Adam Carasso: All Publications, Events and Press

New America Report in ReportNet | 'Hunger grows, pie shrinks'

Communications — Sat, 28 Jun 2008 09:33:00 -0400

...According to the Urban Institute and New America Foundation report, federal spending on children's nutrition programs increased by a tenth of a percent from 2006 to 2007.

Other children's programs that have seen at least some increase in federal spending, the report notes, include school improvement (.4 percent), and foster care (.8 percent). Those in decline include Head Start (down 2.5 percent) and Temporary Assistance for Needy Families (down 2.8 percent)...LINK

Kids' Share 2008

Fiscal Policy — Mon, 23 Jun 2008 02:00:00 -0400

Children are a declining priority in the federal budget -- a trend that shows no signs of stopping. In 2007, the federal government paid out $2.7 trillion through spending programs and disbursed roughly another $1 trillion through the tax code. Rapidly expanding entitlement programs -- Medicare, Medicaid, and Social Security -- and the country's defense system consumed the largest shares of the budget, while spending on children remained essentially stagnant and did not keep up with growth in the economy.

Our second annual Kids' Share report on the state of the children's budget looks comprehensively at trends in federal spending and tax expenditures on children. Again, we determined how much the federal government spent on children and how programs for children fared against other national priorities in the federal budget. We also explored how future budget planning will affect children.

This report echoes what we found in our Kids' Share 2007 report -- the amount spent on children's programs is waning. And neither relatively slower growth in the economy in fiscal 2007 nor changes in party control of Congress affected this trend.

Kid's Share Fact Sheet: How Children Fare in the Federal Budget

Historically, children have not been a priority.

From 1960 to 2007 federal spending on children rose from just 1.9 to 2.6 percent of GDP. Spending on the big three entitlement programs -- non-child portions of Social Security, Medicare, and Medicaid -- nearly quadrupled from 2.0 to 7.9 percent of GDP.
Children’s share of domestic federal spending -- spending that excludes defense, non-defense homeland security, and international affairs -- declined from 20.2 to 16.2 percent from 1960 to 2007.

Last year, children’s spending did not keep pace with growth in the gross domestic product (GDP).

The children’s budget grew 1.6 percentage points slower than GDP between 2006 and 2007, inching up just 0.7 percent in real dollars. Spending on the big three entitlement programs -- non-child portions of Social Security, Medicare, and Medicaid -- rose 2.9 percentage points faster than GDP and 5.2 percent in real dollars.
Even while spending on children’s health programs grew 2.2 percentage points faster than GDP between 2006 and 2007, spending on education declined by 4.4 percentage points relative to growth in the economy.

The next Congress can affect future trends in children’s spending.

Six major programs are up for reauthorization or extension in the next Congress: State Children’s Health Insurance Program, No Child Left Behind, Child Care and Development Block Grant, Child Tax Credit, Child and Dependent Care Tax Credit, and the Earned Income Tax Credit.

Absent policy changes, children’s spending will continue to be squeezed in the next decade.

If current spending and revenue policies continue, children’s share of domestic federal spending will decline from 16.2 percent in 2007 to 13.8 percent by 2018.
As a slice of GDP, children’s spending will decline from 2.6 percent in 2007 to 2.2 percent in 2018, while Social Security, Medicare, and Medicaid will rise from 7.9 to 9.6 percent.
While domestic spending is projected to grow by $771 billion between now and 2018, the type of budget baseline used by the nation’s budget offices indicate that children will reap only 7.1 percent, or $55 billion, of this.

For the full text of the report and the PDF version of the fact sheet, please see the PDFs attached below.

How Much Does the Federal Government Spend To Promote Economic Mobility, And For Whom?

Fiscal Policy — Thu, 17 Apr 2008 09:30:00 -0400

In an economically mobile market economy, individuals and families are able to raise their private incomes, wealth, and ability (sometimes referred to as human capital) over time and across generations. In the United States, many associate economic mobility with the pursuit of the American Dream. Education, work experience, and saving enhance the opportunity for upward economic mobility. To this end, many federal spending and tax expenditure or tax subsidy programs aim to enhance economic mobility. But exactly how much does the federal government encourage economic mobility? What form does this encouragement take? And who benefits from these efforts?

To begin answering these questions, we trace federal expenditures and tax subsidies through an array of spending and tax programs that can be broadly classified as aimed at enhancing economic mobility. We show these expenditures in 1980, 2006, and projected to 2012 under the type of budget baseline developed by the Congressional Budget Office. Within the federal mobility budget, we classify several hundred programs into 10 broad budget categories:

Employer-related work subsidies (e.g., 401(k) plans and exclusion of employer contributions for medical insurance premiums and medical care);

Homeownership (e.g., capital gains exclusion on home sales and exclusion of net imputed rental income on owner-occupied homes);

Savings and investment incentives (e.g., dividend exclusion and expensing of certain small investments);

Education and training (e.g., Title I Education for the Disadvantaged, higher education, and Job Corps);

Child health and nutrition (e.g., Medicaid and child nutrition);

Work supports (e.g., earned income tax credit [EITC] and child care entitlement to states);

Other child well-being (e.g., foster care and children’s welfare services);

Business incentives and development (e.g., Economic Development administration and Small Business Administration);

Citizenship services (e.g., refugee and entrant assistance); and

Equal opportunity services (e.g., minority business development and equal Employment Opportunity Commission).

We separate expenditures and subsidies in the remainder of the budget into other assistance largely aimed at maintaining income and increasing consumption
(e.g., Social Security, Medicare, cash welfare, or SSI), or other spending largely for public goods (e.g., public infrastructure and research). The distinctions between mobility versus consumption and individual versus public goods are, like all budgetary classifications, somewhat blurred. For instance, programs that target a defined group, such as homeowners or renters, are usually counted in mobility or in consumption, respectively. Programs with geographic targets, such as the Appalachian region or areas affected by Hurricane Katrina, without identifying corporate or individual beneficiaries, are classified as public goods even though individuals or the firms that employ them are receiving the funds at some point. Thus, budget classifications are not meant to value alternative uses of public funds but to help sort out and account for the nation’s established priorities. Here we attempt to tease out through a budgetary exercise how much of the federal budget is directed toward improving individual economic mobility.

Our findings are as follows:

A considerable slice of federal funds has been aimed toward programs promoting mobility at some level. In 2006 alone, about $212 billion or 1.6 percent of gross domestic product (GDP) in direct spending and another $534 billion or 4.1 percent of GDP in tax subsidies went to programs aimed at promoting mobility, for a rough total of $746 billion. (The measure itself is rough because of the inevitable issues of categorization, and because one cannot strictly sum tax expenditures together.)

Roughly 72 percent of this $746 billion in mobility expenditures, or $540 billion, is delivered mainly through employer-provided work subsidies, aids in asset accumulation, and savings incentives. This spending flows mainly to middle- and higher-income households and often excludes lower-income households or provides them comparably little in benefits.

The remaining 28 percent, or $205 billion, of the mobility budget is channeled through programs that favor lower- to moderate-income individuals.

Even when the tax and spending incentives directed at middle-income households provide them with greater (relative) benefits than the rich receive, the effect may be to inflate key asset prices (e.g., higher prices for homes than would otherwise be the case). Such inflation places these assets further out of reach for the excluded poor and lower middle-income classes. Consequently, the absolute and relative mobility of lower-rung groups is undercut.

From 1980 to 2006, the mobility budget as measured here has risen from 5.2 to 5.7 percent of GDP. During this same period, income maintenance programs rose slightly less, from 9.3 to 9.9 percent (with non-child Social Security growing substantially while the rest of income maintenance fell).

Income maintenance programs tend to be moderately more directed toward those with lower incomes. At times, however, these programs may impede economic mobility by discouraging work and saving, especially for those with the fewest resources. (We do not assess whether these programs help in achieving greater equalization of consumption, which is a different objective than mobility, as measured by independent economic status.)

Finally, much of the spending that falls into our residual budget category includes public goods that may also promote absolute mobility for the population as a whole. We do not examine that possibility here. At the same time, most of these programs are not directed toward promoting relative mobility.

The net result is a budget of direct spending and tax subsidies that attempts to promote absolute economic mobility for some but, in many areas stymies relative and intergenerational mobility in the acquisition of private assets, income, education, and ability. Trend lines into the future show a likely deterioration, not improvement, in these conditions.

For the full text of the paper, please see the PDF attached below.

Adam Carasso in McClatchy News | 'Pensions for Everyone'

Communications — Mon, 14 Jan 2008 10:04:00 -0500

Pensions for Everyone (McClatchy-Tribune) In a new discussion paper for the Urban-Brookings Tax Policy Center, Adam Carasso of the New America Foundation and I estimate that accounts that collect 3 percent of payroll would provide 13.8 percent of final wages at retirement for every worker. Our paper, "Tax Considerations in a Universal Pension System," also shows how targeted tax subsidies could lead to even larger benefits for low- and moderate- income workers. ...

New America in Roll Call | 'Moderate Graybeards Need Top 10 Agenda'

Communications — Thu, 03 Jan 2008 12:14:00 -0500

Moderate Graybeards Need a Top 10 Agenda (Roll Call) One possible model is the New America Foundation's proposed "progressive consumption tax," which would base taxes on the difference between income and savings, with rates rising with income. ...

How to Hit the Trifecta

Cecille Isidro — Wed, 25 Jul 2007 09:40:00 -0400

Rising insecurity in the oil producing regions of the world along with rising carbon levels in the atmosphere are pushing Congress to update our nation’s energy policies. But far from providing a bold solution to our converging environmental, energy and security dilemmas, the bill that has come out of the Senate to gradually increase fuel efficiency standards relies on timid half-measures. Congress should instead consider a more effective and long-overdue step towards energy independence and environmental protection -- implementing a broad-based energy tax.

Clearly, U.S. energy policies need reforming. Oil-producing nations hold too much sway over our pocketbooks and our way of life. Given the rising instability and anti-U.S. sentiment in many oil producers around the world, an energy policy that will afford us more independence is a crucial matter of both national and economic security. As many of us recall, oil embargos and energy price spikes can wreak economic havoc, pushing inflation up and hurting consumers, particularly the poor. And global warming, triggered by accumulating carbon emissions in the atmosphere -- of which the U.S. is the chief contributor -- is advancing faster than previously believed, heightening the need to embrace a corrective, low-carbon energy production strategy.

Simply put, the Senate bill is not aggressive enough to do the job. Its centerpiece is a gradual hike in our national fuel efficiency standards -- so gradual that the U.S. wouldn’t reach European levels of energy efficiency until 2020. Not only is the pace too slow given the challenges we face, it also leaves the window open for years of business lobbying to loosen the standards, making it discouragingly likely that existing loopholes would be abused and the policy weakened further. And fuel efficiency standards neglect the many other sources of CO2 emissions that pollute the environment.

Implementing a broad-based energy tax is the preferable approach. By making traditional energy sources more expensive, price sensitive consumers -- that is, most of us -- would change our driving habits, power usage and appliance purchases in response to the higher costs. Those who did not would at least have to pay a fair price for the pollution and energy dependencies they created. At the same time, the new taxes would spur technological innovation by inducing industries to harness alternative and renewable energy sources, and design more energy-efficient products. The new tax shouldn’t be a pure "carbon tax," which would saddle coal-based energy production with steep price increases while allowing us to maintain our national addiction to oil with little abatement. Rather, a comprehensive energy tax ought to discourage in a relatively uniform way the use of all energy sources that contribute to global warming.

Instead of costing money, the way subsidies to energy-related industries do, an energy tax would allow the government to raise substantial revenues -- easily $50-$100 billion a year -- a desirable bonus during a period such as this, when the government is strapped for cash. If, given the current anti-tax sentiment in Washington, Congress is unwilling to implement a pure tax increase, it could always use the new revenues to cut other taxes such as corporate taxes, or income taxes for the least well-off who would be hit hardest by new energy taxes. Either approach would result in a tax system that is both more efficient and fairer.

Politicians have thus far been hesitant to use tax policy as a lever to break our unhealthy dependency on energy, due in large part to the scars left over from the vicious fight over BTU taxes during the Clinton Administration. But, the world has changed since then. Growing awareness about the dangers presented by instability in the Middle East and environmental degradation leave the public more receptive to bolder options. The strong business lobbies that have been so effective in opposing energy policy changes in the past look increasingly like special-interest-dominated spoilers.

The bottom line is that a broad-based energy tax would be a rare policy trifecta, curbing U.S. energy consumption, reducing pollution and providing a reliable new source of revenue. If Congress really wants to go green, it will have to be willing to be bold.

Child Well-Being in America and Abroad

Communications — Thu, 28 Jun 2007 14:59:00 -0400

A New America Event
07/17/2007 - 10:30am

The Foundation for Child Development Child Well-Being Index (CWI) provides a research-based look at the status of children in the United States over the last 30 years. Now, for the first time, the CWI examines the status of American children in relation to that of children in other countries. The CWI uses English-speaking democracies with strong market-based systems to provide a more meaningful “apples to apples” portrait of the relative well-being of American children. The study contrasts the well-being… more