Code Blue For TANF Emergency Contingency Fund

September 12, 2010

Back in March, I wrote about the need to extend the TANF Emergency Contingency Fund. It seemed at the time that the extension stood a good chance of passing as part of the then-latest version of the jobs/tax break extender bill — the American Jobs and Tax Loopholes Closing Act (H.R. 4213).

The House had twice passed an extension — once in March as part of the Small Business Jobs and Infrastructure Act (H.R. 4849) and again in May as part of H.R. 4213. But the small business bill is still hung up in the Senate. And the big jobs/tax break bill was ultimately whittled down to just a temporary extension of expanded unemployment benefits.

So here we are nearing the third week of September, with the Fund due to expire at the end of the month.

Republicans seem dead set against more stimulus spending. The Obama administration seems reluctant to step up to the plate, though Jared Bernstein, the Vice President’s Chief Economic Advisor, has blogged in support of an extension.

Hard to know whether the Democratic leadership in Congress will tee up the extension again or focus on high-stakes fights, e.g., the expiring Bush tax cuts, the energy/oil spill legislation, must-pass appropriations and maybe (given the egg recall) the long-pending bill to strengthen the federal food safety system.

Some of the major liberal research and advocacy organizations are trying to get the extension on the agenda — notably, CLASP, the Center on Budget and Policy Priorities and the Center for American Progress. But this is not a typical liberals versus conservatives issue.

Kevin Hassett, an economist at the quite conservative American Enterprise Institute, told the Senate Finance Committee that a major expansion of at least the subsidized employment provisions of the Fund would be a good idea, if focused “as much as possible” on private-sector jobs.

Beyond the Beltway, the bipartisan National Governors Association, National Conference of State Legislators and National Association of Counties have all come out in favor of an extension. Governor Haley Barbour of Mississippi, former Chairman of the Republican National Committee and now  Chairman of the Republican Governors Association, wants an extension too.

At least two West Coast nonprofits are drumming up grassroots support. One — Mission Neighborhood Centers — is a social services provider in San Francisco. The other — Internet Archives — offers free access to digitized books and other resources.

What’s brought these strange bedfellows together are the subsidized jobs programs that state and local agencies have created or expanded using Emergency Contingency Funds.

Those who follow this blog know that I’ve got serious reservations about the District’s use of these funds for its Summer Youth Employment Program. I’ve none at all about programs like San Francisco’s Jobs Now!, which has placed more than 3,600 unemployed and underemployed low-income parents in temporary jobs that build workplace skills and experience.

Or Mississippi’s STEPS, which also focuses on low-income parents and provides phased-out wage reimbursements intended to promote regular hires. Or Tennessee’s program, which has focused on a rural county where the unemployment rate shot up to 25% after an auto plant closed.

All-told, 36 states are operating subsidized jobs programs. A new CBPP brief indicates that they’ve placed more than 250,000 parents and teens.

Only four states will indefinitely continue their year-round programs at the current level if the Emergency Contingency Fund isn’t extended. Twelve will immediately terminate their programs, and three will continue operations only till their current funding runs out.

This will be bad for the many thousands of people who will be thrown out of work and for those who would be eligible for future placements. It will be bad for small businesses that have managed to stay afloat and, in some cases, expand because they’ve had subsidized workers. It will be bad for our economy as a whole, which, as we know, needs more consumer spending.

Close to home, the District could claim nearly $27.8 million if Congress passes the extension that’s been under consideration. It could use the funds for a broad range of purposes, including support and training for its TANF participants, homeless services for families and (dare one hope?) a robust, well-targeted subsidized jobs program.

So if you live outside the District, I urge you to sign my petition (a new one) in support of an extension of the Emergency Contingency Fund. And if you’re disenfranchised like me, please pass the word along.


What Does The New “Jobs Bill” Mean For DC?

August 23, 2010

I’ve been asked how the new job-saving measure will affect the District. Here’s what I’ve come up with thus far.

First a brief overview. The amendment will deliver an estimated $16.1 billion of fiscal relief to the states in the form of a phased-down extension of the higher federal match on state Medicaid costs (FMAP). An additional $10 billion will be apportioned among states to preserve jobs in elementary and secondary education. In both cases, states include the District of Columbia.

About 45% of the total costs — $11.9 billion — will be paid for by terminating the 13.6% boost in food stamps that was part of the economic recovery act. End date will be April 2014. As I previously wrote, the boost was expected to end in 2018 and with no benefits loss.

Now for the District.

FMAP Extension. The District’s Fiscal Year 2011 budget assumes a straightforward extension of FMAP, worth an estimated $77.6 million. According to recent estimates by the Center on Budget and Policy Priorities, the District will actually get $54 million. So there could be a budget gap to close, though much smaller than it would have been without the extension.

Public Education. According to estimates developed for the House Labor and Education Committee, the District stands to gain somewhat over $18 million. The funds are said to support an estimated 200 jobs.

As the DC Fiscal Policy Institute reports, the District will lose considerably more in stimulus funding that was part of the economic recovery act. The Fiscal Year 2011 budget will use local funds to make up part of the loss, but some staff reductions could have been in the offing. The new stimulus infusion might avert them. The amendment strictly limits, if not altogether precludes all other uses of the funds.

Food Stamp Benefits. It’s hard to come up with hard numbers for the impact of the premature end of the food stamp boost. What we know is that, in May 2010, about 119,260 District residents were receiving food stamps — nearly 20% of our total population.

Participation in the food stamp program has been steadily increasing. The annual May-to-May increase for the District was 15.5%. So barring some economic miracle, at least 200,000 or so residents will see their benefits drop.

The dollar impact will depend on family size, income and whether the cost of the food plan used to calculate benefits increases before the boost ends. The Food Action and Research Center says that a family of four will lose $59 per month. I’m guessing this reflects a calculation based on some average.

At this point, the maximum monthly per person benefit for a family of four is $167. Many District residents get far less. In Fiscal Year 2009, with the boost in effect, the average monthly per person benefit for District residents was $128.66. Without the boost, it probably would have been $24 less. I believe the figure would be the same for this fiscal year.

It doesn’t mean that District residents will lose, on average, this amount. But it’s clear that the poorest among us will be paying, with a benefits loss they can’t afford, to save jobs they don’t have.

What They Said About Losing Unemployment Benefits

July 10, 2010

When the jobs/tax bill again ran into a brick wall in the Senate, I wrote a recap for the Poverty in America blog on, as well as the somewhat different, but equally angry review here.

The PIA posting triggered an outpouring of comments, virtually all from people who are unemployed and have been for some time. They tell us a couple of things.

First, the Tea Partiers aren’t the only people out there who are as mad as hell and not going to take it anymore.

Some portion of the jobless population is furious. And they’re ready to throw the Republicans out — every last one of them. No way to know whether the hostile energy represents a critical mass or whether it will make any political difference.

Second, sheer desperation and something close to despair are even more pervasive than outrage.

Here are some extracts from the comments:

“I have already lost my home and my car is going next week…. None of us will even have food to eat so what [Fourth of July] Holiday will we have? … I have had to sell anything of value at all for pennies on the dollar and have no food…. I wonder if we will even survive.”

“I just lost my unemployment benefits at 79 weeks…. I’ve applied for literally EVERYTHING, and no jobs are forthcoming. Have college degree and graphic design skills, but NO JOBS! Most people think, ‘oh just go to Mickey D’s or something’ but I tell you those places won’t hire you if they see you have a degree and used to make good money (trust me, I’ve applied at all of them by now). I have a stack of bills that would have been paid this month, but now I will have to default on them all because no more UI.”

“I have been unemployed for the past year and a half, and I too am a college graduate…. At 37, for the first time in my life, I am facing an eviction…. I can’t tell you how scared I am right now. It is very tough being homeless in Los Angeles, especially if you are a single woman.

“I have been unemployed in northern Nevada for 1 1/2 years and my fiance is a master carpenter and has been unemployed for 2 years. WE HAVE NO MORE UNEMPLOYMENT [BENEFITS]!!! …. I had to get welfare last week (which I always swore to myself I would NEVER take a dime of) so my kids could eat. Still don’t know how we will keep a roof over our heads.”

“My July 4th ‘holiday’ is me coming up with a plan to avoid being homeless the end of July.”

“I’m 57 years old and was laid off through no fault of my own. I am not an IT professional, I am not trained in finance, and I have no experience in health care. I can’t even get a job in fast food because employers want young people who can ‘hustle.’ That’s most of the jobs that are available. I can’t get ‘retraining’ because I have no one to support me while I do it. And a 57 year old with no experience in a new field isn’t exactly in demand.”

These and countless similar stories give the lie to some major arguments against extending unemployment benefits.

We’re told, for example, that people don’t look for work so long as they’re getting their UI checks. The benefits are a “disincentive to seek new work,” said Senator Jon Kyle (R-AZ) on the Senate floor. They “turn the ‘safety net’ into a hammock,” opined Congressman Steve King (R-IA).

They’re one of the ways “we have really spoiled our citizenry,” said Sharron Angle, who’s running for Senate Majority Leader Harry Reid’s seat in Nevada. “You can make more money on unemployment than you can going down and getting one of those … honest jobs,” like the clean-up chores she and her sibs once did in her family’s hotel.

But what the comments tell us is that a goodly number of unemployed people have been diligently looking — and would take those honest jobs if they could get them — because they can barely make do on UI benefits.

And then there’s the more popular deficit argument. We can’t extend unemployment benefits unless they’re totally paid for, e.g., by using stimulus funds intended to create jobs.  Think, after all, of the additional debt we’d be leaving our children.

No need, I trust, to rehash the arguments that UI benefits save and create jobs —  and thus, at the very least, help control the deficit. Also, I trust, no need to note how the proposed pay-for would rob Peter to pay Paul.

Let’s think instead about those children who will grow up with all the disadvantages of poverty if we cut their parents’ lifeline now.

Here’s what one of the jobless commenters has to say:

“The Republicans say that they want the extensions to be fully funded so our children and grandchildren do not take on such debt. What about NOW when we need to feed, clothe and house them … ?” How will they live right NOW?”

How, I wonder, would an opponent of the just-quashed emergency UI extension answer.

Is The Jobs Bill Dead?

June 26, 2010

You’ve probably already read that the jobs/tax bill the House sent over to the Senate in late May is dead — at least for the time being.

On Thursday, the Democratic leadership failed, for the third time, to get the 60 votes need to end debate and proceed to a substantive vote. Senate Majority Leader Harry Reid (D-NV) says he’s going to move on to other things unless/until a couple of Republicans come round.

Still, it’s too soon to order a tombstone.

The tax break extenders part will probably rise again. Can’t have those NASCAR race track owners and rum producers contributing more to the federal treasury that we’re given to understand is in such desperate straits.

Perhaps we’ll also see a revival of some of the changes in the tax code that were supposed to pay for the extenders. Wall Street isn’t so popular these days. So maybe the Democrats will try resurrect the weakened version of their proposal to narrow a loophole that hedge fund managers use to pay the lower capital gains tax rate on a substantial portion of their income.

A bigger question mark is the provision that would have closed a loophole used by owners of professional services companies — doctors, lawyers, accountants, etc. — to shield their income from Social Security and Medicare payroll taxes. Billions a year in underpayments, according to the General Accounting Office.

But those deficit-minded Republicans heeded the outcry about harming small businesses that generate jobs. Lawyers are going to put a lot of unemployed people to work? Senator Olympia Snowe (R-ME) must think so. She previously voted for the jobs/tax bill, but wouldn’t support the latest version because the loophole closer was there.

On the other hand, many, if not all, of the real jobs parts of the bill may truly be as dead as the proverbial doornail. They didn’t die of a thousand cuts. But what the Democratic leadership couldn’t get the magic 60 votes for had been whittled down to a sad remnant of what the Senate had previously passed.

The House had already lopped off a month of extended unemployment benefits. By last Thursday, the extra $25 a week that eligible jobless workers had gotten since the economic recovery act was passed had been eliminated. This would have reduced the average weekly benefit to $284 — not enough to lift a family of three above the federal poverty line.

The extension of the enhanced federal match on state Medicaid costs (FMAP) had also fallen victim to price tag concerns. Instead of a straightforward six-month extension of the 6.2% base rate, the bill would have provided states with 3.2% for three months and 1.2% for the remaining three.

About $8 billion sacrificed on the altar of the deficit. No heed to the impacts on the deficit of the job losses ahead as states make further cuts to rebalance their budgets.

As if that weren’t enough, funds the economic recovery act had provided for a modest increase in food stamp benefits were tapped to partially offset the costs of the rest. I understand that somewhere around $9.5 billion was shifted out of the safety net here.

And all for naught. The Republican leadership claimed concern about “job-killing taxes and adding to the national debt.” Fellow traveler Senate Ben Nelson (D?-NE) wanted the whole thing paid for too.

But this may all be a shuck. Los Angeles Times reporter Janet Hook says that the tax breaks the bill would have extended are worth $32 billion. Nearly enough to cover the unpaid-for part of the jobs bill. Did any Republican suggest they be allowed to die?

More likely, as Washington Post blogger Ezra Klein argues, the Republicans are betting that voters will view the adverse impacts on the economy — and, I would add, their personal situation — as evidence that the Democrats have failed.

But will all Senate Republicans actually stand firm on the issue of unemployment benefits? According to U.S. Department of Labor estimates, more than 1.2 million people have just lost the extended unemployment benefits they presumably were counting on. They’re by no means all in “blue” states.

By the time Senators go home for the July Fourth recess, the number will have swelled to more than 2 million. These people aren’t going to be happy. And I think Republicans are going to have a hard time blaming the Democrats. An even harder time persuading them that restoring their benefits would be fiscally irresponsible — a debt we shouldn’t be leaving their now-poor children.

Senator Snowe has suggested a standalone bill extending unemployment benefits as emergency spending, i.e., without an offset. The Democratic leadership has reportedly said no dice. But I doubt this is the last word.

I do, however, fear that it is for the FMAP extension and the other jobs-related parts of the bill. I hope I’m proved wrong.

Worse State, DC Budget Woes To Come If Extra Medicaid Funding Dies

June 14, 2010

Recent weeks have brought us several important updates on state-level budget woes and their impacts on our still-struggling economy and anemic job market.

First came the Commerce Department’s quarterly report on the gross domestic product–a common measure of the country’s economic health. Cuts in state and local government spending reduced the GDP increase rate by half a percent. This translates into a loss of about $72 billion in economic growth.

Then the National Governors Association and the National Association of State Budget Officers issued the results of their latest fiscal survey of the states. Bottom line here is that Fiscal Year 2010 “presented the most difficult challenge for states’ financial management since the Great Depression.” More of the same is expected in FY 2011.

States spent an estimated $74.4 billion less in FY 2010 than in FY 2008. But they would have had to make even larger cuts if they hadn’t received emergency fiscal assistance through the economic recovery act. The single largest part of this was a higher-than-usual federal match on states’ Medicaid costs (FMAP).

Then we got the Bureau of Labor Statistics’ employment figures for May. While nonfarm payrolls showed on increase of 431,000 employees, but all but 20,000 of them were temporary workers hired by the Census Bureau.

State and local government payrolls shrank by 22,000 jobs. The Center on Budget and Policy Priorities reports that this brings the total to 231,000 jobs shed since August 2008, including 100,000 in education.

The American Association of School Administrators estimates that an additional 275,000 education jobs will be lost in the upcoming school year–unless the federal government steps in with more emergency aid.

And here’s the kicker. According to a lengthier CBPP analysis, 29 states and the District of Columbia developed their FY 2011 budgets on the assumption that FMAP would be extended. Without the assumption, projected shortfalls–and, therefore, cuts–would have been even greater.

It was a reasonable assumption. After all, both the House and Senate had passed bills including a FMAP extension. But, as I recently ranted, the House leadership dropped the extension to garner the votes needed to pass its version of the Senate’s jobs/tax cut extender bill.

Now the Senate leadership has put the extension back into the bill, encouraged by outcries from governors and the National Conference of State Legislators.

It’s trying to corral the magic 60 votes needed for a substantive vote on the bill by easing the tax rates applied to hedge fund managers’ incomes and raising more revenues from oil companies.

Hard to tell whether this will work–or, if it does, whether Blue Dogs will again push back when the bill cycles back to the House.

If the FMAP extension fails, the District will have an estimated $77.6 million budget gap to close. Shortfalls identified in CBPP’s analysis range from $85 million in Maine to a whopping $480 million in Washington state.

No way these and other impending shortfalls will be resolved without larger public service job losses. Mark Zandi, an expert in the economics of economic recovery, says they could be at least as large as those we’ve already seen–“in all likelihood measurably larger.”

Do our business-friendly, deficit-minded members of Congress have a grasp on the impacts? We’ll find out soon, when the Senate votes on whether to proceed to a final vote on the jobs/tax bill.

Surviving, But Endangered Jobs Measures

June 7, 2010

I was so worked up about what got axed from the recently-passed House jobs/tax cut extender bill that I passed over two of the surviving provisions that will save and create jobs. One of them should also help mitigate further damage to our fraying safety net.

That one is an extension of the TANF Emergency Contingency Fund through the end of Fiscal Year 2011, with an additional $2.5 billion to be spent in the new fiscal year.

The Center on Budget and Policy Priorities reports that the extension will support more than 185,000 existing and planned subsidized jobs. It will also help states cope with their rising TANF caseloads and provide further short-term benefits to families with emergency needs.

Without the extension, the Emergency Contingency Fund will expire at the end of September. I’ve heard that states will not receive reimbursements the U.S. Department of Health and Human Services has approved, but not cut checks for.

The House bill takes care of this problem. It would make funds already appropriated available through the end of this fiscal year for any of the authorized reimbursement categories. Funds for subsidized jobs in which individuals are placed during this fiscal year would be available through the end of FY 2011.

The other provision would provide $1 billion for youth work-related activities, including summer youth employment programs. According to the bill summary, it would support more than 300,000 summer jobs for 16-14 year olds.

When the Senate was considering its version of the jobs/tax cut extender bill, Senators John Kerry (D-MA) and Patty Murray (D-WA) offered an amendment to add both the Emergency Contingency Fund extension and $1.3 billion for summer youth jobs.

As Half in Ten’s Melissa Boteach explains, it was blocked on a technical point relating to the number of years it would take for the amendment to be fully paid for, i.e, offset by reduced spending and/or revenue increases.

Now the Senate has another chance at the bill. If it doesn’t pass the Emergency Fund extension PDQ, states will begin closing down their subsidized jobs programs. And they’ll surely put plans for new subsidized jobs on hold. Summer youth employment programs will have to open with fewer slots–or not open at all.

Hard to know what will happen. The two provisions, along with the tax cut extensions and some other spending, are paid for by changes in the tax code that would close some remunerative loopholes. Affected parties and their lobbyists are hard at work to preserve these loopholes. To the extent they succeed, the spending provisions will have to be cut back–assuming that a critical mass of Senators still insist on the offset rules. I’m guessing they will.

Then too, we’re hearing a lot these days about the debts we’re leaving our children. And spending cuts seem to be a popular campaign platform. The TANF Emergency Contingency Fund in particular has been subject to gross distortion as part of an online project House Republicans cooked up “to defeat the permissive culture of runaway spending in Congress.”

Not a good environment for investments that would give poor parents and teens a pathway to gainful work. But maybe not toxic either.

Quick Ways To Help Get The Missing Pieces Of The Jobs/Tax Bill Restored

June 4, 2010

I’ve written elsewhere about the frustration of having no voting representation in Congress. Part of it is writing about pending federal legislation without being able to suggest that my fellow District residents weigh in.

So here’s a brief piece for those of you lucky enough to have Senators–and those of you who live in the District and can pass the word along to fully-enfranchised friends, family and other contacts.

As I recently wrote, the jobs/tax cut extender bill the House passed last Friday was stripped of two important provisions–an extension of COBRA health insurance subsidies and an extension of the enhanced federal match for state Medicaid programs (FMAP).

I’ve created an editable form letter on that urges Senators to restore these two provisions and also to pass an extension of expanded unemployment insurance benefits ASAP. It’s a quick and easy way to voice your support. And support for the endangered provisions is sorely needed.

For the FMAP extension, AFSCME has established a toll-free hotline–888-340-6521. You could use it to support the COBRA subsidies extension as well.

When you punch in your zip code, you’ll be automatically routed to one of your Senators’ offices. So you’ll need to make two calls. Most critical calls are to Senators who’ve been voicing concerns about deficit spending.