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3 Economic Policies That Make It Harder to Be a Parent, According to Economists

We asked three economists about the policies making it harder for middle-class families. Here's what they said.

Parenting today is unaffordable. Wages have stagnated and even declined amidst housing cost explosions, impossibly expensive child care, and inflation. Social programs to support families are constantly inhibited by strings and catches that make it hard for working- and middle-class families to access the programs that they might need, such as Head Start. Even the programs that families can count on to give them help are annually appropriated by state funding and are not guaranteed. The typical middle-class parent spends up to a third of their income on child care and some families spend half of their income on rent. That leaves very little left over, and many middle-class families in the lurch. Couple all that with welfare, Social Security, and other public-assistance reform heralded by former president Bill Clinton in the ’90s, and many families are left out in the cold, unable to access assistance or social programs that might benefit them greatly. 

While much has been suggested in the way of putting new economic policies in place in the future — Elizabeth Warren’s Child Care plan, Cory Booker’s Baby Bonds program, overtime protections, paid family leave, or a jobs guarantee — not much has been said about the programs in place that are actively making it hard to parent. Here, we talked to three giants in the field of economic policy for families about the flaws in the child support system, how state balanced-budget amendments have hamstrung the economy, and why Temporary Assistance for Needy Families has failed to keep up with modern times and modern families. 

The Child Support System

Suggested by: Anne Price, President of the Insight Center for Community Economic Development
The most harmful policy across generations that is deeply gendered and racialized are child support policies that relate to public assistance. I can’t think of a more harmful policy.

There probably isn’t a more damaging narrative than the deadbeat dad. It is so deeply entrenched in the public discourse, and belief system, that it automatically creates an environment ripe to punish families with a great deal of public support.

[The way this program punishes families] really came about during welfare reform in the ’90s, under the Clinton administration. [The reform ensured that parents really] foot the bill for public assistance for their families.

There’s a deep public belief that parents need to take care of their children. No one would debate that.

But what the child support bill did was it said that for fathers, it made it impossible for them to actually take care of their children. Often [fathers who fail to pay child support] are stripped of any kind of occupational license so that they can’t work. They’re often stripped of driver’s licenses so it makes it impossible to own a car and work. It basically strips you of any assets, so you never have the ability to accumulate anything. 

Most people don’t know that most of the money from child support doesn’t go to a child — it goes to repay the state to recoup the costs of public assistance. Families may only get between 25 and 50 dollars back from whatever the father paid. 

There is the constant threat of jail and imprisonment for non-payment, and it creates this cycle of “You can’t pay, you go to jail.” What really happens in that situation is that family members are often footing the bill, not just men. When you get jailed, you call your mother, sisters, friends, family, to get you out of this situation. It’s multi-generational: Even what we found in our research working with other folks who do this work is that, then, grandmothers use their social security to get these men out of jail. This is a lifetime debt for many families and fathers. This is a debt that extends to older age.

Once you have a record [for failing to pay,] it makes it even harder to get a job. And then your license is suspended on top of that. This is a multi-generational debt anchor because it holds back not just the father but their own children.

It also creates family conflict. If a woman goes and needs assistance, the state says, “In order for you to get this assistance, you have to tell us who the father is. You have no choice.” Then the father gets a letter with complicated codes and so forth, not even knowing, sometimes, that this order is coming, right? 

Even for the children of those parents, it makes it almost impossible for them to have anything because their parents don’t have any assets, right? And we know that that’s how wealth is passed down — through an ability to accumulate some kind of asset.

Hearing men talk about what it means to be called a deadbeat dad, the psychological impact of that label drives these men to invisibility. It’s hard to get these men to join focus groups, because they think they’re going to be part of a sting. So, it’s something that we know very little about. Most of the research funded [on child support] is funded by the child support system. 

And this really isn’t about children. We think it is. Child support is for children. But it really isn’t about children. I think that’s one of the most harmful policies for the family.

State Balanced-Budget Amendments

Suggested by: Pavlina Tcherneva, Director of the Economics Program at Bard College, Research Scholar at the Levy Economics Institute 

A clear negative for families are state balanced-budget amendments.

Traditionally, the federal government has provided a lot of income support programs to families, whether it’s for food assistance, housing, Medicare, Medicaid. In the post-war era, these have been primarily the responsibility of the federal government.

But during the Nixon era, we moved toward something called devolution, a process that was accelerated during the Reagan era. The devolution revolution meant that many of the federal government’s responsibilities were transitioned to the states. In fact, a much greater burden was placed on states to provide essential programs for families.

Devolution basically passed the buck from the federal government to states in a process called New Federalism. It was sold to families under the pretext that states would have a lot more independence and flexibility in allocating funds and managing programs. But, actually, during the Reagan era, for the first time in many years, states received less aid from the federal government when Reagan consolidated federal grants with strict federal requirements on spending into block grants, with fewer strings attached. However, the reduction in funding put more financial stress on states in trying to fund various welfare programs. This entire process turned out to be more burdensome financially to states, prompting them to reduce benefits in downturns.

Fast-forward to the ’90s, states start putting in place constitutional amendments, or statutory requirements, requiring them to balance their budgets. Every state, except Vermont, is subject to a balanced-budget amendment. That essentially means that they have to match expenditure with tax revenue dollar for dollar.

That’s not something states should be doing, and here’s why: Because states are responsible for anti-poverty programs, they have to spend more in a recession by necessity. That’s the time when incomes and tax revenues decline, so states are forced to deficit spend. And that’s the function of government — to deficit spend to stabilize the economy.

So now you have states with much greater responsibility for programs like Medicare or unemployment insurance, but they can’t deficit spend when necessary. In fact, what they are forced to do is raise taxes or cut these programs in the middle of a recession. This is a decided negative for families because what one hand gives, the other hand takes away.

And things get even more complicated because Medicaid, for example, is a federal matching program. There are other programs that match, too. However, the reduction in funding puts more financial stress on states in trying to fund them and thus qualify for matching fund. This entire process turned out to be more burdensome financially to states, prompting them to reduce benefits in downturns.

In 2001 was a smaller Bush recession, and the first after the all the state balanced-budget amendments passed. States struggled to pay for programs and meet their balanced budget requirements. So they slashed programs left and right — from child welfare programs, meals for the hungry, child care for low-income earners (like Headstart programs) and others. It made the recession worse by cutting the programs on which families depended.

So, this is really a big-picture issue. It’s fundamental to understanding what governments are supposed to do in downturns. They are supposed to spend counter-cyclically. Not only did the federal government pass this responsibility down onto the states, but on top of that, states added insult to injury by tying their own hands with the straitjacket called a balanced-budget amendment.

And if you want to add another wrinkle, what states try to do to deal with these challenges, and because they will need to deficit spend during hard times, they put together these rainy-day funds which they have to replenish during good times. The funding requirements are often very strict and require states to raise taxes during good times to fill the coffers of the rainy-day funds. Well, what that does is it actually slows the expansion [of the economy]. It pumps the brakes on growth. On the chopping block are always programs for families.

During the 2001 and 2008 recessions, there were essential Head Start programs that were wiped out. Because states are now more responsible for these programs, they have the discretion [to slash them]. Different states, especially red states, don’t protect programs like this.

The block grant issue is a real problem in the way we have devolved federal responsibility to states.

Right now, we’re engaged in a national conversation about the role of government in serving the public interest. Where is the government going? What basic safety net should be provided for families? When you see these very bold programs that are being proposed, in a sense, they are a response to the results of the devolution era. Families feel stretched and government programs do not provide the support they need. Welfare reform became more punitive after Clinton reformed it and put stricter limits on welfare payments and eligibility.

Imagine you have used up your five years [of welfare assistance,] and then you enter the Great Recession. What do you do? You’re no longer eligible [for help]. The [federal government told] the states that they could extend welfare. It was up to them and some of them did. But without additional assistance from the federal government — which came through the Recovery Act — they couldn’t have provided the needed income support.

But it’s such a poor way of thinking about supporting families. It’s like throwing crumbs, essentially, to them in bad times, as opposed to having a stand-by program that provides support, rain or shine, to those who need it.

Temporary Assistance for Needy Families
Suggested by: Shawn Fremstad, Senior Policy Fellow at the Center for Economic and Policy Research

Temporary Assistance for Needy Families actually has its roots in a Social Security program, which was Aid to Families With Dependent Children. That goes back to 1935. It was actually rooted in what was then the state’s mother’s pensions programs, so this was before there was anything even like Social Security. If there was a deceased breadwinner — and at that time, that meant male — this program was available.

During the Civil Rights era, AFDC became a more equitable program. There were strong efforts both at the federal level and at the courts that made it more available to women of color. At its height, there were some 6 million families receiving benefits. It dominated the discussion about social policy in the ’80s and ’90s, and a lot of it was this idea that it was destroying families. 

The program had problems, but those problems had a lot more to do with not being as much like Social Security, i.e. not providing adequate benefits, and having way too many restrictions. But it was there for families, and it was a program that made life possible for a lot of single moms, in particular in the ’70s, ’80s, and ’90s. They could go to school and have better lives.

And then there’s TANF, [which replaced AFDC in 1996]. The basic gist of TANF is that it’s a Reagan era, neoliberal-style program, where there’s no longer anything approaching an individual guarantee. It used to be under AFDC that if you met the income tests, you were eligible for financial assistance. TANF is a block grant program, so there’s no longer anything approaching an individual guarantee of assistance. States can pretty much do whatever they want with the money. Funding was frozen in the early ’90s, so what states were spending in the early ’90s has not increased in real terms. In real terms, it’s declining every year because it’s not keeping up with inflation.

TANF doesn’t even have a program anymore, because the state doesn’t even have to provide anything. There are states that have used TANF money for religious summer camps. Ohio used TANF money for crisis pregnancy services, you know, the pro-life services. States like Oklahoma have spent really large amounts of money on marriage-workshop-type programs through TANF funds that may be fine, but there’s no evidence that they’re effective. They often have to basically pay people to go to the workshop, but they get, like, a gift card to Walmart rather than actual money. [It’s an exemplar of what] social conservatives thinks families need, rather than what would really be helpful. 

This is very broad ability to do almost anything with it. A big part of the money is used to provide child care assistance. But a declining amount of the block grants have been used to actually provide direct financial assistance. 

In a lot of states, in theory, this is about a program that’s about increasing work done by mothers. But in a lot of states, they don’t even spend half their block grant money that they get from the federal government on child care, work activities, training, and financial. It’s really hard to know what states are doing with that money, frankly, because we don’t have great accounting. TANF is almost like a slush fund for states.

It’s striking that Social Security, which I don’t think many people think of as a kid’s program, is helping a lot more children today than TANF, which supposedly was all about children. Part of the difference there is just that it’s kind of a great illustration of the “deserving” or “undeserving” label. Which bucket you fit in decides whether you are treated decently, as an okay human being, versus whether you’re treated as a taker.

You can have people who look exactly alike, one who gets AFDC because their parent is dead and the other doesn’t get anything because one of their parents is in prison, so they’re not eligible for AFDC even though they’re both missing a parent.