Transcripts For CSPAN Joint Economic Hearing On Raising A Family 20240714

The joint costs of raising a child. The hearing is over two hours. Good afternoon. Thank you for being here to join us for this hearing of the joint economic hearing committee. The American Economy is thriving. The current expansion is the longest in history. Unemployment has remained below 4 over the last 18 months. We have seen consistently solid gdp growth and job creation. , notwithstanding the successes, for many parents across this country, raising a family has become harder and more expensive. The New York Times recently reported that based on the survey adults between the ages who are parents or plan to be, they discovered interesting trends. Childrenur had fewer or expected they would have fewer children than they expected to be within the range of ideal. Economic concerns were foremost among the reasons, that they fell short or believed in the future they fell short of what they would consider ideal. These social Capital Project has documented trends in what we associationalr life as americans. The web of relationships through which we pursue various endeavors. Religiouscommunities, congregations, for example. The family is the central set of headwaters for social connectedness generally. That is why two of the projects main policy objectives are making it more affordable to increasingily and the number of children raised by happily married parents. The goals of todays hearing are policy approaches that might allow more americans to start and raised the family they desire. Familyingly, affordability has become a unifying concern among lawmakers , policymakers of the political right and political left and everything in between. We hear it even in discussions thend topics as varied as Child Tax Credit. Of child in the cost care. Paid family leave. Student debt burden. Motivating all of these discussions is a simple statement. It should not be this hard to raise a family. Ts difficult to unravel challenges such as debt loads and increases in the cost of formation andmily expansion difficult for many families. Even families that are stable have to deal with the challenges of the work and family. Tomore families have sent earners into the workforce, employers have been slow to accommodate their desire for a worklife balance. Meanwhile, they face prices for housing that our bid up by dual owner households and they are hampered by correspondingly high poverty rates. The example of how did we get here is complicated. Costs ofs the rising , ofth care, of childcare education and housing . To what extent does declining fertility reflect changing preferences, economic barriers, or other factors, or is the type decline of the family the result of other factors . What is the rest way to help more families of word more time out of the workforce to care for new boers newborns. Are there other ways that are minimally disruptive to employers and less likely to discourage job creation. The policies that have contributed to increases in the cost of housing, higher education, health care, which of those can be reformed. It we can make sure we have the workforce and the taxpayer basis to fund the problems the programs of and 2040 and so on. I look forward to hearing from our panelists and having a productive conversation aimed at helping families. Chairrecognize vice maloney for her remarks. Vice chair maloney thank you to chairman lee. There is nothing more important than shining a spotlight on what is affecting American Families. American families are working longer and harder, not to get place but just to stay in and wages have been stuck or barely increased. Childile, the cost of care, education, housing have grown. Most families rely on two. Ncomes to make ends meet nearly 40 of American Adults report that they have trouble paying for at least one basic need. The picture is no brighter when you look at specific cost. Take childcare. Those who need child care the most cannot afford it. College education, which is almost a necessity in todays economy. I would say it is a necessity. But the cost of a fulltime undergraduate degree has more than tripled. Todays typical graduate leaves college with 30,000 in debt. Look at housing. Home prices are higher than ever. One third of renters spend over. 0 of their income on rent how are families responding . By taking on debt. Consumer jets is now 4 trillion, the highest level ever, adjusting for inflations. Home are putting off ownership, which can the price them of a key source of wealth accumulation. Causes andgree about we may disagree about solutions. Discussionhe robust this committee provides. In the workforce is not a problem. We may hear that americans got married less frequently and that has hurt fertility rates, but women have become key drivers of economic success. Womens share of household 94 in 2016. At women could do even more if we made it easier to enter into the workplace. There are two key ways to do that. Affordable childcare and paid leave for the birth of a child. This takes a lesson from other countries that provide these services and have significantly higher female labor force participation. And while were at it, lets make sure that women are paid fairly so they have strong incentive to work your it on average, a woman earns 80 of her mail counterpart. 80 of her male counterparts salary. For black and hispanic women, it is worse. Do . Can congress lets start by lifting the minimum wage. The house has passed legislation to lift the minimum wage by 2025 and give 33 million americans a raise. It is time for the senate to follow suit. The earned income tax credit, the Child Tax Credit. The eic reduces poverty levels for families. Child taxmake the credit we wrote ponderable fully refundable. Those would benefit 49 million children, including 2. 7 million from my home state of new york. And we should strengthen the supplemental nutrition assistance program. Snap not only provides a Healthy Foundation for the future snap generates 1. 5 in increased gdp. We should join the rest of the world and promote paid leave on the birth of a child. We are the only two countries in provide, that dont america and papua new guinea. My bill which was included in the Defense Authorization act that passed the house the summer is a good start and will provide 12 weeks of paid leave to federal employees, a model for the rest of the country to follow after the birth or adoption of a child or care for a Family Member who has a serious illness or for yourself. Raising a family is hard and rewarding work. We need to do more to provide workers with tools to balance work and family responsibilities. I appreciate the chairmans statement on flex time and how that would be helpful. Today our testimony will shut will shed light on actions we can take to make raising a family more affordable. It is incredibly important for the future of america, the future of American Families and the american dream. I yield back. Loney. Ks, vice chairman i would like to introduce our distinguished panel of witnesses. Some housekeeping matters. This is a joint committee of members of the house of representatives and of the senate. As fate would have it, the senate and house of representatives have decided to call votes in the middle of this hearing. You may see members of the house and of the senate leaving and coming back. That has nothing to do with anything other than our responsibility to continue to vote while our colleagues are voting. Members of this committee, those who are here, interested in this hearing, we will be here for every bit of time we can be. I dont want anyone to be alarmed when they see members filtering in and out. I would like to introduce our witnesses now. First we have mr. Lyman stone who is adjunct fellow at the American Enterprise institute and Research Fellow at the institute for family studies. He has written on migration, Population Dynamics and regional economics. His work is covered in the wall street journal and numerous outlets. Next we have mr. Ryan born, the chair for the public understanding of economics at the cato institute. Prior to his role at cato, he was head of Public Policy at the institute of Economic Affairs for the center for policy studies in the u. K. He has written on a number of Economic Issues like fiscal policy, inequality, minimum wage and rent control. Writes weekly columns for the Daily Telegraph and the london paper city a. M. Dr. Jean waldfogel who works for Columbia University school of social work and the codirector of the columbia population reverts research center. She has written on the impact of Public Policy, the wellbeing of children and families. Her work is focused on inequality in Early Childhood, childhood care and education and the black white achievement gap. She is the author of eight books and has published numerous articles in journals. Rowefinve ms. Kristin kbeiner, who is the executive director and ceo of moms rising. She has been involved in Public Policy and grassroots engagement for over two decades and has received numerous awards for her work. She is an awardwinning author of books and articles, frequent public speaker, media contributor and on the program breaking through. Thank you. You for joining us today. We look forward to hearing your testimony. Go ahead, mr. Stone. Hit the button until it turns red. Mr. Stone it is an honor to be here. Thank you for inviting me. It is an honor to be here to testify on topics important to American Families. I am affiliated with the American Enterprise institute. For my testimony today, the views today are my own. Most of my written testimony discusses concrete questions of family affordability. The upshot is contrary to popular narratives, child rearing is not that much more expensive than in the past. Some elements have gotten more expensive but palin evidence suggests it is not just a budget crunch. According to a wide variety of surveys, the average American Woman says she wants to have 2. 3 to 2. 5 children are this has been approximately stable for 30 years. Children. This has been stable for 30 years. If correct birth rates hold, there will be 1. 7 children. For every 10 women, there will be about six missing children. This is a new problem. From 1990 to 2007 the fertility gap was consistently one third as large. What is going on . Instead of affordability we should be discussing achievability. What is Holding People back from having the family they say they want in service . Surveys . Marriager is postponed which accounts for half of the increase in the fertility gap and virtually 100 of the increase since 2000. Is ativizing marriage tricky question. Americans are justifiably uncomfortable about being lectured about getting hitched by anyone especially the government. There are some good policy options available. It must be said the federal government already has a marriage policy. That is this. Workingclass people should not get married but middle class and wealthy people should. The is the policy stance of tax code, welfare, everything the government does. The tax code gives you a marriage bonus if you have a ceo in the family. If the spouse is unlikely to learn an amount, they arent as great a benefit to families with lopsided and comes lopsided incomes. Welfare, ande on could reduce your benefit. There is a very real tax on marriage. In my written testimony i showed how the penalty amounts to 25 of a familys income. It is no mystery why workingclass are getting married less. The problem is not government benefits per se but eligibility rules that discourage workingclass people from marrying and the result is neighborhoods with scattered families, inconsistent fathers, overworked mothers and diminished opportunities for children. Fewer kids overall. So there is a very real way to make family life more achievable. Fix the massive government bias against marriage in working classes. Second response to the marriage first explanation for decrease family achievement is to reconsider justifications for policies like the Child Tax Credit. The justification for the credit is not that parents are cashstrapped but rather parenting is inherently valuable to society. In other words we should have a parenting wage because parenting is important work and workers deserve to be paid. How we provide that may vary but we should treat parents were generously than we do. In a way that explicitly communicate to parents we see parenting as were the labor. Hy labor. T when this is provided, the fertility cap shrinks. If there is not a change, fertility wave rates will not wait will not raise by a lot. For fertility to improve it is end penalties for workingclass marriage and increase the parenting wage. Whatever happens to fertility, the children who are born are born into a society of greater opportunity, healthier families which engages in a valuable public catechism. Parenting matters. Thank you. Mr. Chairman, members of the committee, thank you for inviting me. To be sure and family can be raised affordably should be an uncontroversial objective but Government Policies at the state and local levels raise prices of basic goods and services to disproportionate financial. Etriment of all households households across the income onctrum spent lots amounts basic income which should be necessities like food, shelter, transport, clothing and childcare. The average household in the poorest 25 allocates 55 of its spending towards shelter, transport and clothing alone. The average married family with Young Children allocates 53 . Any meaningful analysis of family affordability must consider the determinants of prices in these markets. In recent years housing and child care of fertility have become pertinent political onues given the high toll family budgets. High housing and childcare prices are deemed market failures, necessitating corrective intervention, price controls, subsidies. Existing government regulations ,ctively constrained supply raising prices. Extensive Academic Work has shown how overly restricted land use laws constrain new housing building, particularly in major cities. Theemand raises and unresponsive supply of homes drives up market price housing services, forcing downsizing, longer commutes or higher rents and mortgage payments on poor families. Lesserknown is the state childcare staff and regulation notably restricting them and qualification requirements for workers. It reduces the supply of Childcare Centers in poor areas, driving up prices and reducing formal care options. One finds the same pattern of Government Policies increasing prices. The federal sugar program, other mandates raise the price of groceries. Federal fuel standard regulations and state level automobile dealership loss inflate the cost of driving. Protectionist tariffs raise retail clothing prices and state occupation license laws create barriers to entry for workers, raising hair braiding to dentistry. My research has sought to aggregate the price effects of those policies stated using cautious assumptions to find that combined they raise prices based on typical poor families anywhere from 830 and 3000 directly. That is between 7 and 30 of aftertax income. Nor is that list comprehensive of the regulatory areas where government raises prices and it doesnt consider potentially huge indirect costs. , child elevated house and transport might make it physically and financially difficult for families to access jobs with higher wages. Undoing the worst of these could benefit for families considerably. Estimates suggest relaxing the mandated staff to child ratio by one child across all age groups could reduce childcare prices by 10 or more. Addressing Government Policies that drive higher prices would dampen the demands we see from risky rent control measures, affordable housing, higher minimum wages, governmentsubsidized childcare and new tax credits or expanded allowances. My main message today is simple. Before proposing new or expanded federal programs should a college the promarket should tonowledge what exists improve family affordability at the state and local levels. These changes, especially in would notd childcare, require more federal borrowing or come with risks associated with wage and price controls. Such an agenda may not be the full or final answer to the butnels the challenge, before reaching for new programs or regulation, we should attempt to undo the harm caused by existing interventions. [indiscernible] we should make that clear to our colleagues. [laughter] sen. Lee thank you, all, for being here today. So having come in late ok. Ms. Waldfogel, please continue rowefinkbeiner, your next. Prof. Waldfogel thank you for inviting me to speak with you. I have spent the past 25 years studying policies to promote child will being especially for the 11. 5 million child children in poverty or even much of my Research Work uses the Census Bureau new policy measure which allows for the first time to gauge the antipoverty effects of the full range of policies congress has enacted. That makes it clear two set the policies are important, and 4. 5le tax credit million children out of poverty, snap and other nutrition programs moving 4. 2 million out of poverty. We have evidence that these reduce family stress and produce child development. Income is not the only challenge. Since 2012 with the support of the Robin Hood Foundation our group at columbia has been serving new york city residents, we find poverty is the tip of the iceberg. 1. 6 million american new yorkers are for, four points new yorkers are poor but more faith health challenges. Face health challenges. What can we do to better support American Families . We need to start by recognizing the majority no longer have a stayathome caregiver. Policies havent family and medical leave act provides only unpaid leave to 60 of the workforce. Federal childcare subsidies reached 15 of low income families who need them. Employer policies address some of them but these are for unfinished employees while 40 arecess to some fate for advantaged employees. 40 have access to this but only of tiny share received from the we know from a big body of research these policies matter when employees have paid access, they will be employed, higher earnings, mothers less likely to breastfeed they for longer, fathers likely to engage in caring for children, infant majority mortality falls. Opinion surveys consistently show americans favor that paid family and medical leave. My colleagues and i have been serving employers with the laws including small ones who are often missing from such surveys. In three states with paid leave laws, rhode island, new jersey, new york, two thirds of employers were supported. The evidence on childcare is extensive and clear. HighQuality Childcare improves childrens health, social development, especially for disadvantaged children. But few americans can afford it especially in Early Childhood. When more subsidies are available, parents are likely to be employed, reducing poverty and promoting stability. Our estimates suggest universal childcare could reduce poverty by one third. We need to look at what government can do to help families where a parent is not able to work enough hours. Public programs like snap and private programs like food pantries they that play a crucial role but families need cash to buy clothing, pay rent and utilities. All of our. And hes have some all of our kind ofntries have some benefit for all families with children. The Child Tax Credit is the closest policy we have but it leaves out the lowest income where it would have the biggest impact. 23 million american children, one in three, live in families who earn too little to receive the file Child Tax Credit of 2000 per child authorized under the recent tax cuts and jobs act. This includes half a late black and hispanic children and close to half of Young Children and world children. While there is ample evidence about the Critical Role of thinking of policies like the Child Tax Credit and snap, as well as the efforts of groups like robin hood, it is clear we need to do more. S ineed to join our peer providing quality of child care and a universal child allowance. Go ahead. Ms. Rowefinkbeiner thank you. Kristin rowefinkbeiner, executive director of momsrising with over one million members including members in every state working to increase family economic security. We are on the front lines of this crisis facing america. Experts agree it is getting more and more expensive to raise a family and that has dire consequences. Our country, workforce and economy have changed, but policies are out of date and jim and families are suffering. This crisis is solvable in the policies momsrising supports will boost the economy. The work we do with rent parents, people with all caps of families and moms. Situation is urgent. We hear from people experiencing the crisis each day. Stories like this one. Jamie and her husband had three parttime jobs between the two of them and even then could not afford childcare. She can only work when her husband was home in until he started getting snap, the fouryearold and jamie often had to go without food. Nobody let alone anyone Holding Multiple Jobs should struggle to put food on the table. Too many families face choices like hearst. Hers. Jamie is not alone. One in three households are now paying 30 of their income for housing and half are renters. College tuition has tripled since the 1980s and student debt exceeds 1 trillion. Childcare costs more than Public College in most states and black and latino families have to spend more of their income than anyone else. Meredith and her husband planned for years but still ended up with student loans, housing costs that made it hard to stay afloat. The loans cost as much as a car payment. They paid 1000 per month for child care. They live with her parents to save money. That productivity has been rising but wages have been stuck for decades. This means wealth inequality is increasing, the racial wealth gap is persisting and most people raising children in america are facing a crunch. On top of this women are being pushed further behind by way tiring and advancement discrimination wage hiring and advancement discrimination. Moms of all races on average experience increased discrimination, . 71 to a dollar. Moms of color paid less because of structural racism. This is happening despite studies showing a correlation between high levels of women in corporate leadership and higher profits. Families need womens wages as does our economy. Women became half of the fulltime labor force in the last decade and three quarters of moms, half of whom are the primary breadwinners. Women and moms make three quarters of purchasing decisions. When women are not paid fairly and dont have funds to share, the entire economy suffers. It is past time to move policies into the 21st century to match the modern they were forced so families and economy can thrive. The modern workforce so families and the economy can thrive. We need to make basic necessities more affordable. There is growing momentum for policy change that solves many of these issues. Dozens of states and municipalities are based passing paid family medical leave, earned sick days and equity loss. We need to chase at change at the federal level. This many people with the same problems, we dont have an epidemic of personal failings but a national structural issue we must solve together. We need to move quickly to pass the family act so people can access paid medical leave. Childcare working act, the working families tax relief act, the moms act and maternal care act to address maternal kelly and Racial Disparities that drive it. The pregnant workers fairness act and the National Domestic workers bill of rights. We need to raise the federal minimum wage and have it covered all workers, ensuring everyone has access to Health Care Coverage including Reproductive Health care, make college and messageaffordable, end for submission and invest in dennis, with snap, wic, headstart and medicaid, all of which inject funds into the economy. The list is long but important. They work for families and delivers returns. For every dollar invested in childcare, there is a return on investment up to nine dollars. You cant find returns like that anyplace else. When we update outdated policies, we all win. We can and must make it more affordable to raise a family. I know together we will make it happen. Thank you. I want to thank you all for your testimony. We have both taking place those in the house and senate. I will try to get to a few of my questions and then either chairman lee will be back to take care of of the gavel or we will take a short recess. You,t to start with professor waldfogel. Are you familiar with the two generation approach . Prof. Waldfogel yes. What are your thoughts on its role in potentially taking those federal policies that already the need for aside additional policies but better coordinating those to support the development of families and emergence from that cycle of poverty . Prof. Waldfogel it is a model that is attracting a lot of interest. There is a Successful Program underway in tulsa directed by one of my colleagues. It is a winwin. They are taking proven Early Childhood Education Programs which really help engage parents and they are matching those and tying them to employment and Training Programs for the parents and not just random generic and women and training but in the Health Care Sector where there is really a demand. We know from research when parents are involved in training, their children do better in school. Tilde will do better in greece children will do better in preschool if the parents have more stable resources. Enough of that. We dont do enough of thinking across programs. It is a promising model. Sen. Heinrich i appreciate your comments on that. I know in new mexico we have seen groups like united way and others that have really tried to pull these pieces together and act as coordinator to support the family as a whole. Very positive outcomes and we have seen that in liberal and conservative states, very different politically, different governments, have real success with this approach. It is something i have introduced legislation on and continue to push. One of the challenges we have in my state, and i think this is becoming an issue across the country, is in new mexico more than 10 of children are being raised by grandparents. Historically extended families have been important part of our culture and represent a significant asset to all of our communities but what should we be looking at in the federal government to make sure that as we are supporting families, we are not thinking about mothers and fathers, especially in those cases where another Family Member is actually the direct Childcare Provider . It is a really important question. ,he statistics i was reciting 50 of workers having access to the fmla, 40 having Employer Paid family leave, 15 have access to federal childcare subsidies even though they are low income ineligible, that pertains to parents. Grandparents are often boxed out entirely. To gets a lot lottery these things in the first place but the grandparents are categorically ruled out. It is heartbreaking. You hear of grandparents who have chosen to take on or had to take on the grandchildren cant get access to the programs. We need to clean up clean it up. Under the various family leave laws or is a lot of variation who counts as family. There is a lot of debate. Sure, we need to include grandparents. Sen. Heinrich was benefits to the child, so long as we have a legitimate caregiver. Prof. Waldfogel same thing with the ei tc, the Child Tax Credit. Sen. Heinrich many of these people are well into their retirement years and have fixed incomes and yet have all of the incredible burdens of trying to not only raise a child but then after that also help them through their education. Miss rowefinkbeiner, i want to ask if you can expand on how paid family leave impacts the presence of fathers and other caregivers in the life of a child and what impacts then come from that. Ms. Rowefinkbeiner access to paid emily medical leave is a is one of those policies that makes you want to clap and give it a standing ovation. We see when families have access to paid family leave, that actually it is dads who take the paid family leave as well. We see those wage gaps between women and men and moms and dads go down. 50 we have paid a parity, of children would be brought out of poverty, are gdp would be increased by 3 , and we would add more than 500 billion into our economy. Thanking sure that dads also have time with children actually helps moms rise. When we look at some of the other countries, and we did note most other countries have some form of paid family leave except the u. S. , when we look at those countries, some have found that having dads have access to paid family leave is so beneficial for the whole economy. When women have money to spend and are making the majority of our consumer purchasing 72isions in an economy where percent of gdp is based on consumer purchasing dishes and, then we dupe decisions, then we do better. These countries, some of the other ones who have had a paid family medical leave in place for longer, offer a bonus package if the dad takes leave. The family overall would get an additional amount of paid family medical leave because they found it boosts the economy so much. Other things about this winwin of this policy, and i love this policy, is we see that businesses are actually helped out with retention, productivity, and lower retraining costs. We see taxpayers are helped out. Some states like california where they have had paid family medical leave for longer than others, there is a 40 lower need for snap because people have that bridge moment of having those costs come in as Childcare Costs more than college. Having that access to paid family leave at that time when a new baby arrives is very important. Not to mention what you brought up which is the sandwich generation. We need to paid family medical leave and we need it for all workers. We need grandparents to take it as well as parents and other Family Members. In comparing sio, and places that have instituted a paid family leave, and those who have not, there have been consistent data trends showing an increase in economic productivity . Ms. Rowefinkbeiner yeah. Dr. Waldfogel did the original research. Much to my delight, when i found out about the mom wage gap, which is huge moms are making . 71 to a dads dollar. And moms of color are experiencing increased wage hits with a latina moms making as low as . 46 to a mans dollar with the same resume. We can talk about those studies. To pieces of paper and there are two pieces of paper, one resume, the only differences of they are a mom and the other they are a nonmom. This was a study done, and they found they are 80 less likely to be hired if you are a mom and offered 11,000 lower starting salary. Dads get a wage boost. Getting rid of this wage hit when we have so many moms being primary breadwinners is so important to our families and our economy. Sen. Heinrich does that wage gap persist even after mothers return to work . Ms. Rowefinkbeiner yes. The wage gap persists forever. There are policies like the paycheck fairness act which we need to pass. One of the important things it does is you cannot use prior Salary History to create current so you haveing compounded wage hits, do not determine your future. One of thee things she found, is that there is no single Silver Bullet solution. We need to paid family medical leave, affordable accessible childcare, and sick days, and access to Affordable Health care. Families are crunched. We have a modern workforce and our Public Policies are stuck in a time that may be never existed. We need to bring up our workplace protections, and then we will see those wage gaps narrow. Then we all win. Sen. Heinrich you mentioned there is no civil bullet silver buck Silver Bullet. Ms. Rowefinkbeiner and we can do it. In the past, we have passed packages for many things that have had many Different Solutions together. We can pass packages and independently pass these laws to make the changes that we need. It is long overdue. Sen. Heinrich i want to thank you all for your testimony. We will take a really quick recess for 10 minutes, while the chairman returns, so i can go vote as well. Thank you. Thank you for your patience. As the senate and house are in the middle of votes and im grateful to my colleagues, from both houses, and both sides of the aisle in sharing the gavel as we pivoted back and forth to cast votes, we will begin a five minute round of questions. In my case, it may be longer depending on how long it takes my colleagues to get back. It is the upside of this thing happening. It can result in a time period when fall for those of us privileged enough to be here. Mr. Stone, lets start with you. At the end of your testimony, you said our laws should communicate to the citizens that we as a society, as a country see parenting as where they dignified where they come dignified, and important. In your opinion, would our laws do a better job of communicating that message if we allowed parents to draw forward Social Security benefits immediately following the birth of a child so mothers and fathers alike could access their own savings at such a pitiful moment moment . E mr. Stone absolutely. Having our lack of any solution for leave time is a serious issue. Having the option to do it in a sound away that is not inhibiting a mothers odds of being hired. When you voice the bill onto a company, the observed effect is diminished hiring of mothers, which is not the outcome any of us want. If you pay for it out of public offers, then you have difficulty with passing the bill, frankly, due to essentially, where is the money going to come from . Doing it in a way that is long run, budget neutral, is quite reasonable, and is definitely a great improvement over what we have now in terms of communicating to parents and to potential parents that society is with them on this. That you are not doing this work alone. Sen. Lee thank you. That is a conclusion i have reached and i have done a lot of work with senator joni ernst from iowa and he ivanka trump at the white house in trying to move that idea forward. The idea here is that this is money that the parents themselves are already entitled to. The question is what does the government do with that money between the time it is earned in the time they happen to retire . Belief, it is my belief and that of the individuals i have mentioned, that parents ought to have the option of deciding to tap into some of that at the time they have a child. In your testimony, you speak about the marriage penalties for low income families in our tax code and in means tested welfare programs, funded by the federal government. You conclude that the federal government has put its thumb on the scales against workingclass marriage. What are some of the most important policy fixes you can think of that would help remove the antimarriage bias in our tax code and federal where fellers federal welfare system . Mr. Stone in the example families are provided, most of the penalty they experienced comes from the earned income tax credit, as well as to some extent, from snap and from housing vouchers, or housing benefits generally. The earned income tax credit is actually procedurally a simple fix. Just to double the eligibility thresholds if you get married. The problem is this costs billione between 100 to 150 billion per year. That is a large number. This, there is not such just a simple one fix thing. You have to say we cannot afford the current level of generosity for Single Parents if we extended in the same way for married parents. You need to do a wider fix. A simpler thing would be to simply instead of having the earned income tax credit be backdoor Family Support program to replace it with a simpler wage subsidy, and arrived more money through the Child Tax Credit or some other child specific focused benefit. It is not clear why we would say because you have children, the government will be even more determined to support your work outside the home. We have course want to support people with children but i dont think our desire to support children is necessarily contingent on them, in the case of the itc, being unfair unmarried and working outside the home. There is no clear rationale for the structure. The itc is a big one. You see more problems in means tested programs. You will have a similar issue you cant change one or two thresholds, you have to statutorily rewrite the whole program. Sen. Lee thank you. Act thatuts and Jobs Congress passed in 2019 2017 includes a doubling of the Child Tax Credit and the refund ability to cover payroll Tax Liability and counteract the parent tax penalty. In your written testimony, you , liam anddel family wedlock byed out of the marriage penalties in our tax code. Described areu effectively trapped out of marriage as a result of that. You know the only tax provision did not penalize them is in fact the Child Tax Credit. How could this family have fared without the Child Tax Credit expansion, and why is it important for the rest of our tax code to treat liam and emma with similar fairness . Mr. Stone so, in this case, what happened was that when emma, is the one who i have as the custodial parent before marriage, and she, in claiming feeling sen. Lee i mispronounced that name. Picked thei just most common male and female birth names of 2018 and assigned them. She is the custodial parent for these two children. Her income, it is a modest 16,000, but it is it is not enough for her to get the full refund, the full nonrefundable portion of the Child Tax Credit. Once they get married, once liam and emma married, their combined income is enough. Because they get married and there itc is smaller, they can score more refundable on the other cyber because those two offset to some extent. Depending on your income, you cant always get the refund ability the nonrefundable section. Taxhis case, the child credit expanded in generosity when they got married because of how the nonrefundable portion interacts with the refund ability of the earned income tax credit. Sort of some thorny math. This family lost money on the e itc. Emma was getting 5,000 before. When they get married, i believe they dropped to none, or virtually no e itc benefit. Somee same time, they lose means tested benefits on the others, which is to say the tax code is saying even though you two love each other, even though you have jobs, that they are not making large amounts of money, 36,000,ple making there is no reason they should not be able to have the american dream. Maybe they would like to be raising these Children Together and would like to be married, but the tax code says sorry, if you get married, you are going to lose 10,000. Sen. Lee we shouldnt be punishing them for that. Mr. Stone right. We are punishing response will decisions that everyone in the room it is not the states job to get between them and raising their Children Together. Thank you. Senator cassidy . Chairman lee, thank you for putting this on. We announced a bipartisan solution, thank you for nodding your head yes. To help working families. I would say it is currently the most Common Ground paid leave plan in the sun appeared im happy to report additional republican and Democratic Senators are supporting and working with us on legislative text. We hope to introduce this fall. To give you background, many dual income families, the first year following the birth or adoption is the most expensive. Subsequent years, less so. Just as the kind of context for our bill, the tax cut and jobs act bill increased the Child Tax Credit from 1000 to 2000. Er our proposal, the child the family who has the newborn child gets 5,000. And they pull forward that benefit from subsequent years. Instead of 2000 in year two of life, they would get 1500, and on down until it is paid back. It does not raise taxes. We avoid that. It has no mandates on the employer or employee and it does not increase the federal deficit. In fact, i think we heard from one thing we learned is it may be beneficial to the government which seems plausible, because when the mother remains attached to the workplace, instead of going on public assistance which has implications for the child and mother longterm, she remains attached, and the accumulation of seniority and training allows her wage base to grow from that point, as opposed to be brought back in and begin to grow. We think it has downstream benefits for mother and child. By the way, it extends to parents. Obviously, it is the mother who breastfeeds, for example. So we anticipate that women will use it more often, which is why i use the feminine. You are nodding your head affirmatively. I ask your opinion on that. Any suggestions you have to make it better . Dr. Waldfogel i have to say, im so heartened to hear discussion of two different proposals for paid family leave. I think its fabulous that this is on the agenda in a very serious way and we are having the conversation we are having about how to fund it. That really is the issue now. This is a seachange from where we have been on paid family and medical leave where it used to be, what is this thing, should we do it . It is so heartening we are in a place where we are all in agreement that new parents ought to have some period of paid leave. We are trying to figure out how to pay for it. I think this is incredibly heartening. We have heard about a proposal for people to drawdown from their Social Security or people can draw forward their Child Tax Credit. I have to say, i have concerns about those proposals because, as much as i would like to support new parents, and i think i have written about that more than anybody else over the last 25 years, so i absolutely get the importance of paid family and medical leave, but i really worry about what happens in the out years when those benefits have been drawn down. Families with two at two at threeyearolds also need the Child Tax Credits. It is a huge Antipoverty Program. I would hate to be robbing families later in childhood. Likewise, we used to have a big problem with elderly poverty in this country. We still havent completely tackled it. Social security is the biggest Antipoverty Program we have. I worry about families drawing down their Social Security because i want to do the best for their children. Ive been studying there are now eight states that have passed to these payroll funding medical leave laws. They are working really well. It is pennies per week to fund them. We have been talking to employers including small employers. Every state we have talked to employers, two thirds of them are supportive or very supportive of these laws. Another 10 or 15 or 20 are neutral. That means a tiny share of employers are opposed. The public is passing these things. Legislators feeling sen. Cassidy i will also say that if you are going to do it through a payroll tax, that will be regressive. It is easy to speak of that which is the minimalist for someone who was more affluent. For a working family that is the minimum amount, it is actually significant. I will also say i think Research Shows the more financial burden you put on an employer to employ somebody, the more likely they will figure out how to become more productive and lay folks off. I think there is a little bit of a false narrative that there is no cost on raising payroll taxes for more generous benefits. Whereas we just raised the Child Tax Credit from 1000 to 2000, and now we will concentrate a portion at the families option on the year of the childs birth, they will still receive more than they have been receiving. Whichms to be something yes, they receive less at their option, and it is more than they have received as of late. Mr. Stone, you have spoken about how pronatal policie, increase fertility. That a financial toision, if they choose not have another child, but if you have, whatever form it takes, a Child Tax Credit, would that be a pronated tilt policy pro natal policy . Mr. Stone the research on pro natal policymaking is when countries spend money trying to get slightly higher fertility rates, that they do get a little bit of a bump but it costs a lot of money to get that increased. Costeffectivest means of bringing about some increase in the desire to birth rate, the number of births women are having that they intend to have, is through frontloaded benefits. Essentially, giving people 10,000 upfront does get you has a larger influence on childbearing decisions than 1000 a year for 10 years. This is more likely to have an impact on childbearing decisions. There is a question, if you are paying that up front by taking it from later down the road, im actually also some pathetic to the concern raised that the family may need that money down the road. You may frontload their decision here, and then they really need the money sen. Cassidy you spoke nicely of interaction. But we do know that typically people have their children when they are at a lower point of their earning potential. Mr. Stone because income tends to rise over their age cycle. Sen. Cassidy if you are able to maintain your attachment to the workforce with your training, et cetera, and so, i think if you well, the interaction we anticipate is yes, you are pulling forward, if you wish, but but but because he remained the attachment, your salary rises. There is a backfill that occurs from that. Also acknowledging the first year of life is the more expensive year of life. I will take one more. We also want to point out that if we think cvo will not score ours as being expensive because the money is already out there, so what they would do in sweden could be expensive for us. The occasional child who dies before age 10 at which point the money is forgiven. But it will not be something more than that. Thank you all for your time. I yield back to the chair. Im going to cast the final vote. I will be right back. Thank you, mr. Chairman. My apologies on behalf of the house members who have been over voting on legislation. In without theng benefit of context with what you presented. I did have an opportunity to quickly perus your testimony. I thank you for being here. I guess i would like to start with you, mr. Stone. Certain you have talked about this. Unfortunately, i was not here. Researchnated by your finding a relationship between fertility rates and homeownership. By tolerating impediment to, to homeownership and decreased do factorhip, do we have an implicit policy of lowering our fertility rate . Is not what you are suggesting, sir . Of that what you are suggesting, sir . Mr. Stone i dont know it is specifically about how homeownership, but housing costs. There are many ways to manage housing costs. It could be by buying and affordable home or renting in a neighborhood that is affordable. My concern is that housing costs are the one place where the amount that families spend on children is in fact being outpaced by price. Where there is real solid evidence of considerable Financial Stress on families in the housing sector. That is driven there is a lot of research on this, it is driven by local policy, choices about landuse, choices about where people can build, the codes they billed under, these sorts of things. My concern i did not focus on that in my spoken testimony because this is largely a state and local choice. Anyone in to which is, withn can fix this all due respect, somewhat limited. It is a serious problem. There is an and normas amount of Research Suggesting landuse regulation and positive shocks to the price of housing, especially in the rental market, well, the owned market as have a negative impact on peoples ability to achieve their family desires. This is a real concern. Is policy driven. But it is local policy. It is 50,000 municipalities that you need to convince to stop zoning against families. Correlation, the the inverse correlation is ofween price irrespective whether there is an equity position or not and fertility . Mr. Stone yes. Sen. Heck i have had the privilege in the last two and a half years to chair the new Democrats Coalition housing task force. And we have come away with a couple of researchbased findings that i think are relevant to this conversation. The first of which is that in the last 15 years, the single largest increase in Household Budget has been for housing. More than health care, more than higher education. It is masked by the fact that those of us who have been in a place for a long time of the 15 years have not experienced this. Of all major household rentditures, the cost of or conversely, the cost to pay your mortgage has gone up faster than anything else that they are confronting. Problem is that this materially contributed by a lack of supply of housing stock, which of course compels people to stay renting which drives up occupancy rates which drives up rents which cause people to be rent burden, causes people to require public subsidy, causes more people to be homeless. Think either of captures thetions insidious effect on the homeownership side of the deferred home acquisition by millennials. And we have measured this. Its pretty clear. The 28yearolds are more likely to be living upstairs at mom and dad house of than ever be hope for of than ever before. When definedbenefit Pension Plans are falling through the basement, peoples Retirement Security has been diminished. One and the number one asset that the average american invests in contribute into their Retirement Security is their home. Care to respond to my diatribe . Mr. Stone yeah. So, theres a lot there. The number one asset that many families are invested in is their home. The funny thing about owning a home, if you own a share of a company, then maybe you get dividends, or maybe you get a report regularly and you will sally later. The funny thing about owning a home is your dividends come in the home of not in the form of not getting rained on. And then you actually have to put extra money in it. It is this company that you own a part of but you have to buy a new roof for the company ever so every so often, and you have to buy a new hot water heater for the company. You have to keep buying all this stuff for what is allegedly an investment. The problems is when you view the home as an investment vehicle, rather than a form of durable consumption which depreciates, it creates an incentive to lock other people out. It essentially says my home is an investment, so im going to make sure that my School District remains the type of people that people who will buy my home want their kids to go to school with. My home is an investment so im going to make sure that not too many other homes get built so if somebody wants to live here, they have to buy my home. I understand Many Americans have bought into the story that the roof over their head is also their retirement. But i would suggest that this is not always the case. Typically, your security in retirement was that you had children who would take care of you. Thisecondly, that investment, this idea that the home needs to appreciate forever, it creates a toxic politic of exclusion at the neighborhood level. That ultimately the only path forward is for a large number of neighborhoods in america to realize that they are going to increase in quantity of houses, not price of houses. So homeownership may be very important for the benefit of providing for a family, but i think americans expect that real estate, particularly personally held a real estate, will be their Retirement Security, will be in for a nasty shock. Sen. Heck are you suggesting that they are mutually exclusive . Mr. Stone there are times and places where real estate will appreciate and it will not have a negative impact on anyone else and it is not a result of exclusion. But there is an abundant amount of research at this point that suggests most of the really hot real estate markets in america are that way, not just because people decided that neighborhood was amazing, but because new supplies being kept off the demand market where significantly exceeds supply . Create new supply. Me towould be hard for exaggerate how strongly i agree with you, mr. Stone. It is a supply issue. Not a demand issue. Over 700 million Housing Units short in this country and it creates all sorts of problems to families, many of which have been set forth here. I want to thank the panelists for being here today and for your testimony and having this conversation, and thank you to the committee for having ms. Hearing today. For having this hearing. We arguably live in one of the most prosperous times in modern history in terms of economically, and looking at measurements, and yet many people claim having children is too expensive. Can any of you talk a little bit about what is going on there and maybe the reasons for that . I think we have to split the issue into thinking about how people exist with the cost they face today and changed expectations over time. I agree with much of what mr. Stone said earlier and that if you look at the broad trends of the cost of every day basic goods and necessities and bundle up that basket, actually, the affordability of raising a family on fixed expectations about what you want to provide for your children, in most areas for most families, has not gone up. But over time, peoples expectations rise about what they want to deliver for their children, what they want to invest in afterschool clubs and activities. You want to provide them with the best Quality Childcare available. So the amount actually spent by families on children has risen. That is not to say that policy does not play a role in raising prices from what prices could be in a more marketfriendly economy. Much of my research has been attempting to show that in key inkets, particularly childcare and housing costs, there are big regulatory barriers that restrict the supply of new goods, such that when demand rises for child care or housing, there is not an adequate supply in response. In thenifests itself housing market, mainly through local learning and planning laws, which have been had particularly been an issue in growing metropolitan areas. In childcare, it also manifests itself through staffing regulations and occupational licensing, which, many parents and upper income demographics desire that improved quality of childcare. More interaction between staff and children and a qualified staff. When that is imposed as a policy across the state, it has the effect of raising childcare prices and forcing poor families out of the formal childcare sector and into the informal childcare sector, where we have less idea of policies. I guess to summarize the point, i agree with mr. Stone over the longterm. If you wanted exactly the same expectations for your kids 30 years ago, things have gotten more affordable. But our expectations change and that means over time, people are spending more money on their families and there are certain policies, particularly at state and local levels, which raise prices in those sectors. A suggested policy change to help remedy that . Main point point i made my testimony is housing and childcare. Most of the positive regulatory changes that we made would primarily have to occur at the state and local level. Federal policy can push in the right direction. I may not agree with all of the current federal Subsidy Programs, but to the extent that we are going to have them, greater conditionality, making sure we are not rewarding bad distributing subsidies to areas that have very restricted childcare and housing i think is something congressmen and congresswomen should be looking at. Mr. Stone, do you have any comment . Mr. Stone i agree. Do you want to comment . Dr. Waldfogel from the historical perspective, we have to remember to change we have seen in American Families and from stayathome caregiver single parent model. Most children are now growing up with all of their parents in the labor force. We have not come to terms with that in terms of what it means and the need for paid leave, the support for child care, even if it were less childcare, it is expensive. And we really have not come to terms with that. Thank you. 2016, maryland ranked fifth in the country in terms of most expensive childcare. Cost an average of 14,000. Closer to d. C. , it can cost 37,000. Maryland General Assembly is , but itto expand prek is still not universal and it will not be in the foreseeable future. Could you speak to the benefits for families . And the positive impact on higher income families . We now have a lot of research about universal prek and the benefits it offers for all children. The benefits are largest for the low income children, children with the least educated parents because it helps them catch up, but it is beneficial for all kids. It is a very important form of childcare for the year before school. As you indicate, universal prek will only cover the year the poor children start school and in some cases they are extending it to a second year, and it still leaves the infant and toddler years, which are the most expensive. Even though the federal government has a childhood Subsidy Program for low income families, it is only funded at a level that will cover subsidies for 15 of the low income families eligible. Basically, it is a lottery. If you are a low income family, if you are lucky, you have the Winning Ticket and you get a child subsidy, but if not, youre out of luck. And that is unconscionable. I have heard the return on investments is 41. Dr. Waldfogel at least. We childcare, it is all about quality. The highest quality are 81. The low quality, it is less than that. So we have to be careful about proposals to cut the quality and regulations, because there are two sides to that. The reduced cost, and also the reduced benefits or risk of putting children in substandard childcare. About the lack of affordable childcare, i wanted to talk about the populations that are more affected than others. ,nd if you dont mind speaking i am a cosponsor of the childcare for working families act, which will create some high Quality Childcare options all year round. What are some of the proposals we should push forward that are most needed . You for of all, thank being a cosponsor of the childcare care for working families act. A member moms rising strongly supported. Aboutr from our members three key areas of crisis and childcare. Affordability, which we are hearing about now. Accessibility, which 50 of parents are living in childcare deserts. No matter how much money they had, they cannot find childcare. Also, excellence. We really need high quality Early Learning programs to make sure every child has the opportunity to thrive. That is where we see the strongest return on investment. We need to make investments in childcare and Early Learning starting from 02 h five, until until age five, until they get into kindergarten. We need to move into subsidized childcare that has a wage letter for childcare workers, among the lowest paid workers in our nation. And we need to have universal prek. We need to have a whole system that includes the education of our children. Enrichinged safe, places for their children to be so that they can work. Parents are increasingly in the labor force. Children need a safe place so they can thrive and be our future leaders. And childcare workers need better pay. We spoke about increased productivity in the united states. While productivity has gone up 70 in the past 30 years, actual wages have remained quite stagnant. Kids, ages you see 2, 3, combination of public and private, what does it look like . We have a patchwork approach, not a smooth line through childcare. We need to make policies like the childcare care for working families policy act and we need to advance policies that allow parents to be in the labor force and make fair wages, no matter where they work. Thank you very much for coming. Sorry we have been in and out with these votes. I want to push back on mr. B ourne and the overregulation of childcare. I know it is expensive. I am from virginia. Every regulation we have there is a result of a tragedy. Ive been part of this for 25 years, whether it is the quality of the people we are hiring, or the quality of the facility. Dies, we endchild up trying to find a way to put regulations in place to make it safe for all of our kids. Be it seems to me a subset of this is pushing back against women in the workforce, which has caused all these problems. One of the things this committee pushes for is growth in gdp. The postworld war ii economic miracle has only been possible because of women in the workforce. This committee has pushed back in the past years. Women are a relatively smaller percentage in the workforce than they were 30 years ago. It has slowed down our Economic Growth. Great points of contention is the net effect of tax cut and job act. Do you see that it. Do you see that it paid nearly enough attention to the lower income folks, the ones who were not getting married because they cannot afford to . Dr. Waldfogel we were talking earlier about the extension of the Child Tax Credit contained in the bill. It was certainly very important for low income families. Plus inthat was a huge that bill. Are you speaking of other specific provisions . Thank you for pointing out again and again that and the tax credit. One of the things we are trying to push through the house is a significant increase in the earning tax credit, especially for childless individuals. Dr. Waldfogel yes. It is very important. Childless individuals are young people who are the parents of tomorrow. They are about to become parents. The youngest adults are the poorest age group in america. I wouldve thought youngest children Young Children were. But 18 to 24 is the poorest age group. That is the kind of group that. Ould benefit from an extent i noncustodial fathers are another group and noncustodial fathers are another group. We want to make sure they are involved. We want to be evenhanded in our policy in supporting both moms and dads and also supporting young people who were on the path to starting families. Mr. Stone spoke about the marriage penalty. That so many of our federal programs hurt you and move in the wrong direction when you get married. From a moms rising perspective, have you thought much about how you would overcome the various marriage penalty processes in our programs, beginning with the tax cut . One thing we hear from members again and again is people should be able to determine who is there family and how they are raising their children. We heard about grandparents who are involved and the sandwich generation. The important thing to do is look at the reality of families today and make sure we are supporting all families equally. Policy,ax code, public and updating our outdated Public Policies. Women are in the labor force to stay. Happenings that employers have higher returns coming in, so say when about what happens when you have more women in leadership. We want to make sure everyone has a chance to thrive and we are in it for the long haul to make sure that happens. Mr. Stone, same question to you on the marriage penalties. Have you put together your comprehensive legislative peace . Mr. Stone pieces of it are in the works. There is an interesting case where we just heard a very large marriage penalty advanced, very wellintentioned. We know there is discrimination against childless people. But in the example that i provided in my testimony, both the individual people are childless if the partner was, as well. The marriage penalty would be larger. It would be another 5,000 lost when they got married. If we even things out for childless people without fixing the basic antimarriage position that is written into the e itc, we have made the problem worse. This is where we may policy for people as they are today. But humans are not static. They develop. The childless person today has children tomorrow. People situations changes. Hange and we end up creating barriers to the lives they want. I want childless people to be created equally. I think it would be better if we did it through a flat rate subsidy. Thisf we are going to have done when you filed the taxes, i do not be a situation where the childless and custodial parent get a benefit as long as they stay separate. That is not a recipe for supporting americans of any family status. Thank you. Senator harris. Holding thisfor hearing and thank you to the witnesses for being here. Up. D a question to follow there has been considerable discussion already about paid family leave. I wanted to followup on one aspect. I will add my voice that families should not have to make the impossible choice between earning a paycheck and spending time with a loved one in need or taking care of their own personal health care crisis. It has been great to see eight states and washington dc enact the leave to try to address the issue. Providenow these partial wage replacement to workers who need to care for a newborn or newly adopted child, care for a provide Family Member in need or address their own health care crisis. There has been discussion today about the benefits of paid family leave to the Family Members. Could you address a little bit about the benefits for employers . What have we learned about how that relates, what that Ripple Effect is in the workplace . Dr. Waldfogel thank you for the question. It is an important one. We tend to stress the benefits for employees and do not talk enough about employers. Employers are in a tough position. They are looking for employees in a tight labor market and what is valuable for them is having and retaining talent. When a conflict is is losing the talent. ,hen we talk with employers what they say is even a small employers, we give people leave, anyway. We have to give them leave. Someone whose husband has cancer, she has a new baby, we have to give the employee time off. With these laws, we are able to see that they get paid. And we do not have to pay them them ourselvesay through our payroll. What we have also heard from employers is in the back the majority of the time, they are covering the work by sending it assigning it to other employees or waiting for the person to come back. It is very rare to hire a replacement worker. Only 15 of employers say they had trouble covering the work will the person was out. So it is not surprising that we are hearing that two thirds of the employers we speak with, including small employers, are supportive of the laws. When we started the serve i survey, i was nervous about what we would find. Maybe 15 are opposed. Think 15 of employers would oppose any law. So we are finding 85 or 90 that are supportive were neutral. I think that is impressive. Impressive ands it is what i have been hearing in new hampshire. The other thing i wanted to is the issue you of businesses needing more skilled workers. One is probably the number thing i hear from businesses across new hampshire. We also here is that too often, hear is that too often, individuals who are unemployed are not able to get the training they need or the jobs that are open, and also that they face barriers such as transportation a childcare. Either to get the training, they are fighting having a hard time finding childcare. Wouldteway to careers act strengthen pathway opportunities and help individuals navigate barriers that keep people from participating or staying in the workforce. Through your advocacy, do you think we should be doing more to help families access to services they may already be eligible for and strengthen Training Programs to be responsive to issues individuals face outside the workplace . The work i have done on how families spend their eitc suggests that families are facing high transportation and Childcare Costs. We always thought it would be used for durable goods or furniture for the family or. Etting into a better apartment unfortunately, families seem to be using it to pay for work expenses, primarily transportation and childcare. So anything you can do on that front would be fabulous. I agree. Thank you for putting forward the bill. We see three things that need to happen. Update thes, outdated policies, and policies need to be comprehensive. So paid family medical leave, we ind it to mirror the fmla terms of not only covering new parents, but also significant in illness. Of the timemajority that the unpaid fmla is used. As we update these policies, we do not want to rob one program to pay another. Families are stretched. One thing that has not come up so far is wealth inequality. I mentioned earlier we have a 70 increase in productivity, but wages have remained stagnant. That puts us in a situation that an m. I. T. Economist has said is leading us toward a third World Economic model, which will impose the middle class. Basice to make necessities, including transportation, more affordable for families. We do not have a single solution for what is happening right now, but america is in crisis. Families want to do what is best for their children. I am so thankful you are looking at this solution from multiple angles. Thank you. Thank you for letting us go over, mr. Chair. I am grateful to have the participation from both ends of the capital. A seconding to do round, which we will start now. In her testimony, you explained some childcare regulations in your testimony, you explained some childcare regulations that affect the childcare industry tend to reduce the supply of Childcare Centers, especially in poor areas, driving up prices and reducing the rate of formal care options for families. For example, a new law in becomeson dc when it fully implemented over the next few years will start to require Childcare Providers to run degrees, and some year a Fouryear College degree or a certification. Impactll inevitably supply, which will impact price. Childcaremarketbased appears to be widely recognized financial burden for working families. Survey says 64 of the responses said they ,xpected to have fewer children said they expected to have fewer children than they considered ideal, at least in part because they believed childcare was too expensive. To what extent do you think childcare regulations are responsible for higher Childcare Costs . It is difficult to disentangle the demands. There are good reasons to think childcare, even in a market economy, might be more expensive over time as people get richer. Formal childcare is laborintensive and it is difficult to automate in the same way you can the manufacturing sector. For those big structural reasons , there has been an increase in demand for formal childcare overtime. And people tend to value their kids highly. They want a safe, loving environment for them. For upper income families, they want very high Quality Childcare. The areas ofcross the highest cost childcare, its the richest states, which feeds into the ideas that price is strongly incomeelastic. There is a lot of economic regulations of childcare workers, in particular the number of Staff Required per number of children and occupational licensing requirements in terms of qualification requirements to raise cost significantly substantially. Re has been some economic Academic Work that suggests if you relax over the age groups, it would reduce Childcare Costs by 10 . But these regulations are regressive. The best tidy best study was done by some economists who looked at comprehensive data. They found that staff to child effect inno in no improving quality. Did by driving up the cost of care, in poor areas, it led to the closure of formal centers. The lack of availability led to greater use of home daycare. So it is a massive tradeoff. Measures people say improve quality may well improve interaction time in the formal centers that still exist within a state. But if it means many poor families are unable to access formal childcare, we really have no idea what happens in terms of the quality of informal care for people are offered. So i would say the big tradeoff, upper income parents desire these sorts of regulations anyway. But what the regulations do is strip away the choice for lower income families to select a regulation price quality bundle. That can have severely regressive effects in terms of access for those people to the labor market. Other than childcare reforms, what are your other favorite policy reforms you think could significantly lower the cost of living for low income families . The biggest expenditure is housing costs. As i outlined, i think a key driver of housing costs in many major cities, particularly where Economic Opportunities are greatest, tend to be associated with overly restrictive zoning and Land Use Planning laws. I do not think we can really get into the issue without tackling that problem. Evidently, that is primarily a state and local issue. That said, the federal government through schemes such as the Community Element block grant dishes at federal subsidies to states and localities. And to the extent that those come without conditions about the supply environment, they can subsidize bad policy. Looking athas been this, trying to work out a way of making sure states and localities have and i also think with this rise potential rol as a solution being advocated, i would like to see federal policy that precludes those sorts of policies that would damage supplies further. One has to be careful about how far to intrude. Create one sort of problems through the federal government as a response locally and try to treat that remedy with another federal remedy. My time for this round has expired. Mr. Heck. Mr. Heck thank you, mr. Chairman. Thank you for getting to the nobodyins. Better wages and especially in the light of context of stagnant wages and this is the underlying issues that we are dealing with. For purposes of discussion, im thinking about three different buckets in which the federal government could take action to effect peoples standard of living. Im going to ask you each what is the thing we ought to do. The first is a predicate. We can either through the ppropriation through the tax expenditure side impact those things that are affecting people, skile rocketing costs or just cash in the pockets through loehrl pockets through e. T. C. , bucket one. Bucket two, we could adopt those policies which lead to higher wages for at least some, increase minimum wage. Federal level hasnt been increased in 10 years. Nowhere to the purchasing power. And rights of workers. Bucket three is the overall wages. Spirited disclosure, this is my favorite. I believe the Federal Reserve has pursued a policy that suppressed wage growth. In the last 10 years there have only been two months in which our labor supply increased by less than the replacement number in that month, two months in 10 years. So we really havent had an approach to the cost of money which truly gets us to full employment. Indeed, they keep changing their definition of what full employment is. And they keep lowering. As a consequence, we have had very slow wage growth. So im reminded that what one of the chairs of the Federal Reserve said and this is my favorite, recoveries dont usually die of Natural Causes but murdered by the fed. So we have these three buckets and im interested in knowing from each of you quickly, beginning with you, if i may. By the way, as an organization with a million members head quartered in my state, we are proud of the work you do. If we were to do one thing, one thing to make a difference, what would it be . Thats a tough question. Peck peck we have to answer tough questions all the time. M sharing the pain these programs go up when we have increased learning. So we are looking going up. If you have increased quality and we have to make sure we are not cutting care and moving forward wages. If i had to pick one im all three. Im going to see how the doctor handles this one. Im going to say all three as well, we should have employment and minimum wages and bargaining rights. If you can choose one, which one do you think would make the biggest difference . Im going to come back to the universal child allowance. Children should not be suffering because of this. And people whose work hours change from worktoweek. How do you pay for housing, how do you pay for child care when your earnings are changing from weektoweek. You are worrying about money all the time. What impact dotion it have on your family life and children. Children should be protected from these forces while we try to sort this all out. The Child Tax Credit is a Fabulous Program in moving towards that goal and i think anything you can do to expand this and make it more, reach more families and become more universal. When we are thinking about helping families with kids and making it more affordable. But im glad you are talking about moving the big challenges. There is actually a full approach which is to look at why are the costs of goods and services so expensive and try to expand the supply side to make goods inherently cheaper to negate the demand in borrowing for price and wage controls. And a lot of the programs we mentioned no doubt could alleviate poverty. But given the fiscal conditions and the limits what you can achieve through a tight labor market and the risks associated with wage and price controls, i think the principal of first do know harm, examine the policies that raise the cost of living of families and poor families in particular is a fruitful approach. Im going to take the question in the spirit it was given and propose one legislative fix in the spirit of fix it will be a legislative fix with riders attached. We should take the ietc and replace that it should not discriminate. It currently has a benefit for children. We dont want to lose it and roll it back in the Child Tax Credit which we should expand nd should pay for it with non g. D. P. There you go. Thank you for your indulgence. Follow up on a couple of questions. Mr. Stone, in your testimony, you submitted to the committee, you state that the declining marriage rate accounts for at least half of the increase of fertility gap and for basically all of the increases since 2000, is that correct . Thats correct. Can you explain to us what you believe marriage rates are declining and what, if anything, can be done im hesitating to find the right words here. I dont want to live in a country where we have a nanny state that is going to incentivize people that tells them when to get married or where the government is artificially an environment when the government tells you when when to get married . This idea of the fertility gap and it is rising and not because people want more and more kids and fertility is falling. When we look at how fertility is falling, in fact, for a woman who gets married at a given age, her odds of how many children are pretty similar to what they were 30 years ago. This is about marriage choices. Marriage is being postponed and for working class people it is happening less frequently. People get married at the same rate. This has been presented as a class problem, oh, there is a cultural shift. Maybe. But it could be that people without a College Degree are more likely exposed to marriage penalties. Which brings us to this worry about this nanny state or maybe more like a grandma state lecturing about getting married. So nobody wants this. Nobody is saying, i wish, i wish that the i. R. S. Would give me dvice whether to marry my girl friend. Luckily, this isnt what we need. If the problem is the marriage penalty, what we need is the first step, the most popular thing in congress to create a commission of some kind to study where there are marriage penalties and identify where these things occur and can we come up with some agreeable way rule so we are a still spending the same amount of money on the same income range of people but doing it in away that doesnt discourage family formation. Its not lecturing anyone getting married. Its saying we made a mistake on how we wrote these programs. They werent designed in a women world where men and were working. After we have done that kind of study, we need a rule that is whenever we score a bill, we ed that scoring process to include. Does this include a marriage penalty. If it does, it would be nice to know. It is not a hard thing to calculate. In the sweet spot where it really makes a difference, could have an impact on behavior. Doctor, i wanted to follow up on something you mentioned. You coauthored a 2016 study in which you show that the motherhood wage gap has declined and even in some cases, its been replaced with something of a wage premium for some group of moms, am i stating thaling correctly . In light of that, can you discuss that finding and tell is in light of that evidence it that the crisis is necessarily driven by a mootshood wage gap or other factors at play here . I have been working on the mother heap hood wage gap and part of my p hd. When you were 12. And i appreciate that. And what i learned when doing that work, women who didnt have the opportunity to take a paid protected Maternity Leave were faced with an impossible choice, they have a child, they didnt have enough to stay home so they would leave their job and come back a few years later and start at the bottom of the labor market and took 15 years to get back on the par with the women who were in similar jobs with similar training. That is that penalty and lasted for a long time. We live in a world where we dont have paid family leave and child care, we have it in a lot more than we used to back in those days. So it doesnt surprise me that the mother heap deld hood wage penalty. But not as bad as it used to be. Other things happened in the labor market and education system. Women are getting more education than men. There is a group that we are worried about in the labor market. Less educated men who are taking a hit. Things have changed over time. Thats helpful. I want to follow up on what the doctor said and it is not gone. So when we are talking about the wage gap being lowered, the 2018 numbers that were built on u. S. Census data, moms are making 70 cents and women of all races for fulltime yearround work. The motherhood gap is very significant and very, very strong. In looking what is happening at shutions in our country, we need to address the fact that it is married, unmarried or type of family that you are living that are is impacting, it is wage discrimination and that is come bounded by structural and moms of color are experiencing it most. And single moms according to 2018 data, single moms are earning 55 cents to a single dad. When we are looking at solutions, we need to look at the paycheck fairness act and how to raise all families and according to Johns Hopkins university, 57 of last year were to unmarried women and acknowledge that 82 of women in america have children by the time they are 44 years old. These solutions are not going to work. We need to make sure that the solutions we create, we create for all of working america and not just some and dont replicate the structural inequities of the past. Did you have your hand up . Were you wanting to respond . Go ahead. Its surprising this motherhood is not gone. There is Extensive Research with eally rigorous data from European Countries that there is an mother zhrep hood penalty and no correlation for child bearing or motherhood and driven by local social norms. But it suggests that our policies that we want to advance for families, we should justify them in terms of what we pleeven is right for families and good for families and not convince ourselves by giving paid leaf, we shouldnt convince ourselves aat we are going to eliminate pay gap than anything we are talking about. That these differentials are much harder to correct than what we convince ourselves of in political discussion its. They may be worth doing because of kids and because they are a good communication. They dont actually address the pay gap. That is a problem that actually almost no country has found a solution to. We should keep in mind what is possible to achieve and make sure we dont make promises that are going to end up living of people we are going to help. I wanted to come back to the marriage question because it is an important one. My colleague who is at princeton, has done the best research why lowincome families are postponing families are postponing marriage. They need to attain certain footholds and have a decent job. And cant get married until they are stable on their feet. I have been thinking about the conversation we have been this afternoon about high housing costs and couples living in their parents house and uncertainty in work schedule. Im all in favor of getting marriage penalties. We should think about the other things that are holding young people back from marriage. And student debt we have been talking about. Its no wonder that young people are delaying getting married given they dont have a stable place to live and in debt from schools and dont have a stable jobs and we wouldnt want them to be rushing into marriage. Those bucket things is complex to improve issues for young adults. This is to improve prospects because they are the parents of the future. I will like you speak. I guess this is the one area [indiscernible] im skeptical of the idea that tax policy affects this type of behavior to a significant degree and changing tax policy would lead to any significant change infer tilt rates and i say that for two main reasons. If you look across countries that have different tax and benefit systems, there has been a similar secular decline infer tilt rates. The mean age of first marriage for women is much lower in the u. S. Than in countries such as france and sweden. They have higher fertility rates. This is one area where i kind of question how much of an effect of tax and benefit policy really has on this issue. Thats an interesting point. Mr. Heck. Mr. Heck one last question, mr. Stone. Our fertility rate, last i checked is just under 1. 8. Nowhere near replacement and doesnt take into imdepration or the population growth but we have been below replacement and when i think about the programs like Social Security which depend on the number of active workers in the work force that supports those who are retired begs the question what are some of the longterm consequences of having a fertility rate depending on immigration policy and i suspect there are serious implications. Would you care to enumerate some of those. It would be easier to he numerate if if c. B. O. , the Social Security trustees if they bothered to do a simulation that simulated a fertility below 1. 8. If they consider as possible in a most update on the soundness of the rate. We are 1. 72 and falling. We are beyond of what our longterm planners. You see the same thing. They overestimated the first year of their forecast and overestimated population growth by 550,000 people in one year. That was a big miss. We should probably force our forecasting agencies to make sure that at first year of numbers is correct. Let alone you try to get a lit more accurate on the outyears. Given we are not prepared for the demographic shift, there will be significant consequences. There is an article in the wall street jourm a few weeks ago about lots of Older Americans who bought sizeable houses and were planning to sell them for their retirement and no one is buying them right now. Well let me interrupt and sbrl sect something that is important. A lot of those people want to downsize and there isnt a sufficient stock that they could get into. They cant sell the home because there isnt a market to buy it. And second of all, the house they want to move into doesnt exist. We think about Social Security as an intergenerational traffer. You own stock in a company that owns hot dogs. And to have any value when you sell it. We get a free pass pause our stock market to a variety of channels open to Foreign Investments and get this nice thing where we buy goods and invest it into our securities which is a nice handouts for americans but on some level there needs to be a next generation to consume those things to go protect the value of the asset. The lowterm consequence is rmanent slowdown in economic nand. We heard about wage stagnation and productivity is growing but wages havent. It has been better than it has been in japan, which one reason for that, is there no population deproth. There is no plausible story where investing in japan is wise. There is no growth. At the end of the day, you get less entrepreneurship, less innovation and less Economic Growth and less public finances, what we call in aging with dignity is very difficult. Ery few countries achieve. And this is not well fed up. We are facing a very serious issue down the road. When we think about low birth rates, replacement rates is not what motivates me. Im not trying to get into 2. 1. If you have three. But on some level, you do need a society that continues to have growth in the market. That can be through imgracious. However, fertility rates are falling. They are all below replacement in most of the world. Beyond that, most countries like japan are saying we need immigrants, so there is more immigration. Net imdepration has been falling. They are going to keep falling. Regardless of what happens with policy. We cant count that immigration is always going to lift our fiscal boat, it wont, not always. Mr. Heck thank you, sir. Thank you mr. Chairman. I thank you for each of you being here today. I thank all of the members for coming in and participating in the hearing as well and we have had an outstanding exchange. We are going to adjourn here in a moment. As i do, ill note for members, we will keep the record open for three days if they want to supplement the record in writing. And we stand adjourned. Thank you. [captions Copyright National cable satellite corp. 2019] captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org [chatter] there is a look at our live coverage monday. At 7 00 p. M. Eastern am i craddick democratic president ial candidate elizabeth warren. At 9 00, president Trumps Campaign rally in new mexico. U. S. Chamber of Commerce Executive hold a News Conference on trade and infrastructure. The senate gaveled into consideration the u. S. Ambassador to the united arab emirates. At 7 00, neil gorsuch talks about his new book. Greta this week on newsmakers, neil bradley, the chief policy officer and executive Vice President of the u. S. Chamber of commerce. Thank you very much for being here. Neil thanks for having me. Greta we also have with us Jeanna Smialek with the New York Times and Chris Rugaber with associated press. Chris. Chris lets talk about trade. 40 of the fortune 500 has complained on earning calls and so forth about the impact of president trumps tariffs on chinese imports and other items. How big an impact, how much is this hurting companies . I am interested how you may compare it to the benefits of the tax cut in 2017, which reduced rates on business. Have these tariffs got int