One Safety Net Time Limit Down, More Sweeping Limits in View

June 12, 2017

Here in the District of Columbia, the Council has just made history by eliminating the time limit it had imposed on all Temporary Assistance for Needy Families participants. No state has done this, DC Fiscal Policy Institute’s Executive Director notes in an emailed budget wrap-up.

And proudly because DCFPI played a major role in developing and then advocating for a policy that will ensure very poor families some cash assistance, activities that may get them jobs so they no longer need it and child care so they can meet those activity requirement

The Council’s unanimous vote for a policy more protective than what the Mayor originally proposed is maybe the biggest high point of this budget season.

Meanwhile, we see proposed nationwide safety net program limits of a whole other sort — some retreads, but others new inventions, though champions of so-called entitlement reform have been laying the groundwork for a long time.

SNAP Benefits Limits

The law that created TANF also set a time limit on eligibility for SNAP, but only for able-bodied adults without dependents They usually can receive benefits for only three months in any given three years unless they’re working or participating in a work preparation program at least half time.

Generally speaking, however, SNAP benefits have no time limit. People with incomes low enough to qualify can receive them until their incomes break the threshold.

The Trump administration, as you may have read, would shift 25% of SNAP costs to states — $116 billion during the first 10 years. States could reduce the value of the benefits they provide, notwithstanding ample evidence that current benefits don’t cover the costs of a healthful diet.

But they would also have to adopt new restrictions. These collectively seem to save the federal government an additional $77 billion or so. They would, among other things, revise the way the Agriculture Department sets benefit levels.

As things stand now, they’re based on household size. The more members, the larger the benefits, though they’re smaller on a per person basis due to assumed economies of scale.

So, for example, a two-member household can receive as much as $357 a month, while the maximum for a four-person household is $63 less than double that.

On the flip side, a household with only one or two members will receive no less than $16 a month. Most beneficiaries in this group are elderly and/or disabled.

The Trump administration would deny them any minimum benefit. More than 1.9 million people, most of them living alone would have to spend more on food — and perhaps more importantly, lose the incentive to remain enrolled and thus readily eligible for more assistance if needed.

Returning to the household benefits scale, we find an unadjusted per person increase for each member beyond the eighth. The administration would cap benefits at the six-member rate. Larger households would have to feed about 170,000 people who’d now be factored into their benefit.

This flies in the face of several trends. One is a significant increase in multigenerational households, i.e., those with at least two adult generations. The younger of them or even both may have children in the home too.

We also have unrelated families living together — in some cases, one allowing another to double up rather than rely on their community’s homeless services, in others, more permanent arrangements based on shared rent and other household costs.

Why any policymaker should seek to discourage them when they’re obviously beneficial and cost-saving in various ways, e.g., as an alternative to nursing home care, as a source of child care so that a parent can afford to work.

The answer, one infers, is to cut SNAP costs by about $180 million a year — food insecurity and out-and-out hunger increases notwithstanding.

Disability Benefits Limits

The Trump administration also seeks to cut both Social Security programs for people with disabilities.

For Social Security Disability Insurance, its budget would have Congress establish an expert panel to identify ways to keep workers with disabilities out of the program initially and/or get them out later.

It would also test its own strategies. This, one could guess, is because the expert panel might not recommend changes as radical as those the budget counts on to save about $58.7 million during the first 10 years.

It’s nevertheless the case, as I’ve said before, that experts have proposed various return-to-work proposals that could work for SSDI beneficiaries, as well.

What’s altogether other is the benefits limit the administration proposes for Supplemental Security Income — modest monthly benefit for elderly, blind and otherwise disabled people with little, if any other cash income.

Families can receive a benefit for each of their children severely disabled enough to qualify. As with adults, the amount reflects a complex income calculation, but benefits for each child are the same.

The Trump administration would retain the full benefit for one eligible family member, but ratchet benefits down for the rest. This effectively reduces the income that supports all family members — and $9 million in federal safety net spending.

It’s not the first effort to cut SSI funding. The House Republican Study Group tried to get the program block granted in 2012. The House Budget Committee decided to instead adopt the same cost-cutting approach we find in Trump’s budget.

Both have justified it by alleged economies of scale, e.g. the fact that housing for three people doesn’t cost a third more than housing for two.

But we’ve reliable research  showing that even the maximum benefit didn’t cover the extra costs of raising a severely disabled child. Sixty-two percent of families with just one with SSI benefits suffered at least one material hardship.

To borrow from Washington Post columnist Catherine Rampell, the folks who’ve shaped Trumponomics and translated it into specifics seem to think “that it doesn’t suck enough to be poor.”

 

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A Slice of the Trump Budget’s Shrunken Pie for the Needs of Low-Income People

May 26, 2017

Well, we finally have the full version of Trump’s proposed budget for upcoming fiscal year. And we’ve all seen and/or heard news reports, op-eds, social media takes and the like.

They generally have one of two focuses — new cuts, both total and by cabinet-level department or cuts to certain specific programs.

These tacks are basically the same as when the administration released its skinny budget preview, except that we now have a shift prompted by a range of cuts to safety net programs that don’t depend on annual appropriations.

I expect to deal with some of both, but for the time being, I’ll stick with a large perspective on a subset of programs intended to serve human needs — the non-defense discretionary programs, i.e., those annually funded as Congress chooses and the President approves, as Presidents generally do.

We have a broad range of these, of course. They include, bur aren’t limited to programs that support:

  • Some healthcare services, mainly for veterans.
  • Sufficient, healthful diets for mothers and their young children, plus food for nonprofits to give low-income people and/or serve as meals.
  • Public education, mainly for low-income children and those with disabilities.
  • Other opportunities to achieve financial self-sufficiency and security.
  • Child care so that parents can participate in such programs and afford paying jobs.
  • Safe, stable housing that leaves enough income to help pay for other needs.

The Coalition on Human Needs chose 185 such programs and tracked their funding from 2010, the year before Congress passed the Budget Control Act, through the budget the federal government’s operating under now.

All but 32 had been cut, either directly or for want of adjustments to keep pace with inflation, it found. Nearly a third had lost at least 25%, even though the Obama administration and wise heads in Congress agreed to temporarily modify the spending caps the BCA imposed.

Seems that Republicans over on the Senate side aim for another bipartisan agreement to suspend or at least modify the caps, lest they have to ax spending below the too-low levels already in force.

What’s sure as dammit, as the Washington Post reports, is that they’ll not try to push through the extraordinarily harsh cuts the Trump administration proposes as-is.

Most of the new news rightly focuses on the billions of cuts to so-called mandatory spending programs — also sometimes called entitlements.

They’re mandatory because the laws that authorize them require the federal government to spend as much as necessary to cover the costs or its share of costs for the benefits of everyone eligible to receive and enrolled to get them.

Truth to tell, I’m torn between delving into these unprecedentedly sweeping proposals to gut the safety net and giving them short shrift because they’re DOA. So I’ll end here with just a few examples of the proposed NDD cuts and consequences.

The Trump budget would deny affordable housing to more than 250,000 of the country’s lowest-income individuals and families who could otherwise have vouchers to cover all but 30% of their income for rent.

At the same time, it would reportedly increase tenants’ rent responsibility to 35% of adjusted income and impose a $50 minimum on those who had no or virtually no countable income at all. Income regardless, tenants would have to pay for their household utilities, which current law folds in with rent.

Public housing, which subsidizes rents at the same rate, would lose another $18 billion — nearly 29% more than it’s lost through this fiscal year. The stock available has been steadily shrinking due to lack of funds for repairs and renovations.

For these, as well as other reasons, we have and foreseeably will have some 550,000 people who’ve become officially homeless or very soon will unless they get some one-time or temporary help with rent.

Some have been homeless for a long time or repeatedly because they need not only an affordable place to live, but services to help them with physical and/or mental disabilities.

The Trump budget, however, would cut the grants local communities receive for shelters, permanent supportive housing for the chronically homeless I’ve just cited and homelessness prevention or when that’s not possible swift support so people can leave shelters for affordable housing.

The budget would terminate the Low Income Housing Energy Assistance Program, another homelessness prevention program — and a lifesaver too, since people, especially the frail and elderly can freeze to death in their homes or die because they depend on medical equipment that uses electricity, as 26% did when the last survey was conducted.

Roughly 6.7 million families would lose the subsidies they need to keep their homes warm if Congress moves from under-funding LIHEAP to excising it from the safety net altogether.

Turning then to those job opportunities. The Trump budget would cut a range of programs that help people prepare for gainful work — adult basic education, including preparation for GED exams, career and technical education programs in high schools and colleges and the diverse programs funded by the Workforce Innovation and Opportunity Act.

The Trump budget would cut WIOA funding by 43%, as compared to 2015 funding, the Center for American Progress reports. Nearly 571,000 workers nationwide — close to half of the total then served — could be left to muddle through with only what has failed to net them a decent paying job or any at all.

Pretty ironic — or one might say hypocritical — for a President who’s made such a big deal about job opportunities and, more recently, about how he’ll change safety net programs so they no longer discourage work.

More as the dust clears or perhaps as I find angles you’re unlikely to see highlighted in the plethora of conventional and social media stories, analyses and overt budget-bashing.

Meanwhile, we do have ways we can support the defensive campaigns that will give Congressional Republican pause.

CAP and fifteen partners, including CHN have launched an initiative called Hands Off—and #HandsOff as a hashtag for those who want to tweet about programs they want protected.

They’ve got a website where we can contribute stories about how the programs have helped us and what would happen to us, our families or others we know if they’re cut. With our permission, they’ll share our stories.

Reporters, as you know, are always looking for the personal lead-in or thread.

The coalition, CAP says, will also ensure that members of Congress learn from the stories how their own constituents would be affected. How then they may vote, as it doesn’t say, but needn’t.

Some members lean toward — or out-and-out support — less federal spending, especially on so-called welfare programs. But getting reelected and preserving their majority will trump the Trump proposals handily.


A Litmus Test for Safety Net Policies

May 18, 2017

We all, I’m sure, know how people on “welfare,” i.e. receiving virtually any safety net benefit, are often bad-mouthed.

We know too that the process of gaining benefits and keeping them often subjects recipients to requirements and hassles that we’d never imposed on better-off people.

The humiliations and inconveniences deter some eligible people from applying — a feature, not a bug in some state and local systems.

But exclusion from the mainstream has other consequences, say the coauthors of another of the recently-published poverty reduction papers I mentioned the other day.
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We obviously need reforms to reflect current facts—notably, the make-up of the poverty population. But Professors Kathryn Edin, Luke Schaefer and Laura Tach argue that we need something more to make our investments as effective as possible.

They propose a “litmus test” for anti-poverty policies. These, they say, should foster a sense of inclusion. That will not only accord beneficiaries the dignity they deserve, but help motivate them to act in ways that benefit them, their communities and our society as a whole.

They use the refundable Earned Income Tax Credit as a prime example. Not perfect, as they say, because it benefits only lower-income adults with paying jobs—and, as they don’t say, does very little for those who don’t have children living with them.

But their study of how EITC recipients spent their refunds found that they spend them “remarkably responsibly,” e.g,. to pay off debt, buy things that will last and, in their view at least, contribute to upward mobility.

Edin et al. cite two reasons for behaviors generally viewed as responsible. First, the refunds hinge on paying work — a core American value. So when prospective beneficiaries seek to claim it,, they’re treated respectfully, just as better-off filers are.

The second reason is that they can choose how they’ll spend their annual cash infusion, rather than having the choice made for them, as for example, SNAP (the food stamp program) does.

This, the coauthors say, is empowering. That in itself, one infers, contributes to responsible behaviors.

Perhaps, they say, their litmus test should extend to programs that depend on donations. Some I’m familiar with not only treat their clients with respectfully, but offer programs to empower them.

Perhaps you also know some too — and some that would flunk the litmus test. I and your fellow viewers, I think, would welcome personal stories, other examples, etc. posted here as comments.


New Answers to Who Is Poor in America

May 15, 2017

Recent mail included not only the usual junk, requests for donations and bills, but a magazine from Stanford University’s Center on Poverty and Inequality. Such a surprise, since I hadn’t ordered it. And such an informative and thought-provoking issue.

It’s a series of what it terms “blueprints” for ending poverty, prefaced by two framing papers. One presents key facts that reforms should reflect, the other a litmus tests for them.

They seem to me more groundbreaking than the blueprints, fine as those are. So I’ll focus on the first—and more meaty — here. Will follow up with the second soon.

More Jobless, Childless Adults

The authors present two facts that indicate a changing structure in U.S. poverty.

They’re often ignored because they’re at the margins of our safety net programs and so would be harder to accommodate than, say, much-needed reforms in Temporary Assistance for Needy Families. (Unintentionally confirming this, none of the blueprints addressed them.)

The first is the ongoing increase in jobless poverty — more specifically, the unemployment rate for working-age adults. Many are probably “disconnected,” i.e., not looking for work and so not counted in the reported rate.

It rises during recessions, of course. But in good times, as well as bad, working-age adults who don’t have children living with them — often referred to as childless — have dropped out of the labor market.

More in Dire Poverty

So the poverty population as a whole is becoming “a more deprived and destitute class”—not just poor, but deeply so, i.e., living on incomes less than half the poverty threshold or even the extreme $2.00 a day poverty. This is the second key fact.

But our safety net programs don’t reflect it, for several reasons. One is that they’re work-based. TANF, for example, aims to increase the training that will gain participants jobs. The Earned Income Tax Credit is only for people who’ve earned money by working.

The programs are also family-based. TANF, of course, is only for parents who’ve got children living with them. The EITC favors married couples with children and sets a very low maximum benefit for the childless.

Opportunities Out of Reach

The third key fact differs from the others because it’s not directly a change in the structure of our poverty population. The authors refer to it as the “commodification of opportunity”—a fancy term for several developments that help account for poverty.

They include low and unpredictable wages for both workers in regular jobs who’ve got, at most, a high school education and the growing number in the gig economy, e.g., Uber drivers, temp agency employees.

Two other developments have to do with the composition of the poverty population. One is the growing share who are Hispanic. Another, closely related is the share who are immigrants.

They’re at high risk not only because many are undocumented and so justifiably fear complaining of wage theft. Most who are legally here don’t become eligible for major safety net benefits for their first five years.

And however long they’ve been here, a goodly number have limited job opportunities because they speak little or no English.

Still another and again related development is increasing neighborhood segregation. The authors focus here on research on children who grow up in poor neighborhoods, i.e., the potential next generation in the working-age adult poverty population.

But, in fact, living in a poor neighborhood disadvantages the current generation too —  because of few nearby decent-paying jobs, for example, public transportation to get to them, fewer working neighbors to serve as networks and such high levels of stress as to interfere with job training and searches.

Now comes genuine commodification, i.e., the need to buy what’s needed for a decent-paying job. When TANF began, a diploma from a public high school sufficed for a job that paid more than a poverty-level wage.

As we all know, you now need postsecondary education and/or training for in-demand skills. Both are often costly. So it’s sort of them that has gets and those that don’t doesn’t.

Add to these the difficulties low-income parents have in giving their children opportunities that will pay off in the long run. These include high-quality early education delivered in daycare centers.

And following that, ready access to good public schools, since that generally requires living in a well-off neighborhood, where rents are high or nonexistent because it’s a homeowner community.

The authors intersperse these facts with brief remarks on what policies could do and what some already are. But what’s clear enough is that our anti-poverty plans need some significant adjustments.


Rehashed Attacks on SSDI, New Rebuttals, Proposed Reforms

May 1, 2017

The Washington Post recently published a long article on Social Security Disability Insurance benefits in small rural communities. It set off a well-deserved backlash. But it made me wonder whether anyone had ideas for improving the program. Hence this post.

Aspersions on SSDI and Beneficiaries

The Post article focused on a former roofer who was suffering chronic pain because he’d fallen to the ground. He couldn’t find a different sort of job. So he was weighing whether to apply for SSDI.

The thrust of the article was that SSDI, is sort of ongoing unemployment insurance benefit — and how both the number of beneficiaries and costs have soared. “Filled with tropes, gimmicks and dogwhistles frequently promoted by right-wing opponents of SSDI,” said Media Matters.

I was going to take a pass — partly because I dealt with these allegations when an NPR reporter patched together factoids and personal opinions to argue that SSDI has become “a de facto welfare program” and partly because expert advocates swiftly pounced, as they had before.

The Post followed up with an editorial calling for reforms, while suggesting, as did the NPR reporter, that many SSDI recipients aren’t all that disabled. Further fodder for Congressional Republicans eager to “reform” so-called entitlements.

And not only they. Trump’s Office of Management and Budget Director made the same point. SSDI has “effectively become a long-term, permanent unemployment program.” He looks forward to talking with his boss about “ways to fix it.”

Then we got a rebuttal of the Post’s rural county analysis from two policy experts at the Center for American Progress. The Post published a correction, based on a different data set. Still wrong said the rebuttal team — essentially cherry-picking, since it finds only one out of more than 5,100 that backs up its still-broad claims.

Surely SSDI deserves a strong defense, Bad enough you can’t earn money for at least a year at any job whatever because your disability is so severe or because you’ll probably be dead.

Bad too in many cases because disabilities can be painful, hard to adjust to and costly, even with Medicare — a benefit paired with SSDI, if you live long enough.

And bad because you’re tarred with accusations of fraud The program isn’t fraud-free, but two former Social Security Administration officials put the rate at less than 1%.

Proposed Improvements

So should we insist that policymakers leave the program untouched? Experts — and not only those leaning left — say emphatically not.

The Cato Institute, for example, tackles a problem that other more moderate experts have also addressed. Under current law, SSDI recipients may try to reenter the workforce for a year, if they earn no more than $1,170 a month or a bit more than that if they’re blind.

A dollar more and they’re over a cliff because that supposedly shows they’re capable of substantial gainful activity — a hard-and-fast disqualifier for SSDI.

Needless to say, I hope, this hardly encourages recipients who can’t earn a whole lot more from trying to earn what they can, even if they might earn more over time.

So Cato proposes a benefits offset for wages earned, but also a subsidy from another funding source that would that would increase up to a higher level than the SGA. And those who opt for this dual support wouldn’t lose their SSDI eligibility.

This isn’t the only problem, however. The overly-complex, often prolonged process of gaining approval for SSDI benefits necessarily means that applicants mustn’t work for quite a long time. If they’re rejected, as many are they have a hard time finding a job they can perform.

One proposal that two former chairs of the House Ways and Means Subcommittee on Social Security chose for a book would have a new screening system that would identify applicants who could continue to work if they received swift supports, e.g., vocational rehabilitation, assistive technologies like a computer speaks what’s on the monitor.

Employers would, of course, have to retain them — or if they were too disabled for a work support solution hire those who weren’t. Another of the published papers would give them an incentive for the former by requiring them to cover the first two years of disability claims — some skin in the game, so to speak..

The screening system proposal would instead effectively insulate them from liabilities for noncompliance with the Americans with Disabilities Act if they kept their disabled workers who’d received supports on the payroll. (Feel a little queasy about this.)

Still another proposal looks instead to transitional, i.e., short-term, subsidized jobs in the private sector– rather like the highly successful use many states made of the Recovery Act’s TANF Emergency Contingency Fund.

This, however, would be for potentially work-capable beneficiaries, new applicants and those whose applications SSA rejected.

Federal funds would subsidize their pay up to $10 an hour. That would boost their income by roughly $428 more than the average benefit.

But most beneficiaries surveyed had jobs requiring few specialized skills, and only a third had any education beyond high school. So one could assume their benefits were below the average.

Employers would get not only workers they wouldn’t have pay. The program would cover their responsibilities for payroll taxes, unemployment insurance taxes and premiums for workers compensation insurance. In short, good hiring incentives here.

Employers could, at any time, hire their transitional workers, but they couldn’t keep them on as transitional for more than six months.

During that time, transitional workers would have a job counselor, presumably to resolve problems. When the time limit came, the counselor would help those who’d done well to find a regular job. If none panned out within a month, the seeker could become transitional again.

In this respect, it’s somewhat like the trial period the current SSDI program allows in that in eliminates a disincentive to trying to reenter the workforce, but it’s obviously much more supportive than merely allowing a beneficiary to find a job that pays more than the SGA.

The last piece of this proposal tackles problems with the Earned Income Tax Credit that disadvantage all workers who don’t have children living with them and those with children whose spouse also works.

These have been issues on progressive policy agendas for a long time — and the former for the hardly progressive House Speaker Ryan.

Prognosis

The return-to-work proposals could and should raise concerns among progressives, especially that triaging. But one can imagine building in safeguards against denying SSDI to applicants unable to work.

The proposals would appeal to conservative policymakers, I think. They like safety net programs that involve work and/or preparation for work — in other words, programs that aim to get beneficiaries out of them.

Conversely, they don’t like programs that provide ongoing cash assistance without some sort of work component when beneficiaries aren’t demonstrably incapable of doing anything for pay.

Doubtful that we’ll see any of these proposals taken up by this Congress. But the SSDI Trust Fund will probably run out of money toward the end of 2023.

Rather than again redirecting payroll taxes money from the retirement trust account, thus accelerating its shortfall, we might see one or more of them or some combination on the legislative agenda. And one devoutly hopes someone else in the White House.


No Proof Trump-Targeted Programs Work?

April 6, 2017

Congress set in motion a sensible response to the incessant claims from the right that anti-poverty programs don’t work.

It passed a bill that creates an expert commission to review federal program data and make recommendations for using it to support program evaluations and improvements based on results.

Now we’ve got justifications for Trump’s budget that fly in its face — specifically that certain programs that serve low-income people’s needs should cease to exist right now because we don’t have enough proof they work.

The Community Development Block Grant would end because it’s “not well targeted to the poorest populations and has not demonstrated results.”

Communities use CDBG funds to meet various needs. That’s what a flexible block grant is supposed let them do. Some unknown number support Meals on Wheels. They collectively supplied prepared meals for more than 2.4 million homebound seniors last year.

The OMB Director says that Meals on Wheels “sounds great,” but we can’t keep giving states money for “programs that don’t work.”

We do, in fact, have some research showing Meals on Wheels does—probably behind his ken. In any event, he brushes off the lost benefits by donning the mantle of fiscal responsibility.

The Trump budget would also zero-fund grants to local Community Learning Centers, which channel them to afterschool programs, especially in high-poverty, low-performing schools.

The director says more or less the same about them. “There’s no demonstrable evidence that they’re .. helping kids do better in school.” Again, we’ve got some evidence they do, though limited. Not, one infers, demonstrable enough to make the administration even pause.

The budget would also eliminate the Low Income Home Heating and Energy Assistance Program because it’s among the “lower-impact” programs and “unable to demonstrate strong performance outcomes.”

Now, we truly don’t want to fund programs that have no positive or only minimal effects. On the other hand, measuring a program’s effects by the so-called gold standard, i.e., a multi-year comparison of impacts on those who received benefits or services and a control group that didn’t, is a costly business — and still not conclusive.

One need only look at the gold-standard Head Start impact studies. The second, which tracked recent participants through the third grade found that gains didn’t last.

But when research teams at the Brookings Institution and UCLA looked instead at the long term, they found that the children fared better in significant ways

The real issue here, however, is what evidentiary standard a program has to meet for it to be considered funding-worthy.

Consider LIHEAP. It’s done less than it might for quite awhile because it’s been under-funded — and increasingly so. Its appropriations were small, even before the Budget Control Act capped spending on non-defense programs — just $5.1 billion in 2010. Less ever since.

At the same time, home heating costs have increased, as I’m sure you’ve noticed. So states, which get shares of the funding as block grant, have had to cut back on the number of low-income households whose home energy costs they subsidize and by how much.

The program nevertheless keeps the heat on for nearly 6.1 million poor households. Seventy percent are especially vulnerable, the National Energy Assistance Directors Association states, protesting what Trump intends.

Now, common sense tells us that that having heat in the winter averts new or aggravated illnesses due directly to the cold — even death, since roughly a quarter of LIHEAP households include a member who uses electrically-powered.medical equipment.

Bills paid for electricity also prevent injuries, since rooms can be lighted at night and food poisoning by keeping refrigerators running and stoves operating. (This last would be true of natural gas as well, of course.)

Whatever the energy source, the assistance LIHEAP provides can prevent homelessness and other hardships, e.g., food insecurity, because low-income households otherwise have to spend far more on home energy than the less cash-strapped—16%, as compared to 4%, according to findings when energy costs were lower.

Do we really need to find out what happened to another similar group of people who had their utilities cut off and couldn’t scrape up the money to get them turned back on?

It would be bad enough if the Trump administration were holding programs to an unreasonable standard — or merely ignorant of research-based evidence that they work.

But when it says it won’t fund programs without proof of that, it’s putting a self-serving, deceptive gloss on decisions made to cut spending on safety net and other non-defense programs.

How do we know? Well, Trump is bound and determined to fund private school vouchers. Do we have evidence of their outcomes? We do, to some extent, each focused exclusively on one state’s voucher program, plus the District of Columbia’s.

The earliest two found positive effects, e.g. higher graduation rates and, in the District, higher reading, but not math scores.

On the other hand, three of the four most recent, including one financed by a pro-voucher institute found that children in voucher programs scored lower in both reading and math than children in public schools. The fourth found no effect, as measured by graduates going on to college.

A foolish consistency isn’t always the hobgoblin of little minds. In this case, it’s minds of greater capacity engaging in inconsistency to justify their policy preferences — hoping futilely that no one will challenge their alternative facts.


Much Progress Toward Reducing Poverty, But Much More to Do

March 23, 2017

So many news reports, analyses, blog posts, etc. on how the House Republicans’ repeal-replace bill and/or Trump’s budget would harm poor people. I thought I should clear my mind and purge anger, however briefly.

So I reread a fleshed-out speech that Jason Furman, Obama’s Chairman of the White House Council of Economic Advisors—gave a few days before Trump’s inauguration.

It seems even more timely now, as we learn more about what the new administration and Republican House leaders have in mind. But it’s relevant also to what state — and in some cases, local — policymakers have done and can do.

So a brief summary of the hefty, research-based framework and then the agenda Furman lays out.

What Accounts for Poverty

“Poverty is shaped by market forces and government policies and programs,” Furman says. Market forces are basically those that determine what people earn by working, investments and profits from sales. Furman focuses solely on the first.

Government policies and programs include other pre-tax income, e.g., Social Security benefits, post-tax cash transfers like refunds from the Earned Income Tax Credit and cash-equivalent transfers like SNAP (food stamp) benefits.

Significant Progress Toward Reducing Poverty

Forget all that rhetoric about throwing trillions at the problem with no impact on poverty rates. The poverty rate, as measured by a back-looking version of the Census Bureau’s Supplemental Poverty Measure was 41% lower in 2015 than in 1967, as the War on Poverty was setting in.

But the news here is that government anti-poverty programs account for the drop. Market-income poverty has remained essentially flat — and its deep poverty rate risen by nearly 3%.

Why No Progress From Market-Income Poverty

Furman identifies three market-income factors that could lift poor workers and their families over the poverty line — productivity growth, i.e., output per worker per hour, where the income generated flows and labor force participation, i.e., the percent of the population over 16 years old that’s working or actively looking for work.

Productivity growth slowed about 20 years ago, though it recently ticked up. The big difference from the prime period the CEA identified is that most of the income flows to the top — very large salaries for top management, corporate decisions to boost stock prices by buying back shares and maximizing dividends.

So productivity growth and average worker pay, plus benefits no longer closely track. The gap has, in fact, steadily widened, as the Economic Policy Institute’s graphs show.

Meanwhile, the labor force participation rate has trended down, recently reaching a 38-year low. Many reasons for this—retirement of baby boomers, for example, more young people going to college, more people (mainly women deciding to stay home with the kids because child care costs more than they’d earn.

But that still leaves a contingent of discouraged workers — those who looked, but gave up, those who decided it was futile to try — in many cases because they’ve found or have reasons to believe that they don’t have the knowledge and/or skills employers demand.

What the participation rate means, of course, is less household income — and less pressure on employers to offer higher wages.

Where to Go From Here

Furman’s agenda for further progress follows logically from his analysis. It has four major items.

Do no harm. Evidence shows that the safety net works — not only in the short term during recessions, but in the long term because the benefits it delivers have lasting effects on children’s prospects for moving up the income scale. So we should avoid policies that make it less effective, including block grants. (Told you this was timely.)

Focus on raising market incomes. This will involve policies to boost economic growth, but also changes to shift more of the gains to lower-income workers. Measures would raising minimum wages, as 22 states, the District of Columbia and more than 60 local communities have.

Furman also names expanded unions — presumably mostly in the private sector. This would also require repealing laws in half the states that allow workers to benefit from union bargaining without joining — and laws in three that have weakened public-sector union bargaining.

For individual workers and prospective workers, we need better programs to connect workers to jobs. Also more and better formal education.

On the more side, Furman cites research showing that low-income children fared better as adults when they participated in early childhood education programs. On the better, everything from that to college and beyond.

Rounding out this part, Furman looks to unspecified steps to reduce monopsony, i.e., cases where only one employer or a few control the labor market, thus enabling them to keep wages low..

Take further steps to improve the safety net. We need, for example, to increase funding for programs that egregiously fail to serve people who are or ought to eligible, e.g., for Temporary Assistance for Needy Families, housing assistance.

We need to expand the EITC so that it’s a work incentive for childless adults, whom we still tax into poverty or deeper poverty.

And we should redesign the unemployment insurance program so that recessions automatically trigger more weeks of benefits or bigger benefits, rather than depending on what Congress decides at any given moment to do..

Think harder about people who fall through the cracks. Furman has no specific suggestions here, just notes the Edin-Shaefer findings on families living on $2 or less per day.

Worth noting, however, that the team attributes the sharp rise in such extreme poverty to the virtual end of cash assistance for non-working families when TANF replaced welfare as we knew it. Furman too zeroes in on TANF in a lengthy boxed insert.

So as we martial our defenses of safety net programs and protections for under-paid (and unpaid) workers, it’s still worth holding onto a vision and speaking out for a better day and better ways. And worth not losing sight of the policy-driven progress we’ve already made.