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Pennsylvania's Budget Choices This Year

May 27, 2017 - 10:01am

As we head into what everyone hopes will be the last month of the Pennsylvania budget season, this is a good moment to take stock of where we are and what’s at stake in the decisions the Governor and General Assembly will make this year.

Doing so will also explain why the Pennsylvania’s Choice campaign is urging people to attend a tele-town on the budget at 7:15 on June 1, a budget rally at noon on June 5 in Harrisburg, and lobbying days later in the month. (More information and registration for these events can be found here.)

Politicians and — let’s admit it — political advocates tend to magnify the importance of every moment. This election or this piece of legislation is the most important in a year, ten years, a generation, the history of the state or nation, or even the history of the planet.

Passing a budget in Pennsylvania is not that critical. But that doesn’t mean Pennsylvania’s choice this year is unimportant. We do have a choice to start moving in a new direction or to continue the long, downward slide toward political irresponsibility and public disinvestment we have seen in this state since 2010.

Since then, whipsawed by the worst economic crisis in seventy years that reduced state revenues and was driven by an extremist ideology that sees little good in the public sector, we have, with very few exceptions, been slowly reducing public investment in a state that never had the kind of vibrant public sector found in neighboring states.

  • Despite some increases in spending on K-12 education, we have never fully restored the Corbett cuts to education for schools in the lowest income districts, and the gap between the richest and poorest schools remain the largest in the country.
  • We have reduced funding on higher education to the point that we rank fourth from the bottom in the country and 40 states have a higher proportion of adults over 25 with a college degree.
  • We have long waiting lists for child care, disability, and mental health services, as well as help for the unemployed.
  • We spend a third less on protecting our water and air than we did in 2007 despite the increase in challenges created by natural gas fracking.

This investment deficit is made worse by a persistent budget deficit. That deficit has been created by large reductions in corporate taxes; by an upside-down tax system that doesn’t take a fair share from those whose incomes are growing, while burdening the middle class whose incomes are stagnant; and by the General Assembly’s constant reliance on short term fixes including overestimates of revenues, borrowing from the future, and one-shot revenues.

It doesn’t have to be this way. Governor Wolf has called for closing the budget deficit through smart proposals to make state government more efficient and responsive to our citizens and through corporate tax reform, a severance tax on natural gas fracking, and expanded sales taxes on business.

While the Governor’s proposals are welcome, they make only a dent in our investment deficit. But there are bolder tax ideas that would make it possible not only to close the deficit, but to invest more in education, human services, and the environment. These include our Fair Share Tax, which would raise $2 billion mainly from the wealthy while offering 60% of middle class Pennsylvanians a tax cut.

In response, the House Republicans have passed a budget that is driven by the same extremism and irresponsibility that has characterized their proposals since 2010.

It is, to begin with, unbalanced by $600 million. So far the House Republicans have not voted for taxes to close their budget, but have said they would consider a range of ideas, many of which are for short-term revenues that will cost the state in the future.
And what’s worse is that it reduces investment far below the already austere budget proposed by the Governor. It includes:

• $200 million in unspecified cuts to Medical Assistance;

• $62 million in cuts to Child Care Services;

• $50 million in cuts for Pre-K and Head Start;

• $95 million in unspecified cuts to Correctional Institutions;

• $9 million in cuts to mental health and substance use disorder funding; and

• $8.5 million in cuts from Safe Schools Initiatives.

Some people will suffer deeply as a result of cuts in Medical Assistance and other human services. And we will lose the talents that would have been nurtured by an expansion of Pre-K education as well as larger investments in human services and education. For others, the Republican budget is not catastrophic. But it will continue the long downward slide in the funding of the public services that enable individuals to live full lives and enable communities to thrive.

What is really at stake this year is not just this or that budget item, however important, but whether we can start turning this state government around.

We must start freeing ourselves from an extremist ideology that wants to shred the public sector to reduce taxes on the wealthy.

We must start putting the good of our communities above ideology.

We must start telling everyone who will listen, including our public officials, that we believe that public investment paid for by a fair tax system is the only path to shared prosperity.

And we can’t do that unless citizens from every corner of the state start speaking up, in Harrisburg and in the own communities.

Click here to find out how you can do your part.

It's Not Just a Number: PBPC Statement on the CBO Score of the AHCA

May 24, 2017 - 12:00am

The Congressional Budget Office (CBO) analysis of the Republican health care plan, the ACHA, released today shows the danger of Congressional action in advance of a serious analysis of the impact of legislation. Though it was touted as a new and improved version of the bill that failed in March, the CBO analysis shows the bill that passed the House is no better, and in some ways, far worse. The CBO estimates that, at the end of ten years, 23 million fewer Americans will have health insurance because of the legislation, which is one million less than the estimate of their earlier bill.

Most of the lost health insurance created by the AHCA is the result of the slow repeal of the Medicaid expansion and the replacement of the federal entitlement to traditional Medicaid by a per-capita cap on federal funding of the program. These devastating changes to Medicaid will make it impossible for millions of kids and people with disabilities to secure health insurance and will threaten the long-term care of millions of seniors.

The new report also shows that insurance on the individual marketplace in many states, including possibly Pennsylvania, will become unaffordable or unavailable to many people. In states with unstable markets or states that eliminate or modify the essential health benefit or community rating requirements of the ACA, large numbers of people will only be able to purchase health insurance that is inadequate either in that it does not cover pre-existing medical conditions or has yearly or lifetime limits or in that it requires much higher out of pockets costs than people typically pay now.

We come to three conclusions. First, the only real benefit of this legislation goes the 1% and insurance and pharmaceutical industries that will received $600 million in tax breaks. Second, this is a bill that badly undermines health care for millions of Americans and Pennsylvanians and should go no farther. And third, before acting an alternative, the Senate must seek a full CBO analysis so that it too does not pass a bill that harms far more people than it helps.

The Trump Budget

May 23, 2017 - 12:00am

President Trump’s budget is a triple betrayal — of his campaign promises, of working people in Pennsylvania and around the country, and of a uniquely-American economic order that has created the shared prosperity that America once enjoyed and should enjoy again.

The President is, first, betraying his promise not to cut Medicaid, Social Security, and the social safety net — that is, programs relied on by those left behind in a changing economy.

In doing so he is, second, betraying the promise that America has made to working people to ensure that they have the important assistance to meet basic living standards — food on the table, a roof over their heads, and access to health care that millions of Pennsylvanians rely on. The budget proposal calls for a huge reduction in these vital programs in order to give massive tax breaks to the wealthy and powerful. It would also shift massive costs to Pennsylvania at a time when our state is already struggling to meet the needs for education, transportation and other services Pennsylvanians need.

"For example, the President’s budget would:

  • Slash the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) by $193 billion over ten years targeting the elderly, working families, and workers struggling to find a job — and shifting the cost of more than $100 billion of SNAP benefits, a long time federal responsibility, to states.
  • Cut $600 billion from Medicaid over ten years — on top of the already-massive cuts in Medicaid and subsidies for private coverage included in the House-passed bill to repeal and replace the Affordable Care Act that President Trump supports and incorporates into his budget. These additional cuts almost certainly would further increase the number of uninsured Pennsylvanians and would shift additional, significant Medicaid costs to Pennsylvania on top of the $18 billion cost shift in the House health bill.
  • Cut disability programs by $72 billion, including Social Security Disability Insurance, for workers with disabilities and their families, and Supplemental Security Income, which provides income assistance to poor individuals, including children with disabilities. This breaks the President’s promise not to cut Social Security.

And, third, the President is betraying the economic model that combines public investment and private initiative to create broadly shared prosperity. His budget calls for deep cuts in investments that expand opportunity and spur long-term economic growth, from job training to education to scientific research. The President cuts funding for this part of the budget by $54 billion in 2018 alone. The proposed cuts grow far deeper over the decade – the President is proposing for this part of the budget to be cut by more than 40 percent as compared to 2017 after adjusting for inflation. These cuts would take funding for public investments in prosperity to its lowest level as a share of the economy since the Hoover Administration.

At the same time, the President is proposing massive tax cuts, largely for the wealthy and corporations, which would likely cost several trillion dollars over the coming decade if honestly measured. The budget relies on unrealistic economic assumptions, gimmicks, and huge 'magic asterisks' to hide the fact that the President’s tax cuts would dramatically increase deficits and debt.

As Congress prepares to advance its own budget plans, we call on the Pennsylvania Congressional delegation, both Democrats and Republicans, to not just oppose the Trump budget, but oppose any Congressional budget plan that follows the same framework. They must oppose cuts to assistance that helps millions of Americans achieve a basic living standard. They must oppose cuts to investments in long-run economic growth and basic public services. And, they must oppose massive tax cuts for the nation's wealthiest.

PBPC Statement on the AHCA Vote

May 4, 2017 - 2:34pm

HARRISBURG – Marc Stier, Director of the PA Budget and Policy Center, made the following statement following today's passage of the American Health Care Act by the U.S. House:

 "Today the Republican controlled House of Representatives passed legislation that will strip health insurance from 1.3 million Pennsylvanians, will lead to the pre-mature death of 3,250 Pennsylvanians for lack of health insurance, and will threaten the health insurance of five million Pennsylvanians with pre-existing conditions. If the the health care exchanges survive, premiums for older adults will skyrocket, making health insurance unaffordable for most Pennsylvanians between the age of 50 and 64. 

"This legislation was never about improving health care. It was about giving $500 billion in tax breaks to the very wealthy and to big insurance and drug companies.

"We are grateful that all of Pennsylvania’s Democratic members of Congress and four of its  Republican members of Congress in Pennsylvania were willing to put aside right-wing ideology to stand with their constituents.

"Pennsylvania families, including the thousands of people in our state who attended town halls, wrote letters, called their representatives, and fought against this bill, will not stop fighting to prevent this bill from becoming law."

PBPC Statement on the AHCA Vote

May 4, 2017 - 2:34pm

HARRISBURG – Marc Stier, Director of the PA Budget and Policy Center, made the following statement following today's passage of the American Health Care Act by the U.S. House:

 "Today the Republican controlled House of Representatives passed legislation that will strip health insurance from 1.3 million Pennsylvanians, will lead to the pre-mature death of 3,250 Pennsylvanians for lack of health insurance, and will threaten the health insurance of five million Pennsylvanians with pre-existing conditions. If the the health care exchanges survive, premiums for older adults will skyrocket, making health insurance unaffordable for most Pennsylvanians between the age of 50 and 64. 

"This legislation was never about improving health care. It was about giving $500 billion in tax breaks to the very wealthy and to big insurance and drug companies.

"We are grateful that all of Pennsylvania’s Democratic members of Congress and four of its  Republican members of Congress in Pennsylvania were willing to put aside right-wing ideology to stand with their constituents.

"Pennsylvania families, including the thousands of people in our state who attended town halls, wrote letters, called their representatives, and fought against this bill, will not stop fighting to prevent this bill from becoming law."

ACA Repeal Puts Pennsylvanians Who Work for Large Corporations At Risk

May 4, 2017 - 10:01am

The disastrous implications of the GOP health care bill are becoming ever more apparent, especially for those who get their insurance from large national corporations. Under the bill, even if Pennsylvania does not opt-out of the federal essential benefits regulation, large multi-state employers could choose to deny Pennsylvanians coverage for pre-existing medical conditions or particular conditions, such as pregnancy. Or they could impose annual or lifetime limits on coverage.

Over 62% of Pennsylvanians have employer-based coverage, one of the highest rates in the country. Millions of Pennsylvanians get their insurance from large, multi-state corporations that also operate in states that are likely to opt-out of the federal essential benefit rule.

So all of these scenarios could happen:

  • Someone from Pittsburgh who works for Wal-Mart gets pregnant and discovers that pregnancy is not covered by Wal-Mart’s health insurance. When she leaves, she is responsible for the entire bill. A pregnancy with no complications averages $30,000 — a C-section increases that cost to $50,000.
  • Someone from Oil City who works for Target gets cancer, needs multiple operations and chemotherapy and uses up his annual cap on health care in four months, leaving him without any means to pay for post-operative therapy.
  • Someone from Chester who works for Wells Fargo develops multiple sclerosis and uses up her lifetime health benefits in two years. From there, she's responsible for all health care costs.
  • Someone from Camp Hill who works for NTB seeks treatment for depression, but is denied coverage because it was a pre-existing condition.

The Republican attack on the ACA and Medicaid is not just directed at low-income people. It is directed at all of us.

ACA Repeal Puts Pennsylvanians Who Work for Large Corporations At Risk

May 4, 2017 - 10:01am

The disastrous implications of the GOP health care bill are becoming ever more apparent, especially for those who get their insurance from large national corporations. Under the bill, even if Pennsylvania does not opt-out of the federal essential benefits regulation, large multi-state employers could choose to deny Pennsylvanians coverage for pre-existing medical conditions or particular conditions, such as pregnancy. Or they could impose annual or lifetime limits on coverage.

Over 62% of Pennsylvanians have employer-based coverage, one of the highest rates in the country. Millions of Pennsylvanians get their insurance from large, multi-state corporations that also operate in states that are likely to opt-out of the federal essential benefit rule.

So all of these scenarios could happen:

  • Someone from Pittsburgh who works for Wal-Mart gets pregnant and discovers that pregnancy is not covered by Wal-Mart’s health insurance. When she leaves, she is responsible for the entire bill. A pregnancy with no complications averages $30,000 — a C-section increases that cost to $50,000.
  • Someone from Oil City who works for Target gets cancer, needs multiple operations and chemotherapy and uses up his annual cap on health care in four months, leaving him without any means to pay for post-operative therapy.
  • Someone from Chester who works for Wells Fargo develops multiple sclerosis and uses up her lifetime health benefits in two years. From there, she's responsible for all health care costs.
  • Someone from Camp Hill who works for NTB seeks treatment for depression, but is denied coverage because it was a pre-existing condition.

The Republican attack on the ACA and Medicaid is not just directed at low-income people. It is directed at all of us.

They Can’t Buy Us Off

May 3, 2017 - 3:16pm

We are hearing today that the Trump administration is “buying off” support from members of Congress for the bill to repeal the ACA by adding more money for one thing or another.

The latest is a plan to add $8 billion to the $130 billion already set aside for the high-risk pools to provide coverage for those with pre-existing conditions.


A new report from the Center for American Progress
shows that — as we have been saying — this is far less money than needed to provide insurance to everyone with pre-existing conditions. At a minimum, 54,000 Pennsylvanians would be eligible for a high risk pool. Even if they pay $10,000 a year — which many could not afford — the state would need $1.4 billion a year to provide insurance for them. But the AHCA, even with the addition $8 billion over ten years, would only give Pennsylvania $498 million a year. PA would be $1 billion a year short.

Need I add that the state government is in no shape to make up the difference?

Or that actually over five million Pennsylvanians have pre-existing conditions and might need to take advantage of the high-risk pool?

Or that 1.3 million Pennsylvanians a year will lose health insurance as a result of the GOP health plan.

Or that people between the ages of 55 and 64 even without pre-existing conditions would pay 2 to 4 times as much for health insurance?

Or that the ACA has helped provide treatment for 148,000 Pennsylvanians who suffer from the substance abuse crisis in our state, most of whom would lose that treatment if the GOP health care plan is enacted?

And note that the changes in the rules on pre-existing conditions and essential benefits made possible by this legislaiton apply to all health insurance not just insurance secured through the ACA. If you have employer based insurance and lives in a state that opts-out of the ACA regulations, your policy may not cover your pre-existing conditions. And it may again have annual or lifetime limits on the health care you can receive. 

Call your member of Congress today and demand that he not be fooled by the latest alternative facts from Trump and Ryan and their attempt at a buy-off. They need to defend our health care. No matter where you live, you can call 866-426-2631 to get connected.

They Can’t Buy Us Off

May 3, 2017 - 3:16pm

We are hearing today that the Trump administration is “buying off” support from members of Congress for the bill to repeal the ACA by adding more money for one thing or another.

The latest is a plan to add $8 billion to the $130 billion already set aside for the high-risk pools to provide coverage for those with pre-existing conditions.


A new report from the Center for American Progress
shows that — as we have been saying — this is far less money than needed to provide insurance to everyone with pre-existing conditions. At a minimum, 54,000 Pennsylvanians would be eligible for a high risk pool. Even if they pay $10,000 a year — which many could not afford — the state would need $1.4 billion a year to provide insurance for them. But the AHCA, even with the addition $8 billion over ten years, would only give Pennsylvania $498 million a year. PA would be $1 billion a year short.

Need I add that the state government is in no shape to make up the difference?

Or that actually over five million Pennsylvanians have pre-existing conditions and might need to take advantage of the high-risk pool?

Or that 1.3 million Pennsylvanians a year will lose health insurance as a result of the GOP health plan.

Or that people between the ages of 55 and 64 even without pre-existing conditions would pay 2 to 4 times as much for health insurance?

Or that the ACA has helped provide treatment for 148,000 Pennsylvanians who suffer from the substance abuse crisis in our state, most of whom would lose that treatment if the GOP health care plan is enacted?

And note that the changes in the rules on pre-existing conditions and essential benefits made possible by this legislaiton apply to all health insurance not just insurance secured through the ACA. If you have employer based insurance and lives in a state that opts-out of the ACA regulations, your policy may not cover your pre-existing conditions. And it may again have annual or lifetime limits on the health care you can receive. 

Call your member of Congress today and demand that he not be fooled by the latest alternative facts from Trump and Ryan and their attempt at a buy-off. They need to defend our health care. No matter where you live, you can call 866-426-2631 to get connected.

Trump is Wrong: the AHCA Will Make Health Insurance Unaffordable for Those with Pre-Existing Conditions

May 2, 2017 - 4:14pm

President Tump discovered not too long ago that Health Care is hard. So it’s no wonder he doesn't always get things right. He said on CBS's "Face the Nation" Sunday, "Pre-existing conditions are in the bill. And I mandate it. I said, 'Has to be.'"

Wrong.

In the last day, two respected organizations, Consumers Union and AARP, confirmed what we said two weeks ago:  the AHCA will make it impossible for many people — if not most people — with pre-existing conditions to afford health insurance if their state opts out of the ACA rules that guarantee people with pre-existing are offered insurance at the same rates as those without them. A million people in Pennsylvania are threatened if, as seems likely, the Republican-dominated General Assembly were to vote to make Pennsylvania one of those states.

The Republican plan calls for high risk pools to cover people with pre-existing conditions. But as Consumers Union says, their “long track-record of failure have historically resulted in very high premiums and onerous terms for coverage that doesn’t provide the care consumers need.” Consumers Union points out, as we did, that we can’t make high risk pools effective in protecting people with pre-existing conditions at a lower cost than the cost of the ACA. The nation would have to spend more than $1 trillion over ten years, that is 300% more than is included in the most generous version of the AHCA, to guarantee affordable, high-quality care for everyone with pre-existing conditions. 

Members of Congress have to decide whether or not they are going to support a plan on the basis of Donald Trump's fake guarantiees and risk the health insurance of milions of people.  

Trump is Wrong: the AHCA Will Make Health Insurance Unaffordable for Those with Pre-Existing Conditions

May 2, 2017 - 4:14pm

President Tump discovered not too long ago that Health Care is hard. So it’s no wonder he doesn't always get things right. He said on CBS's "Face the Nation" Sunday, "Pre-existing conditions are in the bill. And I mandate it. I said, 'Has to be.'"

Wrong.

In the last day, two respected organizations, Consumers Union and AARP, confirmed what we said two weeks ago:  the AHCA will make it impossible for many people — if not most people — with pre-existing conditions to afford health insurance if their state opts out of the ACA rules that guarantee people with pre-existing are offered insurance at the same rates as those without them. A million people in Pennsylvania are threatened if, as seems likely, the Republican-dominated General Assembly were to vote to make Pennsylvania one of those states.

The Republican plan calls for high risk pools to cover people with pre-existing conditions. But as Consumers Union says, their “long track-record of failure have historically resulted in very high premiums and onerous terms for coverage that doesn’t provide the care consumers need.” Consumers Union points out, as we did, that we can’t make high risk pools effective in protecting people with pre-existing conditions at a lower cost than the cost of the ACA. The nation would have to spend more than $1 trillion over ten years, that is 300% more than is included in the most generous version of the AHCA, to guarantee affordable, high-quality care for everyone with pre-existing conditions. 

Members of Congress have to decide whether or not they are going to support a plan on the basis of Donald Trump's fake guarantiees and risk the health insurance of milions of people.  

Why Representative Tim Murphy Should Oppose the Republican Health Care Bill

May 2, 2017 - 3:51pm

Representative Tim Murphy (R-PA18) has been one of the most important advocates for mental health and addiction care in this country. He’s been a champion of parity between the treatment of physical and mental health problems. And that’s why it’s so surprising that he might vote to repeal the Affordable Care Act. 24 million people nationwide — 1.3 million in Pennsylvania, and 67,000 in his district — will lose health insurance as a result of this legislation and many of them, by some estimates 29%, suffer from mental illness including substance abuse disorders.

And what is even more striking is that the MacArthur amendment to the Republican health care plan allows states to opt-out of the Essential Benefits Requirement that guarantees insurance must provide mental health benefits. Repealing that provision, and the prohibition on insurance companies charging higher premiums to those with pre-existing conditions, could lead to disaster in Pennsylvania. Republican majorities in the General Assembly are likely to vote for Pennsylvania to opt-out of both requirements, and if they have a veto-proof majority or a Republican governor who agrees with them, hundreds of thousands of Pennsylvanians between the ages of 50 and 65 will see their premiums skyrocket and the ACA’s protection of mental health parity will be defunct in our state.

Let’s hope Representative Murphy listens to the better angels of his nature and stands with the people he has championed for so long.

Why Representative Tim Murphy Should Oppose the Republican Health Care Bill

May 2, 2017 - 3:51pm

Representative Tim Murphy (R-PA18) has been one of the most important advocates for mental health and addiction care in this country. He’s been a champion of parity between the treatment of physical and mental health problems. And that’s why it’s so surprising that he might vote to repeal the Affordable Care Act. 24 million people nationwide — 1.3 million in Pennsylvania, and 67,000 in his district — will lose health insurance as a result of this legislation and many of them, by some estimates 29%, suffer from mental illness including substance abuse disorders.

And what is even more striking is that the MacArthur amendment to the Republican health care plan allows states to opt-out of the Essential Benefits Requirement that guarantees insurance must provide mental health benefits. Repealing that provision, and the prohibition on insurance companies charging higher premiums to those with pre-existing conditions, could lead to disaster in Pennsylvania. Republican majorities in the General Assembly are likely to vote for Pennsylvania to opt-out of both requirements, and if they have a veto-proof majority or a Republican governor who agrees with them, hundreds of thousands of Pennsylvanians between the ages of 50 and 65 will see their premiums skyrocket and the ACA’s protection of mental health parity will be defunct in our state.

Let’s hope Representative Murphy listens to the better angels of his nature and stands with the people he has championed for so long.

Last Chance for Sen. Toomey to Vote with Main St. Savers on Retirement Security

May 2, 2017 - 11:35am

We hear from our friends in Washington DC that a U.S. Senate vote on a House Joint Resolution (H.J. Res. 66) that would impede states from improving retirement security for private workers could come today or tomorrow. It won’t come to a vote unless Republican leaders in the Senate think that the resolution will pass – so now is the time for Pennsylvanians to make their voice heard with Sen. Toomey. If he votes against H.J. Res 66 as he should, joining Tennessee Republican Bob Corker, that can send it down.

To refresh your memory, Sen. Toomey should be with us on this issue. A growing number of states have stepped in to help private workers who have no retirement plan at all through their job – more than half of all private workers (about 3 million in Pennsylvania) – set up a savings plan into which they would contribute a small part of their paycheck each pay period. This approach empowers people to save for retirement using their own money, thereby supporting personal responsibility. This approach relieves small businesses of the headaches of researching and setting up a retirement savings plan for their employees. This is why Small Business Majority strongly supports this approach (along with the Philadelphia Chamber of Commerce). And it’s another reason why Sen. Toomey, who speaks often of the importance of small business, should support this approach and vote NO on H.J. Res 66.

In an earlier blog, we walked through the details on why Sen. Toomey was wrong to vote with Wall Street and in favor of a companion resolution (H.J. Res. 67) that already impeded big cities from enabling their private workers from saving for retirement. (Here is the Economic Policy Institute’s summary on the same issue.) That earlier blog also explained that there is a bipartisan effort in Pennsylvania to begin studying and then setting up retirement savings options for private workers without them.

What's urgent TODAY is that people need to call Senator Toomey’s offices (here are the phone numbers). Let him know that he should vote with small business, with Main St. Savers, and for personal responsiblity – by rejecting H.J. Res. 66. 

Last Chance for Sen. Toomey to Vote with Main St. Savers on Retirement Security

May 2, 2017 - 11:35am

We hear from our friends in Washington DC that a U.S. Senate vote on a House Joint Resolution (H.J. Res. 66) that would impede states from improving retirement security for private workers could come today or tomorrow. It won’t come to a vote unless Republican leaders in the Senate think that the resolution will pass – so now is the time for Pennsylvanians to make their voice heard with Sen. Toomey. If he votes against H.J. Res 66 as he should, joining Tennessee Republican Bob Corker, that can send it down.

To refresh your memory, Sen. Toomey should be with us on this issue. A growing number of states have stepped in to help private workers who have no retirement plan at all through their job – more than half of all private workers (about 3 million in Pennsylvania) – set up a savings plan into which they would contribute a small part of their paycheck each pay period. This approach empowers people to save for retirement using their own money, thereby supporting personal responsibility. This approach relieves small businesses of the headaches of researching and setting up a retirement savings plan for their employees. This is why Small Business Majority strongly supports this approach (along with the Philadelphia Chamber of Commerce). And it’s another reason why Sen. Toomey, who speaks often of the importance of small business, should support this approach and vote NO on H.J. Res 66.

In an earlier blog, we walked through the details on why Sen. Toomey was wrong to vote with Wall Street and in favor of a companion resolution (H.J. Res. 67) that already impeded big cities from enabling their private workers from saving for retirement. (Here is the Economic Policy Institute’s summary on the same issue.) That earlier blog also explained that there is a bipartisan effort in Pennsylvania to begin studying and then setting up retirement savings options for private workers without them.

What's urgent TODAY is that people need to call Senator Toomey’s offices (here are the phone numbers). Let him know that he should vote with small business, with Main St. Savers, and for personal responsiblity – by rejecting H.J. Res. 66. 

Why Representative Thompson Should Vote No on the Health Care Bill

April 27, 2017 - 1:37pm

Rep. Glenn Thompson's Background, Consequences for Constituents Are Reasons to Vote "No" on GOP Health Care Bill

Given his personal history in human services, and the demographic makeup of the 5th Congressional district, Congressman Glenn Thompson has long been an advocate for older Pennsylvanians – not just seniors but those in the 55 to 65 age bracket as well.

And that must make the upcoming vote on the Republican replacement of the ACA so difficult. As a loyal Republican, Thompson has reason to support it. But the bill is, in many ways, terrible for older Pennsylvanians, including many of his constituents in the 5th district. So the concerns of his district and his own history very much point in the other direction.

The threat to seniors and near-seniors come from a number of directions.

To begin with the threat to seniors: the per-capita cap  Medicaid expenditures will cost Pennsylvania $18 billion over ten years. This cut will force the state to reduce expenditures for long-term care under our medical assistance program. Nursing homes, like those Representative Thompson once managed, will see their reimbursements reduced. Many seniors will find themselves unable to secure affordable long-term care.

The problems for Pennsylvanians 50 to 65 begin with the Republican plan's subsidies to purchase insurance on the health care exchanges, which are far inferior to those in in the ACA. According to Kaiser Foundation data, In the 16 counties of the 5th Congressional District, a 60 year old couple with an income of $40,000 would receive a subsidy that is $7,566 less under the GOP plan than under the ACA. A 60 year old couple with an income of $50,000 would receive $5,786 less. A 60 year old individual with an income of $30,000 would receive $3,095 less while one with an income of $40,000 would receive $1,495 less.

Revisions made to the Republican plan in late March added a $85 billion fund to lower premiums for people aged 50 to 64. There are rumors that members of Congress have been promised that this amount will be increased to $130 billion. But, there is still no guarantee that these funds will be appropriated. And rough estimates drawing on work by the Center for America Progress suggest that even $130 billion isn’t enough money to compensate for the reduction in subsidies. Indeed, even if we assume there are no other changes in the law, a $130 billion fund would only compensate for half of the subsidy reductions. And that fund can’t compensate at all for other changes in the health care law that increase insurance premiums for those 50 to 65.

The March Republican proposal called for two changes that will lead to higher costs for near-seniors. It raises the age rating ratio to 5:1, allowing the premiums charged to near-seniors to be five times those charged to younger, healthier people, instead of the ACA’s ratio of 3:1. And it abolishes the ACA’s rules on the minimum actuarial value of health insurance plans, which limit the costs of deductibles and co-pays. The result is that the health insurance plans under the GOP proposal will not only be subsidized at lower rates, but both premiums and out of pocket costs will be higher.

If this were not bad enough, the changes to the GOP plan in the MacArthur amendment allow states to opt-out of ACA regulations that were specifically designed to protect those in the 50 to 64 bracket. It allows states seek waviers for the rules that:

  • limit the costs of insurance premiums for older Americans to five times that of younger Americans. (The ACA sets this ratio as 3 to 1.)
  • prohibit insurance companies from charging people with pre-existing medical conditions more.
  • require insurance companies to provide essential benefits in all policies.

If Pennsylvania were to opt out of all three rules, near-seniors now protected by the ACA will face a health care disaster. If the age ratio limitation is eliminated, premiums for those in the 50 to 65 age range will shoot  up even more than predicted. If the prohibition on charging people with pre-existing conditions more is lifted, the burden of higher premiums will also fall on this age group. And if the essential benefits provision is lifted, insurance companies will again be allowed to offer people in this age group insurance that excludes their pre-existing conditions.

We expect that Representative Thompson is as concerned about these implications of the Republican health care plan as we are. And we urge you to contact his office to tell him that you share that concern and want him to put Republican unity aside and vote to support his constituents in the 5th district. 

Why Representative Thompson Should Vote No on the Health Care Bill

April 27, 2017 - 1:37pm

Rep. Glenn Thompson's Background, Consequences for Constituents Are Reasons to Vote "No" on GOP Health Care Bill

Given his personal history in human services, and the demographic makeup of the 5th Congressional district, Congressman Glenn Thompson has long been an advocate for older Pennsylvanians – not just seniors but those in the 55 to 65 age bracket as well.

And that must make the upcoming vote on the Republican replacement of the ACA so difficult. As a loyal Republican, Thompson has reason to support it. But the bill is, in many ways, terrible for older Pennsylvanians, including many of his constituents in the 5th district. So the concerns of his district and his own history very much point in the other direction.

The threat to seniors and near-seniors come from a number of directions.

To begin with the threat to seniors: the per-capita cap  Medicaid expenditures will cost Pennsylvania $18 billion over ten years. This cut will force the state to reduce expenditures for long-term care under our medical assistance program. Nursing homes, like those Representative Thompson once managed, will see their reimbursements reduced. Many seniors will find themselves unable to secure affordable long-term care.

The problems for Pennsylvanians 50 to 65 begin with the Republican plan's subsidies to purchase insurance on the health care exchanges, which are far inferior to those in in the ACA. According to Kaiser Foundation data, In the 16 counties of the 5th Congressional District, a 60 year old couple with an income of $40,000 would receive a subsidy that is $7,566 less under the GOP plan than under the ACA. A 60 year old couple with an income of $50,000 would receive $5,786 less. A 60 year old individual with an income of $30,000 would receive $3,095 less while one with an income of $40,000 would receive $1,495 less.

Revisions made to the Republican plan in late March added a $85 billion fund to lower premiums for people aged 50 to 64. There are rumors that members of Congress have been promised that this amount will be increased to $130 billion. But, there is still no guarantee that these funds will be appropriated. And rough estimates drawing on work by the Center for America Progress suggest that even $130 billion isn’t enough money to compensate for the reduction in subsidies. Indeed, even if we assume there are no other changes in the law, a $130 billion fund would only compensate for half of the subsidy reductions. And that fund can’t compensate at all for other changes in the health care law that increase insurance premiums for those 50 to 65.

The March Republican proposal called for two changes that will lead to higher costs for near-seniors. It raises the age rating ratio to 5:1, allowing the premiums charged to near-seniors to be five times those charged to younger, healthier people, instead of the ACA’s ratio of 3:1. And it abolishes the ACA’s rules on the minimum actuarial value of health insurance plans, which limit the costs of deductibles and co-pays. The result is that the health insurance plans under the GOP proposal will not only be subsidized at lower rates, but both premiums and out of pocket costs will be higher.

If this were not bad enough, the changes to the GOP plan in the MacArthur amendment allow states to opt-out of ACA regulations that were specifically designed to protect those in the 50 to 64 bracket. It allows states seek waviers for the rules that:

  • limit the costs of insurance premiums for older Americans to five times that of younger Americans. (The ACA sets this ratio as 3 to 1.)
  • prohibit insurance companies from charging people with pre-existing medical conditions more.
  • require insurance companies to provide essential benefits in all policies.

If Pennsylvania were to opt out of all three rules, near-seniors now protected by the ACA will face a health care disaster. If the age ratio limitation is eliminated, premiums for those in the 50 to 65 age range will shoot  up even more than predicted. If the prohibition on charging people with pre-existing conditions more is lifted, the burden of higher premiums will also fall on this age group. And if the essential benefits provision is lifted, insurance companies will again be allowed to offer people in this age group insurance that excludes their pre-existing conditions.

We expect that Representative Thompson is as concerned about these implications of the Republican health care plan as we are. And we urge you to contact his office to tell him that you share that concern and want him to put Republican unity aside and vote to support his constituents in the 5th district. 

The New Version of the GOP Health Care Bill is Even Worse Than The Last One

April 26, 2017 - 9:57am
Having failed to enact a plan that would lead 24 million Americans and 1.1 million in PA to lose health insurance, the House Republicans have returned with a new amendment, proposed by Representative Tom MacArthur (R-NJ), which would lead to larger losses.   Though this new proposal is being touted as a compromise between moderate and far-right Republicans, in reality it is a surrender to the demands of those on the right who have repeatedly rejected the notion that the risks of illness should be shared by all of us, young and old, healthy and sick. The new proposal would place the burden of health care on those who, because of their age or medical condition, find that burden most difficult to bear:  
  • It allows states to opt-out of the rule that prohibits insurance companies from charging people with pre-existing medical conditions more.
  • It allows states to opt-out of the rule that limits the costs of insurance premiums for older Americans to five times that of younger Americans. (The ACA sets this ratio as 3 to 1.)
  • It allows states to opt-out of the rule that requires insurance companies to provide essential benefits in all policies, and will make it possible for insurance companies to deny health care for critical medical conditions.
Eliminating these regulations will make insurance unaffordable for millions more in the country as a whole and hundreds of thousands more in Pennsylvania. In Pennsylvania, 5.3 million people under the age of 65 — 52% of the non-senior population — have pre-existing conditions. According to a study prepared by the Center for American Progress, a 40 year old who has breast cancer will pay a surcharge of $32,740 a year for health insurance. If he or she suffered from depression, the surcharge would be $9,700 a year, for diabetes $6,390 and for asthma, $4,950. But it would be just as bad for seniors; in addition to being hit with the surcharges for pre-existing conditions, a 60-year old making $22,000 a year would see their net premiums rise by an average of $9,271 under this proposed legislation.   While the MacArthur amendment would require states opting out of these rules to establish high-risk pools for those who could not secure insurance, it does not provide the funding necessary to make them work.   This proposal is not a replacement of the ACA’s guarantee of quality, affordable health care for all. It is a near-complete abandonment of that guarantee.   The Pennsylvania members of the House of Representatives who opposed or said they would have opposed the last Republican plan, and who have repeatedly defended the regulation that would be repealed in this new proposal, have been given no reason to support it now.

The New Version of the GOP Health Care Bill is Even Worse Than The Last One

April 26, 2017 - 9:57am
Having failed to enact a plan that would lead 24 million Americans and 1.1 million in PA to lose health insurance, the House Republicans have returned with a new amendment, proposed by Representative Tom MacArthur (R-NJ), which would lead to larger losses.   Though this new proposal is being touted as a compromise between moderate and far-right Republicans, in reality it is a surrender to the demands of those on the right who have repeatedly rejected the notion that the risks of illness should be shared by all of us, young and old, healthy and sick. The new proposal would place the burden of health care on those who, because of their age or medical condition, find that burden most difficult to bear:  
  • It allows states to opt-out of the rule that prohibits insurance companies from charging people with pre-existing medical conditions more.
  • It allows states to opt-out of the rule that limits the costs of insurance premiums for older Americans to five times that of younger Americans. (The ACA sets this ratio as 3 to 1.)
  • It allows states to opt-out of the rule that requires insurance companies to provide essential benefits in all policies, and will make it possible for insurance companies to deny health care for critical medical conditions.
Eliminating these regulations will make insurance unaffordable for millions more in the country as a whole and hundreds of thousands more in Pennsylvania. In Pennsylvania, 5.3 million people under the age of 65 — 52% of the non-senior population — have pre-existing conditions. According to a study prepared by the Center for American Progress, a 40 year old who has breast cancer will pay a surcharge of $32,740 a year for health insurance. If he or she suffered from depression, the surcharge would be $9,700 a year, for diabetes $6,390 and for asthma, $4,950. But it would be just as bad for seniors; in addition to being hit with the surcharges for pre-existing conditions, a 60-year old making $22,000 a year would see their net premiums rise by an average of $9,271 under this proposed legislation.   While the MacArthur amendment would require states opting out of these rules to establish high-risk pools for those who could not secure insurance, it does not provide the funding necessary to make them work.   This proposal is not a replacement of the ACA’s guarantee of quality, affordable health care for all. It is a near-complete abandonment of that guarantee.   The Pennsylvania members of the House of Representatives who opposed or said they would have opposed the last Republican plan, and who have repeatedly defended the regulation that would be repealed in this new proposal, have been given no reason to support it now.

Our Upside-Down Tax System

April 25, 2017 - 10:33am

The Pew Research Center released the findings from a recent survey (conducted April 5-11, 2017) that shows an increasing number of Americans find our current tax system unfair.

What do people believe is most unfair about our tax system? Nearly 2/3 (62%) of Americans are bothered “a lot” because some corporations do not pay their fair share in taxes; 60% are equally bothered because some wealthy people don’t pay their fair share.

A significantly less number of Americans are bothered by the amount they pay in taxes (only 27% are bothered “a lot” by this).

What does this tell us?

Americans are ready to fix our unfair tax system. In Pennsylvania, we have a chance to do just that.

What people perceive about corporations and the wealthy not paying their fair share in taxes is, in fact, true. Especially in Pennsylvania.

First let’s look at the wealthy.

The chart below shows that higher income taxpayers pay a lower share of their income in state and local taxes. The top one percent pays less than half of the tax rate of the middle class and two-third’s less than the lowest 20% (earning less than $22,000 a year). We refer to this as an upside-down tax system because it is those people who earn the least amount of money that are paying the highest proportion in taxes and vice versa.

 

Not all states have such a system.

Take a look at Delaware:

or Maryland:

or West Virginia:

Now, let’s look at corporations. The graph below shows how corporate taxes, as a percentage of the state’s general fund revenue over time, has been declining since 1972. In 1972, corporate taxes accounted for 30% of the general fund revenue while today they only account for 17%.

No wonder the state struggles to pay for the services Pennsylvanians want, like quality public education for our kids and human services that help care for our most vulnerable.

Senate Bill 555, otherwise know as the Fair Share plan, proposes to fix this upside down tax system by dividing our Personal Income Tax into two parts: 1) a tax on wages and interest and; and 2) a tax on income from wealth. This plan would raise $2 billion a year by increasing tax on income from wealth (from the current rate 3.07% to 6.5%) and decreasing the tax on wages and interest from 3.07% to 2.8%.

Still not convinced? Compared to neighboring states, with this plan the top 1% in Pennsylvania will still have an overall tax rate of 3.6%, below Ohio (3.7%), Maryland (4.2%), Delaware (4.9%), New York (6.6%) and New Jersey (6.6%).

And that’s not all. With the Fair Share plan, 85% of Pennsylvanians will see their taxes decrease or stay the same. Which, according to the Pew Research Center study, is not most people’s primary concern. Ensuring that corporations and the wealthy pay their fair share is.

The Fair Share plan, then, is exactly the kind of public policy Pennsylvanians will support. Will our elected officials?

To learn more about the Fair Share plan in PA, go to http://pennbpc.org/fair-share-tax-support-public-investment-pennsylvania.