While there are many approaches to addressing our long-term fiscal challenges, numerous proposals being considered by Congress would overwhelmingly place the burden of deficit reduction on the social safety net and the millions who depend on it. Senators Bob Corker and Claire McCaskill have introduced the Commitment to American Prosperity Act (CAP Act), which would be phased in over 10 years and create hard caps on government spending that could lead to severe reductions in projected spending on Social Security, Medicare, Medicaid, and other government programs. In Unbalanced budgeting: Federal spending cap may endanger Social Security, EPI budget policy analyst Rebecca Thiess examines how the CAP Act could affect Social Security expenditures, and finds that the proposed cuts could lead to major benefit cuts and job losses in the hundreds of thousands.
In the related paper, Why spending caps are poor policy: Understanding the costs and constraints of capping spending as a share of the economy, Thiess and fellow EPI analysts Andrew Fieldhouse and Ethan Pollack look at the broad adverse effects the legislation would have on both government spending and economic downturns. Both papers find that the CAP Act could severely harm the economy and the social safety net.
Work and leave policies
This week’s Economic Snapshot shows that Americans work 4.8 weeks more per year than the 41.1 week annual average worked by their peers in developed nations.
Only Australia averaged more (47.6 annual weeks worked), but even then Australian labor laws provide workers with four weeks of paid vacation and seven paid public holidays.
EPI Around Town
On June 7, EPI labor economist Heidi Shierholz joined fellow expert panelists at the event “Raising the Minimum Wage, Rebuilding the Economy,” sponsored by the Center for American Progress. During the event, Shierholz shared her research on the benefits of increasing the minimum wage (watch the full event).
EPI economist Elise Gould recently presented her research on health policy at the Hill briefing, “The Tax Exclusion for Health Benefits and The Future of Employer-Sponsored Insurance.” Organized by Congressman Joe Courtney on June 16, the panelists reviewed the basics of employer-sponsored coverage and discussed how recent deficit-reduction proposals, such as the Simpson-Bowles act and Domenici-Rivlin plan, would impact such provisions.
Rebecca Thiess joined Social Security Works on June 20 to discuss budget policy and spending caps at the “Defending Social Security” caucus staff briefing.
EPI in the News
Mother Jones cited EPI’s research on wage stagnation in the editorial, “All Work and No Pay: The Great Speedup.” Noting the disparity between rising corporate profits and wage stagnation, the magazine’s co-editors wrote that “U.S. productivity increased twice as fast in 2009 as it had in 2008, and twice as fast again in 2010: workforce down, output up, and voilá! No wonder corporate profits are up 22 percent since 2007, according to a new report by the Economic Policy Institute.”
Mother Jones also referenced EPI’s recent work on government regulations. The article “Is the EPA a Job Killing Machine? (Hint: No.)” cites EPI researcher Isaac Shapiro’s briefing paper Tallying up the impact of new EPA rules and EPI economist Josh Bivens’ report A lifesaver, not a job killer.
The Associated Press cited EPI’s research on immigration policy and J-1 visas in the story “Student visa program: New rules, same problems.”