Twelve Questions for the Next OMB Director

Under President Biden’s proposal, expansions to the Earned Income Tax Credit, Child Tax Credit, and Child and Dependent Care Tax Credit would be temporary—lasting only one year—and intended as an emergency response to COVID-19. Beyond the pandemic, how will the Biden administration approach permanently improving these tax credits to provide greater financial relief to those in need, encourage work, and lower child poverty? And while both parties like to argue that preferred policies pay for themselves, are there offsetting reforms that you would pair with these expansions to make them more fiscally responsible?

The Biden administration’s recovery plan proposes to make the CTC fully refundable and increase the maximum benefit from $2,000 to $3,600 for children under 6 and $3,000 for older children. How concerned are you that providing this significant cash payment to families without earnings could diminish incentives to work and further depress labor force participation? How does the Biden administration view balancing much needed financial assistance with policies that continue to reward work, particularly as we try to get people back into the workforce during an economic recovery?

An estimated 25% of EITC payments are made in error, undermining the effectiveness and integrity of the tax credit. While pursuing expansions to the EITC, how will the Biden administration approach reducing the tax credit’s improper payments?

With the Biden administration proposing to increase the weekly federal unemployment benefit supplement to $400, are you concerned about paying over half of unemployed workers more to stay home than to return to the workforce until September, especially without knowing where the labor market and public health conditions will be mid-year? Are you concerned about paying them more than their counterparts who continue to work every day?

State unemployment insurance administrative challenges partially stem from the fact that federal funding for UI administration has declined by 30% over the past 20 years (adjusted for inflation). What will the Biden administration do to ensure that states have the resources necessary to upgrade their systems?

The emergency UI programs enacted in response to COVID-19 expanded eligibility so that a wider range of dislocated workers could receive benefits. What is the Biden administration’s long-term vision for modernizing the UI system so that it is better prepared in the next crisis to provide financial relief to Americans and help dislocated workers return to the labor force?

The federal government is currently owed a total of almost $50 billion from the states to shore up UI trust funds, which are under enormous pressure as a result of COVID-19. Repaying these loans could require states to impose a tax increase on employers before the economy has entered full employment, which could harm the economic recovery. To what extent are you concerned about this potential outcome, and what steps will the administration take to avoid it?

The debt limit will be reinstated on August 1 of this year. At that point, the Treasury Department will only have its cash on hand and so-called “extraordinary measures” to continue meeting the federal government’s obligations. The Bipartisan Policy Center estimates that those tools will run out in late summer or early fall. How and when does the administration want to see the debt limit addressed?

According to the Congressional Budget Office, the federal deficit totaled $3.3 trillion in 2020 and federal debt held by the public will exceed the size of our economy this year. It’s clear that we remain in the middle of an unprecedented crisis. Lawmakers need to continue providing fiscal support, but at what point do you think we should start caring about deficits again? 

Once this crisis passes, what are the most important steps lawmakers should take on each side of the ledger—spending and revenues—to slow the rapid growth of federal deficits and place our budget on a more sustainable path? 

Before the COVID-19 pandemic, Social Security’s finances were already unsustainable and the trust funds were headed for depletion in 2035, at which point benefits will automatically be cut by more than 20% across the board. An analysis by the Bipartisan Policy Center suggests that the recession could result in the trust funds depleting their reserves even sooner. How does the Biden administration plan to address these issues and preserve Social Security for future generations? 

With the spending caps introduced by the Budget Control Act of 2011 now expired, what is the appropriate path for discretionary spending moving forward and how, if at all, should it be constrained?