Do Nothing Congress Gets Something Pretty Good Done

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.

 

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Budget Cap Will Cap Dad’s and Daughter’s Futures

I first met Peter* on a street corner, where he was selling Street Sense, the newspaper for homeless people in the District of Columbia. He now does work for me that I don’t have the strength for.

Peter has in-demand skills, but won’t seek a regular, full-time job because he has to drop whatever he’s doing to pick up his daughter Joanne — and sometimes rush her to a hospital.

She’s prone to seizures due to a severe case of epilepsy. She also has some developmental disabilities. Peter has sole responsibility for her, as well as an older daughter.

Though he must patch together short-term, flexible jobs, the family has a home and basic needs met. For this, we can partly credit the Supplemental Security Income benefits he receives on Joanne’s behalf.

The benefits are far from generous — $733 a month. This is far less than the estimated costs of raising a child with an intellectual disability, including the earnings a parent must forfeit.

Bills introduced in the last Congress would, among other things, have restored the value SSI benefits have lost. But they’d stand even less of a chance now than then.

Meanwhile, the caps on spending for non-defense programs that depend on annual appropriations threaten the special education Joanne is receiving.

She’s entitled to a free and appropriate education under federal law, but the amount states and the District receive to help pay for it comes from one of those programs — the Individuals with Disabilities Education Act.

Peter recently enrolled Joanne in a program that focuses on independent living skills, both work-related and basic everyday. He’s thrilled by the progress he sees and his opportunities for “hands-on” involvement.

He can perhaps look forward to steadier, more gainful employment as Joanne becomes able to manage more on her own — to count cash, for example, wash clothes and prepare meals for herself and her family.

But she’ll gain such skills only if the program continues to receive enough money to provide the high-quality, individualized education that she and her fellow students need. The federal government surely hasn’t been doing its share.

The law that created IDEA commits the federal government to providing states with 40% of the average they spend per student, multiplied by the number of special education students they have.

Funds actually appropriated for the 2013-14 school year fell short by more than $20 billion, the Education Commission for the States reports, saying this is the most recent year it has figures for.

The under-funding didn’t begin with the Budget Control Act that’s responsible for the caps. But both the cut it initially made and the caps have caused IDEA grants for programs like Joanne’s a real-dollar loss of  9.6%, First Focus reports.

Now we’re less than two months away from the end of the short-term bill that’s keeping federal funds flowing to all the programs that depend on annual appropriations. It takes an across-the-board nick from the non-defense programs to keep spending on them below this year’s cap.

Both the House and Senate bills to fund Department of Education programs would provide very small increases for IDEA — nowhere near enough to make up for the shortfall. They may, in fact, not even support the same level and quality of services for the same number of children.

Whether the House and Senate will come together to pass an actual budget for education is an open question. What the squeeze on funding due to the budget cap isn’t.

The caps, recall, were never supposed to go into effect. They were intended as an incentive, if you will, for the bipartisan “super committee” to agree on a sensible plan for reducing the deficit.

A “sizable contingent” of Congressional Republicans still seem bound and determined to preserve the cap for non-defense programs. Defense, as I’ve previously noted, would get an increase through a backdoor.

Senate Majority Leader Mitch McConnell is reportedly mulling over a “major” budget deal that would require cuts to Social Security and Medicare benefits, which don’t depend on annual appropriations. That’s almost surely going to mean no deal at all.

Everybody who lives in this country will suffer harms from the further ratcheting down of federal funding — some more directly than others. Peter and Joanne are mere drops in the ocean. But there are millions like them, doing their best in difficult situations — and vulnerable.

Large coalitions of advocacy organizations are campaigning to get Congress to #StoptheCuts — the hashtag they’ve been using on Twitter and will use for a Twitterstorm, i.e., massive blast of tweets, on Wednesday. This is an opportunity for all of you with Twitter accounts to ramp up the pressure.

You’ll see tweets to many blog posts invited and pulled together by Moms Rising. A shorter version of this post will probably be part of the “carnival.”

*  This isn’t his real name. I’ve changed both his and his daughter’s to preserve their privacy.

 

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

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.

DC Mayor Gray Muddles Anti-Sequestration Message

Last week, Mayor Gray held a press conference purportedly to flesh out the negative impacts of sequestration on the District of Columbia.

I say “purportedly” because both he and his deputy for planning and economic development spent a good bit of time celebrating economic growth in the city — 60 cranes on the skyline, new construction here, new construction there, etc.

The presser did, however, provide data on sequestration impacts. What the Mayor and his people chose to present was interesting. What they didn’t was as well, in part because it left lots of unanswered questions about how sequestration has affected — and will affect — D.C. residents.

Judging from the presser, the big thing that makes sequestration bad is its effect on employment in the District — and as a consequence, on tax revenues.

So far as employment is concerned, the presentation hammered at the loss of government jobs — mostly federal, we were told. (Reductions in the District’s own workforce went unmentioned.)

Now, it seems, the public-sector job losses are dampening private-sector job growth. The private-sector number actually dipped a bit in July, according to one of the presser graphs that Washington Post reporter/blogger Mike DeBonis published.

The Deputy Chief Financial Officer attributes the slowdown to a fall-off in consumer spending — the usual result of job losses, job security anxieties and furloughs.

The end result is that the unemployment rate, which had dropped from 10.3% during the Mayor’s first months to 8.4% at the end of last year, has ticked back up to 8.6%.

But for sequestration, the rate would be either 8% or 8.2%, according to the Department of Employment Services’ projections. Not a big difference, as the Deputy Mayor for Planning and Economic Development acknowledged. But he worries about losing momentum.

And, of course, joblessness depresses tax collections, both income and sales. The Deputy CFO cited a loss, due to sequestration, of $30 million this fiscal year and $60 million in Fiscal Year 2014.

This would still leave the District with an estimated $6.23 billion to spend — about $900,000 more than this fiscal year. So “loss” doesn’t actually mean “less.”

Barely mentioned, except by one reporter, is the fact that the private-sector job growth has been heavily weighted toward low-wage occupations, e.g., retail sales, food preparation and service, hotel front desk operations.

Not mentioned at all is the fact that the labor force, i.e., the number of people working or actively looking for work, seems to be shrinking, as it is nationwide.

If it were the same size as it was in March, when the unemployment rate was also 8.6%, there’d be 3,725 more residents working — not necessarily full-time, of course, or earning anything like what it costs to live in D.C.

Which bring me to the sequestration impacts that got short shrift — cuts in what must be a very large number of federal grants, including those intended to benefit low-income and other vulnerable people.

The Mayor said that the District will lose some $30 million in the upcoming fiscal year. His budget director provided specific figures for the five agencies he said would take the greatest hits — $24.1 million of the total.

Details on what the cuts would mean in human terms for only two agencies. Just general references to what the other agencies use their grant monies for.

So, for example, we were told that the Office of the State Superintendent of Education channels grant funds to charter and regular public schools and to early childhood education programs. But that doesn’t tell us what sequestration will do.

Maybe less for special education, early childhood ed. and free and reduced-price lunches, the Mayor’s press release says.

The last, however, are not subject to sequestration. And I don’t see sequestration-related damage to the other two in the District’s Fiscal Year 2014 budget. If children will be hurt, we need to know how.

Damage there will be to the federally-funded housing voucher program that the DC Housing Authority administers. Here we were given a concrete impact — a “freeze” that will deny an estimated 200-250 families this form of housing assistance in the upcoming fiscal year.

But then the presser reverted to how sequestration would put a crimp in the Mayor’s wildly successful economic development strategy — and all because the federal government is shedding jobs,

Well, that’s not going to make a bit of difference to members of Congress, except perhaps our non-voting representative.

And it’s not going to help the many organizations that are working hard to show the potentially persuadable members why they should end sequestration.

I’m inclined to think the Mayor knows this and, as De Bonis suggests, had other political motives for his presser.

But I was truly disappointed.

Even if, as seems likely, the Mayor and the DC Council have taken advantage of recent and projected revenue growth to shore up programs that will lose federal funds, sequestration will still mean lost opportunities to extend benefits and services to residents in need.

That, I think, is what the Mayor and his officials should have talked about if they wanted to support the campaign against sequestration.