“Poor People Don’t Just Disappear”: This Is What Happens When You Rip A Hole In The Safety Net
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
“Victory For The Middle Class”: On Obamacare’s Third Birthday, There Are Already Reasons To Be Grateful
On March 23, 2010, Obamacare — formally known as the Patient Protection and Affordable Care Act — was signed into law by President Obama.
Three years later, the bulk of the first serious attempt at near-universal health care has not yet taken effect. Health marketplaces are still being formed, states are still deciding if they’ll take Medicaid expansion and the subsidies that will help tens of millions of Americans afford health care won’t roll out until January 1, 2014.
Implementing Obamacare won’t be easy, as even some of the biggest fans of the program admit. Expanding Medicare to cover all Americans would have to be an even simpler solution but a complete political impossibility — given that Joe Lieberman (I-CT), whose vote was necessary to pass the law, single-handedly vetoed a provision that would allow 55- to 64-year-olds to buy into Medicare. It’s a compromise solution that uses unpopular provisions — like the individual mandate — to achieve extremely popular results — ending lifetime limits and banning insurance companies from dropping patients once they become sick.
There will be plenty of time to debate the efficacy of Obamacare — especially with insurance companies enjoying record profits threatening to raise rates in order to justify changes to the law.
But right now we should celebrate the greatest victory for the middle class since Medicare and Medicaid. At its heart, Obamacare is a program that asks the rich and corporations to pay a little more to help working Americans get insurance they can count on, thus lowering the cost of health care for everyone. We already pay for each other’s health coverage, but just in the dumbest possible way — emergency rooms.
Here are five reasons to be grateful for Obamacare, which is already making life better for the middle class.
Obamacare Frees Workers And Entrepreneurs
One of the most popular aspects of Obamacare is that beginning in 2014, insurance companies will no longer be able to deny people coverage because of pre-existing conditions. Because insurance companies had been able to do this, many people avoided going to the doctor for fear of being diagnosed with a disease or condition that would brand them for the rest of their lives. Some stayed in jobs they didn’t want and others didn’t take the leap to start a new business for fear of not being able to get coverage. These changes especially free women — who by federal law can no longer be charged more for care because of their gender — to pursue new opportunities.
Insurance Companies Pay You Back
Insurance companies are required for the first time to prove that they’re spending between 80 and 85 percent of premiums, depending on the size of the company, on actual health care. If companies don’t spend that amount on coverage, they have to return that money to their customers — $1.2 billion was returned in 2012 to self-employed Americans whose insurers didn’t hit the proper ratio.
Millions Of Young People Already Covered
An estimated six million college students are already taking advantage of Obamacare’s provision that lets them stay on their parents’ insurance until the age of 26. This has led to a record drop in uninsured young people, allowing them to go back to school or pursue graduate degrees without taking on as much student loan debt.
Seniors Spend Less On Drugs
One of the most immediate benefits of Obamacare was the closing of the Medicare D prescription drug “donut hole,” which requires seniors to pay for the coverage gap between their deductible and yearly limit, at which point the plan covers all medication — $6.1 billion in drug coverage has already been distributed to seniors, which leads to the irony that Republicans ran and won in 2010 on saying that Obamacare cuts Medicare when, in fact, benefits for seniors have only increased. All the savings come from reforming the way providers are paid.
The Red States Get To Pay The Blue States Back
When the Supreme Court ruled that the mandate in Obamacare was Constitutional, it also gave states the chance to opt out of the Medicaid expansion that will provide free public health care for those not already on Medicaid, but who earn up to 133 percent of the poverty level. The states that are turning down the expansion, unfortunately, are some of those that need it the most. All of the states that have rejected the federal extra funding — which begins at 100 percent of the cost of the expansion and goes down to 90 percent — are states that generally vote Republican.
You probably know that most red states take in more federal money than they contribute, as Republican policies encourage growth of programs like food stamps. Though Republican governors can reject the benefits of Medicaid expansion, their richest citizens and corporations will still have to pay the taxes. As a result, they won’t be such “takers.”
Unfortunately, the working poor of red states — who earn too much to be on basic Medicaid — will suffer without the health insurance they need. Those on Medicare and Medicaid will likely see fewer doctors who want to accept clients from these programs, as Medicaid expansion was supposed to make up for the cut in reimbursement rates that begins in 2014. And all residents will not enjoy the slowdown in the growth of health care costs that will come from shrinking the number of the uninsured.
For red state governors, it’s a chance to fulfill the prophecies of doom Republicans made when Obamacare passed. But for residents of blue states, it’s a chance to make America’s health care system more equitable, with red states finally paying closer to their fair share.
By: Jason Sattler, The National Memo, March 22, 2013; Photo: The Advisory Board Company
“The Stinch Of Formaldehyde”: GOP “Autopsy” Is Dead On Arrival
The Republican National Committee released its long-awaited post-2012 “autopsy” Monday, in the form of a 99-page report titled the “Growth and Opportunity Project.” Although the report pushes for some drastic changes in the way that the Republican Party conducts itself during elections, it ultimately fails to confront the primary problem: Its policies just aren’t popular with voters.
With the exception of a qualified push for immigration reform, the Growth and Opportunity Project centers around the idea that the Republican Party’s platform is sound, while the messaging is at fault. That comes as no surprise — it was RNC chairman Reince Priebus, after all, who recently declared “I don’t think our platform is the issue” — but this plan is startlingly divorced from the Republicans’ present reality. On nearly every issue facing Congress — from raising the minimum wage, to cutting federal programs, to strengthening gun safety laws, to fighting against climate change — most voters side with Democrats over Republicans.
Further complicating the RNC’s mission is the fact that the GOP has shown absolutely no signs of being ready to change the conduct that led to the party’s overwhelming losses in November.
For example, the Priebus plan notes that “if we are going to grow as a party, our policies and actions must take into account that the middle class has struggled mightily and that far too many of our citizens live in poverty,” adding “The perception that the GOP does not care about people is doing great harm to the party and its candidates on the federal level, especially in presidential years. It is a major deficiency that must be addressed.”
Improving outreach to the poor seems like a great idea in theory. In practice, House Republicans are preparing to vote this week on Paul Ryan’s extremist “vision document,” which explicitly promises to slash funding for programs that help the needy in order to finance a massive tax break for the wealthy.
The report’s suggestion that Republicans “learn once again how to appeal to more people, including those who share some but not all of our conservative principles” seems like a no-brainer. But in reality, those people are called RINOs, and are almost automatically disqualified from national races. Priebus’ report can’t change that reality. Even while the autopsy suggests that “The Republican Party needs to stop talking to itself,” most of the GOP’s brightest stars spent the weekend at the insular Conservative Political Action Conference — to which popular governors Chris Christie of New Jersey and Bob McDonnell of Virginia were not invited, for the unforgivable crime of compromising with some of their states’ many Democrats.
In theory, the report’s suggestion that “if we want ethnic minority voters to support Republicans, we have to engage them, and show our sincerity,” makes perfect sense. In practice, the GOP seems to be going out of its way to antagonize minority voters; even as the autopsy suggests showing sincerity, the party continues to push for voter-suppression laws that nakedly attempt to keep minorities away from the polls. While the autopsy suggests that the GOP “must be inclusive and welcoming” to Hispanic-Americans, Senate Republicans are simultaneously gearing up for a racially-charged filibuster of Thomas Perez, the only Hispanic nominee for President Obama’s cabinet.
The report pushes the party to “establish a presence in African-American communities and at black organizations such as the NAACP,” but it seems to forget that Mitt Romney tried that in July. He ended up getting booed repeatedly for promising to repeal health care reform, and patronizingly claiming to be the best candidate for the black community.
“It all goes back to what our moms used to tell us: It’s not just what we say; it’s how we say it,” Priebus said of his report Monday morning. He is forgetting a more important factor: what they do. The Republicans’ problem isn’t that voters aren’t getting the message about the party’s policies; it’s that too many voters read the GOP loud and clear.
By: Henry Decker, The National Memo, March 19, 2013
“We’re The Anti-Party”: This Really IS The GOP Message
I have always loved the story of the ad makers and dog food manufacturers arguing around the conference table. The actual makers of the dog food were convinced their product was full of all the right nutrients, pretty food coloring, right combinations of everything possible. The ad makers were really impressed with their ad campaign, the logos, colors, not to mention the exciting TV ads. The sales force was everywhere, all over the marketplace.
So, the head of the company screamed out—”why is our dog food not selling.” A wise lone voice: “the dogs don’t like it, sir, they won’t eat it.”
What the RNC has just done with their “what went wrong in 2012” report is to ignore the fact that the public isn’t buying what they’re selling. They could point to advertising, they could point to their ground game and metrics, they could cry over changing demographics, they could condemn their polling samples, and they could criticize their process of debates and summer financial problems. They could even critique their candidate.
All that might be true—to a point. But the bottom line is this: the public didn’t like the dog food, they didn’t like what they were selling, they didn’t like the message. The Republican Party became captive to the extremists, and if you followed CPAC this weekend, it was all there in full force. From Donald Trump to Sarah Palin to Ann Coulter, this is not the path to a majority.
How can a party that is perceived as anti-Black, anti-Hispanic, anti-women, anti-gay, anti-middle class, ever hope to change the basic electoral dynamic by tinkering with process and techniques? The RNC has to deal with the fundamental problem: The Message. And they are ignoring that debate within the party. They have to fight it out. They have to decide who they are. They have to confront the divergent views and decide whether the Tea Party is dominant or a more reasoned, moderate view will take hold.
Can they moderate on gay marriage and issues like abortion and women’s health? Can they hold views that are pro-environment and truly confront climate change? Can they embrace real reform on immigration and stop focusing on bigger fences? Can they support a tax system that is fairer to the middle class and isn’t stacked toward the wealthy? Can they balance their approach to taxing and spending? Fundamentally, can they stop the incessant ranting against government and demonizing people?
As long as they are the “anti-party” they will be increasingly out of touch and represent the old, angry, white males—and there are fewer and fewer of them. It is all well and good that they try and get their tactics right but, like a turtle, they won’t make progress until they stick their necks out and have that battle for the soul of their party.
By: Peter Fenn, U. S. News and World Report, March 19, 2013
“Revealing Attitudes”: Reince Priebus’s Plan Recommends Not Behaving Like Reince Priebus
Republican National Committee Chairman Reince Priebus is winning accolades for the wide-ranging plan he presented Monday morning in Washington that charts a way forward for the party after its demoralizing performance in the November elections. Drafted by a five-person committee—which included former George W. Bush spokesman Ari Fleischer—the plan recommends, among other things, holding fewer presidential primary debates, to limit the drift toward comedic extremity that those events encourage, and spending $10 million on new staff to do outreach to the constituencies (women, young voters, racial and ethnic minorities) where GOP support lags.
It’s all well and good, but in reading through the report’s 99 pages I had a nagging sense that what it was recommending was directly at odds with what I remember hearing not long ago from the very people putting forward the report. To wit:
Page 7: “The Republican Party needs to stop talking to itself. We have become expert in how to provide ideological reinforcement to like-minded people, but devastatingly we have lost the ability to be persuasive with, or welcoming to, those who do not agree with us on every issue.”
@Reince: Obama sympathizes with attackers in Egypt. Sad and pathetic. (Sent on September 11, the night that four Americans were killed in Benghazi.)
Page 7: “If we are going to grow as a Party, our policies and actions must take into account that the middle class has struggled mightily and that far too many of our citizens live in poverty. To people who are flat on their back, unemployed or disabled and in need of help, they do not care if the help comes from the private sector or the government—they just want help… The perception that the GOP does not care about people is doing great harm to the Party and its candidates on the federal level, especially in presidential years. It is a major deficiency that must be addressed.”
@AriFleischer: I increased donations to charity in 2012. This deal limits my deductions so I, & many others, will likely donate less in 2013. (Sent in late December, in reference to the deal averting the fiscal cliff, which slightly reduced the value of the charitable deduction for high-income taxpayers.)
Page 20: “The RNC must embark on a year-round effort to engage with African American voters. The engagement must include not only persuasion based upon our Party’s principles but also a presence within community organizations… The African American community has a lot in common with the Republican Party, and it is important to share this rich history. More importantly, the Republican Party must be committed to building a lasting relationship within the African American community year-round, based on mutual respect and a spirit of caring.”
@Reince: We need to call out Obama for trying to water down the voting privileges of our military men and women in Ohio. (Sent in early August, in reference to the Obama campaign’s lawsuit attempting to allow early voting on the weekend before the election for all Ohio voters, not just members of the military and their families, an expansion that would have by far the greatest benefit for black voters in Ohio’s larger cities.)
This is not to pick on Priebus and Fleischer. There are countless similar examples to cull from other high-profile Republicans. It is just to note that the problems that the RNC says it is seeking to address cut deep, into attitudes and instincts that again and again reveal themselves even in the offhand exclamations of the party’s allegedly more sober-minded functionaries. It will take much more than focus groups and a “growth and opportunity inclusion council” to change what lies at the heart of today’s Republican Party—like, say, self-awareness.
By: Alec MacGillis, The New Republic, March 18, 2013
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