TANF at 18: A Weakened Role and Not a Model for Safety Net Reform

August 22, 2014 at 10:08 am

Eighteen years ago today, President Clinton signed into law the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 — commonly known as “welfare reform.”  A key component was its creation of the Temporary Assistance for Needy Families (TANF) block grant to replace Aid to Families with Dependent Children (AFDC).

Since then, TANF has played a shrinking role as a safety net for poor families (see chart), serving a small share of poor families and lifting many fewer families out of “deep poverty” (with incomes below half the poverty line) than AFDC did, as we explain and illustrate in our revised chart book.… Read more

In Case You Missed It…

August 15, 2014 at 12:05 pm

This week on Off the Charts, we focused on food assistance, health reform, Social Security, the federal budget and taxes, and state budgets and taxes.

  • On food assistance, Becca Segal introduced our new database of schools nationwide that qualify for community eligibility and shared what school officials are saying about the benefits of the program, which allows schools in high-poverty areas to serve meals to all students at no charge.
  • On health reform, Jesse Cross-Call rebutted claims by opponents of health reform’s Medicaid expansion that the federal government frequently changes the share of states’ Medicaid costs that it covers.
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What Schools Are Saying About Community Eligibility

August 15, 2014 at 11:14 am

School officials around the country have explained (see here and here) why they’re adopting community eligibility, a powerful new tool to fight hunger in high-poverty neighborhoods by allowing schools to offer nutritious meals to all students at no charge.  As schools and families prepare for the new school year — and as the August 31st signup deadline for eligible schools approaches — here’s more of what school officials are saying about the benefits of community eligibility:

  • Bill Redwine, chair of Rowan County, Kentucky, board of education:

    “This program will have a direct benefit on students in the classroom because teachers know that students who are hungry or have not had breakfast have difficulty concentrating on their schoolwork.

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Federal Medicaid Matching Rates Have Remained Stable, New Study Shows

August 14, 2014 at 1:03 pm

Some state policymakers opposed to health reform’s Medicaid expansion continue to argue that the federal government will likely renege on its commitment to permanently pick up nearly all of the cost.  Some assert that Congress frequently changes the formula that determines what share of states’ Medicaid costs the federal government will cover (also known as the FMAP).  As we noted in February, that’s false, and a new report from the Urban Institute concurs.

The report finds that policymakers have only cut the FMAP once, in 1981, when President Reagan and Congress enacted a temporary cut.  … Read more

Is Your School Eligible to Become Hunger Free?

August 13, 2014 at 3:47 pm

With the August 31 deadline fast approaching for schools to adopt the Community Eligibility Provision for the new school year, we’ve created a searchable database listing each state’s eligible schools.

Community eligibility, which becomes available nationwide this year, enables high-poverty schools and school districts to serve breakfast and lunch to all students at no charge.

The database also lists each state’s Identified Student Percentage (ISP), or the share of students who are already approved for free meals without an application because they either have been identified as low income by another program (such as SNAP, formerly food stamps) or are considered at risk of hunger (because they are homeless or in foster care, for example).… Read more

Happy 79th Birthday, Social Security!

August 13, 2014 at 2:04 pm

Social Security marks its 79th birthday tomorrow.  This highly successful program pays benefits to more than 58 million Americans.  It’s the single most important source of income for its elderly beneficiaries, contributing on average two-thirds of income for recipients over age 65.  For more than one-third of them, Social Security constitutes at least 90 percent of income (see graph).

Reliance on Social Security is especially high among the oldest — those who can no longer work and may have outlived their savings — and elderly blacks and Hispanics.… Read more

Kleinbard: “Competitiveness” Argument for Moving Firms’ Headquarters Overseas Is a Canard

August 12, 2014 at 10:10 am

The claim that many U.S. companies are moving their headquarters overseas because U.S. corporate tax rates make them uncompetitive is “largely fact-free,” USC law professor and former Joint Tax Committee staff director Edward Kleinbard concludes in a new paper.

While many firms and their lobbyists highlight the 35 percent top U.S. corporate rate, that’s not what companies actually pay, Kleinbard explains.  The effective tax rate that U.S. multinationals face on their worldwide income — that is, the share of this income that they pay in taxes — is well below this statutory rate.  … Read more

A Deserved Downgrade of Kansas’ Bonds

August 11, 2014 at 9:41 am

The meaning of Standard & Poor’s recent downgrade of Kansas’ credit rating, in which it cited Kansas’ “structurally unbalanced budget,” is clear:  Kansas’ budget is a train heading off a cliff.

Here are the details:

  • Kansas’ massive tax cuts have sharply cut state tax revenues.  Since Kansas’ massive tax cuts took effect a year and a half ago, revenues have nosedived.  Revenues were down about $700 million in the last fiscal year.  That’s much more of a drop-off than the state’s official forecasters expected.
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In Case You Missed It…

August 8, 2014 at 2:47 pm

This week on Off the Charts, we focused on state budgets and taxes, food assistance, health care, the safety net, and Social Security.

  • On state budgets and taxes, Elizabeth McNichol listed five ways that states can produce a more trusted and reliable revenue estimate.
  • On food assistance, Becca Segal explained how community eligibility is poised to help millions more students nationwide receive free school meals.
  • On health care, Edwin Park highlighted new findings from the Congressional Budget Office that concur with our analysis of the reasons for Medicare Part D’s lower-than-expected costs.
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Five Ways That States Can Produce a More Trusted and Reliable Revenue Estimate

August 7, 2014 at 12:10 pm

Update, September 4: We have updated this post to reflect updates in the related revenue estimating paper.

Every state estimates how much revenue it will collect in the upcoming fiscal year. A reliable estimate is essential to building a fiscally responsible budget and sets a benchmark for how much funding the state can provide to schools and other public services. Yet, as our new report highlights, some states forecast revenues using faulty processes that leave out key players and lack transparency.… Read more

Community Eligibility Poised to Help Millions More Students

August 7, 2014 at 11:11 am

More than 1.8 million students attended schools in 11 states last year that offered community eligibility, according to new data from the U.S. Department of Agriculture (see chart).  Community eligibility, which allows high-poverty schools to offer breakfast and lunch to all students at no charge without having to process meal applications, is now available nationwide, enabling schools in all 50 states to become hunger free.  Eligible schools have until August 31 to sign up for the coming school year.

More than 28,000 schools nationwide qualify for community eligibility. … Read more

CBO Findings Refute the Medicare Part D Myth

August 6, 2014 at 2:37 pm

The Medicare drug benefit’s lower-than-expected costs do not reflect efficiencies produced by competition among private insurers, as we’ve repeatedly explained.  The main factors were the slowdown in per-capita drug spending throughout the U.S. health care system and lower-than-expected Medicare Part D enrollment — and the Congressional Budget Office (CBO) concurred with our analysis in a recent report, finding:

  • National drug spending growth fell unexpectedly because many drugs went off-patent, the use of lower-cost generic drugs increased substantially, and fewer new drugs, which tend to be more costly, came to market. 
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