In Case You Missed It…

March 7, 2014 at 3:45 pm

This week on Off the Charts, we focused on the federal budget and taxes, health care, state budgets and taxes, the economy, and the safety net.

  • On the federal budget and taxes, we highlighted Robert Greenstein’s statement on the President’s 2015 budget and excerpted his PBS “NewsHour” interview on the need to strengthen both the Earned Income Tax Credit (EITC) and the minimum wage.  Nathaniel Frentz pointed to our new state-by-state fact sheets on the impact of the EITC and Child Tax Credit (CTC).  Chuck Marr explained that the President’s budget would extend the EITC’s pro-work success to childless workers.  He also analyzed the treatment of “tax extenders” in House Ways and Means Chair Dave Camp’s tax reform plan.
  • On health care, Paul Van de Water highlighted a new Congressional Budget Office report showing that raising the threshold for full-time work under health reform to 40 hours would negatively affect workers.  Edwin Park explained that delaying health reform’s penalty for lacking health coverage would mean more uninsured and higher premiums.  He also revisited the Medicare Part D myth in light of the program’s lower-than-expected costs in its first five years.
  • On state budgets and taxes, Elizabeth McNichol highlighted a new report by the Economic Analysis and Research Network showing that states need to help address income inequality.
  • On the economy, Chad Stone noted that the February employment report marks the fourth anniversary of the start of the private-sector jobs recovery, but the job market is still far from full strength.
  • On the safety net, we pointed to Sharon Parrott’s commentary on House Budget Committee Chair Paul Ryan’s new report on safety net programs and poverty.

In other news, Chad Stone issued a statement on the February jobs report, Robert Greenstein issued a statement on the President’s budget, and Sharon Parrott issued a commentary on Chairman Ryan’s poverty report.  We issued papers on keys elements of the President’s budget, how strengthening the EITC for childless workers promotes work and reduces poverty, falling SNAP costs, and how the EITC encourages children’s success at school.  We also issued state-by-state fact sheets on the EITC and CTC.

In addition, we paid tribute to the late Richard W. Boone, who conceived of and provided the funding to launch the Center on Budget and Policy Priorities in 1981.

CBPP’s Chart of the Week:

A variety of news outlets featured CBPP’s work and experts recently. Here are some highlights:

Things to Praise and Pan in Camp’s Tax Plan
U.S. News and World Report
March 6, 2014

Washington is Ignoring Obama’s Budget. You Shouldn’t.
New Republic
March 6, 2014

Where Unemployment Insurance Benefits Stand in Your State
Fiscal Times
March 4, 2014

Does the president’s budget present solutions for closing the economic gap?
PBS “NewsHour”
March 4, 2014

Camp Roadmap to Paying for Extenders
Huffington Post
March 5, 2014

Mr. Ryan’s Small Ideas on Poverty
New York Times
March 3, 2014

Obama Budget Would Expand Low-Income Tax Break
New York Times
March 3, 2014

Today’s Jobs Report in Pictures

March 7, 2014 at 9:30 am

Today’s jobs report marks the fourth anniversary of the start of the private-sector jobs recovery. Unfortunately, overall job creation (private plus government jobs) over that period has averaged just 168,000 a month — well below the 200,000 to 300,000 jobs a month that a robust jobs recovery would generate. As a result, payroll employment has not yet topped its December 2007 pre-recession peak, and unemployment remains too high — especially among the long-term unemployed, whose numbers swelled by 203,000 in February. With the job market still so far from full strength, lawmakers should act quickly to restore retroactively emergency federal jobless benefits, which they allowed to expire in December.

Below are some charts to show how the new figures look in historical context. Click here for my full statement with further analysis.

New Report Highlights Need for States to Help Address Income Inequality

March 6, 2014 at 2:05 pm

An important new report documents rising inequality in states across the country.  As we outlined in our 2012 analysis of state-by-state income inequality, states can — and should — take certain steps to help alleviate these trends.

A study of IRS data by the Economic Analysis and Research Network found that:

  • The top 1 percent of taxpayers received the lion’s share of income growth across the country between 1979 and 2007, and its share of income grew in every state.
  • In 15 states, between half and 84 percent of all income growth over this period went to the top 1 percent.  In four states — Alaska, Michigan, Nevada, and Wyoming — incomes grew for only the top 1 percent while the incomes of the bottom 99 percent fell.
  • This lopsided income growth has continued after the recession.  The top 1 percent received at least half of the income growth in 33 states between 2009 and 2011 (the most recent year for which state data are available).

Governments at all levels can take steps to help alleviate these trends.  Specifically, states can:

Stop exacerbating inequality through the tax code.  In most states, low- and middle-income people pay a higher portion of their income in taxes than the wealthy.   States certainly should avoid worsening this trend with tax cuts that benefit the richest households and do little for poor and middle-income families.  For example, cutting progressive taxes like the income tax will benefit high-income families more than low-income families and will widen income gaps further.

Strengthen supports for low-income families.  States play a major role in delivering social safety net assistance.  State assistance with child care, job training, transportation, and health insurance helps poor families get and retain jobs and move up the income scale.  In addition, states can shield the nation’s most vulnerable citizens from poverty’s long-term effects by maintaining their pieces of the safety net.

Raise, and index, the minimum wage.  The purchasing power of the federal minimum wage is 22 percent lower than its late 1960s peak.  Its value falls well short of the amount needed to meet a family’s needs, especially in states with a high cost of living.  Federal action to raise the minimum wage is critical, but states don’t have to wait.  Any state can help raise wages for workers at the bottom by enacting a state minimum wage that is higher than the federal wage and indexing it to ensure continued growth.

In Memoriam: Richard W. Boone

March 6, 2014 at 11:45 am

Update, March 10: The New York Times has published an obituary of Richard W. Boone.

Richard W. Boone, who died February 26, “helped launch President Lyndon B. Johnson’s War on Poverty and later led private-sector initiatives to improve the lives of the poor,” the Washington Post notes in its recent obituary.  As director of the Field Foundation, Boone conceived of and provided the funding to launch the Center on Budget and Policy Priorities in 1981 to pursue fiscal policies and improvements in social programs to protect and better serve low-income and vulnerable Americans.

This 2007 video honors his work in founding CBPP and his extraordinary career dedicated to issues of poverty, civil rights, and social justice.

CBPP

A State-by-State Look at the EITC and Child Tax Credit

March 5, 2014 at 4:43 pm

The Earned Income Tax Credit (EITC) is in the news as part of debates over how to reduce poverty and better help low-income childless workers, so we’ve prepared fact sheets with state-by-state data on how the EITC and the Child Tax Credit (CTC) reduce poverty, who benefits, and how state EITCs can supplement the federal credit.  The fact sheets also cover who benefits from two proposals to strengthen the credits, including one to improve the EITC for childless adults and non-custodial parents.

eitc preview

The EITC, a refundable tax credit for low- and moderate-income workers, encourages and rewards work, offsets federal payroll and income taxes, and raises living standards.  The CTC also helps low-income working families by offsetting part of the cost of child rearing.

Next to Social Security, the EITC combined with the refundable portion of the CTC constitutes the nation’s most powerful anti-poverty program.  The credits lifted 10.1 million people, including 5.3 million children, out of poverty in 2012.

Twenty-six states, including the District of Columbia, have established their own EITCs to supplement the federal credit.

Click here for the fact sheets.