When it comes to American families, the spending bill got two things right

When it comes to American families, the spending bill got two things right
© Greg Nash

When it comes to the health and well-being of children and families, the omnibus spending bill signed by President TrumpDonald John TrumpGOP divided over impeachment trial strategy Official testifies that Bolton had 'one-on-one meeting' with Trump over Ukraine aid Louisiana governor wins re-election MORE on Friday gets at least two things right. The bill enhances spending on opioid abuse and addiction treatment, and it increases funding for the child care development block grant. But by not doing the hard work of paying for the full cost of the bill, which authorizes $1.3 trillion of spending between now and September, Congress harms the country’s financial health and jeopardizes future investments in children and families.

The dangers of opioid addiction to the health of American families are now much better understood, due to extensive data collection efforts by the Centers for Disease Control and Prevention as well as more recent work by the Joint Economic Committee. Opioid overdose deaths rose by 425 percent between 1999 and 2016, with particularly steep increases for women. There are several theories for why opioid addiction may have reached the levels that it has.

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Some argue that over-prescribing by doctors may have led to addiction and subsequent overdosing. Our colleague, Sally Satel, who works at a methadone clinic, suggests that while over-prescribing may have played a role, one should not downplay other factors such as the availability of “street opioids” like illicit fentanyl and heroin. As such, significant spending in the omnibus bill directed towards better addiction treatment infrastructure, going after illicit drugs, and improving state prescription drug monitoring programs is critical. The spending bill allocates $3.3 billion to such efforts. This is a tiny fraction of the actual economic costs of opioid addiction.

In a 2017 report, the Council of Economic Advisers (CEA) produced new estimates of the total cost of the opioid crisis that far exceeded previous estimates. Although the estimate of the non-fatality costs of the opioid crisis — including health care expenditures, criminal justice expenditures, and lost productivity — of $72.3 billion is similar to estimates from other studies, the CEA expanded the cost analysis to include the “value of a statistical life” (VSL), the economic valuation of an individual’s value to society that would be lost due to that individual’s death. The VSL is widely used in other agencies for cost-benefit analyses, and the inclusion of the VSL cost due to opioid overdose deaths raises the total cost of the opioid crisis to $504 billion in 2015.

In their new working paper, Alex Brill and Scott Ganz use the CEA’s new estimates to examine the geographic variation in the costs of the opioid crisis. When looking at the non-mortality cost of the crisis, the greatest cost per capita is in the District of Columbia, followed by New Hampshire and Connecticut, with the lowest non-mortality costs per capita in Louisiana, Kansas and Oklahoma. However, once the mortality costs are incorporated, as the CEA report did, the greatest per capita costs are in West Virginia, followed by the District of Columbia and New Hampshire.

Aside from these economic costs, other studies point to the impact of opioids on the economic lives of American families. A recent article by Alan Krueger shows that opioid addiction is a significant reason why fewer men and women are participating in the labor market today. An earlier article by Angus Deaton and Anne Case documents the increase in midlife mortality in the United States for non-hispanic whites from 1998 to 2013. The authors suggest that the epidemic was exacerbated by the prescription of opioids, though economic insecurity and stagnant wages may have played a role as well. All of this suggests that the spending bill’s attention to the opioid crisis is badly needed.

The bill also recognizes the importance of public support for child care. This is good for two reasons: It encourages employment among low-income families and supports child development for low-income children, especially in their early years. Research shows that child care subsidy receipt increases employment and reduces work disruptions. Parents who receive child care subsidies have a higher probability of employment, work for longer periods of time, and have higher earnings and better family financial health. Research also shows that high-quality early childhood improves child outcomes. Ensuring that government-funded child care subsidy programs also offer high-quality care is imperative. But this can only be done when resources are available.

The omnibus added $2.4 billion for child care assistance to the child care development block grant through the end of fiscal 2018. The child care development block grant authorizes the child care development fund, which provides block grant funding to states to provide child care assistance to low-income families. The bill represents an almost 50 percent increase in current federal spending and estimates suggest it could provide assistance for 150,000 more children per year.

This comes on the heels of the child care development block grant reauthorization in 2014, which added new health and safety requirements and quality control improvements to the program, but failed to fully fund the improvements. The new spending bill makes good on an effort to improve the quality of child care for low-income working families that began in 2014, an important goal aimed at ensuring that dollars for child care are spent to improve child well-being.

However, not paying for these spending increases jeopardizes future federal investments in children and families. Trading the health and well-being of future families for current ones is not acceptable. The omnibus spending bill may have gotten the priorities right for American families, but by increasing the deficit it might sacrifice their future.

Aparna Mathur (@AparnaMath) is a resident scholar in economic policy studies at the American Enterprise Institute, where Angela Rachidi (@AngelaRachidi) is a research fellow in poverty studies.