastructure proposal, accounted for about half of that money. The rest was included in the American Families Plan, a $1.8 trillion package that the Biden administration described as a set of “investments and tax credits for American families and children over ten years.”

In other words, it was a welfare bill, and quite an ambitious one. The plan would put most working-age American households on the dole, even when the economy is strong and the country is not in crisis.

The American Families Plan proposes spending on various new and newly expanded programs, including an extension of the American Recovery Plan’s one-year child tax credit boost, increased subsidies for insurance purchased through the Affordable Care Act’s health exchanges, a new universal paid family and medical leave program, and federal funding for two years of “free” community college. The plan thus represents an escalation of the American Recovery Plan, which temporarily funded some new benefits based on the argument that they were necessary salves for the economic pain caused by the COVID-19 pandemic.

The American Families Plan, by contrast, is premised on the idea that such benefits are necessary on an ongoing basis, regardless of the economy’s condition. That shift would further enmesh such benefits into American life.

In a June working paper, the Hoover Institution’s John F. Cogan and Daniel Heil report that the plan would add more than 6 million households, and more than 21 million Americans, to federal entitlement rolls. That would raise the share of nonelderly American households receiving such entitlements by seven percentage points and push it above the 50 percent mark. Although Biden has pitched the American Families Plan as an inequality-reducing boon to the poor and middle classes, about 40 percent of the benefits would go to the top half of the household income distribution.

The plan may not go into effect exactly as Biden proposed. But if it did, Cogan and Heil write, “this would be the first time in U.S. history”—with the possible exceptions of 2020 and 2021, for which data are not yet available—”that a majority of working age households are federal entitlement recipients.” Biden wants to make most working-age Americans into beneficiaries of federal largesse, a sea change in the relationship between individuals and the state.

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