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What's At Stake: House Transportation and Housing Spending Bill Would Cut Rail Investments and Rental Assistance

September 13, 2013

Attempts by House Republicans to cut domestic programs below this year's already-low post-sequestration spending levels ran into trouble in late July when the House Republican leadership pulled legislation from the House floor (H.R. 2610) that would have funded the Department of Transportation and the Department of Housing and Urban Development (HUD). According to reports, the bill was pulled because it lacked sufficient support to pass.

What's At Stake: Sequestering Meals on Wheels Could Cost the Nation $489 Million per Year

April 30, 2013

Sequestering Meals on Wheels funds could cost taxpayers far more than it saves. While across-the-board spending cuts that began March 1, called sequestration, are expected to reduce spending on Meals on Wheels programs this year by an estimated $10 million, these savings will be dwarfed by at least $489 million per year in increased spending on Medicaid, both this year and in each subsequent year that sequestration remains in place.Outside of Washington, waiting lists for Meals on Wheels enrollees have received media attention, but the expected savings have remained largely unquestioned. In reality, cutting Meals on Wheels will very likely increase the federal deficit by increasing the overall cost burden and shifting it to Medicaid, local charities, and other programs.Overall, Meals on Wheels saves the federal taxpayers money by helping participants live at home instead of living in comparatively expensive nursing homes. The average cost to Medicaid of nursing home care per patient is approximately $57,878 annually.By contrast, the cost to Medicaid of home care is much lower, approximately $15,371 annually, or $42,507 less than nursing home care. Nationally, according to a survey by the Administration on Aging, as many as "92% [of enrollees] say Meals on Wheels means they can continue to live in their own home."Based on these estimates, our analysis suggests that sequestering Meals on Wheels funds will actually cost the U.S. taxpayer $479 million dollars over the seven months it will be implemented during this federal fiscal year, which ends September 30 (see the appendix for details of this estimate). Moreover, because sequestration-related cuts are expected to increase in FY 2014 and beyond, if sequestration is not reversed, Medicaid-related costs will increase even more in those years.

Charitable Deduction Should Be Preserved

April 24, 2013

Congress is currently considering tax changes that could substantially reduce charitable giving in the United States. One threat is a proposal from President Obama to cap the deductibility of itemized deductions by high-income taxpayers at 28 percent. A second threat is less understood – tax reform that lowers tax rates. Tax rate changes like those in the tax reform plan proposed by Rep. Paul Ryan (R-WI) would reduce the tax benefit of charitable giving even more than the proposed Obama limit on itemized giving.This report reviews the impact on charitable giving of both the Obama proposal and tax reform more generally. It concludes that both would substantially reduce charitable giving and that the impact on the nonprofit sector could be comparable to sequestration.Should either of these proposals be seriously considered, policymakers should examine converting the existing charitable deduction into a tax credit, thereby severing the link to tax rates and protecting the incentive for charitable giving

Mitigating the Impact of a Temporary Sequester

November 2, 2012

On Jan. 2, 2013, if Congress and the president have not enacted legislation delaying or canceling a process known as "sequestration," $109 billion in automatic, across-the-board spending cuts will be applied to defense and non-defense programs in 2013.If these cuts were to occur, however, the White House would have substantial authority to mitigate and postpone the impact on those programs that are not exempt for several weeks. Moreover, large portions of the federal budget would be exempt from the cuts

Extending Current Estate Tax Rates May Force Spending Cuts in Education and Health in 2013

October 2, 2012

Regardless of the outcome of the 2012 elections, Congress and the next president are expected to consider far-reaching deficit reduction legislation either late this year or early in 2013. That legislation will reflect trade-offs between multiple revenue and spending priorities.Deficit reduction proposals forwarded by the Obama administration and both parties in Congress have included proposed cuts for many federal programs. The Obama administration has proposed reining in the growth of spending on Medicare, Medicaid, and other entitlement programs. Congressional Republicans have proposed cutting spending on most federal programs, including education, the environment, transportation, and many others.Much of the debate between the parties has centered on tax policy, particularly their differing treatment of households with annual incomes over $250,000. One of the issues currently being debated is the estate tax, which levels a modest tax (averaging 14.5 percent of the total value) on the top 0.15 percent of inherited estates, while leaving the vast majority of estates (99.85 percent) untaxed.This analysis examines the array of options currently being considered for the estate tax. With wealth disparities between the wealthy and middle class continuing to grow under current law, now is not the time to reduce or continue already low rates of taxation on wealth inherited from the top one percent of estates.