An Explosion of Misery

**Paul Krugman** (0:01)
Contrary to what Trump administration officials say, we are not experiencing explosive economic growth. We are, however, experiencing an explosion in misery. And Donald Trump deserves full credit. Hi, Paul Krugman here, slightly different location.
I want to talk about food stamps and health insurance. Two areas where things have gotten dramatically worse just in the past year and are continuing to get worse. There's going to be a lot more hungry people in America, especially hungry children, by the end of this year, and a lot more people without health insurance or with inadequate health insurance. And it all can be tied directly to legislative action or inaction on the part of the Trump administration and its allies.
Here's what has happened. So we have what everybody still calls food stamps, though it's officially Supplemental Nutrition Assistance Program. But we have a situation now where the One Big Beautiful Bill, it didn't exactly, it didn't cut the rate of benefits. What it did was to impose work requirements. You might say, well, shouldn't people who can work work? Yeah, but that's not really what's happening. What's happening is that people who can work and do work, because among those who can work, who are receiving food stamps, the vast majority do in fact work, but they must show proof of work. And that is, for many such people, a basically impossible burden. I mean, think of who is likely to be on food stamps. They may well be irregularly employed. They certainly may not have a job where the employer, where they can call up the HR department and get the necessary forms. They are also, present them with a complicated paperwork requirement. We're talking about people who are, to some extent, lack of formal education, but above all, I've never been poor. Thank God. But as everyone who's studied or been poor can tell you, the biggest issue of poverty in some sense is the cognitive burden. The constant struggle to just make ends meet is a huge burden on everything else. So you're imposing a bureaucratic hurdle, really a bureaucratic barricade in front of exactly the people least able to get across it. So of course, we're seeing a lot of people losing nutritional assistance with millions of those people, children.
Health insurance is a rather different story.
The Affordable Care Act, which made a huge positive difference to many people's lives, and in this case, some people I do know quite well, small business people and so on. But the way it was set up, there are subsidies to help you purchase insurance through the exchanges.
The subsidies are means-tested. You don't, you know, I could not get a subsidy for health insurance, nor should I. But there, so there is a, they fade out with income. But as originally set up, they faded out too quickly with rising income, and there was a cliff at 400% of the poverty line, no more subsidies. Which was clearly a bad policy and they knew it at the time. It was just that trying to scrape together enough votes to get that thing enacted was hard. So during the Biden years, the subsidy program was improved. It became somewhat more generous, but more important, it no longer had a cliff. It just gradually faded out.
Unfortunately, that was not a permanent change. It wasn't enacted into legislation for an ex- you know, for forever. There was a cutoff date.
Why? Well, two words, Joe Manchin. But in any case, the obviously Trump and Republicans in Congress refused to even contemplate extending those enhanced benefits. And so a lot of people are now faced with vastly higher cost if they want to retain their health insurance. This is, interestingly, this is not the poorest. The poorest are going to be on Medicaid, and even people a little bit above that are still going to have the full subsidy. But it's people in the middle class whose income is a little above 400% of the poverty line and suddenly have no subsidy available. That is a hardship for, again, millions of people.
So far, we know that enrollment on the exchanges where people were set up to buy health insurance has dropped by about 3 million so far. Probably a lot more to come. And probably that understates even the loss because people trying to save money because things are more expensive are in many cases stepping down to less comprehensive plans. So there's an increase in the number of uninsured too. Which means that a large number of Americans who had adequate health insurance no longer do.
How should we think about all of this? So the Trump administration has put out a report on the decline in Affordable Care Act enrollment, which is really a blood-boiling document, because it makes it, it portrays the big rise in enrollment that took place during the Biden years as a problem, because it was an increase in fraud. Now, is there fraud in the Affordable Care Act? Is there fraud in the food stamp program? Yeah, there's fraud in every program, public and private sector as well. There's fraud in the endless pasta deal at Olive Garden. There's fraud in frequent flyer schemes. There is no reason to believe that there is significant fraud, that it's a significant, important part of any of these programs. And one thing that you always want to bear in mind when we're talking about these means-tested programs is how cheap they are. The average food stamp recipient receives $187 a month in nutritional assistance.