America’s social safety net, such as it is, has recently come under some scrutiny. Chana Joffe-Walt’s in-depth exploration of the increase in people getting Social Security Disability benefits at NPR got many listeners buzzing. Then in The Wall Street Journal, Damian Paletta and Caroline Porter looked at the increase in the use of food stamps, called SNAP. All three journalists look at the increasing dependence on these programs and come away puzzled: Why are so many people now getting disability and food stamp payments?
The answer is two-fold. Recent trends give us the first part of the explanation. Yes, as Paletta and Porter note, the economy is recovering and the unemployment rate is falling. But, as they recognize, the poverty rate is also rising. And therein lies the rub: people are getting jobs but staying poor. The available jobs are increasingly low-wage and don’t pay enough to live off of. And the big profits in the private sector haven’t led to an increase in wages.
GDP and employment may be doing well, but that hasn’t done much for those at the bottom of the totem pole. As the WSJ article points out, 48.5 million people were living in poverty in 2011, up from 37.3 million in 2007, a 30 percent increase. This is despite an unemployment rate that’s fallen off its peak. Some of the fall in the unemployment rate has been driven by people simply giving up on looking for a job altogether. But those who do get jobs are likely trading their once middle-class employment for low-wage work. The National Employment Law Project has found that mid-wage jobs have been wiped out during the recovery in favor of low-wage work: low paying jobs grew nearly three times as fast as mid-wage or high-wage work.
But there’s a deeper explanation that goes beyond the current economic picture. Aren’t there other programs for the increasing ranks of people living in poverty to turn to? Unfortunately, we’ve worked hard to weaken key parts of the safety net by changing how programs operate and then cutting back on their funds. Consequently, the number of people who are reached by programs for the poor has shrunk. But when you take away someone’s lifeline, they don’t stop needing it. So they either suffer hardship or find support elsewhere. What disability insurance and SNAP have in common is that they are fully funded by the federal government, which also can set the eligibility requirements. While states narrow eligibility requirements for TANF or unemployment insurance, the federal government can leave them (relatively) more open for SNAP and disability. That leaves them absorbing those who we’ve thrown off the rolls of other programs.
Unemployment benefits are where people turn when they lose a job and need income before getting back to work. But due to financial and other requirements, not everyone gets them. These rules vary state by state because states are in almost complete control of the program. They set their own eligibility criteria and benefit levels and are also on the hook for most of the funding for the benefits. As the Center on Budget and Policy Priorities reports, “the federal government pays only the administrative costs.”
Unlike the federal government, states have constrained budgets and most have to balance them every year. These budgets get even tighter in a downturn when people lose jobs and don’t pay as many taxes. On top of this, states have come under pressure from business groups during good times to reduce the contributions they use to fund the reserves that pay out benefits when things get tough. So many states have cut back on eligibility or benefit amounts in light of squeezed budgets. Given all of these constraints on benefits, only about a third of all children whose parents were unemployed at some point in 2011 actually saw any unemployment insurance benefits. They were far more likely to get food stamps, a federally funded program that has been much more flexible.
This story of a program financed by states that hasn’t been able to keep up with demand is the same for another huge part of the social safety net: welfare, or as we know it now, TANF. TANF does even worse than unemployment: it reaches just 10 percent of the children living with unemployment parents and just 30 percent of those living in poverty. The program used to do much better: in 1996, it reached 70 percent of poor families with children living in poverty. But then there was welfare reform, which turned it from a cost-sharing model to a block grant. Rather than the federal government sharing the costs with the states, the government now doles out lumps of cash and mostly lets states handle the rest. That lump doesn’t change even if the economy gets worse and more people live in poverty—and hasn’t even kept up with inflation.
While welfare reformers initially claimed victory as rolls fell during a booming 90s economy, the numbers have continued to fall even as jobs have disappeared. The poverty rate among families is back up to 1996 levels, but TANF’s caseload has fallen by 60 percent since then.
These families aren’t magically de-impoverished when they’re kicked off of government support programs. So they either go hungry or find other means of support. Enter SNAP and disability. SNAP has grown by 45 percent to meet increased need in the poor economy. The federal government was able to increase funding and waive some barriers to entering the program.
The CBPP reports that the growth in the use of disability insurance, on the other hand, is in large part due to demographic factors—an aging population and women’s increased entrance into the workforce—which accounts for half its growth since 1990. The elderly are far more likely to be disabled than younger workers, and more women workers means more workers who might become disabled. Other factors that contributed to its growth include the economic downturn. Joffe-Walt reports on how disability has dovetailed with welfare pruning its rolls. As she shows in two graphs, the number of low-income people on disability rose just as the number of families on welfare declined. Disability receipts also rise as unemployment rises. To qualify for disability, an applicant must have, as CBPP puts it, “little or no income and few assets”—which means that if unemployment and poverty rise, more people will fit this description. As Harold Pollack points out, “If you have a bad back, and the only jobs available are manual labor, that’s a real limitation. You’re unable to work. So it very much matters that we’re in a deep recession and a lot of the opportunities people faced are limited.”
Other than elderly disabled workers, those who sign up for disability are those who can’t even dream of finding a job that doesn’t require physical exertion and have no other income—thus leaving them with no where to turn but disability. After all, unemployment only lasts so long and TANF now comes with strict work requirements. Disability steps in when those with low education levels who live in communities based around industry—hard manual labor—lose their jobs and fall into poverty.
This is what happens when you burn enormous holes in the fabric of the social safety net: people either fall through or cling to the remaining parts. We can certainly debate whether we want food stamps and disability to carry so much of the burden of supporting the poor and vulnerable. In fact, this all seems to point to the simplest answer, which is to just hand money to those in poverty rather than funnel it through these different programs that may or may not actually meet people’s needs. But what we shouldn’t do is assume that food stamps and disability are bloated programs because so many people rely on them and then jump to cutting them back. Poor people don’t disappear just because we slash the programs they rely on. They still struggle to get by. That’s the lesson we should have learned over the past two decades.
By: Bryce Covert, The Nation, March 28, 2013
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March 30, 2013
Posted by raemd95 |
Poverty | Disability, Jobs, Middle Class, SNAP, Social Safety Net, Social Security, TANF, Unemployment benefits, Wages |
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You’d have to live under a rock to miss the news on Saturday morning that Mitt Romney has picked Congressman Paul Ryan to be his running mate. The announcement immediately kicked up a flurry of speculation: what does Ryan bring to the ticket that Romney wants? One thing he does not bring: women’s votes. Mitt Romney has been dogged by a problem with female voters, lagging in their support far behind President Obama, particularly among single women. But where Romney has been vague and flip-floppish on many issues, Ryan has long been very clear about his staunch support for policies that will hurt women economically.
Most people know Paul Ryan for his budget plans. There’s plenty of pain to be found in his budget for the lower and middle class, but women in particular make out poorly (literally) if his budget gets a presidential signature. Add in other policies he’s proposed or supported, and the picture becomes even bleaker. Here’s why:
1. Medicaid is crucial to women’s health. It provides coverage to nearly 19 million low-income women, meaning that they make up 70 percent of the program’s beneficiaries. Any slashing of Medicaid’s rolls will therefore fall heavily on their shoulders.
And Paul Ryan’s policies would do just that. Ryan’s budget slashes Medicaid by more than twenty percent over the next ten years and turns it into a block grant to states, letting them spend the money as they wish – as opposed to the current form in which states have to follow certain rules in how the money is spent. The Urban Institute estimated that the block grant plan alone would lead states to drop between 14 and 27 million people from Medicaid by 2021.
On top of that, Ryan’s budget repeals the Affordable Care Act, and with it the Medicaid expansion that some states are already threatening to refuse. Without that expansion, 17 million people will be left without Medicaid coverage. Women will again be hurt by this outcome: 13.5 million were expected to get health insurance coverage under the expansion by 2016. A Ryan budget would ensure they stay unprotected.
2. Social Security is another crucial safety net program that women disproportionately rely on. It is virtually the only source of income for about a third of female beneficiaries over 65. (Compare that to less than a quarter of men.) Without it, half of those women would live in poverty.
Ryan’s budgets haven’t called for specific cuts to the program, although his first version favorably cited the cuts proposed by the Simpson-Bowles report. But before he was known for chart-filled budgets, he put his name to a plan to partially privatize Social Security by having workers divert about half of their Social Security payroll-tax contribution to a private retirement account. Remember how well 401(k)s fared during the recent financial crisis when stocks took a nosedive? That could happen again – and the women who rely on Social Security benefits could be left without anything to fall back on.
3. One more big social safety net program that women rely on: Medicare. The majority of Medicare beneficiaries are women, and twice as many women over age 65 live in poverty as compared to men.
Ryan’s budget plan would raise the eligibility age for Medicare to sixty-seven while repealing the ACA, leaving those between ages sixty-five and sixty-seven with neither Medicare nor access to health insurance exchanges or subsidies to help them buy coverage. That will leave low-income people with nowhere to turn except the pricey private insurance market at an age when health care is crucially important. Come 2023 his plan would also replace Medicare’s guarantee of health coverage with payments to the elderly to buy coverage from private companies or traditional Medicare. The problem is that the payments would increase so slowly that spending on the average sixty-seven-year-old by 2050 could be reduced by as much as forty percent as compared to now. That’s not going to go very far toward getting the elderly health coverage.
4. There are other huge pieces of the social safety net that women rely on that Ryan would unravel if given the chance. Beyond all the above cuts, his budget plan would spend about sixteen percent less than President Obama’s budget on programs for the poor. This includes slashing SNAP, or food stamps, by $133.5 billion, more than seventeen percent all told, over the next decade.
According to the National Women’s Law Center, women were over sixty percent of adult SNAP recipients and over sixty-five percent of elderly recipients in 2010. Plus over half of all households that rely on SNAP benefits were headed by a single adult – and over ninety percent of them were women.
5. His budget would also cut TANF, the program that replaced welfare, and Supplemental Security Income by $463 billion. Nearly nine in ten adult beneficiaries of TANF were women in 2009 – over eighty-five percent.
6. Given that his budget plan gets over 60 percent of the $5.3 trillion in nondefense budget cuts from support for low-income Americans, there are a host of other programs women rely on that would see huge cuts. Child care assistance, Head Start, job training and housing and energy assistance would likely see a $291 billion cut. Cuts to childcare and Head Start will disproportionately impact working mothers. But other programs also greatly benefit women. Take housing support. The Housing Choice Voucher program provides families with rental assistance, and over 80 percent of households receiving that support are headed by women.
7. There are plenty of other ways that Ryan’s ultra conservative views could impact women financially beyond his severe budget and policy proposals. His views on contraception are from another century. He’s against the ACA’s mandate that religious employers provide insurance coverage for birth control. He’s also opposed to federally funded family planning services. He voted to deny birth control coverage to federal employees in 1999 and has voted at least four times to defund Planned Parenthood, a key provider of contraceptives, particularly for low-income women. He also supports the “personhood” movement, which writes bills defining conception as the beginning of life that would likely outlaw some forms of birth control.
This is not just a social issue. This is an economic issue for millions of women. Research has shown a clear link between women’s ability to control their fertility thanks to contraception and increased female employment. In 1950, 18 million women were in the workforce. Since then, the pill has become widely available and widely used, and that number has tripled to 66 million. Ryan threatens to set us back by at least half a century and make it that much harder for women to get into the workforce.
8. On top of this, he’s no supporter of equal pay for equal work, voting against the Lilly Ledbetter Act, which gives women more time to file lawsuits when they believe they’ve been discriminated against by an employer. The gender wage gap means that the typical woman loses $431,000 over a forty-year career as compared to her male peers.
On Feministing, Vanessa Valenti points out that there are plenty of other ways that Paul Ryan’s policies are a nightmare for the country’s women – from opposing Roe v. Wade to voting against marriage equality to being terrible on immigration issues. One thing is for sure: if Romney’s new running mate is voted in as second in command and his ideas guide the next administration, women can expect a lot of economic pain.
By: Bryce Covert, The Nation, August 13, 2012
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August 15, 2012
Posted by raemd95 |
Womens Rights | Contraception, Medicaid, Medicare, Mitt Romney, Paul Ryan, Ryan Budget Plan, SNAP, Social Security, Women |
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Whether you worry about the sluggish recovery, budget deficits, or widening inequality, you should be scratching your head at what the House of Representatives is up to this week.
On the one hand, the House will likely pass the small business tax cut sponsored by House Majority Leader Eric Cantor, which adds $46 billion to the deficit, largely benefits very high-income taxpayers, and has little potential for creating jobs. On the other hand, the House Agriculture Committee has approved a proposal, as part of its deficit reduction mandate, to cut $36 billion from the Supplemental Nutrition Assistance Program—formerly food stamps—a program that goes mainly to low-income households and is one of the best policies we have for creating jobs in a weak economy.
In Tuesday’s post on the New York Times Economix blog, Bruce Bartlett, who held senior policy roles in the Reagan and George H.W. Bush administrations and served on the staffs of Reps. Jack Kemp and Ron Paul, asks the question, “Do small businesses create jobs?” He appropriately cites the research showing that politicians’ worship of small businesses as jobs creators is misguided, and that it is start-up firms, not small firms per se, that are the job creators. Moreover, many of those who would benefit from the tax cut are affluent doctors, lawyers, and stockbrokers—hardly the local mom and pop store that most people imagine when they hear the phrase “small business.”
Bartlett is scathing on the Cantor bill:
There may be policies that would increase the number of business start-ups and aid employment this way. But an across-the-board tax cut for every small business, defined only in terms of employment, is nothing but …[a] giveaway unlikely to create any jobs whatsoever.
Bartlett’s indictment is backed up by standard “multiplier” or “bang-for-the-buck” analyses from the Congressional Budget Office and private analysts like Mark Zandi, chief economist of Moody’s Analytics. In contrast to an increase in SNAP benefits, which they find to be among the most cost-effective measures for stimulating economic growth and job creation in a weak economy, both the Congressional Budget Office and Zandi find business tax cuts similar to the Cantor bill to be among the least effective. The economic growth and job creation impact per dollar of nutritional assistance spending is six to eight times larger than that of an across-the-board tax cut.
Here is what the House is doing with these two measures: It is adding $46 billion of tax cuts, nearly half of which will go to those making more than $1 million, to the budget deficit. According to the official Joint Committee on Taxation estimate, about $45 billion of it will be received in 2012-13, when the economy could in fact use a boost to jobs. At the same time, any stimulus from the tax cut will be wiped out by the $8 billion of the $36 billion SNAP cut that also would occur in 2012-13.
The bottom line on these actions is that they produce larger budget deficits, more inequality, and no net new jobs. So when I see the House moving in exactly the opposite direction of what is fair and makes economic sense, I’m inclined to ask: “Is it really more politically appealing to cut taxes for millionaires and increase the budget deficit than to maintain food benefits for the poor that also give an extra boost to the economic recovery?”
By: Chad Stone, Chief Economist at the Center on Budget and Policy Priorities, Washington Whispers, U. S. News and World Report, April 19, 2012
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April 20, 2012
Posted by raemd95 |
Deficits | Eric Cantor, Food Stamps, House Republicans, Jobs, Low Income, Politics, Small Businesses, SNAP, Tax cuts |
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Mitt Romney likes to say that this election is a battle for “the soul of America.” He’s right — just not in the way that he thinks.
Romney asserts that President Obama wants to “fundamentally transform America,” turning the country “into a European-style entitlement society.” In fact, Romney and his Republican presidential rivals have a far more radical transformation in mind. They envision a dramatically shrunken federal government and a dangerously unraveled social safety net.
Theirs is not the self-styled compassionate conservatism of a George W. Bush. “It is compassionate to actively help our fellow citizens in need,” Bush said in 2002. “It is conservative to insist on responsibility and results.”
A decade and a Tea Party later, active help — at least active help from the federal government — is out of Republican fashion. Of course Republicans have traditionally favored state over federal involvement, but the degree of proposed retrenchment during the current campaign is remarkable — and troubling.
Consider Romney’s answer to a question at the last debate about the safety net in an age of austerity:
“Well, what we don’t need is to have a federal government saying we’re going to solve all the problems of poverty across the entire country, because what it means to be poor in Massachusetts is different than Montana and Mississippi and other places in the country,” Romney said.
“And that’s why these programs, all these federal programs that are bundled to help people and make sure we have a safety net, need to be brought together and sent back to the states. And let states that are closest to the needs of their own people craft the programs that are able to deal with the needs of those folks.”
Romney went on to tick off specific programs: food stamps, housing vouchers, Medicaid, emergency heating assistance.
“What unfortunately happens is, with all the multiplicity of federal programs, you have massive overhead with government bureaucrats in Washington administering all these programs. Very little of the money that’s actually needed by those that really need help, those that can’t care for themselves, actually reaches them,” Romney added.
Nice talking point, if it were true. As the Center for Budget and Policy Priorities has demonstrated, the major programs for the poor are extraordinarily efficient, even taking into account state as well as federal administrative costs. In 2010, 96.2 percent of Medicaid spending went for care; 94.6 percent of food stamp spending went for food; and 90.9 percent of housing program dollars went to rental assistance for low-income tenants.
Even for the man who ran Bain Capital, that shouldn’t seem like massive overhead.
The more important point is the degree to which Romney & Co.’s back-to-the-states approach would shred protections for the most vulnerable Americans. Romney’s observation about the differences between being poor in Massachusetts and Mississippi underscores the importance of a national safety net. Mississippi has more needs, and less money, than does Massachusetts.
Indeed, it was Richard Nixon who, reacting to reports about pockets of deep poverty and hunger in a wealthy nation, instituted a guaranteed federal minimum income for the elderly and disabled (Supplemental Security Income, or SSI) and set national eligibility levels for food stamps.
Imagine what would have happened during the recession if, say, food stamps — now known as SNAP (Supplemental Nutrition Assistance Program) — were a fixed block grant to states, as Romney envisions. Needs rose dramatically, but states, already strapped for cash, would not have been able to meet them.
Romney, the former Massachusetts governor, understands the importance of the federal role — or once did. His observations about the need to return control to states came in the context of a discussion about the Low Income Home Energy Assistance Program (LIHEAP).
Yet Gov. Romney, in 2003, called on Congress to “support the highest possible funding,” adding, “We need to get the funds to those who need help the most to stay safe and warm this winter.”
Indeed, one of Romney’s leading supporters in New Hampshire, Republican Sen. Kelly Ayotte, is lobbying for more LIHEAP money — funding, by the way, that the president proposed cutting, and that already comes in the form of a block grant to states that decide how to use it.
“It’s an important safety net,” Ayotte told Newsweek. “I’m not against having a safety net for those who are most in need.”
Is Romney? Are his rivals? Because the impact of their plans would be to shred the safety net. Making sure that doesn’t happen is the real battle for America’s soul.
By: Ruth Marcus, Opinion Writer, The Washington Post, January 12, 2012
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January 15, 2012
Posted by raemd95 |
Election 2012 | Kelly Ayotte, Mitt Romney, Politics, Poverty, Republicans, SNAP, Social Safety Nets, Teaparty |
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