NEW YORK - The Federal Reserve Bank of New York's Center for Microeconomic Data today released the April 2023 Survey of Consumer Expectations (SCE) Public Policy Survey, which provides information on individuals' expectations regarding future changes in a wide range of public policies.
The April 2023 survey shows that the public's expectations regarding expansions of federal assistance and social insurance programs primarily declined or remained stable, continuing a trend that started in August 2021. The trend represents a continued reversal from pandemic and 2020 election-induced spikes in the average likelihood of increases/expansions in housing, welfare, and unemployment benefits, as well as in subsidized preschool education and federal student aid. As shown in the survey's interactive chart, largely similar patterns emerge for expansions in Medicare and social security benefits, as well as for an increase in the federal minimum wage. An interesting exception is the average perceived likelihood of an expansion in paid parental leave, which saw a notable increase in April 2023 to 28%, after declining over the past two years. Despite the overall downward trend, expectations of future program expansions in April 2023 broadly remain somewhat above pre-pandemic levels.
As perceived prospects of future expansions in government support programs continue to moderate, expectations about future tax increases were mixed in April 2023. While the average perceived likelihood of an increase in capital gains, gasoline, and the income tax rate on the highest income bracket rose, it declined somewhat for the payroll and average income tax rate. Overall, average probabilities of future tax increases remain considerably lower than those observed immediately following the 2020 election.
Finally, the average perceived likelihood of an increase in state public college tuition fees reached 50%, a new series' high.
Key findings from the April 2023 Survey are:
Expectations about Public Assistance and Social Insurance Programs
- The average likelihood of an increase in housing assistance or affordable housing, and of an expansion in free or subsidized public preschool education have both remained relatively stable over the past year. Their April 2023 readings of 37% and 31%, respectively, were somewhat lower than 2021 levels but well above pre-Covid (December 2019) levels.
- The mean probabilities assigned in April 2023 to an expansion in federal student aid or Pell grants (27%) and in federal student debt forgiveness (31%) were comparable to April 2022 levels. While somewhat lower than levels that prevailed following the 2020 election, they remain higher than their pre-election and pre-pandemic levels.
- The average perceived likelihood of an increase in federal welfare and unemployment benefits declined to 30% and 25%, respectively, from 37% and 29% in December 2022. These readings are also lower than year-ago levels, while somewhat higher than levels observed at the onset of the pandemic.
- The average likelihood of a rise in Medicare or social security benefits declined to 26% and 25% in April 2023, respectively, from 30% and 35% in December 2022. The current readings are now well below those observed in 2021, but remain above those observed prior to the 2020 election.
Expectations about Labor Market Policies
- Prospects of an increase in the federal minimum wage fell to 31% in April 2023 from 35% in December 2022, and are now back to pre-Covid (December 2019) levels.
- The average perceived likelihood of an expansion in paid parental leave over the next 12 months, which has been declining over the past two years, increased to 28%, a higher level than before the 2020 election.
Expectations about Taxes and Fees
- The average likelihood of an increase in the mortgage interest rate deduction has been largely stable since seeing a sizeable jump just after the 2020 election.
- The average probability of an increase over the next 12 months in the capital gains and gasoline tax rates increased slightly to 39% and 52% in April 2023, from 38% and 47% in December 2022. While higher than levels observed before the 2020 election, these readings are noticeably lower than those observed in the year following the election.
- The average probability of an increase in the income tax rate for the highest income bracket also edged up to 43% in April 2023 from 42% in December 2022, still well below year-ago and post-2020-election levels. The mean likelihood of an increase in the average income tax rate declined to 44% in April 2023 from 46% in December 2022 and 45% in April 2022, remaining well below the levels observed immediately following the 2020 election.
- The average probability of an increase in the payroll tax also decreased to 38%, the lowest level since the 2020 election.
- The average perceived likelihood of an increase in the state's public college tuition rose to 50% in April 2023 from 48% in December 2022, a new series' high.
Detailed results are available here.
About the SCE Public Policy Survey
The SCE Public Policy Survey, fielded as part of the Survey of Consumer Expectations (SCE), provides information on consumers' outlook on public policy changes over the next year. Every four months, SCE panelists are asked details about their expectations for year-ahead changes in twenty different public policy instruments, grouped into five broad categories: assistance programs, social insurance programs, labor market policies, taxes, and fees. The SCE Public Policy Survey also solicits information on the expected impact of such shifts on their households. More information on the SCE Public Policy Survey, including the interactive chart guide, can be found here.
