Republicans are in a pickle.
The Senate is voting today to extend emergency unemployment insurance benefits. Democrats are talking up a sharp rise in the federal minimum wage. Most Republicans oppose those ideas, but they still want to show that they care about reducing poverty.
What can they do? Washington Post reporter Robert Costa tweets:
The challenge for Rs is that as they ramp up antipoverty msg, they remain inconclusive on next legislative steps
— Robert Costa (@costareports) January 7, 2014
“Inconclusive” is a nice way to put it. The truth is Republicans have no legislative agenda that would address poverty.
Broadly there are two poverty problems in the United States. One is a cyclical trend: The labour market has been slack for the last five years, leaving many people involuntarily unemployed and limiting workers’ ability to bargain for higher wages. The other is secular: Labour’s share of national income is declining, wages are rising more slowly for low-skilled workers than high-skilled ones, and rises in family income at the bottom have come primarily through fiscal transfers, not wages.
These problems require different solutions, and Republican ideas don’t address either.
On the cyclical side, Republicans favour a variety of policies that would make the unemployed and marginally employed worse off. They want to cut government benefits to the poor: they oppose extension of emergency Unemployment Insurance benefits, they want modest cuts to food stamps, they want to repeal the Medicaid expansion.
Of course, Republicans don’t want the poor to live off government benefits; they want them to get jobs. Unfortunately, Republicans also oppose macroeconomic policies to promote full employment, such as deficit spending, infrastructure investment, and monetary stimulus.
The Republican theory seems to be that if the government “just got out of the way” by cutting taxes, spending and regulation, then labour market would magically tighten, people would get jobs, and wages would rise. Empirical evidence for this proposition is lacking.
Tellingly, this “get out of the way” prescription is exactly the same one Republicans offer when the economy is strong. That’s because these policies are supposed to boost long-run GDP growth. Even if that is true, that’s not a reason to believe they also smooth business cycles, speed economic recovery and reduce unemployment. Whatever the merits of this conservative policy approach in the long-run, it’s not designed to address our short-run problems.
On the long-run side, Republican policies are again nominally aimed at raising long-run GDP growth. They do not address the question of how the returns from such growth are distributed. They don’t necessarily promote a tighter labour market or stronger wage growth. Even if that agenda is a growth agenda (dubious) that doesn’t make it an agenda that is effective at growing low or moderate market incomes.
That’s why, as Costa and Philip Rucker describe, Republicans aren’t really having a policy discussion about poverty at all. They’re having a messaging discussion. Some want to pick up Jack Kemp’s “baton” of talking about social mobility and free enterprise. Social conservatives want to talk about the importance of families to alleviating poverty. Rand Paul wants to add more “anti-government broadsides” to the message.
What all these Republican approaches have in common is that they aren’t policy ideas at all, or they’re policies that won’t do anything about poverty.
The one exception I can see is Sen. Mike Lee (R-Utah), who has proposed a large expansion of the child tax credit, which would indeed be a meaningful antipoverty measure for families with children. But Lee’s proposal doesn’t stand alone: it’s bound up in a tax reform plan that doesn’t raise enough revenue and can’t move in this (or likely any) Congress.
The problem for Republicans on poverty is that their economic policy ideas have nothing to offer on poverty. The problem can only be fixed by changing the party’s policy agenda.
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