Biden Promises To Let Social Security’s Ship Keep Sinking

“Social Security will be insolvent by 2034. One of the trust funds for Medicare will be insolvent even sooner. When insolvency hits, both programs will be subject to mandatory benefit cuts. The exact size of the cuts will depend on payroll tax collections in that year, but the current estimate is that Social Security will be able to pay only 80 percent of promised benefits in 2034.
As I wrote last month, when Republicans such as former President Donald Trump were making similar vows not to cut Social Security benefits: Promising to do nothing amounts to promising a roughly 20 percent benefit cut in a little more than a decade. There is no getting around that fact.”

“Standing up for seniors (and everyone else who has been paying into Social Security and Medicare for their entire working lives) requires acknowledging that there is no reality in which the politicians do nothing and the entitlement programs continue functioning normally. The choice is between making changes now or accepting mandatory cuts in about a decade.”

We forgot to fix unemployment insurance yet again

“Hey, remember the pandemic economy? How could you not, right? In early 2020, millions of people lost their jobs in the blink of an eye, through no fault of their own. In the United States, their subsequent attempts to get help from the government overwhelmed unemployment offices across the country, revealing the system to be fundamentally broken. The infrastructure was bad, the benefits insufficient, and the entire scheme next to impossible to navigate.
And then, something remarkable happened: The federal government stepped in to shore things up. It added extra dollars to state unemployment benefits to make sure people could get by and pay their bills. It expanded the pool of people who were eligible for benefits, so workers such as freelancers and contractors could access them, too. While far from perfect, the extra efforts to help the unemployed made a real difference in people’s lives and played a part in the country averting a deeper and longer recession.

It felt, for a while, like maybe there would be momentum to finally address the issues in America’s unemployment system. So many people had experienced first-hand just what a disaster it was on a massive scale, from outdated administrative systems to inadequate benefits. It seemed obvious that this hybrid state-federal program that had left so much discretion up to individual states just didn’t work.

And then … America’s UI setup didn’t really get fixed, because it never does.”

“As workers stare down the barrel of another potential recession — and the layoffs that would accompany it — the problems that dogged unemployment insurance before the pandemic, many of which have persisted for decades, remain. Most of the momentum to repair the system has dissipated.

Congress and the White House allocated $2 billion to the Department of Labor in 2021 to try to help states update their unemployment systems, combat fraud, and promote equitable access to benefits. But that funding and the accompanying efforts can only go so far, and they are aimed at administrative fixes, not policy fixes. The benefit amount a worker is entitled to, how long the benefits last, and the requirements to get them largely depend on which state that worker lives in. Many states are still digging themselves out from under the last crisis. Given the narrative that has taken hold around unemployment during this most recent economic recovery — that UI kept people out of the workforce, that too much government assistance contributed to inflation — it’s not clear what kind of appetite would exist in Congress to help workers if and when another recession hits.”

“The point of unemployment insurance is to replace income for people who have lost their jobs and keep them attached to the labor market. It’s meant to be a support for the broader economy in times of economic downturn, too, and keep consumer spending going. If I lose my job and can’t pay my rent, it is a problem for me and for my landlord and for the sandwich guy I no longer buy from down the street.”

“UI is financed through state and federal payroll taxes that are supposed to cover both administrative systems and the benefits themselves. Many states have kept those taxes quite low, leaving the system chronically underfunded and resulting in luck-of-the-draw situations for workers applying for UI, depending on where they live.

The average weekly benefit paid out in regular unemployment insurance nationwide was about $385 in the 12 months ending in September. But if you look at Mississippi, for example, the average benefit is in the low $200 range, while it’s now above $600 for Washington state.

These benefits do not move with inflation, either.”

“Many UI offices are understaffed, are still dealing with pandemic-era backlogs, and are using outdated technologies to administer benefits. Or, they’ve updated their technologies and they’re intentionally designed to make the whole thing harder for workers to navigate, or the update was just bad.”

Mitt Romney’s Family Plan Isn’t Great, but It May Be Better Than the Alternatives

“According to Sen. Mitt Romney (R–Utah), America’s current welfare policies have two major flaws: They penalize recipients who get married by reducing the benefits they’re eligible for, and they don’t do enough to help couples afford to have more kids.

“There’s a growing gap between the number of children people say they want to have and the number they actually decide to have,” he said during an event yesterday at the American Enterprise Institute (AEI) in Washington, D.C. “Just to be clear here, I don’t think the goal of policy should be to try to create incentives to have people have more children than they want, but instead should find a way to bridge the gap between what people would like to add to their family and what they’re able to afford.”

Attempting to address these issues, Romney in June released the Family Security Act 2.0, a proposal to send parents monthly checks of between $250 and $700 per child, beginning midway through a pregnancy. A household would need to have earned at least $10,000 the previous year to be eligible for the full benefit, a provision meant to keep families from dropping out of the work force entirely. The program would be “paid for” by reducing or eliminating various existing income tax breaks.

It’s hard to fault efforts to resolve distortions introduced by previous federal policy, including the whoopsie-daisy of incentivizing low-income couples to remain unmarried. The idea that it’s the government’s job to help people have more kids rests on a more debatable assumption—namely, that parents should not have to shoulder the full cost of raising future members of society.

Regardless of whether you buy that “positive externalities” argument, the federal government does spend billions each year on family programs. Given that these efforts are not likely to go away (however much libertarian purists might wish otherwise), it’s worth considering whether Romney’s proposal represents at least an incremental improvement over the status quo.”

How state governments are reimagining American public housing

“Governments have successfully addressed past housing shortages through publicly developed housing in places like Vienna, Finland, and Singapore, but citing these examples often leads to glazed eyes and weary skepticism that such models could ever work in the US, with our more meager welfare systems and our strong cultural attitudes toward private homeownership. America’s 958,000 units of federal public housing have also long suffered from reputation problems both real and exaggerated, with many seen as ugly, dirty, or unsafe. Few understand that many of the woes of American-style public housing have had to do with rules Congress passed nearly 100 years ago that predictably crippled its success and popularity, rules like restricting the housing to only the very poor.”