This article addresses two different but related topics. The first is whether the US election of 2004 represents a serious mandate for social policy change. The second concerns the social policy proposals that the Bush administration has favored. There the question is whether the American proposals are relevant to Canadian social pol- icy discussions. In connection with that question, I take up one particular framing of what is at issue in Canadian social policy: namely, the view that a new century ”” the 21st ”” presents new challenges to social policy, throwing up new risks that require a reconceptualization of the welfare state.
Drawing lessons from the experience of other countries is never easy. It is especially problematic for Canada when the topic is social welfare policy and the country compared is the United States. For decades now, the pattern of media coverage has been imbalanced. The US media ”” television coverage, radio broadcasts, newspaper reports and magazine stories ”” flow northward vastly more frequently than the Canadian flow southward. The result is utterly asymmetri- cal, with Canadians receiving much more information (accurate or not) about the US than their southern neigh- bours receive about Canadian matters.
There are, to be sure, episodic exceptions, as with recent attention in the United States to Canadian drug prices and vaccine supplies. And every time national health insurance arises as an issue in the United States, caricatures of Canada’s medicare find prominent expression in the American media for a time. But the basic pattern is America’s relative igno- rance of Canada and Canadian ambivalence about the United States, particularly about social policy.
What, given the context noted above, should Canada know about recent American social policy and how the risks of the 21st century are being addressed? First, one must ask about the causes of the electoral result and, second, the claim of a mandate to change America in the direction of what President Bush calls an ”œowner- ship society.” There is much to learn here, little in my view to envy, and much to avoid.
The 2004 election was more an echo of 2000 than a dramatic triumph that will fundamentally change American politics. Understandably described by the White House as a ”œman- date” for the future, the results hardly confirm this hyperbolic interpretation. For domestic politics, the likely prospects are continued stalemate over most of the crucial tax, health and social security issues. And, far from transforming the Con- gress, the election increased Republican margins in the House and the Senate by amounts unlikely to produce a Republican policy deluge. That the Bush second term will attempt to do so is far more cer- tain than the president’s capac- ity to accomplish it.
The evidence of the echo is symbolized by the decisive role Ohio played this year, as compared with Florida’s controversial result in 2000. Had Ohio ”” with economic conditions that were predicted to help the Democratic challenger ”” sup- ported Kerry, the electoral result would have been reversed. (A change of 65,000 votes in Ohio would have made the difference, and Kerry would have won the presidency in the elec- toral college while losing the popular vote by more than three million votes, which would have been an ironic reversal of fortune of the 2000 vote). So, why did the line-up of blue and red states remain so close to that of 2000, but the turnout and the margin of popular approval favor Bush so clearly ”” winning by a full three per- centage points? The answer does not appear to be popular approval of the war, agreement with the president’s position on social security pensions or medical care, or support for his per- sistent pursuit of tax cuts that favor wealthier Americans.
In fact, the largest margins of sup- port for Republican views emerged in what have come to be known as ”œmoral issues” about the proper form of the family, the right conception of abortion policy, and, in particular, hostility to same-sex marriage. In eleven states, including ”œliberal” Oregon, citizens rejected in referenda every unorthodox chal- lenge to the legal shape of the fami- ly. And they did so in proportions much greater than these states sup- ported Bush over Kerry. In Ohio, for example, the ban on same-sex marriage won by overwhelming mar- gins: 62 percent (3.2 million) Yes votes versus 38 percent (two mil- lion) No votes. In Florida, the ”œmoral” issue on the referendum ballot was different. There the ques- tion was whether parents should be notified about abortion decisions of their minor daughters. The Yes vote was 65 percent and the No vote, 35 percent, or 4.5 million Floridians agreeing with the president’s views and 2.5 million against. Debates over these issues may have con- tributed to an increase in the proportion of self-identified conservatives from 2000, when they represented 29 percent of the electorate, to 2004, when their proportion reached 33 percent. Given that nearly 85 percent of self- identified conservatives voted for Bush (a figure mir- rored on the liberal side for Kerry) and given that Kerry was ahead of Bush among self-identified moderates, this emphasis on the shape of the family may explain part of the progression in the Bush vote compared to 2000. The militant attitudes of conser- vative groups also led to an increase in turnout in the segment of the electorate that has offset the edge that the Democrats expected to get from the influx of new voters from their own natural con- stituencies. And that may help to explain the large mobilization of new voters in crucial ”œswing” states toward the Republican incumbent.
These referenda results have little to do with the economic security issues that sharply divide the congressional parties. On social security, there is no popular mandate for individual risk- bearing accounts that anyone can find. Indeed, there is skepticism in the pub- lic. On medical care costs and Medicare reform, there is no evidence the presi- dent made gains where previously his positions were less favourably received than Kerry’s. So, on public opinion concerning domestic politics, the pic- ture is quite starkly opposed: support for ”œfamily” and ”œwedge” issues, but not an ideological swing to the right on ”œbread and butter” issues. As Democratic pollster Stanley Greenberg put it, ”œvery important things hap- pened in this election to make Bush’s victory possible, but support for the president’s approach to domestic affairs is not one of them. The American electorate wanted change, but settled for the president.”
What does that foreshadow legisla- tively over the next four years? Stalemate is, as noted above, my predic- tion, with the Republican gains in the House and the Senate not enough to transform the rules of these institutions. Nor are the slight increases in the Senate and House Republican totals likely to overwhelm the capacity of a determined Democratic congressional minority to bloc legislation they abhor with the old tool of the conservative coalition of the 1950s: the filibuster. In the Senate 60 votes are required to stop debate ”” the filibuster when used to block legislation ”” and the Republicans number 55, with four likely to vote with the Democrats on issues of fundamental change in domes- tic policy, including changes in the makeup of the Supreme Court. What is equally important, the loss of Democratic Senate seats included three Southerners who were not party stalwarts.
Canadian commentators, under- standably used to parliamentary rules and the capacity of the majority party to enforce party discipline, have too easily accepted the idea of an American electoral mandate. American political arrangements are designed to make it difficult to legislate, not easy. A deter- mined minority has many means at its disposal if it has the will to use them. In the Bush first term, the president claimed a mandate when he lacked majority support in the popular vote. In the second term, Bush will surely appeal to this popular vote margin. But it is no more legitimate than Bush’s remarkable capacity to convince him- self of his popular approval in 2000.
The fact is that this November’s election echoed the divisions of 2000, with very little separating the two sides. Where the electorate spoke most power- fully and differently ”” the issues noted above ”” it had little to do with the role of the federal government in health, education, tax and social security. An echo is, of course, a great disappoint- ment to the Democrats. But it does not constitute a breakthrough in American domestic politics. A more accurate image might be mud-wrestling for four years.
Against the backdrop of the 2004 election, let’s consider its possible impact on US social policy, and ask how relevant the US experience is to Canada.
Unemployment was central to wel- fare state developments in the 20th centu- ry and remains so today. The cost of medical care has been a central concern for a century, though with a twist. In the early years of welfare state development, the major financial consideration about medicine was not the cost of care itself, but foregone wages from work. So, sickness benefits used to mean ”œsick pay,” not insurance payments, for medical bills. Nonetheless, the common purpose of both was to deal with the risk that illness would threaten family income: in short, income protec- tion. Indeed, providing a basis of eco- nomic security unites most of the rest of traditional social insurance programs: dis- ability coverage, retirement pensions, and, in a limited sense, child allowances. Child allowances (whether direct or through tax concessions) reflect a con- cern for the adequacy of family income for a given size of family.
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There are of course a whole set of familiar service programs that are pro- tective, but not solely of income. Child abuse efforts are illustrative, but so are programs for the mentally handi- capped, those with special chronic ill- nesses or injuries, and those workers requiring retraining. The point here is simple: the scope of the traditional welfare state was and is very broad and the image of a wholly new world of risk is in my view likely to mislead. The one distinctive development of the past half-century is, to be sure, changes in patterns of marriage and divorce, both of which present serious challenges to traditional social insur- ance cash programs. Here is where American experience might well be interestingly illuminating.
In the United States, as in most indus- trial democracies, the traditional retirement, old age, disability and sur- vivors financing arrangements took for granted a model family. That family consisted of a breadwinner (male) and a female spouse, with or without chil- dren, though a family with children dominated the imagery. The concep- tion of income protection proceeded from this assumptive world. If the breadwinner were hurt at work, died prematurely or reached a retirement age, collective publicly funded (or regu- lated) transfer programs were to replace the income from work. In the US, the response to the increasing prevalence of divorce has been a marriage length test: benefits for the first spouse of a mar- riage longer than ten years. A second marriage, given that test, produces a second spousal benefit. But this adaptation cannot respond easily to what one could call serial marriages or partnerships, or short-term marriages or long-term part- nerships.
In Quebec, the civil code has apparently more easily adapted to the mixed realities of fewer marriages altogether and extended partnerships, whatever the gender of the partners. But noth- ing like this flexibility has emerged in the US, or generally elsewhere, includ- ing the rest of Canada. How to deal with same-sex marriages excites consti- tutional activism in the United States, but with prohibitionism, not welfare state adaptation, in mind. Which chil- dren of which marriage ”” or partner- ship ”” are the legally entitled ”œsurvivors” under the provisions of social security law in the US? This question, which has been both buried beneath moralistic commentary on homosexual marriage and bound by bureaucratic rules from another peri- od, is certain to occupy more of the public agenda in the decades to come. But this prediction does not itself vali- date a wholesale revision of our view of the adequacy of the conception of risks the welfare state of the twentieth century took on.
In fact, the most important lesson for Canada from recent American politics is that the traditional risks cov- ered by social security are ideologically under attack in new ways. The rhetor- ical umbrella under which the current President Bush has placed these attacks is an appeal to the idea of an ”œowner- ship society.” Brought into promi- nence at the Republican convention last summer, the ownership society is one where psychological and econom- ic security arises largely from individ- ual provision. So, home ownership is the key to residential security, though mortgage foreclosure amidst unem- ployment is not mentioned. Individ- ual savings are held out as the most reliable means of dealing with retire- ment, health expenses and unemploy- ment. The role of the national government assumed by this array of wishes is that of a large charity for the unlucky, and a source of subsidies for those who can save on their own.
It is no surprise, then, that the Bush administration has embraced health savings accounts, individual savings that are free of tax, with the added provision of catastrophic insur- ance as a guarantee against impover- ishment. Such a policy would hardly appeal to those who have backed the Romanow Royal Commission’s notion of medicare reform.
But the Bush administration’s ideas about health reform were evident, if rhetorically masked, in their policy vic- tory of 2003, the Medicare Modernization Act, signed in law on December 8.
The law, known mostly as the adding of outpatient prescription drug coverage to US Medicare, is in fact two quite different programs. The drug benefit, described by the president as a much-needed, long- awaited and modest addition the pro- gram for retirees and disabled Americans, is to Democratic oppo- nents a ”œmontrous giveaway” to pharmaceutical firms and a deceptive reform aimed at crippling Medicare’s universal benefits and unified con- stituency. The second element con- sists of substantial subsidies to private health insurers to assume the program’s risks and a whole slew of provisions, including tax-financed HASs that have nothing whatever to do with Medicare at all, but affirm the Bush administration’s aim to transform how American medical care is financed.
How this came to pass has to be as puzzling (or more) to us as it was to the American public. The fight over adding prescription drug coverage to Medicare had been going on for more than a decade, with the Democrats offering universal coverage (with costs estimated at $80 per year) and the Republicans countering with plans only for low-income recipients willing to use private health insurers. In the spring of 2003, both sides compro- mised, with the result that a universal benefit was financed at the projected level of $40 billion per year: in short, Democratic eligibility and Republican budget constraints. The result is an unstable policy mess. First, the drug benefit is more convoluted than one might imagine (a deductible of $250 per year, then a co-insurance rate of 25 percent up to $2,251 per year of drug expenses, no insurance from $2,251 to $5,000), and a 5 percent co- insurance rate after that! And second, there are provisions to encourage seniors to buy discount cards until the program comes into effect in 2006, with additional inducements to shift coverage away from Medicare itself to private insurers. There was every rea- son to believe Americans favoured adding drug coverage, but no reason to think they would like what they got. And the polls indicate that the more citizens learn about the pro- gram, the more they dislike it.
Perhaps the most surprising instance of a revival of pre-welfare-state thinking is the Bush administration’s penchant for individual investment accounts as part of America’s public retirement policy. Not presented as an add-on with private sav- ings, the president has since 2001 been keen to support using social insurance retirement contributions for individual risk-bearing investments. That entails transferring the risk of stock market investment to individual families. One would have thought that the rash of recent bankruptcies and loss of work- related pensions ”” Enron and United Airlines to name just two of the most prominent examples ”” would have prompted policy caution in this arena over the past three years.
The reality is that such proposals come from ideological conviction, not disciplined reflection about the risks ordi- nary families face. Just as most people regard their driving skills as above aver- age, so do many citizens delude them- selves into thinking the stock market must go up or that their family will some- how avoid all the risks the welfare state was designed to address. This myopia is what makes the contemporary attack on the welfare state’s foundations at least possible, if not popular.
In the end, the American welfare state ”” centered as it is on popular social security pensions, a much appre- ciated Medicare for the elderly and dis- abled, and modest provisions for unemployment and workers’ compen- sation ”” will neither wither away nor disappear in a bold victory for its ideo- logical enemies. But Canadians would be wise to watch out for the illusions now in play in the American social pol- icy arena. For the next four years, these proposals will be the center of continu- ing ideological conflict. The imbal- anced flow of commentary from south to north makes it certain that Canadians will learn about the claims. That makes it prudent to sort out the myths from the realities and, if the elec- tion of 2004 is any guide, that will be a substantial task.
