Wednesday, Feb. 19, 2014

Wednesday, Feb. 19, 2014

Jindal administration’s proposed budget continues use of one-time money; Raising minimum wage would boost wages for low-income workers, reduce poverty; Recovery Act signed 5 years ago this week; Legislators complain that Jindal mostly absent; and Bills filed to boost health-care coverage. $10.74  – The amount of the minimum wage today, had it kept up with inflation since 1968. (Source: Economic Policy Institute).

Jindal administration’s proposed budget continues use of one-time money
While Gov. Bobby Jindal and his team insist that their executive budget does not include “one-time” money for recurring expenses, Melinda Deslatte of the Associated Press looked inside the numbers and found $450 million of it, cleverly disguised through creative accounting. This is likely to set up a fight with the House Republicans known as the “Fiscal Hawks,” who have led a crusade in recent sessions to purge the budget of one-time money and reform the budget process, and nearly derailed the governor last session when they teamed up with House Democrats. Hawk leader Rep. Brett Geymann called the administration’s budget maneuvers “a gimmick” and “money laundering.”

The fight over one-time money could also jeopardize the Jindal administration’s funding increases for the first state employee raises in years, a modest expansion of Medicaid home health services for people with disabilities and a slight bump in support to higher education (albeit one that comes mostly from allowing colleges and universities to raise tuition)—all areas that have been neglected in the past, causing a political headache for the administration.

Raising minimum wage would boost wages for low-income workers, reduce poverty
A new analysis from the Congressional Budget Office (CBO) looked at two proposals to raise the minimum wage to $9.00 and $10.10 and found good news and bad news. Raising the wage to $10.10 an hour, as President Obama is pushing, would give 16.5 million workers a raise and lift 900,000 Americans out of poverty without requiring new government spending. A boost to $9.00 would have similar positive impacts. But the CBO also said a $10.10 minimum wage could reduce the number of jobs nationwide by up to 500,000 — a 0.3 percent reduction. The report also acknowledges that there could be minimal employment impacts, and that a wage hike to $9.00 could actually increase employment as lower-paid workers had more to spend on goods and services. A recent survey of the academic literature from the Center for Economic and Policy Research found that the consensus view was that modest increases in the minimum wage had “no discernable” employment impacts.

The report was quickly cited by both proponents and opponents of the proposals, the New York Times reports. Had the purchasing power of the minimum wage kept pace with inflation since the late 1960s, it would be $10.74 an hour today. In Louisiana, wages for typical workers have stagnated over the last few decades, even as productivity increased, while the lowest paid employees have seen their wages fall by 8 percent.

Recovery Act signed 5 years ago this week
Signed 5 years ago this week as the American economy tipped over the precipice into the deepest recession in decades, the Recovery Act — also known as the stimulus — kept 6.9 million people out of poverty in 2010 through targeted tax credits, extended unemployment insurance and an increase in food stamp benefits, Arloc Sherman with the Center on Budget and Policy Priorities notes. But even though the economy has recovered somewhat from the Great Recession, unemployment remains high and the poverty rate remains elevated, pointing to the continued need for Recovery Act-type policies. Unfortunately, recent cuts to unemployment insurance and food stamps will only increase hardship and harm the economy further.

Legislators complain that Jindal mostly absent
With the Legislature less than three weeks from the start of its annual session, several key lawmakers told The Lens that Gov. Bobby Jindal has been uncharacteristically detached from the policy conversations at the Capitol and has done little to outline a clear agenda. “Facing his next-to-last session and with his popularity sagging, Jindal’s ability to get things done has waned, political insiders said, adding that spending more and more time out of Louisiana lately trying to raise his national standing among influential Republicans distracts him from his duties here,” Tyler Bridges reports. “Asked to identify the governor’s legislative agenda, state Rep. Joel Robideaux, R-Lafayette, replied:  “You can add me to the list of those who don’t know. I anticipate being brought into the discussion when it involves any of my committees.”

Contrast that with former Gov. Mike Foster, Jindal’s political mentor, who in his seventh year helped push the “Stelly” tax swap through the Legislature and then raised $300,000 to help support it at the polls. One key difference: Foster was enjoying 65 percent approval ratings in 2002, giving him the political capital to get things done, while Jindal’s approval ratings have sunk to 35 percent.

Bills filed to boost health-care coverage
Two new bills filed for the upcoming legislative session seek to extend much-needed health coverage for low-income adults in Louisiana. House Bill 174 by Rep. Jared Brossett, D-New Orleans, is a constitutional amendment that would require the state to expand Medicaid coverage as provided by the federal Affordable Care Act. On the Senate side, Ben Nevers, D-Bogalusa, has authored Senate Bill 77. It is also a constitutional amendment, which means it wouldn’t need a governor’s signature, and unlike Brossett’s amendment it never directly mentions Medicaid. Instead, it says that any Louisiana resident who worked at least 1,000 hours the previous year and has an income below the federal poverty threshold “shall be provided the opportunity by the state to participate in a state program that provides health insurance with essential health benefits, as provided by federal law, with qualifications for such health insurance verified on an annual basis.”

Both bills will be up for discussion in the lawmaking session that starts March 10.

$10.74  – The amount of the minimum wage today, had it kept up with inflation since 1968. (Source: Economic Policy Institute).