Transcripts For CSPAN Joint Economic Hearing On Raising A Family 20240713

We have seen consistent growth and growth and job growth. Thisany parents across country, raising a family has become harder, and more expensive than ever before. The New York Times 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. They discovered interesting trends. In four had fewer children, or expected that they would have fewer children. Then, they considered to be within their range of ideal. Economic concerns were foremost they the reasons that either fell short or believed that in the future that they would fall short of what they considered ideal. Over the past few years the joint economic committees, social Capital Project has been documenting trends and what we refer to as our associational life as americans, the web of social relationships through which we as americans pursue various endeavors, families, communities, friendships, religious congregations, for example. A critical source of meaning and social capital is the family. Central setis the of headwaters for social connectedness, edges why 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 happily married parents. The goals of todays hearing is affecting factors family affordability and examining policy per approaches approaches that would allow americans to start raise families that they desire. Increasingly, family affordability has become a unifying concern among lawmakers and policymakers, and the politicalf right and left, and everything in between. It even in discussions around topics that are as varied as the Child Tax Credit, inclining fertility rates, increases in the cost of childcare, housing, paid family leave, and student debt burdens. Motivating all of these discussions is a state and, it should not be this hard to raise a family. The problem is multifaceted, complex, and difficult to understand completely. Economic challenges such as debt tods and increases costofliving 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. Parents want to afford the best neighborhoods and schools, but that leads less time to spend with them than they would perform. Prefer. Twoore families send earners into the workforce, Many Employers have failed to account date accommodate their desire for worklife balance. Have a single who breadwinner family have prices by dual bi u bid up owner households and Single Parents are hampered by their high poverty rates. The answer to how did the how did we get here is complicated. Our first step must be to adequately diagnose the problems facing our families. What fuels the rising costs of health care . Childcare . Of education, and housing . Hindered byple are excessive student loan debt, inadequate income or poor employment prospects . To what extent does declining affect other factors . And does the rise of the dual earner family signify hardship or changing values . The next step must be solutions giving families more time out of the workforce. Are there ways to increase Family Flexibility that are minimally disruptive to employers and less likely than others to discourage job creation. Are the Government Policies that unintentionally have contributed to increases in the cost of housing, education, and health care, which can be reformed and how can we make the tax code we want toarents if alleviate the cost of supporting future generations. We can make sure that we have the workforce and Taxpayer Base to fund not only the programs of today, but 40 years from now. Our panelists will discuss some of these topics. I look forward to their testimonies and a productive conversation aimed at helping parents and strengthening our families. I now recognize the vice chair for her opening remarks. Thank you so much for our panelists and the chairman for calling this hearing. Nothing is more important than our families and thank you first shining for shining a spotlight on the challenges facing American Families. Aliens of families are working not to getharder ahead, but just to stay in place. Over the past four decades, wages have been stuck or barely increased. Meanwhile, the cost of childcare, education, and other necessities have grown. Most families rely on two incomes just to make ends meet, because that is what it takes to support an american family. Of American Adults report that they or their families have trouble paying for at least one basic need, like food, housing, or utilities. The picture is no brighter when you look at costs. Take childcare, the average cost of infant care is more than one corner of Median Household Income for single working parents. That means those who need childcare the most cannot afford it, or look at college education, which is almost a necessity in todays economy, and i would say it is. Averagee 1980s, the cost of a fulltime undergraduate degree has more than tripled for public and private institutions. Todays typical graduate leaves college with 30,000 in debt, or look at housing, home prices are higher than ever, and out of reach. One third of renters band 30 of their spend 30 of their income on rent. Our families responding . By taking on debt. Consumer debt excluding mortgages is 4 trillion, the highest level ever. Folks are also putting off homeownership, can deprive them of a key source of wealth accumulation. It is morerees that expensive than ever to raise a family, but we may disagree about the causes and about the solutions. I welcome the robust discussion that this committee does provides, the entrance of women in the workforce is not a problem. We may hear that americans got married requip less frequently as americans got careers and that have hurt has hurt fertility rates, but womens have become great drivers. They boost the economy by trillions of dollars and are critical to families. Householdare of earnings increased from 36 to 35 2 women could do more if it if we made it easier for them to have more flexibility in the workplace. There are two key popular ways to do that. Offer affordable childcare and paid leave for the birth of a child and for work reasons such as illnesses. Other take a lesson from countries that provide the services and have higher female later for labor force participation. While we are at it, let us make sure that women are paid fairly. On average a Woman Working fulltime yearround earns 80 of her male counterpart for the same. For black and hispanic women, it is wares. For too many the American Dream is slipping away or out of reach. Some would say that the solution is for the federal government to do nothing, i disagree, it has a key role to play in helping restore the dream. What can it do or what can congress do . Let us start by lifting the minimum wage. House has passed legislation to lift the minimum wage to 15 by 2025. It is time for the senate to follow suit. We should expand programs and initiatives that we know work like current income tax credit and the Child Tax Credit. Eitc deuces poverty levels. We should make the child tax allow fully refundable to the poorest families to receive the full benefit. The working families tax relief act would benefit 49 million children including 2. 7 million from my home state of new york. We should strengthen the nutrition assistance program. P. Not only provides a Healthy Foundation but is also an investment in our economy. Every dollar generates more than 1. 5 in increased gdp. We should join the rest of the world and promote paid leave for the birth of a child. There are only two countries that do not provide paid leave for the birth of a child, america and papa new guinea. Bill, each was included in the National Defense authorization act is a good start and what it and would provide 12 weeks of paid leave for federal employees after the birth, adoption of a child or to care for a Family Member with a serious illness. Raising a family is hard and rewarding, we need to do more to provide workers with tools to balance work and family responsibilities. I appreciate the statement on flex time and how that would be important. Todays hearing and the testimony would shed light on the actions we can take to make raising a family more affordable. It is incredibly important for the future of america and American Families, and for the American Dream. I yelled back. Thank you. I would like to introduce our panel of witnesses. Before, i want to address housekeeping matters. This is a joint committee of both members of the house of representatives and the senate. As fate would have it, both the senate and house of representatives have decided to call votes right in the middle of this hearing. So you may see members of the house and senate leaving and coming back. That has nothing to do with anything other than a responsibility to continue to vote while our colleagues are voting. Members of this committee are very interested, and we will be here for every bit of time that we possibly can. I did not want anyone to be alarmed when they see members filtering in and out. Ok, i would like to introduce our witnesses. First we have mr. Stone. Fellow at the Enterprise Institute and Research Fellow at the institute for family studies. He has written on migration and regional economics, and his work has been covered in the New York Times, wall street journal and numerous outlets. Next we have the chair for the public understanding of economics at the cato institute. He was head of Public Policy at the institute of Economic Affairs and had of Economic Research for the center of policy studies in the u. K. He has written on a number of Economic Issues such as fiscal policy, inequality, and among wages, and rent control and appeared on bbc, cnn, and sky news. He writes weekly columns for the Daily Telegraph and city a. M. The professor for the prevention of children and youth problems at Columbia School in the codirector of the columbia population resort center. She has written extensively on the impact of Public Policy. On more has focused family policies, inequality and Early Childhood care and education. Poverty, social mobility, and the black white achievement gap. Numeral lished numerous articles and peerreviewed. The executive ofector, ceo, and cofounder moms rising. She has been involved in Public Policy and grassroots engagement for over two decades and has received numerous awards for her work. She is also an awardwinning articles, 80ks, contributor and host of the program raking through with powered by host of the program, breaking through. We thank all of you for joining us, and we look forward to hearing your testimony. He will hear for you from you in the order you were introduced. Mr. Stone just hit the button until it turns red. Mr. Stone it is an honor to be here, thank you for inviting me. Tois an honor to be here testify on topics important to American Families. I am affiliated with the american Enterprise Institute, but for my testimony today, the views offered are solely my own. Most of my written testimony talks about family affordability, and the upshot is that child rearing america is not really that much more expensive than in the past. Some elements have gotten more expensive, but evidence suggests that the problem facing families is not simply a budget crunch. According to surveys, the average American Woman says that she wants to have 2. 3 to 2. 5 children. This value has been stable for 30 years, and yet, the average young American Woman will only 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. 2007, theuntil fertility gap was one third as large. What is going on . , weead of affordability should be discussing achievability. What is Holding People back from having the family that they reliably say they want . The answer is basically marriage. Increasingly, postponed marriage can account for half of the increase in the fertility gap over the last decade and 100 of the increase since 2000. Incentivizing marriage is a tricky question in a diverse society. Americans are uncomfortable with being lectured about getting hitched. Luckily, there are good policy options available. First of all, it must be said that the federal government already has a marriage policy, which is this. Workingclass people should not get married, but middleclass and wealthy people should. This is the policy stance of the tax code, welfare programs and everything the government does. The tax code gives you a marriage bonus if you have a ceo. Their spouse is unlikely to earn an equivalent an equivalent amount. Gettinget the eitc, married could reduce your benefit by thousands of dollars. For two workingclass people with similar incomes, there is a real taxon marriage. I show how the marriage penalty comes out to 15 percent or 25 of the income. It is no mystery why workingclass americans are getting married last. The problem is not government benefits per se, but the eligibility rules that discourage workingclass people from marrying. A result is neighborhoods with scattered families, overworked mothers and diminished opportunity for children. Additionally, fewer kids overall. So, there is a real way to make family life more achievable. Fix the massive government bias against marriage, especially workingclass marriage. The second response to the marriage first explanation is to reconsider our justifications for policies like the Child Tax Credit. Is not thatation parents are inherited inherently cashstrapped but that parenting is inherently valuable to society. In other words, we should have a wage because parenting is important work and workers deserve to be paid. How we provide such a wage may vary, but we should treat parents more generously than presently due. And, in a way that communicates to parents that we see parenting is where the labor. Aen societies provide parenting wage, the fertility gap shrinks. If there is not also a change in marriage norms and behavior, fertility rates will not rise by a lot. That strategy is a onetwo punch. One, endal that we penalties for workingclass marriage while increasing our social commitment to the work of parenting by providing a parenting wage. Whatever happens to fertility rates, children who are born are born into a society of greater opportunity, healthier panic the idea which engages that parenting matters. Thank you. Chairman, members of the committee, thank you for inviting me to testify. Ensuring that a family should be raised affordably should be an uncontroversial objective, yet Government Policies raise prices tobasic goods and services the disproportional financial detriment of poor households and family with children. They spend large amounts on goods and services that should be considered necessities. Shelter,h as food, transport, clothing, utilities, and childcare. The average household advocates 57 of spending through shelter, food, transport, and clothing alone. Average men married family 57h Young Children allocates 53 . They must consider prices in these and other important product markets. In recent years, housing and childcare have come particularly political issues given the high toll on family budgets. High housing and childcare are deemed market failures, necessitating corrective government invented intervention. In both of those markets, existing regulations actively constrained supply intern, raising prices in turn, raising prices. Zoning lawsow constrain new housing building, particularly in major cities. Unresponsivees, an supply drives up the market market supply forcing downsizing, longer commutes or higher rents and mortgage payments. Levelknown is the state Childcare Staffing regulation, notably restrictive staff to child ratios and qualification requirements which reduce the supply of Childcare Centers in poor areas, driving up prices and reducing formal care options. Again and again, one finds the same pattern of increasing prices. Milk,deral sugar program, and ethanol mandates raise the price of groceries. And standard regulations state level dealership laws inflate the cost of driving. Protectionist tariffs raise retail clothing and footwear products and local licensing localervade prevent workers. My researchers sought to aggregate the price effects of those policies. Using cautious assumptions i find that they raise prices faced by typical poor families from anywhere between 830 and 3500 per year directly. That is between 7 and 30 of average aftertax incomes. Nor is the list comprehensive of the regulatory areas where Government Action raise prices and it does not consider the indirect costs. We know for example that elevated housing, childcare, and transport costs make it physically and financially difficult for families to access jobs with higher wages. Undoing the worst of these regulations could benefit poor families considerably. For example, estimates suggest that relaxing the staff to child ratio by one child across all age groups could reduce childcare prices by 10 or more. Addressing policies that drive high prices also dampen the demands we see for risky rent control measures, Affordable Housing mandates, higher minimum wages, governmentsubsidized childcare and expanded allowances. Simple,message is before proposing new or expanded federal programs we should acknowledge the 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. Such an agenda may not be the fool or final answer to the challenge you are considering. But before reaching for new regulation we should attempt to , undo the harm caused by existing interventions. [no audio] we should probably make that clear to our colleagues. Thank you. Thank you all for being here so having in late, ms. Waldfogel, please continue your testimony and ms. Rowefinkbeiner, youre next. Go right ahead. Thank you for inviting me to speak with you today. I have spent the past 25 years studying policies and wellbeing in the children in poverty and those just above the poverty line. Much of my recent work uses the census bureaus supplemental poverty measure, which allows us for the first time to gauge the antipoverty effects of the full range of policies that congress has enacted. It makes it clear that two sets of policies are critically important. Refundable tax credits and the Child Tax Credit, 4. 5 million children out of poverty and snap and other nutritional programs mover 2. 4 million children out of poverty. We have good medicine evidence these policies reduce stress improve child health and and improve child health and development. Income poverty is not the only challenge that families face. Since 2012 come with the support of the Robin Hood Foundation 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 longer have a stayathome caregiver but , Public Policies have not been faced with this reality. Only coverseave act 60 of the work orders. The federal child care subsidies reach 15 of lowincome families that need them. Employer policies address some of the gap but to those average employees and some paid family leave, though those who are less fortunate are low income 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 employees have access to paid family leave, they are much more likely to be employed. They have higher earnings and mothers are less likely to be depressed and breastfeed longer. Fathers are engaged to care for children. Infant mortality and hospitalization falls. Opinion surveys consistently show americans favor paid family and medical leave and they are endorsed by employers. My colleagues have been serving employers in states with these laws, including 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 also extensive and clear. HighQuality Childcare improves childrens health, Cognitive Development social development , and especially for disadvantaged children. Too few americans can afford it. When more subsidies are available, parents are more likely to be employed reducing , poverty and promoting family stability. Our estimate suggests that universal child care could reduce poverty by a third. By americans paying for child care. But we need to look what government can do where a parent is not working or not able to work enough Public Programs like hours. Snap and private programs like food pantries play a crucial role, but families also need cash to buy their Children Clothing and school supplies, pay rent and utilities. For this reason virtually all of , our peer countries have a universal Child Development or benefit paid monthly or more , frequently to all families with children. Our Child Tax Credit is the closest policy we have to this , but unfortunately the lowest income is who would have the largest impact. Out of 2 million american children, one in three live in families who earn too little to receive the full 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 ample 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. It is high time we joined our peers in providing paid federal medical and family leave, quality, affordable childcare and a universal child allowance. Ms. Rowefinkbeiner thank you and members of the joint economic committee. I am the executive director of moms rising an organization with a million members, including in every state working. 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. Our country, our workforce, and our economy has changed, but our policies are out of date and families are suffering as a result. And good news, this crisis is solveable and the policies will families and the economy alike. The work we do lists dads, grandparents, 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. Jamie could only work when her husband was home with their toddler and until they started getting a snap, their 4year old and jamie herself often had to go without healthy food. Nobody, let alone anyone Holding Multiple Jobs should struggle to put food on the table. But too many families face stark choices like jamies. Full one in six children live in food insecure households. Jamie isnt alone. One in three households are paying more than 30 of their income for housing and half are renters. College tuition has tripled since the 1980s and student debt exceeds 1 trillion. Childcare, cost core more college 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 terrible truth is that if costs in net productivity have been rising, wages have been stuck for decades. Wealth inequality is increasing and the wealth gap is persisting and most people raising children in america are facing a financial crunch on top of this,. Women are being pushed farther raced by wage and discrimination. 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 studies showing a direct correlation between high levels of women in corporate leadership and higher profits. Womens urgently need wages. Women became half of the fulltime labor force and threequarters of moms are in the labor force. More than half of whom are the primary breadwinners. Further, and our consumer field economy, women and moms make nearly threequarters of purchasinging decisions. When women arent paid fairly and dont have funds to spend, our entire economy suffers. It is long past time to move our policies into the 21st century to match our modern labor force so families and our economy can thrive. We need to address these charges challenges from multiple angles better, fairer wages, update policies and make basic necessities more affordable and growing momentum for policy changes that solve these issues. For instance dozens of states , and municipalities are passing paid medical leave. Paidned sick days and 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. Specifically we need to move , quickly to pass the family act so people can afford family he leave. Ly medical the working families tax relief, fairness paycheck act and maternal mom act to address maternal the Healthy Families act. The Healthy Families axle healthy sick days can be earned. 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 everyone has access to health care coverage, including Reproductive Health care, and make college in housing affordable end mass end mass incarceration and , invest in children and families including with snap, wic c. T. C. , tanf, head start and , medicaid. All of which inject funds into our economy. The list is long 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 anyplace else. When we update our outdated policies, we all 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, ms. Waldfogel. 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 attracting a lot of interest and there is a Successful Program underway in tulsa, oklahoma. Its a winwin. They are taking proven Early Childhood Education Programs that help engage parents and matching them and tying them to employment and Training Programs for the parents. Not just random, generic employment, but in the health care sector, sectors where there is really a demand. We know from research when parents are involved, their children do better in school and do better in preschool and children will do better in preschool if the parents are stably employed or in training and have more 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. I have some very possible positive outcomes. 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 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 part of our culture and represent a significant asset to all of our communities. What should 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 . It is a really important question. The statistics that i was reciting about 60 of workers have access to the fmla or 40 of workers having some Employer Paid family leave, only 15 have access to federal childcare subsidies, even though they are low income and eligible. 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 to hear the grandparents that have chosen to take on or had to take on these grandchildren 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. There is a lot of debate about who counts as a family but for sure we ought to be including grandparents. And we should be defining those benefits to the child as long as they have a legitimate caregiver. Ms. Waldfogel absolutely and the Child Tax Credit. Exactly right. 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 education. Ms. Rowefinkbeiner, one it to i wanted to ask you a little i wantedou could to ask you a little bit 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 paid 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 if dads who take the paid family leave as well. We see those wage gaps between moms and dads and men and women 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. Making 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 United States of america 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. If we have this wage gap with moms, then we do worse overall. 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 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. Infant child care costs are extraordinarily high. Having that access to paid family leave at that time when a new baby arrives is very important. Not to mention what you brought up which is the sandwich generation. We need paid family medical leave and we needed for all workers. We need grandparents to take it as well as parents and other Family Members. Sen. Heinrich so, in comparing in 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 two pieces of paper and there are two pieces of paper, one resume, the only differences of they are the only difference is they are a mom and the other that 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. 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 that may never existed. Existed. Aybe never 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 pivot 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 and with 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 earned and 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. Those are large numbers. 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 a backdoor Family Support program, just replace it with a simpler wage subsidy, and route more money through the Child Tax Credit or some other childspecificfocused 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 this structure. The itc is a big one. You see similar problems in every meanstested program. 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 2017 includes a 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 note 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 and emma marry, their combined income is enough. Because they get married and their eitc 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 refundability the nonrefundable is offset. 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 eitc. 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 other side 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 thousand dollars, 37,000, 36,000, 37,000, 38,000, 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. Sen. 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 in the senate and i am happy to report 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. Just because he had his turn, i want to keep on mine. Dr. Waldfogel 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 minimalist 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 pronatalist 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 a pronatal policy . Mr. Stone the research on pronatal policymaking is when countries spend money trying to get slightly higher fertility rates, that they do get a little bit of bump, but it doesnt cost a lot of money to get that increase. 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 sympathetic 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. Sen. Lee 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. Ia,tolerating impediment 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 buying an 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. Why i never miss an opportunity to point this out is 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 sell 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 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. Essentially, it 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 in price of houses. So homeownership may be very important for the benefit of it the benefit it provides for the family in terms of security 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. Sen. Heck but in a market where demand significantly exceeds supply mr. Stone create new supply. Sen. Heck it would be hard for me to exaggerate how strongly i agree with you, mr. Stone. It is a supply issue, principally, not a demand issue. We are over 700 million Housing Units short in this country, and it creates all sorts of problems to families, many of which have been set forth this year. Have been set forth here. Mr. Hood . Mr. Hood 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. Maybe a question to all of the wenesses here, 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 which 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 zoning and Land Use 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 in upper income demographics desire that improved quality of childcare. More interaction between staff and children and a Better 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. A less idea of quality. 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 and their existence 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 we have to remember the 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 regulated, it is expensive. And we really have not come to terms with that. Thank you. Thank you, mr. Chairman. Dr. Waldfogel, 2016, maryland ranked fifth in the country in terms of most expensive childcare. Cost an average of 14,000. In 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, experience 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 are indicating, universal prek will only cover the year the children start school and in some states they are extending , it to a second year, and it still leaves the infant and toddler years, which are the most expensive uncovered. 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. Do you think that is reasonable . Dr. Waldfogel at least. It is at least 41. With childcare it is all about quality. The highest quality programs are 81. The lower quality programs, 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. As you have heard today, we hear from our members about three key areas about crisis in childcare. Affordability, we are hearing a lot 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 zero five,ing from 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. The 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. Here is one thing that is important 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 fair pay. The one point that 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. Right now 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 child health care. 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 then they were 10, 20, 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 redditearned income tax earned income 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 could benefit from eitc. 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 policies and be 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 ir who is there family the 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 that employee us actually 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 . Piece . 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. We know the eitc discriminates against childless people. It does. It doesnt give them as equal of a benefit. But in the example that i provided in my testimony, both the individual people are getting what they were eligible for 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 eitc, 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 person who is single today is married tomorrow. The childless person today has children tomorrow. Peoples life situations change. When we 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 you file 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. It sounds like you and andrew 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. I understand 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 dc enact the 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 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. What is costly 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. Someone whose husband has cancer, 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 through our payroll. What we have also heard from employers is in the majority 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 will 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. When we started the survey, i was nervous about what we would find. Maybe 15 are opposed. And i think 15 of employers would oppose any law. The fact that we are finding 85 or 90 that are supportive were neutral. I think that is impressive. I think it is impressive and it is similar to what i have been hearing in new hampshire. 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. We also hear is that too often, individuals who are unemployed are not able to get the training they need for the jobs that are open, and also that they face barriers such as transportation a childcare. Either to get the training, they are having a hard time finding childcare. 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, primarily transportation and childcare. So anything you can do on that front would be fabulous. Thank you. I agree. Thank you for putting forward the bill. We see three things that need to happen. Better wages, update the outdated policies, and policies need to be comprehensive. 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 significant illness. That is the majority of the time that the unpaid fmla is used. We wanted to make sure that is happening. As we update these 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 for letting us go over, mr. Chair. 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 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 dc, when it becomes fully implemented, over the next few years will start to require childcare providers to earn degrees, and some year 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. A New York Times survey says 64 of the responses said they expected to have fewer children, 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 . It is difficult to disentangle the demands. At his reply factors. And two ply factors. 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 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 childcare, its 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 do raise costs substantially. There has been some Academic Work that suggests if you relax over the age groups, 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 had no in improving quality. What it did by driving up the cost of care, in poor areas, it led to the closure of formal centers. The lack of availability led to greater use of home daycare. So there is a massive tradeoff. Measures that 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 those people are offered. So i would say the 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 regulation price quality bundle. That can have severely regressive effects in terms of access for those people to the labor market. Other than childcare reforms, what are your other favorite policy reforms you think could significantly lower the cost of living for low income families . 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 Development 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 plans. I think that is a positive step forward. Rise ofhink, with this the rent control as a potential solution being allocated, i would like to see federal policy come with conditions that preclude those policies, which would damage supply further. For a wild, one does have to be careful about how far we create one set of problems for the federal government, there is a response locally, we try to treat that remedy with another federal remedy. My time has expired. Thank you. Thank you very much for getting ,o the better wages especially in light of the context of 30 years of stagnant wages. It seems to be underlining it is foundational to these issues we are dealing with. Purposes of discussion, i am thinking about three buckets in which the federal government could take action to affect peoples standard of living. I will ask you each what is the thing you think we ought to do, if it were one thing. Let me describe this. We can either through appropriation or tax expenditure impact those things that are pinching people, skyrocketing costs associated with higher education, housing, health care, childcare, or cash in the pocket where taxes. Bucket two, we can adopt those policies which lead to higher wages for at least some, increase minimum wage, the federal level has not been increasing at 10 years, nowhere near the purchasing power. Robust collective bargaining laws to favor the rights of workers. Bucket three is the broader issue of overall wages. This is my favorite. I believe the Federal Reserve has pursued a policy which has 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. We have not had an approach to the cost of money, which gets us to full employment. They keep changing their definition of what employment is. They keep lowering it. As a consequence, we have had slow wage growth. Reminded, but one of the chairs of the Federal Reserve said that is my favorite do nottion, recoveries usually die of natural causes, they are murdered by the fed. We have these three buckets. I am interested in knowing from by the way, as an organization with one million members, we are headquartered in my home state, we are proud of the work you do. Towe were to do one thing make a difference, what would it be . That is a tough question. We have to answer tough questions all the time. I am sharing the pain. Thank you for sharing the pain. I would actually do all three. That is because i know that we can do more than one thing at a time. I believe we can do it. What we should not do is cut quality because we think that will cut cost. I want to make sure we look at the fact the return on investment in all of these programs go up when we have increased quality. Early learning and childcare. You are looking at the roi going up when you have increased quality. We bought to make sure we are not cutting care and moving forward wages. All had to pick one, i am three. I am going to say all three as well. We should have a full employment at higher minimum wages and stronger bargaining rights. If you could choose 1 how about which one would make the biggest difference . I will go back to the universal child allowance. Within these forces sweeping our economy, children should not be suffering because of this. We have not talked about the instabilities in the economy and unstable jobs, people whose work hours change from week to week, which means their earnings change. How do you pay for housing, childcare when your earnings are changing from a to week . What are you doing as a parent you are worrying about money all the time. What impact does that happen under family life and children . I think children ought to be protected from these forces that are swirling around in our economy while we try to sort this out. The Child Tax Credit is a Fabulous Program in moving towards that goal. I think anything you can do to expand it, make it reach more universal become more , that is what we ought to be doing. When we think about helping families with kids and making it more affordable to raise a family. I am glad you are tackling the big challenges. I will be more controversial and reject the premise of your question. There is a false approach, which is to look at, why are the costs of necessity goods and services so expensive in the first place . Try to expand the supply side in those areas to make goods inherently cheaper, negating the demand for more in the way of federal borrowing subsidies and price and wage controls. A lot of the programs we mentioned no doubt could alleviate poverty. Even the fiscal conditions you find yourselves in, given the limits of what you can achieve through a tight labor market and given the risks associated with wage and price controls, i think the principle of do no harm, examined want policies on the boat that erased because of the four for families in particular, that is a better approach. Fair enough. I am going to take the question and propose one legislative fix. It will be a legislative fix with writers attached. Itc, repealke the it, replace it with a wage subsidy that does not discriminate based on family structure. It currently has a patent benefit for children. We do not want to lose that. We should roll back into the Child Tax Credit and expand. Because we have to pay for, we should pay for with nominal gdp targeted at the fed which will increase economic growth. Thank you. Thank you for your indulgence. Anytime. I want to follow up on additional questions. In your testimony, you submitted to the committee, you state that the decline marriage declining marriage rate accounts for half of the increase of the fertility gap at the left decade. For basically all of the increases since 2000. Why do youlain to us believe marriage rates are donening and what can be i do not want to necessarily live and a country where we have an omnipresence of a nanny state that is going to incentivize people to get married, tell them when they want to get married. I also do not want to that in a country where the government is artificially creating an environment in which people do not want to get married. Any thoughts what we might be doing there . So, this idea of the fertility gap, it is a and not because people are wanting more kids. The amount of kids they want is a stable. Fertility is falling. When we look at how fertility is falling i just mean a woman who for gets married at a given age, her odds of having children and how many are similar to what they were 30 years ago. It is almost entirely about american choices. Arriage is being postponed for workingclass people, it is less frequent at all. People with higher degrees get married at the same rate. This is presented in the class as a in the past as a class problem. There is a cultural shift in these groups of people. Maybe. It could also be that people without a degree are more likely to be exposed to extensive marriage penalties, their incomes are in the range impacted by that. Very ings us to this this worry about a nanny state or a grandma state, lecturing you about getting married. Nobody wants this. Wish the irsi would give me advice about whether to marry my girlfriend. Nobody wants this. Luckily, this is not what we need. If the problem is the marriage penalty, what we need is the first step is the most popular thing in congress, create a commission of some kind to study, where are their marriage penalties, can we identify where the soccer, once we have identified them, can we come up with a way in a spending neutral fashion rewrite the eligibility and benefit rules so we are spending the same amount of money on the same income range of people, but doing it in a way that does not discourage family formation. This is not lecturing anybody about getting married. It is not pressuring anybody to do anything they do not want. It is saying, we made a mistake and how we wrote programs in the past. They were not designed for a modern world where men and women are both working so when the eligibility threshold does not double, you have a problem. Pool that study, we need a a rule, whenever we score a bill, we need that scoring process to include at a checkbox. Does this create a marriage penalty . If it does, it would be nice to know. It is not a hard thing to calculate. Having Forward Guidance on this as we go forward, whenever we have a due bill that affects individuals, benefits, or taxes, it should be scored, does it create a penalty . When you explain it that way, it becomes easier to understand how that can happen. In nominal terms, the size of the penalty might seem smaller couples than as full in the economy. In relative terms, when you think about what that does to line,rginal bottom families and this sweet spot where it makes a difference, that can have a big impact. Up oned to follow something you mentioned. Study inthored a 2016 which you show that the motherhood wage gap has declined and in some cases replaced by something of a wage premium for some groups of imams. Of moms. Findingou discuss that in light of that evidence, is it fair to conclude at the portability crisis is necessarily driven by a motherhood wage gap, or does it indicate there could be other factors . Working on the motherhood wage gap for a bomb time. It was part of my phd more than 25 years ago. When you were 12. When i was 12, thank you very much. What i learned doing that work, women who did not have the opportunity to take paid Maternity Leave brick faced with an impossible choice. They would have a child, faced a choice, they did not have enough time off to stay home as long as they needed to, so they would leave their job and come back a few years later and start at the bottom of the labor market. It took 10 or 15 years to get back on part with the women who did not have children and were in similar jobs with similar training. That is that motherhood wage penalty. It lasts for a long time. We live in a world now where, although we do not have paid family leave and childcare in all employer settings, we have it in a more than we used to back in those days when i was doing that research. It does not surprise me the motherhood wage penalty has narrowed over time. We still have a problem in terms of a womens earnings, but not as bad as it used to be. At the same time, other things have happened in the education system, women are now getting more education than men. If there is a group we are worried about in the labor market, it is less educated men who are taking a hit. Things have changed over time. That is helpful. Did you have something you want to add . I want to follow up. It is not gone. When we talk about the wage gap being lower, the 2018 numbers were built on u. S. Census data, moms are making . 71 to a dads dollar. Women overall are making . 80 to a mans dollar. Women of all races. Penalty is still significant and very strong. When we are looking at what happens with solutions, we need to address the fact that it is not married or unmarried, or type of family that is impacting the affordability of raising a family, it is also wage discrimination. That wage discrimination is compounded by structural racism. Moms of color are experiencing the most wage discrimination. Single moms experience compounded wage discrimination according to 2018 of data. Single moms are earning . 55 to a dads dollar that is a single dad. Wen we look at solutions, have to look at pay parity solution. The paycheck fairness act. How to look at how to raise all families. According to john hopkins university, 67 of birth to the millennial population were to unmarried women. We need to acknowledge that 82 of women have children by the time they i44. The solutions focus on narrow solutions will not work for the majority of families. The solutions we create, we create for all of working america, not just some. We do not replicate the structural inequities of the past. Did you have to hand up . Did you want to respond . Go ahead. This motherhood pay penalty is not gone, it is real. There is Extensive Research on this with a rigorous data this m sweden, denmark, germany, the u. K. , the u. S. , and all these countries, there is a motherhood penalty. It has almost no correlation with Public Benefits for childbearing or motherhood. It is almost entirely driven by social norms, which is just discrimination may well be part of it, but may suggest that policies that we want to advance for families, we should justify them in terms of what we believe is right for families, we should not convince ourselves that by giving paid leave we will element eight we should give paid leave, but we should not convince ourselves we will element eight a gap that exists in countries that have programs more generous than anything we are talking about. Please differentials are harder to correct that what we convince ourselves of in political discussions. They may be worth doing because they are good for kids, because they are good communication about what we value in parents. They do not address the pay gap. Almost noproblem that country has found a solution to. We should keep in mind what is possible to achieve and make sure we do not make promises that are going to end up being lies to people we are trying to help. I want to come back to the marriage question. It is an important one. Whont to say, my colleague said princeton has done the best incomeh about why though families are postponing marriage, she tells a compelling story about a men and women feeling like they need to obtain certain foothold before they can get married. They had to have completed education, have a decent job, they cannot get married until they are stable on their feet. I have been thinking about the conversation this afternoon about high housing costs and young People Living upstairs of their families house and it difficulties in the labor market and is on certain work schedules. I am in favor of getting rid of marriage penalties in Public Policies. We should not have marriage penalties. We should think about the other things that are holding young people back from marriage. Student debt we have been talking about. People arender young delaying getting married, given that they do not have a stable place to live, they are in debt from school, and they do not have a stable job. In some ways, we would not want them to rush into marriage in those circumstances. It is one of those three bucket things, it is complex to improve prospects for young adults. It is the most pressing challenge we face today, to improve prospects for deaf adults. They are the parents of the future. Indeed. We will let you speak. Areais is probably the one i am skeptical of the idea that tax policy of tax this type of behavior to a significant or that changing tax policy would lead to any significant change in fertility rates. I say that for two reasons. First, if you look across countries that have different benefit systems, there has been a similar secular decline in fertility rates, which suggests there is something bigger going on about peoples expectations and preferences as we get richer. Ofondly, the mean age marriage for women is lower in the u. S. That and countries such as france and sweden. Those countries have higher fertility rates. This is one area where i question how much of an effect tax policy really has on this issue. Interesting point. One last question. Is underlity rate 1. 8 . Thatnear replacement does not take into account immigration and the overall population growth. There is no question that we have been below replacement. When i think about the kinds of programs we have like Social Security, which depend on a number of active workers in the workforce supporting the program , it begs the question, what are some of the longterm consequences of having a fertility rate which is below replacement . Binding on immigration policy. Depending on immigration policy. Would you care to briefly enumerate . Be easier to enumerate them if our longterm planning agencies like the Social Security trustees, if any of these agencies bother to do a simulation that simulated a fertility rate below 1. 8 . The lowered scenario they consider as possible and at 1. 8 most recent update is we are 1. 72 percent now and falling. We are beyond the worstcase scenario of what any of our longterm planners have prepared for. They overestimated the first year of their forecast, overestimated population growth by 350,000 people in one year. That was a big miss. The first step is we should force our forecasting agencies to make sure their first year of numbers is correct, let alone try to get more accurate on the out years. Preparedt we are not for the demographic shift that is coming and terms of low population growth, there will be significant consequences. We talked about housing wealth. There was an article a few weeks ago about a lot of Older Americans who bought sizable houses in a nice neighborhoods and they were planning to sell them for their retirement and no one is buying them. That would be demand somethinginterject that is important. A lot of people want to downsize. There is not a sufficient housing supply stock right that they can get into my even if they sell their home. One, they cannot sell the home because there is not much of a market to buy it. Second, the house they want to move into does not exist. The truth is, we think about Social Security as an intergenerational transfer. The entire economy is an intergenerational transfer. You own stock in a company, there needs to be the kid will eat the hotdog to have any value when you sell it. We give a free pass because our stock market is open to Foreign Investments cannot reject this nice thing where the buy goods from a foreign country and they invest it into our securities, which is a nice handout for americans as they grow older. On some level, there does need to be a nextgeneration to consume those things to protect the value of the asset. The longterm consequence of long though fertility is stagnation. It is a permanent slowdown in economic demand. We heard a lot about wage stagnation and productivity has been growing but wages have not. It has been better than it has been in japan. One reason for that, there has been no population growth. No growth in demand in the market size. No possible story where investing in japan is wise. There is not growth. What is the Growth Market . You get less entrepreneurship, less innovation, less economic growth, less Sustainable Public finances. Call a date with dignity is difficult, few countries achieve it. States, with increasingly unhealthy aging through debts of despair, it is not well set up to handle this. We are facing a serious issue down the states, road. About low birth rates, replacement right is not what motivates me. I care about individual desires. I am not trying to get anybody to 2. 1 . If you have three, i would love for you to have three. If you want one, have one. On some level, you need to have a society that continues to have growth in the market. That can be through immigration. It can be. However, fertility rates are falling and our traditional immigrant dissenting countries. They dip below replacement and most of the world. Beyond that, most countries like japan are aging and saying, we need immigrants. There is more competition for those workers. Net migration rate in the u. S. Have been falling for three decades. They will keep falling. Regardless of what happens with policy. We cannot count that immigration is always going to lift our fiscal vote. It will not. Not always. Thank you. Thank you, mr. Chairman. I want to thank each of you for being here today. If the testimony has been outstanding and thoughtful. Members of the thank all of the members for participating as well. We have had an outstanding exchange. We are going to adjourn in a moment. As we do, i will note for members who will keep the record open for three days, should there be a need to supplement the record. We stand adjourned. Thank you. [captions Copyright National cable satellite corp. 2019] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org] cspans Live Campaign 2020 coverage continues. At 4 00 eastern with congresswoman Tulsi Gabbard in new hampshire. Sunday at 2 00, joe biden in new hampshire. Yang int 2 00, andrew new hampshire. Tuesday at 11 00, Elizabeth Warren in austin. Inch the candidates live cspan, online at cspan. Org, or listen on the cspan radio app. Congress returns for work the first week of january. Here is what is ahead. The house is yet to decide on impeachment of managers and send the articles of impeachment to the senate. Sittually, the senate will as a jury to hear the case against President Trump. We expected the senate to take up the u. S. Mexico canada trade agreement, which the house approved before leaving for a holidays. Congress will hear President Trump deliver the state of the Union Address on february 4. Watch the house live on cspan and the senate live on cspan2. A journalism director discuss the history of journalism and fake news. An event hosted by the liberty forum