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The High cost of doing the wrong thing

The High cost of doing the wrong thing. Saving Our Economy While Helping Those in Need Deborah Weinstein, Coalition on Human Needs March 10, 2011. Child poverty’s toll. Poor children Complete 2 fewer years of schooling Earn less than half as much Work 451 fewer hours per year

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The High cost of doing the wrong thing

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  1. The High cost of doing the wrong thing Saving Our Economy While Helping Those in Need Deborah Weinstein, Coalition on Human Needs March 10, 2011

  2. Child poverty’s toll Poor children • Complete 2 fewer years of schooling • Earn less than half as much • Work 451 fewer hours per year • Receive $826 more in food stamps • Are nearly 3 times as likely to report poor health (as compared with children in families at least 2x the poverty line) • Raise incomes of families with less than $25,000/yr by $3,000: children grow up to earn 17% more. Duncan and Magnuson, “The Long Reach of Early Childhood Poverty,” Pathways, Winter 2011)

  3. Recession’s toll on young workers • Even college-educated workers who get their start during a recession have lower wages than their counterparts starting out in better times. (1% in unemployment = 4% earnings each yr. For 17 years.) • Teen unemployment: 24% (Feb. 2011)

  4. Advocates’ key principle for deficit reduction • Don’t make lower-income people worse off • Before agreeing on deficit reduction measures, do a distributional analysis From 1979-2006: • Bottom 5th income 11% (from $14,900 to $16,500) • 2nd lowest 5th 18% (to $35,400) • Top 5th86% (from $98,900 to $184,400) • Top 1 percent 256% (from $337,100 to $1.2 million) • During last economic recovery, poverty increased.

  5. Strengthening America’s Values and Economy for All • We need a strong federal government able to • spur growth • protect people • provide opportunity • We don’t need a federal government unable to • alleviate inequality • reduce poverty • prevent loss of vital services

  6. Two Visions President’s: • Deficit reduction • over 10 years • 2/3 spending cuts • 1/3 revenue increases • Some investments – more education, infrastructure, jobs, health care • Some military cuts • House’s: • Deficit reduction • NOW! • All spending cuts • No revenue increases • Increased military spending • Scaling back government role

  7. A Better Budget for All:Saving Our Economy andHelping Those in Need

  8. Fewer children will get early learning in House bill. House – FY11 Senate – FY11 Head Start increased from $7.2b to $7.6b Child care increased from $2.13b to $2.44b • 218,000 children will not receive Head Start ($1b or 15% cut) • 150,000 children will lose subsidized child care • President, FY12: $1.3 billion increase for child care: no children lose care • President, FY12: $866m increase for Head Start, Early Head Start – will serve 968,000 children • President, FY12: new Early Learning Challenge Fund ($350m) • President, FY12: expands Child and Dependent Care Tax Credit

  9. Diminished educational opportunity in House. House – FY11 Senate – FY11 Title I increased by $100m Pell grant maintained at $5,500 Special ed (IDEA) increased by $200m • Cuts Title I (K-12 ed for low-income communities) by $700m. Would affect 957,000 children; cost 9,000 jobs. • 9.4m college students lose some/all of Pell grant (max drops from $5,500 to $4,705). • President: adds $300m to Title I, $200m for special ed, other new funding. House level-funds special ed. • President: adds funds to keep max. Pell grant at $5,500

  10. More will lack health care from House cuts House – FY11 Senate – FY11 Community Health Centers: level-funded; no cut No policy riders and no de-funding of health care law Nope Teen Pregnancy Prevention: level-funded • 11 million people will lose health care at Community Health Centers over the next year; 3.2m in the next few months (funding slashed almost in half) • Health care law partly de-funded • Funding for Planned Parenthood eliminated • Funding for Teen Pregnancy Prevention eliminated

  11. Crucial Community Services Threatened by House cuts House – FY11 Senate – FY11 Community Services Block Grant: Level-funded LIHEAP cut nearly $250m Youth Justice: $80m above House CR (Senate is $312.5m) • Community Services Block Grant Slashed: • FY11 House: $305m cut • FY12 President: $350m cut • Home energy aid (LIHEAP) Slashed: • FY11 House: $390m cut • FY12 President: $2b cut • Youth Justice Funds slashed: • FY11 House: $191m cut • FY12 President: $143.5m cut

  12. More people will go without food House – FY11 SNAP/Food Stamps: First in line for cuts When the Administration and Congress wanted to provide more state Medicaid aid, it was funded by cutting future SNAP benefits ($59/month for family of 4). To enact child nutrition improvements, they cut SNAP a little more. • WIC: cut nearly $750m – problem if food prices rise • FEMA Emergency Food and Shelter Program: cut in half. Has served nearly 90m meals • 81,000 people (mostly older) will lose food packages through Commodity Supplemental Food Program (out of 467,000 served) • No money in CSFP to expand to 6 states newly approved (CT, HI, ID, MD, MA, RI)

  13. Job Opportunities Cut in House Plan House – FY11 Senate – FY11 YouthBuild: level-funded Green Jobs: level-funded Career Pathways Innovation Fund: eliminated Reintegration of ex-offenders: cut from $108.5m to $90m WIA: level-funded Community Svc. Employment for Older Americans: cut 27% • YouthBuild: eliminated • Green Jobs: eliminated • Career Pathways Innovation Fund: eliminated • Reintegration of ex-offenders: eliminated • WIA: wiped out for this year • Community Svc. Employment for Older Americans: cut 64%

  14. The Radical Bathtub Project: “My goal is to cut government in half in twenty-five years, to get it down to the size where we can drown it in the bathtub.” --Grover Norquist

  15. There are alternatives Revenues For example: Cut $2b from home energy aid and $350m from Community Services Block Grant? or Reduce tax breaks to oil companies: $2.5 billion (write-offs for drilling and oil well costs) Cut Community Health Centers and job training? ($4b combined) or Reduce tax breaks for offshore operations of U.S. financial companies: $4.1 billion Military Spending The “Deficit Commission” identified about $100 billion in wasteful military expenditures that could be cut in one year

  16. What’s the best choice? Continuing annual tax cuts for millionaires that average $130,000 each? Avoiding cuts in education, health care, Head Start, etc.?

  17. Unpopular cuts: 60 percent strongly oppose education; ½ elderly & food Now I am going to read you some of the specific spending cuts proposed in the House Republicans' budget for this year. After I read each one, please tell me whether you favor or oppose it. Education Meals for Elderly Food Safety Head Start Local Gov. Poor (biggest impact) 78 80 73 73 73 66 Eliminates 5 million meals now delivered to the homebound elderly. The cuts will require the Food Inspection Service to lay-off inspectors for up to a month and a half and some meat and poultry plants will have to stop operating. Cuts funding to local government, which will mean further loss of middle class jobs in police, fire and teaching and likely higher local property taxes. Cuts Head Start funding for 120,000 children in pre-school and eliminates 40,000 jobs. Cuts funding for K-12 education and support for special education, and schools in high poverty areas, cutting off almost 4 million students and losing thousands of teachers. Major cuts in help for the poor, including school funding in poor neighborhoods and removing 600,000 people from the nutrition program for women, infants and children.

  18. On the agenda in Washington • Deciding on spending for the rest of this year (FY11) • Current spending only approved through March 18 • A budget for next year (FY12, starting October 1) • Raising the debt ceiling (sometime this spring) • Medium to long-term deficit reduction plans • Cap spending? • Constitutional balanced budget amendment?

  19. That’s not all. There are serious proposals for: • A constitutional amendment for a balanced federal budget • “Cut-go” • Multi-year spending caps on appropriations and on Medicaid and Medicare • Automatic cuts imposed if reduction targets are not met

  20. Harming children now is not justified by the need to reduce long-term deficits.It’s not a moral choice;it’s not an effective one either. www.chn.org

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