That’s a wrap

That’s a wrap

For the first time in nearly a decade, the central focus of the annual budget debate wasn’t over where and how to cut important programs. Instead, lawmakers spent the past two months discussing how and where to invest new dollars, with K-12 education, early childhood programming and state infrastructure projects emerging as the big winners. Still – as always –  the budget debate came down to the wire, with last-minute disagreements between the House and Senate over funding for safety-net hospitals and the Essence Festival. The Advocate’s Sam Karlin reports:

The budget bill represents a 1% increase in state spending, and House Republicans successfully cut out about $700 million in “excess budget authority,” or money that they don’t expect to come into agencies mostly from the federal government.  … While the rest of the budget negotiations were over much smaller pots of money than the $140 million teacher pay and school funding increase, the House and Senate still had disagreements. Henry and other House members expressed concern with how the Senate planned to pay for its budget plan, partly by swapping means of financing. House leaders warned it would require next year’s Legislature could have to come up with north of $40 million in “replacement revenue” if the Senate’s version of the budget passed. Lawmakers ultimately agreed to strip out funding for an expansion of Medicaid to cover children with disabilities even though their parents don’t normally qualify. The TEFRA program no longer needs funding in the budget because it won’t go into effect until next June.

The AP’s Melinda Deslatte notes that the legislative session was supposed to be centered on the budget and taxes, but was dominated by other items. Deslatte breaks down what passed and what failed.

Nearly $700 million in Gulf oil spill recovery money, given to the state by BP to account for economic damages caused by the spill, will pay for a list of road, bridge and infrastructure projects.

Lawmakers proposed a slew of tax breaks this election season, but none with high price tags reached final passage. House Republicans efforts to undo parts of the 2018 tax compromise stalled in the Senate. Industry-backed bids to roll back changes Edwards made to a property tax break for manufacturers failed to win support.

Edwards again failed to win support for a minimum wage hike and equal pay protections. A proposal to give municipalities the authority to set their own minimum wage rates stalled. Lawmakers gave pay raises to judges, sheriffs, district attorneys and assistant district attorneys

Lawmakers failed to make progress on the minimum wage, paid leave, equal pay for women and a host of other issues that would have helped low-income workers and families. Click here to read LBP’s statement.


How to measure wealth?
Sen. Elizabeth Warren has proposed an Ultra-Millionaire Tax on the richest 0.1% of Americans. The goal is to generate new revenue ($2.75 trillion over 10 years) while closing the wealth chasm between the super rich and everyone else. Two-thirds of all wealth in the country is currently owned by the top 5% of households, while the bottom 60% owns less than 2%. But Brookings’ Gary Burtless notes that conventional measures of wealth, like net worth, doesn’t account for public benefit programs.

One kind of wealth missed in standard statistics is workers’ claims on future Social Security and Medicare benefits. … The financial value of these promised benefits is large, especially for Americans in the bottom half of the (conventional) wealth distribution. …  A low-wage worker who reaches 65 next year can anticipate lifetime Social Security benefits amounting to $193,000 (discounted to age 65) over the remainder of his life. His expected Medicare benefits, net of required premium contributions, amount to $229,000 (discounted to age 65). Expected Social Security benefits are even higher for workers who earn average or above-average wages throughout their careers. Nonetheless, the Social Security formula is more generous for low-wage workers than for earners who receive higher pay. Consequently, the value of the lifetime benefit increases less than proportionately compared to a worker’s lifetime earnings. Medicare benefits are even more favorable for low-wage contributors, because the promised benefit package is the same for low- and high-wage workers. If the discounted value of Social Security and Medicare benefit entitlements were added to conventional measures of wealth, our estimates of wealth concentration would shrink. For many families with a low-wage breadwinner, Social Security and Medicare wealth represents an overwhelming share of the families’ real net worth.


It’s unaffordable to be sick in America
The Los Angeles Times’ Noam N. Levey has been tracking the effect of America’s ever-spiraling healthcare costs on average consumers. With insurance premiums rising, many people have turned to high-deductible plans to lower their costs. But Levey’s latest story shows how these plans often leave families with stacks of unpaid bills. The problem is particularly acute for people with chronic conditions. Meet Wendy Matney, a Tennessee woman with epilepsy whose high-deductible plan has driven her and her husband into bankruptcy.

“It seemed almost selfish to say, ‘Please don’t call because we can’t afford this,’” said the 39-year-old home health aide, who has a form of epilepsy that causes frequent, sometimes violent, seizures. Matney has been to the hospital enough, though, to know a trip means thousands of dollars in bills under the family’s high-deductible health plan. And she and her husband — struggling with more than $20,000 in medical debt — can afford no more. Hit with a hospital lawsuit over unpaid bills, the couple are declaring bankruptcy, effectively giving up hope of moving out of their trailer and buying a house. “I’m losing everything because of this,” Matney said. … “I guess I understand why they do it,” she said. “But there is absolutely no help for people who have to go to the doctor because they’re sick.… I’m being charged an incredible amount of money just to live. It somehow doesn’t feel fair.”


Sweden includes fathers in paid leave
Louisiana lawmakers squandered an opportunity this legislative session to implement a state paid family leave policy. While five states have enacted their own, the United States remains the only industrialized country in the world without a national policy. The weeks after giving birth are critical to a new mother’s health, but it is also when she is most vulnerable. However, Sweden has found a simple solution to improve the health of new mothers – give fathers the ability to take leave while the mother is still at home. Claire Cain Miller with The New York Times’ Upshot Blog reports:

“A lot of focus has been on what we can do in the hospital immediately following childbirth, but less on mothers’ home environment, which is where the vast majority of women spend most of their postpartum time,” Ms. Rossin-Slater said. “What we’re saying is one important component of that home environment is the presence of the father or another adult caretaker.” The key in Sweden was that the policy allowed fathers to take intermittent, unplanned days of paid leave. The researchers — who used Sweden’s vast administrative data, including birth records, leave claims and medical records — were able to see that fathers often used their leave on days that mothers sought health care. The fathers’ presence could have averted the need for more serious medical care, such as by enabling mothers to sleep, seek preventive care or get antibiotics early in an infection, they said.


Number of the Day
75,000 – Number of new jobs added to the U.S. economy in May. That’s far below the 185,000 predicted by economists. (Source: CNN)