NC Budget and Tax Center, Trump Administration

Initial responses to Trump’s budget: ‘This budget isn’t worthy of the American people’

[Note: Yesterday, ahead of the White House unveiling of President Trump’s 2018 fiscal year budget we released a blog on What to expect in Trump’s 2018 budget (and what it means to North Carolina) and a blog on the “Significant positive impacts” under ‘The People’s Budget’.]

On Tuesday President Trump released the first full budget proposal of his presidency. Various national organizations have already released statements on Trump’s proposed budget and the consensus is loud and clear: President Trump’s budget is not good for the American people and relies on various assumptions that are highly unlikely to occur.

The Center on Budget and Policy Priorities stated:

“President Trump’s new budget should lay to rest any belief that he’s looking out for the millions of people the economy has left behind.  He proposes steep cuts in basic health, nutrition, and other important assistance for tens of millions of struggling, low- and modest-income Americans, even as he calls for extremely large tax cuts for the nation’s wealthiest people and profitable corporations … This budget isn’t worthy of the American people, and it betrays the millions of struggling Americans who placed their hopes in Donald Trump.”

Read more

NC Budget and Tax Center, Trump Administration

Analysis: “Significant positive impacts” under ‘The People’s Budget’ proposed by the Congressional Progressive Caucus

The White House plans to unveil President Trump’s detailed 2018 budget tomorrow. While the people wait for its release it is worth noting that earlier this month the Congressional Progressive Caucus (CPC) released ‘The People’s Budget: A Roadmap for the Resistance’, which contains their plan for what the U.S. budget should be. Their budget was the first release in the 2018 fiscal year budget season, coming before either the President’s budget or any proposal from the Budget Committees.

“It’s one thing to oppose President Trump and expose his broken promises to workers, but it’s also important to lay out a positive path forward,” said Rep. Pocan. “The Congressional Progressive Caucus’s budget is a plan to actually help working Americans who have felt left behind by an economy rigged against them. Our budget is a roadmap for the resistance, investing in the progressive priorities and economic, kitchen table issues that matter to real people: infrastructure to create jobs; education to help our kids reach their full potential; and access to affordable health care.”

Here’s what two prominent organizations had to say after they assessed CPC’s ‘The People’s Budget’.

The Committee for a Responsible Federal Budget, a nonpartisan, non-profit organization committed to educating the public on issues with significant fiscal policy impact, stated: “The [CPC] budget certainly contains a lot of tax and spending increases, but we welcome budget alternatives that improve the debt situation.” According to Committee’s analysis, ‘The People’s Budget’ “would represent a substantial improvement over our current debt trajectory.

The Economic Policy Institute analyzed and scored CPC’s budget and stated: “We find The People’s Budget would have significant positive impacts.” Specifically, the Economic Policy Institute found The People’s Budget would:

  • Improve the economic well-being of low- and middle-income families. The People’s Budget would boost gross domestic product (GDP) by 2 percent and employment by 2.4 million jobs in the near term. This would both close the output gap as measured by the Congressional Budget Office (CBO) and further push unemployment down, to 4 percent.
  • Smartly cut spending. The budget focuses on modern security needs by repealing sequestration cuts and spending caps that affect the Defense Department but replacing them with similarly sized funding reductions that are less front-loaded and will allow more considered cuts.
  • Make necessary public investments. The budget finances roughly $281 billion in job-creation and public-investment measures in calendar year 2017 alone and roughly $710 billion over calendar years 2017–2018.
  • Facilitate economic opportunity for all. By expanding tax credits and other programs for low- and middle-wage workers, boosting public employment, and offering incentives for employers to create new jobs, The People’s Budget aims to boost economic opportunity for all segments of the population.
  • Strengthen the social safety net. The People’s Budget strengthens the social safety net and proposes no benefit reductions to social insurance programs.
  • Increase tax progressivity and adequacy. The budget restores adequate revenue and pushes back against income inequality by adding higher marginal tax rates for millionaires and billionaires, equalizing the tax treatment of capital income and labor income, restoring a more progressive estate tax, eliminating inefficient corporate tax loopholes, among other tax policies.
  • Reduce the deficit in the medium term. The budget increases near-term deficits to boost job creation, but it reduces the deficit in FY2019 and beyond relative to CBO’s current law baseline.

Given the fact that where our leaders decide to invest matters to our well-being, it is vital that Congress develop a 2018 fiscal year budget that is grounded with a goal of serving and protecting all people.

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, Trump Administration

What to expect in Trump’s 2018 budget tomorrow (and what it means to North Carolina)

The White House plans to unveil President Trump’s detailed 2018 budget tomorrow.

Ever since the administration released their 2018 budget blueprint (skinny budget) back in March, we have conducted analysis that shows various ways in which North Carolinians would be harmed under Trump’s proposed budget. In case you missed this analysis, below are links to the recent posts in our ‘Federal Budget Blog Series’ (and also a preview of what’s to come): Read more

NC Budget and Tax Center, public health

Analysis: 5 reasons a Medicaid work requirement would hurt North Carolina’s struggling families

Lawmakers in Congress and in North Carolina’s General Assembly are considering “work requirements” in Medicaid as part of an overall health care reform package. However, evidence shows that denying medical care to sick, poor people because they lack a job is not a good idea.

Here in North Carolina too many families across the state are one bad accident, lay-off, or catastrophe away from the brink. Regardless of politics, we all share in the responsibility to ensure that when our most vulnerable do hit hard times, they do not go without the basics – housing, food, and medical care.

The NC Budget & Tax Center has released a Brief that lists 5 reasons why a Medicaid work requirement is not a good policy idea in North Carolina. Here’s a quick summary (bonus: the conclusion at the bottom points out what we really need in NC):

 1) Medicaid beneficiaries want to work but can’t find jobs for reasons that work requirements don’t solve.

In North Carolina, nearly 8 in 10 Medicaid adults live in a family with at least one worker. Most people on Medicaid who can work do so, and for people who face major obstacles to employment, work requirements won’t help to overcome them. Such barriers to work include having an illness or disability that prevents them from working (35 percent), lacking child care assistance or are taking care of family (28 percent), participating in school (18 percent).

Furthermore, in 88 of the state’s 100 counties, there are more unemployed workers than there are job openings. This is a major challenge that policymakers must address to enable more jobless adults to access employment opportunities. Medicaid work requirements do not address the job gap.

2) Low wages keep millions of working people across North Carolina in poverty.

Across all 100 counties in NC, there are 2.2 million North Carolinians who have a job but are still earning poverty-level incomes, which is $24,600 for a family of 4. There are 95 counties in which the working poor make up more than 20 percent of the labor force. In 17 of the state’s 100 counties, the working poor population is between 30 and 40 percent. In other words, having a job is good but not enough to get by for many people across the state.

3) Medicaid makes it easier for people to work and search for work.

According to a statewide Medicaid assessment, a majority of enrollees (52 percent) report that Medicaid has made it easier to secure and maintain employment. Among unemployed enrollees looking for work, 75 percent report that Medicaid makes it easier to look for work.

4) A Medicaid work requirement redirects resources away from the goal of reducing poverty.

Spending taxpayer money to cover increasing administrative costs rather than using it to serve the public is not smart public policy. A work requirement for Medicaid beneficiaries would add to health plan administrative costs and shift money away from providing care, according to health insurers that administer benefits for millions of poor Americans. Jeff Myers, president and CEO of Medicaid Health Plans of America, has said work requirements are an administrative burden: “plans would rather spend their time and resources actually caring for their members.

 5) Dedicating resources to work training programs that help people access job opportunities is more effective in the long-term.

To help North Carolinians who are struggling find work and to secure better jobs, investments targeted to skills training programs that result in an industry-recognized credential and providing a strong career pathway program at every community college will increase skills and employment outcomes.

Research shows that public investments in these areas help low-income adults and youth find jobs, improve their earnings and contribute to their communities. For example, one study found that individuals receiving services are more likely to be employed (by about 10 percentage points) than those who have not received services.

 Conclusion

It is clear that instead of cutting funding and making it more difficult for vulnerable parents and children to access health programs in times of need, what we really need in NC is to change how we end poverty  – by providing adequate funding to help North Carolinians create and find work, get access to education and job training, child care, or mental health services to lift them out of poverty.

NC Budget and Tax Center, public health, Trump Administration

GOP health care bill would hurt one million rural North Carolinians who benefit from Medicaid

A new report finds the House-passed health bill – the American Health Care Act – would devastate health care in rural America, primarily because of the dismantling of Medicaid.

This is concerning considering that last year in North Carolina Medicaid offered health coverage to 1.9 million poor seniors, children, parents, and people with disabilities – of which the majority (1 million) lived in the rural parts of the state.

Specifically, North Carolina’s rural counties accounted for the following Medicaid beneficiaries: 60 percent of poor seniors, 53 percent of blind individuals, 58 percent of people with disabilities, 54 percent of pregnant women, and 51 percent of all infants and children. In other words, rural North Carolinians benefit greatly from Medicaid.

According to the report, “Medicaid has long played an even larger role in providing health coverage and paying for care in rural areas than in urban areas. Medicaid’s importance to rural America has only grown under the ACA. Nearly 1.7 million rural Americans have newly gained coverage through the Medicaid expansion.”

Below are key points from the report of why the proposed GOP health care bill would not meet rural needs:

  • Medicaid has expanded access to substance use disorder treatment at a time when many rural communities have been ravaged by the opioid crisis.
  • Medicaid expansion has become a critical financial lifeline sustaining rural hospitals.
  • The bill’s new tax credit for the purchase of individual market coverage would be woefully inadequate for many people in rural areas, and would leave many of the 1.6 million current rural marketplace enrollees unable to afford their high insurance premiums. Unlike the Affordable Care Act’s (ACA) far more generous and flexible tax credit, the House bill’s credit wouldn’t adjust for geographic variation in premiums and would provide too little assistance for older people.
  • In North Carolina, 25 percent of Marketplace Consumers live in rural areas; under the ACA, their average tax credit is $8,411. However, under the proposed bill, their average tax credit would decrease by 66 percent to $2,869. Furthermore, North Carolinians living in rural areas would see the biggest increase – $7,549 – in total out-of-pocket costs under the proposed health bill. Both the net premium ($5,921) and cost-sharing ($1,628) out-of-pocket costs would increase.
  • Rural populations tend to be older and sicker than urban populations. For example, people in rural areas are more likely to die from heart disease, cancer, unintentional injury, chronic lower respiratory disease, and stroke than their urban counterparts. For these reasons, rural residents likely benefited disproportionately from the ACA’s protections against discrimination based on medical history — and they could be disproportionately harmed by removing those protections, as well as by the other major provisions of the House bill.

To learn more see: Medicaid works for women in North Carolina and Medicaid has allowed millions with substance use disorders to get health coverage, access treatment.