NC Budget and Tax Center

House GOP passes budget to slash Medicaid and Medicare by $1.5 Trillion over the next 10 years

The U.S. House of Representatives has passed a federal budget for 2018 that calls for more than $5 trillion in cuts over the next 10 years to multiple important programs that help communities and working families all across America.

It also contains the latest in a series of backdoor approaches to reduce health insurance coverage for millions of Americans by proposing deep cuts to Medicaid and Medicare after the attempted repeal of the Affordable Healthcare Act was not successful. Instead of working on ways to stabilize health-insurance markets congressional leaders are now directly attempting to disrupt health care by cutting effective health care program budgets that have previously received bipartisan support and helped millions of Americans for over 50 years.

The House passed budget cuts Medicaid by $1 trillion and Medicare by more than $470 billion over the next 10 years. Medicaid provides health coverage to eligible low-income adults, children, pregnant women, elderly adults, and people with disabilities, while Medicare serves individuals 65 or older and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant).

These drastic budget cuts mean more than two million North Carolinians enrolled in Medicaid and the 1.2 million enrolled in Medicare, as well as those that could qualify in the coming years, would be affected by eliminated and reduced services. Additionally, North Carolina’s own budget would also be affected as Congress plans to shift massive costs to the states.

So what happens next? The U.S. Senate is planning to pass its own version of the federal budget as early as next week. In the meantime, it will be important for North Carolina’s congressional delegation to stand up for our health and well-being back home. Taken together, the House passed budget and the tax plan recently proposed by President Trump would do the very opposite by reducing federal revenue by $2.4 trillion, increasing the deficit by $1.5 trillion, and giving 67 percent of the tax cuts to the richest 1 percent of Americans in 2018.

Luis A. Toledo is a Public Policy Analyst for the Budget & Tax Center, a project of the North Carolina Justice Center.

NC Budget and Tax Center

256,000 N.C. children are at risk of losing healthcare coverage as Congress lets federal funding for CHIP expire

Federal funding for the Children’s Health Insurance Program (CHIP), which covers about 9 million children in the U.S., has now expired because Congressional leaders did not renew its funding by Sept. 30 as required by law. The CHIP program was enacted in 1997 and provides affordable, high-quality, and consistent health care coverage for children who do not qualify for Medicaid and whose families lack access to affordable employer-based or private insurance.

Congress’ failure to renew funding for the CHIP program means over 256,000 children across North Carolina are at risk of losing their only source of health care coverage. Furthermore, this decision by Congress also spells budget trouble for our state in 2018, as our General Assembly assumed continued federal funding for CHIP in the most recent state budget and failed to take seriously proposed federal budget cuts.

North Carolina is now projected to exhaust all of its federal funds for CHIP within the first three months of 2018. In other words, our state could be one of many states facing a funding shortfall in this area if Congress does not extend federal funding.

The Kaiser Family Foundation summarizes the negative impact to families and provides a North Carolina case study from the past that shows the real world implications:

“Reductions in CHIP coverage will result in coverage losses for children and negative effects on children’s health and family finances. If states close enrollment and/or discontinue coverage for children in separate CHIP programs, some children could shift to parents’ employer-sponsored plans or Marketplace plans, but others would become uninsured. Previously, some states closed enrollment in CHIP for limited periods in response to state budget pressures, and studies show that this led to coverage losses, left eligible individuals without access to coverage, and had negative effects on health and family finances.

“In North Carolina, enrollment fell by nearly 30% from about 72,000 to 51,300 when it froze enrollment between January and October 2001. The number of children determined eligible for CHIP but placed on a waiting list grew to over 34,000. Most (60%) children added to the waiting list were previously enrolled in Medicaid and were unable to transition to CHIP.

“Enrollment freezes negatively affected children’s health and family finances. In North Carolina, parents with children affected by the enrollment freeze said their children experienced periods of being uninsured and that almost all needed care during the time that they lacked coverage. Parents often had to delay care while their children were uninsured and reported difficulties obtaining prescription medications for their children. Parents also reported that obtaining care while their children were uninsured resulted in significant financial hardships, requiring them to cut back on necessities, borrow money from family or friends, and accrue debt for missed payments on bills.”

The fact that Congress failed to act in a timely manner for such an important program affecting millions of children is unfortunate considering that a recent poll had found three-fourths (75 percent) of the general public saying it was important for Congress to work on reauthorizing funding for the State Children’s Health Insurance Program (CHIP).

The bottom line: It is critical that Congress renew federal funding for CHIP and stop political budget games that hurt vulnerable families and children across America and North Carolina.

Luis A. Toledo is a Public Policy Analyst for the Budget & Tax Center, a project of the North Carolina Justice Center.

 

NC Budget and Tax Center

$1.5 trillion revenue-losing tax cut is windfall for wealthy, leaves out everyone else

After many months of waiting, President Trump and congressional leaders have finally released their tax framework – and, while many details are still missing, enough has been outlined that shows the plan is full of budget gimmicks and major benefits to the wealthiest households.

First, this tax plan is not fiscally responsible, as it would dramatically increase U.S. debt through its $1.5 trillion revenue-losing tax cut. Including interest costs, the plan is projected to cost $2.7 trillion and increase debt to 101 percent of Gross Domestic Product (GDP) by 2027, exceeding the size of the economy. “These numbers are all well above the 91 percent of GDP debt that is expected under current law by 2027,” according to the Committee for a Responsible Federal Budget.

As if that were not enough, this tax plan is not really meant to help “ordinary Americans.” The released framework will give massive tax cuts to the wealthiest households, as roughly half of the plan’s tax cuts would go to the top 1 percent of households, with an average annual tax cut per household of roughly $150,000.

In case you’re wondering how this is possible, it’s because the tax changes include: Read more

NC Budget and Tax Center

Proper planning needed: Within two years there will be more people ‘over 60’ in N.C. than ‘under 17’

The aging of our societies is one of the greatest success stories of the last one hundred years. However, with that success also come new long-term challenges and opportunities. Today, North Carolina is facing an extraordinary demographic makeover in the age of our population. The latest Prosperity Watch analysis from the NC Budget and Tax Center puts it like this:

“In less than two years, in 2019, our state will have a population with more people aged over 60 than under 17. Furthermore, between now and 2027, the proportion of the population aged 60 and over will only continue to grow – rising from 2.2 million to 2.8 million people, an increase of 28 percent.

Ten years ago, in 2007, a total of 31 counties in the state had more people aged over 60 than under 17. Since then, that number has more than doubled, and 78 counties now fit that description. However, what is most surprising is that this trend is not reversing anytime soon – by 2027, a total of 92 counties in North Carolina will have more people over 60 than under 17.”

That the state’s population is aging at this rapid pace requires policymakers and businesses across the state to plan and prepare while we still have the window of opportunity in front of us. If prudent planning in this area is accomplished we can minimize profound negative impacts on our economy and state budget in the coming years.

Policymakers must remember that government can have a constructive role in raising awareness about the implications of an aging society and engaging all sectors in preparing for the associated changes. As North Carolina continues to age here are three basic goals that should be accomplished in order for our state to thrive and be competitive in the coming years:

  • First, we must enable older adults to remain independent and age in the place of their choice with appropriate services and supports that enable a healthy lifestyle. Protecting the safety and rights of older and vulnerable adults, and preventing their abuse, neglect and exploitation is vital.
  • Second, we must ensure adequate investments today in the education of our children and their teachers in order to ensure the state’s workforce of tomorrow is prepared to lead in a complex and global economy.
  • Third, we must realize that migration into our state will be needed in order for us to maintain a strong workforce that will help sustain the state’s economy in the coming years.

Luis A. Toledo is a Public Policy Analyst for the Budget & Tax Center, a project of the North Carolina Justice Center.

Environment, NC Budget and Tax Center

Here’s how much climate change will cost each county in North Carolina

Climate change is not just an environmental issue, but an economic issue as well that impacts all 100 counties across North Carolina. As the country experiences an increasing number of billion-dollar disasters, the challenge for us all is to minimize the harm to families and communities and plan for the future. Since 1980, we have seen the number of billion-dollar weather and climate disasters in the U.S. increase by 400 percent. Profound weather shifts from rising sea levels and flooding to drought and forest fires require effective preparation, planning and response from our leaders.

The financial impact is increasingly relevant to county and state governments as federal officials, despite increasing disasters, consider scaling back federal assistance, and push states to take on greater responsibility for disaster preparation and recovery with their own resources. Here in North Carolina after Hurricane Matthew displaced thousands of families and caused $4.8 billion in damages across 50 counties we all saw that the federal withdrawal approach did not work and instead hurt our state. North Carolina policymakers have made just a $300 million commitment to Eastern NC to date despite documented unmet need of nearly $900 million.

A recent study published by Science that represents a major breakthrough for the field of climate economics finds climate change will aggravate economic inequality in the U.S. as there are “enormous disparities in how rising temperatures will affect American communities.” After simulating the costs of global warming in excruciating detail, modeling every day of weather in every U.S. county during the 21st century, the study finds the “South and lower Midwest will bear the brunt of the economic costs associated with climate change through the end of the century.” Coastal communities are projected to take a toll from rising seas and strengthening hurricanes while the South will be hurt by a decline in farming caused by rising temperatures, along with increasing energy demands to keep up with the heat.

For North Carolina this means many poor and rural parts of the state will be affected the most. Below is a sortable table that shows how much of its income each county in North Carolina stands to lose through the end of the century; linking climate projections with economic effects like mortality, labor productivity, energy demand and crop yields. Based on the analysis it is clear that in order to protect North Carolina’s economy and quality of life for people today and future generations, the state and all 100 counties must be cognizant of climate change and plan for its economic effects – especially in communities most in need.

Luis A. Toledo is a Public Policy Analyst for the Budget & Tax Center, a project of the North Carolina Justice Center.

Climate Change Cost in Each County of North Carolina

CountyTotal Estimated Damages: % of GDP
(percentage of economy lost)
Agricultural Damage
(changes in average yields for
corn, wheat, soybeans and cotton)
Alamance6.7-32.8
Alexander4.7-31.4
Alleghany-2.60
Anson9.1-19.9
Ashe-1.20
Avery-1.50
Beaufort6-5.5
Bertie89.4
Bladen8.9-22.4
Brunswick6.3-22.1
Buncombe3.60
Burke5.9-35.4
Cabarrus5.8-33.7
Caldwell6.6-35
Camden3.7-12.8
Carteret5.7-22.4
Caswell8.2-20.4
Catawba5.4-21
Chatham4.6-27.6
Cherokee8.3-47.3
Chowan7.521.4
Clay1.9-13.7
Cleveland6.8-5.4
Columbus8.4-18.4
Craven5.7-1.7
Cumberland5.4-15.9
Currituck4.2-11.2
Dare3.90
Davidson6.2-31.1
Davie3.7-25.1
Duplin7.9-17.2
Durham4.6-15
Edgecombe8.91.8
Forsyth5-30.1
Franklin5-21.3
Gaston5.56.7
Gates7.1-2
Graham5.10
Granville5.2-16.3
Greene8.8-9.1
Guilford4.7-25.7
Halifax718.1
Harnett6.8-11.6
Haywood-0.734.2
Henderson2.8-38.6
Hertford9-3.7
Hoke7.6-7.5
Hyde7.8-6.2
Iredell3.2-21.3
Jackson-0.70
Johnston4.9-9.3
Jones7.310.4
Lee6.8-11.6
Lenoir8-5.7
Lincoln5.3-22.6
Macon2.40
Madison2.60
Martin822.6
McDowell-0.517.9
Mecklenburg3.3-18.7
Mitchell-0.20
Montgomery7.6-4.4
Moore6.1-18
Nash6.6-5.8
New Hanover5.9-39.8
Northampton7.816.2
Onslow3.6-11.8
Orange3-29.4
Pamlico6.9-10.5
Pasquotank6.2-14.3
Pender7.9-18.3
Perquimans6.72.9
Person5-15.5
Pitt5.8-7.5
Polk6.9-1.5
Randolph6.5-26
Richmond9.20.6
Robeson11-24.7
Rockingham6.5-15.2
Rowan7.7-27.9
Rutherford8.43.7
Sampson7.7-8.8
Scotland10-7.1
Stanly7.7-10.4
Stokes4.7-19.6
Surry3.5-22.7
Swain2.70
Transylvania8.4-66.9
Tyrrell7.9-17.3
Union4.5-26
Vance8-27.8
Wake3.1-24.5
Warren8.3-14
Washington8.2-12.5
Watauga-0.60
Wayne6.9-15.9
Wilkes4.9-50.1
Wilson7-9.3
Yadkin4.7-24.4
Yancey-8.10