National Defense Authorization Act for FY 2019 Includes Border Security Win for White House
President Donald Trump signs the Presidential Space Directive – 1, directing NASA to return to the moon, alongside members of the Senate, Congress, NASA, and commercial space companies in the Roosevelt room of the White House in Washington, Monday, Dec. 11, 2017. Photo Credit: (NASA/Aubrey Gemignani)
The U.S. House passed the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019, establishing the U.S. Space Force and paid family leave for federal workers. The 377-48 vote moves the $738 billion bill to the U.S. Senate over the objection of 41 Democrats, mostly leftwing progressives.
YEAS
NAYS
NV
DEMOCRATIC
188
41
3
REPUBLICAN
189
6
2
INDEPENDENT
1
TOTALS
377
48
5
The initial version of the bill failed in July. Republicans opposed a provision that would’ve blocked the president from funding border security. The final version of the bill represents a big win for the White House and House Republicans.
The final compromise removed a number of leftwing progressive provisions. Putting aside the wisdom of those policies, they would’ve met fierce opposition in the Republican-controlled U.S. Senate.
Prohibit the president from taking U.S. military action against Iran,
End U.S. support for the Saudi-led war in Yemen,
Force the cleanup of “forever chemicals” called PFAS,
Block the deployment of the low-yield nuclear warhead; and
Prohibit new transfers of detainees to Guantánamo Bay.
President Donald J. Trump, who uncharacteristically of a Republican campaigned on childcare reforms, said that he would sign the compromise version of the bill immediately.
“Wow! All of our priorities have made it into the final NDAA: Pay Raise for our Troops, Rebuilding our Military, Paid Parental Leave, Border Security, and Space Force! Congress – don’t delay this anymore!” President Trump tweeted. “I will sign this historic defense legislation immediately!”
Wow! All of our priorities have made it into the final NDAA: Pay Raise for our Troops, Rebuilding our Military, Paid Parental Leave, Border Security, and Space Force! Congress – don’t delay this anymore! I will sign this historic defense legislation immediately!
Though it hasn’t received much media attention, President Trump has already established himself as a consequential leader in space exploration.
In his first 100 days, he signed the National Aeronautics and Space Administration Transition Authorization Act of 2017. Then-acting NASA Administrator Robert Lightfoot said it was vital for “our nation’s space, aeronautics, science, and technology development programs to thrive.”
In June 2017, the president revived the National Space Council for the first time in 24 years. Led by Vice President Mike Pence, the Council is empowered to help implement his space policy, one that makes human exploration of the solar system a national priority.
In December 2017, President Trump signed Space Policy Directive 1, establishing a public-private partnership for human missions to the Moon, Mars and beyond. NASA said the directive would lay the foundation that will eventually enable human exploration of Mars.
In May 2018, the president signed Space Policy Directive – 2, which reformed U.S. commercial space regulatory framework with a goal to ensure the nation maintains its role as a leader in space commerce.
In June 2018, President Trump signed Space Policy Directive-3 instructing Joint Chiefs of Staff Chairman General Joseph Dunford to create a sixth branch of the U.S. military — U.S. Space Force.
In February 2019, the president signed Space Policy Directive-4 instructing then-Acting Secretary of Defense Patrick M. Shanahan to develop a legislative proposal.
The final part of that four-part directive required approval from the U.S. Congress. The NDAA grants that approval and funds the framework for the new and sixth branch.
The U.S. Space Force will start as an agency of the U.S. Air Force similar to the U.S. Marine Corps under the U.S. Navy. It will be led by the chief of space operations, who will report directly to the Secretary of the U.S. Air Force. That person will become a member of the Joint Chiefs of Staff.
The Consumer Price Index (CPI) rose 0.3% in November on a seasonally adjusted basis, beating the consensus forecast, the U.S. Bureau of Labor Statistics reported.
That follows a 0.4% gain in October. Over the last 12 months, the all items index increased 2.1% before seasonal adjustment.
Forecasts ranged from a low of 0.0% to a high of 0.3%. The consensus forecast was 0.2%.
Graphic concept of an election in Great Britain, depicting by the hand of a voter putting his vote in the ballot box with the flag of the United Kingdom in the background. (Photo: AdobeStock)
I’m currently in London for discussions about public policy, particularly the potential for the right kind of free-trade pact between the United States and United Kingdom.
I deliberately picked this week for my visit so I also could be here for the British election. As a big fan of Brexit, I’m very interested in seeing whether the U.K. ultimately will escape the slowly sinking ship otherwise known as the European Union.
But the election also is an interesting test case of whether people are willing to vote for socialism. The Brits actually made this mistake already, voting for Clement Attlee back in 1945. That led to decades of relative decline, culminating in a bailout from the International Monetary Fund (IMF).
Margaret Thatcher was elected in 1979 to reverse Attlee’s mistakes and she did a remarkable job of restoring the British economy.
But do voters understand this history?
We’ll find out on Thursday because they’ll have the opportunity to vote for the Labour Party, led by Jeremy Corbyn, who is the British version of Bernie Sanders.
And he doesn’t hide his radical vision for state control of economic life. Here’s how the Economist describes Corbyn’s agenda.
…the clear outlines of a Corbyn-led government emerged in the manifesto. Under Labour, Britain would have a larger, deeper state… Its frontiers would expand to cover everything from water supply to broadband to how much a landlord may charge a tenant. Where the state already rules, such as in education or health, the government would go deeper, with the introduction of free child-care for pre-schoolers and a “National Care Service” for the elderly. …The government would spend £75bn on building 100,000 council homes per year, paid for from a £150bn “transformation fund”, a pot of money for capital spending on public services. Rent increases would be capped at inflation. The most eye-catching proposal, a plan to nationalise BT’s broadband operations and then offer the service free of charge… Surviving policies from 2017 include a plan to nationalise utilities, alongside Royal Mail and the rail network, and a range of new rights for workers, from a higher minimum wage to restored collective-bargaining rights. All told, government spending would hit 45.1% of GDP, the highest ratio in the post-war era outside of a recession and more than in Germany… To pay for it all, very rich people and businesses would be clobbered. Corporation tax would rise to 26% (from 19% now), which Labour believes, somewhat optimistically, would raise another £24bn by 2024.
As reported by City A.M., the tax increases target a small slice of the population.
Jeremy Corbyn…is planning to introduce a new 45 per cent income tax rate for those earning more than £80,000 and 50 per cent on those with incomes of £125,000 or more. The IFS…estimates that would affect 1.6m people from the outset, rising to 1.9m people by 2023-24. Labour’s policy would add further burden to the country’s biggest tax contributors, with the top five per cent of income tax payers currently contributing half of all income tax revenues, up from 43 per cent just before the financial crisis. But the IFS warned the amount this policy would raise was “highly uncertain”, with estimates ranging from a high of £6bn to an actual cost of around £1bn, if the policy resulted in a flight of capital from the UK. Lawyers have previously warned that high net worth individuals are poised to shift billions out of the country in the event of a Corbyn government.
Even the left-leaning Guardian seems aware of this possibility.
The super-rich are preparing to immediately leave the UK if Jeremy Corbyn becomes prime minister, fearing they will lose billions of pounds if the Labour leader does “go after” the wealthy elite with new taxes, possible capital controls and a clampdown on private schools. Lawyers and accountants for the UK’s richest families said they had been deluged with calls from millionaire and billionaire clients asking for help and advice on moving countries, shifting their fortunes offshore and making early gifts to their children to avoid the Labour leader’s threat to tax all inheritances above £125,000. …Geoffrey Todd, a partner at the law firm Boodle Hatfield, said many of his clients had already put plans in place to transfer their wealth out of the country within minutes if Corbyn is elected. …“There will be plenty of people on the phone to their lawyers in the early hours of 13 December if Labour wins. Movements of capital to new owners and different locations are already prepared, and they are just awaiting final approval.” …On Thursday, Corbyn singled out five members of “the elite” that a Labour government would go after in order to rebalance the country. …The shadow Treasury minister Clive Lewis went further than the Labour leader, telling the BBC’s Newsnight programme: “Billionaires shouldn’t exist. It’s a travesty that there are people on this planet living on less than a dollar a day.
Some companies also are taking steps to protect shareholders.
National Grid (NG.) and SSE (SSE) are certainly not adopting a wait-and-see approach to the general election. Both companies have moved ownership of large parts of their UK operations overseas in a bid to soften the blow of potential nationalisation. With the Labour manifesto reiterating the party’s intention to bring Britain’s electricity and gas infrastructure back into public ownership, energy companies (and their shareholders) face the threat of their assets being transferred to the state at a price below market value.
It also violates the laws of math. The Labour Party, for all intents and purposes, wants a big expansion of the welfare state financed by a tiny slice of the population.
That simply doesn’t work. The numbers don’t add up when Elizabeth Warren tries to do that in the United States. And an expert for the Institute for Fiscal Studies notes that it doesn’t work in the United Kingdom.
The Institute for Fiscal Studies has told ITV News Labour's manifesto spending and taxation pledges are "colossal" and "not credible".
They’re proposing lots of additional spending. And, as City A.M.reports, Johnson also is being criticized for promising company-specific handouts and protectionist rules for public procurement.
In a press conference today, Johnson promised to expand Britain’s state aid regime once the UK leaves the EU. “We will back British businesses by introducing a new state aid regime which makes it faster and easier for the government to intervene to protect jobs when an industry is in trouble,” a briefing document said.
Head of regulatory affairs at the Institute of Economic Affairs (IEA) Victoria Hewson said support for state aid was “veiled support for cronyism.” …A spokesperson for the Institute of Directors said: “It’s not clear how these proposals will fit with ambitions of a ‘Global Britain’. The Conservatives must be wary of opening a can of worms on state aid, it’s important to have consistent rules in place to resist the impulse of unwarranted protectionism.” Johnson also promised to introduce a buy British rule for public procurement. …IEA economics fellow Julian Jessop said: “A ‘Buy British’ policy is pure protectionism, and it comes with heavy costs.
Perhaps this is why John O’Connell of the Taxpayers Alliance has a rather pessimistic view about future tax policy. Here are excerpts of a column he wrote for CapX.
Theresa May’s government implemented a series of big state, high tax policies. Promises of no strings attached cash for the NHS; new regulations on net zero; tax cuts shelved and the creation of more quangos. After his surprise non-loss in the election, Corbyn shifted even further to the political left, doubling down on his nationalisation plans. All in all, the 2017 election result was terrible for people who believe in a small state. …A report from the Resolution Foundation found that government spending is rising once again, and likely to head back towards the heights of the 1970s over the coming years. The Conservatives’ recent spending review suggests state spending could be 41.3% of GDP by 2023, while Labour’s spending plans could take it to 43.3%. This compares to the 37.4% average throughout the noughties. Based on the manifestos, Labour are working towards a German-sized state, while the Tories’ plan looks more Dutch. Unsurprisingly we see this mirrored by the tax burden, which at 34.6% of GDP has already reached a fifty-year high. It is likely to increase further. …British taxpayers are presented with something of a Hobson’s choice: Boris Johnson will see taxes increase and spending shoot up, while Jeremy Corbyn has £1.2 trillion worth of unfunded spending rises just waiting to become unimaginable tax hikes for everyone. Whoever you vote for, you’ll get higher taxes, the question is just about how high.
Let’s close by looking at the big picture.
Here’s a chart showing the burden of government spending in the United Kingdom since 1900. I’ve augmented the chart to show the awful trend started by Attlee (in red) and then the positive impact of Thatcher (in green).
You can also see that Tony Blair and Gordon Brown did a bad job early this century, followed by a surprisingly good performance by David Cameron.
Now it appears that British voters have to choose between a slow drift in the wrong direction under Boris Johnson or a rapid leap in the wrong direction under Jeremy Corbyn.
Normally I would be rather depressed by such a choice. I’m hoping, however, that Brexit (assuming it actually happens!) will cause Boris Johnson to make smart choices even if he is otherwise tempted to make bad choices.
The Justice Department (DOJ) Inspector General Michael Horowitz on Monday released a Review of Four FISA Applications and Other Aspects of the FBI’s Crossfire Hurricane Investigation.
Christopher J. Hale, a former Obama Administration staffer and now contributor to Time Magazine, tweeted on December 08, 2019:
“I think Democrats need to start waking up to the fact that Mike Bloomberg very well could be a front tier contender in just a few weeks. He’s on pace to spend $200,000,000 on ads, mailers and organizers before a single primary voter heads to the ballot box.”
I think Democrats need to start waking up to the fact that @MikeBloomberg very well could be a front tier contender in just a few weeks.
He’s on pace to spend $200,000,000 on ads, mailers, and organizers before a single primary voter heads to the ballot box.
That statement is absolutely correct as far as it goes. In fact, Bloomberg is ahead of Hale’s coming week’s schedule. He is a top-tier candidate now.
Bloomberg officially declared his candidacy on November 24 and, in less than two weeks, he jumped straight into fourth place with 7% in the Harvard/Harris Poll. That is just one point behind Pete Buttigieg and just 6 points behind Senator Elizabeth Warren, D-Mass., the third place vote-getter and a longer-time declared top-tier candidate.
This was not an outlier.
Bloomberg was polling at 6% in ”The Hill” and at 5% in the Morning Consult/Politico Poll.
The aggregate of the latest four polls — which arguably factor his messaging — 5.25%. The remaining ten candidates now trail Bloomberg. The now-departed Harris, Klobuchar, Yang, Booker, Casto, Gabbard, would all kill for his level of support and have been campaigning for months.
If it was just about the money spent, then fellow-billionaire Tom Steyer who declared on July 9th would not be on a miserable 1.4% in the aggregate. He was polling at zero in the latest Economist Poll.
Nor is it wholly name recognition boosting Bloomberg. Arguably, Corey Booker (2%) has similar name recognition and certainly Kamala Harris, who departed at 3.4%, had it.
But in the end, it hasn’t helped either of them.
Every Democratic candidate is either on the decline or has flatlined. Strikingly, Warren has lost 12 points off her high. Sanders is down 4 points. Buttigieg, after being the most recent flavor of the month and ascending sharply, has flatlined with a small decline. Biden, who reached monumental heights at 41.4%, has steadily declined to a flatline at 27.8%.
Of course, it is entirely possible support for Bloomberg will ascend before inevitably descending. That still wouldn’t change his solid position ahead of what now appears more likely to be a contested convention.
It isn’t hard to imagine a scenario in which Biden drops out and the more radical, progressive wing of the party offer centrists unpalatable options. It also isn’t hard to imagine the quagmire if Buttigieg wins in snow white Iowa and New Hampshire.
In a contested convention — presuming there is no first ballot deal between Sanders and Warren, which seems unlikely — special delegates are able to cast votes after the first ballot.
At that point, all sorts of scenarios come into play.
There have been numerous examples of delegate swaps that have led to candidates with small to moderate delegate totals, or even no delegates, receiving the nomination after a number of ballots. Bloomberg would be in a stronger position than several historic examples considering his ability to self-finance.
He would have delegates and be acceptable to party moderates. He was the mayor of a city with a large and diverse minority population. He is a successful businessman and would be seen as suitable by Wall Street, unlike Warren or Sanders.
Bloomberg has taken some pot-shots from the progressive fringes. If he starts to gain traction, then he will most certainly attract more negativity. But he is a seasoned campaigner with a tough hide and the wherewithal to counter attacks in the media. His problem is more likely to be electoral strategy.
He is attempting to succeed where his predecessor Rudy Giuliani failed.
That is to say, his entire strategy is to sit out the early states and wait until “Super Tuesday” to garner his first major delegates. In 2008, Giuliani sat out Iowa and New Hampshire. He hinged all hope on the winner-take-all contest in delegate-rich Florida.
It was a disaster. As the losses in early contests racked up, his polling numbers dropped and he lost Florida. It ended his campaign.
But unlike Giuliani, Bloomberg has massive resources for Super Tuesday and a good showing could put him in a good place ahead of a convention. All the political stars have to align perfectly for this strategy to work. But Bloomberg’s personal financial position, his experience, name-recognition and moderation relative to the progressives, perhaps uniquely places him in a strong position for the nomination.
If Biden drops out it would be Bloomberg’s to lose.
Unemployment Rate at or Below 4% for 21st Consecutive Month
Wages, or average hourly earnings (AHE), have risen on an annual basis by at least 3% for 16 consecutive months in November. The U.S. Bureau of Labor Statistics (BLS) Employment Situation monthly data shows nonsupervisory workers’ wages have been leading wage growth.
Average hourly earnings for all employees on private nonfarm payrolls rose by 7 cents to $28.29. Wages increased by 3.1% over the last 12 months in November.
“Year-over-year wages have grown at or above 3.0% for 16 straight months,” U.S. Secretary of Labor Eugene Scalia. “It is encouraging to see sectors like retail and leisure and hospitality leading wage growth.”
In September, wage growth was initially reported to have slowed to 2.9%, though a still solid gain. However, it was revised higher in the report released on Friday. The 12-month percentage change for October was revised higher from 3.0% to 3.2%.
As People’s Pundit Daily (PPD) previously reported, data indicate wage growth in 2019 was likely stronger than we currently believe.
In the fourth quarter (Q4) 2018, wages posted the biggest gain (3.1%) since Q3 2008, a critical threshold indicating a healthy labor market for the first time since the Great Recession. That trend — while temporarily disrupted in September — has now more clearly continued into 2019.
“Today’s report shows the economy continues to flourish,” Secretary Scalia added. “But we must continue to seek more expansion and opportunities for all Americans — and a critical step in that direction is enactment, now, of the United States-Mexico-Canada Agreement (USMCA).”
The USMCA trade agreement — which the president renegotiated to replace NAFTA — has majority support in both the U.S. House of Representatives and the U.S. Senate.
However, House Democrats have chosen to prioritize impeachment hearings over the USMCA and other administration agenda items such as lowering prescription drug costs. The window to approve the USMCA this year, closed this week.
Meanwhile, the U.S. economy added a solid 266,000 jobs in November -— an astonishing 86,000 jobs more than expected— and the unemployment rate fell to 3.5%. Manufacturing employment rose by 54,000, crushing the consensus forecast of only 15,000.
Democrats Reporting Their Partisan Views Weigh Down Historic Optimism
The preliminary reading on consumer sentiment for December beat the highest forecast for the Survey of Consumers, rising to 99.2 from 96.8. The Sentiment Index has averaged 97.0 under the Trump Administration, the highest sustained level since the all-time record in the late 1990s.
Forecasts ranged from a low of 94.7 to a high of 97.5. The consensus forecast was calling for a slight 0.1 rise to 96.9.
The Current Economic Conditions Index jumped to 115.2 in December, up from 111.6 in November. The Index of Consumer Expectations rose from 87.3 to 88.9.
“While impeachment has dominated the media, virtually no consumer spontaneously mentioned impeachment in response to any question in early December–just 1%,” Richard Curtain, chief economist for the Survey of Consumers, said.
“Nonetheless, the data indicate the strong impact of partisanship on economic expectations, which has widened in the past few months.”
Democrats are reporting partisanship, not the data-supported economic reality shared by the rest of the country. The average gap between Democrats and Republicans was 18.7 points under the Obama Administration.
The average is 41.6 points since Donald Trump took office.
Independents, who represent the largest group and are less likely to report their partisan views, hold very favorable expectations. The mean for independents is 96.6 juxtaposed to 97.0 for all consumers.
Overall, the data indicates a continuation of the economic expansion based on consumer spending.
Wages Have Increased By at Least 3% for 16 Straight Months, Employment Revised Higher for September and October
The U.S. economy added a solid 266,000 jobs in November -— an astonishing 86,000 jobs more than expected— and the unemployment rate fell to 3.5%. The employment situation was also much stronger than initially reported for September and October.
Forecasts for the headline jobs number ranged from a low of 149,000 to a high of 210,000. The consensus forecast was 180,000.
The number of jobs created in September was revised up by 13,000 from +180,000 to +193,000, and October was revised higher by 28,000 from +128,000 to +156,000.
With these revisions, employment gains in September and October combined were 41,000 more than previously reported. Job growth has averaged 180,000 per month thus far in 2019, compared with an average monthly gain of 223,000 in 2018.
However, unemployment has fallen and participation has risen, making it less likely that the headline number will exceed 200,000 on average.
Worth noting, the initial +128,000 change in total nonfarm payrolls reported for September was driven by a strike-related decline in manufacturing employment. In November, 54,000 manufacturing jobs were created, crushing expectations.
Forecasts for manufacturing employment ranged from a low of -16,000 to a high 40,000. The consensus forecast was just 15,000.
“If we were in an environment where there was concern of the economy overheating, this report would be a red flag,” Tim Anderson, analyst at TJM Investments on the New York Stock Exchange (NYSE), said. “We are not in that environment this is just a very solid report.”
The labor force participation rate was little changed (-0.1) at 63.2%. The employment- population ratio was 61.0% for the third straight month.
Wages, or average hourly earnings (AHE) for all employees on private nonfarm payrolls, increased by 3.1% over the last 12 months in November. AHEs for all employees rose by 7 cents to $28.29.
Wages have increased by at least 3% for 16 straight months. The 12-month change for October was revised higher from 3.0% to 3.2%.
Government EBT Snap Card Isolated on White Background.
Building on the success of state-level reforms in Kansas, Maine, Wisconsin, Alabama, and Georgia, the Trump Administration has proposed to tighten rules that impose work requirements on childless and able-bodied adults who receive food stamps.
Here’s some of what National Reviewwrote about the proposal.
Our food-stamp program has some bizarre loopholes… In theory, the program has a strict time limit for “ABAWDs,” or able-bodied adults without dependents… But in practice, the executive branch has broad discretion to waive the limit for large geographic areas with weak labor markets — and previous administrations used that discretion promiscuously. As of 2017, about a third of the U.S. population lived in waived areas. …Under the new rule, effective in April of next year, these waivers won’t be granted to areas with unemployment below 6 percent. And states will be far more limited in the geographical configurations they can request waivers for. …Many on the left complain about the rule simply because it will reduce the number of people on food stamps — by about 700,000, roughly 2 percent of total food-stamp enrollment… But…there is clearly room for cuts. (Despite the recovery, total enrollment is about double what it was in 2000.) …The 1996 welfare reform proved the effectiveness of this approach.
As you might expect, this proposal is causing angst for some lawmakers.
Congresswoman Marcia Fudge condemned the proposal in a column for the Washington Post.
…taking food from the tables of hungry Americans during the holidays…that’s the latest act of cartoonish villainy by the Trump administration. …the Agriculture Department played the part of the Grinch, finalizing a rule to cut billions of dollars from the Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps. The rule will remove nearly 700,000 from the program…, representing a callous escalation of the Trump administration’s war on people in need. …both red and blue states want the flexibility this rule will eliminate. The rule will dramatically reduce the flexibility of states to decide how best to serve the needs of their own citizens.
So if Congresswoman Fudge wants her state to give goodies to able-bodied adults with no children, that would be a decision for Ohio’s politicians (or, even more relevantly, Oregon’s politicians).
I’m fine with that type of flexibility, but there’s a catch that Ms. Fudge doesn’t mention. She wants taxpayers from across the country to subsidize that decision.
By the way, work requirements are not just an issue for the food stamp program.
There are also discussions about whether people getting Medicaid should have an obligation to work.
Writing for the Federalist, John Daniel Davidson applauds an initiative from the White House to move in that direction.
The Trump administration…will allow states to impose work requirements on abled-bodied adults to qualify for Medicaid. …it’s about time. …imposing work requirements on able-bodied adults will…help enrollees far more than Medicaid coverage will, mostly by giving them a strong incentive to secure full employment. …By putting millions of able-bodied adults on the Medicaid rolls, Obamacare created perverse incentive for those enrollees to limit their income so they could keep their Medicaid coverage. …Work requirements are a proven way to unwind perverse incentives and improve people’s lives. …progressives consider work requirements insulting and demeaning.
It was also a major focus of the very successful 1996 welfare reform legislation.
In an article for City Journal, Kay Hymowitz points out that law is still yielding big dividends.
…the Census Bureau released its report on the nation’s income, poverty, and health-insurance coverage for 2018. …poverty in single-mother households sank to its lowest rate . . . ever. What’s more, the decline took place entirely among black and Hispanic single-mother families. …this is a “Wow!” moment. …More black and Hispanic women have jobs and are working more hours. “The rise in full-time, year-round work led to an increase in incomes and earnings at the household level,” the Census Bureau found. Better yet, the growing number of hours worked by single mothers led to a decline in child poverty of 2.5 percentage points. …the 1996 welfare-reform law…overturned Aid to Families with Dependent Children, which had entitled poor single mothers to cash benefits. As a result, unemployment among the growing number of single mothers was high. Essentially, welfare reform said no more free lunch, instituting work requirements and replacing open-ended AFDC with a time-limited grant to poor mothers (TANF, or Temporary Assistance to Needy Families). …full-time, year-round work can reduce poverty and…poor minority women can improve their lives and the lives of their children through nine-to-five labor. Any “welfare-reform-is-a-failure” narrative should collapse under the weight of such demonstrated facts.
And it’s worth pointing out that one of America’s major redistribution programs – the EITC – is entirely based on work.
Recipients only get a handout if they also earn some money.
Regarding the desirability of work requirements, we can learn from what’s happened in other countries.
In an article from last year, Ryan Streeter of the American Enterprise Institute found good news from work-oriented reforms, especially in Nordic nations.
A majority of Americans, including 55 percent of people living in poverty, believe the purpose of welfare is to help people get on their feet, not just to dispense benefits. Eight in 10 low-income respondents believe working should be required to receive welfare benefits. …Welfare reformers might draw some lessons from unlikely places…the Scandinavian welfare systems are arguably more pro-work than ours… For instance, to deal with declining labor force participation, Denmark eliminated permanent disability benefits for people under 40 and refashioned its system to make employment central. Sweden reformed its welfare system to focus on rapid transitions from unemployment to work. Their program lowers jobless assistance the longer one is on welfare. …Similarly, the British government combined six welfare programs with varying requirements into a single “universal credit.” …An evaluation of the new program, which encourages work, found that 86 percent of claimants were trying to increase their work hours and 77 percent were trying to earn more, compared to 38 percent and 55 percent, respectively, under the previous system.
Regarding the reforms in the United Kingdom, here are some excerpts from a report by Emily Top for E21.
The UK overhauled its welfare system with the Welfare Reform Act 2012. …In addition to simplifying the programs into one, the Act required claimants to agree to a “Claimant Commitment,” in which they sought the services of a work coach to improve their job prospects and get hired. …the program has led to an increase in UK labor force participation as well as a decrease in dependence on benefits. During the same period that the labor force participation rate in the U.S. declined from 84 percent to 82 percent for prime age workers, the rate in the UK increased from 84 percent to 86 percent.
Let’s close by looking at some academic research on work requirements in the United States.
Three professors studied the impact of Bill Clinton’s welfare reform on recipients and found significant societal benefits.
The US Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996, often referred to as ‘welfare reform’, was a major policy shift in the US that sought to dramatically reduce dependence of single parents on government benefits by promoting work… The key strategy for reducing dependence was to promote employment by imposing work requirements as a condition for receiving benefits in concert with a lifetime limit on receipt of cash assistance. …The reforms have been successful in that welfare caseloads have declined dramatically – 78% since their peak in 1994. …In a series of recent papers, we investigated the effects of welfare reform in the US – which is still in effect today – on women’s illicit drug use and other types of crime… We found robust evidence that welfare reform led to a 10%–21% decline in illicit drug use among women at risk of relying on welfare, as well as associated declines in drug-related arrests (6%–7%), drug-related hospital emergency department episodes (7%–11%), and possibly drug-related prison admissions (11%–19%). These findings provide some support of the ‘mainstreaming’ argument underlying welfare reform. …We found that welfare reform led to decreases in female arrests for property crime – which is the type of crime women are most likely to commit (Campagniello 2014) – by 4–5%… The findings from this study point to broad-based work incentives – and, by inference, employment – as an important determinant of female property crime…
These are all good outcomes.
Though the best news – both for taxpayers and poor people – is contained in this chart from their research.
P.S. While the Trump proposal is not my ideal policy, it does compare well with the Obama Administration’s efforts to expand food stamp dependency – including bribes for states that signed up additional recipients.
Narrowing Trade Deficit Could Boost GDP for Quarter
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis reported the U.S. trade deficit narrowed more than expected in October. The goods and services deficit fell $3.9 billion to $47.2 billion in October, down from a revised $51.1 billion in September.
Exports fell $0.4 billion to $207.1 billion from September, while imports fell $4.3 billion to $254.3 billion. The overall decline in the U.S. trade deficit was fueled by a $3.7 billion decline in the goods deficit to $68.0 billion and a $0.2 billion increase in the services surplus to $20.8 billion.
The 3-month average for the goods and services deficit ending in October fell $1.8 billion to $50.6 billion. Average exports declined $0.6 billion to $208.0 billion and average imports dropped by $2.4 billion to $258.6 billion.
Year-over-year, the average fell $5.3 billion. Average exports declined $1.2 billion and average imports decreased $6.5 billion.
The politically-sensitive U.S. trade deficit with China fell $2.6 billion to $77.3 billion in Q3 2019. Exports rose by less than $0.1 billion to $42.5 billion but imports fell by $2.6 billion to $119.8 billion.
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