New Food Stamp Benefit

Under the traditional rules for setting food stamp/SNAP benefits, monthly benefits would have increased $25.48 between October 2008 and the present, except for the small fraction of beneficiaries who receive the minimum benefit.  In early 2009, the ARRA deviated from those rules by legislating an immediate $46.53 increase.  That extra increase expired, putting the program back on its traditional path for benefits (but not eligibility -- that's another story).

Of course, putting a program back on its traditional path is known in Washington as a cruel cut.

The average amount of the cut, accounting for beneficiaries who receive the program minimum benefit, is $20.36 per month.  That's about 1/2 of one percent of the employee compensation of the median non-elderly household head or spouse when they are working (and thereby not getting SNAP benefits).  Almost half of the reductions in labor among such person result in SNAP participation, which is why putting SNAP benefits back on their traditional path increases the reward to work by about 1/4th of one percent of compensation.

The overall reward to work is about half of compensation, so the new SNAP benefits increase the reward to work itself by about 1/2 of one percent.  By itself, the change would increase aggregate hours worked by somewhere in the range of (0.2,0.4) of one percent.  That change would be partly realized as additional employment and another part as additional hours.  E.g, at the very high end the additional nationwide employment addition would be 500,000.

However, this increase in the reward to work is small when compared to the reduced reward to work that came in January 2013 with the expiration of the payroll tax cut, and tiny when compared to the reward to work that is coming January 2014 from the ACA.

[Technical note: the traditional SNAP procedure is to increase the maximum benefit (for each household size) proportionally every October according to food price inflation.  Note that the vast majority of SNAP households do not receive the maximum benefit, but instead receive the maximum benefit minus an amount according to their family income.  I.e., adding $25 to the maximum benefit adds $25 to essentially every SNAP household's benefit, which is why my calculations are based on the dollar addition to benefits rather than the percentage increase in maximum benefit.]

People on the group market to lose coverage

There's been a lot of news about people losing their individual coverage as a consequence of the ACA. But the bigger news coming will be people losing group coverage through their employer.

The ACA pays for much of the health costs of people (under 400 percent of the federal poverty line, which is about half of America) who will get insurance through the ACA's exchanges, but ONLY if their employer (or family member's employer) is not offering them affordable coverage. It's like paying employees to work somewhere that does not offer coverage.

Because employers cannot cherry pick which employees are offered coverage, you might say that poses a dilemma for employers:

• drop coverage to help their employees below 400% FPL get the subsidies,
• or keep it to help their higher income employees keep their employer coverage (and the tax advantages that go with it) and to avoid the ACA's employer mandate penalty.

Competitive markets create compensating differentials to eliminate such dilemmas, but let's ignore the economics for today.

There are massive loopholes in the ACA so that coverage can be retained for employees who want employer coverage, and dropped for those who do not:

• Put early retirees on the exchanges. Former employees do not have to be offered the same coverage as current employees (the offer of coverage might not even be that relevant because I don't think that the ACA premium tax credits obligate people to accept coverage from a former employer). Early retirees many times have little or no wages after they retire, which can help keep their income below 400% FPL. Earlier retirees are older than most of the workforce, so the subsidy they'd get is large compared to other families with the same income. As of 2011, there were about 2 million early retirees on their former employer's plan and below 400% FPL. More would adjust the timing of their income to get below 400% FPL if they were paid to do so, as they will be next year. Including their dependents, here alone we get roughly 3 million people who could lose employer coverage this way.
• Implement waiting periods. New hires do not have to be offered coverage right away. It has to be offered within 90 days plus any other eligibility hurdles the employer has (e.g., complete a training program). New hires tend to be lower income people, plus the eligibility hurdles do not have to be uniform by occupation, so in this way employers can have people who are both on the payroll and getting subsidies on the exchanges, yet nonetheless no employer penalty accrues and higher income people can be covered by the employer from day one. At any point in time, JOLTS says that 12+ million people have been hired in the last 90 days. Their propensity to have employer coverage is probably lower than the average worker (a significant majority of employees can get coverage fromt their employer), but still there easily could be 3 million workers here, plus another 3 million dependents, at a point in time during which the ACA is fully operational, who would have been covered by the employer if it weren't for the ACA.
• Require employees -- or even invite them at their option -- to work part time without employer coverage rather than working full time with it. In many cases, employees can make more working part-time. In other cases, they would make just a little less, while working a lot less. 3 million workers is a conservative estimate of how many people will be moved in this way from jobs with coverage to jobs without coverage. Add 2 or 3 million dependents to get 5+ million people moved off of employer coverage this way.  A combination of the part-time and waiting-period options is to declare a new employee as "variable time," so that he has to be employed through the end of the calendar year before it is determined whether he is a full-time employee and thereby eligible for employer coverage.
• Drop spouses from employer plans.  I'm not sure how common this will be, and how many of the dropped spouses will be able to get coverage from their own employer (would that count as "losing your coverage"?)
• Adjust the affordability of coverage. Require employees to pay most of the premium (with pretax dollars) for employer coverage and compensate them with additional salary. This approach will free the low-income employees to receive exchange subsidies, although for large employers it will generate a $3,000 penalty for each such employee-year. Burkhauser and coauthors estimate that a couple million workers, plus dependents, would lose affordable coverage that way (they would still have coverage, but it would not be affordable by the ACA's definition).
• Unemployed people who use the exchanges rather than COBRA.  More than a million unemployed workers are on their former employers health plan and have incomes below 400% of the federal povertly line.  People who could use COBRA are still eligible for exchange subsidies.  Including dependents, that's about 2 million people who could move from employer coverage to exchange plans, although technically they wouldn't be "losing" their coverage.
  

As far as I can tell, the CBO has not considered all of these adjustments, let alone considered the additional economic adjustments I left out here, yet even they admit that 8-9 million people at a point in time will not have any employer coverage as a consequence of a fully-implemented ACA.

I am still working on my own estimate, but the real number has to be in the 20+ million range, plus 2 million or so people who would have chosen to stay on an employer plan through COBRA.

Of course, the American taxpayer - regardless of whether he has employer coverage -- will pay for these group coverage loses that were promised to not occur. Moreover, this is not an issue of the adequacy of the group coverage that's lost (although there are millions of separate and additional instances where group coverage will be lost because it is supposedly inadequate), it simply that the ACA induces market participants to tolerate coverage loses in order to, at taxpayer expense, reduce the monetary loses they experience as a consequence of the law.

Two Studies on the Consequences of Romneycare

My paper cited a few studies of the Massachusetts economy before and after Romneycare. Here a few more:

• A state economy model of taxes and subsidies from Beacon Hill Institute
• The above model was used to simulate the employment consequences of Romneycare.  They find -18,310 jobs, which was 0.6% of Massachusetts employment.
• BHI also looked at health spending and its components before and after Romneycare.

I found that Romneycare increased the Massachusetts marginal tax rate on labor by an average of 0.4 percent points (of total compensation).  From my perspective, I'd expect the Romneycare employment impact to be somewhat smaller than the 0.6% cited above: perhaps 0.2 or 0.3%.

Given that Obamacare increases national average marginal tax rates by about 5 percentage points (about 12 times more than Romneycare did in MA), trying to extrapolate the Massachusetts experience to the ACA -- as many ACA advocates do -- is bold exercise in extrapolation.  But if you absolutely had to extrapolate that way, I'd multiply the Massachusetts results by a factor of something like 12: the ACA's employment impact would be in the -2 to -4 percent range.

Multiplication by twelve is sensitive to all kinds of second order errors like rounding errors and I don't recommend it. We have MUCH better ways of forecasting the ACA's consequences.  Stay tuned for those.

In the Death Spiral We Trust

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The insurance-market death spiral makes sense in theory, but economists do not really know if, and how often, it is a practical consideration in real-world health insurance markets.

Adverse selection refers to a failure of buyers and sellers to transact because one or the other has additional information about the quality or cost of the product to be traded. A classic example from the 2001 Nobel laureate George Akerlof is the market for quality used automobiles, which in theory cannot exist, because buyers of used cars demand a heavy discount because of the likelihood that a used car they might buy will be defective. In theory, nobody sells a quality used car, because it would have to be priced like a lemon.

The used car market is, in theory, caught in a kind of self-fulfilling prophecy in which only defective cars are traded in the marketplace and are priced accordingly.

The same phenomenon has been used to describe the health insurance market. In theory, absent government intervention, only sick people will buy health insurance, which means that insurers have to charge a lot for the insurance, which means that healthy customers will not buy insurance. This is the supposed “death spiral” for health insurance markets.

The solution to this purported problem is to force everyone – especially the healthy – to buy health insurance. That starts a domino effect of other problems, including the unfortunate side effects of the redistribution, such as discouraging employers from creating and employees from accepting full-time jobs, which authors of the Affordable Care Act found to be necessary in order for everyone to be able to comply with the mandate to buy insurance.

I agree with the 2001 Nobel committee, which explained that the adverse selection idea is “a simple but profound and universal idea, with numerous implications and widespread applications.” Still, we don’t really know if the side effects of proposed market interventions are more tolerable than the disease itself.

The used automobile market is a good example. A prudent car buyer should be aware that defective cars are out there.

Nonetheless, the market for used cars did not experience a death spiral and today is active and vibrant. Without any government mandate that the owners of quality used cars sell them, the marketplace has devised a number of practices, such as cars leased from the manufacturer, manufacturer warranties and fleet resales, that help buyers expect quality used cars and thereby prevent the death spiral.

Economic theory predicts that all consumers buy actuarially fair insurance – that is, insurance in which each buyer expects to receive as much as he pays – so the mere fact that many people do not have health insurance (especially healthy people, who do not buy because it is too expensive) would seem to prove that the health insurance market is failing.

But the fact is that health insurance companies, like just about any business, have significant capital and labor overhead costs. Insurance premium revenue is needed to pay those costs. Under such conditions, the average consumer must expect to receive less than he pays. Many healthy people may thereby be uninsured for a good reason: the overhead costs are too much to justify whatever feeling of safety that insurance might give them.

The market might be selecting participants in a productive way. Forcing the insured to buy insurance may be a waste of society’s resources by adding to the already significant overhead costs.

Without proof that adverse selection outweighs other kinds of selection in health insurance, the death spiral may not be a serious threat, and government actions to prevent it may be unnecessary.

Work Now, and Let Uncle Sam Pay You Later

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Notwithstanding quirks in the Social Security system, public policy has sharply reduced the reward to work since 2007.

On Monday, the Economix blogger Nancy Folbre helped explain some of the complex factors that determine the rewards of working. Among other things, she noted the roles of work experience and Social Security benefits, both of which are examples of future consequences of working in the present.

This week I will examine Social Security and Medicare benefits from her forward-looking perspective, and in a future post I will examine work experience.

Professor Folbre says the payment of Social Security payroll taxes confers a benefit on the taxpayer in the form of additional Social Security benefits later in life. Indeed, the Social Security Administration calls the payroll taxes “contributions,” although employers are subject to penalties and even prosecution if they fail to deliver the “contributions” on time and in the legally prescribed amounts.

Technically, a worker’s lifetime history of taxable earnings, rather than the taxes themselves, traditionally determine a person’s old-age benefits, with more lifetime earnings sometimes resulting in more benefits (this book by the longtime Social Security actuary Robert J. Myers has all the details).

A classic paper by Martin Feldstein and Andrew Samwick was able to quantify the the link between lifetime earnings and old-age benefits as it was in 1990, assuming that Social Security rules would be unchanged over the next several decades. They found that secondary earners — in their view, spouses with significantly lower lifetime earnings than the other partner — would receive no future old-age benefits as a consequence of working, but that the value of benefits to patient, primary earners nearing retirement could be significant, especially if they were married.

If payroll taxes were always the same share of taxable earnings, we could ignore the distinction between the two for the purposes of quantifying incentives to work. But payroll tax rates have varied over time, most recently with the partial payroll tax holiday of 2011 and 2012 (interestingly, the Obama administration refers to the two-point reduction as a “tax cut”). Because the payroll tax rates are higher now than in 2012, a person moving earnings from 2012 to this year would increase his payroll tax but not increase his Social Security benefits.

That’s why I count the entire payroll tax cut as an increase in incentives for as long as the cut lasted, even if the rest of the payroll tax confers the benefits that Professor Folbre contends. If all we wanted to know was the amount by which incentives changed over the last 10 years or so, Professor Folbre’s assertion about the future pension benefits conferred would hardly be relevant, unless we thought that the link between present earnings and future benefits had been changing during that time frame.

I agree with Professor Folbre that the best quantitative estimate of marginal tax rates would account for the future consequences of working in the present, but writing in 2013 I am not willing to follow Professors Feldstein and Samwick and assume that Social Security rules will remain unchanged for the remaining lifetimes of today’s workers. In one way or another, we can expect health benefits or cash benefits for the elderly, or both, to be taxed or means-tested more than they are under current law.

Democrats have suggested means-testing Social Security and Medicare, with the likely result that people who worked and saved more during their lifetimes will find themselves with fewer benefits from those programs, compared with people who worked and saved less. Republicans have proposed means-testing Medicare, as part of transforming it to a health insurance premium-support program. The common denominator here is means-testing and the marginal tax rates that go with it.

Professor Folbre is unwilling to assume that “taxpayers derive no marginal benefits from programs such as Social Security.” But that’s hardly relevant for understanding how incentives evolve over time. Based on the considerations cited above, my guess is that the effect of working in the present on future Social Security and Medicare benefits was once somewhat positive (primary earners) or zero (secondary earners), and for primary earners has become less positive (or even negative) over time. By approximating these changes as zero, my work has thereby understated the amount by which marginal labor income tax rates have increased since 2007.

Regardless of whether redistribution is achieved by collecting more taxes from families with high incomes, providing more subsidies to families with low incomes, or both, an essential consequence is the same: a reduction in the reward for activities and efforts that raise incomes. New and revised federal programs do exactly that, in myriad ways, and will be doing so for the foreseeable future.

New Video on the Affordable Care Act and the Labor Market

2014 Marginal Tax Rates without the Individual Mandate

The odds of a one-year delay of the individual mandate have been rising since October 1. The work I did in August 2013 assumed that the individual mandate took effect 1/1/2014 as scheduled by the original law, and that the addition to marginal tax rates on that date would average 3.7 percentage points. Table 5 gives some of the details of the derivation.

The colored circle and rectangles show the ingredients that would change if the individual mandate were delayed beyond 12/31/2014. The red circle entry would become zero, which by itself would reduce the bottom line from 3.7 percentage points to 3.6 percentage points.

I based my estimates of the green rectangle's three parameters on rollouts of Medicare, Medicaid, and ARRA COBRA subsidies, none of which were supported by an individual mandate. Moreover, the most important of the three entries is the first one, representing unemployment, and I expect that the individual mandate will not apply to many unemployed people anyway. Arguably the green rectangle's entries would be the same without or without the individual mandate.

The blue entries are based on expectations of take-up of the exchange plans among workers who are not offered affordable coverage at work. Perhaps they would be cut by one third by eliminating the individual mandate for 2014, which would put the bottom line at about 3.3 percentage points.

[Added: If people without employer insurance do not begin their exchange coverage (perhaps because they don't have to because of the administrations new ruling) until 4/1/2014, their income between 1/1/2014 - 3/31/14 will still count toward their subsidy, but their subsidy will flow only for the last nine months of the year. The marginal tax rates from this scenario are therefore uniform throughout the year but the amount is 1/4 of the way from 3.7 percentage points (individual mandate all year) to the 3.3 percentage points with no individual mandate during the year).]

More important than the individual mandate is the take-up rate of subsidized exchange plans. If healthcare.gov fails and take-up was 1/3 of what was expected, the bottom line with the individual mandate would drop from 3.7 to 1.8 percentage points (see especially Table 8 of my paper). The health of healthcare.gov and the health of the labor market are inversely related.

Since October 1, Obamacare has created positive social value

The best industrial organization economists understand that products have many attributes. Coca-Cola is not simply a substance for quenching consumers' thirst. Consumers value its brand image, familiarity, packaging, etc., which is why it dominates competing sodas despite tasting the same.

I urge Obamacare critics stick to legitimate critiques rather than fabricating them through economic misunderstandings. For example, healthcare.gov was supposedly built at a cost of over $600 billion. Although I agree that healthcare.gov has delivered hardly any value by enrolling (a handful of) people in health insurance, we cannot conclude that the social value created by Obamacare since October 1 has been negative.

First, the social purposes served by healthcare.gov go beyond enrolling people in health insurance, just as the social purposes of Coca-Cola go beyond quenching thirst. I am no fan of Obamacare and thereby don't bear the burden of proof of said value, but can point to entertainment value as an example. Many times lousy unknown films make $50 million in a few months, and that understates the social value created because intellectual property like films cannot monetize all of the social value. I'm confident that healthcare.gov has created more aggregate entertainment than, say, The Smurfs 2 or The Last Exorcism Part 2, which, in the span of a few months, each generated social values in the $20-120 million range.

Millions of Americans are chuckling over videos like these:

You might say that the enjoyment is offset by the pain experienced by Obamacare supporters when they view such videos. But as of October 1 there weren't that many Obamacare supporters (why would NBC and other major networks feature this kind of entertainment if it were offensive to half of the potential viewers?), and the few of them who exist can and do choose to ignore the allegedly major problems with healthcare.gov.

Like international trade, farce is usually a positive-sum game. My best guess is that the entertainment value generated by healthcare.gov during October 2013 is about $200 million, with more value forthcoming, albeit at a diminishing rate.

Second, healthcare.gov didn't cost $600+ million to build. Nobody knows for sure (that's part of the entertainment value!), but healthcare.gov appears to cost $125-150 million. If healthcare.gov created value only via entertainment, it has already generated a surplus in the neighborhood of $50 million.

As I said, healthcare.gov has still more valuable product attributes. Somebody needs to quantify the value of reminding the public (and economists) about "Bright Promises, Dismal Performance" better than Milton Friedman ever did. Who knows what corruption might be uncovered in the Congressional hearings -- corruption that would have persisted undetected but for healthcare.gov.

The Power of the Individual Mandate

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If and when the Affordable Care Act is executed as planned, it will leave few members of working families uninsured.

About 31 million members of nonpoor working families are without health insurance (according to my calculations from the Census Bureau’s current population survey). An important reason they do not have private health insurance coverage is that, in one way or another, they find it too expensive. Their employer may offer health insurance, but they decline coverage because the premiums are too much.

If their employer doesn’t offer insurance, the uninsured workers are, judging from their behavior, unwilling to switch to an employer that does offer health insurance in exchange for lower cash pay (of course, finding such an employer may not be easy and may require a move across state lines, but that’s my point: getting private insurance is costly).

The Affordable Care Act has at least two provisions to make insurance cheaper to workers who have so far been uninsured, compared with what employer insurance would have cost them in previous years, and these will take effect in the next couple of years (or whenever the federal government gets its systems running, whichever comes later).

The first provision is the “individual mandate penalty” for being uninsured, which will eventually reach the greater of 2.5 percent of husband-and-wife income, or $695 per uninsured family member (up to three, with uninsured children counting half, and the $695 indexed to inflation). Undocumented immigrants are not liable for the penalty.

The penalty effectively makes insurance cheaper because people can avoid it by getting insurance. In effect, all nonpoor legal residents pay the penalty, but people who purchase health insurance get their penalty applied toward their health insurance premiums.

The law’s premium assistance tax credits are another provision that makes insurance cheaper, at least for uninsured nonpoor people living in households below 400 percent of the federal poverty line.

These two provisions are a potent combination — and might be reinforced by the prospect of Internal Revenue Service enforcement of fines due.

I estimate that nine million of those who would have been uninsured without the law will find their own health insurance to be free, or even better, in the sense that their penalty (in the years 2016 and beyond) for being uninsured exceeds the premium that they probably would pay on the law’s new health insurance marketplaces (I use the Kaiser Family Foundation calculator to make these estimates because the marketplaces are not yet operational). As taxpayers, each of these families will be helping to pay for other people’s health insurance; those taxes will be owed regardless of what the family decides about its own insurance.

Without the individual mandate, those nine million people might be tempted to remain uninsured.

Although the remaining 22 million nonpoor workers (and their dependents) will have to pay something to have health insurance, most of them will find insurance to be cheaper than it was before the Affordable Care Act. In addition to the nine million who will find insurance to be free (in the sense defined above), another 13 million will find insurance to be at least 25 percent cheaper than it was to get employer insurance before the law passed, and they are therefore more likely to purchase it.

The individual mandate is politically unpopular, and we don’t yet know how vigorously the Internal Revenue Service will enforce it. The law precludes the I.R.S. from criminally prosecuting taxpayers who refuse to pay their penalty, and on this basis some observers have predicted that the I.R.S. will collect hardly any penalties. Others believe that the I.R.S. can get its penalty revenue if it tries hard enough.

After all, banks and other private-sector creditors cannot criminally prosecute either, yet they still manage to collect from most of their borrowers. Senator Tom Coburn, Republican of Oklahoma, explains how the I.R.S. can add penalties and interest to unpaid individual mandate penalties and establish a lien against the delinquent taxpayer’s property so that, should the property be sold, sales proceeds can go toward paying the I.R.S. The I.R.S. can also press delinquent taxpayers for payment.

The Affordable Care Act prohibits the I.R.S. from filing a Notice of Federal Lien, which would give its lien priority over other liens, but, again, that makes the I.R.S.’s collection toolbox more like the toolbox that private-sector creditors have.

For all of these reasons, the individual mandate can be enforced and thereby help discourage millions of people from going without health insurance.

Aging, Taxes, and the State of the Labor Market

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As people age each year, that tends to increase average ages. At the same time elderly people die and babies are born, and that tends to decrease average ages. The combination of these two forces can keep the average population age constant over time.

The baby boom from the late 1940s to early 1960s changed this calculus, because the number of babies born in those years was well above normal. Average ages fell when the baby boomers were born, and have risen thereafter because the baby boomers’ birthdays tended to outweigh the arrival of subsequent birth cohorts.

For decades, people tended to reduce the amount they worked – especially through retirement – as they reached 62 and beyond, because their health declined, they became eligible for Social Security, they wanted to spend time traveling or they looked forward to extra time with grandchildren. Still, retirement behavior need not reduce total workers per capita because people turning 62 can be replaced by young people coming into the work force.

In about 2008, the first baby boomers started to reach normal retirement ages. Their numbers are so large that the people coming out of school are too few to fully replace them. This historically unusual rate of population aging is expected to reduce employment per capita.

You might say that the natural rate of employment has been falling in recent years, for labor supply reasons that have nothing to do with the recession, financial crises and other economic events.

For this reason, in my book and elsewhere I look at labor time series that are adjusted for population aging. The chart of work hours per person below is an example. The chart is on an index scale, with the last month before the recession normalized to 100. An index value of, say, 90, means that hours per person were 90 percent of what they were in December 2007: a drop of 10 percent.

Calculated with data from the Bureau of Labor Statistics, the Census Bureau and the Bureau of Economic Analysis

The red series shows that, without any adjustment, the labor market is still about 6 percent below what it was: less than half recovered from its 10 percent drop. But the recovery is more significant if we adjust for age: the gray series had reached 96.3 by August 2013.

In other words, two of the six percentage points of the current depression of the red series is a consequence of population aging between 2007 and 2013. Because the Federal Reserve and other policy makers cannot stop the aging process and the labor supply shifts that go with it, they should understand that their job of helping recovery will be finished before the red series gets back to 100.

Economists disagree about many things, but they seem to agree with the basic idea that the lack of recovery is partly attributable to population aging, and that policy makers cannot stop the aging process. Paul Krugman, for example, notes that we need to adjust for demographics. He uses a slightly different adjustment, but his measure and mine agree that population aging by itself depresses the usual labor market indicators by 1 or 2 percent.

But aging is not the only change affecting labor supply. Marginal tax rates have increased five percentage points since 2007 and will increase another five percentage points over the next 15 months, a trend attributed especially to expansions in health and other safety net programs. By 2015, a typical worker will keep only half of the value created by employment, compared with 60 percent kept before the recession.

Economists have traditionally recognized that a 17 percent reduction in the reward to working (from keeping 60 to keeping 50) would significantly contract the labor market, and do so at least as much as the 2 percent that the aging of the baby boom does. Yet this time many economists are reluctant to acknowledge marginal tax rate increases, even though marginal tax rates affect labor supply in many of the same ways that aging does.

Perhaps the economists who are silent about marginal tax rate hikes are worried that acknowledging the new rates would overshadow their well-intentioned origins: helping the poor, the unemployed and people without health insurance.

Professor Krugman, for example, says life is too short for him to look closely at my criticism and at the marginal tax rates I’ve measured, and doesn’t indicate that he’s looking at anyone else’s measures either. He’s not the only one: I have visited several Federal Reserve banks since 2009, and hardly any of the economists there seemed to be aware of what’s happening to marginal tax rates.

The Federal Reserve cannot reverse the tax rate increases any more than they can reverse the aging process. Perhaps Congress should ask Janet Yellen, nominated as chairwoman of the Federal Reserve, what she knows about changes in tax and retirement rates, and what they say about the future of the labor market.