NC Budget and Tax Center, Trump Administration

Why does the President tweet about stock market levels but not our poverty rate?

Since July 1, President Trump has tweeted to celebrate the results of the U.S. stock market nine times and has tweeted about strong jobs numbers thirteen times. His frequent tweeting about these two metrics appears to indicate that they are his key indicators for assessing how we are doing as a country. It is worth noting, however, that during this timeframe not once has he tweeted about the “poverty rate” in the U.S. Why not?

Yes, the U.S. stock market, as measured by the Dow Jones Industrial Average, seems to be doing well as the Dow posted record closing highs all of last week. This, however, should not be too surprising. Since 2013, the U.S. stock market has hit a new high closing record 157 times (123 times under President Obama, 34 times under President Trump). Here’s another way of looking at it: The U.S. stock market has hit an all-time high in 30 of the last 54 months. In other words, the U.S. stock market has been doing well for quite some time now, meaning the record-breaking numbers that the President is tweeting about aren’t quite as rare as they might seem.

What should be surprising and alarming is the fact that the President does not seem to view the U.S. poverty rate as a key indicator of how America is doing.

In a recent article Politico points out that economists have frequently found little relationship between returns on stock investments and real economic growth. Instead, it appears that a strong stock market helps the rich get richer while the poor get poorer, through the increasing income inequality gap. The article points out, “about 80 percent of the value of the stock market is held by the richest 10 percent of the nation; the vast majority of gains in share value accrue to the rich, not to most Americans.”

Understanding and tracking the poverty rate in the United States and in North Carolina is important because it is an indicator of whether the economy is delivering opportunity for all. It goes without saying that the greatest country in the world, and the one with strongest economy, should not have a high number of people that are poor.

Unfortunately, Read more

NC Budget and Tax Center, Trump Administration

Essential nonpartisan Congressional Budget Office is now at risk by proposed amendment

Nonpartisan federal government agencies that often go unnoticed but are vital for good government include the U.S Congressional Budget Office (CBO) and the Government Accountability Office (GAO). The CBO, for example, has provided Congress with budgetary and economic information in a variety of ways and at various points in the legislative process for over 40 years.

The concept of good government has always been vital to our democracy. Good government at its core promotes principles such as accountability, openness, integrity, transparency, and reliability. When good government, including agencies such as the CBO and GAO, is supported, the nation and its entire people thrive.

Unfortunately, in Congress, House lawmakers have now introduced an amendment to eliminate CBO’s entire Budget Analysis division (cutting 89 positions) and cut CBO’s budget by $15 million.

Just for reference, CBO currently has a staff of about 235 people. In other words, the proposed amendment would cut CBO’s staff by 38 percent. And from a budget standpoint, the amendment means CBO would lose a third (33 percent) of its funding next year.

A cut of this magnitude would severely damage effective and long-standing good government processes that have helped the U.S. for decades, as professional staff would no longer be able to analyze federal spending or provide formal cost estimates for nearly every bill approved by Congressional committees.

Rep. Mark Meadows

North Carolina’s U.S. House Representative, Mark Meadows (R-District 11), who supports this amendment to cut CBO has stated he would use a rule called the Holman Rule, which allows Congress to cut salaries for individual federal workers, for the first time since 1983. The concern here is that if the House succeeds in doing this to CBO, they could replicate this type of cut at other agencies. [Note: The Holman Rule which was removed in 1983 was reinstated by House Republicans earlier this year.]

All of this is ironic and unfortunate considering that just last Friday every former CBO director signed a letter to congressional leadership that stated: “We write to express our strong objection to recent attacks on the integrity and professionalism of the agency and on the agency’s role in the legislative process.”

No matter which political party one belongs to, it is important to know that these types of devastating budget and staffing cuts to a government agency that is grounded on upholding good government principles are wrong. The CBO has consistently proven that it takes a number of steps to ensure that all of its work is objective, impartial, and nonpartisan—the importance of which was emphasized by CBO’s founding director, Alice Rivlin, in a 1-page memo to CBO staff in 1976 and is posted on CBO’s website.

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

CBO Memo to Staff (1976) by LT on Scribd

NC Budget and Tax Center, public health

NC’s and the nation’s uninsured rate has fallen to a historic low under ACA, but you’d never know that listening to Senate leaders

Here’s some important and quick facts that all Americans and North Carolinians should know this week, when the Senate will formally vote in an attempt to repeal the Affordable Care Act:

The United States has made significant progress over the past seven years when it comes to reducing the number of people that are uninsured, according to data from the Centers for Disease Control and Prevention (CDC). In 2016, only 9 percent of America’s population was uninsured, compared to 18.2 percent in 2010. That’s the lowest share since the CDC began tracking this statistic 45 years ago! If you prefer numbers: 28 million people were uninsured last year, compared to over 48 million in 2010. In NC, only 11.4 percent of all North Carolinians were uninsured last year, compared to 21.3 percent in 2010. Take a moment to think about that.

“There has never been a decline this large and over such a short period of time.” –Rachel Garfield, associate director for the Kaiser Family Foundation’s Program on Medicaid and the Uninsured.

The last time the percentage of uninsured in our country was close to the historic low of 9 percent we saw in 2016 was 39 years ago, in 1978. Here are a few things that happened back in 1978 (when the percentage of persons under 65 without health insurance was 12 percent):

    • President Jimmy Carter signed H.R. 1337 into law, which allowed home-brewing of beer in the United States (sparking the craft beer revolution).
    • U.S. Senate proceedings were broadcasted on radio for the first time.
    • Grease, starring John Travolta and Olivia Newton-John, was released.
    • Woody Allen’s Annie Hall won Best Picture.
    • The rainbow flag of the LGBT movement flew for the first time at the San Francisco Gay Freedom Day Parade.
    • Pope John Paul II became the 264th pope.
    • Mavis Hutchinson, a 53-year-old grandmother, became the first woman to run across the U.S.
    • The Dallas Cowboys defeated the Denver Broncos in Super Bowl XII.
    • Pete Rose, the all-time MLB leader in hits, gets his 3,000th major league hit.

Below you can see the official U.S long-term trends in health insurance coverage since 1968:

CDC_US Healthinsurance1968-2015 by LT on Scribd

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, public health, Trump Administration

Warning: Last-ditch GOP effort offering $200 billion to buy votes won’t fix unfixable Senate health bill

Earlier this week we reported that the Senate GOP health “repeal without replacement” proposal would do great harm to NC, as it would double the number of uninsured in North Carolina.

Unfortunately, the latest is that in a last-ditch effort to save their bill to repeal the Affordable Care Act (ACA), Senate Republican leaders are reportedly offering $200 billion to win the votes of senators from states that expanded Medicaid under the ACA.

Here’s a brief explanation from the Center on Budget and Policy Priorities:

“This new fund would presumably supplement private coverage for those who gained Medicaid coverage under the expansion but would lose it under the Senate bill.  No senator should fall for it. While $200 billion seems like a lot of money, it’s only 17 percent of the bill’s $1.2 trillion in cuts: $756 billion from Medicaid and $427 billion from subsidies to help low- and moderate-income people buy coverage in the individual market.”

Overall, it is clear that this additional money would do nothing to fix the major and fundamental problems that the bill would create:

  • It would do nothing to offset the Medicaid cuts resulting from the per capita cap, which would affect children, seniors, and people with disabilities in all states.  These cuts would shift ever-increasing costs to states, forcing the states to respond by making ever-deepening cuts in eligibility, benefits, and provider payments.
  • It would do nothing to address the bill’s harm to people with private coverage, including the loss of coverage for millions of people (due largely to sharp cuts in marketplace subsidies), increased costs for those who stay covered, and the loss of access to health care for millions with pre-existing conditions.
  • It would do nothing to address the fact that millions of lower-income marketplace consumers in non-expansion states (like North Carolina) would see their deductibles jump many thousands of dollars under the Senate bill.

No one should be fooled:  The reported $200 billion cannot fix this bill, and does not come close to undoing coverage cuts.

Here’s what would really help, as we stated earlier this week:

“Based on the facts, it is clear that NC’s two U.S. senators should support the idea of starting from scratch with a different, bipartisan approach that leaves Medicaid aside and focus on making real improvements to marketplace stability and affordability.”

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

New battle: GOP now slashing billions from programs that help Americans in order to pay for tax breaks for the wealthy

In Congress, the House Budget Committee is moving forward today with discussing their recently released 2018 budget plan that will set a fiscal framework for budget, tax, and appropriations bills to follow and for years to come.

To unlock Congress’ power to expedite tax overhaul this year, the House GOP fiscal blueprint, titled “Building a Better America”, gives instructions to 11 House committees to achieve at least $203 billion in mandatory cuts. These cuts would mark the largest amount of deficit reduction through the budget process in two decades. If that were not enough, the GOP budget resolution states: “These targets are a floor, not a ceiling, and our Committee expects the authorizing committees will achieve significantly larger budgetary savings.”

The Center on Budget and Policy Priorities explains how the House GOP budget framework affects our country:

“It would cause pain to tens of millions of Americans, especially struggling families and others who have fallen on hard times, and would cut deeply into areas important to future economic growth, from education to basic scientific research.  It would do so while opening the door for tax cuts geared toward those who already are the most well off.

“The budget plan is broadly similar in direction and theme to President Trump’s budget:  cutting trillions of dollars from basic assistance, health programs, and core investments in our economy; promising both big tax cuts and so-called deficit-neutral “tax reform” without providing any specifics for how those tax cuts would be paid for; and relying on rosy economic assumptions to show a balanced budget by 2027 on paper.”

For those interested in knowing which Congressional committees will play a major role in cutting the budget, here’s the breakdown:

“The House Ways and Means Committee, which would do much of the GOP’s tax-writing this year, would be charged with finding the most mandatory savings — at least $52 billion. That could include cuts to programs like the Social Services Block Grant, Temporary Assistance for Needy Families, Supplemental Security Income or Disability Insurance.

“The House Judiciary Committee would be tasked with the second-highest amount of savings, with a total of $45 billion — most of which would likely come from medical malpractice reforms. The Education and Workforce Committee, as well as the Energy and Commerce panel, would each need to produce $20 billion in savings, with another $10 billion from the House Agriculture Committee.”

For those wondering if North Carolina’s congressional delegation has GOP members in some of these committees, the answer is yes: House Ways and Means (George Holding, 2nd District); Education and Workforce (Virginia Foxx, 5th District); Energy and Commerce (Richard Hudson, 8th District); Agriculture (David Rouzer, 7th District).

Stay tuned as we continue to analyze and cover the rapid and fluid news on the federal budget and healthcare front this week.

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