After the November 2022 midterm elections, what will the agenda for the House and Senate look like?
The answer to this hinges on who wins. For arguments sakes let’s consider two outcomes, first the Democrats pick up two Senate seats and hold the House. This eliminates the Manchin/Sinema effect. The second outcome is that the Democrats lose both the Senate and the House.
In most cases predicting economic events one year in advance is a fool’s errand, but in this case, with economic agendas being either proposed or leaked, successful predictions are more a function of politics than economics.
Democrats are in favor of, and would pursue, reducing day care costs, assisting with elder care, allowing Medicare and Medicaid Services to negotiate drug prices, making permanent the refundable child tax, and raising taxes on those making more than $400,000 and establishing a minimum corporate tax rate of 20 percent. Republicans are not in favor of any of the Democratic proposals and would not pursue any of them. Additionally, various Republican senators have their own proposals.
Senator Rick Scott of Florida would give the President a line-item veto, which is unconstitutional, prohibit debt ceiling increases, tax poor and retired people, reduce IRS funding by half, end imports from China, and finally require every federal law to be reauthorized every five years, a proposal that if passed would threaten the existence of Social Security and Medicare.
Senator Romney of Utah is in favor of reviving an expanded refundable child tax credit to $350 per child, but with significant work requirements. His proposal would also end the Temporary Assistance to Needy Families program, reduce funding for food stamps, and end the federal tax deduction for state and local taxes. In comments to the Senate budget committee, Senator Romney also raised the idea of cutting Social Security benefits, but only for younger generations before they reach retirement age, as a way to “save” Social Security, but he is opposed to any increase in the Social Security tax rate or base.
Most recently, House Republicans proposed raising the eligibility age for Medicare from 65 to 69. For reasons of health or job displacement most workers retire below their full retirement age. Contrary to popular belief, the average Social Security check is not large, the average yearly Social Security retirement benefit is only $19,931, or $1,660 per month.
Any policymaker proposing raising Social Security’s retirement age should understand the impact this would have on American workers. American life expectancy is decreasing, not increasing. Increases in the retirement age will have their greatest impact on those who can afford them the least (lower income workers with shorter life expectancies) who are less likely to be able to continue working to age 70.
The differing view on the nation’s social safety net, as it exists today, and what it might look like the future, has real world consequences. An example of the problems created by our incomplete, and inconsistent, social welfare programs can be seen in the plight of a young woman I recently met in Ohio.
This mother of five, having lost her husband due to mental illness, and their savings in a fraudulent investment scheme, found her self evicted from their apartment, and, after the refundable child tax credit expired had her car repossessed. In her quest for assistance she discovered that she was ineligible for Section 8 housing due to a lack of income. Her application for assistance under the Temporary Assistance for Needy Families was denied because she had not applied for employment, which was impossible since she could not afford the $2,757/month day care for three children even if she had a job. With no vehicle, and having missed doctors’ appointments for her twin children, the Ohio Department of Job and Family Services was threatening to place her children in foster care. Today she depends on the charity of friends for shelter, transportation, and to some extent food.
Her story is not unique, there are many women who struggle with low wages, a lack of child care, or for reasons of health or location are simply unable to work. Their future welfare hinges on the November elections. The now expired refundable tax credit reduced child poverty by 50 percent, it has since increased by 50 percent. During WWII children received care in government subsidized day care centers for $1 to $1.50/day for two children, in 2021, that’s less than $24/day, or $480/month, far less that the average cost in the US of $1,838/month. We provided the assistance families needed last year, in the past, and we can do it again. Whether or not we do, it depends on how we vote in November.