Casey Mulligan Reads the Bill
Casey has gone and done it again and I learn something new about James Tobin.
His solution was radical: he actually read the bills. Mulligan printed out the relevant section of one highly touted Medicare for All bill and carried it around so that he could disabuse fellow Trump administration officials who thought he exaggerated. One person who listened was Donald Trump. When Trump publicly claimed that Medicare for All would ban private insurance, CNN’s White House correspondent attacked him for lying. But Trump kept it up and by January 2019, CNN, without apologizing, acknowledged the fact. Indeed, notes Mulligan, CNN even asked candidates for the Democratic presidential nomination about the prohibition.
This is an excerpt from David R. Henderson, “Economic Savvy in the White House,” Defining Ideas, October 8, 2020. It’s my review of economist Casey B. Mulligan’s book You’re Hired: Untold Successes and Failures of a Populist President.
It turns out that Casey has done it again. He actually read every page of the $3.5 trillion, 2,465 page budget bill before Congress. And, as comes out in this 45-minute interview he did with Hoover’s John Cochrane, he paid particular attention to incentives and disincentives within the bill.
Some highlights follow with approximate times.
9:45: The biggest item in the bill is the expansion of ObamaCare along with increased disincentive to work.
10:40: Cochrane makes the point that the limit on rent for subsidized housing of 30% of income makes for an implicit 30-percent tax on each additional dollar of income for those who are rent-subsidized. (That’s already there, even without this bill.)
11:10: Casey says that food stamps are essentially an unemployment program.
16:30: The child care tax credit in the bill doesn’t require you to work. DRH comment: That seems counterintuitive, but that’s if you care about people working.
21:00: Employers who have 5 or more employees must fund an IRA for their employees. State governments get to decide what the IRA can be invested in.
26:30: $10 per day fine if you don’t enroll your employees in an IRA. Per employee not enrolled? He doesn’t say but I think so.
27:00: $220 billion for affordable housing.
27:45: Casey’s comment on the subsidies for housing: “Here, you can have this as long as you remain poor.”
32:20: Casey estimates the value of the housing subsidy to tenants at about 30 cents on the dollar.
33:40: Somewhat good news on transportation. Casey finds that the spending is about 20% of the amount he expected based on Biden’s promises during the campaign.
34:20: $30 billion for rail; $30 billion for mass transit, which, Cochrane points out, is for things like the commuter rail that goes by Stanford every day almost empty.
35:18: $150 billion in spending for climate. This does not count tax credits. For things like climate-resilient housing and USPS purchase of electric trucks.
36:40: Given the amount of carbon reduction the climate subsidies will lead to, they are way overpaying.
37:40: Pro tip: if you’re thinking of buying an EV, then wait. This bill just might pass.
38:50: Family medical leave. Government will pay for some. Unclear to what extent employers will be reimbursed by feds if they already provide it.
43:20: New taxes on marriage. Casey points out that the late James Tobin of Yale University, who was a member of President Kennedy’s Council of Economic Advisers, was critical of government programs that discouraged marriage. Tobin’s comment: We’re subsidizing desertion. (Here’s my bio of Tobin for The Concise Encyclopedia of Economics.)