When Congressional Democrats began the legislative process to enact President Biden’s Build Back Better agenda last month, Sen. Bernie Sanders insisted on adding a costly expansion of Medicare benefits to the bill. But a new report from the program’s trustees makes clear that this expansion would be unwise: Medicare is already expensive and growing faster than the revenues needed to finance it, resulting in unsustainable deficits. Before Washington considers adding benefits that would further increase costs, it must find a way to pay for the promises it’s already made. Otherwise, critical public investments in young Americans and working families in greater need could be crowded out.
PPI has long advocated robust federal support for broadband expansion. The infrastructure bill passed by the Senate provides that essential support. More than $42 billion would go to the states to fund broadband network deployments. Another $14 billion would fund a broadband subsidy program for low-income Americans. And almost $3 billion would go for digital inclusion.
Added to previous money already appropriated for broadband expansion and support since the pandemic started, this funding will take the United States a long way toward closing the digital divide, both in rural and urban areas. True, we could quibble with some of the details of how the money is distributed. Nevertheless, the bipartisan Senate bill would accomplish important progress on broadband.
From this perspective, there isn’t any need to address broadband again in the upcoming reconciliation process. Over the past year and a half, billions of dollars has been appropriated for broadband expansion and support, even before the infrastructure bill. The states also have a huge amount of funding from the American Rescue Plan to use for broadband if they want.
As documented in the our June 2021 report, “A Radically Pragmatic Agenda to Connect Rural America,” history shows how easy it can be for federal spending to be misspent in ways that do not contribute to closing the digital divide. We don’t want to repeat history. The key now is to focus on successful implementation of the resources in the infrastructure bill and already in the pipeline — that’s the way to get the biggest broadband bang for the buck.
On the latest segment of Talk Policy, Director of Social Policy Veronica Goodman sits down with Georgetown University McCourt School of Public Policy professors Pamela Herd and Don Moynihan, whose research focuses on public policy and improving social program design, performance, and outcomes. They discuss how administrative burdens prevent those in need from receiving critical welfare benefits and what effect the pandemic has had on these systems.
What changes need to be made? What needs to be done to remove the red tape and simplify these processes? How can policymakers make a positive difference? Listen to find out!
Read Pamela Herd and Don Moynihan’s book, “Administrative Burden” here.
Learn more about the Progressive Policy Institute here.
As part of the American Rescue Plan (ARP) they passed in March, Democrats increased the maximum child tax credit (CTC) parents can claim in 2021 for each of their children under 18 years old to $3,000, or $3,600 for each child under age six, and made the full value of the credit available to families with no income for the first time ever. The expansion lifted three million children out of poverty in its first month alone, which will improve their educational, health and economic outcomes throughout their lives if the policy is continued.
Democrats have made extending this policy a centerpiece of their $3.5 trillion Build Back Better agenda. But despite its success, Democrats are only proposing to extend the expanded CTC through 2025 at the latest because the annual cost of continuing the current expansion will roughly double after related policies from the GOP’s 2017 tax law expire. Fortunately, they can resolve this problem making those related policies permanent.
The GOP tax law temporarily doubled the maximum CTC to $2,000 and made more high-income parents eligible for the credit as part of a broader effort to consolidate family tax benefits. Previously, parents could claim a CTC worth up to $1,000 for each of their children, and all households could reduce their taxable income by $4,050 for each “personal exemption” they claimed for themselves and their dependents.
Taxpayers could also choose to either deduct the cost of specific expenses from their taxable income or claim a “standard deduction” that was the same for everyone. The GOP tax law temporarily repealed personal exemptions but increased the CTC (which replaced exemptions for children), doubled the standard deduction (which replaced exemptions for taxpayers themselves) and created a $500 non-refundable credit for non-child dependents.
To keep their bill from adding to the deficit after 10 years, which would have prohibited them from passing it via the filibuster-proof “reconciliation” process, Republicans scheduled these, and many of their bill’s other provisions, to expire after 2025. Those expirations are what would make a formal score of the cost of the Democrats’ CTC expansion spike after that year.
The official scorekeepers at the Joint Committee on Taxation and Congressional Budget Office score the fiscal impact of all proposals over a 10-year window relative to their “current law baseline,” or the levels of spending and revenues that would occur if Congress did not pass any new laws. Since the GOP tax law scheduled the CTC to shrink after 2025, the gap between the Democrats’ proposed spending levels and current law would grow. The expiration would add roughly $530 billion to the expansion’s 10-fiscal year cost. Should the Democrats’ expanded CTC be made permanent, families in 2026 would be eligible for both the enlarged CTC and the larger per-child exemption that existed in 2017, meaning the tax benefit per child would be even greater than it is today.
Rather than create an unintended bonus benefit that raises the CTC expansion’s cost, Democrats should simply make the changes to personal exemptions and the standard deduction permanent. Based on figures from the Tax Foundation, PPI estimates that permanently repealing personal exemptions while retaining the increased standard deduction and credit for dependents not eligible for the CTC would reduce the net cost of the Democrats’ CTC expansion by more than $100 billion each year after 2025.
As a result, Democrats may need only about $800 billion in additional offsets over the 10-year window to make the current CTC permanent (and even less if they are willing to consider a slightly smaller expansion). Although this figure could be a slight underestimate, since the Office of Management and Budget projects the CTC expansion would cost roughly 10 percent more than Tax Foundation does, the cost of this package is still likely to be only around half the $1.6 trillion cost of making the expanded CTC permanent on its own.
Making these reforms permanent would not only help pay for the CTC expansion but also give Democrats ownership of one of the few progressive components of the GOP’s tax law. The CTC expansion is more progressive than exemptions for dependents because credits directly reduce a taxpayer’s final liability, while exemptions lower their taxable income, which gives a bigger benefit to those in high tax brackets than those in low brackets. Meanwhile, the increased standard deduction only benefits households that do not itemize their deductions, which are disproportionately low- and middle-income households. Making this progressive benefit consolidation permanent now would prevent Republicans from using the continuation of middle-class tax cuts as a vehicle to enact more tax cuts for the rich in 2025.
Democrats do not want their most consequential anti-poverty policy in a generation to expire less than four years from now. When polls show that a majority of voters support the current CTC expansion but are skeptical of continuing it post-pandemic, lawmakers cannot necessarily count on their successors to keep a temporary extension from expiring. Rather than jeopardizing these important benefits to circumvent budget scoring rules, Democrats should protect their policy achievement and help pay for it by extending other family tax provisions in place today along with it.
Brendan McDermott is a fiscal policy analyst at the Progressive Policy Institute’s Center for Funding America’s Future.
For much of the last two decades, beginning with the passage of No Child Left Behind (NCLB) in 2002, our top political leaders have shown concern about children stuck in failing public schools. NCLB required districts to do something — not enough, but something — about those schools. Presidents George W. Bush and Obama both called education “the civil rights issue of our time.” And President Barrack Obama’s Race to the Top and School Improvement Grants created incentives for states and districts to act.
Some states went further than others. New Jersey and Massachusetts took over entire school districts. Louisiana created a Recovery School District (RSD) to take failing schools from their districts and hand them to charter operators. Indiana passed a law allowing the state Department of Education to do the same. Tennessee, Michigan, North Carolina, and Nevada emulated Louisiana’s RSD, to one degree or another.
Predictably, the bureaucracy fought back. School boards, district administrators, and teachers unions all objected. Adult jobs were at risk, after all, and adults vote, while children don’t. In 2015 Congress backed down, replacing NCLB with the Every Student Succeeds Act (ESSA), which, despite its name, significantly reduced the pressure on districts to do anything meaningful about failing schools. As the teachers unions ramped up their pressure, Michigan killed off its takeover district, Georgia’s governor tried to create a takeover district but was defeated at the polls, Nevada killed off its Achievement School District, and North Carolina’s Innovative School District took over just one school. Just recently, the Indiana legislature repealed its legislation authorizing the state to take over failing schools.
Yet millions of children still languish in low-performing schools, where they are less likely to develop the skills or habits necessary to get into college or the military or succeed in anything but low-paying jobs. Most of them are from low-income families, many of them Black or Brown.
This should be a national scandal. In the era of Black Lives Matter, it should be the civil rights issue of the day. But with the glare of publicity focused on other, equally appalling problems — on police officers who kill unarmed Blacks and legislatures that restrict voting rights — it is not. That’s a tragedy, because Black minds matter, too.
If you are a governor, legislator, education commissioner, or district leader who wants to help low-income and minority children get a decent education, what can you do? We still have far too many schools that fail their students year after year. Is increased “support” of the kind suggested by ESSA enough to generate significantly better outcomes? Not often, according to the research data.
Takeover districts with wholesale replacement of existing schools can work, but the political backlash they unleash makes elected leaders leery of them. In their absence, state leaders should do two things. First, make it painful for districts to let their worst schools stagnate, by closing them, handing them to nonprofit operators, or appointing a new school board. Experience shows that district leaders will scramble to avoid such outcomes. Second, give districts an attractive path to turn those schools around by encouraging them to create “innovation zones,” in which schools have the flexibility they need to change, and ensuring that those schools are accountable for performance by appointing a zone oversight board that can replace them if they fail or help them replicate if they succeed. The zone board’s job would be to do whatever it takes to turn the schools around: bring in new principals, replace staff — replace everyone at the school, if needed — even bring in a proven outside operator, such as a charter management organization, to run the school. States should encourage this with a carrot: roughly $1,000 extra per pupil, per year, for zone schools, for the first three-to-five years.
An independent, appointed zone board, organized as a not-for-profit 501(c)3 organization, would ensure that when schools continue to struggle, something is done about it. Typically, when this happens, boards replace principals. If failure continues for several years, they should have the authority to replace entire schools. Elected school boards have proven reluctant to replace schools, for fear of the blowback. Turnout at school board elections is often under 10%, which means a few hundred angry voters can defeat a board member. And nothing creates angry voters quite like closing and replacing a familiar neighborhood school, even if it’s doing a poor job.
We have learned, over the past three decades, that with few exceptions, real change will not occur unless it is driven by local leaders. Innovation zones are locally owned: They require approval by the elected school board, their members are usually prominent local civic, community, and philanthropic leaders, and some of the schools remain in the hands of local principals. The zones give local leaders a workable structure, and the carrot and stick give them an incentive to act. Such zones are succeeding in cities as diverse as Springfield, Massachusetts, South Bend, Indiana, Los Angeles, and several Texas cities: Waco, Ft. Worth, and Lubbock. Other places are even using them to help a group of decent schools go from good to great.
Creating effective innovation zones is not necessarily easy. But after decades of trying different strategies to help children trapped in failing schools, it appears to be our best bet.
WHAT HAS NOT WORKED
Between 1989 and 1995, New Jersey pioneered a new strategy to deal with districts full of failing schools: state takeover of school districts in Jersey City, Paterson and Newark. Since 1989, 29 states have passed legislation allowing such takeovers, and at least 22 have tried it. Most have not been very successful. Only in cases where those appointed by the state have a clear improvement strategy and the political power to impose it has takeover yielded significant improvement.
Massachusetts had some success when it helped Boston University take over Chelsea’s school system in the late 1980s. Almost 25 years later, the state took over the Lawrence schools and also produced significant improvement. In contrast, New Jersey’s takeover districts languished for decades. Only when the state embraced rapid expansion of charter schools as its strategy in Newark did that district begin to turn around. New Jersey then pursued the same strategy in Camden, with equally significant results.
But most takeovers come with no coherent strategy and achieve little. Legislators in both parties are pushing to repeal Ohio’s takeover law, and in most states, the current political climate makes takeover a non-starter.
In 2003, Louisiana pioneered another approach. Its legislature created the Recovery School District (RSD), a statewide school district to take over failing schools and hand them to charter operators. After Hurricane Katrina in 2005, it voted to place more than 100 New Orleans public schools — all those performing below the state average — in the RSD. As I documented in Reinventing America’s Schools, this strategy produced the most rapid improvement of any city in the nation.
Governors and legislators in other states took note, and soon there were bills to emulate the RSD in a handful of other states. In Michigan, the governor created the Educational Achievement Authority in 2011, but he could never persuade the legislature to authorize it or fund it properly, so it remained small and unsuccessful, until the legislature killed it. Virginia passed a bill creating an Opportunity Education Institute in 2013, but the courts ruled it unconstitutional, “because it was created by the general assembly rather than by the state board of education, and because it superseded local district control,” as one analyst summed it up. Nevada passed an Achievement School District in 2015, but it was underfunded and the Democrats abolished it as soon as they took control of the legislature in 2019. North Carolina passed a similar bill in 2016 but limited the new district to five schools, and by 2021 it had taken charge of only one school, amid considerable pushback from districts. Georgia Governor Nathan Deal proposed an “Opportunity School District” and secured a two-thirds vote in the legislature to put it on the ballot as a constitutional amendment in 2016. But after an expensive campaign against it by the teachers unions, 60% of voters opposed it.
The one robust effort to emulate the RSD occurred in Tennessee. In 2010, Tennessee’s legislature created an Achievement School District (ASD), to take over the state’s worst schools. The bill also allowed districts to create innovation zones for low-performing schools and grant them significant flexibilities. Because this strategy showed such promise in its early years, it is worth examining its experience in some detail.
TENNESSEE’S ACHIEVEMENT SCHOOL DISTRICT AND INNOVATION ZONES
Tennessee’s strategy was particularly aggressive in Memphis. By 2016 the ASD had taken over 29 of Memphis’s more than 150 district-operated schools. The ASD turned 23 of these schools over to charter operators, recruited from all over the country, and ran six itself. Unlike Memphis’s other charters, ASD charters were neighborhood schools, not schools of choice. Their students were among the poorest in the district, both in terms of finances and academic performance.
Meanwhile Shelby County Schools (SCS), Memphis’ school district, had moved 21 schools into an Innovation Zone, on its own initiative. In its “iZone”, as it quickly became known, the district lengthened the school day by an hour, using federal School Improvement Grant funds to pay for it. After that money ran out before the 2015-16 school year, the district turned to grants, donations, and its regular budget.
District leaders recruited their best principals to take over iZone schools and gave them the authority to hire staff, and those principals recruited the best teachers they knew. Teachers could earn bonuses based on student performance, and their schools provided intensive support and coaching. Principals were not constrained by union contracts, because Tennessee teachers no longer had collective bargaining rights. All teachers had to re-apply for their jobs once their school entered the iZone, a reality that led to hundreds of layoffs. But once a teacher was rehired and had tenure, firing was still difficult.
There were other limits on autonomy: iZone schools had only about half the autonomy a charter school enjoyed. Principals didn’t control most of their budgets, for instance, and they could choose their own curricula and assessments only if their first-year test scores were above a certain threshold.
But both the ASD and the iZone thrived in their first three years. ASD schools struggled during their first year with high student turnover and discipline issues, but later improved. Tennessee uses a Value-Added Assessment System (TVAAS) to measure student growth, which factors in students’ socioeconomic status. It rates schools on a scale of one (slowest growth) to five (fastest). In 2015, second- and third-year ASD schools averaged level five, while first-year schools averaged level one.
Innovation Zone schools showed faster academic growth than the ASD for their first two years, but in 2014-15 the ASD outpaced them. By 2016, seven iZone schools had improved enough to jump off the “priority list” — the bottom 5% of schools in the state, by performance. Unfortunately, those results came at the expense of district schools that lost talented principals and teachers to the iZone. Predictably, they showed declining performance.
Still, the combination of the iZone and the ASD gave Memphis a more aggressive strategy to deal with its worst public schools than almost any other city. Of the 69 priority schools identified in Memphis in 2012, by 2016 only a handful had escaped some intervention: 28 had been taken over by the ASD, 21 had been moved into the iZone, and 13 had either been closed or consolidated with other schools.
But taking over schools and closing schools generates fierce political resistance, and Memphis was no exception. As a result, according to Chris Barbic, the ASD’s first superintendent, by 2015 Governor Bill Haslem had retreated from his initial support for such aggressive strategies. Disappointed, state Education Commissioner Kevin Huffman departed, and his successor, Candice McQueen, was more intent on mollifying superintendents and principals than taking over schools. Reading the tea leaves, Barbic left the ASD in early 2016. The commissioner never allowed Barbic’s replacement to follow through on ASD plans to spin off its direct-run schools into a new charter management organization, nor to replace struggling ASD schools with stronger operators. Nor did the state place any more failing schools in the ASD. Its performance stagnated — some ASD schools excelled, others lagged far behind. Within a few years, many in the state considered it a failure.
Talk Policy with PPI is a podcast series of discussions with leading policy experts and policymakers on relevant topics in the news. For this latest episode of Talk Policy, PPI’s Director of Social Policy Veronica Goodman sat down with Professors Pamela Herd and Don Moynihan of Georgetown University’s McCourt School of Public Policy. They are the authors of the book, “Administrative Burden,” and their research focuses on public policy and improving social program design, performance, and outcomes. They discuss how administrative burdens prevent those in need from receiving critical welfare benefits and what effect the pandemic has had on these systems. What changes need to be made? What needs to be done to remove the red tape and simplify these processes? How can policymakers make a positive difference?
The full podcast is available hereand below as a transcript. Purchase Pamela Herd and Don Moynihan’s book, “Administrative Burden” here. Other episodes of Talk Policy can be found here.
Radically Pragmatic, a PPI Podcast
TALK POLICY: Administrative Burdens with Pamela Herd and Don Moynihan
Progressive Policy Institute (0:10)
You’re listening to Radically Pragmatic, a podcast from the Progressive Policy Institute. We talk with lawmakers, policy experts and thought leaders about the issues driving the news nationally and internationally. The Progressive Policy Institute is a catalyst for policy innovation and political reform with offices in Washington, D.C., and Brussels. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. We encourage analytical conversations, not your typical partisan talking points.
Veronica Goodman (0:44)
Hi there and welcome to Radically Pragmatic, a PPI podcast. My name is Veronica Goodman, and I’m PPI’s Director of Social Policy. For this segment of Talk Policy, I sat down and talked with Pamela Herd and Don Moynihan, professors at Georgetown University’s McCourt School of Public Policy. They’re the authors of the book “Administrative Burden,” and their research focuses on public policy and improving social program design performance and outcomes. Be sure to subscribe wherever you listen and enjoy the episode.
Veronica Goodman (1:23)
Hi, I’m Veronica Goodman, Director of Social Policy at the Progressive Policy Institute. I first want to thank professors Pamela Herd and Don Moynihan of Georgetown University, here with us today to discuss administrative burden and public policy. And we’ll take some time to discuss exactly what that means and why it’s important. They’re the authors of the book on this topic, appropriately named “Administrative Burden,” which I can’t recommend enough for policymakers and experts or anyone interested in improving public policy. And then in your book, you cover different case studies to show how these administrative burdens can manifest differently depending on the situation and circumstances from the ways that families access food, through the Supplemental Nutrition Assistance Programs, to the way that people vote. And so I think there’s a really exciting conversation that’s been taking place during the pandemic and as the Biden Administration, with Democrats in Congress, have been hard at work, providing relief and you know, trying to shore up economic recovery. And really how we build back the safety net better from all of the social spending programs of the American families and jobs plan. So things like food assistance, and income support for families with children, paid family leave. And I think given the nature of the pandemic, we’ve had to rethink how we provide aid to families or how people interact with the government and government programs. So I think that the concept of administrative burdens continues to be extremely relevant to the discussion. And thank you for taking the time to join me today.
Don Moynihan (2:51)
Thank you. So glad to be here.
Pamela Herd (2:53)
Happy to be here.
Veronica Goodman (2:54)
Thank you. And so just to get started, if you could please both just briefly introduce yourselves and your motivation for having written this book. And Pam, maybe you can go first and also explain what we mean when we use the term “administrative burden.”
Pamela Herd (3:08)
Sure, my name is Pam Hurd. I’m a Professor of Public Policy at Georgetown University and the McCourt School of Public Policy. So the the term administrative burden kind of encompasses three kinds of costs, right, like, broadly speaking, it’s the onerous experiences that we might have when we interact with government. So typically, what people think of is like the three hour wait at the Department of Motor Vehicles to get their license. But we mean, this writ large across a range of different government policies. And we think about those costs in three different ways. So the first are kind of learning costs, like figuring out whether or not you’re eligible for a program, whether there’s a program out there that might help you, for example, if you’re struggling to find health insurance, compliance costs are I think, stereotypically, what we think about when we think about administrative burden or red tape, right, it’s the paperwork, it’s the interviews, it’s the effectively the amount of time on in some respect, as part of this in terms of those encounters with government to access benefits or services. The final category, though, of costs that we think about our psychological costs, and these are the kinds of stresses stigma, and kind of the sense of being overwhelmed, for example, that people experience when they’re trying to access really critical supports or any supports, right, like you get really frustrated at the DMV. But then imagine yourself in a situation where you’re trying to access health insurance for a sick child, and you’re encountering, you know, bureaucratic obstacle after obstacle. And so those kinds of moments are just really scary. I think one quick example right now that we point to that’s probably terrifying for a lot of people is, you know, we’re going to face this, is evictions. And meanwhile, there’s an enormous amount of money just sort of lying around that the federal government allocated so that people wouldn’t be evicted. But actually accessing those resources is turning out to be, you know, really difficult with those processes. So imagine yourself in that situation where you’re trying to not get evicted, and you’re just met with obstacle after obstacle. Those are the kinds of psychological costs that we, you know, we really worry about in terms of their impacts on people.
Don Moynihan (5:31)
And I’ll follow up. So I’m Don Moynihan. I’m the co-author of the book. I’m also a professor at the McCourt School of Public Policy at Georgetown University. And I think another way of thinking about the motivation we had writing the book was trying to fix these different types of communication gaps we’ve observed in the policymaking world. One is between people’s experience of government and maybe the ways in which policymakers talk about it. And so the types of experiences people have, where they can’t get access to something, or they find an administrative process to be complicated and frustrating, we can all relate to those we’ve all had those experiences, but they don’t seem to be often at the forefront of policymakers’ minds. And we think that’s partly because an issue relabeling, there’s also within this policy researcher community, sort of a Babylon effect going on where we might be studying the same sorts of things, but we call them different things. And so economists might call them ordeal mechanisms or public administration. In fact, you might call them red tape or you might not have a particular language to think about them. And the third type of communication gap is that we see the same sorts of administrative burdens occur across lots of different policy areas. And so in our book, we talk, we start with voting, and then we talk about abortion. And then we talk about health policy and social policy and Social Security. So you know, the part of the point is that these might seem idiosyncratic and specific to a particular policy area, but actually do reoccur all the time in lots of different spaces. And by naming and recognizing them, we have a better handle on being able to explain why they occur, whether they’re worthwhile, or what we might do about them.
Veronica Goodman (7:33)
Great, thank you for that. And I guess I’m now sort of having a good understanding of the concept. You lay out in your book, different case studies and why it matters for all of these different areas of policy. But how is it in particular maybe more relevant, even in the pandemic, to the way that some of these programs function?
Pamela Herd (7:53)
Yeah, I mean, the pandemic, in many ways, right, exposed a lot of large failures in the U.S. And it also exposed a bunch of kind of weaknesses or failures within the social welfare system in the U.S. So I do think that what became really obvious during the pandemic, basically, was the extent of these burdens and social welfare policies, right. So the big one that people point to is unemployment insurance, right. And so at the beginning, we saw this sort of huge surge in applications, we saw state agencies completely overwhelmed and unable to process those applications. And I think in the beginning, people just sort of thought, well, it’s just this like, once in 100 year event, like of course they weren’t going to be able to manage this. But once it kind of dug beneath the surface, what we saw was, well, that’s certainly not insignificant, but a lot of what was going on was kind of a fundamentally broken system to begin with. It’s a system basically the unemployment insurance system, it’s really a system that is kind of more effectively designed to prevent fraud than it is to actually provide access to benefits for people who are eligible for them. So I think you know, that being a striking example, but just to get beneath the surface even further, a little bit, I think one of the the second things basically, that the pandemic exposed on is not just the generic failure, for example of the UI system. But I think what it showed is that, you know, UI didn’t hold up well, other programs did it. Right. So I think we saw SNAP, for example, food stamps hold up pretty well, administratively, during the pandemic, Medicaid held up pretty well. What was the difference? Right, why did one collapse, but programs like Medicaid and SNAP held up much more effectively? Part of the answer to that, in terms of those burdens, is the degree of federal control over programs. So this is pretty much systematically true where the federal government has a ton of control. Over these programs, they typically have somewhat less burden than when that control is largely devolved to the state. And there’s a bunch of other examples I could give you. But I think that’s a couple of things to really point out from the pandemic, at least in terms of design and what we saw kind of happen. You know, I think that the second thing that’s really important to point out from the pandemic, in terms of what we learned, is actually just the learning, meaning that a lot of people don’t actually access these social welfare systems. But we had a moment where all of a sudden, all at once a lot more people were trying to access the system, and actually realized what it was like to interact with it. And I think that was really jarring for a lot of people and kind of an eye opening moment, in terms of thinking that, yeah, you know, what, we kind of need to work on this, like, this isn’t a well functioning system. And these burdens are unnecessary, they’re onerous. And they really undermine the fundamental goals of these programs, right? If the goal of the unemployment insurance system is to protect people during spells of unemployment, but people can’t access those benefits, the program doesn’t work. It doesn’t matter how large the benefits are, it doesn’t matter how many people we say should be eligible to them. For them, if people aren’t actually getting them, the program doesn’t work. And I think it was a bit eye opening for some policymakers, some activists, and even policy researchers, I think, to kind of take a closer look at this issue.
Don Moynihan (11:39)
Yeah, I think one of the big lessons for folks is that policy design and implementation really matters. And so you know, if you’re an advocate, and your goal is to get a piece of legislation passed, the one thing you learn in the last couple of years is that there might be no guarantee that the money that might flow from that legislation gets into the pockets of people that need it. And sometimes those processes of policy implementation are designed not to work, right. And, you know, we have these sort of remarkable moments during the pandemic, where the Governor of Florida Ron DeSantis, was talking about pointless roadblocks that his Republican predecessor had put in place for unemployment insurance is almost unthinkable. And I think we also saw moments where people could see these really big differences between programs that seem to work and seem to not work. So Pam mentioned rental assistance, which has just been stymied by sort of multiple layers of government that are involved in delivering that complex processes. But on the flip side of that, if you think about the stimulus checks that were mailed out, that was a burden free experience for the vast majority of people, you know, you essentially had the federal government trying to help people and doing it in that case, in the most straightforward way possible, where they said, we’re gonna have these really simple eligibility rules, you know, how many dependents do you have? What what’s your income? And based on that, we will send you a check. If there’s no big application process, you don’t have to demonstrate how many assets you have. You don’t have to apply for this. And so that was an example I think of when the federal government said, how can we use administrative data to sort of move burden away from individuals and onto the state and make the experience easier. We’re seeing some of that now, with the child tax credit, which I think is another, you know, we might think of this as a pandemic, your program, its expansion to reach a lot more people. But there’s also a contingency on that point that maybe we can talk about more, which is that for something like 86% of people are getting the expanded payments each month without having to do anything, but people who are less connected to the tax system because they haven’t been paying income taxes because their income is so low, they have to negotiate the administrative processes of applying for those benefits. And so they are having a different experience. And so I think that is one other point arise out of this is that a program I worked pretty well for some groups, but then still be experienced as owner as product groups.
Veronica Goodman (14:36)
Agreed. And I’m so glad that you know, you brought up the child tax credit because Pam and I were talking before the podcast about how that’s really a great case study in terms of what happens when administrative burdens are really low and you’re trying to focus on reaching as many people as possible with you know, the ultimate policy goal just being to get help to families who are struggling. And I’m glad that you mentioned SNAP, because it’s a program that I’ve studied in depth. And it’s one of the big case studies in your book. And really in particular, I thought it was great that you looked at the way that the burdens affect different groups disproportionately. So you have the elderly who have some of the lowest take up rates, just given sort of the hoops that they have to jump and the and the way that the administrative burdens are really complex in terms of recertification windows. So, I love that if you could talk a little bit more about that case study and just generally how the administrative burdens of these programs might affect groups and, and perpetuate inequities and outcomes.
Pamela Herd (15:43)
Yeah, the food stamp example is a nice one, actually, in terms of thinking about, you brought up older adults, and we do we have this huge take up issue with older adults in the foods in terms of food stamps, in terms of the you know, in meaning that the fraction of older adults eligible for the program who actually receive it as a relatively low, I believe it’s still hovering around 60%. And so why is that? Well, it really is, it’s a simple calculation, which is burden. And the central issue for older adults, actually, is that the way older adults basically are more likely to qualify for food stamps, because they have extraordinarily high out of pocket health care costs. So low income older adults can spend 20% to 30% of their income on out-of-pocket health care costs. And so that’s how you’re supposed to be able to apply that basically to reduce your income threshold to become eligible for the program. But it’s just an incredibly complicated process that varies by state. And so as a result, a lot of older adults who really are desperate like they’re literally making the trade off between the eating and accessing health care, are not getting these benefits. And so it’s a really nice example of kind of within a program, how we can see disproportionate impacts. Whereas actually, for children and adults, we don’t don’t do quite as badly, we see much higher take up rates probably between 80% and 90%, that you mentioned the child tax credit. And I do want to go back to that as well, though one thing in terms of thinking about disproportionate impact, and that I mean one of the reasons people who studied poverty were so excited about this expansion was because we know deep poverty has accelerated basically over the past 20 years. And so one of the things that child tax credit expansion could do is actually reduce deep poverty. The catch here is that the degree to which that program is burdensome is it’s largely burdensome for that population. So the people who kind of most need that benefit, are also the people who are most likely to struggle actually accessing it. And the Biden Administration is clearly aware of this. They’re working actually, for example, with Code for America right now to kind of do some redesign on their website for people. For people who are not automatically basically getting it in terms of trying to access it, they’re clearly aware of this. Advocates: there’s a lot of advocates out in the field who are doing a lot of work trying to do outreach. But it’s you know, it’s a meaningful problem. And the one thing I would sort of step back, big picture and say, you asked at the beginning, like how did you come to this? Why did you get interested in this, the policy that they kind of started with it, my dissertation was on was actually Social Security, retirement, and social security retirement right. Like it is our most effective social welfare program, in terms of poverty reduction, it is our largest, and it is our most popular, it’s basically the definition of social welfare policies success, it also has basically 100% take up, and it doesn’t have 100% take up, because it’s not complicated. The eligibility, having written a benefit eligibility calculator is a part of my district, the eligibility process is complicated. Like if we actually put that burden on individuals and said, okay, document, your earnings history to qualify for this program. And for us to figure out your benefit size, you’d have like 50% take up in the program at best. It’s simply the way that we designed it. And so when we say params, I think for those of us who focus on poverty, or folks who focus on property, they look at an 80% take up, they look at 90% take up and they say, That’s amazing. We’re doing really well. I do kind of want to shift that lens a little bit and say, no, not amazing. Amazing is 100%. Not even amazing, that’s actually effective. Like that’s what we should expect from these programs, because we know we’re capable of doing that. So that’s the only thing I would add in terms of thinking big picture about how do we really reduce inequality? How do we make it so that it doesn’t disproportionately fall on certain populations? The model is Social Security, basically. And we think about program design and implementation and burden that way. And so then when you get to food stamps, when you get to the child tax credit, that becomes the expectation of what we can do.
Don Moynihan (20:18)
So I think in an ideal world, we would like policymakers to ask themselves the questions of who was missing out from these programs? And why now is that you know, the sort of traditional econ perspective from ordeal mechanisms, the answer would be, well, they don’t deal with the hassles, that means they don’t value the benefits. Whereas I think some of the the arguments we’ve tried to promote is that if people are struggling with the processes, and maybe for a myriad of reasons, including, you know, intense poverty, the experience of scarcity, other life challenges going on, like poor health or being evicted from your house might affect your ability to manage administrative burdens. And then finally, you know, what are policy makers doing about it, right, if you can just sort of look at a program that has 50% take up and not pay attention to the 50% of people are not taking up those benefits, you should be looking at their motivations, their barriers, and our ways to deal with sorts of bottlenecks that they face.
Veronica Goodman (21:29)
So one of our Fellows at PPI is Joel Berg, who’s also the CEO of Hunger Free America, who does hunger advocacy all over the country. And he actually just completed a road trip across the country. And he stopped at certain SNAP offices, where people would go to sort of fill out the applications and try to get aid in person. And he said, for a lot of them, they weren’t open or you know, the hours coincide with people’s work schedules, so they’d be missing a day of work. Or even just once he got the application, it would be over 20 pages, which would be really difficult for somebody to navigate on their own. So one of the one of the things that we look at at PPI is how do we sort of combine the applications for all these programs and make them you know, sort of a one stop shop, there’s legislation on the Hill called the HOPE Act, which would try to make it be one application for all of these programs and see how your eligibility would be right there in the online application so that people would have a very straightforward idea of what they’d be getting, which I hope is sort of the future, but sort of as we’re talking about the child tax credit, and how the conversation has been moving to things being automatic and direct, and an administrator federally, you know, I guess, what do you sort of, do you expect that this will be the new trend? And how programs are designed? Or do you think it will be done in a sort of bipartisan way?
Don Moynihan (22:59)
It should be done in a bipartisan way. I mean, I think there isn’t any deep philosophical reason why conservatives and liberals wouldn’t agree that they want our government to work well, and simply and effectively and respectfully for the citizens that they serve. And, you know, in many respects, some of our critiques embedded in the book could be read about the need for bureaucracies to just constantly monitor their performance, because without that sort of monitoring, they will tend to slide into maybe prioritizing the needs of the bureaucracy over the people that they’re serving. And so the you know, the core idea at the heart book is that human beings deal with these government processes. And so we should think about that when we’re designing and implementing these processes. I think they’re, you know, there’s a much longer conversation to be had about why then these potential coalition’s break down, in particular policy areas. And you know, the shorter version of that conversation that we document in the book is that if, if your party is generally opposed to a particular policy, it’s likely that you’re going to support imposing more burdens and barriers in that policy, or if it serves a constituency or group that you don’t particularly care for, or that don’t come out and vote. But immigrants don’t because they can, right there, you’re more apt to be subject to the negative face of administrative power. But the hope with this project is that simply by exposing how important these administrative burdens are, you could build this sort of general bipartisan consensus that you once The law was passed, and we agree that people are eligible for benefits or that we’re going to serve them, we try to do it in a reasonably competent way that takes into account the actual challenges people have in their lives and treat them as real people.
Pamela Herd (25:15)
On a hopeful note, right, like the you look at the, you look at the food stamp program. And, you know, it was under George W. Bush, when he was president, that they really put a huge effort into reducing barriers and burdens in that program. So, you know, it’s not futile, like there is there is oftentimes actually, I think, some consensus around reducing those burdens there, but politics mattered, you know, and so that will be sort of a part of the part of the picture, too. You know, I think we clearly document throughout the book, I mean, the most obvious place you see this, this, especially around abortion policy, where it’s really different burdens are really driven by politics. We saw some of it during the Trump administration and around programs like Medicare, Medicaid, and food stamps like these, these burdens, because they couldn’t get changes passed in Congress. So there’s some back and forth. But I would actually argue that the overall picture at this point is a bit more hopeful, in terms of the acknowledgement of how much of a problem this is, in most places, and the willingness to try to kind of fix and reduce them.
Don Moynihan (26:27)
Let me add one more point to that, which is that what we’ll talk about in the book is the ways in which burdens grow and become more powerful when they’re kept in the dark. They’re sort of like a fungus. So when they’re kept in the shadows, and people don’t talk about our effects, you’re more likely to become prominent, if you if you flip the script around and think about the way in which people talk about fraud as a concern, and push that to the front of the policy discussions, have hearings in legislature about the potential for fraud point to individual cases that may not be terribly representative, and then make policy on the basis of that. That’s an example of the ways in which values shape our policy and implementation choices. And that’s fine, values should do so. But we should pay attention to the potential trade-offs between one approach versus another. And so if you’re only making policy to limit fraud, you can drive fraud down to zero by building a policy implementation system that’s essentially impossible for anyone to navigate. And what we want is just for policymakers to have those two ideas in mind, if I’m going to do wax, how’s this gonna affect access to this particular program?
Pamela Herd (27:51)
And I do think in terms of the awareness, journalists have been covering this, like nothing I’ve ever seen before. And I think that really matters, you know, in terms of the degree to which they’re putting this out for people who may not encounter burdens in these programs, who are kind of shocked, like if you saw the response to the Annie Lowery piece in The New York Times, I’m sorry, in the Atlantic around the time tax. I mean, when you listen to people’s responses to that, they were like, really surprised, disturbed, we need to do something about this. So to that point about increased visibility has to help. I think that’s true. And I do think that journalism, actually journalists, have been doing a really good job of late really covering it.
Veronica Goodman (28:38)
Yeah, absolutely. And that that was really an excellent piece by Annie Lowery. You know, as you were mentioning, Don has how some of our values guide, sometimes disproportionately the conversation, Pam, I can’t help but think about some of the things you were tweeting lately about the FDA decision around the vaccines for kids. We’re a very captive audience here in our household because we have a five-year-old and a two-year-old, desperately want them to be vaccinated, of course, and so it would be great if you could talk a little bit about how that’s also coming about.
Pamela Herd (29:16)
Do you mean the burdens and…
Veronica Goodman (29:17)
Yeah, the burdens from, yeah, the process of everything.
Pamela Herd (29:21)
So we also have an eight year old who is unvaccinated. I’m deeply sympathetic. Yeah. I mean, actually, the vaccines are really interesting when you think about it in terms of burdens. So we often start to talk about administrative burden by actually saying burdens actually aren’t always bad. So on the one side with vaccines, one thing that we’ve seen are mandates, right, that there’s burden and like I had to at Georgetown, we have a vaccine mandate, so I had to obviously get the vaccine, and then I had to upload my documentation. But that kind of burden arguably is an okay burden. Because what Don was talking about in terms of weighing the costs and benefits of these burdens, I think it’s a really clear case where whatever cost, I’m entailing with that burden is far outweighed by the health benefits, right, of making sure that people are vaccinated. I think that the where we’ve seen burdens as bad with vaccines is Yeah, I think it’s reasonable to say, we know, actually, there are, there are actually a lot more people out there willing and wanting to get vaccinated, but in fact, are impeded by barriers. So some of it is kind of learning. You know, a lot of people are just starting out where the vaccine is free, basically, because nothing in our health care system is free. Or if you go to see the CVS website, for example, to try to get a vaccine, you’re met with a screen that initially just asked you to provide your health insurance probably stops a lot of people right there, right? Because they just don’t get it free. So there’s been some coverage of that. How accessible is it really, so we hear a lot of this. Well, you can get it anywhere. But you know, what, if you work in an unstable employment, where your schedule is constantly changing, where I know, theoretically, you’re supposed to get sick leave. But in practice, we know that actually doesn’t happen. It’s a real cost to you to try to figure out when you can get the vaccine to avoid causing problems with your work schedule. Whereas we’ve seen efforts when people just show up, you know, at low wage workplaces, for example, they get a ton of people vaccinated. So I do think one of the things that we’ve seen with the vaccine rollout is that we were not taking seriously enough the actual burden involved, for particular sub populations, low income populations, immigrant populations, and that’s have real consequences for us in terms of the fraction of people actually vaccinated.
Veronica Goodman (32:04)
Sure, and so I guess, looking forward for both of you, are there any topics you’d like to see more research on in this space, or what you’re hoping to focus on in the future?
Pamela Herd (32:16)
One quick area I mentioned before Don’s time is done is I’m looking for a greater understanding actually, about not just the impact these kinds of burdens have on people’s like access to programs, but their actual mixture, their health, their psychological well being, and their views of government. So one thing that we haven’t really talked about is how these really negative interactions with government actually impact people’s views about what government can do, and then what they’re willing to support in terms of kind of government intervention on the thing that I always point to, right, was that billions of dollars in aid that was hugely beneficial during the pandemic, but for a certain group of people, for not an insignificant group of people. Despite all that money being spent, they were left with really negative feelings, actually, because it was inconsistent, it was hard to access. So those kinds of feedback mechanisms. So I would like to understand a lot better in terms of how it actually affects people’s views of government. How does it affect people’s willingness to support going forward kind of more social welfare policy intervention to do things like reduce poverty and increase access to health insurance?
Don Moynihan (33:31)
Yeah, I think I’d reiterate what Pam said. I think there’s also like a class of research that is much more at the intersection of just practical design and academic research, that I hope to see a lot more of where governments will routinely experiment with a new way of doing things maybe by doing data matching, or by combining forms as you talked about, or by simplifying processes in some way. And even if they don’t run a full randomized control trial, that they do some sort of tracking to get feedback on whether that worked or not. Because some of the times administrative burdens occur in the public sector is simply because we’ve had an administrative process in place to do things a certain way for a long period of time. We become wedded to that. People might understand it’s not perfect, but they don’t have a systematic incentive to examine and improve those processes. So I think there’s a huge opportunity. And I think the Biden Administration is moving in this direction. But to do this for a practical, experimental approach to research where you just systematically and routinely look at potential problems, try something else, get feedback. And if that doesn’t work, try something else again. So I think that’s one type of research, I’m excited to see a lot more of. And then there’s sort of another type of research, which is more to do with sort of structural issues, that you know, why is it harder for some people more than others? Right, you know, issues of like human capital, health, financial resources, race, where you live? I think those are sort of fascinating, deeper issues. Why, as Pam also referred to, why might these processes matter to how you think of yourself as a citizen, as a member of society? Like, what are the sort of policy feedback processes that lead you to come out of a mundane experience, like going to the DMV, and feel happy or unhappy about that, to a more fundamental or important experience, like, you know, trying to get a benefit that’ll affect whether you get stay in your house or not? Right? And do you still see yourself as engaging in sort of a social contract in those processes where government is there to help you? Well, government is, instead, not being particularly useful to you. I think this sort of deepers or questions, then whether the American state can still do big and important things? Whether people see government as a positive force in our lives, and whether they feel like they are a player in this process, as opposed to simply being the subject to this sort of whims of market and governmental powers? So I think that, you know, you have these multiple levels of research opportunities here. It’s very exciting, right? There’s more than anyone can do. As well as like, there’s lots of different policy areas where, as I said at the start of our conversation, pretty much anyone can talk about your experiences of these administrative burdens. And so pretty much in any policy area, there’s also an opportunity to do this type of research.
Veronica Goodman (37:07)
I think that’s a that’s a great note to end on. I’ll add that I saw in the recent memo from the Office of Management and Budget, that they’re making administrative burdens a priority in terms of how they’re thinking about equity, which I think it’s just fantastic. But thank you so much. This has been really interesting. And thank you to both of you for taking the time to discuss your research and your work with me today. I hope folks take the time to read the book “Administrative Burden,” I will link it to the recording for this conversation, and thanks very much. It was a pleasure. Thank you. Thank you.
Progressive Policy Institute (37:42)
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In response to the coronavirus pandemic, policymakers approved almost $6 trillion in spending to combat the once-in-a-century public health emergency, support those who lost their incomes, and stimulate the economy. They intend to spend even more money to rebuild the economy in the pandemic’s wake: in addition to the $1 trillion bipartisan infrastructure deal that the Senate recently passed, Congress is deliberating a $3.5 trillion budget blueprint that would invest in the nation’s human infrastructure. As Democrats determine the final size and scope of this package, they should prioritize modernizing the social safety net, which the pandemic severely strained.
Rebuilding these systems will require more than just expanding benefits. Federal lawmakers should require states to administer federal-state benefit programs such as unemployment insurance and food assistance more efficiently. Improving benefit administration would both help struggling people pay their bills and help mitigate any anxiety that taxpayers may feel about expanding effective social programs.
The pandemic made clear the importance of functional aid programs. The Urban Institute estimates that government benefits will keep nearly 50 million Americans out of poverty this year alone. After stimulus checks, which also spent considerable amounts of money on people who were not financially distressed, the programs that reduced poverty the most were the Supplemental Nutrition Assistance Program (SNAP) and unemployment insurance (UI). These two programs, which are both administered by the states in partnership with the federal government, lifted 7.9 million and 6.7 million people from poverty, respectively. The largest poverty reduction impacts were in households with children and Black and Hispanic families.
However, SNAP and UI struggled to fulfill their potential during the pandemic. As millions lost their jobs, many state systems failed to respond quickly to the rush in claimants or the benefit changes Congress passed in response to the crisis. As a result, 7 months after unemployment first surged, only 3 states met federal timeliness standards for delivering new unemployment benefits. Despite an increase in SNAP benefits during the pandemic, food insecurity increased dramatically for many households, suggesting that benefits and administrative systems were still inadequate to meet unprecedented need.
Fixing the administrative issues that caused these problems would ensure no beneficiary fails to pay their bills or feed their families as they wait on bureaucracy. It would also show taxpayers that Democrats are spending money wisely. 69% of voters polled in swing districts expressed concerns that spending on infrastructure could hurt the economy, and Republicans are capitalizing on this anxiety to paint these programs as “reckless” spending and to stir panic on inflation ahead of the midterm elections. Democrats overcome this skepticism by demonstrating to voters that they are ensuring that all social programs use their resources as well as possible.
First, states should simplify the application and renewal process for benefits. Working families are forced to jump through lengthy, bureaucratic applications to get benefits from programs such as Medicaid, UI, and SNAP. Creating one application for multiple benefits would reduce barriers on eligible populations. This idea is central to the Health, Opportunity, and Personal Empowerment (HOPE) Act, which would fund state and local pilot programs that would allow low-income people to apply for multiple benefits at once without running a bureaucratic gauntlet. In the shorter term, states should update their income and contact information for Medicaid enrollees using more up-to-date records from SNAP. Congress prohibited Medicaid from dropping beneficiaries while the federal public health emergency declaration is in effect, but updating information on enrollees now could minimize the administrative burden of determining who should remain covered after the emergency declaration expires.
Second, states should upgrade existing IT infrastructure and use modern, flexible administration systems to deliver benefits and interact with beneficiaries. For example, the Biden administration should encourage the U.S. Department of Agriculture to invest in innovative payment systems beyond Electronic Benefit Transfer (EBT) that will let SNAP recipients use mobile wallets and chip cards to buy food. The current EBT system can be prone to outages, especially in rural communities, which can leave families in “food deserts” without any stores to use their benefits. States should also use money made available by the American Rescue Plan Act to overhaul the outdated, inflexible computer systems they use to administer UI. Those systems were unable to base benefits on each beneficiaries’ lost wage, as Congress initially wanted to do during the pandemic and should do in the future, and still struggled to administer the simpler flat benefit increases that ultimately passed.
Third, states can cut through reams of red tape by eliminating undue restrictions on how beneficiaries can use their benefits. For example, there’s no good reason to deny SNAP recipients the ability to use their benefits for hot and prepared meals. Rather than enforce onerous restrictions, policymakers should incentivize recipients to use the benefits for nutritious foods, using lessons learned from pilot programs such as the USDA’s Health Incentives Pilot in Massachusetts.
Fourth, Congress should reinforce UI and SNAP as “automatic stabilizers” so that they can react faster in future economic downturns. The size and duration of benefits should rise when an economic indicator such as the unemployment rate passes a threshold, signaling economic distress. Automatically expanding benefits during downturns would put money in the hands of those who are most likely to stimulate the economy by spending it.
Progressives should seize the opportunity that the budget agreement presents to show that spending money smartly is good policy and politics. Making these programs work better during future crises and showing voters that they are improving the administration of social benefits would both serve their most at-risk constituents well and strengthen public support for that service.
The Progressive Policy Institute’s Third Way Foundation recently announced the addition of three new members to the Board of Directors, including leaders in business, public education, and finance.
The new board members include:
Elizabeth “Liz” Bowyer, global co-head of brand and content strategy at Goldman Sachs. Prior to joining Goldman Sachs, Ms. Bowyer practiced law at Boies, Schiller & Flexner in New York, specializing in complex civil litigation. She was also a producer for Tom Brokaw in his documentary unit at NBC, Tom Brokaw Reports, and helped with Brokaw’s bestselling books, The Greatest Generation and Boom: Voices of the Sixties. Bowyer is a veteran of two Clinton presidential campaigns in 1992 and 1996 and was a researcher and speechwriter for former First Lady Hillary Clinton at the White House. Bowyer is a graduate of the University of Florida and Columbia University Law School.
Robin Lake, director of the Center on Reinventing Public Education (CRPE) a non-partisan research and policy analysis organization developing transformative, evidence-based solutions for K–12 public education. Lake has authored numerous studies and provided expert testimony and technical assistance on charter schools, district-charter collaborations, and urban school reform and has provided invited testimonies to the U.S. House of Representatives Education and Labor Committee as well as various state legislatures. Lake holds a BA in International Studies and an MPA in Education and Urban Policy from the University of Washington.
Bernard F. McKay was Intuit’s Chief Public Policy officer and Senior Vice President for global corporate affairs. In this role, McKay was Intuit’s senior officer responsible for government affairs, industry relations and global public policy, and was the founding Chairman of the Intuit Financial Freedom Foundation. McKay joined Intuit in January 1998. Prior to that time, he served in a variety of capacities in both the private and public sectors. A former vice president for AT&T, McKay served in government relations positions there in the corporate public affairs department and later led the emerging global markets business development group in AT&T Federal Systems. He also previously served as deputy director of Hewlett-Packard’s Washington Government Affairs office.
Prior to joining the private sector, McKay served in positions in the U.S. Department of Energy office of Congressional Affairs, and with the Environmental Protection Agency’s Emergency Interagency Task Force on the Wreck of the Argo Merchant. He previously served in the Rhode Island State Department of Health. McKay holds a bachelor’s degree in Political Science from Providence College and a master’s degree in business and public administration from Southeastern University. He studied business, government, and international affairs at the University College of North Wales (UK), the Hong Kong University of Science and Technology, CEDEP at INSEAD in Fontainebleau, France, and at the Indiana University School of Business. He was previously Vice Chairman of the Board of Trustees of John Cabot University in Rome, Italy, and currently serves as a Trustee of Salve Regina University of Newport, RI.
The Third Way Foundation Board of Directors includes:
Will Marshall, Chair of Third Way Foundation Board
Lindsay Lewis, Vice Chair
Paul Weinstein Jr., Secretary and Treasurer
Board Members
Elizabeth Boyer
Robin Lake
Chris Kelly
William Galston
William Budinger
Bernard F. McKay
Jonathan Adelson
Brodi Fontenot
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.
Afghanistan has fallen, for the second time, to a brutal band of Islamist fundamentalists with medieval views about how people should be governed. That’s a tragedy for Afghans who want to live in the modern world — including many girls and women, ethnic and religious minorities, educated professionals, journalists and civic activists, as well as those who worked with the United States and our allies to establish a capable national government.
That long, costly experiment in nation building has collapsed with sickening speed, and bitter recriminations fill the air. No wonder, given the thousands of U.S. and allied troops killed or wounded, and the $2 trillion taxpayers poured into a noble if losing cause.
But amid all the facile finger-pointing and instant historical revisionism, let’s try to keep three basic facts in mind.
What would a new middle class look like? And which industries are leading the way?
We actually know who is missing from the middle class. More than one-quarter of American workers have some college (including an associate’s degree), but no bachelor’s degree. These are the people at the middle of the education distribution, and the single largest group (Figure 1) — but they are also the people who been betrayed by the transformations of the American economy in recent years. They invested time and often took on debt to go to school, and discovered that employers did not want to pay them.
Over the past 30 years, workers with some college have seen their real earnings rise by less than 12%, slower than every other group including workers with only a high school diploma (Figure 2), As of 2019, the average person with some college but no bachelor’s earned only $45,000, just $6,000 more than the average high school graduate. By comparison, the average person with a bachelor’s degree but no advanced degree earned $73,000 (Figure 3). That’s a huge payoff for the bachelor’s degree, but much, much less for some college.
In America, having a “middle” education does not mean earning a “middle” income or being part of the “middle” class. There’s a hole in the middle of the income distribution, and it’s hurting Americans.
But over the past few years, a surge in tech/ecommerce employment has begun filling in the middle. As of 2019, tech/ecommerce companies employed 1.8 million American workers with some college, in occupations like computer support specialists and network and computer system administrators. (That figure is based on our tabulations of the March 2020 Annual Social and Economic Supplement to the Current Population Survey, covering 2019 earnings and employment).
Moreover, tech/ecommerce workers with some college are paid more, on average, than workers with comparable education are getting elsewhere in the economy. The tech/ecommerce wage premium is 32% for workers with some college (Figure 4). Overall, tech/ecommerce workers with some college earned almost $60,000 in 2019.
Now, part of this tech/ecommerce premium is a composition effect. Tech/ecommerce workers skew more male than the overall population, and since men on average get paid more, that shows up as higher average wages. However, even when we take gender into account, the tech/ecommerce wage premium shrinks for workers with some college but does not disappear. Men with some college make 23% more in tech/ecommerce, on average, then comparable men with the same education. Women with some college make 20% more in the tech/ecommerce sector. That’s an important benefit of working in the tech/ecommerce sector.
For examples of the tech/ecommerce wage premium for workers with some college, a comparison to health care pay is instructive. Two-thirds of emergency medical technicians and paramedics have some college but no bachelor’s. Their median full-time weekly pay in 2019 was $912. Similarly, 60% of dental hygienists have some college but no bachelor’s, and their median full-time weekly pay was $1,094. By comparison, the median full time weekly pay for network and computer systems administrators, a tech occupation with a significant portion of workers with some college, was $1,447.
Geographically, the growth of tech/ecommerce jobs has been spread out around the country, much like manufacturing was. California is still at the top of the list with 291,000 new tech/ecommerce jobs created between 2016 and 2020, but other states with strong job creation include Florida, Ohio, Georgia, and Illinois (see table below, based on QCEW data for all education groups).
The problem of the missing middle did not spring up overnight, and it won’t disappear right away. But based on these trends, it may be time for young people to shift their aspirations away from healthcare occupations to the growing tech/ecommerce sector. That shift may alleviate some of the economic frustration and struggles that have become part of the political landscape.
Increase in tech/ecommerce jobs, 2016-2020, thousands
Debate among Democrats on the size and scope of their Democrat-only reconciliation package threatens to derail their biggest opportunity to make progress on long-held health care priorities.
But not only is the Democrat-only social spending bill in jeopardy, but disagreements over topline spending also threatens to derail the bipartisan infrastructure package. Progressives in the House want to wait to vote on the bipartisan infrastructure deal until the Senate has approved the Democrat-only reconciliation package, but nine moderate Democrats are pushing Speaker Pelosi to pass the infrastructure bill now as finding consensus on the social spending provisions could take months.
As House Democrats continue to battle it out, the Senate is moving forward with drafting the reconciliation package. It approved a topline $3.5 trillion budget resolution last week. The resolution directs the relevant committees to draft legislation to be included in the budget reconciliation package that will only require a simple majority, and Democratic votes, to pass. But requiring only Democratic votes still requires stitching together a constituency that includes both Congresswoman Alexandria Ocasio Cortez, D-N.Y., in the House and Senator Joe Manchin, D-N.Y – which currently seems elusive.
The health care provisions taken together are estimated to cost more than a third of the $3.5 total spending. They include:
Adding dental, vision, and hearing coverage to Medicare
Making the expanded Affordable Care Act (ACA) subsidies permanent
Closing the Medicaid gap in non-expansion states
Expanding home health services for seniors in Medicaid
Lowering the age of Medicare eligibility
Funding pandemic preparedness
Allowing the government to negotiate prescription drug prices
With health care, getting Democrats on the same page is never easy. Arizona Senator Kyrsten Sinema has already voiced her opposition to a package of that magnitude. So as the Democrats continue to debate what should be included, it is important that they consider the costs, impacts and potential pay-fors.
Adding dental, vision, and hearing coverage to Medicare
Senator Bernie Sanders, I-Vt., and progressive Democrats are leading the push for the inclusion of dental, vision and hearing coverage to be covered under the traditional Medicare program. While Medicare Advantage often covers dental, vision and hearing care, the traditional fee-for-service program, in which two-thirds of beneficiaries are enrolled, doesn’t. Adding dental, vision and hearing benefits to Medicare Part B would benefit millions of American seniors that currently can’t afford dental, vision and hearing services. While beneficiaries pay premiums for Part B, it’s largely subsidized by taxpayers. Which means the largest expansion of the Medicare program since the creation of Part D would come with a hefty price tag: roughly $358 billion over 10 years — but once fully phased in, it would cost roughly $80 billion per year. However, this provision that the Democrats are considering would impact the largest number of Americans — somewhere around 40 million seniors would be newly eligible for these benefits. Liberal Democrats have been outspoke proponents of expanding Medicare to cover dental, hearing and vision and a bill in the House that would do so has 76 co-sponsors.
Making the expanded ACA subsidies permanent
Democrats are also pushing to make the expanded subsidies for ACA plans approved in the COVID-19 relief law permanent. The American Rescue Plan expanded health insurance exchange subsidies to cover those making more than 400% of the federal poverty level (FPL) and increased the amount of subsidy for those making between 100-400% of the FPL. These enhanced subsidies make private coverage more affordable for the roughly 14 million people who buy coverage through the exchanges. However, it too, comes at a cost. It would cost roughly $165 billion over 10 years. And while these subsidies make coverage more affordable, they also flow to private insurance companies and hospitals with no mechanisms in place to reduce health care costs — which is the highest of all comparable countries. This has broad support across the Democratic coalition — including the more conservative Blue Dogs.
Closing the Medicaid gap in non-expansion state
In red states that have not expanded Medicaid, roughly 2.5 million people have incomes that are too low to qualify for subsidies for ACA plans, but do not meet the qualifications for Medicaid under the traditional program (being disabled, pregnant, or a child). Closing the so-called “Medicaid gap” is a priority for the Biden administration. Democrats are seeking a way to get these people coverage even if their states don’t expand the Medicaid program. The budget reconciliation package proposed creating a new federal program that would cover those in the Medicaid gap if their state hadn’t expanded the program. Depending on how it is structured, it could cost $300 billion over 10 years. Democrats in the New Democrat Coalition have said that closing the gap is a top priority but haven’t explicitly endorsed creating a new program to do so.
Expanding home health services for seniors in Medicaid
President Biden has proposed a $400 billion Medicaid funding increase for long-term care benefits as part of his American Jobs Act. The proposal would increase funding for long-term care and make it easier for states to use Medicaid resources on in-home care rather than at a facility. President Biden is trying to thread the needle between signaling that long-term care needs a dramatic increase in investment and not fleshing out the details to generate opposition. This was not included in the bipartisan infrastructure deal and now is being considered for the final reconciliation package.
Lowering the age of Medicare eligibility
Progressive Democrats see the reconciliation package as an opportunity to act on long-held goals, like expanding Medicare. They want to use the all-Democrat deal to lower the age of eligibility. However, it seems unlikely that the more conservative Democrats in the House and the Senate would support this effort and, to-date, there isn’t a formal cost estimate from the Congressional Budget Office (CBO). Roughly 8% of people 60-64, 1.6 million people, are uninsured and would benefit from an expanded Medicare program. However, if the program is expanded as is, it could also be cost effective for many people with commercial insurance to enroll in Medicare instead. This would make the expansion extraordinarily expensive. A more cost-effective way to expand coverage would be to allow people to buy into Medicare, covering the cost of their premiums. There could be a premium subsidy similar to that of the ACA but not as fully subsidized as the traditional program. This could help more people get access to the benefits of the program (lower prices, comprehensive coverage) without draining federal coffers.
Lowering the eligibility age faces an uphill battle. Not only is it extraordinarily expensive, but it is also is vehemently opposed by hospitals who prefer higher paying private insurance to Medicare rates. Senator Bernie Sanders, I-V.T., has long pushed to expand Medicare. However, he doesn’t have the support of all the other 49 Democrats that would be required to approve it. He is likely including this in the initial draft as a negotiating tool to press for other priorities (like a dental benefits expansion).
Funding pandemic preparedness
President Biden proposed $30 billion for future pandemic preparedness in his American Jobs Plan. President Biden had pushed for proactive investment to restock the Strategic National Stockpile, invest in vaccine development, and finance in U.S. production of personal protective equipment. But in an effort to squeeze a multitude of Democratic policy priorities into the $3.5 trillion reconciliation package, some are pushing to reduce pandemic preparedness funding to $5 billion. This seems shortsighted after the U.S. was unprepared for COVID-19 and ravaged by the novel virus.
Allowing the government to negotiate prescription drug prices
The only health care provision Democrats are considering that would lower health care spending is authorizing Medicare to negotiate drug prices for beneficiaries and private plans. One proposal being considered, H.R. 3, requires the Secretary of the Department of Health and Human Services (HHS) to negotiate the price of at least 50 brand-name drugs without generic competitors starting in 2025 and would make the negotiated price available to both Medicare and private payers. The CBO projects that Medicare drug negotiation would save $400 billion. However, the leverage to negotiate with drug manufactures comes from the government’s ability to refuse to cover a drug if it is too expensive. This may limit or delay the availability of some drugs for seniors in the Medicare program. It is likely that pressure from beneficiaries or specific advocacy groups may limit the government’s ability to refuse to cover certain high-cost drugs. If this is the case, the savings will likely be less than $400 billion. While this is the pay-for for many of the Democratic priorities, at this point it’s unclear if Democrats will come to an agreement on the best policy to reduce the cost of prescription drugs. Senator Ron Wyden, chairman of the Senate Finance Committee, and President Biden have also endorsed Medicare drug negotiation which suggests that it’s a priority to find a path forward to reduce the costs of prescription drugs but other Democrats are concerned that limit drug prices would also limit drug research and development.
As Democrats are working to reach a consensus on which health care provisions to include in their reconciliation package, they should consider how to reduce the topline number while achieving as many of their policy goals as possible. The savings from Medicare drug negotiation may not be as high as projected, depending on how the program is structured, so it is vital to include other ways of reducing health care costs. Program expansions should be accompanied with cost saving measures to reduce overall health care spending and make affordable health care coverage a reality for every American.
Today, the Innovation Frontier Project, a project of the Progressive Policy Institute (PPI), released a new report from Daniel Oberhaus, titled “Space Solar Power: An Extraterrestrial Energy Resource for the U.S.”
“As Daniel Oberhaus lays out in this fascinating report, space-based solar power is becoming an increasingly viable option for providing energy on Earth, in orbit, and for deep space exploration. The falling costs of solar power and vehicle launches allow for the creation of satellites that can collect energy from the Sun all day long throughout the year,” said Jack Karsten, Managing Director of the Innovation Frontier Project at PPI.
In his report, Oberhaus argues that space-based solar power (SSP) projects offer a solution to advancing both clean energy production and space exploration. Space-based solar power is renewable, cost-efficient, and could meet a substantial portion of the Earth’s energy needs, even in geographically distant locations. This could also provide a renewable energy source for moon bases and deep space missions.
Oberhaus’s report concludes that the U.S. must allocate substantially more human and financial capital to SSP as part of its national security, domestic energy, and space exploration strategies.
Based in Washington, D.C., and housed in the Progressive Policy Institute, the Innovation Frontier Project explores the role of public policy in science, technology and innovation. The project is managed by Jack Karsten. Learn more by visiting innovationfrontier.org.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.
This week, the United States Department of Agriculture (USDA) announced it will update the Thrifty Food Plan, which is used to calculate monthly Supplemental Nutrition Assistance Program (SNAP) benefits. This update will increase the benefit to better reflect the true cost of a healthy and nutritious diet, helping food insecure families across the country put food on the table. PPI’s Director of Social Policy, Veronica Goodman, released the following statement:
“SNAP is one of our most effective and far reaching anti-hunger programs that helps to feed over 42 million Americans each month. However, for many families, benefits are not enough and run out well before the end of the month. This update by the USDA will better support working families, especially those with children, and we applaud the Biden Administration for this action. No family should face food insecurity in America.”
The Progressive Policy Institute’s Reinventing America’s Schools Project and The 74 Million hosted a webinar on the future of school choice. Following a celebration of the 30th anniversary of the passage of the first charter school law in America, the Reinventing America’s Schools project looks forward 30 years, and asks what America’s public school system will look like in 2050, and who should be at the table driving change.
The event featured a panel of experts who are taking steps to shape the future of Black & Brown students in America, including Alisha Thomas Morgan, Former Georgia State Representative; Dr. Charles Cole, Founder of Energy Convertors; Naomi Shelton, CEO of the National Charter Collaborative; Jada Bolar, Executive Producer at the National Parents Union, and Patrick Jones, Senior Vice President of The Mind Trust. The event was moderated by Curtis Valentine, Co-Director of Reinventing America’s Schools Project at the Progressive Policy Institute.
Learn more about the Progressive Policy Institute here.
Learn more about the Reinventing America’s Schools Project here.
Hailed by many credulous observers as the future of U.S. politics, the progressive left is on an epic losing streak. Democratic primary voters in Cleveland last week dealt the latest rebuff, choosing Joe Biden loyalist Shontel Brown over Nina Turner, a combative acolyte of Sen. Bernie Sanders, in the race to fill a vacant congressional seat.
Brown’s upset victory followed centrist Eric Adams’s comfortable win over the progressive favorite in New York City’s mayoral Democratic primary in June, as well as recent drubbings of leftist hopefuls in primaries in Virginia and Louisiana.
Progressives also stumbled in last year’s main event — the 2020 presidential nominating contest. It began amid lavish media coverage of the jockeying by Sanders, Elizabeth Warren, Kamala Harris, Cory Booker, Julian Castro and Bill de Blasio for “more progressive than thou” honors. It ended with Biden, the unfashionable old party warhorse, coasting to the nomination on his way to a resounding victory over Donald Trump in November.
The country got a preview of the left’s narrow electoral appeal two years earlier, in the 2018 midterm. No doubt Democrats benefitted from activist energy, but they won back control of the House mainly by recruiting mainstream candidates who wrested 41 swing districts from Republicans. Sanders-style progressives fared badly.
The activist left was cheered by socialist India Walton’s victory in June’s Democratic primary for this fall’s mayoral race in Buffalo. Otherwise, the campaign by Sanders, Rep. Alexandria Ocasio-Cortez and her Squad and allied activist groups to refashion the Democratic Party in their image isn’t going very well. The insurgents keep stumbling over the same obstacle and, it’s not a monolithic party “establishment” that exists mostly in their imagination. It’s grassroots Democrats, anchored by Black and Brown working-class voters and moderate suburbanites.
These voters seem to like their party and share its pragmatically liberal outlook. Like Brown, they also trust Biden and want him to succeed. No wonder they are put off by Sanders’ monotonous railing against “corporate Democrats,” or AOC’s lament that she has to run in the same party as Biden, or Turner’s infamous crack that having to vote for Biden was like being forced to eat excrement.
Nonetheless, the party’s Jacobin faction keeps insisting that its ideas are popular, even if its candidates aren’t. That’s probably true in some deep blue urban districts, but across wider geographies, the progressive catechism clearly repels voters Democrats need to build majorities. A confident prediction: In competitive races next year, you won’t hear many Democrats running on nationalizing health care and abolishing private insurance; giving affluent kids a free ride to college; shutting down oil and gas production ASAP; defunding the police, or decriminalizing illegal immigration.
It’s true that Democrats have become more liberal since 2000, especially on social issues and government spending. Even so, the party remains a heterogeneous coalition about evenly balanced between self-identified liberals on the one hand and moderates and conservatives on the other.
To understand where that coalition’s true center of gravity lies, however, you also have to take into account its generational and class cleavages.
The activist left is overwhelming white, college-educated and urban. Older and working-class Black voters are more religious and socially moderate. “The median Black voter is not AOC and is actually closer to Eric Adams,” says Stanford political scientist Hakeem Jefferson. The picture is similar for Hispanic voters, as Democrats learned to their chagrin last November when Trump made unexpected gains among blue-collar men.
In an analysis of Americans’ ideological composition in presidential years going back to 1980, Brookings scholars Bill Galston and Elaine Kamarck note that one thing hasn’t changed: Self-identified liberals are still the smallest part of the U.S. electorate. They constituted 24% of the voters in 2020, compared to 38% each for conservatives and moderates. Nearly half of independent voters identify themselves as moderates.
Progressive pretensions to historic inevitability, based on America’s changing demographics, keep colliding with these electoral realities. The left has a choice to make: It can continue to hector Biden and the party to adopt purist positions that will make it difficult to win elections and govern. It can accept its role as an influential but not dominant part of a broad Democratic coalition that’s respected more for its passion and mobilizing energy than its often utopian ideas. Or it can turn Democratic Socialists of America into a real political party and try to win elections on its own.
For our country’s sake, let’s hope it’s option two. The Republicans, led by a vengeful sore loser, lacking any kind of unifying vision for the country, and stewing in paranoia and hatred of their political competitors, are incapable of governing the country.
It’s up to Democrats, working together, to right our ship of state.
Marshall is president of the Progressive Policy Institute.
It is good to see a pragmatic Democrat following the data. The percentage of total COVID-19 cases represented by children is growing: 14.3% in the week ended Aug. 5, compared with less than 2% for most of 2020. Until the vaccine is available to children under 12, more states should follow California Governor Gavin Newsom’s new requirement that all public school teachers to get fully vaccinated or face frequent testing. The option to remain “unvaccinated but frequently tested” should be limited to school staff with valid medical exemptions. Unvaccinated adults working in public schools, paid with public dollars, have no place contributing to the current public health crisis caused by a rampant variant that not only puts kids in harm’s way, but continues to mutate in the unvaccinated.
Children — even the vast majority who have remained physically healthy — have suffered too much in this this pandemic. With schools shuttered for significant periods spanning two school years, they have been isolated from teachers, friends, and other role models. They have been barred from sports and extracurricular activities. Some have missed meals usually provided by their school. Many have been unsupervised in households where parents are required to work in person; they have suffered through COVID-caused deaths of older relatives, and so on. We may not know the full extent of the trauma for years.
The safest and healthiest place for students to be is in school — even before academics are taken into consideration. Learning loss is real — and it exacerbates existing inequities in our public education systems. Using the imperfect but best data available, McKinsey & Company translated 2021’s spring in-school test scores of more than 1.6 million elementary school students across 40 states into “months of lost learning.” It found, compared to similar students in previous years, students on average were five months behind in math and four months behind in reading. Students in majority-Black and predominantly low-income schools were even further behind their higher-income and suburban peers, as were younger students. When considering the huge strides first and second graders usually make in learning to read, and the importance of literacy to future school work, recent reports putting those 2021 students’ average two grade levels or more behind schedule are alarming.
Newsom — unlike a handful of Republican governors who are kicking and screaming in opposition to common sense safety measures — recognizes our urgent national imperative: Ensuring our public schools open, remain open, and operate as safely as possible this fall. His decision follows the Biden administration and Congress’ leadership on this enormous task. They have sent almost $200 billion in aid to the nation’s public schools to help them rise to the challenge. Those dollars flow through the states before reaching districts and schools. The stakes are far too high to leave districts free to take the money, but ignore science and common sense.
We applaud California’s governor for being the adult in his state on this issue. The other 49 should waste no time following suit.
Tressa Pankovits is Co-Director of Reinventing America’s Schools Project at Progressive Policy Institute.
