Guess who else wanted to give Americans a financial boost
Shhsh. Don’t tell Joe Biden, but he is the modern incarnation of Richard M. Nixon. Not with Watergate. Not with his heritage as a cold warrior. Not with his instinct for scheming against his enemies.
But with his $1.9 trillion coronavirus-relief bill, Mr. Biden is taking a page from Nixon’s approach to fighting poverty. And at the same time he inadvertently is taking aim at nearly a century of Democratic dogma on social welfare programs.
More than 50 years ago, Nixon — employing the Benjamin Disraeli approach of using liberal means to achieve conservative goals — startled Washington with his guaranteed-income plan, which passed in the House but stalled in the Senate. The Nixon plan was designed to attack poverty and hunger — and essentially to replace welfare — with a negative income tax that would send a flood of money to the poor.
Its 21st-century incarnation is the Biden plan to provide as much as $12,800 to some families of four in the form of stimulus checks plus expanded child tax credits.
“The big surprise is that this was the way Nixon wanted to handle things,” said John Roy Price, a Nixon domestic affairs aide who, with Daniel Patrick Moynihan, a Harvard professor who later became a Democratic senator from New York, helped shape the Nixon Family Assistance Plan. “Nixon really believed the way to fight poverty was to give people money. He recognized there was a strong sentiment to help people who needed help. But he thought there was an animus toward what we think of as welfare. He saw poverty as a problem of lack of income.”
Nixon did not believe in merely paring down the spending-program largesse of the Franklin Delano Roosevelt years, a policy that was pursued by his Republican presidential predecessor, Dwight Eisenhower, and that alienated conservatives; Barry Goldwater, who would become the party’s 1964 presidential nominee, opposed Eisenhower’s efforts to expand the universe of Social Security recipients and dismissed his policy as a ‘’dime-store New Deal.”
Instead, Nixon wanted to junk the myriad New Deal spending programs that Lyndon Johnson built upon with his expansive Great Society and that were attracting increasing, even bipartisan, criticism. In a nationally televised Oval Office address, the president said “the present welfare system has to be judged a colossal failure,” arguing that “what began on a small scale in the Depression ’30s has become a huge monster in the prosperous ’60s.”
Though the Nixon plan, providing nearly $11,500 in 2021 dollars to a family of four, never was enacted, the philosophy behind it spawned the expansion of food stamps, now known as the Supplemental Nutrition Assistance Program, and the earned-income tax credit.
And this winter, Sen. Mitt Romney, the 2012 Republican presidential nominee, floated the idea of making direct bank deposits of $3,000 a year for children between the ages of 6 and 17.
All of this, including the Biden plan — derided by 21st-century conservatives as a giveaway to favored constituencies — is a repudiation of the New Deal/Great Society ethos. Nixon, true to the dark side of his persona, pilloried his 1972 presidential opponent, Democratic Sen. George McGovern, for preferring a similar “demogrant” plan; the Nixon forces portrayed his plan to provide $1,000 to every
American every year as a slippery slope to socialism.
“The growing interest in cash payments is an admission that welfare programs aren’t working,” said former Republican Sen. Robert Kasten of Wisconsin, who served on both the budget and appropriations committees. “It’s a new feeling that it might be better to just give out money instead of continuing with programs that are unsuccessful and hoping that maybe that will work.”
At the same time, the 21st-century Biden approach is an adaptation of a notion that first surfaced in overseas-development circles in the mid-20th century. At a time when foreign aid was under attack — by conservatives who consider edit a waste of money, by liberals who argued it was ineffective and by scholars who maintained it was a remnant of colonialism — growing numbers of thinkers argued that targeted development programs should be replaced by the simple transfer of money.
“The question is how to structure aid so people can serve their own interests,” said Donald W. McNemar, who teaches international relations at Bentley University in Massachusetts. “The notion is to make people sustainable in the long run. It’s the old idea about teaching people to fish so they can eat for a lifetime rather than giving them a fish for one day’s dining. It also gives people independence and dignity.’’
That idea does not have universal appeal. “You want the money to be used the way you want it to be used,” said Raphael S. Cohen, a Rand Corp. senior political scientist who studies foreign aid. “You want to condition the money, so in foreign aid simply cutting a check becomes problematic.”
That’s part of the criticism that the Biden plan is receiving from Republicans, who as a mass voted against the virus-relief plan — just as every Democrat opposed the Trump tax cuts and every Republican voted against the Obamacare health plan.
“It’s a one-shot affair and it will get some people over the hump, but it doesn’t provide the long-term assistance that some people need,” said Sen. Rob Portman, an Ohio Republican who is not running for re-election. “It’s helpful for immediate spending but not for long-term stability and long-term sustainability — but it has some advantages over Great Society programs that haven’t successfully met their own goals.”
And at the same time, critics believe that a substantial portion of the money provided by the Biden plan will be employed more as savings than as stimulus, with the final effect being to billow the deficit and pass the costs on to future generations of American taxpayers.
“Someday this bill will have to be paid,” said former GOP Sen. Judd Gregg of New Hampshire, a onetime Budget Committee chairman. “Maybe it will provoke a currency crisis with people losing confidence with the dollar, and then our standard of living could be in danger, because if there is a loss of confidence in the currency, we lose everything. The only thing that is saving us right now is that all the other industrialized countries are printing money like crazy too. When it catches up to us, it catches up to the world.”