Tuesday, April 26, 2011

Welcome to a New and Improved Version of Public Policy Perspectives

To Blog or not to Blog, that is the question.”

Since joining CFILC in 2008 as the Public Policy Director, I have experimented with creating an email newsletter as a communication tool to share topical news and information about issues affecting people with disabilities.  We all receive a wealth of information from websites and emails, but sometimes find it hard to find the time read them all or pass them on to our colleagues.

This new Public Policy Perspectives Blog will focus in reporting on key legislation and budget issues in Congress and the California State Legislature as they emerge, as well covering news articles and research studies impacting the disability community.  I will write some full articles and in other cases summarize this information and include internet links if you are interested in reading them in full.

I invite you to pass along news you’d like to share with the disability community using this Blog as a forum.  You may even want to submit your own articles.  This is a work in progress, so I welcome feedback and any others suggestions you may have.
 
Thank you.

Henry J. Contreras, CFILC Public Policy Director
INSIDE THE CAPITOL:  NEWS AND EVELOPMENTS IN SACRAMENTO

At the time of the posting of this Blog, the state budget negotiations are still at an impasse.  Republicans in the Assembly and the Senate are still withholding the votes that are necessary to place the question of calling for the voters to have an opportunity to vote for an extension of temporary taxes that are scheduled to expire June 30, 2011.
As we are all aware, the Legislature did enact budget trailer bills to cut programs and services that disproportionately impact poor and low-income families and their children, seniors, and people with disabilities.  If the Legislature is unable to resolve the remaining $12.4 billion budget deficit, further cuts may be required.  As time passes, the prospects for the voters approving the tax extension in November are growing dimmer and the State will lose substantial revenues that will add to the deficit.

Hopefully, future Blogs will provide more details of the budget negotiations.  Until then, CFILC must return its attention to legislation that has been introduced in 2011.  The CFILC Board of Directors has taken formal positions on our 2011 Legislative Agenda.


NEWS AND DEVELOPMENTS IN WASHINGTON D.C.

While there are many controversial national and international issues currently being debated in Washington D.C, few are as contentious and foreboding for the disability community than the proposing major revamping of the Federal Budget.  Somehow Republicans viewed the voter anger or apathy in the November election as a “public mandate” for them to pursue a radical agenda.  Thus far, public reaction to their proposal to “Kill the Medicare and Medicaid Programs in Order to Keep Them Solvent” could be a pivotal issue as public attention focuses more on what Republicans are proposing to do.  The devil is always in the details.

House Republicans are moving aggressively forward on their 2012 Budget Resolution that would make massive changes in the way that the Federal Government plays its traditional role as the guardians of the public good.  Labeled as the “Ryan Budget” to reflect the author of the budget resolution, Rep. Paul Ryan (R-Wis.), the bill passed the House on April 15th along party lines 235-193, with only four Republicans voting against the proposal.

It is highly unlikely that the Ryan Budget will be adopted in the still-Democratic controlled.  However, it is important to pay close attention to the various proposals that include, among other things, major changes in Medicare and Medicaid, privatizing programs, the utilization of Block Grants for many programs, and tax cuts for the wealthy and corporations.  Various components will be featured in other budget alternatives, so it is necessary to gain a better understanding of the impact they may have upon the disability community.

The Ryan Budget will be the defining issue in the 2012 Congressional and Presidential campaign trails.  Democrats are hopeful that by highlighting the clear political and policy differences they will win back the House.  Messaging campaigns and GOTV efforts are already being developed commercials.  The contrast between how the two parties view the role of the Federal government in the daily lives of Americans has never been this stark or contentious.

Republicans counter that it is misleading to characterize the Ryan Budget as promoting privatization and claim that it is necessary the reduce the Federal Budget Deficit and make Medicare and Medicaid solvent.  Immediately after its passage, political pundits, pollsters, and fiscal Think Tanks have begun analyzing the details and its impact on the economy.

The following is a summary of some of the key issues and analyses.  This Blog gives you a choice.  You can merely read the headline and the short, but if you are interested in reading the full blown reports, a link is added for your convenience. 

In many, but not all, cases the information is summarized from or otherwise attributed to other writers of the various articles and reports.  Where there is no such attribution, the text reflects my own research or opinion on the issues.

Under the Ryan Budget, “Tax Reform” Places Top Priority on High –Income Tax Cuts and Ignores Deficit Reduction

The most recent analysis highlighted in this Blog dated April 26, 2011 by Chuck Marr and Gillian Brunet of the Center on Budget and Policy Priorities concludes that the Ryan Budget ignores real deficit reduction and places a greater priority on cutting taxes for higher-income taxpayers.  They found that the Price Tag for the proposal to make the Bush era tax cuts for the wealthy taxpayers permanent and to continue other tax breaks would be  nearly $4 trillion over 10 years.  In addition, the Ryan Budget would propose an additional series of tax cuts for the wealthy and corporation that would cost of an additional $3 trillion over that period. 

They presume that the new tax breaks would be offset by additional unspecified spending reductions.  In other words, the Ryan Budget finances these tax cuts with extremely large budget cuts, including cuts for people with low or moderate incomes. 

The proposal would also reduce top individual and corporate tax rates from 35 to 25 percent and would rescind the health care reform law’s Medicare payroll taxes on high income people.  So, once again it is clear that the House Republicans have a unique definition of “tax reform.”  The common characteristics are that they are very costly and that they would disproportionately or exclusively benefit those with high incomes.  

What does this mean for the underlying public sales pitch that the Ryan Budget will reduce the Federal deficit and benefit all taxpayers?  According to the Urban Institute-Brookings Institution Tax Policy Center (TPC), even if the House follows through on the commitment to offset $2.5 trillion of these costs by eliminating loopholes, the net result would most likely make the United States Tax Code more regressive than it is today.

According to the TPC report “[r]educing the top income tax rate to 25 percent would primarily benefit households with the highest incomes.  For example, a family with two children that earns $850,000 would receive an annual tax cut of $61,200 from lowering the top rate to 25 percent, which would be in addition to the $31,000 the family would get from extending all of the Bush tax cuts.  And family with $8.5 million in earned income would receive a tax cut of $1.64 million a year from the reduction in the top rate. 

In contrast, 95 percent of Americans would receive no benefit at all from lowering the top rate to 25 percent, because they would already be in the 25 percent tax bracket or a lower bracket (assuming that the Bush tax cuts were extended, as the House budget envisions).”


To read the entire report, go to:


Congressional Budget Office (CBO) Report Analyzes Impact of the Ryan Budget’s Plan for Medicare and Medicaid

According to a recent non-partisan CBO report, with some exceptions, the Ryan Budget would cause most Federal government programs to literally cease to exist.  The report also reveals that his plan envisions additional Medicare cuts that were not disclosed in his official proposal.  Moreover, the proposal to privatize Medicare with “premium support” and its Medicaid block grant proposals were found to substantially differ from and have much deeper cuts than the so-called “Ryan-Rivlin” plan that was rejected last fall as “too severe” by the Bowles-Simpson fiscal commission.

Medicare---Welcome to the Wonderful World of the Health Care Plan Free Market:  According to a posting by Robert Greenstein on the Center on Budget and Policy Priorities’ website (www.cbpp.org), for Medicare the  plan would raise the age at which people become eligible from 65 to 67, even as it repeals the health reform law's coverage provisions.  This means 65- and 66-year-olds would have neither Medicare nor access to health insurance exchanges in which they could buy coverage at an affordable price and receive subsidies to help them purchase coverage if their incomes are low. 

This change, which is not mentioned in the 73-page booklet on his plan that Chairman Ryan released, would put many more 65- and 66-year-olds who don't have employer coverage and can't afford insurance into the individual insurance market — where the premiums charged to people in this age group tend to be very high — leaving them uninsured.  People of limited means, such as those who are trying to get by on incomes as low as $12,000 a year in today's dollars, would be affected most harshly because they wouldn't be able to afford private coverage.

      In another report, the Center on Budget and Policy Priorities also estimated that out-of-pocket medical costs would skyrocket for low-income seniors and “dually eligible” people with disabilities under the Ryan plan.  This would be because the Ryan budget would eliminate supplemental Medicaid coverage, except for long-term care services and support and replace it with a medical savings account.

          To read this entire report, go to:

Wait, There’s More---Medicaid:  For Medicaid, the CBO report similarly concludes that the Medicaid block grant amounts would grow each year only with inflation and U.S. population growth, which is roughly four percentage points less than current projected annual growth in Medicaid.  CBO found that Federal funding for Medicaid would fall 35 percent by 2022 — and 49 percent by 2030 — far below the levels the federal government now is projected to provide for the program.  

The CBO report makes clear that unless states made up the difference, the measures they would have to take as a result of this large loss of Federal funding would include cuts in eligibility (leading to more uninsured low-income people), cuts in covered services (also leading to more underinsured low-income people), and/or cuts in already-low payment rates to health care providers, which would cause doctors, hospitals, and nursing homes to withdraw from Medicaid and thereby reduce beneficiaries' access to care.

To read the entire report, go to:

The Ryan Budget Plan Also Would Produce Less Real Deficit Cutting Than Reported

Robert Greenstein with the Center on Budget and Policy Priorities reported that upon closer inspection, Chairman Ryan’s claims that his plan would produce $1.6 trillion in deficit reduction is illusory.  In fact, the plan would only produce $155 billion in real deficit reduction over ten years.

That means that, despite proposing $4.3 trillion in what would be the most severe and wrenching budget cuts in U.S. history — two-thirds of which would come from programs for people of low or moderate incomes — the plan barely reduces deficits at all over the next decade. That’s because his budget cuts are offset by the $4.2 trillion in tax cuts (for more information, see the first report in this blog) that would go disproportionately to those at the top. In essence, at least for the next decade, this plan is far less a blueprint for addressing deficits and far more a proposal to redistribute large amounts of resources from those at the bottom to those at the top.
Cuts in low-income programs appear likely to account for at least $2.9 trillion — or nearly two-thirds — of this total amount.  The $2.9 trillion includes the following three categories of cuts:

§  $2.17 trillion in reductions from Medicaid and related health care.   The plan shows Medicaid cuts of $771 billion, plus savings of $1.4 trillion from repealing the health reform law’s Medicaid expansion and its subsidies to help low- and moderate-income people purchase health insurance.

§  $350 billion in cuts in mandatory programs serving low-income Americans (other than Medicaid).  

In exploring this category in more detail, Chairman Ryan’s budget documents show that he is proposing $719 billion in cuts in mandatory programs other than Medicare, Medicaid, and Social Security, but do not specify how much will be cut from various programs (although they imply that cuts in the Food Stamp Program will be large).  

The Greenstein report made the conservative assumption that savings from low-income mandatory programs (other than Medicaid) would be proportionate to their share of spending in this category. Thus, he derived the $350 billion figure from the fact that about half of mandatory spending other than for Medicare, Medicaid, and Social Security goes for programs for low- and moderate-income individuals and families. 

Mr. Greenstein admits that this likely substantially understates the cuts that the plan would make in low-income programs.  The Ryan documents show that $380 billion in cuts would come from mandatory programs in the income security portion of the budget, and the overwhelming bulk of the mandatory spending in that category goes for low-income programs.  The documents also show $126 billion in mandatory cuts in the education, training, employment, and social services portion of the budget which, based on the discussion in those documents, would likely come mainly from cuts in the mandatory portion of the Pell Grant program for low-income students.

§  $400 billion in cuts in low-income discretionary programs.   The Ryan budget documents showed the plan containing $1.6 trillion in cuts in non-security discretionary programs, but again did not provide details about the size of cuts to specific programs.  (The documents did identify some major low-income program areas, including Pell Grants and low-income housing, as prime targets for cuts.) 

To read the entire report, go to: