Transcripts For CSPAN Joint Economic Hearing On Raising A Family 20240713

Raising a family has become harder and more expensive than ever before. The New York Times recently reported that based on the survey of adults between the ages of 2045 who were parents or plan to be. One in four had newer children or expected that during their life times they would have fewer children than they considered to be within the range of ideal. Economic concerns were foremost among the reasons that they either fell short or believed that in the future they would fall short of what they considered ideal. The joint economic committees social Capital Project has been documenting trends in what we refer to as our association on life as americans, that is the web of social relationships for which we as americans pursue various endeavors, our families, our communities, our friendships, our religious congregations, for example. A critical source of meaning and social capital is of course the family. In fact, it is the central set of headwaters for social connecttiveness generally. Two of the projects main policy objectives are making it more affordable to raise a family and increasing the number of children who are raised by happilymarried parents. The goals of todays hearings are to examine family affordability and policy approaches that might allow for more americans to start and to raise a family that they desire. Increasingly, family affordability has become a unifying concern among law makesers and commentators of the political right and left and everything in between. Even, we hear it even in discussions around topics that as varieds the Child Tax Credit, declining fertility rates, increasing costs of child care, housing care and paid family leave. This is a simple statement and should not be this hard to raise a family. The problem is multifaceted and complex and difficult to unravel. Economic challenges such as debt loads and increases in the costs of living make family formation and expansion difficult for Many Americans. Even many families that are economically stable have to deal with the challenges of balancing work and family. Families want the best neighborhoods and schools for their children but leads too little to spend with them, less time than they would prefer. As more families have sent two earners into the work force, employers have been slow to accommodate their desire for worklife balance. Americans who might prefer something to a single bread winner family face pricing that re bid up by dual earner households and it is hampered by their high poverty rates. The answer to how do we get here is complicated. Our first step must be to diagnose the problems facing our families. What fuels the rising costs of health care, of child care, of education and of housing. How many people are hindered in family formation and expansion by excessive student loan debt, inadequate income or poor employment prospects, to what extent declining fertility and economic barriers and other factors and the rise face increasing hardship or changing values . The next step must be to come up with a solution and best way to help families afford time to care for newborns or increase Work Flexibility that are minimally disruptive to employers and less likely than others to discourage job creation or the government on policies that unintentionally have increased to education and housing. 40 years from now. Our panelists today will discuss some of these topics and more. I look forward to their testimonies and to a productive discussion aimed at helping parents and strengthening our families. I recognize vice chair maloney. Mrs. Maloney i thank you for calling this hearing. Nothing is more important than our families and thank you for shining a spotlight on the challengeses facing American Families. There is a problem. Millions of American Families are working longer and harder, not to get ahead but just to stay in place. And over the past four decades wages have been stuck or have barely increased. The cost of child care, education, housing and other necessities for families have grown. Most families rely on two incomes just to make ends meet because thats what it takes to support an American Family today. Nearly 40 of American Adults report that they or their families have trouble paying for one basic need like food, health care, housing or utilities. The picture is no brighter when you look at specific costs. Child care, the average cost of centerbased infant care is more than one quarter of Median Household Income for a single working parent. Those who needs child care the most cant afford it or look at college education, which is almost a necessity in todays economy. I would say it is a necessity. But since the 1980s, the average cost of a fulltime undergraduate degree has tripled. A graduate leaves college with 30,000 in debt or look at housing. Whom prices are higher than ever and often out of reach and over onethird of renters spend 30 of their overall income on rent. How are families responding to stagnant wages and growing costs . By taking on debt. Consumer debt excluding mortgages is now 4 thrillion, the highest level adjusting after inflation. Folks are putting off Home Ownership which can deprive of a key source of wealth accumulation. Everyone in this room agrees that it is more expensive than ever to raise a family but we may disagree about the causes and the solutions. I welcome the robust discussion that this committee provides. The entrance of women into the work force is not a problem. Women took on careers and that has fertility rates. But women have become key drivers of our economic success. Womens earnings boost the economy by trillions of dollars and are critical to American Families. Womens share of household arnings increased from 1993 to 2016 and women could do more if we made it easier for them to enter and stay in the workplace. There are two key overwhelming popular ways to do that. Offer affordable child care and paid leave for the birth of a child and work for reasons such as illness. Take a lesson from other countries that provide these services and have significantly higher female labor force participation. Lets make sure that women are paid fairly so they have strong incentives to work. On average a women working fulltime earns 80 of her male counterpart. For black and hispanic women, it is far worse. The American Dream is slipping away or is completely out of reach. Some would say the solution is for the federal government to do nothing. I disagree it has a key role to play in helping to restore that dream. What can congress do but by lifting the minimum wage. We have asked to lift it by 2025 and its time for the senate to follow suit. We should expand programs and initiatives that we know work like the earned income tax credit and Child Tax Credit. And there is employment in single mothers. We should make the Child Tax Credit fully refundable to allow the poorest families to receive the full benefit. The tax relief act which expands the c. T. C. Would benefit 49 million children and 2. 7 million in my home state of new york. Snap not only provides a healthy nounges for americas current and future work force but an investment in our economy. Every dollar of snap generates 1. 5 in increased g. D. P. We should promote paid leave for the birth of a child. We are one of two countries that do not provide paid leave for the birth of a child. My bill which was included in the National Defense authorization act is a good start and would provide 12 weeks of paid leave to federal employees after the birth or adoption of a child or to care for a Family Member who had serious families. Raising a family is hard and rewarding work. We need to provide workers with tools to balance their work and family responsibility. I appreciate the chairmans statement on flex time and that would be helpful. Todays hearing and our witnesses testimony will shed light to make raising a family more affordable and incredibly important for the future of American Families and for the American Dream. And i yield back. Fellow at the American Enterprise institute. And mr. Stone has written on migration dynamics and regional economics and work has been covered in the New York Times, Washington Post and numerous outlets. Mr. Ryan bourn who is the chair for the public understanding at the cato institute. He was head of Public Policy at the institute of Economic Affairs and head of Economic Research at the center of policy studies in the u. K. He has written on a number of Economic Issues such as fiscal policy, minimum wages and rent news and has been on media outlets. E writes for we have dr. Jane waldfogel who is the professor for the prevention of childrens and youth problems at Columbia University school of social work and codirector of the columbia population Research Center and has written extensively on the impact of Public Policy on the wellbeing of children and families and family policies and Early Childhood care and education, poverty, social mobility and author of eight books and published numerous articles and peerreview. We have kristin rowefinkbeiner, executive director and c. E. O. Of an Organization Called moms rising. Dr. Fine biner has been involved in and received numerous awards for her work and Award Winning author of books and authors and media contributor and host of breaking through. Thank you. We thank you for joining today and we will hear from you in the order in which you were ntroduced. Mr. Stone i thank you. Its an honor to be here. Thank you for inviting me, mr. Chairman. Its an horn to testify on topics with a. M. Can families. Im here on the institute for american studies. The views are solely my own. Most of my written testimony discusses fairly concrete questions of family affordability. And contrary to popular fartives, child rearing in america is not that much more expensive than in the past. Some elements of raising a family have gotten more expensive but the evidence suggests that the problems facing families is not simply a budget crunch. According to a wide variety of surveys, the average american man wants to have 2. 3 to 2. 5 children. That has been safe for 30 years. If current birth rates hold, the average American Woman will end up having 1. 7 children. That means for every 10 women in america, there will be six missing children. This is a new problem, the fertility gap was consistently just onethird as large. So whats going on . Instead of affordability, we should be discussing achieve built. What is holding back from a family having the children they want . The answer is basically marriage. Postponed marriage can account for half of the increase in the fertility gap over the last decade in virtually 100 of the increase since 2000. Incentivizing marriage is a tricky question. Americans are justifiably uncomfortable with lectured about getting hitched by anyone especially the federal government. There are good policy options available. It must be said that the federal government already has a marriage policy. And that policy is this, working class people should not get married but middle class and wealthy people should. This is the tax code of our welfare programs in almost everything. It gives you a handy marriage bonus if you have a c. E. O. And the tax brackets are our greatest benefit with the most lopsided spousal incomes. Getting married could reduce your benefit by thousands of dollars. There is a very real tax on marriage. In my written testimony, i show how the marriage penalty comes out up to 25 of a familys income. Working class americans are getting married less. The problem here is not government benefits per se, but their eligibility rules that discourage working class people from married and neighborhoods with scattered families, overworked mothers and diminished opportunity for children and fewer kids overall. So theres a very real way to make family life more achievable. Fix the american bias against marriage and especially working class marriage. The second response to the marriage first explanation for decreased family achievement is to reconsider our policies like the Child Tax Credit. The justification for the Child Tax Credit is not that parents are inherently cash strapped but rather that parenting is inherently valuable to society. We should have have a parenting wage because it is important work and workers need to be paid. We as a society should treat parents more generously than we presently do and communicates to parents that we see parenting as worthy labor. When societies provide a parenting wage, the fertility gap shrinks. Now if there is not also a change in norms and behavior, fertility rates wont rise by a lot. For family achieveability to improve, it is vital to end the penalties for workingclass marriage and increasing our social work by providing a parental wage and whatever happens to fertility rates, the children who are born are born into greater opportunity, healthier families and engages in a valuable republic. Parenting matters. Thank you. Mr. Bourne mr. Chairman and members of the committee. Ensuring a family can be raised affordbly in america should be the policy objectives. Government policies today raise prices of basic goods and services to the disproportionate detriment of poor households and families of children. Households spend large amounts of goods and services. Items such as food, shelter, clothing and utilities and child care. The average child care allocates 57 of its spending towards shelter, transport, shelter and clothing. The average married family with Young Children allocates 5 . Any meaningful must determine the prices in these and other important product markets. In recent years, housing and child care have been pertinent issues given their high toll on family budgets. High husband housing and child care are market failures and Government Intervention and price controls or subsidies. Existing government regulations actively constrain supply. Extensive Academic Work and local land use and laws. As housing rises and drives up the market price forcing downsizing, longer commutes or higher rents and mortgage on poorer families. The state Level Staffing regulation notably the staff to child ratio and qualifications which reduce the supply of child care centers, driving up prices and reducing formal care options. One finds the same policies increasing prices. The federal program raise the price of familys grocery. Federal fuel standard regulations and auto dealership laws increase the driving. And state occupational licensing laws create barriers for entry to workers, rising the prices of serviceses. My research is looking at the price affects. I find that combined they raise prices faced by typical poor 3,000s between 830 and per year directly and that is average off the tax income for households. Nor is that list comprehensive of the regulatory areas and doesnt consider the huge indirect costs. We know for example that elevated housing care and transport costs make it financially difficult tore family to access jobs with higher wages. And one of these regulations could benefit families. Estimates suggest that relaxing the average mandated staff to child ratio by one child could reduce child care prices by 10 or more. Addressing Government Policies that drive higher prices would ampen risky rent control measures, government subsidized child care and new tax credits or expanded allowances. My main message today is therefore simple. Before proposing new or expanded federal programs we should acknowledge the important promarket reforms exist. Particularly at the state and local levels of government. These regulatory changes especially in housing and child care would not require yet more federal borrowing or come with the risks with wage and price controls. Uch an agenda may not be the final challenge that you are considering. But we should attempt to undo the harm caused by existing interventions. [no audio] ms. Waldfogel,te please continue your testimony and ms. Rowefinkbeiner, youre next. Go right ahead. Thank you for inviting me to speak with you today. Have spent the past 25 years studying policies and wellbeing in the children in poverty and those just above the poverty line. I use the burros poverty measure which allows us to gauge the antipoverty effects of the full range of policies that congress has enacted. Two sets of policies are critically important. Refundable tax credits and the Child Tax Credit, 4. 5 million out of poverty and snap and other nutritional programs move children out of poverty and these at the these policies improve child health and development. Income poverty is not the only challenge that families face. Since 2012, our group at columbia has been serving new york city residents. Poverty is the tip of the iceberg or 1. 6 million new yorkers are poor, 4. 4 million face poverty and hardship. It is not just families below the poverty line who struggle to put food on the table. What can we do to support . We need to start that the majority has a stay at home caregiver but Public Policies have not been faced with this reality. Federal child care subsidies reach 15 of lowincome families. Employer policies address some of the gap but to those average employees and some paid family leave, though those who are less likely to be covered and only 10 receive any help from employers to pay for child care. We know from a large body of research these policies matter when they have access to child care, they are having higher earnings and mothers are less likely to be depressed. Fathers are engaged to care for children. Infant mortality falls. Americans favor paid family and medical leave and they are endorsed by employers. My colleagues have been serving employers in states with these laws and small employers who are missing from such surveys. In three states with paid leave laws, rhode island, new jersey and new york, 2 3 of employers were supportive of them. The evidence on child care is clear. It improves children health, social development and especially for disadvantaged children. Too few americans can afford it. When more subsidies are available, parents are more likely to be involved, reducing poverty and promoting family stability. Universal child care could reduce poverty by a third. But we need to look what government can do where a parent is not working. Public programs like snap and private programs like food pantries but they need cash to buy their Children Clothing and food and virtually all of our peer countries have a universal child. Paid monthly or more frequently to all families with children. Our Child Tax Credit is the closest policy we have to this but the lowest income with whom it would have the biggest impact. 2 million american children, one in three live in families who earn too little to receive this Child Tax Credit of 2,000 per child that was authorized under the recent cuts and jobs act. This includes half of blacks and hispanic children and Young Children and rural children. So in summary, while there is a. M. Will evidence about the Critical Role of safety net policies like the Child Tax Credit and snap and efforts of groups like robin hood, we need to do more. We need to join our peers in quality affordable child care and universal child allowance. Ms. Rowefinkbeiner thank you and members of the joint committee. Im executive director of moms rising an organization with over a million members. We are on the front lines of this crisis facing america. Experts agree. Its getting more a more expensive to raise a family and has dire consequences. And families are suffering as a result. And good news, this crisis is solveable and the policies will boost families. What we have done, grand parents, people with all types of families and moms. The situation is urgent. At moms rising we hear from people experiencing this crisis. Stories like this. Jamie and her husband juggle three parttime jobs and couldnt afford child care. She could only work when her husband was home and they had to go without healthy food. Nobody anyone Holding Multiple Jobs should struggle to put food on the table. But too many families face stark choices. Full one in six children live in food insecure households. They are paying 30 of their income to housing. College tuition has tripled since the 1980s and student debt exceeds 1 trillion. And black and latino spend more on their income on child care. Meredith and her husband planned for years and ended up with Student Loans that made it hard to stay afloat. Their Student Loans cost as much of a car payment. 1,000 per month for child care. They live with her parents. The costs have been rising and wages have been stuck for decades. Wealth inequality is increasing and the wealth gap is persisting and most people are facing a financial crunch. On top of this, women are being pushed farther behind. People of all races are paid 80 cents on a mans dollar and earn an average of 71 cents to a dads dollar with moms of color paid even less. This is happening despite a correlation between higher profits. Families need womens wages. Women became half of the fulltime labor force and threequarters of moms are in the labor force. Further, and our consumer field economy, women and moms make threequarters of purchasinging decisions. When women arent paid fairly and dont have funds to spend, our entire economy suffers. It is long to move our policies into the 21st century so families and our economy can thrive. We need to address these charges better, fairer wages, update policies and make basic necessities more affordable and growing momentum for policy changes that solve these issues. Dozens of states and municipalities are passing paid medical leave. But to move the needle, we need changes at the federal level because when these people are having the same problems at the at the same time, we have a national structural issue. We need to move quickly to pass the family act so people can afford family he leave. The working families the paycheck and maternal mom act to address maternal the Healthy Families act. The pregnant workers fairness act and the National Domestic workers rates and we need to raise the federal wage and have it cover all workers and ensure that people have coverage, make college and housing affordable, end mass incarceration and invest in children and families cluding with snap, c. T. C. , tanf, head start and medicaid. The list is clong but important. These policies work for families and deliver significant returns for our economy. For instance, for every dollar invested in child care, there is a return on investment of up to 9. You cant find returns like that any place out. When we update our outdated policies. We win. We can and must make it more affordable to raise a family and i know we will make that happen. Thank you. I want to thank you all for your testimony today. We have votes taking place both in the house and senate. Im going to get through a few of my questions and either chairman lee will be back to take over the gavel or take a real short recess depending how long that takes. I want to start with you, miswaldfogel. Are you to reducing generational poverty . Mr. Walden yes. What are your thoughts in taking those federal policies that already exist, taking aside the need for additional policies, but better coordinating those to support the development of families and emergence from that cycle of poverty . Ms. Waldfogel its a model that is attracting progress and there undertaken in ng tulsa, oklahoma. Its a winwin. They are taking proven Early Education programs that help engage parents and matching them and tying them to employment and Training Programs for the parents. In the health care sector, sectors where theres a demand. We know from research when parents are involved, their children do better in school and do better in preskile and they will do better in preschool if their parents are employed and have stable resources. We dont do enough of thinking across programs and its a really promising model. I appreciate your comments on that. I know in new mexico we have seen groups like united way and others that have tried to pull these pieces together and act as a coordinator to support the family as a whole. And we have seen it in both liberal and conservative states, very different politically different governments have real success with this approach and its something i have introduce touchdown legislation on and continue to hope to push. One of the other challengeses that we have in my state and i think this is becoming an issue, that in new mexico, more than 10 of children are actually being raised by grandparents. And historically extended families have been an important of our culture and represent a significant asset to all of our communities. What should he we be looking at to make sure that as were supporting families and not just thinking about mothers and fathers especially in those cases where another Family Member is actually the direct Child Care Provider to those kids . The statistics that i was eciting about 60 of workers ve access to the fmla or familypaid family leave, 15 have access to that. That pertains who parents who are entitled to these programs. Grandparents are often boxed out entirely. There is a lottery to get these things in the first place but the grandparents arent in the lottery because they are ruled out. It is heartbreaking that the grandparents had to take on these children and arent able to get access to the programs. We need to clean it up. Under the fmla and the family leave laws there is variation who counts as family. But for sure we are including grandparents. And defining those pen fits to the child as long as they have a legitimate caregiver. Ms. Waldfogel absolutely and the Child Tax Credit. Many of these people are well into their retirement years and have fixed incomes and have all the incredible burdens of trying not only raise a child but after that, help them through their one it to ask you a little about if you could expand on how paid family leave impacts the presence of fathers and other caregivers in the life of the child and what impacts come from that. Ms. Rowefinkbeiner access to family medical leave is a winwinwin as one of those policies that makes you want to clap and give it a standing ovation. We see when families have access to paid family leave, that actually it is dads who take the paid family leave as well. We see those wage gaps between women and men and moms and dads go down. When we have paid a parity, 50 of children would be brought out of poverty, are gdp would be increased by 3 , and we would add more than 500 billion into our economy. Thanking sure that dads also have time with children actually helps moms rise. When we look at some of the other countries, and we did note most other countries have some form of paid family leave except the u. S. , when we look at those countries, some have found that having dads have access to paid family leave is so beneficial for the whole economy. When women have money to spend and are making the majority of our consumer purchasing decisions in an economy where 72 percent of gdp is based on consumer purchasing decisions, then we do better. These countries, some of the other ones who have had a paid family medical leave in place for longer, offer a bonus package if the dad takes leave. The family overall would get an additional amount of paid family medical leave because they found it boosts the economy so much. Other things about this winwin of this policy, and i love this policy, is we see that family medical leave in place for longer, offer a bonus package if the dad takes leave. Businesses are actually helped out with retention, productivity, and lower retraining costs. We see taxpayers are helped out. Some states like california where they have had paid family medical leave for longer than others, there is a 40 lower need for snap because people have that bridge moment of having those costs come in as Childcare Costs more than college. Having that access to paid family leave at that time when a new baby arrives is very important. Businesses are actually helped not to mention what you brought up which is the sandwich generation. We need to paid family medical leave and we need it for all workers. We need grandparents to take it as well as parents and other Family Members. Sen. Heinrich so, in comparing and places that have instituted a paid family leave, and those who have not, there have been consistent data trends showing an increase in economic productivity . Ms. Rowefinkbeiner yeah. Dr. Waldfogel did the original research. Much to my delight, when i found out about the mom wage gap, which is huge moms are making . 71 to a dads dollar. And moms of color are experiencing increased wage hits with latina moms making as low as . 46 to a mans dollar with the same resume. We can talk about those studies. I love those studies of pieces two of paper and there are two pieces of paper, one resume, the only differences of they are a mom and the other they are a nonmom. This was a study done by dr. Shelley correll, and they found they are 80 less likely to be hired if you are a mom and offered 11,000 lower starting salary. Whereas dads get a wage boost. Getting rid of this wage hit when we have so many moms being primary breadwinners is so important to our families and our economy. This was a study done by dr. Shelley correll, sen. Heinrich does that wage gap persist even after mothers return to work . Ms. Rowefinkbeiner yes. The wage gap persists forever. There are policies like the paycheck fairness act which we need to pass. One of the important things it does is you cannot use prior Salary History to create current salary earning so you have compounded wage hits you have experienced do not determine your future Salary History. One of the things dr. Waldfogel found, and she is brilliant at this, is that there is no single Silver Bullet solution. We need to paid family medical leave, affordable accessible childcare, and sick days, and access to Affordable Health care. Families are crunched. We have a modern workforce and our Public Policies are stuck in a time that may be never existed. We need to bring up our workplace protections, and then we will see those wage gaps narrow. Then we all win. Sen. Heinrich you mentioned there is no Silver Bullet. But there may be silver buckshot. Ms. Rowefinkbeiner exactly, and we can do it. In the past, we have passed packages for many things that have had many Different Solutions together. We can pass packages and independently pass these laws to make the changes that we need. It is long overdue. Sen. Heinrich i want to thank you all for your testimony. We will take a really quick recess for 10 minutes, while the chairman returns, so i can go vote as well. Thank you. Thank you for your patience. As the senate and house are in the middle of votes and im grateful to my colleagues, from both houses, and both sides of the aisle in sharing the gavel as we pivoted back and forth to cast votes, we will begin a five minute round of questions. In my case, it may be longer depending on how long it takes my colleagues to get back. It is the upside of this thing happening. It can result in a time period windfall for those of us privileged enough to be here. Mr. Stone, lets start with you. At the end of your testimony, you said our laws should communicate to the citizens that we as a society, as a country see parenting as worthy, dignified, and important. In your opinion, would our laws do a better job of communicating that message if we allowed parents to draw forward Social Security benefits immediately following the birth of a child so mothers and fathers alike could access their own savings at such a Pivotal Moment . Mr. Stone absolutely. Having our lack of any solution for leave time is a serious issue. Having the option to do it in a sound away that is not inhibiting a mothers odds of being hired, for example because when you force the bill onto a company, the observed effect is diminished hiring of mothers, which is not the outcome any of us want. If you pay for it out of public coffers, then you have difficulty with passing the bill, frankly, due to essentially, where is the money going to come from . Doing it in a way that is long run, budget neutral, is quite reasonable, and is definitely a great improvement over what we have now in terms of communicating to parents and to potential parents that society is with them on this. That you are not doing this work alone. Sen. Lee thank you. That is a conclusion i have reached and i have done a lot of work with senator joni ernst from iowa and he ivanka trump at the white house in trying to move that idea forward. The idea here is that this is money that the parents themselves are already entitled to. The question is what does the government do with that money between the time it is earned in the time they happen to retire . The belief, it is my belief and that of the individuals i have mentioned, that parents ought to have the option of deciding to tap into some of that at the time they have a child. In your testimony, you speak about the marriage penalties for low income families in our tax code and in means tested welfare programs, funded by the federal government. You conclude that the federal government has put its thumb on the scales against workingclass marriage. What are some of the most important policy fixes you can think of that would help remove the antimarriage bias in our tax code and federal welfare system . Mr. Stone in the example families i provided in my written testimony, most of the penalty they experienced comes from the earned income tax credit, as well as to some extent, from snap and from housing vouchers, or housing benefits generally. The earned income tax credit is actually procedurally a simple fix. Just double the eligibility thresholds if you get married. The problem is this costs somewhere between 100 billion and 250 billion per year. That is a large number. Sen. Lee you will not find that in the couch cushion. Mr. Stone no, you will not. To do this, there is not just a simple one fix thing. You have to say we cannot afford the current level of generosity for Single Parents if we extended in the same way for married parents. You need to do a wider fix. A simpler thing would be to simply instead of having the earned income tax credit be backdoor Family Support program , just replace it with a simpler wage subsidy, and arrived more and route more money through the Child Tax Credit or some other child specific focused benefit. It is not clear why we would say because you have children, the government will be even more determined to support your work outside the home. We have course want to support people with children but i dont think our desire to support children is necessarily contingent on them, in the case of the idc, being unmarried and working outside the home. There is no clear rationale for the structure. The itc is a big one. You see more problems in means tested programs. You will have a similar issue you cant change one or two thresholds, you have to statutorily rewrite the whole program. Sen. Lee thank you. The tax cuts and jobs act that Congress Passed in includes a 2017 doubling of the Child Tax Credit and an expansion of refundability to cover payroll Tax Liability and counteract the parent tax penalty. In your written testimony, you wrote a model family, liam and emma, trapped out of wedlock by the marriage penalties in our tax code. This couple you described are effectively trapped out of marriage as a result of that. You know the only tax provision that did not penalize them is in fact the Child Tax Credit. How could this family have fared without the Child Tax Credit expansion, and why is it important for the rest of our tax code to treat liam and emma with similar fairness . Mr. Stone so, in this case, what happened was that when emma, is the one who i have as the custodial parent before marriage, and she in claiming two childs sen. Lee i mispronounced that name. Mr. Stone i just picked the most common male and female birth names of 2018 and assigned them. She is the custodial parent for these two children. Her income, it is a modest income, think it is 16,000, but it is not enough for her to get the full refund, the full nonrefundable portion of the Child Tax Credit. Once they get married, once liam mma marry, their combined income is enough. Because they get married and itc is smaller, they can score more refundable on the other cyber because those two offset to some extent. Depending on your income, you cant always get the refund ability the nonrefundable section. In this case, the Child Tax Credit expanded in generosity when they got married because of how the nonrefundable portion interacts with the refund ability of the earned income tax credit. Sort of some thorny math. This family lost money on the e itc. Emma was getting 5,000 before. When they get married, i believe they dropped to none, or virtually no eitc benefit. At the same time, they lose some means tested benefits on the others, which is to say the tax code is saying even though you two love each other, even though you have jobs, that they are not making large amounts of money, but a couple making 36,000, 30,000, there is no reason they should not be able to have the American Dream. Maybe they would like to be raising these Children Together and would like to be married, but the tax code says sorry, if you get married, you are going to lose 10,000. Sen. Lee we shouldnt be punishing them for that. Mr. Stone right. We are punishing responsible decisions that everyone in the room things these people want this. It is not the states job to get between them and raising their Children Together. Lee thank you. Senator cassidy . Sen. Cassidy chairman lee, thank you for putting this on. We announced a bipartisan solution, thank you for nodding your head yes. You are familiar with it. To help working families. I would say it is currently the only Common Ground paid leave plan and i happy to report am additional republican and Democratic Senators are supporting and working with us on legislative text. We hope to introduce this fall. To give you background, many dual income families, the first year following the birth or adoption is the most expensive. Subsequent years, less so. Just as the kind of context for our bill, the tax cut and jobs act bill increased the Child Tax Credit from 1000 to 2000. Under our proposal, the child the family who has the newborn child gets 5,000. And they pull forward that benefit from subsequent years. Instead of 2000 in year two of life, they would get 1500, and on down until it is paid back. It does not raise taxes. Payroll taxes are inherently regressive, so we avoid that. It has no mandates on the employer or employee and it does not increase the federal deficit. In fact, i think we heard from one thing we learned is it may be beneficial to the government with one theory, which seems plausible, because when the mother remains attached to the workplace, instead of going on public assistance which has implications for the child and mother longterm, she remains attached, and the accumulation of seniority and training allows her wage base to grow from that point, as opposed to be brought back in and begin to grow. We think it has downstream benefits for mother and child. By the way, it extends to parents. Obviously, it is the mother who breastfeeds, for example. So we anticipate that women will use it more often, which is why i use the feminine. You are nodding your head affirmatively. I ask your opinion on that. Any suggestions you have to make it better . Dr. Waldfogel i have to say, im so heartened to hear discussion of two different proposals for paid family leave. I think its fabulous that this is on the agenda in a very serious way and we are having the conversation we are having about how to fund it. That really is the issue now. This is a seachange from where we have been on paid family and medical leave where it used to be, what is this thing, should we do it . It is so heartening we are in a place where we are all in agreement that new parents ought to have some period of paid leave. We are trying to figure out how to pay for it. I think this is incredibly heartening. We have heard about a proposal for people to drawdown from their Social Security or people can draw forward their Child Tax Credit. I have to say, i have concerns about those proposals because, as much as i would like to support new parents, and i think i have written about that more than anybody else over the last 25 years, so i absolutely get the importance of paid family and medical leave, but i really worry about what happens in the out years when those benefits have been drawn down. Families with two at threeyearolds also need the Child Tax Credits. It is a huge Antipoverty Program. I would hate to be robbing families later in childhood. Likewise, we used to have a big problem with elderly poverty in this country. We still havent completely tackled it. Social security is the biggest Antipoverty Program we have. I worry about families drawing down their Social Security because they want to do the best for their children. Ive been studying there are now eight states that have passed to these payroll funding medical leave laws. They are working really well. It is pennies per week to fund them. We have been talking to employers including small employers. Every state we have talked to employers, two thirds of them are supportive or very supportive of these laws. Another 10 or 15 or 20 are neutral. That means a tiny share of employers are opposed. The public is passing these things. Legislators who are passing these are bipartisan. Sen. Cassidy i will also say that if you are going to do it through a payroll tax, that will be regressive. It is easy to speak of that which is the minimalist for someone who was more affluent. But for a working family that is the socalled to minimize amount, it is actually significant. I will also say i think Research Shows the more financial burden you put on an employer to employ somebody, the more likely they will figure out how to become more productive and lay folks off. I think there is a little bit of a false narrative that there is no cost on raising payroll taxes for more generous benefits. Whereas we just raised the Child Tax Credit from 1000 to 2000, and now we will concentrate a portion at the families option on the year of the childs birth, but they will still receive more than they have been receiving. It seems to be something which , yes, they receive less at their option, and it is more than they have received as of late. Mr. Stone, you have spoken about how pronatal policie, policies do not necessarily increase with more natal, if you will, increase fertility. Suggesting that a financial decision, if they choose not to have another child, but if you have, whatever form it takes, a Child Tax Credit, would that be april natal would that be a pronatal policy . Mr. Stone the research on pro natal policymaking is when countries spend money trying to get slightly higher fertility rates, that they do get a little bit of a bump but it costs a lot of money to get that increased. However, the most costeffective means of bringing about some increase in the desire to birth rate, the number of births women are having that they intend to have, is through frontloaded benefits. Essentially, giving people 10,000 upfront does get you has a larger influence on childbearing decisions than 1000 a year for 10 years. This is more likely to have an impact on childbearing decisions. There is a question, if you are paying that up front by taking it from later down the road, im actually also some pathetic to the concern raised that the family may need that money down the road. You may frontload their decision here, and then they really need the money sen. Cassidy you spoke nicely of interaction. But we do know that typically people have their children when they are at a lower point of their earning potential. Mr. Stone because income tends to rise over their age cycle. Sen. Cassidy if you are able to maintain your attachment to the workforce with your training, et cetera, and so, i think if you will, the interaction we anticipate is yes, you are pulling forward, if you wish, but because you remain that attachment, your salary continues to rise. There is a backfill that occurs from that. Also acknowledging the first year of life is the more expensive year of life. I will take one more. We also want to point out that if we think cvo will not score ours as being expensive because the money is already out there, so what they would do in sweden would be expensive for us. It would be the occasional child who dies before age 10 at which point the money is forgiven. But it will not be something more than that. Thank you all for your time. I yield back to the chair. Im going to cast the final vote. I will be right back. Thank you, mr. Chairman. My apologies on behalf of the house members who have been over voting on legislation. Im helicoptering in without the benefit of context with what you presented. I did have an opportunity to quickly peruse your testimony. I thank you for being here. Mr. Stone, i guess i would like to start with you. Certain you have talked about this. Unfortunately, i was not here. Im fascinated by your research finding a relationship between fertility rates and homeownership. By tolerating impediment to, to homeownership and decreased homeownership, do we do factor have an implicit policy of lowering our fertility rate . Is that what you are suggesting, sir . Mr. Stone i dont know it is specifically about how homeownership, but housing costs. There are many ways to manage housing costs. It could be by buying and affordable home or renting in a neighborhood that is affordable. My concern is that housing costs are the one place where the amount that families spend on children is in fact being outpaced by price. Where there is real solid evidence of considerable Financial Stress on families in the housing sector. That is driven there is a lot of research on this, it is essentially driven by local policy, choices about landuse, choices about where people can build, the codes they billed under, these sorts of things. My concern i did not focus on that in my spoken testimony because this is largely a state and local choice. The extent to which anyone in washington can fix this is, with all due respect, somewhat limited. It is a serious problem. There is an enormous amount of Research Suggesting landuse regulation and positive shocks to the price of housing, especially in the rental market, but in the owned market as well, have a negative impact on peoples ability to achieve their family desires. This is a real concern. Is policy driven. But it is local policy. It is 50,000 municipalities that you need to convince to stop zoning against families. Sen. Heck so, the correlation, the inverse correlation is between price irrespective of whether there is an equity position or not and fertility . Mr. Stone yes. Sen. Heck i have had the privilege in the last two and a half years to chair the new Democrats Coalition housing task force. And we have come away with a couple of researchbased findings that i think are relevant to this conversation. The first of which is that in the last 15 years, the single largest increase in Household Budget has been for housing. More than health care, more than higher education. It is masked by the fact that those of us who have been in a place for a long time of the 15 years have not experienced this. Of all major household expenditures, the cost of rent or conversely, the cost to pay your mortgage has gone up faster than anything else that they are confronting. Number one. And number two, that this problem is materially contributed to by a lack of supply of housing stock, which of course compels people to stay renting which drives up occupancy rates which drives up rents which cause people to be rent burden, causes people to require public subsidy, causes more people to be homeless. But i dont think either of those observations captures the insidious effect on the homeownership side of the deferred home acquisition by millennials. And we have measured this. Its pretty clear. The 28yearolds are more likely to be living upstairs at mom and dads house more than ever before. In an era when definedbenefit Pension Plans are falling through the basement, peoples Retirement Security has been diminished. And the number one asset that the average american invests in contributing to their Retirement Security is their home. Care to respond to my diatribe . Mr. Stone yeah. So, theres a lot there. The number one asset that many families are invested in is their home. The funny thing about owning a home, if you own a share of a company, then maybe you get dividends, or maybe you get a report regularly and you will cell it later. It later. The funny thing about owning a home is your dividends come in the form of not getting rained on. And then you actually have to put extra money in it. It is this company that you own a part of but you have to buy a new roof for the company from the Company Every so often and you have to buy a new hot water heater for the company. You have to keep buying all this stuff for what is allegedly an investment. The problems is when you view the home as an investment vehicle, rather than a form of durable consumption which depreciates, it creates an incentive to lock other people out. It essentially says my home is an investment, so im going to make sure that my School District remains the type of people that people who will buy my home want their kids to go to school with. My home is an investment so im going to make sure that not too many other homes get built so if somebody wants to live here, they have to buy my home. I understand Many Americans have bought into the story that the roof over their head is also their retirement. But i would suggest that this is not always the case. Typically, your security in retirement was that you had children who would take care of you. And secondly, that this investment, this idea that the home needs to appreciate forever, it creates a toxic politic of exclusion at the neighborhood level. That ultimately the only path forward is for a large number of neighborhoods in america to realize that they are going to increase in quantity of houses, not price of houses. So homeownership may be very important for the benefit of providing for a family, but i think americans expecting that real estate, particularly personally held real estate will be their Retirement Security, will be in for a nasty shock. Sen. Heck are you suggesting that they are mutually exclusive . Mr. Stone there are times and places where real estate will appreciate and it will not have a negative impact on anyone else and it is not a result of exclusion. But there is an abundant amount of research at this point that suggests most of the really hot real estate markets in america are that way, not just because people decided that neighborhood was amazing, but because new supplies being kept off the market, generally by local regulatory choices. Whereeck but in a market demand exceeds supply mr. Stone create new supply. Be hard fort would me to exaggerate how strongly i agree with you. It is a supply issue, principally, not a demand issue. We are over 700 million Housing Units shortness country and it creates all sorts of problems to families, many of which have been set forth this year. I want to thank the panelists for being here today and for your testimony and having this conversation, and thank you to the committee for having this hearing. We arguably live in one of the most prosperous times in modern history in terms of economically, and looking at measurements, and yet many people claim having children is too expensive. Can any of you talk a little bit about what is going on there and maybe the reasons for that . Or if there is validity to that . I think we have to split the issue into thinking about how people exist with the cost they face today and changed expectations over time. I agree with much of what mr. Stone said earlier and that if you look at the broad trends of the cost of every day basic goods and necessities and bundle up that basket, actually, the affordability of raising a family on fixed expectations about what you want to provide for your children, in most areas for most families, has not gone up. But over time, peoples expectations rise about what they want to deliver for their children, you want to invest in afterschool clubs and activities. You want to provide them with the best Quality Childcare available. So the amount actually spent by families on children has risen. That is not to say that policy does not play a role in raising prices from what prices could be in a more marketfriendly economy. Much of my research has been attempting to show that in key markets, particularly in childcare and housing costs, there are big regulatory barriers that restrict the supply of new goods, such that when demand rises for child care or housing, there is not an adequate supply in response. That manifests itself in the housing market, mainly through local learning and planning laws, which have been particularly pernicious in growing metropolitan areas. In childcare, it also manifests itself through staffing regulations and occupational licensing, which, many parents and upper income demographics desire that improved quality of childcare. More interaction between staff and children and a qualified staff. When that is imposed as a policy across the state, it has the effect of raising childcare prices and forcing poor families out of the formal childcare sector and into the informal childcare sector, where we have less idea of policies. I guess to summarize the point, i agree with mr. Stone over the longterm. If you wanted exactly the same expectations for your kids 30 years ago, things have gotten more affordable. But our expectations change and that means over time, people are spending more money on their families and there are certain policies, particularly at state and local levels, which raise prices in those sectors. Is there a suggested policy change to help remedy that . Mr. Bourne the main point i made in my testimony, the two bigticket items are housing and childcare for many families with Young Children. Most of the positive regulatory changes that could be made would primarily have to occur at the state and local level. Federal government policy can push in the right direction. I may not agree with all of the current federal Subsidy Programs, but to the extent that we are going to have them, greater conditionality, making sure we are not rewarding bad policy by distributing subsidies to areas that have very restricted childcare and housing i think is something congressmen and congresswomen should be looking at. Mr. Stone, do you have any comment . Mr. Stone i agree. Doctor, do you want to comment . Dr. Waldfogel from the historical perspective, we have to remember to change we have seen in American Families and from stayathome caregiver , single breadwinner model, to the dual breadwinner model to the parent model. Most children are now growing up with all of their parents in the labor force. We have not come to terms with that in terms of what it means and the need for paid leave, the support for child care, even if it were less childcare, it is even if it were less regulated, it is expensive. And we really have not come to terms with that. Thank you. Thank you, mr. Chairman. Waldfogel, 2016, maryland ranked fifth in the country in terms of most expensive childcare. Cost an average of 14,000. Closer to d. C. , it can cost 37,000. The maryland General Assembly is working to expand prek, but it is still not universal and it will not be in the foreseeable future. Could you speak to the benefits for families . From having universal prek. And also the positive impact on higher income families . Dr. Waldfogel we now have a lot of research about universal prek and the benefits it offers for all children. The benefits are largest for the low income children, children with the least educated parents because it helps them catch up, but it is beneficial for all kids. It is a very important form of childcare for the year before school. As you indicate, universal prek will only cover the year the children start school and in some cases they are extending it to a second year, and it still leaves the infant and toddler years, which are the most expensive. Even though the federal government has a childhood Subsidy Program for low income families, it is only funded at a level that will cover subsidies for 15 of the low income families eligible. Basically, it is a lottery. If you are a low income family, there is a lottery. If you are lucky, you have the Winning Ticket and you get a child subsidy, but if not, youre out of luck. And that is unconscionable. The number i have heard on return on investments is 41. Is that reasonable . Dr. Waldfogel at least. With childcare it is all about quality. The highest quality programs are 81. The low quality, it is less than that. So we have to be careful about proposals to cut the quality and regulations, because there are two sides to that. There is the reduced cost, and also the reduced benefits or risk of putting children in substandard childcare. When we talk about the lack of affordable childcare, i wanted to talk about the populations that are more affected than others. And if you dont mind speaking, i am a cosponsor of the childcare for working families act, which will create some high Quality Childcare options all year round. What are some of the proposals we should push forward that are most needed . Thank you. First of all, thank you for being a cosponsor of the childcare care for working families act. It is an act that moms rising strongly support, as well. We hear from our members about three key areas of crisis and childcare. Affordability, which we are hearing about now. Accessibility, which 50 of parents are living in childcare deserts. No matter how much money they had, they could not find childcare. Also, there is excellence. We really need high quality , Early Learning programs to make sure every child has the opportunity to thrive. That is where we see the strongest return on investment. Importantly, we need to make investments in childcare and Early Learning starting from 02 zero to h five, until they get into kindergarten. We need to start with access to paid family medical leave and then we need to move into subsidized childcare that has a career in wage letter for childcare workers, among the lowest paid workers in our nation. Good childcare for working families act includes components that relate to all of those. And we need to have universal prek. We need to have a whole system that includes the education of our children. Parents need safe, enriching places for their children to be so that they can work. Parents are increasingly in the labor force. Children need a safe place so they can thrive and be our future leaders. And childcare workers need better pay. 21 point people were talking about a moment ago is we have had increased productivity in the united states. While productivity has gone up 70 in the past 30 years, actual wages have remained quite stagnant. Where do you see kids, ages four years or in prek, where do you see the 2, 3, combination of public and private, what does it look like . Ms. Rowefinkbeiner that is an excellent question. We have a patchwork approach, and we do not have a smooth line through childcare. We need to make policies like the childcare care for working families policy act and we need to advance policies that allow parents to be in the labor force and make fair wages, no matter where they work. Thank you very much for coming. Sorry we have been in and out with these votes. I want to push back on mr. Bourne and the overregulation of childcare. I know it is expensive. I am from virginia. I promise you every regulation we have there is a result of a tragedy. Ive been part of this for 25 years, whether it is the quality of the people we are hiring, or the quality of the facility. Every time a child dies, we end up trying to find a way to put regulations in place to make it safe for all of our kids. It seems to be a subset of this is pushing back against women in the workforce, which has caused all these problems. One of the things this committee pushes for is growth in gdp. The postworld war ii economic miracle has only been possible because of women in the workforce. This committee has pushed back in the past years. Women are a relatively smaller percentage in the workforce than they were 30 years ago. It has slowed down our Economic Growth. One of the great points of contention is the net effect of tax cut and job act. Do you see that it paid nearly enough attention to the lower income folks, the ones who were not getting married because they cannot afford to . Dr. Waldfogel we were talking earlier about the extension of the Child Tax Credit contained in that bill, and that certainly was very important for low income families. I think that was a huge plus in that bill. Are you speaking of other specific provisions . Thank you for pointing out again and again that and the tax credit. One of the things we are trying to push through the house is a significant increase in the earned income tax credit, especially for childless individuals. Dr. Waldfogel yes. It is very important. Childless individuals are young people who are the parents of tomorrow. They are about to become parents. Turns out that young adults are the poorest age group in america. Who knew . I would have thought Young Children were, but it is young adults, 18 to 24, is the poorest age group. That is the kind of group that eitc. Benefit from and of course, noncustodial fathers are another group, and we have been talking about how we want to make sure they are involved. We want to be evenhanded in our policy in supporting both moms and dads and also supporting young people who were on the path to starting families. Mr. Stone spoke about the marriage penalty. So many of our federal programs hurt you and move in the wrong direction when you get married. From a moms rising perspective, have you thought much about how you would overcome the various marriage penalty processes in our programs, beginning with the tax cut . Ms. Rowefinkbeiner one thing we hear from members again and again is people should be able to determine who is there family and how they are raising their children. We heard about grandparents who are involved in families and the sandwich generation. The important thing to do is look at the reality of families today and make sure we are supporting all families equally. That means in the tax code, Public Policy, and updating our outdated Public Policies. To match our modern labor force. The fact that women are in the labor force to stay. That companies that employers have higher returns coming in, so studies, like one at university of what happens when you have more women in leadership. We want to make sure everyone has a chance to thrive and we are in it for the long haul to make sure that happens. Mr. Stone, same question to you on the marriage penalties. Have you put together your comprehensive legislative peace . Mr. Stone pieces of it are in the works. There is an interesting case where we just heard a very large marriage penalty advanced, very wellintentioned. Eitc discriminates against childless people. But in the example that i provided in my testimony, both the individual people are getting if the childless partner was, as well. The marriage penalty would be larger. It would be another 5,000 lost when they got married. If we even things out for childless people without fixing the basic antimarriage position that is written into the e itc, we have made the problem worse. This is where we may policy for we make policy for people as they are today. But human lives are not static. They develop. The childless person today has children tomorrow. Peoples life situations change. Dont think about that. We end up creating barriers to the lives they want. I want childless people to be treated equally, which is why i mention it would be better if we did it through a flat rate subsidy that did not refer to Family Status at all, but if we are going to have this done when your taxes, i do not want it to be a situation where the childless and custodial parent get a benefit as long as they stay separate. That is not a recipe for supporting americans of any Family Status. Thank you. Andrewds like you and yang have been talking. Senator harris. Thank you, mr. Chair, and thank you for holding this hearing and thank you to the witnesses for being here. I had a question to follow up. There has been considerable discussion already about paid family leave. I wanted to followup on one aspect. I will add my voice that families should not have to make the impossible choice between earning a paycheck and spending time with a loved one in need or taking care of their own personal health care crisis. It has been great to see eight states and washington, d. C. Enact paid family leave to try to address the issue. We all know these provide partial wage replacement to workers who need to care for a newborn or newly adopted child, provide care for a Family Member in need or address their own health care crisis. There has been discussion today about the benefits of paid family leave to the Family Members. Could you address a little bit about the benefits for employers . What have we learned about how that relates, what that Ripple Effect is in the workplace . Dr. Waldfogel thank you for the question. It is an important one. We tend to stress the benefits for employees, and we do not talk enough about employers. Employers are in a tough position. They are looking for employees in a tight labor market and what is valuable for them is having and retaining talent. When a conflict is is losing the talent. When we talk with employers, what they say is even a small employers, we give people leave, anyway. We have to give them leave. Somebody is ill herself, her husband has cancer, her mother falls and breaks her hip, she has a new baby, we have to give the employee time off. With these laws, we are able to see that they get paid. And we do not have to pay them ourselves off of our payroll, so they are getting paid to the public social insurance fund. What we have also heard from employers is in the vast majority of the time, about 85 of the time, they are covering the work by assigning it to other employees or waiting for the person to come back. It is very rare to hire a replacement worker. Only 15 of employers say they had trouble covering the work while the person was out. So it is not surprising that we are hearing that two thirds of the employers we speak with, including small employers, are supportive of the laws. I have to say when we started the survey, i was nervous about what we would find. It is maybe 10 , 15 are opposed. I suppose 10 or 15 of employers would oppose any law. The fact that we are finding about 85 or 90 that are supported or neutral, i think it is impressive. Thank you for that. I think it is impressive and it is what i have been hearing in new hampshire. New hampshire is a very Small Business state, and it is what ive been hearing, as well. The other thing i wanted to touch on with you is the issue of businesses needing more skilled workers. That is probably the number one thing i hear from businesses across new hampshire. What we also hear is that too often individuals who are underemployed or who have fallen out of the labor market entirely are not able to get the training they need for the jobs that are open, but also that they face barriers such as transportation a childcare. Either to get the training, they are having trouble finding childcare or transportation to it. Ive introduce something, a bipartisan bill, called the gateway to careers act would strengthen pathway opportunities and help individuals navigate barriers that keep people from participating or staying in the workforce. Through your advocacy, do you think we should be doing more to help families access to services they may already be eligible for and strengthen Training Programs to be responsive to issues individuals face outside the workplace . Dr. Waldfogel the work i have done on how families spend their eitc suggests that families are facing high transportation and Childcare Costs. We always thought it would be used for durable goods or furniture for the family or getting into a better apartment. Unfortunately, families seem to be using it to pay for work expenses or to pay back bills, primarily transportation and childcare. So anything you can do on that front would be fabulous. Ms. Rowefinkbeiner i agree. Thank you for putting forward the bill. We see three things that need to happen. We need better, fairer wages, we need to update the outdated policies, and policies need to be comprehensive. So when we talk about things like paid family medical leave, we need it to mirror the fmla in terms of not only covering new parents, but also covering peoples own significant serious illness and a serious illness of a close Family Member. That is the majority of the time that the unpaid fmla is used. We want to make sure that is happening. As we update these outdated policies, we do not want to rob one program to pay another. Families are already stretched. One thing that has not come up so far is wealth inequality. I mentioned earlier we have a 70 increase in productivity, but over the last 30 years, wages have remained stagnant. That puts us in a situation that an m. I. T. Economist has said is leading us toward a third World Economic model, which will implode the middle class. We have to make basic necessities, including transportation, more affordable for families. We do not have a single solution for what is happening right now, but america is in crisis. Families want to do what is best for their children. I am so thankful you are looking at this solution from multiple angles. Thank you. Thank you, mr. Chair, for letting us go over. Mr. Chair i am happy to do it. I am grateful to have the participation from both ends of the capital. We are going to do a second round, which we will start now. In her testimony, you explained some childcare regulations. In your testimony, you explained some childcare regulations that affect the childcare industry tend to reduce the supply of childcare centers, especially in poor areas, driving up prices and reducing the rate of formal care options for families. For example, a new law in washington, d. C. , when it becomes fully implemented over the next few years, will start to require childcare providers to earn degrees. In some cases, a twoyear post secondary degree or in some cases a Fouryear College degree or a certification. This will inevitably impact supply, which will impact price. Expensive marketbased childcare appears to be widely recognized financial burden for working families. In a New York Times survey says 64 of the responses said they expected to have fewer children. It said they expected to have fewer children than they considered ideal, at least in part because they believed childcare was too expensive. To what extent do you think childcare regulations are responsible for higher Childcare Costs . Bourne it is difficult to disentangle the demands. There are good reasons to think childcare, even in a market economy, might be more expensive over time as people get richer. Formal childcare is laborintensive and it is difficult to automate in the same way you can the you canada manufacturing sector. For those big structural reasons, there has been an increase in demand for formal childcare overtime. And people tend to value their kids highly. They want a safe, loving environment for them. And for upper income families, they want very high Quality Childcare. If you look across the areas of the highest cost of childcare, it tends to be the richest states, which feeds into the ideas that price is strongly incomeelastic. There is a lot of economic evidence that regulations of childcare workers, in particular the number of Staff Required per number of children and occupational licensing requirements in terms of qualification requirements to do raise costs substantially. There has been some Academic Work that suggests if you relax by oness all age groups child, it would reduce Childcare Costs by 10 . But these regulations are regressive. The best study was done by some economists who looked at comprehensive data. They found that staff to child ratio regulation in particular had no affect and improving quality. But it did do, by driving up the cost of care, was in poor areas, it led to closure of formal centers. The lack of availability led to greater use of home daycare. So there is a big, massive tradeoff, which is measures people say improve quality may well improve interaction time in the formal centers that still exist within a state. But if it means many poor families are unable to access formal childcare, we really have no idea what happens in terms of the quality of informal care for people that is offered. So i would say there is a big tradeoff. Upper income parents desire these sorts of regulations anyway. But what the regulations do is strip away the choice for lower income families to select a different price regulation price quality bundle. That can have severely regressive effects in terms of access for those people to the labor market. Sen. Lee other than childcare reforms, what are your other favorite policy reforms you think could significantly lower the cost of living for low income families . Mr. Bourne the biggest expenditure is housing costs. As i outlined, i think a key driver of housing costs in many major cities, particularly where Economic Opportunities are greatest, tend to be associated with overly restrictive zoning and Land Use Planning laws. I do not think we can really get into the issue without tackling that problem. Evidently, that is primarily a state and local issue. That said, the federal government through schemes such as the Community Element block grant dishes at federal subsidies to states and localities and to the extent that those come without conditions about the supply environment, they can subsidize bad policy. I know hud has been looking at this, trying to work out a way of making sure states and localities have and i also think with this rise of rent control as a potential solution being advocated, i would like to see federal policy that precludes those sorts of policies that would damage supplies further. One has to be careful about how far to intrude. Create one sort of problems through the federal government as a response locally and try to treat that remedy with another federal remedy. My time for this round has expired. Mr. Heck . Mr. Heck thank you, mr. Chairman. Thank you for getting to the nobodyins. Better wages and especially in the light of context of stagnant wages and this is the underlying issues that we are dealing with. For purposes of discussion, im thinking about three different buckets in which the federal government could take action to effect peoples standard of living. Im going to ask you each what is the thing we ought to do. The first is a predicate. We can either through the appropriation through the tax expenditure side impact those things that are affecting people, skile rocketing costs or just cash in the pockets through loehrl pockets through e. T. C. , bucket one. Bucket two, we could adopt those policies which lead to higher wages for at least some, increase minimum wage. Federal level hasnt been increased in 10 years. Nowhere to the purchasing power. And rights of workers. Bucket three is the overall wages. Spirited disclosure, this is my favorite. I believe the Federal Reserve has pursued a policy that suppressed wage growth. In the last 10 years there have only been two months in which our labor supply increased by less than the replacement number in that month, two months in 10 years. So we really havent had an approach to the cost of money which truly gets us to full employment. Indeed, they keep changing their definition of what full employment is. And they keep lowering. As a consequence, we have had very slow wage growth. So im reminded that what one of the chairs of the Federal Reserve said and this is my favorite, recoveries dont usually die of Natural Causes but murdered by the fed. So we have these three buckets and im interested in knowing from each of you quickly, beginning with you, if i may. By the way, as an organization with a million members head quartered in my state, we are proud of the work you do. If we were to do one thing, one thing to make a difference, what would it be . Thats a tough question. Peck peck we have to answer tough questions all the time. Im sharing the pain. These programs go up when we have increased learning. So we are looking going up. If you have increased quality and we have to make sure we are not cutting care and moving forward wages. If i had to pick one im all three. Im going to see how the doctor handles this one. Im going to say all three as well, we should have employment and minimum wages and bargaining rights. If you can choose one, which one do you think would make the biggest difference . Im going to come back to the universal child allowance. Children should not be suffering because of this. And people whose work hours change from worktoweek. How do you pay for housing, how do you pay for child care when your earnings are changing from weektoweek. You are worrying about money all the time. What impact dotion it have on your family life and children. Children should be protected from these forces while we try to sort this all out. The Child Tax Credit is a Fabulous Program in moving towards that goal and i think anything you can do to expand this and make it more, reach more families and become more universal. When we are thinking about helping families with kids and making it more affordable. But im glad you are talking about moving the big challenges. There is actually a full approach which is to look at why are the costs of goods and services so expensive and try to expand the supply side to make goods inherently cheaper to negate the demand in borrowing for price and wage controls. And a lot of the programs we mentioned no doubt could alleviate poverty. But given the fiscal conditions and the limits what you can achieve through a tight labor market and the risks associated with wage and price controls, i think the principal of first do know harm, examine the policies that raise the cost of living of families and poor families in particular is a fruitful approach. Im going to take the question in the spirit it was given and propose one legislative fix in the spirit of fix it will be a legislative fix with riders attached. We should take the ietc and replace that it should not discriminate. It currently has a benefit for children. We dont want to lose it and roll it back in the Child Tax Credit which we should expand and should pay for it with non g. D. P. There you go. Thank you for your indulgence. Follow up on a couple of questions. Mr. Stone, in your testimony, you submitted to the committee, you state that the declining marriage rate accounts for at least half of the increase of fertility gap and for basically all of the increases since 2000, is that correct . Thats correct. Can you explain to us what you believe marriage rates are declining and what, if anything, can be done im hesitating to find the right words here. I dont want to live in a country where we have a nanny state that is going to incentivize people that tells them when to get married or where the government is artificially an environment when the government tells you when when to get married . This idea of the fertility gap and it is rising and not because people want more and more kids and fertility is falling. When we look at how fertility is falling, in fact, for a woman who gets married at a given age, her odds of how many children are pretty similar to what they were 30 years ago. This is about marriage choices. Marriage is being postponed and for working class people it is happening less frequently. People get married at the same rate. This has been presented as a class problem, oh, there is a cultural shift. Maybe. But it could be that people without a College Degree are more likely exposed to marriage penalties. Which brings us to this worry about this nanny state or maybe more like a grandma state lecturing about getting married. So nobody wants this. Nobody is saying, i wish, i wish that the i. R. S. Would give me advice whether to marry my girl friend. Luckily, this isnt what we need. If the problem is the marriage penalty, what we need is the first step, the most popular thing in congress to create a commission of some kind to study where there are marriage penalties and identify where these things occur and can we come up with some agreeable way to come up with a rule so we are still spending the same amount of money on the same income range of people but doing it in away that doesnt discourage family formation. Its not lecturing anyone getting married. Its saying we made a mistake on how we wrote these programs. They werent designed in a modern world where men and women were working. After we have done that kind of study, we need a rule that is whenever we score a bill, we need that scoring process to include. Does this include a marriage penalty. If it does, it would be nice to know. It is not a hard thing to calculate. In the sweet spot where it really makes a difference, could have an impact on behavior. Doctor, i wanted to follow up on something you mentioned. You coauthored a 2016 study in which you show that the motherhood wage gap has declined and even in some cases, its been replaced with something of a wage premium for some group of moms, am i stating thaling correctly . In light of that, can you discuss that finding and tell us, in light of that evidence is it that the crisis is necessarily driven by a mootshood wage gap or other factors at play here . I have been working on the mother heap hood wage gap and part of my phd. When you were 12. And i appreciate that. And what i learned when doing that work, women who didnt have the opportunity to take a paid protected Maternity Leave were faced with an impossible choice, they have a child, they didnt have enough to stay home so they would leave their job and come back a few years later and start at the bottom of the labor market and took 15 years to get back on the par with the women who were in similar jobs with similar training. That is that penalty and lasted for a long time. We live in a world where we dont have paid family leave and child care, we have it in a lot more than we used to back in those days. So it doesnt surprise me that the mother heap deld hood wage penalty. But not as bad as it used to be. Other things happened in the labor market and education system. Women are getting more education than men. There is a group that we are worried about in the labor market. Less educated men who are taking a hit. Things have changed over time. Thats helpful. I want to follow up on what the doctor said and it is not gone. So when we are talking about the wage gap being lowered, the 2018 numbers that were built on u. S. Census data, moms are making 70 cents and women of all races for fulltime yearround work. The motherhood gap is very significant and very, very strong. In looking what is happening at shutions in our country, we need to address the fact that it is married, unmarried or type of family that you are living that are is impacting, it is wage discrimination and that is come bounded by structural and moms of color are experiencing it most. And single moms according to 2018 data, single moms are earning 55 cents to a single dad. When we are looking at solutions, we need to look at the paycheck fairness act and how to raise all families and according to Johns Hopkins university, 57 of last year were to unmarried women and acknowledge that 82 of women in america have children by the time they are 44 years old. These solutions are not going to work. We need to make sure that the solutions we create, we create for all of working america and not just some and dont replicate the structural inequities of the past. Did you have your hand up . Were you wanting to respond . Go ahead. Its surprising this motherhood is not gone. There is Extensive Research with really rigorous data from European Countries that there is an mother zhrep hood penalty and no correlation for child bearing or motherhood and driven by local social norms. But it suggests that our policies that we want to advance for families, we should justify them in terms of what we pleeven is right for families and good for families and not convince ourselves by giving paid leaf, we shouldnt convince ourselves that we are going to eliminate a pay gap than anything we are talking about. That these differentials are much harder to correct than what we convince ourselves of in political discussion its. They may be worth doing because of kids and because they are a good communication. They dont actually address the pay gap. That is a problem that actually almost no country has found a solution to. We should keep in mind what is possible to achieve and make sure we dont make promises that are going to end up living of people we are going to help. I wanted to come back to the marriage question because it is an important one. My colleague who is at princeton, has done the best research why lowincome families are postponing families are postponing marriage. They need to attain certain footholds and have a decent job. And cant get married until they are stable on their feet. I have been thinking about the conversation we have been this afternoon about high housing costs and couples living in their parents house and uncertainty in work schedule. Im all in favor of getting marriage penalties. We should think about the other things that are holding young people back from marriage. And student debt we have been talking about. Its no wonder that young people are delaying getting married given they dont have a stable place to live and in debt from schools and dont have a stable jobs and we wouldnt want them to be rushing into marriage. Those bucket things is complex to improve issues for young adults. This is to improve prospects because they are the parents of the future. I will like you speak. I guess this is the one area [indiscernible] im skeptical of the idea that tax policy affects this type of behavior to a significant degree and changing tax policy would lead to any significant change infer tilt rates and i say that for two main reasons. If you look across countries that have different tax and benefit systems, there has been a similar secular decline infer tilt rates. As the mean age of first marriage for women is much lower in the u. S. Than in countries such as france and sweden. They have higher fertility rates. This is one area where i kind of question how much of an effect of tax and benefit policy really has on this issue. Thats an interesting point. Mr. Heck. Mr. Heck one last question, mr. Stone. Our fertility rate, last i checked is just under 1. 8. Nowhere near replacement and doesnt take into imdepration or the population growth but we have been below replacement and when i think about the programs like Social Security which depend on the number of active workers in the work force that supports those who are retired begs the question what are some of the longterm consequences of having a fertility rate depending on immigration policy and i suspect there are serious implications. Would you care to enumerate some of those. It would be easier to he enumerate if if c. B. O. , the Social Security trustees if they bothered to do a simulation that simulated a fertility below 1. 8. If they consider as possible in a most update on the soundness of the rate. We are 1. 72 and falling. We are beyond of what our longterm planners. You see the same thing. They overestimated the first year of their forecast and overestimated population growth by 550,000 people in one year. That was a big miss. We should probably force our forecasting agencies to make sure that at first year of numbers is correct. Let alone you try to get a lit more accurate on the outyears. Given we are not prepared for the demographic shift, there will be significant consequences. There is an article in the wall street jourm a few weeks ago about lots of Older Americans who bought sizeable houses and were planning to sell them for their retirement and no one is buying them right now. Well let me interrupt and sbrl sect something that is important. A lot of those people want to downsizeand there isnt a sufficient stock that they could get into. They cant sell the home because there isnt a market to buy it. And second of all, the house they want to move into doesnt exist. We think about Social Security as an intergenerational traffer. You own stock in a company that owns hot dogs. And to have any value when you sell it. We get a free pass pause our stock market to a variety of channels open to Foreign Investments and get this nice thing where we buy goods and invest it into our securities which is a nice handouts for americans but on some level there needs to be a next generation to consume those things to go protect the value of the asset. The lowterm consequence is permanent slowdown in economic nand. We heard about wage stagnation and productivity is growing but wages havent. It has been better than it has been in japan, which one reason for that, is there no population deproth. There is no plausible story where investing in japan is wise. There is no growth. At the end of the day, you get less entrepreneurship, less innovation and less Economic Growth and less public finances, what we call in aging with dignity is very difficult. Very few countries achieve. And this is not well fed up. We are facing a very serious issue down the road. When we think about low birth rates, replacement rates is not what motivates me. Im not trying to get into 2. 1. If you have three. But on some level, you do need a society that continues to have growth in the market. That can be through imgracious. However, fertility rates are falling. They are all below replacement in most of the world. Beyond that, most countries like japan are saying we need immigrants, so there is more immigration. Net imdepration has been falling. They are going to keep falling. Regardless of what happens with policy. We cant count that immigration is always going to lift our fiscal boat, it wont, not always. Mr. Heck thank you, sir. Thank you mr. Chairman. I thank you for each of you being here today. I thank all of the members for coming in and participating in the hearing as well and we have had an outstanding exchange. We are going to adjourn here in a moment. As i do, ill note for members, we will keep the record open for three days if they want to supplement the record in writing. And we stand adjourned. Thank you. Imd 2019dam cook in cspan 2018 winter. Dont worry, you will have time. Now in ddc offices right and it was an Incredible Opportunity for me to express my thoughts and views about the Political Climate and connect with local and state leaders. Im extremely excited that you all are interested in this. Theres still time for you to enter the cspan student video competition. We are giving a total of 100,000 and a grand prize of 5,000. Tonight on cspan, Chris Wallace and Eleanor Holmes norton taken part in a discussion on the First Amendment and then constitutional litigator Jesse Pearson talks about occupational licensing requirements in later, we hear from a senator discuss his new bill on challenges facing native americans. Good evening, ladies and gentlemen. The theater. I