Can Policy Make It More Affordable to Have a Family?

A Joint Economic Committee hearing this week explored ways to ease the financial burdens that make family formation difficult.

The annual American Family Survey (AFS), released this morning, suggests that while most Americans used to consider cultural concerns the most important problem facing families, they now see economic concerns as a more pressing issue.

It’s not surprising, then, that young couples and parents report having fewer children than they’d like for economic reasons. Last summer, a New York Times/Morning Consult survey found that one in four adults ages 20 to 45 who are parents, or hope to be, said they had fewer children or expected to have fewer children than they considered ideal. Three of the primary reasons for that disparity were child-care expenses, financial instability, and general concerns about the state of the economy.

That reality has driven much of the work of the Social Capital Project undertaken by Congress’s Joint Economic Committee (JEC), a multi-year research effort spearheaded by the JEC’s chairman, Senator Mike Lee (R., Utah). The project aims to document trends in what its mission statement calls “associational life” in the U.S., a “web of social relationships through which we pursue joint endeavors—our families, communities, workplaces, and religious congregations.”

The family is first on that list for a reason. Many conservatives, especially social conservatives, acknowledge the family as the fundamental unit of a strong, flourishing society. The JEC clearly recognizes as much: On Tuesday, it held a hearing intended to explore factors affecting family affordability and policies that might encourage Americans to start and raise families.

In his opening remarks at the hearing, Lee said that two of the Project’s central policy goals are “making it more affordable to raise a family and increasing the number of children raised by happily married parents.” He went on to note that concerns about family affordability have increasingly become an area of focus for lawmakers and commentators on both sides of the aisle, manifesting in policy debates over the child tax credit and paid parental leave, along with discussions of the costs associated with child care, housing, and student debt. “It shouldn’t be this hard to raise a family,” he said.

Some of Lee’s remarks were echoed by Representative Carolyn Maloney (D., N.Y.), the JEC’s vice chairwoman, who focused her statement on what she argued was a need to expand government programs, primarily to make it easier for women to function as “key drivers of our economic success.”

“Women’s earnings boost the economy by trillions of dollars and are critical to American families,” Maloney said. “Women could do even more if we made it easier for them to enter and stay in the workforce.” She argued that affordable child care and paid leave would be key to accomplishing that goal, and she touted her plan to provide twelve weeks of paid leave to federal workers after the birth or adoption of a child, or to care for a seriously ill family member. Along with many of her Democratic colleagues, Maloney also favors creating a new federal entitlement program, funded by a 0.4-percent increase in the payroll tax, to offer paid parental leave, family leave, and medical leave to all citizens.

But Democratic politicians aren’t the only ones proposing policies to increase access to paid parental leave. Lee himself, along with Senator Joni Ernst (R., Iowa), is sponsoring the CRADLE Act, which would allow parents to draw forward Social Security benefits to finance one, two, or three months of leave after the birth or adoption of a child. The bill would offset the cost by having parents delay collecting their benefits for an equal amount of time upon retirement. It is similar to the New Parents Act sponsored by Republican senators Marco Rubio (Fla.) and Mitt Romney (Utah), which would likewise use Social Security to fund paid parental leave, but would not require parents to actually take leave from work in order to be eligible for the benefit.

There is also one bipartisan proposal, drafted by Republican senator Bill Cassidy of Louisiana and Democratic senator Kyrsten Sinema of Arizona. It would allow new parents to obtain an advance of up to $5,000 on their child tax credit to help with expenses during the first year of having a child, offsetting the cost by giving beneficiaries a smaller child tax credit over the next ten years.

During the hearing, Lee asked one of the experts a question that seemed to reference his own paid-leave legislation. “You say that our laws should communicate to our citizens that we . . . should ‘see parenting as worthy, dignified, and important work,’” Lee told Lyman Stone, an adjunct fellow at the American Enterprise Institute. “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 that mothers and fathers alike could access their own savings at such a pivotal moment?”

Stone agreed that they would, emphasizing that it’s important to find cost-neutral solutions to the lack of paid leave. “When you foist the bill onto a company,” he said, “the observed effect is the diminished hiring of mothers, which is not the outcome that any of us want.” He suggested that the Social Security proposal would be “long-run budget-neutral” and called it “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.”

Senator Cassidy, also a member of the JEC, was present at the hearing and asked the experts for feedback on his child-tax-credit proposal. He pushed back against Jane Waldfogel, a Columbia University professor on the panel, who suggested that an entirely new benefit program would be the best solution to the lack of paid leave.

“If you are going to do it through a payroll tax, that will be regressive,” Cassidy replied. “It’s easy to speak of that which is de minimus for someone who’s more affluent, but for a working family, that so-called de minimus amount is actually significant. . . . There’s a little bit of a false narrative that there’s no cost on raising payroll taxes for a more generous benefit.”

Cassidy’s comment hinted at a broader point: Unlike the two Republican proposals and his own bipartisan plan, the Democratic legislation would not be optional. Americans would be coopted into financing a benefits program that they might never use, or might take advantage of at disparate rates.

According to the new AFS, most Americans support the concept of family leave, but most don’t want to fund leave programs through government entitlements, tax increases, or borrowing against Social Security. A slim majority, meanwhile, favors offering tax incentives to employers to provide their own leave programs. Most Republicans suppors paid-maternity-leave programs but not other types of paid leave, while a large majority of Democrats supports paid maternity leave, paternity leave, and family leave for caregivers.

Of course, as Tuesday’s hearing demonstrated, the effort to craft policy that makes family formation more affordable can’t begin and end with the debate over paid leave. For conservatives, the challenge is to find policy solutions that encourage and support stable families without ceding ground to Democratic efforts to expand the scope of federal control.

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