>> so this is panel two. . . thank you so much for coming. take it away. >> thank you ron and thanks to all of you for being here. my name is a. i'm in policy studies at the american enterprise institute. i work in tax policy labor markets. one of the areas i've recently been focusing on is paid family leave. as i'm listening to the conversation i think you know generally talking about paid leave and child care and how we reform the existing system in the u.s. is very important to the conversation that we have here. i've also written about the system of child care, the child tax credit, the -- you know, the system of tax credits that we have and how much of it is queued toward people at the top.

how people with the benefits doesn't go to the people with the lower income. this is part of a larger discussion how do we reform child care how to we make it more accessible to people at the bottom. the first panel was more about why we need these policies. why are we even talking about universal child allowance? and we heard from kathy about how we've seen a trend in a sense welfare reform, the nonworking force being left out of the system. and we've heard from other panelists in the first -- if the first panel about how we can -- which we care about the health of a child, why that matters, for mobility and other reasons. and in this panel we are going to start off with the discussion of how do we do in? we have two presenters. we have two different proposals for universal child allowance. so chris who is the core director of the center on poverty and social policy will

begin the discussion. he will present for 15 minutes thp pen then turn over to samuel hammond who is at the scan lynn center also presents his proposal about 15 minutes then we have a discussion with melissa who is vice president poverty to proermts program tp scott winship project directorer at the joint economic committee and then maria who is plofser of university of wisconsin. let's begin with chris. thank you. >> does that do anything? is there we go. okay. okay. that's a good idea. there we go. all right.

sorry. so i would acknowledge my co-authors but i only have 15 minutes. so i'm not going to do that. but i'm -- you would think sort of adding an additional author to a paper would decrease the totals amount of effort that goes into the content. but it turns out that that -- that equation is not quite accurate. but i want to acknowledge a couple of people one is luke schaeffer the lead author on this paper i shamelessly stole almost all of his slides i'm presenting today. then also jane waldfogel who -- when you have ten co-authors getting them all on the phone, getting them to all agree on something is herk ewe lean task and jane was the best that anybody could be. we're talking about our plan to provide a universal child allowance to reduce poverty in income and instability among children in the u.s. i want to acknowledge this briefly. some of the funders.

the centerry foundation supported a preliminary version of some of the analyses irp r-russell sage abet cetera. but all the flaws are ours. so child poverty in the u.s. sort of remains stubbornly high. right. so some much our work at columbia and elsewhere has shone some of the progress we made in fighting child poverty in the united states over. regardless how you measure it we still have especiallily high levels in the united states. and some of the tp tax efrpgs l exemption tendsing to to go to families higher up in the income distribution rather than lower down. and that's become a big problem. . the safety net has panned. but it obviously -- and that can

supplement incomes quite significantly but it leaves out some of the most vulnerable families we argued could reduce long-term -- long-term outcomes.

just to skip ahead the u.s. as i said before, i mean over the past 50 continues to be a laggard by international comparisons in terms of the level of child poverty that we -- that we tolerate. . after this tanf and unicef we looked at the great recession and that -- is eye that would

constitute a major. break threw. and also might have a larger effect in reducing child poverty in our country. it's a nonrefundable child credit will be established it will be impossible to come back. probably. that was over 25 years ago. if there's any sort of short summary from my proposals to prove bob green stein wrong that refund ability is possible and achievable and we smunt resign ourselves because all the points that he makes in this memo are as true today as they were in

1992. i'm going to just sort of skim over the information because it's been covered already. but the bottom of this bar graph is the u.s., the child poverty rate compared to other countries. tsz enormously different. as has been said what mostly explains this especiallily the anglo countries, canada, uk and australia is child credit and refundable tax credits. you know sints just looking across time it hasn't really changes in been more or less fluctuating with the business cycle, so again just confirming that everything that was said in the memo to bill clinton in 92 is as true today as when it was written. so about the proposal let's make the child tax credit refundable and we should probably double it for younger children. now the -- just previous presenters said this would be expense oef but i don't think it's that expensive when you

look at the net cost to be $9 billion that is order on the magnitude of ivanka trump's child deduction for rich nannies about the same amount of money she proposed. and it's paid for by eliminating -- eliminating the dependent exemption you could pick anything like was said you could cut the military, whatever i'd choose to go with school nutrition programs in part because i think it signals if we did this that we're serious about signaling parental responsibility and choice. and a big part of my motivation coming comes from this photo which i put together with on the orders of my intern. what you see is public assistance divided by adults versus children. and and on the left i think the most notable thing is how much

assistance that goes to adults comes in in form of either cash or medical reimbursement. over half whereas when you look at spending on children it is like a rain bow. it's been divided up into literally near -- almost 100 separate programs for every little tiny niche think that you could imagine for kids. and part of what we argue in our paper is that children don't really have an advocate. they don't have sort of the aarp for kids. they have third parties, adults who argue on their behalf. and also third parties in the sense of businesses that defend their own interests while supporting kids interests incidentally. so you know, within this -- within this second column school nutrition programs you'll see in brackets is five. that includes school lunch

programs includes breakfast programs also includes programs called special milk. and you know what makes the program so special? well it's the millions of dollars that the dollars that the dairy farmers of america spend lobbying to protect milk programs not on behalf of kids but on behalf of payments that go to the suppliers for these programs. the other reasons, i'm just going to run through quickly, number one, it's effective. i'm just going to pull up two studies that i find the most compelling for why cash is so effective. the first is from a major paper on the benefits of long-term tax credits in the u.s. what he remarkably finds is that a dollar of spending on the tax

credit leads to more of a dollar of earnings increase in present value terms. it's a free lunch. you can spend a dollar and get more and a dollar in turn. the reason it shouldn't be true is because parents don't get the full benefit of their investment. if parents could go to a bank and say give me a loan or buy some equity, you could spend a dollar and i could give you fair market return. obviously we can't do that so maybe that's an alternative to this proposal. but in the meantime, without child tax credit being fully unrefundable, we are not investing in our children. the second study tried to isolate the health impact.

it uses a measure called quality adjusted life years which is a standard way of measuring health impacts across different kinds of intervention to try to make a standardized metric. it finds that a dollar spent on the eitc is 8 times more effective as a health intervention than spending on medicaid. we consider that spending on medicaid to be cost effective so the fact that we're not massively spending more on child tax credits suggests that we're systematically underinvested on cash-based forms of the systems. my paper does a deep dive on the canadian system which i'm most familiar with. the studies there looked at -- first of all, they found that it was actually effective at reducing maternal depression,

improving child health outcomes, and they wanted to understand why. they did this expenditure survey and found that parents were increasing their spending on things that they didn't expect, not just direct inputs like educational resources and health resources but also what are sometimes called home stability items, just general household items that increase the stability of the household and reduce stress, even leading to reductions in tobacco and alcohol consumption. that goes to some of the psychological research that shows that stress from a shortage of income is a big determinant for detrimental non-cognitive developments in children down the road. the last point is it's fair. we had on the stage people that represent the left, the center and the right of center.

but i come at this sort of like from a libertarian perspective that says the social engineering that the right does and the social engineering that the left does, neither are correct, that we should leave it to parents. that's my strongest motivation for supporting expansion of the child tax credit. it's basically neutral to your way of life. we had this debate in canada where i hail and the one party was proposing that we have a universal daycare program. it was very controversial, especially among conservative families that favored at-home care, stay at home mothers and so on. so the conservative party at the time introduced the child benefits because they tried to split the defense and say let's give cash and that opens up the choice to the parents whether they want to use it to subsidize or compensate at-home care versus external daycare, and it actually worked out extremely well. the alternative approach was taken in the provence of quebec.

they massively subsidized child care and over the last 20 years where we looked at this, number one, it did not actually increase the amount of child care that was taking place, it just displaced informal child care by pulling kids into the formal sector. and number two, there was pretty disturbing evidence that it led to non-cognitive decline, more aggressiveness in children. so i think a big piece of why cash matters is when you lock yourself into service delivery, you can end up going down a wrong path that's very difficult to get out of. this is where i kind of tick off people on the right. so what about work? we heard that we should focus on labor market participation and labor market strength. well, i agree, and that's why i

did a deep dive on this topic too, and it's just not the case that a $2,000 unconditional tax credit is going to significantly reduce work. what you see here is a before and after of the introduction of what's called the universal child care credit or child care benefit in canada, which is what it used to be called. the cohort where it actually reduces work is the low educational cohort. so before and after the child tax credit it goes from 60% to 57% for the low education group in young children, and that's sort of what you would expect. the choice to use an external provider for care or to stay at home as a stay at home mom or dad, it depends on your educational level and opportunity cost. if you can earn more outside the house, you'll do that. but if you're spending your entire paycheck on an at-home

nanny or daycare, it doesn't quite make sense to do that. the neutrality of money accommodates the market price signals that you wouldn't be able to derive sort of just in the abstract from these different cohorts. this really quickly is just looking at the different labor force participation between legally married and single mothers. i think the most notable thing is that single mothers have a harder time after a newborn re-entering the labor force partly because they're on their own and once again cash is able to split this difference in a way that an in kind benefit can't because one size fits all. this is from an important paper called the differential impact of universal child benefits on labor supply. it found that married parents use subsidized stay at home mother on the margin, whereas single mothers use to go and

access external services. so even though married mothers reduced their labor force by two percentage points, single mothers increased their labor force participation by 1.4 percentage points. either way, the sky is not falling in these scenarios, and if you really value choice and are opposed to social engineering, whatever form it takes, a point drop in labor force participation based on the choice of mothers is not something to be terrified about. this is just demonstrating that it is single mothers who -- single-mother families who have the highest poverty rates. i just want to finish on a note for the direction of the conservative movement and by extension of the libertarian movement which i'm a part of.

even though tanif has shrunk in size in absolute terms, it looms as large in the consciousness of d.c. policy debates as it ever has, and everything is sort of talked about in those terms. even today's discussion was framed around welfare reform, which at the time was a debate about work requirements, work incentives. going forward, i think there's a lot of discussion about this right now about where the conservative movement should go is to maybe look at, we've lost the battle on gay marriage but what about single mothers or traditional families. this is a policy that can bridge both the needs and desires of the progressives to care for the most needy and the desires of the conservatives to be neutral with respect to traditional families. there's my information, and feel free to reach out. [ applause ]

>> now to melissa for a quick comment. >> i want to thank both chris and fam for interesting presentations. also a child allowance proposal in 2015 which is much closer to the columbia university one and i'll go through quickly why i think that's the right approach. i have both positive and negative feedback on fam's and then just some general thoughts about the political moment that we're in and why this idea is an idea whose time has come. in terms of the columbia university proposal, i think it's incredibly forward thinking and hits all the right notes because you have something that is available monthly. child expenses don't wait until tax time. diapers don't wait until tax time. formula doesn't wait until tax time. so the idea of having a monthly allowance i think is really important. the research on economic mobility and the long-term

outcomes is sort of striking the right amount at the right age group. caps proposals had a young child credit that was fully refundable. we kept the base as $1,000 fully refundable and eliminated the earnings threshold so everybody would get it but we kept it so that there was a pot of money for big purchases or to facilitate savings at tax time and added on a young child tax that was available in monthly installments for those day to day costs, diapers and car seats and cribs and all the things you need when your kids are young. i think that the young child tax credit concept is also important because there's a big mismatch between parents' peak earning years and the age of -- a quarter century mismatch. so the exact time that you in many cases need to take time off of work, whether it's paid or unpaid leave, that you have a little less flexibility in your

schedule because you're caring for young children. you're already relatively early in your career or job so you're making less money. it's the exact time when the highest cost smack you. when you're in your early 50s you're in peak earning years and your children are likely to be older. there are other expenses but not necessarily at the same time. so very much in favor of the columbia university proposal. it has a lot of similarities to some of the research that cap has put out there. yay for full refundability, yay for monthly payments and yay for recognizing that a child allowance isn't going to have catastrophic labor force participation effects. i don't know anybody who would not work because they were getting $2,000 or $3,000 a year to help raise kids when kids cost so much more than that. those are helpful points and i think it's helpful to spur these kinds of bipartisan discussions. the main area of concern i have

with fam's proposal is the pay fors. so the idea of taking away school lunch to pay for a child's credit seems a little ironic to me. it seems as though you're almost taking away lunch to pay for dinner or taking away lunch to pay for housing or some other kind of basic human needs. children are whole people with a whole host of needs. if we're paying for this with other payments that are helping children, it seems to me we're not making the progress that the columbia university proposal shows is possible. so a couple of other thoughts. many people have noted how other countries spent much more on their families than we do. so in the u.s. we spend about 1.2% of gdp on families. that's less than half of what other countries spend, about 2.6% their economies on children and families. so we should be actually spending a lot more and not looking to cut within that

budget to pay for these kinds of proposals. the stepped up basis in capital gains for the adult children of the wealthy is about $50 billion a year. so if we're looking for places to pay for things, i'm just throwing out a couple of suggestions or ideas. that doesn't have to be it habu there's such a concentration of the growing income inequality. olivia mentioned the low wage labor market, the increase in productivity and education, the gains of which have not reached these low wage workers who would be helped by this. so i think there's a lot of other ways that we could pay for a massive expansion. the final point i'll make is sort of on the political moment. we've talked a lot about the $2 a day for the deeply poor would be an enormous step forward. i think we have to also see the fact of a child allowance is phased out with the child tax credit. middle class families are

really, really squeezed right now. so we did an estimate showing that between 2000 and 2012 wages stayed flat but that middle class income security went up by $10,000, 70% of which was child related. 70% of families are going to turn to this program at some point during their working years so there's an alignment of interest between low and middle income families that i think makes the time right for these kinds of proposals. thank you. >> scott. >> thank you. if there's one thing that i want you to take away from this today it's that i am not speaking for the joint economic committee of congress. these are my own personal remarks. glad to be here. chris and sam, congratulations. i thought you were really interesting. i'm going to focus my remarks on a way in which i think my diagnosis of what's wrong with our anti-poverty system differs from what we've heard, fairly

conventional, conservative critique i think. reading these papers, to me it was awful to think about the current system as essentially being a two-tiered child allowance system. we have pretty low child allowance for the kids and parents who can't or won't work. it's in the form of a bunch of programs, not a single program. and we've got another more generous child allowance for the kids of parents who do work. that's an oversimplification in a bunch of ways but i think it's an easy way to sort of think about this. it's a costly program. it's costly partly because it it's -- i think work requirements for instance have been fantastic for low income families. we can come back to that. other parts of that, i think if

folks would rather spend their money on food, give them cash rather than food stamps and they probably know better how to spend it. the othfirst reaction is i like aspects of sam's program a lot because it involves consolidation. it doesn't involve spending a lot more although i think you would probably wind up spending a lot more for some of these families, wasn't quite clear on that. the columbia proposal would essentially make both of these tiers more generous. less generous for people who don't work and more generous for people who do. that makes conservatives a little uncomfortable because we worry about unintended consequences. we worry about people who were going to work but now will choose not to work. we worry about people who were going to delay their child bearing until they were married

and now we worry that maybe some of them won't. i think that's a real concern that i have with the proposal that changes sort of the balance of what people are finding on the margin. plus the columbia proposal would spend quite a bit of money on non poor families, a stack of the calculation. i would not die on these numbers but it seems to me it's pretty likely that the policy spends $30 billion or $40 billion on the top half and maybe are fine with that. i think a lot of people have a different view than i do which we can come back to. to my mind if you're going to propose something that's unpragmaticly big, i would want to spend that money on something else. another problem that i have is that the proposal is sort of premised on an overstatement of the problem that we face.

i don't say this to be pollyanna-ish about poverty. i think the number of poor people we had in america could fit in this room, i would still want to help them. so you should not take this to mean that we don't have a child poverty problem. that said, child poverty is at an all-time low. i've written on this. there's an economist at the congressional research service, thomas gabe, all found essentially that child poverty is at historic lows today. if you include non cash benefits, not talking about medicaid. if you include things like food stamps and housing benefits and co-habiters income when you determine who's under the poverty line, also probably at an all-time low.

cli chris's numbers would probably show that if they were updated today. $2 a day poverty is frankly so rare that it can't be reliably detected. i think the comments about $2 a day poverty and that being caused by welfare reform, unfortunately is really misleading. in the cps my report also used the cps, that increase in $2 a day poverty if you believe it's true started in the mid 1970s, not welfare reform. if you believe it, increased among the elderly, among married college graduates. it increased among the children of married couples. if i had more time i would say you should not believe these numbers. there are good reasons that think they're not right. if you do believe the numbers, it's not welfare reform. we've reduced poverty more than we think but we haven't increased upward mobility

because we tended to think that cash is the way to do that. that's the premise of these proposals, i think. and i think that's just not true. we spend $1 trillion on anti-poverty programs. upward mobility is installed for decades. i think we need to look at different ways to spend that money, especially if it's going to be $100 billion a year. >> thank you. maria? >> indistinct to be at the end of this panel. let me try to step back a little and try to say what is the problem that we're trying to solve because sometimes it's a little easier to think whether this is the right way and i think there are two pretty distinct problems we're trying to solve. one is that parents make big investments in kids and kids are a public good. we have a collective interest in making the appropriate investment in those children because we'll get something out of that investment. so if we're underinvesting,

that's a problem for all of us and the child allowance would improve those investments. a different issue is that we have a common obligation, not a self-interest but an obligation to meet the needs of poor children who are poor through no fault of their own. those are two reasons and i think we should be evaluating this proposal and its ability to do each of those things. when i do that i come up with is this a good solution to those two problems. i think in some ways the answer is yes and in other ways the answer is no. i think the answer is yes because a universal child benefit, by being universal it recognizes that common and collective responsibility that we all have that investment we should all be making in the next generation. it recognizes that parents are taking on a big task. one of my favorite comments is that in the u.s. alone we think of children as pets. if you have a pet you can have a pet, you clean up after your pet. don't bother me with your pet.

but children aren't pets. they will be our next generation and maybe we need to have some collective responsibilities. i think on that end it's a good opportunity. it also is a good opportunity because it provides those benefits in a way that doesn't have some of the inefficiencies that tar dwegeted benefits can . there are two things that i think are less good about a universal child benefit and one of those is that it's not targeted. because it's not targeted, it doesn't give the benefits to the people who need it the most and that makes it relatively more expensive relative maybe to the effect it will have on the second question which is meeting the obligation of a rich country to provide a basic floor for children in our country. i think the other way in which it doesn't target those who need it most perhaps is that -- and this goes to one of the questions -- issues that sam brought up in terms of

supporting parents at home. when we think about parents i think we really need to reflect on all the resources that they have and if we're going to keep it simple let's at least think about time and money. if you take a family, say, that has $40,000 of income and they have that income because one parent is working and one parent is at home, that family is better off than another family that has only one parent resident and that family has $40,000 of income because there's not another parent to take care of that kid. that family is also better off than a family that has two parents that are each earning $20,000 in the labor market. so we need to take into account both of those kinds of resources and things that provide child care that support other expenses that families have that recognize that stay at home parents are a resource. they are valuable, i agree, but that means that families that have them are richer than they would look if we only counted their income. i think that's another piece to

take into account when we're thinking about targeting. in terms of supporting these proposals, having a child allowance seems like a great idea to me if it is replacing -- if it's either extra money or if it's replacing something that is not as well targeted to meeting these needs. so if we're going to replace the dependent care deduction which overwhelmingly provides more benefits to higher income people, if we're going to replace the child tax credit which again doesn't provide benefits to those lowest, i think those are admiral opportunities. but i think if we're going to replace snap, school lunch, i'd like to see the same chart that chris put on there with net benefits. i think there's a real problem if we're taking benefits that overwhelmingly target low income families and redistributing them across the income distribution. i don't think that's what we

need at this point. the last thing that i'll say just because i think it hasn't come up is i think it's important to recognize that the political will, the potential for coming up for resources to provide to families isn't unrelated to the form of those benefits. part of why we have political support for aitc is because it's tied to work. part of why we have support for food stamps, food stamps or snap is also a different support. so we want to avoid magical thinking that we can just shift money from one place to another and the support for that level of funding will be the same. i think it's another piece of the puzzle that we haven't talked about before. >> great, thank you so much to all of you for your discussion and your presentations. let me start with two questions to chris and samuel. one of the questions i have

about the child allowance, we're essentially saying that we are let's say replacing the child tax credit or changing the child tax credit and transferring more money essentially to people who may or may not be working. it's a benefit. whether, whether or not you're working, we are taxing people, we're going to have to get the funding somehow. we are going to be taxing people to raise funds for the child allowance. what happens to the work incentive under the system of transfer that you described? do you still believe that those work incentives will still preva prevail. if we give you $500 and now we're telling a person who's not

working, we'll give you $2,000 because you have a child, i think i don't want to destroy that incentive to work. melissa, you mentioned that is it enough for somebody getting $2,000 to actually stop working just because they're getting that $2,000. but if ywe're saying, yeah, thaa huge incentive to work. but if you give them $2,000 why would we imagine that that's not a disincentive to work? >> i'm comfortable because the itc. we have a strong tax credit that is a big labor force incentive. if you want to do this monthly, if you want to make this available periodically as a ctc, if it's not fully refundable, not the same for everybody, it's going to be a lot harder to administer if you don't know what your earnings are going to be until the end of the year and your total amount and trying to divide that by 12 and administer

it. if everybody's getting the same amount of child tax credit up to whatever income level you phase it out at, i think the average payday loan is $375. there's all these expenses that cause families to have a downward spiral. so the idea of introducing a monthly benefit and a periodic payment i think is an important part of this discussion and it becomes much harder to do that once you take away that universality. i'm very comfortable with the eitc being that work insin tif. >> don't you think it would affect the people if you're saying i'm giving you $2,000 irrespective of whether you work. >> people make choices on the margin. the marginal dollar you earn stays the same. it could be an income effect where if you have income, if $2,000 is really the amount that causes you to drop out of the labor force, then i think you have much bigger problems.

people don't make decisions on that scale. there's actually deep literature on this. whenever this debate comes up, i ask people what are your implied elasticities. are they like so huge that a small increase in income will just cause you to drop out. that's what we find with child allowances like in canada where the effect is differential. you can't generalize. some families will use it to compensate at-home care and other families will use it to enter the labor force. i think that's a really important point which is that we have all this and it's one thing to create a target program for a particular problem but to try to peer through that and find a one size fits all solution isn't actually possible. >> it's worth adding that this is universal child benefits so the work incentives are the work

incentives. i don't think we're incentivizing children to not work. it's designed to provide minimal income for children regardless of their parents' behavior. we already have a safety net system that's going to encourage and enable people to work and supplement their wages even when those wages are low, and this would be a different component to that safety net that says regardless of what happens there is a universal floor on children's income. >> these things are in the shadow of welfare reform. they were fixing a genuine problem. there was a problem that needed to be fixed but we have to stop comparing every single thing to welfare reform because it's become a steale metaphor.

>> i think we have a good point which is we have this earned income tax credit, the point of which you top off earnings by a relatively small amount and it's enough to convince people to go into the labor force. some people don't believe that it does that. i think the evidence is clear it does. i think you do have to be open to the reverse argument on that as well. kathy brought up her piece with sandy janks from '95 about do poor women have the right to bear children. the whole point of that article is that there are women out there who, if you demand of them that they not have a child until they can afford it, will never be able to have a child. the premise is do you give the money to those folks, some of them will be able to afford a child. you might think that's a good or bad thing but i think the implied incentive is sort of there. >> people make choices on the margin, so the next dollar, if

you have a flat benefit that's not the same kind of incentive as say a benefit that -- >> there was a debate in our paper about whether the income was eligible for other benefits. that's another way to reduce the price tag. if you got $2,000 or $3,000 in a child benefit maybe that would reduce your eligible for snap. some of us were in favor, some of us thought maybe that's not the best idea. >> i think it's important to think about what you're trying to solve. i didn't hear any of the authors of these proposals suggesting that this was a work incentive and that it was designed to increase employment. it's designed to manage child poverty problems that we have even when we have an eitc.

i think there's a logic for having such a program because there are collective benefits to that investment. again, i think it is useful to think about what problem we're trying to solve and to agree with them, not have the argument only in the context of tanif and whether this is another way to improve work incentive. this isn't. it's an income effect, does not have an effect on wages. it shouldn't have the same negative effect that the eitc has on the positive end because that's not tied to hours of work. >> i was really glad sam brought up the school milk programs. we lump all these things together as anti-poverty programs that total up to a trillion dollars, whatever. the school milk program is -- thank you. that's very special. it should be judged according to

whether we think it's a rational program goal to provide milk to kids. if that has nutrition benefits -- i'm not saying it does. i'm saying if that's the goal, that's the benchmark it should be judged, not whether it moves somebody above or below a poverty line. these programs do have anti-poverty effects but they have their own goals. snap money we want to spend because we want to make sure that kids have a benefit and to make sure kids don't go hungry. if cash does a better job of that, fine. these things each have their own legacy and goals. it's not tit for tat, dollar for dollar. >> a quick question on some of the issues that are likely to arise. that a lot of the money is going to noncustodial parents and i

assume some of these issues could translate to the child allowance as well because you're saying they're distinguishing between households with children and without. do you worry that the rate we've seen in the eitc could also be a design problem with the universal child allowance? >> i think it would be a lot less because you would have a child or forgot. there's the administrative burden of implementing it. we talked some about that. because we had a principle based approach we were less worried about whether it would come out of treasury. but i think we would imagine that the ssa would administer it if i had our ideal world. it might not be their ideal world.

[inaudible] that's a problem that doesn't apply here because it's a flat benefit. who claims it might end up being a bigger problem. you see this in canada and other places where parents will, going through custody battles, will wrestle with who gets the credit. that would be true with any kind of benefit. >> great. let's open it up for questions now. >> i have a couple comments on universality. first, it's important to recognize the system we have. so one argument for universality is we should be investing in all of our children. that's actually implemented in the income tax system. it's a flip side that we think

children are a burden so in terms of ability to pay, we have either exemptions or deductions or tax credits. the way the system works, the current system, is that we have a very near universal child allowance. people at the bottom get nothing. that's one exception. and the people at the top get more. that's a little bizarre. that is a little bizarre. second, i want to go back to olivia's point. half the population of children are poor or near poor when you use the new definition of poverty, the supplemental measure of poverty. it goes even higher if you're talking about insecurity. it's probably two-thirds to three-quarters, so universality

has a great advantage. most of the children are poor, near poor or insecure. if you try to make it income tested, you would have disincentives to work and marriage in the middle of the income distribution, and they're more serious incentives, as sam pointed out, because it affects the return to work as opposed to just an income effect. so i understand the worry about negative effects on work, marriage, child bearing, but we have imperial evidence which suggests those effects are small. >> anybody want to comment? >> what i would say there is that one of the functions of work requirements is to address those sort of work disincentives

that are there of folks who might otherwise choose to work less and go on public benefits. the requirements now, it's not an easy life to do that and i think that's one of the reasons why i would defend work requirements. about empirical evidence, i think it's true that conservative fears about unintended consequences are almost inherently not empirical. if we all knew there were going to be negative effects and we did it anyway, they would be intended bad consequences. so i think that's absolutely the case. i think what we tend to run into on these debates is that then on the left you get to barrage of correlations which are not safely taken as causal relationships. it's a problem for, i think, any number of debates, policy debates in town. >> can i respond to scott's

point real quick. i don't see how taking away basic living standards like health care and disability support, et cetera, is going to get anybody back to work any faster. >> i'm not talking about taking that away. i'm not talking about abolishing medica medicaid. >> if you're saying you need to work in order to get medicaid but you have a chronic health issue that you need to address, i don't see how taking away basic living standards is going to get anybody to work faster. if you're interested in getting people to work faster you invest in job creation which tightens labor markets, raises wages and makes more jobs available. that seems to be one of the most important solutions that's going to address a lot of these issues and then you still have the child benefit there. so progressives and conservatives agree that a good job is the best way out of poverty. investments in job creation and raising wages should be a big part of that conversation and the child allowance doesn't

provide distortions there. >> i think we can agree economic growth and job creation is super important and at the same time we can believe that -- you won't believe this, but a lot of us can believe that what welfare reform did is convince a lot of people to work who otherwise would not have. and they were better off for it. >> i think the etic and investment in child care had a lot to do with that. >> totally agree. >> i totally agree that welfare reform was necessary and had a huge impact on bringing people from the ftc into the workforce but just to address the point of the universality, we don't have a child allowance for young kids even if you add up the cash value of existing programs. what we have is a two-tiered system where we're happy to transfer cash to parent in the form of either direct credits or deductions in their taxes, which is just cash in hand versus for

the truly poor having this bureaucratized system. i don't want to give up the opportunity because if we did move forward and expand the child tax credit to make it fully refundable, we're doing something that's unambiguously pro-poor so we shouldn't pass up that opportunity to simplify and consolidate the existing system because we have 100 programs representing $100 billion that go to kids that are fragmented and captured by industry interests. the problem we face is whenever someone comes out and says, well, you know, this lunch program is great but tyson and midland and these big companies are lobbying for them because they get to be the special producers, maybe we should fix that, you get the kind of boot legers and baptists scenario where you have child advocates that come out of the woodwork and say, no, you're taking away lunch for kids, but if you're

doing something that is unambiguously benefitting those families at the same time and unambiguously is no comparison of the cash value of the school lunches will not overwhelm giving parents another $1,000, that's an opportunity to assuage a lot of the fears that this is austerity in disguise and not trying to fix a lot of the cronyism in the system. >> we have time for one more question. >> just in terms of this welfare, the discussion about the impact of welfare reform, i think i'd like to go pack to sam's point. we now have a system that really does make it easier for people who can find work consistently to do better. so it clearly made life better for many people. but it left a number of people behind and we can have debates about exactly how many and how far, but there are lots of people who are not able to work

full time, who are not able to work a full year, cannot find that employment, and we just don't have a floor for them. we have completely abandoned them. that stability is pernicious for young children. these proposals would address a problem. you can think welfare reform was positive or negative but there's no question that it left children vulnerable in a way that's inappropriate in this country. >> i have one question. >> it seems like you could make an argument piggybacking off of what you said that providing a child's basic allowance is work incentive in terms of reducing barriers for employment that are based in transportation and things like that. would you agree with that? >> yes. if you look at the supplemental poverty rate, it not only shows

what transfers with people out of poverty but what pushes them into poverty. child care and transportation and other work-related expenses are one of the main factors besides medical out of pocket costs that push people into poverty. there's not a work clothing assistance program. there's not a national transportation voucher program. there are some things you just need cash for, and so the idea of having a child allowance could actually again facilitate people getting and sustaining work because whether it's maintaining an automobile and paying for your car payment, whether it is making sure we have work appropriate clothing and some people you have to buy your uniforms or whether it's just making sure you can plug a child care hole if you get scheduled with a day's notice which is unfair and predictable scheduling, cash matters for keeping a job, too. >> great, thank you so much. please join me in thanking our panelists. [ applause ]

so, before we