Top White House 'Ally' Throws Wrench in Biden's Economic Plans
With allies like Jason Furman, President Joe Biden’s administration hardly needs enemies.
Furman, a Harvard economist and former chair of the Council of Economic Advisers in the Obama administration, hasn’t come out and publicly denounced Biden’s American Families Plan. He hasn’t started appearing on Fox News to criticize the current president or the previous Democratic administration.
The White House ally simply led a study that acknowledged economic reality — and that could scuttle one of the Democrats’ talking points for an immediate, taxpayer-funded “investment” in child care to pump up the labor market.
According to Politico, Furman’s study found low employment levels weren’t connected to either school or day care closures, contradicting what had become a key Democrat talking point in recent weeks.
(Even the left-leaning Politico’s headline didn’t sugarcoat the story: “A Biden-friendly economist is creating a big headache for president’s spending plans.”)
The lack of day care availability had been one of the scapegoats for April’s cataclysmically bad jobs report; only 266,000 new jobs were added, compared with the 1 million that were expected.
NOT GOOD: Women’s employment FELL in April.
Gains/losses in female employment:
April: -8,000
March: +595,000
Feb: +256,000
Jan: -34,000Gains/losses in female labor force participation (working or seeking work):
April: -64,000
March: +492,000
Feb: +137,000
Jan: -380,000— Heather Long (@byHeatherLong) May 7, 2021
“All the job gains in April went to men. The number of women employed or looking for work fell by 64,000, a reminder that child-care issues are still in play.” https://t.co/sfFdCNlGJF
— Kasie Hunt (@kasie) May 8, 2021
“[Child care] isn’t a private issue. It isn’t an in-the-house or a family issue that doesn’t need to be discussed within our larger society,” Misty L. Heggeness, a principal economist and senior adviser at the Census Bureau, told Business Insider in the aftermath of April’s jobs data. “Rather, it’s crippling people’s ability to get back to work and spur economic growth — and should be treated as such.”
Not only was the child care issue a convenient talking point to distract from just how far short April’s jobs numbers fell from meeting predictions, the moment seemed like a blessing in disguise for the Biden administration. Child care spending is one of the key components of the president’s $1.8 trillion American Families Plan, which gave its proponents an opportunity to advocate for hurried passage.
White House press secretary Jen Psaki, for instance, said passing the plan “would have a huge benefit in addressing some of the impacts of child care, on educational needs … that is preventing women from rejoining the workforce.”
“As we see continued evidence that women and working parents have been hit hardest in the economy, we must invest in human infrastructure with the American Families Plan which strengthens the child care and early education support that families need: children learning, parents earning,” House Speaker Nancy Pelosi said in a May 7 statement.
“As we build on the progress of the historic Rescue Plan, Democrats in Congress hope to work in a bipartisan spirit to Build Back Better. However, the evidence is clear that the economy demands urgent action, and Congress will not be deterred or delayed from delivering transformational investments For The People.”
Senate Health, Education, Labor and Pensions Committee Chairwoman Sen. Patty Murray of Washington, meanwhile, said in a May 17 Ms. magazine article that “[i]f we don’t solve our child care crisis, there isn’t going to be an economic recovery.”
“With the child care sector struggling to keep its doors open due to COVID-19, millions of women — who are already more likely to shoulder caregiving responsibilities —have been forced to quit their jobs. Often, they can’t even go to a job interview because they can’t find or afford someone to safely look after their children,” Murray wrote.
“What does that mean for the economy? We saw it last week. Businesses are re-opening, people are getting vaccinated, [COVID-19] cases are going down and things are starting to look up — but yet, of the 4.2 million women who dropped out of the labor force between February and April of 2020, nearly 2 million women have yet to return.”
However, Furman’s study, released Monday, suggests these talking points are evidence-free, given that the number of parents of children who couldn’t work at home is a small enough group that no investment in child care would yield significant short-term employment benefits.
“But a new economic analysis led by a prominent White House ally concludes that school and daycare closures are not driving low employment levels — blunting a key Biden administration argument in favor of its American Families Plan and undercutting the view of some Democrats that investing in child care is crucial for the country to climb out of the coronavirus recession,” Politico reported.
“School closures and lack of child care are not holding back the recovery,” Furman told Politico. “And conversely, we shouldn’t expect a short-term economic bump from reopening schools and making child care more available.”
Using numbers from the federal government’s Current Population Survey, Furman and his co-authors — Melissa Kearney of the University of Maryland and Wilson Powell III of Harvard — found “that differential job loss among parents, or even mothers specifically, accounts for a negligible share of aggregate job loss and could even have led to a small increase in jobs between the first quarters of 2020 and 2021.”
“This analysis demonstrates that despite the widespread challenges that parents across the country have faced from ongoing school and daycare closures, excess employment declines among parents of young children are not a driver of continuing low employment levels,” the study read.
“In fact, while women with young children have left the workforce at a slightly higher rate than other women, men with young children have left the workforce at a lower rate than men without. Overall, the employment rates of parents of young children have declined by 4.5 percent as compared with 5.2 percent among people who are not parents of young children (the decline is also smaller for parents of young children when adjusting for age differences between the two groups).”
While a Federal Reserve survey released on the same day as the Furman, Kearney and Powell study said over a fifth of parents had left the workforce or were working less due to the pandemic, Kearney said that didn’t match up with the data and noted the issues might not be specific to those with children.
“Yes, parents have left the workforce. Many of them will say, ‘Oh, it’s because of child care,’” Kearney said. “But there’s likely other issues going on too that affect non-parents as well.”
So what’s the next way to save the talking point? Try Florida Rep. Lois Frankel’s approach: What are you going to believe, the narrative or those lying numbers?
“This report is contrary to common sense and real-life experience,” said Frankel, co-chair of the Democratic Women’s Caucus, according to Politico. “The child care system was already teetering before the pandemic. It was too costly and in many places not available, keeping parents who want and need to work at home as caregivers.”
In other words, when numbers contradict “common sense and real-life experience” — which is to say, one’s default political position — stick with the latter.
It’s worth noting that both Kearney and Furman emphasized they still buy into massive federal investment in child care, they just didn’t find evidence it would change the current employment situation.
The reason the report is critical, however, is that Democrats want to usher Republicans and wavering members of their own party past a sober-eyed analysis of the $225 billion in American tax dollars the White House’s own fact sheet says it plans to sink into child care via the American Families Plan alone.
It’s much easier to feign alarm, point at that lead balloon of the April jobs report, and yell, “Look! Look! See what’ll keep happening if we don’t get child care dollars now?” The Democrat hype machine was prepared to make this point until it got the spending they wanted. And then a “Biden-friendly economist” threw a wrench into the works.
When even a Biden ally like Furman won’t defend the narrative, it’s time to find new excuses, both for passing the American Families Plan and for those wretched employment numbers.
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