Ending Childhood Hunger

September 30, 2009

With poverty on the rise in California and the US as a whole, President Obama has set an ambitious goal of ending childhood hunger in the US by 2015. As part of this effort, the US Department of Agriculture, which oversees many of the nation’s nutrition programs, will hold a “listening session” in Oakland tomorrow to gather recommendations on how to achieve this objective.

The CBP believes the President’s goal is potentially achievable with the right mix of policy changes, additional federal funding, and continued efforts to overcome the deepest and longest economic downturn since the end of World War II. However, as we point out in our letter to the USDA, we are concerned that the severity of the recession in California, combined with the state’s persistent budget crisis, has the potential to undermine federal efforts to achieve the President’s goal.

Subsequent rounds of state budget cuts would further dampen the state’s (and, potentially, the nation’s) economic recovery and undercut efforts to help parents in low-income families find jobs and increase their incomes – a prerequisite to ending childhood hunger. That’s why we recommend, among other things, that additional federal assistance (similar to the broad range of assistance provided by the American Recovery and Reinvestment Act of 2009) is needed to boost the state’s economy and help state policymakers avoid making deep spending cuts in 2010 and beyond.

– Scott Graves

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When It Comes to Health Care Reform, What Is Affordable?

September 29, 2009

Much of the debate surrounding health care reform has centered on affordability. Some policymakers believe that if a person is required to buy health insurance, the cost should not be burdensome. The three main Congressional committee bills being debated all recognize the need to provide some level of assistance for individuals and families to buy health coverage. Our research, though, suggests that any health reform package should include larger subsidies and at higher income levels than are currently being considered. 

The latest version of the Senate Finance Committee proposal, released September 22, would limit the amount an individual or family would be required to pay toward a health care premium. The limit would range from 2 percent to 12 percent of income; those with lower incomes would pay a smaller share of the cost. The remainder of the health care premium would be paid by public subsidies.

How would this work? Let’s take a single adult with earnings at 200 percent of the poverty line, or $21,660. Already, this individual earns less than the annual $24,760 that the CBP estimates a single adult would need to earn in order meet basic expenses, including rent, food, and transportation. This does not include the cost of health care. 

Under the Senate Finance Committee proposal, though, this individual would be required to spend 7 percent of his or her income on health insurance premiums, or $1,516 per year, for a modest health coverage plan. This does not include copayments and other out-of-pocket costs. If those costs add up to the typical $750 per year on medical care, total health-related costs would be $2,266 annually. That’s 10.5 percent of this individual’s annual income, in addition to basic needs. In short, to pay rent, eat, get to work, and meet the requirements of the Senate Finance Committee proposal, this individual would need to earn $5,366 more than he or she actually does, equivalent to a 24.8 percent raise.

As lawmakers continue to debate and improve upon the health reform proposals, they should continue to keep affordability in mind, but within the context of the budget realities of the individuals they are trying to help.

Note: The Kaiser Family Foundation has posted a Health Reform Subsidy Calculator  to help determine how much consumers would pay under various proposals.

– Hanh Quach

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Congress May Help California’s Long-Term Unemployed – Again

September 28, 2009

As we noted on Labor Day, the share of California’s jobless workers who have been without work for at least six months is at its highest recorded level. Congress and the Legislature have both taken action at several points during the last 15 months to extend unemployment insurance (UI) benefits for workers who can’t find a job. Still, more than 150,000 Californians are expected to run out of UI benefits by the end of the year.

Congress is considering another extension of UI benefits that would help these workers stay afloat while job-hunting. The House took the first step last Tuesday, passing the Unemployment Compensation Extension Act of 2009 (H.R. 3548). This proposal would maintain UI benefits for an additional 13 weeks for workers who have used all the benefits available under the state’s regular UI program – a maximum of 26 weeks – as well as the 53 weeks of extended benefits that have already been authorized.

The Senate is expected to consider this proposal in the coming weeks, and President Obama has indicated he will sign the bill. We agree that Californians desperately need this additional help.

– Vicky Lovell

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Fee Increases and Faculty Furloughs at California’s Public Universities Inspire Walkout

September 24, 2009

As students head back to class at the University of California (UC) and the California State University (CSU), concern over cuts and fees is on the rise. Today’s walkout at the UC comes as increases in fees – which do not include expenses such as room, board, and books – will make affording college challenging for many California students and their families.

Last week’s proposal to increase UC student fees comes less than five months after the last round of fee increases. If the proposal is approved, undergraduate fees for UC students who are California residents would increase to $10,302 in 2010-11, 44.6 percent more than what undergraduates paid just last year. If the UC’s Board of Regents approves the current proposal, fees will be more than three times higher than they were in 1990-91, after adjusting for inflation.

In July, the CSU increased 2009-10 undergraduate fees for California residents to $4,026, 32.1 percent more than students paid in 2008-09. The CSU’s latest round of fee increases comes after a 10 percent fee hike in both 2007-08 and 2008-09. Inflation-adjusted CSU fees have more than tripled over the past 20 years.

To compound matters, UC and CSU faculty furloughs and other budget cutting measures mean students will pay more for less. CSU faculty will work two fewer days per month, which translates into a 9.2 percent pay cut. The majority of faculty and staff at the UC are required to take from 11 to 26 furlough days this year resulting in a four to 10 percent reduction depending on a faculty member’s salary. The UC’s requirement that faculty furloughs not occur on instructional days may cause a professor to show up to class, but the increased workload likely will reduce the quality of education students receive. Recent budget cuts have severely tarnished what was once a central part of the California dream – access to a high-quality, affordable college education.

– Jonathan Kaplan

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Mea Culpa

September 22, 2009

We hate it when this happens, but if you work with enough data, it happens sooner or later. We recently learned that a chart included in a past blog post and our analysis of the Commission on the 21st Century Economy’s (COTCE) proposals included an erroneous data reference. We’ve revised our August 12 blog post and our analysis of the COTCE proposals.

We pride ourselves on staying true to the facts and correcting our mistakes when we find them, because, to a steal a line from our colleagues at the Oregon Center for Public Policy, “facts matter.”

The most important points made in our analysis still stand: the COTCE proposals would provide the largest personal income tax breaks to those whose incomes have posted the strongest growth in recent years and would reduce, in the case of the personal income tax, and eliminate, in the case of the corporate income tax, the state’s two taxes that have posted the strongest growth in recent years. And, the Commission’s own estimates suggest that their proposals would result in a tax system that grows more slowly over time than the state’s existing tax system.

–Jean Ross

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