Opinion | Wonking Out: Conservatives Face a Rude Fiscal Awokening

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By Paul Krugman

The Republican response to President Biden’s suggestion that they want to cut Medicare and Social Security has been basically that of the Monty Python knights to the Killer Rabbit of Caerbannog: “Run away, run away!” But many in the party still appear to hope that they can make big spending cuts without hurting anyone they care about.

Many House Republicans are reportedly listening to Russell Vought, Donald Trump’s former budget director, who has a new think tank and has been circulating a budget proposal titled “A Commitment to End Woke and Weaponized Government,” which purports to show a way to balance the budget without touching Medicare and Social Security. The document uses the word “woke” 77 times, and — weirdly for a fiscal blueprint — also manages to mention critical race theory 16 times.

Anyway, the proposal relies in part on magical thinking — the assertion that conservative economic policies will cause a burst of economic growth that in turn increases tax receipts. Such claims have, of course, never — and I mean never — worked in practice. But it’s difficult to get politicians to understand something when their careers depend on their not understanding it.

More interesting, however, is the idea that we can achieve major spending cuts by taking on wokeness. What this means in practice is huge cuts to means-tested social insurance programs: Medicaid, Affordable Care Act subsidies and food stamps (or, to use the official term, SNAP, for Supplemental Nutrition Assistance Program).

So now we know what many conservatives mean by being woke: It means showing any concern for, and offering any help to, Americans who are victims of adverse circumstances.

But if Republicans get anywhere close to carrying out the ideas in Vought’s blueprint, they’re going to get an education in both political and economic reality. The beneficiaries of the programs they want to gut aren’t whom they imagine, and the effects of slashing these programs would be far worse than they realize.

What’s going on in proposals like Vought’s, I believe, is that many conservatives are still stuck in a vision of American society that’s many decades out of date. (I keep thinking about the Florida officials who wanted to know whether the Advanced Placement course in African American history was “trying to advance Black Panther thinking.”) When they hear about means-tested programs, they think “welfare,” and when they think about welfare, they imagine that the beneficiaries are inner-city Black people.

In modern America, however, some of the biggest beneficiaries of means-tested programs are rural white people — who also happen to be the core of the Republican base.

Consider Owsley County, Ky. Eastern Kentucky is at the epicenter of the “Eastern Heartland,” a region that has been left stranded by the rise of the knowledge economy and the migration of jobs to highly educated metropolitan areas. The county is almost entirely non-Hispanic white; 88 percent of its voters supported Trump in 2020.

And 52 percent of its population is covered by Medicaid, while more than 40 percent are SNAP recipients.

Realities like this may explain why Medicaid appears to be highly popular, even among Republicans, and why large majorities of voters in states that haven’t yet expanded Medicaid appear to favor expansion. It’s true that politicians like Ron DeSantis who continue to block expansion haven’t paid any obvious political price. But as we saw in the political backlash against Trump’s attempt to repeal Obamacare, there’s a big difference between obstructing an expansion of social insurance and taking away benefits that have become an integral part of people’s lives.

Furthermore, although it may not matter much for the politics, it’s important to be aware that “woke” social insurance programs almost surely have important benefits beyond the financial support they provide.

First, the beneficiaries of these programs are disproportionately children. Medicaid covers 39 percent of all American children under 18; in West Virginia, another almost all-white and very Trumpy part of the Eastern Heartland, the number is 46 percent. More than 65 percent of SNAP recipients are families with children.

Why does this matter? Partly for moral reasons. Even if you’re one of those people who blame the poor for their own plight, children didn’t choose to be born into low-income households, so why should they be the prime targets of fiscal pain?

There are also practical reasons to provide aid to children, because today’s children are tomorrow’s adults — and they’ll be more productive adults if they have adequate nutrition and health care in their formative years.

This isn’t a speculative assertion. Both SNAP and Medicaid were rolled out gradually across the United States, creating a series of “natural experiments” — situations in which some children had early access to these programs and some otherwise similar children didn’t. And the evidence is clear: Childhood safety net programs lead to improved outcomes in adulthood, including better health and greater economic self-sufficiency.

Actually, the evidence for long-run economic payoffs to investing in children is a lot more solid than the evidence for payoffs to investing in infrastructure, even though the latter has bipartisan support while the former doesn’t.

So if you’re concerned about America’s future, which advocates of big budget cuts claim to be, slashing benefits for children is a really bad way to address your concerns.

And there’s another benefit to Medicaid, in particular: It helps keep rural hospitals alive. America has a growing crisis in simple availability of medical care in rural areas, presumably tied to the growing geographic divergence that has stranded places like eastern Kentucky. But the crisis is significantly worse in states that haven’t expanded Medicaid. That is, Medicaid doesn’t just help its direct recipients; it helps anyone seeking medical care, by helping to keep hospitals afloat.

Now think about what would happen if Congress slashed overall Medicaid funding. One likely result is that the rural-hospital crisis would go national.

So conservatives who think that targeting “woke” spending provides an easy way out of their dilemma — they want to shrink the government, but the big-money government programs are highly popular — are deluding themselves. If they get anywhere near actually realizing their plans, they’re going to face a rude awokening.

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