WASHINGTON — Despite low unemployment, rising wages, slowing inflation and strong consumer spending, a heated political debate is brewing over why voters hate the economy.
Are you a person? Brainwashed by TikTok? Is it partisan misinformation or just too dark journalism? Did no one notice? ? Price of 12 eggs plummets• These questions are plaguing the White House as President Joe Biden’s poll numbers slump ahead of the 2024 election.
There is another possible reason for the bitter outlook on the economy, and that is policy explanations hidden in plain sight. Government policies are shrinking, making life harder for some people than it was three years ago.
Starting in 2020, the federal government significantly expanded social programs, suspending student loan payments and suspending evictions. However, these efforts were temporary, and the government withdrew these benefits as the COVID-19 pandemic subsided.
Median household income fell significantly last year, according to the Census Bureau reported in September – Inflation is partly to blame, but it’s also “partly due to the expiration of policies introduced in response to the coronavirus pandemic.”
One example: Congress created a monthly child benefit that pays parents up to $300 per child in the second half of 2021, dramatically reducing material hardship for millions of families. When benefits expire in early 2022, the child poverty rate will jump from 5.2% to 12.4%, the fastest year-over-year increase in modern American history, largely due to opposition from Sen. Joe Manchin (D-Va.) It became the rate. .
Millions of families who experienced dramatic changes in their economic circumstances may not have enjoyed the experience.in A survey last yearone-third of parents said they had reduced their food expenses due to the expiration of benefits.
This year, the government cut increases in pandemic food assistance, cutting monthly Supplemental Nutrition Assistance Program benefits by $82 per person for 16 million households. More than 11 million Americans have been disenrolled from Medicaid, student loans must be repaid, and additional federal funding for child care programs just expired.
Most of these pandemic policies automatically expired without significant partisan conflict, which may have reduced the attention they received.
“Classically, I understand the idea that people don’t like shows being cut, but people are kind of blind to that right now. Maybe they consider these shows to be cut shows. That’s not surprising,” said Matt Brunig, director of the left-leaning think tank People’s Policy Project.
Brunig’s research Inflation-adjusted income suggests that 58% of Americans decreased their income last year, although it increased at a similar rate in 2020.
The White House has touted the success of “Bidenomics,” pointing to overall economic growth, low unemployment, and rising wages. Outpacing inflation.
asked to respond to viral TikTok videos White House economic adviser Jared Bernstein heard from Mackenzie Moan, a working mother who tearfully explained that her husband and wife have good jobs but are still living paycheck to paycheck. He suggested that he may not be aware of some of the administration’s policy achievements.
“If you actually asked someone like that…what would they think about the fact that we’re keeping the price of insulin at $35 a month?” Bernstein He spoke on Fox News Sunday last month.. “What about giving Medicare the power to negotiate lower drug prices? What about tax incentives for manufacturing? What about caps on out-of-pocket costs for prescription drugs?”
Bernstein noted that polls on recently enacted insulin price caps are showing very positive results, as are polls on prescription drug cost limits. However, these policies targeted older Americans enrolled in Medicare. These are part of the Anti-Inflation Act that Democrats passed last year, which included green energy subsidies and funding to the IRS, but also extends child tax credit payments that benefit households in 2021. It wasn’t something. That policy would have significantly expanded the $100 cap. Or, say Moan, a married couple with $200 in disposable income left after monthly bills.
TUniversity of Michigan Indicators of consumer sentiment It remains at a level not seen since the Great Recession and its aftermath, when unemployment was nearly three times its current rate. Overall, the good feelings from expanded social welfare programs are likely to be offset by bad feelings from consumers who dislike government spending and debt. (Just as there was good sentiment from slowing inflation; partially offset by bad emotions About high interest rates. )
“Expanding fiscal policy probably won’t have a big impact on sentiment,” Joan Hsu, director of consumer research at the University of Michigan, told HuffPost.
Perhaps the most popular fiscal package enacted by Congress in response to the pandemic was the stimulus package.Lawmakers appear to be encouraging consumers to donate to the government by sending three checks totaling $800 billion to nearly everyone in America in 2020 and 2021. Economic policy highly evaluated In a study by the University of Michigan.
Congress also increased unemployment insurance, temporarily reshaping the shaky federal and state systems into Democrats’ dream wage replacement programs at a cost of nearly $700 billion. And Democrats wanted to make permanent child benefits, which were supposed to be a new agreement between families and the government on the scale of Social Security retirement insurance. But it fell one vote short of that goal in the Senate, with the program set to expire in six months and voters potentially poised to put Republicans back in charge of the Senate next year.
The pandemic policy experiment may have disappointed voters. Because voters knew how easy it was for Washington to restructure the economy and improve the lives of Americans, only for lawmakers to abandon the project and return to the status quo.
However, voters may not think so. In Hsu’s view, people are nostalgic for the pre-pandemic economy more than they are for the pandemic-era government benefits.
“We’re all in a collective sadness that we can’t go back to 2019,” Hsu said.