The Fiscal CliffWhat does it mean for Ohio?

The Fiscal CliffWhat does it mean for Ohio?

Featuring:

Ellen Nissenbaum, Senior Vice President for Government Affairs, CBPP

Debbie Weinstein, Executive Director Coalition on Human Needs

Wendy Patton, Senior Project Director, Policy Matters Ohio

TODAY’S AGENDA 3:00 - 3:05 Will Petrik – Intro, agenda and purpose of conversation 3:05 - 3:10 Debbie Weinstein – What’s at stake for struggling families and

communities? 3:10 - 3:30 Ellen Nissenbaum – How did we get here? What are possible

approaches to deficit reduction? 3:30 - 3:40 Debbie Weinstein - What would a cuts only approach mean for

human needs programs nationally? 3:40 - 3:48 Wendy Patton - What does it mean for Ohio? 3:48 - 3:50 Debbie Weinstein – What can Ohioans do to advocate for deficit

reduction that doesn’t increase poverty or income inequality? 3:50 - 4:00 Q&A

So much is at stake.Why the decisions Congress will (or won’t) make in the coming months will matter in Ohio and the nation.

Deborah Weinstein

October 16, 2012

Will Poverty and Economic Insecurity Matter in the Big

Decisions Ahead?• 46 million poor people (15%; 16.4% in Ohio).• 106 million people below 2x the poverty line

(below $46,000, family of 4) = 1/3 of the nation.

• 16 million poor children (22%; 24.2% in Ohio).• Huge racial/ethnic disparities:

Total Poor: Children Poor:White: 9.8% 12.5%Black: 27.5% 37.4%Hispanic: 25.3% 34.1%

Top Ten Cities for Child Poverty

Gary, IN: 70%Flint, MI: 61%Detroit, MI: 58%Canton, OH: 58%Camden, NJ: 57%

Reading, PA: 56%Rochester, NY: 55%Cleveland, OH: 55%Dayton, OH: 55%South Bend, IN: 54%

American Community Survey, 2011

Life and Death Stakes Deaths due to lack

of health coverage25-64 year olds, 2005-2010

U.S. = 134,120Ohio = 4,496

Source: Families USA

18-64 year olds:U.S., 40m uninsured (21%)21.3m have public insurance (11%).Ohio, 1.2m uninsured1.05m have public insurance

Families facing hardships turn to SNAP

SNAP caseloads up nationwide –

July ’08 July ’11 July ’12 % Increase(7/08 – 7/12)

29 m 45.3 m 46.7 m + 61%

• SNAP = Supplemental Nutrition Assistance Program, aka food stamps

EITC, UI, SNAP lift families out of poverty

All people lifted out of poverty

by EITC, 2011: 5.7 million

All people liftedout of poverty by

UI, 2011: 2.3 million

All people liftedout of poverty by

SNAP, 2011: 3.9 millionsource: U.S. Census Bureau

Huge Fiscal Decisions Lie Ahead:

The Key Policy ChoicesThursday Webinar for Ohio folksEllen Nissenbaum

Senior Vice President, Government Affairs

www.cbpp.orgnissenbaum@cbpp.org

October 16, 2012

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Long-Term Debt is Unsustainable

Center on Budget and Policy Priorities

cbpp.org

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Center on Budget and Policy Priorities

cbpp.org

Number of U.S. Households Living Below World Bank Measure of Serious Poverty in

Developing Nations:Living on Less Than $2 a Day, Per Person

Cash Income Cash Income plus Food Stamps

1996 636,000 households with 1.4 million children 475,000 households

Start of 2011 1.46 million households with 2.8 million children 800,000 households

04/08/2023

Source: Shaefer and Edin, “Extreme Poverty in the United States,” 1996 to 2011.

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Center on Budget and Policy Priorities

cbpp.org

Tax cuts & UI expire in December

Sequestration hits in January

Debt limit is hit in early 2013

Current FY13 CR runs through March

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Center on Budget and Policy Priorities

cbpp.org

Sequestration:• Automatic across the board spending cuts (9 years)

• Primarily hits appropriations

• $109 billion in FY 2013; Roughly $1trillion over 9

years

• 50% from the defense; 50% from all other

nonexempt spending

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Center on Budget and Policy Priorities

cbpp.org

• Insert slide from Kelsey that has budget pie chart showing 1/3 of NDD is money for states.

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Center on Budget and Policy Priorities

cbpp.org

Deficit Deal:

3-legged stool

(ratio)

Discretionary spending

Health/other

entitlements

Revenues (reduce

deficit? Lower rates?)

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Center on Budget and Policy Priorities

cbpp.org04/08/2023 18

Non-Defense Discretionary Spending Cuts Far Below Historical Levels

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Center on Budget and Policy Priorities

cbpp.org

Over Nine-Tenths of Entitlement Benefit Spending Goes to the Elderly, Disabled,

or Working Households

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Center on Budget and Policy Priorities

cbpp.org

Large Deficit-Reduction Packages Have Included Large Revenue Increases

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Center on Budget and Policy Priorities

cbpp.org

KEY DECISIONS TO PROTECT THE POOR

• Averting further cuts in NDD (nondefense discretionary)

• No cuts in nonhealth low-income entitlements (SSI,etc)

• SNAP (no more than the Sen. Farm Bill $4 billion)

• No reductions in Medicaid that hit beneficiaries or shift costs to states

(which ultimately hurts beneficiaries and could discourage states from adopting

the ACA’s landmark Medicaid expansion)• No cuts in the refundable tax credits for working poor (EITC, Child Tax

Credit)

• Ensuring tax reform raises significant revenues and is progressive

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Center on Budget and Policy Priorities

cbpp.org

There Are Both Risks and Opportunities on Taxes, Especially for Low-Income Families with Children

2222

• If new tax revenue is raised, who will bear the burden? Will revenue increases be progressive?

• How will low-wage workers fare? Emerging proposals to make everyone who works pay at least some federal income tax would effectively result in a several-thousand-dollar tax increase for low-income working families.

• A mother raising two children on full-time minimum-wage earnings now receives a $7,000 tax credit check because of the Earned Income Tax Credit and Child Tax Credit — essentially a large negative income tax. For her to owe income tax would require taking more than $7,000 — the equivalent of $3.50 an hour — away from her.

• On another front, if revenues are to be raised as part of a deficit-reduction package, can that provide an opening for a carbon tax or other major energy tax that can help us address global warming?

Center on Budget and Policy Priorities

cbpp.org

BOTTOM LINE: A Balanced PlanREVENUES

• Bipartisan commissions all agree

• Getting to $2+ trillion

• $1.5 trillion cuts already enacted

• What’s “off the table?”

• Two big budgetary “losers” w/o major revenues

• Big hit on states

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Center on Budget and Policy Priorities

cbpp.org

Core Principles for Deficit Reduction

• Must include substantial new revenues & spending cuts

• The cuts already made in discretionary spending should be counted

• Do not increase poverty or income inequality, or reduce opportunity for those who are disadvantaged.

• End the 2001/2003 tax cuts now for the wealthiest 2%

• No more cuts in total discretionary spending below BCA

• Don’t shift costs to states

04/08/2023 24

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What happens if the deficit is reduced by spending cuts alone?

Cuts of $110 billion a year for 10 years, evenly divided between defense and domestic/international.

Many low-income programs exempted.

Don’t like that?

Options:• Cut defense less?• Cut defense more?• Cut domestic programs

more deeply?• Cut Medicaid,

Medicare, SNAP, UI, SSI, low-income tax credits?

Is there room to cut the Pentagon?

• If sequestration takes effect through 2021, Pentagon will still have more than it had at height of Cold War (in real terms).

• After cuts in 2013, U.S. will still make 40% of world’s military expenditures.

Impact of Automatic Cuts(aka “sequestration”)

750,000 – 900,000 fewer infants, children and moms receiving WIC

413,000 fewer adults and youth getting job training

51,000 fewer veterans in ed/training1.8 million fewer low-income

schoolchildren with reading and math help96,000 fewer children in Head Start;

80,000 fewer children in child care

More Impacts…

734,000 fewer households with home heating/cooling aid

185,000 – 200,000 fewer households receiving rental vouchers

100,000 more homeless people because of cuts to Homelessness Assistance Grants

1.5 million fewer low-income people helped in community action agencies (through Community Services Block Grant)

34,000 fewer women screened for cancer169,000 fewer admissions to substance abuse

treatment

How much less than in FY 2010?

• Adult job training: 22.5 – 23.5 percent• Adult basic education: 19.5 – 20.5 percent• IDEA education: 12.8 – 14.0%• LIHEAP grants to states: 33.3 – 34.2 percent• Public housing capital fund: 35 – 35.9

percent• WIC: 20.9 – 22.0 percent• Substance abuse treatment: 29.9 – 30.8

percent• Maternal and Child Health: 16.4 – 17.5

percent

A Choice:

The cost of continuing the favorable tax treatment for hedge fund managers:

$21 billion over 10 years

The cost of avoiding sequestration-level cuts for housing vouchers and WIC:

$21 billion over 10 years

Choice #2

Spend $156 million for 2 V-22 Osprey helicopters, which cost 5 times as much as other helicopters and don’t work well.

OR

Provide low-cost child care to 22,000 children

Choice #3

Keep estate tax low:• Helps 7,400 estates

nationwide, who get $1.1 million more each than if at 2009 levels.

• Helps 140 Ohio estates.

OR• Preserve refundable

tax credits for 13m families; 25.7m children.

• Helps 500,000 Ohio families; nearly 1 million children.

Source: Center on Budget and Policy Priorities

Proposals looming to cut vital programs

• Medicaid: block grant? Per capita cap?Ryan budget would block-grant and cut Medicaid by one-third by 2022.

• SNAP: block grant? Reduce benefits?Ryan budget would block-grant and cut SNAP by $134b over 10 years.

• UI: allow federal benefits for long-term unemployed to expire in December?

Federal Funding in the State Budget:Impact of sequester on funding levels

Wendy PattonSenior Project DirectorPolicy Matters Ohiowww.policymattersohio.orgwpatton@policymattersohio.or

Federal share of Ohio’s General Revenue Fund has Grown over time

Source: Policy Matters Ohio based on Legislative Service Commission

Federal program funding in the Ohio Department of Health

Source: Policy Matters Ohio based on Legislative Service Commission Budget in detail

• Figure 1• Share of Federal Funding in Total

Budget by Service Area, State of Ohio, Current State Biennial Budget (SFY

Ohio to lose $316 million in first year of sequester

• $126 million annual cut to K-12– $58 million – Title 1 (K-12)– $38 million – Special education

• Higher education– $3.3 million cut from work study (2000 students)– $2.6 million from supplemental opportunity

grant

Source: Policy Matters Ohio based on Federal Funds Information for the States

Sequester cuts to health and human services in Ohio

• Health and human services in Ohio to see $82 million cut– Head Start loses $25 million– Low income energy assistance to lose $14.6

million– Child care & development block grant - $6.9

million– Substance abuse prevention and treatment block

grant - $5.9 million

Source: Policy Matters Ohio based on Federal Funds Information for the States

Strengthening America’s Values and Economy (SAVE) For All

Letter with 1,900 signers:92 in Ohio.

Protect low-income and vulnerable people

Promote job creation to strengthen the economy

Increase revenues from fair sources

Seek responsible savings from the Pentagon and other areas

You can help!

• If your organization signed the SAVE for All letter, send notes to staff for Senators Brown and Portman.

• Bring the letter to candidates’ forums.

• Set up meetings with staff – in person or by phone.

• Write an op-ed (we can help with drafting.)

• Write letters to the editor responding to stories about deficit reduction, impending cuts.

CONTACTAdvocates for Ohio’s Future

510 East Mound Street, Suite 200

Columbus, OH 43215

www.advocatesforohio.org

Will Petrik | 614-602-2464

Gail Clendenin | 614-602-2463