Safety Net

The War on Medicaid Is Moving to the States

In the early 1960s, as the Johnson administration worked to enact Medicare and Medicaid, then-actor Ronald Reagan traveled the country as a spokesman for the American Medical Association, warning of the danger the legislation posed to the nation. “Behind it will come other federal programs that will invade every area of freedom as we have known it in this country,” he said in one widely distributed speech. “Until one day … you and I are going to spend our sunset years telling our children and our children’s children what it once was like in America when men were free.”

Reagan set the tone for a conservative war against Medicaid that is now in its 52nd year. Recent congressional proposals to repeal and replace the Affordable Care Act would have reduced Medicaid enrollment by up to 15 million people, and, despite being defeated, congressional Republicans aren’t done yet: It’s likely they will attempt to gut the program during the upcoming budget debate. Meanwhile, more than half a dozen conservative governors are trying to take a hatchet to the program—at the open invitation of the Trump administration—through a vehicle known as a “Medicaid waiver.”

Waivers are intended for state pilot projects designed to improve health care coverage for vulnerable populations. But that’s not what conservative governors are pursuing. In Maine, for example, as citizens prepare to vote on a referendum that would force the state to expand Medicaid to 70,000 people, Gov. Paul LePage (R) is moving in the opposite direction. His Department of Health and Human Services has requested permission to create a 20-hour-a-week work requirement, impose co-pays and premiums, and implement a $5,000 asset cap on Medicaid beneficiaries. The result, health care experts warn, will be that low-income people in Maine will be kicked off the program.

LePage’s administration argues that the work requirement will help people earn more and become more self-sufficient. But according to Hannah Katch, a senior policy analyst at the Center on Budget and Policy Priorities and a former administrator of the California Medicaid program, 80 percent of Medicaid patients nationwide are already in working families. “The vast majority of people who aren’t working are either taking care of a family member, have a physical or behavioral health condition, or are in school, or have a combination of these factors,” said Katch. “While a work requirement is unlikely to help them get a job, it is very likely to take away health coverage from people who can’t work.”

While Maine’s application specifies categories of exemptions for the work requirement—including for individuals receiving treatment in a residential substance abuse program, caring for a child under age 6, or who are “physically or mentally unable to work”—Katch said that the exemptions are likely to be difficult to obtain. “The burden could fall on an individual to prove their exemption,” she said. “If a person is low-income and has a disability, or a substance abuse disorder, or has young children—proving an exemption in a specified time period with the proper and often extensive documentation can be really difficult.” As a result, Maine’s work requirement would likely result in a much broader population being kicked off of assistance than intended—or at least than explicitly intended. (Maine Department of Health and Human Services did not respond to requests for comment.)

Of equal concern is the people who likely wouldn’t qualify for an exemption under Maine’s proposal. Previously, the state allowed a limited Medicaid expansion for women with low incomes who need family planning services, and for people who are HIV-positive. Katch said that these are two of the groups who could be deemed “able-bodied” and required to work for their coverage—people who clearly need consistent access to their medications. (Low-income parents and young adults aging out of the foster care system are also of particular concern.)

That seems to be LePage’s ultimate goal: forcing people out of the program.

Direct service providers in Maine share Katch’s apprehension. Kara Hay is CEO and president of Penquis community action agency, which serves approximately 17,000 people annually through 80 programs across the state, including Head Start and child care, legal aid, housing, transportation, business training and financial support, health care assistance, and more. Hay said that the state’s waiver request “is not new, innovative, or designed to deliver care more efficiently” to low-income people, as waivers are supposed to be. In addition to a work requirement that offers no access to transportation, child care, or training—common barriers experienced by her agency’s clients—Hay takes issue with the state’s proposal to force people with little to no money to pay co-pays and premiums, and to deny coverage to people with $5,000 or more in assets. Maine used asset tests for public assistance programs for 40 years and they were “complicated to administer, devilishly inefficient, and problematic to document,” Hay said. “They often cause people who would be eligible to give up during the application process.”

That seems to be LePage’s ultimate goal: forcing people out of the program.

Another problem with Maine’s proposal is that with far fewer people having Medicaid coverage, the costs of caring for the uninsured will fall on “rural hospitals and providers—who are the least capable of absorbing these additional costs,” Hay said. “It unintentionally sets up the foundation for a collapse in rural health care. It’s a recipe for escalating rural decay.”

Maine is not the only state trying to tighten its Medicaid requirements. Wisconsin, Kentucky, Utah, Indiana, Arizona, and Arkansas have requested similar waivers. Health and Human Services Secretary Tom Price and the administrator of the Centers for Medicare and Medicaid Services, Seema Verma, have made clear that waivers granted to one state will be an option for other states. That means that for now, the front lines in the conservative war on Medicaid are in the states, where the fight might be a little quieter than in Washington, but equally dangerous.

This article was produced in partnership with The Nation.

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Media and Politics

Trump Is Trying to Cut Disaster Relief to Build a Border Wall

On Monday, President Donald Trump was asked point-blank whether he supports cutting the Federal Emergency Management Agency’s (FEMA) budget in the aftermath of Hurricane Harvey. His response: “No.”

Left unmentioned was the fact that, earlier this spring, the president of the United States called for historic cuts to FEMA’s budget. Trump’s 2018 budget blueprint proposed more than $1 billion in cuts to FEMA—11 percent of its total footprint. The proposal would make major cuts to six FEMA grants, including its two largest for preparing for and responding to emergencies. It would also entirely eliminate four grants, including funding for emergency food and shelter and training for first responders.

The administration’s rationale is that FEMA funding cuts are needed to pay for its immigration enforcement and mass deportation efforts—along with Trump’s proposal to build a wall along the southern border. All told, Trump wants to shift $5 billion within the Department of Homeland Security, where FEMA is housed, to Customs and Border Protection and Immigration and Customs Enforcement.

FEMA is not Trump’s only target for cuts when it comes to disaster preparedness. The budget also takes an axe to the U.S. Coast Guard (unusual given the administration’s support for increased U.S. military spending), which has already rescued dozens from the floodwaters in Texas. The budget cuts a whopping $1.2 billion from the Coast Guard’s approximately $9 billion budget.

The administration is so focused on deportation that it is neglecting real national security risks

And despite promises to invest in the country’s infrastructure, Trump’s budget slashes the investments that are critical for disaster preparedness. He would immediately eliminate the Transportation Investment Generating Economic Recovery grant, which, among other things, helped Florida build a new hurricane evacuation route in the Everglades. His cuts to the Highway Trust Fund would starve the country’s highway infrastructure of nearly $100 billion—and put more than 97,000 jobs at risk in Texas alone. Just last week, Trump announced the rollback of an Obama administration order that new infrastructure projects be designed to survive rising sea levels and climate change (FEMA was in the process of soliciting public comment).

The impact of these cuts will not be felt equally. Cuts to emergency preparedness—like the natural disasters themselves—fall particularly hard on the most vulnerable. Communities of color are the most likely to live in neighborhoods that are at risk of flooding. They’re also more likely to live near the petrochemical plants that could discharge toxic substances during the hurricane. According to social vulnerability maps, seniors, people with disabilities, immigrants, and people in poverty are all more likely to live in neighborhoods most affected by Hurricane Harvey.

The irony is that the administration is so focused on mass deportation and building a wall that it is openly neglecting real national security risks. FEMA and the U.S. Coast Guard not only respond to natural disasters and protect vulnerable populations; they also respond to terrorist attacks. As with so many other policies, Donald Trump is so focused on chasing his white whale that he’s ignoring the core functions of government.

Editor’s note: The Center for American Progress has launched a coalition of over 20 groups united in pushing back against any cuts to health care, disability benefits, nutrition assistance, and other basic living standards in the upcoming congressional budgets. Learn how you can get involved here.

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Media and Politics

The Tax Cuts Hidden in Congress’ Tax Reform, Explained

In a joint statement on July 27, top Republican policymakers in the House and Senate, along with President Donald Trump’s top two officials responsible for tax policy, re-upped their commitment to passing “comprehensive tax reform.” With the help of business groups and conservative organizations backed by the Koch brothers, they plan to ramp up their campaign for tax reform over the Labor Day weekend.

The language that Republicans are using to push these proposals—“make taxes simpler, fairer, and lower” for American families—sounds appealing. But the policies on their wish list are almost entirely tax cuts, and almost all of the benefits (99.6 percent under House Speaker Paul Ryan’s plan) will go to the top 1 percent of taxpayers.

A real effort at tax reform would focus on closing loopholes that benefit the wealthy and well-connected. It would raise the revenue we need to strengthen Medicare and Social Security and maintain quality schools, housing, and roads. What Trump and Republicans have in mind is the opposite.

Here’s a list of the new tax breaks for the wealthy and corporations contained in the Trump and House GOP tax plans.

Cut the corporate tax rate

At the top of the list is a dramatic cut in the corporate tax rate. Donald Trump wants to reduce the rate from 35 percent to 15 percent, which the Tax Policy Center estimates would cost a staggering $2.2 trillion over 10 years (that’s more than three times what the Supplemental Nutrition Assistance Program, formerly known as food stamps, would cost over the same time period). Congressional Republicans proposed a slightly smaller reduction to 20 percent in their 2016 plan, which the Tax Policy Center estimated would cost $1.8 trillion.

Corporations contribute less to total taxes than they did in the early 1950s.

The standard justification for these cuts is that they’ll boost business and create jobs. During the 2016 Presidential debates, Trump vowed the cut would “be a job creator like we haven’t seen since Ronald Reagan.” The catch is, U.S. corporations’ tax burden is already comparatively lower than our major trading partners, and U.S. multinationals take advantage of so many loopholes that their effective tax rates are nearly half the statutory rate. Corporations as a whole are actually contributing less to total taxes than they did in the early 1950s: Their share of total tax revenues has dropped from 33 percent down to roughly 10 percent of total revenues.

Eliminate the tax on corporations’ overseas profits

Right now, U.S. corporations pay the U.S. corporate income tax on both domestic and foreign profits, but they can put off paying the tax on their foreign profits by keeping them offshore. This also gives them the incentive to shift profits they earn in the United States offshore. Trump has proposed moving to a territorial tax system, which would eliminate the tax on foreign profits altogether. That way, U.S. corporations would only owe taxes on profits made in the United States and no tax at all on their foreign profits. And the incentive to shift domestic profits offshore would be even greater.

Absent strong measures to prevent multinationals from shifting profits (and possibly jobs) offshore, a territorial corporate tax would create new tax loopholes that could be used for this purpose. Anti-profit shifting provisions are notoriously difficult to develop and enforce.

Cut the tax rate paid by high-income business owners

Businesses that are structured as S corporations, partnerships, LLCs, and sole proprietorships do not pay the corporate income tax at all. Instead, their owners pay taxes on their share of the business’s income at regular individual income tax rates, which range from 10 percent to 39.6 percent.

Trump and the House GOP have proposed capping the tax rate on pass-through business profits that individuals receive. Trump calls for capping the rate at 15 percent, while the House GOP has proposed a 25 percent rate. Since that would significantly lower the tax rate for business owners who are currently in higher tax brackets, this proposal would cost between $2 trillion (for Trump’s proposal) and $412 billion (for the House GOP proposal) over the next decade.

Trump and the House GOP claim this tax cut is for “small” businesses, but most actual small businesses won’t benefit much, if at all, from this change. Over 90 percent of pass-through businesses already fall in the 25 percent tax bracket or lower, and over 50 percent currently fall in the 15 percent bracket or lower. The people who will benefit from the change are very wealthy business owners—such as hedge fund managers, lobbying and law firms, and big businesses—that are organized as pass-throughs but compete with large corporations.

This proposal would also likely create a new avenue for wealthy individuals to avoid taxes, since they could avoid tax by re-characterizing their high salary as business income that would qualify for the lower rate. This can be accomplished, for example, by creating an LLC to receive their salary, then paying the preferential tax rate on the “profits” they receive from the LLC.

Collapse the individual tax rates from seven to three

Both Trump and the House GOP have made a lot of noise about simplifying the tax code for working Americans by reducing the number of tax brackets. Trump’s most recent proposal calls for individual income tax rates of 10, 25, and 35 percent, while the House GOP plan calls for rates of 12, 25, and 33 percent.

Depending upon where the rates kick in, there may or may not be any benefit for those who currently fall in the 25 percent tax bracket or lower. In fact, some moderate-income people may pay more tax than under current law, since other “simplifying” proposals include eliminating personal and dependent exemptions.

Millionaires, on the other hand, would benefit in two ways. The top rate, which currently applies to all income above roughly $400,000, would be cut from 39.6 down to 33 or 35 percent. For someone with $1 million in income, this could be a tax cut of roughly $30,000 or more. They would also get a secondary benefit from the lower rates on portions of their income that fall in the (newly reduced) lower-rate brackets.

For someone with $1 million in income, this could be a tax cut of $30,000 or more.

Repeal the tax on estates worth more than $5 million

Repealing the estate tax is a perennial GOP proposal. The estate tax is a progressive tax that only applies to the super wealthy: estates worth more than $5.49 million for an individual or nearly $11 million for a couple. Of the millions of people who die each year in the United States, less than 0.2 percent of estates are subject to any estate tax at all.

Since the gain in value of stock, art, real estate, and other capital assets is not taxed unless the assets are sold, the estate tax is designed to ensure that wealthy people pay at least some tax on assets they’ve held onto before those assets are passed down to their lucky heirs. Repealing the estate tax is not about making the tax code simpler or fairer. It’s about enabling millionaires and billionaires to pass valuable assets to their heirs tax-free.

What real tax reform would look like

There are many ways the tax code could be improved to increase fairness and reduce complexity, while still providing adequate revenue to fund investments in education, housing, and transportation. These tax code improvements include eliminating loopholes that reward multinational corporations that offshore profits; ending special subsidies for oil and gas companies; treating income from wealth and work more equitably so that everyone pays their fair share of the cost of government; strengthening tax credits for working families so that those who need them the most can have access; and addressing tax accounting complexity faced by truly small businesses. These steps would constitute real reform.

Instead, the GOP is clinging to the premise that tax cuts will spur huge economic growth that will somehow trickle down to average American workers. History tells us they won’t. It also tells us that tax cuts of this size will lead to budget-busting revenue losses—and that could threaten funding for Medicare, Medicaid, education, and many other foundations of an economy that works for everyone.

So let’s stop calling this plan “reform” and call it what it is. It’s tax cuts. Trillions of dollars’ worth of them for the wealthy and corporations.

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Culture

Happy Women’s Equality Day. Now Let’s Get to Work.

It has been almost half a century since the Women’s Strike for Equality March. Forty-seven years ago, 50,000 women marched down Fifth Avenue in New York City, calling for equity in education and employment, the repeal of anti-abortion laws, and universal child care. This massive event sparked Congresswoman Bella Abzug to lead the charge in establishing Women’s Equality Day in 1971.

Women’s rights have come a long way since then. We can expect the Equal Protection Clause to apply to us. We can end marriages that don’t work for us, and pregnancies that we didn’t plan. We can’t be fired for getting pregnant, and we can apply for our own credit cards. We can refuse to have sex with our spouses, and buy contraception without being married. We can be astronauts, Supreme Court justices, four-star generals, and nominees for President of the United States.

It’s easy to point out all the broken glass ceilings as evidence of our equality. But it isn’t the full picture—not by a long shot.

Women’s earnings are still approximately 20 percent less than men’s. And the gender pay gap persists even though women are more likely to earn bachelor’s degrees than men, and do one and a half times as much unpaid care work.

Right now, women in our country are given unreasonable and unequal choices. Either put food on the table or care for your child. Find a new job or a second job to make ends meet. Grin and bear sexual harassment, unequal pay, and disrespect, or accept a reputation as a troublemaking bitch. Choose to be a good mom, a good daughter, or a good employee.

This is not the life I signed up for, and I doubt you did either. Yes, there are a handful of women who seem to have it all. They either came into this world with privilege, possess exceptional family supports, or won the boss lottery. But none of those bits of fortune are guaranteed—we can gain them through luck, lose them through misfortune, or never experience them at all. That’s why, until all women can slay, none of us really can.

As feminists, we have a long road ahead in the struggle for women achieving economic freedom. We need to root out sexism, racism, discrimination, ageism, and gender inequality across the board, but that’s not possible until all women acquire real economic power.

The women who make our country work ought to have a say in how that work gets done and who benefits from it. Our economic liberation requires freedom in our workplaces, in our health care decisions, in our homes, and in our communities. The long-term policy shifts to make that happen won’t take place overnight. Structural fixes aren’t easy or sexy, and can’t be summed up in a hashtag or on a t-shirt.

Women in our country are given unreasonable and unequal choices

How many women do you know who are stressed out from juggling work and caring for their spouses, children, and aging parents because Congressional leaders refuse to implement a comprehensive paid family leave program? The care conundrum cuts across race and class, yet the women who work for low-wage employers are in the worst predicament, trying to balance the fear of losing their jobs or life savings while navigating a patchwork of insufficient fixes.

And how many still have to bear the brunt of sexual harassment, for fear of losing their jobs? The Huffington Post found that 1 in 3 women has been sexually harassed at work. Nearly half of all housekeepers in Chicagoland hotels had guests expose themselves, and 65 percent of casino cocktail servers had a guest grope or grab them.

But there are signs of progress, as women band together to reclaim our power. Around the country, women are winning campaigns for paid sick days, for consistent and dependable schedules, for equal pay, for ending the sexist and racist tipped subminimum wage, and for domestic workers to be included in basic wage and overtime protections that they have been barred from since the New Deal. Through these wins, women are taking the first steps at earning a fair return on their work so they can make smart choices for themselves and their families, and for the women who follow.

As feminists, we must combine the demands of the millions of women who came before us, of those fighting for their rights today, and of our daughters and granddaughters who have yet to grasp the full weight of living in an unequal world. If we do so, together we can rewrite the rules so that women from all walks of life are in the drivers’ seat, taking control of their lives and their economic well-being.

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Safety Net

I Helped Low-Income Americans Save for Retirement—Until Trump Ended the Program

Last month, the Treasury Department announced plans to wind down the myRA program, an Obama-era initiative designed to help low- and middle-income earners start a retirement account. According to the July 28 press release, the Treasury could not justify the expense the three-year-old program represented to taxpayers, given the slow uptake of the program among its target demographic: the 55 million Americans who lack access to a workplace retirement plan.

The argument against myRA’s expense is hard to swallow, since the next item on President Donald Trump’s agenda is a tax reform plan that could cost as much as $7 trillion over the next decade. The myRA program would be 0.001 percent of the cost. The claim that enrollment has been unenthusiastic isn’t much easier to stomach, since the program was so new. Publicity efforts, such as partnerships with Volunteer Income Tax Assistance programs and promotions through government websites and TurboTax, have not yet been executed.

In reality, it was a deeply practical, badly needed program. I spent this past tax season working with United Way of King County to expand the savings options available to low-income taxpayers in Seattle. Tax time is one of the only times a year that saving is a real possibility for low-income earners—their tax refunds are often the largest lump-sum payment they receive all year. Asking clients a question as simple as, “Are you considering saving a portion of your refund today?” was enough to spark a meaningful conversation about budgeting, savings, and overall financial stability. Tax clients had the option of splitting their refund into a savings account, savings bond, or myRA, which was piloted at United Way’s tax sites for the first time this season.

For middle- and upper-income earners, retirement programs are an assumed benefit.

myRA was a great fit for clients who were new to saving. The accounts had no minimum balance required, no fees, and no risk of losing money. Account holders could withdraw contributions in case of an emergency, and had the option to automatically contribute from their paycheck. And since almost 1 in 6 King County households are underbanked or unbanked, myRA’s accessibility without a formal relationship with a bank or other financial institution is a major asset. Of course, myRA was not perfect: It was hard to access without a Social Security number, and it counted against people enrolled in other safety net programs like Medicaid and food stamps (SNAP) in states with public assistance asset limits.

Imperfections aside, myRA provided a straightforward and flexible savings platform unlike any other. For middle- and upper-income earners, primarily white collar workers, retirement programs are an assumed benefit. There is no comparable alternative for workers whose employers don’t offer such benefits. And with the increasing necessity of “side hustles” in the gig economy, many workers don’t even have an employer to fill that role. Five states are moving forward with state-sponsored retirement plans called “Secure Choice,” which provides some hope, despite congressional efforts to block them.

After I left Seattle, I worked with a think tank in Washington, D.C. I passed by the Treasury building on my way to the office every morning, which gave me plenty of time to reflect on the thousands of taxpayers all the way across the country in the “other” Washington.

The label “taxpayer” is one Americans on both sides of the country (and the states in between) wear with honor, regardless of their political ideology. The structure of our tax code, the loopholes and deductions we permit, and whether or not we feel our tax burden is fair should be reflective of our values. If we value financial stability, for ourselves and our neighbors, we need to support programs like myRA. Without it, there aren’t many safe and accessible retirement savings options for lower-income workers. Innovative programs that could level the playing field deserve a chance to prove that they work, instead of being shut down.

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