Family Affordability

Sep 13 2019

The American economy is thriving. The current economic expansion is the longest in U.S. history. Our unemployment rate has remained below 4 percent for the past 18 months. In recent years, we’ve seen consistently solid GDP growth and job creation.

Yet, for many parents across this country, raising a family is harder and more expensive than ever. The New York Times recently surveyed adults 20 to 45 who were parents or planned to be. One in four had fewer children—or expected to have fewer children—than they considered ideal. Economic concerns were foremost among the reasons that they fell short or believed they would.

It shouldn’t be this hard to raise a family.

There must be some things that the federal government can do, or at least do differently, to make it easier for Americans to raise their families. The Joint Economic Committee held a hearing to explore possible reforms this week in Washington, D.C.

Ryan Bourne of the Cato Institute testified that many existing regulations unnecessarily drive up the costs of essential goods and services that families depend on. Restrictive zoning laws have been shown to raise the cost of housing, staffing regulations drive up the costs of child-care, and subsidy programs drive up the price of staples like milk, sugar, and corn.

Mr. Bourne estimated that these regulations cost the typical low-income family anywhere between $830 and $3,500 per year.

Lyman Stone of the American Enterprise Institute went even further, noting that the federal government’s tax and welfare systems penalize married working-class families while benefiting wealthier ones. “The eligibility rules for welfare programs generally do not double the eligibility threshold for married couples, nor do they generally double the benefit size. In effect, the Federal government has put its thumb on the scales against working class marriage,” Stone said.

Stone then detailed the effects federal policies would have on a fictional working-class couple with three children making $24,000 and $20,000 who wanted to get married. Thanks to Earned Income Tax Credit benefit phase outs, Affordable Care Act premium phase outs, Medicaid eligibility rules, and other welfare policies, getting married would cost this couple $10,500 every single year!

No wonder working-class families are finding it so hard to get and stay married!

If the federal government’s tax and welfare policies continue to punish working-families who want to be married, we should not be surprised if American women continue to have fewer children than they want and more of those children are born out of wedlock.

We can and must do better. In the coming months the JEC will continue to investigate this issue and identify specific ways we can reform federal policy so that our government can being playing a positive role in the maintenance of the American family.