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Policy Basics: Property Tax Caps
December 18, 2008
The property tax is a major source of funding for public safety, schools, roads, libraries, and other services in most American communities. In recent decades, concern over rising property tax bills has led a number of states to impose some form of limit on the amount of property tax revenue … -
Louisiana's Medicaid Waiver Proposal
December 17, 2008
In the Louisiana Health Care Reform Act of 2007, the Louisiana legislature put the state on a path intended to transform how Medicaid beneficiaries and low-income uninsured people get health care services. The Act directed the state Department of Health and Hospitals (DHH) to establish a “medical home system of care” with the goal of improving patient … -
The Long-Term Fiscal Outlook Is Bleak
December 16, 2008
This report updates the Center on Budget and Policy Priorities’ projections of federal spending, revenues, deficits, and debt through 2050. These projections — like the projections the Center issued in January 2007 and the projections by other institutions such as the Congressional Budget Office (CBO), Government Accountability … -
Podcast: Long Term Deficit Projections Highlight Need for Action
December 16, 2008
This podcast discusses a report that provides updated long-term federal budget projections. The report describes the factors driving the big increases in deficits and debt projected for the next several decades, such as rapidly rising health care costs and revenues that are inadequate to cover even current expenditures. This podcast features the Center's Executive Director Robert … -
Press Release: New Long-Term Deficit Projections Paint Grim Picture
December 16, 2008
The nation faces a grim long-term budget outlook even after the economy recovers from the current recession, with the prospect of skyrocketing deficits and debt in the coming decades that will far eclipse all previous levels, the Center on Budget and Policy Priorities reported today. Driving this grim outlook are at least three factors: (1) … -
Chad Stone, Chief Economist, on November Employment Report
December 5, 2008
Today’s devastating jobs report confirms that the economy is in a serious recession. Good policy in the months ahead is vital to limit the damage, but even so this recession is likely to be the longest, and possibly one of the deepest, since World War II. Today’s report also … -
Child Tax Credit Expansion Passed by Congress Will Help 13 Million Children
Updated December 5, 2008
A recently enacted Child Tax Credit provision will benefit 12.9 million children — 2.4 million who will become newly eligible for the benefit and 10.5 million who will see their credit increased because of it — according to the Urban Institute-Brookings Institution Tax Policy Center. These almost 13 million children come from families with parents who … -
Recession Could Cause Large Increases in Poverty and Push Millions into Deep Poverty
November 24, 2008
[T]he current downturn is likely to cause significant increases both in the number of Americans who are poor and the number living in "deep poverty," with incomes below half of the poverty line...There are a series of steps that federal and state policymakers could take to soften the recession’s harshest impacts and limit the extent of the increases in deep poverty, destitution, and homelessness.
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Podcast: How Will the Economic Downturn Affect Poverty? Can Today's Safety Net Cope?
November 24, 2008
This podcast discusses the findings of an analysis, which: examines the impact of recent recessions on poverty and deep poverty (incomes below half of the poverty line); discusses recent changes in the safety net that could weaken its ability to address the increase in need during this downturn; and outlines steps Congress can take as part of an upcoming economic recovery … -
TANF Benefits Are Low and Have Not Kept Pace with Inflation
November 24, 2008
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Immigration and Social Security
November 20, 2008
Increases in immigration tend to improve the financial status of the Social Security program by a modest amount. Estimates by both the Congressional Budget Office (CBO) and the Social Security actuaries belie contentions that legalizing some undocumented immigrants, or increasing immigration in general, would impair the solvency of … -
Slideshow: Federal Budget Outlook
Updated January 30, 2008
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Video: Independent Sector's 2008 John W. Gardner Leadership Award Recipient: Robert Greenstein
November 19, 2008
The John W. Gardner Leadership Award was established in 1985 to honor outstanding Americans who exemplify the leadership and the ideals of John W. Gardner (1912-2002), American statesman and founding chair of Independent Sector. Independent Sector presents the Award each year to an individual whose leadership in or with the nonprofit community has been transformative … -
Statement by Stacy Dean, Director of Food Assistance Policy, on the New USDA Report on Hunger
November 17, 2008
Even before the current economic downturn, some 13 million households, containing 36.2 million people, lacked access to adequate food at some point in 2007 because they didn’t have enough money for groceries, according to the USDA report on hunger.
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State Revenues Plummet
Updated November 12, 2008
Newly available data compiled by the Rockefeller Institute of Government show conclusively that state revenue dropped sharply in the July-September 2008 quarter, creating large, additional state budget shortfalls.[1] All indications are that revenue collections will worsen further in coming months. Of the 42 states for which … -
Ways and Means Committee Republicans’ Use of Joint Tax Committee Data is Deeply Deceptive
Revised November 12, 2008
In a November 8 press release, Ways and Means Committee Ranking Member Jim McCrery claimed that new estimates from the nonpartisan, highly respected Joint Committee on Taxation (JCT) show that Ways and Means Committee Chairman Charles Rangel’s recently-introduced tax reform bill would raise taxes on 113 million households.[1] The claim is false; the … -
Video: Iris Lav, Deputy Director, on State Tax Revenues, NBC Nightly News
November 9, 2008
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Statement by Chad Stone, Chief Economist, on the October Employment Report
November 7, 2008
The weakness in the economy showed up with a vengeance in today’s employment report. As unemployment continues to rise, the percentage of Americans with a job is at its lowest level since 1993 and more than one in five of the unemployed has been looking for work for at least 27 weeks. … -
The Impact of State Income Taxes on Low-Income Families in 2007
October 29, 2008
Poor families in many states faced substantial state income tax liability for the 2007 tax year. In 18 of the 42 states that levy income taxes, two-parent families of four with incomes below the federal poverty line were liable for income tax. In 15 states, poor single-parent families of three paid income tax in 2007. And 26 … -
Press Release: Many States Tax Working-Poor Families Deeper Into Poverty
October 29, 2008
Poor families faced income tax bills that pushed them deeper into poverty last year in nearly half of the states with an income tax, according to a new report from the Center on Budget and Policy Priorities. Income tax bills on poor families in those 18 states range from a few dollars to several … -
Video: Testimony of Robert Greenstein on Widening Income Inequality in the United States
October 29, 2008
Thank you for the invitation to testify about widening income inequality in the United States, including the impact of recent developments in financial markets and the economy. As former Federal Reserve chairman Alan Greenspan has said, “this is not the type of thing which a democratic society — a capitalist democratic society — can really … -
Putting U.S. Corporate Taxes in Perspective
October 27, 2008
The U.S. corporate tax burden is smaller than average for developed countries.[1] Corporations in 19 of the member states of the Organization for Economic Co-operation and Development paid 16.1 percent of their profits in taxes between 2000 and 2005, on average, while corporations in the United States paid 13.4 percent. … -
Average Income in 2006 up $60,000 for Top 1 Percent of Households, Just $430 for Bottom 90 Percent: Income Concentration at Highest Level Since 1928, New Analysis Shows
Revised October 22, 2008
The Piketty-Saez data has been updated. An analysis of the new data as of March 7, 2012 can be found here: http://www.cbpp.org/cms/index.cfm?fa=view&id=3697. Average pre-tax incomes in 2006 jumped by about $60,000 (5.8 percent) for the top 1 percent of households, but just $430 (1.4 percent) for the bottom 90 percent, after … -
Video: Testimony of Iris J. Lav on "Economic Recovery: Options and Challenges"
October 20, 2008
Hearing Titled: “Economic Recovery: Options and Challenges” There are 29 states that closed shortfalls of $48 billion in enacting their fiscal year 2009 budgets (for the year beginning July 1, 2008 in most states). The shortfalls equaled 9 percent of these states’ general fund (operating) budgets. Since fiscal year 2009 budgets … -
Video: Nicholas Johnson, Director of the Center's State Fiscal Project, speaks about state budget problems, and answers questions from call-ins on C-SPAN's Washington Journal Program
October 18, 2008
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Video: Stacy Dean, Director of Food Assistance Policy, on the Importance of Food Stamps, CNN's Situation Room
October 15, 2008
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Job Growth Has Slowed Significantly in 2006
Revised October 13, 2008
New Labor Department data released today show that employment growth slowed markedly in September, providing further evidence that the labor market has weakened in 2006. Looking at this year to date, two key findings emerge. Average job growth in 2006 has been notably slower than in either 2005 or 2004. Employment has grown at an average annual … -
Video: Chad Stone, Chief Economist, on Economic Stimulus, Fox 5 News DC
October 13, 2008
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States Face Two Immediate Financial Issues: Short-Term Borrowing and Big Budget Deficits
Updated October 10, 2008
States face two distinct financial problems right now. First, California and Massachusetts officials last week raised concerns about their states’ ability to access credit markets for short-term borrowing. Second, most states have been facing budget deficits that have forced, or … -
Preserving Safe, High Quality Public Housing Should Be a Priority of Federal Housing Policy
Revised October 8, 2008
This report, based on significant new research, examines the state of public housing in the United States today and discusses federal policy changes that have greatly improved public housing over the past decade, as well as the deteriorating funding situation that is undermining this progress. It then outlines several policy … -
State Earned Income Tax Credits: 2008 Legislative Update
Updated October 8, 2008
Twenty-four states (counting the District of Columbia) have enacted an Earned Income Tax Credit (EITC), a tax reduction and a wage supplement for low- and moderate-income working families. State EITCs are based on the federal EITC, which a large body of evidence has shown to serve a number of important public policy goals. States … -
Testimony: How to Promote Housing Integration and Choice through the Section 8 Voucher Program
October 6, 2008
The Section 8 Housing Choice Voucher program is by far the nation’s largest low-income housing program. More than 2.2 million housing vouchers have been authorized by Congress and allocated to the approximately 2,400 housing agencies that administer the program. It is also the housing program that is the most targeted on the … -
Statement by Chad Stone, Chief Economist, on the September Employment Report
October 3, 2008
Today’s employment report is a reminder that the economy’s troubles run deeper than the financial market distress that is monopolizing the headlines. Enacting the financial rescue plan before the House today is vital to reduce the risk of financial meltdown and an ensuing economic contraction more severe than any since the 1930s. But … -
Video: Nicholas Johnson, Director of the Center's State Fiscal Project, speaks about state budget on CNN's Lou Dobbs
October 3, 2008
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Statement on Senate-Passed Financial Rescue Legislation by Robert Greenstein and Chad Stone
October 2, 2008
The House should quickly approve the financial rescue plan that the Senate approved in strong bipartisan fashion yesterday. Further delay would leave the U.S. economy increasingly vulnerable to a contraction more severe than any since the 1930s — one that could trigger large increases … -
House Stimulus Plan Effectively Targets Fiscal Relief to States
September 26, 2008
The House Leadership’s new stimulus proposal includes more than $14 billion in fiscal relief for states. This is designed to help states avert budget cuts and tax increases that they otherwise will have to institute to balance their budgets but that will make the economic downturn worse by withdrawing demand from the … -
Key Components of House and Senate Economic Recovery Packages Would Boost the Economy and Provide Needed Relief to Struggling Families
September 26, 2008
Congress is properly focused on designing an appropriate measure to address very serious problems in the financial markets, which many experts persuasively argue is essential to help avert a meltdown in the financial markets and a potentially severe recession. The problems in the financial sector, however, are not the only ones the … -
An Examination of the Wyden-Bennett Health Reform Plan
September 24, 2008
Click here for an up-to-date listing of recent Center health reform analyses. Introduction and Executive Summary The U.S. health care system suffers from a number of serious problems. According to the latest Census data, 45.7 million individuals were without health insurance in 2007, an increase of 5.9 million people since 2001. Employer-based coverage, the … -
North Dakota's Measure 2 is Imbalanced and Would Harm Efforts to Secures State's Economic Future
September 18, 2008
North Dakota’s proposed Measure 2, a major change to the state’s income tax that will appear on the November ballot, would be detrimental to the state for three principal reasons: Measure 2 is risky and short-sighted. Measure 2 would cost the state a very large amount of revenue — some $400 million per … -
Press Release: “Measure 2” Would Set up North Dakota for Future Bust, Not Long-Term Growth
September 18, 2008
A ballot measure to cut taxes that North Dakota voters will consider this November could create major budget problems and hamper investments needed for long-term economic growth, according to a new report by the Center on Budget and Policy Priorities, a nonpartisan policy research organization based in Washington, DC. The measure is among the most radical such … -
How Projected Surpluses Became Deficits
September 12, 2008
The federal budget is projected to run a $546 billion deficit in 2009, compared with the $710 billion surplus that budget experts projected for 2009 back when President Bush took office nearly eight years ago. This $1.3 trillion deterioration in the nation’s fiscal finances for 2009 can be seen by comparing estimates that the … -
Policy Brief Changing Medicaid and SSI Rules to Encourage Retirement Saving
September 12, 2008
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Removing Barriers to Retirement Saving in Medicaid and Supplemental Security Income
September 12, 2008
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Bonus Depreciation Tax Cut Unlikely To Provide Effective Economic Stimulus
September 10, 2008
Stimulus legislation enacted in February included a provision that increased the tax deduction which businesses can claim when they purchase certain types of equipment and place it in service during the 2008 tax year. Suggestions are being made that this “bonus depreciation” provision — a form of accelerated … -
Using TANF or MOE Funds to Provide Supplemental Assistance to Low-Income Working Families
Updated September 8, 2008
As states revisit their welfare reform approaches in the wake of the TANF changes in the Deficit Reduction Act of 2005 (DRA), a number of states have implemented or are considering policies that expand support to low-income working families, particularly those transitioning into employment and off of basic TANF assistance programs. In most states, families lose eligibility for TANF cash … -
Statement by Chad Stone, Chief Economist, on the August Employment Report
September 5, 2008
Today’s extremely disappointing employment report shows that the economy remains mired in a slump and still waiting for something to jump start a sustainable recovery. Consumer spending supported by the stimulus payments that Congress enacted earlier this year helped keep the economy growing … -
Rhode Island's Medicaid Proposal Would Put Beneficiaries at Risk and Undermine the Federal-State Partnership
September 4, 2008
On August 8, Rhode Island applied for federal permission to radically transform its Medicaid program in ways that could profoundly affect beneficiaries.[1] If approved, the proposal could also set a national precedent that would affect low-income people in other states who rely on Medicaid to obtain needed health care. The proposal … -
How Robust Was the 2001-2007 Economic Expansion?
Updated August 29, 2008
Proponents of the 2001 and 2003 tax cuts often argue that the economic and employment growth of the past several years establishes that these tax cuts “worked” and had strong beneficial effects. More recently, some have also argued that, with growth slowing, new tax cuts are needed and would reinvigorate the economy. It now appears likely that the economic expansion that … -
Podcast: Examining the New 2007 Census Data on Poverty, Income, and Health Insurance Coverage
August 26, 2008
This podcast covers the following: What do the new data show about poverty and poverty trends for the population as a whole and for specific demographic groups such as children and racial minorities? What do the data show regarding trends in income and in income disparities? What do the data show about the number and … -
Poverty and Share of Americans Without Health Insurance Were Higher in 2007 - And Median Income for Working-Age Households Was Lower - Than at the Bottom of Last Recession
August 26, 2008
The number of Americans in poverty climbed by 816,000 in 2007, while the poverty rate remained statistically unchanged, overall median income rose modestly, and the number and percentage of Americans without health insurance fell somewhat, according to Census data issued today. But the poverty rate remained higher, median income for working-age … -
Robert Greenstein on Census' 2007 Income, Poverty, and Health Insurance Data
August 26, 2008
Despite modest improvements in overall median income and health insurance coverage, the new Census data are disquieting. Though 2007 was the sixth (and likely the final) year of an economic expansion, 4.4 million more Americans were poor, the median income of non-elderly households was $1,100 lower, and nearly 6 million more Americans were uninsured than in 2001 — … -
What to Watch For in the New Census Income and Poverty Numbers
August 21, 2008
On August 26 the Census Bureau will release findings on household income and poverty for 2007. These figures may well show that median income increased modestly and poverty declined modestly in 2007, the typical pattern for years well into an economic expansion. While improvements in incomes and poverty would … -
Caution: the Tax Foundation's State and Local Tax Rankings are Unreliable
Revised August 13, 2008
As it has annually for several years, the Tax Foundation has attempted to measure the current impact of state and local taxation on the residents of each of the 50 states. And once again, the results are very different from the Tax Foundation’s own previous attempts to do this calculation. The Tax Foundations figures — both the … -
Only a Few of the 2001 and 2003 Tax Cut Provisions Benefit Families with Modest Incomes: But a Superficial Treasury Analysis Obscures this Fact
August 7, 2008
A recent Treasury Department release, “Tax Relief in 2001 Through 2011,” shows the reduction in taxes that four hypothetical families with modest incomes are receiving as a result of “legislation enacted during the President’s term in office.”[1] The implication of the release is that the 2001 and 2003 … -
Statement by Chad Stone, Chief Economist, on the July Employment Report
August 1, 2008
Today’s disappointing employment report lends greater urgency to lawmakers’ efforts to craft a second round of effective economic stimulus legislation that Congress can enact quickly when it returns in September. Consumer spending supported by the stimulus payments that Congress … -
Testimony of Robert Greenstein on Widening Income Inequality in the United States Before the Subcommittee on Workforce Protections Committee on Education and Labor
July 31, 2008
Thank you for the invitation to testify about widening income inequality in the United States. As former Federal Reserve chairman Alan Greenspan has said, “this is not the type of thing which a democratic society — a capitalist democratic society — can really accept without addressing," and I commend the subcommittee for holding this hearing. … -
Medicare Changes Can Complement Health Reform
July 31, 2008
The U.S. health care system faces well known problems: 47 million people without health insurance, rapidly rising costs that consume 16 percent of the country’s economic output, and uneven quality of care. At the same time, Medicare — the federal program that provides health coverage for older Americans and … -
Evidence Shows That Tax Cuts Lose Revenue
Revised July 21, 2008
The claim that tax cuts “pay for themselves” — i.e., cause so much economic growth that revenues rise faster than they would have without the tax cut — has been made repeatedly in recent years and is one of the many tax policy issues that is likely to receive renewed attention in light of the upcoming … -
Lessons From The Telephones Lifeline Program Add To Concerns About Using Utilities to Deliver Low-Income Climate Rebates
July 18, 2008
Protecting the budgets of low-income consumers is a critical issue in the design of climate change legislation. The Lieberman-Warner Climate Security Act recently debated in the Senate contained a measure that relied primarily on electric and gas utilities to deliver such relief. However, evidence from the only existing federal program that delivers … -
National and State Voucher Utilization Data, 2004 - 2008
July 16, 2008
This page is no longer being updated. For the most recent data on federal rental assistance please see this page. Of the 2,191,371 vouchers authorized for agencies nationwide, only 90 percent were used by families last year. In contrast, 96 percent of authorized vouchers were used in 2004, before policy changes and underfunding led to a decline in … -
Statement by Edwin Park, Senior Fellow, on the President's Veto of the Medicare "Doctor Fix" Bill
July 15, 2008
Contrary to the President’s claim today, the Medicare bill would not “harm beneficiaries by taking private health plan options away from them.” It would merely slow the explosive growth in private fee-for-service plans, the most overpaid and least efficient private Medicare plans. Under the bill, overall enrollment in Medicare … -
Smaller Deficit Estimate No Surprise: New OMB Estimates Do Not Support Claims About Tax Cuts
Revised July 13, 2008
The Office of Management and Budget today released a report estimating that revenues for the current fiscal year will be higher, and the deficit lower, than the administration and the Congressional Budget Office projected five months ago. OMB now estimates that the deficit for fiscal year 2007 will be $205 billion, down from the $244 billion estimate in the President’s budget in … -
A Balanced Approach to Restoring Fiscal Responsibility
July 9, 2008
In a recent paper, “Taking Back Our Fiscal Future,” a group of policy analysts from several Washington think tanks proposed a radical change in budget procedures related to Social Security, Medicare, and Medicaid as a way to address budget deficits projected for future decades. They urged Congress to establish 30-year budgets, or caps, for these programs. The White House would conduct a review every five years. If it projected that expenditures would exceed the caps, the programs would face automatic cuts or related tax increases.
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Policy Points: Controversial Provision of "Doctor Fix" Bill Would Improve Medicare and Help Keep Bill Deficit-Neutral
July 7, 2008
When the Senate returns from its July 4th recess, it is expected to reconsider H.R. 6331, the Medicare “doctor fix” bill that failed to advance by one vote last month. Despite overwhelming bipartisan support in the House (which passed it by a 355-59 vote), the bill stalled in the … -
Farm Bill Contains Significant Domestic Nutrition Improvements
Revised July 1, 2008
The 2008 Farm Bill makes numerous improvements in domestic food assistance programs to help low-income Americans put food on the table in the face of rising food and fuel prices. The nutrition title includes more than $10 billion over ten years in increases in these programs — including $7.8 billion for the Food Stamp … -
Food Stamp Provisions of the Final 2008 Farm Bill
Revised July 1, 2008
The Food, Conservation and Energy Act of 2008,[1] otherwise known as the “Farm Bill,” includes a significant nutrition title that makes numerous improvements to the Food Stamp Program. Of the more than $10 billion over ten years in increases in domestic nutrition programs, $7.8 billion is for the Food Stamp Program (soon … -
Implementing New Changes to the Food Stamp Program: A Provision By Provision Analysis of The 2008 Farm Bill
July 1, 2008
The 2008 Farm Bill makes numerous improvements to the Food Stamp Program that will help low-income Americans put food on the table in the face of rising food and fuel prices.[1] Over the 2009-2017 period, the Farm Bill will add $7.8 billion in new resources for the program, according to the Congressional Budget Office (CBO).… -
New Georgia and Florida Health Plans Unlikely to Reduce Ranks of Uninsured
July 1, 2008
This year, Georgia and Florida — states in which the percentage of people who are uninsured is well above the national average of 18 percent — have enacted legislation aimed at decreasing the number of uninsured residents. Georgia created new tax breaks for high-deductible health plans, while Florida will allow private … -
States’ Vehicle Asset Policies in the Food Stamp Program
Revised July 1, 2008
States have great flexibility to set the food stamp vehicle asset policies to ensure that needy households can get the help they need and still have reliable transportation. Forty six states have used this flexibility to exempt at least one vehicle from consideration in determining food stamp eligibility. However, nine states still limit the value of the cars participants … -
Expanding Medicaid a Less Costly Way to Cover More Low-Income Uninsured Than Expanding Private Insurance
June 26, 2008
Average medical expenditures[1] per person are lower under public programs like Medicaid or the State Children’s Health Insurance Program (SCHIP) than under private insurance, according to new research published by Health Affairs.[2] The new research, by Leighton Ku of George Washington University and Matthew Broaddus of the Center on Budget and Policy … -
Testimony of James Horney on Addressing the Nation's Financial Challenges
June 26, 2008
Chairman Carper, Senator Coburn, Members of the Committee, thank you for the opportunity to appear here today to talk about the long-term fiscal problems facing the United States. My name is James Horney. I am the Director of Federal Fiscal Policy at the Center on Budget and Policy Priorities, which is a non-partisan, non-profit … -
Testimony of Robert Greenstein at the Hearing on the SAFE Commission Act and the Long-Term Fiscal Challenge
June 24, 2008
Mr. Chairman and Mr. Ryan, thank you for inviting me to testify today. My testimony will focus primarily on the general question of whether a “budget commission” would be useful at this point as a way to address the serious long-term fiscal problems the nation faces. I would like to make three principal observations. First, the … -
Property Tax Limitation in the Senate Housing Bill is Unnecessary, Impractical, and Likely to Cause Harm
June 23, 2008
Legislation that the Senate is considering in response to the ongoing foreclosure crisis (H.R. 3221) includes a provision that would allow non-itemizers to deduct property taxes up to an amount of $500 for an individual and $1,000 for a couple.[1] It would deny the deduction, however, to residents of any locality that raises its … -
House-Passed Housing Tax Package Improves Significantly on Senate Version: But Addressing the Foreclosure Crisis Will Require Other Measures
Revised June 17, 2008
On April 10, the Senate passed a bill comprised largely of housing-related tax cuts. [1] Six weeks later, the House passed its own housing legislation including its own package of housing-related tax measures. Some of the provisions in House-passed housing tax package have merit, and the House-passed tax package represents a … -
The Unemployment Rate Is Already High Enough to Warrant Extended Benefits
Revised June 16, 2008
On June 6, the U.S. Department of Labor reported that the unemployment rate had risen sharply, to 5.5 percent. Legislation is moving on Capitol Hill to provide additional weeks of unemployment insurance (UI) benefits to people whose regular benefits run out before they can find a new job. (The House passed such legislation June 12.) … -
Policy Points: "Tax Extenders" Bill the Latest Test of Congress's Commitment to Fiscal Discipline
June 10, 2008
“Tax extenders” legislation now before the Senate has become the latest battleground in the intensifying debate over whether Congress should abide by its “pay-as-you-go” (PAYGO) rules and pay for new tax and budget measures so they don’t expand the deficit. Opposition to abiding by PAYGO is also impeding congressional action to extend Alternative Minimum Tax relief … -
Statement by Chad Stone, Chief Economist, on the May Employment Report
June 6, 2008
Today’s disappointing employment report should lead the White House to reconsider its opposition to extending unemployment insurance benefits for workers who have been unable find a new job. A temporary extended benefits program for workers who exhaust their regular unemployment insurance … -
Well-Designed, Fiscally Responsible Corporate Tax Reform Could Benefit the Economy: Unpaid-For Rate Cuts Would Likely Hurt Most Americans in the Long Run
June 4, 2008
Over the past year, proposals for federal corporate tax cuts and corporate tax reform have received increasing attention. The corporate income tax appears to have joined the long list of tax issues likely to be addressed, or at least debated, over the next few years. Already, two different approaches have emerged. In … -
How Low-Income Consumers Fare in the Senate Climate-Change Bill
June 3, 2008
On June 2, the Senate began consideration of S. 3036, the Lieberman-Warner Climate Security Act of 2008. This is landmark legislation that would establish a cap on U.S. greenhouse-gas emissions — a critical step forward in the fight against global warming. It would do so without endangering future economic growth and … -
Suozzi's Statement Ignores Truth About Massachusetts' Property Tax Cap
May 28, 2008
On May 21, the Center on Budget and Policy Priorities released a report, “Hidden Consequences: Lessons from Massachusetts for States Considering a Property Tax Cap.” The same day, Thomas Suozzi, the Chairman of New York’s Property Tax Relief Commission, issued a … -
Claims That a Modest Tax Surcharge on Millionaires Would Damage Small Businesses and the Economy Do Not Withstand Scrutiny
Revised May 22, 2008
Supplemental appropriations legislation that the House of Representatives approved last week (H.R. 2642) would impose a modest income tax surcharge on couples with adjusted gross income above $1 million (and singles with AGI above $500,000) to fund an expansion of higher education benefits for veterans.[1] The surcharge would be … -
The Congressional Budget Plan
May 22, 2008
On May 20, House and Senate negotiators reached agreement on a congressional budget plan for fiscal year 2009 (S.Con.Res. 70), which the House and Senate plan to vote on by the end of this week. This paper provides a brief analysis of the plan and how it compares with the budget President Bush submitted earlier this year. Current … -
Press Release: New York Shouldn't Look to Massachusetts as a Model for Property Tax Reform, Report Shows
May 21, 2008
With New York’s Commission on Property Tax Relief planning to recommend that the state impose a rigid cap on property taxes for education based on Massachusetts’ Proposition 2 ½, a new report from the Washington, D.C.-based Center on Budget and Policy Priorities describes the problems the law has … -
Improving the Medicare Savings Programs Would Help Low-Income Seniors Cope With Higher Medical Expenses
May 20, 2008
Bipartisan Senate negotiators are crafting Medicare legislation that would avert a cut in physician payments scheduled to take effect at the end of June. This legislation could also include long-overdue improvements to the Medicare Savings Programs, which help low-income Medicare beneficiaries pay their premiums and cost-sharing. … -
Statement by Robert Greenstein, on Misleading Claims That Congressional Budget Plan Calls For "Largest Tax Increase In History"
May 20, 2008
Some claim that the budget plan of the conferees — which the House and Senate are scheduled to consider this week — would constitute “the largest tax increase in history.” This claim is inaccurate, just as the same claim was inaccurate with regard to the budget … -
GAO Study Again Confirms Health Savings Accounts Primarily Benefit High-Income Individuals
May 19, 2008
A new Government Accountability Office (GAO) report indicates that Health Savings Accounts are used disproportionately by affluent households. Its findings also suggest that HSAs are being used extensively as tax shelters.[1] What Are Health Savings Accounts and Why Are They Attractive as Tax Shelters? Established by the 2003 … -
Improving the Refundable Child Tax Credit
Revised May 19, 2008
Because of their potential impact in reducing child poverty and hardship, proposals to improve the refundable Child Tax Credit have garnered significant bipartisan support. In the Senate, Olympia Snowe (R-ME) and Blanche Lincoln (D-AR) have introduced legislation that would begin to address key flaws in the credit's structure. In … -
Missouri's Proposed Voting Requirement Could Disenfranchise More Than 200,000 U.S. Citizens
May 15, 2008
Missouri’s legislature is considering a constitutional amendment permitting the state to require residents to provide documentary proof of their U.S. citizenship in order to vote. If implemented, it risks disenfranchising large numbers of Missouri residents who are U.S. citizens. The amendment does not specify the forms … -
Statement by Robert Greenstein on the House Supplemental Funding Bill
May 15, 2008
The House supplemental funding bill makes important changes to domestic policy by temporarily extending unemployment benefits and imposing a moratorium on harmful Medicaid regulations. The unemployment measure would provide, on a temporary basis, an extra 13 weeks of jobless benefits to workers … -
How CBO Estimates the Cost of Climate-Change Legislation
May 13, 2008
When the Congressional Budget Office prepares cost estimates for climate-change legislation, those estimates reflect what is known as a “25-percent income and payroll tax offset.” As a result of this offset, the net revenue estimated to be generated by an auction of emissions allowances under a cap-and-trade program or … -
Informing the Debate About Curbing Medicare Advantage Overpayments
May 13, 2008
Bipartisan Senate negotiators are now working on the details of Medicare legislation that would avert a cut in physician payments scheduled to take effect at the end of June. This legislation could also serve as an opportunity to curb, at least to a modest extent, overpayments to private insurance plans that … -
Brochure: Climate-Change Policies Can Treat Poor Families Fairly and Be Fiscally Responsible
Revised May 12, 2008
The United States can reduce greenhouse-gas emissions in a way that does not increase poverty or otherwise harm low-income households and is fiscally responsible. As part of any global warming legislation, Congress should take steps to protect low- and moderate-income consumers. Efficient, effective policies to reduce greenhouse-gas … -
Eliminating Louisiana's Income Tax Will Harm the State's Budget Outlook, Competitiveness
Revised May 12, 2008
On April 29, the Louisiana Senate voted to phase out the state’s income tax over 10 years without proposing any replacement revenues. The House Ways and Means Committee is expected to consider this proposal, along with others that would significantly cut the income tax but not eliminate it, on Monday May 12. The desire to cut … -
Senate Housing Legislation Highly Disappointing: Less Than One-Fourth of Cost of Senate Bill Goes for Provisions That Will Actually Help Address the Foreclosure Crisis
Revised May 12, 2008
On April 10, the Senate passed legislation that its supporters say will help struggling families hold on to their homes and assist the communities hit hardest by the foreclosure crisis. Measures that would help achieve these goals, however, account for less than one-fourth of the bill’s cost. The remainder of the cost comes … -
Designing Climate-Change Legislation That Shields Low-Income Households from Increased Poverty and Hardship
Revised May 9, 2008
Efficient, effective policies to reduce greenhouse-gas emissions work in part by raising the prices of fossil-fuel energy products to encourage energy efficiency and the substitution of clean energy sources for fossil fuel. This is essential to prevent extensive environmental and economic damage from climate change. However, it … -
Tax Cuts: Myths and Realities
Updated May 9, 2008
Since 2001, the Administration and Congress have enacted a wide array of tax cuts, including reductions in individual income tax rates, repeal of the estate tax, and reductions in capital gains and dividend taxes. Nearly all of these tax cuts are scheduled to expire by the end of 2010. Making them permanent would cost about $4.4 trillion over the next decade (when the cost of … -
The Effects of Climate-Change Policies on the Federal Budget and the Budgets of Low-Income Households
Revised May 9, 2008
Effective measures to reduce greenhouse-gas emissions can be compatible with sound budgeting and the fair treatment of low-income consumers. Designing a policy that meets these objectives requires, however, that lawmakers be mindful not just of the environmental consequences of their actions but of the budgetary and distributional … -
Statement by Barbara Sard, Director of Housing Policy, on House Action on Foreclosure Legislation
May 7, 2008
Two essential elements of an effective federal response to the foreclosure crisis are stabilizing communities hard hit by foreclosures and helping renters who lose their homes to foreclosure through no fault of their own. The Neighborhood Stabilization Act (H.R. 5818), which the House plans to … -
How Much Would a State Earned Income Tax Credit Cost in 2009?
May 5, 2008
Twenty-three states have enacted tax credits for low- and moderate-income working families based on the federal Earned Income Tax Credit. A number of additional states are considering enacting EITCs in the 2008 legislative session. The following provides guidelines that policymakers and others can use to estimate … -
HUD Budget Contains Major Funding Shortfalls
May 5, 2008
Last year, Congress rejected deep cuts the Administration proposed in affordable housing and community development programs and funded the Department of Housing and Urban Development at $2.1 billion above the Administration’s budget request for 2008. For 2009, Congress will have to provide a substantially larger increase — totaling … -
Federal Spending, 2001-2008: Defense Is a Rapidly Growing Share of the Budget, While Domestic Appropriations Have Shrunk
Revised March 6, 2008
Both last year and this year, President Bush called for large funding increases for defense and related programs while demanding considerable restraint in domestic appropriations. And this year, like last year, he has threatened to veto appropriations bills if Congress does not adhere to his tight domestic levels. Some may think … -
Statement by Chad Stone, Chief Economist, on the April Employment Report
May 2, 2008
Today’s employment report provides no comfort to those who want to work but can’t find a job, especially those who have exhausted their regular unemployment insurance benefits or soon will. Congress should quickly enact temporary extended unemployment benefits both to support the … -
Joint Tax Committee Estimate Shows That Tax Gimmick Being Designed To Evade Senate Budget Rules Would Increase Long-Term Deficits
Revised April 26, 2008
House and Senate conferees negotiating an agreement on the tax reconciliation bill are widely reported to have decided to use a change in Roth IRAs to help “offset” the cost of capital gains and dividend tax cuts in years after 2010. If the tax reconciliation bill increases the deficit after 2010, it would violate a Senate rule that a … -
Delaying Adminstration's Medicaid Regulations Will Not Weaken the Program's Fiscal Integrity
April 25, 2008
The Bush Administration has threatened a veto of H.R. 5613, the “Protecting the Medicaid Safety Net Act of 2008,” which the House passed 349-62 on April 23.[1] The bill would place a moratorium until April 1, 2009 on seven Medicaid regulations that the Administration has issued over the past year. H.R. 5613 would delay … -
Testimony of Robert Greenstein, Executive Director, Center on Budget and Policy Priorities at the Hearing on the Tax Aspects of a Cap-and-Trade System, Senate Committee on Finance
April 24, 2008
Strong and effective measures are needed to reduce greenhouse gas emissions and prevent costly and potentially catastrophic environmental and economic damage as a result of climate change. The Center on Budget and Policy Priorities’ area of expertise is not in environmental policy per … -
Tax Foundation Figures Do Not Represent Typical Households' Tax Burdens: Figures May Mislead Policymakers, Journalists, and the Public
April 23, 2008
Each year, the Tax Foundation releases a report projecting “Tax Freedom Day,” which it describes as the day when Americans will have “earned enough money to pay this year’s tax obligations at the federal, state, and local levels.”[1] The Tax Foundation’s “Tax Freedom Day” report is plagued by two major problems. First, its … -
Video: CNN Features Elizabeth McNichol on Rising Income Inequality
April 23, 2008
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Policy Points: Experts Agree That Capital Gains Tax Cuts Lose Revenue
Revised May 7, 2007
During Wednesday’s Democratic presidential debate, Charles Gibson of ABC News made the following statements about capital gains taxes: “Bill Clinton in 1997 signed legislation that dropped the capital gains tax to 20 percent and George Bush has taken it down to 15 percent and in … -
Testimony: Enhancing Affordable Housing Opportunities: Reforming the Housing Voucher Program"
April 16, 2008
I am Barbara Sard, Director of Housing Policy for the Center on Budget and Policy Priorities. The Center is an independent, nonprofit policy institute that conducts research and analysis on a range of federal and state policy issues, with particular emphasis on fiscal policies and policies affecting low and moderate-income families. We receive no government … -
Fixing TABOR's "Ratchet" Will Not Repair TABOR
April 10, 2008
Proponents of adopting a tight TABOR limit in Florida sometimes claim that Florida would not experience the same negative effects on the economy and public services that occurred in Colorado. They argue that Colorado’s problems stemmed entirely from one feature of its TABOR, the so-called “ratchet.” (The ratchet, … -
State Fact Sheets: Income Inequality Over the Past Two Decades
April 9, 2008
Income Inequality Within the States: Ratio: Incomes of Top Fifth of Families Compared to Incomes of Bottom Fifth of Families State-specific fact sheets containing information on income inequality over the past two decades, including the changes in average incomes and income ratios, are provided through the links below. … -
Pulling Apart: A State-by-State Analysis of Income Trends
April 9, 2008
I. Executive Summary A state-by-state examination of trends in income inequality over the past two business cycles finds that inequality has grown in most parts of the country since the late 1980s. The incomes of the country’s highest-income families have climbed substantially, while middle- and lower-income families have … -
Press Release: Income Inequality Grew in Most States Over Past Two Decades
April 9, 2008
The gap between the richest and poorest families, and between the richest and middle-income families, grew significantly in most states over the past two decades, according to a new study by the Center on Budget and Policy Priorities and the Economic Policy Institute. In fact, the nation’s … -
Press Release: Mississippi's Income Inequality Among Nation's Worst
April 9, 2008
The gaps between the incomes of the rich and the poor, and the rich and the middle class, have grown more in Mississippi since the late 1990s than in any other state, according to a new study by the Center on Budget and Policy Priorities and the Economic Policy Institute, two Washington, DC-based … -
Video: CNN Reports on the Center's Income Inequality Analysis
April 9, 2008
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Statement by Chad Stone, Chief Economist, on the March Employment Report
April 4, 2008
Today’s disappointing employment report makes one thing clear: Congress should quickly enact temporary extended unemployment insurance benefits, both to support the slumping economy and to provide needed assistance to workers who have been looking for work for more than half a year and have … -
Press Release: Most Large Iowa Manufacturers Already Comply With Proposed Corporate Tax Reform in Other States
April 3, 2008
Almost all major Iowa manufacturers maintain facilities in other states that have adopted a corporate tax reform measure known as “combined reporting” — including several outspoken opponents of Governor Culver’s proposal to adopt combined reporting in Iowa, according to … -
Almost All Large Iowa Manufacturers Are Already Subject to "Combined Reporting" in Other States
April 3, 2008
For the second year in a row, Governor Chet Culver has recommended that the Iowa legislature enact an important reform in the state corporate income tax known as “combined reporting.” Some Iowa corporations have opposed this change, claiming that it would result in some companies leaving the state or shunning Iowa for … -
Statement by Iris Lav, Deputy Director, on Provision in Bipartisan Senate Housing Package Affecting Local Property Taxes
April 3, 2008
While the Senate housing package would establish a new property tax deduction for non-itemizers, a little-noticed provision of the bill would deny the new deduction to any resident of a locality that raises its property tax rate between April 2 and next January 1. By preventing localities from … -
Slideshow: Putting Tax Cuts into Context
Updated April 2, 2008
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Trustees Reports Show Social Security Shortfall Manageable, Medicare's Problems More Daunting
Revised April 2, 2008
The annual reports of the Social Security and Medicare trustees project the financial status of these two programs for the next 75 years. The new reports confirm that policymakers will need to take action to keep Social Security and Medicare on a sound financial footing. In evaluating the new reports, the reader should keep several … -
Long-Term Social Security Shortfall Smaller Than Cost of Extending Tax Cuts for Top 1 Percent
March 31, 2008
The Social Security trustees’ report issued this week estimates that Social Security faces a total shortfall over the next 75 years of 0.56 percent of Gross Domestic Product (GDP). This is slightly less than the estimated cost over that same period of extending the 2001 and 2003 tax cuts just for the top 1 percent of … -
Extending the President's Tax Cuts and AMT Relief Would Cost $4.4 Trillion Through 2018
Revised March 28, 2008
President Bush continues to urge that the tax cuts enacted in 2001 and 2003 be made permanent. Despite the severe long-term budget shortfalls the nation faces, the Administration has not proposed measures to offset the cost of extending these tax cuts. Nor has it proposed measures to pay for extending relief from the … -
The Skewed Benefits of the Tax Cuts: With the Tax Cuts Extended, Top 1 Percent of Households Would Receive Almost $1.2 Trillion in Tax Benefits Over the Next Decade
Revised March 28, 2008
Under current law, nearly all provisions of the 2001 and 2003 tax cuts are scheduled to expire at the end of 2010. The President’s budget calls for making these tax cuts permanent. The enacted tax cuts and their extension carry a high cost. This raises the question: how would the large sums involved be … -
Capital Gains Tax Cuts Slashed Taxes of Top 400, While Their Incomes SoaredCapital Gains Tax Cuts Slashed Taxes of Top 400, While Their Incomes Soared
March 27, 2008
New Internal Revenue Service (IRS) data show that the 400 U.S. taxpayers with the very highest incomes pay only 18 percent of their income, on average, in federal individual income taxes. The data, published by the Wall Street Journal and the Urban-Brookings Tax Policy Center, provide detailed income and tax information for the 400 tax filers with the highest adjusted gross incomes (AGI) in … -
What the 2008 Trustees’ Report Shows About Social Security
March 27, 2008
Executive Summary On March 25, the Social Security Board of Trustees released the 68th annual report on the program’s financial and actuarial status. The report projects that Social Security’s trust fund reserves will be exhausted in 2041, the same as projected last year. In 2041, Social Security will be … -
A Response to Americans for Prosperity's Misleading Claims About Florida's TABOR (CP 45)
March 25, 2008
Americans for Prosperity recently issued a critique of the Center on Budget and Policy Priorities’ analysis of the Florida Taxation and Budget Reform Commission’s revenue cap proposal. In its critique, Americans for Prosperity made several false claims. This analysis addresses the major flaws in their critique. There is no disagreement between the Center and Americans for Prosperity about the large size of the … -
Statement By Robert Greenstein Executive Director On The New Reports From The Social Security And Medicare Trustees
March 25, 2008
Today’s reports demonstrate again that policymakers will need to take action to shore up Social Security and Medicare finances, with the challenge being more modest in Social Security and more daunting in Medicare. Social Security The reports show that Social Security will be able to pay full benefits until 2041 and to pay 75 … -
Administration Moves to Withdraw Key Health Services from Children and Adults with Mental Illness and Other Disabilities
Revised March 21, 2008
On August 13, 2007, the Centers for Medicare and Medicaid Services issued a proposed regulation that would eliminate federal Medicaid funding for important services provided to adults and children with disabilities (particularly those with mental illness), as well as other beneficiaries. The rule would significantly limit states’ … -
Press Release: Commission's Revenue Cap Proposal Would Require Cuts in Education, Health, and Safety, and Harm Business Climate
March 21, 2008
Florida would likely suffer significant cuts in education, public health, public safety, infrastructure and other priorities under the revenue cap proposal the Taxation and Budget Reform Commission will consider on Wednesday, March 26, according to the Washington, DC-based Center on Budget and Policy Priorities (CBPP). The constitutional … -
The Tax Commission's TABOR: A Path to Deterioration in Florida
March 21, 2008
The Taxation and Budget Reform Commission will soon consider placing an amendment on the ballot to tightly limit revenue growth for state and local governments.[1] This proposal, CP 45, deserves a great deal of attention because it shares the fundamental characteristics of Colorado’s Taxpayer Bill of Rights (TABOR): it is a … -
Fact-Checking the Budget Resolution Debate
Revised March 13, 2008
In the ongoing debates over the House and Senate budget resolutions, some members of Congress have made questionable or inaccurate statements regarding various issues. This brief factsheet, which will be updated as needed throughout the debates, corrects the record regarding some of the most egregious examples. 1. “Eighteen million seniors will see their … -
Policy Points: Four Helpful Hints for States Dealing With Deficits
March 12, 2008
States, facing their worst fiscal problems in five years, should consider the following four policy options when dealing with deficits: (1) protect their revenues from the effects of federal tax changes, (2) tap their "rainy day funds," (3) don't rule out revenue increases, and (4) avoid "stimulus" tax cuts. At least 25 states, including several of the … -
Kyl Estate Tax Amendment Would Cost Nearly As Much As Estate Tax Repeal
March 12, 2008
Permanent repeal of the estate tax would reduce revenues by almost $1 trillion between 2012 and 2021, the first ten-year period in which its costs would be fully felt. With the economy slowing and deficits returning — and with far larger deficits projected for future years — there is increasing recognition that … -
Accounting for the Cost of Retiree Health and Other Benefits (GASB 45)
March 11, 2008
New rules issued by the Governmental Accounting Standards Board (GASB) that change the way states account for the future cost of health and other non-pension benefits for retirees will force states to make some hard choices. For the first time, state and local governments must treat the costs of health and other non-pension … -
Have the 2001 and 2003 Tax Cuts Made the Tax Code More Progressive?
March 11, 2008
Supporters of extending the 2001 and 2003 tax cuts claim that these tax cuts’ benefits have been broadly and fairly distributed. Some argue that the tax cuts have actually made the tax system more progressive, pointing to Congressional Budget Office (CBO) data showing that the share of total federal … -
Senate Bill Would Update And Streamline Housing Voucher Program
March 10, 2008
On March 3, 2008, Senate Banking Committee Chair Chris Dodd, Senate Housing Subcommittee Chair Charles Schumer, and several other Senators introduced S. 2684, the Section 8 Voucher Reform Act (SEVRA). SEVRA would make significant changes to the “Section 8” Housing Choice Voucher program and related changes in other … -
Claim That Congressional Budget Plans Call for "Largest Tax Increase in History" is Inaccurate
March 7, 2008
Some are claiming that the budget plans adopted this week by the House and Senate Budget Committees — the full House and Senate are scheduled to consider their respective committee’s plan next week — would constitute “the largest tax increase in history.” This … -
Statement by Chad Stone, Chief Economist, on the February Employment Report
March 7, 2008
Today’s employment report adds to the mounting evidence that the economy is too weak to avoid more unemployment and shrinking job opportunities in the months ahead. Rather than wait too long, as it has in similar situations in the past, Congress should quickly enact temporary extended … -
Administration's Budget Does Not Reflect Administration Policies
March 5, 2008
Administration’s fiscal year 2009 budget released on February 4 did not fully reflect the Bush Administration’s policies. While claiming to reach a surplus of $48 billion by 2012, the budget projections omitted the costs of two policies central to the Administration. The Administration says it is committed … -
Strengthening the Food Stamp Program to Serve Low-Income Seniors
March 5, 2008
Many Americans do not realize that millions of seniors in our country live in poverty and cannot always afford an adequate diet. This is a complex problem requiring several responses, such as strengthening federal food assistance programs for seniors, improving Supplemental Security Income (SSI) benefits, and removing disincentives … -
Administration’s Medicaid Regulations Will Weaken Coverage, Harm States, and Strain Health Care System
Revised March 4, 2008
Over the last year, the Department of Health and Human Services (HHS) has issued a series of Medicaid regulations that could significantly affect health care at the state and local level. [1] These regulations, most of which alter longstanding Medicaid policies, do not require congressional approval. In fact, in some cases Congress … -
Economic Data Can be Used to Target State Fiscal Relief Effectively
March 3, 2008
States are experiencing major budget problems; more than half faced or are projecting deficits for the 2009 fiscal year. To meet their balanced budget requirements, many states have had to raise taxes and/or cut expenditures for services such as health care and education — actions that deepen the nation’s economic problems and offset some of … -
Fiscal Stimulus at the State Level?
February 29, 2008
Policymakers in many states are proposing tax cuts or rebates that they hope will “stimulate” their economies. Such proposals have been issued by governors and/or leading legislators in Alabama, Arizona, Connecticut, Florida, Illinois, Pennsylvania, and Wisconsin, among others. The proposals vary, but many are modeled at … -
Idaho is the Only State to Exclude Low-Income Families From Its Grocery Tax Credit
February 28, 2008
Idaho is one of seven states that taxes groceries at the same rate as other goods. It is one of five states that offer a credit or rebate to mitigate the tax. But even though the tax falls most heavily on low-income families, Idaho—unlike any other state—excludes many poor families (mostly working families) from … -
New Federal Law Could Worsen State Budget Problems
Revised February 28, 2008
The federal “economic stimulus” package enacted on February 13 not only cuts federal taxes, but also threatens to reduce many states’ corporate and personal income tax revenue this year and next year. The potential revenue loss comes at a particularly problematic time for states, because about half the states … -
Press Release: Idaho Stands Alone in Denying Grocery Tax Credit to Those Who Need it Most
February 28, 2008
With a slowing economy increasing the threat of hunger for many Idaho families, lawmakers should extend the state’s grocery tax credit to those who need it the most, according to a new report from the Washington, DC-based Center on Budget and Policy Priorities. Such action would undo a dubious … -
Net Operating Loss Measure under Consideration In Senate Has Low Bang-For-The-Buck As Stimulus: No Justification for Waiving PAYGO for the Provision
February 26, 2008
According to news accounts, the Senate will soon consider a housing stimulus package (S. 2636), introduced by Senator Reid earlier this month.[1] While the package primarily targets the housing market, it also includes a measure dealing with business net operating losses. A business experiences a “net operating … -
Is It Raining Yet? Yes, and It’s Time for Many States To Use Their Rainy Day Funds
February 21, 2008
Executive Summary After they emerged from the fiscal crisis earlier in the decade, many states began preparing for the next economic downturn by setting aside “rainy day funds,” or reserve accounts designed for use when revenues decline or expenditures increase unexpectedly because of downturns, natural disasters, or other events. A rainy day fund serves … -
Using Income Taxes to Address State Budget Shortfalls
February 21, 2008
States are on the brink of their worst fiscal problems since the 2001 recession. At least half the states are anticipating budget shortfalls for next year (fiscal year 2009). For those states that have estimated the size of the gap, estimated deficits range from $34 billion to $38 billion in total. Among affected states, … -
Bush Budget Would Cut Domestic Discretionary Programs by $20 Billion In 2009
February 20, 2008
The President’s 2009 budget would provide some $20.5 billion [1] less for domestic discretionary programs outside of homeland security — a broad category of programs that includes everything from child care to environmental protection to medical research — than the 2008 level, adjusted for inflation.[2] The … -
Summary of Final TANF Rules
February 20, 2008
The final TANF rule implementing changes due to the Deficit Reduction Act of 2005 was published in the Federal Register on February 5, 2008 at 73 Fed. Reg. 6772. The new rule finalizes, with some changes, the Interim Final Rule published on June 29, 2006. The Final Rule is effective October 1, 2008. The Deficit Reduction Act (DRA) provided HHS with broad new … -
Understanding Errors in the School Meals Programs
Revised February 19, 2008
The Agriculture Department recently published a rigorous study of error in the school lunch and breakfast programs. The results show a troubling degree of error in the programs. As USDA notes, changes to reduce program errors should improve accuracy without impeding program access or increasing paperwork. Moreover, the study could easily be misunderstood by … -
The President's Budget and the Medicare “Trigger”
Revised February 15, 2008
Today, the President submitted legislation to Congress that would ostensibly keep general revenues from covering more than 45 percent of overall Medicare costs in each year through at least 2013. Congress is supposed to consider the President’s proposal or a comparable proposal to avoid exceeding the 45-percent limit. Some have … -
State Low-Income Tax Reflief in the Absence of an Income Tax
Revised February 14, 2008
Most states target tax relief to low- and moderate-income households. In part, this is because without such relief, state and local taxes would absorb a much larger share of the income of poor and near-poor families than of families at higher income levels. This is particularly true in states that do not use a personal income tax, … -
Fact Sheet: The “Mother of All Distortions” - Attacks on Rangel AMT Plan Not Based On Reality
February 13, 2008
Republican congressional leaders have sharply attacked House Ways and Means Chairman Rangel’s proposal to replace the Alternative Minimum Tax with a tax surcharge for very-high-income households as a massive tax increase that would seriously damage, even “doom,” the economy. In fact, however, the Rangel plan … -
Testimony of Robert Greenstein on the Long- and Short-Term Budget Outlook
February 13, 2008
I am Robert Greenstein, executive director of the Center on Budget and Policy Priorities. The Center is an independent, nonprofit policy institute that conducts research and analysis on a range of federal and state policy issues, with particular emphasis on fiscal policies and policies … -
The Rangel AMT Proposal Versus Unpaid-For Repeal of the AMT: Which Is Better Tax Reform?
February 13, 2008
Last fall, House Ways and Means Committee Chairman Charles Rangel introduced major tax legislation (H.R. 3970) that would repeal the Alternative Minimum Tax and finance repeal by imposing an income tax surcharge on high-income households. The package also includes expansions of the Earned Income Tax Credit, refundable Child … -
President's Budget May Provide States With Inadequate Funding To Maintain Current SCHIP Programs
February 7, 2008
December 2007, Congress extended the expiring State Children’s Health Insurance Program through March 2009. As part of his fiscal year 2009 budget, the President proposes to reauthorize SCHIP through the end of fiscal year 2013. The budget proposal would provide an additional $19.7 billion to states for their SCHIP … -
The Dubious Priorities of the President's FY 2009 Budget
Revised February 7, 2008
The President’s budget would provide more tax cuts heavily skewed to the most well-off while cutting vital services for low- and moderate-income Americans, generating large deficits, and increasing the strain on states already confronting budget problems as a result of the economic downturn. The budget … -
2008 Omnibus Appropriations Bill Cuts Funding for Head Start
Revised February 6, 2008
This year, as in 2007, Congress and the President are likely to have a contentious debate about the appropriate level of overall funding for “appropriated” programs — the programs funded through the annual appropriations process, including most education, environmental, veterans, defense, and transportation … -
Federal Grants to States and Localities Cut Deeply in Fiscal Year 2009 Federal Budget
February 4, 2008
Grants to state and local governments have long been an important way in which the federal government supports and administers programs efficiently. The new budget, however, continues to significantly erode those grants. This leaves states and localities the option of either curtailing services or increasing their own taxes to … -
Policy Points: Despite Some Problems, Senate Finance Committee Measure More Effective as Stimulus Than House Bill
February 1, 2008
Some have charged that the Senate, by failing to simply rubber-stamp the House-approved stimulus package, is delaying the injection of stimulus into the economy. This charge is incorrect. Some also have criticized the specific stimulus measures approved by the Senate Finance Committee.… -
Senate Rebate Proposal Targets More Funds to Low-Income Households, Boosting Stimulus Impact: Lifting Income Cap Reduces Bang-for-the-Buck, But Changes Are an Improvement Overall
Revised February 1, 2008
The stimulus legislation that was adopted by the Senate Finance Committee on Wednesday would make several changes to the House-passed stimulus package, including significant changes to the tax rebate proposal that on balance would make the rebate more effective as stimulus. While retaining the House rebate’s basic structure, the Finance … -
Statement by Chad Stone, Chief Economist, on the January Employment Report
February 1, 2008
Today’s employment report provides fresh evidence both that the economy is slowing and that Congress should include a temporary extension of unemployment insurance benefits in its fiscal stimulus package. The percentage of the unemployed who have been looking for a job for more than half … -
Senate Action Will Not Delay Rebates
January 31, 2008
The facts are clear: Senate action on the stimulus package will not delay the rebates by a single day. The earliest that the IRS can begin to send out rebates is mid-May. No matter how fast Congress enacts the stimulus package, the IRS cannot start issuing the rebates any sooner because it must first process the 2007 … -
Senate Proposal to Add Unemployment Insurance Benefits Improves Effectiveness of Stimulus Bill
January 31, 2008
The economic stimulus package approved by the Senate Finance Committee contains an important improvement to the package the House passed January 29 — the addition of temporary extended unemployment insurance (UI) benefits. The Finance bill would make 13 weeks of additional UI benefits available to all jobless Americans who … -
House Bill Makes Significant Improvements In “Hope Vi” Public Housing Revitalization Program
Revised January 30, 2008
On January 17, the House of Representatives approved H.R. 3524, the HOPE VI Improvement and Reauthorization Act of 2007, by a vote of 271 – 130. The bill reauthorizes the program for 7 years, while making a number of important improvements. Historically, HOPE VI — which provides grants to public housing agencies to … -
Repatriation Measure Unlikely to Stimulate the U.S. Economy or Boost U.S. Investment — But Will Promote Investment in Tax Havens and Undermine the Corporate Income Tax
January 30, 2008
When the Senate Finance Committee considers stimulus legislation today, Senator John Ensign is expected to offer an amendment dealing with repatriated foreign earnings. Modeled on a provision included in the 2004 American Jobs Creation Act, Senator Ensign’s amendment would create a tax holiday during which repatriated … -
President's Expected Push to Make Tax Cuts Permanent is Irresponsible Fiscal and Economic Policy
January 28, 2008
In his State of the Union address this evening, President Bush is expected to renew his push to make his signature tax cuts permanent. In recent weeks, Administration officials have offered three major arguments for this policy — (1) the tax cuts yielded strong economic growth over the past few years, (2) extending them … -
Dispelling Confusion on Food Stamps, Tax Rebates, and the Stimulus Package: Speaker's Statement on Food Stamps at National Press Club Was Mistaken
January 26, 2008
House Speaker Nancy Pelosi made tough choices in the stimulus package, securing a tax rebate that includes most low-income working families while dropping provisions for temporary increases in unemployment and food stamp benefits. Unfortunately, in defending those choices at the National Press Club on Friday, she mistakenly provided an inaccurate description … -
An Analysis Of The Rebate Proposal In The Announced Stimulus Deal
January 25, 2008
The centerpiece of the stimulus deal announced yesterday by House Speaker Nancy Pelosi, House Minority Leader John Boehner, and Treasury Secretary Henry Paulson is a proposal to send rebate checks to 117 million U.S. households. The structure of the proposed rebate, while not ideal from a stimulus standpoint, is far superior to the … -
Paying More for Less
January 24, 2008
Following requests for federal assistance from states seeking to expand publicly-funded health coverage for the uninsured, the Bush Administration announced its “Affordable Choices” initiative in January 2007. Affordable Choices provides no new federal funds to states. It simply permits states to divert … -
Statement by Robert Greenstein: Reported Stimulus Package Would Provide Little Immediate Boost Due to Removal of Most Effective Provisions
January 24, 2008
Changes reportedly made last night in the stimulus package would reduce its effectiveness as stimulus. Although the package includes a reasonably designed tax rebate, the two most targeted and economically effective measures under consideration — a temporary extension of unemployment benefits and a temporary boost in food stamp … -
Testimony Of Robert Greenstein, Executive Director, Center On Budget And Policy Priorities Hearing On "Cap, Auction, And Trade: Auctions And Revenue Recycling Under Carbon Cap And Trade" Select Committee On Energy Independence And Global Warming
January 23, 2008
Strong measures are needed to reduce greenhouse gas emissions and prevent costly and potentially catastrophic environmental and economic damages from climate change. The Center on Budget and Policy Priorities’ area of expertise is not in environmental policy per se, but rather in the impacts that climate change policies … -
Tax Policy Center Estimates Show Fewer Than 60 Percent of Working Households Would Benefit In Full From President’s Proposed Rebate
January 22, 2008
The centerpiece of the President’s economic stimulus proposal reportedly is a tax rebate that would be provided by temporarily reducing the 10 percent income tax rate to zero. The plan has been described as featuring a rebate of $800 for individuals and $1,600 for couples. This description, however, is misleading. Only those … -
Zandi Analysis Finds Rebates More Effective As Stimulus If They Include Lower-Income Workers
January 22, 2008
A new analysis by Mark Zandi, chief economist of Moody’s Economy.com, examines the effectiveness of various stimulus options that policymakers are now discussing. Zandi’s findings, which cover both tax and spending options, include the following: A temporary increase in food stamp benefits is the most effective stimulus measure on the … -
Statement By Robert Greenstein Executive Director In Response to Administartion Comments on Economic Stimulus
January 18, 2008
In outlining its principles for economic stimulus today, the Administration helpfully called for measures that would be temporary and would take effect right away. At the same time, however, the Administration also included several principles that would substantially reduce the effectiveness of a stimulus package. First, … -
Administration Stimulus Plan Fails Tests for Achieving
January 17, 2008
The centerpiece of the President’s new stimulus plan — a rebate provided by temporarily eliminating the 10 percent income tax bracket — fails crucial tests for providing the most effective stimulus, because it is not targeted on the tens of millions of families most likely to spend that rebate. In so doing, … -
29 States Faced Total Budget Shortfall of at Least $48 Billion in 2009
January 15, 2008
For the most up-to-date information on state budget shortfalls, please view our newer analysis: "State Budget Problems Worsen: 13 States Face New Shortfalls" At least 29 states plus the District of Columbia, including several of the nation’s largest states, faced … -
Another Misdiagnosis: Marginal Rate Reductions and Extensions of Tax Cuts Expiring in 2010 Not the Right Medicine for the Economy’s Current Ills
January 15, 2008
Six months ago, the economy was growing steadily, and the President gave an address in which he claimed that the 2001 and 2003 tax cuts had brought about strong economic growth and should be made permanent to ensure strong growth over the long run.[1] Prominent conservatives recommended a corporate rate cut to make U.S. businesses … -
Comparison of Nutrition Provisions In House- and Senate-Passed Farm Bills
Revised January 14, 2008
The House passed its farm bill (H.R. 2419, the “Farm, Nutrition, and Bioenergy Act of 2007”) in July 2007. The Senate farm bill passed on December 14 (H.R. 2419, the “Food and Energy Security Act of 2007”). The two chambers are expected to begin negotiations on a conference agreement early in 2008. The attached … -
Description of Provisions In Senate Agriculture Committee Nutrition Title
Revised January 14, 2008
The Senate passed its 2007 Farm Bill, H.R. 2419, “The Food and Energy Security Act of 2007,” on December 14, 2007. The nutrition provisions of the bill include about $4.1 billion over five years in improvements for the Food Stamp Program and the Emergency Food Assistance Program (TEFAP), $1.0 billion for an expanded program under the School … -
The Four Pieces of Effective Fiscal Stimulus
January 14, 2008
Recent evidence that the economy has weakened significantly has sparked discussion of possible fiscal stimulus measures. To be effective, such measures must be timely, targeted, and temporary. Timely measures are those that, once triggered, stimulate new spending quickly so that … -
Principles for Fiscal Stimulus Economic Policy in a Weakening Economy
Revised January 11, 2008
The weak December jobs report that the Labor Department issued January 4 is the latest evidence the economy has weakened significantly and is now growing quite slowly. A number of economists continue to believe this slow growth will continue into 2008, but that the economy will avoid slipping into a recession.[1] Some … -
Food Stamp Improvements for More Than 10 Million People Would Disappear in 2013 Under Senate-Passed Farm Bill
January 8, 2008
The nutrition titles of the House- and Senate-passed farm bills are very similar over the first five years that the farm bill would be in effect (2008 through 2012). The House bill invests $3.9 billion — and the Senate $4.1 billion — over five years in food stamps and the Emergency Food Assistance Program (TEFAP).… -
Preliminary Analysis of the HUD Provisions of the Omnibus Appropriations Bill for FY 2008
Revised January 4, 2008
Here is a preliminary assessment of the HUD provisions of H.R. 2764, the Consolidated Appropriations Act of 2008 (or “omnibus”), which includes funding for programs administered by HUD and every other federal agency outside of Defense. The bill was approved by Congress on December 19 and signed into law by the President on … -
Statement by Chad Stone, Chief Economist, on the December Unemployment Report
January 4, 2008
Today’s report shows that the economy is entering 2008 with a weakening labor market. Employers expanded their payrolls by a meager 18,000 jobs in December, private payrolls actually shrank by 13,000 jobs, and the unemployment rate rose from 4.7 to 5.0 percent. These data are very …
