At a White House event this morning, First Lady Michelle Obama highlighted an important new provision that allows schools in high-poverty areas to fight hunger by providing free breakfasts and lunches to all students. Known as community eligibility, it has been phasing in since 2011 and this fall will be available to any school district nationwide that meets the eligibility criteria. More than 22,000 schools serving 9 million children will be eligible next school year, according to the White House.
Kansas Governor Sam Brownback said recently that his radical 2012 income tax cuts — among the largest that any state has ever enacted — generated over 15,000 small businesses in Kansas. He’s made this claim before, such as to the New York Times last month. It’s one of his top arguments that the tax cuts have worked.
But it’s misleading, at best.
First, while more than 15,000 new businesses were incorporated in Kansas in 2013, more than 16,000 other businesses were either dissolved by their owners or forfeited for failure to file an annual report and pay the annual fee. … Read more
The comprehensive health reform that Massachusetts enacted in 2006 improved residents’ financial well-being, likely by protecting them from high out-of-pocket medical costs (among other things), according to recent research from the Federal Reserve Bank of Chicago. Combined with previous research, these findings suggest that the federal Affordable Care Act (ACA) will not only give people better access to quality health care but also help them avoid financial hardship.
As the share of Massachusetts residents with health coverage rose by about 7 percentage points, residents’ credit scores improved, personal debt fell 22 percent on average, and the likelihood of bankruptcy fell 18 percent, after controlling for other personal and macroeconomic factors. … Read more
Four questions are particularly important in evaluating the tax reform proposal that House Ways and Means Committee Chairman Dave Camp (R-MI) is expected to issue tomorrow.
1. Does it raise needed revenue?
All tax reform plans raise revenue by scaling back tax expenditures (deductions, exemptions, and other preferences). A key litmus test for the Camp plan is whether it uses any of the savings to reduce deficits instead of just to reduce tax rates.
The nation’s long-term fiscal problems will require savings from both revenue and spending. … Read more
I explained earlier today that the Medicare Advantage payment rates that the Administration announced Friday didn’t include any cuts beyond those required by current law, despite misleading claims to the contrary from AHIP, the health insurance industry’s trade association. A related AHIP argument against the new rates — that they’re unfair coming on top of the cuts imposed by sequestration — is equally unconvincing.
Sequestration, which first took effect last year, includes a 2 percent cut in Medicare reimbursements to health care providers and plans, as well as other cuts to discretionary funding and some other mandatory programs. … Read more
Most media coverage of the President’s decision not to include the “chained CPI” for cost-of-living adjustments in Social Security and other retirement programs in his 2015 budget has left out a key point to understanding the announcement.
When the President was preparing his 2014 budget early last year, Republican leaders strongly urged him to include the chained CPI, and he did. But House Budget Committee Chairman Paul Ryan then failed to put the proposal in his budget, which included no Social Security savings (and fewer Medicare savings over ten years than the Obama budget).… Read more
The Centers for Medicare and Medicaid Services (CMS) has announced the preliminary 2015 payment rates for private “Medicare Advantage” plans that serve some Medicare beneficiaries and, just as we expected, Friday’s announcement include no payment reductions beyond those already in law.
Also as expected, the health insurance industry’s trade association, America’s Health Insurance Plans (AHIP), still insisted that the CMS announcement included “new proposed cuts.” AHIP wants CMS to keep Medicare Advantage payment rates “flat” in 2015. But to do so would effectively mean repealing or scaling back most provisions of health reform that rein in excessive Medicare Advantage payments over time. … Read more
This week on Off the Charts, we focused on the minimum wage, health care, the federal budget and taxes, Social Security, and safety net programs.
- On the minimum wage, we excerpted Jared Bernstein’s New York Times Economix blog on why the new Congressional Budget Office analysis shows the benefits of raising the minimum wage. Arloc Sherman explained why a higher minimum wage is a net win for most income groups.
- On health care, Paul Van de Water explained why the health reform law provides premium subsidies in all states to help people buy coverage.
We’ve previously highlighted research showing that the Earned Income tax Credit (EITC) encourages work — particularly among single mothers — and that children whose families get more income from the credit tend to do better in school. Now, two new working papers strengthen the case that the EITC helps children from low- and moderate-income working families get to college and show that it does so by boosting their educational performance and making college more affordable for families with high-school seniors.
Improving Academic Performance
One paper, by Michigan State University’s Michelle Maxfield, examines data from before and after changes to federal and state EITCs and finds that children receiving larger EITCs tend to do better academically in both the short and long term.… Read more
The White House announced today that it will recommend $56 billion in additional discretionary funding for 2015 above the level contained in the budget deal that Senate Budget Committee Chair Patty Murray and House Budget Committee Chair Paul Ryan negotiated in December. The additional funding, which would be evenly split between defense and non-defense, would be fully offset by cuts in mandatory programs and revenue increases.
The Administration’s proposal does not undermine the Murray-Ryan deal, but builds on it. The Administration’s detailed budget proposal will include line-by-line and program-by-program funding levels that fully adhere to the budget agreement’s 2015 funding caps, which are now the law. … Read more
Here’s a point about the minimum wage that hasn’t received enough attention: A rise to $10.10, from the current $7.25, raises average incomes for roughly the bottom half of all Americans — those with incomes up to $72,300 for a family of four, according to the new Congressional Budget Office (CBO) report on such a proposal.
Yes, as widely reported, CBO estimates that a minimum wage hike to $10.10 would mean the loss of 500,000 jobs (though some top economists, such as Harvard’s Lawrence Katz, estimate smaller or negligible losses), and some business owners and shareholders would have lower profits. … Read more
We’ve long said that the chained Consumer Price Index (CPI) for cost-of-living adjustments in Social Security and other retirement programs could be a reasonable part of a comprehensive deficit-reduction package — but only under certain conditions. In the absence of those conditions, the President’s decision not to include the chained CPI in his fiscal year 2015 budget is a sound one.
Many economists believe the official CPI overstates inflation and view the chained CPI as a more accurate measure of overall inflation (although not of inflation faced by the elderly). … Read more