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Trumplandian Feudalism: Employ the Unemployed While Still Starving Them

Some­thing odd is going on in the White House. Don­ald Trump just did a mas­sive flip-flip. Ok, it’s not that odd. But it’s still some­what odd because it’s unclear if he actu­al­ly did the flip-flop or is attempt­ing to hold two mutu­al­ly exclu­sive views simul­ta­ne­ous­ly. You see, Don­ald Trump used to say the US unem­ploy­ment rate was a com­plete fraud and actu­al­ly much, much worse than the head­line sub‑5 per­cent unem­ploy­ment rate makes it out to be. Like clos­er to 42 per­cent. That’s what Trump said over and over on the cam­paign trail and since get­ting elect­ed while lament­ing that 94 mil­lion Amer­i­can adults are “out of the labor force” (which includes all retirees and stu­dents). But all of sud­den that changed and now Don­ald Trump is super excit­ed about the offi­cial unem­ploy­ment rate. Why? Because the jobs report for the first full month of his pres­i­den­cy just came in and it was­n’t too shab­by [1].

So did Trump sud­den­ly drop his oft-repeat­ed crit­i­cism of tra­di­tion unem­ploy­ment report­ing? Well, as we’re going to see, prob­a­bly not because his admin­is­tra­tion is still plan­ning on redefin­ing the “offi­cial” unem­ploy­ment rate to be much “loos­er” [2] and his claims that 42 per­cent if Amer­i­can adults are out of work are nec­es­sary to achieve a long-held GOP goal cham­pi­oned by House Speak­er Paul Ryan: con­vert­ing the US safe­ty-net — includ­ing Medicare, Med­ic­aid, and Social Secu­ri­ty — into a “work for a pit­tance to get a pit­tance of gov­ern­ment support”-net that traps the poor in sys­tem where if you have to find full time work to get any help at all [3]. Maybe [4] even [5] for the elder­ly. And the help you get in return for that work-require­ment will keep shrink­ing year after year. It’s a plan that can’t hap­pen unless almost all non-work­ing adults are defined as “unem­ployed”. So, no, Trump did­n’t change his mind. He just still thinks we’re all stu­pid [6] (maybe [7]).

***

The jobs report for the first full month of the Trump pres­i­den­cy came in at a robust 235,000 new jobs and the unem­ploy­ment rate dropped to 4.7 per­cent. Not too shab­by for the first month and as one might imag­ine Don­ald Trump was quite pleased. And tweet-hap­py. But as one might also imag­ine, the fact that Don­ald Trump was so pleased has less to do with any­thing Trump actu­al­ly did (235,000 new jobs a month is rough­ly inline with the last four years [8]), and more to do with his fan­ci­ful imag­i­na­tion. In this case, it’s Trump’s imag­i­na­tive hal­lu­ci­na­tion that we would­n’t all notice that he called the unem­ploy­ment rate com­plete­ly fake — and pos­si­bly 42 per­cent — right up to the moment that this jobs report came out [1]:

For­tune

The White House Is Cel­e­brat­ing Jobs Num­bers Pres­i­dent Trump Used to Call ‘Pho­ny

Tes­sa Beren­son
3/10/2017 4:32 PM Cen­tral

The Trump Admin­is­tra­tion is cel­e­brat­ing the Depart­ment of Labor’s lat­est jobs report [9]. But in the past Pres­i­dent Trump has called the same month­ly report “pho­ny” and a “hoax.”

Fri­day morn­ing the pres­i­dent retweet­ed [10] a Drudge Report link to the num­bers that said “GREAT AGAIN: +235,000.” (Employ­ers added 235,000 new jobs in Feb­ru­ary, bring­ing the unem­ploy­ment rate down to 4.7%, the report found.)

White House spokesman Sean Spicer tweet­ed that the report is “Great news for Amer­i­can work­ers” and “Not a bad way to start day 50 of this Admin­is­tra­tion.”

Oth­er Admin­is­tra­tion offi­cials tout­ed the num­bers as well, includ­ing Chief of Staff Reince Priebus [13] and Vice Pres­i­dent Mike Pence [14].

...

‘Pho­ny’ and a ‘joke’

Dur­ing a press con­fer­ence in 2015, Trump said the unem­ploy­ment rate, then at 5.1%, was too low to accu­rate­ly cap­ture the real eco­nom­ic sit­u­a­tion in the coun­try. He called it “such a pho­ny num­ber” and said, “the num­ber isn’t reflec­tive ... 5.3 per­cent unem­ploy­ment, that is the biggest joke there is in this coun­try … The unem­ploy­ment rate is prob­a­bly 20 per­cent, but I will tell you, you have some great econ­o­mists that will tell you it’s a 30, 32. And the high­est I’ve heard so far is 42 per­cent.”

Poli­ti­Fact rat­ed [15] Trump’s 42 per­cent claim “pants on fire” and wrote at the time, “Get­ting a per­cent­age that high requires believ­ing that being a high school, col­lege or grad­u­ate stu­dent, a senior cit­i­zen, a stay-at-home par­ent, a job-train­ing par­tic­i­pant, or hav­ing a dis­abil­i­ty is no excuse for not hold­ing down a job, or for work­ing less than 40 hours in a week. The high­est alter­na­tive unem­ploy­ment-rate mea­sure we could come up with that had any cred­i­bil­i­ty was 16.4 per­cent, and even that exag­ger­at­ed fig­ure is only about one-third of the way to Trump’s 42 per­cent.”

‘One of the biggest hoax­es’

In August 2016, Trump once again claimed that the actu­al unem­ploy­ment rate was high­er than the jobs report reflect­ed. ” We have the low­est labor force par­tic­i­pa­tion rates in four decades,” Trump said in a speech [16] to Detroit Eco­nom­ic Club dur­ing the gen­er­al elec­tion cam­paign. “Fifty-eight per­cent of African-Amer­i­can youth are either out­side the labor force or not employed. One in five Amer­i­can house­holds do not have a sin­gle mem­ber in the labor force. These are the real unem­ploy­ment num­bers – the five per­cent fig­ure is one of the biggest hoax­es in mod­ern pol­i­tics.”

‘Nine­ty-four mil­lion Amer­i­cans’

Dur­ing his first address to Con­gress [17] to Con­gress, Trump threw out a star­tling sta­tis­tic: “94 mil­lion Amer­i­cans are out of the labor force.” But that fig­ure is mis­lead­ing [18]. Like the oth­er unem­ploy­ment sta­tis­tics Trump men­tioned as a can­di­date, it includes retirees, stu­dents, stay-at-home par­ents and peo­ple who are disabled—people who are not active­ly look­ing for a job. If Trump were being con­sis­tent about using that def­i­n­i­tion, the Admin­is­tra­tion could not also tout the 4.7 per­cent unem­ploy­ment rate from this mon­th’s jobs report.

‘Not a good sign’

In Decem­ber 2012, the jobs report said employ­ers added 244,000 jobs, about 10,000 more than this week’s report that Trump seems excit­ed about. But at the time, Trump, then a pri­vate cit­i­zen, was not pleased. “Today’s job report is not a good sign & we could be fac­ing anoth­er reces­sion,” he tweet­ed. “No real job growth. We need over 300K new jobs a month.”

‘Not real’

And here’s a bonus men­tion for Trump’s new Trea­sury Sec­re­tary Steven Mnuchin. “The unem­ploy­ment rate is not real,” Mnuchin told the Sen­ate Finance Com­mit­tee [20] dur­ing his con­fir­ma­tion hear­ing in Jan­u­ary. “I’ve trav­eled for the last year. I’ve seen this.”

Poli­ti­Fact rat­ed [15] Trump’s 42 per­cent claim “pants on fire” and wrote at the time, “Get­ting a per­cent­age that high requires believ­ing that being a high school, col­lege or grad­u­ate stu­dent, a senior cit­i­zen, a stay-at-home par­ent, a job-train­ing par­tic­i­pant, or hav­ing a dis­abil­i­ty is no excuse for not hold­ing down a job, or for work­ing less than 40 hours in a week. The high­est alter­na­tive unem­ploy­ment-rate mea­sure we could come up with that had any cred­i­bil­i­ty was 16.4 per­cent, and even that exag­ger­at­ed fig­ure is only about one-third of the way to Trump’s 42 per­cent.””

Just FYI to all the high school, col­lege or grad­u­ate stu­dents, senior cit­i­zens, stay-at-home par­ents, job-train­ing par­tic­i­pant, and peo­ple with a dis­abil­i­ty. Trump want you to know that there’s no excuse for not hold­ing down a job, or for work­ing less than 40 hours in a week. All 94 mil­lion of you.

And in case you’re tempt­ed to assume that Trump’s 42 per­cent gues­ti­mate that he kept men­tion­ing on the cam­paign trail [21] was mere­ly the high-end of the gues­ti­mate range that Trump and threw out there for shock val­ue on the cam­paign tail but was going to drop once he became pres­i­dent, he want­ed you to think oth­er­wise dur­ing his first big tele­vised address to Con­gress:

...
Dur­ing his first address to Con­gress [17] to Con­gress, Trump threw out a star­tling sta­tis­tic: “94 mil­lion Amer­i­cans are out of the labor force.” But that fig­ure is mis­lead­ing [18]. Like the oth­er unem­ploy­ment sta­tis­tics Trump men­tioned as a can­di­date, it includes retirees, stu­dents, stay-at-home par­ents and peo­ple who are disabled—people who are not active­ly look­ing for a job. If Trump were being con­sis­tent about using that def­i­n­i­tion, the Admin­is­tra­tion could not also tout the 4.7 per­cent unem­ploy­ment rate from this mon­th’s jobs report.
...

His first address to Con­gress and he straight up using the 94 mil­lion num­ber. This is going to be bru­tal. And that was dur­ing his first address to con­gress a week and a half ago. Unless he real­ly did drop the 42 per­cent unem­ploy­ment meme over the last week and a half and is now relent­ing on his appar­ent deter­mi­na­tion to rede­fine the unem­ploy­ment rate as includ­ing almost liv­ing adult who is not work­ing. Includ­ing retirees. And stu­dents.

Trump’s Trea­sury Sec­re­tary Agrees. Sud­den­ly. Sort of

And yes, Trea­sury Sec­re­tary Steve Mnuchin echoed Trump dur­ing his con­fir­ma­tion hear­ings by say­ing he’s changed “unem­ploy­ment rate isn’t real”:

...
And here’s a bonus men­tion for Trump’s new Trea­sury Sec­re­tary Steven Mnuchin. “The unem­ploy­ment rate is not real,” Mnuchin told the Sen­ate Finance Com­mit­tee [20] dur­ing his con­fir­ma­tion hear­ing in Jan­u­ary. “I’ve trav­eled for the last year. I’ve seen this.”
...

Now, it’s impor­tant to real­ize that what Mnuchin said was­n’t an out­ra­geous state­ment on it’s own, in part because there are many dif­fer­ent ways to define an offi­cial unem­ploy­ment rate. It’s a sub­jec­tive call so there isn’t a “cor­rect” “offi­cial” unem­ploy­ment met­ric. It just depends on what you want to mea­sure as “unem­ployed” for the offi­cial met­ric. You can lim­it it to peo­ple active­ly look­ing for work (the cur­rent “offi­cial” rate) or every­one who isn’t work­ing but could work whether they’re active­ly look­ing for a job or not. There’s not a “cor­rect” way to do that. There real­ly is a much larg­er pool of long-term unem­ployed/un­der-employed peo­ple who would like to work but gave up look­ing and it’s not unrea­son­able on it’s own to say “hey we should count those peo­ple who gave up look­ing too”. Although it is unrea­son­able to sug­gest that the gov­ern­ment isn’t actu­al­ly look­ing at that expand­ed def­i­n­i­tion of the unem­ploy­ment rate since those met­rics col­lect­ed and report­ed.

Also note that when Mnuchin gave his con­fir­ma­tion tes­ti­mo­ny and echoed Trump’s unem­ploy­ment rate views it’s pret­ty unclear what exact­ly he went when he because, while he did­n’t lament that 94 mil­lion adults were out of the labor force like Trump did dur­ing his con­gres­sion­al address and so many times before, Mnuchin did call for “all poten­tial work­ers” to be con­sid­ered in a new unem­ploy­ment rate. And how you define “all poten­tial work­ers” is also a sub­jec­tive call. Is it all the long term unem­ployed who want and job and those who don’t. Or maybe retirees and stu­dents count­ed in the unem­ploy­ment rate too. There real­ly are 94 mil­lion “poten­tial work­ers” too, at least poten­tial­ly if that’s how you want to define all unem­ployed adults as a “poten­tial work­er”. So deter­min­ing how Mnuchin defines the pool of “poten­tial work­ers” is pret­ty urgent as he vague­ly describes this plank of the Trump agen­da [22]:

The Hill

Mnuchin: Unem­ploy­ment rate is ‘not real’

By Peter Schroed­er — 01/19/17 01:49 PM EST

Steven Mnuchin dis­missed the sharp decline in the unem­ploy­ment rate as “not real,” argu­ing that the aver­age Amer­i­can still hasn’t felt any­thing from the eco­nom­ic recov­ery.

Tes­ti­fy­ing before the Sen­ate Finance Com­mit­tee Thurs­day, Mnuchin said that his trav­els with Pres­i­dent-elect Don­ald Trump have changed his per­spec­tive and argued the nation’s needs a new approach.

In so doing, Trump’s pick to head the Trea­sury Depart­ment dis­missed the valid­i­ty of one of the nation’s cen­tral eco­nom­ic guide­posts, which cur­rent­ly sits at 4.7 per­cent.

“I absolute­ly under­stand why he got elect­ed,” said Mnuchin. “The aver­age Amer­i­can work­er has gone absolute­ly nowhere. The unem­ploy­ment rate is not real.”

...

Repub­li­cans have argued in the past there should be more focus on alter­nate ways to mea­sure the nation’s labor mar­ket, not­ing that poten­tial work­ers that give up search­ing for a job after six months are no longer count­ed as unem­ployed.

“Repub­li­cans have argued in the past there should be more focus on alter­nate ways to mea­sure the nation’s labor mar­ket, not­ing that poten­tial work­ers that give up search­ing for a job after six months are no longer count­ed as unem­ployed.”

Who’s not going to be a “poten­tial work­er”? That’s a pret­ty big ques­tion. Stu­dents who have nev­er worked? Retirees? The dis­abled? Keep in mind that, there is a kind of val­ue judge­ment at work for dif­fer­ent labels. For instance, if retirees were count­ed in the “offi­cial” unem­ploy­ment rate that sort of implic­it­ly sug­gests they should actu­al­ly be work­ing. Full time. Same with stu­dents. And don’t for­get that when Don­ald Trump repeat­ed­ly lament­ed how 94 mil­lion Amer­i­cans were out of the labor force, he was implic­it­ly sug­gest­ing retirees, stu­dents, and basi­cal­ly all adults capa­ble of work­ing should be work­ing full time. In oth­er words, you retire when you’re either too sick or dis­abled to work or you die. That’s what’s implied if Trump’s “94 mil­lion Amer­i­cans are out of the labor force” com­ment is to be tak­en seri­ous­ly.

So what per­cent­age of that 94 mil­lion pool of adult Amer­i­cans with­out full-time work does Trea­sury Sec­re­tary Steve Mnuchin con­sid­er “poten­tial work­ers”? Well, the arti­cle below points to a hint Mnuchin gave us back in the begin­ning of Feb­ru­ary in his writ­ten respons­es to ques­tions from Sen­a­tors dur­ing his con­fir­ma­tion hear­ing (the hear­ing where he referred to “poten­tial work­ers”. In his writ­ten response Mnuchin sug­gest­ed still using exist­ing Bureau of Labor Sta­tis­tics (BLS) unem­ploy­ment sta­tis­tics as the “offi­cial” unem­ploy­ment rate sys­tem, but just using one of the “loos­er” unem­ploy­ment rates as the “offi­cial” one instead. The BLS sys­tem ranges from the “U‑1” unem­ploy­ment rate (nar­row­est def­i­n­i­tion of unem­ployed that isn’t typ­i­cal­ly seen as very use­ful) to the “U‑6” (all unem­ployed, under­em­ployed, and peo­ple capa­ble of work­ing, but not stu­dents and retirees). Cur­rent­ly, the “U‑3” rate (unem­ployed peo­ple who have looked for work in the last 12 months) is the “offi­cial” unem­ploy­ment rate.

It’s the U‑3 that just came in at 4.7 per­cent that Trump claims is now sud­den­ly real after claim­ing for years it was garbage and hid­ing the real extent of US unem­ploy­ment because it did­n’t count peo­ple who want to work but just gave up try­ing to look. And, again, that’s not an invalid point Trump is mak­ing about the inad­e­qua­cy of the “U‑3” rate as an unem­ploy­ment met­ric. it’s Trump’s 42 percent/94 mil­lion claims that are invalid points because they assume every phys­i­cal­ly capa­ble adult is work­ing full time. But the points that Trump was also mak­ing about the U‑3 “offi­cial” unem­ploy­ment rate not cap­tur­ing what’s real­ly going in the econ­o­my isn’t invalid.

There’s no rea­son we could­n’t fol­low Trump’s sug­ges­tion of using a “loos­er” def­i­n­i­tion of being unem­ployed and, say, call the “U‑5” rate (the “U3” plus work­ers look­ing for work more than 12 months and work­ers who are capa­ble and inter­est­ed in work­ing but haven’t looked for a job for what­ev­er rea­son in the last four months) the “offi­cial rate”. There’s noth­ing wrong with that as long as we under­stand how to inter­pret it. As Paul Krug­man point­ed out in 2014, there’s a lot of val­ue in look­ing at “U‑3” vs “U‑6” rates togeth­er just to get a bet­ter idea of how much slack there is in the econ­o­my (and as Krug­man also not­ed we should apply gov­ern­ment stim­u­lus if there’s too much slack) [23].

And as the arti­cle below points out, Trea­sury Sec­re­tary Mnuchin sug­gest­ed in his writ­ten response to the Sen­ate that maybe the “U‑5” should be the offi­cial rate. As the arti­cle also notes, the “U‑5” was at 5.7 per­cent in ear­ly Feb­ru­ary (and is pre­sum­ably low­er now). So if shift­ing to the U‑5 rate real­ly is the change to the unem­ploy­ment rate that the Trump admin­is­tra­tion is plan­ning on imple­ment, the unem­ploy­ment rate is going to be per­ma­nent­ly high­er. And at times per­haps much much high­er depend­ing on the slack in the econ­o­my. And there’s noth­ing nec­es­sar­i­ly wrong with using the U‑5. But if the U‑5 is what the Trump admin­is­tra­tion makes the “offi­cial” unem­ploy­ment rate going for­ward, there’s def­i­nite­ly not going to be an 42 per­cent unem­ploy­ment rate any time soon...unless he changes the “U‑5” def­i­n­i­tion to include all 94 mil­lion stu­dents, the dis­abled, and retirees out of the labor force, of course [2]:

Bloomberg

Full Employ­ment May Be Rede­fined as Trump Attacks Bench­mark
by Patri­cia Laya
Feb­ru­ary 1, 2017, 11:01 PM CST Feb­ru­ary 2, 2017, 12:15 PM CST

* Trea­sury nom­i­nee says unem­ploy­ment rate has too much clout
* Main rate is still best indi­ca­tor, for­mer stats chief says

Just as the U.S. nears full employ­ment based on the prin­ci­pal mea­sure used for almost eight decades, Pres­i­dent Don­ald Trump and his team are look­ing at new yard­sticks.

The job­less rate prob­a­bly held in Jan­u­ary at 4.7 per­cent, accord­ing to the medi­an esti­mate from econ­o­mists ahead of Friday’s Labor Depart­ment report. Fed­er­al Reserve pol­i­cy mak­ers see such a lev­el — which is down from a post-reces­sion high of 10 per­cent in 2009 — as being at or near full employ­ment, mean­ing any­thing low­er would push infla­tion high­er.

While the rate’s use as a chief indi­ca­tor dates to the Depres­sion era, Trump spent last year’s elec­tion cam­paign call­ing the mea­sure “pho­ny” and argu­ing it over­states the strength of the labor mar­ket. More recent­ly, his Trea­sury sec­re­tary nom­i­nee, Steven Mnuchin, said the num­ber has “exces­sive influ­ence” over pol­i­cy and that it fails to account for peo­ple who have dropped out of the labor force or aren’t active­ly look­ing for work. White House spokesman Sean Spicer said [24] Trump’s eco­nom­ic team will look at a “mul­ti­tude of sta­tis­tics” in assess­ing labor-mar­ket strength.

Trump’s offi­cials actu­al­ly share com­mon ground with Fed Chair Janet Yellen on their sup­port for review­ing a range of labor-mar­ket indi­ca­tors. Yellen has argued in the past that the job­less rate didn’t cap­ture slack evi­dent else­where, as the Fed kept inter­est rates near zero until late 2015. She’s point­ed to low lev­els of labor-force par­tic­i­pa­tion and the large num­ber of part-time work­ers who would pre­fer full-time employ­ment.

Fed pol­i­cy mak­ers indi­cat­ed in their post-meet­ing state­ment [25] Wednes­day that there’s still room for improve­ment in the job mar­ket. While the unem­ploy­ment rate “stayed near its recent low” in Decem­ber, “some fur­ther strength­en­ing” is expect­ed in labor con­di­tions.

Com­pa­ra­ble Rates

That doesn’t mean cen­tral bankers or Labor Depart­ment econ­o­mists are about to aban­don the unem­ploy­ment rate as their main gauge. That fig­ure is the “num­ber that’s most com­pa­ra­ble over time and one that’s most com­pa­ra­ble inter­na­tion­al­ly,” said for­mer Bureau of Labor Sta­tis­tics Com­mis­sion­er Eri­ca Groshen, who left the gov­ern­ment last month at the end of her four-year term as Pres­i­dent Barack Obama’s appointee to the post.

Mnuchin, in writ­ten respons­es to sen­a­tors’ ques­tions fol­low­ing his con­fir­ma­tion hear­ing last month, cit­ed the so-called U‑5 rate as an alter­na­tive indi­ca­tor. That rate, which stood at 5.7 per­cent in Decem­ber, includes dis­cour­aged work­ers as well as a group called mar­gin­al­ly attached work­ers, who aren’t work­ing or active­ly look­ing for work but want a job. Anoth­er mea­sure, the U‑6 or under­em­ploy­ment rate, was 9.2 per­cent in Decem­ber. It also includes part-time employ­ees who want full-time work.

“Peo­ple change their minds about whether they’re dis­cour­aged,” said Groshen, who was pre­vi­ous­ly a Fed econ­o­mist. “We’ve been mea­sur­ing the unem­ploy­ment rate the same way since the 1940s. Most oth­er coun­tries that have an unem­ploy­ment rate use a def­i­n­i­tion that’s sim­i­lar to ours — part­ly because we cre­at­ed it and because it works.”

While oth­er mea­sures can help give a more nuanced view of the labor mar­ket, they don’t go back as far, Groshen said.

Chang­ing the tar­get unem­ploy­ment rate “would just say to me that you’re con­fused, that you don’t know what you’re aim­ing for,” said John Sil­via, chief econ­o­mist at Wells Far­go Secu­ri­ties LLC in Char­lotte, North Car­oli­na.

Pay­rolls, Wages

Friday’s report is pro­ject­ed to show a steadi­ly improv­ing labor mar­ket, accord­ing to econ­o­mists’ esti­mates. Employ­ers prob­a­bly added 175,000 work­ers to pay­rolls in Jan­u­ary, an improve­ment from Decem­ber, while aver­age hourly wages prob­a­bly rose 2.8 per­cent from a year ear­li­er, com­pared with the 2.5 per­cent rise in Jan­u­ary 2016.

...

Trump’s skep­ti­cism was part of his mes­sage that helped him win the 2016 elec­tion. The pres­i­dent is “absolute­ly right in say­ing that the labor mar­ket has much more slack in it than the Fed and oth­er com­men­ta­tors are think­ing about,” David Blanch­flower, a Dart­mouth Col­lege eco­nom­ics pro­fes­sor and for­mer Bank of Eng­land pol­i­cy mak­er, said on Bloomberg Tele­vi­sion. “Mil­lions of peo­ple vot­ed for Trump say­ing there are no decent jobs out there and noth­ing much is chang­ing.”

U.S. efforts to define and mea­sure unem­ploy­ment stemmed from the Great Depres­sion, when about 13 mil­lion peo­ple were out of work, amount­ing to a 25 per­cent job­less rate. But no one knew these fig­ures at the time or whether they were improv­ing or dete­ri­o­rat­ing, accord­ing to a 2009 paper by BLS econ­o­mist Steven Hau­gen.

Researchers devised the method­ol­o­gy, and the month­ly employ­ment report began in 1940, based on a reg­u­lar sam­ple sur­vey of the pop­u­la­tion. That prac­tice con­tin­ues today, with about 60,000 U.S. house­holds sur­veyed each month by the Cen­sus Bureau. Pay­roll fig­ures come from a sep­a­rate sur­vey of busi­ness­es and gov­ern­ment agen­cies.

Since 1940, there have been var­i­ous reviews of the con­cept and def­i­n­i­tion of unem­ploy­ment, which have result­ed only in minor revi­sions to the offi­cial mea­sure, Hau­gen wrote. A range of alter­na­tive met­rics, includ­ing the U‑5 and U‑6 rates, were devel­oped in the 1970s.

Such mea­sures now show that the “labor mar­ket is tight­en­ing,” said Neil Dut­ta, head of U.S. eco­nom­ics at Renais­sance Macro Research LLC in New York.

Polit­i­cal Influ­ence

While the BLS com­mis­sion­er par­tic­i­pates in the draft­ing of the month­ly employ­ment release and approves it, oth­er polit­i­cal appointees aren’t involved, and long-stand­ing guide­lines are aimed at avoid­ing the politi­ciza­tion of the reports, Groshen said. Trump hasn’t named a new BLS chief yet. The posi­tion is sub­ject to Sen­ate con­fir­ma­tion.

If the focus is placed on a rate that mea­sures unem­ploy­ment dif­fer­ent­ly, what would mat­ter is that “you use it con­sis­tent­ly over time, both back­wards and for­ward,” said Stu­art Hoff­man, chief econ­o­mist at PNC Finan­cial Ser­vices Group Inc. in Pitts­burgh.

Among peo­ple out of the work­force, “it’s hard to know how many are legit­i­mate­ly would-be employ­ees,” Hoff­man said. Still, “there are peo­ple on the side­lines that could come back in, who keep the labor mar­ket from being all that tight.”
d
“The spig­ot keeps twist­ing a lit­tle tighter, but it’s not bone-dry,” he said.

“Mnuchin, in writ­ten respons­es to sen­a­tors’ ques­tions fol­low­ing his con­fir­ma­tion hear­ing last month, cit­ed the so-called U‑5 rate as an alter­na­tive indi­ca­tor. That rate, which stood at 5.7 per­cent in Decem­ber, includes dis­cour­aged work­ers as well as a group called mar­gin­al­ly attached work­ers, who aren’t work­ing or active­ly look­ing for work but want a job. Anoth­er mea­sure, the U‑6 or under­em­ploy­ment rate, was 9.2 per­cent in Decem­ber. It also includes part-time employ­ees who want full-time work.”

That’s the line the Trea­sury is going to walk now that Don­ald Trump is call­ing into ques­tion the US’s long-stand­ing unem­ploy­ment rate met­ric: Use U‑5 instead of U‑3 as the “offi­cial” rate. Which would push it up to a whole 5.7 per­cent today. And not remote­ly 42 per­cent.

So What’s the Offi­cial Plan for the “Offi­cial” Unem­ploy­ment Rate? Andy Puzder Gives Us a Clues. An Omi­nous Clue

So is Mnuch­in’s “U‑5” pro­pos­al reflec­tive of what Trump thinks the “offi­cial” unem­ploy­ment rate should be reset to? Well, don’t for­get that Mnuchin deliv­ered his response to the Sen­ate with the “U‑5” pro­pos­al at the begin­ning of Feb­ru­ary and Trump lament­ed how “94 mil­lion Amer­i­cans are out of the labor force,” at his first speech to Con­gress at the end of the month.

And at this point who knows which, if any, of Trump’s pre‑3/10/2017 (when the Feb­ru­ary jobs report came out) views on the unem­ploy­ment rate are still in effect after his bizarre embrace of the jobs report that was in direct con­tra­dic­tion of his bizarre repeat­ed lamen­ta­tions of the idea that 94 mil­lion Amer­i­cans are out of the labor force. Are there any oth­er clues he’s left for us?

Well, there was one big clue, and it’s an omi­nous one. The clue came in the form of Trump’s deci­sion to nom­i­nate fast-food CEO Andy Puzder as labor sec­re­tary. Spe­cial­ly, the clue comes from the choice of Puzder for that labor sec­re­tary role and how Puzder’s well known views on replac­ing all social safe­ty-net and wel­fare pro­grams with a nation­al work require­ment and wage sub­si­dies in the form of the Earned Income Tax Cred­it (EITC) for low-income work­er and how close­ly those views align with anoth­er key fig­ure in this mess: House Speak­er Paul Ryan’s desire to do the same. If Trump defines all adults phys­i­cal­ly and men­tal­ly capa­ble of work­ing as “out of the labor force”, that means all recip­i­ents of wel­fare and safe­ty-net pro­grams can be con­sid­ered eli­gi­ble for a work-require­ment to get their gov­ern­ment assis­tance (with an EITC). And that’s all required if Paul Ryan’s long-held goal of elim­i­nat­ing wel­fare pro­grams (includ­ing Med­ic­aid) can come to fruition.

So first, let’s take a look at the Andy Puzder’s views on replac­ing all wel­fare with a check from the gov­ern­ment. A check you only get if you’re work­ing in the form of the EITC. If you want food and shel­ter you’ll need find a job. At min­i­mum wage if that’s all that’s avail­able (per­haps at a fast food restau­rant?). And while Puzder isn’t going to be labor sec­re­tary because he with­drew his nom­i­na­tion over a vari­ety of per­son­al scan­dals [26], this was still the well known views of Puzder when Trump select­ed him. And, again, Puzder’s dream of cre­at­ing a giant work force of gov­ern­ment sub­si­dized min­i­mum wage work­ers (for the ben­e­fit of all employ­ers who might want to employ min­i­mum wage work­ers) is the same as House Speak­er Paul Ryan’s dream. So Puzder’s views on these mat­ters, which he made clear in the fol­low­ing opin­ion piece he write in 2015, is a big clue as to why Don­ald Trump keeps talk­ing about 94 mil­lion Amer­i­cans being out of work [27]:

The Hill

More work, less wel­fare

By Andy Puzder — 06/22/15 06:31 PM EDT

After six years of a recov­ery that has failed to mean­ing­ful­ly help work­ing-class Amer­i­cans, our nation is fac­ing a cri­sis of entrenched pover­ty and declin­ing oppor­tu­ni­ty.

...

Not sur­pris­ing­ly, the num­ber of peo­ple depen­dent on the Sup­ple­men­tal Nutri­tion Assis­tance Pro­gram (SNAP), fed­er­al hous­ing assis­tance and Med­ic­aid con­tin­ues to grow. The num­ber of peo­ple receiv­ing SNAP ben­e­fits (food stamps) alone has dou­bled since 2008, to 74.7 mil­lion; in trou­bled cities like Bal­ti­more, more than 1 in 3 res­i­dents receives them.

These impor­tant pro­grams gen­uine­ly help peo­ple in need, and we are a nation rich enough to assist the eco­nom­i­cal­ly dis­ad­van­taged. But these pro­grams have the unin­tend­ed con­se­quence of dis­cour­ag­ing work rather than encour­ag­ing inde­pen­dence, self-reliance and pride.

At quick-ser­vice restau­rant brands Carl’s Jr. and Hardee’s, we’ve seen these poli­cies’ unin­tend­ed con­se­quences first­hand.

Con­sid­er that some of our crew mem­bers are declin­ing pro­mo­tions to shift leader posi­tions because the increase in income would dis­qual­i­fy them for food, hous­ing, med­ical or oth­er gov­ern­ment ben­e­fits.

These pro­mo­tions are the first step on the lad­der to becom­ing a gen­er­al man­ag­er, poten­tial­ly mak­ing up to $80,000 a year. It’s a shame they’re unable to take a pro­mo­tion for fear of los­ing pub­lic assis­tance. Fol­low­ing local min­i­mum wage increas­es, oth­er employ­ees have refused addi­tion­al hours or request­ed few­er hours to keep their incomes below the cut­off for receiv­ing ben­e­fits.

Called the “wel­fare cliff” by pol­i­cy wonks, this grow­ing trend is lit­tle more than peo­ple respond­ing to incen­tives. Sim­ply, peo­ple get trapped into work­ing less and keep­ing valu­able ben­e­fits over work­ing more and los­ing them.

For exam­ple, eli­gi­bil­i­ty for food stamps ends when annu­al income exceeds 130 per­cent of the pover­ty line, or a lit­tle more than $15,000 a year, for an indi­vid­ual. At $8.25 an hour or less, employ­ees can work a full-time sched­ule of 35 hours a week and still qual­i­fy for these ben­e­fits. But when the min­i­mum wage increas­es above this lev­el, as it has recent­ly in many cities and states, employ­ees must reduce their hours to keep their ben­e­fits.

Sim­i­lar­ly, in most states, Med­ic­aid eli­gi­bil­i­ty ends when annu­al income exceeds 138 per­cent of the pover­ty line. Under­stand­ably, some employ­ees choose to work less and keep the thou­sands of dol­lars’ worth of ben­e­fits instead of work­ing a lit­tle more and los­ing them.

The impact a loss of gov­ern­ment ben­e­fits has on finan­cial secu­ri­ty for peo­ple liv­ing in pover­ty can be dra­con­ian. It can lock them into pover­ty by mak­ing the chasm between gov­ern­ment depen­dence and inde­pen­dence too broad to cross.

As a result, peo­ple for­go oppor­tu­ni­ty for safe­ty, which pre­vents them from real­iz­ing the inde­pen­dence and self-reliance that come with per­son­al suc­cess and a job.

There is a solu­tion that ful­fills society’s oblig­a­tion to help the poor with­out reduc­ing oppor­tu­ni­ty: the earned income tax cred­it (EITC).

The EITC sup­ple­ments incomes of the work­ing poor through the tax code. Rather than access to myr­i­ad and com­plex gov­ern­ment pro­grams, peo­ple receive a gov­ern­ment check sup­ple­ment­ing their pay­check.

As their income from work increas­es, their gov­ern­ment sup­ple­ment declines. The decline, though, is nev­er so steep that it results in a decline in total income. You make more when you work more, thus reward­ing work, with­out the per­verse incen­tives and mas­sive gov­ern­ment bureau­cra­cy that char­ac­ter­ize exist­ing social pro­grams.

The IRS recent­ly esti­mat­ed that near­ly 28 mil­lion Amer­i­cans received more than $66 bil­lion in EITC pay­ments in 2013, lift­ing an esti­mat­ed 6.5 mil­lion peo­ple out of pover­ty, includ­ing 3.3 mil­lion chil­dren. While pro­grams that pro­vide food, hous­ing and med­ical ben­e­fits are cer­tain­ly impor­tant, the EITC is more effec­tive in help­ing peo­ple rise out of pover­ty. These exist­ing pro­grams should be rolled into an expand­ed EITC.
...

The IRS recent­ly esti­mat­ed that near­ly 28 mil­lion Amer­i­cans received more than $66 bil­lion in EITC pay­ments in 2013, lift­ing an esti­mat­ed 6.5 mil­lion peo­ple out of pover­ty, includ­ing 3.3 mil­lion chil­dren. While pro­grams that pro­vide food, hous­ing and med­ical ben­e­fits are cer­tain­ly impor­tant, the EITC is more effec­tive in help­ing peo­ple rise out of pover­ty. These exist­ing pro­grams should be rolled into an expand­ed EITC.

Replace all fed­er­al pro­grams that pro­vide food, hous­ing and med­ical ben­e­fits with an expand­ed EITC (that you only get with a job). That was pub­lished view of Trump’s first labor sec­re­tary. A view that makes defin­ing a very “loose” def­i­n­i­tion of the “unem­ployed” a require­ment because you can’t force peo­ple get­ting wel­fare ser­vices (like Med­ic­aid) to work for those ben­e­fits if they aren’t con­sid­ered “unem­ployed”.

Paul Ryan Gives Us Anoth­er Clue: His Long-Held GOP Agen­da

So how close­ly do Puzder’s views on these mat­ters match that of Paul Ryan’s? Well, the last time Ryan issued an pover­ty-pro­gram “reform” agen­da it was last year and the agen­da was just a vague set of goals that gave lit­tle idea of what he actu­al­ly intend­ed to do (it was a pres­i­den­tial elec­tion year) [28]. But we don’t need to guess what Ryan intends, since he’s been very clear when it’s not a pres­i­den­tial elec­tion year. Like he made clear in 2014 when he laid out a plan to fold all saftey-net pro­grams in one big pro­gram that would be block-grant­ed to states and sched­uled to slow­ly whith­er away and die as peo­ple were pushed onto and expand­ed EITC (with an implic­it work require­ment) [3]:

The Nation

Paul Ryan’s Wel­fare Reform Ideas Are Even Worse Than You Think

Ryan is ask­ing the poor to be more flex­i­ble in being oppressed.

By Michelle Chen
August 15, 2014

If you ask con­gres­sion­al con­ser­v­a­tives about their plan to revive the econ­o­my, you’re not like­ly to get a very detailed answer, since they tend to doubt that the gov­ern­ment is the solution—to a bad econ­o­my or any­thing else. But the neolib­er­al philoso­pher king of Capi­tol Hill, Rep­re­sen­ta­tive Paul Ryan, has rolled out a plan to reduce gov­ern­ment and reduce pover­ty simul­ta­ne­ous­ly. He calls it “Expand­ing Oppor­tu­ni­ty in America”—and he plans to do it by shrink­ing what’s left of the wel­fare state.

Under the ban­ner of “flex­i­bil­i­ty for account­abil­i­ty [29],” Ryan presents an agen­da that reflects “dereg­u­la­tion for depri­va­tion,” sys­tem­at­i­cal­ly reduc­ing pub­lic assis­tance in hopes of “incen­tiviz­ing” peo­ple to be some­how less poor. New research shows us that the plan would deep­en the dam­age already inflict­ed by eigh­teen years of reform­ing wel­fare out of exis­tence.

The cen­ter­piece of Ryan’s lat­est bud­get plan is the so-called “oppor­tu­ni­ty grant,” which con­sol­i­dates eleven fed­er­al pro­grams into a sin­gle chunk of fund­ing, includ­ing food stamps, sub­si­dized child­care, and hous­ing funds. This ulti­mate­ly forces wel­fare adm­nis­tra­tions to par­cel out mon­ey for, say, reha­bil­i­ta­tion pro­grams for peo­ple with dis­abil­i­ties, senior cen­ters and sub­si­dized day­care for tod­dlers, all from the same capped fis­cal pot, which in turn dilutes over­all fund­ing streams and under­cuts resources for direct­ly assist­ing the poor.

Pro­gres­sive crit­ics say that this for­mu­la has been tried before, with the 1996 wel­fare reform law [30] that gut­ted key pub­lic assis­tance pro­grams. Those mea­sures capped ben­e­fits and lumped pro­grams into a sin­gle pot of fund­ing, with dis­as­trous effects on the poor.

Ryan’s “oppor­tu­ni­ty grant,” as Bob and Bar­bara Drey­fuss report­ed ear­li­er [31], would impose the same aus­ter­i­ty two-step of cap­ping and con­sol­i­dat­ing. Fol­low­ing the “account­abil­i­ty” frame­work of the cur­rent wel­fare laws, Ryan’s “oppor­tu­ni­ty” pro­gram would impose strict require­ments on wel­fare recip­i­ents, which would humil­i­at­ing­ly micro­man­age their house­hold spend­ing work-relat­ed activites.

The pro­gram also pro­motes the Earned Income Tax Cred­it [32], which sub­si­dizes incomes through income tax refunds, as an alter­na­tive to direct cash ben­e­fits, sug­gest­ing that tax breaks are a form of assis­tance supe­ri­or to cash pay­ments.

At the heart of Ryan’s plan is an all-out assault on food stamps. Food stamps are a favorite tar­get for small-gov­ern­ment con­ser­v­a­tives because (1) they run the way a wel­fare pro­gram should—benefits expand based on people’s need, not the polit­i­cal whims of Capi­tol Hill; and (2) even though ben­e­fits are extreme­ly lean, only a few dol­lars per day, food sub­si­dies are extreme­ly effec­tive at reduc­ing poverty—so it’s the kind of wel­fare lib­er­tar­i­ans hate.

The restruc­tur­ing pro­posed in the Ryan Plan, accord­ing to an analy­sis by the CBPP [33], would direct­ly tar­get cru­cial (and frag­ile) pil­lars of the wel­fare state [34]: because about 80 per­cent of the Oppor­tu­ni­ty Grant goes toward food stamps and hous­ing assis­tance, “the cuts would almost cer­tain­ly reduce fam­i­lies’ access to these pro­grams, which are effec­tive at reduc­ing poverty—particularly deep pover­ty.

Although the 1996 wel­fare reforms were sup­posed to pro­mote self-sufficiency—and over­all pover­ty has fall­en by some measures—CBPP’s lon­gi­tu­di­nal analy­ses shows that “deep pover­ty” [35]—or liv­ing on less than rough­ly $8.50 per day—has actu­al­ly surged, par­tic­u­lar­ly among chil­dren. And accord­ing to new research by H. Luke Shae­fer and Kathryn Edin, pub­lished in Path­ways [36], the num­ber of house­holds sur­viv­ing in extreme pover­ty, or on less than about $2 per day, has more than dou­bled since the Clin­ton-era reforms were enact­ed.

Although all demo­graph­ics expe­ri­enced greater pover­ty and insta­bil­i­ty over a fif­teen-year peri­od, racial and gen­der dis­par­i­ties aggra­vate the effects. Extreme pover­ty shot up 186 per­cent among blacks, and 134 per­cent among whites. While house­holds head­ed by mar­ried cou­ples saw extreme pover­ty near­ly dou­ble, sin­gle-woman house­holds saw a stag­ger­ing 230 per­cent rise.

...

Today fund­ing for the Tem­po­rary Assis­tance for Needy Fam­i­lies Block Grant [37], the main source for cash assis­tance, man­aged joint­ly by states and Wash­ing­ton, is not only frozen but melt­ing away. TANF has seen much of its val­ue erode through infla­tion since 1996. Accord­ing to the CBPP, spend­ing on basic assis­tance declined in real dol­lars by 50 per­cent between 1997 and 2011.

Ryan’s plan, which embraces an elit­ist con­cept of flex­i­bil­i­ty by giv­ing more free­dom to employ­ers to pay work­ers as lit­tle as pos­si­ble and more free­dom to offi­cials to cut pub­lic spend­ing, encap­su­lates the free-mar­ket log­ic of empow­er­ing cap­i­tal through the unfree­dom of labor. The work­ing poor get to eat all the cake they can get. The hier­ar­chy of employ­ers over work­ers that the Ryan plan pro­motes reflects a pro­found mis­trust of, along with social dis­in­vest­ment from, those who already have the least pow­er over their eco­nom­ic lives.

In con­trast to Ryan’s rhetoric, numer­ous stud­ies show that when entrust­ed with the flex­i­bil­i­ty to spend cash assis­tance [38] how­ev­er they want, peo­ple gen­er­al­ly use it to fit their ratio­nal needs. These actu­al stud­ies, of course, defy the stereo­types [39] that the poor would rather splurge on friv­o­lous expens­es like cig­a­rettes and beer.

Plus, the dig­ni­ty of hav­ing con­trol over your life—something that chron­ic pover­ty tends to rob peo­ple of—is price­less. When the econ­o­my declines, Schae­fer explains, “cash sup­port offers a flex­i­bil­i­ty to recip­i­ents that is absolute­ly essen­tial if they want to suc­ceed in the labor force. Let’s say some­one los­es their job and can­not get unem­ploy­ment insur­ance (which is pret­ty com­mon among the work­ing poor). They need some amount of cash to use for the things that will help them find that next job (as long as the gov­ern­ment con­tin­ues to be unwill­ing to fund jobs of last resort)…. some amount of cash, imme­di­ate­ly avail­able when a cri­sis strikes, is cru­cial for peo­ple to pur­sue their self inter­est at the very bottom—and the lack of this is a gap in the cur­rent sys­tem.”

Ryan is ask­ing the poor to be more flex­i­ble in being oppressed—to seize the oppor­tu­ni­ty to sleep under the bridge of their choice. This ratio­nale presents the poor them­selves, not the social sys­tem of pover­ty, as the scourge the gov­ern­ment must get rid of. And as long as they’re wiped off the wel­fare rolls, they real­ly do dis­ap­pear, in a way. To many in Wash­ing­ton, they were nev­er vis­i­ble.

“If you ask con­gres­sion­al con­ser­v­a­tives about their plan to revive the econ­o­my, you’re not like­ly to get a very detailed answer, since they tend to doubt that the gov­ern­ment is the solution—to a bad econ­o­my or any­thing else. But the neolib­er­al philoso­pher king of Capi­tol Hill, Rep­re­sen­ta­tive Paul Ryan, has rolled out a plan to reduce gov­ern­ment and reduce pover­ty simul­ta­ne­ous­ly. He calls it “Expand­ing Oppor­tu­ni­ty in America”—and he plans to do it by shrink­ing what’s left of the wel­fare state.

Reduc­ing gov­ern­ment pro­grams and reduc­ing pover­ty simul­ta­ne­ous­ly. That’s the plan. Offi­cial­ly. Unof­fi­cial­ly the plan isn’t actu­al­ly about reduc­ing pover­ty, but that’s the sales pitch: if we just set bun­dle all wefare and safe­ty-net pro­grams into one big fed­er­al block-grant to states, and then set that block-grant on a sched­ule for slow (or fast) death, peo­ple will be incen­tivized to find work because their gov­ern­ment sup­port will be con­stant­ly shrink­ing and the EITC tax cred­it for low-wage work­ers increas­es:

...
The cen­ter­piece of Ryan’s lat­est bud­get plan is the so-called “oppor­tu­ni­ty grant,” which con­sol­i­dates eleven fed­er­al pro­grams into a sin­gle chunk of fund­ing, includ­ing food stamps, sub­si­dized child­care, and hous­ing funds. This ulti­mate­ly forces wel­fare adm­nis­tra­tions to par­cel out mon­ey for, say, reha­bil­i­ta­tion pro­grams for peo­ple with dis­abil­i­ties, senior cen­ters and sub­si­dized day­care for tod­dlers, all from the same capped fis­cal pot, which in turn dilutes over­all fund­ing streams and under­cuts resources for direct­ly assist­ing the poor.

Pro­gres­sive crit­ics say that this for­mu­la has been tried before, with the 1996 wel­fare reform law [30] that gut­ted key pub­lic assis­tance pro­grams. Those mea­sures capped ben­e­fits and lumped pro­grams into a sin­gle pot of fund­ing, with dis­as­trous effects on the poor.

Ryan’s “oppor­tu­ni­ty grant,” as Bob and Bar­bara Drey­fuss report­ed ear­li­er [31], would impose the same aus­ter­i­ty two-step of cap­ping and con­sol­i­dat­ing. Fol­low­ing the “account­abil­i­ty” frame­work of the cur­rent wel­fare laws, Ryan’s “oppor­tu­ni­ty” pro­gram would impose strict require­ments on wel­fare recip­i­ents, which would humil­i­at­ing­ly micro­man­age their house­hold spend­ing work-relat­ed activites.

The pro­gram also pro­motes the Earned Income Tax Cred­it [32], which sub­si­dizes incomes through income tax refunds, as an alter­na­tive to direct cash ben­e­fits, sug­gest­ing that tax breaks are a form of assis­tance supe­ri­or to cash pay­ments.
...

Are you too poor to afford food, shel­ter, and med­i­cine? Well, you bet­ter find a job at any wage at all and hope the expand­ed EITC cov­ers the cost of liv­ing. Lit­er­al­ly liv­ing. Have fun bar­gain­ing with the boss:

...
Ryan’s plan, which embraces an elit­ist con­cept of flex­i­bil­i­ty by giv­ing more free­dom to employ­ers to pay work­ers as lit­tle as pos­si­ble and more free­dom to offi­cials to cut pub­lic spend­ing, encap­su­lates the free-mar­ket log­ic of empow­er­ing cap­i­tal through the unfree­dom of labor. The work­ing poor get to eat all the cake they can get. The hier­ar­chy of employ­ers over work­ers that the Ryan plan pro­motes reflects a pro­found mis­trust of, along with social dis­in­vest­ment from, those who already have the least pow­er over their eco­nom­ic lives.
...

That’s the plan. And it’s a plan that requires a “loose” a def­i­n­i­tion of the unem­ployed as pos­si­ble. And even if you do have a job and are hop­ing that EITC gov­ern­ment wage sub­sidy will cov­er your costs of liv­ing, that EITC is going to have to be expand­ed dra­mat­i­cal­ly if the work­er poor of tomor­row aren’t going to be the work­ing deeply-poor [40]:

Cen­ter on Bud­get and Pol­i­cy Pri­or­i­ties

Com­men­tary: The EITC Works Very Well – But It’s Not a Safe­ty Net by Itself

March 26, 2014
by Sharon Par­rott

House Bud­get Com­mit­tee Chair­man Paul Ryan’s recent report on safe­ty net pro­grams right­ly praised the Earned Income Tax Cred­it (EITC) for reduc­ing pover­ty and pro­mot­ing work. But, Ryan’s report crit­i­cizes much of the rest of the safe­ty net. And, over the past sev­er­al years, Chair­man Ryan’s bud­get plans have tar­get­ed low-income pro­grams such as SNAP (for­mer­ly food stamps) and Med­ic­aid for extreme­ly deep cuts. While it’s heart­en­ing to hear Chair­man Ryan trum­pet the EITC’s suc­cess, pol­i­cy­mak­ers need to under­stand that the EITC alone can’t do what’s need­ed to ame­lio­rate pover­ty and hard­ship.

The EITC serves a spe­cif­ic role in our safe­ty net: eas­ing the tax­es and sup­ple­ment­ing the wages of low-income work­ing fam­i­lies. It pro­motes work by pro­vid­ing the most help to fam­i­lies with sig­nif­i­cant earn­ings. A sin­gle par­ent with two chil­dren, for exam­ple, must earn between $13,650 and $17,850 in 2014 to qual­i­fy for the max­i­mum cred­it. Those earn­ings are mod­est, to be sure, but most peo­ple in this earn­ings range work most of the year and work at least 30 hours per week when they have a job. In short, they have sig­nif­i­cant attach­ment to the labor force.

Here’s what the EITC (and its sib­ling the Child Tax Cred­it or CTC, which helps off­set the cost of rais­ing chil­dren) are not designed to do — and can­not do with­out oth­er safe­ty net pro­grams:

* Help peo­ple who are out of work or can’t work. The EITC and CTC are designed to help fam­i­lies with at least mod­est earn­ings. But, some peo­ple don’t have jobs, par­tic­u­lar­ly in a weak econ­o­my, or have long peri­ods of unem­ploy­ment dur­ing a year. Oth­ers can’t work due to ill­ness or dis­abil­i­ty or the need to care for an ill or dis­abled child. Still oth­ers can’t work because they have young chil­dren and can’t earn enough to afford child care.

With­out pro­grams such as SNAP, Sup­ple­men­tal Secu­ri­ty Income (SSI), and Med­ic­aid, peo­ple in these fam­i­lies, includ­ing mil­lions of chil­dren, couldn’t put food on the table, keep a roof over their head, and get need­ed health care. Help­ing them isn’t only the right thing to do — it’s also an invest­ment in chil­dren. Research shows that basic assis­tance to chil­dren not only reduces short-term hard­ship but also improves their aca­d­e­m­ic per­for­mance and long-term prospects. And, Med­ic­aid cov­er­age enables chil­dren to receive pre­ven­tive care as well as treat­ment for every­thing from ear infec­tions to can­cer.

* Keep peo­ple out of “deep pover­ty.” Because the EITC and CTC aren’t tar­get­ed to the very poor­est fam­i­lies, they don’t do much to keep peo­ple out of deep pover­ty, or above half the pover­ty line. Over­all, the EITC and CTC plus oth­er pro­grams tar­get­ed on low-income indi­vid­u­als — such as SNAP, SSI, and Tem­po­rary Assis­tance for Needy Fam­i­lies — kept an esti­mat­ed 15 to 20 mil­lion peo­ple above halfthe pover­ty line (about $11,000 for a fam­i­ly of three) in 2010. (That esti­mate is based on the fed­er­al Sup­ple­men­tal Pover­ty Mea­sure, which most ana­lysts favor. The upper end of the range reflects esti­mates based on Urban Insti­tute data that cor­rect for the under­re­port­ing of gov­ern­ment ben­e­fits.) Rough­ly 70 to 80 per­cent of these peo­ple would have remained in deep pover­ty if the EITC and CTC were the only forms of income-test­ed assis­tance for very poor fam­i­lies (see Fig­ure 1).

...

* Help fam­i­lies get health care. The aver­age EITC ben­e­fit for fam­i­lies with chil­dren was $2,254 in 2011 — not enough to buy health insur­ance for a fam­i­ly or pay health care bills when some­one gets sick or needs expen­sive med­ica­tions. The pro­grams designed to help low-income peo­ple get decent health care are Med­ic­aid, the Children’s Health Insur­ance Pro­gram, and sub­si­dies to buy pri­vate cov­er­age through health reform’s new mar­ket­places, not the EITC.

* Help fam­i­lies on a month­ly basis. Recip­i­ents get their EITC and CTC for the year in one lump sum when they file their income tax return. That works fine for many work­ing fam­i­lies, help­ing them save for larg­er expens­es and bud­get for the com­ing year, but poor­er fam­i­lies and fam­i­lies whose incomes drop sharply due to a mid-year job loss need help dur­ing the year. And, for fam­i­lies that need sig­nif­i­cant help with large month­ly expens­es — such as putting gro­ceries on the table and pay­ing high rent or child care costs — month­ly assis­tance pro­grams are often a bet­ter fit. If a new moth­er needs help pay­ing for child care to go back to work, for exam­ple, a tax cred­it that she needs earn­ings to qual­i­fy for and doesn’t arrive until she files her tax return the fol­low­ing win­ter or spring isn’t going to help her get back to work.

* Serve as an auto­mat­ic sta­bi­liz­er for the econ­o­my in reces­sions. Pro­grams like unem­ploy­ment insur­ance, SNAP, and Med­ic­aid auto­mat­i­cal­ly expand dur­ing reces­sions when more peo­ple lose their jobs and need help. Since the EITC only goes to peo­ple who work, in con­trast, it doesn’t help those who are out of work through­out the year. And, for peo­ple who still have earn­ings but whose earn­ings shrink dur­ing a down­turn, the EITC ris­es for some, but falls for oth­ers. A recent study found that the EITC is only weak­ly counter-cycli­cal — that is, it expands only a small amount over­all when unem­ploy­ment rises.[1] For sin­gle-par­ent fam­i­lies, the largest group of EITC recip­i­ents, the study found “no evi­dence that the EITC sta­bi­lizes income” over­all as unem­ploy­ment ris­es. By con­trast, oth­er pro­grams such as unem­ploy­ment insur­ance and SNAP are far more respon­sive to increas­es in unem­ploy­ment, accord­ing to the study.

The bot­tom line? The EITC is a crit­i­cal­ly impor­tant and high­ly effec­tive part of the safe­ty net, but it can’t — and wasn’t meant to — stand alone as our answer to pover­ty.

...

“The EITC and CTC are designed to help fam­i­lies with at least mod­est earn­ings. But, some peo­ple don’t have jobs, par­tic­u­lar­ly in a weak econ­o­my, or have long peri­ods of unem­ploy­ment dur­ing a year. Oth­ers can’t work due to ill­ness or dis­abil­i­ty or the need to care for an ill or dis­abled child. Still oth­ers can’t work because they have young chil­dren and can’t earn enough to afford child care.”

Can’t afford to eat? Well, you bet­ter find a job, any job, if you want to eat in the Amer­i­ca Paul Ryan and Don­ald Trump want to make. And if the econ­o­my sucks that’s tough so you bet­ter not com­plain about your work­ing con­di­tions.

And if you think that this agen­da is just going to impact low-income work­ers (and you’re sick enough not to care about their plight), keep in mind that the cre­at­ing a sea of mil­lions des­per­ate work­ers who will work at just about any wage under any con­di­tions just to get enough gov­ern­ment assis­tance for basic food and shel­ter is a recipe for drag­ging down wages every­where but the top. Imag­ine all the peo­ple who aren’t cur­rent­ly work­ing and aren’t look­ing for work for what­ev­er rea­son — maybe they can’t find any jobs that aren’t pay­ing pover­ty wages or maybe they have phys­i­cal or men­tal health issues that make employ­ment dif­fi­cult but don’t entire­ly pre­vent them from work­ing — and now imag­ine them being forced to take any job at all at any wage just to get the most basic gov­ern­ment assis­tance. How is that going to do any­thing oth­er than dri­ve down wages?

And What About the Poor Retirees. They’ll Might Need to Work For Thi­er Gov­ern­ment Pit­tance Too

Now, so far, all the pro­posed changes to the “offi­cial” unem­ploy­ment rate and how that ties into the broad­er agen­da to replace the safe­ty-net with a work-require­ment and an inad­e­quate gov­ern­ment check haven’t involved pro­grams for retirees. But don’t for­get that in addi­tion to the block grant­i­ng of Med­ic­aid — with the idea of steadi­ly shrink­ing it to death which is already part of Paul Ryan’s Oba­macare replace­ment pro­pos­al [41]Paul Ryan and the GOP has also cham­pi­oned a sim­i­lar idea for retirees: voucher­iz­ing Medicare [42]. And ensur­ing those vouch­ers shrink­ing every year while the eli­gi­bil­i­ty age is steadi­ly ratch­eted up. And if you’re a poor retiree who can’t afford health insur­ance with your future Medicare vouch­er, there’s also the option of bank­rupt­ing your­self and going on Medicaid...which just might include a work-require­ment to receive after it gets block-grant­ed if you par­tic­u­lar state decides to imple­ment a Med­ic­aid work require­ment that includes seniors. This is all on the agen­da even if Paul Ryan, Trump, and the rest of the GOP don’t want you to know it [4]:

The Huff­in­g­ton Post

Not Just Oba­macare: Med­ic­aid, Medicare Also On GOP’s Chop­ping Block
The health care safe­ty net as we know it could be bound for extinc­tion.

By Jonathan Cohn , Jef­frey Young
11/15/2016 11:50 am ET | Updat­ed Nov 15, 2016

Don­ald Trump and Repub­li­can lead­ers in Con­gress have made clear they are seri­ous about repeal­ing Oba­macare, and doing so quick­ly. But don’t assume their dis­man­tling of gov­ern­ment health insur­ance pro­grams will stop there.

For about two decades now, Repub­li­cans have been talk­ing about rad­i­cal­ly chang­ing the government’s two largest health insur­ance pro­grams, Med­ic­aid and Medicare.

The goal with Med­ic­aid is to turn the pro­gram almost entire­ly over to the states, but with less mon­ey to run it. The goal with Medicare is to con­vert it from a gov­ern­ment-run insur­ance pro­gram into a vouch­er sys­tem — while, once again, reduc­ing the mon­ey that goes into the pro­gram.

House Speak­er Paul Ryan (R‑Wis.) has cham­pi­oned these ideas for years. Trump has not. In fact, in a 2015 inter­view [43] his cam­paign web­site high­light­ed, he vowed that “I’m not going to cut Medicare or Med­ic­aid.” But the health care agen­da on Trump’s tran­si­tion web­site, which went live Thurs­day, vows [44] to “mod­ern­ize Medicare” and allow more “flex­i­bil­i­ty” for Med­ic­aid.

In Wash­ing­ton, those are euphemisms for pre­cise­ly the kind of Medicare and Med­ic­aid plans Ryan has long envi­sioned. And while it’s nev­er clear [45] what Trump real­ly thinks or how he’ll act, it sure looks like both he and con­gres­sion­al Repub­li­cans are out to undo Lyn­don Johnson’s health care lega­cy, not just Barack Obama’s.

Of course, when­ev­er Trump or Repub­li­cans talk about dis­man­tling exist­ing gov­ern­ment pro­grams, they insist they will replace them with some­thing bet­ter — imply­ing that the peo­ple who depend on those pro­grams now won’t be worse off.

But Repub­li­cans are not try­ing to repli­cate what Med­ic­aid, Medicare and the Afford­able Care Act do now. Nor are they try­ing to main­tain the cur­rent, his­tor­i­cal­ly high [46] lev­el of health cov­er­age nation­wide that these pro­grams have pro­duced. Their goal is to slash gov­ern­ment spend­ing on health care and to peel back reg­u­la­tions on parts of the health care indus­try, par­tic­u­lar­ly insur­ers.

This would mean low­er tax­es, and an insur­ance mar­ket that oper­ates with less gov­ern­ment inter­fer­ence. It would also reduce how many peo­ple get help pay­ing for health cov­er­age, and make it so that those who con­tin­ue to receive gov­ern­ment-spon­sored health ben­e­fits will get less help than they do now.

It’s dif­fi­cult to be pre­cise about the real-world effects, because the Repub­li­can plans for replac­ing exist­ing gov­ern­ment insur­ance pro­grams remain so unde­fined. Ryan’s “A Bet­ter Way” pro­pos­al [47] is a broad, 37-page out­line [48] with­out dol­lar fig­ures, and Sen­ate Repub­li­can lead­ers have nev­er pro­duced an actu­al Oba­macare “replace­ment” plan.

But the Repub­li­can plans [49] in cir­cu­la­tion, along with the vague — and shift­ing — health care prin­ci­ples Trump endorsed dur­ing the cam­paign, have com­mon themes. And from those it’s pos­si­ble to glean a big-pic­ture idea of what a ful­ly real­ized ver­sion of the Repub­li­can health care agen­da would mean.

...

Med­ic­aid

As of August, 73 mil­lion Amer­i­cans [50] had ben­e­fits from Med­ic­aid or the Children’s Health Insur­ance Pro­gram, accord­ing to the Cen­ters for Medicare and Med­ic­aid Ser­vices, which doesn’t break up the num­bers for the two pro­grams. All but around 16 mil­lion [50] of them are cov­ered by pre-Oba­macare rules, but all Med­ic­aid ben­e­fi­cia­ries stand to be affect­ed by the GOP’s plans.

Until the Afford­able Care Act, work­ing-age adults with­out dis­abil­i­ties were inel­i­gi­ble for this ben­e­fit [51] in most cas­es, with some excep­tions, includ­ing low-income preg­nant women and very poor par­ents [51] of chil­dren who qual­i­fied for Med­ic­aid or CHIP.

As an enti­tle­ment like Medicare and Social Secu­ri­ty, Med­ic­aid gets how­ev­er much mon­ey [52] it takes to cov­er the med­ical expens­es for every­one enrolled.

Over a 10-year time peri­od, the Med­ic­aid plan the House Bud­get Com­mit­tee approved [53] this year would reduce fed­er­al spend­ing on the pro­gram by about one-third, or rough­ly $1 tril­lion [54], not even count­ing the effects of repeal­ing Obamacare’s expan­sion of the pro­gram, accord­ing to the Cen­ter on Bud­get and Pol­i­cy Pri­or­i­ties.

Repeal­ing the Afford­able Care Act and its Med­ic­aid expan­sion ful­ly would elim­i­nate the cov­er­age for the rough­ly 16 mil­lion peo­ple [50] the Cen­ters for Medicare and Med­ic­aid Ser­vices reports have enrolled under this pol­i­cy.

The fed­er­al gov­ern­ment paid for 62 per­cent [55] of the $532 bil­lion [56] in Med­ic­aid expen­di­tures in fis­cal year 2015, the most recent year for which such a break­down is avail­able. In 25 states [57], the fed­er­al share of spend­ing is high­er still [55], so even states that may want to main­tain today’s Med­ic­aid ben­e­fits would find it extreme­ly dif­fi­cult, if not impos­si­ble [58], to replace the fed­er­al dol­lars that would dis­ap­pear under GOP pro­pos­als.

One result could be 25 mil­lion few­er [59] Med­ic­aid ben­e­fi­cia­ries, accord­ing to the RAND Corp.’s analy­sis of Trump’s plans.

Trump and oth­er Repub­li­cans have long pro­mot­ed “flex­i­bil­i­ty” that would enable states, which joint­ly finance and man­age Med­ic­aid with the fed­er­al gov­ern­ment, to alter the pro­gram.

While this may seem on its face like sim­ple fed­er­al­ism, the pur­pose is not to allow states to cov­er as many peo­ple as they do now in dif­fer­ent ways, but to sig­nif­i­cant­ly reduce fed­er­al spend­ing on Med­ic­aid and to per­mit states to cut back on who can receive Med­ic­aid cov­er­age and what kind of ben­e­fits they have.

Ryan’s lat­est ver­sion [47] of this 35-year-old idea [60] would estab­lish either “block grants” to states — that is, a flat amount of mon­ey each state would get from the fed­er­al gov­ern­ment each year to spend on Med­ic­aid as they like — or “per capi­ta allot­ment” — mean­ing a flat amount of mon­ey for each per­son enrolled. These approach­es would dif­fer [61] in terms of how much mon­ey states would receive year­ly and how much the fund­ing would increase from year to year.

In any case, the fund­ing wouldn’t be high enough to main­tain cur­rent cov­er­age, inevitably lead­ing to mil­lions of cur­rent­ly cov­ered indi­vid­u­als los­ing their ben­e­fits. And the financ­ing would grow at a slow­er rate than health care costs, por­tend­ing more lost cov­er­age over time. For those who remain on Med­ic­aid, Ryan would per­mit states to charge them month­ly pre­mi­ums and add oth­er strings [48], such as a work require­ment.

...

Medicare

The Medicare revamp [62] in “A Bet­ter Way” would result in whole­sale changes [63] to the enti­tle­ment — ones that would real­ize Ryan’s long-term goal of pri­va­tiz­ing [64] the pro­gram.

Today, most of the 55 mil­lion Medicare ben­e­fi­cia­ries enroll in the tra­di­tion­al, gov­ern­ment-run pro­gram and then buy pri­vate sup­ple­men­tal insur­ance to cov­er remain­ing out-of-pock­et costs. A siz­able minor­i­ty opts to buy pri­vate insur­ance plans, through the Medicare Advan­tage pro­gram. The gov­ern­ment reg­u­lates these plans tight­ly, to make sure they pro­vide cov­er­age at least as gen­er­ous as the tra­di­tion­al Medicare pro­gram does.

Ryan would replace [65] this arrange­ment with a “pre­mi­um sup­port [66]” sys­tem, under which each senior would get an allot­ment of mon­ey — a vouch­er, in oth­er words — he can use to get insur­ance. When Ryan intro­duced the first for­mal ver­sion of his pro­pos­al, in 2010 [67], he envi­sioned end­ing the tra­di­tion­al gov­ern­ment pro­gram alto­geth­er. Now he says it should con­tin­ue to exist along­side the pri­vate plans, com­pet­ing with them for busi­ness..

What would this mean for ben­e­fi­cia­ries? A great deal would depend on details Ryan has yet to pro­vide, par­tic­u­lar­ly when it comes to the val­ue of that vouch­er — and how quick­ly it would increase every year — com­pared to the cost of the insur­ance. But the whole point of the sys­tem is to ratch­et down the val­ue of the vouch­ers over time.

That would reduce spend­ing on Medicare, which Ryan always says is a goal, and some seniors would like­ly end up sav­ing mon­ey, because they could eas­i­ly switch to cheap­er plans. The ques­tion would be what hap­pens to every­body else. With­out ade­quate reg­u­la­tion [66] of ben­e­fits and oth­er safe­guards tai­lored to the spe­cial needs of an old­er, fre­quent­ly impaired pop­u­la­tion of seniors, the con­se­quence of mov­ing to pre­mi­um sup­port could be high­er costs for indi­vid­ual seniors who have seri­ous health prob­lems — with low-income seniors feel­ing it most intense­ly.

If at the same time Repub­li­cans shrink Med­ic­aid, those seniors will suf­fer even more, since today the poor­est seniors can use the pro­gram to pay for what­ev­er med­ical bills Medicare does not.

Ryan promis­es that the pro­pos­al would not affect seniors who are 55 or old­er, since the new sys­tem wouldn’t begin oper­at­ing for 10 years. But real­is­ti­cal­ly the entire Medicare pro­gram would change once pre­mi­um sup­port took effect — pri­vate plans would almost cer­tain­ly find ways to pick off the health­i­est seniors, for instance — and, at best, the dam­age would sim­ply take longer to play out.

Ryan’s Medicare scheme includes one oth­er ele­ment — a pro­vi­sion to raise the eli­gi­bil­i­ty age [68] grad­u­al­ly, so that seniors would even­tu­al­ly enroll at 67, rather than 65. Par­tic­u­lar­ly in a world in which the Afford­able Care Act no longer exists, 65- and 66-year-olds search­ing for pri­vate cov­er­age would find it hard­er to obtain, more expen­sive and less gen­er­ous than what they’d get from Medicare today.

The end result would almost sure­ly be high­er out-of-pock­et costs for those younger seniors — and a sig­nif­i­cant num­ber of them, maybe into the mil­lions, with no insur­ance at all.

“But Repub­li­cans are not try­ing to repli­cate what Med­ic­aid, Medicare and the Afford­able Care Act do now. Nor are they try­ing to main­tain the cur­rent, his­tor­i­cal­ly high [46] lev­el of health cov­er­age nation­wide that these pro­grams have pro­duced. Their goal is to slash gov­ern­ment spend­ing on health care and to peel back reg­u­la­tions on parts of the health care indus­try, par­tic­u­lar­ly insur­ers.”

Yep, the goal isn’t “repeal and replace” Oba­macare as Repub­li­cans made their ral­ly­ing cry. The goal is “repeal all enti­tle­ments and replace them with some­thing steadi­ly cheap­er”. That’s it. That’s the goal. And that means things like turn­ing Medicare into a steadi­ly shrink­ing vouch­er and con­vert­ing Med­ic­aid into steadi­ly-shrink­ing block grants that can include things like work-require­ments:

...
Ryan’s lat­est ver­sion [47] of this 35-year-old idea [60] would estab­lish either “block grants” to states — that is, a flat amount of mon­ey each state would get from the fed­er­al gov­ern­ment each year to spend on Med­ic­aid as they like — or “per capi­ta allot­ment” — mean­ing a flat amount of mon­ey for each per­son enrolled. These approach­es would dif­fer [61] in terms of how much mon­ey states would receive year­ly and how much the fund­ing would increase from year to year.

In any case, the fund­ing wouldn’t be high enough to main­tain cur­rent cov­er­age, inevitably lead­ing to mil­lions of cur­rent­ly cov­ered indi­vid­u­als los­ing their ben­e­fits. And the financ­ing would grow at a slow­er rate than health care costs, por­tend­ing more lost cov­er­age over time. For those who remain on Med­ic­aid, Ryan would per­mit states to charge them month­ly pre­mi­ums and add oth­er strings [48], such as a work require­ment.
...

Today, most of the 55 mil­lion Medicare ben­e­fi­cia­ries enroll in the tra­di­tion­al, gov­ern­ment-run pro­gram and then buy pri­vate sup­ple­men­tal insur­ance to cov­er remain­ing out-of-pock­et costs. A siz­able minor­i­ty opts to buy pri­vate insur­ance plans, through the Medicare Advan­tage pro­gram. The gov­ern­ment reg­u­lates these plans tight­ly, to make sure they pro­vide cov­er­age at least as gen­er­ous as the tra­di­tion­al Medicare pro­gram does.

>Ryan would replace [65] this arrange­ment with a “pre­mi­um sup­port [66]” sys­tem, under which each senior would get an allot­ment of mon­ey — a vouch­er, in oth­er words — he can use to get insur­ance. When Ryan intro­duced the first for­mal ver­sion of his pro­pos­al, in 2010 [67], he envi­sioned end­ing the tra­di­tion­al gov­ern­ment pro­gram alto­geth­er. Now he says it should con­tin­ue to exist along­side the pri­vate plans, com­pet­ing with them for busi­ness..

What would this mean for ben­e­fi­cia­ries? A great deal would depend on details Ryan has yet to pro­vide, par­tic­u­lar­ly when it comes to the val­ue of that vouch­er — and how quick­ly it would increase every year — com­pared to the cost of the insur­ance. But the whole point of the sys­tem is to ratch­et down the val­ue of the vouch­ers over time.
...
If at the same time Repub­li­cans shrink Med­ic­aid, those seniors will suf­fer even more, since today the poor­est seniors can use the pro­gram to pay for what­ev­er med­ical bills Medicare does not.
...

Shrink­ing Medicare by push­ing health care costs onto seniors, which will push more seniors onto Med­ic­aid, whil simul­ta­ne­ous­ly shrink­ing Med­ic­aid and giv­ing states the option cre­at­ing things like work-require­ments to get it. That’s the plan. And while Pres­i­dent Trump has­n’t for­mal­ly agreed to that plan, don’t for­get that his “94 mil­lion out of the labor force” com­ments that he repeat­ed­ly made implic­it­ly assumes that all retirees are poten­tial employ­ees.

And then there’s the fact that pri­va­tiz­ing (and cut­ting) Social Secu­ri­ty is very much part of the GOP/Ryan agen­da too [69].
:

Forbes

Why Social Secu­ri­ty Cuts Are Still In GOP Agen­da

John Wasik
Mar 10, 2017 @ 09:19 AM

Despite what Pres­i­dent-elect Trump says, Social Secu­ri­ty cuts are still very much on the table. His Sec­re­tary for the Depart­ment of Health and Human Ser­vices — Rep. Tom Price (R‑Georgia) — filed leg­is­la­tion last year to trim the pro­gram’s ben­e­fits. And I sus­pect it’s still on his radar screen.

Price’s strat­e­gy was to bury Social Secu­ri­ty “reform” inside of a a mas­sive bud­get bill [70], so the issue would­n’t nec­es­sary receive a sep­a­rate hear­ing in Con­gress. Price was chair­man of the pow­er­ful House Bud­get Com­mit­tee in the last Con­gress.

The con­ser­v­a­tive Geor­gia doc­tor has long been a pro­po­nent of major cut­backs to Social Secu­ri­ty, Medicare, Med­ic­aid and Oba­macare. In a speech before the con­ser­v­a­tive group Her­itage Action for Amer­i­ca on Jan­u­ary 12, 2015, Price told the group [71] about his plans for Social Secu­ri­ty:

“This is a pro­gram that right now on its cur­rent course will not be able to pro­vide 75 or 80 per­cent of the ben­e­fits that indi­vid­u­als have paid into in a rel­a­tive­ly short peri­od of time. That’s not a respon­si­ble posi­tion to say, ‘You don’t need to do any­thing to do it.’

So all the kinds of things you know about – whether it’s means test­ing, whether it’s increas­ing the age of eli­gi­bil­i­ty. The kind of choic­es — whether it’s pro­vid­ing much greater choic­es for indi­vid­u­als to vol­un­tar­i­ly select the kind of man­ner in which they believe they ought to be able to invest their work­ing dol­lars as they go through their life­time. All those things ought to be on the table and dis­cussed.”

None of these ideas are new and have been float­ed by Repub­li­cans such as Paul Ryan, speak­er of the house, and con­ser­v­a­tive think tanks for years. But the word Price does­n’t use — pri­va­ti­za­tion — is still very much on the GOP agen­da for Social Secu­ri­ty and Medicare.

Even worse, Price used false infor­ma­tion as a scare tac­tic to pro­vide polit­i­cal cov­er to carve up the pro­gram. Social Secu­ri­ty is not in any dan­ger of not being able to pro­vide “75 or 80 per­cent of ben­e­fits in a short peri­od of time.”

Accord­ing to the non-par­ti­san Con­gres­sion­al Bud­get Office [72] (CBO), the Social Secu­ri­ty trust fund that serves as a kit­ty for retirees, will be forced to reduce ben­e­fits in 2030. And that’s only if Con­gress does noth­ing to boost fund­ing of the sys­tem.

That means that only com­plete inac­tion by Con­gress will dri­ve the trust fund bal­ances to zero. Even then, Social Secu­ri­ty will still pay ben­e­fits.

By 2030, “the Social Secu­ri­ty Admin­is­tra­tion would no longer be per­mit­ted to pay full ben­e­fits when they were due,” with future ben­e­fits by annu­al income, the CBO report said. At most, ben­e­fits would like­ly be cut by 29%.

Pres­i­dent-elect Trump has said on the cam­paign trail that he would­n’t touch Social Secu­ri­ty or Medicare, but he’s clear­ly at odds with his par­ty, which has want­ed to trim or pri­va­tize Social Secu­ri­ty and Medicare for more than a decade.

...

“None of these ideas are new and have been float­ed by Repub­li­cans such as Paul Ryan, speak­er of the house, and con­ser­v­a­tive think tanks for years. But the word Price does­n’t use — pri­va­ti­za­tion — is still very much on the GOP agen­da for Social Secu­ri­ty and Medicare.”

Pri­va­ti­za­tion, the word that GOP­ers always think about but dare not speak. But they sure love propos­ing it:

...
So all the kinds of things you know about – whether it’s means test­ing, whether it’s increas­ing the age of eli­gi­bil­i­ty. The kind of choic­es — whether it’s pro­vid­ing much greater choic­es for indi­vid­u­als to vol­un­tar­i­ly select the kind of man­ner in which they believe they ought to be able to invest their work­ing dol­lars as they go through their life­time. All those things ought to be on the table and dis­cussed.”
...

Those were the words of Tom Price, Trump’s choice for Sec­re­tary of Health and Human Ser­vices and the House GOP’s long-time point man on gut­ting enti­tle­ments. And what those word describe is a Social Secu­ri­ty pri­va­ti­za­tion option even if he does­n’t use the word “pri­va­ti­za­tion”. But that’s what it is, even if it’s not the full pri­va­ti­za­tion of Social Secu­ri­ty and mere­ly a pri­vate option. That’s how pri­va­ti­za­tion is sup­posed to work under the Paul Ryan agen­da: start with the option to have your social secu­ri­ty tax­es go into a Wall Street-run pri­vate fund, and then steadi­ly shrink the defined ben­e­fits of the tra­di­tion­al pro­gram.

And don’t for­get that when you move peo­ple away from a defined ben­e­fit sys­tem — the way social secu­ri­ty oper­ates today — and towards a defined con­tri­bu­tion option — which is how the pri­vate option would work — that is a plan allow peo­ple to make real­ly bad invest­ments when they’re young and have almost noth­ing left in that Social Secu­ri­ty pri­vate per­son­al account when they hit retire­ment age. And if ther’s a mas­sive finan­cial cri­sis, a whole gen­er­a­tion of retirees or near-retirees could see their Social Secu­ri­ty accounts wiped out. Which means the pri­va­tion of Social Secu­ri­ty is a recipe for push­ing seniors onto Med­ic­aid because they will be poor enough to qual­i­fy. And, again, Med­ic­aid in the future just might require work require­ments. Maybe for peo­ple over 65 if that’s allowed. Or 67. Or what­ev­er the retire­ment age ends up being in the future.

So, once again, when Don­ald Trum­np repeat­ed­ly refers to a 42 per­cent unem­ploy­ment rate and 94 mil­lion peo­ple being out of the labor force it’s not incon­ceiv­able that he’s inten­tion­al­ly fram­ing the unem­ploy­ment def­i­n­i­tion required for a “Ryan” vision of the future where every­one needs to work for gov­ern­ment assis­tance. Includ­ing the elder­ly.

Yes, Trump Thinks We’re Stu­pid. Or Has Demen­tia

Of course, now that Don­ald Trump embrace the 4.7 per­cent unem­ploy­ment rate it unclear what to think about what Trump actu­al­ly thinks when it comes to the verac­i­ty of past and present unem­ploy­ment rates. Espe­cial­ly after Don­ald Trump had Sean Spicer deliv­er to the press a mys­te­ri­ous tragi­com­ic mes­sage: “I talked to the pres­i­dent pri­or to this, and he said to quote him very clear­ly: ‘They may have been pho­ny in the past, but it’s very real now.’ ” [6]:

The Wash­ing­ton Post

19 times Trump called jobs num­bers ‘fake’ before they made him look good

By Christo­pher Ingra­ham
March 10, 2017 at 4:49 PM

We may assume Pres­i­dent Trump is quite pleased with the strong jobs report [73] from his first full month in office: He retweet­ed [74] the Drudge Report’s tri­umphant “GREAT AGAIN” fram­ing of the num­bers Fri­day morn­ing, after tout­ing employ­ment fig­ures [75] released by pay­roll firm ADP ear­li­er in the week.

Not so long ago, how­ev­er, Trump’s view of the month­ly jobs report, which comes cour­tesy of the non­par­ti­san fed­er­al Bureau of Labor Sta­tis­tics, was marked­ly dif­fer­ent. As recent­ly as Decem­ber [76], he described the report as “total­ly fic­tion.”

If there was any argu­ment over whether Trump was flip-flop­ping on the jobs report at the pre­cise moment it reflect­ed pos­i­tive­ly on him, White House press sec­re­tary Sean Spicer laid it to rest Fri­day after­noon, telling reporters: “I talked to the pres­i­dent pri­or to this, and he said to quote him very clear­ly: ‘They may have been pho­ny in the past, but it’s very real now.’ ”

...

“If there was any argu­ment over whether Trump was flip-flop­ping on the jobs report at the pre­cise moment it reflect­ed pos­i­tive­ly on him, White House press sec­re­tary Sean Spicer laid it to rest Fri­day after­noon, telling reporters: “I talked to the pres­i­dent pri­or to this, and he said to quote him very clear­ly: ‘They may have been pho­ny in the past, but it’s very real now.’ ””

“I talked to the pres­i­dent pri­or to this, and he said to quote him very clear­ly: ‘They may have been pho­ny in the past, but it’s very real now.’ ” WTF. Is he trolling us? Because Trump is either sug­gest­ing that the unem­ploy­ment rate dropped from 42 per­cent to 4.7 per­cent in the first month, which would indeed be pret­ty impres­sive, or he thinks that the entire world is stu­pid. Demen­tia per­haps? Only Trump knows. Unless it’s demen­tia in which case maybe not.

But some­thing very weird and very omi­nous is going on with Trump and the unem­ploy­ment rate. It’s pos­si­ble the Trum­np admin­is­tra­tion is mere­ly going to shift the “offi­cial” rate from the “U‑3” to “U‑5” rate the way Steve Mnuchin rec­om­mend­ed expand it to include every­one who would like to find work, even the long-term unem­ployed who are so dis­cour­aged they’ve stopped look­ing.

But when we look at all the clues avail­able it’s becom­ing increas­ing­ly clear that Don­ald Trump’s repeat­ed ref­er­ences to a 42 per­cent unem­ploy­ment rate with 94 mil­lion Amer­i­cans out of the labor force isn’t demen­tia. It’s lay­ing the rhetor­i­cal ground­work to rede­fine who is con­sid­ered “unem­ployed” in order to lay down the con­cep­tu­al ground­work required to replace the US safe­ty-net with a “work for a pit­tance to receive a gov­ern­ment pit­tance” safe­ty-net. And includ­ing retirees in that poten­tial work­force. That’s where all the clues are point­ing.

Although when you con­sid­er that in imple­ment­ing this agen­da Don­ald Trump is basi­cal­ly set­ting him­self up to be Paul Ryan’s ghoul­ish and super-vil­lain stand-in who will be loathed for gen­er­a­tions to comes. As con­ser­v­a­tive colum­nist Rei­han Salam recent­ly wrote in Slate, if Don­ald Trump lis­tens to Paul Ryan he’s com­mit­ting polit­i­cal sui­cide [77]. And it’s hard to see why Salam isn’t cor­rect. What Paul Ryan and the GOP want to do — make almost all poor Amer­i­can adults a new serfs-for-wel­fare class of des­per­ate low-wage employ­ees — is beyond cru­el and just bad pol­i­cy that’s going to end up harm­ing the entire econ­o­my and make liv­ing in Amer­i­ca that much more stress­ful for almost every­one. The idea of los­ing your job in Amer­i­ca is already scary enough. It’s about to become ter­ri­fy­ing. And Don­ald Trump, when he used that “94 mil­lion Amer­i­cans out of the labor force” line dur­ing his first address to Con­gress, gave a very strong indi­ca­tion that he’s will­ing to lead Amer­i­ca into Paul Ryan’s vision of the future. As his pol­i­cy agen­da unfolds and becomes more and more aligned with the Paul Ryan ‘granny starv­er’ agen­da that real­ly does appear to be Trump’s plan . And Trump increas­ing­ly appears will­ing to take the bulk of the pub­lic blame for mak­ing it a real­i­ty. So while it’s unclear what exact­ly Trump meant when he had his spokesper­son troll the world, you know, maybe it real­ly is demen­tia [7].