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.

In Case You Missed It…

September 12, 2014 at 4:14 pm

This week on Off the Charts, we focused on health care, poverty and income, the federal budget and taxes, welfare reform, and food assistance.

  • On health care, Matt Broaddus previewed the Census Bureau’s upcoming health insurance coverage estimates.  Edwin Park explained how a House bill would undo health reform protections and raise small business premiums.
  • On poverty and income, Arloc Sherman previewed the Census Bureau’s upcoming poverty and income figures.
  • On the federal budget and taxes, we reviewed how the federal budget process is supposed to work — and what happens when it doesn’t.
  • On welfare reform, LaDonna Pavetti critiqued a recent study on the Temporary Assistance for Needy Families (TANF) program’s response to increased need during the Great Recession.
  • On food assistance, Zoë Neuberger highlighted how schools can do more to shield children from hunger.

Robert Greenstein issued a commentary on issues raised by House Budget Committee Chairman Paul Ryan’s “Opportunity Grant” proposal.  We issued papers on how a House bill would raise small business premiums and undercut health reform’s consumer protections, new research that shows the limits of risk adjustment in protecting traditional Medicare under premium support, and the flaws in a recent study on TANF’s response to increased need during the Great Recession.  We updated our explainer on the federal budget process.  Finally, ahead of the Census Bureau’s upcoming release of poverty, income, and health insurance data, we released papers on understanding next week’s figures on poverty and inequality and health insurance coverage.

CBPP’s Chart of the Week:

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

David Sarasohn: Expanded free lunch reduces hunger and stigma
The Oregonian (OR)
September 9, 2014

Local residents languish for years on HUD voucher waiting list
McPherson Sentinel (KS)
September 8, 2014

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

How the Federal Budget Process Works — and What Happens When It Doesn’t

September 12, 2014 at 11:21 am

With Congress expected to approve a stopgap funding bill before October 1 to keep the government running for the next few months, this is an appropriate time to review how the federal budget process is supposed to work.  Our newly updated backgrounder does just that, describing the laws and procedures under which Congress decides how much money to spend each year, what to spend it on, and how to raise the money to pay for that spending.

More specifically, our backgrounder explains:

  • the President’s annual budget request, which is supposed to kick off the budget process;
  • the congressional budget resolution — how it is developed, what it contains, and what happens if there is no budget resolution;
  • how the terms of the budget resolution are enforced in the House and Senate;
  • budget “reconciliation,” an optional procedure used in some years to facilitate the passage of legislation amending tax or entitlement law; and
  • statutory deficit-control measures — spending caps, pay-as-you-go requirements, and sequestration.

It also explains the differences between discretionary and mandatory programs and between budget authority and outlays, as well as other concepts that aren’t widely known but are critical to understanding the budget process.

Noting that in recent years the budget process hasn’t always worked as envisioned, our backgrounder describes what happens if, for example, Congress fails to complete a budget resolution or to pass appropriations bills before the October 1 start of the fiscal year.