Off the Charts Blog | Center on Budget and Policy Priorities

This week on Off the Charts, we focused on the economy, the budget deficit, inadequate health insurance plans, and elderly and disabled refugees losing much-needed benefits.

• On the economy, Chad Stone analyzed the September jobs report with a series of charts.  Nick Johnson pointed out that “state and local governments eliminated 83,000 jobs in September, and most of the lost jobs — some 50,000 of them — were in education.” Elizabeth McNichol discussed our updated analysis of state budget shortfalls due to the recession.
• On the deficit, we posted the webcast from the America’s Fiscal Future conference we co- sponsored with The Century Foundation, Demos, and the Economic Policy Institute, which featured a number of prominent economists and budget experts.  Paul Van de Water explained why a new deficit-reduction proposal could drive up health care premiums and cause more people to go without insurance.  Paul also debunked myths about Social Security, explaining that the program is on sound financial footing.

• On health reform, Edwin Park discussed the inadequacy of many of the health care plans offered to low-wage workers and explained how the Affordable Care Act will help consumers and employers find better, affordable health insurance.
• On elderly and disabled refugees, Kathy Ruffing noted that many will lose their much-needed SSI benefits over the coming year unless Congress gives them extra time to become citizens.

In other news, the Center released a report and podcast on understanding the Social Security trust funds; a report on a new deficit proposal that would jeopardize health reform; and a statement, podcast, and chart book on the September jobs report.

As our analysis of today’s jobs report explains, a sharp decline in government jobs in September more than offset the small gain in private-sector jobs. State and local governments, still coping with a massive recession-induced loss of tax revenue and their own balanced-budget requirements, eliminated 83,000 jobs in September, and most of the lost jobs — some 50,000 of them — were in education. Since August 2008, states and localities have shed 416,000 jobs (see chart). These numbers suggest three things:

• States badly needed the extra education assistance that Congress approved in August. Today’s Washington Post editorial argues, on the basis of a few local examples, that states didn’t really need the $10 billion in education funding. But today’s national figures on the large and continuing loss of education jobs show otherwise.
• Even with that help, state budgets are extremely tight and will remain so next year. States addressed $125 billion in budget shortfalls for the current fiscal year and face as much as $140 billion on shortfalls next year, our new analysis of state budget conditions shows. While federal help (both the 2009 Recovery Act and the August legislation, which included money for health care as well as education) has closed part of state shortfalls over the past few years, states are also imposing significant layoffs, cuts in services, and tax increases to balance their budgets.Moreover, the federal help is running out. About $60 billion is helping states in the current fiscal year, but only $6 billion will remain next year.
• Large losses of public-sector jobs weaken the economic recovery. When teachers are laid off, for example, it’s bad news not only for them and for their students, but for the wider economy. Laid-off workers cut back their spending, which means local businesses are less likely to hire new workers or increase orders from their suppliers.

As our statement and podcast both explain, today’s jobs report shows that the economy still faces a long and difficult climb out of the jobs hole created by the recent recession. Private-sector job creation has averaged fewer than 100,000 jobs a month this year — not enough to keep up with population growth and not nearly enough to bring down the unemployment rate. Worse, the pace of job creation is slowing as the economy slows; only 64,000 private-sector jobs were created in September.

Below are some charts to show how the new figures look in historical context.

See our chart book for more charts.

With states in the third year of a fiscal crisis sparked by their steepest revenue decline on record, we’ve updated our analysis of state budget shortfalls for the current (2011) and coming (2012) fiscal years. Here are the highlights:

• To balance their budgets for fiscal year 2011 (which began July 1 in most states), states had to address $125 billion in shortfalls. Since the start of the recession, they have closed about $425 billion in shortfalls.
• Thirty-nine states are estimating $112 billion in shortfalls for 2012. We estimate that, once all states have prepared estimates, the total shortfall for 2012 will reach about $140 billion.
• While federal aid in the 2009 Recovery Act (and, to a smaller degree, in the August 2010 jobs bill) has lessened state cuts in services and tax increases over the past few years, that help is running out. About $60 billion remains to help with states’ 2011 fiscal problems, and by 2012 only $6 billion will remain.

Recent Census data show that state revenues are stabilizing, as we noted earlier, but they remain far below pre-recession levels — and well below levels needed simply to maintain current public services.

The longer the fiscal crisis continues, the more damaging the potential cuts to public services, since states have already made the less painful cuts. That’s just one of several reasons why most states have rejected a cuts-only strategy in favor of a balanced approach that includes more revenue.

Several thousand impoverished elderly or disabled refugees who fled persecution in such troubled places as Afghanistan, Somalia, the former Yugoslavia, and Cuba lost their badly needed Supplemental Security Income (SSI) benefits last week. Thousands more will lose their SSI eligibility over the coming year.  A last-minute push in Congress to preserve these modest benefits failed before lawmakers left town to campaign for re-election; restoring those benefits should be high on lawmakers’ to-do list when they return to work in mid-November.

SSI provides aged, blind, and disabled people who have little or no income with modest monthly checks to help them meet basic needs.  Noncitizens who entered the United States after August 1996 generally can’t get SSI, but Congress has allowed very poor refugees — many of whom faced violence or torture in their home country and often arrive here with little more than the clothes on their back — to receive SSI benefits for a certain period to give them time to become citizens.

Two years ago, Congress overwhelmingly approved a law temporarily lengthening the SSI eligibility period for refugees from seven years to nine.  On October 1, the first group of up to 5,600 beneficiaries hit the nine-year limit and were cut off.  Another 5,600 may be cut off over the next 13 months as they bump up against the limit.

The assumption that elderly and disabled refugees can readily become citizens and thereby retain SSI eligibility has turned out to be mistaken, for several reasons.  Refugees generally may not even apply for citizenship until they have been in the country for five years — longer for asylees — and the application fees of $595 to $675 represent a huge amount for people living below the poverty line.

Applicants must also pass tests in English and civics — a steep hurdle for people who often had limited education in their home country and are elderly or seriously disabled.  And to become citizens, these individuals must navigate a confusing bureaucracy, often without help from an attorney or friend who is knowledgeable on these matters.

People whose benefits were due to expire on October 1 include:

• A blind man, age 77, who spent 14 years as a political prisoner in Cuba and who did not know that he would have to seek citizenship in order to keep his SSI.
• An elderly man from Ethiopia who received asylum in 2001 and applied for a green card promptly but didn’t receive it for six years and thus can’t apply for citizenship until 2011.  “I am 79 years old, so I can’t work,” he pleads.
• A 101-year-old woman who was granted political asylum after fleeing Cuba and now suffers from cognitive degeneration.
• An elderly couple who arrived from Sudan ten years ago as political asylees; they experienced long delays in obtaining green cards because of their difficulties with English and thus are not yet eligible to apply for citizenship.
• A man from Azerbaijan who was granted asylum in 2000, suffers from schizophrenia, and won’t be eligible to apply for citizenship until 2014.

“I don’t want to complain against the United States because this country has helped me immensely, but the reality is that I may be homeless,” says one refugee threatened with loss of benefits.   There’s no good reason for letting these extremely vulnerable people face destitution.