Off the Charts Blog | Center on Budget and Policy Priorities

“Tens of thousands of people will lose their jobs within weeks unless Congress extends one of the more effective job-creating programs in the $787 billion stimulus act,” the New York Times explained yesterday in an article on the TANF Emergency Fund.

As one of these workers — a father of four who got a stimulus-funded job after being laid off from his job of 17 years — told the Times, “It’s very scary, because there’s just no work.”

Most of the 37 states operating subsidized employment programs created them to respond to the recession, and all of these states agree that the programs are still needed. Yet many of the programs — including most of the largest ones — will have to close their doors on September 30 or shortly thereafter if Congress doesn’t extend the fund; others plan to greatly scale back operations (see map).

This week on Off the Charts, we discussed debates over taxes and spending, the announcement that the recession officially ended in June 2009, the six-month anniversary of health reform, and the Census Bureau’s new poverty figures.  We also started a countdown to the expiration of the TANF Emergency Fund, which has provided a quarter-million Americans with jobs but will end September 30 unless Congress extends it.

• On tax and spending debates, we noted that the new legislative agenda from some House Republicans includes Minority Leader Boehner’s recent proposal for sharp spending cuts. Edwin Park also explained why the Republicans’ proposal would mean more uninsured Americans and higher deficits.  Chuck Marr explained why focusing the tax debate on the middle class will mean a better outcome for the economy.
• On the recession, Arloc Sherman pointed out that it followed an “expansion” between 2001 and 2007 in which the nation actually lost ground in areas like poverty rates and median incomes.  Chad Stone warned that while the recession is over, poverty and unemployment will likely remain high for some time.
• On health reform, January Angeles sat down with us to discuss two of the law’s key provisions that took effect yesterday:  improved access to preventive care and a coverage expansion for young adults.
• On the new poverty figures, Arloc Sherman explained that food stamps and unemployment benefits kept millions of Americans out of poverty in 2009.
• On the TANF Emergency Fund, we began a series of posts counting down to the program’s expiration.  Donna Pavetti featured stories of communities and employers that have benefited from the fund.

In other news, the Center released a podcast on this week’s health care milestone.   Find it on iTunes.

In addition to the sharp funding cuts we noted yesterday, another major component of the legislative blueprint some House Republicans issued yesterday is near-full repeal of the Affordable Care Act (ACA) — i.e., health reform.  In its place, the House Republicans propose the same policies they offered as an alternative to health reform last fall.

• The Republican blueprint would likely cover only 3 million of the uninsured, 29 million fewer than under the ACA, according to the Congressional Budget Office.
• The proposal would likely produce deficits that are tens of billions of dollars higher over the next decade — and hundreds of billions of dollars higher over the following decade — than would occur under the ACA.  This is because the Republican blueprint would repeal the ACA’s revenue increases and Medicare and Medicaid savings (which more than offset the cost of the law’s coverage expansions, reducing the deficit by $143 billion over ten years and $1.3 trillion in the following decade, according to CBO).  The proposal would replace these provisions with only modest savings in the health area.
• The Republican blueprint’s elimination of the Medicare savings and efficiencies in the ACA would likely move up the date when Medicare becomes insolvent by 12 years (to 2017) and drive Medicare premiums higher.

Moreover, at the same time that the blueprint would repeal the ACA’s requirement that individuals have health coverage or face a penalty, it purports to keep several of the law’s popular insurance-market reforms, such as the rules preventing insurance companies from denying coverage to people with pre-existing medical conditions or from placing lifetime caps on covered benefits.

As this Center report explains, implementing the insurance market reforms without an individual mandate would be doomed to failure.  In fact, such an approach would make health coverage less affordable, not more so because:

• The people most likely to enroll in health coverage after enactment of such reforms would be older people and people with pre-existing medical conditions, who could not purchase coverage and needed health care most urgently.  Healthier people, knowing they could wait to buy coverage until they got sick, would be less likely to enroll.  This would drive up premiums significantly, since less healthy people cost more to treat — and thus to insure.
• The resulting increase in premiums could further discourage healthy uninsured people from buying coverage and could lead some healthier people who already have coverage to cancel it.  This, in turn, would raise premiums still higher, triggering a vicious cycle, commonly called a “death spiral.”

It was precisely to prevent this from happening that policymakers included the individual mandate in the ACA.

Our report also notes that criticisms of the individual mandate echo arguments from Social Security’s opponents back in the 1930s:

Opponents of the individual mandate make many of the same arguments that opponents of Social Security made when it was first enacted.  At the time, some argued that requiring people to pay a portion of their wages into Social Security was an infringement on personal liberty and an oppressive burden that the federal government had no right to impose.

Over time, however, the vast majority of people have come to recognize the value of protecting America’s seniors through Social Security.  Mandatory Social Security provides critical help to people who hoped to save enough on their own for their retirement but didn’t succeed in doing so or were wiped out by an unexpected catastrophic cost, disability, or the loss of employment.

Similarly, the individual mandate will protect people who are healthy now and don’t think they need insurance but subsequently develop a serious illness or have a serious accident and otherwise would face exorbitant costs for care and possibly be forced into medical bankruptcy.  It is an essential part of a package of health reforms that will move the nation a long way toward achieving another valued, common goal: quality, affordable health coverage for all Americans.

We hear a lot these days about public resentment of government.  But a new Idaho poll gives further evidence that, when confronted by the real impact of the record revenue losses that states and localities have suffered due to the recession, Americans favor a balanced approach that includes new revenues instead of just fewer public services.

Like other states, Idaho has experienced steep revenue declines in the past few years.  Last year, the governor and legislature responded by cutting services and not raising taxes.

But that policy had a cost.  The state cut K-12 education spending by 7.5 percent.  The state has also cut health care, services for seniors and people with disabilities, higher education, and its own workforce.  And another $182 million budget gap looms for the 2012 fiscal year.

In a new poll sponsored by a group of daily newspapers, while most Idahoans say it was right to rule out taxes last year, 48 percent support raising taxes to avoid additional education cuts next year; 38 percent were opposed.

Idaho’s far from alone.  In recent months, I’ve blogged about election results in Michigan and Arizona, where voters backed tax increases rather than deep service cuts.  And don’t forget the similar vote in Oregon earlier this year.  In 2008-2009, 33 states raised revenues to help balance their budgets.

The fact that people are willing to pay for services that meet important needs and invest in a better future isn’t such a “man-bites-dog” story after all.

Today, we continue our countdown to the end of the TANF Emergency Fund, which has provided 250,000 Americans with subsidized jobs in the private and public sectors but will expire September 30 — despite continuing high unemployment — unless Congress acts.  The fund has enabled formerly unemployed workers to earn a weekly paycheck so they can pay their bills and care for their families.  It also has given them an opportunity to gain more work experience and build new skills that will help them find permanent employment as the economy recovers.  Here are two examples:

• Bryan P., who has a high school degree, a technical certificate, and ten years of work experience, lost his job last year due to the recession and could not find steady work to support his two children.  Illinois’ subsidized jobs program helped him find a job at a Chicago hotel, where his supervisor has praised his strong work ethic and is considering him for a permanent job.   “I love this job.  I love the program.  It’s awesome,” Bryan said.
• Teresa L. lost her job when her employer was forced to make cuts due to the recession, leaving her and her husband struggling to provide for their five children.  Through South Carolina’s subsidized jobs program, she found an administrative position at an insurance agency.  Her new job also allowed the family to move to a neighborhood with better schools.  Teresa plans to build on her experience and become a licensed insurance agent.

On Monday, I’ll discuss what will happen to states’ jobs programs when the Emergency Fund expires.