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Pre-2005 Content Archive

Report

Podcast: Understanding the New Budget Deficit Updates

The new budget deficit updates from CBO and OMB are explained by the Center’s Director of Federal Fiscal Policy, Jim Horney.

Duration: 3:28

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The new budget deficit updates from CBO and OMB are explained by the Center’s Director of Federal Fiscal Policy, Jim Horney.

Duration: 3:28

Report

Podcast: Correcting Myths About the Stimulus Bill

Director of Federal Fiscal Policy, Jim Horney, and Director of the State Fiscal Project, Nick Johnson, discuss their paper “Correcting Five Myths About the Stimulus Bill.” They explain how the stimulus legislation is providing a much-needed boost to the economy.

Duration: 4:44

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Changing Climate Bill To Give More Allowances To Electric Utilities Would Likely Hurt, Not Help, Consumers

Key Findings

  • In a July 6 letter to Majority Leader Harry Reid, the Edison Electric Institute (EEI) proposed that the utility sector receive an even larger allocation of free allowances than under the House climate bill and that the phase-out of these allowances be stretched out.  This, however, would more likely harm consumers than help them.
  • EEI describes the allowances allocated to electricity local distribution companies under the House bill as “important consumer protection.”  But the majority of these resources would likely go to increase business profits rather than to protect consumers.  
  • EEI argues that its recommendation would “reduce the costs of any cap-and-trade program to energy consumers and the American economy.”  Yet local utilities are not the best means of delivering consumer relief.  Moreover, utility-based relief would likely increase the overall cost to the economy of reducing carbon emissions by undercutting incentives for energy conservation and energy efficiency investments.
  • EEI claims that the House bill’s plan to phase out the allocation of free allowances to utilities “will lead to abruptly higher energy prices for consumers.”  But under the House bill these resources would be converted into direct consumer relief.  This would give households both the financial resources and the economic incentives to make sound choices about energy conservation and energy efficiency investments.
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Podcast: Health Reform — Examining the Flaws of the Proposed “Free Rider” Employer Requirement Provision

This podcast discusses an employer mandate proposal known as “free rider” that the Senate Finance Committee negotiators have agreed to include in their forthcoming health reform legislation.  It also discusses alternative, better-designed approaches to an employer responsibility requirement, which is a necessary component of health care reform.

Duration: 21:45

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Podcast: The Estate Tax

Director of Federal Tax Policy, Chuck Marr, discusses the basics of the estate tax and the debate about it in Congress.

Duration: 5:04

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Tax Measures Help Balance State Budgets

Key Findings

  • In response to the current recession, 30 states this year have enacted tax increases. Another seven states are considering similar measures.
  • This response is consistent with past practices. States often reduce taxes during economic expansions and increase them during downturns. In the recession of the early 1990s, some 44 states raised taxes; in the early 2000s, some 30 states did so.
  • Raising taxes can reflect sound policy judgment. Tax increases can be less harmful to families and less damaging to state economies than the likely alternative: deep cuts in services.
  • Federal economic recovery funds are reducing the size and extent of state tax increases. But those funds are insufficient to avert the need for tax increases.
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Reports Calling for Estate Tax Repeal Seriously Flawed

Key Findings

  • Two recent reports from the American Family Business Foundation (“AFBF”), a group funded by wealthy families advocating for elimination of their estate taxes, make highly implausible claims about the impact of repealing the tax.
  • One report, by former CBO director Douglas Holtz-Eakin and Cameron T. Smith, ignores the fact that repeal would expand deficits by $798 billion in the first decade alone unless offset by other tax increases. Those larger deficits would likely slow long-term economic growth by reducing the amount of funds available for investments that boost productivity.
  • This report also overstates the evidence that repeal would increase saving by individuals. Studies suggest that cutting the estate tax would increase private saving only modestly at best — and by nowhere near enough to offset the large public “dissaving” and adverse economic effects caused by increased deficits.

The other AFBF report, by longstanding tax-cut advocate Stephen Entin, claims that repealing the estate tax would actually increase government revenues. Its own dubious assumptions and opaque methodology underscore the implausibility of this claim.

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Safety Net Effective at Fighting Poverty But Has Weakened for the Very Poorest

Key Findings

An improved poverty measure, using more accurate benefit data and following National Academy of Sciences recommendations, reveals that:

  • Safety net programs are more effective at reducing poverty than previously known. They reduce the number of poor Americans by almost half — by nearly 31 million people.
  • The safety net also reduces deep poverty effectively, lifting 76 percent of deeply poor children above half of the poverty line in 2005.
  • Over the last decade, however, the safety net has grown less effective at protecting families from the deepest poverty, including families with unemployed workers.
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New EPA and CBO Estimates Refute Claims That House Climate Bill Would Impose Large Costs on Households and the Economy

Key Findings

  • New EPA and CBO analyses demonstrate that the costs of fighting greenhouse gas pollution are modest and manageable, decisively refuting opponents’ claims that reducing emissions would cost the average household several thousand dollars a year.
  • EPA estimates that the average cost per household of the House climate bill would be $80 to $111 per year.  CBO estimates that if the policies the bill calls for in 2020 were already in place, the net annual economy-wide cost would average $175 per household in 2010.
  • CBO estimates that, on average, low-income households would not suffer any financial loss.
  • The new CBO analysis also finds that the House bill fully complies with “pay-as-you-go” budgeting rules and does not increase the federal deficit. Under CBO scoring, in fact, the legislation produces a small amount of deficit reduction.
  • Moreover, the EPA and CBO analyses examine only the costs of reducing emissions. They do not reflect the benefits of avoiding the adverse consequences of climate change.
  • The vastly higher cost estimates that opponents are citing ignore the bill’s substantial consumer relief to help offset higher energy costs. Those figures also rely on outdated estimates that are based on earlier climate proposals that do not reflect the provisions of the current legislation.

 

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Reforming HUD’s “Section 3” Requirements Can Leverage Federal Investments in Housing to Expand Economic Opportunity

Key Findings

  • Section 3 of the Housing and Urban Development Act of 1968 requires certain HUD-funded projects to meet specific goals for contracting, hiring, and training low-income people to work on these projects.
  • With unemployment rising and the federal government making new investments in affordable housing, this is an important time to reform Section 3 so those investments also expand economic opportunities for low-income people.
  • Reforms should enhance HUD’s monitoring and enforcement of Section 3 compliance, maximize economic opportunities for households receiving federal housing assistance, and build the capacity to implement the requirements and provide low-income residents with job training.
  • A draft bill by Rep. Velazquez would make major progress in strengthening Section 3.  Changes in the Workforce Investment Act also are needed.  In addition, there is much that HUD can do administratively.