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Off the Charts Blog: House to Vote Tomorrow on Unprecedented Amendment that Would Increase Hardship and Hold Millions of the Most Vulnerable Americans Hostage to Farm-Bill Politics
June 19, 2013
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Higher Tobacco Taxes Can Improve Health and Raise Revenue
June 19, 2013
The President’s proposal to raise the federal excise tax on tobacco products and use the additional revenue to expand preschool education could achieve the dual goals of reducing the number of premature deaths due to smoking and raising an estimated $78 billion over ten years to finance early childhood education. Tobacco taxes are … -
What the 2013 Trustees’ Report Shows About Social Security
June 18, 2013
On May 31, the Social Security Board of Trustees issued its annual report on the program’s financial status.[1] Social Security does not face an immediate crisis, the trustees’ report shows, but it does face a funding shortfall two decades from now that the President and Congress should address reasonably soon so the program … -
House “Budget Transparency” Bill Would Make Budget More Opaque
June 18, 2013
The House Budget Committee may soon consider the proposed “Budget and Accounting Transparency Act” (H.R. 1872), which is identical to a bill that the House passed last year (H.R. 3581). The bill would implement what proponents call “fair-value accounting” for federal credit programs. In fact, the proposal is … -
House Bill Would Artificially Inflate Cost of Federal Credit Programs
Revised June 18, 2013
The House Budget Committee may consider legislation in the near future that would change the federal accounting of direct loans and loan guarantees in ways that would overstate the federal costs of those programs. As a result, the legislation also would overstate total federal spending and deficits. The Federal Credit Reform Act of 1990 … -
Academic Research Lacks Consensus on the Impact of State Tax Cuts on Economic Growth
June 17, 2013
Some policymakers, organizations, and individual economists assert that a consensus exists in the academic literature that state tax cuts boost state economies and that state tax increases harm them, but no such consensus exists. Numerous academic studies find no correlation between state tax levels and various measures of state … -
Policy Basics: Non-Defense Discretionary Programs
June 14, 2013
Non-defense discretionary (NDD) programs comprise domestic and international programs outside of national defense that Congress funds on an annual basis. (They exclude “entitlement” programs such as Social Security, Medicare, and Medicaid.) NDD programs include a broad … -
Benefit Restrictions Beyond Those in Senate Immigration Bill Would Jeopardize Legalization for Many and Risk Severe Hardships for Others
June 14, 2013
The Senate immigration reform bill establishes a long and difficult path to legal status that includes substantial fees and fines and tough restrictions on eligibility for federal assistance for immigrants who newly convert to a legal status. Yet, there will be efforts on the Senate floor to make it considerably more difficult for … -
States Should React Cautiously to Recent Income Tax Growth
June 13, 2013
Recent tax collections are considerably higher than last year in most states and, in many cases, exceed states’ projections when they adopted their current budgets in the spring of 2012. In 32 states for which data are available, state tax collections in the first ten months of fiscal year 2013 were 5.7 percent higher than in the … -
Statement of Nicholas Johnson: North Carolina Senate Tax Plan Would Gut School Funding, Hurt State’s Economy
June 12, 2013
The tax plan that North Carolina’s Senate leaders unveiled yesterday should not be mistaken for tax reform. It is, in reality, a plan to gut North Carolina’s schools, public colleges and universities, infrastructure, and other key state investments that promote long-run prosperity.… -
Chart Book: The Legacy of the Great Recession
Updated June 11, 2013
The United States went through its longest, and by most measures worst economic recession since the Great Depression between December 2007 and June 2009. This chart book will document the course of the economy following that recession against the background of how deep a hole the recession … -
Statement by Chad Stone, Chief Economist, on the May Employment Report
June 7, 2013
Today’s jobs report shows that employers continued to add jobs in May, but total employment (private and government combined) remains well below its level at the December 2007 start of the Great Recession (see chart). Job losses were far greater than in other recent recessions, and the … -
A Technical Assessment of SNAP and Medicaid Financial Eligibility Under the Affordable Care Act (ACA)
Revised June 6, 2013
Beginning in 2014, the number of low-income people eligible for Medicaid will expand dramatically. The Affordable Care Act (ACA) sets a national minimum standard for Medicaid eligibility to cover most individuals with incomes below 133 percent of the poverty line.[2] The Supreme Court ruling leaves it up to states to decide whether or not … -
Too Little to Go Around
June 5, 2013
The House Appropriations Committee’s plan to apportion discretionary funding for fiscal year 2014 among its 12 appropriations subcommittees — which it approved on a May 21 party-line vote — would override a key provision of the 2011 Budget Control Act (BCA) and shift tens of billions of dollars from domestic programs to … -
Media Briefing: Understanding the Annual Reports of the Social Security and Medicare Trustees
June 3, 2013
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Medicare Is Not “Bankrupt”
Updated June 3, 2013
Claims by some policymakers that the Medicare program is nearing “bankruptcy” are misleading. Although Medicare faces financing challenges, the program is not on the verge of bankruptcy or ceasing to operate. Such charges represent misunderstanding (or misrepresentation) of Medicare’s finances. … -
Policy Basics: How Many Weeks of Unemployment Compensation Are Available?
Updated June 3, 2013
The unemployment insurance (UI) system helps many people who have lost their jobs by temporarily replacing part of their wages. (See “Introduction to Unemployment Insurance.”) The total number of weeks of benefits available in any particular state depends on the unemployment rate and unemployment insurance laws in the state where the person … -
Statement of Paul Van de Water, Senior Fellow, on the 2013 Medicare Trustees' Report
May 31, 2013
Medicare has grown financially stronger in both the short and long term compared to last year, but it continues to face financing challenges in the long run, today’s new report from its trustees shows. The projected date of insolvency for Medicare’s Hospital Insurance (HI) … -
Statement of Robert Greenstein, President, on the 2013 Social Security Trustees' Report
May 31, 2013
Social Security does not face an immediate crisis, the trustees’ report shows, but it does face a funding shortfall two decades from now that the President and Congress should address in the near future so the program can fully meet its promises. Specifically, the trustees estimate that Social Security will be able to pay full … -
House Agriculture Committee Farm Bill Would Cut Nearly 2 Million People off SNAP
Revised May 16, 2013
On May 15, the House Agriculture Committee passed its 2013 farm bill, H.R. 1947 (the Federal Agriculture Reform and Risk Management Act of 2013, or FARRM).[1] The bill would cut the Supplemental Nutrition Assistance Program (SNAP, formerly known as the Food Stamp Program) by almost $21 billion over the next decade, eliminating food … -
Paul Van de Water Testimony: Health Reform’s Health Insurance Tax
May 9, 2013
Mr. Chairman, Ranking Member Hahn, and members of the subcommittee, I appreciate the invitation to appear before you today. The Affordable Care Act (ACA) will extend health insurance coverage to 27 million people and help assure that Americans have access to affordable coverage. And it will do so in a fiscally responsible way. In … -
Tax Credits for Lower-Income Working Families Help 21 Million Mothers
May 9, 2013
Two working-family tax credits — the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) — have proven to be powerful tools for reducing children's poverty and advancing their long-term well-being.[1] About 21 million low- and moderate-income working mothers received either the EITC or the low-income portion of the CTC in … -
Medicaid Per Capita Cap Would Shift Costs to States and Undermine Key Part of Health Reform
May 8, 2013
Two prominent congressional Republicans have proposed placing a “per capita cap” on federal Medicaid funding, under which the federal government would no longer cover a fixed share of each state’s overall Medicaid costs but instead would limit each state to a fixed dollar amount per beneficiary.[1] The per capita cap … -
A Closer Look at Who Benefits from SNAP: State-by-State Fact Sheets
Updated May 8, 2013
The Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) is the nation’s most important anti-hunger program, reaching nearly 48 million people nationwide in 2012 alone. These fact sheets provide state-by-state data on who participates in the SNAP program, the benefits they receive, and SNAP’s role in strengthening … -
Policy Basics: Introduction to Medicaid
Updated May 8, 2013
What Is Medicaid? Created by Congress in 1965, Medicaid is a public insurance program that provides health coverage to low-income families and individuals, including children, parents, pregnant women, seniors, and people with disabilities. Medicaid is funded jointly by the federal government and … -
Statement by Chad Stone, Chief Economist, on the April Employment Report
May 3, 2013
Today’s jobs report shows that labor markets still bear the scars of the Great Recession despite 38 straight months of private-sector job growth and a drop in the unemployment rate from 7.9 percent to 7.5 percent since January. Unemployment remains stubbornly high and many people who would likely have a … -
Proposed Balanced Budget Amendment is Extreme by International Standards
Revised May 3, 2013
Some proponents of a constitutional balanced budget amendment have argued that other developed countries’ constitutions require balanced budgets, suggesting that such a requirement for the federal government would therefore be appropriate.[2] In reality, however, no European country — not even Germany or Switzerland, which are … -
Online Services for Key Low-Income Benefit Programs
Revised May 1, 2013
Virtually all states have made basic program information on the five main state-administered low-income benefit programs — SNAP (Supplemental Nutrition Assistance Program, formerly known as Food Stamps), Medicaid, CHIP (Children’s Health Insurance Program), TANF (Temporary Assistance for Needy Families), and child care assistance … -
SNAP Benefits Will Be Cut for All Participants in November 2013
Revised May 1, 2013
The 2009 Recovery Act’s temporary boost to Supplemental Nutrition Assistance Program (SNAP) benefits is scheduled to end on November 1, 2013, resulting in a benefit cut for every SNAP household. For families of three, the cut likely will be $20 to $25 a month — $240 to $300 a year. That’s a serious loss, … -
SNAP Online: A Review of State Government SNAP Websites
Updated May 1, 2013
All states make information regarding the Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program, [1] including their applications, state policy manuals or regulations, and general program information, available to the public via the Internet.[2] The Center on Budget and Policy Priorities reviewed all the states' web pages to determine what information … -
Reducing Overpayments in the Earned Income Tax Credit
April 30, 2013
A recent report from the Treasury Department’s Inspector General raised the issue of overpayments in the Earned Income Tax Credit (EITC).[1] The EITC, a tax credit for low- and moderate-income working families that has been shown to increase work, lower welfare receipt, and reduce poverty, has a significant error rate that needs … -
Obama Proposal to Limit Tax Breaks for High-Income Households Would Reduce Total Charitable Contributions By a Modest 1.6 to 3.0 Percent
Revised April 30, 2013
The President’s fiscal year 2014 budget includes a proposal from previous Obama budgets to limit the tax subsidies that affluent Americans take for deductible expenses and some other tax expenditures. After the President made this proposal in previous budgets, some critics contended it would lead to substantial reductions in … -
Chained CPI Proposal Would Cut Social Security Retirement Benefits by About 2 Percent, on Average
April 23, 2013
The President’s new budget proposes to use the chained Consumer Price Index (CPI) for computing cost-of-living adjustments in Social Security and certain other federal benefits, as well as for indexing key parameters of the tax code.[1] The effect of this proposal on Social Security retirement benefits would vary by a … -
Commentary: Think Obama’s Medicare Savings Aren’t Significant? Take a Closer Look.
April 23, 2013
Commentators, pundits, and some policymakers routinely say that while the President’s new budget takes useful steps to reduce the cost of health care programs, the steps are small and rather timid. This judgment seems rooted in the belief that the budget’s changes affecting Medicare beneficiaries, which save a modest $64 … -
Policy Basics: State Supermajority Rules to Raise Revenues
April 22, 2013
Legislatures in most states (34 states plus the District of Columbia) can approve tax bills with a simple majority vote in each house, the same margin required for practically every other bill. In the other 16 states, some or all tax bills require a supermajority vote of each house (plus the … -
The Earned Income Tax Credit and Refundable Child Tax Credit in Rural America
April 19, 2013
In 2010, 22.9 percent of rural tax filers — compared with 20 percent of filers nationwide — claimed the Earned Income Tax Credit (EITC), according to research by the Brookings Institution and the Carsey Institute.[1] This difference reflects rural areas’ generally lower wage levels. The EITC brought $10.5 billion in benefits to … -
Strategies to Address the State Tax Volatility Problem
April 18, 2013
State revenues plummet in recessions, just when states can least afford the loss. Some proposals to address this flaw in state tax systems would change the systems’ structure — for instance, by replacing state personal income taxes with sales taxes — but wouldn’t solve the problem and would exacerbate others in … -
Chart Book: Top Ten Tax Charts
Updated April 18, 2013
In recognition of Tax Day, we’ve collected our top ten charts related to federal taxes. Together, they provide useful context for ongoing debates about how to reduce deficits and reform the tax code. Our first chart reminds us what taxes pay for. National defense, Social Security, and major health programs like Medicare and Medicaid account for … -
Policy Basics: Deficits, Debt, and Interest
Updated April 18, 2013
Three important budget concepts — deficits (or surpluses), debt, and interest — are often misunderstood. Deficits (or Surpluses) For any given year, the federal budget deficit is the amount of money the federal government spends (also known as outlays) minus the amount of money it … -
Myths and Realities about the Estate Tax
Revised April 16, 2013
The estate tax is a tax on property (cash, real estate, stock, or other assets) transferred from deceased persons to their heirs. Only the wealthiest estates in the country pay the tax because it is levied only on the portion of an estate’s value that exceeds a specified exemption level, currently $5.25 million per person … -
Policy Basics: Tax Exemptions, Deductions, and Credits
Updated April 16, 2013
Tax exemptions, deductions, and credits all can reduce the amount of taxes that a person owes. Some of these tax benefits are intended to reflect a person’s ability to pay tax; the Child Tax Credit, for example, recognizes the costs of raising children. Other tax benefits, such as the deductions for charitable donations and home mortgage interest payments, … -
Policy Basics: Federal Payroll Taxes
Updated April 15, 2013
The federal government levies payroll taxes primarily on wages and self-employment income and uses most of the revenue to fund Social Security, Medicare, and other social insurance benefits. Federal payroll taxes generated $845 billion in 2012, or 35 percent of all federal revenues (see “Policy Basics: Where Do Federal Tax Revenues Come From?”). … -
Policy Basics: Marginal and Average Tax Rates
Updated April 15, 2013
Misunderstandings about two different types of tax rates often create confusion in discussions about taxes. A taxpayer’s average tax rate (or effective tax rate) is the share of income that he or she pays in taxes. By contrast, a taxpayer’s marginal tax rate is the tax rate imposed on his or her last dollar of income. Taxpayers’ average tax rates … -
Policy Basics: Where Do Federal Tax Revenues Come From?
Revised April 12, 2013
In fiscal year 2012, the federal government spent $3.5 trillion on the services it provides, such as national defense, health care programs like Medicare and Medicaid, Social Security benefits for the elderly and disabled, and investments in infrastructure and education, in addition to interest on … -
Policy Basics: Where Do Our Federal Tax Dollars Go?
Revised April 12, 2013
The federal government collects taxes to finance various public services. As policymakers and citizens weigh key decisions about revenues and expenditures, it is instructive to examine what the government does with the money it collects. In fiscal year 2012, the federal government spent $3.5 … -
Policy Basics: Where Do Our State Tax Dollars Go?
Updated April 12, 2013
With state revenues still deeply damaged by the recession, policymakers continue to confront major choices about how to pay for important services now and in the future. To inform this crucial decision making, it is useful to examine where state tax dollars go as well as changing trends over time.… -
President Obama’s Deficit-Reduction Package and Other Proposals in the 2014 Budget
April 11, 2013
The President’s 2014 budget is presented in two parts. One part includes the package of deficit- reduction policies that the President included in his last offer to Speaker Boehner during the “fiscal cliff” negotiations in December 2012. This package would reduce the deficit by $1.8 trillion over the next decade … -
Federal Income Taxes on Middle-Income Families Remain Near Historic Lows
Revised April 11, 2013
Federal taxes on middle-income Americans are near historic lows,[1] according to the latest available data. That’s true both for federal income taxes and total federal taxes.[2] Income taxes: A family of four in the exact middle of the income spectrum will pay only 5.3 percent of its 2013 income in federal income taxes next year, according to a new analysis by … -
The Impact of the Sequester on WIC
Revised April 11, 2013
WIC — the highly effective nutrition program that serves roughly 9 million low-income women and children — has been battered by funding uncertainty for the last six months as Congress grappled with how to accomplish deficit reduction over the coming decade. The WIC funding level recently enacted for the remainder of the … -
Statement by Robert Greenstein, President, on President Obama’s FY 2014 Budget
April 10, 2013
President Obama’s budget includes a $1.8 trillion deficit reduction package that reflects his last offer to Speaker Boehner during their budget talks in December. The new budget — like the President’s offer — represents a substantial compromise on the President’s part; compared to the President’s original offer to the … -
Commentary: The Debate Over the Chained CPI
April 9, 2013
The news that President Obama’s new budget will propose adopting the “chained” Consumer Price Index (CPI) for cost-of-living adjustments in Social Security and other retirement programs, and annual inflation adjustments in the tax code, has intensified the debate on this issue. Some commentators portray this proposal as … -
Earned Income Tax Credit Promotes Work, Encourages Children’s Success at School, Research Finds
Revised April 9, 2013
The Earned Income Tax Credit (EITC), which went to 27.5 million low- and moderate-income working families in 2010, provides work, income, educational, and health benefits to its recipients and their children, a substantial body of research shows. In addition, recent ground-breaking research suggests, the EITC’s benefits extend well … -
Statement by Chad Stone, Chief Economist, on the March Employment Report
April 5, 2013
Today’s jobs report, with disappointing job growth and a large drop in the labor force, shows that a robust jobs recovery remains elusive. That situation won’t likely improve in coming months as the sequestration budget cuts begin to slow the economic recovery and make it harder … -
Mortgage Interest Deduction Is Ripe for Reform
April 4, 2013
Costing about $70 billion a year, the mortgage interest deduction is one of the largest federal tax expenditures, but it appears to do little to achieve the goal of expanding homeownership. The main reason is that the bulk of its benefits go to higher-income households who generally could afford a home without assistance: in 2012, … -
Making Health Care More Affordable: The New Premium and Cost-Sharing Assistance
Updated April 3, 2013
Under the new health reform law, people of modest means will get help paying for health insurance premiums and “cost-sharing” expenses — costs that people with insurance have to pay out-of-pocket like co-payments for doctor visits and hospital care — beginning in 2014. This help will come in the form of … -
Tax Foundation Figures Do Not Represent Typical Households’ Tax Burdens
April 2, 2013
The Tax Foundation released its annual “Tax Freedom Day” report today that, once again, can leave a strikingly misleading impression of tax burdens — showing an average federal tax rate across the United States that’s likely higher than the tax rate that 80 percent of U.S. households actually pay. To project the day … -
Sequestration Could Deny Rental Assistance to 140,000 Low-Income Families
April 2, 2013
The budget cuts known as “sequestration,” initiated on March 1, will likely force state and local housing agencies to cut the number of low-income families using Housing Choice Vouchers to afford housing by roughly 140,000 by early 2014.[1] This represents a sharp break from Congress’ bipartisan commitment — … -
The Value of TANF Cash Benefits Continued to Erode in 2012
March 28, 2013
Cash assistance benefits for the nation’s poorest families with children fell again in purchasing power in 2012 and are now at least 20 percent below their 1996 levels in 37 states, after adjusting for inflation. Unlike in 2011, when six states reduced the already-low benefits they provide through the Temporary Assistance for … -
Chart Book: SNAP Helps Struggling Families Put Food on the Table
Updated March 28, 2013
The Supplemental Nutrition Assistance Program (SNAP) is the nation’s most important anti-hunger program. SNAP reaches millions of people in need of food assistance. It is one of the few means-tested government benefit programs available to almost all households with low incomes. For more detail on the program’s basics, see … -
Policy Basics: Introduction to the Supplemental Nutrition Assistance Program (SNAP)
Updated March 28, 2013
What Is SNAP? The Supplemental Nutrition Assistance Program (SNAP, formerly known as the Food Stamp Program) is the nation’s most important anti-hunger program. In 2012, it helped almost 47 million low-income Americans to afford a nutritionally adequate diet in a typical month. Nearly 72 percent of SNAP participants are in families with children; more … -
Ryan Budget Would Shift Substantial Costs To States and Localities
March 27, 2013
The budget that House Budget Committee Chairman Paul Ryan developed and the full House passed recently would cause federal support for services that state and local governments provide — schools, health care, clean water facilities, and law enforcement, for example — to decline precipitously over the next several years. … -
Ryan Block Grant Proposal Would Cut Medicaid by Nearly One-Third by 2023 and More After That
March 26, 2013
The Medicaid block grant proposal in the budget plan proposed by House Budget Committee Chairman Paul Ryan, which the House of Representatives passed on March 21, would cut federal Medicaid (and the Children’s Health Insurance Program, or CHIP) funding by 31 percent by 2023, because the funding would no longer keep pace with health … -
Sequestration by the Numbers
March 22, 2013
The automatic budget cuts known as “sequestration” took effect on March 1. Under the requirements of the 2011 Budget Control Act (BCA) as amended by January’s American Taxpayer Relief Act (ATRA), both defense and non-defense programs were automatically cut, or sequestered, reducing total funding by $85 billion. While the press and public have focused on the programmatic effects of … -
Ryan Budget Would Undermine Safety Net’s Work Supports
March 21, 2013
House Budget Committee Chairman Paul Ryan justifies the massive cuts he proposes in programs for low- and moderate-income Americans in part by claiming that the current safety net “can create a powerful disincentive to get ahead.”[1] He uses this argument to defend converting both Medicaid and the Supplemental Nutrition … -
State Personal Income Tax Cuts: A Poor Strategy for Economic Growth
March 21, 2013
Policymakers in a number of states including Arkansas, Kansas, Missouri, North Carolina, Ohio, and Wisconsin are promoting deep cuts in personal income taxes as a prescription for economic growth — an approach that has not worked particularly well in the past and is not supported by the preponderance of the … -
Commentary: Why Balancing the Budget by the End of the Decade Is Not the Right Goal
March 20, 2013
As the House and Senate consider their respective budget resolutions this week, a key point of debate will be whether balancing the budget over the decade is an essential goal. We don’t think it is. We agree with Alice Rivlin, a former director of both the Congressional Budget … -
Testimony of Kathy A. Ruffing Senior Fellow, Center on Budget and Policy Priorities, Before the Subcommittee on Social Security Committee on Ways and Means U.S. House of Representatives
March 20, 2013
Mr. Chairman, Ranking Member Becerra, and members of the subcommittee, I appreciate the invitation to appear before you today.[1] The Social Security Disability Insurance (DI) program provides modest but vital benefits to workers who become unable to perform substantial work on account of a serious medical impairment. Although some … -
Ryan Budget Would Slash SNAP Funding By $135 Billion Over Ten Years
Revised March 20, 2013
House Budget Committee Chairman Paul Ryan’s budget plan includes cuts in the Supplemental Nutrition Assistance Program (SNAP, formerly known as the Food Stamp Program) of $135 billion — almost 18 percent — over the next ten years (2014-2023),[1] which would necessitate ending assistance for millions of low-income families, … -
Ryan Budget Understates Defense Spending by $100 Billion
March 19, 2013
The Ryan budget understates defense spending by $100 billion over the next ten years. It claims $100 billion in defense savings that, in reality, would not materialize because they are flatly inconsistent with Congressional Budget Office (CBO) estimates of the amount of defense spending that would result from the amount of defense … -
An Apples-to-Apples Comparison of the Deficit-Reduction Figures in the House and Senate Budget Plans
March 19, 2013
The House and Senate are scheduled to consider the budget resolutions that their respective budget committees approved last week. These two budgets — one drafted by House Budget Committee Chair Paul Ryan, the other by Senate Budget Committee Chair Patty Murray — offer sharply contrasting visions.[1] Yet they are not … -
Media Briefing: Examining States’ Dramatic Higher Education Cuts and Tuition Increases
March 19, 2013
The Center on Budget and Policy Priorities held a conference call briefing to discuss the deep cuts almost every state has made to public universities and colleges, and explains how those cuts hurt students and state economies.
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Recent Deep State Higher Education Cuts May Harm Students and the Economy for Years to Come
March 19, 2013
As states prepare their budgets for the coming year, they face the challenge of reinvesting in public higher education systems after years of damaging cuts — the product of both the economic downturn and states’ reluctance to raise additional revenues. In the past five years, state cuts to higher education funding … -
Statement by Robert Greenstein, President, On Unifying the District of Columbia’s Health Insurance Marketplace
March 19, 2013
“The DC Health Benefits Exchange Board’s recent decision to move to a unified health insurance market over the next two years will make it easier for small businesses to give their employees quality, affordable health insurance. “Starting in 2014, under the Affordable Care … -
Paul Van de Water Testimony: Financing Medicare and Medicaid
March 19, 2013
Chairman Pitts, Ranking Member Pallone, and members of the subcommittee, I appreciate the invitation to appear before you today on the importance of preserving Medicare and Medicaid. Budgetary entitlements of many kinds are designed to guarantee Americans adequate protection in case of illness, disability, or economic misfortune. Efforts … -
States Made Deep Cuts to Higher Education, New Report Finds
March 19, 2013
Public universities and colleges in nearly every state have seen their state funding decline sharply, according to a new report from the Center on Budget and Policy Priorities. Nationwide, states are on average spending 28 percent less this year than they did in 2008, a decrease of $2,353 per student. As a result, colleges and universities have had to … -
The Ryan Budget’s Tax Cuts: Nearly $6 Trillion in Cost and No Plausible Way to Pay for It
March 17, 2013
The new budget from House Budget Committee Chairman Paul Ryan proposes a series of dramatic tax cuts that would cost nearly $6 trillion in lost federal revenue over the next decade (see Figure 1), and that would provide the lion’s share of their benefits to high-income households and corporations. But, despite its stated … -
Medicare in Ryan’s 2014 Budget
March 15, 2013
The Medicare proposals in the 2014 budget resolution developed by House Budget Committee Chairman Paul Ryan (R-WI) are essentially the same as those in last year’s Ryan budget. Once again, Chairman Ryan proposes to replace Medicare’s guarantee of health coverage with a premium-support voucher and raise the age of eligibility … -
Chairman Ryan Gets 66 Percent of His Budget Cuts from Programs for People With Low or Moderate Incomes
March 15, 2013
House Budget Committee Chairman Paul Ryan’s new budget plan would get at least 66 percent of its $5 trillion in non-defense budget cuts over ten years (relative to a continuation of current policies) from programs that serve people of limited means, standing a core principle of the Simpson-Bowles fiscal commission on its head. Not much … -
Commentary: Murray’s More Evenhanded Approach to Deficit Reduction Contrasts Sharply With Ryan’s
March 14, 2013
The budget that Senate Budget Committee Chair Patty Murray released yesterday stands in sharp contrast to the one that her House counterpart, Paul Ryan, released on Tuesday. As I wrote Tuesday, his budget is extreme.[1] Hers is more balanced and appropriate to meet the nation’s economic and fiscal challenges. The … -
Statement by Robert Greenstein, President, On Chairman Ryan’s Budget Plan
March 12, 2013
When House Budget Committee Chairman Paul Ryan released his previous budget last year, I wrote that for most of the past half century, its extreme nature would have put it outside the bounds of mainstream discussion. It was, I wrote, “Robin Hood in reverse — on … -
State Taxes on Inherited Wealth Remain Common:
Updated March 12, 2013
Taxes on inherited wealth are a traditional and common revenue source for states. Prior to the passage of the federal estate tax cut in 2001, every state levied an estate tax that allowed them to “pick up” a share of federal estate tax revenues. The state “pick-up” estate taxes did not increase total estate … -
Deficit Reduction Should Not Increase Poverty and Hardship
March 11, 2013
Executive Summary With President Obama and lawmakers of both parties vowing to achieve further deficit reduction, the stakes are high for low- and moderate-income Americans. If policymakers heavily target programs that serve vulnerable Americans, they will run the risk of increasing poverty and hardship and reducing opportunity for … -
Excise Tax on Medical Devices Should Not Be Repealed
Updated March 11, 2013
Bills introduced in the House (H.R. 523) and Senate (S. 232) would repeal the 2.3-percent excise tax on medical devices that policymakers enacted in 2010 to help pay for health reform. The provision is sound, however, and the arguments against the tax don’t withstand scrutiny. The tax does not single out the medical … -
SNAP Is Effective and Efficient
Updated March 11, 2013
The Supplemental Nutrition Assistance Program (SNAP — formerly the Food Stamp Program) is the cornerstone of the nation’s safety net and nutrition assistance programs. It currently provides over 47 million participants in about 23 million low-income households with debit cards they can use to purchase food each month.… -
Strengthening State Fiscal Policies for a Stronger Economy
Updated March 11, 2013
Strengthening state economies and creating jobs — now and into the future — will require sensible, forward-looking state fiscal policies. States need to invest adequately in education, health care, transportation, and workforce development. To do that, they need to generate sufficient revenue, and they need to do so … -
Jared Bernstein Testimony: Tax Expenditures: How Cutting Spending Through the Tax Code Can Lower the Deficit, Improve Efficiency, and Boost Fairness in the US Tax Code
March 5, 2013
Chairman Murray, ranking member Sessions, I thank you for the opportunity to testify today. These are uniquely challenging times for fiscal policy. Our national economy continues to face a series of self-imposed fiscal deadlines in the forms of cliffs, ceilings, and most recently, sequestration. Various independent analyses find … -
Paul Van de Water Testimony: Health Reform’s Tax Provisions Are Sound Health and Tax Policy
March 5, 2013
Mr. Chairman, Ranking Member Lewis, and members of the subcommittee, I appreciate the invitation to appear before you today. The Affordable Care Act (ACA) will extend health insurance coverage to 27 million people and help assure that Americans have access to affordable coverage. And it will do so in a fiscally responsible way. In … -
Estimated Cuts in Federal Housing Assistance and Community Development Programs Due to Sequestration, 2013
Updated March 5, 2013
Automatic, across-the-board funding cuts in most federal programs (or “sequestration”) had been scheduled to begin on January 2, but the “fiscal cliff” budget deal enacted by President Obama and Congress delayed these cuts until March 1, 2013. The budget deal also reduced the amount to be sequestered in fiscal … -
TANF Emerging from the Downturn a Weaker Safety Net
March 1, 2013
Nationally, Temporary Assistance for Needy Families (TANF), which provides basic assistance to families with little or no income, responded only modestly to the severe recession that began in December 2007, and the national TANF caseload began to decline in January 2011. State TANF caseloads varied widely in their responsiveness … -
TANF Emerging from the Downturn a Weaker Safety Net : State-By-State Fact Sheets
Updated March 1, 2013
Nationally, Temporary Assistance to Needy Families (TANF), which provides basic assistance to families with little or no income, responded only modestly to the severe recession that began in December 2007, and the national TANF caseload began to decline in January 2011. State TANF caseloads varied widely in their responsiveness during the recession, … -
Commentary: Senate Republican Proposal Fails to Address Key Sequestration Problems
February 28, 2013
A measure from Senators James Inhofe (R-OK) and Patrick Toomey (R-PA), which the Senate is expected to consider today, is presented by supporters as giving the President the needed flexibility to address the impending $85 billion in across-the-board spending cuts (“sequestration”), enabling him to cut some programs more and some … -
Economic Downturn and Legacy of Bush Policies Continue to Drive Large Deficits
Updated February 28, 2013
Federal deficits and debt have been sharply higher under President Obama, but the evidence continues to show that the Great Recession, President Bush’s tax cuts, and the wars in Afghanistan and Iraq explain most of the deficits that have occurred on Obama’s watch — based on the latest Congressional Budget Office projections … -
Tax Expenditure Reform: An Essential Ingredient of Needed Deficit Reduction
February 27, 2013
The revenue raised as part of January’s American Tax Relief Act (ATRA) came primarily as a result of raising tax rates on high-income households. Yet throughout the negotiations around avoiding the fiscal cliff last year, both President Obama and Speaker Boehner called for raising revenue through limiting tax deductions, exclusions, and other tax breaks … -
Changes in TANF Work Requirements Could Make Them More Effective in Promoting Employment
February 26, 2013
The complexity and rigidity of the work requirements in the Temporary Assistance for Needy Families (TANF) program can force states to design their TANF programs in ways that compromise, rather than promote, the goal of connecting parents to work. State TANF programs are built around an expectation of work, and many states have argued … -
The Pending Automatic Budget Cuts
February 26, 2013
This report has been updated to reflect new data. In budget circles and beyond, all eyes are focused on the automatic budget cuts, known as “sequestration,” that are slated to take effect on March 1. But, in fact, March will bring two separate sequestrations — the first and well-known one of March 1 and a second and much smaller one … -
Testimony of Robert Greenstein, President, Center on Budget and Policy Priorities, Before the Senate Committee on Finance
February 26, 2013
Mr. Chairman and distinguished members of the Finance Committee, I appreciate the invitation to testify here today. As we all know, the nation faces fiscal and economic challenges, and we will have to make some tough decisions to put the budget on a more sustainable fiscal course and to do so without hindering a still-too-weak economic … -
Comparison of Benefits for Poor Families to Middle-Class Incomes Is Deeply Flawed
February 25, 2013
Senator Jeff Sessions (R-AL) recently posted to the Senate Budget Committee website a document that implies that programs targeted to low-income people provide lavish benefits that raise the typical poor household’s standard-of-living above that of the typical middle-income household.[1] The Sessions release, however, is deeply … -
Commentary: A Look at the New Simpson-Bowles Plan
February 22, 2013
The new deficit-reduction plan that Alan Simpson and Erskine Bowles issued this week calls for $2.4 trillion of additional deficit reduction over the next ten years (through 2023), with roughly $2.1 trillion in policy changes and about $300 billion in resulting interest savings.[1] Of the policy savings, about $700 billion would come … -
Cutting State Personal Income Taxes Won’t Help Small Businesses Create Jobs and May Harm State Economies
February 19, 2013
Cutting state personal income taxes not only won’t promote small business growth and job creation, but it is also likely over time to threaten the success of entrepreneurs by taking resources away from critical services like education. Until recently, most proposals to cut state taxes in the name of boosting economic growth and job … -
Policy Basics: Taxpayer Bill of Rights (TABOR)
Updated February 15, 2013
A Taxpayer Bill of Rights or TABOR is a constitutional measure that limits the annual growth in state and local revenues to the sum of the inflation rate and the percentage change in the state’s population. (For example, if the general inflation rate is 2 percent and the state’s … -
Testimony of Chad Stone, Chief Economist, on Unintended Consequences: Is Government Effectively Addressing the Unemployment Crisis?
February 14, 2013
Mr. Chairman and members of the subcommittee, thank you for the opportunity to testify on this important topic. The first half of my testimony focuses on the macroeconomic roots of our current jobs crisis and the second part focuses specifically on unemployment insurance. There is no doubt that the United States continues to suffer a … -
Four Big Threats to State Finances Could Undermine Future U.S. Prosperity
February 14, 2013
Without adequate revenues, states and localities cannot continue providing public services like education, health care, and infrastructure that lay the groundwork for a prosperous future. But state revenue systems face four serious challenges. The most severe recession in seven decades blasted holes in state budgets from … -
Testimony of Robert Greenstein, President, Before Senate Budget Committee
February 13, 2013
I appreciate the invitation to testify today on the impact of federal budget decisions on families and communities. This is an important matter. As you know, the nation will have to make tough decisions to put the budget on a more sustainable fiscal course. The issue is not only whether policymakers act to secure adequate … -
ALEC Tax and Budget Proposals Would Slash Public Services and Jeopardize Economic Growth
February 12, 2013
Governors and legislatures in numerous states are considering, or have recently enacted, sweeping tax and budget proposals that follow recommendations of the American Legislative Exchange Council (ALEC), with potentially adverse consequences for middle- and lower-income families, individuals, and communities across the country. These policies … -
State Policy Decisions in Exchange Implementation
Updated February 12, 2013
The Affordable Care Act (ACA) establishes a health insurance exchange in every state. Exchanges are new competitive marketplaces offering an array of comprehensive health insurance plans for eligible small businesses and individuals, some of whom may qualify for federal tax credits to help cover the cost of coverage. Each exchange will be operated either by the state as a … -
$1.5 Trillion in Deficit Savings Would Stabilize the Debt Over the Coming Decade
February 11, 2013
Policymakers could stabilize the public debt over the coming decade with $1.5 trillion in additional deficit savings, according to the Center’s updated calculations, which are based on the new budget projections that the Congressional Budget Office (CBO) released this week. Policymakers could achieve these savings with $1.3 … -
Policy Basics: The ABCs of State Budgets
Revised February 7, 2013
States are slowly recovering from an unprecedented budget crisis that resulted from the recent recession and the greatest decline in state tax revenues on record. Below is some background on the fundamentals of state finances and the depth of the problems that states face today. The Budget … -
Commentary: How Effective Is the Safety Net?
February 6, 2013
Nicholas Kristof published an important column in the New York Times recently about young children in some poor communities who face greatly diminished opportunities by the time they’re just 2 years old.[1] “Many low-income children never reach the starting line,” he notes. Kristof points out that there are no magic … -
Introduction to Unemployment Insurance
Updated February 6, 2013
The federal-state unemployment insurance system (UI) helps many people who have lost their jobs by temporarily replacing part of their wages while they look for work. Created in 1935, it is a form of social insurance, with contributions being paid into the system on behalf of working people so that they have income support if they lose … -
Testimony of Jared Bernstein, Senior Fellow, Before the House Education and Workforce Committee
February 5, 2013
Chairman Kline and ranking member Miller, I thank you for inviting me to testify today on issues directly in the wheelhouse of this committee: education, skills, and jobs. My testimony begins by looking at the current jobs situation with an emphasis on educational investments. I then discuss ways in which recent budget cuts are threatening the … -
Policy Basics: Climate-Change Legislation and Low-Income Consumers
Updated February 5, 2013
“Putting a price on carbon” through market-based policies like cap and trade or a carbon tax is the most cost-effective way to reduce greenhouse gas pollution. By raising the price of fossil-fuel energy products — from home energy and gasoline to food and other goods and services … -
Policy Basics: Policies to Reduce Greenhouse Gas Emissions
Updated February 5, 2013
Cap and trade and its close cousin a carbon tax are the approaches that most economists favor for reducing greenhouse gas emissions. These market-based approaches work by creating incentives for businesses and households to conserve energy, improve energy efficiency, and adopt clean-energy … -
Statement by Chad Stone, Chief Economist, on the January Employment Report
February 1, 2013
Employers continued to add jobs in January (see chart), but the economy must grow faster to bring unemployment down more quickly. Instead, the recovery apparently has hit a soft patch, and both growth and job creation could slow further if policymakers let the automatic across-the-board … -
Policy Basics: The Child Tax Credit
Updated February 1, 2013
Enacted in 1997 and expanded with bipartisan support since 2001, the Child Tax Credit (CTC) helps working families offset the cost of raising children. It is worth up to $1,000 per eligible child (under age 17 at the end of the tax year). Taxpayers eligible for the credit subtract it from the total amount of federal income taxes they would otherwise … -
Policy Basics: The Earned Income Tax Credit
Updated February 1, 2013
The Earned Income Tax Credit (EITC) is a federal tax credit for low- and moderate-income working people. It encourages and rewards work as well as offsetting federal payroll and income taxes. Twenty-five states, including the District of Columbia, have established their own EITCs to supplement the federal credit. Who Is Eligible, and for How Much? In … -
The Fiscal and Economic Risks of Territorial Taxation
January 31, 2013
Many policymakers say they want to reform the U.S. system of taxing multinational corporations so that it better promotes growth and helps reduce budget deficits. Unfortunately, one proposal that has received significant attention would take the tax code in an ill-advised direction, creating serious economic and fiscal risks. … -
A Quick Guide to SNAP Eligibility and Benefits
Updated January 31, 2013
Most families and individuals who meet the program’s income guidelines are eligible for food stamps. The size of a family’s food stamp benefit is based on its income and certain expenses. This paper provides a short summary of eligibility and benefit calculation rules.
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States Can Opt Out of the Costly and Ineffective “Domestic Production Deduction” Corporate Tax Break
Updated January 31, 2013
Over the past few years, states have faced large budgets gaps caused by a dramatic decline in revenue collections since the start of the recession. One contributor to this fiscal crisis in many states has been a relatively new corporate tax break — one that in most states never even received a vote in the state legislature but … -
The Relationship Between SNAP and Work Among Low-Income Households
January 29, 2013
Executive Summary The Supplemental Nutrition Assistance Program’s (SNAP) primary purpose is to increase the food purchasing power of eligible low-income households in order to improve their nutrition and alleviate hunger and malnutrition.[1] The program’s success in meeting this core goal has been well documented.[2] … -
“Pease” Provision in Fiscal Cliff Deal Doesn’t Discourage Charitable Giving and Leaves Room for More Tax Expenditure Reform
January 29, 2013
The recent “fiscal cliff” deal reinstated a limit on itemized deductions for high-income taxpayers known as the “Pease” provision,[1] which policymakers created as part of the 1990 bipartisan deficit-reduction package but which the Bush tax cuts phased out between 2006 and 2010. In recent days, some pundits … -
Policy Basics: Federal Rental Assistance
January 25, 2013
What Is Federal Rental Assistance? Federal rental assistance enables 5 million low-income households to afford modest homes. Three major programs — Housing Choice Vouchers, Section 8 Project-Based Rental Assistance, and Public Housing — assist about 90 percent of these households. Other programs serve households with special needs, including the “202” and “811” Supportive Housing Programs for the Elderly and for People with Disabilities; Housing … -
Policy Basics: Section 8 Project-Based Rental Assistance
January 25, 2013
The Section 8 Project-Based Rental Assistance (PBRA) programs enable more than 2 million people in 1.2 million low-income households to afford modest apartments by contracting with private owners to rent some or all of the units in their housing developments to low-income families. Seniors or … -
“Boehner Rule” Linking Debt-Ceiling Increase to Spending Cuts Is Dangerous Policy
January 25, 2013
House Speaker John Boehner has argued that “any increase in the debt limit has to be accompanied by spending reductions that equal or exceed it.”[1] The Budget Control Act (BCA) of 2011, which ended the previous debt-limit showdown, paired a $2.1-trillion increase in the debt ceiling with spending cuts of similar size.[2] … -
Policy Basics: Introduction to Public Housing
Updated January 25, 2013
What Is Public Housing? Public housing is one of the nation’s three main rental assistance programs, along with “Section 8” vouchers and project-based rental assistance. Public housing developments provide affordable homes to 2.2 million low-income Americans. Where Is … -
Policy Basics: The Housing Choice Voucher Program
Updated January 25, 2013
Created in the 1970s, the “Section 8” Housing Choice Voucher Program has become the dominant form of federal housing assistance. What Is the Housing Voucher Program? Low-income families use vouchers to help pay for housing that they find in the private market. The program is … -
Separating the Debt Limit From the Deficit Problem
January 23, 2013
Some lawmakers speak of refusing to raise the debt limit and thereby risking default on obligations of the U.S. Treasury unless Congress and the President agree to harsh spending cuts, or of raising the debt limit for only a few months at a time and thereby fostering ongoing uncertainty. To be sure, the nation’s long-term fiscal … -
2013 Is a Good Year to Repair (if Not Replenish) State Rainy Day Funds
January 15, 2013
The last decade’s roller-coaster economy has highlighted the importance of state “rainy day funds” — budget reserves for when recessions or other unexpected events cause revenue declines or spending increases. States with rainy day funds were able to avert over $20 billion in cuts to services and/or tax … -
Achieving Further Deficit Reduction Solely Through Spending Cuts Entails Cutting Entitlements That Benefit the Poor and Middle Class While Shielding the Biggest Entitlements for the Wealthy
January 9, 2013
Since President Obama and Congress enacted the “fiscal cliff” budget deal, congressional Republican leaders have vowed not to raise a dollar more in taxes for deficit reduction. All further deficit reduction, they say, must come from budget cuts, primarily from entitlement programs. That, however, would spare the broad … -
To Stabilize the Debt, Policymakers Should Seek Another $1.4 Trillion in Deficit Savings
January 9, 2013
With the “fiscal cliff” deal in place, President Obama and Congress are now expected to seek more deficit reduction to replace the automatic spending cuts (“sequestration”) that are scheduled to take effect on March 1. Policymakers can stabilize the public debt over the coming decade, ensuring that it … -
Commentary: Next Round on the Deficit
January 7, 2013
In recent days, policymakers, pundits, and the media have debated whether the “fiscal cliff” budget deal was a victory or defeat for the President or congressional Republicans, progressives or conservatives, rich or poor, the economy or the deficit — you name it. Most of the commentary is unpersuasive, however, for … -
Statement by Chad Stone, Chief Economist, on the December Employment Report
January 4, 2013
The economy added private sector jobs for the 34th straight month in December, but a robust recovery remains elusive, long-term unemployment remains very high (see chart), and threats to the economy from misguided policies in Washington remain significant. Policymakers appropriately renewed … -
Budget Deal Makes Permanent 82 Percent of President Bush’s Tax Cuts
January 3, 2013
The American Taxpayer Relief Act of 2012 (ATRA)[1] , which President Obama signed into law last night, makes permanent 82 percent of President Bush’s tax cuts. The Joint Committee on Taxation (JCT) and Congressional Budget Office estimate that making permanent all of the Bush tax cuts would have cost $3.4 trillion over 2013-2022.[2] …
