States’ Very Good Deal on Expanding Medicaid Gets Even Better

April 22, 2014 at 3:51 pm

In a little-noticed finding in last week’s Congressional Budget Office (CBO) report on health reform, CBO sharply lowered its estimates of how much the Medicaid expansion will cost states.  We’ve noted repeatedly that the federal government will cover the large bulk of the expansion’s cost.  As our new report explains, these new figures make it even clearer that the expansion is a great deal for states.

  • CBO now estimates that the federal government will, on average, pick up more than 95 percent of the total cost of the Medicaid expansion and other health reform-related costs in Medicaid and the Children’s Health Insurance Program (CHIP) over the next ten years (2015-2024).
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Improving the Odds for America’s Children

April 21, 2014 at 12:18 pm

The safety net has been more effective than critics suggest, the Center’s Robert Greenstein, Sharon Parrott, and I explain in a chapter for Improving the Odds for America’s Children, which Harvard Education Press has just published.

For our chapter, we reviewed the last 40 years of anti-poverty policies for children and offered ideas for future decades.

Here’s some of what we found, and some of what we proposed:

Household incomes have risen since 1973 for the poorest fifth of children if you include the value of non-cash benefits, as most experts favor (the official poverty figures omit them). … Read more

3 Steps States Can Take to Improve Their Rainy Day Funds Now

April 21, 2014 at 10:02 am

States can take concrete steps now to improve the structure of their rainy day funds, helping them to more effectively weather the impact of inevitable future downturns, as we explain in our new paper.

States used their rainy day funds to avert over $20 billion in cuts to services, tax increases, or both, in each of the last two recessions, highlighting the funds’ importance.  Yet these reserves filled only a modest share of states’ record-setting budget gaps; states would have weathered the storms better with bigger rainy day funds.… Read more

In Case You Missed It…

April 18, 2014 at 1:40 pm

This week on Off the Charts, we focused on Tax Day (April 15), the federal budget and taxes, health reform, state budgets and taxes, and the safety net.

  • On Tax Day, Chris Mai compiled CBPP’s top charts on state tax issues and Chuck Marr compiled our top federal tax charts.  We recognized the efforts of volunteers who helped file more than 3 million federal tax returns free of charge for low- and moderate-income people.  We also listed our most recent analyses on tax issues.
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New York Times Is Right: “No Spring Break for the Unemployed”

April 18, 2014 at 12:30 pm

“As members of Congress enjoy their extended spring break, 2.3 million unemployed Americans have been left to worry about whether lawmakers will ever get around to renewing federal unemployment benefits, which expired at the end of 2013,” today’s New York Times editorial points out.  And the total number of jobless workers affected grows each week.

As we’ve explained, the Labor Department estimates that 4.9 million people will miss out on emergency benefits by the end of the year if policymakers don’t restart the federal program, known as Emergency Unemployment Compensation (see graph).… Read more

Tax-Credit Bill Would Help Low-Income Families Facing Higher Rents

April 17, 2014 at 2:48 pm

House Ways and Means Committee member Charles Rangel (D-NY) has introduced legislation to establish a new federal tax credit to help low-income renters afford housing.  As we’ve explained, a renters’ credit along these lines would be a valuable tool to address low-income families’ mounting housing needs.

As the graph shows, the typical or median rent has risen much faster than inflation over the last decade, while renters’ median income has fallen in inflation-adjusted terms.

In fact, in 90 cities around the country, a median-income resident would have to pay more than 30 percent of his or her income to afford the median rent, the New York Times reports. … Read more

CBPP Releases New Resource on State Marketplace Design and Policies

April 17, 2014 at 11:28 am

Health reform’s marketplaces launched in every state on January 1, offering individuals and small businesses the opportunity to shop from an array of affordable, comprehensive health insurance plans.  Now that the open enrollment for 2014 coverage has closed, states have a chance to fine-tune their plans for next year.  A new database that CBPP has launched will give them critical information that they’ll need to make those decisions.

The health reform law gave states the option to establish and operate their own marketplace as a State-based Marketplace (SBM), partner with the federal government through a State Partnership Marketplace (SPM), or defer to the federal government to provide a Federally-facilitated Marketplace (FFM) in the state (see map).… Read more

States Are Starting to Save for Another Rainy Day

April 16, 2014 at 1:19 pm

With the budget challenges of the Great Recession and its aftermath still fresh in their minds, state policymakers are considering ways to strengthen their “rainy day funds” — budget reserves they can use when recessions or other unexpected events cause revenues to fall or spending to rise.  But, it’s still premature for most states to act aggressively to refill the funds until their revenues rise well above pre-recession levels, unemployment has declined further, and they have restored programs cut during the recession, as we explain in a new paper.… Read more

Increase the EITC to Help Lift “Childless Workers” Out of Poverty

April 15, 2014 at 3:21 pm

It’s time for policymakers to fix a glaring hole in the Earned Income Tax Credit (EITC), as I explain today in an op-ed for National Journal:

While the tax credit reduces poverty among families with children by double-digit percentages, as a recent Congressional Research Service report found, it does little or nothing to help low-wage workers who aren’t raising minor children. A “childless adult” working full time at the minimum wage — an annual income of just $14,500 — earns too much to receive the credit.

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3 Million Reasons to Thank Tax-Season Volunteers

April 15, 2014 at 11:35 am

This tax season, 85,000 trained volunteers across the country have helped file more than 3 million federal tax returns free of charge for low- and moderate-income people.  Tax Day is the perfect time to reflect on the critical services that these volunteers provide.

Free tax preparation programs such as the Internal Revenue Service’s (IRS) Volunteer Income Tax Assistance (VITA) and the AARP Foundation’s Tax-Aide programs are national efforts to provide professional tax filing assistance to low-income households.

Together, the VITA and AARP programs operate more than 10,000 sites across the country.  … Read more

The Top 10 (Well, 11) Federal Tax Charts

April 15, 2014 at 11:05 am

To usher in Tax Day, here are our top 11 charts on federal taxes, which provide context for debates on issues like tax reform and deficit reduction.

Our first chart shows the sources of federal tax revenue.

Individual income tax revenues have held steady for many decades at a little under half of federal revenue.  The share of federal revenue from payroll taxes (mostly Social Security and Medicare taxes) grew sharply between the 1950s and 1980s and has since remained relatively stable. … Read more

CBO: Health Reform Is Working — and Costing Less

April 14, 2014 at 5:23 pm

In new estimates that it released today, the Congressional Budget Office (CBO) projects that health reform’s coverage expansions will cost less than it previously estimated.  That’s good news for two reasons:

First, the new cost projections come even as CBO also estimates that health reform will dramatically reduce the number of Americans without health coverage.  Second, the lower cost estimate likely means that health reform will reduce budget deficits even more than CBO previously estimated.

Let’s take these one at a time.… Read more