More Fixes Won’t Fix Sequestration’s Harms

Never let it be said that Congress can’t get anything done because bipartisanship is dead. Look at how swiftly Republicans and Democrats jointly acted when the air traffic controller furloughs started inconveniencing frequent flyers.

This isn’t the first time Congress has created a loophole in the law that mandates across-the-board cuts.

When the Agriculture Department announced that it would have to furlough the inspectors who must be in meat, poultry and egg processing plants, Congress found funding to keep the inspectors on the job.

Took part of it out of the department’s fund for grants to help more schools serve breakfast to low-income students.

I’m hardly the first to note that Congress has evinced no significant concern about other delays sequestration seems likely to cause — or those that will worsen.

Nor about other harms the cuts will cause — not merely furloughs that will create hardships for some as-yet unknown number of federal employees, but as many as 750,000 actual job losses in both the public and private sectors.

And lost benefits for jobless workers who’ve been unemployed long enough to qualify for federally-funded unemployment insurance benefits. Nineteen states have already rolled out cuts averaging $120 a week. The longer states wait, the bigger the cuts will have to be.

Some of the other cuts have also gotten considerable press coverage.

So you probably know that Head Start programs have begun paring back enrollment. Some of them already have waiting lists — a far more consequential sort of delay than some extra hours in an airport.

The U.S. Secretary of Education says that about 70,000 children won’t have the early learning opportunities and other benefits, e.g., health services, that Head Start provides.

One Head Start director warns that parents may have to quit their jobs to tend to their children — not unlikely, since unsubsidized child care can cost more than they earn.

And sequestration has taken a bite out of the block grant that helps pay for subsidized care.

Also out of federal programs that fund subsidized housing. Long waiting lists for housing assistance are already common. And the number of years applicants wait are often far longer than the number of hours fussed airline travelers waited.

The Center on Budget and Policy Priorities estimates that 140,000 fewer households will have housing vouchers by early next year. Others, it says, may face rent increases — perhaps beyond their ability to pay.

Yet funds for homeless services will be cut too.

But I’m cherry-picking here, just as many say Congress just did. Those interested can find many other examples in the weekly reports the Coalition on Human Needs is publishing.

No one, I think, would doubt that Congress hasn’t acted to avert impacts like the aforementioned because the people affected don’t have the political clout that frequent fliers and agribusinesses do.

I think we’re looking at something more difficult to deal with than a power imbalance, however.

The air traffic controller and food safety inspector furloughs caused — or were about to cause — large, clear, nationwide impacts. In many other cases, the proverbial is only beginning to hit the fan — or more precisely, a vast number of fans.

Most of the genuine news we have about the impacts on low-income people and the programs that serve them are local — and often likelihoods rather than sure things.

This is partly because program directors, in many cases, don’t yet know what their share of the cut will be. Even those who do are mostly still figuring out how they’ll manage — and give various answers when asked.

We also don’t get a whole picture because stories tend to get written when some advocates have gotten reporters interested. And, face it, some programs have more heart-tug appeal than others.

In one respect, it’s good that we’re getting stories. In fact, this is a welcome — if unintended — side effect of the air traffic controller save.

Yet, in another respect, it’s dangerous. Because the more major media focus on a handful of programs — and the more grassroots campaigns call on Congress to save one or another — the more likely other FAA-type fixes become.

And most federal agencies, unlike FAA, don’t have a pot of money they can tap that they didn’t need to spend this year anyway.

So a reprieve for some programs will mean deeper cuts for others. Like as not they’ll be programs that benefit low-income people — especially those that don’t have an effective public voice or lend themselves so well to poignant individual stories.

House Republicans seem open to this. “The main thing,” says Congressman Tom Cole (R-OK), “is to secure $85 billion in savings. We are not wedded to where the savings come from.”

But the fundamental issue is the savings, a.k.a spending cuts. Sequestration is a singularly dumb way to address a problem that’s been blown out of all proportion, i.e., the federal deficit.

Yet, as Federal Reserve Chairman Ben Bernanke has testified, deep cuts at this point — even if not across-the-board — are likely to lead to less deficit reduction.

And the whole approach is unbalanced, since sequestration comes on top of $1.5 trillion in cuts and a mere $620 billion or so in additional revenues.

Congress ought to get rid of sequestration, which none of its members wanted — or thought would come to pass. And some, who will remain nameless, should back off their cuts-only/cuts-now solution to the long-term deficit.

That, I hope, will be the message that all who care about the well-being of our nation’s children, seniors and everyone in between will deliver. Because if we don’t hang together … Well, you know the rest.

The Message Behind the Messages in Ryan’s Budget Plan

This year I vowed not to pick apart Congressman Paul Ryan’s budget plan — the refurbished, but barely changed Path the Prosperity.

A path it certainly is. And it’s worth attending to because it shows where right-wing Republicans want to take us — if not all at once (highly improbable), then step by step. Or should I say manufactured crisis by crisis?

Specifically, as Washington Post columnist Michael Gerson indicates, they view “civil society as an alternative to government.” This should set off alarm bells among nonprofit service providers and all of us who care about the work they do.

Like last year’s plan — and the plan the year before — it purports to strengthen the safety net by block granting Medicaid and SNAP (the food stamp program), thus giving states “flexibility” to manage increasing diminished federal funds.

Except that they’d have to time-limit SNAP participation, since that worked so well for former — and now desperately poor — families dumped out of the safety net by “welfare reform.”

Retirement would be secured by converting Medicare into a modified voucher program that would jack up the per person cost of traditional Medicare, thus building a fiscal case for killing it.

Meanwhile, seniors would have to pay increasingly more for their insurance because the premium support they’d get from the government wouldn’t keep pace with rising health care costs.

And the Affordable Care Act would be repealed, including the federal incentives for Medicaid expansion. So an estimated 40-50 million more low and moderate-income people too young for Medicare wouldn’t have any health insurance whatever.

Something (unspecified) would be done to cut Social Security spending. The plan cites misleadingly over-simple life expectancy increases. So we can infer that Ryan wants the eligibility age increased again.

Also “less generous benefits.” We know by now that this is code for pegging Social Security cost-of-living adjustments to the chained CPI, which rises more slowly than the price index used now.

But the plan itself merely directs the President and Congress to propose reform legislation — a profile in courage, as one advocate remarked.

But I said I wasn’t going to write about these things. And here I am off on a tear.

The combination of what Robert Greenstein at the Center on Budget and Policy Priorities calls “reverse Robin Hood policies” and the euphemisms used to describe them does that to me.

Well, the Path will die in the Senate, just like the previous plans. So the most we can say about it as a genuine budget blueprint is that it sets the stage of another partisan standoff.

What actually struck me about the plan was the introductory justification — not the lead-off hysteria about the imagined debt crisis, but the celebration of community.

The budget, Ryan says, “makes room for community — for the vast middle ground between government and the person.” People find happiness “through friendship, … in their families, their places of worship and youth groups.”

“While we belong to one country, we also belong to thousands of communities.” They encourage our personal growth. “So the duty of government is not to displace these communities, but to support them.”

Who could argue with that? Only someone, I suppose, who thought that the federal government was — or should be — the source of our personal happiness, sense of “belonging and self-fulfillment.”

The explicit message is that our communities — and our families — face many dangers, i.e., “rising health costs, a stagnant economy, massive debt, an uncertain world.”

The federal government can do something about these, but it shouldn’t play the leading role because its proper business is to “secure our individual rights and protect … [community] diversity.”

The unspoken message is that Ryan and his right-wing colleagues aim to divest the federal government of core responsibilities for the health, well-being and economic opportunities of the population as a whole.

The proposed Medicaid and SNAP block grants wouldn’t merely shift funding responsibilities to the states — by shrinking the federal cost shares over time.

They would ultimately shift feeding and tending to the medical needs of low-income people onto local communities because it’s wholly unrealistic to believe that states would — or even could — continue to absorb the costs of retaining these critical safety net programs intact.

Nor make up for deeper, as-yet-unspecified cuts to non-defense programs that depend on annual appropriations, e.g., education, transportation, public safety, housing assistance.

They’d be billions larger than those the current law requires because the Ryan budget would shift all further mandated cuts in defense to those other so-called discretionary programs.

States could also lose funds for school meals, other child nutrition programs and Temporary Assistance for Needy Families because another $800 billion would be taken from programs that don’t depend on annual appropriations — in addition to those, like SNAP and the major health care programs, that the plan specifically names.

We would, in other words, return to some long ago time when faith-based and other local community organizations cared for the poor in their communities as best they could, with no government help whatever.

Many communities today have strong networks of nonprofit organizations that both supplement and serve as channels for federal spending on both safety net programs and others that meet vital human and economic needs.

But not all communities have such organizations.

And I doubt you could find a nonprofit anywhere that would say that it — and others in its network — could meet the needs of all low-income community members if the federal government backed out of its anti-poverty commitments.

In short, the budget plan presents a clear contrast between the right-wing Republican vision for our society and the vision President Obama campaigned on — that “we are greater together” and that government is a way we come together to help give life to values we commonly share.

Well, most of us anyway.

Panel to Address Poverty in DC and What to Do About It

On Tuesday, March 5, the Fair Budget Coalition will host a panel discussion on poverty in the District of Columbia — “The State of the District’s Poverty: What’s the Story Behind the 600 Kids at DC General?”.

As the online invitation suggests, the Coalition is linking the record-high number of children in DC General — the District’s main shelter for families — to funding cuts in both safety net programs and others that benefit low-income residents.

A look at the District’s poverty rates is surely worthwhile. As I’ve written before, both the overall rate and the child poverty rate are well above the national rates — and considerably higher than the rates in 2007, just before the recession set in.

But, as I’ve also written, the Census Bureau’s poverty thresholds are unrealistically low. For a single mother with two children, for example, the 2011 threshold was just $18,123.

The Wider Opportunities for Women’s Basic Economic Security Tables for the District show that the family would need about $85,680 for basic necessities, child care and taxes, plus some extra for rainy day and retirement savings – if the mother had employer-sponsored health insurance and retirement benefits.

This is higher than the 2011 median income for District households as a whole, but nearly $22,000 lower than the median for households classified as white/non-Hispanic.

One of many indications that the growing economic prosperity Mayor Gray’s recent State of the District address celebrated hasn’t done much for the “have-nots” in the city.

The challenge Fair Budget faces is that no panel can specifically address all the programs that could alleviate hardship — and narrow the huge income gaps here — if the Mayor and the DC Council invested more money in them.

The event can provide a framework for the programs, however, and draw some links among them. Also identify priorities for addressing critical weaknesses.

We know, for example, that the Temporary Assistance for Needy Families program aims to prepare parents for work that will, at the very least, reduce their need for safety net benefits.

The District has invested resources in making TANF job training more effective. It’s also launched several initiatives to match job seekers with employers that might hire them.

But many parents won’t be able to work unless they have child care — and a subsidy to make it affordable. Consider, for example, that the average annual market rate local centers charge for infants is $2,400 more than a full-time minimum wage worker earns.

Yet the District’s subsidy program reimburses providers at such low rates that many have gone out of business. The remainder perforce generally limit the number of subsidized children they’ll take.

So there are more than 9,000 infants and toddlers on center waiting lists, according to the Fair Budget invite.

We’ve thus got one program that’s doing more to address barriers to work and another that should, but isn’t because it’s egregiously under-funded.

Similarly, the employment prospects of more than 36% of D.C. adults are extremely limited because they’re functionally illiterate.

Yet local funding for adult education programs was cut in Fiscal Year 2011 and again in Fiscal Year 2012. It’s at its twice-reduced level in the current budget, I’m told. (The budget for the Office of the State Superintendent of Education, where adult ed. is housed, is notoriously opaque.)

Well, I could go on, but point is made, I hope. As with any complex problem, poverty has a lot of inter-related parts. And the District government has a lot of parts that affect it, for good or ill.

If the Mayor truly wants to “improve the quality of life for all,” as his One City Action Plan says, then he should fashion a budget that reflects a comprehensive commitment to both the safety net and poverty reduction.

Like all elected officials, he’ll tend to want what he believes his constituents want seriously enough to consider when election time rolls round.

So a good turnout at the Fair Budget Coalition’s event would send a helpful message. And I expect it to be both informative and a launching pad for this year’s grassroots budget advocacy.

And who wouldn’t be inspired to launch after listening to panelists who know poverty first-hand — and while sitting among some of the families from DC General who’ll be there too?

The hour-long event begins at 3:30 p.m. in Room 412 of the Wilson Building, 1350 Pennsylvania Avenue, NW. You’ll need a photo ID to get past the guards.

And Fair Budget asks that you RSVP to Janelle Treibitz, 202-328-5513 or janelle@fairbudget.org.

UPDATE: The event will be in Room 123 instead of Room 412, as originally planned.

More at Stake With the Chained CPI Than Social Security Benefits

As perhaps you know, the President’s last comprehensive “fiscal cliff” proposal included the adoption of a new inflation measure — the Chained Consumer Price Index.

We’ve heard about it before, but almost exclusively as a way to curb spending on Social Security retirement benefits. And that’s what we’re hearing most about now.

But what the President proposed was apparently a global switch to the chained CPI, with some unspecified protections for “the most vulnerable.”

Just because Congress decided to punt on the “fiscal cliff” doesn’t mean something of this sort won’t resurface.

In fact, it already has in a bill co-sponsored by Tennessee’s Republican Senators Bob Corker and Lamar Alexander.

Like the President’s offer, the Corker-Alexander bill would make the chained CPI the inflation measure used for all federal cost-of-living adjustments.

So it would raise more tax revenues, with the highest percent increases coming from fairly low-income households.

It would also make relatively fewer people eligible for a host of safety net programs and, in some cases, reduce the benefits those still eligible would get, relative to what they could expect if there were no CPI switch.

The same result, of course, for Social Security retirement benefits.

I’ll deal here with the eligibility issue and return to benefit cuts in a separate post. But first, a super-simple primer to set the context.

Chained CPI 101

At this point, the federal government uses the Consumer Price Index for All Urban Consumers (CPI-U) to make what are basically cost-of-living adjustments in both the tax code and the Census Bureau’s poverty thresholds.

A somewhat different index — the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) — is used to adjust all major federal retirement benefits, including Social Security, and Social Security disability benefits as well.

Both these indexes reflect the prices consumers pay for a set market basket of goods and services. When the average costs of the total go up, so do  the CPIs.

But, say economists, consumers change their purchasing practices when the costs of certain items rise. For example, if the price of beef goes up, they buy less of it and more chicken.

The chained CPI is designed to capture these changes. So the cost-of-living increases it produces are lower than those based on a a market basket that isn’t continuously re-weighted to reflect substitutions.

Eligibility for Safety Net Benefits

More than 30 federal anti-poverty programs based their income cut-offs or targeting on the federal poverty guidelines,* as do some state and local programs.

The federal programs include many we think of as key parts of the safety net, e.g., the food stamp program, other nutrition assistance programs, the Children’s Health Insurance Program, LIHEAP (the Low Income Home Energy Assistance Program).

The poverty guidelines are simplified versions of the Census Bureau’s official poverty thresholds. These, as I’ve said, are annually adjusted using the CPI-U.

The chained CPI would thus mean smaller upward adjustments in the income cut-offs — not much smaller in any given year, but cumulative over time.

Bad Policymaking

I see at least three problems with the result I’ve just described.

First, the thresholds already significantly understate the number of poor people in this country, as even the Census Bureau’s still-evolving Supplemental Poverty Measure shows.

This is partly because the thresholds are based on an outdated minimum cost-of-living measure — three times the cost of what used to be the U.S. Department of Agriculture’s cheapest food plan.

The annual adjustments compound the problem because the CPI-U understates living-cost increases for households in the bottom fifth of the income scale — or so the research we have suggests.

Use of the chained CPI would thus, as Shawn Fremstad at the Center for Economic and Policy Research says, define deprivation downward, even more than use of the current thresholds do.

At the same time, the living-cost research tells us that the chained CPI probably isn’t more accurate for low-income households — quite the opposite, in fact.

So using it would unjustly exclude even more people from the safety net — assuming the proper measure is insufficient income to pay for basic living needs. And if not that, what?

Finally, the proposed switch to the chained CPI is an underhanded way to make consequential policy changes. And that, as Wonkblogger Dylan Matthews says, is what makes it so attractive.

If our policymakers want to shrink the safety net, then they should say so forthrightly, name the programs and give us the figures — not trot out a supposedly technical change that only the most wonkish among us can understand.

* The official list of programs that use the federal poverty guidelines says that the Temporary Assistance for Needy Families Program doesn’t. This is because states can set income eligibility standards for TANF however they choose. Fourteen expressly use the federal poverty level, which I assume means the guidelines.