Schmudget Blog
Showing blog entries tagged as: Federal Issues


President Trump’s budget won’t strengthen the economy. It will harm Washington state

By Misha Werschkul, executive director

President Trump’s 2019 budget does nothing to bolster the economic security of people with middle and low incomes – which is critical to create a thriving economy. Instead, his budget actually threatens the economic security of millions of Washingtonians who rely on federal programs to be able to pay for food on the table, a roof over their head, health care, and other basic needs. Further, it will have profound ripple effects on Washington's local economies. 

While this budget is largely symbolic, since the U.S. Congress just approved a two-year budget deal, these extreme proposals should not be ignored. They are an important signal of the president’s priorities. Many of the specific proposals included in the budget have been introduced before and could be incorporated in future budget proposals or stand-alone legislation this year.  

On the heels of the passage of harmful new federal tax breaks that benefit the wealthy and corporations to the detriment of people with low and middle incomes, President Trump laid out a recipe for increased poverty, homelessness, and inequality. Specifically:

  • He again calls for repealing the Affordable Care Act (ACA) and drastically cutting Medicaid, putting health insurance for millions of Washingtonians at risk.
  • He calls for huge cuts in nutrition, housing, and other basic assistance for millions of Americans below or close to the poverty line, most of whom work for low wages, are elderly or have disabilities, or care for young children. For example, the president cuts nearly 30 percent over 10 years from the Supplemental Nutrition Assistance Program, which currently helps put food on the table for more than 900,000 Washingtonians.
  • He proposes deep cuts to the non-defense discretionary budget that funds education, scientific research, job training, and other core government functions. This would result in massive and unsustainable cost shifts to state governments.  

Instead of pursuing the policies proposed by President Trump, federal leaders should take common-sense steps to support families and grow the economy. They can do this by investing in high-quality job training and apprenticeships; increasing access to safe, affordable, dependable child care and care for family members with disabilities; and advancing policies that create jobs and raise wages for working families. 

For more analysis about this harmful budget proposal, see this statement from Bob Greenstein, president of the Center on Budget and Policy Priorities: "Trump budget offers stark vision."


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Three Reasons Why the House GOP Tax Plan is Bad for Washington State

Posted by Kelli Smith at Oct 30, 2017 03:20 PM |
Filed under: Federal Issues

Republican leaders in Washington, D.C. have introduced a harmful plan to give large tax cuts to the wealthiest few while jeopardizing funding for health care, education, and other investments that benefit working families. Take a look at our latest fact sheet to see how the plan would negatively impact Washingtonians with low and middle incomes.

This fact sheet was updated on November 15, 2017.

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 House GOP tax plan 11 15 2017

Trump-GOP’s Tax Plan Will Give Wealthiest 1 Percent of Washingtonians Even More Preferential Treatment

Posted by Kelli Smith at Oct 11, 2017 05:15 PM |
Filed under: Federal Issues
By Kelli Smith, policy analyst, and Andy Nicholas, associate director of fiscal policy

The numbers on the Trump-GOP federal tax plan make one thing abundantly clear: The plan would be an enormous boon to the wealthiest 1 percent of Washingtonians. The numbers also make it clear that it is not a plan built to expand opportunities for working families. The average tax break for those in the top 1 percent would be 1,000 times higher than for those in the bottom fifth of Washington’s households. These tax cuts would drain federal coffers by trillions of dollars over the next decade. This could result in immense cuts to education, health care, infrastructure, child care, and other essential public investments that benefit us all.


In Washington state in particular, people should be especially concerned about the proposal to gut the federal tax code. That’s because our state tax code is already heavily rigged in favor of the wealthiest and most powerful, and it disproportionately harms people of color. People with low and middle incomes already pay up to seven times more in state and local taxes as a share of their income than the top 1 percent. And this takes a heavier toll on many Black, American Indian, and Latino Washingtonians, who make up a disproportionately larger share of those income groups than whites do – because of historically racist policies that have denied them equitable access to opportunity. 

According to analysis by the Institute on Taxation and Economic Policy, 63 percent of federal tax cuts for Washingtonians in the Trump-GOP tax plan would go to the top 1 percent. As the chart below shows, people with low and middle incomes would see a very small tax reduction on average. While people in the lowest-income group in Washington state would see an average tax cut of $100 under the plan, people in the wealthiest 1 percent would receive an average tax cut of more than $100,000. (Of note, the average annual income among the top 1 percent of Washingtonians is about $2 million.)

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avg_tax_cut_by_inc

The enormity of the tax cuts under this plan can’t be rationalized by the top 1 percent's comparatively higher income levels, either. Even when Trump’s proposed tax cuts are calculated as a share of income, the tax cuts at the top would be much higher than those at the bottom. The wealthiest 1 percent would get a tax cut that amounts to a 5.2 percent of their annual income. By contrast, those making the least would see a tax cut that amounts to just 0.6 percent of their incomes. People in the middle don’t fare much better. In fact, every income group in the bottom 95 percent would see an average tax cut that amounts to less than 1 percent of their income. In other words, any lawmakers who are saying this plan is designed to help the middle class are lying. 

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avg_cut_as_share_of_income

Further, it’s important to note that not all Americans – or Washingtonians – would get a tax cut under this plan. One in six Washingtonians would actually see a tax hike under the plan. Ultimately, many of those in the middle would contribute more while the top 1 percent get a break. That is not sound policy – especially in our state, where working families are already paying more than their fair share while the wealthiest get a special deal. 

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share_with_increase

Adding insult to injury, this plan does not include other sources of revenue to offset the huge tax cuts for millionaires. As a result, these giveaways will create a gaping hole in the federal budget. Without other revenue to fill that hole, investments that strengthen our economy will be at risk. And it’s a safe assumption, given this presidential administration, that those cuts won’t come at the expense of the top 1 percent. Instead, the shortfall will be used as an excuse, either now or in the future, to undermine investments that help low- and middle-income Americans – by cutting programs like health care, education, job training, and the like. 

This tax plan, the latest in a series of federal proposals designed to benefit the very wealthiest, lacks any foresight about the real needs of everyday Americans now and into the future. Washingtonians need a plan that actually helps all families have the opportunity to thrive – not a plan that only serves to exacerbate our upside-down tax code. 

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New Census Numbers: To Build Thriving Communities, Invest in Removing Barriers to Economic Security

New data released by the U.S. Census Bureau shows that there is some good news when it comes to poverty rates and access to health care in our state. At the same time, the data shows that many Washingtonians – in particular, some communities of color, women, and people with disabilities – still face barriers to economic security. The numbers make it clear that to build thriving communities, our policymakers must invest in priorities that remove obstacles to prosperity for Washingtonians.

First the good news: Last year, the poverty rate in Washington state declined slightly to 11.3 percent from 12.2 percent in 2015. And between 2013 and 2016, the rate of people with health insurance increased to 94 percent from 86 percent.

The fact that fewer Washingtonians are living in poverty is likely due to economic growth and a low unemployment rate. And the insurance rate is more evidence that the Affordable Care Act has been extremely effective in ensuring more people can afford to have access to a doctor and preventive health services.

Yet the numbers also reveal that despite economic growth, far too many residents of Washington face barriers to economic security, especially people of color, women, and people with disabilities. In fact, the poverty rate for some communities of color in Washington is nearly two to three times that of whites. Systemic barriers are impacting many people’s ability to put food on the table and pay for their housing. For example:

  • Twenty-seven percent of American Indian/Alaska Natives, 23 percent of Blacks, 20 percent of Native Hawaiian/Pacific Islanders, and 19 percent of Latinos live in poverty.
  • Among full-time workers, women earned 75 percent of what men earned in 2016.
  • One in four working age Washingtonians with a disability live below the federal poverty line, compared to one in ten adults without disabilities. 


Further, when looking at the data over a longer time period, they show those facing the greatest hardship are not reaping the benefits of economic growth. In fact, more people in Washington are living in deep poverty – below 50 percent of the federal poverty line, which is less than $10,080 a year for a family of three in 2016 – than in 2006. The number of Washingtonians living in deep poverty grew by 17 percent between over the last decade (See figure below).

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Washingtonians in Deep Poverty

Our economy and our communities will be stronger when everyone is able to not only to make ends meet, but also to have a better future – and when lawmakers act to undo systemic and institutional barriers that prevent people from having equal access to opportunity.

While it is good news that there is declining poverty overall and greater rates of health insurance coverage in our state, the new Census numbers nevertheless underscore that too many people are still facing financial hardship. In order to build thriving communities, lawmakers in our state need to make investments that enable all our residents to thrive. Further, federal policymakers must protect essential health care coverage – pushing back against continued efforts to repeal the Affordable Care Act – and they must protect programs that ensure that when people hit hard times, they don’t go without the basics.

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State and Federal Proposals to Cut Funding for Women’s Health Would Decrease Family Economic Security

By Misha Werschkul, executive director
 
Building economic security for Washington's women is an essential component of creating a thriving economy in our state. Nearly 500,000 women and more than 20 percent of Black, Hispanic, and Native American women live in poverty in Washington. Many factors contribute to high poverty rates among women, and especially among women of color – including the gender wage gap, a disproportionately high percentage of women working low-wage jobs, and the lack of universal paid leave programs and child care supports. Access to health care– including high-quality pre- and post-natal care – and the ability to choose when and under what circumstances to start a family are also critical ingredients of family economic security.
 

Investments in the wellbeing of women are critical to any serious strategy to address inequality or reduce poverty. And investing in the full spectrum of women’s health services in particular is an important step toward strengthening the economic security of women and families.

The good news is Washington state has made significant progress in expanding health care access for women and in reducing unintended pregnancies. Under the Affordable Care Act, the number of uninsured women in Washington state has dropped to historic lows. And as the KIDS COUNT Data Center shows, Washington’s teen birth rate has fallen from 25 teen births per thousand in 2011 to 18 teen births per thousand in 2015. King County has the second lowest teen pregnancy rate in the country. Expanding health care and reducing unintended pregnancies is good for women and families, and it’s also cost effective for states.

However, this progress is being threatened. Recent federal and state proposals would pay for tax cuts for the wealthy at the expense of investments that support women and communities. In the next few weeks, we anticipate the release of the 2018 federal budget and a compromise 2017-2019 state budget, not to mention the U.S. Senate’s health care bill. Elected leaders must ensure legislation invests in programs that help promote economic security for women and families. 

Federal Threats

Washington’s women face a multitude of threats from federal proposals, ranging from the repeal the Affordable Care Act to President Trump’s 2018 budget proposal to the possibility of new regulations affecting birth control from his administration. Especially when combined with deep cuts to federal programs that disproportionately serve women and children – like housing and energy assistance, job training, and hunger relief – these cuts to women’s heath are a recipe for increased economic insecurity. Federal proposals include:

  • Cutting Medicaid – Federal proposals to eliminate the Affordable Care Act’s Medicaid expansion and make deep cuts to Medicaid would jeopardize health care for nearly one million women in Washington state (see graph below). In fact, women make up a majority of Medicaid beneficiaries and therefore face a disproportionate burden of proposed cuts to the program. Medicaid is a key support for women on multiple fronts: Working women who don’t have employer-sponsored coverage are able to get health insurance coverage through the Medicaid expansion; women of reproductive age rely on Medicaid for family-planning and maternity care services (importantly, Medicaid provides health care for nearly half of all pregnant women nationwide); and older women and women with disabilities are the primary users of Medicaid long-term services and supports. In addition, Medicaid serves women of all races and ethnicities in Washington. 

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Women girls medicaid enrollment

 

  • Defunding Planned Parenthood – Congressional Republicans have put forward multiple proposals to ban Planned Parenthood from receiving federal and state funds through the Medicaid program and to allow states to exclude them from the Title X family-planning program. These funds are currently used to provide family-planning and a wide range of critical health care services like cancer screenings to more than 98,000 low-income women and men at 32 health care centers in Washington state. Several of Washington’s Planned Parenthood clinics are the only clinic in their county that offers the full range of contraceptive health services, including longer-acting methods like intrauterine devices that are the most effective at preventing pregnancy. Defunding Planned Parenthood would jeopardize health care for thousands of low-income women in Washington state and increase economic insecurity as a result of unplanned pregnancies. 
  • Reducing coverage for newborn and maternity care and birth control – The Affordable Care Act repeal legislation from House Republicans removes the requirement for publicly funded health insurance to cover the full range of health care services, including newborn and maternity care. In addition, the Trump administration is considering rule-making that would remove the requirement for insurers to provide copay-free birth control. Both of these changes would mean that women who have health insurance coverage would have to pay more money out of pocket to get their health care needs met.

State Threats

Washington state legislators are continuing to negotiate the 2017-2019 biennial state budget in order to avoid a state government shutdown on July 1, 2017. This year, budget writers have an opportunity to clean up the tax code to make historic investments in ensuring every child in Washington has access to quality public education. However, the Senate Republicans’ approach is largely to protect tax breaks for wealthy special interests and fund investments in schools at the expense of other important priorities like child care and job training for low-income parents. 

The State Senate's proposals would also reduce state family-planning funding. On top of cuts being proposed at the federal level, state Senate Republicans propose a 10 percent reduction to state funds that provide family-planning services, which would result in reduced access to women’s health services.

Especially with federal threats looming, Washington state leaders should be doing everything possible to protect women and build on the progress that has been made in our state. 

Economic security and women’s health are fundamentally intertwined. If we want to have an economy that works for everyone, we simply can’t ignore women’s health. As federal and state policymakers develop new budget proposals, they must focus on advancing economic security by investing in the full spectrum of women’s health services. 

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New Report: Supplemental Nutrition Assistance Program Critical to the Wellbeing of Many Washingtonians with Disabilities

Posted by Julie Watts at Jun 14, 2017 06:25 PM |
According to a new report by the Center on Budget and Policy Priorities, the Supplemental Nutrition Assistance Program (SNAP) – which provides basic food support to people with lower incomes – helps 126,000 Washingtonians with disabilities secure a better quality of life and protect their basic health. The report underscores the key role SNAP plays in lifting people with disabilities out of poverty, helping them put food on the table, and contributing to a wide range of positive long-term health and economic outcomes.

 

What is a Disability

Far too many Washingtonians with disabilities are just one accident or mishap from financial catastrophe. SNAP plays a vital role in providing them with added financial security. Further, by ensuring they have the resources for adequate nutrition, SNAP offers them a key foundation of good health. Policymakers must protect this important program against funding cuts being proposed by Congress and President Trump.

Two out of five non-elderly individuals with disabilities in Washington state participate in SNAP. For them, it is an especially important resource because having a disability can make life more expensive and can make it harder to earn enough money to buy food and other necessities.

People with disabilities are more likely to live in poverty than those who don’t. In fact, as seen in the chart below, 33 percent of children with disabilities live below the federal poverty line in Washington state, compared to 21 percent of non-disabled children. And among 18 to 64 year olds, people with disabilities are twice as likely to live in poverty than non-disabled people. Given that this is the time of life when most people are in the workforce, earning income, and saving money, this data underscores how much harder it can be for people with disabilities to make ends meet without basic supports like SNAP.

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People with Disabilities are More Likely to Live in Poverty in WA

Despite the fact that SNAP provides important nutrition benefits to millions of low-income people with disabilities nationwide, President Trump has proposed shifting 25 percent of the federal cost of the program to states, which would cost Washington state an additional $363 million a year. Congressional House Republicans are also in the process of negotiating a 2018 budget resolution that will likely propose sweeping changes to SNAP, including cuts to overall spending and shifting costs to states. Among the other things the president and Congressional Republicans have proposed are:

  • The elimination of a small SNAP benefit (called the “minimum SNAP benefit”) that seniors and people with disabilities can qualify for in connection with other public supports. This modest amount of additional assistance is critical for people living in poverty.
  • Limits on the length of time people living in communities with high unemployment can receive SNAP. This is yet another challenge for people with disabilities who already have a difficult time finding work.
  • New fees imposed on grocers who accept SNAP benefits, which will result in many grocers opting out of the program. This will obviously make it harder for SNAP participants to find stores where they can use their food assistance benefits.

Not only will none of these proposals help people move out of poverty; they will actually increase hardship for working families and millions of Americans with disabilities.

SNAP plays a vital role in ensuring that many Washingtonians with disabilities can put food on the table and have an opportunity to move out of poverty. As Congressional budget writers in Washington D.C. sit down to figure out how they will allocate public resources, Washington state’s elected officials should ensure that all residents – especially those with disabilities – have access to basic supports like SNAP.

To find out more about how SNAP is a critical resource for many people with disabilities, read the Center on Budget and Policy Priorities’ report, “SNAP Provides Needed Food Assistance to Millions of People with Disabilities.”

 

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Guest Post: Kansas Experiment Yields Valuable Lessons in Why State Investments Are Essential

Posted by Melinda Young-Flynn at Jun 08, 2017 11:05 AM |
This week, the Kansas legislature rolled back significant parts of the state’s massive 2012 tax cuts. A two-thirds bipartisan majority voted to reject the “tax-cut your way to prosperity” approach. This was a major repudiation of bad fiscal policies that Congressional Republicans and President Trump are touting as solutions to create economic growth. Heidi Holliday, executive director of the Kansas Center for Economic Growth, wrote this guest post:

You’re welcome, America. 

Heidi Holliday

Our state, Kansas, just wrapped up a 5-year long experiment in governance from which the other 49 states can now glean some important lessons. The Kansas Legislature has voted to roll back much of the 2012 package of tax cuts that sent the state into a downward spiral of financial instability and weakened the Kansas’ public schools, universities, Medicaid program, and virtually everything else that the state funds.

With the state facing yet another budget shortfall of $900 million, government leaders decided that enough was enough. Governor Brownback, who heralded the 2012 experiment, was proposing yet more temporary band-aid approaches and more cuts to deal with the shortfalls. The Legislature chose a different path and instead sent the Governor a bill that would raise more than $1.2 billion in new revenue over two years by, among other things, repealing a costly tax break for pass-through income, rebalancing individual income tax rates by reinstating a third tax bracket, and reversing course on the governor’s plan to eliminate our state income tax. Brownback vetoed the legislation but, with bipartisan support, the House and Senate quickly overrode the veto.

Our state has begun the path to fiscal stability and is closer to becoming a model of good policy choices as much as it is a cautionary tale. The damage done to Kansas from this reckless experiment will not be undone overnight, but other states need not wait to act upon the lessons learned. 

Put simply, revenue matters. You can’t get something for nothing. We all want and deserve thriving communities with great schools, parks, and modern roads and bridges; and we chip in to pay for that. That’s what taxes are for. 

Because of the scope of the 2012 changes, it didn’t take long before Kansans in every corner of the state began connecting the dots between the actions of state lawmakers and the quickly eroding quality of the things that make for a good economic foundation in every community. With every subsequent shortfall, the picture became more clear. Meanwhile, the promised economic boom—and the revenue rebound that would supposedly follow—never happened (as economists predicted). In the last few election cycles, voters have viewed candidates and their promises through a different lens, and the 2017 Legislature had the experience and public backing to chart a new course. 

Most state tax codes, including ours, need further reform, but it’s high time that state tax policy adhere to one basic, proven (and now proven once again) principle—states need revenue to invest in the things that create thriving communities and a prosperous economy. Kansas just learned this lesson again, the hard way, so that your state doesn’t have to. You’re welcome.

Heidi Holliday and her team were instrumental in the legislative victory in Kansas. For more background on the failed Kansas tax-cut experiment and the lessons that can be learned from it:

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HIGHLIGHTS

Our Policy Priorities

Washington state should be a place where all our residents have strong communities, great schools, and the chance for a bright future. Our 2017-2019 Legislative Agenda outlines the priorities we are working to advance to build a better Washington.

Testimonies in Olympia

Misha TVW
We're in Olympia throughout the 2018 legislative session to testify in support of bills that advance our legislative priorities. Watch our testimonies on TVW:

Our Seattle Policy Summit

You can watch our Budget Matters 2017 Seattle Policy Summit, which took place on December 6, online. The first part of the day (watch herefeatured Washington State Lt. Governor Cyrus Habib and Race Forward President Glenn Harris. The second part of the day (watch here) featured Budget & Policy Center Senior Policy Analyst Jennifer Tran, and a panel of local leaders moderated by Michael Brown of the Seattle Foundation.