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The Agenda

NRO’s domestic-policy blog, by Reihan Salam.

Today’s Policy Update: Kay Hagan and Thom Tillis Are Fighting over Teacher Pay



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Maine reinstates work requirements for food stamps.

Last week, Republican governor Paul LePage of Maine announced that his administration would not seek a waiver for food-stamp work requirements that most states have received since the start of the recession. Eric Russell reported for the Portland Press Herald:

Gov. Paul LePage announced Wednesday that Maine will no longer seek a federal waiver that allows some able-bodied adults to receive food stamps without fulfilling work requirements.

“We must continue to do all that we can to eliminate generational poverty and get people back to work,” LePage said in a statement announcing the change, which would take effect Oct. 1. “We must protect our limited resources for those who are truly in need and who are doing all they can to be self-sufficient.”

Currently, Maine receives a waiver from the federal government that allows some food stamp recipients to receive benefits without meeting work requirements. Maine has received the waiver for the past six years, largely because of its high employment rate and anemic job market. In fact, all but four states have received waivers during at least some years since 2008, when the economy sank and unemployment rose nationwide, according to the U.S. Department of Agriculture, the agency that oversees the Supplemental Nutrition Assistance Program, commonly known as food stamps.

The food-stamp program used to be the kind of assistance program everyone could fully get behind: a work support designed to top off the wages of working people and help them feed their families. However, in the wake of the recent recession, the SNAP program got away from its role as a work-support program by altering and easing work requirements, recertification timelines, and the application process.

It would seem that as a partial result of these changes, unlike previous recessions or points in history, SNAP participation is not coming down along with the unemployment rate at an acceptable pace, given how much participation sky-rocketed in the recession — in fact, it seems to be lagging the drop in unemployment significantly.

Jim Manzi has discussed before how research shows work requirements to be the best way to get individuals back into work — to return the program to encouraging and assisting employment, more states may need to follow Maine’s lead.

Senator Kay Hagan and GOP challender Thom Tillis split over teacher pay in North Carolina.

As the Senate campaign in North Carolina heats up, one of the biggest obstacles facing challenger Thom Tillis, who’s the speaker of the state house, is low approval ratings for the state legislature. His legislature has enacted a number of dramatic and somewhat controversial reforms, but this summer’s session has proved especially controversial. USA Today’s Paul Barton described it as “one marked by snarling over teacher pay raises and Medicaid spending.” Leaving Medicaid to the side, what about Tillis’s resistance to teacher raises?

Fighting for teacher raises will usually be politically popular, but is it good policy?

Conventional wisdom holds that raising teacher pay is a great way to attract strong talent to the profession. However, economists Dale Ballou and Michael Podgursky find that across-the-board pay raises generate marginal improvements in the quality of teachers and could likely lower the quality because “teacher labor markets are typically in a state of excess supply, [and] success of such policies is contingent on containing perverse feedbacks which arise among exit decisions, vacancy rates, and the willingness of prospective teachers to invest in occupation specific human capital.”

In other words, as Agenda contributor Jason Richwine explains:

Their argument starts with the observation that increasing pay reduces the number of job openings (because fewer teachers will quit or retire), and increases the number of new applicants (because the salary is more attractive). This necessarily lowers the chance that any given teaching applicant will receive a job offer.

That reduced probability may discourage certain would-be applicants from making the costly investment of time and money in becoming certified for teaching, especially if they do not perceive that schools favor them in the hiring process [because administrators tend to approve less-skilled teachers with traditional education degrees €“ AS]. And, unfortunately, the best-qualified applicants are probably most discouraged [because they have better non-teaching options than education majors – AS].

This story neatly aligns with the Chetty thesis we’ve discussed before that the most effective way to improve the quality of the teacher labor force is to fire the bottom 5 percent of teachers. Maybe Thom Tillis should have tried that!

The Medicare Trustees’ report filled with doom and gloom for our entitlements, but somehow liberals are claiming victory.

The Medicare Trustees’ report was released on Monday, and many on the left have seized on the projection that the Medicare trust fund can last an additional four years and claimed that Obamacare is succeeding by extending the life of the program. Doug Holtz-Eakin of the American Action Forum was skeptical in his summary of the report:

The big picture is simple. Social Security (over $10 trillion) and Medicare (over $9 trillion) will both run sustained deficits over the next 75 years of each program. Social Security ($70 billion) and Medicare ($290 billion) are running cash deficits right now, so the problems are not abstract or simply far into the future. Because their respective trust funds — elaborate federal accounting mechanisms, not money — will turn negative in the next 20 years, seniors face abrupt, across-the-board meat cleaver cuts in their benefits unless real reforms are enacted.

Now, turn to the good news. Medicare is projected to last another 4 years compared to last year. . . . It is nothing really major to celebrate, and, given the uncertainties about such projections, could easily be undone in next year’s report. Moreover, the supposed help from Obamacare exists only on paper. Yes, the new surtaxes on high-income individuals are dedicated to the Medicare trust fund. In reality, however, the federal government is still running multibillion dollar deficits and those monies are long since spent. Yes, there are planned cuts to hospitals, Medicare Advantage, Medicare home health, and other providers. Unfortunately, the leading edge of those cuts has already led to the elimination of 24 percent of MA plans and has dramatically hurt home health agencies. From a policy perspective, both outcomes are undesirable and unsustainable. So, a future Congress will doubtless be forced to waive the cuts just as it annually has waived the cuts to Medicare physicians. No real cuts are on the books.

Additionally, as has come up in this space before, much of the slowdown in health-care spending can be explained by global trends – not something that can be tied to Obamacare. It also appears that Holtz-Eakin is right that reforms to these programs need to come sooner rather than later, and the types of Medicare and Social Security reforms circulating on the right would seem to be up to the task of addressing the fiscal problems while helping the programs perform their mission effectively. 



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