While rumors swirl about a deal to re-open the federal government, the impact of the shutdown on North Carolina is becoming ever more apparent. In this week’s issue of Prosperity Watch, Tazra Mitchell looks at the consequences of the federal government shutdown on children, the most vulnerable residents of our state, and specifically at the suspension of child care subsidies that are hurting kids and forcing their parents to choose between caring for their kids and going to work. For more, see the latest issue of Prosperity Watch.
It appears that North Carolina is the only state to stop processing applications for the Temporary Assistance for Needy Families (TANF) program, formerly known as welfare, due to the federal government shutdown. This news comes just days after the Governor’s Administration was the only one in the nation to turn away low-income mothers and infants from food assistance via the WIC program. Fortunately, state officials quickly reversed course last week and accepted federal contingency funding to keep WIC assistance for hungry families.
In a new editorial, the Charlotte Observer rightly points out that it is “unnecessary” for the Governor’s administration to push the stop button on applications because North Carolina can float the money, continue assistance and services, and then request reimbursement by the federal government thereafter:
“Last month, the U.S. Health and Human Services Family Assistance Office wrote a pre-shutdown letter to states, promising to reimburse money states had to spend to cover federal TANF benefits. That’s probably why so few states have yet to talk about shutting down their TANF programs. Read more
As the government shutdown grinds on and the need to raise the federal debt limit looms ahead, the latest word emanating from behind closed doors in Washington is the emerging possibility of a “big” deal on the federal budget—one that includes new revenues and possible entitlement reforms. Any big must replace sequestration with a balanced approach that raises new revenues by closing corporate tax loopholes.
But first things first—Congress must reopen the Federal government and pass a debt limit increase without delay and without condition. Everyone wants to put together a fiscally responsible budget, but shutting down the government is just not the way to do it. Certainly refusing to raise the debt ceiling and defaulting on our national debt is not the way to do it either—doing so would almost certainly cause even greater economic challenges at home and around the world.
North Carolina and the nation are already reeling from the first round of sequestration cuts. Since 2011, almost three-quarters of debt reduction has come from spending cuts, and as a result, key domestic initiatives like K-12 education, food safety inspections, and research and development are now at the lowest levels as a share of the economy since the 1950s.
Rather than embrace additional spending cuts to these domestic initiatives, Congress should look at hidden corporate tax code spending as a source for raising new revenues. And fortunately, HR 1588—the Stop Tax Haven Abuse Act (S. 1533)—presents a great place to start, by closing a number loopholes that allow American-based corporations to avoid paying taxes on the incomes they stash in overseas accounts. See some examples here.
State Rep. Julia Howard — who, in fairness, occasionally bucks the conservative establishment in the North Carolina GOP — had this to say during a legislative hearing at the General Assembly yesterday on unemployment insurance as she expressed her frustration with the McCrory administration’s failure to implement a legislative directive:
““It’s the law,” she said. “Unless you repeal the law, we should be compliant.”
Hopefully, Rep. Howard is communicating this sentiment to her fellow conservative Republicans in Washington as they hold the nation hostage over a duly enacted and constitutional law.
Blog contribution provided by Tazra Mitchell, Public Policy Analyst with the NC Budget and Tax Center
The federal budget process would become a bit more stable and predictable if the recently introduced Stop Tax Haven Abuse Act is enacted. This bill, which has been introduced by Senator Carl Levin, would raise at least $200 billion over the next 10 years by closing corporate tax loopholes that allows multinationals to shield their offshore profits from taxation. The bill’s passage would deliver a more balanced approach to addressing the federal deficit and help prevent a second round of across-the-board cuts that will only further harm the nation’s most vulnerable citizens at a time when hardship remains high. Read more