In Making Budget Cuts, New Joint Committee Should Not Forget the Human Impact

September 2, 2011 at 2:39 pm

With attention focused on spiraling federal deficits, some budget experts surely will rate the new joint congressional committee that will start work this month on whether it meets its deficit-reduction targets.  Another important yardstick should be whether it does so in a fair and humane way.

A recent ABC News series of pieces, entitled “Hunger at Home: Crisis in America,” is especially relevant in this regard because it sheds light on the many dimensions of hunger that now face families across the nation.  Among the many families highlighted in the series, two families stood out.

Over a year ago, Don Orange, a single father of two, lost his job as a manager of a chain of shoe stores in Florida.  When his unemployment benefits ran out in April, Don applied for SNAP (formerly called food stamps) and turned to the local food pantry because he could no longer afford to feed his family.

Meanwhile, Jahzaire Sutton, a 10-year-old boy from Philadelphia whose family participates in SNAP, says that, by the end of the month, he watches his mother skip meals so that he can eat.

Orange, Sutton, and their families are among the millions of Americans who are struggling every day to get by.

Some 50 million Americans (about one household in seven) are “food insecure,” meaning their family lacks the resources they need to get enough nutritious food to thrive, according to federal Agriculture Department figures from 2009.  That means that 17.2 million children are at risk of going hungry.

Thankfully, there are critical supports available to these families through SNAP, school meals, and the other federal nutrition programs.  It is crucial that these programs not be weakened in their ability to assist families in need.

State and Local Job Cuts Continue, Especially in Education

September 2, 2011 at 1:24 pm

Three Years of State and Local Jobs CutsToday’s jobs report shows that in August, cuts by states and local governments — especially school districts — wiped out private-sector job gains.

The state and local sector cut 15,000 jobs in August.  That comes on top of a whopping 66,000 jobs lost in July, according to revised figures released today — the worst single month of job loss for states and localities since the recession began in December 2007.  States and localities have eliminated 671,000 jobs since employment peaked in August 2008 (see first graph).

Not coincidentally, July was also the first month of the new fiscal year for most states, one in which they are facing the double-whammy of weak revenues (which remain well below pre-recession levels) and the expiration of temporary federal aid.

Three Years of School Job CutsSome 14,000 of the state and local jobs lost in August were in local school districts, bringing to 293,000 the total decline in school-district employment since August 2008 (see second graph).

Cuts in state education funding are a big reason behind these education-related job losses.  As we reported yesterday, the vast majority of states for which data are available are cutting basic education grants to local school districts to below pre-recession levels.  Some of the cuts exceed 20 percent.

These troubling numbers raise a disconcerting question:  What kind of an economic future will this country have if we keep cutting education?

Today’s Jobs Report in Pictures

September 2, 2011 at 9:47 am

Today’s jobs report highlights the critical need to enact policies to get people back to work.  Employers added no net new jobs to their payrolls and the unemployment rate remained 9.1 percent.  Most forecasters, including the Congressional Budget Office (CBO), expect the unemployment rate to remain very high for the next few years.

Below are some charts to show how the new figures look in historical context. Here is our statement and further analysis.

See our chart book for more charts.

Unemployment Rate Stubbornly High
Job Losses Far Exceed Other Recessions
Employment Growth Remains Stalled
Share of Population with Job Remains Depressed
Long-Term Unemployment at Record Levels

School’s Open, But Funding’s Down

September 1, 2011 at 11:38 am

As a new school year begins, states are providing less funding per student to elementary and high schools than last year (after adjusting for inflation) in 21 of the 24 states for which these data are available, our new analysis finds.  (See first graph.)  These 24 states include about two-thirds of the nation’s school-age population.

School Funding Remains Below 2008 Level in Many States

Funding cuts likely are similarly widespread in the states for which these data aren’t yet available.  The 24 states we studied faced budget shortfalls this year that were no worse than the nation as a whole, on average.

In many cases, the cuts for the current fiscal year (2012) come on top of other cuts in state K-12 funding since the recession hit.  As a result, 17 of the 24 states studied are providing less funding per student than they did in 2008.  (See second graph.)  In ten of these states, funding is down more than 10 percent since 2008, and in South Carolina, Arizona, and California, it is down more than 20 percent.

School Funding Remains Below 2008 Level in Many States These cuts have serious consequences for students and the broader economy.

  • They slow the economic recovery. Between August 2008 and July 2011, local school districts cut 229,000 jobs in response to funding reductions.  These job losses, and other state spending cuts, have reduced overall consumption and slowed the recovery.
  • They inhibit education reform efforts and damage the nation’s long-term competitiveness. Funding reductions counteract state and local efforts to improve teacher quality, increase student learning time, and boost student achievement in other ways.  At a time when the United States is trying to produce more workers with the skills to master new technologies and adapt to the complexities of a global economy, large cuts in funding for basic education threaten
    to undermine a crucial building block for future prosperity.
  • They leave school districts with few choices for restoring the lost aid. State funding makes up 47 percent of K-12 expenditures nationally.  When school districts face cuts in state funding, they generally must raise additional property tax revenue (an unlikely prospect at a time when property values have
    plummeted), scale back the services they provide, or both.

While the state funding cuts partly reflect the economic downturn, which has depressed state revenues and raised the demand for public services, they also reflect choices by state and federal policymakers.  Most states took a cuts-only approach to closing their budget shortfalls for the current fiscal year, rather than using a more balanced mix of cuts and additional revenues.  And the federal government has failed to extend the emergency education aid it gave states earlier in the downturn, which played a crucial role in limiting the funding cuts to schools across the country.

Michigan’s Mis-Timed TANF Cut

August 31, 2011 at 12:22 pm

A report from the Port Huron Times Herald this week noted that, to help reduce the state’s budget shortfall, Michigan Gov. Rick Snyder is expected to sign legislation to reduce the time that individuals can receive Temporary Assistance for Needy Families (TANF), or welfare, assistance.  The new 48-month limit is expected to cause more than 11,000 people to lose benefits at the October 1 start of the fiscal year.

Meanwhile, Michigan has enacted large tax cuts that will cost more than $1 billion in 2012 alone. Michigan is among 12 other states with budget shortfalls to enact tax cuts, most of them benefitting corporations and high-income individuals. Thus, Michigan is cutting programs for the poor, as a prolonged downturn has significantly hurt struggling families, while giving tax breaks to the wealthy.

Snyder’s expected signature on TANF cuts comes just as my colleague, Donna Pavetti, has explored TANF’s record in providing assistance to needy families all across America a full 15 years after it was created as part of the 1996 welfare reform law.

In a four-part series on our blog, Pavetti noted that while the poverty rate initially declined when the economy was booming and unemployment was extremely low, it started increasing in 2000 and now exceeds its 1996 level. At the same time, the national TANF caseload has declined by 60 percent.

These opposing trends — TANF caseloads going down while poverty is going up — mean that a much smaller share of poor families are receiving the critical assistance that they need as the economy continues to struggle.

In light of these daunting statistics, it is even more unfortunate that states across the country are continuing to make some of the harshest cuts in history to this vital safety net for America’s poorest families.

While budget shortfalls in states must be addressed, budgets should not be balanced on the backs of the most vulnerable.