We published a new report at the Center for American Progress that details a policy to automatically and temporarily expand national service programs in times of high long-term unemployment. There are still over two million Americans who have been out of work and looking for a job for at least 27 weeks—the definition of long-term unemployment—even though the Great Recession technically ended more than six years ago.
This is especially relevant on Martin Luther King Day, both because the holiday is associated with service and because the long-term unemployed are victims of a mindset that King warned about in 1961: “When human values are subordinated to blind economic forces, human beings can become human scrap.”
The most important point in the report is that long-term unemployment is a solvable problem. Our policy isn’t a panacea, but we think it can be a big part of the solution. Here are some of the details from our report:
Under this plan, national service would function as an automatic stabilizer. Automatic stabilizers, such as unemployment insurance and nutrition assistance, expand during recessions and contract during times of economic expansion. The need for assistance from the nonprofit sector is greatest when the economy is struggling, meaning that recessions are the perfect time to boost capacity with a surge of national service. Specifically, the plan would establish a formula for an automatic funding source that would support 25,000 new and temporary national service positions for every tenth of a percentage point by which the long-term unemployment rate exceeds 1 percent. The long-term unemployment rate has averaged about 1 percent from 1948 to the present, and no temporary positions would be created whenever long-term unemployment is at or below this historical average. The plan includes guardrails to ensure that national service is not expanded more rapidly than the system can support, and also to prevent economic shocks from withdrawing temporary positions too rapidly.
In the aftermath of the Great Recession, this policy would have responded decisively by supporting a peak of 475,000 temporary national service positions at a time when about 4.6 million people were long-term unemployed. If this automatic policy had been in place from fiscal years 2000 to 2014, it would have cost an average of $2.6 billion per year—enabling 1.87 million Americans to serve their country for a year during tough economic times and delivering a return on investment of $3.93 in benefits to society for every dollar spent based on an economic study of national service.
The full report is posted on the CAP website.
Looks like this is going to be another election where some on the far left threaten to stay home on election day—if Hillary Clinton is the Democratic nominee—because they see no difference between the two parties. I don’t expect that very many people will actually do this (even in 2000, Ralph Nader received less than 3% of the popular vote). Of course, even a small number of votes can swing the election (as we saw in 2000). I understand the impulse on the far left to reject a Democratic Party that has rejected or failed to enact many of their preferred policies. But staying home on Election Day or casting a symbolic vote for a third party only makes sense if you don’t care about women’s reproductive rights. Continue reading
My new column at Center for American Progress proposes executive actions that would make it easier for low-income households to save for retirement at tax time. New legislation would be ideal, but if Congress remains gridlocked there is still progress to make:
[T]he Internal Revenue Service, or IRS, could make it easier for households to claim the Saver’s Credit by directing a portion of their tax refund into retirement accounts—a step that is already legal and would simply require one additional line on the Saver’s Credit tax form and clear guidance from the IRS. This would give struggling families an immediate, tangible benefit from retirement savings around tax time, which is the very moment when they have resources to set money aside.
From my experience as a tax preparer with the Volunteer Income Tax Assistance program, I see this as a small change with the potential to help a lot of low-income taxpayers. Read the full column here.
Why you should care about the smallest appropriations bill:
The fact remains that the legislative branch includes much more than just members of Congress. When members vote to slash legislative spending, they undermine the professional staff and independent agencies that make it possible for Congress to oversee federal programs and understand complex policy questions. As funding and staffing levels for these legislative branch institutions have declined, Congress has become increasingly dependent on privately funded lobbyists and outside policy experts.
Read my full column at Center for American Progress.
My column in Roll Call looks at what happens in Washington when one side refuses to compromise:
At the 2015 Fiscal Summit, convened recently by the Peter G. Peterson Foundation, Washington’s centrist fiscal hawks repeated their warnings about the national debt and their call for bipartisan compromise. The good news is deficits are low and the short-term budget outlook is stable, so there is no looming debt crisis. But long-term fiscal challenges remain, and the leading organizations of centrist fiscal hawks — the Committee for a Responsible Federal Budget, the Campaign to Fix the Debt and the Concord Coalition — all stress that a realistic deficit reduction plan must include both spending cuts and tax increases.
What is missing from the conversation among fiscal hawks, at the Fiscal Summit and elsewhere, is a frank acknowledgement that a large bloc in Congress has pledged to oppose any tax increase, even in the context of a bipartisan compromise that also includes spending cuts. By failing to confront this anti-tax pledge, the fiscal hawks’ calls for bipartisan compromise to achieve deficit reduction largely amount to calls for surrender by those who believe that new revenues must be included to sustain Social Security, Medicare, Medicaid and other programs to strengthen and grow the middle class.
Read the full column here.
My column in MSNBC looks at the budget fight brewing in Congress over defense and domestic spending:
Despite the budget impasse between parties, the congressional majority did something remarkable in their budget resolution this year: they agreed that President Obama’s defense budget for the next 10 years – including over $600 billion this year – is roughly the right amount of investment in our national defense.
The majority’s embrace of President Obama’s defense budget is a dramatic shift. Just months ago, many conservatives were calling for huge increases in national defense spending. Senate Armed Services Committee Chairman John McCain (R-Ariz.) and other prominent conservatives had been advocating spending tens of billions more on defense, going back to the sky-high defense budgets we had during the peak of the wars in Iraq and Afghanistan.
Since both sides now agree on how much money should be used for defense spending, why not just agree to get rid of the Budget Control Act spending caps?
The problem is that there is still a deep divide about the right amount of domestic spending. The House and Senate majority don’t want to reverse any of the spending cuts for domestic priorities, even though they want to let the Pentagon spend over the budget caps.
Read the full column here.
My new column at Center for American Progress looks at how the budget outlook has changed since the Bowles-Simpson commission published their report in 2010:
Lawmakers did not enact the Bowles-Simpson plan—and the plan had serious flaws—but the budget outlook stabilized anyway. At this point, the most urgent spending problem is that lawmakers are cutting key investments, such as affordable housing, scientific research, and public health, to a detrimental degree. But while there is no looming fiscal crisis at this point, the United States still faces long-term budget challenges. As the Bowles-Simpson commission recognized, addressing those challenges requires solving problems on both the spending and revenue sides of the budget. Based on how the budget outlook has changed relative to the Bowles-Simpson plan, spending growth has become a smaller problem, while insufficient revenue has become a larger problem.
Read the full column here.