The Ship of State Encounters Icebergs Ahead
Repeal and Replace meets the Submerged State
What will block the Trump Administration’s policy agenda: Russian interference in the 2016 election? Executive orders regarding immigration policy? Firing the FBI director? It’s a parlor game pundits and prognosticators play almost daily.
These matters might grab the headlines but the submerged state may be the ultimate barrier to enacting the Trump program.
Suzanne Mettler defined the term in her book of the same title. She writes:
The ‘submerged state’ includes a conglomeration of federal policies that function by providing [regulations,] incentives, subsidies, or payments to private organizations or households to [require,] encourage or reimburse them for conducting activities deemed to serve a public purpose.” In particular, it consists of “existing policies that lay beneath the surface of U.S. market institutions and within the federal tax system.
These government benefits are generally not delivered directly to citizens. Rather, government encourages or mandates that private actors must follow these standards. They are now part of the submerged state, invisible to most of those who benefit from these policies.
This stands in contrast to more direct state programs, such as unemployment benefits or Social Security, in which the government issues a check directly to the recipient.
What is the result of these different pathways of state aid? According Mettler, “Many Americans express disdain for government social spending, incognizant that they themselves benefit from it,” particularly if their benefits arrive via the submerged state. Furthermore, “even if they do realize that benefits they utilize emanate from government, often they fail to recognize them as ‘social programs.’ People are therefore easily seduced by calls for smaller government — while taking for granted public programs on which they themselves rely.”
Health care as an example of the submerged state
Government policy plays a central role in the U.S. health care system. Medicare and Medicaid are single-payer systems, and the Veterans Health Administration is part of the federal government, but public policies shape the private health insurance market as well. For instance, companies that provide health insurance to their employees can deduct the costs from their corporate income taxes, and state and federal regulations determine minimum levels of coverage for insurance plans.
Many Americans simply do not understand this, and thus our health care systems are a prime example of the submerged state. Americans benefit from an array of government regulations, but often do not recognize this reality. Mettler describes how Americans frequently believe the system, e.g. as in health care, has emerged as a result of private, market actions when, in fact, it is the product of complex public and private interactions.
This fed into the opposition to the Obama Administration’s health care reform efforts, with citizens haranguing their representatives about government interference in what they seemed to think was a private, competitive market system.
Republicans continued this line of attack even after the ACA was enacted. They spent seven years demonizing Obamacare as a government takeover of health care system, and thought they could ride that demon through Congress.
However, to their surprise, by the time President Trump took office, the ACA was more popular than it had ever been. For instance, here are the results of an NBC/Wall Street Journal poll from January:
The ACA created public benefits that Americans started taking for granted. They like the idea of keeping their children on the family’s health plan until age 26; they accept the notion that pre-existing conditions should not affect one’s ability to get health insurance; they increasingly recoil at the idea that a family’s ability to afford health care should affect their chances of being covered. The submerged state shaped their perceptions of what is right and necessary.
This is why the House Republicans barely passed the American Health Care Act (AHCA) in April. The AHCA reduced the minimum benefits required of private health plans; once again, allowed insurance companies to factor in pre-existing conditions when setting premiums; and started tearing at the fabric of what Americans now took as natural, settled parts of the health care systems. Americans were enraged and started calling and e-mailing their members of Congress in opposition. They were not coming to the aid of a government program; rather, they were angry that Congress was messing with what they now took for granted. The Republicans ran smack into the submerged state.
Icebergs ahead
President Trump, Speaker Ryan, and Majority Leader McConnell will find many more icebergs in their path over the month ahead, most of which are part of the submerged state in their path. Tax reform and Trump’s budget proposal both promise to affect policies that large numbers of Americans accept as normal such as college saving plans, mortgage interest deductions, and myriad programs administered by private organizations but funded by the federal government.
Russian-American intrigue may dominate the news and congressional hearings, but the submerged state is probably the strongest part of the resistance to Republican policies.
I thank Susan Riley for extensive help with this essay.
