On June 28, the Supreme Court made an historic decision: they upheld the individual mandate in the Affordable Care Act. This news came with a bitter pill for low-income advocates, however – that states now have the option to refuse to expand Medicaid to cover people with incomes up to 133 percent of the poverty line, choosing to forego federal funds provided to them for this purpose.

The Medicaid expansion is fully funded by ACA for its first three years (after which the federal match phases down to 90 percent by 2020). If a state chooses not to expand Medicaid however, many low-income people will remain uninsured. The Affordable Care Act was designed assuming that those individuals with incomes below the poverty line would be covered by Medicaid. Based on this assumption, Congress set the income eligibility range for subsidies aimed at helping people purchase coverage in insurance exchanges at 100 to 400 percent of the poverty line. If a state does not accept the Medicaid expansion, individuals living below the poverty line who are not now covered by their state’s Medicaid program will not be eligible for premium subsidies either.  The Congressional Budget Office estimates that because some states will refuse to expand Medicaid, 6 million people will not receive health coverage through that program.  Of these, CBO expects 3 million with incomes from 100 – 133 percent of the poverty line will get subsidized coverage through their state’s insurance exchange.  The remaining 3 million will fall into the “coverage gap” – left without any coverage at all. For further details, see this piece from Robert Greenstein at the Center for Budget and Policy Priorities and this blog post from the Center.

The expansion is a very favorable deal for states, and not only because it is almost fully federally funded. Hospitals also benefit from the expansion because they are ensured Medicaid payment for services that are not currently reimbursed. Essentially, for a small cost to states that would be partly offset by savings in uncompensated care, CBO had estimated that the Medicaid expansion with all states participating would cover an additional 17 million low-income people.

So why are so many states threatening not to take the Medicaid expansion? Governor Rick Perry of Texas, along with Republican governors from at least 10 other states, has announced that he will not expand Medicaid. Many advocates believe their opposition is based on partisan politics or ideology, although these governors claim that states would bear a financial burden by expanding Medicaid (see this color-coded map from ThinkProgress to see which way states are leaning).  The small proportion states would pay is expected to amount to a 2.8 percent increase over their Medicaid costs without the expansion, less the savings from reducing uncompensated care payments to hospitals (because more patients would have insurance).  To most anti-poverty advocates, accepting the expansion seems like a no-brainer for states because of the benefits it provides and the fact that is almost fully funded by the federal government. Health care providers who expected more insured patients through the ACA are already starting to exert pressure on states to accept the option.  How many states will refuse the expansion money is yet to be seen – while they decide, the coverage of millions of low-income Americans hangs in the balance.

The Supreme Court’s validation of most of the health care law does not change the fierce opposition to it among right-wing members of Congress.  The House of Representatives has taken more than 30 votes to repeal the law, all of which have been rebuffed by the Senate.  The House has also attempted to deny the funding required to implement the law, most recently by cutting about $8 billion from the Department of Health and Human Services in the appropriations bill that was approved by a House subcommittee (see Appropriations article, this issue).  The Senate and the President will prevent the law from being de-funded, but the partisan attacks on the law can be expected to continue.

The post CHN: Medicaid Expansion Favorable for States, Yet Some Still Refuse to Cooperate appeared first on Coalition on Human Needs.

The Medicaid program is a critical source of health care coverage for low-income children, some of their parents, seniors, and people with disabilities.  An estimated one in five Americans enrolled in the Medicaid program in 2011.  Medicaid, along with the Children’s Health Insurance Program (CHIP) which provides health care to children in families with slightly higher incomes, covered 31 million low-income children, 11 million non-elderly low-income parents and pregnant women, 8.8 million non-elderly individuals with disabilities, 4.6 million low-income seniors and 3.7 million seniors with disabilities.  But people who do not fit the above categories have not qualified for Medicaid, no matter how poor they are.  The Affordable Care Act will change that, allowing all whose incomes are low enough to receive health care through Medicaid.

Under the ACA, the federal government would pay 100 percent of the cost of expanding Medicaid for the first three years and 90 percent or more of the cost thereafter.  The states who are plaintiffs in the Supreme Court case are calling the Medicaid expansion coercive.  That was met with some skepticism during oral arguments.  Justice Kagan asked what was coercive about states receiving a “boatload” of federal dollars to implement the expansion.  There is plenty of precedent for Medicaid expansions that have required states to share the costs.  States always have the option to drop out of the program; they have not because Medicaid provides vital services with the federal government paying a generous share of the cost.  If the Medicaid expansion in the ACA is declared unconstitutional it would have alarming implications for all of Medicaid, not just the new provisions, and could throw into question other programs in which states are required to pony up funds as a condition of receiving federal funds.  For more information on Medicaid’s role under health care reform see this Kaiser Family Foundation issue brief .

The Court is expected to make its ruling on the constitutionality of the provisions in the Affordable Care Act in late June when the session ends.

The post CHN: Stakes Couldn’t Be Higher for Low-Income Uninsured appeared first on Coalition on Human Needs.

The hearing uncovered growing abuses by unscrupulous agents in private companies marketing Medicare Advantage plans to unsuspecting seniors who are convinced to enroll in a plan they may not understand and that may be inappropriate for their situation.  Agents often receive bonuses and gifts based on their ability to increase enrollment in their company’s plans.  Marketing abuses include agents misrepresenting their association with Medicare, using scare tactics and tricking seniors into unknowingly signing application documents.  Currently, 8.5 million beneficiaries, or 19 percent of the Medicare population, are enrolled in Medicare Advantage plans.  As long as companies can pad profits through high subsidies and continue to engage in deceptive market practices, enrollment will increase in Medicare Advantage programs.  Some would go as far as to argue that this ultimately could lead to privatization of the Medicare program.

The debate over Medicare Advantage plans has come into focus in the context of the reauthorization of the State Children’s Health Insurance Program (SCHIP).  SCHIP is a program that provides affordable health care with a robust benefit package for low-income children and families unable to afford health insurance but not poor enough to be eligible for coverage under Medicaid.  In order to expand coverage to more children, advocates and many in Congress support increasing the federal government’s investment in SCHIP by $50 billion over the next 5 years.  The rules adopted by Congress this year require that spending increases in mandatory programs like SCHIP be paid for (offset) by comparable reductions in spending or increases in revenue.  CBO estimates that eliminating overpayments in Medicare Advantage would save $54 billion between 2009-2013, enough to offset $50 billion in new funding for SCHIP.

Many would argue that reducing or eliminating overpayments to private insurance companies in the Medicare Advantage plans is an excellent offset for increasing resources to the SCHIP program.   For advocates the choice is clear.  Funding windfalls for insurance companies that place traditional Medicare at a competitive disadvantage is not just a low priority; it is downright undesirable.  The nation’s interests are far better served by directing these funds to increase access to health care coverage for more children.

Both the House and Senate are expected to mark up SCHIP reauthorization bills in July.

The post CHN: House Examines Medicare Advantage Program appeared first on Coalition on Human Needs.

Most significantly, the President proposed expanding Health Savings Accounts (HSAs), tax-free savings accounts created in the 2003 Medicare law that can be used to pay deductibles and out-of-pocket costs of health care provided through a high-deductible health insurance plan. Many economists and analysts point out that HSAs offer the greatest benefits to those at the highest tax brackets who need help with health care the least. HSAs drive up the cost of health care for low-income and sicker people who would be more likely to stay in traditional lower-premium plans. Further, higher out-of-pocket costs will induce many lower-income people to avoid seeking necessary care, which could eventually result in health problems that are more costly to treat. The idea behind HSAs is to create a greater incentive for people to avoid unnecessary health care costs, but research shows that the vast majority of health care costs are spent on the ten percent of people who have major illnesses or disabilities, situations in which health care cannot be safely avoided. Critics also argue that some ways of expanding HSAs could even encourage employers to stop providing coverage, making health care further out of reach for the average worker. (For more information, see the recent paper released by the Center on Budget and Policy Priorities at http://www.cbpp.org/1-31-06health.htm)

The President’s speech included other proposals that could affect services for moderate- and low-income families. The President pledged, as he has in previous budget cycles, to reduce or eliminate a number of programs his administration deems to be not successful. He will propose to save $14 billion in fiscal 2007 by eliminating 140 programs. The President called for reducing or eliminating 150 programs last year and 65 programs the year before that and each time Congress has largely declined to do so. The sorts of programs targeted for elimination last year included the Safe and Drug Free Schools program, Upward Bound for low-income high school students, and Hope VI funding for revitalizing public housing. Although funding has been cut for these programs, Congress rejected the President’s plan to eliminate them.

The President also announced a proposal to “train 70,000 high school teachers to lead advanced placement courses in math and science, bring 30,000 math and science professionals to teach in classrooms, and give early help to students who struggle with math so they have a better chance at good, high-wage jobs.” This proposal would be one prong of his American Competitiveness Initiative, which would also increase federal funding for scientific research and make permanent the research and development tax credit. Educators generally agree with the need for more focus on math and science, but the new initiatives are hardly adequate to make up for other shortfalls in federal education policy, such as underfunding the Leave No Child Behind Law by $40 billion over the past five years.

The post CHN: State of Union Address Foreshadows Fiscal 2007 Budget appeared first on Coalition on Human Needs.

The difference between those two bills must be ironed out in the next few days. The final bill that emerges from the conference committee will be voted on in each chamber. The reconciliation bill represents the top priority for right-wing members – yet many representatives and senators have voiced concerns over a wide variety of provisions under consideration. It is not yet clear Republican leadership will find enough votes to pass any final bill. House Speaker Dennis Hastert (R-IL) has threatened to keep the House in session until December 20 or later until the House agrees to the budget cuts.

Although right-wing members claim the cuts are necessary to reduce the deficit, any money “saved” from cutting services is being directed to pay for new tax cuts benefiting the wealthy. In fact the coupling of two reconciliation bills – one cutting services and one cutting tax cuts – actually increase the deficit. For more information about the tax cuts, see related article in this issue.

To combat the budget cuts, low-income advocates are planning a National Week of Prayer and Action for Compassionate Priorities for December 12-16. Advocates are being encouraged to call their representatives and senators next week and the Emergency Campaign for America’s Priorities is staging more than 90 events across the country. The faith-based organization Sojourners will hold a prayer vigil at the U.S. Capitol on December 14. Dozens of other prayer vigils will be held elsewhere in the country that week.

There are stark differences between the House and Senate versions of the budget-cutting bill – and those differences could trip up negotiators. If Congress is not able to approve the final bill before the end of the year, they could attempt to bring it up again in January. The budget resolution for fiscal year 2006, which Congress approved in the spring and which granted authority for the reconciliation bill, will remain in effect until Congress passes the next budget resolution for fiscal year 2007.

The Senate budget cutting bill (S. 1932) was approved November 3 by a vote of 52 to 47 with all Democrats except Mary Landrieu (LA) and Ben Nelson (NE) opposed. All Republican senators but five voted for the cuts. The House budget-cutting bill (H.R. 4241) was approved November 18 with all Democrats opposed and all but 14 Republicans in favor.

Here is a brief summary of what is in the House and Senate bills. (This list is not comprehensive.)

Medicaid: The Senate would cut Medicaid by about $6.1 billion over the next five years – but the burden of those cuts would be borne by the drug and insurance industry. H.R. 4241, on the other hand, would cut $11.4 billion from Medicaid and would allow states to require poor mothers and children to pay more for their health care. A family of three earning $18,000 a year could face total Medicaid charges of as much as $900 per year. The Congressional Budget Office (CBO) estimates 80 percent of the savings generated from these changes will come from people not getting care because they can’t afford it. The CBO estimates 100,000 people will lose Medicaid altogether. Senator Gordon Smith (R-OR) pledges to oppose any Medicaid cuts that harm beneficiaries.

Food Stamps: The Senate chose not to cut Food Stamps. The House bill denies Food Stamps to at least 255,000 people . At least 185,000 low-income working families with children will lose assistance, plus 70,000 legal immigrants who have been in this country for five years or more. Several Republican senators signed a letter urging rejection of Food Stamp cuts in final bill: Gordon Smith, Mike DeWine (OH), Richard Lugar (IN), Susan Collins (ME), Arlen Specter (PA), Chuck Hagel (NE), Rick Santorum (PA), Olympia Snowe (ME), Jim Talent (MO), Norm Coleman (MN), Lincoln Chafee (RI), Elizabeth Dole (NC), and Charles Grassley (IA).

Child Support: The House bill cuts $5 billion from child support enforcement. As a result of this cut, children in families owed child support by an absent parent will lose $24 billion in support over ten years. The Senate bill does not cut child support enforcement. Forty senators have signed a letter objecting to cuts to child support enforcement.

Aid to Disabled: H.R. 4241 cuts $730 million from Supplemental Security Income (SSI). Poor people with severe disabilities will have to wait longer to receive the aid the federal government owes them. It often takes months or a year for a disabled person to be approved for SSI. Now he or she gets a lump sum payment that can help pay back rent or other bills for the period when no money was coming in. The House bill would spread out the owed benefits over many months – and if the disabled person dies while waiting, the government gets to keep the money. The Senate bill does not cut SSI.

TANF/Welfare Reform: The House bill requires many more families to participate for longer hours in paid or unpaid work. The bill provides an inadequate $500 million in new child care funds – half of what previous House bills proposed. As a result, 330,000 fewer children will receive child care help. The bill makes it harder for poor parents to get education, training, rehabilitation or other services to enable them to work at decent pay. S. 1932 does not include TANF provisions. Welfare advocates have been asking senators to object to including TANF in a reconciliation bill. Six Republican senators have signed a letter being circulated by Olympia Snowe (ME) asking Majority Leader Bill Frist (TN) to ensure TANF stays out of a final bill. Signers include: Senators DeWine, Chafee, Coleman, Specter, and Collins.

Foster Care: The House bill cuts $600 million from programs for abused and neglected children. The bill limits eligibility for federal foster care payments for grandparents taking care of their grandchildren. The Senate bill does not make cuts to child welfare programs.

LIHEAP: The House bill includes a $1 billion increase for home energy assistance for low-income households. Acknowledging predictions of sky-high heating oil and electricity costs this winter, Republican leaders added LIHEAP money as a sweetener to the bill to attract Northeastern and Midwestern moderates. The Senate bill does not include additional LIHEAP funds.

Arctic Drilling: The Senate bill would open the Arctic National Wildlife Refuge to drilling; the House bill does not. To many observers, drilling in the Arctic will be a lynchpin issue in the negotiations. A group of House moderates vow to defeat any bill that includes arctic drilling but Senator Ted Stevens (R-AK) has said he would vote against a bill that does not include drilling.

For More Information

CHN: TANF Has No Place in Reconciliation   *** Page Not Found
CBPP: Judging the Outcome of House-Senate Negotiations
CHN alert on next week’s activities

The post CHN: House and Senate to Attempt Passing a Final Bill Cutting Aid to Poor appeared first on Coalition on Human Needs.

Less than two months ago hurricane Katrina swept the Gulf Coast, revealing the calamitous consequences of failing to invest in communities and people. President Bush addressed the nation on September 15 from New Orleans, noting the “deep, persistent” poverty of the region and said, “We have a duty to confront this poverty with bold action.”

Instead of “bold action,” conservatives in Congress are pushing ahead with business as usual — with cuts to services for poor people and new tax breaks for the wealthy. Instead of expanding opportunities or providing health care, nutrition assistance or employment opportunities to those who need it most, the House and Senate will be moving ahead as early as next week with legislation that cuts Food Stamps and Medicaid.

The budget resolution approved by Congress in the spring called for $35 billion in cuts over five years to services that mostly help low-income families. The cuts will come from mandatory programs (sometimes called entitlements) such as Medicaid, student aid and Food Stamps. Temporary Assistance for Needy Families (TANF), the Earned Income Tax Credit (EITC) and Supplemental Security Income (SSI) for people with disabilities may also be at risk. The budget resolution also called for $70 billion in new tax breaks that will primarily benefit the wealthy.

The $35 billion in cuts now appears to be only a starting point. Next week the House may consider amending the budget resolution to make at least $50 billion in cuts. (For the moment, the Senate is sticking with the $35 billion target.) In addition, Congress may consider an across-the-board cut to all discretionary programs (those that must be funded annually — see related story, this issue.)

To accomplish the $35 to $50 billion in cuts, Congress will use a technique called reconciliation. Various committees will pass legislation cutting from programs under their jurisdiction. For example, the Senate Agriculture committee is expected to pass a bill next week that will change eligibility requirements of the Food Stamp program resulting in a nearly $600 million cut, expected to affect 200,000 people. Once committees have passed their separate bills, the Budget Committee will package them together into a single bill that will be sent to the floor for a vote. In the Senate, a reconciliation bill requires just 51 votes for passage.

The original deadline Congress set for itself to make cuts was mid-September. The Senate has put off that deadline to the end of October and the House will take at least one week longer to make the cuts. Votes on the floor are expected in late October or early November, but that timeline could slip.

Later in the fall the House and Senate plan to pass legislation with $70 billion in new tax breaks over five years. An important piece of the tax cut package is expected to be an extension of the capital gains and dividend rate reductions, which are supposed to expire in 2008. The Center on Budget and Policy Priorities predicts 53 percent of the benefits from that tax break will go to millionaires (the top 0.2 percent of taxpayers.)

Ostensibly, the House is calling for deeper cuts to services in order to pay for the cost of recovery. But many observers say “how to pay for the cost of Katrina” is the wrong question. The budget resolution approved by Congress actually increases the deficit by $35 billion (spending for low-income services is reduced by $35 billion but new tax breaks will cause the government to lose $70 billion in revenue.) The tax breaks of 2001 and 2003 are costing the federal government more than $225 billion this year alone in lost revenue.

Several Senators and members of the House have admitted that figuring out where and how to cut services will not be easy. Human needs advocates are planning massive call-in days on October 17 and 18 to tell Senators and Representatives to abandon their plans for service cuts and tax breaks. Last week more than 750 organizations in all 50 states signed a letter calling on Congress to discard its plans to cut services for the needy while passing more tax breaks for the wealthy.

Three Senate committees with reconciliation markup sessions scheduled at this writing are Health, Education, Labor and Pensions (Tuesday, October 18, 2:30 p.m.), Agriculture (Wednesday, October 19, 9:30 a.m.), and Energy and Natural Resources (Wednesday, October 19, 10:00 a.m.). The Budget Committee is scheduled to meet to report out the legislation compiled from other committees on October 26.

The post CHN: House Presses for Even Larger Cuts to Low-Income Services appeared first on Coalition on Human Needs.

The Administration continues to promote the existing process through which states can apply for waivers under section 1115 of the Social Security Act. The Administration claims that the waivers are more workable and will result in full compensation to the states receiving the influx of hurricane survivors who are eligible for Medicaid.

Supporters of S. 1716, sponsored by Senate Finance Chairman Charles Grassley (R-IA) and ranking Finance Democrat Max Baucus (D-MT), point out that the waiver process is unnecessarily cumbersome in an emergency situation and that the waivers do not expand the eligibility rules of the Medicaid program for Katrina survivors. Under Medicaid rules, a person must fall in one of five categories to be eligible: children, pregnant women, parents of dependent children, seniors or people with severe disabilities. Childless adults under 65 years of age who do not have a very severe health conditions cannot access Medicaid under the waivers no matter how poor they are.

There are reportedly thousands in Louisiana and in states where survivors have relocated who are denied Medicaid for this reason, some of whom are lacking needed medications. (See two recent reports from the Center on Budget and Policy Priorities: Edwin Park, “Failing to Deliver,” http://www.cbpp.org/9-29-05health.pdf ; Donna Cohen Ross, “Many Katrina Survivors Seeking Medicaid in LA Shelters Remain Without Coverage,” http://www.cbpp.org/10-12-05health3.pdf .)

Advocates have also pointed out that the states hit by the hurricane are in fiscal ruin that is only exacerbated by the waiver policy. The administration has forced Louisiana, Mississippi and Alabama to sign IOUs to pay their normal proportion of Medicaid costs for those survivors who are now residing in another state and receiving Medicaid there under a waiver. The hurricane-affected states also have increased numbers of people eligible for Medicaid still within their borders, putting new demands on the program, and yet the administration’s waiver policy offers no funding assistance.

To address these issues, the Emergency Health Care Relief Act (S. 1716)

.  streamlines the application procedures;

.  makes Medicaid available to any Katrina survivors with below-poverty incomes (or up to twice that level for pregnant women and children) for at least 5 months;

.  provides full federal funding for these benefits;

.  provides full federal funding for the State Children’s Health Insurance Program (SCHIP) in the three affected states through the end of 2006;

.  provides compensation to health care providers serving evacuees and provides support to individuals to allow them to continue private insurance formerly received through their employers.

Senator Grassley, whose committee was tasked with finding $10 billion in spending cuts in the budget resolution passed in April (H. Con. Res. 95), has reportedly warned of a “domino effect” that would result if S. 1716 is not passed. He stunned a packed hearing room on September 28 by suggesting that his committee would be unable to make the $10 billion in cuts that are to be included in the budget reconciliation bill if the Katrina Medicaid legislation is not enacted. Over a week later a GOP Finance Committee aide suggested the failure of S. 1716 could lead to the failure of the planned reconciliation bill to cut spending, which in turn would mean there is less money available to fund the tax cuts that are to be included in a second reconciliation bill.

The Katrina Medicaid legislation is thought to have wide support in the Senate, but Senators John Sununu (R-NH) and John Ensign (R-NV) blocked the bill from coming to the Senate floor. There is a good chance the bill might pass if Majority Leader Bill Frist (R-TN) were to call it to the floor.

Meanwhile, Senator Baucus has refused to work with Chairman Grassley on finding cuts unless the Katrina Medicaid legislation is approved. If Grassley has to depend entirely on Republican Finance Committee members to approve the reconciliation cuts, his success will hinge on persuading moderates Olympia Snowe (R-ME) and Gordon Smith (R-OR), who have indicated that they oppose any cuts in Medicaid that would harm beneficiaries.

To get out of this difficulty, Chairman Grassley is now making plans to insert the Katrina Medicaid legislation into his reconciliation bill. But this approach requires additional spending cuts to pay for the Katrina provisions – cuts that would not be needed if the Katrina bill were passed as emergency legislation, which of course it is. S. 1716 was originally estimated to cost $9 billion, but Grassley has whittled it down to $6.1 billion. If $6 or more billion is added to the reconciliation bill, the total cuts will have to be at least $16 billion to net the $10 billion required by the budget resolution. Chairman Grassley has identified cuts in Medicare and reduced the amount to be cut from Medicaid in an attempt to win enough votes to get the bill out of committee. But it remains unclear whether the numbers and the votes add up.

The post CHN: Victims of Katrina Still Waiting for Medicaid Help appeared first on Coalition on Human Needs.

On October 6 the House agreed by a voice vote to pass H.R. 3971, which would have extended TMA for three months (through December 2005) and extended QI-1 for one year (through September 2006.) The next day the Senate amended the bill to extend TMA for six months (through March 2006) and would have extended the Temporary Assistance for Needy Families program for an additional three months (through March 2006). Under current law, the TANF program will expire December 31, 2005. The House recessed without taking up this change, and without final agreement, the provisions expired.

Because there is separate authorization to continue Medicaid for most of the families affected for four months, if Congress takes up this soon on its return there should be little impact. If Congress fails to act, both these benefits for low-income people will be lost. Advocates will continue to push the House to extend QI-1 and TMA.

Status of H.R. 3971: http://thomas.loc.gov/cgi-bin/bdquery/z?d109:HR03971:@@@L&summ2=m&

The post CHN: House and Senate Fail to Extend Help for Low-Income Medicare Recipients appeared first on Coalition on Human Needs.

Although some members of Congress continue to be uncomfortable making cuts to vital services, others justify cuts as a way to pay for the high costs of Katrina recovery. The original budget resolution set September deadlines for various committees to cut spending from mandatory programs by a total of $35 billion and for the tax writing committees to produce a bill cutting taxes by $70 billion. Mandatory programs include Medicaid, Food Stamps, Temporary Assistance for Needy Families (TANF), the Earned Income Tax Credit and Supplemental Security Income (SSI).

A group of 100 conservative House members released a report September 21 calling on Congress to find “offsets” for hurricane relief – in other words, cut spending to pay for the costs. Many of the offsets chosen by the Republican Study Committee (RSC) are not palatable politically and will not end up in any legislation. But it is worth noting that many of their options for place the burden on low-income families (such as Medicaid cuts).

Other members of Congress have raised the possibility of making steep across-the-board cuts to programs funded through the annual appropriations process. Education, child care, Head Start, veteran’s benefits, education for children with disabilities, certain nutrition programs, and many other services are funded through the appropriations bills – and would be at risk for deep cuts.

A number of advocates view with some surprise Congress’s newfound concern about spiraling deficits. The deep tax breaks of 2001 and 2003 that overwhelmingly benefited the wealthiest Americans were not paid for – and contributed mightily to the deficit. This year people earning more than $200,000 will get back more than $250 billion from the 2001 and 2003 tax cuts.

The budget resolution would actually make the deficit worse – because the new tax breaks are twice the size of the spending cuts. Those tax breaks are expected to include extending the reduced capital gains and dividend rates for investors.

Advocates are gearing up to meet with their members of Congress during the District work period the week of October 10 through 14. The Coalition on Human Needs and other groups are organizing call-in days on October 17 and 18 to tell Congress to abandon its plans to cut services for the poor while cutting taxes for the rich.

Gene Sperling of the Center for American Progress writes with clarity about this topic: Deficits and Katrina: Right Topic, Wrong Question

The post CHN: Conservatives Continue to Press for Cuts to Low-Income Services and New Tax Breaks for the Wealthy appeared first on Coalition on Human Needs.

Congress and the President have scrambled over the last two weeks to respond to Hurricane Katrina and the devastation it has wrought on the Gulf Coast. First, Congress reconvened early on September 2 to pass a $10.5 billion supplemental appropriation ( PL 109-61 ) which was followed by a $51.8 billion supplemental ( PL 109-62 ) enacted on September 8. Both were mainly to fund the Federal Emergency Management Agency (FEMA), with some funds going to the Defense Department and the Army Corps of Engineers.

The FEMA funds are intended to support ongoing recovery efforts as well as the $2,000 grants to affected households announced by the President on September 8, to be distributed by FEMA and the Red Cross.

In addition, the President on September 8 granted the hurricane victims “evacuee status,” making them entitled to federal benefits administered by the states and streamlined enrollment process. These benefits include Medicaid, TANF, childcare, food stamps and others.

Democrats and Republicans disagreed over the extent to which amendments to appropriations bills were practical vehicles to aid the Gulf Coast. On September 15, the Senate passed the Commerce-Justice-Science appropriation bill (H.R. 2862 ) after rejecting certain Katrina-related amendments offered by Democrats but including $4.3 billion in emergency spending for the Gulf Coast as well as $595 million for loans and assistance to small businesses affected by the disaster. It is not clear yet how much of this will survive conference since the House bill was passed in July and thus does not contain Katrina-related spending.

Efforts to Provide Short-Term Benefits to Hurricane Victims

The House and Senate passed a series of short-term assistance measures over the past two weeks. On September 7, the House passed H.R. 3169 , allowing the Department of Education to waive repayment requirement for Pell grant recipients, and the next day passed H.R. 3668 allowing the Department to waive repayment requirements for Student Financial Aid for those college students evacuated from campuses. Both were passed by the Senate on September 15.

The House and Senate also passed legislation ( H.R. 3672 ) to encourage states to provide hurricane victims short-term grants under TANF (defined as four months or less under current regulations) that are not subject to the work requirements and time limits of the regular welfare benefits. The bill reimburses states for grants to families evacuated from other states, advances TANF funds that are otherwise due to the states at the start of the next fiscal year, extends the program through December, and also increases funding by 20 percent in Louisiana, Mississippi, and Alabama. It is likely that additional changes to TANF will be enacted beyond this emergency bill.

The bipartisan Grassley (R-IA) – Baucus (D-MT) emergency package (S. 1716, see below) would expand upon the legislation just passed to allow victims of Katrina to qualify for the full range of TANF aid, still without triggering the time limit, child support or work requirements. Advocates are attempting to add aid for immigrants affected by the disaster to the Grassley-Baucus package.

The Senate has also addressed the additional housing crisis left in Katrina’s wake. The Senate on September 14 adopted an amendment proposed by Paul Sarbanes (R-MD) to the Commerce-Justice-Science appropriation bill ( H.R. 2862 ) to provide $3.5 billion in housing assistance to survivors that would cover utilities and relocations costs as well as rent.

More Legislation Proposed

Members of both chambers are currently working to pass more legislation that would aid people displaced physically and economically by the hurricane. Some of the proposals include measures to address health care and nutrition needs.

To address nutrition needs of those affected, Senators Leahy (D-VT) and Harkin (D-IA) have proposed legislation that would, among other steps, increase the maximum Food Stamp benefit for affected households by 10 percent, increase the gross income limit from 130 percent of the poverty line to 150 percent, and exempt for one year bank accounts and other assets from the resource limits under Food Stamps.

One of the greatest concerns for the state and local authorities is how Medicaid can be provided and funded for the disaster victims. After several proposals were put forth by Senators of both parties, by September 15 most attention had settled upon a compromise crafted by Senators Grassley and Baucus (S. 1716) that would provide emergency Medicaid coverage to survivors in whatever state they are now residing for five months (with a possible 5-month extension) under a streamlined application process without the normal documentation required. States would not be required to apply for a waiver and rules would be waived to allow more mental health and home health care. Louisiana and Mississippi would receive a 100 federal funding match. Hurricane survivors who are below 100 percent of the poverty line (200 percent for children and pregnant women) would be eligible.

Also, the late enrollment penalty under Medicare Part B would be suspended and Medicaid recipients who are eligible to transition to the Medicare prescription drug benefit are to be notified of the new benefit.

The administration has indicated that it would rather act by offering Medicaid waivers to states similar to the one negotiated recently with Texas. The waivers would create a new category for evacuees in Medicaid and SCHIP and include a streamlined enrollment process. The administration’s waiver plan is generally not as broad as the Grassley-Baucus proposal. Able-bodied adults without children, for example, would not be eligible no matter how poor, and low-income children could receive the more limited benefits under SCHIP rather than Medicaid. The administration plan also would not change the federal matching rate for Medicaid and SCHIP.

The Grassley-Baucus package also includes assistance for paying premiums to continue job-based health insurance and 13 weeks of Unemployment Insurance payments, funded fully from the Federal Unemployment Trust Fund, for hurricane victims who have exhausted their normal UI benefits.

In the House, Financial Services Chairman Michael Oxley (R-OH) and Richard Baker (R-LA) proposed a manager’s amendment to provisions creating a National Housing Trust in legislation ( H.R. 1461 ) regulating GSEs (Freddie Mac and Fannie Mae). The National Housing Trust provisions, which were approved by the committee in May, would be amended so that the disaster areas and the evacuees would have priority in accessing the fund. Passage of the bill in the House is uncertain, and the version of the GSE bill approved by the Senate Banking, Housing and Urban Affairs Committee does not include Housing Trust provisions.

Tax Legislation

The House and Senate, under a suspension of the rules, each passed bipartisan tax legislation September 15 geared towards helping the Gulf Coast. The House bill ( H.R. 3768 ) is slightly different from the Senate bill ( S. 1696 ), which was crafted by Senators Grassley and Baucus.

The measures would allow hurricane victims (or anyone in disaster zones, in the Senate bill) to borrow tax-free from retirement savings for three years; expand work opportunity tax credits (for employers of TANF/FS recipients) to employers of hurricane victims; provide an extra personal exemption of $500 for each victim a taxpayer houses for 60 days or more and increase tax breaks for charitable donations. Both bills would make people living in the affected areas eligible for mortgage revenue bonds that are usually only available to first-time homeowners.

The Senate bill would also provide a tax credit for displaced businesses to continue paying workers, 40 percent credit for wages up to $6,000.

The Senate and House versions allow hurricane survivors to use their 2004 income in calculating eligibility for EITC if necessary to avoid losing the benefit.

Administration Actions and Proposals

Last week, President Bush used a provision in the 1931 Davis-Bacon Act allowing him, during a “national emergency” to waive the requirement that construction workers on a federal contract be paid a prevailing wage. The White House signaled that it was working to waive a similar prevailing wage requirement for service workers under the McNamara-O’Hara Service Contract Act. The White House claimed that without such a move, many of the disaster workers might argue that the prevailing wage applies to them because their work is partly service work in addition to construction. But the McNamara-O’Hara Act does not have a provision allowing the rule to be waived, and Secretary of Labor Chao stated September 14 that the administration was not planning such a change.

The President announced additional proposals to address the disaster in a speech to the nation on Thursday night. Many were ideas recycled from previous Administration budget proposals that Congress has not so far acted upon. The President proposed $5,000 Worker Recovery Accounts for unemployed Katrina survivors. These could pay for job training, or supports such as child care or transportation. While much is not yet known about the plan, the dollars proposed fall far short of the actual costs of training under the existing Workforce Investment Act (WIA vouchers in 2003 were typically worth about $10,000), and child care costs could easily take up the whole amount. The President also proposed funding school vouchers that could be used in private and parochial schools as part of an education aid package, and the creation of a Gulf Opportunity Zone for communities in the affected states, including various business tax breaks intended to encourage redevelopment. Low-income advocates will be monitoring these and other proposals to see whether they result in survivors being trained and hired for the recovery activities.

The post CHN: Washington Focuses on Aiding Gulf Coast Families appeared first on Coalition on Human Needs.