Whom Should Government Serve? Kids Vs. Grandparents

(Bloomberg Opinion) -- How does the government balance the interests of parents and children? How should it?

I argued in a column last month that the Trump administration’s policy of separating children from parents at the U.S. southern border is cruel and an offense against the inherent dignity of both. My Bloomberg Opinion colleague Tyler Cowen pointed out that these families are hardly the only ones broken up by U.S. public policy. He cites a 2010 study finding that over 1.2 million incarcerated Americans have children under the age of 17. “These separations can be traumatic,” Cowen argues, “and they help perpetuate generational cycles of low achievement and criminal behavior.”

In both these instances, policy turns children into collateral damage.

In other situations, policy is clearly crafted to favor families with children. While not comparable in impact to family separation, consider the earned-income tax credit, a federal transfer payment to working, low-income households designed to supplement low earnings and encourage work. The maximum benefit given to households with more than three children is over $6,000 per year. The maximum benefit for a household with no children? A little over $500.

The interests of parents and children sometimes diverge over the long run. Conservatives, for example, often argue that safety net programs, such as food stamps, do not sufficiently encourage work. Remedying this by putting in place more aggressive work requirements might result in fewer people receiving food stamps. But there is evidence that children who have access to food stamps achieve higher levels of economic self-sufficiency as adults. Policy must balance these interests, in part by deciding for whom food stamps are primarily offered.

This divergence is often more clear in programs like food stamps that directly affect families than in macroeconomic issues. But consider the recent tax law. It is forecast to provide a noticeable boost to the economy over the next few years, which would benefit today’s workers and households. But by adding well over $1 trillion to the national debt, the law will reduce private investment and economic output in the future, hurting outcomes for tomorrow’s workers, who are today’s children. (In my view, this is primarily an argument for the need to cut entitlement spending. But that’s another column.)

Or take an example from the political left, where many want to expand Social Security retirement benefits. In many forms, this policy would benefit retired Americans at the expense of younger generations, who would face higher taxes to finance more generous benefits. Weighing these long-term considerations is not easy. The challenge deserves more attention and debate than it gets.

In addition to the long run, public policy has to wrestle with divergent interests between parents and children in real time. I mentioned the long-run divergence with safety net programs like food stamps, but there is clearly an immediate divergence as well: efforts to encourage work, while good for adult recipients, could shrink the program’s rolls, which could be bad for some children.

Aggressive child support obligations can help children by reducing poverty and increasing the involvement of both parents in the lives of the child. But obligations that are too aggressive sometimes drive fathers away from their children, and result in no collections.

Or consider the policy goal of broadly increasing employment. From a macroeconomic perspective, this leads to a stronger economy and higher incomes. And many (including me) argue that the benefits of work extend far beyond income. But it must be recognized that often, the more time parents spend in the workforce, the less time they spend with their children.

In addition, policy must balance effects across families, not just within families. Some policies described as “pro-family” would help some families while hurting others. Mandatory paid parental leave, for example, would benefit the parents and children who receive it by providing an opportunity for some new parents to bond with their infants without having to worry about a steep drop in income. There is some evidence that this improves the health outcomes of children and mothers. But at the same time, mandatory paid leave would likely reduce the employment opportunities for many women, which could have a deleterious effect on their children.

The Urban Institute projects that children’s programs will receive less than one percent of federal spending increases over the next decade. Instead, entitlements like Social Security and Medicare dominate the budget. This represents a choice: Rather than invest in children so that they are more likely to be self-sufficient when they one day retire, we subsidize income and medical expenditures for people in retirement.

Policymakers should take great care to consider the unintended consequences of laws that affect families — within and across families, in the moment and over time, in and across generations. This would require more deliberate policymaking. It would result in better policy, too.

©2018 Bloomberg L.P.

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