Looming Threats to Health Centers and Their Low-Income Patients

April 10, 2017

I recently met someone who follows my blog — one of the benefits I treasure. She’d come to the District for a meeting of the National Association of Community Health Centers. I learned a lot about this important piece of our federally-subsidized healthcare system.

I could see right off ways that they and the low-income people they serve are threatened now. But Terri told me about another that’s more than a threat.

Federally Qualified Health Centers

Terri serves as the strategist and advocate for a Southern California network of Federally Qualified Heath Centers — outpatient clinics that have met a set of requirements and receive grants from a Health and Human Services Department agency.

The FQHCs must, among other things. provide specific healthcare services — primary, preventive and emergency, plus education so that patients with diabetes and chronic kidney disease can monitor and control their conditions.

They must serve an otherwise under-served area or under-served people elsewhere. And they must use income and family size as the basis for their fees. So people with no income can get care, even if not enrolled or eligible for Medicaid.

A number of clinics provide additional services, e.g., dental care, mental health and/or substance abuse treatment. The clinic where Terri is based does all this and more.

It has social workers, for example, who link patients to sources of help, according to their individual needs, including navigating them through online enrollment in Medicaid.

The clinic goes beyond its diabetes management requirement by giving its diabetic patients cellphones that read their blood sugar levels and relay them to the clinic.

Terri, her colleagues and counterparts across the country are worried about how they will continue to operate — and what will happen to the low-income they serve if they can’t.

Her network receives some donations. But like all FQHCs, it depends largely on the HHS grants and partial cost reimbursements for patients enrolled in Medicaid.

Raid on Medicaid Still a Threat

California jumped at the chance to expand its Medicaid program when the Affordable Care Act became effective. The clinic Terri works in experienced a large influx of newly-eligible people with untreated conditions, e.g., diabetes, high blood pressure, oral diseases, mental health problems.

Congressional Republicans haven’t block-granted Medicaid or the similarly cost-shifting per capita alternative.

But the Affordable Care Act assured states that the federal government would reimburse 90% of care costs for their newly-eligible enrollees from 2020 on forward — the last phase in the incentive pay scheme.

What with Trump now trying to cut a deal with far right-wing members of the House, one might reasonably expect the product to end this level of funding like the failed repeal-replace bill. All expansion states, including California would face some tough choices then.

Federal Grants in Two-Part Jeopardy

The legislation that authorizes the federal government to award the FQHC grants will expire at the end of September. Without the grants, the health centers will collectively lose about 70% of their federal funding.

So a must-do for Congress is a straightforward extension, like the one included in the same law that kept the Children’s Health Insurance Program alive. Given the lack of hearings, other preoccupations and usual long summer break, simply kicking the expiration deadline forward is the only way to avert a for-sure funding loss.

But that would only give HHS authority to spend as much money as Congress chooses — and the President agrees to. Trump’s budget plan would cut the HHS budget by 17.9% — $15.1 billion less than it’s getting now. We don’t know the details, but we shouldn’t, I think, rule out anything.

Even if Congress won’t go along with such radical spending cuts (a likely response), the Budget Control Act’s cap on spending for non-defense programs will kick in again, after the latest two-year halt.

What this means it that Congress will have to cut spending on these programs by $2.9 billion. So the size and/or number of the FQHC grants are at risk — unless Congress decides to again defer or altogether eliminate the caps.

Immigrant Roundups and Healthcare Needs

The clinic where Terri is based is in a community where many immigrants live, including some unknown number without the documents authorizing them to live and work in this country.

Even immigrants here legally generally can’t qualify for Medicaid for the first five years, though they can receive Medicaid-financed emergency services.

California, as well as some other states provides a few others, regardless of immigration status. But as the Los Angeles Times reports, the community health care centers “treat all comers.”

We all know how federal immigration enforcement authorities have aggressively ramped up raids aimed at deportation. They’re active in the clinic’s community, where local authorities have partnered with them.

The agents have started patrolling side roads, including one leading to the clinic. Staff have witnessed a large drop off in immigrants seeking care.

One day an agent showed up in the building, with a warrant for something (not somebody). He opened the door to the waiting room. Patients fled, dragging children by the hands. What’s going to happen to them and their kids now that fear will keep them away?

These aren’t the only threats to the health of low-income people. The unremitting efforts to defund Planned Parenthood clinics put them at high-risk too, notwithstanding the anti-choice Congress members’ and supporters claim that clinics like Terri’s can fill the gap.

May have more to say about this than I already have.


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.

 


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

October 19, 2015

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

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.


How Many More Low-Income Households Will Be Left in the Cold?

November 26, 2013

On Sunday, a blast of cold air arrived in Washington, D.C. With the gusting winds, the feel temperature around mid-day was 21 degrees. So much for my plans to cut down the withered vines and sweep up the mounded leaves in our backyard.

Instead, I spent part of the afternoon cleaning out my inbox, where I found a press release that made me feel at once privileged and newly distressed about the hardships that sequestration is causing.

About 300,000 fewer low-income households received help with their home heating and cooling costs last fiscal year, reports the National Energy Assistance Directors’ Association, which represents the state directors of the federally-funded Low Income Home Energy Assistance Program.

This was a direct result of sequestration, NEADA says. But the cut came on top of other cuts that began in Fiscal Year 2010. The cumulative losses have reduced the number of households served by 17%, or 1.4 million.

At the same time, the average grant households received shrank from $520 to $406. And even during the baseline period, the average grant didn’t cover estimated heating costs.

The shortfall was greatest — and has remained so — for households that use heating oil. These are largely households in the Northeast, where, as you know, it can get bitter cold.

But even households like ours, which use natural gas, would have had to come up with about 40% of their heating costs last winter, assuming the estimated seasonal cost and average grant apply.

Prospects for the winter season that seems to have begun are worse. Home heating costs are expected to rise by an average of 6%, due mainly to a 13% spike for households using natural gas.

This translates into a further purchasing power loss for LIHEAP — from 52.5% of the average household’s home heating costs in 2010-11 to a projected 41.5%.

And this doesn’t factor in any additional funding cut for the current fiscal year. NEADA seems to think that another cut will occur unless Congress “takes action to reverse” sequestration — by which I assume it means the spending caps imposed by the Budget Control Act.

In point of fact, non-defense discretionary programs like LIHEAP, i.e. those that depend on annual appropriations, will collectively meet their Fiscal Year 2014 spending cap without further cuts because Congress tinkered with the BCA to give defense some one-year protection.

But that doesn’t mean there’s no reason to worry. Republicans generally — and some Democrats — want to shield the Pentagon from the $20 billion cut it faces.

At the same time, some leading Republicans insist that the total discretionary spending level the BCA imposes must remain the same. That’s not possible, of course, unless that $20 billion is shifted over to the non-defense side of the ledger.

It’s doubtful we’ll see this sort of deal. But a deal that preserves the existing NDD cap would still leave LIHEAP vulnerable because Congress could decide to trim it in order to boost spending on other programs, as the President’s proposed budget did.

Even if Congress can’t agree on anything more than a continuing resolution, more low-income households could be left without home energy assistance because, as the NEADA press release indicates, level funding won’t be enough to help even as many households as were helped last winter — unless grants are further reduced.

No (or less) energy assistance could mean no heat this winter — perhaps no indoor lighting or ability to cook either. The loss would affect some of the most vulnerable people in the country, according to a survey NEADA conducted several years ago.

Seventy-two percent of the households served then had a family member with a serious medical condition. Of these, 26% relied on medical equipment that used electricity. Even with a LIHEAP grant — or perhaps before they received it — 19% got sick because their homes were too cold.

Merely restoring LIHEAP to its Fiscal 2010 level would leave more than 99.8% of the estimated budget for other purposes.*

Something I would hope members of Congress think about as they sit snug and warm in their homes this weekend.

* This figure reflects the result yielded by the Center for Economic and Policy Research responsible budget calculator.


More Fixes Won’t Fix Sequestration’s Harms

May 2, 2013

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 benefitse.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.


Next Act in the Congressional Fiscal Follies

February 6, 2013

When Congressional Republicans agreed to temporarily suspend the debt ceiling, they and their Democratic colleagues left chunks of the so-called fiscal cliff in place. Or rather, they left one in place and pushed the other ahead to March 1.

The deferred chunk is sequestration, i.e., the across-the-board cuts that were supposed to give the bipartisan Super Committee a compelling incentive to agree on a more sensible deficit reduction plan.

Supposed to, but as we all know, didn’t.

As I’ve said before, no one likes the across-the-board cuts — a genuine bipartisan sentiment here. But we also seem to have a bipartisan agreement that they’re more likely to happen than not.

When the Washington Post alerted us to this next act in the fiscal follies, it focused on the impacts on the national economy. So have most other news articles and commentaries.

Not so bad, the Post gave us to understand.

A nick in economic growth — earlier estimated by the Economic Policy Institute at 0.6%. But “the financial markets” — those barometers of investors’ hope and fears — aren’t sending up distress signals.

Defense contractors certainly are. Likewise governors and mayors — as well they might, since federal grants account for, on average, about a third of state revenues. Sequestration would cut many, though not all those grants.

States can expect further revenue losses — and more safety net spending pressures — because of the job losses the across-the-board cuts will cause, both directly and indirectly.

We don’t know how many jobs will be lost. The Bipartisan Policy Center has estimated a million over the next two years.

Another widely-cited study put the total at close to 2.1 million this fiscal year, based on the assumption the cuts would begin when originally scheduled, as was the Center’s estimate.

Well, the economy can’t afford even a nick, as the latest economic growth report reminds us. Or should I say, economic non-growth report?

Nor can we afford more job losses, when we’re still shy about 3.2 million of the jobs lost since the recession set in — and actually need to create an even larger number because we’ve got more working-age people now.

Republicans and Democrats agree that we need to create more jobs, though differ dramatically in their views on how to do that.

At this point, however, job losses are in the forecast because there’s a huge bipartisan gulf that would have to be bridged to stop them.

Leading Democrats say that any alternative to sequestration must balance spending cuts and revenue raisers — one of the President’s fundamental principles for deficit reduction.

Republicans say they’re done with tax increases, based on the relatively piddling $620 billion they agreed to as part of the partial January fiscal cliff deal.

And they clearly want to halt the across-the-board cuts for defense, while preserving the overall savings from sequestration — $85.3 billion for the current fiscal year.

That would mean shifting all the cuts to the non-defense side of the ledger, though not necessarily to the vast number of programs and activities now targeted for cuts.

The sequestration replacement bill the House passed in December folded in the $16.5 billion cut in the food stamp program that was part of the House Agriculture Committee’s Farm bill — and made it bigger.

It also adopted some earlier “savings” that came out of the House Ways and Means Committee — all detrimental to low and moderate-income people.

Other provisions undermine the Dodd-Frank financial services reform legislation and the Affordable Care Act — a stab in addition to what was already in the Ways and Means plan.

House Republicans know full well that the Democratic majority in the Senate won’t swallow all these “poison pills” — a term commonly used for provisions designed to kill a piece of legislation.

They also now seem to know that Democrats won’t agree to a cuts-only bill to replace sequestration.

So they’re inclined to take the sequestration savings and move on to the next episode in the fiscal cliff follies — the expiration of the continuing resolution that’s funding the federal government.

That will happen on March 27, unless both parties in Congress come to some kind of agreement. And they probably will.

But in the meantime, we’ll have what Matt Yglesias at Slate has aptly called “the idiocy of sequestration.”

Anyone who doubts this need only read what the President said yesterday in his call for a further sequestration delay and House Majority Leader John Boehner’s preemptive response.

NOTE: I’m indebted to Joan Entmacher, the Vice President of Family and Economic Security at the National Women’s Law Center, for the term “fiscal follies.” She used it in a very informative webinar co-sponsored by the Center and the Coalition on Human Needs.

You can view the webinar by clicking the link at the bottom of this page.