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Donald Trump’s budget ignores what is ailing American workers

Summary:
PRESIDENTIAL budget requests are worth exactly nothing. They carry no force of legislation. They land, heavy, bound and shrink-wrapped, so they can be immediately binned as Congress continues its now yearly stumble toward a “continuing resolution”—a supposedly temporary legislative act that in recent decades has almost entirely replaced the statutory budget process. The request from the President is the least consequential part of something that is completely broken. It functions like a bumper sticker on an old car. It only tells you about the person who’s driving. Mick Mulvaney, a former congressman from South Carolina who won his seat in the Tea-Party wave of 2010, runs Donald Trump’s Office of Management and Budget. Mr Mulvaney has created the budget his wing of the Republican party

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PRESIDENTIAL budget requests are worth exactly nothing. They carry no force of legislation. They land, heavy, bound and shrink-wrapped, so they can be immediately binned as Congress continues its now yearly stumble toward a “continuing resolution”—a supposedly temporary legislative act that in recent decades has almost entirely replaced the statutory budget process. The request from the President is the least consequential part of something that is completely broken. It functions like a bumper sticker on an old car. It only tells you about the person who’s driving. 

Mick Mulvaney, a former congressman from South Carolina who won his seat in the Tea-Party wave of 2010, runs Donald Trump’s Office of Management and Budget. Mr Mulvaney has created the budget his wing of the Republican party always wanted: government as a service, paid for by its clients, the taxpayers. If you receive more than you pay, the system has failed, and must be fixed. The marketing copy that accompanied the budget calls this “respect for people who pay the bills”.

This respect consists, mostly, of cuts to social services. Mr Mulvaney finds most of his savings by reducing what the federal government spends on health insurance programmes for the poor by $616bn over the next ten years. He wants to cut subsidies for student loans, for a savings of $143bn. He wants to make cuts to a programme that supports poor families with children ($272bn), and another that provides an income for those sick or injured who can’t work ($72bn). His aim is to encourage people to get back to work.

This last programme, the Social Security Administration’s (SSA) disability insurance, is certainly in need of reform. More than 5% of working-age Americans receive disability benefits, a number that’s doubled since 1990. Last year its chief actuary told me this growth could mostly be explained by the ageing of the workforce. But the programme also grows when unemployment is high, a correlation that shouldn’t exist, since unemployment has nothing to do with back pain. And benefits are disproportionately high in rural counties that have lost jobs. In parts of America, disability insurance functions as a kind of unemployment insurance. 

That does not necessarily mean that the programme has grown through malingering or fraud (though some anecdotes to this effect can be found). Aggressive fraud investigation over the last five years by the SSA failed to dig up a lot of savings. The truth is more depressing, and complex. People with poor health will work when there are jobs, and apply for disability when there aren’t. Last year, in Van Buren County, Arkansas, I met a woman with a list of health complications that come from being overweight; she had spent her career in the cab of a long-haul truck. She receives a disability cheque, and works when she can as a “secret shopper”, checking in on petrol stations for the companies that own them. She is careful not to take a job too far away, so as not to have to spend her wages on a motel stay. Hers is not the tale of someone unwilling to try hard enough. 

To fix disability insurance, then, Mr Trump must pull off an impossible trick: he has to fix rural America. He has to provide better, cheaper health care, and public health programmes to prevent obesity and smoking. He has to provide jobs—to replace the poultry slaughterhouse and copper wire and fishing boat manufacturing plants that have left Van Buren County, for example. He could make it easier to move, or train for a job at a desk. 

There is already a Republican plan to reform Social Security Disability Insurance. It comes from French Hill, a Republican congressman who represents Van Buren County. In cooperation with David Autor, an economist at MIT, Mr French hopes to raise the limit on what people receiving benefits can earn through work, to ease the transition into a new job. But there is no sign of this plan in the White House’s budget request. Again, the request is just a bumper sticker. What it says of the man driving is that he’s not paying attention to the landmarks around him, and he’s not interested in asking for directions.  

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