Two eras — policymaking under Presidents Franklin D. Roosevelt and Lyndon B. Johnson, characterized as the New Deal and Great Society, respectively — brought the country the most significant changes in how we provide social insurance and protect Americans with the least. Yet Trump is making America great again by choosing people who have pledged to dismantle them.
We can’t know yet exactly what Trump’s Cabinet will do; they could turn out to be as mercurial as the man himself. Yet Trump’s team has long been intent on repealing the achievements of the New Deal and Great Society.
Social Security was the most sweeping and longest lasting achievement of New Deal policymaking, and now, it buoys 22 million people above the poverty line. Trump himself defended the program during his campaign for the presidency, promising, “We’re going to save your Social Security without making any cuts.”
Yet the man who advised Trump on the Social Security Administration during the transition, Tom Leppert, proposed privatizing the program when he ran for Senate in 2012. He floated the idea of diverting part of Americans’ payroll taxes that fund the program into private retirement accounts, managed by individuals. It’s an idea that Trump’s own vice president, Mike Pence, once tried to get implemented: President George W. Bush pushed for an ill-fated privatization plan in office, and Pence led the charge of those arguing that Bush’s plan didn’t go far enough.
This idea would both cripple our system of social insurance and endanger many people’s retirements. How much money each American would have to survive on in old age would depend on how well she could invest it and how well the stock market fared. The risk of bad investment choices would be passed down to each individual; any potential higher rates of return from the market would come thanks only to the increased risk that it can crash and leave them with nothing. It would eliminate the current insurance model that protects retirees from downturns, runaway inflation, or outliving savings.
At the same time, it would leech even more money out of the Social Security system and make it harder to pay out regular benefits. Once the program became completely hobbled, it would be even more vulnerable to being fully dismantled.
Crippling Social Security will harm some more than others. White, well off people are far more likely to have personal retirement savings and to rely less on the security of social insurance. About half of white workers are enrolled in a 401(k) plan, compared to about a third of black workers and just 20 percent of Hispanics. The majority of black and Hispanic families have no retirement savings at all, making Social Security potentially their only source of income in old age, but more than two-thirds of white families have money stored away. Women, meanwhile, rely far more on Social Security benefits in retirement than men do. If Social Security suffers body blows, white men will be far better shielded from the ensuing pain.
Trump’s pick to lead the Department of Health and Human Services, meanwhile, not only supports privatizing Social Security but also backs a similar plan for Medicare, the largest achievement of Johnson’s Great Society. Tom Price’s plan to abolish and replace the Affordable Care Act also includes allowing people on Medicare to instead opt for a tax credit and then purchase private insurance for themselves. Price, who in his role would oversee the program, has made it clear that Medicare reform will be high on the Republican agenda under Trump, dropping within months of his administration’s start.
Leppert and Mick Mulvaney, Trump’s pick to the lead the Office of Budget and Management, have also backed similar privatization plans. Mulvaney vowed to “end Medicare as we know it” in 2011, and in 2009 he voted in favor of a measure in the South Carolina senate calling both Medicare and Social Security unconstitutional, although he walked that back in his recent confirmation hearing.
It’s not just Medicare that could be in danger. Price put forward a budget proposal this year that includes turning Medicaid, the program that provides health insurance to the poor, into a block grant, rather than its current form where the federal government shares rising costs with the states. Kellyanne Conway, counselor to Trump, confirmed this would be on the administration’s agenda. Seema Verma, Trump’s pick to run the agency that directly oversees Medicaid and Medicare, helped implement reforms to Medicaid in Indiana that incorporated private savings accounts to help pay for coverage.
All of these models invoke the same danger as privatizing Social Security: they shift risk from the federal government — a massive body that can easily absorb it — down to the littler guys. With a tax credit in hand instead of Medicare coverage, elderly people looking to buy health insurance will be on the hook to either find a cheap enough plan that the credit can cover or pay for any cost overruns. They’ll have to cough up extra money if health costs increase. If Medicaid spending goes up, meanwhile, a block grant puts states on the hook — but their budgets aren’t flexible, so any increase in spending has to be offset by cuts to services or increased taxes.
As with retirement security, white people will be most able to weather those outcomes. More than a third of black and Hispanic people are enrolled in Medicaid or another public health insurance program, compared to just 20 percent of whites. On the other hand, about half of people of color get private insurance, compared to more than 70 percent of white people.
The New Deal also brought us a national floor on wages for the first time, making sure there is a lower bound to how much someone can earn. Trump himself has taken a number of contradictory positions on the federal minimum wage, but his selection to lead the Department of Labor, which oversees the enforcement of this law, is no friend to it. Andrew Puzder has indicated that he sees government-mandated increases as “artificial” and harmful to jobs, and he was a big donor to a campaign against raising Nevada’s minimum wage by a dollar in 2006. Meanwhile, as CEO of Hardee’s and Carl’s Jr. he’s overseen some of the most frequent violations of minimum wage laws.
This could indicate an unwillingness to go after employers who fail to pay full wages, and an opposition to raising the floor. And those most impacted would be, once again, women and people of color. Women make up 60 percent of those who would benefit from increasing the wage to $12 an hour, for example, and workers of color would disproportionately benefit as well. Both are overrepresented among workers who need every cent of their minimum-wage paycheck.
Fair housing was another huge gain during the Great Society: the Fair Housing Act, signed into law in 1968, prohibits racial and gender discrimination. It also includes a mandate for local governments to “affirmatively further” fair housing, or actively pursue equality, something that has long been neglected even by the Department of Housing and Urban Development, the agency tasked with overseeing it. President Obama’s administration only just began trying to give it more heft.
But Ben Carson, Trump’s selection to lead HUD, is publicly against this concept. He’s likened affirmatively furthering equality to “failed socialist experiments” and the policies of communist countries. When asked about it during his confirmation hearing, he replied that while he has no problem with integration, “I do have a problem with people on high dictating it when they don’t know about what’s going on in the area.”
Without proactive action, though, the inequality that plagues the housing market will only metastasize. Realtors still favor white buyers; black families are still largely segregated from white families. These housing disparities contribute heavily to the racial wealth gap. The average black home’s value is about $75,000, compared to over $200,000 for a white home.
If Trump’s Cabinet selections make it through the confirmation process and succeed in achieving their priorities of dismantling Social Security, Medicare and Medicaid while rolling back enforcement of minimum wage and housing laws, it won’t just be women and people of color who suffer. White men, too, benefit from and rely on these programs. They form the structure of America’s social insurance system and help guarantee a basic standard of living.
But those harmed the most will not be white men and women, the bloc that put Trump in the White House. When Trump promised to make America great again, he made a pledge to bring the country back to an imagined era when things were better, at least for some. Now we know just how far back he wants to go — before the Great Society and New Deal ever existed — and just who he wants the country to be great for.