President Has Bold, New Plans for Homeless and At-Risk Families

February 16, 2016

The Obama administration has turned its attention to family homelessness — a big problem even now, years after the recession officially ended. We find the focus in the President’s proposed budget — and not only in the groundbreaking investment the White House overview flags.

We could, of course, find it in all sorts of places, especially if we took a long-range view. We see, for example, diverse investments that will enable current and future workers to qualify for higher paying jobs.

But I’ll confine myself here to a handful of proposals that would house homeless families and prevent some from losing their homes. A partial summary even so.

Assistance for Homeless Families

The proposed budget would dedicate $11 billion over 10 years to housing assistance earmarked for homeless families. An estimated 80% would fund Housing Choice vouchers — those that families can generally have so long as their incomes don’t rise above 30% of the median for the area they live in.

The other 20% would support rapid re-housing, which generally subsidizes housing for a year or less, plus services intended to enable families to then pay the full costs.

The budget for the upcoming year would essentially make a down payment, providing funds for 10,000 new vouchers for families with children and 8,000 more units to rapidly re-house others.

An interesting policy shift here, since the federal Interagency Council on Homelessness has tilted toward rapid re-housing as the tool for ending family homelessness.

We can, I think, credit the shift to the findings of a recently-completed study conducted for the U.S. Department of Housing and Urban Development. The White House summary, in fact, suggests as much.

Shift in Budget Too

The homeless family piece of the proposed budget is notable for another reason. The $11 billion would be so-called mandatory spending. In other words, the federal government would have the authority to make the investment unless Congress changed or repealed it.

Up to this point, homeless assistance, vouchers and other such programs have depended on discretionary spending, i.e., the choices Congress annually makes. This would still be true for the down payment.

But the larger shift to the mandatory side will permit further investments without effectively taking funds from other non-defense programs, as they would if they added to discretionary spending, which the Budget Control Act caps.

Though subsequent deals temporarily eased the caps, public housing authorities are still shy roughly 67,000 housing vouchers lost due to the across-the-board cuts the BCA required for 2013.

Mandatory funding at the proposed level would provide 20,000 new vouchers a year, a HUD director told those of us on a budget briefing call. The Secretary put the total number of families housed at 550,000 during an in-person briefing.

And they’d be secure from the vagaries of annual spending choices.

Short-Shot Homelessness Prevention

Not all families need ongoing assistance to cover their housing costs, of course. Some can remain housed if they merely get a swift infusion of cash or the equivalent — enough, for example, to repair a car needed to get to work or to defray lost wages when an injury sidelines the breadwinner.

The President proposes $2 billion for grants to test ways of providing emergency aid and services. This too is a sort of down payment because the aim is to learn what works best — and so pave the way for a future initiative.

This isn’t the only preventive measure the President proposes. We find also two for insurance. One would tackle state restrictions on unemployment insurance benefits that left barely more than a quarter of laid-off workers with any wage replacement in 2014.

The other measure would create a wage insurance program for workers who lose their jobs and have to settle for one paying less. They’d get half the wages they lost for two years, though no more than $10,000 total. Still, a bit of a cushion for families while they try to adjust.

More Hope Than Change?

Republican House leaders bashed the proposed budget before they even saw it. “[A] progressive manual for growing the federal government at the expense of hardworking Americans,” Speaker Paul Ryan opined.

That doesn’t mean it’s altogether irrelevant, however. For one thing, it presents reasonable solutions to problems that affect hardworking Americans, as well as those who can’t work — homeless children, for example.

How many of them is anybody’s guess. We do know, however, that the latest reported one-night count found nearly 128,000 who met HUD’s restrictive definition of “homeless.” That’s a lot of kids to shrug off as just cost items in a left-wing agenda.

The proposed budget is also relevant because its homeless family initiatives — and many others that would benefit lower-income people — don’t drive up the deficit. On the contrary. The projected deficit would drop by $2.9 trillion over the next 10 years.

I can’t account specifically for the budget changes that would pay for the President’s initiatives. I do note, however, a suite of tax reforms that would raise more revenues from corporations and well-off individuals.

Doubt Congressional Republicans will accept the pay-fors to give homeless families a modicum of security — or in other ways, help poor and near-poor people, as the President proposes.

But the offsets show what’s possible within tight fiscal constraints. And they could be back on the table, a hopeful budget expert has suggested. A lotta hope there. but who knows?

Better to let hope fuel our efforts, as it has at the White House, than to leave change to “the worst,” who surely are “full of passionate intensity” these days.

UPDATE: Due to a typographical error, this post originally understated the estimated number of families that would have housing vouchers. I have corrected the figure.

 


Obama Wants to Do More About Summer Hunger Too

February 8, 2016

As I was polishing off my post on how the Senate Agriculture Committee went at the problem of summer hunger, the White House previewed two child nutrition initiatives in the budget the President will soon propose. One is a more expansive version of the electronic benefits transfer option.

As I’ve said, the Senate Ag Committee’s version of a new Child Nutrition Act would have the U.S. Department of Agriculture distribute a limited number of EBT cards for summer food purchases to a limited number of states.

Some limited number of families in those states would get cards loaded with $30 per month, per eligible child, i.e., one who’s eligible for free or reduced-price meals during the school year. By 2020, families with a total of no more than 285,000 such children would have the cards.

Roughly 22 million children now get free or reduced-price school meals. Some of them can get free summer meals and/or snacks through an existing program the Ag Committee seeks to expand. So it’s hard to know how much the EBT complement would reduce summer hunger.

This much we do know. The bill would provide a total of $150 million from Fiscal Year 2018 through Fiscal Year 2020. USDA could then spend any money left over until it was gone. End of the EBT option then, unless a future Congress extends it.

The President’s plan would create a permanent summer EBT card program. His proposed budget would provide $12 billion over the 10-year window generally used to cost out federal spending proposals.

The program would phase in, beginning in the summer of 2017. Families with a total of nearly a million children would get a food budget boost then, according to a USDA fact sheet.

This is roughly four times as many as would initially benefit under the Ag Committee’s bill. Nine years later, when all states could participate, the number of children benefited would increase to nearly 20 million.

Families would initially get $45 a month per eligible child. The fact sheet uses the same definition of eligibility as the Ag Committee’s bill — at least so far as family income is concerned. The maximum would be 185% of the federal poverty line — roughly $37,300 a year for a single parent/two-child family if the program existed today.

We’ll need to see the budget to know how much further the proposals track — or perhaps rules, if Congress adopted the President’s. Big if.

The summer EBT card initiative is one of those evidence-based solutions we’re enjoined to favor. USDA conducted a two-year pilot, testing several variations.

Experts from three independent consulting firms found, among other things, that the cards led to “a substantial reduction” in very low food security — roughly equivalent to out-and-out hunger for at least one family member, at least some of the time.

The cards prevented such dire food insecurity for about a third of the children whose families received them. And the children generally ate more healthfully too.

A higher benefit than now proposed reduced food insecurity at the household level, i.e., among the adults as well as the children. This, USDA says, shows that parents used the extra food-purchasing money to meet the children’s “most severe needs” — rather, one notes, than easing hunger somewhat for themselves as well.

Splitting the difference between the higher and lower benefits tested, as the proposed budget will, leaves them at risk of summer hunger.

But for the time being, our federal policymakers have decided to focus on child nutrition. And there are good and proper reasons for that, if one must choose. A plethora of research documents the diverse harms children suffer from hunger and poor diets.

So it’s good to see strong bipartisan support for a better Child Nutrition Act in the Senate Agriculture Committee. And good to see the President apparently ready to sign the bill, should it come to him.

Good as well to see him trying to move policy further on child hunger — and not only during the summer. He’ll propose an expanded automatic enrollment process for free and reduced-price meals during the school year too.

Will leave such details as we’ve got to the White House announcement — at least, for the time being.

 

 


Brooding on My Blog’s Seventh Birthday

December 7, 2015

Yesterday was my blog’s seventh birthday. The occasion always prompts reflections, some of which I’ve shared.

I’ve spoken in the past about how things were when I launched the blog, compared to how they were when the birthday rolled round. I’ve spoken about the value of the blog as a source of discipline for learning and of relationships with advocates who inspire me — and readers who keep me going.

What’s top of mind today — and has been for awhile — grows out of the scope I carved out for the blog, but only gradually got a purchase on.

The scope is very — or one might say self-indulgently — broad, as the blog’s name indicates. It essentially licenses posts on any nexus between public policies and poverty, though as a practical matter, I’ve confined myself to the American scene.

I’ve stretched the scope as I’ve come to understand how our official poverty measure fails to do justice to the extent of economic hardship in our country.

Some of our major federal policies recognize this and so set income eligibility maximums above the federal poverty line — a simplified version of the thresholds the Census Bureau uses for the official measure.

At the same time, those income eligibility maximums vary a lot from state to state insofar as federal programs grant states flexibility.

We also see marked variations when we look at how states invest their own tax revenues in programs that provide a safety net and others that can help low-income people achieve a modicum of financial security.

States have always faced the challenges these choices reflect. They surely face them now, as they have ever since the Budget Control Act capped federal spending on non-defense programs that depend on annual appropriations.

The fact that the recent budget deal temporarily lifts the caps doesn’t relieve them from the challenges because the non-defense part of the budget includes a very wide range of programs.

Congressional appropriations committees have divvied up the new, higher spending level now. And at least on the House side, Labor, Health and Human Services, and Education — a major source of funds for programs that benefit low-income people — reportedly won’t get its fair share.

Highly doubtful that the Transportation-Housing and Urban Development budget will fully undo the damages to the federal housing voucher program or the capital fund that local agencies use to keep public housing units habitable.

Meanwhile, Congress will clearly do nothing now about a long-neglected piece of the federal budget that’s not subject to annual appropriations — the Temporary Assistance for Needy Families block grant.

It’s not only the federal government’s major share of funding for states’ TANF programs. It also determines how much of their own funds they must spend to get that share.

And as I’ve written (perhaps too often), it’s never gotten a penny more than it did the year that TANF ended welfare as we knew it. This means it’s now worth about a third less in real dollars.

Which brings me to the other nexus I’ve tried to deal with, but mostly one nibble at a time. That’s the nexus between federal policies — budgets included — and related state and local policies. These too include budgets, but not budgets only.

I’ve referred to states’ TANF policies — mainly the very low cash benefits they provide. And I’ve taken a poke from time to time at some states’ Medicaid eligibility policies.

I’ve also cited states’ varying responses to federal policy choices that can enable them to enroll more low-income people in SNAP (the food stamp program) — and qualify some of them for higher benefits.

I’ve noted disparities in minimum wages, as some states raise their minimums above the federal, while others either preserve the link or have no minimum of their own at all. I haven’t noted, but probably should have how much those higher minimums vary.

These and other such differences have made me increasingly conscious of what I think of as geographic inequality. We read a lot about income inequality — and about how children’s future financial prospects hinge so much on whom they’re born to.

But how low-income people, including children fare depends a whole lot on where they live. Part of that, of course, is that some local economies offer better opportunities than others. But a major part stems from policy choices.

I know I’m not saying anything new or original here. Only taking this occasion to say how the more I learn, the more I’m disturbed by how unfair our federal-state-local system is to so many poor and near-poor people who’ve got little, if any choice of where they live.

Not saying I’d like to see all policies determined by our federal government — surely not the one we have now. Low-income people have it bad enough already. I shudder to think how much worse off the geographically fortunate would be if left to the tender mercies of the majorities in Congress.

Won’t think because I can’t bear to what would happen to all struggling people if the next election not only sustains those majorities, but puts a like-minded candidate — or a loose cannon — in the White House.

What would a ninth birthday post look like then?

 


Do Nothing Congress Gets Something Pretty Good Done

October 30, 2015

So Congress did indeed pass a big package to deal with pressing, undone business. It’s entitled the Bipartisan Budget Act. And one could call it that, though it would have died in the House if still-Speaker Boehner hadn’t relied on Democrats to get it through.

No one, so far as I know, likes everything in it. But it’s a whole lot better than no bill at all — and not only because the federal government was mere days before defaulting on the debt.

I can’t possibly cover every jot and tittle. Here instead is what I’ve learned about several major issues I’ve blogged on.

Spending Caps

The bill doesn’t eliminate the spending caps that the Budget Control Act imposed. It does, however, lift them for this fiscal year and the next. For non-defense programs that depend on annual appropriations, this will mean an extra $40 billion — the same as the extra for defense.

Most of the extra non-defense money applies to the budget for this fiscal year, which Congress still hasn’t produced. Only another half billion or so will be left for the following year. Then the caps kick in again, forcing cuts unless the next Congress and President agree to prevent them.

On the upside, the non-defense programs will have $34 billion more this year than they would have had with no budget deal. On the downside, they’ll have 12% less in real dollars than they had the year before the BCA first cut and then capped spending.

What this means, in practical terms, is that we can’t hope for significantly larger investments in the safety net programs funded as much (or little) as Congress chooses each year — WIC, for example, housing assistance and homeless services.

Nor for significantly larger investments in a wide range of programs that offer low-income people opportunities to fare well without “welfare,” e.g., education, job training, affordable, high-quality child care.

In short, as CLASP says, the cap relief is “a welcome down payment,” but only that.

Disability Insurance Benefits

The bill shores up the trust fund that helps pay for Social Security Disability Insurance benefits. As I’ve written before, the trustees projected total depletion next year. That would have forced across-the-board benefits cuts of about 20%.

The bill preserves full benefits, with no changes in eligibility standards by shifting money from the retirement benefits trust fund, as many experts have recommended ever since insolvency loomed on the horizon.

This should avert a shortfall for seven years. And, no, it doesn’t “rob Social Security,” as the Heritage Foundation (and other right-wingers) claim.

Some funds to offset the costs of the package as a whole will come from the DI program. These include savings expected from beefed-up investigations to identify fraud, plus revenues from steeper penalties.

The bill also eliminates a long-standing pilot program that enabled staff responsible for processing SSDI claims in 20 states to determine eligibility without an independent medical opinion.

All applicants will henceforth have to have two written evaluations from medical experts, either their own doctors or doctors the DI office refers them to.

The fact that the bill anticipates savings from this indicates that the scorekeepers expect it to result in more denials and/or longer delays in approvals. But the projected savings are very small — about 0.3% of benefits paid.

A small price to pay for fending off cost-reduction measures some Congressional Republicans have pushed for, e.g., denying SSDI benefits to recipients who returned to the workforce and then received unemployment benefits because they were laid off.

The bill also requires the Social Security Administration to test an alternative way of encouraging SSDI recipients to try working again.

Seems like a good idea, but probably won’t reduce the DI rolls by much, since most former workers who make it through the screening process are far too disabled to ever “engage in substantial gainful activity” again.

Medicare Premiums

That Medicare Part B premium spike I blogged on earlier this week won’t occur. Well-off seniors will, as always, have to pay more for the outpatient care and other health-related costs Part B covers.

The rest of the 16.5 million or so who were going to get hit hard will have to pay only the same amount more as they would have if all Part B beneficiaries paid a share of the expected spending increase, just as they do virtually every year when Social Security benefits are adjusted to reflect estimated living cost increases.

The unprotected will now have to pay about $15 a month more, plus an additional $3 over a longer period of time so as to restore general tax revenues tapped to cover the costs of the remedy. Rolling the two together, I figure premiums will increase, on average, by about half as much as they would have without the fix.

Not the End of the Story

So Congress packed up for the weekend, having done what seemed impossible. If no one’s altogether happy — and no one ever is with bipartisan deals — reasonable people on both the left and right seem pretty satisfied.

Need I add relieved that we won’t find out how much damage to our economy and economies around the world an unprecedented default on the federal debt would cause?

Now comes the budget or some equivalent to prevent a government shutdown before mid-December. So no one with an interest in any of the multifarious issues can rest easy. But advocates for programs and services that benefit low-income people should feel good about how much they’ve achieved.

 


No Government Shutdown (Now), But Congress May Shut Out More From Affordable Housing

October 5, 2015

If the official poverty rate ticks down at the same pace it did last year, we won’t see it cut in half until 2040, the Coalition on Human Needs reports. Not even then if we have another recession, which, of course, we will.

What this tells us, CHN says, is that economic growth won’t reduce poverty fast enough. We need bigger investments in programs with a strong anti-poverty track record.

Doesn’t look as if bigger investments are in the cards. The Republican majorities in Congress insist that appropriations for non-defense programs total no more than the budget cap set by the 2011 Budget Control Act.

What we may forget is that the cap — and caps going forward — were set after Congress cut appropriations by about $38 billion, thus lowering the baseline the caps were based on. So even if the non-defense cap were lifted by $37 billion, as the President proposed, funding would still be lower than in 2010.

Hard to know whether we will have a genuine budget for the upcoming fiscal year. We’ll have a short-term continuing resolution instead.

But not an ordinary CR because it doesn’t maintain program-by-program spending at the same level it’s been. It instead makes cuts in non-defense programs — a total of about $7 billion — so as to bring spending below the FY 2016 cap.

And we might not have even this if House Speaker John Boehner hadn’t resigned, freeing himself, it seems, to let the House vote on the CR, even though so many of his Republican colleagues signaled they’d balk that it couldn’t pass without Democrats.

So we won’t have a government shutdown. We’ll instead have the stage set for a showdown in early December — or sooner.

A more complex situation then because Congress will have to somehow deal with not only the expiring CR, but the expiration of nominally temporary tax breaks and the fact that the Treasury Department will have exhausted measures it can take to avert a default on the federal debt.

Some predict another budget deal like the one that pulled us back from the so-called fiscal cliff at the tail end of 2012. Others a year-long CR.

Assume that becomes the solution. Well, we know (or should) that even level funding doesn’t mean as many people served as well as they’ve been served.

Take Housing Choice (formerly Section 8) vouchers, for example. Actually, you probably can’t if you don’t already have a voucher — perhaps not even if you do.

We all know that rents generally rise — and have been rising faster in recent years. Utility costs are rising also. And they’re folded into what housing vouchers help pay for.

Incomes of households in the bottom tier of the affordability scale generally haven’t kept pace. So their share of rent, plus basic utilities — 30% of income — covers less. Each voucher then usually costs the agency that issues it more.

What this means is that funding for Housing Choice would have to increase each year just to maintain a steady state. But it hasn’t. Quite the contrary.

The across-the-board cuts in 2013 left a large majority of local housing agencies without funds to cover their share of rent for all the vouchers they’d issued.

By and large, they coped by holding back vouchers they’d otherwise have reissued when households that had them not longer qualified, e.g., because they’d moved out of the area or gained enough income to boost them over the eligibility cut-off.

Some pulled back vouchers they’d issued to people who hadn’t yet found apartments. At least one changed its standards, requiring voucher holders to either move to smaller units or come up with the money for rooms that were now “extra.”

And some actually shifted funds from vouchers to cope with other shortfalls, exacerbated, but not originating in the cuts — mainly under-funding for the program that covers the costs of maintaining and renovating public housing.

They could do this because they were part of the U.S. Department of Housing and Urban Development’s Moving to Work pilot, which essentially converted their federal housing assistance funding to a block grant.

But for a seemingly over-flexible, under-monitored MTW, about 63,000 more households would have had vouchers last year, the Center on Budget and Policy Priorities estimates.

On the other hand, more probably had apartments in public housing than if the MTW agencies hadn’t shifted funds to keep units from becoming unlivable.

So the story’s a bit more complicated than direct cuts to the Housing Choice program. But choices Congress has made nevertheless account for the shrinking number of households that make rent affordable.

The across-the-board cuts ultimately denied about 100,000 households vouchers they’d otherwise have had. Congress later restored some of the lost funds — enough to renew all vouchers issued and put some back in circulation.

Yet the boosts in the last two budgets will still leave roughly 68,560 fewer households with vouchers than pre-sequestration, according to CBPP estimates (and my calculator). And there weren’t enough vouchers well before the Budget Control Act and aftermath.

Of course, the House and Senate might agree to an actual budget. So it’s worth a look at what could then arrive on the President’s desk. Will confine myself again to Housing Choice.

House funding for HUD would reverse the progress made toward restoring lost vouchers. The White House predicts a loss of 28,000 more.

Over on the Senate side, the Appropriations Committee says its bill would “continue assistance to all individuals and families served by both Section 8 and public housing.” The White House, however, contends that the funding level falls short of what would be needed to renew roughly 50,300 vouchers.

Distressing, to put it mildly, that folks who call the shots in Congress seem disposed to make a bad situation worse.


House Republicans Set to Promote Single Motherhood

August 3, 2015

Seems the House will vote next month on budgets for the agencies lumped together as Labor, Health and Human Services and Education. Some increases, many cuts. Two of the latter would deny low-income women safe, reliable, affordable contraception.

There’s something extremely perverse about limiting women’s opportunities to postpone childbearing until they feel ready to fulfill — alone or with a spouse or partner — the heavy-duty responsibilities of motherhood.

Especially perverse, given all the expressed concern about single mothers, their dependency on welfare, how they’re breeding criminals, etc.

Labor-HHS-Education Overview

The House bill would cut total spending for the programs it includes by $3.7 billion. On top of cuts made since 2010, they’d have $29 billion (16%) less in real dollars, the Center on Budget and Policy Priorities reports.

Republicans claim they’ve got no choice because the Budget Control Act caps spending on domestic programs subject to annual appropriations.

They could, of course, have adjusted the cap — or done away with it altogether — by adopting a more balanced approach to deficit reduction, as the President’s proposed budget would and Senate Democrats seem ready to insist on.

Cap aside, it’s still the case that the Appropriations Committee foisted the largest dollar cut — and the second largest percent cut — on Labor-HHS-Education.

Predictable Defunding of Health Care Reform

HHS would take a $216 million hit, as compared to its current budget. By far and away the largest part reflects a near-total block on spending related to the Affordable Care Act — a significant source of expanded health insurance coverage for birth control, as well as other preventive services.

Were the budget to become law, which it won’t, HHS could no longer operate health insurance exchanges in the 34 states that haven’t created their own — or in three others that use its infrastructure.

Hard to see how this wouldn’t mean loss of the subsidies that make health insurance affordable for low and moderate-income people — or the related measures that limit out-of-pocket costs for health care.

Low-income individuals and families could also wind up without affordable health care, including no-cost family planning services, because the Republicans’ bill effectively bars HHS from covering most of the costs of newly-eligible people in states that have expanded their Medicaid programs.

Hammering another nail into the coffin, the House bill would prohibit HHS from enforcing certain consumer protections.

These are intended to prevent insurance companies from denying coverage or charging higher premiums, based on health conditions or gender. They also require most companies to cover birth control, as well as numerous other preventive services at no extra charge.

Renewed Direct Attack on Family Planning Services

The Labor-HHS-Education bill would zero out funding for Title X of the Public Health Service Act — the source of grants to nonprofits and public agencies that provide free or low-cost family planning and certain other preventive services, e.g., screenings for sexually-transmitted diseases and for cervical and breast cancer.

They can’t use the funds for abortions. But earlier zero-funding efforts leave no doubt that House Republicans intend to cripple Planned Parenthood, which, as we all know, does perform abortions, using privately-donated funds and, in some limited cases, funds it can claim from Medicaid.

Now, I’m hardly the first to observe that if you object to abortions, then you should want women to have the option of effective, affordable birth control.

For women (and men) with incomes below the poverty line, Title X-funded services, including contraception, must, in most cases, be free. Somewhat over 70% of Title X family planning clients qualified in 2013, the latest year we’ve got official figures for.

Folding in the near-poor, we see that defunding Title X would jeopardize family planning and other reproductive health services for more than 4 million people, mostly women.

Roughly 3.5 million of them either began or continued using some form of contraception as a result of their last visit to a Title X center. Some who didn’t were pregnant or wanted to be.

Anti-Anti-Poverty Choice

Brookings Institution economist Isabel Sawhill has persuasively argued that encouraging and enabling women to deliberately choose motherhood, rather than just “drifting” into it is a more realistic poverty prevention strategy than the patently unsuccessful efforts to promote marriage.

The end result would be fewer poor single mothers — thus fewer children growing up in poverty, with all the disadvantages that entails. Fewer women forced to compromise education and career goals too. Fewer at risk of depression and perhaps abuse.

Yet LARCs (long-acting, reversible contraceptives) — the surest protections against unplanned pregnancies — can reportedly cost as much as $1,000, counting only one followup visit after the initial insertion procedure.

That’s a formidable barrier for low-income women — or rather, would be without effectively enforced ACA requirements, expanded Medicaid coverage and family planning services covered by Title X.

What Next?

It’s doubtful that the final budget for the upcoming year will deny all funds to Title X. The Senate’s Labor-HHS-Education bill — still in an earlier stage than the House bill — would allocate $257.8 million to the program.

This, however, would represent a cut of roughly $27.8 million. Even level funding would almost surely mean less available for services because program costs rise, much as our own living costs do.

What next year’s budget will look like is anybody’s guess, especially because the President has said he’ll veto any spending bill that reflects the caps.

Meanwhile, Senate Republicans — not quite all, however — have decided to make a cheap political gesture, before the pseudo-scandal stales, by denying federal funds of any sort to Planned Parenthood — the largest of our nonprofit family planning providers.

“[H]ard to see other clinics stepping in to fill the gap,” Vox health care blogger Sarah Kliff remarks. Indeed. We probably won’t see that sort of gap, however — at least, not right away.

But we won’t see enough funding for affordable family planning and other preventive healthcare services either.

UPDATE: I’ve learned that the Senate Labor-HHS-Education bill has cleared the full Appropriations Committee. So it is as far along as the House bill.

 

 


Too Soon to Lock in DC Tax Cuts

June 25, 2015

Life is full of surprises, they say. So is the District of Columbia’s budget. I’m referring here to the Budget Support Act, the package of legislation that’s paired with the spending bill.

Turns out that the BSA the DC Council will soon take its second required vote on could trigger tax cuts before either the Mayor or the Council knows how much the District will need to spend just to keep services flowing — let alone how much it should spend.

Whoever knew? Doubtful all Councilmembers did, since Chairman Mendelson distributed the final BSA shortly before the first vote. Other interested parties surely didn’t because it wasn’t published.

And one would have needed time to figure out what the Chairman had done because his bill doesn’t spell out how it would change trigger provisions enacted as part of last year’s BSA.

Well, we know now — or could, thanks to a heads-up from the DC Fiscal Policy Institute and a DC for Democracy post that adds some angles.

The basic issue here — though not the only one — is when tax cuts recommended by the Tax Revision Commission should go into effect. Both the original BSA provision and the new version require a revenue projection higher than an earlier one.

Tax cuts wouldn’t all kick in at once, since that would immediately throw the budget out of balance. Last year’s BSA ranked them in priority order. The ranking would stay the same. But that’s as far as the parallels go.

Set aside for a moment the egregious lack of transparency. What’s wrong with the latest plan for triggering tax cuts based on rosier revenue projections? Three big things.

Tax Cuts Take Priority Over Spending Needs

The new plan would dedicated all of the projected revenue increase to tax cuts, rather than the excess over a threshold set by the current BSA.

And it would do that before the Chief Financial Officer had estimated the costs of sustaining existing programs in the upcoming fiscal year. These tend to rise for various reasons, as DCFPI notes.

Beyond that, we’re not spending as much as we should in a number of areas — affordable housing and homeless services, to name just two. This year’s budget makes some progress on both. But further progress will stall if the Mayor and Council can’t allocate the revenues needed.

Without them, the Housing Production Trust Fund — the single largest source of financial support for affordable housing construction and preservation — could have less next fiscal year, since half of the $100 million it has now reflects a one-time appropriation.

The next steps envisioned in the latest strategic plan to end homelessness in the District also hinge on further investments. For example, the plan envisions year-over-year increases in permanent supportive housing for families, plus some rapid re-housing vouchers extended past the usual one-year limit.

It also calls for some indefinite-term vouchers earmarked for families and single adults who can’t afford housing when they don’t need intensive supportive services any more or come to the end of their rapid re-housing extensions.

And at the risk of beating a dead horse, I’ll add that we’re likely to have homeless families until the Mayor and Council significantly increase Temporary Assistance for Needy Families benefits, which now, at best, leave a family of three at about 26% of the federal poverty line.

More generally, setting automatic triggers for a series of tax cuts denies both the Mayor and Council a chance to weigh priorities during budget seasons. Those tax cuts, recall, will mean relatively less in revenues not only next year, but every year — unless they’re repealed.

A whole lot harder politically to repeal a tax cut than to defer it until it won’t preempt spending that will do more good for more people than reducing tax obligations for some.

Cuts in the Offing Tilt Toward Well-Off Taxpayers

The Tax Revision Commission made nearly a dozen recommendations for cuts — a mixed bag if you believe that individuals and businesses should contribute to the general welfare according to how well they’re faring.

The Council adopted a couple that ease tax burdens for low and moderate-income residents. But those ranked highest in the BSA now don’t reflect a consistent preference for a progressive tax structure — far from it.

The second listed, for example, would reduce the tax rate on income between $350,000 and $1 million. Next on the list — and again in fifth place — are cuts in the franchise taxes that businesses pay.

The threshold for any tax on estates would increase to $2 million before filers would get larger standard deductions — the option virtually all low-income taxpayers choose because they’d pay more by itemizing.

Bigger Revenue Losses Than Recommended

The Tax Revision Commission recommended revenue increases to offset the losses resulting from its recommended cuts. The Council took a pass on two. The new BSA would do the same, forgoing $67 million, DCFPI reports.

So there’d be a straitjack on revenue growth — possibly indeed future shortfalls. The District has had these before — the latest only just remedied by savings found.

What the shortfalls tell us is that revenue projections are inherently iffy — the more so as they estimate collections beyond the upcoming quarter of a fiscal year. That’s just how forecasts are. Ditto projections of spending needs.

Who, for example, can foresee a prodigious snowstorm, requiring millions more to clear the roads than budgeted? Who, at this point, can predict how much crucial programs will lose due to federal spending cuts?

So it seems unnecessarily risky to plow ahead with tax cuts before next year’s budget is even on the drawing board. And if past is prologue, programs that help low-income residents are what the BSA would actually put at risk.

UPDATE: I’ve learned, from reliable sources, that the excess revenue threshold in the current BSA applied only to the forecast used as the basis for next fiscal year’s budget. Under the current law, tax cuts would kick in with any higher revenue forecast, but not until next February. The Mayor could, if she chose, ask the Council to approve using the extra for unmet needs instead.

So what I wrote about the current BSA is misleading, but my basic point that the new BSA would trigger cuts prematurely stands.

 

 


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