This material was published by Kaiser Health News.
By Michelle Andrews
Q. My self-employed husband is covered under my insurance plan at work. I am looking at retirement and the spousal insurance cost for retirees is more than $800 per month, which is 40 percent of my retirement income. Would he be eligible for the exchange?
A. He likely is. Almost anyone can buy a health plan on the health insurance marketplaces, also called exchanges, which will open next month. The real question is whether he would be eligible for a premium tax credit to make the plan more affordable.
In general, people who have access to good health coverage that meets standards for affordability and adequacy under the Affordable Care Act aren’t eligible for subsidized coverage on a marketplace. A plan is considered affordable if it costs less than 9.5 percent of income, and adequate if it pays for at least 60 percent of allowed medical costs, on average.
You don’t say whether your husband is 65 or older andeligible for Medicare. If he is, he wouldn't qualify for subsidized coverage on a marketplace if he opts against your retiree spousal coverage.
But assuming he's not eligible for Medicare and doesn't enroll in your retiree health plan, he could qualify for a premium tax credit on the marketplace if your household income is less than 400 percent of the federal poverty level ($62,040 for a couple in 2013).
In contrast to regular employer coverage, "if you’re eligible for early retiree coverage but choose not to take it, you can choose to get subsidized coverage on the exchange," says Timothy Jost, a law professor at Washington and Lee University who’s an expert on the Affordable Care Act.
Please send comments or ideas for future topics for the Insuring Your Health column to questions@kaiserhealthnews.org.
This material was published by the Center for American Progress.
By Daniel J. Weiss, Jackie Weidman, and Stephanie Pinkalla
View disaster-relief spending from federal agencies by state(.xls)
Endnotes and citations are available in the PDF version of this issue brief. Download the report: PDF Read it in your browser: Scribd
The United States suffered from numerous extreme weather events in 2011 and 2012. In fact, there were 25 severe storms, floods, droughts, heat waves, and wildfires that each caused more than $1 billion in economic damages, with a total price tag of $188 billion. To help communities recover from these violent weather events, the federal government spent nearly $62 billion for disaster relief in fiscal years 2011 and 2012. These federal funds only cover a portion of recovery costs; private insurance and individuals harmed by the events also spent billions of dollars.
There is recent evidence that climate change played a role in the extreme weather events of 2012. The recently released analysis from the American Meteorological Society determined that:
Approximately half the analyses found some evidence that anthropogenically caused climate change was a contributing factor to the extreme event examined, though the effects of natural fluctuations of weather and climate on the evolution of many of the extreme events played key roles as well.
Interestingly, many of the states that received the most federal recovery aid to cope with climate-linked extreme weather have federal legislators who are climate-science deniers. The 10 states that received the most federal recovery aid in FY 2011 and 2012 elected 47 climate-science deniers to the Senate and the House. Nearly two-thirds of the senators from these top 10 recipient states voted against granting federal emergency aid to New Jersey and New York after Superstorm Sandy.
Information on federal disaster-relief spending is essential to help Congress and the Obama administration budget enough funds to assist communities with damages from future extreme weather events. This issue brief provides the first-known comprehensive estimate of federal disaster-recovery spending on a state-by-state basis. Federal and individual state governments need these data to better budget funds to help communities recover from future storms, floods, droughts, heat waves, and wildfires, as scientists warn that climate change will increase the incidences of extreme weather. This information also shows federal taxpayers how money for disaster relief has been spent during the past two years.
The estimates in this issue brief are derived from state-specific federal fiscal outlay data for disaster-recovery programs in FY 2011 and 2012. The brief includes state spending data from six federal departments that provide federal funds for these purposes.
At least one additional program is not included in this analysis because the relevant department was unable or unwilling to provide state-specific outlay data. With the increasing cost and frequency of extreme severe weather events, the federal government must make state-by-state data on disaster-recovery spending publicly and readily available.
As the following map shows, the 10 states that received the most federal disaster relief are primarily farm states in the plains and the Midwest. These states suffered billions of dollars of crop losses due to prolonged drought in 2011 and 2012. This necessitated an estimated $28 billion in crop insurance expenditures in FY 2011 and 2012, which comprised a majority of the spending for disaster programs where we could identify state-by-state expenditures. (See Table 1 below, and see the attached Excel spreadsheet for the spending data by program and state.)
Data from the past 30 years reveal an increase in both presidential disaster declarations and billion-dollar extreme weather events. (see Figure 2) In the 1980s, there was an annual average of less than two extreme weather events that caused at least $1 billion in damages, and the average annual total damages from these events was $20 billion (in 2012 dollars). From 2010 to 2012, however, there was an annual average of more than nine extreme weather events with at least $1 billion in damages, with average annual total damages of $85 billion (in 2012 dollars).
What’s worse, the draft National Climate Assessment predicts that the number of extreme weather events will continue to grow and that our communities face growing risks because they were not built for an unstable climate:
Human-induced climate change is projected to continue and accelerate significantly if emissions of heat-trapping gases continue to increase. Heat-trapping gases already in the atmosphere have committed us to a hotter future with more climate-related impacts over the next few decades.
Many [climate-related changes] will be disruptive to society because our institutions and infrastructure have been designed for the relatively stable climate of the past, not the changing one of the present and future.
This past June was the fifth-hottest month on record, and the first six months of 2013 were the “seventh warmest such period on record,” according to the National Oceanic and Atmospheric Administration. As of September 4, there were 44 presidential disaster declarations in 2013 due to climate-related extreme weather events. AON Benfield, a reinsurance company, estimates that extreme weather caused at least $32 billion in economic damages in the United States during the first half of 2013.
What’s more, one-third of the continental United States is suffering from severe, extreme, or exceptional drought as of August 27; the drought has shrunk available Colorado River water for cities dependent on it. As The Weather Channel reported:
More than a dozen years of drought have begun to extract a heavy toll from water supplies in the West, where a report released last week forecast dramatic cuts next year in releases between the two main reservoirs on the Colorado River, the primary source of water for tens of millions of people across seven western states.
The U.S. Bureau of Reclamation—the agency charged with managing water in the West—announced Friday [August 16] that it would cut the amount of water released next year by Lake Powell in Arizona by 750,000 acre-feet, enough to supply about 1.5 million homes.
It marks the first reduction in water flows since the mid-1960s.
“This is the worst 14-year drought period in the last hundred years,” said Larry Wolkoviak, director of the bureau’s Upper Colorado Region.
Wildfires are plaguing the West as well. Nationwide, nearly 35,000 wildfires have burned 3.9 million acres of land as of September 4, according to the National Interagency Fire Center. This includes the ongoing Rim fire in California, which has already burned an area the size of Chicago in and around Yosemite National Park. The U.S. Forest Service, which receives 70 percent of federal fire-protection funding, has depleted its budget for wildfire response, forcing the agency to divert hundreds of millions of dollars from other programs to fight ongoing fires. This funding shortage was exacerbated by the automatic across-the-board sequester budget cuts that shrunk firefighting funds by 5 percent, forcing cuts of 500 firefighters and 50 engines.
Scientists predict that extreme weather will worsen in the coming years even if the United States and other nations make significant reductions in carbon and other climate pollution. Despite this, it is still imperative that the United States significantly reduce its greenhouse gas pollution—starting with carbon pollution from power plants—and continue to build support for the international phase down of hydrofluorocarbons, or HFCs, and other climate pollutants. President Barack Obama’s recently announced Climate Action Plan includes many essential measures that would launch such pollution-reduction efforts.
In addition to pollution reductions, the United States must also plan for the fiscal impact of more frequent or ferocious extreme weather events. The National Academy of Sciences recommended that “a national resource of disaster-related data should be established that documents injuries, loss of life, property loss, and impacts on economic activity.” This should include an annual estimate of total federal disaster expenditures nationally and by state. The latter information is essential for budget planning since states will draw on different disaster-relief programs, depending on the climate impacts in each state. States suffering from drought, for instance, will rely on Department of Agriculture programs to help farmers, while those harmed by hurricanes will need Federal Emergency Management Agency, or FEMA, disaster relief.
Congress must use this information to include full funding for disaster relief in future budgets and spending bills so that Americans can better understand the cost of extreme weather—and the cost of inaction on climate change. In addition, Congress must end budget sequestration to ensure that funds for disaster-relief and -recovery efforts are not reduced further due to across-the-board budget cuts.
The federal government must also invest more funds in communities’ efforts to become more resilient to extreme weather. A recent CAP analysis estimated that the federal government spends $6 on disaster recovery for every $1 invested in reducing disaster damages, even though resilience investments reduce economic damages 4-to-1. Fortunately, President Obama’s Climate Action Plan includes many valuable proposals to help “prepare for the impacts of a changing climate that are already being felt across the country … by building stronger and safer communities and infrastructure.” The plan will marshal existing federal resources to help communities build stronger disaster resilience.
In addition, the government should gather and publish data on current federal community resilience investments and future needs, and also identify a dedicated source of revenue to provide federal investments in state and local extreme weather resilience efforts. This will not only help Americans protect their lives, homes, farms, and businesses, but it should also reduce total federal disaster-relief spending, as resilience investments reduce future damages and disaster-recovery costs.
In 2011 and 2012, Americans suffered from severe droughts, heat waves, wildfires, storms, and floods, which some described as the “new normal” after decades of a relatively stable climate. This climate instability is exacerbated by climate change, as noted by Dr. Kenneth Trenberth of the National Center for Atmospheric Research. He warned that “All weather events are affected by climate change because the environment in which they occur is warmer and moister than it used to be.” In addition to steep climate pollution reductions, we must increase our knowledge about where and how much we are spending on disaster relief to help the United States recover from climate-driven wind, rain, heat, and fire.
To compile state-level outlays from agency budgets for disaster-relief and -resilience programs, we found publicly available budget information from annual budget summaries and reports published on agency websites for FY 2011 and 2012. For the departments and agencies that did not publish this information, we contacted staff from each department and agency with our request and submitted Freedom of Information Act solicitations. Unfortunately, not all of our requests have received replies at this time.
This compilation of federal disaster spending by state comes from multiple agencies. Although we believe that it includes all the major programs that fund disaster relief and recovery annually, it may have some gaps. We welcome any state-by-state spending data for additional federal disaster-recovery programs.
Daniel J. Weiss is a Senior Fellow and the Director of Climate Strategy at the Center for American Progress. Jackie Weidman was a Special Assistant for the Energy program at the Center. Stephanie Pinkalla was an intern for the Energy program.
Thanks to Matt Kasper, Special Assistant for the Energy program.
We were unable to obtain state-specific spending data for the Department of the Interior’s Wildland Fire Management program.
This material was published by the Center for American Progress.
The Center for American Progress released a report called “4 Ways that Austerity Demands Have Reached New Extremes,” which notes that the House Republican caucus is now proposing “spending cuts … so severe that the House Republican caucus has been unable to pass actual spending bills to implement its own budget plan, since those bills would have to make deep and specific cuts that are beyond the pale of what even most conservatives would support.” They are doing so based on the “claim that their demands for more austerity are a response to exploding budget deficits, but in fact, the federal budget deficit is shrinking, not growing.”
As Nobel Laureate economist Paul Krugman argued at length in The New York Review of Books, recent history both in Europe and the United States has proven conclusively that “the results [of austerity] were disastrous—just about as one would have predicted from textbook macroeconomics.” Not only has the experience of the nations that instituted austerity policies made their economic predicaments far worse than before, but the data upon which the arguments were made were also “deeply flawed.” The so-called Reinhart-Rogoff thesis—in which the authors insisted that large levels of government debt would inevitably result in much lower rates of economic growth—was discredited when the authors belatedly made their data widely available in April 2013.
As Krugman notes, Thomas Herndon, a graduate student at the University of Massachusetts, Amherst, found that in addition to a coding error:
… their data set failed to include the experience of several Allied nations—Canada, New Zealand, and Australia—that emerged from World War II with high debt but nonetheless posted solid growth. And they had used an odd weighting scheme in which each “episode” of high debt counted the same, whether it occurred during one year of bad growth or seventeen years of good growth.
The result was “undermining the scare stories being used to sell austerity,” coupled with the understanding that “the immense suffering that has resulted from these policy errors” was all for naught.
The most visible symbol of austerity economics in U.S. politics has been the congressional sequester. Because of Congress’s inability to agree on budget numbers last year, all federal agencies were forced to shave off 5 percent from their budgets. The plan made little sense, not only because of its meat-cleaver approach to budget reduction but also because all sides agreed that the fiscal problems facing the United States derived not from agency spending but from so-called entitlement programs, which were unaffected by the cuts.
Still, right-wingers celebrated the move and continue to do so. In a just-published editorial inThe Wall Street Journal entitled “The Power of 218,” the paper’s editorial staff termed the sequester to be “a rare policy victory the GOP has extracted from Mr. Obama, and it is squeezing liberal constituencies that depend on federal cash.” Such ideological assertions received considerable support in the mainstream media from early reports such as the one that appeared in The Washington Post back in June, entitled “They said the sequester would be scary. Mostly, they were wrong,” by David A. Fahrenthold and Lisa Rein. The report—which did not entirely support the headline—compared what the authors believed to be the scare-tactic warnings of the Obama administration regarding the potential results of the sequester to the actual results that materialized in its first few months. They concluded that in many cases, the “cuts … didn’t cause much real-world pain.” The authors quoted Robert L. Bixby, executive director of The Concord Coalition, which they described as an organization that “pushes for fiscal responsibility in Washington”—apparently, to The Washington Post, “fiscal responsibility” and “budget cuts” are the same thing—explaining, “The dog barked. But it didn’t bite.” In other words, all is well—the warnings were much ado about nothing.
This view has been largely reflected in the media’s sequester coverage. Indeed, outside of those federal workers who have been furloughed as a result of the sequester, it has not always been easy for those of us who enjoy comfortable incomes to discern any ill effects of its implementation. As it happens, I was directly impacted by the sequester when, on the day it went into effect, my flight was canceled due to a lack of manpower at the airport. I ended up taking a long bus ride, but if I had waited a day, then Congress would have saved me the inconvenience. Congress prevented the furloughs of air traffic controllers and other air travel personnel, which would have affected the less vulnerable and more powerful—indeed, senators and representatives themselves—and replaced the furloughs with $253 million from the FAA’s Airport Improvement Program. Thus far, no one appears to have been inconvenienced.
Whenever the mainstream media has focused on the negative effects of the sequester, it has been on the programs favored by conservatives. Cuts to the military have led to complaints by neoconservatives, and former FBI Director Robert Mueller said that sequestration—which will cut about $700 million from the FBI’s $8 billion budget and cause furloughs for its 36,000 employees, possibly beginning next month—will move resources from violent crime and white-collar business fraud to ensure that alleged national security threats and cyber-threats get priority.
Still, the impact of the sequester has been slow to materialize in the minds of most Americans. An ABC News/Washington Post poll taken back in May found that 37 percent of those surveyed said they had experienced negative effects from the sequester, up from 25 percent in March.
In fact, almost all Americans have been or are about to be negatively affected by the sequester in significant ways, though this may not be apparent from anecdotal reporting in the mainstream media. Sequestration will likely prevent the creation of up to 1.6 million jobs in the next year,according to the Congressional Budget Office, and a recent report by Goldman Sachs suggests that this process is already well underway: “Personal income, for example, has been largely stagnant across the board due in large part to a 0.5 percent decline in government wages and salaries in July.”
Where is the reporting about the human cost of the sequester? Back in early May, ProPublicacredited Mother Jones with examples of how sequestration has played out in each of the 50 states and noted that The Washington Post was charting the sequester’s projected and actual impact on federal agencies. It cited Government Executive for tracking furloughs by department and agency, and offered up its own compilation of what it deemed to be some of the best charts and graphics explaining the sequester’s impact. But the reporting on its direct impact—many months later—is still not so easy to locate.
One exception is a story by Nancy Cook in National Journal, “The Sequester’s Devastating Impact on America’s Poor.” In it, she told the story of Kristina Feldotte of Saginaw, Michigan, who is unemployed and one of roughly 82,000 people in that state who have been forced to get by on federal unemployment checks—checks whose dollar amounts have fallen by 10.7 percent since late March. “That’s as much as a $150 per month from payments that, at most, clock in at $1,440.” Cook also wrote about “the Meals on Wheels program in Contra Costa County, California, which, like the national program, has had to cut 5.1 percent of its budget. After losing $89,000 in federal funding over a six-month period, the program had to scale back the number of meals it serves from 1,500 to 1,300 a day.” As a result, Paul Kraintz, director of the county’s nutrition program, said that people will either “die or be institutionalized if we don’t get to them.”
And cuts to the Head Start program have been particularly devastating. It has been forced into a 5.27 percent reduction to its $8 billion in funding. As Sam Stein noted in The Huffington Post:
All told, 57,265 children (nearly 6,000 of whom attend Early Head Start) saw their services eliminated, according to data provided to The Huffington Post by HHS. The state to take the biggest hit was California, where 5,611 Head Start kids were denied a spot in the program. In Texas, that number was 4,410. In New York it was 3,847. But underscoring just how widespread the effects of sequestration have been felt, even smaller states were impacted. In North Dakota, Head Start eliminated 194 slots in its program. In Rhode Island, it cut 450 positions. Even in far-flung Hawaii, 72 Head Starts slots were slashed.
Stein’s reporting in The Huffington Post has been one of the only sources where one could consistently keep up with the effects of the sequester. His most impressive report, entitled “Sequestration Ushers In A Dark Age For Science In America,” focused on the long-term, self-inflicted damage America was doing to itself by ruining decades of important research projects that will never be able to be repeated, simply by removing funding in a foolish manner. People will undoubtedly die as a result of this over time, and science will be set back for decades. “‘It is like a slowly growing cancer,’ Steven Warren, vice chancellor for research at the University of Kansas said of sequestration at a recent gathering of academic officials in Washington, D.C. ‘It’s going to do a lot of destruction over time.’”
Unfortunately, by the time Americans become aware of that destruction—not only to science but to much of the fabric of life in our nation, and particularly to the lives of our most vulnerable citizens—it will likely be far too late to address its consequences.
Eric Alterman is a Senior Fellow at the Center for American Progress and a CUNY distinguished professor of English and journalism at Brooklyn College. He is also “The Liberal Media” columnist for The Nation. His most recent book is The Cause: The Fight for American Liberalism from Franklin Roosevelt to Barack Obama, recently released in paperback.
This material was published by the Center for American Progress.
By Ben Olinsky and Sasha Post
Endnotes and citations are available in the PDF version of this issue brief. Download the report: PDF Read it in your browser: Scribd
Areas with large middle classes enjoy far more economic mobility than areas with small middle classes. Consequently, low-income children who grow up in regions with large middle classes are likely to become more financially successful than those who do not. This finding provides powerful new evidence that a strong middle class and economic opportunity go hand in hand.
Despite our plentiful political disagreements, Americans share a common commitment to equality of opportunity. Indeed, a remarkable 97 percent of Americans believe that every person should have an equal opportunity to get ahead in life.
Yet over the past few decades, a child’s chance of succeeding in life has become increasingly dependent on the circumstances into which he or she is born. Children of low-income parents tend to grow up to earn lower incomes themselves, while children of affluent parents tend to remain affluent. More than 4 in 10 children who start at the bottom stay at the bottom, and close to 4 in 10 children who start at the top stay at the top. If we aspire to give every child the chance to achieve the American Dream, we must do better. We must clearly understand the determinants of economic opportunity and craft solutions that will help to reignite it.
Last month, four economists from Harvard University and the University of California, Berkeley—Raj Chetty, Nathaniel Hendren, Patrick Kline, and Emmanuel Saez—made an important contribution to this effort by releasing a comprehensive study of intergenerational income mobility across the United States. Their study revealed not only that mobility varies substantially across metropolitan areas and other geographic regions, but that these variations are associated with a number of regional characteristics, such as school quality, civic and religious engagement, the share of single-parent families, and geographic sprawl. In other words, the variation in economic mobility is not random. Some characteristics likely improve mobility, while others dampen it.
By using the same data and methodology employed by Chetty and his colleagues, we can see that one of the most important characteristics is the size of the region’s middle class. Put simply, the data show that when a region has a larger middle class, its low-income children are likely to be more upwardly mobile. Indeed, the size of a region’s middle class is a stronger predictor of economic mobility than all but 2 of the 28 regional characteristics that the study’s authors tested.
This finding—that the middle class and mobility are strongly related—is very much in line with recent research that shows a negative correlation between intergenerational mobility and economic inequality. International studies have shown that countries with more inequality have less economic mobility, a relationship termed the “Great Gatsby Curve” by Alan Krueger, the former chairman of President Barack Obama’s Council of Economic Advisers. Now we know, based on the study from Chetty and his co-authors, that this relationship is true right here within the United States, not only across countries.
For too long, a strong middle class was believed to be merely the consequence of strong economic growth, not the other way around. Furthermore, income inequality was often dismissed as a natural and harmless side effect of a purportedly equal-opportunity economy. But increasingly, those understandings have been upended. A growing body of scholarship suggests that a strong middle class can drive prosperity while high inequality can hamper it.
The latest data from Chetty and his colleagues add to this work by revealing that the middle class and inequality are clearly linked with mobility: Regions with larger middle classes and lower income inequality have higher mobility. By contrast, their findings undercut the key premise of “supply-side” economic theory by showing that places where state income taxes are lower and less progressive actually have lower mobility. These findings should have a dramatic impact on the debate over whether and how to address ever-widening income disparities and an ever-weakening middle class.
Americans have long believed that their children would be better off than they were; today, only half of all Americans hold this belief. This growing pessimism is based on tectonic shifts in the American economy. In the decades following World War II, the benefits of robust economic growth were broadly shared. As a result, from the late 1940s to the early 1970s, families from across the income spectrum saw their incomes grow at nearly the same rate, roughly doubling over this period. But since the early 1970s, productivity growth has decoupled from median wage growth. Consequently, nearly all of the income gains from the last 40 years of growth have gone to the richest 10 percent. And in the past decade, median family income actually declined. In 1963, President John F. Kennedy famously declared that “a rising tide lifts all boats.” Today, however, this no longer holds true.
As economic advancement has stalled for most families, the circumstances into which Americans are born increasingly dictate their futures. A number of studies suggest that the United States enjoyed substantial intergenerational mobility from the 1940s to around 1980. But this postwar period of economic opportunity began to stall for the generation of Americans who joined the workforce during the 1980s. In the following three decades, mobility has stagnated, and the prognosis for today’s children is particularly worrisome—Stanford University Professor Sean Reardon found that the educational achievement gap between rich and poor students grew 40 percent over the past 30 years. This is a troubling indicator that could signal further declines in mobility.
As the Pew Economic Mobility Project noted, “the view that America is ‘the land of opportunity’ doesn’t entirely square with the facts.” Indeed, data show that the United States has less relative mobility than almost any country in Europe. In particular, Pew found that the top and bottom are “sticky”—42 percent of children born to parents in the poorest income quintile remain in the bottom quintile, while 39 percent born to parents in the top fifth remain there.”
When Pew looked at the mobility prospects for poor black children, they found that they were worse than those for poor white children. They also found that a majority of black children whose parents were middle class in the late 1960s grew up to have less family income than their parents did. Indeed, almost half of black children whose parents were in the middle income quintile have fallen to the bottom quintile, compared to only 16 percent of white chilren.
America considers itself to be a country in which success is determined by talent and hard work, not the size of your parents’ bank account. Declining mobility directly contradicts this principle and also threatens our future prosperity. Economic growth depends on ensuring that we can make full use of a precious national resource: the American workforce. That means we must cultivate individuals’ talents and make sure that every person can realize their full potential. This is not merely a moral matter, it is an economic imperative: When one person is held back, all Americans are held back.
With economic mobility on the decline, it is critical to understand what factors might slow or reverse this trend. That is why the report from Chetty and his colleagues is so important and has garnered so much attention. Their findings show that variations in mobility are not random, but rather are systematically associated with certain regional characteristics.
Much of the coverage of that study has highlighted factors such as school quality, civic and religious engagement, the share of single-parent families, and geographic sprawl. But Chetty and his colleagues have yet to publish any analysis testing the relationship between mobility and the middle class. As a result, one of the single strongest predictors of regional mobility has barely been discussed.
Using the same data and methodology as Chetty and his colleagues reveals that the size of the middle class is strongly linked to mobility. The relationship is striking and statistically significant. Specifically, the correlation coefficient between the size of a region’s middle class and its economic mobility is nearly 0.69. Moreover, nearly half of the regional variance in mobility is explained by the size of the middle class.
To put this relationship in perspective, consider that Chetty and his colleagues examined 28 different characteristics that might or might not be associated with economic mobility. These characteristics range from student test scores to geographic sprawl. The size of the middle class is more strongly associated with mobility than 26 out of 28 characteristics, and is only barely exceeded by the concentration of single mothers and a region’s divorce rate.
This association means that as a region’s middle class expands, so too does mobility. Specifically, the data suggest that for every percentage-point increase in the share of a region’s population who fall between the 25th percentile and the 75th percentile of the national household income distribution, children who begin at the 25th percentile of the income distribution will climb up nearly half a percentile. So if one city’s middle class is 10 percentage points larger than another’s, we would expect that its low-income children will grow up to earn incomes that put them 5 percentiles higher in the national distribution.
For example, imagine a city in which 40 percent of the population is in the middle class. According to the data, a child who begins in the 25th income percentile could expect to reach the 37th percentile when he or she turns 30. But if the city’s middle class were larger, say, 50 percent instead of 40 percent, then a low-income child could expect to end up in the 42nd percentile, making around $26,000 a year instead of $22,000 a year. That’s almost $4,000 in additional income—a 17 percent increase.
What is correlation?
One way to understand the relationship between the size of a region’s middle class and its level of mobility is to look at the extent to which they are “correlated.” The correlation between two variables tells you how accurately you can predict one variable just from knowing the other one. For example, there is a high correlation between the average number of runs that a baseball team scores in each game and the number of games that it wins in the season. Knowing the number of runs doesn’t tell you precisely how many games the team won, but we know that teams that score more runs tend to win more games.
The strength of a correlation is called its “coefficient,” which is measured on a scale from -1 to 1. A coefficient of 0 means that the two variables have no relationship and change entirely independently of each other. As the coefficient approaches 1, the two variables are more “positively” correlated because they increasingly move up or down in tandem. By contrast, as the coefficient approaches -1, the variables are more “negatively” correlated, meaning that changes in one variable are accompanied by opposite but proportional changes in the other. Using the same example, wins are positively correlated with runs, but negatively correlated with fielding errors.When we look at the relationship between the size of a region’s middle class and its mobility, we find a large positive coefficient of 0.69. That means that just by knowing the size of a region’s middle class, we can guess its level of mobility with a fairly high degree of accuracy.
One objection to the association between middle-class size and mobility might be that looking at the “size of the middle class” is just another way of looking at poverty concentration. Since the middle class is defined here as the percentage of a region’s population falling between the 25th percentile and the 75th percentile of the national income distribution, you could reasonably assume that regions with smaller middle classes also have higher amounts of poverty. Indeed, the size of a region’s middle class and its poverty level are correlated, with a correlation coefficient of -0.539. Perhaps, then, the size of the middle class is irrelevant and what truly affects mobility is the amount of poverty in a region. But even after accounting for a region’s poverty concentration, the size of the middle class still retains substantial independent explanatory power—far more than the poverty level.
A second objection might be that although the data clearly demonstrate that there is a strong link between the size of the middle class and economic mobility, it does not establish a causal relationship. For instance, it is possible that greater economic mobility is producing a larger middle class, not the other way around. But existing social-science research suggests several mechanisms by which the size of a community’s middle class may causally contribute to upward mobility.
For example, consider the relationship between the middle class, education, and mobility. Previous research by David Madland and Nick Bunker at the Center for American Progress found that states with larger middle classes invest more in education and have stronger student performance. In addition, Chetty and his colleagues found a strong correlation between student test scores and economic mobility for lower-income students. This finding is in line with economic research showing that educational attainment and human-capital development are critical contributors to an individual’s earning potential. One could thus imagine a causal pathway by which a larger middle class leads to better schools, which in turn offers greater mobility for low-income students.
Finally, one troubling finding is that few regions of the country with large African American populations have high mobility. In light of this observation and the fact that African Americans have much less economic mobility than other groups, we checked to see whether race might limit the relationship between the middle class and mobility. The results are concerning: In regions with large African American populations, increases in the middle class’s size are linked to smaller increases in mobility than in other regions. This suggests that the middle class’s influence on mobility may be dampened by racial inequities, both social and economic. The size of the middle class is a powerful predictor of mobility, yet its reach is limited by our nation’s troubling legacy of racial inequity.
The finding that mobility is closely linked to the size of the middle class adds to a growing body of research suggesting that high-income inequality is a major drag on U.S. mobility. For example, Daniel Aaronson and Bhash Mazumder have found that inequality and mobility in the United States have moved in tandem over the past 70 years.
Moreover, Canadian economist Miles Corak has used Organisation for Economic Co-operation and Development, or OECD, data to show that countries with more income inequality have less intergenerational mobility, the relationship that Alan Krueger has called the Great Gatsby Curve. Dan Andrews and Andrew Leigh also found a statistically significant relationship between a country’s inequality and earnings persistence between fathers and sons; according to their study, economic inequality explains 71 percent of the variance in intergenerational mobility across countries.
The strong inverse relationship between inequality and mobility is further demonstrated by the Chetty study, which shows that the Great Gatsby Curve holds not only across countries but across regions within the United States. They define inequality as the dollar difference between incomes at the 25th percentile and the 75th percentile in a region’s household income distribution. They also find a significant negative correlation (-0.475) between inequality and intergenerational income mobility, demonstrating that regions with greater inequality have less mobility.
These findings give strong support to the notion that economic policymakers should focus on strengthening the middle class. But there is a different theory about how the economy works that has enjoyed enormous influence in recent decades. That theory, known as “supply-side” or “trickle-down,” maintains that the rich are job creators and that giving tax cuts and other benefits to those few at the top of the income ladder will generate economic prosperity and opportunity for everyone else. Recent scholarship and economic experience have revealed significant flaws with this theory, showing that giving tax cuts to the rich does not increase economic output. Rather than boosting growth and mobility, supply-side policies, such as the Bush tax cuts of 2001 and 2003, have exacerbated income inequality and failed to create new jobs.
The data from Chetty and his colleagues’ study further undercuts supply-side’s central premise—that higher taxes are anathema to prosperity. If supply-side theory were right, then we should expect regions with higher taxes to have lower economic mobility. But there is simply no evidence of any such relationship; to the contrary, there is a small positive correlation. In regions with higher state income tax levels, low-income children were slightly more mobile than in regions with lower state tax levels. Moreover, supply-side theory predicts that asking the rich to pay more taxes would diminish mobility; instead, Chetty and his colleagues found that states with more progressive income taxes had greater mobility. These two findings are in direct opposition to the supply-side theory that taxing the rich will reduce prosperity for all.
All Americans—conservatives and liberals alike—have long imagined our nation to be a land of equal opportunity, where anyone can succeed by dint of talent and hard work. Yet the reality is that economic mobility is a scarce commodity, and a child’s life chances are too often dictated by his or her parent’s pocketbook.
We now know that regions of the United States that have larger middle classes and less inequality have more economic mobility. As a consequence, a low-income child who grows up in an area with a large middle class is likely to earn more money and make a better life for himself or herself. Giving tax breaks and other benefits to the wealthy will only perpetuate the current era of diminished mobility; to reignite opportunity, policymakers must grow and strengthen a vibrant middle class.
Ben Olinsky is a Senior Fellow at the Center for American Progress. Sasha Post is Advisor to CAP President and CEO Neera Tanden.
This material was published by Kaiser Health News.
By Michelle Andrews
One of the health care overhaul's most far-reaching provisions prohibits health plans from refusing to cover people who are sick or charging them higher premiums. Still, for people with serious medical conditions, the online health insurance marketplaces present new wrinkles that could have significant financial impact.
Obviously, premium costs will be an important consideration for consumers. But just as important will be a realistic assessment of what kinds of out-of-pocket costs they could expect with different types of policies and what subsidies they will be eligible for.
"Everybody should be factoring in cost sharing along with the premium to try to assess what their total financial exposure is," says Jennifer Tolbert, director of state health reform at the Kaiser Family Foundadtion. (KHN is an editorially independent program of the foundation.)
The law requires new individual and small group plans sold on the online marketplaces, also called exchanges, and on the private market to cover a comprehensive set of 10 "essential health benefits," including prescription drugs, hospitalization and doctor visits. The benefits covered will be similar in all plans, but the proportion of the costs that a consumer pays will vary.
There will be four different levels of plan coverage, each identified by a precious metal: Platinum plans will pay 90 percent of covered expenses, on average; gold plans will pay 80 percent, silver plans 70 percent and bronze plans 60 percent.
Tax credits to help cover the cost of the premiums for plans sold on the exchanges will be available to people with incomes up to 400 percent of the federal poverty level ($45,960 for an individual in 2013), and cost-sharing subsidies will reduce the out-of-pocket costs for people with incomes up to 250 percent of poverty ($28,725 for an individual in 2013). The maximum amount that consumers will owe out of pocket for in-network medical claims will generally be capped at roughly $6,400 for individuals and $12,700 for families in 2014. (Those figures do not include money spent on premiums.)
How all those elements work together can have cost and coverage implications for people with high medical expenses.
For example, even though the premium for a platinum plan will generally be higher than that of a bronze plan, the out-of-pocket spending cap may be significantly lower since platinum plans must cover 90 percent of expenses. In California, for example, the out-of-pocket spending limit on a platinum plan is $4,000, compared with $6,400 for other metal level plans.
For people who expect to hit their spending cap, buying a pricier platinum plan may actually result in lower total spending, says Marc Boutin, executive vice president and chief operating officer at the National Health Council, a patient advocacy organization.
"It's counterintuitive," he says.
Insurers anticipate that people with high medical costs will gravitate toward platinum and, to a lesser extent, gold plans, and they're pricing those plans accordingly, say experts.
If only one member of a family has high medical expenses, families may want to consider splitting coverage between different plans.
"Many insurers are expecting that savvy families will enroll a sick family member in a platinum plan and the rest in lower level plans," says Tolbert.
Depending on where people live, that strategy could run into snags. Although splitting family coverage is allowed on the individual market, state and federal officials say the Department of Health and Human Services is considering whether to limit the practice on the exchanges it will run in 34 states next year, as are some states setting up their own exchanges.
In addition, platinum plans may not be available in every state. For example, none of the seven insurers that have been approved to sell plans on the Washington State Health Benefit Exchange will offer platinum plans next year, says spokeswoman Bethany Frey.
A platinum plan may not be the best option in any case, even for people with expensive medical conditions. Although premium tax credits are available for any type of plan, cost-sharing subsidies that can substantially reduce deductibles, copayments and coinsurance are only available on silver plans.
"If you qualify for cost-sharing reductions, you'll have lower out-of-pocket costs for doctor visits," among other things, says Carrie McLean, director of customer care at ehealthinsurance.com, an online vendor. "Add those things up and see what would happen if you were to forgo that [subsidy] and get the platinum plan."
In addition to how much the plan costs overall, people with serious medical conditions need to carefully review whether the drugs they take are on the plan formulary, and the specialists and facilities they visit regularly are in the plan's network, say experts, as well as their out-of-pocket costs to go out of the network.
"People need to do an honest assessment of their needs, and determine what's on their 'must have' list," says Kirsten Sloan, senior director of policy at the American Cancer Society’s Cancer Action Network.
Please send comments or ideas for future topics for the Insuring Your Health column to questions@kaiserhealthnews.org.
Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.
This material was published by the Center for American Progress.
By Arkadi Gerney and Chelsea Parsons
Endnotes and citations are available in the PDF version of this report. Download the report: PDF Download introduction & summary: PDF Read it in your browser: Scribd
The shooting death of Trayvon Martin and George Zimmerman’s subsequent acquittal have focused the nation’s attention on expansive self-defense laws—so-called Stand Your Ground laws—that enable an individual to use deadly force even in situations in which lesser force would suffice or in which the individual could safely retreat to avoid further danger. Leaders from around the country, including President Barack Obama and U.S. Attorney General Eric Holder, have questioned how Florida’s law—which is similar to laws enacted in 21 other states—may have contributed to the circumstances that led to Martin’s death.
Yet the Martin case also implicates another set of laws: the state laws governing who may carry concealed firearms—the laws that put a gun in Zimmerman’s hands in the first place. Under Florida law, even individuals such as Zimmerman, who have a criminal history and a record of domestic abuse, are generally entitled to a concealed carry permit, as long as they are not barred from gun possession under federal law and as long as their offense does not meet a very narrow range of additional exclusions under state law. If Zimmerman had applied for a permit in one of the many states with stronger permit requirements, his history of violence and domestic abuse would likely have disqualified him from obtaining a concealed carry permit. This case might then have had a very different outcome.These bodies of law—Stand Your Ground and concealed carry permitting—concern issues that are traditionally left to the states. In many ways, these issues are appropriately decided at the state level; the self-defense and concealed carry laws of New Jersey should not be imposed on Montana and vice versa. But there is an appropriate federal role. The federal government should ensure that states do not enact laws that have racially disparate impacts or significantly jeopardize public safety.
Additionally, in recent years, the issue of concealed carry permitting has become a federal one. The National Rifle Association, or NRA, has encouraged Congress to enact legislation that would create a national concealed carry mandate superseding individual state permitting laws. The NRA has described such national “concealed carry reciprocity” as its “top priority,” and since 2009, NRA backers in Congress have repeatedly introduced legislation and amendments that would override existing state-law standards and create national concealed carry with standards of the lowest common denominator.
In the pages that follow, we consider the intersection of Stand Your Ground laws and weak state permitting laws that allow potentially dangerous individuals to carry concealed, loaded weapons in public with little law enforcement oversight or discretion. This report begins with a review of Stand Your Ground laws, examining the net effect on public safety and the disparate racial impact of these laws. We then examine how weak concealed carry laws compound those dangers. In conclusion, we offer recommendations for how the states, the Obama administration, and Congress can work together to ensure that these laws enhance—rather than jeopardize—public safety.
As the states, Congress, and the administration confront the challenges created by the variety of state approaches to self-defense and concealed carry laws, they should seek to balance competing interests. On the one hand, there is a legitimate state interest in tailoring laws to the particular needs and circumstances of its citizens; on the other, there is a federal interest in ensuring that such laws are applied equitably and do not jeopardize public safety. Likewise, it is important to respect the rights of responsible, law-abiding gun owners while protecting the public safety of all citizens. Achieving this balance will require an enhanced role by the Department of Justice in evaluating Stand Your Ground laws, congressional scrutiny of efforts to undermine states’ strong concealed carry laws, and more careful state-level reviews of the benefits and risks of these two bodies of law and how they intersect.
Arkadi Gerney is a Senior Fellow at the Center for American Progress. Chelsea Parsons is Associate Director of Crime and Firearms Policy at the Center.
This material was published by the Center for American Progress.
By Harry Stein and John Craig
Endnotes and citations are available in the PDF version of this issue brief. Download the report: PDF Read it in your browser: Scribd
The fiscal debate hit a critical turning point on July 31, when leaders in the House of Representatives abandoned efforts to pass their transportation and housing spending bill after determining that a majority of House members opposed it. This typically routine legislation was an attempt by supporters of this year’s House budget resolution—authored by Rep. Paul Ryan (R-WI)—to implement the deep cuts to domestic programs required by their budget. The specific cuts to infrastructure investment, public safety, and protections for low-income Americans, however, were so severe that even members of Congress who voted for the abstract austerity of the Ryan budget opposed them. House Appropriations Committee Chairman Hal Rogers (R-KY), who runs the committee responsible for writing the spending bills to implement the Ryan budget, stated, “With this action, the House has declined to proceed on the implementation of the very budget it adopted just three months ago.”
The transportation and housing bill is 1 of 12 appropriations bills. Congress passes these bills every year to fund the government or passes a continuing resolution based on a prior year’s appropriations bill. Congress passes a budget resolution to cap overall spending, and the appropriations bills decide how to allocate funds to specific government programs within that overall cap. For the House of Representatives, the Ryan budget sets the overall spending cap.
The transportation and housing bill represented the sincere effort of Ryan budget supporters to allocate the budget’s spending cuts in the best way possible. When members of Congress saw what these specific cuts actually looked like, however, they refused to support the bill, as it would abandon our nation’s infrastructure to disrepair and obsolescence.
Here were some of the bill’s specific cuts, which this issue brief will explain in further detail below:
The transportation and housing bill had to make these cuts because the Ryan budget’s overall spending limit was just too low. The budget limited overall nondefense discretionary spending—the spending that Congress approves on a yearly basis—to a level significantly below the one set by the across-the-board cuts known as sequestration. Even though the Congressional Budget Office, or CBO, estimates that sequestration will eliminate 900,000 jobs in FY 2014, the Ryan budget argued that the cuts could be reallocated to protect important programs and promote economic prosperity.
The transportation and housing bill’s failure shows that the deep cuts demanded by the Ryan budget simply cannot be allocated in a responsible way. And amazingly, under the House plan, many sectors would be hit even harder than transportation and housing. (see Figure 1) Sectors such as health care, diplomacy, energy, and other areas would absorb even deeper cuts.
Fortunately, this kind of severe austerity is completely unnecessary. Discretionary spending has already been deeply cut, and the federal budget picture is much improved from a few years ago. (see Figures 2 and 3) Congress has already committed to $2.5 trillion in deficit reduction over the next 10 years, about three-quarters of which will come from spending cuts—which does not include sequestration.
Those spending cuts began with the 2011 appropriations process and culminated with the pre-sequestration spending caps in the Budget Control Act of 2011, leading to $1.5 trillion in spending cuts over 10 years. By allowing the Bush tax cuts of 2001 and 2003 to expire for incomes above $400,000—$450,000 for joint filers—Congress raised revenues by about $630 billion over 10 years. Taken together, these actions will reduce spending on interest payments for the national debt by an additional $400 billion over 10 years.
Unlike the House of Representatives, the Senate’s appropriations bills conform to the pre-sequestration limits set by the Budget Control Act. In the Senate Appropriations Committee, six Republicans joined every Democrat to support their version of the transportation and housing bill. This bill received majority support on the Senate floor but was blocked by a filibuster.
By the end of September, Congress will have to resolve the vast differences between the House and Senate plans to fund the government for FY 2014. While Washington will debate this question in terms of broad spending levels, Americans will feel the real impacts in cuts to specific programs. The following examples highlight programs that the House Appropriations Committee judged as the best areas to cut in order to implement the Ryan budget; these were the lowest-hanging fruits left after several years of earlier spending cuts. These cuts would have eliminated jobs, reduced economic competiveness, and created greater social, economic, and fiscal problems that would have to be addressed down the road. The failure of the transportation and housing bill demonstrates that there is no low- or even medium-hanging fruit left in the domestic discretionary budget.
The TIGER grant program partners the U.S. Department of Transportation with state and local agencies to invest in nationally significant upgrades to our transportation infrastructure. Projects seeking TIGER funding are competitively selected based on the benefits they offer to their community and the nation at large. The House transportation and housing bill would have completely eliminated TIGER—a successful and popular program that received 568 applications from state and local governments in 2013 totaling more than $9 billion, despite only being authorized to issue $474 million in grants.
TIGER grants target multimodal and multijurisdictional projects that have traditionally been hard to fund, with most federal funding separated by both jurisdiction and transportation sector. By unifying America’s transportation systems sector to sector and geographically, TIGER funds deliver especially large economic returns. In Mobile, Alabama, for example, TIGER funds are helping connect the Port of Mobile to the freight rail system. The project is estimated to support 600 jobs, increase port capacity by 25 percent, and lower transportation costs by $25 per container. And in Rhode Island a TIGER grant will help rebuild the Providence Viaduct. The viaduct is a bridge and overpass in downtown Providence that is the third-heaviest-traveled section of Interstate 95, which runs along the entire East Coast. The viaduct currently requires frequent repairs and partial closures—costly problems that this modernization will address.
Cutting the TIGER program would prevent other nationally important transportation projects from getting off the ground, adding to an infrastructure backlog that will place greater strain on federal, state, and local budgets in future years. Eliminating TIGER grants also means eliminating jobs—an estimated 10,200 jobs lost relative to the Senate bill. In addition to creating thousands of new jobs, TIGER funds in the Senate bill would increase American competitiveness by reducing the cost and time of commuting to work and getting goods to market.
The House transportation and housing bill would have also cut the FAA budget, reducing their facilities and equipment account by more than 20 percent. The cuts would impact staffing, research, equipment, and operations and would place a major strain on the service and improvements that American airports can afford. Cutting equipment replacement today only pushes those costs onto future budgets, while delaying major air traffic control innovations leaves us with a less efficient system.
Within the larger facilities and equipment account and elsewhere in the FAA budget, the Next Generation Air Transportation System, or NextGen, would be cut by an estimated $90 million—25 percent of the total budget request for NextGen. A fully funded NextGen technology system would shift air traffic control to a smarter satellite tracking system that allows easier runway approaches for arriving planes, greater fuel savings, and more environmentally friendly air travel. One specific example of the NextGen technology’s benefits is displayed in Houston, Texas, where the approach to the airport could be shortened by 10 minutes, resulting in greater convenience for passengers, less noise for neighbors, and less pollution in the environment.
By cutting back on investment in this new technology, flights would continue to waste fuel and delay passengers across the country. Shifting to NextGen would not only save money and time, but the weather- and hazard-identification aspects of the system would make flying safer as well. Cutting current investments in this system merely pushes this spending onto future budgets.
The House transportation and housing bill would have cut one-third of Amtrak’s funding, leaving Amtrak with its lowest funding level in more than a decade. That would put all of Amtrak’s services at risk, according to Amtrak President and CEO Joe Boardman. Some routes might be closed down entirely, and trains throughout the nation may have to operate at slower speeds to preserve safety.
In addition to reducing service today, these cuts come at a time when greater investment in rail travel is desperately needed on the Northeast Corridor to meet the expected 60 percent increase in demand by 2030. With adequate funding, Amtrak plans to not only increase the capacity for intercity travel but also enable commuter trains throughout the corridor to operate more frequently during rush hours.
Just one year ago the House Appropriations Committee recognized the importance of investing in better rail service, recommending nearly $1.5 billion for capital and debt-service grants. Now, however, the House funding level would only leave $600 million for debt service and capital improvements. With $200 million devoted to debt service and another $200 million to maintenance and equipment, the remaining $200 million does not even cover half of next year’s normal capital improvements along the Northeast Corridor alone.
While the Ryan budget endorses the use of block grants to radically transform Medicaid, the House transportation and housing bill would have cut Community Development Block Grants, or CDBGs, to the lowest level ever in the program’s 38-year history. This kind of cut is completely unprecedented; the Republican-controlled House Appropriations Committee actually recommended a funding increase for CDBGs just one year ago. The difference now is that the harsher austerity in this year’s Ryan budget makes cuts such as this one a mathematical necessity.
Community Development Block Grants empower state and local officials to invest in infrastructure, affordable housing, job creation, and social services in ways that best meet their local needs. In California’s Sonoma County, for example, CDBG funds were combined with other sources to build Lavell Village, an affordable community for 49 low-income families. Fort Bend County in Texas used CDBGs to construct a water and sewer system. Volusia County, Florida, used CDBG funding to build a community center serving 1,500 low-income residents.
Recognizing how important CDBGs are to communities across the country, the House of Representatives actually reversed a small portion of this cut. A floor amendment from Rep. Shelley Moore Capito (R-WV) raised CDBG funding by $350 million, from $1.637 billion to $1.987 billion. This increase, however, would still be a 33 percent cut relative to FY 2013—to a program Rep. Capito called “vital” and “essential.”
But Rep. Capito’s amendment had to make cuts elsewhere in the bill in order to conform to the Ryan budget’s overall spending limits. The amendment made deep cuts to Housing and Urban Development, or HUD, administrative expenses, jeopardizing HUD’s ability to carry out its mission effectively without waste, fraud, and abuse. The amendment also cut another major block grant for affordable housing, which had already been cut to historic levels. Rep. Capito conceded that, “It was very difficult to find an offset for this,” but choices similar to these would be the new normal under the Ryan budget.
Even after restoring some of the cuts to the CDBG program, the House cut would still cost our country 30,000 jobs relative to the Senate bill. This cut would also add to our nation’s growing backlog in both infrastructure and affordable housing and shift more costs onto cash-strapped states and localities.
Our nation’s public housing stock has a backlog of more than $20 billion in capital needs. Yet the House transportation and housing bill would cut capital investments in public housing to their lowest level since 1987. This is a severe cut that does nothing to improve the nation’s long-term fiscal health. Maintenance costs go up, while needed repairs and modernization projects must still be paid for in future years. Failing to invest in public housing also eliminates jobs. The House bill, for example, would cut 13,000 jobs relative to the Senate bill.
While public housing literally crumbles, the House bill would cut the largest federal block grant focused exclusively on affordable housing to the lowest level ever in the program’s 22-year history. The HOME Investment Partnerships Program is a flexible program that has worked with state and local governments to create more than 1 million affordable homes. In Windsor, Vermont, for example, HOME funded an award-winning redevelopment of Armory Square Apartments, reversing the deterioration of a historic building that had fallen into disrepair and was overrun with drugs and violence. Local leaders in Bryan, Texas, use HOME funds to support construction training programs in their high schools and prisons, which have built more than 50 homes for working-class families.
In FY 2010 HOME provided more than $1.8 billion to support affordable housing projects. The House legislation initially cut HOME funding to $700 million, less than half of the support it provided just three years ago. The Capito Amendment cut HOME even further, to $600 million. The Senate bill provides $1 billion for HOME—more than the House bill but still a substantial cut from 2010 levels. According to HUD, the additional cut by House Republicans would eliminate 7,200 jobs compared to the Senate bill.
One of the worst consequences from austerity to emerge in the House transportation and housing bill is a 58 percent cut to lead-removal grants. While lead paint was banned in 1978, the toxin remains in more than three-quarters of the homes built prior to the ban, leaving more than 500,000 American children with elevated levels of lead in their blood. Lead poisoning causes permanent brain damage and is linked to lower IQs, learning disabilities, and even violent crime.
Since 1993 HUD’s Office of Healthy Homes and Lead Hazard Control has partnered with states, cities, and the private sector to remove lead from more than 200,000 homes. With funding from HUD, cities in the Boston area are removing lead-contaminated soil and lead paint from hundreds of homes. Somerville Mayor Joseph A. Curtatone said:
As a richly historic community, we also have a large percentage of aging homes and infrastructure that contribute to higher rates of lead paint, and without the support of HUD and its grant program, Somerville would not be as successful in our efforts to provide abatement.
Just one year ago everyone agreed that lead removal should be fully funded. The Republican-controlled House Appropriations Committee, Democrat-controlled Senate Appropriations Committee, and President Barack Obama all supported $120 million for the Office of Healthy Homes and Lead Hazard Control. The president and the Senate still support $120 million, but the House now has to cut this investment to $50 million in order to fit within the overall limits of their austerity budget.
There are few investments with a better return than lead removal. According to a 2009 study, “For every dollar spent on controlling lead hazards, $17–$221 would be returned in health benefits, increased IQ, higher lifetime earnings, tax revenue, reduced spending on special education, and reduced criminal activity.” This means that the House cut would cost the country at least $1.19 billion, using the most conservative estimated return of 17 to 1.
Cutting funding for this project leaves children in homes that poison them and has long-term implications for crime, public health, and the overall economy. This short-term spending cut actually makes the long-term debt worse by increasing spending in the criminal-justice, health care, and social-service systems while reducing tax revenues.
When this year’s Ryan budget was released, Michael Linden, Managing Director for Economic Policy at the Center for American Progress, called it a “fantasy budget,” in part because it ignored the specific decisions that would have to be made to implement its spending cuts. Linden wrote:
… it is far easier to “cut” the nebulous category called “nondefense discretionary” than it is to cut actual programs, benefits, and protections that the public knows and likes. But in fact, for these kinds of cuts to actually come to pass, Congress—now and in the future—will have to get specific. And if they decide that they can’t, in reality, reduce these things to levels unheard of in generations, then Rep. Ryan’s claim to a balanced budget falls apart.
When Chairman Rogers stated that the House was declining to implement its own budget, he confirmed that indeed the Ryan budget does not balance. The question now is: Where do we go from here?
Appropriations bills such as the House’s failed transportation and housing legislation are not message bills that occupy a news cycle and then disappear. Deciding how much money to spend and where to spend it is a fundamental role of Congress.
Even if Congress chooses to fund the government with a continuing resolution rather than detailed appropriations bills, the overall funding level in that continuing resolution will determine how much our nation invests in transportation, housing, and every other sector of our economy. If across-the-board sequestration cuts continue, the programs described above will still take additional cuts, as will other investments that House appropriators attempted to protect in their legislation. One way or another, Congress will have to decide whether economic investment, public safety, and protections for low-income Americans should absorb yet another round of cuts.
Harry Stein is the Associate Director for Fiscal Policy at the Center for American Progress. John Craig is a Research Assistant at the Center.
This material was published by the Center for American Progress.
Endnotes and citations are available in the PDF version of this testimony. Download the report:
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Mr. Chairman and members of the subcommittee:
More than 12 years after the September 11 attacks, and two and a half years into the Middle East uprisings, the United States continues to face dangerous threats on a daily basis from that region of the world. Complicated security and political dynamics present new challenges for U.S. national security in the Middle East, and new threats posed by a number of Islamist terrorist networks affiliated with Al Qaeda in transition have emerged across the region.
That is why it is important to take opportunities such as today’s hearing to step back from the daily events, assess the security implications of the recent changes in the Middle East, and focus in on the overall status of the Al Qaeda network and the particular threats posed by Al Qaeda in the Arabian Peninsula, or AQAP.
At the outset, it is worth noting that more than a decade after the September 11 attacks transformed the way we as a nation view these threats, the United States still lacks the overall ability to assess strategically whether the government is properly matching resources to meet the threats posed by these various terrorist networks.
The United States has invested in many new sophisticated means to collect intelligence on a range of terrorist networks, and it has substantially enhanced its capabilities to take action against these networks through various kinetic actions, targeting financial networks, and countering propaganda produced by terrorist groups. The use of new technologies and weapons systems by the United States has been a stunning revolution. The U.S. government has become more capable in reacting and responding to new threats.
But the United States still lacks an overarching strategy that anticipates the emergence of new threats and adapts nimbly to fast changes within terrorist networks. America’s ability to assess the overall strategy to counter terrorist networks around the world remains limited and hampered by bureaucratic challenges. In sum, the United States still lacks clear and discernible metrics that can help senior policymakers assess whether the current strategic focus of all U.S. government efforts to protect the homeland from terrorist attacks has the right priorities, objectives, and tactics to reinforce the strategy. The U.S. counterterrorism efforts to respond to the threats posed by AQAP in Yemen is a prime example of a series of tactical efforts producing some successes and some failures, but all of these efforts are nested in a weak overarching strategy lacking sufficient focus on the long-term investments necessary to help produce sustainable security.
Since 2008, Al Qaeda’s core organization in Pakistan has suffered a series of severe losses, including the death of founder Osama bin Laden at the hands of U.S. forces in 2011. These continuing losses have sufficiently harmed the group such that, according to the U.S. director of national intelligence’s March 2013 worldwide threat assessment, core Al Qaeda “is probably unable to carry out complex, large-scale attacks in the West.” As a result, the major threats posed by Al Qaeda are increasingly less about the core organization that attacked the United States on September 11, 2001, and more related to a series of local and regional organizations sharing a common ideology.
The most dangerous of these more local organizations is AQAP, which represents a hybrid of the transnational core Al Qaeda organization on the one hand and largely regional groups like Al Qaeda in the Islamic Maghreb, or AQIM, or the Islamic State of Iraq and al-Sham, or ISIS. Whereas core Al Qaeda remains focused on global strategic goals, groups such as AQIM and ISIS focus primarily on national or regional objectives. By contrast, AQAP pursues both local goals and attacks against the United States and other international targets.
One possible reason for this hybrid focus is a stronger organizational tie between AQAP and core Al Qaeda. Yemen served as a core Al Qaeda communications hub prior to the 9/11 attacks. Before 9/11, Al Qaeda elements attacked the USS Cole in Aden in October 2000. AQAP’s leader, Nasir al-Wuhayshi, had served as bin Laden’s personal secretary and was in Afghanistan prior to the fall of the Taliban in 2001. He was also part of the February 2006 jailbreak in Yemen that preceded the formation of AQAP, and was tapped this summer to serve as core Al Qaeda’s “general manager” by Ayman al-Zawahiri.
The 2006 jailbreak is a seminal moment that contributed to the eventual creation of AQAP. Along with Wuhayshi, 22 other jailed Al Qaeda members escaped. By September 2006, Al Qaeda in Yemen, or AQY, was conducting large-scale suicide terrorist attacks against Yemeni oil facilities. In 2008, AQY conducted a series of attacks against Western diplomatic and Yemeni government facilities, including an attack with multiple car bombs outside the U.S. embassy that killed 13 in September 2008.
In January 2009, AQY merged with the remnants of the Al Qaeda organization in Saudi Arabia that had been conducting attacks in the Kingdom since 2003 to form AQAP. During the last four years, AQAP has come to form the most direct terrorist threat to the United States, as direct threats to U.S. homeland security from Pakistan reduced in part due to the aggressive counterterrorism efforts pursued since 2008 there.
In the past four years, AQAP has attempted multiple attacks against the United States, including the Christmas 2009 underwear bomb plot against a U.S.-bound airliner, the October 2010 parcel bomb plot, and most recently last summer’s shutdown of U.S. diplomatic facilities across the Middle East. This threat has prompted the United States to become directly involved in Yemen, conducting an active campaign against AQAP in coordination with the Yemeni government and other governments in the region.
Moreover, AQAP has sought to foment “lone wolf” attacks in the West via propaganda such as the English-language Inspire online magazine. AQAP ideologues like Anwar al-Awlaki andInspire have been implicated in several attacks, including the 2009 Fort Hood shooting and the 2013 Boston Marathon bombing. Despite the elimination of Awlaki and Inspire editor-in-chief Samir Khan in a U.S. airstrike in September 2011, AQAP’s desire to spread violence to the West by encouraging attacks by individuals heretofore unaffiliated with terrorist organizations remains. This approach has also been encouraged by core Al Qaeda leader Zawahiri in his latest tape recording.
AQAP maintains a strong regional focus—particularly against the governments of Yemen and Saudi Arabia. Yemeni and Saudi officials have been the targets of AQAP attacks since the group’s formation in 2009, most notably an attempt against Saudi Arabia’s then-counterterrorism chief Prince Mohammed bin Nayef. Saudi intelligence also played a crucial role in disrupting a May 2012 AQAP plot to bomb a U.S.-bound airliner with an improved underwear explosive. The threats posed by AQAP produced incentives for several countries in the region to work more closely with the United States on counterterrorism efforts, most notably Saudi Arabia, which hosts a drone base from which the United States conducts operations against AQAP in Yemen.
Beyond direct action against the Saudi and Yemeni governments, AQAP has also served as a key interlocutor with other Al Qaeda-linked terrorist branches. For instance, AQAP has provided weapons and training to Somalia’s al-Shabaab group according to the guilty plea of Ahmed Warsame. AQAP leader Wuhayshi has also been in contact with the leaders of AQIM according to documents found in Mali following the French intervention against jihadist forces there in January 2013.
Outside of its obvious role in Yemen, AQAP has played little role in the ongoing political transitions in the region. A number of other jihadist groups have played more direct roles in North African states such as Libya, Tunisia, and Egypt. AQAP’s influence there is likely limited to advice and possible support. In Yemen, AQAP has sought to take advantage of the chaos and uncertainty surrounding the transition from the Saleh regime to take and hold territory. However, this effort has been met with a U.S.-supported Yemeni government counteroffensive that has in part reversed AQAP’s gains. AQAP’s wider regional role has therefore been limited, which is somewhat expected given its previous focus on Saudi Arabia, Yemen, and the West.
The United States became directly involved in efforts against AQAP in December 2009, when the Obama administration launched a cruise missile strike against AQAP targets in order to prevent “an imminent attack against a U.S. asset.” (This strike is also believed to have unfortunately killed dozens of civilians.) The U.S. air campaign against AQAP began in earnest in May 2011, when the United States launched the first of 14 airstrikes in Yemen that year. Subsequently, the United States conducted 54 airstrikes in Yemen in 2012 and 23 thus far in 2013.
This policy has scored several tactical successes in eliminating key AQAP leaders and helping the Yemeni government reverse AQAP’s battlefield advances. In addition to Awlaki and Khan, U.S. airstrikes in Yemen have killed a number of AQAP leaders from Abdul Munim Salim al-Fatahani, Fahd al-Quso, and Muhammad Saeed al-Umda in 2012, to Saeed al-Shehri, then AQAP’s second-in-command, and Qaeed al-Dhahab in 2013. In addition to their roles in AQAP, Fatahani and Quso were both believed to have been involved in the Cole bombing, and Quso likely was involved in supporting the 9/11 hijackers as well. Umda was believed to have been involved in the 2002 attack on the oil tanker Limburg.
The recent shift toward regional plots, as evidenced by the regional embassy closures this summer, suggests a possible degradation of AQAP’s capability to mount plots outside the Middle East.
These tactical successes, however, are not reinforced by a broader, more coherent U.S. policy to promote Yemen’s transition to democracy under President Abdo Rabu Mansour Hadi. There is an inherent tension between the long-term objective of supporting a transition to a stable democracy in Yemen and the short-term imperative of preventing terrorist attacks against the United States and our allies and partners in the region. This short-term imperative is being at a quicker speed than the more difficult problem of transitioning a developing country from authoritarianism to democracy. This transition cannot be accomplished at a pace that will solve the immediate and pressing security challenge presented by AQAP.
However, it is possible for the United States to try and better link these short- and long-term policies. Doing so will be difficult, but offers a chance to translate recent tactical success into long-term stability. President Hadi has recently outlined the progress made in Yemen’s political transition, and should be commended and supported as the transition continues. Encouraging Yemen’s National Dialogue to be as inclusive as possible to include Southern Yemenis and those outside the capital, Sanaa, will be important, as will ensuring the Yemeni government meets its commitments on human rights and democratic reforms.
Of particular importance going forward will be support for security sector reform. Despite some progress in purging the security services of Saleh loyalists, developing an effective and professional security sector capable of tackling AQAP with minimal U.S. support will likely take time.
In short, the United States should make every effort to sync up the imperatives of its short-term fight against AQAP with the long-term goal of a stable and developing Yemeni democracy that is able to provide for its own security. This effort will be difficult, but not impossible.
The withdrawal of U.S. forces from Afghanistan next year is unlikely to have a major impact on either core Al Qaeda or AQAP. Assuming a bilateral security agreement between the United States and Afghanistan is concluded, U.S. forces will remain in Afghanistan to conduct operations against core Al Qaeda if and when necessary. However, core Al Qaeda is less important today than before its evisceration began in 2008. Branch Al Qaeda organizations such as AQIM and ISIS are likely to prove greater challenges to U.S. interests even if they do not directly target the U.S. homeland.
AQAP is a hybrid organization that maintains a dual focus on international targets such as the U.S. homeland and more local and regional goals such as fighting the Yemeni and Saudi governments. It will therefore rightly receive more attention from U.S. policymakers than AQIM, ISIS, or the myriad jihadist groups operating in Egypt’s Sinai Peninsula. While these groups operate in regions with equally good prospects for serving as a terrorist “safe haven,” they do not as yet present the same direct threat to the U.S. homeland or regional interests as AQAP.
However, the proliferation of jihadist militant groups does present a potential recruitment problem for AQAP and core Al Qaeda. In particular, Syria’s civil war has provided a magnet for both jihadi funding and recruitment. Increased lawlessness in the Sinai may prove a more attractive prospect for militants than fighting in Yemen, particularly in the wake of the Muslim Brotherhood’s ouster from power in Egypt, and AQIM’s activities in North Africa present another possible syphon of recruits and funding. In short, AQAP is facing greater competition from other jihadist groups for potential recruits. Paradoxically, this competition may both serve and harm American interests by drawing jihadi funding and recruitment away from AQAP, the only non-core Al Qaeda organization that directly targets the U.S. homeland, and toward various other groups that pose threats both to U.S. regional interests and the citizens of the region itself.
While it remains appropriate for U.S. policy to concentrate on the threat posed by AQAP, policymakers should begin re-evaluating the threat posed by Al Qaeda to take into account its evolution from the core organization that attacked the United States on 9/11. AQAP serves as an example of Al Qaeda’s transition from a core organization based in Afghanistan and Pakistan with grandiose global objectives to a series of largely independent but mutually supportive branch offices with a more local and regional focus. These movements still pose a threat to the United States and its allies, but the nature of these threats are constantly changing.
These changes and transitions within terrorist networks such as AQAP require a more strategic and nimble policy approach by the United States. The Middle East has entered a difficult and complicated period of transitions, one that will likely be prolonged and will present new challenges for U.S. security. Syria’s civil war, ongoing unrest in Egypt, Iran’s role in supporting terrorist groups around the region, and the unsettled security situations in Yemen and Libya all present substantial challenges to U.S. security.
During the last 12 years, the United States has increased its capabilities to identify, target, and act against a range of terrorist networks operating in the Middle East. What it has not succeeded in doing is helping the countries and governments of the region develop their own institutions that possess sufficient capability and political legitimacy to produce the long-term gains necessary ultimately to defeat the threats posed by groups like Al Qaeda in the Arabian Peninsula.
Brian Katulis is a Senior Fellow at the Center for American Progress.
This material was published by the Center for American Progress.
By Caroline Wadhams and John Podesta
While U.S. policymakers focus their attention on Syria’s civil war and the August 21 chemical weapons attack, Afghanistan is quickly approaching a political transition that will require sustained U.S. attention to be successful. Afghans will soon begin announcing their candidacies on September 16, and campaigning will follow in the lead-up to the presidential election scheduled for April 5, 2014—all in a volatile security situation and political environment. The U.S. foreign-policy establishment is rightfully concerned about the situation in the Middle East, but continued U.S. leadership in Afghanistan remains essential to ensuring a successful and peaceful transition process and maintaining the gains made by the United States and its allies. As the U.S. military draws down after more than 12 years of war, our job in Afghanistan is not done.
A series of recent developments have made Afghanistan’s first major transfer of executive power since 2001 from President Hamid Karzai to his successor more probable. These include the ratification of two pieces of parliamentary legislation that established an electoral architecture for Afghanistan: the establishment of an Independent Electoral Commission to organize the elections and the floating of potential candidates to succeed President Karzai. These developments come after a concerted push by Afghan leaders and civil society, the United States, and members of the international community, all of whom emphasized the importance of a credible election process and urged President Karzai to pass the electoral laws he had previously vetoed.
A credible, inclusive, and transparent electoral process will be one central ingredient in a successful political transition, but it will not be sufficient to forge a new political consensus to replace the current frayed one. That consensus, reached by a diverse set of Afghan factions but excluding the Taliban, is now so fragile—a result of years of abuse by many Afghan governmentofficials and their allies, perceptions of exclusion, and flawed elections in 2009 and 2010—that many now fear that Afghan leaders will return to infighting as the United States draws down its forces.
Developing a stronger political consensus will demand that Afghans, especially factional leaders who have resisted fighting thus far—the “nonviolent opposition”—negotiate, cajole, and strategize over what’s next. Who are acceptable candidates? In a time of declining resources, how will power and resources be shared among a broader swathe of Afghan society? Afghan leaders who represent different political groupings are already meeting to discuss these questions.
While the responsibilities of a transition will largely fall on Afghan shoulders, the United States and the international community should continue to support this process in the lead-up to the 2014 presidential election and beyond, without picking any one candidate. Here are three recommended steps to supporting a peaceful political transition.
The United States and its partners should attempt to reduce the risk of spoilers, who might delay or suspend the election or sabotage the election process through intimidation or violence. Spoiler actions might include attacking electoral workers, candidates, or polling stations and mobilizing formal and informal security forces and militias to disenfranchise citizens or support fraud. The United States and the international community should focus on mitigating spoiler behavior during the political transition process by actors who fall into three camps in particular: President Karzai and those close to him who have benefitted from the past decade and may resist new leadership; regional players who aim to advance their own proxies; and insurgents, who fear an electoral outcome with significant Afghan buy-in.
The United States should support inclusive politics through support for a technically sound electoral process, as well as through urging broad participation by Afghan women, youth, and its diverse ethnic groups. The international community should continue to provide technical advice and financial support on the electoral processes as it has in previous Afghan elections. While the optics of foreign interference need to be considered, U.S. and international policymakers should ensure the provision of financial and technical assistance to establish the Independent Electoral Complaints Commission, or IECC—an essential watchdog for adjudicating complaints—and consider a general electoral fund for candidates with fewer finances, especially for those in need of enhancing their security.
In addition, the international community will need to consistently state its support for an inclusive process in all stages of the presidential election, including the establishment of the IECC, the candidate nomination and verification process in September and October, the campaign period, and the adjudication process over the results. It should also renew a decree prohibiting the use of government resources in campaigns; support the participation of women as candidates, election workers, and voters; and urge the Electoral Complaints Commission and Independent Electoral Commission to make transparent decisions to the Afghan public and international community.
It also means that the embassy and U.S. officials should make a concerted effort to meet with all candidates and support civic education, media coverage, and transparency in the process so that the larger population is informed and involved. A particular focus on women and youth is necessary, given that approximately 68 percent of the Afghan population is under the age of 25.
In addition to urging the participation of women and youth in political consensus building, the international community should continue to urge the inclusion of Pashtuns, especially those in the south and east, where the insurgency is strongest. This means urging Afghans to include southern Pashtuns in political coalitions as candidates or in tickets.
An inclusive process will require enhanced security and access to polling stations. As mentioned previously, the United States and NATO-ISAF should provide support to the ANSF as they protect candidates, electoral officials, polling stations, and more.
Past mistakes must be avoided. A look back at Afghanistan’s experience in the 1990s offers many lessons of what to avoid during Afghanistan’s political transition and the foreign drawdown from Afghanistan, including the dangers of moving outside of a constitutional framework, creating an interim government, and suspending foreign assistance to the Afghan government.
Following the Soviet troop withdrawal from Afghanistan in 1989, President Mohammad Najibullah remained in power for several years as a result of divisions among the mujahidin and continued Soviet assistance. It was only when Soviet support to President Najibullah was suspended that his government quickly fell. The Afghan government’s security forces disintegrated, and many joined different political military networks.
Several years later in April 1992—after a failed U.N. transition plan from President Najibullah to an inclusive successor government—seven Pakistan-based parties representing different elements of the mujahidin signed the Peshawar Accord in Pakistan and created an interim government in Afghanistan. The Accord divvied up power, placing control in the hands of Sibghatullah Mujaddidi for two months, followed by Professor Burhanuddin Rabbani for four months as president, and Ahmad Massoud as defense minister; it also established a 51-person body dubbed the Islamic Council to advise the president. The accord attempted to appease most major political players in Afghanistan but crumbled due to disagreements by party leaders, unleashing a brutal civil war in Afghanistan in which thousands of civilians died.
It will ultimately be up to Afghans to make agreements among themselves to avoid chaos and loss of life similar to that of the 1990s. The United States and the international community, however, should tread carefully to avoid a repeat of those years. They should urge Afghans to hold the election on time on April 5, 2014, and caution against the establishment of any interim government between President Karzai and a successor government. Creating an interim government—a possibility, if the election is delayed—has the potential to unleash greater violence in an uncertain political environment. The United States should also continue to pursue regional dialogue and coordination to avoid the regional use of proxies as in the 1990s when countries backed separate Afghan actors to advance their respective agendas, thereby fueling civil war.
The United States must also adhere to the commitments it made at the conferences in Tokyoand Chicago to maintain approximately $4 billion per year for the Afghan National Security Forces, the Afghan government, and development priorities. Given the recent events in the Middle East from the civil war in Syria to growing uncertainty in Egypt, Congress and the country as a whole will be tempted to turn away from its commitments to Afghanistan. While U.S. policymakers should demand transparency and accountability for these funds and be willing to reduce funds in a targeted way if those demands are not met, Congress should not abruptly make significant cuts, as it did in 1992. Doing so would deeply destabilize Afghanistan and threaten to undermine the progress that has already cost so much.
Caroline Wadhams is a Senior Fellow at the Center for American Progress. John Podesta is the Chair of the Center.
By Michelle Andrews
This material was published by Kaiser Health News.
Workers at small companies rarely get a choice of health plans. That could change for some of them when online health insurance marketplaces for businesses open this fall.
The health care overhaul requires every state and the District of Columbia to establish a Small Business Health Options Program, or SHOP exchange, to enable businesses with 50 or fewer workers to offer health insurance to their employees. These exchanges will function much like the online marketplaces for individual coverage that will open this fall, but with some key differences.
Since small employers lack the buying power of larger companies, the insurance plans they offer are often limited and their administrative costs are high. The SHOP exchanges are intended to make it easier for small businesses to offer their employees a variety of good plans, something employees prize.
"[Plan choice] is a big value added for workers," says Linda Blumberg, a senior fellow at the Urban Institute Health Policy Center who co-authored a report on shop exchanges.
Through the exchanges, employers will be able to designate how much they want to contribute toward their employees' coverage, and the exchange will handle the back-office functions, such as making sure the payments get to the correct insurance company. Employees, meanwhile, will be able to compare plans' features and costs online and enroll in a plan.
At least, that’s the way it eventually is supposed to work nationwide. In June, though, the Department of Health and Human Services announced that in the 33 states where it is running the health insurance marketplaces, it would delay for a year giving workers the ability to choose among different plans. HHS said that option would be too complicated for insurers to implement by 2014.
In the remaining states and the District of Columbia, the SHOP exchanges are all generally moving forward with plans to allow employers to offer their workers more than one coverage option. How much choice workers have will be up to the employers and the states, however.
Workers may be able to choose any plan offered by a single carrier such as Aetna or UnitedHealthcare on the SHOP exchange, for example, or they may instead be able to pick any insurer but be limited to plans that are all at the same level or tier. (Health plans will be grouped into four tiers based on how much of their medical claims consumers will be responsible for: In a platinum plan, consumers will owe 10 percent of the costs; in a gold plan, 20 percent; silver, 30 percent, and bronze, 40 percent.) In some states, employers can choose to offer employees just one plan.
Employers can work with their insurance broker to select a plan, or compare exchange plans online on their own and pick one.
On the shop exchange, "[employers] get to see all the plans--the issuers, the policies they're offering, the premiums and benefits--all in one place," says Kevin Lucia, senior research fellow at the Georgetown Center On Health Insurance Reforms.
Michael Brey wants to give his employees as much choice as possible. His Laurel, Md.-based Hobby Works stores employ roughly 50 workers, many of whom work part-time. (The health law requires employers with more than 50 workers to provide insurance or face a possible fine, but that mandate refers to "full-time equivalent" employees. So two half-time workers might equal one full-time worker.)
Unusual among small business owners, Brey offered employees a number of plans this year: two types of HMOs with linked health savings accounts, a PPO and a very high-deductible plan. But that’s not always the case, he says, and some years he’s only been able to offer a single plan.
Brey says he's excited about having more options. Up to 13 insurers will be approved to sell plans through the Maryland SHOP exchange, although the opening has been delayed until January 2014, three months later than the October start date that states are aiming for.
"Right now I'm looking forward to it," he says. "I'm hoping that the combination of more participants and more insurers [on the exchange] will keep our rates from going up."
In addition to offering more health insurance choices through the SHOP exchanges, the health care law makes some important improvements to health insurance for small businesses. Starting next year, insurers will no longer be able to charge small businesses higher premiums because their workers have pre-existing health conditions. Small group plans sold on the exchanges and in the private market will have to provide 10 so-called "essential health benefits" that cover emergency care and hospitalization, prescription drugs and doctor visits, among other services. Out-of-pocket costs will generally be capped at $6,350 for individuals and $12,700 for families.
Small businesses are much less likely to offer health insurance than larger companies, and the number has declined in recent years. In 2011, a little over a third of employers with fewer than 50 workers offered health insurance, compared with 45 percent a decade ago, according to a study published by the Robert Wood Johnson Foundation. In contrast, 96 percent of larger firms offered health insurance in 2011, virtually unchanged from 10 years earlier.
Unlike larger employers, companies with fewer than 50 workers won’t be penalized for not offering coverage.
If a small employer doesn’t offer health insurance, workers can shop for individual policies on the marketplaces, where they may qualify for subsidies to make coverage more affordable. Subsidies will not be available to workers who buy coverage through a SHOP exchange, however.
Please send comments or ideas for future topics for the Insuring Your Health column to questions@kaiserhealthnews.org.The health care overhaul requires every state and the District of Columbia to establish a Small Business Health Options Program, or SHOP exchange, to enable businesses with 50 or fewer workers to offer health insurance to their employees. These exchanges will function much like the online marketplaces for individual coverage that will open this fall, but with some key differences.
Since small employers lack the buying power of larger companies, the insurance plans they offer are often limited and their administrative costs are high. The SHOP exchanges are intended to make it easier for small businesses to offer their employees a variety of good plans, something employees prize.
"[Plan choice] is a big value added for workers," says Linda Blumberg, a senior fellow at the Urban Institute Health Policy Center who co-authored a report on shop exchanges.
Through the exchanges, employers will be able to designate how much they want to contribute toward their employees' coverage, and the exchange will handle the back-office functions, such as making sure the payments get to the correct insurance company. Employees, meanwhile, will be able to compare plans' features and costs online and enroll in a plan.
At least, that’s the way it eventually is supposed to work nationwide. In June, though, the Department of Health and Human Services announced that in the 33 states where it is running the health insurance marketplaces, it would delay for a year giving workers the ability to choose among different plans. HHS said that option would be too complicated for insurers to implement by 2014.
In the remaining states and the District of Columbia, the SHOP exchanges are all generally moving forward with plans to allow employers to offer their workers more than one coverage option. How much choice workers have will be up to the employers and the states, however.
Workers may be able to choose any plan offered by a single carrier such as Aetna or UnitedHealthcare on the SHOP exchange, for example, or they may instead be able to pick any insurer but be limited to plans that are all at the same level or tier. (Health plans will be grouped into four tiers based on how much of their medical claims consumers will be responsible for: In a platinum plan, consumers will owe 10 percent of the costs; in a gold plan, 20 percent; silver, 30 percent, and bronze, 40 percent.) In some states, employers can choose to offer employees just one plan.
Small employers in the district will have those three options, says Mila Kofman, executive director of the DC Health Benefit Exchange Authority. Maryland will take a similar approach, except that employers can’t limit choice to one plan. In Oregon, employers can allow their workers to choose virtually any plan available on the shop exchange, or limit them to one of the narrower options discussed above.
Employers can work with their insurance broker to select a plan, or compare exchange plans online on their own and pick one.
On the shop exchange, "[employers] get to see all the plans--the issuers, the policies they're offering, the premiums and benefits--all in one place," says Kevin Lucia, senior research fellow at the Georgetown Center On Health Insurance Reforms.
Michael Brey wants to give his employees as much choice as possible. His Laurel, Md.-based Hobby Works stores employ roughly 50 workers, many of whom work part-time. (The health law requires employers with more than 50 workers to provide insurance or face a possible fine, but that mandate refers to "full-time equivalent" employees. So two half-time workers might equal one full-time worker.)
Unusual among small business owners, Brey offered employees a number of plans this year: two types of HMOs with linked health savings accounts, a PPO and a very high-deductible plan. But that’s not always the case, he says, and some years he’s only been able to offer a single plan.
Brey says he's excited about having more options. Up to 13 insurers will be approved to sell plans through the Maryland SHOP exchange, although the opening has been delayed until January 2014, three months later than the October start date that states are aiming for.
"Right now I'm looking forward to it," he says. "I'm hoping that the combination of more participants and more insurers [on the exchange] will keep our rates from going up."
In addition to offering more health insurance choices through the SHOP exchanges, the health care law makes some important improvements to health insurance for small businesses. Starting next year, insurers will no longer be able to charge small businesses higher premiums because their workers have pre-existing health conditions. Small group plans sold on the exchanges and in the private market will have to provide 10 so-called "essential health benefits" that cover emergency care and hospitalization, prescription drugs and doctor visits, among other services. Out-of-pocket costs will generally be capped at $6,350 for individuals and $12,700 for families.
Small businesses are much less likely to offer health insurance than larger companies, and the number has declined in recent years. In 2011, a little over a third of employers with fewer than 50 workers offered health insurance, compared with 45 percent a decade ago, according to a study published by the Robert Wood Johnson Foundation. In contrast, 96 percent of larger firms offered health insurance in 2011, virtually unchanged from 10 years earlier.
Unlike larger employers, companies with fewer than 50 workers won’t be penalized for not offering coverage.
If a small employer doesn’t offer health insurance, workers can shop for individual policies on the marketplaces, where they may qualify for subsidies to make coverage more affordable. Subsidies will not be available to workers who buy coverage through a SHOP exchange, however.
Please send comments or ideas for future topics for the Insuring Your Health column toquestions@kaiserhealthnews.org.
This material was published by the Center for American Progress.
As Congress prepares for yet another fiscal showdown, new data released by the U.S. Census Bureau should be a wake-up call that it is time to move away from a wrong-headed austerity agenda and pivot to a focus on creating jobs, boosting wages, and investing in family economic security.
The new data on poverty and income show that despite economic growth, there was no statistically significant improvement in the poverty rate or median household income in 2012.
Behind these topline numbers are data that contain real warning signs for American families and the overall economy if Congress continues down its current path.
Here are three things you need to know about the new data and how they affect the budget and policy choices before us:
Let’s examine each trend and its implications for timely fiscal debates.
1. Income inequality has widened since the end of the Great Recession.
Since the end of the Great Recession, the wealthiest households have fully recovered—and even shown income gains—while middle-class and low-income families are still suffering from the lingering effects of the downturn with little to no improvement in their incomes.
While household incomes for the top 5 percent have grown 5.2 percent in the past three years, incomes for workers in the bottom fifth have seen their incomes fall by 0.8 percent, while middle-class incomes have fallen even more.
These latest data are consistent with a new analysis by inequality scholars Thomas Piketty and Emmanuel Saez, showing that the top 10 percent of earners in the United States brought in more than 50 percent of all income in 2012, the largest amount in nearly 100 years. In fact, in the first three years of the recovery, from 2009 to 2012, the top 1 percent captured 95 percent of income gains.
As the wealthiest households have captured a rising share of income, the share of Americans struggling to make ends meet has risen.
The poverty line does not adequately capture the number of Americans struggling to get by, and a threshold of two times the poverty line is more closely aligned with the estimated amount necessary for people to make ends meet. Using this measure, the share of people living in low-income households with incomes below twice the poverty line has risen by 12.1 percent from 30.5 percent in 2007 to 34.2 percent in 2012.
This disturbing trend is related in part to the explosion of low-wage and part-time work. In 2012, more than 40 percent of job growth took place in low-wage sectors such as hospitality, retail, and health and education services.[1] In addition, while the number of people who are involuntarily working part time decreased from 2011 to 2012, last year there were still 8.1 million people working part time even though they wanted full-time work.[2]
In this context, conservatives have taken the prospect of any additional revenue from the wealthiest Americans off the table even as they are proposing cuts to the very services that help struggling families scrape by as they navigate an economy that is not producing enough living-wage jobs. In the meantime, a national movement to raise the minimum wage is emerging, with fast-food workers mobilizing to demand a living wage to pull their families out of poverty.
The good news in the data is that our safety net is making a difference in lifting families out of poverty and helping them meet basic needs.
If not for unemployment insurance, 1.7 million additional people would have been in poverty last year, and absent Social Security, nearly 15.3 million additional seniors would have lived in poverty, nearly quadrupling the senior poverty rate. While the Supplemental Nutrition Assistance Program is not taken into account in calculating the poverty rate, if it were counted as income, it would have lifted 4 million people out of poverty last year.[3]
The bad news is that our safety net is working harder than it should. Though a full employment economy and rising wages are the surest pathways out of poverty, our system of work and income supports provide vital assistance to help families make ends meet.
It is in this environment that conservatives are debating a Farm Bill that would kick 4 million to 6 million people off of nutrition aid and cost our economy 55,000 jobs as people cut back on their food spending.
Low- and middle-income families have been slammed across age and demographic groups, but three years into the recovery, children are facing crisis levels of poverty—particularly very young children of color under the age of 5. In 2012, 42.5 percent of African American children under age 5 and 37.1 percent of Latino children under age 5, lived in poverty.
Research into early childhood development has shown that this is a crucial time for cognitive development. The deprivation and toxic stress associated with persistent poverty can leave a lasting imprint on children’s brains and affect future educational and health outcomes, as well as worker productivity.
This is not only a moral issue; it represents a threat to our future economic competitiveness.Given that half of all births are now children of color, these high rates of poverty among our nation’s future workforce should spur us to invest in our nation’s children and end racial and ethnic disparities.
Unfortunately, our policy priorities are going in the opposite direction. First Focus’s annual “Children’s Budget” report finds that in 2013 alone, sequestration will cut $4.2 billion of funding for children concentrated in the areas of education, early learning, and housing, and Congress is considering a budget plan that would lock in or deepen these cuts for next year. This November, 22 million children will see a cut in their family’s nutrition assistance, and House Republicans are considering cuts to food aid that would drop more than 200,000 children from free school meals.
These data could not be timelier. They reveal an economy where the gains of economic growth are not reaching low- and middle-income families. They show structural threats to our economic competitiveness owing to high rates of poverty among young children of color—who would be badly hurt by Congress locking in or deepening the sequester cuts. And they show the effectiveness of programs such as nutrition assistance, even as House Republicans propose deep cuts to food aid.
It is time to reset the national debate. Austerity that exacerbates poverty and inequality is not the answer; we must focus on creating jobs, investing in family economic security, and promoting shared economic growth.
Melissa Boteach is the Director of the Poverty to Prosperity Program and Half in Ten at American Progress
[1] Author’s calculations based on Bureau of Labor Statistics, Current Employment Statistics (U.S. Department of Labor, 2013), available at http://www.bls.gov/ces/.
[2] Author’s calculations based on Bureau of Labor Statistics, Current Population Survey (U.S. Department of Labor, 2013), available at http://data.bls.gov/cgi-bin/surveymost?ln.
[3] Carmen DeNavas-Walt, Bernadette D. Proctor, and Jessica C. Smith, “Income, Poverty, and Health Insurance Coverage in the United States: 2012” (Washington: U.S. Department of Commerce, 2013), available at http://www.census.gov/prod/2013pubs/p60-245.pdf.
By Michelle Andrews
This material was published by Kaiser Health News.
Rod Coons and Florence Peace, a married couple from Indianapolis, pay $403 a month for a family health plan that covers barely any of their individual medical care until each reaches up to $10,000 in claims. And that’s just the way they like it.
"I'm only really interested in catastrophic coverage," says Coons, 58, who retired last year after selling an electronic manufacturing business. Since they're generally healthy, the couple typically spends no more than $500 annually on medical care, says Coons.
"I'd prefer to stay with our current plan because it meets our existing needs."
That won’t be an option next year for Koons and Peace. In 2014, plans sold on the individual and small group markets will have to meet new standards for coverage and cost sharing, among other things. In addition to covering 10 so-called essential health benefits and covering many preventive care services at no cost, plans must pay at least 60 percent of allowed medical expenses, and cap annual out-of-pocket spending at $6,350 for individuals and $12,700 for families. (The only exception is for plans that have grandfathered status under the law.)
Plans with $10,000 deductibles won’t make the cut, say experts, nor will many other plans that require high cost sharing or provide limited benefits, excluding prescription drugs or doctor visits from coverage, for example.
Many policyholders don't realize their plans won't meet the standards set by the Affordable Care Act next year, say experts.
When online health insurance vendor ehealthinsurance.com began notifying people in non-grandfathered plans that they would have to change policies next January, they got so many calls that they shut down the planned week-long email campaign after one day.
"The people that received the email were not happy at all," says Carrie McLean, the website's director of customer care. "They said, 'What are you talking about? I thought I was already on an ACA plan.'"
Coons is none too pleased either.
"I'm happy with where I'm at right now, but it doesn't look like that's where I'm going to be at in the future," he says.
Coons plans to look for coverage through the online state marketplace next year. The couple may qualify for subsidies that are available to people with incomes up to 400 percent of the federal poverty level ($62,040 for a couple in 2013) to make coverage more affordable.
Rainy Knight also has a plan with a $10,000 deductible. The Vancouver, Wash., substitute teacher says that on her limited income, the $279 monthly premium is all she can afford. She's healthy and has used her coverage only a few times in recent years for minor problems and preventive care.
Even though she would likely be eligible for subsidies on the state marketplace, Knight, 64, says she'll stick with her grandfathered plan until she turns 65 next July and becomes eligible for Medicare.
"If I apply [for an exchange plan], they're going to charge me even more money," she says.
Health policy experts point out that even though the sticker price on a plan may be higher next year, many people will qualify for subsidies that will make coverage more affordable. In addition, the health plans offered on the individual market next year will provide much better coverage than many existing plans, they say.
In addition to high deductibles and skimpier coverage, current policies often have significant cost-sharing requirements, including separate deductibles or caps on coverage for different types of services. After meeting their deductibles, Rod Coons and his wife still owe 30 percent of most medical expenses they incur, for example, up to their annual out-of-pocket maximum of $15,000 each. Knight's policy is even less generous: she's responsible for covering half of her medical bills once she reaches the deductible, up to her annual out-of-pocket maximum of $15,000.
Many experts scoff at the argument that people don't need more than a very high-deductible policy because they're healthy and don't use many medical services.
"Unfortunately, people have catastrophic things happen to them, or they get chronic conditions that expose them to serious financial harm," says Sabrina Corlette, research professor at Georgetown University's Center on Health Insurance Reforms.
"The [ACA] provisions are designed to protect people from potentially ruinous medical bills," says Corlette.
Please send comments or ideas for future topics for the Insuring Your Health column to questions@kaiserhealthnews.org.Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.
This material was published by the Center for American Progress.
By Kellan Baker
See also: Infographic: How New Coverage Options Affect LGBT Communities by Kellan Baker, Andrew Cray, and Gary J. Gates
Download the report: PDF Read it in your browser: Scribd
Health care reform has enormous potential to improve access to health insurance coverage for millions of Americans, including many lesbian, gay, bisexual, and transgender, or LGBT, people and their families. Thanks to the Affordable Care Act, LGBT community members across the country can expect real improvements in the affordability and quality of their coverage—and many LGBT people will gain access to comprehensive and affordable health insurance for the first time.
Out2Enroll is an initiative of the LGBT State Exchanges Project at the Center for American Progress, the Sellers Dorsey Foundation, and the Federal Agencies Project. We’re working with advocates and organizations across the country to spread the word about the Affordable Care Act and to help connect people and their families with their new coverage options under the law. One of the biggest opportunities for new coverage under the Affordable Care Act comes from the Health Insurance Marketplaces, which will offer coverage in every state starting January 1, 2014.
Here are the top four facts you need to know about what the Marketplaces mean for LGBT communities.
1. You will be able to shop online, over the phone, or in person for a plan that fits your budget.
Starting in January 2014, almost everyone in the United States will need to have health insurance coverage to protect themselves and their families from big medical bills. Most people already have coverage that satisfies that requirement, including coverage through a job, Medicare, Medicaid, or the military. If you don’t have coverage right now or want to get new coverage, you will be able to shop online, over the phone, or in person in your state’s Health Insurance Marketplace for a plan that fits your needs. Every state will have a Marketplace that opens for enrollment on October 1, 2013, and coverage through the Marketplaces starts on January 1, 2014.
Your state’s Marketplace will help you determine whether you are eligible for tax credits that will make coverage more affordable. If you are eligible for tax credits, you can choose to have the federal government pay part of your premium directly to the insurance company every month, or you can pay the premiums yourself and owe less in taxes at the end of the year. The tax credits are on a sliding scale, so the smaller your income is, the less you will need to pay toward your coverage.
Regardless of where you live, the tax credits are calculated according to your federal tax filing, so if you are legally married to someone of the same sex, you will be able to claim the credits jointly with your spouse. If you are not legally married—if you are in a domestic partnership, a civil union, or another relationship—you will still be able to get these credits. You’ll just need to apply for them as an individual instead of as a couple. Depending on your state, you may be able to combine your individual tax credits to purchase family coverage for yourself and your partner.
2. Every plan will have to cover a core set of basic benefits.
Under the health reform law, every insurance plan sold through the Health Insurance Marketplaces will have to cover a core set of basic benefits called the essential health benefits. These benefits include a variety of services and medical procedures across 10 broad categories of care, including doctor visits, hospital stays, preventive screenings, prescription drugs, laboratory services, reproductive health care, and mental and behavioral health services.
3. LGBT people will have the same access to health insurance coverage through the Health Insurance Marketplaces as anyone else.
Nobody who works with the Health Insurance Marketplaces, including employees and insurance companies offering plans for sale, is allowed to discriminate against LGBT people. What’s more, insurers can’t treat you differently or charge you more if you have a condition such as HIV, cancer, or any pre-existing condition.
If you are a transgender person, you have the right to expect that your plan will cover the services you need as long as those services are covered for other people on your plan. These services include preventive screenings such as mammograms, Pap tests, and prostate exams; hormone therapy; and mental health services. Depending on your plan, these services may also include surgical procedures related to gender transition.
If you feel you’ve been treated unfairly, you can make a complaint directly to your state’s Health Insurance Marketplace or with the Office for Civil Rights at the U.S. Department of Health and Human Services by visiting www.hhs.gov/ocr/civilrights/complaints/index.html. If you receive a denial of coverage for services that should be included under your plan, you have the right to appeal the denial by contacting your insurance company or your state’s department of insurance.
4. The Health Insurance Marketplaces will help you navigate your options and enroll in coverage that’s right for you.
The health reform law allows various kinds of organizations to apply to become navigators who will help Marketplace customers understand their options and find coverage that works for them. You will be able to get in touch with navigators and other consumer-assistance personnel in your state online, in person, and over the phone.
Navigators are already working in every state, and you will start seeing more information explaining how to learn about your insurance options and how to enroll in coverage through the Marketplaces or determine whether you are eligible for Medicaid coverage. Organizations that may be working as navigators in your state include community health centers, AIDS service organizations, local hospitals, and LGBT community organizations.
Like anyone else working with the Marketplaces, navigators can’t discriminate against LGBT people, and federal law requires them to be able to provide appropriate services to diverse groups of people. This means that navigators should be able to understand issues such as whether any plans in the Marketplace offer coverage for domestic partners, how people in same-sex relationships can get the right subsidies and enroll for coverage, and how to work with transgender people to find appropriate coverage options.
Not all health care providers accept every insurance plan, so it’s important to talk with consumer-assistance personnel to find plans that include any providers you want to continue seeing. You can also speak with your provider about your plan options. If you are receiving services through the Ryan White Program or your state’s AIDS Drug Assistance Program, be sure to speak with consumer-assistance personnel or your case manager to make sure you’re considering plans that are right for you.
To learn how to partner with Out2Enroll, please visit www.Out2Enroll.org.
For more information about this fact sheet, please contact Kellan Baker at the Center for American Progress by emailing him atkbaker@americanprogress.org.
This material was published by the Center for American Progress.
Although ESPN sports writer Jason Whitlock is not a personal favorite, there’s something compelling about his look-at-me writing approach to all things in the sports world. In the same way that motorists feel forced to rubberneck at calamity along the highway, Whitlock drives people to notice his antics, which often result in controversy over the point he’s trying to make. But last week, Whitlock’s showboating actually managed to draw attention to important issues: the corporate exploitation of young black men in sports and an ignorance of the historical importance of black athletes.
After he got into hot water last week with a radio diatribe against a Sports Illustrated writer, Whitlock returned to the larger topic of allegations of corruption in big-time college athletics with something of a mea culpa column posted on ESPN.com over the weekend. In the latter, he explains apologetically that he gets “angry and emotional and convulse[s] childishly” when he reads about abuses in college sports. To Whitlock, it’s an attack on black opportunity: “Here’s what it sounds like to me: The problem with college athletics is these poor, unprepared black kids. Less of them, less problems. Headache over.”
As inelegant as his argument might be, Whitlock is right on the money. Indeed, he doesn’t follow the cash trail far enough, stopping short to defend the athletes who are, in effect, the victims of a corporate hustle. And to his credit, he notes accurately that, “Big-time college football and basketball have been profe$$ionalized.”
College athletics are in big trouble. Pulitzer Prize-winning historian Taylor Branch, an erstwhile high school football star, has become so alarmed by the abuse of college athletes that he’s veered off the path of writing about the life of the Rev. Martin Luther King Jr. to take on the NCAA cabal that controls college-aged athletes’ fate with an iron fist. In an articulate and well-researched argument for The Atlantic, Branch makes the persuasive case that college athletes are no longer amateurs but professionals-in-waiting who should be paid for their services:
For all the outrage, the real scandal is not that students are getting illegally paid or recruited, it’s that two of the noble principles on which the NCAA justifies its existence—“amateurism” and the “student-athlete”—are cynical hoaxes, legalistic confections propagated by the universities so they can exploit the skills and fame of young athletes. The tragedy at the heart of college sports is not that some college athletes are getting paid, but that more of them are not.
Actually, I’m convinced that if college athletes were paid, it would hasten to destroy the entire mythology of amateur athletics on college campuses. Separate the young men who are biding their time for professional contracts from those who enroll to study. Maybe then, colleges might allow students to be the only ones playing the games. I’d bet you that few alumni would sneak money to the gym rats tossing a ball around just for the hell of it—and I’m convinced that would be a good thing.
I guess I’m old enough to remember when it was uncommon to see a black athlete on the gridiron or hardwood at a big, majority-white state university. But back in the day, those black guys were studs and scholars. Perhaps because they were rare and carefully chosen to favorably represent the school and themselves, the early black college athletes let all who watched them on and off the court know that they belonged on campus. I’m thinking of folks such as Charlie Scott at North Carolina, Mike Maloy at Davidson, Lew Alcindor (now Kareem Abdul-Jabbar) at UCLA, Bill Russell at San Francisco, Jim Brown at Syracuse, Jesse Owens at Ohio State, and, of course, Paul Robeson, an All-American football player and valedictorian at Rutgers.
Two factors make this history little known and less appreciated—factors that go to the heart of what Whitlock hints at in his article.
The first factor: Absent blanket television coverage of the role black athletes played in changing American society, few of us appreciate the fact that they were agents of social change. Through the sweat of their bodies and the exercise of their intellect, they exhibited a form of exemplary achievement that pointed the way toward racial progress. Sadly, I suspect today’s athletes don’t know this. Otherwise, how could they behave as if they’re simply entertainers or shoe pitchmen without a cause beyond their temporary celebrity?
The second factor: Prior to the dawn of ESPN, corporations—such as the advertising firms, product manufacturers, college presidents and universities, and the NCAA itself—hadn’t devolved to the point that they could profitably exploit the games won or lost by the black athletes in their midst. ESPN didn’t even exist to showcase how great Elgin Baylor or Oscar Robertson were as players in college or the pros. Michael Jordan was the first ESPN-boosted athlete, and that’s primarily why people think he’s the “Greatest of All Time.”
But they’re arguing from a position of ignorance, because they never so much as saw a highlight reel of Earl Monroe at Winston-Salem State in North Carolina or Willis Reed at Grambling State in Louisiana. What’s more, how can we adjust for a legacy of racial discrimination to debate that they didn’t belong on their campuses—or at some other, better-known white university?
The whole issue of corruption in college sports suddenly becomes moot if big-business entertainment stops being the driving force for the games. Let the professionals get paid what the market will bear, and let the kids on campus play for the sheer fun of it.
Sam Fulwood III is a Senior Fellow at the Center for American Progress and Director of the CAP Leadership Institute. His work with the Center’s Progress 2050 project examines the impact of policies on the nation when there will be no clear racial or ethnic majority by the year 2050.
This material was published by Kaiser Health News.
By Susan Jaffe
Some seniors think Medicare made a mistake. Others are just stunned when they find out that being in a hospital for days doesn't always mean they were actually admitted.
Instead, they received observation care, considered by Medicare to be an outpatient service. Yet, a recent government investigation found that observation patients often have the same health problems as those who are admitted. But the observation designation means they can have higher out-of-pocket expenses and fewer Medicare benefits.
More Medicare beneficiaries are entering hospitals as observation patients every year. The number rose 69 percent in five years, to 1.6 million nationally in 2011, according to the most recent federal statistics. At the same time, Medicare hospital admissions have declined slightly.
Here are some common questions and answers about observation care and the coverage gap that can result. (Seniors enrolled in Medicare Advantage should ask their plans about their observation care rules since they can vary.)
Q. What is observation care?
A. Hospitals provide observation care for patients who are not well enough to go home but not sick enough to be admitted. This care requires a doctor's order and is considered an outpatient service, even though patients may stay as long as several days. The hospitalization can include short-term treatment and tests to help doctors decide whether the patient should be admitted. Medicare guidance recommends that this decision should be made within 24 to 48 hours, but observation visits exceeding 24 hours nearly doubled to 744,748 between 2006 and 2011, federal records show.
Q. What effect does observation status have on patients' care and expenses?
A. Because observation care is provided on an outpatient basis, patients usually also have co-payments for doctors' fees and each hospital service, and they have to pay whatever the hospital charges for any routine drugs the hospital provides that they take at home for chronic conditions such as diabetes or high cholesterol.
Observation patients cannot receive Medicare coverage for follow-up care in a nursing home, even though their doctors recommend it. To be eligible for nursing home coverage, seniors must have first spent at least three consecutive days (or through three midnights) as an admitted patient, not counting the day of discharge.
Q: Why are more Medicare patients receiving observation care instead of being admitted?
A. Medicare has strict criteria for hospital admissions and usually won't pay anything for admitted patients who should have been observation patients. In response to these rules, hospitals in recent years have increased their share of observation patients.
But under recently revised Medicare rules, hospitals that were denied reimbursement because a patient should not have been admitted can now can resubmit a bill within one year to Medicare for a payment based on observation status. The American Hospital Association has said that is not enough time and is suing Medicare to end the policy.
Hospitals have another incentive for keeping patients in observation status: If patients return within 30 days, they don't count as readmissions since they were not admitted in the first place. Medicare withholds a percentage of payment from hospitals with high readmission rates.
Q. Will the cost of my maintenance drugs be covered when I am in the hospital?
A. No, Medicare does not pay for these routine drugs for patients in the hospital in observation care. Some hospitals allow patients to bring these drugs from home. Others do not, citing safety concerns.
If you have a separate Medicare drug plan, the coverage decision will be up to the insurer. If the plan covers your maintenance drugs at home and agrees to cover them in the hospital, it will only pay prices negotiated by the plan with drug companies and in-network pharmacies. Most hospital pharmacies are out-of-network. So even if your drug plan covers these drugs, you may be left paying most of the bill.
Q: How do I know if I'm an observation patient and can I change my status?
A. The only way to know for sure is to ask. Medicare does not require hospitals to tell patients that they are in observation status and that they will be responsible for paying any non-covered Medicare services. "Unless people are in an observation unit, the difference between observation and inpatient care is basically indistinguishable," said Toby Edelman, a senior attorney at the Center for Medicare Advocacy.
Medicare does require hospitals to tell patients they have been downgraded from inpatient to observation.
If you believe you should be admitted, ask your doctor to change your status to inpatient. However, even if the doctor agrees, the hospital may be able to overrule that decision or Medicare can change it later when reviewing the claim.
Q. What can I do if I'm about to be discharged or am already in a nursing homeand I find out Medicare won’t cover my nursing home care?
A. If you can't persuade the hospital to change your status, Edelman advises patients to file two kinds of appeals. When you receive your Medicare Summary Notice, follow the instructions to challenge the charges from the hospital listed under Part B of the notice if you believe those services should have been billed as inpatient services. Also challenge any charges from the nursing home for outpatient services such as physical therapy.
If you do enter the nursing home, you may be billed for the care. Ask the nursing home to submit a "demand bill" to Medicare. When it is rejected, you can appeal. The Center for Medicare Advocacy's online "self-help packet" offers more details about to how to challenge observation status.
Q. What is being done to fix the problem?
A.Medicare's recent revisions in payment rules, are intended to ease the financial pressure on hospitals to put patients in observation care.
So far, Medicare has not made changes that would directly affect patients, for example, dropping the three inpatient day criteria for nursing home coverage, forcing hospitals to tell patients when they getting observation care or requiring hospitals to allow patients to bring drugs from home.
A group of 14 seniors has sued the government to eliminate observation status. Government lawyers argued in court filings that the case should be dismissed.
Medicare officials declined to be interviewed for this article because of the pending litigation.
Legislation has been introduced in Congress that would count an observation visit as part of the three hospital days required for nursing homes coverage, but has not received any action.
Contact Susan Jaffe at Jaffe.KHN@gmail.com
Observation visits increase 69% while hospital admissions decline
Source: Medicare Payment Advisory Commission, "Health Care Spending and the Medicare Program, Data Book," June 2013
Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.
By Michelle Andrews
This material was published by Kaiser Health News.
As the state health insurance marketplaces, also called exchanges, get set to launch in October, many people have questions about the coverage that will be offered there. Here are a few that were posed to me recently.
Q. Are there unintended consequences of shopping through an exchange? For example, are the benefits of a plan with a lower monthly premium less comprehensive than the benefits of an expensive plan? And are there plans available only to people who qualify for subsidies, so that once income increases, the consumer must switch to a different plan?
A. All plans sold on the exchanges must cover 10 so-called essential health benefits, including prescription drugs, emergency and hospital care, and maternity and newborn care.
For the most part, the plans will differ not in which benefits they cover but in the proportion of costs that consumers will be responsible for paying.
Individuals and families with incomes up to 400 percent of the federal poverty level ($45,960 for an individual and $94,200 for a family of four in 2013) may be eligible for federal tax credits to help pay premiums.
Consumers "can use the premium subsidy to purchase any plan," says Edwin Park, vice president for health policy at the Center on Budget and Policy Priorities.
If your income increases during the year, you may no longer qualify for the same level of assistance, but you won't have to switch plans. However, you may have to repay any overpayments that were made to insurers if your projected income turns out to be higher than your actual income. On the other hand, if your income falls, you may be eligible for a larger tax credit. That's why it's important to report any income changes to the exchange promptly.
A second type of subsidy available on the exchanges will reduce the amount that people owe in co-payments, deductibles and other out-of-pocket costs. The cost-sharing subsidy is available to individuals and families with incomes up to 250 percent of the poverty level ($28,725 for an individual and $58,875 for a family of four in 2013). To qualify for this subsidy, you must buy a silver plan, Park says. If your income changes, however, you won't be responsible for any overpayments.
Q. Once the exchanges open, how much will an insurer be allowed to increase premiums annually? And are those increases based on claims?
A. Premium increases are driven by many factors, including medical costs and the health of the people covered by a particular plan.
The Affordable Care Act discourages insurers from imposing unreasonable premium increases in a couple of ways. Insurers in the small-group and individual markets that want to raise premiums by 10 percent or more must submit data, projections and other information to justify the increase to state or federal regulators, who review the requests and make the information available to the public. Asking insurers to justify why they want to increase rates should act as a deterrent to unreasonable increases, experts say.
But the law doesn't give regulators new authority to refuse rate increases, says Timothy Jost, a law professor at Washington and Lee University in Lexington, Va. It does, however, provide funding for states to beef up their rate-review processes.
The Department of Health and Human Services says that increased scrutiny of insurance rates has led to a decrease in rate increases, says Jost, "and that's probably true."
In addition, the law requires insurers to spend at least 80 percent of the money they collect in premiums on medical claims and quality improvements rather than on administrative activities such as marketing. If they exceed that limit, they must rebate the excess to consumers. Insurers will return $500 million to 8.5 million consumers -- about $100 per eligible family -- by mid-August of this year for overcharges in 2012, according to the Obama administration. Rebates may come in various ways, including a check or a reduction in the following year's premium.
Q. My parents are legal immigrants over 65 but not yet eligible to buy into Medicare because they haven't lived in the United States for five years. Will they be able to buy health insurance on the federal exchange?
A. Yes, legal immigrants will be able to shop for coverage on the exchanges, where they may be eligible for premium tax credits if their income is no more than 400 percent of the federal poverty level ($62,040 for a couple in 2013). Immigrants living in the United States without legal permission, on the other hand, are not permitted to buy coverage on the exchanges even if they wish to pay the entire premium out of pocket.
Please send comments or ideas for future topics for the Insuring Your Health column to questions@kaiserhealthnews.org.
Alarmed by the explosion of high-cost lending in the state, cities across Texas have passed ordinances to prevent the cycle of debt that short-term, high-cost loans can create.
But some big lenders are finding clever ways around the laws 2013 like giving away cash for free.
TitleMax promises to "make getting cash easy!" To get a loan, borrowers with "good credit, bad credit, or no credit" need only turn over the title to their car.
In Dallas, San Antonio, and Austin 2013 which have all passed lending laws 2013 those loans have come with zero percent interest.
What's the catch? After 30 days, the loan is due in full. If the borrower cannot pay 2013TitleMax's average loan is for $1,300 2013 the borrower is sent to another TitleMax location outside of the city, where he or she can receive a new, unrestricted loan. That loan, states a contract given to one borrower, could have an annual rate as high as 310 percent.
Of course, the borrower would be free to renew the loan at that location 2013 over and over again.
"It's a bait and switch," said Ann Baddour of the non-profit Texas Appleseed. "The practice may not be illegal, but it's definitely unethical and unconscionable."
TitleMax declined to comment. Like other high-cost lenders, the company touts its products as an option for borrowers who might not qualify for other sources of credit.
An auto-title loan is similar to its better known cousin, the payday loan 2013 but larger and with more at stake. Typically, the borrower hands over title to her car and agrees to pay off the loan after one month. If she can't do that, she can pay only the interest due and roll over the principal to the next month.
As with payday loans, the cycle can repeat itself over and over. A study by the Consumer Federation of America and Center for Responsible Lending found that the average borrower renews a loan eight times. A borrower who defaults risks having her car seized. (Disclosure: The Center and ProPublica both get significant funding from The Sandler Foundation.)
In six TitleMax contracts from Texas reviewed by ProPublica, the company actually charged an annual rate ranging from 145 to 182 percent.
TitleMax's ploy is the latest example of high-cost lenders' ingenuity when confronted by unwanted laws. In Texas, at least eight towns and cities have passed lending ordinances in the past two years.Together, the new laws cover over four million Texans.
The ordinances come at a time of explosive growth for TitleMax's parent company, TMX Finance, one of the largest title lenders in the country. The company has more than 1,200 stores across 14 states and will soon move into its 15th.
In its home state of Georgia, TMX boasts more than 300 locations 2013 more branches than any bank. (Wells Fargo and SunTrust come closest with around 280 branches statewide each.). The company has doubled in size since 2008 and says it plans to keep up the same rate of growth.
TMX's growth is especially evident in Texas, where it has opened more than 150 stores in the past two years. It continues to operate in cities that have passed ordinances. Under the names of TitleMax and TitleBucks, for instance, TMX operates a total of more than 80 stores in Dallas, Austin, and San Antonio.
Last December, Texas's regulator for payday and auto-title lenders announced 2013 without naming TitleMax 2013 that it was "concerned" about the practice of offering a zero percent loan to customers in those cities. The offer might prove too tempting to someone who might otherwise never take out an auto-title loan, said the regulator in a bulletin to lenders: "This business model could also be perceived as a deceptive practice because it appears calculated to bring the consumer into the store with the promise of one product, but later effectively requires the consumer to go to another location to purchase another product."
In a statement to ProPublica, Dana Edgerton, spokeswoman for the Office of Consumer Credit Commissioner, said that the agency was not aware of any other lenders besides TitleMax offering a zero percent loan.
Despite their concerns, state regulators do not have authority to enforce the city's ordinances, Edgerton said. It can only warn lenders of potential consequences 2013 a warning TMX has not heeded.
The city of Denton's lending ordinance, which passed in March, prohibits payday and auto-title lenders from renewing borrowers' loans more than three times. "That was the biggest thing, just having some kind of end point," said Kayce Strader of the non-profit Serve Denton.
As soon as Denton's law went into effect, according to a class action lawsuit filed in June in state court, TitleMax notified its current customers there would be a change. They would no longer be able to renew their loan in Denton. Instead, customers had a choice: They could pay off the loan in full or accept a zero percent loan. That loan, in turn, would not be renewable at the Denton location. But, the notice says, "We want you to know that we will work with you during this transition period."
Where to go, then? TitleMax also has a location 15 miles down the highway in Flower Mound, Texas, the notice says. "[You] may want to consider doing business" there, and once you've switched, "you can continue transacting at that location," it says.
According to the suit, the named plaintiffs all got caught renewing TitleMax loans over and over. One allegedly renewed her loan 23 times, paid at least $10,800 in fees, and after all that still owed $3,961. Another, the suit says, renewed her loan twelve times. By switching such customers to a location outside Denton, TitleMax would have been able to continue renewing the loans without restriction.
The suit charges TitleMax duped customers into thinking they were paying down their balance when they were in reality just paying the same fees again and again. TitleMax denies the allegations and is contesting the suit. The company's attorney declined comment.
This material was published by the Center for American Progress.
When people are forced to choose between protecting their safety and guarding their civil rights, almost everyone picks safety. After all, what good are rights if you’re injured or dead?
In the days after the terrorist attacks of September 11, 2001, many policymakers used this forced choice to argue for new surveillance laws such as the Patriot Act. The law gave the government sweeping new powers to spy on Americans by wiretapping, seizing financial records, tracking Internet activity, and more; but these measures, we were told, were a necessary trade-off for security.
The FBI also paid informants to infiltrate mosques and set up sting operations that were supposed to catch terrorists in our midst. Yes, the informants were sometimes the ones to suggest violent jihad in conversations with mosque goers. In one case, members of a California mosque were so alarmed that they reported an informant to the FBI. But we were told that the “war on terror” demanded aggressive tactics.
Racial and religious profiling, particularly at airports, followed a similar pattern. Folks who looked “Muslim”—whatever that means—were more likely be to stopped, questioned, and detained based on nothing more than their name, clothing, or skin color. But hey, that was the price for keeping our country safe.
For too many Muslims living in America after 9/11, saying a prayer, attending worship, wearing a headscarf, joining a student organization, frequenting an ethnic restaurant, or participating in any number of everyday activities could trigger suspicion, and even arrest.
Twelve years after that terrible September day, it is worth recalling the premise of the choice presented to us—safety versus civil rights—because it was false. Targeting people who looked or sounded Muslim was tactically misguided and morally wrong. It wasted time and resources and distracted law enforcement officials from focusing on real evidence and threats. It risked alienating Muslim American communities rather than encouraging their civic engagement and partnerships with law enforcement. It gave credence to terrorists around the globe who pointed to the indiscriminate targeting of Muslim Americans as proof that America hated Islam and those who practiced the faith. Beyond all that, targeting a group of people because of their race, ethnicity, or religion was—and is—a serious violation of America’s core values of religious freedom and equal justice under the law.
Fortunately, we have learned some lessons over the past 12 years. Here are some things we now know.
Given how important these lessons are, it is unfortunate that some groups still seem to be operating under the forced-choice premise that the best way to catch a terrorist is by targeting mosques and Muslim community centers.
Recent news reports reveal that the New York Police Department, for example, has conducted at least a dozen “terrorism enterprise investigations” over the past 12 years, in which they have gotten authorization to plant secret informants in local mosques and community centers, wiretap conversations, and build files on anyone who steps inside those buildings.
The NYPD even tried to plant an informant on the board of a local nonprofit that provides education and social services to immigrants. The Arab American Association of New York is a secular organization, and its executive director, Brooklyn-born-and-raised Linda Sarsour, works regularly with local officials and has won numerous awards, including one from theWhite House. But no matter: Sarsour and her nonprofit found themselves targeted by the NYPD despite zero evidence of wrongdoing. It’s worth noting that the NYPD’s spying program has produced no actual leads.
Unfortunately, the department has also been targeting black and Latino New Yorkers through its stop-and-frisk practice. Last month, U.S. District Judge Shira Scheindlin ruled the practice unconstitutional, calling it a form of racial profiling.
Besides being unconstitutional, stop-and-frisk is an extremely inefficient way to catch criminals, not to mention gain the trust of the community. A study by the New York office of the American Civil Liberties Union found that:
innocent New Yorkers have been subjected to police stops and street interrogations more than 4 million times since 2002 … and black and Latino communities continue to be the overwhelming target of these tactics. Nearly nine out of 10 stopped-and-frisked New Yorkers have been completely innocent, according to the NYPD’s own reports.
Criticizing racial and ethnic profiling is not being soft on crime or denying the reality of terrorism. New York City has many criminals. America has real enemies. The world is a dangerous place. The point is this: In order to make our cities, nation, and world safer, we need a smarter approach than targeting communities because of their race, ethnicity, or faith—a tactic that only makes the problem worse.
Studies show that working with communities through community-oriented policing andcommunity-law enforcement partnerships works. Understanding the complex paths that lead to violent behavior is also important. And we need to challenge and debunk the anti-Muslim bigotry that feeds the attitudes and shapes the actions of law enforcement officials, policymakers, and the public at large.
The best way forward is not a forced choice between safety and civil rights. We do not have to sacrifice one for the other. Rather, upholding both is the best way to safeguard our national security and protect our nation’s core values.
Twelve years ago today, 19 hijackers in four airplanes killed more than 3,000 men, women, and children on American soil. Heroic first responders—including brave police officers in New York—put the safety of others before their own, and many lost their lives in the line of duty. We owe it to them—and to all the victims—to put into practice the lessons we have learned since that day. Doing so is the best weapon in our arsenal to fight terrorism. It is the strongest proof we have that—although terrorists killed thousands that day—they have not been able to destroy our resilience or shred the fabric of our democracy.
Sally Steenland is Director of the Faith and Progressive Policy Initiative at the Center for American Progress. Steenland, a best-selling author, former newspaper columnist, and teacher, explores the role of religion and values in the public sphere.
This material was published by the Center for American Progress.
By Michael Linden and Harry Stein
Some members of Congress are threatening a government shutdown on October 1 unless a new round of spending cuts is enacted—cuts that ignore the nation’s true, improved fiscal and economic outlook. Federal budget deficits have actually shrunk dramatically in recent years. The national debt is no longer on the brink of exploding. But our economy continues to struggle; the Census Bureau recently reported that income inequality is growing while middle-class wages are stagnant. The 15 charts in this column illustrate how much the fiscal picture has changed, and why—in order to get the economy back on track—the debate must change with it.
Note: Click on any of these charts to download them as .pdf files.
In 2010, the nonpartisan Congressional Budget Office, or CBO, projected exploding annual budget deficits and cumulative national debt. Policymakers on both sides agreed that stabilizing the federal budget had to be a high priority, so Congress enacted legislation that will reduce deficits by about $2.5 trillion over the next 10 years—not including the automatic spending cuts known as the “sequester.” Congress cut spending by $1.5 trillion and raised about $630 billion in new revenues. Taken together, these actions will reduce government spending by an additional $400 billion by reducing interest costs for the national debt. Due in part to these policy changes, annual budget deficits and cumulative national debt are both stable over the medium term.
None of this deficit reduction was painless or easy, and each attempt nearly led to a severe crisis. Congress began to cut spending in its annual appropriations bills for fiscal year 2011. Those cuts were the product of several rounds of difficult negotiations, which nearly shut down the government. Later that year, Congress locked in even deeper cuts for a 10-year period in legislation that raised the debt ceiling just in time to avoid an economic catastrophe. And at the start of 2013, Congress agreed to some tax increases for the wealthiest Americans as part of the “fiscal cliff” agreement.
Over the past several years, health care costs have also grown much more slowly than the CBO expected back in 2010. Lower costs mean less government spending on health care programs such as Medicare and Medicaid. In addition, the Affordable Care Act made important policy changes that substantially reduced cost projections for Medicare.
The long-term budget outlook has also significantly improved, mainly due to two factors. First, of course, is the ripple effect of the medium-term improvements. Second, the budget projection that many were using to analyze long-term trends was based on expectations of future Congresses passing new legislation to increase the deficit, rather than continuing current policies. If one assumes that, 10 years from now, Congress will cut taxes and increase spending, then the debt looks dire. If we project forward and account for policies in place today, the debt looks far more manageable.
Those calling for more austerity policies ignore not only the improved domestic budget outlook, but also the failed austerity policies of other nations. In Greece, the economy has shrunk dramatically each year after deep spending cuts. In the United Kingdom, severe austerity failed to even reduce the national debt, because the resulting economic stagnation damaged that nation’s fiscal health.
Austerity has similarly damaged the U.S. economy. The expiration of job-creation measures, along with trillions of dollars in spending cuts, resulted in the sharpest reduction in federal spending since the end of the Korean War. Important federal investments—such as infrastructure, education, and basic scientific research—will reach historic lows. Independent experts now project slower economic growth than they expected in 2010, before the cuts began.
Because sequestration makes new automatic cuts every year, austerity will only get worse. The sequestration cuts were intentionally designed to be so damaging that Congress would never let them take effect. But sequestration did take effect, and CBO expects that in the next 12 months alone, it will reduce GDP by 0.7 percent and eliminate 900,000 jobs.
And sequestration is certainly not necessary for debt reduction. Even if all the sequestration cuts were repealed without any offsetting deficit reduction, our debt-to-GDP ratio 10 years from now would be the same as it is today.
Because the fiscal picture has improved so much over the past couple years, sequestration is completely unnecessary to stabilize the debt. In fact, the CBO currently projects lower budget deficits without sequestration than it projected two years ago with sequestration.
The Center for American Progress has outlined a plan that repeals sequestration through 2016 and makes new investments in key economic sectors. While new deficit reduction is unnecessary since the medium-term budget is stable even without sequestration, the plan includes smart spending cuts elsewhere in the budget and proposals to make sure that Big Oil companies and the wealthiest Americans pay their fair share.
Finally, even if one does not believe any of these facts about the improving fiscal outlook, then perhaps the free market will convince them. Private investors have decided that the United States is as good an investment as ever. If investors believed the United States was about to go “broke” due to exploding debt, we would see higher interest rates on U.S. Treasury bonds as they became harder for the government to sell; instead, interest rates on Treasury bonds are unusually low.
Instead of working to grow our economy and get unemployed Americans back to work, Congress is approaching another self-created crisis over shutting down the government and defaulting on our financial commitments by failing to raise the debt limit. Not only do these unnecessary partisan battles pull the focus away from creating jobs, but they also risk further damaging our struggling economy.
The fiscal debate is still focused on more austerity—despite an improved budget outlook and mounting evidence of austerity’s failure. It’s time to reset the fiscal debate to focus instead on the economic crisis we have today.
Michael Linden is the Managing Director for Economic Policy at the Center for American Progress. Harry Stein is the Associate Director for Fiscal Policy at the Center.