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How Access To Food Stamps Leads To Better Health And Economic Outcomes

Children who have access to the federal food stamp program — now known as the Supplemental Nutrition Assistance Program (SNAP) — in the earliest years of their lives have better health and economic outcomes later in life depending on their gender, according to a new academic study of the government safety net by professors Hilary Hoynes, Diane Whitmore Schanzenbach, and Douglas Almond.

Across genders, children whose mothers had access to food stamps during pregnancy and in their earliest years were less likely to have long-term health problems like diabetes, obesity, and high blood pressure in adulthood. Women who had similar access, meanwhile, are more likely to become economically self-sufficient as adults, the study found:

We find that access to food stamps in utero and in early childhood leads to significant reductions in metabolic syndrome conditions (obesity, high blood pressure, heart disease, diabetes) in adulthood and, for women, increases in economic self-sufficiency (increases in educational attainment, earnings, income, and decreases in welfare participation).

Because nutrition is especially important for long-term development early in life, the positive effects of food stamps are especially strong for children who benefit from the program before birth and up to the age of five. The long-term developmental effects begin to subside after that age, though there are still obvious positive nutritional effects for children who remain on the program after that.

The food stamp program is especially vital in times of economic downturn or famine, the researchers wrote, since children can be exposed to lower food levels that jeopardize future development. Food stamp enrollment in the United States grew to 15 million households in 2011, according to government figures released Wednesday. The program’s growth during and after the Great Recession has come under the scrutiny of budget-cutters in Congress, even as it helps keep millions of Americans out of poverty each year.

Climate Progress

Exclusive: Since Election Day, Big Oil Lobby Dropped $3 Million On Ads To Protect Its Tax Loopholes

On election night, polluter-backed candidates lost in some of the most expensive races targeted by polluters, despite outside ad spending that tallied to $270 million.

The American Petroleum Institute already has 2014 in its sights, and it is spending aggressively to protect the oil industry’s multi-billion-dollar tax breaks. Three weeks since election day, API has spent $3 million on TV ads, according to a ThinkProgress analysis of Kantar Media’s CMAG data. That is already $1 million more than what API spent in the final two months of the election, as part of its “I’m an Energy Voter” campaign.

A bulk of the spending, $600,000, targets specific senators over Big Oil’s $4 billion annual tax breaks, all of whom are up for reelection in 2014. All but two voted in March to end oil subsidies, a vote blocked by 47 senators who have taken more than $23.5 million from the oil and gas industry.

Here is an example of one ad directed at Sen. Mark Warner (D-VA):

NARRATOR: America spoke loudly. Clearly, we want a commonsense plan to help people succeed. Senator Mark Warner can make energy a big part of improving our economy. He can choose economic growth and American jobs, not slow them with job-killing energy taxes. Let’s take advantage of America’s energy resources to power growth. American energy – not higher taxes on energy – will create jobs. Let’s get to work.

Ending the industry’s tax breaks would not affect Americans’ gas prices, or kill jobs. Factcheck.org writes that “nonpartisan congressional analysts and industry experts say higher taxes would have little or no effect on gasoline prices.” And at the same time oil enjoyed low tax rates and earned high profits, Exxon, Shell, and BP still shed 17,500 jobs.

ExxonMobil, Chevron, and ConocoPhillips have paid federal tax rates well below the 35 percent top corporate rate. ExxonMobil, for instance, paid a 13 percent tax rate in 2011, after drilling deductions and benefits, and 14 percent on average between 2008 and 2010.
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GOP Senator’s Crazy Reasoning: Raising Taxes On The Rich Would Hit The Poor ‘The Hardest’

Sen. Mike Lee (R-UT)

Cloaking his predilection for the rich as concern for the less fortunate, Sen. Mike Lee (R-UT) argued Wednesday that raising taxes on the wealthy would primarily hurt the poor. Lee’s comments came on former Arkansas Gov. Mike Huckabee’s (R) radio show as the two discussed the looming fiscal showdown in Congress.

“The reason we worry about raising taxes on anyone – even raising taxes on the rich,” Lee argued, is “that will hit the poorest among us the hardest.” Lest listeners get the wrong idea, the Utah Senator insisted, “it’s not that we’re looking out for the rich.”

LEE: People need to understand that the reason we worry about raising taxes on anyone – even raising taxes on the rich – it’s not that we’re looking out for the rich, it’s not that we’re concerned that the rich won’t be able to fend for themselves, because they will. It’s because we worry about the consequences that will inevitably result from that action and that will hit the poorest among us the hardest.

This prospect, frequently repeated by conservatives, that raising taxes on the wealthy will decimate the economy and destroy job creation (and thus hurt the poor) is simply not supported by empirical evidence. As these three graphs show, the nation’s best GDP growth and job creation rate in the last 60 years actually occurred when the top marginal income tax rate was between 75 and 80 percent. The worst period for both measurements occurred when the top rate was 35 percent, as it stands today. In fact, job growth and gross domestic product has little, if any, correlation to the tax rate on wealthy Americans.

Of course, Lee’s compassion for the poor does not extend to the actual government services that provide a safety net for those less fortunate. He voted for the House Republican budget that slashes low-income programs in order to finance the very tax breaks he supports. Lee also authored the Cut, Cap, and Balance constitutional amendment, a proposal so extreme that not even the GOP budget would go far enough in its cuts to be considered legal.

Extending Unemployment Insurance Would Create 300,000 Jobs Next Year

While Washington obsesses over the so-called “fiscal cliff” — the set of tax increases and spending cuts scheduled to take place at the end of the year — America’s unemployed are facing a cliff of a different kind. In January, the expanded federal unemployment insurance program will expire, cutting off benefits for millions of Americans.

According to the Congressional Budget Office, extending unemployment insurance won’t just help those Americans struggling to find work in a still-sluggish economy. It will also help create 300,000 jobs:

For the three options involving extensions for an entire year—Options 1, 2, and 4—economic output would be $1.10 higher per dollar of budgetary cost, on average, in 2013, CBO estimates, and employment would be increased by six years of full-time-equivalent employment per million dollars of budgetary cost (see figure below).

Under Option 1 [a full, year-long extension], for example, which extends the benefits provided under the current EUC and EB programs at a total budgetary cost of $30 billion, CBO estimates that gross domestic product adjusted for inflation would be 0.2 percent higher in the fourth quarter of 2013 and that full-time-equivalent employment would be 0.3 million higher at that time than it would be under current law.

Unemployment insurance kept 2.3 million people out of poverty last year, despite America’s system being one of the stingiest in the developed world. Already, 500,000 Americans have lost benefits due to the program’s faulty design and Congress restricting eligibility. (HT: Matt O’Brien)

GOP Congressman Scapegoats Low-Income Americans In Campaign Against Cell Phone Program

Conservatives stirred up outrage this summer over the “Obama phone,” which they claimed was a free cell phone handed out by President Obama to low-income people in exchange for their votes. In fact, the Lifeline phone program was first conceived in 1985 by President Ronald Reagan as a way to help Americans below the poverty line connect to jobs, family and emergency services. Nor are the phones free; Lifeline provides low-income Americans with a monthly subsidy of $9.25 for cell phones or land lines.

Nevertheless, one Republican congressman, Rep. Tim Griffin (R-AR) is taking advantage of the renewed political firestorm to push stalled legislation that would gut the program. Griffin wants to take away the prepaid cell phones that were introduced to the Lifeline plan in 2005 under George W. Bush. In a video promoting his bill, Griffin points to the Universal Service charges on phone bills as evidence of the “wasteful program.”

Though Griffin is trying to convince consumers they are paying for a “cell phone giveaway” for poor people, the Lifeline program is actually only one part of this fee. The Universal Service fee also covers the cost of providing “reasonable rates for those living in rural and high-cost areas, income-eligible consumers, rural health care facilities, and schools and libraries.” The companies with a Universal Service charge have chosen to pass on the cost to the consumer. The fee is usually around $2.50 to $2.75 a month per family. In 2011, Universal Services programs cost $8.1 billion, with $1.75 billion going to the Lifeline phone program for 13.7 million households.

Griffin’s proposal to restrict the program to landlines is also impractical, as people living in poverty are very unlikely to own a permanent residence they could install a landline. A CDC survey in 2010 found that adults living in poverty are far more likely to depend on a cell phone than higher income people who also have a landline.

Moreover, Griffin’s bill ignores cost-saving reforms that the FCC already began implementing at the beginning of 2012. The Lifeline program now has databases that prevent multiple subsidized phones per person and more efficiently tracks people who are eligible for the phones. There is also a new rule that restricts phones to one per household. These reforms are projected to save $2 billion in 3 years.

Why The ‘Fiscal Cliff’ Makes Norquist’s Anti-Tax Pledge Irrelevant

Americans for Tax Reform President Grover Norquist

Rep. Tom Cole (R-OK) yesterday said that Republicans should embrace President Obama’s offer to extend the Bush tax cuts on income below $250,000 immediately, arguing that to do so would not violate Grover Norquist’s anti-tax pledge that so many Republicans have signed. “I don’t see that as a violation of my pledge,” Cole said, noting that “Republicans would be voting to lower [taxes] for most folks and do nothing — which would result in an increase — for the rest.”

Indeed, the pledge — which Norquist uses as a cudgel to cow any Republican who strays from his no-tax-increase line — is based on current law, so only extending some of the Bush tax cuts still counts as a tax reduction and doesn’t violate the pledge. Norquist himself admitted as much last year:

According to Mr. Norquist’s interpretation of the Americans for Tax Reform pledge, lawmakers have the technical leeway to bring in as much as $4 trillion in new tax revenue — the cost of extending President George W. Bush’s tax cuts for another decade — without being accused of breaking their promise. “Not continuing a tax cut is not technically a tax increase,” Mr. Norquist told us. So it doesn’t violate the pledge? “We wouldn’t hold it that way,” he said.

This interpretation makes sense, because if it weren’t true, then voting for any temporary tax cut would technically violate the pledge, as doing so would mean voting for a tax increase at some point in the future, as conservative writer Kevin Glass noted. Citizens for Tax Justice agreed: “Rep. Cole is correct because the Bush tax cuts are temporary tax cuts that are specifically written to expire at a certain date. Any extension of part of those tax cuts is a new tax cut that reduces revenue, and is ‘scored’ by the Joint Committee on Taxation and the Congressional Budget Office as a revenue loss.”

Other Republicans have hinted that they think the same way as Cole. “I don’t intend to violate any pledge,” said Sen. Pat Toomey (R-PA). “What we’re faced with in just a few weeks is a massive tax increase. If I can help ensure that we don’t have that tax increase, then I believe I’ve fulfilled my pledge to fight for the lowest possible taxes.”

Last year, Norquist tried to muddle his statement, while never quite denying that allowing tax cuts to expire is in accordance with the pledge. Norquist’s organization, Americans for Tax Reform, confirmed the same thing when questioned by ThinkProgress.

Congressman Hawks Nonsense For Sugar Industry, One Of His Largest Donors

Rep. Tom Rooney (FL-16)

Rep. Tom Rooney (R-FL) made a nonsensical argument in a recent op-ed piece that just happens to support a tax benefit for one of his largest donors, the sugar industry. Rooney’s op-ed defends the heavy tariffs the U.S. places on imported sugar as means to prop up the American industry, despite Rooney’s own stated belief that “expanding free trade” is critical to the growth of the U.S. economy:

Sugar producers from my home state of Florida, and across this country, have some of the lowest production costs in the world. However, they cannot compete with the heavy hand of the Brazilian government, or with Brazil’s sugar labor force that, in some cases, makes just 50 cents an hour.

After European governments allowed Europe’s sugar industry to go out of business, 120,000 Europeans lost their jobs, sugar supplies fell and prices rose. There were even reports of sugar rationing in Germany. America hasn’t seen sugar rationing since World War II, the last time we depended on foreign sugar producers.

Rooney is simultaneously arguing that 1) Brazil would destroy the American sugar industry by selling cheaper sugar and 2) that sugar would be more expensive if we imported more of it. Both cannot be true. And while Rooney claims sugar tariffs don’t “cost taxpayers a dime,” the GAO estimated in 2000 that they knocked $900 million dollars off of U.S. GDP in 1998, a figure that rises to $1.2 billion in 2011 dollars (assuming losses were constant).

Moreover, the European sugar industry is anything but out of business: the EU supplies roughly 10 percent of the world’s sugar. The 120,000 jobs figure comes from a study written by a consultant to the sugar industry that was released at the 29th Annual Sweetener Symposium.

Trusting the sugar industry appears to be a theme for Rooney. U.S. Sugar, America’s largest sugar corporation, was the second-largest corporate contributor to Rooney’s campaign in the last election. He also received a significant donation from U.S. Crystal, another major player in the American sugar market. Rooney’s district, FL-16, is also the single-largest sugar cane growing district in the country.

The U.S. sugar industry is, of course, the staunchest supporter of maintaining the sugar tariff.

Norquist: Republicans Should Hold Federal Government Hostage Every Month


Anti-tax activist Grover Norquist’s hold over Republicans has slipped in the past week, as several prominent GOP senators and one congressman have signaled willingness to break from Norquist’s strict pledge to never raise taxes.

The debt ceiling fight in 2011 almost led to an unprecedented U.S. credit default because House Republicans refused to break from Norquist’s pledge and agree to any tax increase. While most Americans want to avoid another debacle, Norquist is now calling for even more frequent fights over the debt ceiling. During Wednesday’s Playbook Breakfast with Mike Allen, Norquist proposed that Congress force President Obama into monthly debt ceiling negotiations, or even weekly “if he misbehaves”:

MIKE ALLEN: This president is not going to extend [Bush tax cuts], he knows that he loses his leverage that way.

NORQUIST: Well, the Republicans also have other leverage. Continuing resolutions on spending and the debt ceiling increase. They can give him debt ceiling increases once a month. They can have him on a rather short leash, you know, here’s your allowance, come back next month.

ALLEN: Okay, wait. You’re proposing that the debt ceiling be increased month by month?

NORQUIST: Monthly if he’s good. Weekly if he’s not.

Watch it:

The last high-stakes fight over the debt ceiling resulted in record low approval ratings for Congress and the downgrading of U.S. credit for the first time in history. That one fight also cost taxpayers $18.9 billion. Norquist now wants to replicate this debacle 12 or possibly 52 times per year.

As Debt Ceiling Looms, Last Year’s Debacle Cost Taxpayers $18.9 Billion

Congressional leaders and President Obama are currently negotiating around the so-called “fiscal cliff,” the package of automatic spending cuts and tax increases that were scheduled during last year’s impasse over raising the debt ceiling. Sometime in the beginning months of 2013, though, the federal government will hit its debt limit again, necessitating another debt ceiling increase.

Democratic leaders have hinted that a debt ceiling increase should be a part of fiscal cliff negotiations. However they choose to do it, Congress would be wise to avoid repeating the mistakes it made last year, because Republican demands for broad spending cuts (and their accompanying intransigence on taxes) that nearly led to a credit default during debt ceiling negotiations actually cost taxpayers billions of dollars, the Washington Post reports:

The irony is that another political fight over the debt ceiling could cost the government even more money. The Bipartisan Policy Center has calculated that last year’s debt ceiling fight will ultimately cost taxpayers $18.9 billion over 10 years, due to elevated interest rates between January and August 2011.

The Bipartisan Policy Center study isn’t the only estimate showing that the debt ceiling impasse ultimately cost taxpayers. The U.S. Treasury estimated that it increased the nation’s borrowing costs by $1.3 billion last year, and Scott Lilly from the Center for American Progress estimated that it cost the economy at least a million jobs. Monthly job growth was cut in half during the three-month fight, and economists Justin Wolfers and Betsey Stevenson wrote that ” “employment is likely still below where it would otherwise have been” without the GOP’s brinksmanship.

Still, Republicans have indicated that they are willing to create another debacle over the debt ceiling this winter. Politico reported yesterday that when Obama demanded a debt limit increase before the end of the year, House Speaker John Boehner (R-OH) responded, “There is a price for everything.”

Econ 101: November 28, 2012

Welcome to ThinkProgress Economy’s morning link roundup. This is what we’re reading. Have you seen any interesting news? Let us know in the comments section. You can also follow ThinkProgress Economy on Twitter.

  • The U.S. Treasury once again declined to name China a currency manipulator in its semi-annual report to Congress. [Bloomberg]
  • U.S. home prices have increased for six consecutive months. [Financial Times]
  • The European Union has approved a financial rescue of four Spanish banks, as long as they lay off employees. [New York Times]
  • Greece’s opposition party continues to lead in opinion polls, largely due to Greek opposition to continued austerity. [Reuters]
  • Rep. Jeb Hensarling (R-TX) will likely become the new chairman of the House Financial Services Committee. [The Hill]
  • Failed Vice Presidential candidate Paul Ryan will likely return as chairman of the House Budget Committee, which would require a waiver from the House Republican caucus. [Washington Post]
  • California’s moribund economy is finally starting to rebound. [New York Times]

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