Everyone with a conscience should be mad as hell at those in Congress who have signed up behind a heartless Farm Bill proposal to cut $40 billion from the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps). Their plan would throw millions of people out of the program and cut benefits for millions more.
If you are a man, woman, parent, business owner, farmer, teacher or veteran, you should be furious. If you’re old, young, Black, Hispanic or White, your blood should be boiling. Why? Because we all stand to lose big.
Weill gives some examples on why SNAP benefits are so important, and why cutting them would have some real, lasting effects for millions of Americans and our economy:
Children. Rampant unemployment and the proliferation of low-wage jobs have resulted in one out of two American children spending at least a few months during childhood on food stamps. The good news? Food stamps help boost their health, learning and long-term productivity. The bad news? House Republicans have made children prime targets for cuts. (...)
Women. SNAP cuts are particularly brutal to women. Because they tend to earn less and be the primary caregivers to children, 60 percent of working-age adult SNAP recipients are women. In addition, 67 percent of elderly SNAP recipients are women.
In Connecticut alone, more than 430,000 people received SNAP benefits in June 2013. Many of them are children. The majority of them are on working families. SNAP benefits are going to be subject to automatic cuts later this years as additional funding from the stimulus bills expires; cutting the program further will be devastating to millions of children and families across the country.
The SNAP program is a crucial part of the US safety net. Cutting the program is damaging and senseless, and will only hurt those who are the most vulnerable. Considering how income inequality has skyrocketed since the end of the recession, this cut is anything but a reasonable way to cut deficit.
Jonathan Cohn, at the New Republic, has an epic, 30,000 character article at The New Republic on the state of early care and education in America. His conclusion: we, as a county, are doing a terrible job at it.
American day care performs abysmally. A 2007 survey by the National Institute of Child Health Development deemed the majority of operations to be “fair” or “poor”—only 10 percent provided high-quality care. Experts recommend a ratio of one caregiver for every three infants between six and 18 months, but just one-third of children are in settings that meet that standard. Depending on the state, some providers may need only minimal or no training in safety, health, or child development. And because child care is so poorly paid, it doesn’t attract the highly skilled. In 2011, the median annual salary for a child care worker was $19,430, less than a parking lot attendant or a janitor. Marcy Whitebook, the director of the Center for the Study of Child Care Employment at the University of California–Berkeley, told me, “We’ve got decades of research, and it suggests most child care and early childhood education in this country is mediocre at best.”
At the same time, day care is a bruising financial burden for many families—more expensive than rent in 22 states. In the priciest, Massachusetts, it costs an average family $15,000 a year to place an infant full-time in a licensed center. In California, the cost is equivalent to 40 percent of the median income for a single mother.
This is specially worrisome because, as Cohn has pointed out in another must read article, early care and education is by far the most powerful, effective tool we have to help low income kids succeed.
CAHS has long recognized how important these issues are, and we have advocated for better early care and education for years we will continue to do so as member of the Early Childhood Alliance.
Our work this year is specially relevant, as budget deficits endanger Connecticut´s investment in helping low income families have access to quality child care. Care 4 Kids, the state´s child care subsidies program, has been targeted for cuts. Currently, when a family’s income raised above 50% of State Median Income (SMI), their childcare subsidy is adjusted, and they can continue receiving Care4kids until they reach 75% of SMI. The Governor’ has proposed to close the program to families between 50 and 75% SMI, creating a sudden benefit cliff for these households. Due to the very high cost of child care in the state, these cuts can potentially drive working families to refuse pay raises or longer hours to avoid going over the income limit, as it will entail a net loss of take home income due to the sudden increase in child care payments. The governor´s plan, rather than saving money, puts these working families and their kids in a no-win situation.
CAHS is build on two pillars: our program side, working with community based organizations across the state to help low income families become self sufficient, and our policy work, advocating for those families both at the Capitol in Hartford and in Washington DC. Our program work informs our policy efforts; a lot of the issues we see on the ground when working with clients and talking with people in the community end up being front and center in our policy agenda.
We advocate for the state EITC because we know that the Earned Income Tax Credit is important thanks in no small part to our own VITA work. We support the Affordable Care Act because we have seen how important health insurance is to keep a family out of poverty. What we hear on the ground informs what we say at the Capitol. It is one of our main strengths, are we are proud of it.
We do advocacy, however, for another crucial reason: politicians will not listen to low income families otherwise. In a classic study Larry Bartels, a political scientist from Princeton, analyzed how US Senator votes relate to the average policy positions of their voters by level of income. What he found is the following:
My analysis includes broad summary measures of senators’ voting behavior as well as specific votes on the minimum wage, civil rights, government spending, and abortion. In almost every instance, senators appear to be considerably more responsive to the opinions of affluent constituents than to the opinions of middle-class constituents, while the opinions of constituents in the bottom third of the income distribution have no apparent statistical effect on their senators’ roll call votes.
In other words: US Senators´voting patterns closely mirror what polls show to be the opinions of the wealthiest voters in their states. What people on the bottom third of the income distribution think turns out to be almost entirely incidental, bearing no relation to how the legislator will vote. This pattern holds for politicians from both parties, but it is even more pronounced in the case of Republicans (surprise), that tend to be almost twice as responsive to the wealthy.
What does this mean? We need voices. We need advocates. The idea that politicians only listen to the wealthy might be a cliche, but happens to be true. Corporations have lobbyists, fast food cooks do not. CAHS, and other organizations like us, work very hard to try to readdress this imbalance, trying to get the voices of those usually unheard to the Capitol. And you can help us do it with your support.
The National Head Start Association is facing a dilemma and this may have serious consequences on the future of our children. Sequestration, which began on March 1st, 2013 is causing cuts for many areas of government spending. Spending that includes funding for Head Start and Early Head Start. These programs are facing budget cuts that will not allow children the opportunity to become successful in the future. Currently there are 70,000 at- risk children- we need to give them a voice.
If we do not fund the education of at risk children of poverty, then we are bound to face the consequences of this action in the future. An early education and a healthy childhood development all make a significant difference in the future lives of children.
One parent has made the following statement in regards to the cuts:
“Head start is crucial for children to develop the motor skills, independent behavior skills, communication skills and multiple learning comprehension skills needed to grow into grade school! If head start is gone, I'm afraid there will be A LOT of children being held back to take kindergarten a second time!! Head start should be taken seriously- as it is the foundation of a child's academic future!!”
One of the ways to end this sequestration and take action is the Stroll-In to Stop Sequestration. Families who benefit from Head Start participated in visits to the offices of their members of Congress to let them know how these cuts to Head Start will have an impact on their families and the economy. We hope you will do the same, by either emailing or calling your elected officials today. Find out how to contact your U.S. Senator or Representative at usa.gov!
One thing that political scientists have known for awhile is that voters say that they prefer spending cuts to tax hikes on the abstract, but they are against cutting any specific social program when given a choice.
The Pew research center published a poll last month with a list of Federal spending programs, from entitlements to foreign aid, asking if funding should be reduced, sustained or increase in each of them. Here are the results:
Not a single Federal program (not even foreign aid) has a majority of voters asking for cuts over increase or maintain funding. Not one. In most cases a plurality of voters want to keep spending at the same level as it is today, closely trailed by the group that wants to spend more. Even in the three programs were budget-cutting did not come last they could only muster 48, 34 and 32% support.
These numbers explain, incidentally, why the policy debates on the budget are so frustrating. Fiscal conservatives are quick to demand budget cuts, but they are always very reluctant to name what policies and programs they want to pull money from. Liberals, on the other hand, tend to avoid saying that they want higher revenue and more spending on the abstract, but will offer a shopping list of stuff it is worth funding in a heart beat. In the last election we had the Republican running on a platform of cutting spending while blasting the President for cutting Medicare; you do not get more confusing than that. No wonder voters give contradictory answers when polled. Politicians have not been really clear on what their ideas are either.
In any case, the numbers above should serve as an important reminder: voters do like the programs we advocate for. It is a matter of making sure they understand what budget cuts entail; on the rest they are already on our side.
That´s the title of today´s editorial on the Hartford Courant, a very strong, forceful defense of the Connecticut Earned Income Tax Credit. The message is clear:
The earned income tax credit, or EITC, is one of the best domestic policy tools ever invented. Since it can only be claimed by people who work and pay taxes, it encourages and rewards work. It keeps low-income wage earners out of poverty. The money saved goes right back into the local economy.
It would be a shame to cut it, even temporarily.
The article goes on quoting the excellent study from CT Voices for Children on who gets the credit and its effectiveness. We do believe that the EITC is one of the best, if not the best, anti-poverty policies that the state has. The Courant is right: it should be preserved.
Paul Ryan released today the House Republican budget. In Ryan´s own words, the main objective of his plan is reducing the deficit, the biggest issue that the country is facing right now: "Yet the most important question isn't how we balance the budget. It's why."
Well, it turns out that "how" happens to be a fairly big deal, as Ryan´s budget includes a bold, radical redefinition of how the Federal government works and what it does. The main bullet points on this plan are fairly straightforward:
What remains the same:
- Social Security is held harmless.
- The cuts on military spending from the sequester remain largely in place, with only modest changes.
- Medicare cuts from the Affordable Care Act remain in place.
- Huge, harsh cuts on Medicaid, turning the program into a block grant state program.
- It turns Medicare into a voucher program (it is a voucher program, not premium support) to anyone under 55.
- Repeal of the Affordable Care Act, but leaving its tax increases in place. The nonpartisan Kaiser Family Foundation estimates that cuts on the order of what Ryan is proposing will mean around 35 million people lose their health-care coverage.
- Block granting SNAP (food stamps) and passing it on to the states, with huge spending cuts.
- Big spending cuts in education, infrastructure, research, public-safety, and low-income programs.
To complement these changes, Ryan also proposes a vaguely defined tax cut on the wealthy and lowering corporate tax rates, just in case the list above was not regressive enough. Ezra Klein describes the proposal as "social engineering with a side of deficit reduction", and he is right. For a party that spends most of its time bemoaning any tax increase as "class warfare", the budget truly looks like class warfare on behalf of the rich.
The House Republicans have decided to double down on the list of proposals that led them to defeat in last year´s election. The Affordable Care Act and increasing some revenue to pay for government programs were clearly on the ballot, and they won. The GOP negotiating position, however, remains the same, as the election never happened. The only significant change is that Ryan now seems to support the cuts to Medicare included in Obamacare that he opposed on the campaign trail.
The cuts would have devastating effects both on low income families and the middle class. The cuts on Medicaid and SNAP would really hurt the poor. Repealing the affordable care would be a major blow to working families, as the health care subsidies cover households making up to $92,000 for a family of four (400% FPL, to be more precise). Gutting Medicare will endanger retirement for all but the very wealthiest Americans.
The fact that most of the money saved from these changes is used to pay for a gigantic tax cut for the rich is just the icing on the cake; in a country were income inequality has risen to almost insane levels, putting forward a budget proposal that redistributes level upwards at this rate is beyond belief.
Budget deficit at the Federal level are an issue, but not on the short run. Interest rates are extremely low (the 10 year treasury note is at 2%; essentially zero, if we account for inflation), and they don´t seem to be going moving up in any meaningful way. Congress has passed, in the past few months, more than $2.4 trillion dollars in deficit reduction, to the point that the medium term budget outlook is basically stable. Inflicting untold amounts of pain on American families trying to solve a problem that is years in the future in a context of sluggish growth and high unemployment is deeply irresponsible.
If we were to cut deficit and reduce debt levels, Congress does need to use a balanced approach. First of all, it needs to make sure that any reduction happens down the road, not in the midst of a slow recovery. Second, the cuts need to be targeted and focus on truly wasteful programs, without hurting those that are the most vulnerable. Third, it needs to include revenue, either with higher rates (not just on the rich - Clinton-level middle class taxes were slightly higher than today, and it did not hurt the economy one bit) or reducing tax expenditures, closing loopholes and eliminating inefficient tax deductions. The Senate Democrats proposal, although with some flaws, is a much better model than they Ryan plan.
I wonder if the media will pay the same level of attention to both documents, or they still think that Paul Ryan is a reasonable guy with a reasonable plan. We will see tomorrow.
In 2011, during the (dreadful) debt ceiling negotiations, the White House and congressional republicans reached an odd agreement. In exchange of not destroying the full faith and credit of the United States and blowing up the world economy, Congress created a super committee that was going to devise a deficit reduction plan. To force the committee to reach some sort of deal, the agreement included a poison pill: if there was no deal, the legislation would trigger a fiscal doomsday machine with brutal, irrational, across the board spending cuts that should have been unacceptable to all parties, starting January 2nd, 2013. The sequester.
Congress being Congress, the super committee met, argued and discussed, but never managed to reach an agreement. Republicans wanted a deal that was all budget cuts, Democrats wanted some revenue, negotiations went nowhere fast, and both parties decided to settle the conflict the old fashioned way, in an US presidential election. That was the theory, at least; as usual, Congress ended in a stalemate in December, postponing the cuts until March 1st - that is, this Friday. And this time it seems that the sequester will go into effect, in full force.
The big problem, in this case, is that the sequester is a terrible policy idea. Congress tried to make them the automatic cuts really unpalatable, and for once they made a really good job at it. The sequester essentially is more that one trillion dollars in budget cuts in ten years using the bluntest instrument possible: cutting a fixed percentage of spending across government, without giving any consideration on what to preserve or how.
This is bad for two reasons. Although the sequester excludes several key anti-poverty program and entitlements (SNAP, Medicaid and Social Security are not cut, for instance) and half of the cuts fall on the (bloated) defense budget, a significant portion of the cuts do fall on low income children and families. To be more specific, in 2013 we would see cuts on programs like WIC, emergency unemployment benefits, community health centers or the social services block grant. The sequester will also bring cuts to education funding, work-study jobs, Head Start, child care or even nutrition assistance for seniors. The White House has released a detailed breakdown of the effects of the sequester in Connecticut, and the numbers are pretty grim, even with SNAP or Medicaid excluded.
Besides the specifics, the spending cuts coming from the sequester will create a substantial drag on the economy. Unemployment will go up; Stephen Fuller from George Mason University has estimated that up to 2.14 million jobs could be lost. Other analysts have produced lower job lost estimates, but the impact would be substantial.
The combined fiscal tightening will also slow down the economy. The Congressional Budget Office has estimated that the sequester alone will reduce GDP growth by 0.6%, on top of the 0.9% drag derived from the rest of deficit reduction in the public sector and the payroll tax increase.
To put it mildly, slashing Federal spending at random in the midst of a very slow, tentative economic recovery is a stupid idea. The fact that those cuts come from a specially convoluted budget agreement that was never supposed to take place in the first place makes it even worse. The sequester is, like the debt ceiling, a debt crisis that should have never happened; it is pretty astounding that Congress is actively choosing not to reverse an exceptionally bad policy like this, but that is what we are about to see.
There are two ways out of this mess. Even acknowledging the need for deficit reduction (a worthy goal on the medium term, but not something that should be a priority right now) the best things Congress could do is just get rid of the budget cuts right now, and move budget discussions further down the road. If Congress wanted to do deficit reduction right now, they should replace the sequester with a balanced mix of additional revenue and more targeted, less arbitrary spending cuts. The defense budget probably needs to be trimmed, for instance; but cuts to vital services (from the FAA to the FBI) does not. Offsetting those cuts with new revenue closing tax loopholes and inefficient exemptions would greatly decrease the adverse macroeconomic effects of the sequester while still improving the fiscal situation (that, we insist, it is not as dire as some say it is) in the long term.
The roadblock, of course, is the Republican House majority, who oppose both ideas and prefer the sequester to either idea, or a budget deal with no new revenue whatsoever. Not that this is surprising, really, but it is still important to keep in mind.
Governor Malloy’s spending plan for the next two years, unveiled last week, includes a reduction to Connecticut’s EITC:
The working poor would receive less money back as part of a program known as the earned income tax credit, according to Malloy’s proposal. Last spring, 182,000 poor families claimed the credit and received an average of $601; under Malloy’s plan, they would receive about $500.
The federal government also provides a tax credit for poor families that earn income, and the state’s credit is equal to 30 percent of the value of the federal credit — the largest of any state’s program. Under Malloy’s proposal, the state’s credit would be reduced to 25 percent of the federal credit, or a cut of about 16 percent. The maximum credit would drop from $1,767 to $1,473.
Barnes said the cut would be temporary. The administration’s plan calls for increasing the credit after the coming tax year to 27.5 percent in the 2014 tax year, and return to 30 percent in 2015.
Governor Malloy’s plan cuts the EITC to 25% of the federal in 2013, 27.5% in 2014, and restores it to 30% in 2015. Although the temporary nature of this cut is encouraging, it still means a tax increase for low-income families in the state.
We need to change this - it is important for lawmakers to hear from their constituents on this issue, and it is important to explain far and wide that the EITC is one of the most effective anti-poverty programs Connecticut has ever devised.
It is for this reason that CAHS has created a dedicated website, Connecticut EITC, with information on the EITC, detailed data on who receives it and its effectiveness, research and resources, and the latest, most up to date information on how the state budget on this issue. You can also sign up for updates and e-mails, volunteer, contact your legislator or tell us your story on how important the EITC is for you and your family.
The Connecticut EITC is the cornerstones of how our state helps low income families get out of poverty. It is a key social mobility program. Make your voice heard.
One of the biggest surprises on the Governor´s budget last week was doing away with the motor vehicle property taxes, or to be more precise, on the taxes for vehicles worth less than $28, 500. In a state where towns rely a great deal on property taxes (a bad idea, by the way), axing one of their potential sources of revenue has been greeted by howls of protest by Mayors and First Selectmen all over the state.
Behind this change on property taxes, however, we should keep in mind two main issues. First the motor vehicle property tax is a fairly lousy way to collect money in the first place. Second, eliminating it without providing an alternative to municipalities is a terrible idea.
We will start with the tax itself. The car tax, by itself, is wildly inconsistent. The same car, owned by two people across municipal lines, can generate a tax bill four or five times larger, just from the huge mill rate disparities. Real state property taxes are similarly unfair, but at least you can´t move a house from New Haven to Greenwich and call it a day. Car taxes, however, make this big differences specially galling.
In addition, Municipal tax collectors really don´t like car taxes that much. For starters, it doesn´t raise that much money in the first place; 5.5% of local budgets, according to CCM, requiring a hefty amount of paperwork to do so. The problem, however, is that some towns barely get any money out of them as they rely more on taxing residential and commercial property (as is the case of Stamford, where it only accounts for 2% of the budget) while it is a big chunk of the taxable grant list in other places (Sprague, 20% of their income). This means that in some towns eliminating the tax could be compensated with a slight adjustment in the mill rates, while in others it will translate into a large tax increase elsewhere. The incidence of this change, as a result, greatly depends on the economic activity of each town. Opening a big hole on municipal budgets without offering any way to compensate for the loss is, by itself, a bad idea.
What are the alternatives? A good, workable alternative would be turning the car property tax into a state tax with a uniform mill rate, and increasing municipal aid from the general fund. After all, the state has to pay for its roads somehow, and with cars getting more efficient the gas tax really doesn´t have the revenue potential it used to. A state car tax would eliminate the regressive silliness of having the same car pay more taxes in Hartford than in Avon, and enable the state to plug the hole in municipal budgets at the same time. What does not make sense is have the Legislature mandating expenditures and cutting taxes to local governments, without putting more money on the table.