Tag Archives: policy

How Much Do You Care?

In politics, it all comes down to salience. 

We often hear about survey research confirming that most Americans believe X or Y (usually, a relatively liberal policy), and then wonder why we can’t get lawmakers to pass X or Y. The usual cynical answer is money–the folks bankrolling the lawmakers–and there is certainly truth to that.

But the most accurate explanation is salience–or more accurately, the lack thereof. How much do the people expressing their approval of policy X or Y actually care about the issue?

I first realized the importance of the answer to that question several years ago, when a commission co-chaired by former Supreme Court Justice Shepard and former Indiana Governor Kernan concluded that Indiana needed to dispense with the 1008 township offices that had once had multiple duties, but for many years had mainly dispensed poor relief and maintained pauper cemeteries. (California, to the best of my recollection, had 59 townships at the time, reinforcing the argument that Indiana’s 1008 were excessive.) The commission noted that, to the extent that township duties still needed to be performed, the counties could easily take over those responsibilities.

Indiana’s townships were created when the ride to the county seat took half a day by horseback. The townships’ poor relief function preceded creation of federal welfare programs; not only was the need for local relief far less, several research projects showed that it cost taxpayers 1.50+ for every dollar of poor relief the townships were dispensing.

In addition, the Commission’s report noted that every one of those townships was paying a salary to the township trustee and a stipend to the five members of a township board. The League of Women Voters published a study showing that a number of Trustees paid rent on offices that were located in their own garages or other accessory buildings, and a number hired and paid family members as office personnel.

It all added up to a big waste of tax dollars, and the Indiana Chamber fielded a survey that found some 80% of Hoosier voters in favor of the change. The problem was, those voters really didn’t care very much. Reforming political subdivisions was way down on their list of pressing concerns. 

I bet you can guess who did care–the township trustees, and members of those township boards. They cared a lot, and they descended on the legislature in droves. Indiana still has 1008 townships.

So we come to the moral of my story. 

 A clear majority of American voters tell survey researchers that they want to protect abortion rights– at least to some extent. An even larger majority wants meaningful gun control and are unlikely to consider the current possible  “bipartisan agreement” sufficiently meaningful. Although we don’t have research on the number of voters appalled by what we are learning from the hearings being held by the January 6th Committee, it is likely to be a large number–even larger than the millions of votes cast for Joe Biden in 2020–and we can assume that those voters care about preserving American democracy and punishing the bad guys who tried to overturn it.

However, the critical question is: how much do they care? 

The midterms are coming up. Will the millions of Americans who don’t usually bother to cast a ballot go to the polls and send a clear and convincing message to lawmakers? Are these issues salient enough to enough Americans  to get them off their couches? Because if the GOP takes over the House or Senate or both, we can kiss goodby to both American democracy and accountability under the rule of law, let alone any glimmer of hope for imposing ethical standards on the Supreme Court, or curtailing the sale of weapons of war to teenagers.

If history is any guide, I’m not optimistic…..

 

Who Do We Subsidize?

There was a very interesting–and very odd– article in Governing recently, purportedly about means testing.The introductory argument was that our various policies about who we subsidize have resulted in rewarding those who clearly don’t need the particular benefit involved, while failing to help those who definitely do need help.

The lede gives you a hint of the author’s thesis:

When I turned 65, I instantly became eligible to ride on any D.C. Metro train for half-price. Perhaps I ought to have been grateful for this windfall, but in fact I found it annoying. I’m not rich by any means, but I can afford to pay full fare for a subway ride. I didn’t appreciate the idea of charging the taxpayers (myself among them) to give me and countless others a benefit we didn’t need. Warren Buffett can ride on the Metro for half-price if he comes to visit Washington. Stupid is the only word for it.

It isn’t simply kindness to old folks that has pissed him off; he also attacks the exemption for blind people on America’s tax returns. After all, he says, some blind people are wealthy.

It evidently hasn’t occurred to the author that these accommodations may have been intended as a way to show social respect for the elderly, or as a minor compensation for the lack of sight–that they weren’t measures intended to be part of America’s (admittedly inadequate, crazy-quilt) social safety net.

Aside from that somewhat odd introduction, the article didn’t really focus on problems with means testing, which is defined as a determination of eligibility for government assistance based upon the means (income) of the potential recipient. Instead, the article (quite properly) criticizes the way in which many fines are assessed.

A low-income single mother gets stopped for a minor traffic violation, perhaps a broken headlight or an illegal left turn. The fine is a couple of hundred dollars, which is more than she can afford. She is summoned to a court date that she can’t keep because she has to work or care for her children. A few missed court appearances, and she can be sent to jail and/or have her driver’s license suspended, possibly costing her the job she holds and needs to have.

It doesn’t seem fair, does it? A middle-class violator can walk into court, pay the fine and then walk out again. At first glance, it might seem equitable to charge everyone the same $490 for driving alone in a carpool lane (which is what California does). But it isn’t equitable.

The author proposes that, in order to be equitable, fines of this sort should be levied in an amount proportional to what the offender earns in a single day of work. Evidently, other countries do this, and the bulk of the article is an argument for following their example.

It’s a reasonable argument–but it really has nothing to do with means testing or the provision of subsidies–at least, not in the way we usually use those terms.

And that’s too bad, because I’m convinced that policymakers do need to revisit our approach to America’s tattered safety net and the whole concept of means testing, which rests on some deep-seated convictions about “deservingness.” (I once traced that obsession back to England’s 15th Century poor laws, which prohibited giving alms to “sturdy beggars.” The notion that some poor folks are deserving and others are not also has roots in a bastardized Calvinism, an analysis I will spare you…)

This approach to deservingness ignores all manner of structural/systemic inequity. It is also both massively expensive to operationalize and very frequently unfair in application. But aside from all the practical and equitable problems, America’s current approach to social welfare operates to strengthen popular divisions and harmful stereotypes.

Think about it.

I haven’t heard complaints from financially-comfortable Americans that “those people” are getting Social Security. Or that “those people” are driving on roads that I paid for with my tax dollars. I seriously doubt that any of the right-wingers braying about how national health insurance would be “socialism” are refusing to accept their Medicare. As other Western democracies have learned, a universal social benefit is not only less expensive to administer, it is far less socially divisive.

Bottom line: social safety net policy considerations shouldn’t be limited to a single-minded focus on “means,” just as there should be considerations other than uniformity of punishment when we assess fines.

And not so incidentally– policy debates would be  dramaticallyimproved by a more judicious attention to the use of language…

 

Policy And Procedure

So here’s the problem: as Paul Krugman recently noted in his weekly newsletter, Will Rogers oft-quoted line — “I am not a member of any organized political party;  I am a Democrat” —is still accurate.

Today’s Republican Party has morphed into an ideological monolith, mainly constructed around racism and a visceral rejection of the “other.”  That has led to a Democratic Party that encompasses, and must appeal to, pretty much everyone else–from the sane centrists fleeing what has become of the GOP to the moderate left to America’s version of the far left.  In order to win elections with such a coalition, Democrats have to satisfy multiple constituencies. (As Krugman also observed, there’s a positive side to this reality–“this makes it harder to sell your soul, because it’s not clear who you’re supposed to sell it to.”)

The monolithic nature of the current GOP has helped it hold power despite the fact that we have literally mountains of research attesting to the fact that the party’s priorities are widely–sometimes wildly–unpopular. But (as a political scientist friend of mine recently explained over coffee) we fail to appreciate the extent to which Republican electoral successes are also a consequence of the filibuster.

Bear with me.

Even moderately honest observers realize that GOP legislators routinely put partisan advantage over the common good of the country. What we fail to appreciate is that most Democratic lawmakers–not all, certainly, but most–truly do try to put country first. (Granted, that doesn’t mean that the policies they pursue are necessarily correct, or that their motives are always pure.) Part of putting country first is protecting Americans from some truly awful policies that Republicans want to impose.

Democrats defending the filibuster point to precisely that function. They argue that in an inevitable future, when Republicans gain control of the Senate, Democrats will need the filibuster to keep the GOP from enacting damaging policies. As my friend pointed out, that impulse–to protect the country from policies that are broadly harmful and unpopular–actually helps the GOP.

He provided two illuminating examples.

In Indiana, when the Republican Governor and legislature passed a bill that would have allowed merchants to discriminate against LGBTQ customers, the blowback was intense, and the effort ultimately failed. The law was “clarified” to avoid its obvious goal. The very public nature of the response also “educated” a lot of people who don’t follow politics–and in the more urban parts of the state, at least, did the GOP no favors.

The more recent example is the Texas anti-choice vigilante law. For a number of years, pro-choice voters have relied upon the courts to protect their right to reproductive freedom, leaving them free to vote on the basis of other issues. It remains to be seen how much the outrage over the Supreme Court’s refusal to step in will motivate voters, but at this point, it looks like Texas Republicans have handed the Democrats a powerful issue.

My friend’s point is simple: let the GOP enact their pet policies, many if not most of which research tells us are very unpopular. Don’t use the filibuster to protect the party from the consequences of its own venality. Yes, the country will initially suffer the results –but the likely negative reaction will, once again, “educate” voters, clarifying the importance of  registering their disapproval with their votes. 

Obviously, there are other structural elements of our electoral system protecting an unpopular GOP from losses it would otherwise incur–as enumerated in this story in Vox.        Gerrymandering and the Electoral College are huge hurdles, as is the growing tendency to view political party affiliation as part of one’s tribal identity, and to vote on that basis rather than on reaction to policy. But the less-recognized use of the filibuster as a mechanism to keep Republicans from enacting a toxic agenda is counterproductive.

Also, since it is a rule made by the Senate, it ought to be easier to eliminate. Someone needs to “educate” Manchin and Sinema.

 

Forgiveness

One of the problems inherent in all public policy discussions is the degree to which various aspects of our communal lives are connected–and the even greater degree to which those connections are unseen and/or under-appreciated.

As an example, a recent study from the Brookings Institution detailed the multiple ways in which student loan debt affects Americans, and illustrates the way lack of understanding of those connections distorts discussion of proposals to forgive at least some portion of it.

There is one element of student debt that is widely understood, of course–its size. In the last quarter of 2020, the Federal Reserve calculated the national student debt at $1.7 trillion, spread across 45 million borrowers. That is a monumental amount, and a monumental burden on both the borrowers and the economy.

Research suggests that forgiveness of some or all of that burden would prompt a variety of economically consequential behaviors–everything from eating out more frequently to  making large purchases that the level of debt currently doesn’t permit: houses, cars, appliances and furnishings. Respondents to one survey also cited returning to school, and saving more for emergencies.

In a study cited by Brookings,

Higher amounts of student debt forgiveness were associated with other investment behaviors like starting a business or savings for a down payment on a home, as well as a willingness to spend more on entertainment….

These results [of the study cited] show two things. First, they show how extensively student debt affects debt holders. The responses to this experiment indicate that student debt is strongly influencing decisions that can have large implications for household economic stability (e.g., emergency savings) and mobility (e.g., saving for a down payment on a home, starting a business). In addition, student debt may be altering the structure of families themselves. Roughly 7 percent of respondents reported that they would be more likely to get married (results not shown) or have children if their student debt were forgiven, indicating that this debt burden is affecting even fundamental decisions about debt holders’ life trajectories.

Second, these results show that the level of student debt forgiveness matters. In particular, setting a student debt forgiveness target too low may not lead to broad-based changes in households’ economic behaviors. However, setting a student debt forgiveness amount at a point where the average debt holder would have more than a quarter of their debt forgiven may yield large changes in savings behaviors, human capital investments (e.g., returning to school), and business starts, without leading to large changes in labor supply.

It is undisputed that even a modest amount of debt forgiveness would remove what is currently a large drag on the economy. There are, obviously, other considerations: many people who have dutifully paid off their loans object to what they see as unfairness of giving later-comers relief that was unavailable to them. Others argue that any forgiveness should prioritize low-income borrowers, and avoid “bailing out” higher income folks.

Going forward, my own preference would be to replace the current, complicated student loan environment with a program that pays for at least two years of college in return for a year or two of military or civic service (a la Americorp).

Whatever the policy approach, we need to recognize that debt of 1.7 trillion dollars constitutes an enormous drag on Amreica’s economic growth. It isn’t simply an impediment to business formation–it prevents many individuals from taking lower-paying but gratifying jobs in the nonprofit sector– and it is a significant fiscal and psychic burden to individuals. It has become unsupportable.

 

Pesky Data!

Andrew Yang’s campaign for the Presidency introduced the UBI , or Universal Basic Income, to millions of Americans unfamiliar with the concept. He put that policy debate “on the table”–following which policymakers have ignored or ridiculed it.

In previous blogs about the UBI, I have acknowledged how unlikely it is that contemporary American lawmakers would pass, or even consider, such a program. But research suggests a high probability that  millions of jobs will be lost to automation within the next 15-20 years– a probability that will present a daunting challenge that America’s current inadequate and bureaucratic social safety net is clearly unable to meet.

The right-wingers who believe that taxation is theft, and the contemporary Calvinists who believe that poverty is the result of sloth and/or moral defect, respond to UBI advocacy with horror: those sluts who are producing babies in order to get added welfare payments of a munificent 150/month would obviously become an even greater burden on the “makers.”

Pilot programs and academic research continue to crank out evidence to the contrary. Those programs continue to multiply:the latest effort is in Germany, where a Basic Income Pilot Project will start next spring and will send 122 people €1,200 ($1,422) per month for three years. No strings attached. The study, initiated by the German Institute for Economic Research and My Basic Income, a Berlin-based nonprofit, will investigate the effects of an unconditional basic income.

Recently, a new multi-agency report backed by the United States Agency for International Development reported on a project to compare the effectiveness of workforce training programs with direct cash transfers. It found a “marked increase in entrepreneurialism, well-being and productivity within the cohort that received only cash.” Other experiments have found that unrestricted cash payments went for food, medicine and education, and did not–as cynics warned– increase joblessness or substance abuse.

Our policymakers, of course, prefer ideology to pesky evidence…

There actually is substantial data showing that, contrary to Americans’ deep cultural disdain for social welfare programs, a UBI would be both efficient and socially unifying.  Universal programs escape the stigma of benefits targeted to the poor.

Aside from the ideologically-grounded and empirically dubious belief that “handouts” encourage sloth and vice, the major objection to a UBI is cost. My own proposal for finding the money to pay for such an expensive program would begin with ending fossil fuel and other subsidies that have long since outlived any usefulness they may have had, and curtailing our bloated military expenditures–all measures that are overdue in any case. But there are several other approaches.

A while back, William Gale of the Brookings Institution’s Hamilton Project made a persuasive case for coupling a UBI to a tax that would pay for it– a 10 percent Value-Added Tax (VAT).

As he pointed out, a VAT is a national consumption tax—like a retail sales tax but collected in small bits at each stage of production. It raises a lot of revenue without distorting economic choices like saving, investment, or the organizational form of businesses. And it can be easier to administer than retail sales taxes. The big problem with such a tax is that it is usually regressive–but interestingly, not when combined with a UBI.

As I explained in an earlier post,

The Tax Policy Center estimates that the VAT in conjunction with a UBI would be extremely progressive. It would increase after-tax income of the lowest-income 20 percent of households by 17 percent. The tax burden for middle-income people would be unchanged while incomes of the top 1 percent of households would fall by 5.5 percent.

It may seem counter-intuitive, but the VAT functions as a 10 percent tax on existing wealth because future consumption can be financed only with existing wealth or future wages. Unlike a tax imposed on accumulated assets, the VAT’s implicit wealth tax is very difficult to avoid or evade and does not require the valuation of assets.

Assuming that Gale’s numbers are sound, a VAT would generate more than enough money to pay for a UBI. Meanwhile, a growing body of research confirms the benefits of the UBI approach to social welfare.

But this is America, where Republican senators are climate change deniers. America, where Republican governors dismiss overwhelming evidence that mask wearing helps abate a pandemic. America, where lawmakers reject the very idea of implementing the sort of national healthcare programs that work well elsewhere.

America–where our lawmakers pay absolutely no attention to evidence contrary to their preferred beliefs.