Labor, (HHS) Education, and Housing Appropriation FY24

Labor, HHS, Education Subcommittee testimony. February 23, 2023.

1. The President’s Budget includes funding the first two years of education at community college. The same level of funding should be provided to students in technical training after grade ten and should be available to students at both public and accredited private schools, including religious schools. In Espinoza v. Montana, prohibitions on funding private schools (Blaine Amendments) were found to be unconstitutional. New (and existing) funding should reflect that fact.

A main problem with current training regimes is that potential students have opportunity costs that are not covered by training. TANF is simply too narrowly tailored and directs too many people to low wage work, especially in the dirtiest jobs in the medical field. The woke among us do not have to look hard for the intrinsic sexism and racism in this scheme.

Payments for tuition, stipends and family support would be funded by employer-paid subtraction value added taxes. Ideally, both state and federal subtraction VAT will be enacted. A federal VAT would be levied to assure that a minimum amount of funding is available should states underfund their programs, which some will.

The American Recovery Plan Act required payment of the child tax credit in advance of the annual tax filing. This is appropriate and will change the culture of such credits, which should be for continuing support, not an annual bonus. The current plan is for the IRS to manage payments. I submit that, over the long-term, it would be more acceptable to distribute them either through other government subsidies, such as Unemployment Insurance, Disability Insurance, or a training stipend OR through wages. In the latter case, until a subtraction value added tax is in place, the credit would be paid in advance by employers and then deducted from their quarterly tax payment.

2. Unemployment insurance must be less punitive, particularly where younger workers are concerned. In lower wage jobs, the preference is to find potential supervisors (whose compensation is usually subpar as well) and keep a file of infractions to justify firing workers who do not work out. A punitive work environment that does not exactly make any kind of work attractive. 

In certain circumstances, unemployment compensation should be available on a no-fault basis. Better still, employees should be allowed to voluntarily leave firms with a history of quickly dismissing employees without penalty. There should be no expendable jobs or workers. 

Current punitive taxes on employers would not be appropriate, so a more general levy, such as employer-paid subtraction VAT (if employers continue to pay former workers and help them find jobs or paid training) or a goods and services tax, likely levied, at least partially, at the federal level, with states providing most of the funding.

Unemployment Insurance would include CTC payments and automattic subsidized health insurance coverage with eligibility in the Public Option under the Affordable Care Act framework.

3. Developing the Public Option needs to be funded in this budget. Particularly, it should explore the impacts on coverage and cost of automatically enrolling individuals who are denied coverage under pre-existing condition rules. Such rules must be revoked as the price of passing the bill. Such a trade-off is necessary for enactment of such a proposal on a bipartisan basis. Healthcare reform should only be done in this way. Among our other proposals is to fund healthcare spending through an employer paid subtraction value added tax. This would allow for the repeal of the ACA-SM surtax on higher income individuals enacted as part of the Affordable Care Act.

4.  State governments were under financial pressure as a result of the pandemic, especially in the area of healthcare costs, most especially for seniors in nursing homes who are “dual eligibles.” The heart of President Reagan’s Federalism Proposal was the transfer of state Medicaid expenses to the federal government, largely to fund baby boomers who would become dual eligible with time. Time is now up, or will be shortly. 

  Welfare has been reformed, allowing state and federal governments to save money - which was part of the New Federalism bargain that was not accepted at the time. We will address this part shortly, but the irony is that federal money was reduced without the second part of the trade-off. Finish the process and create Medicare Part E for low income disabled and retirees. This will put investigation of nursing home conditions into the federal sector. States have done a poor job in enforcement of health and safety standards. It is time to make this a national responsibility funded by an employer paid subtraction value added tax.

5.  The hardest puzzle to crack in social welfare is housing. For this reason, starting next year, funding for the Department of Housing and Urban Development and housing related spending for veterans should be transferred to this subcommittee, with Transportation Department funding shifted to the Energy and Water Development Subcommittee.  Each change will provide synergy in both considering policy and incentive to fund certain expenditures over others. Related agencies of this subcommittee include the Barry Goldwater Scholarship and Excellence in Education Foundation, the Harry S Truman Scholarship Foundation, the Neighborhood Reinvestment Corporation and the United States Interagency Council on Homelessness.

The size of the current appropriation for this agency is massive. Adding housing would make it uncontrollable, so HHS and related agencies should be combined with the remainder of Veterans Affairs to form a new subcommittee. If reorganization takes place for the coming fiscal year rather than for the next, items  3 and 4 above would be shifted to the new body.