Shriver Center: October 2005

Katrina Whacks Federal Budget Process: Delayed and Outcome Uncertain

2006-07-13T16:23:58Z

Hurricane Katrina has already had a powerful impact on the federal budget and, perhaps more important, on the political process for next year’s budget. Congress has already passed $62 billion in direct spending for relief in the Gulf and in the other states, including Illinois , where evacuees have temporarily settled. This spending is expected to reach hundreds of billions in the very near future. For now, since none of this spending is “on budget,” it is simply an emergency addition to the burgeoning federal deficit.

The Federal Budget Schedule and Status

The federal fiscal year expired on September 30 without a new budget. Instead all of the functions of government are temporarily funded in the new fiscal year by a continuing resolution that buys time for Congress.

Under a resolution passed last spring, Congress laid out a blueprint for the new budget. Under that budget resolution, all of the congressional committees with jurisdiction over entitlement programs were to produce a plan of specific cuts to meet budget-cutting targets by September 16. These plans would then be merged into one bill known as a “reconciliation” bill, which would then be fast-tracked under special Senate rules that preclude a filibuster. Buried in the reconciliation bill were inevitable cuts in the Food Stamp Program and Medicaid, among other important programs.

The budget resolution also called for a separate reconciliation bill involving tax proposals. Under that plan, new tax cuts of $70 billion would be fast-tracked. The two reconciliation bills together would increase the deficit because the tax cuts (revenue losses) would be larger than the spending cuts. There were also plans to cut many nonentitlement programs (“domestic discretionary spending”), which include such categories as education, community development block grants, and worker training programs.

The immediate response to Katrina has been to delay the budget reconciliation for entitlement programs until October 17. The House and Senate will then consolidate all these plans into one reconciliation bill in each chamber. The chambers will consider and vote on the reconciliation bills after October 26. The tax-cutting reconciliation bill is then due in November.

The Developing Debate

The leaders of the House and Senate delayed the budget process for at least two reasons. First, Congress recognized a duty first to spend time devising a response to the disasters. Second, there appears to have been a political calculation that proceeding with deep cuts in indispensable antipoverty programs would be highly unpopular after the nation was jolted by the images of Katrina victims. The national recognition of persistent poverty in the Gulf region created a public sympathetic to disadvantaged individuals and families.

The images that we all saw on television spotlighted the fundamental unfairness of addressing the hurricane by withdrawing key government supports and services for the poor. This is driving some legislators to reconsider the whole reconciliation process as it related to entitlements and tax cuts. Several key Republicans have questioned the advisability of a process that shrinks the government’s role in responding to poverty. However, fiscal conservatives have begun to dig in their heels and insist on budget cuts to balance any new spending devoted to hurricane relief. This debate will be ongoing throughout the coming budget season.

Action

Katrina creates two new threats to federal spending on domestic programs. First, Congress could decide to fund the hurricane relief and rebuilding effort by cutting other spending. Second, Congress could decide that a “stimulus package” is needed and thus cut taxes more deeply. This would increase the deficit and result in even more pressure on all categories of spending.

There are powerful counterarguments. People who value the importance of federal spending on key programs that address poverty and equality should make these arguments to their federal legislators. The key message is “No Reconciliation Process.” The arguments are:

The disasters and what they revealed about the state of affairs in the country offer a chance for Congress to set new priorities and get us on a better track. We cannot stick to a plan that defunds government efforts to address poverty, deepens the deficit, and widens the yawning rich-poor gap in this country.
This is a time to help the victims of the disasters, not make them worse off. This is a time for shared sacrifice, and not a time to help people who do not need it by cutting their taxes even further. Millionaires who already got $100,000 a year from the first round of Bush tax cuts should not be given another $20,000 under the planned reconciliation process.
Requiring the bill for Katrina to be paid by domestic programs that help people all over America makes no sense and is profoundly unfair. The short-term costs of Katrina relief can be absorbed without cuts. The long-term budget woes that we are in are not caused by Katrina but by tax cuts.

For Illinois , the federal budget outcome is crucial. First, federal funding for programs such as Medicaid, the Food Stamp Program, child care, and many others is essential to the effort to create opportunity and fight poverty in our state. Second, federal funds in general are a key component of the state’s revenue system. Any significant overall loss of federal funds means a worsening of the state’s fiscal crisis.

All Illinois legislators should hear these messages many times, especially before October 17. Key members of Congress who have leadership or committee positions or who are important possible swing voters are Rahm Emanuel, Jerry Weller, John Shimkus, Ray LaHood, Tim Johnson, Judy Biggert, and Donald Manzullo. Contact information for your representatives and senators can be located at www.ilga.gov, and click on “legislator lookup” or call 800.426.8073 for the congressional switchboard.

Advocates, CHA Enact New Protection Provisions for Persons with Disabilities

2006-07-13T16:23:58Z

The Shriver Center, Access Living of Metropolitan Chicago, and the Chicago Housing Authority (CHA) have designed a new “disability protocol” to ensure that persons with disabilities have access to CHA’s redeveloped mixed-income housing. The CHA has pledged to implement this protocol to exempt persons with disabilities from new work requirements that might otherwise block their access to this important supply of housing.

When the CHA began its ten-year Plan for Transformation in 1999, the agency promised that families who were displaced by the redevelopment would be offered an opportunity to return to redeveloped public housing. More recently, as previously reported in IWN (“Stringent Screening Criteria May Block Displaced Residents’ Return to ABLA,” April 2004), advocates have been concerned that the CHA’s rigid screening criteria will prohibit many families from returning. For one, families in most developments must work at least thirty hours per week in order to qualify to return. Building on lessons learned from our welfare-to-work expertise, the Shriver Center has long advocated more flexible requirements that recognize families’ individual paths out of poverty.

The CHA originally implemented a disability exemption to these work requirements. However, Shriver Center advocates worried that the exemption inadvertently excluded some individuals who do not qualify for Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI), but who nonetheless have a disability that affects their ability to work thirty hours per week. Together with Access Living, the Shriver Center entered a productive dialogue with the housing authority. CHA was receptive to the advocates’ concerns, and their discussions culminated in this new screening policy.

As a result, CHA will soon begin implementing the new disability protocol when screening residents who seek to return and new applicants who are seeking affordable housing. The protocol provides a broader, more complete definition of “disability,” in addition to mechanisms for applicants to document both that they have a disability and that they are unable to work thirty hours as a result of their disability or related barriers. The protocol also acknowledges that some persons with disabilities may work, but less than thirty hours per week. These families are provided with an adjusted goal.

The Shriver Center, Access Living, and CHA have now begun working together to implement the new policy. All three groups expect that the result will be improved access for persons with disabilities to redeveloped public housing units in these mixed-income communities.

For more information, e-mail Raj Nayak.

Consumer Groups Oppose H&R Block Application for Bank Charter

2006-07-13T16:23:58Z

Five major consumer groups, led by the California Reinvestment Coalition in San Francisco, are urging federal regulators to reject H&R Block Inc.’s application for a bank charter. They contend that a bank charter would make it easier for H & R Block to market costly tax refund anticipation loans and subprime home mortgages in low-income neighborhoods. The largest tax preparation company in the country, H & R Block filed last May for a bank charter through the Office of Thrift Supervision.

According to a report from the Brookings Institution, 38 percent of all working families receiving the Earned Income Tax Credit forfeited significant sums on tax refund anticipation loans at interest rates that generally exceeded 200 percent in 2003. Many of H & R Block’s clients have filed class action and other lawsuits over exorbitant fees and other loan terms.

Illinois Sen. Jeff Schoenberg this year sponsored a bill to protect Illinois consumers from tax refund anticipation loans, but the Illinois General Assembly did not pass the bill in the last session. Senator Schoenberg is expected to sponsor a similar bill next year.

For more information, contact Dory Rand at 312.368.2007.

Food Stamp Advocacy Tool Available as Displaced Families Seek Assistance

2006-07-13T16:23:58Z

In Illinois 1,176,006 were receiving food stamps in June 2005. That is up 39 percent from June 2000, according to the Food Research Action Council. These numbers do not include Hurricane Katrina’s victims, who are now eligible for temporary food assistance. Amazingly the program that is offering support to millions continues to be threatened by budget resolutions. Before Katrina, the House and Senate had agreed to a budget that threatened to make cuts in the Food Stamp Program of anywhere from $600 million to upward of $2 billion. Since Katrina, they have merely postponed this plan, not dropped it. To add insult to injury, now some in Congress are suggesting even larger food stamp reductions to help pay for other Katrina expenses.

The plan in the House would reverse the bipartisan mid-1990s decision to preserve the Food Stamp Program’s strengths. The plan would allow some states to drop federal rules and take fixed amounts of funds. If the states hardest hit or with the most evacuees from Katrina had this “block grant” rule in effect, the Food Stamp Program there would have collapsed this month rather than acted well to meet the need.

The Illinois Department of Human Services (IDHS) will process applications for displaced families even if they lack the requisite paperwork. It will accept any type of identification verification, including a statement from a local family member or social service organization or a statement from the Red Cross. Applicants need not wait for the usual 45 days for approval; IDHS will process the application upon completion.

The Shriver Center’s Community Investment Unit continues to support new rules for food stamp participation that eliminate limits on car ownership for participants in the Food Stamp Program. Because of the work of the coalition work of Shriver Center’s Community Investment Unit, retirement accounts are no longer countable assets if participants will incur a penalty for early withdrawal. The Joint Committee on Administrative Rules approved the new rules on August 16, 2005, after initial approval by the Governor’s office.

The Sargent Shriver National Center on Poverty Law is also making its Food Stamp Advocacy Tool envelope available to displaced families who are temporarily residing in Illinois. IDHS will allow families who have been displaced to apply for temporary food assistance. Families are encouraged to seek out their nearest IDHS local office to apply until October 31, 2005.

For more information about food stamps for displaced families, or the Food Stamp Program in general, go to www.fns.usda.gov/fsp/ or contact the Shriver Center at 312.263.3830. When contacting the Shriver Center, be sure to ask about its Food Stamp Advocacy Tool, available in English, Spanish, and Polish.

Judge Mikva Has High Hopes for the Antipoverty Movement

2006-07-13T16:23:58Z

Although the last major American campaign against poverty began in the 1960s, and many of those initiatives and ideals had changed over the years, the Honorable Abner Mikva said that America learned an important lesson. Speaking before a group of young professionals invited by the Sargent Shriver National Center on Poverty Law last month, Judge Mikva said that the War on Poverty’s greatest success was that the American people chose to take responsibility for the poverty among them. Now that the horror of Hurricane Katrina had again turned the national attention to poverty, he hoped that this would mark the next turning point in the antipoverty movement.

Judge Mikva also spoke of his experience as an attorney and his relationship with the Shriver Center. The work of the Shriver Center continues to amplify and honor visionaries such as its founder, Sargent Shriver, he said.

More than sixty people from law firms and businesses from the Chicago metropolitan area attended the cocktail party fund-raiser, held by the Shriver Center’s associate board at Lake Point Tower in Chicago. Thanks to in-kind and financial support from Lake Point Tower, the associate board members’ law firms, and the event’s guests, the associate board collected over $2,500 for the Shriver Center.

The associate board members are Anne Duprey (chairwoman), Laura Duprey, Shauna Fulbright, Sarah Garner, Eric Halverson, John deMoulpied, Allyson Paflas, Bill Robison, Melissa Skilken, Max Stein, John Thurmond, and Adriana Weber.

Public Hearings on Health Care Affordability, Access and Quality in Illinois Begin

2006-07-13T16:23:58Z

The Illinois Adequate Health Care Task Force began conducting public hearings this month to develop a plan for Illinois residents to have access to a full range of preventive, acute, and long-term health care services. Mandated by the Health Care Justice Act and appointed by Gov. Rod Blagojevich and Illinois General Assembly leaders, the task force is holding public hearings in each of Illinois’s 19 congressional districts between now and April 2006 and will submit its plan to the General Assembly in the fall of 2006.

The task force also will meet at least monthly in Chicago to hear from health care experts, advocacy groups, medical providers, and others on health care access, affordability, and quality. Like the hearings, the task force meetings are open to the public. The Illinois Department of Public Health and others are arranging for webcasting the hearings and meetings.

The dates and general locations of the public hearings are:

October 5	1st Congressional District, 400 West 95th Street, Chicago
October 18	4th Congressional District, Chicago
October 19	7th Congressional District, Oak Park
November 1	3d Congressional District, LaGrange
November 2	2d Congressional District, Homewood
November 16	11th Congressional District, Bourbonnais
December 6	13th Congressional District, Naperville
December 7	14th Congressional District, Aurora
January 4	5th Congressional District, Franklin Park
January 11	6th Congressional District, Elk Grove Village
January 18	9th Congressional District, Skokie
February 1	18th Congressional District, Peoria
February 8	19th Congressional District, Mt. Vernon
February 15	15th Congressional District, Champaign
March 8	12th Congressional District, Carbondale
March 15	17th Congressional District, Quad Cities
March 22	16th Congressional District, Rockford
April 4	10th Congressional District, Deerfield
April 5	8th Congressional District, Hoffman Estates
April 18	19th Congressional District, Collinsville
April 19	Springfield

At the hearings, which run from 4:00 p.m. to 7:00 p.m., speakers have three minutes for oral testimony. Witnesses are heard in the order in which they sign up. Written testimony may be submitted by mail, or electronically, or in person. To submit written testimony, mail two copies to Tracy Morgan, Division of Health Policy, Illinois Department of Public Health, 525 W. Jefferson St., Springfield, IL 62761; or e-mail it as an attachment to tmorgan@idph.state.il.us; or hand-deliver two copies to Department of Public Health staff members at the public hearings.

More information about the Health Care Justice Act and the Adequate Health Care Task Force is available on the Illinois Department of Public Health’s website, www.idph.state.il.us, and on the Campaign for Better Health Care’s website, www.cbhconline.org.

For more information, contact Margaret Stapleton at the Sargent Shriver National Center on Poverty Law, 312.368.3327.

FLLIP Celebrates Successes and Calls for Action

2006-07-13T16:23:58Z

Over 100 banks, community groups, government agencies, and others celebrated the successes of the Financial Links for Low-Income People (FLLIP) coalition at the 2005 Catalyst Awards Luncheon hosted by the Federal Reserve Bank of Chicago on September 28. FLLIP’s free, community-based financial education program has graduated thousands of low-income adults and trained over 500 instructors since 2001.

Marva Arnold, director of the Division of Human Capital Development at the Illinois Department of Human Services, and the Sargent Shriver National Center on Poverty Law’s Dory Rand urged FLLIP members to let policymakers know about the successes and benefits of the FLLIP program and to support rules to eliminate barriers that keep recipients of public benefits from building savings and assets. The Shriver Center coordinates the FLLIP coalition.

In her keynote address, Michele Latz, director of the Illinois Department of Financial and Professional Regulation’s Division of Financial Institutions, highlighted the Blagojevich administration’s policies that help Illinois residents build and protect assets. The Payday Loan Reform Act and Lending Practices-Tech are two of such policies. Latz emphasized the importance of financial education to help people avoid money traps.

FLLIP presented the William J. and Irene Beck Award to Barbara and Sheldon Stein for their years of active support and vision. Catalyst Award recipients were Arnold; Michael Burnside of Allstate Bank; Lesley Slavitt of Chase; Oboi Reed of Citibank; Casandra Slade of National City; and two outstanding FLLIP financial education sites—Madison County Employment and Training Department and YWCA Lake County.

The 2005 Catalyst Awards Luncheon was supported by the William J. and Irene Beck Foundation, LaSalle Bank, National City Bank, Charter One Bank, Chase, Cole Taylor Bank, State Farm Bank, Fifth Third Bank, Lisle Savings Bank, MB Financial Bank, US Bank, and Grace Newton.

Rand expressed the Shriver Center’s thanks for the continuing support of FLLIP’s major funders—the Grand Victoria Foundation and the Illinois Department of Human Services. She also gave special thanks to the Federal Reserve Bank of Chicago, everyone who attended, and all who support FLLIP.

For more information on the luncheon or FLLIP, contact Rick Rand at 312.263.3830 ext. 273.