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Pre-2005 Content Archive

Report

Discretionary Funding Under the New Congressional Budget Plan

May 16, 2007 |

Key Findings

  • The Administration has threatened to veto any 2008 appropriations legislation that exceeds the President’s requested levels, and has portrayed the Congressional budget plans as containing dramatic increases in appropriated spending. In fact, the vast bulk of the increase in appropriations in the new House-Senate budget agreement is for defense, and it is exactly the amount the President requested in this area.
  • For non-defense appropriations, the new congressional budget plan calls for $452.3 billion for fiscal year 2008, a 3.1 percent increase over the current level of funding, adjusted for inflation.
  • In historical terms, this level for non-defense appropriations is modest. Relative to the size of the economy, this level would be lower than the amount provided in every year from 2001 through 2006, and lower than the average level for 1990-2007.
  • Similarly, in real per capita terms — i.e., after adjusting for inflation and population growth - this level of funding would be below the levels in 2002, 2003, 2004, and 2005. It would fall more than 6 percent below the 2004 level.
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Report

Making Higher Education Tax Credits More Available To Low- And Moderate-Income Students: How and Why

May 10, 2007 |

Key Findings

  • Currently, federal tax credits for higher education are largely unavailable to low-income students and are also unavailable to many moderate-income students.
  • This limitation substantially reduces the credits’ effectiveness in encouraging students who would not otherwise attend college to do so.
  • Low-income students who do attend college frequently face high costs of attendance, even after taking into account governmental and institutional aid. According to Department of Education statistics, 85 percent of undergraduates from families with incomes below $20,000 had unmet financial need in 2003-2004 that averaged thousands of dollars per student.
  • Making the higher education tax credits available to low- and moderate-income students would require making the credits refundable. About a third of all households, and almost half of families with children, have no federal income tax liability. Very few of these households can benefit in full from the current, nonrefundable tax credits, and many cannot benefit at all.
  • Expanding the definition of qualifying expenses also would be an important reform. Currently, non-tuition costs such as room and board and books - which make up the majority of out-of-pocket expenses for low- and moderate-income students - count as qualifying expenses for education tax incentives aimed at upper-income students, but not for the education tax credits.
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Report

Alternative Approaches to AMT Reform

April 30, 2007 |

Key Findings

  • This analysis lays out three criteria for assessing AMT reform proposals.
  • Are the reforms fully paid for, so they do not add hundreds of billions of dollars to deficits?
  • Are the reforms well targeted, so they protect middle-income taxpayers from the AMT without spending billions on massive tax cuts for the highest-income households?
  • Are the reforms permanent, so they actually resolve the AMT issue, instead of leaving policymakers facing even larger costs for AMT relief a few years from now?
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Report

How Strong Are State Budgets?

April 20, 2007 | and

Key Findings

  • State fiscal conditions appear solid right now, resulting from strong revenue collections of the last several years.
  • But the most recent data suggest fiscal conditions are starting to get weaker.
  • States spend their money primarily on education, health care, and transportation. Weakening revenue streams could make it harder for states to finance those services in the future.
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Report

Forthcoming Medicare Trustees’ Report May Contain Dubious "Medicare Funding Warning"

April 20, 2007 | and

Key Findings

  • The Social Security and Medicare Trustees report may project, for the second year in a row, that general revenues will make up more than 45 percent of Medicare funding within six years. Under a provision of the 2003 prescription drug law, this would trigger a requirement that the President submit, and Congress consider, proposals to keep that threshold from being exceeded.
  • The 45-percent threshold is not a meaningful measure of the health of Medicare. Medicare’s basic problem is its large projected cost, not what share of that cost comes from general revenues rather than payroll taxes.
  • The threshold also makes it harder to address Medicare’s fiscal problems fairly. It rules out increases in progressive taxes as part of Medicare reform but allows increases in regressive payroll taxes and beneficiary premiums, as well as cuts in Medicare benefits.
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Report

Op-Ed: Are Americans Overtaxed?

April 17, 2007
No one likes paying taxes – least of all Americans. But, despite well-worn assertions to the contrary, Americans are not paying too much – at least not by historical standards, not compared to...
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Report

Low-Income and Minority Beneficiaries Do Not Rely Disproportionately on Medicare Advantage Plans

April 12, 2007 | and

Key Findings:

  • Private "Medicare Advantage" health plans were brought into Medicare to reduce costs, but Medicare pays them 12 percent more than the cost of treating comparable beneficiaries through traditional Medicare, adding billions to Medicare’s costs.
  • Private plans argue that curbing the overpayments would harm low-income and minority Medicare beneficiaries, who they claim rely disproportionately on Medicare Advantage for supplemental coverage. This claim, however, is based on misleading use of data.
  • Medicaid, not Medicare Advantage, is the main form of supplemental coverage for low-income and minority Medicare beneficiaries. The most cost-effective way to help these individuals would be to strengthen the programs within Medicaid on which many of them rely to supplement Medicare coverage and to pay the Medicare premiums for them.
  • Moreover, the overpayments are harming millions of minority beneficiaries by raising their monthly Medicare premiums. The overpayments also are weakening Medicare’s finances and ballooning its costs, thereby building pressure for sizable Medicare cuts in the future.
  • Curbing overpayments to Medicare Advantage plans would benefit Medicare beneficiaries by reducing costs and premiums and improving Medicare’s long-term fiscal sustainability.
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Report

President's "Affordable Choices" Initiative Provides Little Support for State Efforts to Expand Health Coverage

April 3, 2007 |

Key Findings:

  • The Administration's Affordable Choices initiative provides states with no new funds to help cover the uninsured; it simply redirects existing federal funds that now go to safety-net health-care providers who care for the uninsured.
  • Many states currently receive only small amounts of federal funds for safety-net providers and thus would have few funds to redirect.
  • Even states that do have significant funds that could be redirected still would not be able to cover all of their uninsured residents; the funds won’t stretch that far. The result would be that many people remain uninsured, even as safety-net providers (such as public hospitals) were deprived of support they need to care for these patients.
  • By allowing states to use redirected funds only to provide "basic" private coverage - and barring the use of these funds to expand coverage through public health insurance programs - the Affordable Choices proposal would deny states the flexibility to design their coverage initiatives to best meet their residents’ needs.
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Report

President's Budget Calls for Deep Cuts in a Wide Range of Domestic Programs

March 28, 2007 | and

Key Findings

  • Information the Administration has provided to Congress but has not made readily available to the public shows that its new budget would make large cuts in key domestic priorities between 2008 and 2012.
  • Environmental programs would sustain some of the biggest cuts. Funding for pollution control, for example, would be cut by a total of $5.5 billion over the next five years (relative to the expected 2007 funding level adjusted for inflation).
  • K-12 and vocational education would be cut by $10 billion over five years.
  • The part of the budget that includes community health centers, domestic HIV/AIDS programs, and maternal and child health would be cut by $2.5 billion over five years.
  • Funding for hospital and medical care for veterans would be increased next year but cut in each of the four years after that.
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Report

The 2001 and 2003 Tax Cuts and Small Business

March 21, 2007 | and

Key Findings

  • Tax-cut supporters often claim that the reductions in the top income tax rates enacted in 2001 are vitally important to small business owners. In fact, just 1.3 percent of tax filers with small business income benefited in 2004 from the reduction in the top income tax rate enacted in 2001. Just 2.6 percent benefited from the reductions in either of the top two tax rates.
  • Over half of the tax cuts that have gone to households with small business income have gone to the 8 percent of such households with incomes exceeding $200,000 a year. Most small business owners have not received large tax cuts.
  • The Administration classifies all wealthy investors with passive business investments as “small business owners,” regardless of whether they have anything to do with operating the business in question or have ever set foot in it. Under the Administration’s definition, President Bush and Vice President Cheney are classified as “small business owners.”

 

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Report

A Frigid Forecast for the Sunshine State: Proposed Revenue Cap as Damaging as Colorado’s TABOR

March 20, 2007 | and

Key Findings

  • The proposed state and local revenue cap contains the key elements of Colorado’s TABOR.
  • In Colorado, TABOR led to reductions in health, education, public safety, and transportation services. Voters suspended TABOR for five years in November 2005.
  • If the proposed limit had been adopted in Florida in FY 1995, capped revenues for FY 2006 would have been $4.8 billion — 12 percent — less than the actual revenue level.
  • Florida is already at the bottom among states on many measures of public services; falling further could make it unattractive as a place to live or do business.
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