In Case You Missed It…

September 26, 2014 at 3:22 pm

This week on Off the Charts, we focused on the new Census data on poverty, inequality, and health coverage; the federal budget and taxes; state budgets and taxes; and housing.

  • On the new Census data, we listed five key takeaways from the data.  Arloc Sherman explained why the data strengthen the case for doing more to help low-income childless workers and pointed out that the decline in the official poverty rate follows a decade and a half of mostly rising or stagnant poverty rates.  Matt Broaddus highlighted our analysis of the health coverage data, which show a slight improvement.
  • On the federal budget and taxes, Chuck Marr commended the Obama Administration’s important first step against corporate “inversions.”  Paul Van de Water explained why “fair-value accounting” would make federal loan and loan guarantee programs look more expensive than they really are.
  • On state budgets and taxes, Elizabeth McNichol noted that Kansas’ financial troubles highlight the need for well-designed state rainy day reserve funds.
  • On housing, Will Fischer explained that a House bill would raise rents on some of the nation’s poorest families while lowering rents for better-off households.

We released reports analyzing the new Census data and taking a closer look at the health coverage figures.  We also released an analysis of the Republican Study Committee’s health plan and updated our backgrounder on the number of weeks of unemployment compensation available.

CBPP’s Chart of the Week:

A variety of news outlets featured CBPP’s work and experts recently. Here are some highlights:

Bad Policy Is Stalling Economic Recovery
US News and World Report
September 26, 2014

Census data on poverty show results of economic policy gone wrong
Los Angeles Times
September 20, 2014

Don’t miss any of our posts, papers, or charts — follow us on Twitter and Instagram.

5 Takeaways From Last Week’s Figures on Poverty, Inequality, and Health Coverage

September 25, 2014 at 12:32 pm

Here are five key findings from our analyses (here and here) and blog posts on the new figures from the Census Bureau and Centers for Disease Control and Prevention (CDC).

  1. While poverty and median income improved last year for families with children,poverty rates reached record highs for childless families and individuals.  The poverty rate for individuals not living in families (people living alone or only with non-relatives) rose to 23.3 percent in 2013, the highest in over 30 years.  The poverty rate for childless families (childless couples, older couples or other families whose children have moved away or turned 18, and other relatives who live together), while much lower at 6.2 percent, was also the highest in over three decades.
  1. Income inequality remained historically high.  The share of the nation’s income going to the bottom fifth of households remained at 3.2 percent, tied for the lowest level on record with data back to 1967.  The ratio of the median income of the top fifth of households to that of the bottom fifth topped 12 to 1 for the first time on record, with data back to 1967.
  1. Austerity policies limited progress on jobs, income, and poverty.  Instead of responding to continued weak job growth by creating jobs (such as by expanding infrastructure investments), policymakers adopted various austerity policies that constrained consumer spending and employment growth.  Sequestration budget cuts, for example, lowered appropriations for most discretionary programs by 5 to 8 percent in 2013.  Policymakers also allowed a payroll tax holiday to expire after December 2012 and allowed tax cuts for very high-income individuals to expire (though the latter mattered less for consumer demand since high-income people’s spending is less sensitive to tax changes).  The Congressional Budget Office projected in early 2013 that these measures would reduce economic growth over the year by about 1½ percentage points and lower employment by more than 1 million jobs.
  1. The uninsured rate fell slightly last year and is falling further in 2014, as health reform’s major coverage expansions take effect.  The share of Americans without health coverage fell from 14.8 percent to 14.5 percent in 2013, according to Census’ American Community Survey.  And preliminary data from CDC — the first government survey data that reflect the early impact of the coverage expansions (the Medicaid expansion and subsidized marketplace coverage) — show that the number of uninsured fell by 3.8 million in the first quarter of 2014.
  1. The coverage gap between states that have expanded Medicaid and states that haven’t is widening.  In 2013,before the expansion took effect, some 14.1 percent of the people in the 27 expansion states (including Washington, D.C.) were uninsured, compared to 17.3 percent in the 24 non-expansion states.  Figures for the first part of 2014 show the gap is widening.  For example, CDC data show that 15.7 percent of non-elderly adults in expansion states were uninsured in the first quarter of 2014, compared to 21.5 percent for non-expansion states (see graph).

In Case You Missed It…

September 19, 2014 at 4:23 pm

This week on Off the Charts, we focused on the new Census Bureau data on poverty, income, and health coverage; the federal budget and taxes, housing, food assistance, and state budgets and taxes.

  • On Census Bureau data, we excerpted Robert Greenstein’s statement.  Danilo Trisi explained why the Census Bureau’s official poverty rate provides a real but incomplete picture of poverty and anti-poverty policies in the United States and noted that income inequality remained near a record high in 2013.  Matt Broaddus highlighted improvements in uninsured rates but found wide disparities in health coverage among certain groups of Americans.  He also noted that states that have expanded Medicaid had lower uninsured rates in 2013 (before the expansion took effect) than non-expansion states, which are falling further behind in 2014.  In addition, he analyzed new figures from the Centers for Disease Control and Prevention that show that the number of uninsured fell in the first quarter of 2014 by 3.8 million.  Paul Van de Water highlighted the rise in full-time work in the Census data, which undercuts claims that health reform is causing large increase in part-time employment.  Sharon Parrott noted that despite gains for families with children, poverty is still higher and incomes are still lower than before the recession.  Erica Williams pointed out that poverty remained above pre-recession levels for 47 states in 2013 and explained how states can reduce child poverty.
  • On the federal budget and taxes, Chye-Ching Huang debunked myths about corporate inversions on a Heritage Foundation panel.  Chuck Marr raised concern over a House Republican bill that would make permanent certain tax “extenders” and bonus depreciation.
  • On housing, Douglas Rice explained why policymakers should make a priority of fully restoring housing vouchers lost to 2013 sequestration budget cuts.
  • On food assistance, Brynne Keith-Jennings described a Brookings Institution report that found that the health of caregivers, access to stable housing, and child care can influence children’s food insecurity.
  • On state budgets and taxes, Elizabeth McNichol pointed to a new report from Standard & Poor’s that finds that growing income inequality in recent decades has slowed state tax collections.

Robert Greenstein issued a statement about the newly released Census Bureau data on poverty, income, and health coverage.  We posted the recording from our media briefing following the release of the Census Bureau’s new figures.  We also posted information about our SNAP Academy webinar series that seeks to educate states and local advocates, application assisters, and outreach workers with information on the program.

CBPP’s Chart of the Week:

A variety of news outlets featured CBPP’s work and experts recently. Here are some highlights:

Is Obamacare causing a surge in part-time work?
CBS News
September 18, 2014 

Poverty rate posts 1st notable drop since ’06; Latinos show big strides
Los Angeles Times
September 16, 2014

U.S. Incomes End 6-Year Decline, Just Barely
Wall Street Journal
September 16, 2014

Incomes for Most Americans Won’t Budge 
The New York Times
September 16, 2014

Poverty in U.S. Declines for First Time Since Before Recession
Bloomberg News
September 16, 2014

Beacon Hill needs legislative fiscal office
Boston Globe
September 15, 2014

Don’t miss any of our posts, papers, or charts — follow us on Twitter and Instagram.

Debating Corporate “Inversions”

September 19, 2014 at 3:32 pm

At a Heritage Foundation panel discussion this week, CBPP Senior Tax Policy Analyst Chye-Ching Huang debunked myths surrounding the recent wave of corporate “inversions,” in which U.S.-based firms move their headquarters overseas for tax purposes, and explained why policymakers should take strong action against them, explaining:

People think that there is a simple story that is driving inversions . . . that there are companies that are changing their tax headquarters to escape the highest statutory rate in the OECD [Organisation for Economic Co-operation and Development].  But that simple story is not what is happening. . . . The problem is really about U.S. multinationals and other multinationals gaming the tax system in the U.S. and all throughout the OECD so that they can claim that all of their profits are in tax havens.

Other panelists included CNBC Senior Economics Contributor Larry Kudlow, Heritage Chief Economist Stephen Moore, and Walter J. Gavin, Retired Vice Chairman of Emerson Electric.

As we’ve explained (see here and here for examples), the effective tax rate that U.S. multinationals face on their worldwide income is well below the 35 percent top U.S. statutory rate.  A big reason why is that multinationals report vast amounts of their income as coming from tax havens where they pay little or no tax.  Adopting a foreign headquarters could make it easier for multinationals to claim that their profits are made offshore and to use tax havens to avoid taxes anywhere.

Greenstein on Today’s Census Figures

September 16, 2014 at 1:44 pm

CBPP President Robert Greenstein just issued a statement on the Census Bureau’s 2013 data on poverty, income inequality, and health insurance:

Today’s Census data provide fresh evidence that the economy strengthened in 2013, but too slowly to improve the living standards of many middle- and low-income Americans.  Median household income did not rise significantly and remained 8.0 percent (or $4,497) below its level in 2007, before the Great Recession — and 8.6 percent below its level in 2000, before the 2001 recession.  The poverty rate fell from 15 percent in 2012 to 14.5 percent, the first statistically significant decline since 2006 (and only the second since 2000).  But the rate remained well above its 12.5 percent level in 2007 and even further above its 2000 level of 11.3 percent.  At last year’s rate of improvement, we would need to wait until 2018 for it to fall to or below the 2007 pre-recession level, and until 2020 to fall below the 2000 level.

Today’s report, however, does include a substantial and welcome decline in poverty among children, from 21.8 percent in 2012 to 19.9 percent in 2013 (although the child poverty rate remains well above its 2000 and 2007 levels).  The Census data indicate that the drop in 2013 was driven largely by a rise in employment and earnings among parents.  Indeed, median income among families with children rose between 2012 and 2013 even as overall median income was statistically unchanged.

In contrast with the 1960s, 1970s, and 1980s — when the benefits of economic recoveries were more broadly shared and poverty and median income improved more quickly when recoveries started — the recoveries of the past two decades have been much slower to generate income gains for middle- and low-income Americans.  Part of the problem is the rising inequality of recent decades, which has meant that economic growth has not been widely shared.  By various Census measures, inequality remained at or near record levels in 2013, with inequality essentially unchanged between 2012 and 2013.

Another factor that held down improvements in middle- and low-income living standards in 2013 was premature federal austerity policies, such as the sequestration budget cuts, that restrained economic growth.  The changes in federal spending and tax policies that took effect in 2013 reduced economic growth last year by about 1.1 percent of gross domestic product (GDP), according to Goldman Sachs.  The Congressional Budget Office projected that these policy changes cost the economy more than 1 million jobs.  We would have been wiser to invest more in infrastructure and education and training to put more people back to work in the short term and to strengthen productivity and economic growth in the long term.

Health care provides a brighter story.  The share of Americans without health insurance fell slightly in 2013, based on data from the Census Bureau’s American Community Survey.  In addition, an array of studies and data — including new data that the Centers for Disease Control and Prevention (CDC) issued this morning — show that the number of Americans without insurance has fallen markedly in 2014 with implementation of health reform.

These studies also show that the states that expanded Medicaid under health reform experienced much larger declines in their uninsured populations this year than states that rejected the expansion.  Since today’s Census and CDC data also show that people in the more than 20 states that rejected the expansion were likelier to be uninsured in 2013 than people in states that took the expansion, this means the gap in health insurance coverage between the two groups of states is widening.

Today’s data also provide some evidence about other areas (beyond health reform) where the safety net is producing results.  Programs like the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) are not counted in the official poverty measure, but the Census data issued today show that when SNAP assistance is counted as income — as analysts generally believe it should be — it lifted 3.7 million people above the official poverty line in 2013, including 1.5 million children.