When Commerce Secretary Gina Raimondo spoke at the recent Milken Institute global conference, moderator Andy Serwer of Yahoo Finance asked her about President Biden’s plan to offer free community college to any student who wants it. “I can tell you this,” Raimondo said. “I know it works. About four years ago, when I was the governor of Rhode Island, I worked with our legislature to put through a plan to provide every Rhode Island student two years tuition-free community college. Fast forward a few years, we've seen a five-fold increase in the on-time graduation rate of students of color. We've seen a tripling of the graduation rate of students.”
Wow. That's nice. But it raises a question: If states can run such a successful program, why should the federal government try to do it, as Biden insists?
These sorts of doubts are lacerating Biden’s social-welfare agenda as Congressional Democrats dump one plan after another to slim down the “Build Back Better” legislation and draft something able to pass. The Biden plan for two years of free community college—at a cost of about $10 billion per year—appears to be out of final legislation. So does Biden’s plan for paid family leave ($23 billion per year). Biden’s affordable housing plan may be cut in half, from $30 billion in new spending per year to $15 billion. Overall, Democrats are trying to cut the price tag of the grab-bag bill from $3.5 trillion over a decade to less than $2 trillion.
Liberal Democrats are so infuriated they’re threatening to take revenge by killing a major bipartisan infrastructure bill that would provide hundreds of billions of dollars for needed projects throughout the country. But a lack of federal action on liberal social priorities doesn’t mean there’s no action at all. States, counties and cities have governments too, and many of them are rolling out social programs tailored to local needs, which in many cases are better than one-size-fits-all national programs.
At least 19 states, for instance, offer free or subsidized community college, similar to the program Biden wants but now seems unlikely to get. A federal program would provide a lot more money, but that’s not automatically a good thing. One unintended consequence could be a flood of new students who strain available resources, similar to the way subsidized student loans for college may have the unintended effect of pushing up tuition. Locally run community college incentives also sometimes involve local businesses that help design curricula and boost hiring, something the federal government is unlikely to do effectively.
Another obvious area where state and local policies supersede a federal one is the minimum wage. Nearly 30 states have a minimum wage above the federal threshold of $7.25 per hour. Democrats tried and failed earlier this year to raise the federal minimum to $15, with one difficulty being a single federal standard applied to areas with sharply different living costs. The real value of the federal minimum wage has eroded over time, due to mostly Republican opposition to indexing it to inflation. But states and cities are allowed to set their own minimums, which provides some relief.
Many states and cities already offer affordable housing programs, though arguably it’s still not enough. Nine states offer some form of paid leave, though typically less generous than what Biden wants. Only two states offer thorough universal pre-school programs, with a few others offering more limited options. Costlier programs are obviously harder to fund and more scarce.
What's worth paying for?
It’s fair to argue that a patchwork of state policies still leaves millions of Americans without access to benefits some states offer but others don’t. But it’s also true that some voters don’t want to pay for benefits they feel aren’t worth the cost. Family benefits are popular, but less so when voters have to bear the cost. The fact that Democrats can’t even agree among themselves whether free college or universal preschool is worth the cost reflects the inconsistencies among states over what’s worth paying for.
People are also free to move from places with thin support structures to areas with more generous ones. It’s not easy to move if you have roots and family in a particular place. But Americans have always chased economic opportunity, and it doesn’t have to be different today. Yet there’s no rush from mostly red states with leaner benefits to bluer states that offer more. If anything, demographic flows are going the other way.
If you believe good government should only tackle problems nobody else can solve, then the menu of regional social benefits serves as a decent guide to what Biden’s priorities should be. States and cities have the capability to offer free community college and affordable housing, without federal aid. As Biden needs to toss some of his plans overboard, that’s a good place to start.
States and cities have a harder time providing universal preschool, which is costly and would require an army of new workers probably earning more than prevailing pay now. That might require a federal effort, so it’s appropriate that part of Biden’s plan seems likely to make the cut. Paid family leave might be even costlier, with few state-level benefits and what’s looking like a failure by Democrats to mount a national plan, due to the high price tag. Maybe next time.
Rick Newman is the author of four books, including "Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman. You can also send confidential tips, and click here to get Rick’s stories by email.
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