Archive for the ‘Center on Budget and Policy Priorities’ Category

Policy Basics: Deficits, Debt, and Interest

April 9, 2015 Comments off

Policy Basics: Deficits, Debt, and Interest

Three important budget concepts — deficits (or surpluses), debt, and interest — are often misunderstood.

Deficits (or Surpluses)
For any given year, the federal budget deficit is the amount of money the federal government spends (also known as outlays) minus the amount of money it takes in (also known as revenues). If the government takes in more money than it spends in a given year, the result is a surplus rather than a deficit.

Unlike the deficit, which drives the amount of money the government has to borrow in any single year, the national debt is the cumulative amount of money the government has had to borrow throughout our nation’s history. When the government runs a deficit, it increases the national debt; when the government runs a surplus, it shrinks the debt

Interest, the fee a lender charges a borrower for the use of the lender’s money, is the cost of government borrowing. Interest costs are determined by both the amount of money borrowed (also known as the principal) and the interest rate. When interest rates rise or fall, interest costs generally follow, making the national debt a bigger or smaller drain on the budget.

The Debt Limit
Congress exercises its constitutional power over federal borrowing by imposing a legal limit on the amount of money that the federal government can borrow to finance its operations. The debt subject to that limit differs only slightly from the gross debt. Thus, it combines debt held by the public with the Treasury securities held by U.S. government trust funds.

A Guide to Statistics on Historical Trends in Income Inequality

February 24, 2015 Comments off

A Guide to Statistics on Historical Trends in Income Inequality
Source: Center on Budget and Policy Priorities

This guide consists of four sections. The first describes the commonly used sources and statistics on income and discusses their relative strengths and limitations in understanding trends in income and inequality. The second provides an overview of the trends revealed in those key data sources. The third and fourth sections supply additional information on wealth, which complements the income data as a measure of how the most well-off Americans are doing, and poverty, which measures how the least well-off Americans are doing.

Geographic Pattern of Disability Receipt Largely Reflects Economic and Demographic Factors; Disability Benefits Especially Important in South and Appalachia

January 13, 2015 Comments off

Geographic Pattern of Disability Receipt Largely Reflects Economic and Demographic Factors ; Disability Benefits Especially Important in South and Appalachia
Source: Center on Budget and Policy Priorities

About 6 percent of the nation’s working-age population receives disability payments from Social Security Disability Insurance (DI) or Supplemental Security Income (SSI), and people who depend on those benefits live in every state, county, and congressional district. Nevertheless, there’s a distinct “geography of disability.” Some states, chiefly in the South and Appalachia, have much higher rates of receipt — nearly twice the national average.[2] In contrast, states along the Washington-to-Boston corridor (where many policymakers and opinion leaders live), on the West Coast, and in the Great Plains and Mountain West have relatively few disability beneficiaries.

While some critics see this disparity as evidence of problems with the programs, it mostly reflects a few key demographic and economic factors. In a nutshell, states with high rates of disability receipt tend to have populations that are less educated, older, and more blue-collar than other states; they also have fewer immigrants. (See Table 1 for state-by-state data.) In fact, those four factors alone are associated with about 85 percent of the variation in disability receipt rates across states.[3] Furthermore, those factors are directly or indirectly related to the programs’ eligibility criteria.

Approximately 1 Million Unemployed Childless Adults Will Lose SNAP Benefits in 2016 as State Waivers Expire

January 12, 2015 Comments off

Approximately 1 Million Unemployed Childless Adults Will Lose SNAP Benefits in 2016 as State Waivers Expire
Source: Center on Budget and Policy Priorities

Roughly 1 million of the nation’s poorest people will be cut off SNAP (formerly known as the Food Stamp Program) over the course of 2016, due to the return in many areas of a three-month limit on SNAP benefits for unemployed adults aged 18-50 who aren’t disabled or raising minor children. These individuals will lose their food assistance benefits after three months regardless of how hard they are looking for work.

One of the harshest pieces of the 1996 welfare law, this provision limits such individuals to three months of SNAP benefits in any 36-month period when they aren’t employed or in a work or training program for at least 20 hours a week. Even SNAP recipients whose state operates few or no employment programs for them and fails to offer them a spot in a work or training program — which is the case in most states — have their benefits cut off after three months irrespective of whether they are searching diligently for a job. Because this provision denies basic food assistance to people who want to work and will accept any job or work program slot offered, it is effectively a severe time limit rather than a work requirement, as such requirements are commonly understood. Work requirements in public assistance programs typically require people to look for work and accept any job or employment program slot that is offered but do not cut off people who are willing to work and looking for a job simply because they can’t find one.

The loss of this food assistance, which averages approximately $150 to $200 per person per month for this group, will likely cause serious hardship among many. Agriculture Department (USDA) data show that the individuals subject to the three-month limit have average monthly income of approximately 19 percent of the poverty line, and they typically qualify for no other income support.

The indigent individuals at risk are diverse. About 40 percent are women. Close to one-third are over age 40. Among those who report their race, about half are white, a third are African American, and a tenth are Hispanic. Half have only a high school diploma or GED. They live in all areas of the country, and among those for whom data on metropolitan status are available, about 40 percent live in urban areas, 40 percent in suburban areas, and 20 percent in rural areas.

Health Reform Not Causing Significant Shift to Part-Time Work; But Raising Threshold to 40 Hours a Week Would Make a Sizeable Shift Likely

January 8, 2015 Comments off

Health Reform Not Causing Significant Shift to Part-Time Work; But Raising Threshold to 40 Hours a Week Would Make a Sizeable Shift Likely
Source: Center on Budget and Policy Priorities

Congressional leaders have tentatively scheduled a House vote early in January on a measure to raise the threshold for health reform’s employer mandate from 30 to 40 hours.[1] The health reform law requires employers with at least 50 full-time-equivalent workers to offer health coverage to employees who work 30 or more hours a week or pay a penalty.[2]

House Speaker John Boehner and Senate Majority Leader Mitch McConnell call the 30-hour threshold “an arbitrary and destructive government barrier to more hours” of work and propose raising it to 40 hours.[3] In reality, however, that step would lead to fewer hours of work for employees and more part-time work — the exact opposite of what their rhetoric about “restoring” the 40-hour work week implies.

Recent data provide scant evidence that health reform is causing a significant shift toward part-time work, contrary to the claims of critics. The number of part-time workers who would rather be working full time is shrinking. And there’s every reason to believe that health reform will have only a small effect on the part-time share of total employment.

More important, raising the law’s threshold from 30 hours a week to 40 hours would make a shift toward part-time employment much more likely — not less so. That’s because only a small share of workers today — 7 percent — work 30 to 34 hours a week and thus are most at risk of having their hours cut below health reform’s threshold. In comparison, 44 percent of employees work 40 hours a week, and another several percent work 41 to 44 hours a week. Thus, raising the threshold to 40 hours would place many more workers at risk of having their hours reduced. In short, it’s the present legislation, not health reform, that threatens the traditional 40-hour work week the legislation’s sponsors say they want to protect.

Many People Who Auto-Enroll in Federal Marketplace Health Coverage for 2015 Could Pay More Than They Should

December 10, 2014 Comments off

Many People Who Auto-Enroll in Federal Marketplace Health Coverage for 2015 Could Pay More Than They Should
Source: Center on Budget and Policy Priorities

People in 34 states[1] who enrolled in health coverage for 2014 through the Federally Facilitated Marketplace (FFM) will be automatically re-enrolled in the same plan in 2015 unless they choose a new plan through the FFM during the open enrollment season, which began November 15 (see Figure 1).[2] While auto-renewal is an important backstop to avoid loss of coverage, it could leave many people paying more for health care than the Affordable Care Act envisions — and more than they will pay if they go back to the Marketplace.

Unless people provide updated information and have their eligibility re-determined, most who received subsidies for marketplace coverage in 2014 will automatically receive the same dollar level of subsidies in 2015. (These subsidies consist of advance payments of premium tax credits, which are paid to insurers on enrollees’ behalf to help cover the enrollees’ premiums.) But since many factors that affect the level of people’s subsidies change from year to year, a high percentage of people who auto-renew will receive advance premium credits that turn out to be too low or too high. To avert such problems, consumers need to return to the FFM (rather than auto-renewing) to receive an updated eligibility determination. That is the only way to ensure they receive the correct level of benefits.

Community Eligibility Database: Eligible and Near-Eligible Schools by Identified Student Percentage

October 6, 2014 Comments off

Community Eligibility Database: Eligible and Near-Eligible Schools by Identified Student Percentage
Source: Center on Budget and Policy Priorities

This searchable database provides information on the schools that will be eligible in the 2014-2015 school year for the Community Eligibility Provision (CEP), a powerful new tool to ensure that low-income children have access to breakfast and lunch at no charge through the National School Lunch and School Breakfast Programs. High-poverty schools and school districts in all states can adopt CEP starting with the new school year.

CEP allows school districts, individual schools, or groups of schools to offer two nutritious meals daily to all students at no charge if their Identified Student Percentage (ISP) is at least 40 percent. The ISP represents the share of students who are approved for free meals without an application because they either have been identified as low income by another program (such as SNAP, formerly food stamps) or are considered at risk of hunger (because they are homeless or in foster care, for example).

Under CEP, schools with higher ISPs receive higher federal reimbursements for the meals they serve, which makes CEP more financially viable. Schools with an ISP of 62.5 or higher will have all meals reimbursed at the highest federal rate, known as the free rate.

Each state was required to publish a list of schools eligible for CEP by May 1. This database is based on that information and includes the state, school district (also known as the Local Educational Agency or LEA), the school, the school’s ISP, and the school’s enrollment, if the state published those items. To select more than one option in a given category, hold down the Control key when making selections.

This database is not a comprehensive list of all schools in every state or school district. Some states published lists of all schools regardless of eligibility, while other states published lists only of eligible and near-eligible schools or only of eligible schools.


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