Editorial: A Big Question in Old Lyme

in Affordable Housing

Since the great tax revolt of the 1970s that helped pull Ronald Reagan into the presidency, few writings on everyday economics have reshaped the public understanding of an issue like Columbia economist Joseph Stiglitz’s biting critique “Of the 1%, by the 1%, for the 1%” in a 2011 issue of Vanity Fair.

“The upper 1 percent of Americans are now taking in nearly a quarter of the nation’s income every year. In terms of wealth rather than income, the top 1 percent control 40 percent,” warned Stiglitz.

We are the 99% would soon become a slogan for Occupy, a self-styled revolution that fell short as a political movement, but that nonetheless exerts a profound influence on the public conversation regarding taxation, education and social spending.

On the federal level, Elizabeth Warren has announced plans to forgive existing college debt, and to offer a free public college education to future students. On the state level, Democratic legislators have introduced a bill “Free 2 Start/Free 2 Finish” that is moderately means-tested to allow a family of four with an income of $72,900 to qualify for state aid to help Connecticut students start and complete their college careers at community colleges and state universities. Supporters have suggested that the bill would perhaps cost $30 million, though it’s somewhat difficult to predict exactly how many students would enroll.

To be sure, cuts to the safety net are still on the table at the state level. Governor Ned Lamont has proposed to save an estimated $25.6 million by implementing a stringent asset test for the Medicare Savings program—a cap of $7,730 for individuals and $11,600 for couples—that would cut participation by about 10% or 18,000 of the 180,000 enrolled in the state-federal program in Connecticut. As part of his “Debt Diet,” the governor appears similarly ready to impose tough cuts on state housing programs.

In Lyme and Old Lyme, School Superintendent Ian Neviaser proposed – and residents overwhelmingly approved – a universal pre-kindergarten program without means testing that makes this area a trailblazer in the state, translating a program that has been for the most part directed toward urban, poor and disadvantaged districts, to relatively (though hardly uniformly) well-to-do and rural Lyme-Old Lyme.

In meetings with the board of Hope Partnership last year, I learned that the affordable housing proposed near Exit 70 in Old Lyme was not aimed at the semi-transient families moving between short-term rentals and motels along the Post Road – a population that was apparently the original impetus for the group – but instead to “workforce” housing and families better able to weather an application process that would no doubt daunt many from the off-the-books working poor.

If ever there was a big question raised in a small place… with limited dollars, how much social spending on the state and federal level should be devoted away from the poor and to the middle class?

According to a 2018 study by the Economic Policy Institute, the wealthiest 1% of families in the United States earn at least $421,926 every year. In Connecticut, the number is $700,800.  Is that where we should draw the line, the have’s and have not’s – as Saul Alinsky once put it?

You might not know that this “big question” is at the root of the Social Security and Medicare benefits which by design are provided even to the 1% —  a seeming quirk that was carefully guarded by Democrats in the 1980s and 1990s who feared that restricting these programs to the poor would relegate them to unpopularity and later cuts. Their efforts are part of the reason why “I’m on Medicare” carries none of the stigma of “I’m on Welfare.”

Perhaps extending social spending deep into the middle class is both good policy and good politics. I am agnostic.  I would only encourage you to see it as a “big question” that has come to roost recently in Old Lyme.