Is America ready for a welfare state?

MEXICO CITY — As a foreigner currently writing a book about Americans, I am encouraged by some signs I see as the 2020 presidential campaign heats up. In particular, with the race for the Democratic nomination fully under way, many of the candidates are advocating bold policies that address some of the most important challenges the United States has faced in decades.

Their most striking proposals would create elements of a modern American welfare state in areas such as healthcare, childcare and education. It remains to be seen whether these proposals will survive the heat of a presidential election campaign. But whether a Democrat wins or loses in 2020, social democracy has reemerged in American politics for the first time since the 1930s.

This is a potentially momentous development. For much of its history, and certainly since Alexis de Tocqueville travelled through the republic in the 1830s, the United States was a middle-class country. Or, perhaps more accurately, it denied the rights of a majority of the population, including African-American slaves and Native Americans, as well as white women, while affording unprecedented equality to the rest.

America’s middle class swelled and prospered more or less continuously over the next century and a half, effectively preventing the emergence of the sort of welfare state that other rich countries began to establish from the late 19th century onward. True, the US introduced a federal old-age pension, Social Security, in the 1930s and established the government-funded Medicare and Medicaid health-insurance programmes in the 1960s. But as long as middle-class Americans enjoyed full employment and relatively high wages, bolder ideas, such as universal government-funded healthcare and proper unemployment insurance, remained off the mainstream political agenda.

This was especially true during the three decades from the end of World War II until the late 1970s. But then the US’ economic fortunes started to dip. For a variety of reasons, including president Ronald Reagan’s economic policies, globalisation and a loss of American competitiveness, inequality began to rise, real (inflation-adjusted) wages and incomes stagnated, and the middle class started to shrink.

These negative trends persist today, and partly explain Donald Trump’s presidential election victory in 2016. Moreover, increasing economic hardship made the case for a plain-vanilla US welfare state increasingly self-evident. But only now are mainstream American politicians openly advocating this.

To varying degrees, the principal contenders for the Democratic nomination in 2020 have espoused many of the tenets of a modern welfare state. So much so, in fact, that Trump and the Republican Party have attacked them for wanting to bring socialism to the US, charging that Democrats will turn the US into Venezuela. 

Many Democratic candidates have called for a major expansion of government-funded healthcare. But their proposals, a single-payer system (“Medicare for All”), a national health service or something else, do not all mean the same thing. Several contenders, including Bernie Sanders, Elizabeth Warren, Kamala Harris and Beto O’Rourke, do not entirely agree on the details of such schemes, or simply have not spelled them out. But after former president Barack Obama attempted to fix the American healthcare disaster with halfway measures, arguably the most that was politically feasible at the time, those vying for the Democratic nomination clearly have more ambitious plans.

Warren, meanwhile, has proposed the introduction of universal childcare, to be financed by a wealth tax on fortunes above $50 million. Such a tax may sound revolutionary, but it is not. As the former US secretary of labour Robert Reich often points out, the US has long imposed highly regressive property taxes that affect those whose only asset is their homes.

Democratic candidates have also proposed universal free tuition at public colleges, an increase in marginal income-tax rates to pre-Reagan levels and a carbon tax on non-renewable energy sources. All of these ideas are exciting, innovative and disruptive, and would have been confined to the extreme-left fringe just four years ago. Implementing all of these policies would not create an American welfare state overnight, but the US would look a bit more like Scandinavia.

Furthermore, some Democratic candidates want to reform the US’ dysfunctional political system to increase the chances of introducing such a welfare state. In particular, Warren recently proposed abolishing the Electoral College, so that US presidents would instead be elected by a national popular vote. In 2000 and again in 2016, the Democratic presidential candidate won the most votes overall but did not win the election.

Warren’s proposal will not succeed in the near term. But the fact that a mainstream candidate is promoting it suggests that Americans may be thinking more seriously about how their political system works, or does not.

Several obstacles stand in the way of bringing these welfare-state proposals to fruition after 2020, starting with the possibility that Trump will be reelected. Moreover, the Democratic nominee may veer away from radical, substantive planks in the party’s platform, and opt for a more moderate programme in the hope of attracting enough centrist voters to defeat Trump. And even if a Democrat who supports many of these welfare-state reforms is elected president, they may be unable or unwilling to implement them.

Nonetheless, leading Democratic candidates are advocating welfare-state policies that seemed almost unthinkable in the US until recently. As these ideas gain traction among the country’s squeezed middle class, they are changing the terms of US political debate. For that reason alone, the 2020 presidential campaign already seems light years away from the bromides and vacuous invective of 2016.

Jorge G. Castañeda, former foreign minister of Mexico (2000-2003), is professor of politics and Latin American and Caribbean studies at New York University. Copyright: Project Syndicate, 2019. www.project-syndicate.org