AOF fiscal cliff webinar


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Have you heard about the fiscal cliff?
After the November election, Congress will make decisions about the Bush tax cuts, sequestration, and a number of other federal budget related issues. Join the webinar to learn how it could impact health, human services, and early care & education in Ohio.

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  • There is no doubt we need to control deficits in the long run.Most fiscal analysts agree that we need to stabilize national debt as a percentage of GDP (our economic output), in order to avoid reductions to our standard-of-living. That’s not what’s projected in the long-run.Big problem: Inadequate revenues and system wide health care cost controlSo, despite what you may hear, our debt as a percent of GDP is not projected to rise because of spending on income support programs like SNAP, or Food Stamps, or even because of growth in Pell Grant spending.
  • Here you can see that most large deficit reduction packages in recent memory have included large revenue increases. But so far in 2011, deficit reduction from the only major agreement to date—the Budget Control Act--is on pace to rely entirely on budget cuts, without any contributions from revenues.------------------------------------------(Paul: 1997 deal was Mixed bag. Congress stopped adhering to the tight discretionary caps after a few years, so it is hard to judge them. The Medicare cuts were very largely adhered to, and I don't think they are necessary regretted or caused bad outcomes. The SGR was created and ultimately, after 7 years or so, stopped working -- but the deal only counted on the SGR for a very small proportion of its Medicare savings, and in that it delivered. I am not as enamored of the CTC since it was not made refundable in 1997. I defer to others on CHIP, which is badly designed (a block grant, bad distribution formula, difficult to reallocated funds) and yet nevertheless has been very helpful in increasing the number of children with insurance. What I really don't like, especially in retrospect, was the reduction in the tax rate of capital gains. I don't think we fully appreciated how wrong it was to create such a huge differential between ordinary income and cap gains.Kathy: Well, even at the time of the 1997 legislation CBPP found it unbalanced: Nevertheless there were some progressive aspects to the tax cuts, notably a big expansion in the child tax credit. And I suppose political realities ruled out a better mix of policies. Remember that the 1993 package (with significant revenue increases) barely squeaked to passage, and in 1995 the GOP took the House. The deficit challenge that the 1997 deal tackled was modest by today's standards. As you can see from the chart, it was a respectably-sized package but far from the heroic efforts of 1982, 1990, and 1993. We need a vastly bigger deal today, and discretionary spending is already cut close to the bone.
  • AOF fiscal cliff webinar

    1. 1. The Fiscal CliffWhat does it mean for Ohio?
    2. 2. The Fiscal Cliff What does it mean for Ohio? Featuring: Ellen Nissenbaum, Senior Vice President for Government Affairs, CBPP Debbie Weinstein, Executive Director Coalition on Human Needs Wendy Patton, Senior Project Director, Policy Matters Ohio
    3. 3. TODAY’S AGENDA 3:00 - 3:05 Will Petrik – Intro, agenda and purpose of conversation 3:05 - 3:10Debbie Weinstein – What’s at stake for struggling families and communities? 3:10 - 3:30 Ellen Nissenbaum – How did we get here? What are possible approaches to deficit reduction? 3:30 - 3:40 Debbie Weinstein - What would a cuts only approach mean for human needs programs nationally? 3:40 - 3:48 Wendy Patton - What does it mean for Ohio? 3:48 - 3:50 Debbie Weinstein – What can Ohioans do to advocate for deficit reduction that doesn’t increase poverty or income inequality? 3:50 - 4:00 Q&A
    4. 4. So much is at stake.Why the decisionsCongress will (or Deborah Weinsteinwon’t) make in the October 16, 2012coming months willmatter in Ohio and thenation.
    5. 5. Will Poverty and Economic Insecurity Matter in the Big Decisions Ahead?• 46 million poor people (15%; 16.4% in Ohio).• 106 million people below 2x the poverty line (below $46,000, family of 4) = 1/3 of the nation.• 16 million poor children (22%; 24.2% in Ohio).• Huge racial/ethnic disparities: Total Poor: Children Poor: White: 9.8% 12.5% Black: 27.5% 37.4% Hispanic: 25.3% 34.1%
    6. 6. Top Ten Cities for Child PovertyGary, IN: 70% Reading, PA: 56%Flint, MI: 61% Rochester, NY:55%Detroit, MI: 58% Cleveland, OH:Canton, OH: 58% 55%Camden, NJ: 57% Dayton, OH: 55% South Bend, IN: 54% American Community Survey, 2011
    7. 7. Life and DeathStakes Deaths due to lack of health coverage 25-64 year olds, 2005-201018-64 year olds:U.S., 40m uninsured(21%)21.3m have public U.S. = 134,120insurance (11%).Ohio, 1.2m Ohio = 4,496uninsured1.05m have public Source: Families USAinsurance
    8. 8. Families facing hardships turn to SNAPSNAP caseloads up nationwide –July ’08 July ’11 July ’12 % Increase (7/08 – 7/12) 29 m 45.3 m 46.7 m + 61%• SNAP = Supplemental Nutrition Assistance Program, aka food stamps
    9. 9. EITC, UI, SNAP lift families out of poverty All people lifted out of poverty by EITC, 2011: 5.7 million All people lifted out of poverty by UI, 2011: 2.3 million All people lifted out of poverty by SNAP, 2011: 3.9 million source: U.S. Census Bureau
    10. 10. Huge Fiscal Decisions Lie Ahead: The Key Policy Choices Thursday Webinar for Ohio folks Ellen Nissenbaum Senior Vice President, Government Affairs October 16, 2012
    11. 11. 11Long-Term Debt is Unsustainable
    12. 12. Center on Budget and Policy Priorities 12
    13. 13. Center on Budget and Policy Priorities 13 Number of U.S. Households Living Below World Bank Measure of Serious Poverty in Developing Nations: Living on Less Than $2 a Day, Per Person Cash Income Cash Income plus Food Stamps 636,000 households1996 475,000 households with 1.4 million children 1.46 million householdsStart of 2011 800,000 households with 2.8 million children Source: Shaefer and Edin, “Extreme Poverty in the United States,” 1996 to 10/18/20 2011.
    14. 14. Center on Budget and Policy Priorities 14 Debt limit is Sequestration hits hit in early in January 2013 Current FY13Tax cuts & CR runsUI expire in throughDecember March 27
    15. 15. Center on Budget and Policy Priorities 15 Sequestration:• Automatic across the board spending cuts (9 years)• Primarily hits appropriations• $109 billion in FY 2013; Roughly $1trillion over 9 years• 50% from the defense; 50% from all other nonexempt spending
    16. 16. Center on Budget and Policy Priorities 16• Insert slide from Kelsey that has budget pie chart showing 1/3 of NDD is money for states.
    17. 17. Center on Budget and Policy Priorities 17 Health/other entitlementsDiscretionary Revenues spending Deficit (reduce deficit? Lower rates?) Deal: 3-legged stool (ratio)
    18. 18. Center on Budget and Policy Priorities 18 Non-Defense Discretionary Spending Cuts Far Below Historical Levels cbpp.org10/18/2012 18
    19. 19. Center on Budget and Policy Priorities 19 Over Nine-Tenths of Entitlement Benefit Spending Goes to the Elderly, Disabled, or Working Households
    20. 20. Center on Budget and Policy Priorities Large Deficit-Reduction Packages Have Included Large Revenue Increases
    21. 21. Center on Budget and Policy Priorities 21 KEY DECISIONS TO PROTECT THE POOR• Averting further cuts in NDD (nondefense discretionary)• No cuts in nonhealth low-income entitlements (SSI,etc)• SNAP (no more than the Sen. Farm Bill $4 billion)• No reductions in Medicaid that hit beneficiaries or shift costs to states (which ultimately hurts beneficiaries and could discourage states from adopting the ACA’s landmark Medicaid expansion)• No cuts in the refundable tax credits for working poor (EITC, Child Tax Credit)• Ensuring tax reform raises significant revenues and is progressive
    22. 22. Center on Budget and Policy Priorities 22 There Are Both Risks and Opportunities on Taxes, Especially for Low-Income Families with Children• If new tax revenue is raised, who will bear the burden? Will revenue increases be progressive?• How will low-wage workers fare? Emerging proposals to make everyone who works pay at least some federal income tax would effectively result in a several-thousand-dollar tax increase for low-income working families.• A mother raising two children on full-time minimum-wage earnings now receives a $7,000 tax credit check because of the Earned Income Tax Credit and Child Tax Credit — essentially a large negative income tax. For her to owe income tax would require taking more than $7,000 — the equivalent of $3.50 an hour — away from her.• On another front, if revenues are to be raised as part of a deficit-reduction package, can that provide an opening for a carbon tax or other major energy tax that can help us address global warming?
    23. 23. Center on Budget and Policy Priorities 23 BOTTOM LINE: A Balanced Plan REVENUES• Bipartisan commissions all agree• Getting to $2+ trillion• $1.5 trillion cuts already enacted• What’s “off the table?”• Two big budgetary “losers” w/o major revenues• Big hit on states
    24. 24. Center on Budget and Policy Priorities 24 Core Principles for Deficit Reduction• Must include substantial new revenues & spending cuts• The cuts already made in discretionary spending should be counted• Do not increase poverty or income inequality, or reduce opportunity for those who are disadvantaged.• End the 2001/2003 tax cuts now for the wealthiest 2%• No more cuts in total discretionary spending below BCA• Don’t shift costs to states cbpp.org10/18/2012 24
    25. 25. What happens if the deficit is reduced by spending cuts alone? Don’t like that?Cuts of $110 billion a year Options:for 10 years, evenly • Cut defense less?divided between defense • Cut defense more?anddomestic/international. • Cut domestic programs more deeply?Many low-income • Cut Medicaid,programs exempted. Medicare, SNAP, UI, SSI, low-income tax credits?
    26. 26. Is there room to cut the Pentagon?• If sequestration takes effect through 2021, Pentagon will still have more than it had at height of Cold War (in real terms).• After cuts in 2013, U.S. will still make 40% of world’s military expenditures.
    27. 27. Impact of Automatic Cuts (aka “sequestration”)750,000 – 900,000 fewer infants, children and moms receiving WIC413,000 fewer adults and youth getting job training51,000 fewer veterans in ed/training1.8 million fewer low-income schoolchildren with reading and math help96,000 fewer children in Head Start; 80,000 fewer children in child care
    28. 28. More Impacts…734,000 fewer households with home heating/cooling aid185,000 – 200,000 fewer households receiving rental vouchers100,000 more homeless people because of cuts to Homelessness Assistance Grants1.5 million fewer low-income people helped in community action agencies (through Community Services Block Grant)34,000 fewer women screened for cancer169,000 fewer admissions to substance abuse treatment
    29. 29. How much less than in FY 2010?• Adult job training: 22.5 – 23.5 percent• Adult basic education: 19.5 – 20.5 percent• IDEA education: 12.8 – 14.0%• LIHEAP grants to states: 33.3 – 34.2 percent• Public housing capital fund: 35 – 35.9 percent• WIC: 20.9 – 22.0 percent• Substance abuse treatment: 29.9 – 30.8 percent• Maternal and Child Health: 16.4 – 17.5 percent
    30. 30. A Choice:The cost of continuing The cost of avoidingthe favorable tax sequestration-level cutstreatment for hedge for housing vouchersfund managers: and WIC:$21 billion $21 billionover 10 years over 10 years
    31. 31. Choice #2 ORSpend $156 million for 2 Provide low-costV-22 Osprey child care to 22,000helicopters, which cost children5 times as much asother helicopters anddon’t work well.
    32. 32. Choice #3 ORKeep estate tax low: • Preserve refundable• Helps 7,400 estates tax credits for 13m nationwide, who get families; 25.7m $1.1 million more children. each than if at 2009 • Helps 500,000 Ohio levels. families; nearly 1• Helps 140 Ohio million children. estates. Source: Center on Budget and Policy Priorities
    33. 33. Proposals looming to cut vital programs• Medicaid: block grant? Per capita cap? Ryan budget would block-grant and cut Medicaid by one-third by 2022.• SNAP: block grant? Reduce benefits? Ryan budget would block-grant and cut SNAP by $134b over 10 years.• UI: allow federal benefits for long-term unemployed to expire in December?
    34. 34. Federal Funding in the State Budget: Impact of sequester on funding levels Wendy Patton Senior Project Director Policy Matters Ohio wpatton@policymattersohio.or
    35. 35. Federal share of Ohio’s General Revenue Fund has Grown over timeSource: Policy Matters Ohio based on Legislative Service Commission
    36. 36. Federal program funding in the Ohio Department of HealthSource: Policy Matters Ohio based on Legislative Service Commission Budget in detail
    37. 37. • Figure 1 • Share of Federal Funding in TotalBudget by Service Area, State of Ohio, Current State Biennial Budget (SFY
    38. 38. Ohio to lose $316 million in first year of sequester• $126 million annual cut to K-12 – $58 million – Title 1 (K-12) – $38 million – Special education• Higher education – $3.3 million cut from work study (2000 students) – $2.6 million from supplemental opportunity grantSource: Policy Matters Ohio based on Federal Funds Information for the States
    39. 39. Sequester cuts to health and human services in Ohio• Health and human services in Ohio to see $82 million cut – Head Start loses $25 million – Low income energy assistance to lose $14.6 million – Child care & development block grant - $6.9 million – Substance abuse prevention and treatment block grant - $5.9 millionSource: Policy Matters Ohio based on Federal Funds Information for the States
    40. 40. Strengthening America’s Values and Economy (SAVE) For All Letter with 1,900 signers: 92 in Ohio. Protect low-  Increase revenues income and from fair sources vulnerable people  Seek responsible Promote job savings from the creation to Pentagon and strengthen the other areas economy
    41. 41. You can help!• If your organization • Write an op-ed (we signed the SAVE for can help with All letter, send notes drafting.) to staff for Senators • Write letters to the Brown and Portman. editor responding to• Bring the letter to stories about deficit candidates’ forums. reduction, impending• Set up meetings with cuts. staff – in person or by phone.
    42. 42. CONTACTAdvocates for Ohio’s Future510 East Mound Street, Suite 200Columbus, OH 43215www.advocatesforohio.orgWill Petrik | 614-602-2464Gail Clendenin | 614-602-2463