Earlier this week, Harvard University Professor and extramural extraordinaire Lawrence “Larry” Summers gave the opening speech at a joint conference hosted by the Peterson Institute of International Economics and the International Monetary Fund. The event, titled “Rethinking fiscal policy — global perspectives,” was an opportunity for researchers to gather and discuss the impacts of interventions taken by various governments around the world in response to the COVID-19 pandemic.
Summers began by referencing how America’s debt limit debate made the conference especially timely. While we have emphasized how the Fiscal Responsibility Act (FRA), undermines the executive branch with budget cuts that will undermine its effectiveness, Summers was far more sanguine:
“Some of the policy contained [in the FRA] is, in my view, actively good. More liberalization on permitting is, I think, a positive thing. Some of it is debatable; the extension of work requirements, which I think in some cases probably does serve a useful function. Some of it is, in my view, unfortunate. Particularly the $20 billion dollars that has been removed from the IRS that will facilitate immoral tax cheating and expand deficits over time. And some of it is less unfortunate, the cutting of the domestic discretionary budget.”
Summers’ evaluation of the good, bad, and ugly of the deal President Biden struck with House Speaker McCarthy is notable for a number of reasons. Setting aside his praise for “permitting liberalization” — which in reality will offer more concessions to fossil fuel interests than those fighting for renewable infrastructure — the work requirements he tepidly praised will directly revoke food access from (already vulnerable) older Americans. Yet remarkably, Summers didn’t seem to view this outcome as an “unfortunate,” or even “less than fortunate,” consequence of the bill.
The FRA will expand long standing work requirements on a new cohort of Americans eligible for aid under the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps). Under current law, recipients who are able to work, don’t have dependents, and are between 18 and 49 years of age have their access to long term support limited by their ability to confirm 80 hours of work per month (either via paid employment or participation in government-run work programs). This, as Matt Bruenig of the People’s Policy Project importantly points out, is “effectively the same as a job that pays $3.51 per hour […] less than half the federal minimum wage of $7.25.”
The age limit for those caught in this web of conditioned access to food subsidies, should the FRA be signed into law, will be raised from 49 to 54, although, veterans, the unhoused, and people who were children in foster care are shielded from the requirements. Summers’ characterization of this policy outcome as “debatable” likely stems from the latter provision. Even Biden himself, with the support of Congressional Budget Office estimates, has used these new exemptions to argue that concerns over low-income Americans going hungry as a result of expanded work requirements are “ridiculous assertion[s].”
Such a stance, however, disregards the difficulties of delivering these services as they currently exist, ignores the negative effects of additional red tape on uptake by otherwise eligible individuals, and sidesteps more fundamental moral questions regarding which populations are deemed deserving of support.
Furthermore, framing the debate over work requirements around their potential use cases assumes for a fact that these policy stipulations are actually useful. There is plenty of evidence to suggest that work requirements, rather than achieving their purported goals of disincentivizing dependency and more effectively allocating aid, actually result in the indiscriminate disqualification of potential beneficiaries. If anything, work requirements are only useful in ensuring that the vulnerable go hungry.
You’d imagine that a professor of economics at Harvard University, of all people, would at least be aware of the ever growing body of scholarship challenging the efficacy of work requirements. (And maybe he would be, if he were really a professor, rather than a promiscuous corporate consultant and talking head.) However, given both his history of neoliberal policy making during the Clinton and Obama administrations and ongoing insistence on mass unemployment as the answer to inflation, Summers’ blindspot for policy solutions which don’t immiserate the working class is entirely on brand.
The issue though, is not simply that Summers, as an individual, still believes in the utility of means testing. Rather, the concern is that Summers’ opinions — which, despite our objections, remain influential in media and policymaking circles alike — will serve as justification for widespread acceptance of this outcome. The consequences of the FRA’s SNAP provisions will, at best, reshuffle which vulnerable groups have access to food and, at worst, condemn large swaths of low-income Americans to hunger. Neither result should be tolerable.
Forcing older Americans, who already have trouble finding employment, to work in order to receive food assistance is a terrible proposal; made worse by the fact that Biden himself insisted that such a suggestion would be a non-starter in debt ceiling negotiations mere weeks ago. The expansion of SNAP work requirements is both cruel and unnecessary, considering the Biden administration still had other avenues to avoid nonpayment on government debt. If there are any debates to be had, they should be whether the imposition of barriers on essential life goods for those already living in precarity are worth a temporary and tenuous reprieve from hostage-taking Republicans.
But we again return to the question – why does the media grant crypto enthusiast Larry Summers such an outsized role in debates such as these?