Why anti-poverty advocacy is important

IMAG0109CAHS is build on two pillars: our program side, working with community based organizations across the state to help low income families become self sufficient, and our policy work, advocating for those families both at the Capitol in Hartford and in Washington DC.  Our program work informs our policy efforts; a lot of the issues we see on the ground when working with clients and talking with people in the community end up being front and center in our policy agenda.

We advocate for the state EITC because we know that the Earned Income Tax Credit is important thanks in no small part to our own VITA work. We support the Affordable Care Act because we have seen how important health insurance is to keep a family out of poverty. What we hear on the ground informs what we say at the Capitol. It is one of our main strengths, are we are proud of it.

We do advocacy, however, for another crucial reason: politicians will not listen to low income families otherwise. In a classic study Larry Bartels, a political scientist from Princeton, analyzed how US Senator votes relate to the average policy positions of their voters by level of income. What he found is the following:

My analysis includes broad summary measures of senators’ voting behavior as well as specific votes on the minimum wage, civil rights, government spending, and abortion. In almost every instance, senators appear to be considerably more responsive to the opinions of affluent constituents than to the opinions of middle-class constituents, while the opinions of constituents in the bottom third of the income distribution have no apparent statistical effect on their senators’ roll call votes.

In other words: US Senators´voting patterns closely mirror what polls show to be the opinions of the wealthiest voters in their states. What people on the bottom third of the income distribution think turns out to be almost entirely incidental, bearing no relation to how the legislator will vote. This pattern holds for politicians from both parties, but it is even more pronounced in the case of Republicans (surprise), that tend to be almost twice as responsive to the wealthy.

What does this mean? We need voices. We need advocates. The idea that politicians only listen to the wealthy might be a cliche, but happens to be true. Corporations have lobbyists, fast food cooks do not.  CAHS, and other organizations like us, work very hard to try to readdress this imbalance, trying to get the voices of those usually unheard to the Capitol. And you can help us do it with your support.

Voters like abstract budget cuts, but support real spending

One thing that political scientists have known for awhile is that voters say that they prefer spending cuts to tax hikes on the abstract, but they are against cutting any specific social program when given a choice.

The Pew research center published a poll last month with a list of Federal spending programs, from entitlements to foreign aid, asking if funding should be reduced, sustained or increase in each of them. Here are the results:

pew-poll-spending

 

Not a single Federal program (not even foreign aid) has a majority of voters asking for cuts over increase or maintain funding. Not one. In most cases a plurality of voters want to keep spending at the same level as it is today, closely trailed by the group that wants to spend more. Even in the three programs were budget-cutting did not come last they could only muster 48, 34 and 32% support.

These numbers explain, incidentally, why the policy debates on the budget are so frustrating. Fiscal conservatives are quick to demand budget cuts, but they are always very reluctant to name what policies and programs they want to pull money from. Liberals, on the other hand, tend to avoid saying that they want higher revenue and more spending on the abstract, but will offer a shopping list of stuff it is worth funding in a heart beat. In the last election we had the Republican running on a platform of cutting spending while blasting the President for cutting Medicare; you do not get more confusing than that. No wonder voters give contradictory answers when polled. Politicians have not been really clear on what their ideas are either.

In any case, the numbers above should serve as an important reminder: voters do like the programs we advocate for. It is a matter of making sure they understand what budget cuts entail; on the rest they are already on our side.

Vote: As simple, and critical, as 1, 2, 3.

1. According to the Every Child Matters Education Fund, 6 million Americans did not vote in 2008 because they didn’t know how to register or missed the deadline. National Voter Registration Day, September 25, was created to make sure no American is left out in 2012. Click here for information about how to plan events and use the effort to increase turnout and voter registration.

2. In Connecticut, fewer than 50% of those eligible to vote do so, according to Secretary of State Denise Merrill’s first-ever Civic Health Index.

3. Why does it matter? Our colleague Orlando Rodriguez at Connecticut Voices for Children blogged yesterday about a new National Bureau of Economic Research study showing that investing in children would return $2.6 billion to our economy.

The study found that “…the state could reap benefits equivalent to 1.28 percent of total disposable income (consumer spending) if families with children who live in poverty received additional support, as more of their children would reach the earnings capacity of the typical child. Furthermore, this increase would be ‘in perpetuity,’ which translates into more private sector jobs and additional tax revenues for state government — forever.”

How critical is this? We learned this week that Connecticut showed the fifth highest increase in child poverty in the country.

Vote, vote, vote!

 

 

Why block granting Medicaid is a terrible idea

Medicaid has the rare distinction of being one of the most misunderstood Federal programs of the American safety net system. Usually depicted as a program focused on providing health insurance to low income families, the vast majority of Medicaid spending is used to cover two specific groups: seniors and the disabled.

Distribution of Medicaid Payments by Enrollment Group, FY2009View 50-State Comparison
US
%
US
$
US
%
US
$
Aged 23% $80,660,323,951 23% $80,660,323,951
Disabled 43% $147,331,691,737 43% $147,331,691,737
Adults 14% $47,382,742,690 14% $47,382,742,690
Children 21% $71,111,551,676 21% $71,111,551,676
Total 100% $346,488,974,182 100% $346,488,974,182

Most Medicaid spending for seniors goes to cover long term nursing care (41%) and home and personal care (45%), very expensive services that they otherwise won´t be able to afford. Long term disability coverage, meanwhile, is a corner of the health insurance market that private insurers have largely left alone, as premiums would be prohibitive.

Interestingly enough, even if most tax dollars go to cover these patients, the vast majority of Medicaid and S-CHIP participants are children and their parents:

Distribution of Medicaid Enrollees by Enrollment Group, FY2009View 50-State Comparison
US
#
US
%
US
#
US
%
Aged 6,117,262 10% 6,117,262 10%
Disabled 9,534,463 15% 9,534,463 15%
Adults 16,196,075 26% 16,196,075 26%
Children 30,746,220 49% 30,746,220 49%
Total 62,594,979 100% 62,594,979

Why does most of the spending go to seniors and the disabled? Simple: costs for those groups are much higher. As usual, most medical spending goes to a tiny sliver of the population, as costs usually are concentrated on those that are really sick.

Medicaid Payments per Enrollee, FY2009View 50-State Comparison
US
$
US
$
Aged $13,186 $13,186
Disabled $15,453 $15,453
Adults $2,926 $2,926
Children $2,313 $2,313
Total $5,535 $5,535

When political candidates talk about block granting Medicaid, consequently, they are not proposing to cut benefits to low income adults that don´t have insurance. Most program participants are children, not adults – and the bulk of the spending goes to two population groups that are extremely vulnerable, seniors and the disabled. Cuts in Medicaid are much more damaging for the elderly than any proposed cut to Medicare spending any candidate has put on the table.

And by the way, Obama and Ryan have largely similar Medicare cuts in mind.

Romney´s tax plan: more “redistribution”

Not long ago we talked about how Newt Gingrich´s tax plan as a presidential candidate was a wonderful of example of income redistribution. Upwards, for that matter, as the plan was highly regressive, but redistribution nonetheless.

The non-partisan Tax Policy Center has followed up with the release of a  distributional analysis of Mitt Romney´s plan, and it looks… well, fairly similar. It is not just regressive, but blatantly so : a big tax cut for the top 1% earners (and a modest tax cut for the top quintile), an almost irrelevant tax relief for those in the middle and fourth quintiles, and a tax increase for the bottom 40% households.

Ezra Klein in the Washington Post points out:

Bush wanted to pay down a surplus with spending cuts and expand Medicare. Romney wants to finance larger tax cuts by slashing domestic spending. It’s a more regressive policy that will be paid for in a more regressive way. In today’s GOP, even the most moderate presidential candidate is far to George W. Bush’s right.

Romney would probably object to accusations of having a tax plan that favors the wealthy, but that´s what his own numbers show.

 

Using taxes for redistribution. Sort of.

Social scientists usually point out that the tax system is a fairly clunky way to do much income redistribution. It is too easy for a tax system to end up full of carefully crafted loopholes, after all, and wealthy individuals and corporations have plenty of cash lying around to hire good accountants to exploit them. If we add to that that taxes often have odd side effects and loss of efficiency, it is easy to understand why most countries do most of the redistribution on the spending side of fiscal policy, not the revenue side. Not surprisingly, most European countries pay for their welfare states using a fairly regressive value added tax.

A tax system, however, can do quite a bit of redistribution, depending on how it is designed. Some observers will call that social engineering or some other nasty word. Newt Gingrich, however, calls it his tax plan:

There is a nice amount of redistribution going on in that graph, but I am not sure if we can call it fair. The numbers are from the Tax Policy Center, via Money Box, and they are worth a good read. It also increases the deficit by more than a trillion, by the way. Just in case you were wondering.