Making Work Pay - The Earned Income Disregard Explained

The following was written by Peter Zurflieh, legal services attorney at the Community Justice Project and CLIP Co-Chair.  Increasing the Earned Income Disregard for TANF families was adopted as a CLIP priority for 2017.

While studies by Pathways PA, CLIP, and, most recently the PA Legislative Budget and Finance Committee, convincingly dispel the myth that public benefit programs are rife with "benefit cliffs" that make families worse of when they go to work (these studies all show that families are better off financially when they go to work, despite partial loss of benefits), it is true that public benefits programs could do more to make families even better off when they work. One way to do this is by increasing earned income disregards (EID), i.e., the amount of a family's earnings it is allowed to "keep." 

CLIP and Making Work Pay (MWP)PA have advocated for a "phased in" increase in the TANF earned income disregard that would do just that.  The "EID" in PA is currently 50%. This means that one half of a TANF family's earned income is disregarded when computing the family's monthly TANF grant. So, if the grant is $403 per month and the family earns $500 per month, only $250 of the earnings are counted. This $250 is subtracted from the $403 full monthly TANF grant, leaving the family with $153 per month in TANF. But, when you add to this the $500 in earnings, the total monthly income for the family is $653 per month, a net increase in income of $250 per month.

The problem is that it doesn’t take very many hours of employment even at minimum wage to make the family completely ineligible for TANF, even with the disregard. The CLIP/MWP PA proposal would address this problem by disregarding more of the family's earnings, allowing the parent to work more hours and/or receive a higher wage before losing eligibility for TANF.

The CLIP/MWP PA proposal, which is being considered for introduction in the PA Senate, would increase the disregard from 50% to 60% of earnings initially; would increase it again after two years to 67%; and then increase it again two years later to 75%.  Increasing the TANF Earned Income Disregard is the kind of measure that “makes work pay” and helps families feel like they are getting ahead by working.

Coalition on Human Needs issues statement on Trump budget proposal

May 23, 2017 - A statement from Deborah Weinstein, CHN Executive Director:

“Members of Congress should rise up to reject the bleak and dangerous vision in President Trump’s budget.  Its massive denial of help to people struggling to provide for their children, people with disabilities, and millions who need health care and food would set our nation back incalculably.

“In so many ways, this budget breaks promises and deceives about its true impact.  It disinvests in America.  The basic living standards that everyone needs – enough food, health care, and housing – are shredded, not strengthened.  Crippling Medicaid by over $1 trillion in cuts will leave many millions of people without health coverage.  Untreated health problems will make it harder for people to work.  Cutting nearly $200 billion from food assistance will make millions of people hungrier, with especially damaging consequences for children.  We have decades of evidence that SNAP/food stamps helps children to do better in school, to be healthier, and to earn more as adults.  The Trump budget would recklessly undermine that progress.

“For those who thought the budget would provide investments to create jobs, that promise is broken.  Cutting trillions of dollars from needed services will slow our economy.  Education cuts will make it harder for people to qualify for good jobs.

“The budget would massively transfer money that should be invested in all our people to a handful of millionaires and profitable corporations, through multi-trillions in tax cuts that would average $50,000 each for millionaires.  Claims of huge gains in economic growth are dismissed by reputable economists.  Investments in real economic growth will not be made in order to increase the unaudited and bloated Pentagon budget.  People of modest incomes will fall farther behind and high income individuals and businesses will concentrate their gains still more.  Our nation will become weaker as a result, with the federal government far less able to help people secure basic living standards.  

“Instead of opportunities, ordinary people will face roadblocks at every turn.  Health insurance that costs more, especially if they are actually sick.  More onerous requirements to qualify for food assistance or tax credits.  250,000 fewer rental housing vouchers for families struggling to avoid homelessness.  Billions in cuts to Social Security Disability Insurance and Supplemental Security Income, which provides income assistance to poor seniors and people with disabilities. No legal services to prevent eviction.  No help to heat or cool homes.  Funds eliminated for the anti-poverty community action agencies.  Substantial reductions in substance abuse and mental health services.  

“Around the nation, Americans must remind our elected officials that we can only make progress through research, education, infrastructure rebuilding, secure public health, and strong communities.  This budget turns its back on these commitments, and generations of our people will suffer if its bleak vision is not rejected.”

The Coalition on Human Needs is made up of more than 100 national organizations including faith groups, service providers, policy experts, labor, civil rights and other advocates concerned with meeting the needs of low-income and vulnerable people.

 

Federal Budget Webinar Thursday! Join Advocates Across the U.S. to Discover and Fight the Awful Truth

The Trump 2018 budget is shaping up to the most draconian budget in modern history with massive cuts to both mandatory and discretionary programs being proposed. (see just posted article from the Center on Budget and Policy Priorities (CBPP).

Join CBPP, the Coalition on Human Needs, and the Center for American Progress for a webinar for advocates across the country on Thursday, May 25 to learn about the content of these budget proposals and discuss recommended messages and activities to use to help protect human needs programs as the federal budget debates progress.  This webinar is off the record and not for the press.  Please contact Deborah Swerdlow at   dswerdlow@cbpp.org with any questions.

Webinar Thursday, May 25^th, 1 PM ET

Register Now 

 

Trump Budget's Impact on Low Income Americans - Preview from the Center on Budget and Policy Priorities

Previewing the Trump Budget: More “Robin Hood in Reverse” and Gimmicks?

MAY 19, 2017

BY

ISAAC SHAPIRO, SHARON PARROTT, JOEL FRIEDMAN, CHYE-CHING HUANG

President Trump’s forthcoming 2018 budget will likely propose policies that would significantly damage the well-being of tens of millions of low- and middle-income people, both now and in the future, while lavishing large and costly tax cuts on those at the top.  AT A TIME OF INTENSELY CONCENTRATED INCOME AND WEALTH, THE BUDGET WOULD LIKELY SHIFT TRILLIONS... AWAY FROM LOW- AND MIDDLE-INCOME PEOPLE.Thus, at a time of intensely concentrated income and wealth, the budget would likely shift trillions of dollars of resources away from low- and middle-income people and toward the highest-income Americans, thereby increasing inequality, hampering mobility, and worsening poverty and hardship.

We already know this is where the President is headed based on the policies he has supported or proposed.  For starters, he strongly supports the House-passed bill to “repeal and replace” the Affordable Care Act (ACA).  That bill would provide large tax cuts to millionaires (averaging $50,000 apiece in 2025 alone) while ending health coverage to more than 20 million people, raising health costs for millions more, radically restructuring Medicaid, and substantially weakening key protections for people with pre-existing medical conditions.  In addition, the President has proposed a tax plan that could cost more than $5 trillion in lost revenues over ten years and provide tax cuts to the top 1 percent of households averaging hundreds of thousands of dollars per household per year, while its ramifications for low- and middle-income households are decidedly unclear.  Finally, the President’s “skinny” budget, which the Administration released in March, proposes deep cuts to non-defense discretionary programs that fund such priorities as education, job training, basic research, infrastructure, and other investments that help boost productivity and the living standards of average Americans.

The Trump budget will provide more information about these cuts and, for the first time, present the President’s proposals for mandatory programs (“entitlements”) — through which tens of millions of eligible low- and middle-income individuals and families receive health, nutrition, and other benefits and services based on their age, income, or other criteria.  If, as news reports suggest, the budget includes sizable cuts to programs that provide basic food assistance, Social Security Disability Insurance benefits for workers with disabilities and their families, income assistance to low-income people with disabilities (including children), and Medicaid beyond the cuts in the House bill, then the President’s “reverse Robin Hood” agenda will be even clearer.

At the same time, the budget could be rife with gimmicks and unrealistic economic assumptions to hide the distributional and fiscal effects of its tax cuts, as well as to claim progress in reducing the deficit — potentially even claiming that the budget would reach balance in some future year.  The extent of smoke and mirrors could be unprecedented in scale.  That would be highly unfortunate because debates around core questions of where the nation should invest, how much and whom it should tax, and the nature of public services and our safety net can only produce sound policymaking if they’re grounded in fact, not wishful thinking about the costs and benefits of various policies.

The budget’s answers to the following questions will shed further light on the winners and losers under the President’s proposals and the credibility of the information that the budget presents.

Who wins, who loses?

Will the budget cut basic assistance that helps families, children, and people with disabilities afford food, housing, and other necessities?  The skinny budget didn’t provide information about the Administration’s plans for mandatory programs, but these programs reportedly could be slated for $800 billion in cuts over the next decade.  This could include further cuts to Medicaid beyond the very severe cuts that the House has already agreed to (see below), as well as to a range of basic support programs.  The cuts might hit basic food assistance provided through the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps); aid to children with disabilities (such as Down syndrome, cerebral palsy, and autism) living in low-income families that is provided through the Supplemental Security Income program; and basic aid to struggling families through other mandatory programs.  The President reportedly may also propose cuts in Social Security Disability Insurance (SSDI), which benefits workers who pay into Social Security and whose careers have been cut short by severe medical impairments, contradicting the President’s pledge not to cut Social Security.

Will the budget cost Americans their health coverage, and will the coverage losses exceed those from the House ACA repeal bill?  The House bill would effectively end the ACA’s Medicaid expansion for low-income adults.  It would also cut and radically restructure Medicaid for seniors, people with disabilities, families with children, and poor adults by establishing an arbitrary cap on per-beneficiary federal Medicaid funding (a “per capita cap”) or by allowing states to elect a block grant, either of which would cover a declining share of program costs over time.  As a result, the bill would cut Medicaid spending by more than $800 billion over the decade, and cut Medicaid enrollment by 14 million people by 2026. The Trump budget reportedly will likely assume enactment of the House bill and then propose further significant cuts to Medicaid, potentially swelling the ranks of the uninsured or under-insured even more than the House bill would.

Which particular services and investments will be affected by the President’s proposed steep cuts in non-defense discretionary programs in 2018, and what aggregate funding levels will the President propose for such programs in subsequent years?  The skinny budget provided information about just one part of the budget — discretionary (or annually appropriated) programs.  It proposed to increase defense funding by $54 billion in 2018 (compared to the sequestration level under the 2011 Budget Control Act) and offset it with a $54 billion cut below the sequestration level in non-defense discretionary programs.  These cuts would come on top of the reductions to non-defense discretionary programs that have already occurred since 2010, and they would drive overall spending on those programs to its lowest percent of the economy in more than six decades.  The skinny budget suggests the President will propose significant cuts in a range of areas, such as job training for workers and young people who need help to succeed in today’s labor market; in research and development, which promotes future economic growth; in environmental protection; and in humanitarian aid that fights the hunger and deplorable health conditions faced by people in developing nations who live in extreme poverty.  But the skinny budget didn’t delineate all of the specific cuts to come, it didn’t provide the precise nature of the cuts it did specify, and it didn’t indicate whether the overall cuts to this part of the budget would grow or shrink over time.  The coming budget will provide additional detail that will enable a better assessment of the cuts in non-defense discretionary programs.

Will the budget clarify the President’s tax proposals that affect low- and middle-income households, and will those proposals be well-designed?  To date, Administration officials have rhetorically embraced the notion of focusing their tax plan on working families, but the President’s tax proposals, themselves, have not done so and have left many questions unanswered.  The President’s tax plan, unveiled on April 26, didn’t even provide enough detail for analysts to assess whether low- and middle-income families would receive tax cuts or tax increases.  Further, by not proposing to expand the Earned Income Tax Credit or the part of the Child Tax Credit that’s focused on working families with limited incomes, the Trump tax plan ignores at least 17 million working families.  That’s disturbing because that tax plan comes on top of the House-passed ACA repeal bill, which the President supports and which contains the largest tax increase on low- and moderate-income families in recent decades, because it slashes tax credits that help such families to afford adequate insurance.  In the coming budget, the Administration may provide further clarity about its tax policies as they affect low- and middle-income workers — or it may remain vague about whether its proposals help or hurt working families while proposing specific tax cuts that primarily benefit those at the top.

Will the budget include transparent and credible information?

How much information will the budget provide?  The skinny budget included far less information than its predecessors (based on a comparison of initial budget submissions of new administrations back to President Reagan).  It only provided information on discretionary programs — which comprise less than a third of the budget — and even that information lacked essential details, such as overall funding levels after 2018.  Similarly, the President’s tax plan consisted of a one-page document that begged for answers to many key questions.  The coming budget could fill much of this information gap by providing the details behind various policy proposals, but it also could leave out critical details of proposals.

What revenue levels will the budget assume, and will those levels reflect its tax policies as well as realistic economic assumptions?  As noted, the President’s tax plan could lose more than $5 trillion in revenues over the next ten years.  The budget, however, will almost certainly show revenues declining much less than that.  The size and nature of the discrepancy deserves close scrutiny in two respects.

First, the tax plan would provide trillions in tax cuts to those at the top and to corporations but, at the same time, Treasury Secretary Steven Mnuchin has promised that the rich will receive no net tax cuts because their tax cuts will be offset by cuts in deductions and loopholes that benefit them.  Due to the size of the specific tax cuts for the wealthy, however, there is no mathematical way to reduce deductions that benefit the wealthy enough to fully offset the tax cuts.  The budget may or may not provide additional information to explain this serious discrepancy.

Second, the economic growth assumptions on which Administration officials have suggested this budget will rely are far more optimistic than those of the Congressional Budget Office and other reputable forecasting institutions, and are almost certainly unachievable.  In particular, the budget may claim unrealistically large impacts from its proposed tax cuts.  The impact of optimistic growth assumptions is dramatic when it comes to revenues: over a decade, each 0.1 percentage point increase in average economic growth boosts forecasted revenues by about $300 billion.  So, if the Administration artificially adds one percentage point to its growth forecast, that would boost projected revenues by roughly $3 trillion over ten years.

Such chicanery would have far-reaching implications.  If the effects of tax cuts on the deficit and the debt are obscured, policymakers will likely provide larger tax cuts that disproportionately benefit the affluent and large corporations, thereby squandering national resources that policymakers could better use to help struggling families, invest in high-priority programs, or devote to long-term deficit reduction.  And if, in turn, tax cuts fuel higher deficits than predicted, that likely will prompt policymakers to make further rounds of budget cuts in coming years to programs that help low- and middle-income families (or perhaps even to raise taxes on such families).  So even if working families initially receive a modest tax cut from the Trump plan, they will likely wind up worse off in the end.

Will the budget assume implausibly large spending reductions from eliminating “waste, fraud, and abuse”?  The budget reportedly may claim large savings from reducing “waste, fraud, and abuse” and from making programs “more efficient.”  While laudable goals, critics often overstate the extent of wasteful spending and understate the difficulty in significantly reducing erroneous payments.  Some programs have very low error rates.  And, the measurement of improper payment rates often overstate levels of true error and fraud.  This is because many “improper payments” are, in fact, payments that individuals or companies were owed but lacked some of the required documentation, and some improper payments reflect underpayments rather than overpayments.

Efforts to cut wasteful or inefficient spending are also far from new, suggesting that further progress in these areas could be modest.  The federal government, for instance, already has in place efforts to ensure that those receiving payments — be they contractors, Social Security beneficiaries, or providers of services for Medicare patients — are indeed supposed to receive those payments.  This includes rigorously reviewing the eligibility factors before families are certified as eligible for SNAP or workers receive SSDI, and using data to identify potentially incorrect or fraudulent health care provider claims in Medicare.  While greater investment in program integrity efforts can yield some savings, very large savings are unlikely to materialize.

While the budget may propose new initiatives in this area, the budget also may underfund efforts at the Internal Revenue Service (IRS) to pursue tax cheating whether by households or corporations.  These IRS efforts have been shortchanged in recent years, leading to lower audit rates and ultimately diminished revenue collection.  And adequate IRS resources may be more important than ever because of certain provisions of the President’s tax cut plan — such as his proposal for a special, lower tax rate on “pass-through” business income, which almost certainly would lead many wealthy individuals to reclassify as much of their income as possible as pass-through income so they could take advantage of the dramatically lower tax rate.  The resulting tax avoidance could cost the government hundreds of billions of dollars over the next decade, and IRS rulemaking and enforcement would be crucial to averting even more abuse.

Finally, if the budget projects any specific savings under the category of reducing “waste, fraud, and abuse,” one question will be whether it is misusing the “waste, fraud, and abuse” label to promote proposals that would, in fact, result in denying assistance to needy families legitimately eligible for the programs.

Will the budget include other gimmicks?  Hoping to show that their budget reduces deficits or even reaches balance, Administration officials may also include large, unspecified spending cuts (sometimes called “magic asterisks”), dubious technical assumptions, and other smoke and mirrors.  The combination of such gimmicks, highly unrealistic economic assumptions, and potentially large illusory savings from eliminating waste, fraud, and abuse, means the budget could contain an unprecedented amount of highly questionable material that misportrays its likely effects on deficits, debt, the economy, and everyday citizens.

TO RAISE BASIC LIVING STANDARDS, WE MUST FIRST #RAISETHECAPS

From the Coalition on Human Needs (CHN) May 18, 2017

“On Tuesday, the President is expected to unveil a budget that busts through spending caps for defense while slashing domestic investment, which are also critical to our defense. We can’t have a secure nation if our citizens aren’t educated, aren’t healthy, and don’t have access to opportunities.” – House Minority Whip Steny Hoyer

On Thursday, May 18, Democratic members of the House Budget and Appropriations Committees joined advocates in calling on Congress to raise the FY 2018 spending caps so we can invest in programs Americans need to maintain and raise basic living standards. Unless Congress acts soon to undo sequestration cuts that are scheduled to go back into effect for FY18, domestic and international programs will be subjected to billions in cuts. While the spending caps for this category for FY18 are about $3 billion below FY17 levels, a combination of unavoidable cost increases and loss of revenue means $16-$20 billion more will be needed just to stay even with current levels.

As we’ve discussed in previous blogs, President Trump’s FY18 budget proposal outline cut $54 billion below the sequester caps for these discretionary (annually appropriated) programs, including housing assistance and afterschool programs, to give this money to the Pentagon. And a more detailed version of his FY18 budget request, anticipated next Tuesday, May 23, is expected to cut $800 billion over 10 years from entitlement programs that help low-income people, almost certainly including Medicaid, and very possibly also hitting SNAP/food stamps, children’s health insurance, tax credits for the working poor, and income assistance to the poor and people with disabilities. The House GOP budget, due out in June, is expected to cut $400 billion from entitlement programs and include some of the cuts to discretionary programs called for by President Trump. And these cuts come on top of years of shrinking funding for human needs programs.

House Budget Committee Ranking Member John Yarmuth (D-KY) was one of the members of Congress at the press conference on Thursday. He didn’t mince words when it came to calling for a bipartisan budget deal that would reject the cuts President Trump is calling for and instead lift the spending caps to allow for needed investments:

“The current 2018 spending caps are far too low and would leave our country unable to make investments critical to our families, our economy, and our security. Unfortunately, President Trump’s budget blueprint takes us in the wrong direction, cutting even more funding for programs that support health research, environmental protection, housing programs, diplomacy initiatives, and much more. Members of Congress of both parties have the responsibility – and the opportunity – to invest in both non-defense and defense spending, boost economic development, and guarantee that every American family has the chance to build a better future. We’ve raised the caps in a bipartisan manner before, and we must do so again.”

CHN was there at the press conference, along with our friends at NDD United who organized the event. We’re working with them and hundreds of other groups to urge Congress to pass a budget that promotes economic opportunities for all, safeguards and advances our basic living standards, and protects our environment.

As Rep. Pramila Jayapal (D-WA) said on Thursday, “The budget is more than just numbers on a page – it represents our moral values and our commitment to the future of our country….We need a budget that makes us healthier, safer and better off. Now is the time to invest in communities, working families and job growth.”

To paraphrase the speakers at Thursday’s event: to raise basic living standards in our country, we must first #RaiseTheCaps.

American policy fails at reducing child poverty because it aims to fix the poor

If we want to help kids, it's time to focus on money, not marriage.

By Philip Cohen

From the first federal social welfare program for Civil War widows to Social Security and the 1960s War on Poverty, government support for poor families in the United States has attempted to enforce a moral hierarchy based on marriage: Widows got pensions they were considered to have earned, for example, while single mothers got shame and stigma for their moral misdeeds.

Since the 1960s, as marriage rates have fallen and women’s employment opportunities have improved, fewer and fewer women rely on husbands for their material needs. Now, the majority of children no longer depend primarily on the income of a married father. And yet, our policies to alleviate poverty still remain focused on correcting the behavior of poor people – especially their marital behavior – rather than addressing poverty itself.

The stated goal of the 1996 welfare reform law, for instance, was not to alleviate poverty but to encourage marriage and reduce single parenthood. The problem was seen as poor character rather than poor income, and the solution was imagined as a matter of replacing the dependency of so-called “deadbeat” parents on the state with dependency on a spouse. Those who insisted on remaining unmarried were singled out for special censure: In the words of one architect of the reform effort, Ron Haskins, “mothers on welfare, even those with young children, should be encouraged, cajoled, and, when necessary, forced to work.”   Today, many policymakers still want to impose conditions on families receiving food stamps and housing support, and as of 2015, marriage-promotion programs aimed at reducing poverty through matrimony had cost the federal government nearly a billion dollars.

One wonders if the money could have been better spent. There are about 6 million poor families with children in the United States — which means nearly 1 in 5 families with children in the wealthiest nation on the planet are living in poverty. My analysis of the latest federal data shows that, on average, these families’ income — including tax credits and all sources of welfare — is about $9,000 below the poverty line. That means ensuring no children grow up in poor households would cost $57 billion a year. (To put that in perspective, that’s how much money we’d get if Apple brought back the $200 billion it has stashed overseas, and paid just 29 percent tax on it – it’s a big problem, but it’s small compared to the wealth of our society.)

We know growing up poor is bad for kids. But instead of focusing on the money, U.S. anti-poverty policy often focuses on the perceived moral shortcomings of the poor themselves. We don’t try to address poverty directly, or alleviate it; we simply try to change the way poor people behave, especially poor parents. Specifically, we offer two choices to poor parents if they want to escape poverty: get a job, or get married. Not only does this approach not work, but it’s also a cruel punishment for children who cannot be held responsible for their parents’ decisions.

Policy that addresses poverty by punishing the poor for their perceived misdeeds plays on some popular misunderstandings, especially about marriage and parenting. Many non-poor people mistakenly believe that our lax attitude toward marriage is behind the child poverty problem. That’s why a Heritage Foundation claim that marriage reduces the chance of living in poverty by 82 percent has been a staple on the Republican campaign trail this season, and welfare money has been diverted from alleviating poverty to promoting marriage among the poor.

Yes, the children of single parents face steeper odds of success than their fellow citizens whose parents are happily married. Many single parents – the vast majority of whom are women – experience chronic shortages of money, time and social support. Their children are less likely to be closely supervised, to be well prepared for kindergarten, to graduate high school, and to make it through young adulthood free from entanglements with the criminal justice system. The intuitive case for more marriage is easy to see.

How then, as the share of children born to unmarried mothers has risen from just 1-in-20 in 1960 to 8-in-20 today, is it possible that child poverty has fallen, educational attainment has risen, and (at least since the 1990s) crime rates have fallen dramatically? There are two answers.

First, single parenthood doesn’t just cause these social ailments, it also reflects them. Some of these problems are merely the consequence of whatever caused their parents to be single in the first place: poverty, illness, incarceration, weak relationship skills, and so on. In other words, successful people are more likely to raise successful children and to have successful marriages. Research on marriage among poor Americans clearly shows that the majority want to be married, but they aren’t for a variety of reasons related to their poverty.

Faced with poor prospects in a marriage partner, some women reason, “I can do bad by myself,” as reported in the book “Promises I Can Keep,” by Kathryn Edin and Maria Kefalas. Some couples place marriage on a pedestal, and plan to postpone it until they are financially stable. As one young man with a pregnant girlfriend put it, “I’d rather get engaged for two years, save money, get a house, make sure … the baby’s got a bedroom.” For too many, however, that moment never arrives.

Poverty clearly lowers the chance of a successful marriage, even as being single may make it harder to escape poverty. This pattern is the subject of a long-running debate among social scientists. Although we can’t agree on the exact breakdown of cause and effect, any reasonable researcher will concede it runs both ways.

But the second answer is perhaps more important for today’s poverty debates. It is that the number of single-parent families doesn’t drive the poverty rate – rather, it mostly helps determine which families and children will be poor, not how many will be. How many people live in poverty is largely the outcome of our policy choices, about jobs and wages, and support for poor families. A key study compared poverty rates and family structure in 18 countries, finding that the United States had the highest rate of poverty among single-mother families – more than 40 percent, compared with 5 or 10 percent in the Nordic countries. No country had as large a difference in poverty rates between single mothers and the rest of the population as the United States  – that’s our unique penalty for single parenthood.

Raising children takes work, and it’s work that produces something of value: adults. Somehow, a slice of our national income needs to be allocated to cover that expense, the future benefits of which mostly won’t return directly to the parents who raise them. We pay for this work in the formal economy all the time, in daycare centers and schools and doctors’ offices – all the places people are paid to care for children. (Paid poorly, however, as Paula England recently explained in a brief for the Council on Contemporary Families.) The one time we don’t want to pay for it is when parents do it for their own children at home. So the support is indirect, from a spouse, or parents pay themselves to do it – using their income from a paid job to give themselves time to raise their children. And when there’s not enough income to cover the children’s needs, we need government support to make possible that unpaid work of raising children.

So how could we actually do it? A new report from the Century Foundation – by the respected poverty scholars Irwin Garfinkel, David Harris, Jane Waldfogel and Christopher Wimer – lays out some of the options. They take two approaches, expanding the current child tax credit (CTC), or joining much of the rich world in using a child allowance that gives families with children cash without conditions.

Our current tax policy (principally the CTC and the Earned Income Tax Credit) reduces child poverty to the shameful 17 percent it is from the catastrophic 24 percent it would be otherwise. The problem with these credits is that they only help people with jobs, leaving those who can’t work – which is most of the poorest families – without assistance. They mostly aren’t working because they don’t have valuable skills, have health problems, or can’t manage a job (or jobs) while caring for their families. Yet you need a job to claim the CTC, on the cruel logic that the government doesn’t want to “disincentivize” work. The current CTC costs about $50 billion per year but does almost nothing to help the very poor, because coercing or cajoling them into getting a job is useless. So we have 3.4 million children living in “deep poverty,” in families with incomes less than half of what the government says they need (again, after accounting for all government benefits).

On the other hand, a universal child allowance could help everyone, and it might be more popular since middle-class voters would get a check, too. Although you end up giving non-poor people money they don’t really need (some of which you could tax back), this is better than the tax credits because it more efficiently reaches the poorest families. Using a child allowance, the report says we could cut child poverty in half, and reduce deep poverty by two-thirds – for about $200 billion per year. That seems like a lot – it is, after all, but wouldn’t you sleep better at night knowing your poorer neighbors were sleeping better at night?

What about those pro-marriage policies? In short, they have failed; despite more than a billion dollars, marriage promotion programs have produced no increase in marriage. Furthermore, just as our tax policy doesn’t help people who can’t work, marriage doesn’t help people who can’t marry workers capable of supporting them and their children. A child allowance would provide an income floor for those who aren’t married (they’ve been widowed or divorced, had abusive partners, have no one to marry – or, more rarely, don’t want to get married). And it would do so without coercing them into marriage or shaming them for being single, because all parents would get it, married or not.

Our social policy – especially in the post-1996 welfare reform era – says a spouse’s income is a good way to pay for children, and a job is a good way to pay for children, but government support is not. And the people behind our policy feel this so strongly that, rather than shape welfare policy to provide for the needs of children, they have crafted programs instead to pressure parents into either getting a job or getting married. And when neither of those is possible – or they are practically so undesirable that they may as well be impossible – then the suffering of the parent and her children is the cost of teaching that lesson to everyone else.

We know enough now to see that this approach doesn’t work: It doesn’t increase compliance with social norms on marriage and employment, and it doesn’t stop the scourge of child poverty. We can do better.

Philip N. Cohen is a professor of sociology at the University of Maryland, College Park, and a senior scholar with the Council on Contemporary Families. He blogs at familyinequality.com.

Please Join the Fight for Human Needs Funding in Federal Budget!!

Friends and Colleagues,

The Coalition on Human Needs is circulating a letter to Congress regarding the Trump Administration's proposed budget and its devastating impact on human needs.  We assume that most of you have seen and signed this letter but signatures don't seem to be available on the CHN website.  CLIP has signed as a statewide anti-poverty coalition.  If your organization has not signed please click on the link below. The deadline is June 12.

Thank you.

"Congress is about to begin serious work on the 2018 federal budget and we need your organization's help.

"President Trump already has released a budget outline that would cut domestic and international programs by $54 billion – money he would transfer to the Pentagon.

"We don’t know all the details of the President’s budget – those are expected to be released later this month. But we do know enough to be deeply concerned.

"Examples:

• 1.8 million children would be terminated from after school and summer programs.


• 200,000 families would not get rental assistance and would risk losing the roof over their head.


• President Trump supports $880 billion in Medicaid cuts in the health care repeal bill, and is reported to be including still more Medicaid cuts in his FY 2018 budget plan.

"We have to prepare for the fight of our lifetime. 

"And this is where you come in.

"Do you represent a local, state or national organization? A church, a synagogue, a labor union, a civic organization? A human or civil rights group? An environmental protection organization?  A small business? A front-line service provider agency?  

"We want your organization to sign a letter, addressed to every member of Congress, calling upon them to pass a budget that promotes opportunity for all, safeguards and advances our basic living standards, and protects our environment."

Click here to read and sign.

Senator Casey Introduces Bill Prohibiting Schools From 'Lunch Shaming'

Earlier this week, CLIP posted an article about the practice of "Lunch Shaming". According to a report yesterday on CBS Channel 21 in Harrisburg, PA Senator Casey has taken action to prohibit this practice.

WASHINGTON D.C. — Senator Bob Casey has introduced a bill which would prohibit schools from 'lunch shaming' students.

The Anti-Shaming Lunch Act bans schools from singling out children if their parents have not paid their school meal bill.

"It is completely absurd that students would be shamed at school based on their inability to purchase food,” said Sen. Casey. “I am confident that this legislation will do its part to stop students suffering from humiliation for circumstances outside of their control. This is bullying and I am saddened that we have to write legislation to ensure it ends.”

Casey says in a press release that schools have required students to wear wristbands or hand stamps, do extra chores or thrown away the child's meal if there is debt.

"Children who have no ability to pay their debts shouldn't be shamed, punished at school or even go hungry because their parents can't pay their school meal bills," Sen. Tom Udall said. "Shaming students or requiring extra chores from kids who need help paying for lunch is inexcusable — not only does it stigmatize our most vulnerable children, it takes away from time they can be spending on schoolwork or with their peers. This meal shaming can sometimes stand in the way of students' only healthy meal of the day — we can't expect our kids to succeed in the classroom if they are hungry. I'm proud of New Mexico for being the first state to outlaw this harmful practice and will do everything I can in the Senate to pass this legislation on a federal level so no child will have to spend their time at school feeling ashamed of a debt they have no power to pay."

The bill would also make the application process for free or reduced price lunches simpler.

Pennsylvania Poverty Data, 2016, Broken Down

Total Population: 12,385,716 Number in Poverty: 1,629,995

POVERTY RATE & /RANKING

GENDER & AGE

 Overall

13.2%

RANKED: 21ST

Percentage of people who had incomes below the poverty line ($24,250 for a family of four) in 2015.

 Children

19.0%

RANKED: 25TH

Percentage of children under 18 in related families who had incomes below the poverty line in 2015.

 Working-Age Women

14.2%

RANKED: 21ST

Percentage of working-age women (ages 18-64) who had incomes below the poverty line in 2015.

 Working-Age Men

10.8%

RANKED: 19TH

RACE & ETHNICITY

African American, 28.5%

Asian American, 15.8%

Latino, 30.3%

Native American, 30.1%

White, 10.3%

CREATING GOOD JOBS

 Income Inequality Ratio

15.1 %

RANKED: 28TH

The ratio of the share of income going to the top 20 percent of households and the share of income going to the bottom 20 percent of households in 2015.

 Unemployment

5.1%

RANKED: 25TH

Percentage of all workers who were unemployed in 2015.

 High School Graduation

85.3%

RANKED: 22ND

Percentage of high school students who graduated on time at the end of the 2013–14 school year.

 Disconnected Youth

14.0%

RANKED: 19TH

Percentage of youth ages 18 to 24 who were not in school or working in 2014.

 Higher Education Attainment

47.2%

RANKED: 13TH

Percentage of young adults ages 25 to 34 who had an associate’s degree or higher from 2015.

 Gender Wage Gap

78.9¢

RANKED: 27TH

Women’s median earnings for every dollar of men’s median earnings among full-time, year-round workers in 2015.

STRENGTHENING FAMILIES AND COMMUNITIES

 Children Living Apart from Parents

5.0 kids

RANKED: 17TH

Number of children who lived in foster care for every 1,000 children under age 18 in 2014.

 Teen Birth Rate

19.3 births

RANKED: 14TH

Number of births per 1,000 women ages 15 to 19 in 2014.

PROMOTING FAMILY ECONOMIC SECURITY

 Hunger and Food Insecurity

12.4%

RANKED: 19TH

Percentage of households who were food insecure on average from 2013 to 2015, meaning that at some point during the year, they experienced difficulty providing enough food due to a lack of money or resources.

 Affordable Housing

68.0 units

RANKED: 19TH

Number of apartments or other units that were affordable and available for every 100 renter households with very low incomes in 2015. Very low-income households are those with incomes at or below half of median income in the metropolitan or other area where they live.

 Assets and Savings

4.4%

RANKED: 9TH

Percentage of households that used high-cost, high-risk forms of credit to make ends meet during 2013. This includes payday loans, automobile title loans, refund anticipation loans, rent-to-own, and pawning.

 Unemployment Insurance

44.6%

RANKED: 4TH

Percentage of unemployed workers who were helped by unemployment insurance in 2015.

 Health Insurance Coverage

13.5%

RANKED: 17TH

Percentage of people under age 65 and below 138 percent of the poverty line who did not have health insurance at any time in 2015.

From Talking Poverty, a project of The Center for American Progress

Congressional Democrats’ $15 Minimum Wage Bill, Explained

From Talk Poverty, May 1, 2017, by Rachel West

During the last week of April, Democratic leaders in the Senate—including Bernie Sanders, Patty Murray, and Charles Schumer—announced legislation to raise the minimum wage to $15 per hour by 2024.

Five years ago, when fast-food workers formed the Fight for $15 movement, it seemed like a pipe dream. Sanders’s 2015 bill advocating for a $15 federal minimum wage received just five co-sponsors, and throughout the 2016 presidential campaign Hillary Clinton supported a more modest $12 per hour wage. But last week’s bill already has support of nearly half the Democrats in the Senate, and has champions lined up in the House.

With Republicans in control of both Congress and the White House, the bill stands little chance of passing. But raising the minimum wage is one of the best tools we have to fight poverty, so it’s worth understanding the details of the legislation that Congressional Democrats have united behind.

Here’s How the Bill Works

If enacted, the Raise the Wage Act of 2017 would raise the federal minimum wage by $2 this year, to $9.25. That would immediately raise wages in 37 states. Thereafter, the wage would increase by about a dollar per year until it reaches $15 in 2024. Ultimately, that will raise wages in 48 states (New York, California, and the District of Columbia, which make up nearly one-fifth of the national workforce, have already enacted their own $15 minimum wage legislation).

After 2024, increases would be linked to growth in the median wage. That’s actually a big deal. In the past, the minimum wage has only increased when new legislation specifically raised it. That’s a slow process, and Congress typically doesn’t bother to do it until inflation has caused the minimum wage to lose a lot of value.  There have been several proposals to link the federal minimum wage to inflation, so that it would increase automatically each year, but none of them have ever become law. This bill skips right over inflation and links to the median wage, which tends to grow faster than inflation does. That would ensure that wage growth for low-wage workers would keep pace with the rest of the workforce, which would curb inequality and make a meaningful statement about the value of their work.

The bill would also gradually phase out subminimum wages for tipped workers, young people, and people with disabilities. Their minimum wages—currently set at $2.13 per hour for tipped workers, $4.25 per hour for young people, and as low as pennies per hour for disabled people—would be raised gradually until they are even with the federal minimum wage.

By the time the minimum wage hits $15 in 2024, it will likely have the same purchasing power as about $12.50 to $13.50 does today (depending on inflation). That’s about 70 percent to 85 percent greater than the current federal minimum wage, and about 30 percent more than the minimum wage’s peak value in 1968. It would be just enough to keep a family of four out of poverty—unlike the current minimum wage, which leaves a family of four well below the federal poverty line.

Here’s Who It Would Help

According to analysis by the Economic Policy Institute, nearly 3 in 10 American workers—more than 41 million people—would see higher wages under the Raise the Wage Act of 2017. Two-thirds of affected people work full time, and well over half are women. And, although white workers would be the largest group to benefit in terms of population size, the bill would disproportionately help workers of color. More than 4 in 10 African American workers—and one-third of Latino workers—would get a raise. Children also stand to gain a lot, since nearly 1 in 4 have a parent who would be affected.

The average affected worker is 36 years old, and is a primary breadwinner who uses their earnings to support their family. These low-wage workers are not only older, but also more productive and better educated than their counterparts in prior generations. Nearly half (46.5 percent) have at least some college experience.

Here’s What It Would Do for the Economy

The average directly affected full-time, year-round worker would see his annual earnings rise by more than $5,000 by 2024—an increase of nearly one-third. The bill would increase consumer spending and reduce taxpayer spending on public-assistance programs such as nutrition assistance since workers would be able to make ends meet on their own.

To be sure, economists can’t predict the full effects of a $15 minimum wage, even if it is phased in slowly. We can be confident that the increased consumer spending would give local economies a boost, but we can’t be positive that there would be no adverse effect on employment.

Even if employers responded to the wage hike by cutting workers’ hours, or if workers ended up spending a few extra days between jobs, the benefits would likely far outweigh the negatives. First of all, the wage hike is big enough that workers who experience a reduction in hours may still break even or come out ahead in terms of annual earnings. Second, there are other legislative options that could make sure disadvantaged workers do not feel negative effects. This includes, for example, expanding our Unemployment Insurance system to cover low-wage workers who spend a few extra days searching for their next job; extending short-time compensation and partial unemployment benefits for workers who experience reductions in hours; and creating subsidized employment, national service, paid training, and apprenticeship opportunities for folks who are unable to find work.

It’s also worth remembering that there are benefits beyond pure economic growth and workers’ pay. A $15 minimum wage would help increase family stability and close stubborn gender and racial wage gaps. Rigorous research also shows that higher minimum wages improve infant health, reduce crime, and decrease poverty.

It’s a Political Long Shot—but Not Introduced in Vain

Since Republicans have the majority in Congress, this bill can’t pass without their support. And, even though the bill is popular with the public and would help Trump keep his promise to give his supporters higher wages at virtually no cost to government, it’s unlikely that Congressional Republicans are going to reverse course and suddenly support minimum wage hikes.   

But even if Congress doesn’t pass this bill, it will likely encourage wage hikes on a local level. Sen. Sanders’ previous $15 proposal, inspired by the Fight for $15, preceded successful state and local bills such as those in California, New York, the District of Columbia, and Seattle. Similarly, Sen. Murray and Rep. Scott’s bill for $12 by 2020 provided the wage target for Arizona and Colorado’s laws. With a strong majority of voters across party lines supporting a higher minimum wage, more states and localities can be expected to take matters into their own hands by adapting federal legislation.

Rachel West is a Senior Policy Analyst in the Center for American Progress’s Poverty to Prosperity Program.

 

Shaming Children So Parents Will Pay the School Lunch Bill

From The New York Times April 30, 2017

By Bettina Elias Siegel 

On the first day of seventh grade last fall, Caitlin Dolan lined up for lunch at her school in Canonsburg, Pa. But when the cashier discovered she had an unpaid food bill from last year, the tray of pizza, cucumber slices, an apple and chocolate milk was thrown in the trash.

“I was so embarrassed,” said Caitlin, who said other students had stared. “It’s really weird being denied food in front of everyone. They all talk about you.”

Caitlin’s mother, Merinda Durila, said that her daughter qualified for free lunch, but that a paperwork mix-up had created an outstanding balance. Ms. Durila said her child had come home in tears after being humiliated in front of her friends.

Holding children publicly accountable for unpaid school lunch bills — by throwing away their food, providing a less desirable alternative lunch or branding them with markers — is often referred to as “lunch shaming.”

The practice is widespread — a 2014 report from the Department of Agriculture found that nearly half of all districts used some form of shaming to compel parents to pay bills. (About 45 percent withheld the hot meal and gave a cold sandwich, while 3 percent denied food entirely.)

A Pennsylvania cafeteria worker posted on Facebook that she had quit after being forced to take lunch from a child with an unpaid bill. In Alabama, a child was stamped on the arm with “I Need Lunch Money.” On one day, a Utah elementary school threw away the lunches of about 40 students with unpaid food bills.

Hazel Compton, 12, remembers being given a sandwich of white bread with a slice of cheese instead of the hot lunch served to other children at her Albuquerque elementary school. (A school district spokeswoman said the sandwich met federal requirements.)

“They would use the sandwich like a threat,” Hazel recalled. “Like, ‘If you don’t want it, your parents have to pay.’”

Oliver Jane, 15, said that when she had meal debt at Shawnee Heights High School in Tecumseh, Kan., she was told to return her tray of hot food and was given a cold sandwich instead.

“If you didn’t eat the lunch, they were just going to throw it away,” she said. “It seems unfair to me to expect a bunch of kids to be responsible for putting money in their lunch accounts when they don’t even handle their own funds.”

Marty Stessman, superintendent of the Shawnee Heights Unified School District, said that younger children were allowed to take a limited number of meals despite debt, but that high school students were not.

“Notices are sent home automatically when they go below $5, so it shouldn’t be a surprise,” Dr. Stessman said. “They should know before they get to the cashier.”

The problem of meal debt is not new, but the issue has received more attention recently because the Department of Agriculture, which oversees school lunch programs, imposed a July 1 deadline for states to establish policies on how to treat children who cannot pay for food.

“It has been a longstanding issue in schools, one that’s gone on for decades,” said Kevin W. Concannon, who was the department’s under secretary for food, nutrition and consumer services in the Obama administration.

After a 2010 overhaul of school nutrition standards, the department heard from schools and advocacy groups about the burden of lunch debt and the shaming practices that often result. Last summer, the Agriculture Department concluded that meal debt should be managed locally, but required states to formalize their debt policies.

“We’re not telling schools what to put in their policy, but we do want them to think about the issue,” said Tina Namian, who oversees the school meals policy branch.

The department does not prohibit practices that stigmatize children with meal debt, but offers a list of “preferred alternatives,” such as working out payment plans and allowing children with unpaid balances to eat the regular hot meal.

In March, New Mexico passed a law that directs schools to work with parents to pay debts and ends practices like cold sandwich substitutes that may embarrass children.

“Our biggest hope for this bill is that no student will have to contemplate what meal they are going to get,” said Monica Armenta, a spokeswoman for Albuquerque Public Schools, where Hazel Compton was given a cheese sandwich.

Minnesota and the San Francisco Unified School District, among others, also have adopted anti-shaming policies. Recently, the Houston Independent School District notified its food service department that children with debt should be served the regular hot meal.

“This is fundamentally a right-versus-wrong decision,” said Brian Busby, the chief operating officer for Houston schools. “If a kid needs a meal, he’s going to eat.”

But feeding hungry children whose families have meal debt does not solve the problem for schools, which still must grapple with paying the bill. In 2016, the School Nutrition Association published a review of almost 1,000 school lunch programs, finding that nearly 75 percent of districts had unpaid meal debt.

One solution is the federal free meal program. But not every struggling family meets the income requirements, and those that do may have language barriers or fears over immigration status, or fail to file the paperwork.

An Agriculture Department guidance document suggests that districts reach out to the community for help, for example through “random acts of kindness” funding and school fund-raisers. Such efforts around the country have begun to help some districts solve the problem.

In 2014, when a theater technician, Kenny Thompson, was mentoring fourth graders in the Houston-area district of Spring Branch, he saw a cafeteria worker refuse to serve a child the hot meal of chicken, potatoes, fruit and milk.

“The lunch lady says: ‘I’m sorry, I told you yesterday you couldn’t have this today. You need to tell your parents to pay their bill.’ And then she turns around and gives him two slices of bread with cold cheese,” Mr. Thompson said.

He knew the child’s mother was in the hospital, and he stepped in to pay the bill.

Later, Mr. Thompson started Feed the Future Forward, which has hosted crawfish boils and charity golf tournaments to raise money for lunch debt. It has wiped out more than $30,000 in food bills and is planning an additional $23,000 in donations. The giving comes with a catch: Schools must promise they will not give alternative meals to children with unpaid bills. Spring Branch, where Mr. Thompson first witnessed the practice, has taken the pledge.

Rob Solomon, chief executive of GoFundMe, said it had about 30 active campaigns to raise money for meal debt. Camille Billing, a teacher in Hamilton, N.J., recently started a GoFundMe page. In Galveston, Tex., a retired teacher, Donna Woods-Stellman, paid off the city’s meal debt after raising $1,000.

A YouCaring page has raised more than $6,000 for students at impoverished high schools in Virginia. In West Palm Beach, Fla., two high school juniors started School Lunch Fairy to help erase lunch debts.

While the efforts are laudable, “they should be a last resort,” said Abby J. Leibman, president and chief executive of Mazon, a Jewish anti-hunger organization.

Others argue that school meals should be offered free to all children, regardless of income, as is the case in Sweden and Brazil.

“We need to provide school meals on the same basis on which we provide school transportation and textbooks,” said Janet Poppendieck, a senior fellow at the CUNY Urban Food Policy Institute and author of “Free for All: Fixing School Food in America.”

Some cities, including Boston, Chicago and Detroit, offer free meals to all students under the Community Eligibility Provision, a federal regulation that allows schools and districts in high-poverty areas to do so regardless of individual need. In New York City, a pilot free lunch program is under review. Most schools in the United States, however, do not qualify for the provision, and only about half of those that do take advantage of it.

As a result, districts struggling with unpaid lunch bills, which can run into the millions in large urban areas, often resort to shaming tactics to push parents to pay.

Crystal Jarek, a retired teacher in Lee County, Fla., said she remembered the staff taking debt notices to class. “The cafeteria staff would come in at noon, wearing their hairnets, and hand out letters,” she said. “All the kids would turn around to see who was getting one.”

During the 2015-16 school year, Lee County began offering free meals for all students at 76 of its schools, including the one where Ms. Jarek taught.

Kerry Krepps, a retiree in Kansas City, Mo., has seen the lasting effects of lunch shaming. Her adult son refuses to eat peanut butter because it reminds him of middle school in western Minneapolis, when students with debt were sent to a table to make peanut butter sandwiches.

“The humiliation has persisted for 20 years,” she said. “It shows how lasting these experiences can be.”