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Get used to ‘spending hockey stick’ charts

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Democrats on the House Ways and Means Committee recently introduced a series of bills amending a program known as Health Profession Opportunity Grants or HPOG for short.  (Clearly, PR staff were not involved in the naming of this program, whose funding to date has been called — nerd alert — HPOG 1.0 and HPOG 2.0.)  HPOG supports training for welfare recipients in health professions like nursing and home health aides.

The new bills include a series of set-asides, mandates, and new program rules.  But the more important story is proposed program funding, which would grow rapidly under related legislation (H.R. 3398) introduced by Danny Davis (D-IL), the Chairman of the Worker and Family Support Subcommittee:

As the “spending hockey stick” chart above shows, H.R. 3398 (let’s informally call it “HPOG XXL”) would expand funding fivefold from the current $90 million to $500 million per year.  More would be spent in 2021 through 2024 ($1.7 billion) than in the past 10 years combined.

Especially in this era of deep deficits and a desire for evidence-based policymaking, there must be solid evidence of effectiveness to merit such sharp spending increases, right?  That is, we know HPOG participants are working in health professions and earning more, right?  Not exactly.

A recent report found paying for more tuition and other assistance leads to more “educational progress” in the short run: “HPOG programs…are associated with larger short-term impacts on educational progress.”  Not surprising, but “educational progress” is not the same as more work and earnings.  The same report notes “programs that offer more childcare, transportation, and non-cash incentives…tend to have smaller impacts on employment than programs with fewer of these components or features.” The authors wonder if “losing access” to services like childcare when individuals exit the program “makes becoming employed more difficult for participants.” Another theory is “these services may be an incentive for individuals to stay in training longer, thereby delaying employment.”

Another report specifically about tribal HPOGs notes “almost half of the participants who were unemployed at intake became employed at some time after intake,” which means more than half remained unemployed.  Further, some participants, especially in rural areas, “experienced challenges with finding local healthcare employment…making it necessary for participants to move to urban areas to find employment, which many participants were not willing or interested in doing.”  Surely that could have been discovered before taxpayer-funded training was provided.

HHS promotional materials note an average hourly wage increase of $4.77 for early (HPOG 1.0) participants employed at intake.  Still, of almost 39,000 “participants served,” less than half (only about 18,000 or 44%) “gained healthcare employment,” which is the whole point.  Data for HPOG 2.0 show fewer participants served than in HPOG 1.0, and after three years, only 37% of participants began or were promoted in an existing healthcare occupation.

Maybe it’s too early to see strong work and earnings results, and a full cost-benefit analysis won’t be available until 2024.  But that caveat only suggests, as with other programs, increased spending should wait on more evidence of effectiveness.

Meanwhile, the nonpartisan Government Accountability Office has identified 43 other current federal employment and training programs.  As I highlighted in a recent post, evidence suggests most programs fail to produce significant employment and wage gains for their participants. Which begs the obvious question: Shouldn’t we reform those 40-plus training programs instead of expanding this one by orders of magnitude?

Further, is this even the right focus?  The $16.5 billion per year TANF welfare program, which supports the same low-income parents meant to get help from HPOG, has been operating under a seemingly endless line of short-term extensions, even though both parties have full reauthorization plans on the shelf.  If Congress really wants to review how best to get low-income parents into work, that would be a better place to start than rapidly expanding the HPOG program.

That doesn’t seem to be the plan, in the House at least.  While the House and Senate were approving the most recent short-term extension of the TANF program, in recent weeks Ways and Means Democrats focused their attention on increasing funding for one program after another:

  • A two-year expansion of the Refundable Child Tax Credit costing $50 billion;
  • A two-year expansion of the Earned Income Tax Credit for childless workers costing $30 billion; and
  • A two-year increase in child care, which CBO scores as costing $10 billion over the next decade.

Those are just short-term “down payments” on far larger spending plans Democratic presidential candidates are crafting for “universal” child care, health care, college tuition, and more.  Those proposals’ price tags include “trillions” more often than “billions.”  So look for even more “hockey stick” spending charts to come.

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