Its official release is set for this morning, but details of President Trump’s first executive budget have been emerging since last week and the news is not good for low-income Americans or Louisiana. Although House Republicans are expected to craft their own spending plan, the president’s budget serves as a starting point for their work. The document also reveals the president’s true priorities, despite what he may have said on the campaign trail. Politico’s Andrew Restuccia, Matthew Nussbaum, and Sarah Ferris report:
Rather than breaking with Washington precedent, Trump’s spending blueprint follows established conservative orthodoxy, cutting taxes on the wealthy, boosting defense spending and taking a hatchet to programs for the poor and disabled – potentially hurting many of the rural and low-income Americans that voted him into office. The budget proposal underscores the wide gulf between campaigning and governing, even for a president who promised to rewrite the presidential rule book. The president’s budget plan calls for more than $1 trillion in cuts to a wide range of social programs with millions of beneficiaries, from farm subsidies to federal student aid.
For example, the Trump budget proposed unprecedented cuts to the SNAP program (formerly food stamps), which provides nutrition assistance to more than 926,000 Louisianans. Caitlin Dewey and Tracy Jan with the Washington Post:
While details remain sparse, Trump is expected to propose cutting as much as 25 percent of the program’s funding over 10 years, which would go far beyond past House Republican proposals — and require far more than axing SNAP’s unemployed adults. (According to the Department of Agriculture, only 14 percent of the people who receive benefits are able to work, and do not.)
Trump’s budget also proposes the repeal of the Gulf of Mexico Security Act, an agreement to share Gulf offshore oil revenues with Gulf Coast states. In Louisiana, the money was to be set aside for coastal restoration and payments to the Army Corp of Engineers. Mark Schleifstein with The Times-Picayune/Nola.com has more:
The revenue sharing legislation was sponsored by former U.S. Sen. Mary Landrieu, D-La., who hammered out a complex compromise with other Gulf State members of Congress to slowly ramp up the money coming to Louisiana and other states. Louisiana would have received a first large payment of about $140 million under the act in October 2018. The state’s share of that money was required by a constitutional amendment to be placed in a trust fund for use only for coastal restoration and hurricane protection projects. Coastal parishes are expected to receive up to another $30 million in direct revenue-sharing payments, once the larger share of offshore money kicks in in late 2018.
Minimum wage bill back in committee
Twenty-nine states have established a state minimum wage above the federal rate, and Louisiana could become the 30th. Senate Bill 153 by Sen. Troy Carter, which would raise the state’s minimum wage to $8.50 per hour by 2019, has already passed the Senate Labor Committee and moves on to the Senate Finance Committee this afternoon. An increase in the minimum wage would be particularly impactful in The Pelican State, which has the highest percentage of workers making at or below the federal minimum of $7.25 per hour. A new brief by LBP’s Nick Albares details why raising the state’s minimum wage is long overdue:
Had the (federal) minimum wage kept up with inflation since 1968, it would be $9.68 today. This decline in purchasing power means low-wage workers have to work longer hours just to achieve the standard of living that was considered bare minimum almost half a century ago. Had the 1968 wage kept up with rising economic productivity, the federal minimum wage would be $19.60 per hour in 2019 – or $11.10 higher than what’s being proposed in the bill.
A dubious rural jobs bill
The state’s dire fiscal circumstances have made it difficult for lawmakers to garner support for any legislation that proposes additional state spending. One such bill, HB 641 by Rep. Jack McFarland, is scheduled for debate in the House today and its $90 million price tag is not the only cause for concern. McFarland’s bill would create a new tax credit program to attract business investors to rural areas. While that may seem like a good idea at first blush, a new LBP blog post illustrates why the bill would be a bad deal for Louisiana:
Similar tax credit programs have been implemented in 20 states over the last three decades, and there is extensive evidence that they do not live up to promises made by their supporters. The state would be better served by direct investments in rural schools, infrastructure upgrades and workforce training. In other states, these tax credit programs funnel credits to “middle-men” investors that pledge to use them to spur private investment in rural businesses. When applying for the tax credits, the investment firms must provide an estimate of how many jobs will be created and how much state and local tax revenue will be generated. Based on audits by other states, most never come close to producing the return on investment promised.
LBP and the Louisiana chapter of Americans for Prosperity released a joint press release yesterday, expressing a shared concern about HB 641.
Iowa: an AHCA petri dish
Only one major insurance company is currently participating in Iowa’s individual insurance marketplace, and that company is threatening to leave in 2018. While some point to Iowa’s experience as evidence of Obamacare’s shortcomings, in an opinion piece for the Washington Post, Catherine Rampell shares how Iowa never fully implemented the Affordable Care Act, which has caused many of its current challenges. She also shares how the failure of the Iowa insurance markets offer a foreshadowing of how the American Health Care Act could affect insurance markets across the nation:
Trumpcare, in the name of promoting “choice,” would basically replicate Iowa’s adverse- selection problem on a much larger scale. As passed in the House, the American Health Care Act would let states get waivers allowing insurers to offer new plans that don’t meet Obamacare’s coverage or cost requirements. In other words, as in Iowa, Trumpcare would permit healthier and younger people to sort themselves into cheaper plans that cover little, and leave sicker and older people in more expensive plans. Which, as in Iowa, would probably cause markets to unravel.
Number of the Day
$72 billion – amount cut from disability programs in President Trump’s budget — primarily from Social Security Disability Insurance and Supplemental Security Income, which provides income assistance to poor seniors and people with disabilities. (Source: Center on Budget and Policy Priorities)