tag:theconversation.com,2011:/africa/topics/budget-cuts-9698/articlesBudget cuts – The Conversation2023-09-21T12:44:02Ztag:theconversation.com,2011:article/2139512023-09-21T12:44:02Z2023-09-21T12:44:02ZKevin McCarthy’s leadership is an open question as budget shutdown looms and GOP infighting takes center stage<figure><img src="https://images.theconversation.com/files/549445/original/file-20230920-23-qfcfls.jpeg?ixlib=rb-1.1.0&rect=22%2C11%2C7633%2C5085&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">House Speaker Kevin McCarthy.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/speaker-of-the-house-kevin-mccarthy-addresses-reporters-news-photo/1676976025?adppopup=true">Drew Angerer/Getty Images</a></span></figcaption></figure><p><em>What do you get when you combine a tiny legislative majority, a former president itching for influence and a rogue group of lawmakers who like making headlines? House Speaker Kevin McCarthy’s hellish life these days. The pressure has been fierce on McCarthy to fashion <a href="https://apnews.com/article/mccarthy-government-shutdown-house-republicans-congress-543f93b6ad6a3f23ee3f5275e19293f9">an agreement with his caucus to stave off a government shutdown</a>. But every day seems to bring another set of demands from hardline House Freedom Caucus members, who seem unwilling to accept a deal – and willing to risk a shutdown to make their points. The Conversation spoke with congressional expert <a href="https://www.charlesrhunt.com/">Charles R. Hunt</a>, a political scientist at Boise State University, about the current political standoff, its roots and what it means for people across the country.</em></p>
<h2>Why does a small faction of GOP lawmakers have control over McCarthy?</h2>
<p>The 2022 elections were <a href="https://www.nytimes.com/2022/12/13/upshot/2022-republicans-midterms-analysis.html">much closer than Republicans thought</a> they were going to be. And there is a big difference between having a 20-vote margin and the nine-vote margin that McCarthy has now. A big part of <a href="https://theconversation.com/what-does-the-speaker-of-the-house-do-heres-what-kevin-mccarthy-will-have-for-a-job-94884">the speaker’s job</a> is to whip votes and to keep people in line, mainly in the speaker’s own party. And that becomes much more difficult when you have such a small margin.</p>
<p>McCarthy’s job is made even more difficult by the <a href="https://www.npr.org/2023/01/08/1147762006/the-house-speaker-battle-has-roots-in-the-tea-party-movement">extremist wing of the Republican Party</a>. Though the extremists have been around for years, starting with the <a href="https://www.britannica.com/topic/Tea-Party-movement">Tea Party during the Obama Administration</a>, they have changed over the years. Back then, they were hyper-focused on true ideological battles such as small government and spending cuts. </p>
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<figcaption><span class="caption">After much wrangling, Kevin McCarthy was finally announced as speaker of the House on Jan. 6, 2023.</span></figcaption>
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<p>It’s not that the current crop of lawmakers in <a href="https://www.pewresearch.org/short-reads/2023/01/23/freedom-caucus-likely-to-play-a-bigger-role-in-new-gop-led-house-so-who-are-they/">the Freedom Caucus</a> don’t want those things. But more and more, it’s not so much issue positions, but rather personality and culture that are driving this faction of Republicans – as well as the voters that they need to win. </p>
<p>They are much more interested in impeaching President Joe Biden or investigating his son, Hunter, than getting a vote on, say, immigration reform. </p>
<h2>What is the Trump factor on the House GOP?</h2>
<p><a href="https://www.theguardian.com/us-news/2023/jan/15/kevin-mccarthy-house-speaker-trump-republican-influence">The fact that Donald Trump continues to have inordinate influence</a> tells us a lot about what being conservative means right now; more than ever, it is not so much a statement of policy positions as it is a statement on <a href="https://academic.oup.com/poq/article/82/S1/866/4951269">cultural identity</a>. </p>
<p>Trump is a good example. He is <a href="https://apnews.com/article/abortion-federal-ban-trump-gop-2024-20586bbb64a511030ef58290e98f99f0">not as traditionally conservative on the issues</a> as some of his GOP opponents in the presidential race. But he embodies the conservative wing of the party <a href="https://www.brookings.edu/articles/6-things-to-know-about-rising-anti-establishment-politics-in-the-us-and-europe/">among both the voters</a> and members of Congress because of his cultural identity and his insistence on taking the anti-establishment road every time it is available to him, even if it has nothing to do with policy positions.</p>
<h2>Why is getting a budget deal more difficult to achieve with the Trump factor?</h2>
<p>It seems like no one in this far-right faction can define exactly what they want because striking a deal with McCarthy on the budget is not their endgame. Their endgame seems to be giving the congressional equivalent of the middle finger to the establishment. That was the <a href="https://theweek.com/articles/626012/donald-trump-middle-finger-entire-political-system">entire basis for the first Trump candidacy</a> in 2016. And some congressional Republicans are mimicking that because that is what their voters want.</p>
<h2>So what you’re saying is that the public interest is not what these extremists represent in Congress. They represent something entirely different.</h2>
<p>This is what’s really interesting about Congress. There’s a reasonable argument to be made that a member of Congress’ job is not necessarily to represent the broader public interest but to <a href="https://theconversation.com/4-reasons-why-abortion-laws-often-clash-with-the-majoritys-preferences-in-the-us-from-constitutional-design-to-low-voter-turnout-188180">represent the interests of their constituents</a> in their districts. And whether you like it or not, that is what these lawmakers see themselves as doing at this moment. </p>
<p>Compare the far-right wing to the more moderate Republicans in districts <a href="https://www.nbcnews.com/politics/congress/vulnerable-republicans-arent-sold-impeaching-biden-rcna98638">who are reluctant</a> to go down the impeachment route and want to strike a deal with McCarthy and the Democrats to pass a budget. But the GOP far right doesn’t appear to care about passing any significant legislation. </p>
<h2>What is the process for removing McCarthy?</h2>
<p>Most of the time, speakership battles are not contentious. And there’s always a rumbling of some kind or another from an outsider wing of the majority party. But the problem now is that, in a new rule since McCarthy became speaker, one member can bring a <a href="https://www.nbcnews.com/politics/congress/speaker-of-the-house-ousted-motion-to-vacate-rcna64902">motion to vacate</a>, which forces a vote on whether the speaker keeps their job. That does not mean that McCarthy automatically loses the speakership – it would still require votes by the whole House.</p>
<p>And it seems like the Democrats’ strategy here is to <a href="https://thehill.com/blogs/in-the-know/3797102-democrats-on-mccarthy-gop-chaos-pass-the-popcorn/">just watch the GOP self-destruct</a>. So a lot of this is what we call <a href="https://www.usatoday.com/story/news/politics/2023/02/14/long-shot-legislation-focus-republicans-118th-congress/11156048002/">messaging votes</a>. We got a lot of this in the 2010s with the Republican House voting over and over again to repeal Obamacare – even though President Barack Obama would obviously never sign that bill.</p>
<p>But the problem with McCarthy is that his majority is so slim and this faction is so extreme that it’s driving many of the <a href="https://www.theatlantic.com/politics/archive/2023/01/moderate-centrist-republicans-pragmatic-conservatives/672856/">moderate Republicans</a> crazy. The moderates want to just get through the day, and the Freedom Caucus isn’t letting them.</p>
<h2>Why should GOP infighting matter to the average American?</h2>
<p>A <a href="https://www.washingtonpost.com/business/2023/09/20/federal-government-shutdown-2023/">government shutdown</a> is not just this kind of amorphous thing that only Washington cares about. It has <a href="https://abc7.com/government-shutdown-need-to-know/13798112/">huge implications</a> for people’s everyday lives, <a href="https://theconversation.com/what-happened-during-the-last-government-shutdown-4-essential-reads-169003">especially if it drags on</a> for weeks.</p>
<p>A shutdown means slower mailing of Social Security checks, and closed national parks. A shutdown has automatic economic consequences on the stock market and in regular <a href="https://theconversation.com/federal-workers-begin-to-feel-pain-of-shutdown-as-800-000-lose-their-paychecks-109710">people’s paychecks</a>.</p>
<p>We can talk about the 2024 presidential election and Trump’s indictments all we want. But budget negotiations matter now.</p><img src="https://counter.theconversation.com/content/213951/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Charlie Hunt does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>An expert on Congress helps untangle the mess that is Kevin McCarthy’s life as speaker of the House right now.Charlie Hunt, Assistant Professor of Political Science, Boise State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2051782023-05-12T12:20:16Z2023-05-12T12:20:16ZA brief history of debt ceiling crises and the political chaos they’ve unleashed<figure><img src="https://images.theconversation.com/files/525714/original/file-20230511-17-v7jrtw.jpeg?ixlib=rb-1.1.0&rect=5%2C5%2C3988%2C2850&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">With the House GOP and President Joe Biden locked in a struggle over the debt limit, it's dark times in the U.S. Capitol.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/dramatic-clouds-over-the-u-s-capitol-as-the-congress-faces-news-photo/1246606510?adppopup=true">Bill O'Leary/The Washington Post via Getty Images</a></span></figcaption></figure><p>A draft agreement to <a href="https://www.washingtonpost.com/business/2023/05/27/debt-ceiling-talks/">raise the debt limit, cap federal spending and stave off a default</a> has been announced by Republican and White House negotiators.</p>
<p>Republicans and Democrats in the House now must review the deal. How they <a href="https://www.nytimes.com/2023/05/27/us/politics/debt-limit-deal.html">vote on it</a> will determine whether there will be a resolution to the long-running standoff, or the U.S. will plunge into an unprecedented fiscal crisis. </p>
<p>There have been numerous fiscal crises in the United States where Congress has either failed to pass a budget on time or there were doubts that the federal debt ceiling would be raised, which could cause the U.S. to default on its debt. </p>
<p>These two kinds of crises can sometimes play out at the same time. A federal budget was not adopted in time, for example, and there were threats of not increasing the debt ceiling.</p>
<p><a href="https://millercenter.org/sites/default/files/2017-01/CV%20Scheppach.pdf">I worked as</a> the deputy director of the Congressional Budget Office and the executive director of the National Governors Association, and I witnessed firsthand much of the wrangling in Congress during these crises. </p>
<p>Since 1976, there have been <a href="https://www.brookings.edu/blog/fixgov/2023/04/27/why-is-federal-spending-so-hard-to-cut-recurring-debt-ceiling-fights-will-only-be-solved-by-budget-reform/">22 shutdowns of the federal government</a> due to lack of a federal budget. </p>
<p>While these were very disruptive and damaged <a href="https://policyinstitute.iu.edu/doc/mpi/insight/2013-03.pdf">the economy and employment</a>, they pale in comparison to the potential effects of failing to lift the debt ceiling, which could be <a href="https://www.npr.org/2023/05/08/1174853895/what-happens-if-the-government-defaults-a-former-federal-reserve-economist-expla">catastrophic</a>. It could bring down the entire international financial system. This in turn could devastate the world gross domestic product and create mass unemployment. </p>
<p>Fortunately, the U.S. has never experienced a default. The <a href="https://www.npr.org/2023/04/29/1172894580/congress-has-revised-the-debt-ceiling-78-times-since-1960-a-financial-historian-">debt ceiling has been raised 78 times since 1917</a> and currently stands at US$31.4 trillion. </p>
<p>Here are three debt-limit crises I watched play out - which not only had economic consequences, but political ones as well.</p>
<h2>1995: A GOP revolution – and blunder</h2>
<p>Often, a debt-limit crisis is preceded by an election that produces a major shift in who controls Congress. In the 1994 midterm election, during President Bill Clinton’s first term, <a href="https://library.cqpress.com/cqalmanac/document.php?id=cqal94-1102765">the Republicans gained eight Senate seats and 54 seats in the House</a>, flipping both chambers. The election was seen as a Republican revolution. Bob Dole became the majority leader in the Senate, and Newt Gingrich became the speaker of the House.</p>
<p>GOP lawmakers pledged to pass a balanced budget as part of what they named their “Contract with America.” House Republicans sent Clinton a budget that <a href="https://millercenter.org/1995-96-government-shutdown">cut spending on domestic programs</a>, which he vetoed. This in turn led to a <a href="https://www.businessinsider.com/how-long-will-government-shutdown-last-2018-1">five-day shutdown of the federal government</a>. </p>
<p>Gingrich then threatened not to increase the debt limit. A Washington Post story described the House leader’s actions as “House Speaker Newt Gingrich (R-Ga.) <a href="https://www.washingtonpost.com/archive/politics/1995/09/22/gingrich-vows-no-retreat-on-debt-ceiling-increase/9f7c9620-e6aa-489e-8ace-3ebb27e349bc/">threatened yesterday to take the government into default</a> for the first time in history unless President Clinton bows to Republican demands for a balanced budget.” Clinton responded to the latest GOP budget offer with a second veto, which led to a longer government shutdown of 21 days.</p>
<p>In the end, the Republicans <a href="https://www.govexec.com/management/2023/02/i-helped-balance-federal-budget-1990s-heres-just-how-hard-it-will-be-gop-achieve-same-rare-feat/382443/">passed a budget offered by Clinton</a> and also lifted the debt ceiling.</p>
<p>There were unique aspects to this standoff. Dole was not interested in continuing the negotiation, as he was running for president. Gingrich made <a href="https://www.washingtonpost.com/archive/politics/1995/11/16/underlying-gingrichs-stance-is-his-pique-about-president/cc78a470-7093-48ba-b2d0-386e0ede1372/">comments about being snubbed</a> by the president while traveling with him on Air Force One, and the press had a field day with those comments, <a href="https://apnews.com/article/a6b650344d947fc019f12343c63de231">linking the shutdown to the snub</a>. Polling increasingly showed that the <a href="https://www.huffpost.com/entry/voters-blamed-gop-for-1995-shutdown_n_842769">Republicans were getting blamed</a> for the shutdown – a 1995 ABC poll <a href="https://www.huffpost.com/entry/voters-blamed-gop-for-1995-shutdown_n_842769">indicated 46% blamed the Republicans</a> and only 27% blamed the Democrats. </p>
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<figcaption><span class="caption">The press and Democratic lawmakers made fun of House Speaker Newt Gingrich’s pique at what he said was a presidential snub.</span></figcaption>
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<h2>2011: Budget reductions and reforms, with a side of financial chaos</h2>
<p>As in 1995, the 2011 crisis happened after an election and a major power shift on Capitol Hill. </p>
<p><a href="https://www.theguardian.com/world/2010/nov/03/us-midterm-election-results-tea-party">The election of 2010</a>, in the middle of President Barack Obama’s first term, saw the Republicans gain seven Senate seats, but not yet a majority, and a net gain of 63 House seats, making the GOP the majority. <a href="http://www.cnn.com/2011/POLITICS/07/25/debt.talks.timeline/index.html">The House then demanded</a> that Obama negotiate a deficit reduction package in exchange for raising the debt ceiling.</p>
<p>As the deadline for increasing the debt limit approached, both the U.S. domestic and even international <a href="https://home.treasury.gov/system/files/276/POTENTIAL-MACROECONOMIC-IMPACT-OF-DEBT-CEILING-BRINKMANSHIP.pdf">financial markets became chaotic</a>. The <a href="https://www.reuters.com/markets/us/us-debt-ceiling-markets-gauging-fallout-2023-02-16/">S&P 500 fell by 17%</a> and bond rates spiked. On Aug. 5, 2011, the Standard and Poor’s rating agency <a href="https://www.nytimes.com/2011/08/06/business/us-debt-downgraded-by-sp.html">reduced the rating for long-term U.S government debt</a>, which could result in higher interest rates on that debt. </p>
<p>On July 31, 2011, only two days before the U.S. government ran out of money, an agreement was reached between Congress and Obama that, once enacted, became the <a href="https://sgp.fas.org/crs/misc/R41965.pdf">Budget Control Act of 2011</a>. It reduced spending over the following 10 years by US$917 billion and authorized raising the debt ceiling to $2.1 trillion. </p>
<p>The act also included several budget reforms – a concession to Republicans by Obama and the Democrats – including creating a congressional joint select committee to make recommendations on deficit reduction. It also included an automatic provision to cut the budget should Congress fail to act.</p>
<h2>2013: ‘We got nothing’</h2>
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<span class="caption">U.S. House Speaker John Boehner, a Republican, on Oct. 8, 2013, the eighth day of a government shutdown over the debt limit crisis.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/speaker-of-the-house-john-boehner-speaks-at-the-us-capitol-news-photo/183655358?adppopup=true">Saul Loeb/AFP via Getty Images</a></span>
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<p>In January 2013, the debt ceiling that was established in 2011 was hit and the Treasury Department began extraordinary actions to continue funding necessary spending. </p>
<p>This included not paying into retirement funds of federal workers and borrowing from trust funds such as Social Security.</p>
<p>Treasury told Congress that those extraordinary measures to avoid default would be exhausted by mid-October 2013, and <a href="https://web.archive.org/web/20131017174553/http://www.treasury.gov/initiatives/Documents/082613%20Debt%20Limit%20Letter%20to%20Congress.pdf">the debt limit would be reached then</a>, meaning the U.S. could not borrow any more money to pay its bills.</p>
<p>At the same time, Republicans, who controlled the House, had demanded budget cuts <a href="https://www.nytimes.com/2013/10/17/us/congress-budget-debate.html">as well as policy changes</a>. They wanted Obama to <a href="https://www.npr.org/sections/thetwo-way/2013/09/20/224422562/house-gop-votes-to-fund-government-kill-obamacare">eliminate the funding for</a> his Affordable Care Act, which was considered his major legislative achievement. </p>
<p>The government was shut down once more, for 16 days. Again, public support for the Republican approach <a href="https://www.theguardian.com/world/2013/oct/16/senate-leaders-strike-debt-ceiling-deal-shutdown">began to erode</a>. That led the GOP to capitulate and adopt a budget that did not include significant cuts, and raised the debt ceiling, all in a vote the day before the government was slated to run out of money. </p>
<p>“<a href="https://www.theguardian.com/world/2013/oct/16/senate-leaders-strike-debt-ceiling-deal-shutdown">We got nothing</a>,” said conservative Republican Rep. Thomas Massie from Kentucky.</p>
<h2>Risks to both sides</h2>
<p>Each crisis is unique and depends on the specific leaders on both sides as well as how the public reacts to the crisis.</p>
<p>History indicates there are substantial risks to both parties as well as their respective leaders in such fiscal showdowns. The 1995 crisis <a href="https://www.huffpost.com/entry/voters-blamed-gop-for-1995-shutdown_n_842769">did not benefit Republicans</a>, and some even argue it contributed to Clinton winning reelection. </p>
<p>In 2011, I would argue that the Republicans gained substantial budget reduction and budget reform concessions from Democrats. But lack of support for the Republican position in 2013 saw them concede. </p>
<p>The 2023 crisis is like 1995 and 2011 in that it was preceded by an election that flipped the House majority. But it differs substantially in the size of that majority. With only a four-seat majority, the risks to the Republican leadership have been high. </p>
<p>As House members determine whether they will accept the deal their negotiators have settled on, the stakes for the two parties and their respective two leaders are huge. This could well affect President Joe Biden’s reelection and the longevity of the current Speaker of the House, Kevin McCarthy.</p>
<p><em>This story has been updated to reflect the draft deal announced on the evening of May 27, 2023.</em></p><img src="https://counter.theconversation.com/content/205178/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Raymond Scheppach does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>How will the House vote on the deal negotiated by the White House and GOP leaders? If they reject it, there are political as well as huge economic risks to debt standoffs in Congress.Raymond Scheppach, Professor of Public Policy, University of VirginiaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1930892022-10-23T11:31:02Z2022-10-23T11:31:02ZAustralia’s growth downgraded and inflation drives massive rise in cost of pensions and payments in budget<p>Tuesday’s budget will point to a slowing Australian economy, with growth forecasts cut, and contain more than $21 billion of savings and decisions to redirect spending. </p>
<p>Delivered against a background of rising inflation, increasing interest rates and huge global uncertainties, Treasurer Jim Chalmers’ first budget will also contain $32.8 billion in extra funding over four years for pensions and payments compared to the April Pre-election Economic and Fiscal Outlook (PEFO) forecasts. </p>
<p>The budget pays for the largest indexation increase to payments in more than 30 years for allowances and the largest in 12 years for pensions.</p>
<p>High inflation and changing economic parameters account for this huge rise in social security payments. </p>
<p>Spending on social security payments in 2022-23 is set to be $120.1 billion. This is an increase of $3.1 billion since PEFO.</p>
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Read more:
<a href="https://theconversation.com/floods-drive-up-fruit-and-veg-prices-while-energy-costs-will-prolong-high-inflation-193014">Floods drive up fruit and veg prices, while energy costs will prolong high inflation</a>
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<p>The breakdown of social security payments in 2022-23, with increases compared to PEFO forecasts, is: </p>
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<li><p>Job Seeker payments: $14.3 billion for 2022-23 – an increase of $1.5 billion and $10.6 billion over four years</p></li>
<li><p>Support for seniors/age pension: $55.3 billion for 2022-23, an increase of $1.1 billion in 2022-23 and $11.8 billion over four years</p></li>
<li><p>Family assistance payments: $20.5 billion for 2022-23, an increase of $4.4 billion over four years</p></li>
<li><p>Financial Support for Carers: $10.6 billion for 2022-23, an increase of $0.8 billion in 2022-23 and $2.5 billion over four years</p></li>
<li><p>Financial Support for people with Disability: $19.5 billion for 2022-23, an increase of $0.4 billion in 2022-23 and $3.5 billion over four years.</p></li>
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<p>The budget will show the forecast for Australia’s real GDP growth has been downgraded to 3.25% for 2022-23, which is a quarter of a percentage point lower than the forecast in PEFO. </p>
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Read more:
<a href="https://theconversation.com/grattan-on-friday-politics-of-future-budgets-likely-to-get-harder-for-albanese-government-192948">Grattan on Friday: Politics of future budgets likely to get harder for Albanese government</a>
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<p>Growth for 2023-24 is forecast to be a low 1.5%, one percentage point lower than PEFO. </p>
<p>The slowdown is expected to be primarily driven by weaker household consumption growth, as a result of increasing interest rates and cost of living pressures. </p>
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<p>Chalmers doesn’t expect the Australian economy to go into recession, despite the slides in key economies overseas. </p>
<p>Labor campaigned strongly in the election on lifting real wages, but circumstances have pushed that prospect into the distance. </p>
<p>Chalmers told the ABC: “Real wages were falling behind before the election and they’ve been falling since the election. That’s because inflation is higher for longer as a consequence of the war in Ukraine, natural disasters and issues in our own supply chains here at home, and also a consequence of a decade of wage stagnation”.</p>
<p>He said on “current treasury forecasts, inflation will persist for longer than we’d like, and wages growth, which is beginning to happen in our economy, will cross over with inflation some time we think the year after next”. </p>
<p>Chalmers said the budget would be “family-friendly”, recognising “that our pressures on the economy come from around the world, but they’re felt around the kitchen table”.</p>
<p>It would be responsible, sensible and suited to the times “because when you’ve got all of this uncertainty around the world, the best possible response is a responsible budget at home”. </p>
<p>On the savings side, $6.5 billion has been found from what the government describes as “re-profiling of infrastructure projects to better align the investment with construction market conditions”. </p>
<p>Some $3.6 billion is saved from reducing spending on external labour, advertising, travel and legal expenses. </p>
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Read more:
<a href="https://theconversation.com/lidia-thorpe-sacked-as-a-greens-deputy-leader-after-failing-to-disclose-relationship-with-bikie-figure-192947">Lidia Thorpe sacked as a Greens deputy leader after failing to disclose relationship with bikie figure</a>
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<p>More than $2 billion has been cut from a range of grants programs.</p>
<p>Savings have been identified across government agencies. But the government says this is just the “first phase” of its spending audit, with more savings to be found in future budgets. </p>
<p>With regional programs set to be hit, shadow treasurer Angus Taylor told the ABC he’d just spent eight days cycling through regional NSW and “a lot of those regional infrastructure investments are paying back in spades right now. We’re seeing incredible resilience and robustness.” </p>
<p>Apart from the budget, the resumption of parliament this week will see the introduction of the government’s industrial relations legislation for multi-employer bargaining, which is running into business opposition. </p>
<p>In a statement on Friday the Australian Chamber of Commerce and Industry, the Business Council of Australia and the Australian Industry Group said the planned changes “raise the risk of higher unemployment, increased strike action and damage to our economic security”. </p>
<p>The groups said the government should “slow down and consult more widely and more meaningfully”.</p><img src="https://counter.theconversation.com/content/193089/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Delivered against a background of rising inflation, increasing interest rates and huge global uncertainties, Labor’s first budget will also contain $33 billion in extra funding for pensions and payments.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1922512022-10-11T06:59:18Z2022-10-11T06:59:18ZChalmers flags gas action, with escalating power prices a cost-of-living nightmare for government<p>High and rising power prices will become a bigger part of Australia’s inflation problem over time, Treasurer Jim Chalmers has warned, as he foreshadowed more government action to combat high gas prices. </p>
<p>Ahead of leaving for the United States on Tuesday night, Chalmers also said he would use the information from briefings he receives there to make any needed changes to the October 25 budget – now in the final stages of preparation. </p>
<p>And he continued to prepare the public for large, but selective, spending cuts in the budget. </p>
<p>Chalmers painted a dark picture of probable recession in key economies. He remained optimistic the Australian economy could avoid going backwards, but it would not be immune from the global downturn, he said. </p>
<p>The treasurer’s Tuesday appearances were his first after receiving a major rebuff when Anthony Albanese at the weekend quashed any prospect of rejigging the Stage 3 tax cuts in the budget. </p>
<p>Chalmers had pushed hard to have the controversial tax cuts reconfigured, but Albanese – who’d given him a licence to test the water – decided he couldn’t afford to risk breaking an election promise to deliver them. </p>
<p>On his US visit, Chalmers will talk with the US Federal Reserve, the International Monetary Fund, the World Bank, private investment banks and his counterparts from other countries who will be there at the same time for briefings.</p>
<p>“The world is bracing for another global downturn,” he told a news conference. </p>
<p>“The deteriorating global situation combined with high and rising inflation here at home and the ongoing, persistent structural spending pressures on the budget […] are the three most important factors which provide the backdrop for the budget.”</p>
<p>The budget would not be “fancy” or “flashy”, Chalmers said. </p>
<p>He made it clear its spending cuts, expected to be substantial, would focus on “wasteful” Coalition programs rather than including areas such as the NDIS (National Disability Insurance Scheme), the cost of which has been rapidly rising. “The burden won’t fall completely equally across portfolios.”</p>
<p>The increasing price of power is now a major problem for the government, which promised at the election a saving by 2025. Ministers are now mostly dodging questions about that undertaking, although the Deputy Prime Minister, Richard Marles, said on Tuesday “we continue to stand by the modelling” that indicated the price saving. </p>
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Read more:
<a href="https://theconversation.com/albanese-insists-tax-position-hasnt-changed-as-the-government-targets-defence-delays-192155">Albanese insists tax position 'hasn't changed', as the government targets defence delays</a>
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<p>Alinta Energy’s boss, Jeff Dimery, at an Australian Financial Review Energy summit this week predicted retail electricity prices, on current market prices, would rise at least 35% next year.</p>
<p>Andrew Richards, CEO of the Energy Users Association of Australia, said, “It appears that some people think [the energy transition] will be easy and cheap, but I think most people in this room understand it’s hard and expensive and likely to drive energy bills [up] in the near term”.</p>
<p>Chalmers told his news conference: “We are very concerned about what’s happening with power prices”. It was due to a combination of international factors, extreme weather and policy delay.</p>
<p>He said that “even as inflation eases in aggregate […] the treasury’s expectation is that a bigger and bigger part of this inflation problem over time will be what happens with power prices.</p>
<p>"Shipping costs have been a concern, supply chains have been a concern, the labour shortages are an ongoing concern that we’re addressing in the budget. But electricity is the one that I think most about. I think it is going to be the most problematic aspect […] of our inflation problem over the course of the next six or nine months.” </p>
<p>Chalmers said there was more that governments could and would do to deal with high gas prices. He was working with Industry Minister Ed Husic, Resources Minister Madeleine King and Energy Minister Chris Bowen on what can be done. </p>
<p>“I think all of those ministers recognise that the way that our gas industry regulation is set up has not been delivering the kinds of outcomes that we want to see and so if you recognise that, and I do, then you recognise that if more can be done, it should be done - and I’m a part of that work.”</p>
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Read more:
<a href="https://theconversation.com/grattan-on-friday-jim-chalmers-plays-the-tease-as-he-pushes-to-change-stage-3-tax-cuts-192022">Grattan on Friday: Jim Chalmers plays the tease as he pushes to change Stage 3 tax cuts</a>
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<p>He did not say what was contemplated. The government has not pulled the “trigger” (the Australian Domestic Gas Supply Mechanism) under which it could order companies to put aside a certain amount of gas for the domestic market, but it has that trigger being reviewed. </p>
<p>Companies have recently agreed with the government to supply gas for local consumption at prices no higher than the international price. But that is little comfort domestically given the soaring overseas price. </p>
<p>Husic this week accused companies of “milking gas prices”.
He told Nine newspapers: “The gas companies can either be part of team Australia or they can be part of team greed. They will make the choice.”</p>
<p>Husic said the trigger legislation needed to be reformed, as did the code of conduct which is supposed to help local buyers of gas.</p><img src="https://counter.theconversation.com/content/192251/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The treasurer’s Tuesday’s appearances were his first after receiving a major rebuff when Anthony Albanese at the weekend quashed any prospect of rejigging the Stage 3 tax cuts in the budget.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1423482020-07-14T12:40:15Z2020-07-14T12:40:15ZFederal spending covers only 8% of public school budgets<figure><img src="https://images.theconversation.com/files/346723/original/file-20200709-58-1fr8t19.jpg?ixlib=rb-1.1.0&rect=0%2C50%2C5637%2C2430&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The White House is threatening to cut funds to school districts that don't resume daily in-person instruction.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/president-donald-trump-speaks-as-vice-president-secretary-news-photo/1215228995">Drew Angerer/Getty Images</a></span></figcaption></figure><figure class="align-center zoomable">
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<p>State and local tax dollars cover the bulk of U.S. public school funding.</p>
<p>The federal government spends just under <a href="https://www.census.gov/programs-surveys/school-finances/data/tables.html">US$55 billion per year on K-12</a> education, in addition to outlays for <a href="http://nieer.org/state-preschool-yearbooks">early childhood education</a> and post-secondary programs like loans and grants for <a href="https://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2019/10/two-decades-of-change-in-federal-and-state-higher-education-funding">college tuition</a>.</p>
<p>That’s <a href="https://www.census.gov/programs-surveys/school-finances/data/tables.html">just 8%</a> of the total $720 billion it costs to run the nation’s public schools during the 2017-18 school year, the most recent national data available.</p>
<p>This amounts to around $1,100 per K-12 student.</p>
<p>Federal funding has <a href="https://nces.ed.gov/programs/digest/d19/tables/dt19_235.10.asp">never surpassed 10%</a> of total public school funding, except from 2010 to 2012 when the federal government sought to reduce the <a href="https://www2.ed.gov/policy/gen/leg/recovery/implementation.html">school spending cuts</a> <a href="https://muse.jhu.edu/article/688011/summary">local and state governments made during the Great Recession</a>.</p>
<p>The <a href="https://www.mitpressjournals.org/doi/abs/10.1162/edfp_a_00245">American Recovery and Reinvestment Act of 2009 sent</a> $54 billion – the equivalent of $56.5 billion, adjusted for inflation, in spending today – to schools. That infusion most likely <a href="https://files.eric.ed.gov/fulltext/ED533671.pdf">saved thousands of education jobs</a> from budget-based layoffs. In contrast, recent federal aid provided so far, through the March 2020 CARES Act, amounts to <a href="https://www.brookings.edu/blog/brown-center-chalkboard/2020/05/07/supporting-students-and-promoting-economic-recovery-in-the-time-of-covid-19/">only about $13 billion</a> for school districts, with an extra $3 billion for governors to use for K-12 education at their discretion.</p>
<p>[<em>The Conversation’s science, health and technology editors pick their favorite stories.</em> <a href="https://theconversation.com/us/newsletters/science-editors-picks-71/?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=science-favorite">Weekly on Wednesdays</a>.]</p>
<p>These funds may be spread even thinner if districts must <a href="https://theconversation.com/giving-private-schools-federal-emergency-funds-slated-for-low-income-students-will-shortchange-at-risk-kids-138503">allocate funds to neighboring private schools</a> based on enrollment levels. The Education Department, led by Betsy DeVos, issued guidance with this <a href="https://www.aasa.org/policy-blogs.aspx?id=44687">directive</a>, but several states including <a href="https://www.cde.ca.gov/fg/cr/esserfaqs.asp">California</a> and <a href="https://in.chalkbeat.org/2020/5/12/21256499/indiana-rejects-guidance-from-devos-to-reroute-more-coronavirus-relief-to-private-schools">Indiana</a> have pushed back, arguing that federal funds for private schools should be limited to aid targeting low-income students.</p>
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<p>Most K-12 federal funding supports the nation’s most vulnerable students through the <a href="https://theconversation.com/americas-poorest-children-wont-get-nutritious-meals-with-school-cafeterias-closed-due-to-the-coronavirus-133341">National School Lunch Program</a> and the <a href="https://nces.ed.gov/fastfacts/display.asp?id=158">Title I program</a>, which targets funding to schools serving low-income students. Federal K-12 funding also supports <a href="https://theconversation.com/trusting-states-to-do-right-by-special-education-students-is-a-mistake-98820">special education</a> – providing services for students with special needs.</p>
<p>In short, federal funds make up a small proportion of total funding for U.S. K-12 education, but those funds largely serve children facing economic hardship or with learning differences.</p>
<p>The <a href="https://www.politico.com/news/2020/07/08/trump-schools-reopening-federal-funding-352311">White House now says it may cut spending</a> for school districts that don’t resume daily in-person instruction when the next school year gets underway, or perhaps make additional funding contingent on <a href="https://www.cnn.com/2020/07/08/politics/donald-trump-threat-to-cut-school-funding-fact-check/index.html">students being in classrooms five days a week</a>. As a scholar of <a href="https://scholar.google.com/citations?user=F8pdFSgAAAAJ&hl=en">education finance</a>, I’m concerned that this approach would harm the most vulnerable students and families. At a time when schools really need federal leadership and financial support, the administration is threatening to withhold funding from the highest-need schools.</p><img src="https://counter.theconversation.com/content/142348/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David S. Knight receives funding from the National Science Foundation, the W. T. Grant Foundation, the Spencer Foundation, and the American School Counselor Association.</span></em></p>US cities and states are responsible for the vast majority of K-12 funding.David S. Knight, Assistant Professor of Education Finance and Policy, University of WashingtonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1411052020-07-10T12:23:31Z2020-07-10T12:23:31ZCoronavirus’s painful side effect is deep budget cuts for state and local government services<figure><img src="https://images.theconversation.com/files/346680/original/file-20200709-42-zuizzp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Washington state cut both merit raises and instituted furloughs as it faced a projected $8.8 billion budget deficit because of the coronavirus.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/washington-state-olympia-state-capitol-building-with-spring-news-photo/452908636?adppopup=true">Wolfgang Kaehler/LightRocket via Getty Images</a></span></figcaption></figure><p>Nationwide, state and local government leaders are warning of major budget cuts as a result of the pandemic. One state – <a href="https://www.budget.ny.gov/pubs/archive/fy21/enac/fy21-enacted-fp.pdf">New York</a> – even referred to the magnitude of its cuts as having “no precedent in modern times.” </p>
<p>Declining revenue combined with unexpected expenditures and <a href="https://www.washingtonpost.com/business/2020/04/10/cities-states-coronavirus-budgets/">requirements to balance budgets</a> means state and local governments need to cut spending and possibly raise taxes or dip into reserve funds to cover the <a href="https://www.cbpp.org/research/state-budget-and-tax/states-continue-to-face-large-shortfalls-due-to-covid-19-effects">hundreds of billions of dollars lost by state</a> and local government over <a href="https://www.nlc.org/sites/default/files/users/user52651/CAE-Local-Impact-Survey-One-Pager.pdf?_ga=2.13807287.1829137316.1594041435-1549561652.1523293299">the next two to three years because of the pandemic</a>. </p>
<p>Without more <a href="https://www.nga.org/news/press-releases/with-millions-of-jobs-at-stake-state-and-local-government-associations-call-on-congress-to-approve-aid/">federal aid</a> or access to other sources of money (like reserve funds or borrowing), government officials have made it clear: Budget cuts will be happening in the coming years.</p>
<p>And while specifics are not yet available in all cases, those cuts have already included reducing the number of state and local jobs – from firefighters to garbage collectors to librarians – and slashing spending for education, social services and roads and bridges.</p>
<p>In some states, agencies have been directed to cut their budget as much as 15% or 20% – a tough challenge as most states prepared budgets for a new fiscal year that began July 1. </p>
<p>As a <a href="https://www.american.edu/spa/faculty/flink.cfm">scholar</a> of public administration who researches how governments spend money, here are the ways state and local governments have reduced spending to close the budget gap. </p>
<h2>Cutting jobs</h2>
<p>State and local governments <a href="https://www.routefifty.com/management/2020/07/state-local-govenrment-job-losses-june-coronavirus/166619/">laid off or furloughed 1.5 million workers in April and May</a>.</p>
<p>They are also reducing spending on employees. According to surveys, government workers are feeling <a href="https://www.routefifty.com/management/2020/06/coronavirus-state-local-employees-finances-layoffs/166257/">personal financial strain</a> as many state and local governments have cut merit raises and regular salary increases, frozen hiring, reduced salaries and cut seasonal employees. </p>
<p><a href="https://www.king5.com/article/news/politics/washington-state-furloughs-employees-cancels-raises-citing-severe-revenue-downturns/281-c24fa6b1-110f-4b06-b606-26e192467b66">Washington state</a>, for example, cut both merit raises and instituted furloughs. </p>
<p>A <a href="https://www.nlc.org/sites/default/files/users/user52651/CAE-Local-Impact-Survey-One-Pager.pdf?_ga=2.13807287.1829137316.1594041435-1549561652.1523293299">survey</a> from the National League of Cities shows 32% of cities will have to furlough or lay off employees and 41% have hiring freezes in place or planned as a result of the pandemic.</p>
<p>Employment reductions have met some resistance. In Nevada, for example, a state worker union <a href="https://www.usnews.com/news/best-states/nevada/articles/2020-06-26/nevada-state-workers-sue-governor-over-coronavirus-furloughs">filed a complaint against the governor to the state’s labor relations board</a> for violating a collective bargaining statute by not negotiating on furloughs and salary freezes.</p>
<p>Most of the employee cuts have been made in <a href="https://www.routefifty.com/finance/2020/05/coronavirus-will-have-unequal-impact-school-budgets/165710/">education</a>. Teachers, classroom aids, administrators, staff, maintenance crews, bus drivers and other school employees have seen salary cuts and layoffs. </p>
<p>The job loss has hurt public employees beyond education, too: librarians, garbage collectors, counselors, social workers, police officers, firefighters, doctors, nurses, health aides, park rangers, maintenance crews, administrative assistants and others have been affected. </p>
<p>Residents also face the consequences of these cuts: They can’t get ahold of staff in the city’s water and sewer departments to talk about their bill; they can’t use the internet at the library to look for jobs; their children can’t get needed services in school.</p>
<p>Most of these cuts have been labeled temporary, but with the extensions to stay-at-home orders and a mostly closed economy, it will be some time before these employees are back to work. </p>
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<span class="caption">Health care workers are among those affected by budget cuts.</span>
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<h2>Suspending road, bridges, building and water system projects</h2>
<p>As another way to reduce costs quickly, a National League of Cities <a href="https://www.nlc.org/article/canceled-infrastructure-projects-furloughs-and-economic-ripple-effects-nlc-survey-shares">survey</a> shows 65% of the municipalities surveyed are stopping temporarily, or completely, <a href="https://www.washingtonpost.com/business/2020/06/23/cities-budget-infrastructure-cuts/">capital expenditure and infrastructure projects</a> like roads, bridges, buildings, water systems or parking garages. </p>
<p>[<em><a href="https://theconversation.com/us/newsletters/the-daily-3?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=experts">Expertise in your inbox. Sign up for The Conversation’s newsletter and get expert takes on today’s news, every day.</a></em>]</p>
<p>In New York City, there is a US$2.3 billion proposed cut to the capital budget, a fund that supports large, multiyear investments from sidewalk and road maintenance, school buildings, senior centers, fire trucks, sewers, playgrounds, to park upkeep. There are potentially serious consequences for residents. For example, New York housing advocates are concerned that these cuts <a href="https://therealdeal.com/2020/06/01/nyc-will-lose-21000-affordable-units-to-budget-cuts-report/">will hurt plans for 21,000 affordable homes</a>.</p>
<p>Suspending these big money projects will save the government money in the short term. But it will potentially harm the struggling economy, since both public and private sectors benefit from better roads, bridges, schools and water systems and the <a href="https://www.brookings.edu/research/expanding-opportunity-through-infrastructure-jobs/">jobs these projects create</a>. </p>
<p>Delaying maintenance also has consequences for the deteriorating infrastructure in the U.S. The costs of unaddressed repairs could increase future <a href="https://www.washingtonpost.com/opinions/the-high-cost-of-delaying-infrastructure-repairs/2015/05/14/dd033556-f1a7-11e4-90bc-afe06f530791_story.html">costs</a>. It can cost more to replace a crumbling building than it does to fix one in better repair.</p>
<h2>Cities and towns hit</h2>
<p>In many states, the new budgets severely cut their aid to local governments, which will lead to large local cuts in education – both K-12 and higher education – as well as social programs, transportation, health care and other areas. </p>
<p><a href="https://www.budget.ny.gov/pubs/archive/fy21/enac/fy21-enacted-fp.pdf">New York state’s</a> budget proposes that part of its fiscal year 2021 budget shortfall will be balanced by $8.2 billion in reductions in aid to localities. This is the state where the cuts were referred to in the budget as “not seen in modern times.” This money is normally spent on many important services that residents need everyday –mass transit, adult and elderly care, mental health support, substance abuse programs, school programs like special education, children’s health insurance and more. Lacking any of these support services can be devastating to a person, especially in this difficult time. </p>
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<img alt="" src="https://images.theconversation.com/files/346676/original/file-20200709-46-1fzjqm8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/346676/original/file-20200709-46-1fzjqm8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/346676/original/file-20200709-46-1fzjqm8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/346676/original/file-20200709-46-1fzjqm8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/346676/original/file-20200709-46-1fzjqm8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/346676/original/file-20200709-46-1fzjqm8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/346676/original/file-20200709-46-1fzjqm8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Schools will need more money as the coronavirus crisis continues.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/the-schoolyard-at-ps-75-sits-empty-during-the-coronavirus-news-photo/1220018898?adppopup=true">Rob Kim/Getty Images</a></span>
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<h2>Fewer workers, less money</h2>
<p>As teachers and administrators figure out how to teach both online and in person, <a href="https://www.edweek.org/ew/articles/2020/05/18/how-covid-19-will-balloon-district-costs-this.html">they and their schools will need more money</a> – not less – to meet students’ needs. </p>
<p>Libraries, which provide services to many communities, from free computer use to after-school programs for children, will have to cut back. They may have fewer workers, be open for fewer hours and not offer as many programs to the public.</p>
<p>Parks may not be maintained, broken playground equipment may stay that way, and workers may not repave paths and mow lawns. Completely separate from activists’ calls to shift police funding to other priorities, police departments’ budgets may be slashed just for lack of cash to pay the officers. Similar cuts to firefighters and ambulance workers may mean poorly equipped responders take longer to arrive on a scene and have less training to deal with the emergency.</p>
<p>To keep with developing public safety standards, more maintenance staff and materials will be needed to <a href="https://www.health.state.mn.us/diseases/coronavirus/schools/clean.html">clean and sanitize schools</a>, courtrooms, auditoriums, <a href="https://www.cdc.gov/coronavirus/2019-ncov/community/correction-detention/faq.html">correctional facilities</a>, <a href="https://www.cdc.gov/coronavirus/2019-ncov/community/organizations/transit-maintenance-worker.html">metro stations, buses</a> and <a href="https://www.cdc.gov/coronavirus/2019-ncov/community/parks-rec/park-administrators.html">other public spaces</a>. Strained budgets and employees will make it harder to complete these new essential tasks throughout the day.</p>
<p>To avoid deeper cuts, state and local government officials are trying a host of strategies including borrowing money, using rainy day funds, increasing revenue by raising tax rates or creating new taxes or fees, ending tax exemptions and using federal aid as legally allowed.</p>
<p><a href="https://www.dailycamera.com/2020/06/22/colorado-budget-cuts-coronavirus-polis/">Colorado</a> was able to hold its budget to only a 3% reduction, relying largely on one-time emergency reserve funds. <a href="https://www.newarkpostonline.com/news/delaware-lawmakers-give-final-approval-to-new-budget/article_9ffcb379-c9e8-54f4-b72c-8bafe44571a8.html">Delaware</a> managed to maintain its budget and avoided layoffs largely through using money set aside in a reserve account.</p>
<p>Nobody knows how long the pandemic, or its economic effects, will last.</p>
<p>In the worst-case scenario, budget officials are prepared to make steeper cuts in the coming months if more assistance does not come from the federal government or the economy does not recover quickly enough to restore the flow of money that governments need to operate.</p><img src="https://counter.theconversation.com/content/141105/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Carla Flink does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>State and local government jobs are being axed, public schools won’t get money the state planned to send them, and fire and police departments budgets are being slashed. All because of the pandemic.Carla Flink, Assistant Professor of Public Administration and Policy, American UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1269242019-11-13T19:03:43Z2019-11-13T19:03:43ZNation-building to ‘national shame’: the ABC’s complex role as sports broadcaster<figure><img src="https://images.theconversation.com/files/301445/original/file-20191113-77291-1aerp4i.jpg?ixlib=rb-1.1.0&rect=3%2C15%2C1763%2C886&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">ABC once viewed sports coverage as integral to its mission of nation-building. But in recent years, it has grown far more ambivalent about sports.</span> <span class="attribution"><span class="source">Dean Lewins/AAP</span></span></figcaption></figure><p>The <a href="https://www.theguardian.com/media/2019/nov/11/abc-drops-tokyo-olympics-live-radio-coverage-blaming-budget-cuts">ABC has announced</a> it will not provide live radio coverage of the Olympics for the first time in 67 years for budgetary reasons, and because Australians now have the “increased ability to access Olympics coverage in other ways”.</p>
<p>The decision sparked a <a href="https://www.smh.com.au/politics/federal/national-shame-abc-to-end-67-years-of-live-olympics-radio-broadcasting-20191111-p539c0.html">furious response</a> from some, such as veteran sports broadcaster Quentin Hull, who deemed it a “national shame”. </p>
<p>But was the decision a snub to sports fans in favour of other types of broadcasting, or just a matter of hard-nosed accounting?</p>
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<h2>Funding cuts forcing difficult decisions</h2>
<p>The ABC’s decision needs to be viewed in two contexts: internal competition for increasingly scarce resources, and a battle to define how sport now fits into the ABC’s charter obligations.</p>
<p>First, the money. The ABC’s financial situation <a href="https://theconversation.com/the-abc-didnt-receive-a-reprieve-in-the-budget-its-still-facing-staggering-cuts-114922">is in dire straits</a>, especially given the range of services it is now expected to provide.</p>
<p>In the past two decades, the ABC has transformed from a radio and television broadcaster to a multi-channel media organisation. It’s done this to meet the responsibilities of its comprehensive service charter, ensuring it reaches Australians across a range of new digital platforms (three digital television channels, digital radio services, podcasts and apps).</p>
<p>At the same time, the government <a href="https://www.abc.net.au/news/2019-10-23/abc-boss-confirms-staff-to-go-following-budget-cuts/11629336">has frozen the ABC’s budget</a> for three years from 2019, which comes on top of earlier budget cuts. The decision not to send a radio team to the 2020 Tokyo Olympics is a direct result of these cuts.</p>
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Read more:
<a href="https://theconversation.com/the-abc-didnt-receive-a-reprieve-in-the-budget-its-still-facing-staggering-cuts-114922">The ABC didn't receive a reprieve in the budget. It's still facing staggering cuts</a>
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<p>Prior to the federal election in May, and the funding freeze, the ABC expected to receive an extra $14.6 million in indexed funding for 2019-20, sufficient to cover occasional events like the Olympics and the current bushfires.</p>
<p>Now, it faces an <a href="https://www.abc.net.au/news/2018-05-08/budget-2018-abc-funding-frozen-in-$84-million-hit-bottom-line/9740690">$84 million shortfall</a> over the next three years instead.</p>
<p>There’s an added problem created by the annual approval of divisional budgets.</p>
<p>This year, ABC Radio’s budget would have needed special top-up funding to meet the cost of the Olympics. Sources close to the ABC have said this is estimated to be $1 million (for the rights and production costs).</p>
<p>Given top-up funding is not available in the current budget, executives would have had to make program or staff cuts elsewhere. That’s on top of the cuts already planned as a result of the budget freeze. They chose not to.</p>
<p>Sports fans may be outraged the ABC has chosen to ditch its Olympic radio coverage instead, but cuts anywhere else - say to regular religious or children’s programming - would have produced equally loud protests from other audiences.</p>
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<h2>A long history of sports coverage</h2>
<p>Which leads to our second question: what is the ABC’s role in providing sports coverage in a multi-platform world?</p>
<p>For decades, the ABC and its constituents <a href="https://www.blackincbooks.com.au/books/abc">saw sports broadcasting as central to its charter roles</a>: universal service, national identity and innovation.</p>
<p>The <a href="https://catalogue.nla.gov.au/Record/1623095?lookfor=Annual%20Report%20of%20The%20Australian%20Broadcasting%20Commission&offset=3&max=3919039">first ABC Annual Report</a> noted in 1933 that the “keen national interest in sport” had inspired daily broadcasts of the “Bodyline” Ashes cricket series to a national network of 12 stations. Indeed, the ABC helped build a national audience for sports such as cricket and tennis, first on radio, and then on television.</p>
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Read more:
<a href="https://theconversation.com/into-the-spotlight-media-coverage-of-the-paralympic-games-has-come-a-long-way-65228">Into the spotlight: media coverage of the Paralympic Games has come a long way</a>
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<p>According to ABC historian Ken Inglis, the broadcaster believed sports broadcasting was its “<a href="https://www.blackincbooks.com.au/books/abc">most characteristic feature</a>”, directly linked to its role in nation-building.</p>
<p>Sports broadcasts, especially of the Olympics, have also been opportunities for the broadcaster to try new programming approaches and delivery technologies. For instance, the use of shortwave and relay services enabled coverage of the 1952 Summer Olympics in Helsinki – the first ABC Olympics coverage.</p>
<p>Yet, ABC sports broadcasting has always been contentious.</p>
<p>In 1948, ABC Chairman Richard Boyer argued to General Manager Charles Moses that there was too much sport on ABC Radio. Although Moses countered that these broadcasts brought audiences to the ABC, the “commission insisted that the time devoted to sport be reduced” and savings spent on other programs. </p>
<p>However, Boyer changed his mind somewhat after the ABC’s re-broadcast of the BBC coverage of the 1948 Olympics was widely criticised for focusing too little on Australian competitors.</p>
<p>In 1956, ABC’s coverage of the Melbourne Olympics became a major moment in Australian television, though for most Australians it was ABC Radio that ensured they were able to share in the event.</p>
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<p>Decades later, when top-tier sports like cricket were being commercialised, the <a href="https://apo.org.au/node/41206">Dix Inquiry</a> argued the ABC needed greater diversity in its sporting output, leading to increased broadcasts of women’s sport and the Paralympics from 1988.</p>
<p>However, less than a decade after <a href="https://www.abc.net.au/pm/content/2005/s1313677.htm">battling SBS</a> for the Ashes cricket rights in 2005, the ABC started to become more ambivalent about sports as a fundamental part of its charter activities. Since the early 2010s, ABC TV has moved almost completely out of sports.</p>
<p>ABC Radio, in contrast, had maintained a strong commitment to sports broadcasting throughout the 2000s – until now. </p>
<h2>Where can Australians go now?</h2>
<p>So, without the ABC’s involvement, will Australians still have audio access to the Olympics?</p>
<p>Southern Cross Austereo was <a href="https://www.theroar.com.au/olympics/olympics-live-stream/">earlier tipped</a> to be in position to buy the commercial Olympic radio rights, following its coverage of the 2016 Rio Games. </p>
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Read more:
<a href="https://theconversation.com/the-coalition-government-is-again-trying-to-put-the-squeeze-on-the-abc-122037">The Coalition government is (again) trying to put the squeeze on the ABC</a>
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<p>But as its parent company shares <a href="https://www.afr.com/companies/media-and-marketing/southern-cross-shares-tumble-following-weak-ad-spend-20191015-p530rh">hit a five-year low</a> in mid-October and it recently slashed jobs, there’s a chance it won’t follow suit for Tokyo. It’s not yet clear. </p>
<p>What is clear is that in the “anywhere, anytime, any device” age, radio is still important to many Australians. For people driving, exercising or working, radio remains a critical sports delivery platform.</p>
<p>The ABC has decided this will no longer be a priority. The question, then, is whether Australians who want to follow the Olympics on radio will have any options at all in 2020.</p><img src="https://counter.theconversation.com/content/126924/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael Ward is affiliated with ABC Alumni. </span></em></p><p class="fine-print"><em><span>Fiona R Martin does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>ABC’s decision to ax its radio coverage of the 2020 Tokyo Olympics has been labeled a ‘complete shame’. But from a financial viewpoint, the broadcaster had few other options.Michael Ward, PhD candidate, University of SydneyFiona R Martin, Senior Lecturer in Convergent and Online Media, University of SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1263422019-11-06T19:05:18Z2019-11-06T19:05:18ZEnrolments flatlining: Australian unis’ financial strife in three charts<figure><img src="https://images.theconversation.com/files/300390/original/file-20191106-88378-145tyb5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Macquarie University is hit harder than others, but domestic enrolments across Australia aren't increasing like they used to.</span> <span class="attribution"><span class="source">from shutterstock.com</span></span></figcaption></figure><p>Sydney’s Macquarie University <a href="https://www.smh.com.au/national/zero-growth-enrolment-troubles-force-university-to-make-budget-cuts-20191101-p536mc.html">announced budget cuts</a> in recent days, due to “zero growth” in enrolments next year. </p>
<p>Vice-Chancellor Bruce Dowton reportedly wrote a letter to staff announcing the cuts, which included a hiring freeze. The letter said:</p>
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<p>Enrolment growth domestically and internationally has slowed significantly at a time when our base operating costs continue to rise […] Current projections are that there will be zero growth in load [full-time student numbers] in 2020.</p>
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<p>This <a href="https://www.afr.com/policy/health-and-education/unis-risk-catastrophic-hit-due-to-reliance-on-china-20190820-p52ivu">comes a few months</a> after a report from the Centre for Independent Studies warned Australia’s universities were in for a “catastrophic” financial hit due to their over-reliance on international students from China.</p>
<p>Macquarie has been hit harder than most other universities, but many universities are finding it more difficult to recruit students than they did a few years ago. New domestic enrolments are in a mild recession. And although international student numbers are still growing, demand from Chinese international students has stabilised. </p>
<h2>No increase in school leavers wanting university</h2>
<p>In 2018, the number of students starting a bachelor degree <a href="http://highereducationstatistics.education.gov.au/">fell for the first time since 2003</a>. Of Australia’s 37 public universities, 23 took fewer new bachelor-degree students in 2018 than 2017. </p>
<p>Enrolments are expected to be down again in 2019, following a drop <a href="https://www.education.gov.au/undergraduate-applications-offers-and-acceptances-publications">in applications</a>. Commencing domestic postgraduate student numbers peaked several years ago.</p>
<p>In a sector used to growth a downturn causes problems. </p>
<p>Since a Commonwealth <a href="https://www.brisbanetimes.com.au/politics/federal/universities-warned-against-regional-cuts-as-turnbull-government-strips-22-billion-from-budget-20171218-h06i24.html">funding freeze announced in late 2017</a>, universities have not had strong financial incentives to enrol additional students. But this is not the main reason for falling enrolments. The issue is weak demand more than reluctant supply. </p>
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Read more:
<a href="https://theconversation.com/demand-driven-funding-for-universities-is-frozen-what-does-this-mean-and-should-the-policy-be-restored-116060">Demand-driven funding for universities is frozen. What does this mean and should the policy be restored?</a>
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<p>Demand for higher education is influenced by the population of potential applicants. Recent school leavers are the biggest bachelor-degree market. The number of year 12 school students fell slightly in 2018, mostly due to a downward trend in babies born 17 years previously. </p>
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<p>Birth and forecast population trends suggest year 12 student numbers will increase by only 1-2% in the next couple of years. So domestic demand for higher education from school leavers should stay close to current levels.</p>
<h2>Mature-age students also affect enrolments</h2>
<p>To date, <a href="https://andrewnorton.net.au/2019/10/29/has-the-university-funding-freeze-caused-commencing-enrolments-to-fall/">mature-age students are the principal cause</a> of falling commencing bachelor-degree enrolments. But the number of non-year 12 applicants new to higher education is not trending down. For the last few years their applications have fluctuated in a narrow range. </p>
<p>The drop in demand is driven by people who have been to university before. Possibly, <a href="https://theconversation.com/labor-wants-to-restore-demand-driven-funding-to-universities-what-does-this-mean-116060">more student places under demand-driven funding</a> triggered a boom in course switching and former students returning, which has now subsided. </p>
<p>Former students are also affecting the domestic postgraduate market. The number of people who already have a degree, which makes them eligible for postgraduate study, <a href="https://andrewnorton.net.au/2019/09/12/migration-has-outpaced-demand-driven-funding-as-a-source-of-additional-graduates/">is at record levels</a>. But domestic postgraduate coursework commencements peaked in 2014 <a href="https://twitter.com/andrewjnorton/status/1188684271843606529/photo/1">and have declined since</a>. </p>
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<p>This is not an isolated trend. All types of structured education for <a href="https://andrewnorton.net.au/2019/10/18/the-changing-nature-of-work-training-further-evidence-and-puzzles/">people already in the workforce are in</a> <a href="https://andrewnorton.net.au/2019/09/26/contrary-to-expectations-reskilling-and-retraining-seem-to-be-in-decline/">decline</a>. It’s likely <a href="https://andrewnorton.net.au/2019/10/15/the-popularity-of-online-self-education/">online self-education is taking market share</a>. </p>
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Read more:
<a href="https://theconversation.com/the-three-things-universities-must-do-to-survive-disruption-117970">The three things universities must do to survive disruption</a>
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<h2>What about international enrolments?</h2>
<p>The story is very different in the international-student postgraduate market, which is growing rapidly. In 2018, for the first time ever, more international students <a href="https://twitter.com/andrewjnorton/status/1188676824387051520/photo/1">started a postgraduate than an undergraduate course</a> in Australia. </p>
<p>Despite some soft international markets, the overall trend is up. The <a href="https://internationaleducation.gov.au/research/International-Student-Data/Pages/InternationalStudentData2019.aspx">most recent data</a>, which take us to August 2019 and cover all levels of higher education, show commencing enrolments are 7% higher than at the same time in the previous year.</p>
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<p><a href="https://data.gov.au/dataset/ds-dga-324aa4f7-46bb-4d56-bc2d-772333a2317e/details?q=student%20visa">Student visa applications</a>, which go up to September this year, suggest overall demand continues to increase modestly. But we should wait until later in the year before drawing firm conclusions. </p>
<p>A key cause of enrolment increases is India’s rapid rise. Commencing Indian student enrolments have <a href="https://internationaleducation.gov.au/research/International-Student-Data/Pages/InternationalStudentData2019.aspx">more than doubled since 2016</a>. Although China remains the largest source of international students, new Chinese enrolments have stabilised this year.</p>
<h2>International student issues could cause numbers to fall</h2>
<p>Given enrolment and visa trends, total international student enrolments will increase in the short term. But there are many concerns about this industry, including <a href="https://andrewnorton.net.au/2019/09/18/how-bad-is-the-international-student-english-language-problem/">English language standards</a>, <a href="https://www-tandfonline-com.ezp.lib.unimelb.edu.au/doi/full/10.1080/03075079.2018.1462788">cheating</a>, <a href="https://issuu.com/nteu/docs/sotus_2017_report_1_overview">soft marking</a>, <a href="https://www.abc.net.au/4corners/red-flags/11601456">Chinese political interference</a>, university financial <a href="https://www.afr.com/policy/health-and-education/auditors-general-warn-again-over-reliance-on-international-students-20190602-p51tnh">over-reliance on international students</a>, <a href="https://www.smh.com.au/opinion/tackling-the-exploitation-of-international-student-workers-20150818-gj1ge3.html">labour market exploitation of students</a>, and <a href="https://theconversation.com/australias-temporary-graduate-visa-attracts-international-students-but-many-find-it-hard-to-get-work-in-their-field-123997">poor graduate outcomes</a>. </p>
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Read more:
<a href="https://theconversation.com/are-international-students-passing-university-courses-at-the-same-rate-as-domestic-students-116666">Are international students passing university courses at the same rate as domestic students?</a>
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<p>There are also broader issues of <a href="https://tapri.org.au/wp-content/uploads/2019/04/Overseas-students-are-driving-NOM-final-18-April-2019.pdf">international students driving up migration numbers</a>, as well as questions of whether we want a large proportion of the population living with <a href="https://www.textpublishing.com.au/books/not-quite-australian">limited political and welfare rights</a>. </p>
<p><a href="https://www.stawelltimes.com.au/story/5964043/pm-morrison-hits-pause-on-migrant-intake/">Population issues</a> contributed to a <a href="https://campusmorningmail.com.au/news/the-international-education-regional-visa-scheme-is-working">rule change</a> to attract international students away from congested big cities to regional and minor city locations. I expect further regulatory changes and market reactions to international education issues to eventually cause a decline in numbers. </p>
<h2>University luck might be about to run out</h2>
<p>For universities addicted to international student dollars any enrolment decline is bad news. But universities have a history of luck. As international student numbers dropped a decade ago, domestic enrolments boomed. And as domestic numbers flattened in recent years, the international market took off. </p>
<p>As the domestic demography chart above suggests, there is potential for big increases in Australian undergraduates in the mid-2020s, as the mid-2000s baby boom children reach university age.</p>
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Read more:
<a href="https://theconversation.com/australian-universities-cant-rely-on-india-if-funds-from-chinese-students-start-to-fall-122052">Australian universities can't rely on India if funds from Chinese students start to fall</a>
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<p>There is, however, a major obstacle to that scenario: with the end of demand-driven funding, there will be <a href="https://andrewnorton.net.au/2019/08/27/will-the-number-of-commonwealth-supported-student-places-fall/">no money to pay for those extra students</a>. Federal Education Minister Dan Tehan has <a href="https://ministers.education.gov.au/tehan/afr-higher-education-summit">acknowledged the problem</a> but so far has no solution. </p>
<p>Without one, the future contains major risks. Universities could have falling enrolments for both domestic and international students. This will mean staff cuts and less money for research. </p>
<p>And the people born in the mid-2000s could be part of an unlucky generation in which <a href="https://andrewnorton.net.au/2019/04/29/young-people-were-less-likely-to-enter-higher-education-in-the-years-after-whitlam-than-before-demography-and-deficits-were-against-them/">population growth collides with budget constraint</a>. Their chances of finding a university place will be lower than for people born in earlier decades.</p><img src="https://counter.theconversation.com/content/126342/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrew Norton does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>In 2018, domestic numbers for undergraduate courses fell for the first time since 2013 – they will remain stagnant for some years. This and other factors put unis at face financial risk.Andrew Norton, Honorary fellow, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1202202019-07-15T10:57:08Z2019-07-15T10:57:08ZIn divided Alaska, the choice is between paying for government or giving residents bigger oil wealth checks<figure><img src="https://images.theconversation.com/files/283945/original/file-20190713-173347-1kunqej.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Students protest Alaska Gov. Mike Dunleavy's budget cuts at the University of Alaska, Anchorage campus.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/alaska-landmine/48247436282/in/photolist-2gvsHTG-2gvsHP8-2gvsHLh-2gvsHEA-2gvsg79-2gvsHvn-2gvsHti-2gvsfY8-2gvsfSr-2gvsHge-2gvsHbE-2gvsH7m-2gvsH38-2gvsfus-2gvsfp7-2gvsGLg-2gvsfen-2gvsf9n-2gvsf5e-2gvsf11-2gvseRy-2gvseNs-2gvsG9u-2gvsG2W-2gvsevU-2gvsFRA-2gvsFKt-2gvsFCz-2gvse4m-2gvsdWx-2gvsFkL-2gvsdKa-2gvsdFY-2gvsF7K-2gvsEZW-2gvsEUL-2gvsdnX-2gvsdhM-2gvsdcM-2gvsd7S-2gvsEvV-2gvscVQ-2gvscRB-2gvscMD-2gvsEa9-2gvscAb-2gvscvb-2gvscmZ-2gvschk-2gvscar/">The Alaska Landmine</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>Alaskans will soon confront the dramatic effects of Republican Gov. Mike Dunleavy’s <a href="http://www.nomenugget.com/news/governor-eliminates-444-million-operating-budget">vetoes of US$444 million</a> from the state operating budget of $8.3 billion, which went into effect July 1.</p>
<p>The Alaska legislature was unable to get enough support to block the cuts through a veto override late last week. </p>
<p>The budget cuts will be immediate, <a href="https://iseralaska.org/2019/07/guettabi-provides-presentation-on-economic-impact-of-governors-vetoes/">affecting most Alaskans</a>. </p>
<p>I’m a faculty member at the <a href="https://www.uaa.alaska.edu/academics/college-of-arts-and-sciences/departments/journalism-and-communication/">University of Alaska Anchorage in the Department of Journalism and Public Communications</a> and have served on the community advisory board of Alaska Public Media. Both the university and the <a href="https://www.kcaw.org/2019/06/28/governors-veto-cuts-all-funding-for-alaskas-public-radio-tv-stations/">public broadcasting network</a> will face budget cuts. In the case of the university, <a href="https://www.npr.org/2019/07/13/741391200/alaskas-state-government-faces-big-budget-cuts">more than 40% of its state support</a> will be lost.</p>
<p>State legislators from both parties who tried to override the vetoes described a ruinous future, with <a href="https://time.com/5623042/alaska-budget-cuts/">university students bailing en masse, elderly residents moving out of state</a> and <a href="https://www.ktuu.com/content/news/Legislature-to-hold-vote-over-governors-operating-budget-vetoes-in-joint-floor-session-512441121.html">domestic violence survivors being left without emergency shelter</a>. </p>
<p>“You’re looking at Alaska at 1869 level of services,” said <a href="https://twitter.com/mattbuxton/status/1149064503939588097">Rep. Jonathan Kreiss-Tompkins</a>, a Democrat.</p>
<p>Dunleavy, who has largely avoided press interviews, told a conservative radio talk show host on July 10 that the vetoes <a href="https://www.governing.com/topics/finance/tns-alaska-budget-veto-override.html">would not “end Alaska as we know it</a>.”</p>
<p><a href="https://www.governing.com/topics/finance/gov-university-alaska-governor-dunleavy-legislature-vetoes-override-budget.html">Advocates for the university system</a>, <a href="https://time.com/5623042/alaska-budget-cuts/">the poor</a>, <a href="https://www.juneauempire.com/news/save-our-arts-juneau-artists-protest-governors-vetoes/">the arts</a>, <a href="https://www.ktuu.com/content/news/State-public-media-funding-targeted-in-Dunleavy-budget-proposal-512443012.html">public media</a> and other entities on the receiving end of the cuts rallied supporters, from <a href="https://www.alaskapublic.org/2019/07/09/portugal-the-man-returns-home-to-protest-budget-vetoes/">indie music groups</a> to <a href="https://twitter.com/Nat_Herz/status/1149376994125025280">entrepreneurs</a>. </p>
<p><a href="https://www.peninsulaclarion.com/news/even-right-leaning-groups-bankers-and-builders-are-calling-for-an-override/">Business groups, including the Alaska Bankers Association</a>, tried to persuade three-fourths of the Alaska Legislature – 45 of 60 members – to override the governor’s vetoes. In the end, <a href="https://thehill.com/homenews/state-watch/452270-alaska-political-mess-has-legislators-divided-over-meeting-place">only 37 legislators</a> stood against the governor.</p>
<p>How did Alaska, one of the country’s <a href="https://www.anchoragepress.com/news/how-we-got-here-recapping-the-history-of-alaska-s/article_2df9cb56-9207-11e9-9dd3-b7cf7f00ad72.html">richest states with a $65 billion savings account</a> fueled by oil royalties and leasing revenues, get into this position?</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/283946/original/file-20190713-173338-1y07y0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/283946/original/file-20190713-173338-1y07y0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/283946/original/file-20190713-173338-1y07y0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=455&fit=crop&dpr=1 600w, https://images.theconversation.com/files/283946/original/file-20190713-173338-1y07y0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=455&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/283946/original/file-20190713-173338-1y07y0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=455&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/283946/original/file-20190713-173338-1y07y0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=572&fit=crop&dpr=1 754w, https://images.theconversation.com/files/283946/original/file-20190713-173338-1y07y0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=572&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/283946/original/file-20190713-173338-1y07y0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=572&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The 800-mile Trans-Alaska pipeline carries Alaska North Slope crude oil from Prudhoe Bay south to Valdez.</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Associated-Press-Domestic-News-Alaska-United-St-/b49f2204f8e6da11af9f0014c2589dfb/1/0">AP/Al Grillo</a></span>
</figcaption>
</figure>
<h2>‘Safe landing or nose dive’</h2>
<p>The troubles have been a long time coming. </p>
<p>As the state prepared to <a href="http://www.alaskapublic.org/2017/06/22/midnight-oil-doesnt-he-know-its-frozen-how-alaska-almost-overlooked-prudhoe-bay/">reap the benefits of its oil reserves in the 1970s</a> as the trans-Alaska oil pipeline neared completion, voters approved in 1976 an amendment to the Alaska Constitution <a href="https://apfc.org/who-we-are/history-of-the-alaska-permanent-fund/">establishing the Alaska Permanent Fund</a>. </p>
<p>The idea was to save a slice of the current oil windfall in a special fund for future generations when the oil ran out. Meanwhile, the rest of the massive oil royalties – <a href="http://www.tax.alaska.gov/programs/documentviewer/viewer.aspx?1532r">$391.5 million in 1976, more than four times the amount collected the previous year</a> – flowed into state coffers. That meant less need to rely on the traditional way government raises money: taxes. So the legislature <a href="http://www.akleg.gov/basis/get_documents.asp?session=30&docid=17151">repealed a state income tax and the Alaska school tax in 1980</a>.</p>
<p>Now, most Alaska communities have no sales tax and property taxes are low. The total state and local tax burden on Alaskans is <a href="https://www.investopedia.com/financial-edge/0210/7-states-with-no-income-tax.aspx">the lowest in the country</a>. </p>
<p>In addition to repealing state taxes, Alaska legislators in 1980 <a href="https://apfc.org/who-we-are/history-of-the-alaska-permanent-fund/">approved a payout from mineral royalties to state residents called the Alaska Permanent Fund Dividend</a>, or “PFD.” </p>
<p>The idea was that the dividend would distribute to state residents a portion of the state’s natural resource wealth belonging to them as Alaskans. </p>
<p>“The initial bonanza of oil revenues was spent like a sailor hitting port after a long voyage,” <a href="http://www.alaskajournal.com/authors/clem-tillion">wrote Clem Tillion, one of the legislators behind the PFD’s creation, in an op-ed last summer</a>. The first payment was made in 1982 and Alaskans receive roughly $1,000 every year from state government.</p>
<p>Oil supports about <a href="https://www.aoga.org/facts-and-figures/state-revenue">85% of the state’s budget</a>. One respected state economist has been warning since the late 1980s that as the massive <a href="https://www.npr.org/2017/06/24/533798430/alaskas-40-years-of-oil-riches-almost-never-was">Prudhoe Bay oil field</a> is depleted, the state faces a fiscal crisis necessitating a severe reduction in spending or a shift to different revenues. </p>
<p>“Alaska is poised for either a safe landing or a nose dive,” wrote economist Scott Goldsmith in 1992. “Whether we land safely or crash depends on <a href="http://www.akleg.gov/basis/get_documents.asp?session=29&docid=53071">how Alaskans deal with declining oil revenue.”</a> </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/283949/original/file-20190713-173347-10dbijx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/283949/original/file-20190713-173347-10dbijx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/283949/original/file-20190713-173347-10dbijx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=449&fit=crop&dpr=1 600w, https://images.theconversation.com/files/283949/original/file-20190713-173347-10dbijx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=449&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/283949/original/file-20190713-173347-10dbijx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=449&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/283949/original/file-20190713-173347-10dbijx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=564&fit=crop&dpr=1 754w, https://images.theconversation.com/files/283949/original/file-20190713-173347-10dbijx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=564&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/283949/original/file-20190713-173347-10dbijx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=564&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Alaskans often use their Permanent Fund dividends to help pay for big-ticket items like trucks.</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Alaska-Dividend-Lawsuit/8e0836d44407449bb57048f32b155d42/12/0">AP/Mark Thiessen, file</a></span>
</figcaption>
</figure>
<h2>Dividing lines</h2>
<p>Other factors have compounded the state’s fiscal dilemmas. </p>
<p>The usual partisan demarcations don’t apply to Alaskans. Some of the fiercest speechmaking against Dunleavy’s budget vetoes <a href="https://www.alaskapublic.org/2019/07/12/pfd-fight-splits-alaska-gop-leaving-some-aligned-with-democrats/">came from his fellow Republicans</a>. </p>
<p>Alaskans are divided along more jagged lines, such as <a href="https://www.governing.com/topics/urban/gov-rural-urban-special-series.html">rural vs. urban</a>, <a href="https://www.espn.com/college-sports/news/story?id=3480242">Fairbanks vs. Anchorage</a>, <a href="https://www.thedailybeast.com/salmon-vs-gold-splits-alaska-gop">pro-extraction industries vs. pro-fishing</a>.</p>
<p>The divides have made it hard to find agreement, and Alaskans have been whipsawed between state leaders’ different interpretations of fiscal solutions. </p>
<p>Gov. Sarah Palin campaigned for governor and then governed from 2006 to 2009 as a <a href="https://www.wsj.com/articles/SB122002615833483595">reform-minded Republican</a> who imposed higher oil taxes. Her successor, Republican Sean Parnell, <a href="https://www.nytimes.com/2011/03/18/us/politics/18palin.html">undid that reform</a> in 2013. That prompted <a href="https://www.vox.com/2014/11/3/7150491/alaska-governor-election-2014">Palin to endorse Independent Bill Walker</a> in the 2014 governor’s race. He won.</p>
<p>By that time, <a href="https://www.macrotrends.net/2516/wti-crude-oil-prices-10-year-daily-chart">oil prices had flagged</a>. The <a href="https://www.latimes.com/nation/la-na-alaska-oil-20141216-story.html">state budget, which depended on prices higher than the mid-$40 per barrel range, fell into deficit</a> starting in 2014. </p>
<p>State leaders turned to a <a href="http://treasury.dor.alaska.gov/Investments/Constitutional-Budget-Reserve.aspx">Constitutional Budget Reserve</a> to make up the difference. </p>
<p>Walker also <a href="https://www.adn.com/politics/2016/06/29/walker-budget-vetoes-include-capping-permanent-fund-divdends-at-1000/">resorted to budget vetoes</a> to reduce the Legislature’s spending.</p>
<p>Most notably, <a href="https://www.juneauempire.com/news/the-pfd-is-1600-a-qa-about-your-dividend/">Walker reduced the amount Alaskans received from the Alaska Permanent Fund Dividend</a> in 2016, 2017 and 2018, enraging many Alaskans and inviting a state <a href="https://law.justia.com/cases/alaska/supreme-court/2017/s-16558.html">Supreme Court challenge</a> from a Democratic state senator. That challenge failed, leading to the backlash that brought Dunleavy to office in November 2018.</p>
<h2>Basic income</h2>
<p>And it’s the PFD that is <a href="https://gov.alaska.gov/dunleavy/alaska-pfd-applicants/">driving Gov. Dunleavy now</a>. He campaigned on a <a href="https://www.adn.com/politics/2018/11/08/its-going-to-be-rolled-out-pretty-quick-heres-everything-governor-elect-dunleavy-said-about-super-sized-permanent-fund-dividends/">promise to restore the full PFD and pay $3,000</a> this year. That’s an appealing promise to Alaskans who <a href="http://hurricanedavemusic.com/music-44.html">feel as if they have been deprived of their rightful dividend</a> for three years in a row. </p>
<p>The problem is that by paying a dividend of $3,000 to Alaskans, major spending reductions or eliminations to basic services must be imposed, despite rebounding oil prices and a $65 billion savings account. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/283947/original/file-20190713-173370-1v5elsg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/283947/original/file-20190713-173370-1v5elsg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/283947/original/file-20190713-173370-1v5elsg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=358&fit=crop&dpr=1 600w, https://images.theconversation.com/files/283947/original/file-20190713-173370-1v5elsg.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=358&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/283947/original/file-20190713-173370-1v5elsg.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=358&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/283947/original/file-20190713-173370-1v5elsg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=450&fit=crop&dpr=1 754w, https://images.theconversation.com/files/283947/original/file-20190713-173370-1v5elsg.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=450&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/283947/original/file-20190713-173370-1v5elsg.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=450&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Signs urging Alaska lawmakers to fund a full oil wealth fund check, known locally as the PFD or Permanent Fund Dividend, are shown Monday, July 8, 2019, in Wasilla, Alaska.</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Alaska-Legislature/742a739b00c54f19a240df061b9840d7/25/0">AP/Mark Thiessen</a></span>
</figcaption>
</figure>
<p>Former Gov. Frank Murkowski, a Republican, was one of many former state leaders to lament the decision to fully fund the PFD. He predicted in an <a href="https://www.adn.com/opinions/2019/07/10/lets-step-back-and-compromise-to-protect-alaskas-economy/">op-ed in the Anchorage Daily News</a> the day the veto failed that “The Permanent Fund and its Earnings Reserve are crucial to funding a significant part of state services going forward.”</p>
<p>That fund can either pay $3,000 dividends to every Alaska resident, or it can pay for government services. It can’t do both.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/283950/original/file-20190713-173347-1583yfw.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/283950/original/file-20190713-173347-1583yfw.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/283950/original/file-20190713-173347-1583yfw.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=596&fit=crop&dpr=1 600w, https://images.theconversation.com/files/283950/original/file-20190713-173347-1583yfw.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=596&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/283950/original/file-20190713-173347-1583yfw.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=596&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/283950/original/file-20190713-173347-1583yfw.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=749&fit=crop&dpr=1 754w, https://images.theconversation.com/files/283950/original/file-20190713-173347-1583yfw.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=749&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/283950/original/file-20190713-173347-1583yfw.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=749&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The unusual front-page editorial in the Fairbanks Daily News-Miner on July 8, 2019.</span>
<span class="attribution"><a class="source" href="https://www.newsminer.com/news/alaska_news/alaska-legislators-brace-for-showdown-over-governor-s-vetoes/article_b6539b27-8a05-5734-9c29-fa7a61559b6f.html">Screenshot, Fairbanks Daily News-Miner</a></span>
</figcaption>
</figure>
<p>State Sen. Natasha Von Imhof, an Anchorage Republican, <a href="https://www.360north.org/gavel/video/?clientID=2147483647&eventID=2019071010&startStreamAt=780">said</a>, “I cannot fathom why the governor is purposely throwing Alaska into a severe economic recession. … The governor is cutting the budget not because we are in a fiscal crisis. It is to distribute nearly $2 billion to Alaskans to the detriment of core government services like public safety, roads and education.”</p>
<p>Few state universities, social service networks or public media systems have had to adjust so quickly to such sharp declines in state support. Wisconsin comes close, when its state universities <a href="https://www.dailycardinal.com/article/2018/10/uw-system-continues-search-for-methods-to-reconcile-budget-losses">lost $250 million in 2015 and 2016</a>. </p>
<p>Alaskans’ PFD has become an entitlement so central that it impedes clear thinking about what the state needs in 2019 and what its future will be when oil wealth can’t provide basic services anymore.</p><img src="https://counter.theconversation.com/content/120220/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Paola Banchero works for the University of Alaska Anchorage and has served on the Community Advisory Board of Alaska Public Media. </span></em></p>How did Alaska, one of the richest states in the Union, end up with budget cuts that lawmakers on both sides say could wreck the state’s future? One answer’s found in three letters: PFD.Paola Banchero, Associate Professor Journalism and Public Communications, University of Alaska AnchorageLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/967782018-05-18T10:41:23Z2018-05-18T10:41:23ZThe GOP’s poor arguments for doubling down on SNAP’s work requirements<figure><img src="https://images.theconversation.com/files/219501/original/file-20180517-26290-15xxk5g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">More than 40 million Americans rely on SNAP for groceries.</span> <span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Faster-Food-Stamps/cb234d5d00184abf93214b3e6e7a76a2/1/0">AP Photo/Seth Wenig</a></span></figcaption></figure><p>Republicans aim to tighten the Supplemental Nutrition Assistance Program’s work requirements as part of the <a href="https://theconversation.com/what-the-2018-farm-bill-means-for-urban-suburban-and-rural-america-89605">farm bill</a> Congress is debating.</p>
<p>These changes would cut spending on this nutritional benefit for the poor – commonly called SNAP or food stamps – by more than <a href="https://www.cbpp.org/blog/6-takeaways-from-cbo-estimate-of-house-agriculture-committee-snap-proposals">US$17 billion over the next decade</a> and reduce the number of Americans getting these benefits by about 1.2 million.</p>
<p>As an <a href="https://umdearborn.edu/users/pksmith">economist who studies nutrition policy</a>, I’m discouraged by continuing pushes to <a href="https://www.cbpp.org/research/food-assistance/presidents-budget-would-cut-food-assistance-for-millions-and-radically">cut SNAP</a>. By many measures, SNAP is fulfilling its mandate to <a href="https://www.fns.usda.gov/snap/food-stamp-act-1964-pl-88-525">meet an essential human need</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/219481/original/file-20180517-26258-1anakh7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/219481/original/file-20180517-26258-1anakh7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/219481/original/file-20180517-26258-1anakh7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/219481/original/file-20180517-26258-1anakh7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/219481/original/file-20180517-26258-1anakh7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/219481/original/file-20180517-26258-1anakh7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/219481/original/file-20180517-26258-1anakh7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/219481/original/file-20180517-26258-1anakh7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">A supermarket in Muncie, Ind., that accepts SNAP payments.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/muncie-circa-march-2017-sign-retailer-596629331?src=xlgwiVihi99ykhVMtvqPQA-1-0">Jonathan Weiss/Shutterstock.com</a></span>
</figcaption>
</figure>
<h2>Some fact-checking</h2>
<p>Under new federal rules that <a href="http://thehill.com/homenews/house/387855-white-house-urges-support-for-house-farm-bill">President Donald Trump says he would sign</a>, SNAP <a href="https://www.factcheck.org/2018/05/facts-on-food-stamp-work-requirements/">work requirements would change</a> and be subjected to new layers of scrutiny. Just about all adults between the ages of 18 and 59 would have to work. The states, which administer this federally funded program, would lose their <a href="https://www.cbpp.org/research/food-assistance/house-farm-bills-snap-changes-are-a-bad-deal-for-states-and-low-income">enforcement discretion</a>, with the rules becoming stricter and less flexible.</p>
<p>To justify these changes, White House Budget Director Mick Mulvaney and other Republicans have long argued that the government wastes money on aiding “<a href="http://www.npr.org/sections/thesalt/2017/05/24/529831472/trump-wants-families-on-food-stamps-to-get-jobs-the-majority-already-work">able-bodied</a>” people who ought to provide for themselves.</p>
<p>But nearly <a href="https://www.fns.usda.gov/snap/characteristics-supplemental-nutrition-assistance-program-households-fiscal-year-2016">two-thirds of SNAP participants</a> are children, elderly or disabled and thus not expected to work. What’s more, 44 percent of Americans who rely on SNAP live in a household with at least some earnings. Furthermore, when able-bodied adults who aren’t caring for a dependent qualify for SNAP benefits, they <a href="https://www.fns.usda.gov/snap/facts-about-snap">lose them within three months</a> if they aren’t working at least 20 hours a week. The farm bill would raise this federal minimum to 25 hours in 2026, and the states may set a minimum of up to 30 hours.</p>
<p>Research indicates that these <a href="https://www.irp.wisc.edu/publications/media/webinars/2015/Dec2-2-2015-Webinar-SNAP.pdf">benefits go where they are intended</a>: to the poor. It’s true that some people get benefits who shouldn’t, and others who should get benefits don’t. But SNAP’s approximately 3 percent “<a href="https://www.fns.usda.gov/snap/snap-quality-control-error-rates">error rate</a>” is <a href="https://paymentaccuracy.gov/high-priority-programs/">much lower</a> than for Medicaid, Medicare, unemployment insurance and most other big government programs. Losses due to SNAP recipients selling their benefits amount to only about <a href="https://fns-prod.azureedge.net/sites/default/files/ops/Trafficking2012-2014.pdf">1.5 percent of the program’s total benefits</a>, according to the USDA. </p>
<p>That is why economists generally regard SNAP as an efficient and effective program. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/174793/original/file-20170620-29242-4ynrfm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/174793/original/file-20170620-29242-4ynrfm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/174793/original/file-20170620-29242-4ynrfm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/174793/original/file-20170620-29242-4ynrfm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/174793/original/file-20170620-29242-4ynrfm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/174793/original/file-20170620-29242-4ynrfm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/174793/original/file-20170620-29242-4ynrfm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/174793/original/file-20170620-29242-4ynrfm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">States currently don’t have to fund SNAP, but they cover some of the program’s administrative costs and issue the cards beneficiaries use to redeem benefits.</span>
<span class="attribution"><a class="source" href="https://snaped.fns.usda.gov/ebt-cards-several-states">USDA</a></span>
</figcaption>
</figure>
<h2>Encouraging work</h2>
<p>The Trump administration and GOP lawmakers say job requirements <a href="https://www.whitehouse.gov/wp-content/uploads/2018/05/saphr2hr_20180515.pdf">make the poor more self-sufficient</a>.</p>
<p>But <a href="http://www.cbpp.org/research/the-relationship-between-snap-and-work-among-low-income-households?fa=view&id=3894">research indicates that SNAP benefits do little to discourage paid work</a>. More than half of the <a href="http://www.cbpp.org/research/the-relationship-between-snap-and-work-among-low-income-households">non-disabled, working-age adults getting these benefits work</a>. Even more – 80 percent – are employed the year before or afterwards.</p>
<p>Besides, SNAP benefits average <a href="http://www.cbpp.org/research/food-assistance/a-quick-guide-to-snap-eligibility-and-benefits">just $1.40 per meal per person</a>, offering a meager incentive to remain unemployed.</p>
<h2>The economics</h2>
<p>The program currently <a href="https://www.cbpp.org/research/policy-basics-the-supplemental-nutrition-assistance-program-snap">costs around $70 billion</a> a year, <a href="http://econofact.org/welfare-and-the-federal-budget">around 2 percent of the federal budget</a>. It helps millions of vulnerable Americans by reducing <a href="http://www.tandfonline.com/doi/abs/10.1080/01621459.2012.682828">food insecurity</a> and <a href="https://www.sup.org/books/title/?id=24621">economic hardship</a> and solves other problems indirectly.</p>
<p>For example, <a href="https://www.ers.usda.gov/publications/pub-details/?pubid=84466">food insecurity increases the risk of many ailments</a>. Children who get too little to eat are more likely to have anemia, asthma, cognitive problems and behavioral problems. Food-insecure working-age adults report more hypertension and sleeping problems. Seniors who don’t eat right are more likely to experience depression. Children of pregnant women who get food assistance are less likely to <a href="https://www.aeaweb.org/articles?id=10.1257/aer.20130375">become obese or have hypertension or diabetes</a>.</p>
<p>Low-income Americans who lose SNAP benefits would probably have more health problems, and the harm can be lasting. This bodes badly for low-income Americans’ ability to support themselves.</p>
<p>And since SNAP automatically responds to the business cycle, the program stimulates local and national economies during economic downturns. Each $5 the government spends on <a href="http://www.ers.usda.gov/publications/pub-details/?pubid=44749">SNAP triggers $9 of economic activity</a> and every $1 billion in benefits <a href="https://www.ers.usda.gov/topics/food-nutrition-assistance/supplemental-nutrition-assistance-program-snap/economic-linkages/">creates roughly 9,000 jobs</a>, economists estimate.</p>
<p>The upshot is that lots of people could soon be spending less on food and thousands of Americans could lose their jobs – mostly in retail and farming. And more Americans will eventually suffer during the next economic downturn.</p>
<p><em>This is an updated version of an article <a href="https://theconversation.com/the-trump-teams-poor-arguments-for-slashing-snap-79710">originally published on June 25, 2017</a>.</em></p><img src="https://counter.theconversation.com/content/96778/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Patricia Smith does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Cutting the program formerly known as food stamps would hurt low-income Americans and the whole economy.Patricia Smith, Professor of Economics, University of MichiganLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/959432018-05-08T09:41:10Z2018-05-08T09:41:10ZMorrison’s budget tax plan is another missed opportunity<p>Even though <a href="https://www.budget.gov.au/">this year’s budget</a> is pretty good politics and reasonable economics, on almost every front, it is a missed opportunity to be bold. </p>
<p>Last year’s budget was a bank-bashing bombshell, with 4-5% of profits for five of Australia’s biggest banks yanked away, not for financial stability reasons, but because, as Treasurer Scott Morrison hinted at the budget press conference, people don’t like the banks very much.</p>
<p>With that populist mission accomplished, this year’s budget is more mundane. </p>
<p>The much-vaunted return to surplus is now planned for 2019-20 at just 0.1% of GDP. In 2017-18 we are told to expect a deficit of 1% of GDP ($18.2 billion). That’s before the forecast 3% real GDP growth from 2018-19 onward kicks in. An heroic assumption. </p>
<p>Compare that to an actual of 2.1% in 2016-17. That topline forecast is not insane, but it is certainly bullish. One is tempted to ask the Treasurer whether he would bet a year’s salary that real GDP will be above 3% compared to below that. I suspect he wouldn’t.</p>
<h2>A new personal income tax plan</h2>
<p>Having previously introduced, but not wholly managed to get through the Senate, a 10-year plan to reduce the company tax rate from 30% to 25%, this year the government has a seven-year “Personal Income Tax Plan”.</p>
<p>Under the “PIT plan” (pun absolutely intended) the number of tax brackets will be reduced from five to four. By 2024-25 the tax-free threshold will remain at $18,200 and a 19% tax rate will apply up to income of $41,000, at which point the 32.5% rate will kick in. The top marginal rate of 45% will apply to incomes above $200,000. </p>
<p>One good thing the plan does address (at least in part) is “bracket creep,” where wage growth coupled with fixed tax thresholds, leads taxpayers to pay more. Under the new plan, 94% of Australians will pay no more than a 32.5% marginal tax rate. That compares to 63% of Australians who pay that rate or less, under existing policy settings.</p>
<p>In terms of tax relief, it’s relatively modest. A person earning $50,000 will be $530 better off in 2018-19. Because of changes to the Low and Middle Income Tax Offset, this falls to $215 for someone earning $120,000 (and less still beyond that).</p>
<p>Now $530 post-tax dollars, for someone on $50,000 a year, isn’t nothing. But it doesn’t really make up for wage growth so sluggish (2.2% on average last year) that it barely keeps up with inflation.</p>
<p>This is all part of the government’s newly announced, but thoroughly leaked, mantra that taxes should be no more than 23.9% of GDP. The rationale is, as the budget papers put it “so we do not unfairly burden Australians, nor allow taxes to chase ill-disciplined spending”. </p>
<p>In some sense that’s a fair point, but the 23.9% is completely unscientific. It appears to be the average of what tax as a share of GDP was during the Howard government, which has left most economic commentators wondering “so what?”</p>
<h2>The black economy and superannuation</h2>
<p>There’s a “crackdown” on the black economy with a $10,000 limit on cash transactions. Who knows how that will be enforced. Perhaps our good friends the banks will start complying with anti-money laundering provisions. </p>
<p>In any case, I prefer a $0 limit on cash transactions by transitioning over three years to a cashless Australia. That would likely raise $5-6 billion a year every year, maybe more.</p>
<p>The sneakiest thing of all is taxing tobacco 12 weeks earlier upon entry into Australia, rather than at present when it leaves the warehouse. That will boost tax receipts once, and once only, in 2019-20 by $3.27 billion. Without that timing trick the return to surplus would be pushed back a year to 2020-21.</p>
<p>Having attacked retirement savings last year, the government is now “reuniting Australians with lost super”. Hard to be against that, but hard to get too excited either. Exit fees on superannuation accounts will also be banned, which is a very good idea and should help consolidation of accounts.</p>
<p>One step better would be making it a net zero cost to transfer all banking arrangements (mortgage, accounts, credit cards, etc) from one bank to another, through a mandate on banks and a subsidy for customers. That would help with competition in the banking sector, which has come under recent scrutiny.</p>
<p>Another small but sensible initiative is increasing the Pension Work Bonus from $250 to $300 per fortnight, which permits pensioners to earn up to that amount without affecting their pension eligibility.</p>
<p>On a more disappointing note there is a reasonably large amount of fanfare but very little substance about “backing regional Australia”. There is $200 million for a third round of the Building Better Regions Fund to support infrastructure on top of the $272 million from the Regional Growth Fund. </p>
<p>That’s fine but falls well short of a systematic plan for regional infrastructure and does not address regional unemployment, particularly youth unemployment, in a meaningful way. Tackling that would require the kind of place-based policies like targeted wage subsidies and reduced payroll taxes <a href="https://theconversation.com/the-government-should-pick-towns-not-industries-to-fund-78464">that I have advocated before</a>.</p>
<p>There are a host of so-called “integrity measures” to do with taxation. There’s the oft-talked about tightening of thin capitalisation rules, whereby companies load worldwide debt onto an Australian entity to increase interest charges in Australia, instead of in low taxing jurisdictions like Ireland. This is in addition to other attempts to get multinationals to pay more tax. These are more likely to get multinationals to pay lawyers more, but it’s now customary padding in every budget. </p>
<p>The forecasts are pretty rosy in this year’s budget, but they always are. Overall, it’s a hard budget to hate, and a hard budget to like. But it is a classic political pre-election budget.</p><img src="https://counter.theconversation.com/content/95943/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Richard Holden does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Even though this year’s budget is pretty good politics and reasonable economics, on almost every front, it is a missed opportunity to be bold.Richard Holden, Professor of Economics and PLuS Alliance Fellow, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/845572017-11-01T10:14:17Z2017-11-01T10:14:17ZCalifornia’s higher education: From American dream to dilemma<figure><img src="https://images.theconversation.com/files/190048/original/file-20171012-31431-5dey19.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Students at Berkeley campus</span> <span class="attribution"><span class="source">AP Photo/Ben Margot, File</span></span></figcaption></figure><p>For the Golden State of California, 1960 was a golden year: It was a time of rapid development, when the state chose to use its tax revenues to fund magnificent freeways and other infrastructure. </p>
<p>Part of this massive development was a system of <a href="https://doi.org/10.2307/25157701">public higher education</a> – a model that put California center stage in the American imagination.</p>
<p>From my perspective as a social historian who started high school in Southern California in 1961 and then entered graduate school at the University of California Berkeley in 1969, the story of higher education in California over the past 60 years has been a fantastic voyage – albeit with detours and delays.</p>
<h2>Start of the dream</h2>
<p>California’s higher education prospects of 1960 were built on a distinctive historical foundation. The idea that the state’s colleges and universities could – and should – be the <a href="http://www.sup.org/books/title/?id=339">source</a> of an informed, responsible citizenry and state leadership had been established by legislators and voters by World War I. </p>
<p>Robert Gordon Sproul, president of the University of California, who served from 1930 to 1958, built on this early vision. He set up <a href="http://www.sup.org/books/title/?id=339">six campuses statewide</a> as part of a creation of a multi-campus system to meet California’s growing demand for higher education. </p>
<p>After World War II, as returning veterans headed back to school the demand continued to grow: <a href="http://www.lib.berkeley.edu/uchistory/archives_exhibits/masterplan/MasterPlan1960.pdf">Enrollments in universities increased by as much as 50 percent.</a> At the same time, the <a href="http://www.lib.berkeley.edu/uchistory/archives_exhibits/masterplan/MasterPlan1960.pdf">number of high school graduates</a> went up as well. The number of campuses needed to be further increased. </p>
<p>The rapid growth in potential students coinciding with the crazy quilt of a large number of public and private institutions led to <a href="http://www.sup.org/books/title/?id=339">turf wars</a>. The foremost problem was a contentious rivalry between the University of California system and other state-funded higher education institutions. Both were <a href="http://content.time.com/time/covers/0,16641,19601017,00.html">in competition</a> for funding and students.</p>
<h2>The dream years</h2>
<p>When Clark Kerr was named president of the University of California system in 1958, he sought to end the chaos of the <a href="http://content.time.com/time/covers/0,16641,19601017,00.html">statewide academic “guerrilla warfare</a>.” Kerr was an economist who had served for seven years as chancellor of the university’s flagship campus at Berkeley.</p>
<p>With Kerr’s efforts higher education became part of the California dream. In 1960 the state legislature passed the Donahoe Act. This legislation included a 246-page report, <a href="http://www.lib.berkeley.edu/uchistory/archives_exhibits/masterplan/MasterPlan1960.pdf">“A Master Plan for Higher Education in California, 1960-1975.”</a></p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/190050/original/file-20171012-31386-rqx9mv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/190050/original/file-20171012-31386-rqx9mv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=810&fit=crop&dpr=1 600w, https://images.theconversation.com/files/190050/original/file-20171012-31386-rqx9mv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=810&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/190050/original/file-20171012-31386-rqx9mv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=810&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/190050/original/file-20171012-31386-rqx9mv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1018&fit=crop&dpr=1 754w, https://images.theconversation.com/files/190050/original/file-20171012-31386-rqx9mv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1018&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/190050/original/file-20171012-31386-rqx9mv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1018&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">President Clark Kerr on the cover of Time magazine.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/urbanoasis/3560475324/">Dale Winling</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span>
</figcaption>
</figure>
<p>To reduce chaos, missions were clearly defined for each institutional segment: University of California was to admit the top 12.5 percent of high school graduates, and the California State University and Colleges would draw from the top 33 percent of remaining high school graduates. The others could enroll in junior colleges, later renamed “community colleges.” These junior colleges provided associate degree programs, and their graduates could apply for transfer to the four-year colleges.</p>
<p>The plan gained national attention. On Oct. 17, 1960, Time magazine featured Clark Kerr on its cover as the <a href="http://content.time.com/time/covers/0,16641,19601017,00.html">“Master Planner.”</a> </p>
<p>A distinctive feature of the California master plan was that the state’s private colleges and universities (also known as “independent colleges and universities”) too were <a href="https://www.aiccu.edu/about/">included in this public policy</a>, the rationale being that distinguished private colleges and universities such as Stanford, University of Southern California, California Institute of Technology and Claremont Colleges were a unique resource to the state. Their alumni, as skilled professionals and leaders, contributed to the state’s development. These institutions were also major employers within their counties and communities.</p>
<h2>Affordable and a place of excellence</h2>
<p>What is particularly important to note is that the California dream of higher education combined access to higher education with affordability and choice. Until then, the City University of New York (CUNY) had been the only major public higher education system that had a tradition of not charging tuition. But the New York policy for its CUNY segment did not apply to New York’s other public institutions, such as the State University of New York (SUNY). </p>
<p>In contrast, the new California policy of no tuition was extended to all public colleges and universities statewide. Furthermore, the master plan promoted <a href="http://www.csac.ca.gov/doc.asp?id=128">state-funded student scholarships</a> through a state agency created in 1955, the California Student Aid Commission. </p>
<p>California came to provide a high quality of education – the best in the country. A 1966 report by the American Council on Education (based on data collected in 1964) shows that University of California, Berkeley was the <a href="https://eric.ed.gov/?id=ED016621">top university at the time in America</a> for overall quality in graduate education. </p>
<p>Excellence was encouraged and nurtured. Between 1939 and 1968, 12 professors at UC Berkeley had received the Nobel Prize, the <a href="https://www.berkeley.edu/news/features/nobel/">highest number</a> at any university. </p>
<p>Resources were made available for the realization of the dream. As part of passing the Donahoe Act in 1960, the California state government <a href="http://content.time.com/time/covers/0,16641,19601017,00.html">approved US$1 billion</a> (equivalent to about $10 billion in 2017) in funding for higher education facilities. Central to its growth was an expansion of campuses. Between 1964 and 1965 the University of California <a href="https://doi.org/10.2307/25157701">built three new campuses</a> – at San Diego, Irvine and Santa Cruz. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/190049/original/file-20171012-31408-1fra4yz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/190049/original/file-20171012-31408-1fra4yz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=467&fit=crop&dpr=1 600w, https://images.theconversation.com/files/190049/original/file-20171012-31408-1fra4yz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=467&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/190049/original/file-20171012-31408-1fra4yz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=467&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/190049/original/file-20171012-31408-1fra4yz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=587&fit=crop&dpr=1 754w, https://images.theconversation.com/files/190049/original/file-20171012-31408-1fra4yz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=587&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/190049/original/file-20171012-31408-1fra4yz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=587&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">University of California, Irvine, 1966.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/ocarchives/2868164141/">Orange County Archives</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<h2>Inflation, tuition, loans</h2>
<p>By 1967, however, the master plan was encountering problems – it was expensive and increasingly seemed not sustainable.</p>
<p>In addressing citizen groups, state Senator George Deukmejian voiced Republican concerns about higher education. According to a front-page story in The Whittier Daily News on October 14, 1967, Deukmejian argued in favor of adding a tuition charge for University of California students and endorsed <a href="http://www.newfoundations.com/Clabaugh/CuttingEdge/Reagan.html">Governor Ronald Reagan’s new “equal education plan.”</a> The plan called for a modest tuition of $250 per year (worth approximately $2,500 today) for the university and $80 per year in the state colleges (equivalent to $800 per year today).</p>
<p>The Republican reform plan included grants or loans to those who could not afford the modest tuition. He noted that half of the enrolled students came from relatively affluent families. Only about 12 percent came from modest-income families earning $6,000 year or less (about $60,000 today). </p>
<p>When Deukmejian took office as governor in 1983, he <a href="http://www.nytimes.com/1982/12/28/science/california-weighs-end-of-free-college-education.html">continued</a> to impose tuition charges on students at the University of California and other state colleges.</p>
<h2>The realities today</h2>
<p>Today, California’s higher education system struggles with budget cuts and an uncertain future. The reasons are many.</p>
<p>The percentage of Californians seeking to go to college gradually increased, and so did the overall number of high school graduates. Consequently, the expansion in college enrollments over a little more than a half-century was incredibly large. </p>
<p>In 1960, for example, the total enrollment for all institutions in the state was 234,000. By 2015 University of California enrolled 253,000 students at 10 campuses, California State University enrolled 395,000 students at 16 campuses, and the community colleges enrolled 1,138,000 at 113 campuses. This was a <a href="http://www.lao.ca.gov/handouts/education/2017/Overview_of_Higher_Education_in_California_083117.pdf">seven-fold enrollment increase</a> since 1960 – the most among all states in the nation. </p>
<p>In contrast to 1960, <a href="http://www.lao.ca.gov/handouts/education/2017/Overview_of_Higher_Education_in_California_083117.pdf">student fees and tuition increased</a> while state general fund subsidies per student tapered. In 2015, tuition charges at UC were $12,240, a tenfold increase over 1960.</p>
<p>During the past four decades, California’s public colleges and universities have <a href="http://www.ppic.org/wp-content/uploads/r_0917hj3r.pdf">endured lean budgets</a>. The start of this came about in 1978, when <a href="http://content.time.com/time/nation/article/0,8599,1904938,00.html">passage of Proposition 13</a> placed a ceiling on property taxes, which, among others, had helped provide revenues to the state for meeting expenditures for public education.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/190051/original/file-20171012-31414-w0mb4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/190051/original/file-20171012-31414-w0mb4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/190051/original/file-20171012-31414-w0mb4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/190051/original/file-20171012-31414-w0mb4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/190051/original/file-20171012-31414-w0mb4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/190051/original/file-20171012-31414-w0mb4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/190051/original/file-20171012-31414-w0mb4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Signs from students who came together from all California university campuses to protest against tuition hikes in November 2009.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/42047737@N07/4119078870/in/photolist-9nCY4K-bUCrXX-9nFYNY-bzQeJW-cbZFeo-7gWjGZ-8HcCJd-7gWzBa-bUCrMp-cbZFA1-bUCryX-bzQeM5-9nCYrX-9nCXvr-8HcGNE-9nFZUQ-7gWzBg-8HcGpf-8HcGQL-8HcGBL-8HcH1y-8H9yRT-7gZmDd-8H9yZt-7gZmDf-8HcGo9-8HcGUq-7gWjGX-8H9yHr-8H9yPB-8H9zdD-7gZPR1-7gZPQN-7h1zwh-7gWzB4-7gWjH4-7gWzAZ-7gZPR7-8HcGSd-7gZmDh-GYJ4xU-7gZPQQ-bUCs4T-bUCrzP-cbZEXy-cbZEV9-cbZENo-bNJT5v-8HcGJo-7gWjGV">Sarah Smith</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
</figcaption>
</figure>
<p>Today there are concerns that the public universities, as a result of budget cuts, are soon going to be <a href="http://stanford.universitypressscholarship.com/view/10.11126/stanford/9780804780506.001.0001/upso-9780804780506">“public no more.”</a> As education scholar <a href="https://scholars.opb.msu.edu/en/persons/brendan-j-cantwell">Brendan Cantwell</a> notes, even the preeminent research university, Berkeley, has been <a href="https://theconversation.com/what-berkeleys-budget-cuts-tell-us-about-americas-public-universities-54997">hit by budget cuts</a>. At the same time, the state’s outstanding private colleges and universities <a href="http://www.economist.com/node/21560290">have soared</a> in terms of academic standards, selective admissions, tuition revenues, new construction and federal research grants. </p>
<p>The master plan has struggled to keep up. It has gone through many reviews and revisions, the latest of which, in 2017, emphasized improving access and <a href="https://edsource.org/2017/college-leaders-urge-changes-to-californias-higher-education-master-plan-to-improve-access-and-affordability/586647">affordability.</a></p>
<p>But the convergence of these trends, combined with <a href="http://www.economist.com/node/21560290">fluctuations in the state economy and tax revenues</a>, has turned the Californian dream of higher education into an American dilemma. </p>
<h2>California dreaming: Questions ahead</h2>
<p>In truth, the 1960 Master Plan was hardly a panacea for making a college education available to all. It has, however, been an enduring document with its essential principles and goals.</p>
<p>To go from the ideal to the real requires attention to the context of a new era.</p>
<p>In looking ahead, California’s higher education system faces <a href="https://books.google.com/books/about/Excellence.html?id=liE59woX624C">the challenge</a> that president of the Ford Foundation, John Gardner, a Californian, aptly posed in 1961:</p>
<blockquote>
<p>“Can we be equal and excellent, too?” </p>
</blockquote>
<p><em>Read more about the past and future of the <a href="https://theconversation.com/topics/california-dream-39642">California Dream</a>. This series is published in collaboration with KQED.</em></p><img src="https://counter.theconversation.com/content/84557/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John R. Thelin does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Post-World War II California built an unrivalled system of higher education combining access, affordability and choice. Then a contraction of the vision came in the 1980s.John R. Thelin, University Research Professor, University of KentuckyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/814462017-08-07T02:23:57Z2017-08-07T02:23:57ZHow affordable housing can chip away at residential segregation<figure><img src="https://images.theconversation.com/files/180793/original/file-20170802-23530-5b14m3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A federal housing incentive could have untapped potential.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/small-house-calculator-sitting-on-stack-157353578?src=KP9aoohHJ9Wcs2ZnhFBTgA-1-49">photastic/Shutterstock.com</a></span></figcaption></figure><p>With the health care debate stalling, Republicans are beginning to make more noise about tax reform. President Donald Trump has promised to make his bid to alter the code his <a href="http://www.cnbc.com/2017/07/20/tax-reform-battle-could-be-worse-than-health-care-brawl.html">next big battle</a>, as has House Speaker Paul Ryan.</p>
<p>Though the <a href="https://fas.org/sgp/crs/misc/RS22389.pdf">low-income housing tax credit</a> <a href="https://www.cbo.gov/budget-options/2016/52278">could land on the chopping block</a>, it’s probably safe due to its history of bipartisan support. Along with politicians from both sides of the aisle, developers and many banks and nonprofits embrace it because the tax credit makes creating new affordable housing units financially feasible and less risky. Yet the program, which is the only significant federal subsidy for building affordable housing, could be in jeopardy as lawmakers seek to close tax loopholes and lower tax rates.</p>
<p>As a tax law researcher who has studied where properties built with this tax credit are located, I see good reasons to preserve it. Above all, this program has the untapped potential to help solve the intractable problems of residential segregation by race, ethnicity and class.</p>
<h2>Affordable housing</h2>
<p>Each year, the federal government delivers approximately <a href="https://www.huduser.gov/portal/datasets/lihtc.html">US$8 billion</a> in low-income housing tax credits to housing developers that agree to set aside a certain number of units as rent-controlled affordable housing for qualified tenants. Since it began in 1986, the program has helped create at least 45,905 affordable housing projects with <a href="https://www.huduser.gov/portal/datasets/lihtc.html">nearly three million units</a>.</p>
<p>Some recent research suggests that the affordable housing properties built with the tax credits <a href="https://web.stanford.edu/%7Ediamondr/LIHTC_spillovers.pdf">help to integrate and revitalize</a> otherwise poverty-stricken neighborhoods.</p>
<p>Notwithstanding these encouraging findings, I still worry that the program may reinforce racial and economic segregation in some cities. For example, affordable housing advocates have voiced concern about the program’s harmful effects on <a href="https://www.dallasnews.com/news/dallas/2016/08/31/supreme-court-victory-dallas-nonprofit-loses-racial-bias-suit-texas-agency">neighborhood choice in Dallas</a> and <a href="http://nlihc.org/article/fhjc-report-says-lihtc-unit-locations-reinforce-poverty-concentration-and-segregation-nyc-re">New York City</a>. In my own research about low-income tenants <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2929672">in Philadelphia</a>, I have noted that they have few options to live in low-income housing tax credit projects outside of high-poverty neighborhoods where most residents are people of color.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/180794/original/file-20170802-16521-ixgqb6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/180794/original/file-20170802-16521-ixgqb6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/180794/original/file-20170802-16521-ixgqb6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/180794/original/file-20170802-16521-ixgqb6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/180794/original/file-20170802-16521-ixgqb6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/180794/original/file-20170802-16521-ixgqb6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/180794/original/file-20170802-16521-ixgqb6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/180794/original/file-20170802-16521-ixgqb6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">This new St. Louis housing development is backed by federal low-income housing tax credits.</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Trump-Infrastructure/18f02e5c11494ec18ed1000d2d01f63e/1/0">AP Photo/Jeff Roberson</a></span>
</figcaption>
</figure>
<h2>A new mandate</h2>
<p>Here’s one possible explanation for the disagreement. Because there are no geographic restrictions on where affordable housing may go for builders to qualify for the tax credit, and there is no mandate that eligible projects help break up pockets of poverty, its impact inevitably varies. </p>
<p>Instead of leaving outcomes to chance, some <a href="http://nlihc.org/article/prrac-highlights-fair-housing-best-practices-state-lihtc-policies">affordable housing advocates</a> and <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2929672">I are suggesting a solution</a>: Housing authorities – which determine which affordable housing projects will be awarded the tax credits – should approve only properties consistent with new, broader anti-poverty and anti-segregation objectives. </p>
<p>For more than a decade, researchers have noted that affordable housing properties boosted by this tax credit are disproportionately located in low-income neighborhoods. Perhaps for this reason, an important line of research has sought to understand the tax credit’s impact on the communities surrounding new affordable housing projects. Though findings have varied, several researchers have found positive spillover effects.</p>
<p>In a recent report, <a href="https://web.stanford.edu/%7Ediamondr/LIHTC_spillovers.pdf">Rebecca Diamond and Tim McQuade</a> from Stanford’s Graduate School of Business offered new empirical evidence to support the view that the tax-subsidized properties benefit surrounding areas. They found that the projects increased property values, lowered the crime rate and spurred economic and racial integration – as long as the buildings were located in low-income neighborhoods where more than half the population was black or Latino. </p>
<p>The study didn’t detect these benefits, however, for affordable housing located in more affluent, predominantly white areas. Does that mean builders should go out of their way to site projects in low-income neighborhoods? Not necessarily.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/180798/original/file-20170802-9082-vr1w5z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/180798/original/file-20170802-9082-vr1w5z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/180798/original/file-20170802-9082-vr1w5z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=337&fit=crop&dpr=1 600w, https://images.theconversation.com/files/180798/original/file-20170802-9082-vr1w5z.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=337&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/180798/original/file-20170802-9082-vr1w5z.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=337&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/180798/original/file-20170802-9082-vr1w5z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/180798/original/file-20170802-9082-vr1w5z.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/180798/original/file-20170802-9082-vr1w5z.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Residential segregation in many U.S. communities has persisted.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-illustration/several-homes-families-connected-neighborhoods-50580424">iQoncept/Shutterstock.com</a></span>
</figcaption>
</figure>
<h2>A Philadelphia case study</h2>
<p>Establishing affordable housing in low-income neighborhoods may give surrounding areas a small boost. But doing so exclusively may severely restrict housing options available to low-income tenants, leaving many without opportunities to live in other kinds of places. </p>
<p><a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2929672">My own research</a> on siting patterns has focused on Philadelphia, a city with a history of residential housing <a href="http://www.phillymag.com/citified/2015/09/22/philadelphia-segregated-big-city/">segregation that still persists</a>. I found that the number of low-income housing tax credit properties in a Philadelphia ZIP code is strongly correlated with the ZIP code’s <a href="https://www.census.gov/topics/income-poverty/poverty/guidance/poverty-measures.html">poverty rate</a>, or the percentage of residents below the poverty line, which varies according to family size. (Families of four <a href="https://www.census.gov/data/tables/time-series/demo/income-poverty/historical-poverty-thresholds.html">earning less than $24,755</a>, for example, fall into this category.)</p>
<p>My findings suggest that the projects have been – intentionally or not – clustered in low-income neighborhoods. In fact, 40 percent of Philadelphia’s 465 low-income housing tax credit properties built or rehabilitated since 1987 were located in just five low-income ZIP codes.</p>
<p>Since my study didn’t look at neighborhood change, I can’t say with certainty whether siting 184 low-income housing tax credit projects in those five ZIP codes has increased the racial and economic diversity of those neighborhoods over the past few decades. I don’t know whether the neighborhood homeowners benefited from having 30 or more low-income housing tax credit properties down the street.</p>
<p>What I can say is that the average poverty rate in those five ZIP codes was still 43 percent in 2015 (the city average is <a href="https://factfinder.census.gov/bkmk/cf/1.0/en/county/Philadelphia%20County,%20Pennsylvania/POVERTY/BLW_LVL_PCT">26 percent</a>), and 83 percent of the residents were nonwhite, compared with <a href="https://factfinder.census.gov/bkmk/table/1.0/en/ACS/15_5YR/DP05/0500000US42101">58.3 percent</a> of all Philadelphia residents. Meanwhile, most of these low-income housing tax credit properties are zoned for highly segregated public schools.</p>
<p></p><hr><p></p>
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These are troubling statistics, given <a href="http://press.uchicago.edu/ucp/books/book/chicago/S/bo14365260.html">recent findings</a> by New York University sociologist Patrick Sharkey that children who live in high-poverty, racially segregated neighborhoods are more likely to be even poorer than their parents when they grow up. This effect takes a toll on the generation of children living there and the next generation.<p></p>
<h2>Mixed-income properties</h2>
<p>Given the risks tied to living in overwhelmingly segregated neighborhoods, housing policies should encourage builders to construct affordable housing in more affluent areas. </p>
<p>Though the tax code calls for a larger tax credit for projects located in certain <a href="https://www.huduser.gov/portal/datasets/qct.html">high-poverty census tracts</a>, it lacks geographic restrictions or guidance on where they should go. In other words, the federal tax law is designed to increase the supply of affordable housing without saying where to put it.</p>
<p>Without siting mandates, the tax credit is relatively flexible and could, at least theoretically, help make poverty less concentrated. One possibility is to draw higher-income tenants to low-income neighborhoods through low-income housing tax credit-financed mixed-income housing.</p>
<p>The tax law allows for mixed-income projects, but Yale Law professor Robert Ellickson has noted that more than 80 percent of low-income housing tax credit properties are <a href="http://www.uclalawreview.org/pdf/57-4-3.pdf">exclusively low-income</a>. For the tax program to support a mixed-income strategy, developers would have to reserve fewer units for poor tenants. And that change that might undermine the program’s primary goal.</p>
<h2>Housing vouchers</h2>
<p>For this reason and others, policymakers should instead look to the program’s potential to aid other housing programs. For instance the <a href="https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/50782-lowincomehousing-onecolumn.pdf">$18 billion</a>-per-year Housing Choice Voucher program is designed to give low-income renters choices about where they will live – including places where poverty is less concentrated than where they currently reside.</p>
<p>This program gives low-income tenants vouchers to help pay their rent. They agree to spend up to 30 percent of their income on rent, state housing authorities pick up the rest of the tab, and the federal government reimburses the states for that expense.</p>
<p>Many landlords won’t accept vouchers, sometimes because they worry that low-income tenants won’t pay their rent. Even the landlords who take vouchers can get skittish over compliance and inspection requirements.</p>
<p>But landlords renting out affordable housing units built through the low-income housing tax credit program aren’t allowed to refuse to lease to tenants merely because they plan to use vouchers. Disproportionately siting projects in poor neighborhoods may limit the tax law’s capacity to make the most out of this federal program.</p>
<p>In contrast, encouraging builders to place affordable housing in more affluent neighborhoods with this tax credit may give low-income renters more housing location options. For parents facing economic hardship, the ability to move to an affluent neighborhood may make it more likely that their kids will grow up to be better off.</p><img src="https://counter.theconversation.com/content/81446/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michelle D. Layser does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>With some tinkering, a federal tax credit that encourages developers to create new units that low-income Americans can afford to rent might yield other benefits.Michelle D. Layser, Research Fellow, Adjunct Professor of Law, Georgetown UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/813672017-08-01T00:17:35Z2017-08-01T00:17:35ZWelfare as we know it now: 6 questions answered<figure><img src="https://images.theconversation.com/files/179898/original/file-20170726-28585-6xhxyw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">When President Bill Cllinton officially ended welfare as we knew it, he was flanked by women who had received Aid to Families with Dependent Children.</span> <span class="attribution"><a class="source" href="http://pictures.reuters.com/C.aspx?VP3=SearchResult&VBID=2C0BXZNAYW76Z&SMLS=1&RW=1195&RH=684&POPUPPN=36&POPUPIID=2C0408YJW9N">Reuters/Stephen Jaffee</a></span></figcaption></figure><p><em>Editor’s note: President Donald Trump’s proposed budget would slice <a href="https://www.washingtonpost.com/graphics/politics/trump-budget-benefits-cuts/?utm_term=.6fe8a036bc8a">US$21.7 billion over a decade, or 13.1 percent</a>, from Temporary Assistance for Needy Families (TANF) – what’s left of basic welfare for families facing economic hardship. To justify this cut and an across-the-board reduction in <a href="https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/budget.pdf">antipoverty spending</a>, he argued, “We must reform our welfare system so that it does not discourage able-bodied adults from working, which takes away scarce resources from those in real need.”</em> </p>
<p><em>But, as political scientist Laura Hussey explains, that’s already the case. Today’s welfare system is short-term and reserved mainly for children.</em></p>
<h2>1. What is TANF?</h2>
<p>TANF provides cash assistance and other services to children and their parents or guardians who can work and are extremely poor. States, sometimes through local governments, administer the program and help fund it.</p>
<p>It replaced the welfare program known first as Aid to Dependent Children and later renamed Aid to Families with Dependent Children. In 1996, President Bill Clinton and the Republican-led Congress <a href="https://www.congress.gov/bill/104th-congress/house-bill/3734/text">overhauled the welfare system</a>, creating TANF. This modern welfare system’s main goals boil down to:</p>
<ol>
<li><p>Help families in need care for their own children.</p></li>
<li><p>Get families off welfare quickly, especially through paid work.</p></li>
<li><p>Encourage marriage and two-parent families while discouraging unmarried and teen pregnancy.</p></li>
</ol>
<p>Fulfilling Clinton’s campaign promise to “<a href="https://www.brookings.edu/book/ending-welfare-as-we-know-it/">end welfare as we know it</a>,” the law tied time limits and other, sometimes intrusive, mandates to cash grants. Among other changes, it converted the federal program into a block grant model, letting states use these dollars how they wanted. It converted this antipoverty program into aid contingent on efforts to <a href="http://onlinelibrary.wiley.com/doi/10.1002/pam.21880/full">enter or reenter the workforce</a> through new job requirements. In 2012, the most recent year for which comprehensive data are available, more than 42 percent of TANF families included <a href="https://aspe.hhs.gov/system/files/pdf/116161/FINAL%20Fourteenth%20Report%20-%20FINAL%209%2022%2015.pdf">an employed household member</a>.</p>
<h2>2. How many Americans get TANF benefits?</h2>
<p>The <a href="https://www.cbpp.org/research/family-income-support/tanf-reaching-few-poor-families">1.5 million American families</a> who obtained TANF benefits in a typical month in 2015 represent roughly 23 percent of those experiencing poverty. In contrast, AFDC, the precursor program, supported 4.7 million families in 1995 – 76 percent of the nation’s poor families. </p>
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<h2>3. Who gets TANF benefits?</h2>
<p>More than three out of four of the people who get these benefits are children. For a <a href="http://digitalcommons.ilr.cornell.edu/key_workplace/1504/">growing share</a> of TANF “families” – nearly half in 2015 – <a href="https://www.acf.hhs.gov/ofa/resource/characteristics-and-financial-circumstances-of-tanf-recipients-fiscal-year-2015">the only beneficiaries are minors</a>. </p>
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<p>Most of these children who are the only people in a household getting benefits either reside with guardians or have parents who are aren’t eligible themselves. Ineligible parents who live in poverty might be immigrants, people who receive disability-related assistance or adults who would qualify if they hadn’t broken TANF rules, such as failing to fully comply with a work requirement or submit required paperwork.</p>
<p>In those cases, families keep receiving the children’s part of the grant. This reflects a reluctance by policymakers to punish kids for their parents’ status or behavior.</p>
<h2>4. How long do people get these benefits?</h2>
<p>Most TANF recipients get benefits for short periods of time. From 2008 to 2011, as the Great Recession ended, most of them were out of the program within four months or less. The vast majority of Americans who got TANF benefits from 1999 to 2008 received it for no more than <a href="https://aspe.hhs.gov/system/files/pdf/116161/FINAL%20Fourteenth%20Report%20-%20FINAL%209%2022%2015.pdf">two of those years</a>, according to the Department of Health and Human Services. </p>
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<p>The federal government cuts off TANF benefits for families with an adult recipient after a total of 60 months. States may set their own ceiling below five years if they want or make an exception to this lifetime limit for up to 20 percent of their TANF cases, based on exceptional hardship. They can also use their own money to continue cash benefits for families that hit that five-year quota, which applies to adults but not children.</p>
<h2>5. How does the program vary across the country?</h2>
<p>TANF cash grants averaged $442 per family <a href="https://www.acf.hhs.gov/sites/default/files/opre/2015_welfare_rules_databook_final_09_26_16_b508.pdf">as of July 2015</a>. The maximum monthly grant available to households with one adult and two children ranged from a low of $170 in Mississippi to a maximum of $923 in Alaska.</p>
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<h2>6. What does TANF fund?</h2>
<p>After two decades under the block grant model that gives states discretion over how to spend TANF dollars, cash grants typically consume only a <a href="https://www.acf.hhs.gov/ofa/resource/tanf-financial-data-fy-2015">small share of this money</a>.</p>
<p>States may spend federal TANF funds on other activities serving its official purposes, as well as such things as foster care, juvenile justice and what the government calls “emergency assistance” – goods or services that help meet children’s basic needs amid short-term hardships. </p>
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<p>States spent on average about a quarter of federal TANF funds on “basic assistance” – mostly as cash grants – in 2015 and 16 percent on child care. Another 10 percent funded “work, education and training activities,” including subsidies to employers that hire people enrolled in the program and services designed to help them get jobs. “Work supports,” benefits that cover expenses such as transportation to job interviews, uniforms and occupational licensing, averaged 2.5 percent of TANF funds. </p>
<p>The remaining fifth of federal TANF dollars funded an array of efforts to promote two-parent families, reduce domestic violence and topple what the government says are “barriers” to work and self-sufficiency, like substance abuse counseling. Not all of this money helps the poor. Michigan spends some of its federal welfare dollars, for example, on college scholarships for <a href="https://www.marketplace.org/2016/06/09/wealth-poverty/how-welfare-money-funds-college-scholarships">high-income families</a>.</p>
<p>Despite not covering most U.S. families living in poverty, the states ended the year with $1.4 billion in committed but unspent federal TANF funds, plus $2.3 billion more that they are saving for future years.</p><img src="https://counter.theconversation.com/content/81367/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Laura Antkowiak does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Trump’s rationale for cutting the Temporary Assistance to Needy Families program rests on a myth at odds with contemporary data.Laura Antkowiak, Associate Professor, Department of Political Science, University of Maryland, Baltimore CountyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/806512017-07-27T02:01:11Z2017-07-27T02:01:11ZWhen the federal budget funds scientific research, it’s the economy that benefits<figure><img src="https://images.theconversation.com/files/179810/original/file-20170726-27705-12b4ng0.jpg?ixlib=rb-1.1.0&rect=298%2C502%2C2708%2C1823&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Impacts of federal research funding can be felt region-wide.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/view-downtown-seattle-skyline-washington-usa-510934489">f11photo/Shutterstock.com</a></span></figcaption></figure><p>Emergency: You need more <a href="https://www.washington.edu/alumni/columns/june97/mills.html">disposable diapers</a>, right away. You hop into your car and trust your ride will be a safe one. Thanks to your phone’s GPS and the <a href="http://www.longviewinstitute.org/projects/marketfundamentalism/microchip/">microchips that run it</a>, you map out how to get to the store fast. Once there, the <a href="https://www.nsf.gov/about/history/sensational60.pdf">barcode on the package</a> lets you accurately check out your purchase and run. Each step in this process owes a debt to the universities, researchers, students and the federal funding support that got these products and technologies rolling in the first place.</p>
<p>By some tallies, almost two-thirds of the technologies with the most far-reaching impact over the last 50 years <a href="http://www.bu.edu/research/articles/funding-for-scientific-research/">stemmed from federally funded R&D</a> at national laboratories and research universities.</p>
<p>The benefits from this investment have trickled down into countless <a href="http://money.cnn.com/galleries/2011/technology/1110/gallery.government_inventions/index.html">aspects of our everyday lives</a>. Even the internet that allows you to read this article online has its roots in federal dollars: The U.S. Department of Defense supported installation of the first node of a <a href="https://www.darpa.mil/about-us/timeline/arpanet">communications network called ARPANET</a> at UCLA back in 1969.</p>
<p>As Congress debates the upcoming budget, its members might remember the economic impacts and improved quality of life that past <a href="https://nsf.gov/about/history/nifty50/index.jsp">congressional support of basic and applied research</a> has created.</p>
<h2>Federal dollars do more than fund labs</h2>
<p>Here in the state of Washington, federally funded research at both my employer, Washington State University, and the University of Washington has led to transformational innovations. It’s helped spawn not only new products that save and improve lives, but productivity growth through new businesses and services.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/179521/original/file-20170724-11166-1s8eb5f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/179521/original/file-20170724-11166-1s8eb5f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/179521/original/file-20170724-11166-1s8eb5f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=382&fit=crop&dpr=1 600w, https://images.theconversation.com/files/179521/original/file-20170724-11166-1s8eb5f.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=382&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/179521/original/file-20170724-11166-1s8eb5f.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=382&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/179521/original/file-20170724-11166-1s8eb5f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=480&fit=crop&dpr=1 754w, https://images.theconversation.com/files/179521/original/file-20170724-11166-1s8eb5f.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=480&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/179521/original/file-20170724-11166-1s8eb5f.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=480&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The Zhang lab at WSU works on recycling carbon composite fiber materials.</span>
<span class="attribution"><span class="source">Robert Hubner, WSU</span>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<p>Just a few examples include new kinds of <a href="https://cmec.wsu.edu/documents/2015/04/wmel-history.pdf">composite-based lumber</a>, <a href="https://www.geekwire.com/2015/these-researchers-are-building-extra-brainy-smart-homes-to-monitor-aging-adults/">smart home technology for the aged</a>, <a href="https://nephrology.uw.edu/about/history-innovation">kidney dialysis machines</a>, <a href="https://magazine.wsu.edu/2015/08/16/the-ion-investigators/">airport explosive detectors</a> and new varieties of wheat, <a href="https://news.wsu.edu/2016/11/21/mcdonalds-chooses-wsu-potatoes/">potatoes</a> and other <a href="http://www.seattletimes.com/pacific-nw-magazine/quinoa-comes-to-the-northwest/">agricultural crops</a> that we enjoy at our tables and in numerous products.</p>
<p>All these inventions relied on federal investment combined with university research lab expertise. The important final step was commercialization. Together it all led to positive economic impacts.</p>
<p>We see this pattern again and again.</p>
<p>For instance, next time you’re on Google, remember it was founded by two Stanford University doctoral students who were funded in part by <a href="https://www.nsf.gov/discoveries/disc_summ.jsp?cntn_id=100660">National Science Foundation Graduate Fellowships</a>. Fast forward 20 years and here in my backyard, the company is busy building a new campus in downtown Seattle that may house <a href="https://www.geekwire.com/2016/paul-allens-vulcan-develop-huge-complex-google-amazons-backyard/">3,000-4,000 workers</a> by 2019. Many of those hired will likely be <a href="http://www.seattletimes.com/business/technology/google-plans-big-expansion-to-south-lake-union/">graduates from both WSU and UW</a>.</p>
<p>The fact is that <a href="http://www.sciencecoalition.org/downloads/AMI_v3_4-17-17.pdf">thousands of companies</a> can trace their roots to federally funded university research. And since the majority of federally funded research takes place <a href="https://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/82xx/doc8221/06-18-research.pdf">at America’s research universities</a> – often in concert with federal labs and private research partners – these spinoff companies are often located in their local communities all across the country.</p>
<p>Just one of these firms, headquartered in Broomfield, Colorado, employs over 2,800 workers and started with researchers at the University of Colorado who create instruments, data exploitation solutions and technologies for civil, commercial, <a href="http://www.sciencecoalition.org/successstories/company/ball-aerospace-technologies-corp">aerospace and defense applications</a>. Another in Audubon, Pennsylvania develops rapid, noninvasive <a href="http://www.sciencecoalition.org/successstories/company/liquid-biotech-usa-inc">“liquid biopsy” tests</a> for cancer screening and early detection based on research from the University of Pennsylvania. And another company with 85 employees in Madison develops high-density <a href="http://www.sciencecoalition.org/successstories/company/nimblegen-systems-inc">DNA microarrays</a> for pharmaceutical research based on research from the University of Wisconsin.</p>
<p>The list goes on and on.</p>
<h2>A Washington state case study</h2>
<p>Focusing federal research funding on research universities who enjoy strong corporate and business partners has <a href="https://www.rdmag.com/article/2015/04/how-academic-institutions-partner-private-industry">strategic value</a>. There is little doubt that the state of <a href="http://247wallst.com/special-report/2016/06/16/states-with-the-fastest-and-slowest-growing-economies-2/2/">Washington’s recent economic successes</a>, for example, comes down to a cycle of innovation and discovery that feeds additional economic growth and private-public-university relationships. Federal R&D funding is a key ingredient.</p>
<p>Our two public research universities have strong relationships with federal funding agencies. Together Washington State University and the University of Washington – the largest recipient of federal research funding in the nation among public universities – form the technological and intellectual pillar around which many of our state’s successful businesses are built and sustained. Both universities graduate thousands of undergraduate and graduate students who provide a constant supply of educated, trained workers. In turn, the universities and federal R&D investment benefit from the active engagement and monetary support of business leaders and professionals. Innovative ideas and knowledge percolate back and forth between federally funded research and the private sector.</p>
<p>A recent milestone provides an example.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/179516/original/file-20170724-11666-199zx5g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/179516/original/file-20170724-11666-199zx5g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/179516/original/file-20170724-11666-199zx5g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/179516/original/file-20170724-11666-199zx5g.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/179516/original/file-20170724-11666-199zx5g.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/179516/original/file-20170724-11666-199zx5g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/179516/original/file-20170724-11666-199zx5g.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/179516/original/file-20170724-11666-199zx5g.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Gassing up with renewable, affordable jet fuel – thanks to a public/private research collaboration.</span>
<span class="attribution"><span class="source">Robert Hubner, WSU</span>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<p>Federal research dollars helped solidify a collaboration aimed at solving a big problem: the high carbon emissions from air travel, a contributor to climate change. WSU worked together with the UW and a host of other regional public research institutions, the U.S. Department of Agriculture, Alaska Airlines, Weyerhaeuser Corp., Gevo, Inc. and a large alliance of private industry to develop a <a href="https://nararenewables.org/">renewable, affordable source of jet fuel</a>.</p>
<p>Each collaborator brought unique expertise to the innovation table. USDA provided the funding and the policy commitment to the development of biofuels that spurred matching investment from private partners. Alaska Airlines brought the need to reduce its carbon emissions and its leadership in applying clean technologies to improve its environmental performance. WSU contributed decades of pertinent experience in both basic science and applied research. UW researchers demonstrated the fuel’s potential reduction in life cycle greenhouse gas emissions. And, Gevo, Inc. brought its private-sector skills and patented technology in developing bio-based alternatives to petroleum-based products. The sum of these parts created a strong, successful partnership that took a big step toward sustainable aviation.</p>
<p>Individual researchers with their deep expertise remain the bedrock of the research enterprise. But teams of scientists – drawn from research universities, government and the private sector – all <a href="http://commons.erau.edu/cgi/viewcontent.cgi?article=1116&context=publication">working on multidisciplinary problems</a> are having an increasing impact.</p>
<h2>Recipe for amplifying R&D investment</h2>
<p>Importantly, this phenomenon is not unique to the state of Washington. The <a href="https://www.nerdwallet.com/blog/studies/americas-most-innovative-tech-hubs/">nation’s most active innovation hubs</a> and successful regional economies have similar factors that drive economic growth and resiliency, including:</p>
<ul>
<li><p>Top-tier research institutions supported by federal, state and private funding;</p></li>
<li><p>A concentration of talented and diverse workers;</p></li>
<li><p>An ecosystem of firms, entrepreneurs and intermediaries;</p></li>
<li><p>Accessible pools of risk capital;</p></li>
<li><p>A global orientation; and</p></li>
<li><p>Communities that take advantage of the area’s unique assets and advantages in creating a desirable quality of life.</p></li>
</ul>
<p>We see these conditions <a href="http://www.businessinsider.com/the-20-most-innovative-cities-in-the-us-2013-2#4-corvallis-oregon-17">coming together around the country</a>: in Silicon Valley, the Raleigh-Durham Research Triangle Park, Boston’s metro area and other innovation hubs in cities like Boulder, Colorado; Madison, Wisconsin; Austin, Texas; and Gainesville, Florida.</p>
<p>It’s this <a href="https://itif.org/publications/2008/07/09/where-do-innovations-come-transformations-us-national-innovation-system-1970">cooperative model</a> and leveraging of federal R&D dollars that have long been this <a href="https://www.brookings.edu/research/localizing-the-economic-impact-of-research-and-development/">nation’s competitive advantage</a>. With fewer federal dollars allocated to scientific R&D, the next Silicon Valley – with its potential for an economic renaissance for a new area not even on our innovation map yet – may not emerge as quickly.</p><img src="https://counter.theconversation.com/content/80651/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>In his position as VP of Research for WSU, Christopher Keane oversees projects that receive grants from DOE, USDA, NIH, NSF and DOD.</span></em></p>Research dollars don’t stay locked up in academia and government labs. R&D collaborations with the private sector are common – and grow the innovation economy.Christopher Keane, Vice President for Research and Professor of Physics, Washington State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/812412017-07-26T01:53:16Z2017-07-26T01:53:16ZThe bigotry baked into welfare cuts<figure><img src="https://images.theconversation.com/files/179523/original/file-20170724-6656-pvglfu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Relatively few low-income Americans are getting welfare payments these days.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/bad-financial-situation-crisisspending-money-high-594201662">Christine Hoi/Shutterstock.com</a></span></figcaption></figure><p>The <a href="https://budget.house.gov/budgets/fy18/">budget blueprint</a> the House of Representatives recently unveiled isn’t a carbon copy of President Donald Trump’s proposal, dubbed “<a href="https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/budget.pdf">A New Foundation for American Greatness</a>.” But they would both make what’s left of the already tattered safety net for the poor a lot weaker.</p>
<p>As a scholar of American poverty and the policies meant to alleviate it, I find that one of the most troubling things about these cuts is the role of bigotry. Like other politicians before him, Trump uses “<a href="https://global.oup.com/academic/product/dog-whistle-politics-9780190229252?cc=us&lang=en&">dog whistles</a>” – coded racist messages – to demonize the poor, signal that they don’t deserve support and justify cutbacks. </p>
<p>Trump is perhaps more apt to disparage noncitizens than some of his predecessors and he tends to be more explicit when he <a href="http://billmoyers.com/story/dog-whistle-politics-racism/">smears nonwhites</a> while using terms like “<a href="https://www.theatlantic.com/business/archive/2016/10/trump-african-american-inner-city/503744/">inner cities</a>” as shorthand for African-Americans and “the illegals” to disparage Latinos. </p>
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<h2>Baffled experts</h2>
<p>Consider what <a href="http://www.foxnews.com/politics/2017/06/22/trump-in-iowa-president-calls-for-barring-immigrants-from-welfare-for-five-years.html">Trump told supporters</a> at an Iowa rally in June:</p>
<blockquote>
<p>“The time has come for new immigration rules that say … those seeking immigration into our country must be able to support themselves financially and should not use welfare for a period of at least five years.”</p>
</blockquote>
<p>This baffled experts since immigrants are already <a href="https://www.nilc.org/issues/economic-support/overview-immeligfedprograms/">barred from receiving welfare</a> in most cases. But Trump has also proposed preventing undocumented immigrants from getting <a href="http://www.washingtonexaminer.com/trump-calls-to-cut-off-tax-breaks-for-illegal-immigrants/article/2623845">earned income and child tax credits</a>, even if they have U.S.-born citizen children.</p>
<p>As scholars like <a href="https://www.law.berkeley.edu/our-faculty/faculty-profiles/ian-haney-lopez/">Ian Haney López</a> argue, Trump’s dog-whistling about newcomers casts them as nonwhites who pose a threat to white America.</p>
<h2>Cuts upon cuts</h2>
<p>This demonization has laid the groundwork for some of the harshest cuts Trump has proposed, which take aim at <a href="https://www.cbpp.org/research/policy-basics-an-introduction-to-tanf">Temporary Assistance for Needy Families</a> (TANF). The states administer this time-limited welfare program with strict work requirements, parceling out those funds as they see fit. Less than half of the money covers cash payments to the poor and child care programs. The rest funds job training and other priorities, such as <a href="https://www.cbpp.org/research/despite-inclusion-of-marriage-promotion-funding-budget-bill-would-penalize-states-that">encouraging marriage</a>.</p>
<p>Spending on TANF has already <a href="https://www.cbpp.org/blog/president-trumps-budget-cuts-tanf-despite-stated-goal-to-reduce-poverty-boost-work">fallen by a third</a> in inflation-adjusted dollars since the federal government “reformed” the welfare system in 1996. Aid to Families with Dependent Children (AFDC), the program that morphed into TANF, supported 4.7 million families in 1995 – 76 percent of the nation’s poor families. By 2015, the number of poor families getting TANF benefits had fallen to 1.5 million, representing roughly 23 percent of that population.</p>
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<p>Yet, Trump’s budget calls for <a href="https://www.cbpp.org/blog/president-trumps-budget-cuts-tanf-despite-stated-goal-to-reduce-poverty-boost-work">cutting TANF by another 13 percent</a>, a US$2.2 billion reduction in the 2018 fiscal year. Trump’s proposed cuts are not limited to TANF and <a href="http://www.nbcnews.com/politics/white-house/trump-budget-would-cut-safety-net-programs-boost-defense-spending-n763236">span the entire safety net</a>, including large cuts for spending on food stamps – now called Supplemental Nutrition Assistance Program (SNAP), as well as Medicaid, the Earned Income Tax Credit, housing assistance and other programs. </p>
<p>If the cuts go through, they will hit millions of low-income families hard. As spending on assistance has declined over the past two decades, the number of American families living on as little <a href="http://www.twodollarsaday.com">$2 per person per day</a> has tripled, according to some estimates. The 1.5 million households in that demographic include about three million children.</p>
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<figcaption><span class="caption">Getting by on $2 a day requires selling plasma and resorting to other survival strategies, scholar Kathryn J. Edin explained in this PBS NewsHour interview.</span></figcaption>
</figure>
<h2>Dog whistles</h2>
<p>Since Trump campaigned as a different kind of Republican who would not cut basic social welfare programs, his proposed budget cuts violate some of his promises. </p>
<p>“The forgotten men and women of our country will be forgotten no longer,” Trump pledged in his <a href="https://www.usatoday.com/story/news/nation/2017/01/20/his-own-words-president-trumps-inaugural-address/96836330/">inauguration speech</a>. </p>
<p>Here’s one explanation that I think explains this duplicity: He really only meant whites. Using bigotry to demonize immigrants, the poor and others helps solidify support among his base by playing on <a href="http://www.people-press.org/2017/04/17/1-views-of-trump/">their prejudices</a>. </p>
<p>When tea party Republicans started getting elected in 2010, they reignited a politics of bigotry to resist Barack Obama, the first U.S. nonwhite president. <a href="http://onlinelibrary.wiley.com/doi/10.1111/j.1540-5907.2011.00577.x/abstract">Michael Tesler</a>, a University of California, Riverside professor, calls this the “Obama effect.” Trump’s candidacy and presidency have built on that <a href="http://www.politifact.com/truth-o-meter/article/2017/jun/27/trump-says-time-has-come-immigration-law-barring-i/">resurgent prejudice</a>. </p>
<p>Trump’s dog-whistling got louder when he took it upon himself to become a leader of the so-called “birther” movement to spread unfounded suspicions that Obama was a <a href="http://www.cnn.com/2016/09/09/politics/donald-trump-birther/index.html">Kenyan-born Muslim</a>, with comments like this one from 2011.</p>
<blockquote>
<p>“Obama "doesn’t have a birth certificate, or if he does, there’s something on that certificate that is very bad for him. Now, somebody told me – and I have no idea if this is bad for him or not, but perhaps it would be – that where it says ‘religion,’ it might have ‘Muslim.’ And if you’re a Muslim, you don’t change your religion, by the way.”</p>
</blockquote>
<p>Whereas Republican presidential nominee John McCain was quick to <a href="http://time.com/4866404/john-mccain-barack-obama-arab-cancer/">refute</a> such lies when he ran against Obama in 2008, <a href="https://www.facebook.com/attn/videos/926428204059306/">Trump indulged these smears </a>. As he leveraged this racial resentment, he acquired support among a white nationalist base that <a href="https://www.usnews.com/opinion/articles/2016-08-19/why-donald-trumps-kkk-and-white-supremacist-supporters-matter">endorsed his presidency</a>.</p>
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<h2>Us versus them</h2>
<p>Trump’s repeated smears about Obama’s nationality and religion were more than an attempt to discredit his predecessor. They not only conveyed a coded message that Obama wasn’t qualified to lead our country but by extension a sense that communities of color were undeserving. </p>
<p>Trump’s rhetoric amplifies an “<a href="http://nymag.com/daily/intelligencer/2017/05/the-trump-budget-is-based-on-discredited-delusions.html">us versus them</a>” perspective that suggests his <a href="https://www.theatlantic.com/politics/archive/2017/05/white-working-class-trump-cultural-anxiety/525771/">white supporters</a> are the real victims. He signals that he will stand up for them and against supposed interlopers threatening their well-being and safety.</p>
<p>Racism has always hampered American poverty alleviation, but starting in the 1960s, <a href="http://press.uchicago.edu/ucp/books/book/chicago/W/bo3633527.html">consistently misleading media coverage</a> and cynical politicians led the American public to mistakenly consider welfare a “black program” that mostly serves undeserving non-whites, as political scientist Martin Gilens has documented.</p>
<p>That is far from the case today. Only 30 percent of the families getting TANF benefits were black <a href="https://www.acf.hhs.gov/ofa/resource/characteristics-and-financial-circumstances-of-tanf-recipients-fiscal-year-2015">in 2015</a>, while 28 percent were non-Hispanic white and 37 percent Latino. The remaining 6 percent were either Asian-American or the government put them into different ethnic categories. Combined, the number of non-Hispanic whites and Hispanic whites together total <a href="https://www.census.gov/prod/2011pubs/p70-127.pdf">just over half</a> the welfare population. </p>
<h2>Welfare discrimination at the state level</h2>
<p>In my research, I have found that bigotry colors how <a href="https://www.cbpp.org/research/family-income-support/state-fact-sheets-how-states-have-spent-funds-under-the-tanf-block">states administer welfare</a>. </p>
<p>A 2001 study I co-authored showed that the generosity of a state’s welfare program tends to be correlated with the share of its beneficiaries who are white. States where <a href="http://www.jstor.org/stable/2669347?origin=JSTOR-pdf">people of color</a> represent a majority on the welfare rolls generally make their benefits more meager and impose tough eligibility requirements. The handful of states like Oregon – where two-thirds of TANF <a href="https://www.theatlantic.com/business/archive/2016/05/welfare-utopia/484607/">recipients are white</a> – usually run the most <a href="http://www.urban.org/research/publication/why-does-cash-welfare-depend-where-you-live/view/full_report">generous welfare programs</a>.</p>
<p><a href="https://thinkprogress.org/mississippi-reject-welfare-applicants-57701ca3fb13">Mississippi</a>, for example, pays at most $170 a month to families of three that somehow get approved and enrolled. Only 1.42 percent of the state’s 11,000 TANF applicants last year managed to clear that hurdle, according to state data obtained by ThinkProgress. More than four out of five of Mississippi’s 14,061 TANF beneficiaries were black in 2015 and only eight out of every 100 poor families in Mississippi got these benefits. In comparison, 43 out of every 100 poor families <a href="https://www.cbpp.org/sites/default/files/atoms/files/tanf_spending_or.pdf">in Oregon</a> were TANF beneficiaries, according to the Center for Budget and Policy Priorities, a think tank.</p>
<p>Trump is only the latest politician to deploy dog whistles to leverage bigotry. Like the many other politicians who did this long before he joined in, he is using coded disparagement to justify slashing aid to people facing extreme economic hardship.</p><img src="https://counter.theconversation.com/content/81241/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sanford Schram is Professor of Political Science, Hunter College and the Graduate Center, CUNY. </span></em></p>Misleading stereotypes help explain why the share of families living in poverty who benefit from a core assistance program has plummeted – and why Trump wants new cuts.Sanford Schram, Professor of Political Science, Hunter College, CUNY Graduate CenterLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/797102017-06-26T01:08:03Z2017-06-26T01:08:03ZThe Trump team’s poor arguments for slashing SNAP<figure><img src="https://images.theconversation.com/files/174996/original/file-20170621-30227-1fsxuyw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">SNAP helps millions of Americans get food on their tables.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/family-breakfast-children-eating-together-575014342">Rawpixel.com/Shutterstock.com</a></span></figcaption></figure><p>The Trump administration aims to slash spending on the Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps, by <a href="http://m.startribune.com/republicans-already-giving-trump-s-budget-a-cold-shoulder/423439583/">US$193 billion over the next decade</a>. The proposal would also overhaul how the nation’s main nutrition assistance program operates, potentially encouraging additional cuts by the states.</p>
<p>Curbing SNAP’s reach is only one way that Office of Management and Budget Director Mick Mulvaney and other officials are trying to trim the <a href="http://www.cbpp.org/research/state-budget-and-tax/the-trump-budgets-massive-cuts-to-state-and-local-services-and">safety net</a> to <a href="http://www.nbcnews.com/video/mulvaney-on-trump-s-budget-plan-it-is-a-taxpayer-first-budget-951433283665">save taxpayer dollars</a> – while simultaneously <a href="http://www.cnn.com/2017/03/16/politics/donald-trump-defense-budget-blueprint/index.html">boosting military spending</a>.</p>
<p>As an economist who studies nutrition policy, I don’t understand what good the administration thinks it can do by overhauling and paring back an effective and efficient program. By many measures, SNAP successfully satisfies an essential human need and fulfills its mandate to <a href="https://www.fns.usda.gov/sites/default/files/PL_88-525.pdf">promote the general welfare</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/174999/original/file-20170621-9586-olq4qo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/174999/original/file-20170621-9586-olq4qo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/174999/original/file-20170621-9586-olq4qo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=403&fit=crop&dpr=1 600w, https://images.theconversation.com/files/174999/original/file-20170621-9586-olq4qo.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=403&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/174999/original/file-20170621-9586-olq4qo.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=403&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/174999/original/file-20170621-9586-olq4qo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=506&fit=crop&dpr=1 754w, https://images.theconversation.com/files/174999/original/file-20170621-9586-olq4qo.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=506&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/174999/original/file-20170621-9586-olq4qo.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=506&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Most economists find the SNAP program to be an efficient way to increase food security.</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Faster-Food-Stamps/cb234d5d00184abf93214b3e6e7a76a2/1/0">AP Photo/Seth Wenig</a></span>
</figcaption>
</figure>
<h2>Some fact-checking</h2>
<p>To justify the SNAP cuts, Mulvaney argued that the government wastes money on aiding “<a href="http://www.npr.org/sections/thesalt/2017/05/24/529831472/trump-wants-families-on-food-stamps-to-get-jobs-the-majority-already-work">able-bodied</a>” people who ought to earn enough money to provide for themselves.</p>
<p>But nearly <a href="https://fns-prod.azureedge.net/sites/default/files/ops/Characteristics2015-Summary.pdf">two-thirds of SNAP participants</a> are children, elderly or disabled and thus are not expected to work. What’s more, 44 percent of the Americans who rely on SNAP benefits live in a household with at least one worker. Among SNAP households with children, 55 percent include at least one employed person. Furthermore, when able-bodied adults who aren’t caring for a dependent qualify for SNAP benefits, they <a href="https://www.fns.usda.gov/sites/default/files/snap/ABAWDS-1-2016.pdf">lose them within three months</a> if they aren’t working at least 20 hours a week.</p>
<p>What about saving tax dollars? SNAP uses little federal money. The U.S. is currently <a href="https://www.fns.usda.gov/sites/default/files/pd/SNAPsummary.pdf">spending around $71 billion</a> a year on the program. While this sounds like a lot, it accounts for only <a href="http://www.politifact.com/truth-o-meter/statements/2015/aug/17/facebook-posts/pie-chart-federal-spending-circulating-internet-mi/">around 2 percent of this year’s federal budget</a>. The cuts proposed for the next 10 years would scale the program back by more than a quarter, but even eliminating it entirely would barely make a dent in federal spending. </p>
<p>As for government inefficiency and waste, research indicates that SNAP’s <a href="https://www.irp.wisc.edu/publications/media/webinars/2015/Dec2-2-2015-Webinar-SNAP.pdf">benefits go where they are intended</a>: to the poor. There are inevitable errors in all government programs that mean some people get paid who shouldn’t, and others who should get paid don’t. But the “<a href="http://www.fns.usda.gov/sites/default/files/snap/2013-rates.pdf">error rate</a>” for SNAP, at about 3 percent, is <a href="https://paymentaccuracy.gov/high-priority-programs/">much lower</a> than for Medicaid, Medicare, Unemployment Insurance and most other large-scale government programs. “<a href="http://www.fns.usda.gov/sites/default/files/Trafficking2009.pdf">Illegal trafficking</a>,” when SNAP recipients sell their benefits for a reduced amount of cash to food retailers, amounts to only about 1 percent of the program’s total benefits, according to the USDA. </p>
<p>In short, SNAP is an efficient and effective program that helps millions of vulnerable Americans.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/174793/original/file-20170620-29242-4ynrfm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/174793/original/file-20170620-29242-4ynrfm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/174793/original/file-20170620-29242-4ynrfm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/174793/original/file-20170620-29242-4ynrfm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/174793/original/file-20170620-29242-4ynrfm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/174793/original/file-20170620-29242-4ynrfm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/174793/original/file-20170620-29242-4ynrfm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/174793/original/file-20170620-29242-4ynrfm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The states currently don’t have to fund SNAP benefits, but they do cover some of the program’s administrative costs and issue the cards beneficiaries use to redeem these benefits from retailers.</span>
<span class="attribution"><a class="source" href="https://snaped.fns.usda.gov/ebt-cards-several-states">USDA</a></span>
</figcaption>
</figure>
<h2>Changing SNAP’s structure</h2>
<p>To accomplish the SNAP spending reductions, the Trump administration proposes dramatic structural changes, morphing SNAP from a federal program into a federal-state arrangement. Currently the federal government establishes basic eligibility and benefit level standards, but states have some power to alter them. The federal government funds 100 percent of SNAP benefits and shares administration costs with the states.</p>
<p>Under the new proposal, states would be able to change benefit and eligibility standards more. This means SNAP would no longer assure consistent levels of food assistance nationwide. </p>
<p>Of particular importance, the proposal would <a href="http://www.cbpp.org/research/food-assistance/presidents-budget-would-shift-substantial-costs-to-states-and-cut-food">shift some of the responsibility for funding</a> SNAP benefits to states, requiring them to shoulder 25 percent of the cost. Faced with this substantial new obligation and the requirement to balance their budgets, states would have an incentive to cut SNAP benefits even more.</p>
<p>In addition, the White House wants to cut back on <a href="http://www.cbpp.org/research/food-assistance/waivers-add-key-state-flexibility-to-snaps-three-month-time-limit">waivers granted to states</a> experiencing high unemployment. These waivers allow childless, able-bodied adults who have worked less than 20 hours per week to receive SNAP benefits beyond the current three-month limit. </p>
<h2>What economists say</h2>
<p>Economists generally regard SNAP as successful and efficient. It reduces <a href="http://www.tandfonline.com/doi/abs/10.1080/01621459.2012.682828">food insecurity</a>, poverty rates and <a href="http://www.irp.wisc.edu/publications/media/webinars/2015/Dec2-2-2015-Webinar-SNAP.pdf">economic hardship</a>. It also solves other problems indirectly.</p>
<p>For example, <a href="http://content.healthaffairs.org/content/34/11/1830.abstract">food insecurity increases the risk of many ailments</a>. Children who don’t get enough to eat are more likely to have anemia, asthma, cognitive problems and behavioral problems. Food-insecure working-age adults report more hypertension and sleeping problems. Seniors who don’t get appropriate nutrition are more likely to experience depression and lose the ability to do basic tasks, such as housework, for themselves. Food assistance for pregnant women is associated with <a href="http://www.nber.org/papers/w18535">reduced obesity, hypertension and diabetes</a> for their children years after they’re born.</p>
<p>Cutting SNAP, therefore, would probably increase health problems among low-income Americans, and the harm to children can be long-lasting. This doesn’t bode well for national health care costs or for low-income Americans’ ability to support themselves now or in the years to come.</p>
<p>Because of SNAP’s income-based eligibility requirements, its caseloads track the unemployment and poverty rates. For example, the number of Americans qualifying for the program rose considerably during the Great Recession, but now that labor markets are recovering the caseload is <a href="https://www.fns.usda.gov/sites/default/files/pd/SNAPsummary.pdf">declining</a>.</p>
<p>And since SNAP automatically responds to the business cycle, it serves what economists call a countercyclical role. That means the program stimulates local economies and the national economy during economic downturns. Economists estimate that each $5 the government spends on <a href="http://www.ers.usda.gov/publications/pub-details/?pubid=44749">SNAP triggers $9 of economic activity</a> and that every $1 billion in benefits creates roughly 9,000 jobs.</p>
<p>The upshot is that if Congress approves the proposed changes, lots of people would have less to spend on food and thousands of Americans would lose their jobs – mostly people who work in food sales and farming. All Americans could eventually be harmed because the economy as a whole would be more vulnerable during the next downturn.</p>
<h2>Work ethics</h2>
<p>Some conservatives fear that SNAP may discourage work, but <a href="http://www.cbpp.org/research/the-relationship-between-snap-and-work-among-low-income-households?fa=view&id=3894">research</a> indicates that SNAP benefits do little to discourage paid work. Most of the nondisabled, working-age adults who get these benefits – <a href="http://www.cbpp.org/research/the-relationship-between-snap-and-work-among-low-income-households">58 percent – work</a>, and even more – 80 percent – are employed the year prior or following receipt. Given that SNAP benefits average <a href="http://www.cbpp.org/research/a-quick-guide-to-snap-eligibility-and-benefits">just $1.40 per meal per person</a>, they offer a meager incentive to remain unemployed.</p>
<p>Most voters do not seem to share these concerns, as SNAP enjoys broad-based support. <a href="http://www.publicconsultation.org/federal-budget/americans-support-greater-federal-efforts-to-reduce-poverty/">One poll</a> found that about 80 percent of respondents – including about two-thirds of Republicans – favored raising <a href="http://www.cbpp.org/research/a-quick-guide-to-snap-eligibility-and-benefits">benefit levels</a> after being told that someone living alone receives an average of $140 a month and a single mother with one child gets just $253.</p>
<p><a href="http://farmdocdaily.illinois.edu/2013/10/public-opinion-about-food-stamp-program.html">Another poll</a> found that 61 percent opposed cutting SNAP by $39 billion over a decade – as <a href="http://www.nbcnews.com/feature/in-plain-sight/house-gop-votes-cut-39-billion-food-stamp-program-f4B11200650">Republican lawmakers tried and failed to do in 2013</a>. The $193 billion cut President Donald Trump seeks would be much bigger.</p>
<p><a href="http://www.vox.com/2017/2/27/14751872/budget-process-explained">Trump’s proposal only begins</a> the long process of building the budget. Hopefully, Congress will reject these cuts to SNAP.</p><img src="https://counter.theconversation.com/content/79710/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Patricia Smith does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Cutting the program formerly known as food stamps would hurt low-income Americans and the whole economy. As research indicates that it’s working well, this drive to defund is baffling experts.Patricia Smith, Professor of Economics, University of MichiganLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/783252017-06-06T00:11:45Z2017-06-06T00:11:45ZTrump’s push for self-sufficiency misses the point of safety net programs<figure><img src="https://images.theconversation.com/files/171877/original/file-20170601-23531-ba6vgd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The Trump administration wants to shrink the safety net.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/hammock-net-91331678?src=RAPYxEsAV_B9dzo1tht0nw-1-0">www.shutterstock.com</a></span></figcaption></figure><p>Here’s how Office of Management and Budget Director <a href="http://www.npr.org/sections/health-shots/2017/05/23/529654114/medical-research-health-care-face-deep-cuts-in-trump-budget">Mick Mulvaney</a> has tried to justify the Trump administration’s bid to cut or scrap many safety net programs: </p>
<blockquote>
<p>“We are no longer going to measure compassion by the number of programs or the number of people on those programs. We are going to measure compassion and success by the number of people we get off of those programs to get back in charge of their own lives.”</p>
</blockquote>
<p>In other words, Mulvaney is arguing that the main criterion for a program’s success should be whether it leads to self-sufficiency. But as researchers who have studied ways to evaluate social services, we don’t think this metric makes sense in this case.</p>
<h2>Evaluating government programs</h2>
<p>Determining whether a government program works involves looking at its goals and whom it’s supposed to help.</p>
<p>Congress created and has sustained a safety net to help people meet basic needs and reduce poverty, and these are its goals. Many of the people who benefit from it are already working or cannot work because of a disability.</p>
<p>In short, government-provided social services and benefits are often not simply handouts on the road to a job that will pay the bills for Americans temporarily facing hard times. They also make it possible for the working poor, the disabled, the elderly and children living in poverty to get the food, shelter and medical care they need to survive. </p>
<p>The proposed cuts are surprising because many of these programs enjoy widespread <a href="http://www.publicconsultation.org/federal-budget/americans-support-greater-federal-efforts-to-reduce-poverty/">bipartisan support</a>, according to polling by the University of Maryland’s Program for Public Consultation.</p>
<h2>Energy and food aid</h2>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"824440456813707265"}"></div></p>
<p>Our research involves looking at how funders and providers of social programs assess the work they do. </p>
<p>In one study, <a href="http://www.tandfonline.com/doi/abs/10.2753/PMR1530-9576360101">we surveyed</a> 145 funders and providers. The average respondent told us that the most important reason they assess outcomes is to see if their programs are accomplishing their goals. Based on follow-up interviews with a subset of this group, we learned that their goals varied depending on the purpose of the program. For example, early childhood education programs can measure the academic achievement of the kids who benefit from it a few years later, and teen pregnancy prevention programs may assess success based on how many participants get pregnant before adulthood. </p>
<p>If you apply this basic standard to the programs the Trump administration seeks to cut, the evidence indicates safety net programs are meeting their goals. </p>
<p>Take the Low-Income Home Energy Assistance Program (LIHEAP), established by Congress in 1981, which helps poor Americans <a href="https://www.acf.hhs.gov/ocs/resource/liheap-fact-sheet-0">pay their utility bills</a>. That program, which the <a href="http://www.cnn.com/2017/05/23/politics/trump-budget-cuts-programs/">Trump administration wants to eliminate</a>, targets the elderly, disabled and households with young children. By helping to keep the heat on when it’s cold out so <a href="https://www.cdc.gov/nchs/data/nhsr/nhsr076.pdf">no one in a household freezes</a> and the <a href="http://www.cnn.com/2016/06/22/us/heat-wave-deaths/">air conditioning humming</a> during heat waves, it’s clearly aimed at meeting basic needs.</p>
<p><a href="https://www.researchgate.net/publication/254384671_The_Impact_of_Low_Income_Home_Energy_Assistance_Program_LIHEAP_Participation_on_Household_Energy_Insecurity">Research about its effectiveness</a>, including a study by Anthony Murray of the Federal Reserve Bank of Richmond and Bradford Mills of Virginia Polytechnic Institute and State University, shows that the program works. They note that LIHEAP significantly reduces energy insecurity – a measure of whether people have enough home energy to meet their basic needs. Eliminating the program would increase energy insecurity among low-income Americans by 18 percent, they calculated.</p>
<p>The Supplemental Nutrition Assistance Program (SNAP), popularly known as <a href="https://www.fns.usda.gov/snap/supplemental-nutrition-assistance-program-snap">food stamps</a>, is another safety net program <a href="https://www.vox.com/policy-and-politics/2017/5/22/15676490/trump-budget-2018-explained">on the chopping block</a> that appears to be working well. <a href="https://www.fns.usda.gov/snap/supplemental-nutrition-assistance-program-snap">The program’s explicit purpose</a> is reducing hunger, and research indicates that it achieves this goal. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/172274/original/file-20170605-16849-1l2y4cu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/172274/original/file-20170605-16849-1l2y4cu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/172274/original/file-20170605-16849-1l2y4cu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=428&fit=crop&dpr=1 600w, https://images.theconversation.com/files/172274/original/file-20170605-16849-1l2y4cu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=428&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/172274/original/file-20170605-16849-1l2y4cu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=428&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/172274/original/file-20170605-16849-1l2y4cu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=538&fit=crop&dpr=1 754w, https://images.theconversation.com/files/172274/original/file-20170605-16849-1l2y4cu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=538&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/172274/original/file-20170605-16849-1l2y4cu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=538&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Proposed cuts may mean fewer Americans will be able to rely on food stamps to feed their families.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/usdagov/4622011485/in/photolist-83r1Zc-q8gmPM-r94mxE-qtCeJw-bxnQUb-a184Ek-rt2hAZ-bj1BRX-8mVaJg-bjaasp-rquZ1V-rMeqM5-bb37K4-mwDGaZ-bb3f8k-rqwytA-ctzxPw-rwCrj5-rqBQra-azzmjq-8gQJCF-9C2DeJ-8pb4m4-8oTq4n-9AuekN-dQuN5i-biHLUM-qSp1K2-aRqnK8-83u8hU-qtQpVZ-qSp882-83r1VD-biCuDr-qtCftC-ctzBVm-rMeu4q-rK43ky-rPwsaD-ojJcpe-92mkgP-rwWj7w-92mkiV-9Aueu3-8e2scr-92prRb-9AriUP-pRxQEd-8wZXVL-rwXDxA">U.S. Department of Agriculture/flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<p><a href="https://academic.oup.com/ajae/article-abstract/93/4/1082/203719/How-Much-Does-the-Supplemental-Nutrition">One recent study</a> from The Urban Institute, a think tank that researches government policies, found that getting food stamps reduced the chance that eligible Americans would would go hungry by approximately 30 percent. Analysis by the <a href="http://www.cbpp.org/sites/default/files/atoms/files/5-6-15pov.pdf">Center for Budget and Policy Priorities</a>, another think tank that evaluates government policies, found that food stamps kept or lifted 10.3 million Americans out of poverty – an additional sign it is an effective piece of the safety net. </p>
<p>Yet, Trump’s reductions would <a href="http://m.startribune.com/republicans-already-giving-trump-s-budget-a-cold-shoulder/423439583/">cut federal spending</a> on food stamps by US$193 billion – more than a 25 percent reduction – over 10 years.</p>
<p>Other safety net programs are also at risk. The proposed federal budget would <a href="http://nlihc.org/sites/default/files/Trump-Budget.pdf">decrease housing assistance</a> for 250,000 people, <a href="http://www.cbpp.org/blog/trump-budget-would-increase-homelessness-and-hardship-in-every-state-end-federal-role-in">cut $1.8 billion</a> from public housing and <a href="http://www.cnn.com/2017/05/23/politics/trump-budget-cuts-programs/">eliminate after-school programs</a> serving the poorest members of our society. In addition, it would add to the House-approved health care bill’s <a href="https://www.childrenshospitals.org/Newsroom/Press-Releases/2017/CBO-Score-Confirms-$834-Billion-AHCA-Cut-to-Medicaid">$834 billion in Medicaid cuts</a> by taking another <a href="https://theconversation.com/beyond-the-cbo-score-how-trump-budget-and-the-ahca-are-dismantling-americas-safety-net-78308">$610 billion from the program</a> over a decade, further reducing health insurance coverage for low-income and disabled Americans.</p>
<p>In short, the Trump budget conveys skepticism about the idea of even having a safety net.</p>
<h2>Mulvaney’s standard</h2>
<p>Self-sufficiency is certainly an appropriate way to measure the success for some social programs, such as job-training initiatives – which Trump’s budget request would <a href="http://money.cnn.com/2017/05/24/news/economy/trump-budget-job-training-programs/">slash by 40 percent</a> despite the <a href="https://www.whitehouse.gov/the-press-office/2017/03/17/remarks-president-trump-roundtable-discussion-vocational-training-us-and">president’s own explicit support</a> for vocational training. But does Mulvaney’s view that a declining number of beneficiaries should be the primary indicator of success for every program designed to meet basic human needs make sense? </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/172275/original/file-20170605-16877-149w8uh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/172275/original/file-20170605-16877-149w8uh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/172275/original/file-20170605-16877-149w8uh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/172275/original/file-20170605-16877-149w8uh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/172275/original/file-20170605-16877-149w8uh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/172275/original/file-20170605-16877-149w8uh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/172275/original/file-20170605-16877-149w8uh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Safety net programs have been jeopardized before. In 2011, protesters gathered in Illinois to object to budget cuts.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/peoplesworld/5495785210/in/photolist-zEWpG3-zEWPsE-AkndUj-zEWqLY-AkmbP9-AALr4A-AALbEL-AALgSE-AzEicL-ACXy7P-zF4Tda-AknkRW-zEW8Dm-AzFeSh-zEVNdh-zEVM5q-AkmhzN-Aknjrb-zEWooG-ABY8r4-Akncz5-zF4L76-AzEpBQ-zEWjab-zEWMPu-zF5QZk-zF5V9x-AzEotY-9nAiQe-8XFzoX-9nDkzN-9nDkJU-9nAiZK-9nApnX-9nAiJF-9nDksA-9nAiCT-9nDkAG-9nDkSL-9nDkC9-9nAiKr-9nAiUp-9nDkxA-9nDkP1-9nDkHj-9nDkrQ-9nDkv5-9nAiAZ-KvDhU3-9nDktq">peoplesworld/flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span>
</figcaption>
</figure>
<p>Here are the kinds of people the proposed safety net cuts would affect: severely disabled parents who can’t afford food for their toddlers. An elderly couple who can’t foot their heating bill in the winter. A single mom working two jobs and nevertheless struggling to feed her three children with what she earns. It makes little sense for the government to deny assistance to these people because they can’t get a job or because they have a job but don’t earn enough to make ends meet. </p>
<p>The Agriculture Department, which oversees food stamps, <a href="https://fns-prod.azureedge.net/sites/default/files/ops/Characteristics2015.pdf">says that 75 percent</a> of the Americans receiving those benefits in 2015 were children, elderly or disabled. Further, <a href="https://www.fns.usda.gov/snap/able-bodied-adults-without-dependents-abawds#1">it reports</a> that among households that included someone able to work, more than 75 percent included someone who had held a job in the year before or after receiving food stamps. <a href="https://fns-prod.azureedge.net/sites/default/files/ops/Characteristics2015.pdf">Many others</a> worked for low wages while receiving benefits. LIHEAP serves a similar population.</p>
<p>Leaving aside the question of why so many low-income workers <a href="http://www.epi.org/publication/minimum-wage-workers-poverty-anymore-raising/">don’t earn enough money to feed their families</a>, what would it mean for children, the elderly and the disabled to be more, as Mulvaney puts it, “in charge of their lives”? Doesn’t our society want to spend money ensuring the very neediest and most vulnerable people don’t starve or freeze to death? </p>
<p>As researchers, we embrace evidence-based decision-making. We are confused by Mulvaney’s metric of success. We want to know why, if experts have deemed these popular programs a success, the Trump administration doesn’t seem to agree.</p><img src="https://counter.theconversation.com/content/78325/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The best way to assess a program’s effectiveness is see how well it meets the goals for which it was created. Maybe someone could tell the Trump administration.David Campbell, Associate Professor of Public Administration, Binghamton University, State University of New YorkKristina Marty, Associate Dean of the College of Community and Public Affairs, and an Associate Professor of Public Administration, Binghamton University, State University of New YorkLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/751192017-03-30T02:19:52Z2017-03-30T02:19:52ZWho feels the pain of science research budget cuts?<figure><img src="https://images.theconversation.com/files/162959/original/image-20170328-3788-186tgbd.jpg?ixlib=rb-1.1.0&rect=532%2C491%2C2625%2C2110&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Not much science will get done without the money to fund people and equipment.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/beigephotos/2282318205">Michael Pereckas</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p>Science funding is intended to support the production of <a href="http://faculty.ucmerced.edu/awhalley/web/Kantor_Whalley_Proximity.pdf">new knowledge</a> and ideas that <a href="http://dx.doi.org/10.3386/w20889">develop new technologies</a>, improve medical treatments and strengthen <a href="http://doi.org/10.1162/REST_a_00357">the economy</a>. The idea <a href="https://nsf.gov/od/lpa/nsf50/vbush1945.htm">goes back to influential engineer Vannevar Bush</a>, who headed the U.S. Office of Scientific Research and Development during World War II. And the evidence is that science funding does <a href="http://dx.doi.org/10.2139/ssrn.2097842">have these effects</a>.</p>
<p>But, at a practical level, science funding from all sources supports research projects, the people who work on them and the businesses that provide the equipment, materials and services used to carry them out. Given current <a href="http://dx.doi.org/10.1126/science.aal0921">proposed cuts to federal science funding</a> – the Trump administration has, for instance, proposed a <a href="https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/2018_blueprint.pdf">20 percent reduction for the National Institutes of Health</a> – it’s important to know what types of people and businesses are touched by sponsored research projects. This information provides a window into the likely effects of funding cuts.</p>
<p>Most existing research into the effects of science funding tries to quantify research artifacts, such as publications and patents, rather than tracking people. I’ve helped to start an emerging project called the <a href="http://iris.isr.umich.edu">UMETRICS initiative</a> which takes a novel approach to thinking about innovation and science. At its core, UMETRICS views people as key to understanding science and innovation – people conduct research, people are the vectors by which ideas move around and, ultimately, people are one of the primary “products” of the research enterprise.</p>
<p>UMETRICS identifies people employed on scientific projects at universities and the purchases made to carry out those projects. It then tracks people to the businesses and universities that hire them, and purchases to the vendors from which they come. Since UMETRICS relies entirely on administrative data provided by <a href="http://iris.isr.umich.edu/membership/contactus/">member universities</a> (now around 50), the U.S. Census Bureau and other naturally occurring data, there are no reporting errors, sample coverage concerns or burden for people. It covers essentially all federal research funding as well as some funding from private foundations.</p>
<h2>Who does research funding support?</h2>
<p>Our administrative data allow us to identify everyone employed on research projects, not just those who appear as authors on research articles. This is valuable because we’re able to identify students and staff, who may be less likely to author papers than faculty and postdocs but who turn out to be an important part of the workforce on funded research projects. It’s like taking into account everyone who works in a particular store, not just the manager and owner.</p>
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<p>We <a href="http://doi.org/10.1126/science.1250055">compared the distribution of people</a> supported on research projects at some of the largest National Science Foundation (NSF) Divisions and National Institutes of Health (NIH) Institutes and Centers. Together, the NSF and NIH support <a href="https://www.nsf.gov/statistics/2016/nsb20161/#/report/chapter-5/expenditures-and-funding-for-academic-r-d">close to 70 percent of federally funded academic R&D</a>.</p>
<p>The striking thing is that the majority of people employed on research projects are somewhere in the training pipeline, whether undergraduates; graduate students, who are particularly prevalent at NSF; or postdocs, who are more prevalent at NIH. Staff frequently constitute 40 percent of the NIH-supported workforce, but faculty are a relatively small portion of the workforce at all NIH Institutes and NSF Divisions.</p>
<p>Based on these results, it seems likely that changes in federal research funding will have substantial effects on trainees, which would naturally have implications for the future STEM workforce.</p>
<h2>What happens to STEM doctoral recipients?</h2>
<p>Given the importance of trainees in the research workforce, we have <a href="http://doi.org/10.1126/science.aac5949">focused much of our research on graduate students</a>. </p>
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<p>We mapped the universities in our sample and the share of the graduate students in each state one year after graduation. Our data show that many grad students contribute to local economies – 12.7 percent are within 50 miles of the universities where they trained. For six of our eight universities, more people stayed in state than went to any other single state. At the same time, graduate students fan out nationally, with both coasts, Illinois and Texas all being common destinations.</p>
<p>The doctoral recipients in our sample are also more likely to take jobs at establishments that are engines of the <a href="https://www.elsevier.com/books/the-age-of-discontinuity/drucker/978-0-434-90395-5?start_rank=1&sortby=sortByRelevance&imprintname=Butterworth-Heinemann&q=the%20age%20of%20discontinuity">knowledge economy</a>. They are heavily overrepresented in industries such as electronics, semiconductors, computers and pharmaceuticals, and underrepresented in industries such as restaurants, grocery stores and hotels. Doctoral degree recipients are almost four times as likely as the average U.S. worker to be employed by an R&D-performing firm (44 percent versus 12.6 percent). And, the establishments where the doctoral degree recipients work have a median payroll of over US$90,000 per worker compared to $33,000 for all U.S. establishments and $61,000 for establishments owned by R&D performing firms. </p>
<p>We also studied initial earnings by field and find that earnings of doctoral degree recipients are highest in engineering; math and computer science; and physics. Among the STEM fields, the lowest earnings are in biology and health, but our data also suggest that many of the people in these fields take postdoc positions that have low earnings, which may improve long-run earnings prospects. Interestingly, we find that women have substantially lower earnings than men, but these differences are entirely accounted for by <a href="http://doi.org/10.1257/aer.p20161124">field of study, marital status and presence of children</a>.</p>
<p>Taken as a whole, our research indicates that the workers trained on research projects play a critical role in the industries and at companies critical for our new, knowledge economy. </p>
<h2>What purchases do research projects drive?</h2>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/162759/original/image-20170327-3283-1yekf1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/162759/original/image-20170327-3283-1yekf1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/162759/original/image-20170327-3283-1yekf1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=763&fit=crop&dpr=1 600w, https://images.theconversation.com/files/162759/original/image-20170327-3283-1yekf1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=763&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/162759/original/image-20170327-3283-1yekf1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=763&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/162759/original/image-20170327-3283-1yekf1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=959&fit=crop&dpr=1 754w, https://images.theconversation.com/files/162759/original/image-20170327-3283-1yekf1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=959&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/162759/original/image-20170327-3283-1yekf1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=959&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Researchers need to buy the equipment they use to do their science.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/beigephotos/6561743">Michael Pereckas</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
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<p>Another way in which sponsored research projects affect the economy in the short run is through purchases of equipment, supplies and services. Economist Paula Stephan writes eloquently of <a href="http://www.hup.harvard.edu/catalog.php?isbn=9780674088160">these transactions</a>, which range from purchasing computers and software, to reagents, medical imaging equipment or telescopes, even to lab mice and rats.</p>
<p>Still unpublished work studying the <a href="http://doi.org/10.3386/w23018">vendors who sell to sponsored research projects at universities</a> shows that many of the firms selling to sponsored research projects are frequently high-tech and often local. Moreover, firms that are vendors to university research projects are more likely to open new establishments near their campus customers. Thus, there is some evidence that research projects directly stimulate local economies.</p>
<p>So while the goal of sponsored research projects is to develop new knowledge, they also support the training of highly skilled STEM workers and support activity at businesses. The UMETRICS initiative allows us to see just which people and businesses are touched by sponsored research projects, providing a window into the short-run effects of research funding as well as hinting at its long-run value.</p><img src="https://counter.theconversation.com/content/75119/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Bruce Weinberg's work has been supported by the National Institutes of Health (NIA and OBSSR), National Science Foundation (EHR/DGE and SciSIP) and the Kauffman and Sloan Foundations. He also receives funding from the Institute for Research on Innovation and Science which is home to the UMETRICS initiative. He is affiliated with the IZA Institute for Labor Economics and the National Bureau of Economic Research, which supported this work directly and through a subcontract to Ohio State University. </span></em></p>What are research dollars actually spent on? Rather than looking at artifacts like publications and patents, a new initiative directly tracks the people and businesses that receive research funding.Bruce Weinberg, Professor of Economics, The Ohio State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/738832017-03-16T12:26:28Z2017-03-16T12:26:28ZTrump’s planned military buildup is based on faulty claims, not good strategy<p>President Donald Trump just released a <a href="https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/2018_blueprint.pdf">budget plan</a> intended to fulfill a <a href="http://www.cnn.com/2017/02/28/politics/donald-trump-congress-speech/">promise</a> to rebuild the military with “one of the largest increases in national defense spending in American history.”</p>
<p>Specifically, Trump wants to <a href="https://www.bloomberg.com/politics/articles/2017-03-16/trump-seeks-639-billion-for-defense-department-a-10-increase">boost “base” military spending</a> by US$52.3 billion to $574 billion, an increase of 10 percent over <a href="https://www.defense.gov/News/Special-Reports/0217_budget">fiscal year 2016</a>. Separately, he’s requesting $65 billion for ongoing wars. </p>
<p>Trump’s rhetoric aside, a 10 percent increase would not actually rank among the nation’s largest, <a href="http://www.politifact.com/truth-o-meter/statements/2017/mar/01/donald-trump/trump-wrongly-claims-historic-defense-increase/">as many quickly pointed out</a>. But that exaggeration should not be the central concern for Americans as they monitor how Trump and Congress debate how to spend their hard-earned dollars. The real problem is whether any increase is justified. </p>
<p><a href="https://theconversation.com/why-trumps-skinny-budget-is-already-dead-73824">President Trump</a> is arguing for a military buildup before producing a <a href="https://theconversation.com/whats-the-purpose-of-president-trumps-navy-74016">strategic vision</a> or laying out priorities to guide the new spending. Instead he has justified it, so far, on two misleading premises: that President Barack Obama slashed the defense budget and that as a result the military is depleted and needs to be rebuilt. </p>
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<h2>Paying for two wars</h2>
<p>Since 2001, Congress has funded the Pentagon in two separate ways.</p>
<p>The first is through the base budget for the Department of Defense. The second is in the form of emergency supplemental appropriations bills that cover, in effect, the extra or net costs created by the wars in Afghanistan, Iraq and related military actions elsewhere. These “emergency” appropriations are called Overseas Contingency Operations (OCO) funds.</p>
<p>From 2001 to 2012 the <a href="https://obamawhitehouse.archives.gov/omb/budget/Historicals">Pentagon’s base budget</a> increased 85 percent, from $287 billion to $530 billion. That 85 percent does not include the OCO funds, which totaled $1.36 trillion over the same 12 years, for an average of an additional $113 billion per year on top of the base budget. War funding alone was more than what China – the world’s second-biggest military spender – spent on its entire defense budget during those same years. </p>
<p>Adjusted for inflation, U.S. military budgets reached the highest levels since World War II, significantly exceeding expenditures during Korea, Vietnam and the Reagan years. </p>
<p>It is also important to note that the entirely separate <a href="https://obamawhitehouse.archives.gov/omb/budget/Historicals">budget for Veterans Affairs</a> increased by 162 percent over this same period, from nearly $48 billion to just under $125 billion (and last year it was over $160 billion).</p>
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<h2>Claim #1: Obama slashed military spending</h2>
<p>This brief overview of American military spending since 9/11 provides context for the misleading and widespread implication that the defense budget was significantly reduced under President Obama. </p>
<p>While on board the U.S.’s newest aircraft carrier, the USS Gerald R. Ford, <a href="https://www.whitehouse.gov/the-press-office/2017/03/02/remarks-president-trump-aboard-uss-gerald-r-ford">President Trump described</a> “years of endless budget cuts that have impaired our defenses.”</p>
<p>During his two terms, President Obama ended combat operations in Iraq and, after a relatively brief surge, did the same in Afghanistan. So naturally as two expensive wars were ending, military spending fell. The cuts came mostly in contingency spending. The Pentagon’s base budget remained at near record levels. </p>
<p>Under Obama, OCO spending fell from $163 billion in 2010 to $59 billion in 2016, as combat operations ceased in Iraq and wound down in Afghanistan after the surge.</p>
<p>The base budget declined from a peak of $530 billion in 2012 to $495 billion in 2013 after a budget agreement between Congress and Obama led to across-the-board spending cuts – known as the sequester – but climbed back to a planned $524 billion for the current fiscal year. </p>
<p>Even without the $85 billion in war spending, the 2014 base budget of $496 billion – the lowest in recent years – <a href="https://www.washingtonpost.com/news/worldviews/wp/2015/02/11/chart-u-s-defense-spending-still-dwarfs-the-rest-of-the-world/?tid=a_inl&utm_term=.5da14a49dd7d">equaled the total spent by the next seven biggest military spenders combined</a>, including our close allies Great Britain, Japan and France. </p>
<p>The bottom line is that base defense spending remains, from a historical and comparative perspective, at a very high levels. </p>
<h2>Claim #2: Military is in desperate need of rebuilding</h2>
<p>In his <a href="https://www.whitehouse.gov/inaugural-address">inaugural address</a>, and echoing a regular theme from his 2016 campaign, President Trump lamented “the very sad depletion of our military” which he has vowed to “rebuild.” The truth is, we haven’t stopped building the military since the terrorist attacks of 9/11. </p>
<p>As the budget numbers cited above show, the U.S. just had an enormous military buildup, which I refer to as the <a href="https://jhupbooks.press.jhu.edu/content/irrational-security">buildup hidden in plain sight</a>, because everyone was paying attention to the wars. The post-9/11 buildup did not go away, only the wars did. </p>
<p>In many respects the “hidden in plain sight” buildup has been a do-it-all, no-priorities affair, with significant increases in funding for research and development, pay, benefits, <a href="http://projects.washingtonpost.com/top-secret-america/">intelligence</a> and weapons procurement. The key “investment” portions of the base military budget (procurement and R&D) <a href="https://obamawhitehouse.archives.gov/omb/budget/Historicals">increased 147 percent and 107 percent, respectively</a>, from 2000 to 2010.</p>
<p>As one example, the Air Force procured 187 F-22 Raptors – the world’s most advanced fighter – for around $67 billion in the 2000s. But at the same time, it started production of what has since become the most expensive weapons program in world history, the Joint Strike Fighter (aka F-35 Lightning II), which is <a href="https://www.bloomberg.com/news/articles/2017-02-22/lockheed-s-f-35-stealth-fighter-is-here-to-stay">estimated to cost</a> around $380 billion. </p>
<p>In addition, whole new weapons programs, most notably the <a href="http://articles.latimes.com/2013/dec/27/world/la-fg-afghanistan-armor-20131227">MRAP armored vehicle</a> (nearly $50 billion for over 26,000 MRAPS in about five years), were developed and produced just for the wars.</p>
<p>If Trump’s plans for greater spending are implemented, we would be adding a buildup right on top of another. Military spending adjusted for inflation was comparable to that under President Reagan, without including war appropriations. And OCO spending has been used, <a href="http://www.pogo.org/straus/issues/defense-budget/2016/pentagon-admits-half-of-war.html">as is well-documented</a>, not just to pay for the wars but also for equipment, such as F-35s and V-22 Osprey transport planes, to be used beyond or even separate from the conflict zones. In the core years of the wars, for example, <a href="https://jhupbooks.press.jhu.edu/content/irrational-security">procurement and R&D comprised 20 percent to 30 percent of OCO spending</a>.</p>
<p>What presidents, Congress and the Pentagon did not make over this period were tough decisions about what to fund and what could be cut. The U.S. military vaulted forward in military technology, propelled by the urgency of the wars on terror and the flood of spending, making what was already the best trained and equipped military in the world even better in both categories.</p>
<p>This immense and sustained buildup also highlighted the extent to which the Pentagon – which still has not completed a congressionally mandated audit – <a href="http://www.reuters.com/investigates/pentagon/#article/part1">could not account</a> for how hundreds of billions of dollars of its budget has been spent.</p>
<h2>Wasteful spending</h2>
<p>Consequently, I would argue the military’s problem is not that it has too little money. The Pentagon has had more than enough. Instead, the problem is how that money has been spent. </p>
<p>Before the president and Congress send the military budget once again skyward, they should account for how the Pentagon has used the trillions of dollars it has spent since 9/11 and a plan that balances U.S. strategy and resources.</p>
<p>Beyond some <a href="http://www.latimes.com/politics/la-na-pol-trump-military-20170303-story.html">simplistic and at times contradictory statements</a>, the Trump administration has nothing like a grand strategy to guide its desired buildup. In other words, it’s putting the cart before the horse. </p>
<p>In lieu of this, President Trump has so far leaned heavily on the slippery concept of “<a href="https://www.whitehouse.gov/america-first-foreign-policy">peace through strength</a>,” even though all these years of unrivaled U.S. power – and our repeated use of it – have not produced peace. The president seems to see military strength almost as an end in itself, or “performative,” as <a href="https://www.nytimes.com/2017/03/03/world/americas/donald-trump-us-military.html">military analyst Erin Simpson put it</a>, a kind of show or performance, regardless of whether the capabilities are matched to the threats we face. </p>
<p>It is, if nothing else, a very expensive performance, but one that at least will be “made in America” befitting Trump’s stand on economics and trade. Standing on the deck of the $13 billion USS Gerald R. Ford, Trump reminded his audience that “American workers will build our fleets.” Whatever else it may be, an increase in military spending is one economic stimulus program that will sail through a Republican Congress.</p>
<p>Trump has been critical of the recent wars and their consequences. Yet, if he launches another unchecked military spending spree, he and Congress will compound rather than fix the problems of priorities and waste created by and amid those wars.</p><img src="https://counter.theconversation.com/content/73883/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Daniel Wirls is affiliated with Council for a Livable World. I am a member of its Board. It is a PAC focused on lower the dangers posed by nuclear weapons. </span></em></p>Trump’s first budget proposal would boost defense spending by US$52 billion, but his desired military buildup is premised on misleading claims and lacks a strategic vision.Daniel Wirls, Professor of Politics, University of California, Santa CruzLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/653512016-09-14T06:28:09Z2016-09-14T06:28:09ZDespite the funding cut, ARENA’s glass is still half full – here’s how to spend the money<p>The <a href="http://arena.gov.au/">Australian Renewable Energy Agency (ARENA)</a> will suffer a <a href="http://sjm.ministers.treasury.gov.au/media-release/095-2016/">A$500 million funding cut</a>, after being <a href="https://theconversation.com/australian-renewable-energy-agency-saved-but-with-reduced-funding-experts-react-65334">saved from a far worse fate</a> during negotiations over the government’s proposed budget savings package. So does this mean the ARENA funding glass is half full, or half empty? </p>
<p>The 2014 Abbott/Hockey budget aimed to <a href="http://reneweconomy.com.au/2014/australia-dumps-clean-energy-in-favour-of-asphalt-economy-60115">destroy ARENA altogether</a>. Thankfully it was blocked by Labor, the Greens and the crossbench in the Senate. In March this year the Turnbull government claimed to have saved ARENA but intended to <a href="http://www.greghunt.com.au/Media/MediaReleases/tabid/86/ID/3705/Turnbull-Government-taking-strong-new-approach-to-clean-and-renewable-energy-innovation-in-Australia.aspx">divert most of its funds and prevent it from offering grants</a>. The ALP <a href="http://reneweconomy.com.au/2016/labor-abandons-arena-blames-ngo-media-releases-38358">supported that position before the election</a>.</p>
<p>The government’s omnibus savings bill, which in its <a href="http://www.abc.net.au/news/2016-08-30/omnibus-bill-includes-welfare-cut-labor-previously-rejected/7796604">original form</a> would have chopped A$1.3 billion from ARENA, would have doomed Australian renewable energy research and development (R&D) – despite our country’s <a href="http://mission-innovation.net/participating-countries/#Australia">recent pledge</a> “to double government clean energy research and development investment by 2020”.</p>
<p>The <a href="http://www.adambandt.com/160913">Greens</a> and <a href="http://www.abc.net.au/news/2016-09-10/labor-under-pressure-amid-renewable-energy-funding-cuts/7832656">Nick Xenophon Team</a> opposed the cuts to ARENA. Labor <a href="http://markbutler.alp.org.au/news/2016/09/13/labor-secures-the-future-of-arena">compromised</a> with the government, allowing A$500 million to be diverted elsewhere and leaving ARENA with A$800 million over the next five years.</p>
<p>The axe that previously hung over ARENA’s granting process has been lifted. So to answer the earlier question, our glass is now half full, because substantial funding will still flow to renewable energy R&D, this time with bipartisan political backing which hopefully confers greater funding stability. But it is also half empty, because clean energy innovation has taken another huge cut.</p>
<h2>International support</h2>
<p>Two weeks ago, some 200 Australian solar energy researchers signed a <a href="http://theconversation.com/dear-politicians-please-dont-endanger-world-leading-solar-research-by-cutting-arena-64611">letter of support</a> for ARENA, amid a groundswell of community support for the agency – not just here but from abroad too. </p>
<p>Australian solar energy R&D is held in very high regard within the international community. Nearly 300 overseas scientists, engineers and company executives signed a <a href="https://www.dropbox.com/s/r69u096z260pobx/160906%20draft%20Int.%20petition%20text%20-%20Copy.docx?dl=0">petition</a> calling on Australia’s parliamentarians not to axe grants for renewable energy research, innovation and education. Many included complimentary comments, such as:</p>
<blockquote>
<p>The Australian renewable energy program is an international treasure. It would be a disaster worldwide for the Australian government to end the program. These are world-renowned scientists.</p>
<p>For decades Australian scientists have been world leaders in the critical area of renewable energy research and development … the legacy of Australia’s great scientific contributions must be saved and their future excellent work supported.</p>
<p>The ARENA funding program has helped Australia lead the world in photovoltaics for decades, which enabled the worldwide economic boom from manufacturing and installing solar panels.</p>
<p>The quality of the work done by Australian researchers in this field is outstanding… to cut back on funding for ARENA is to cut back on the future of Australia’s science and Australia’s economy.</p>
<p>I have been involved in solar research for 35 years in the United States. Solar technology, including advances made at UNSW and ANU in Australia, have made [a] great impact on the world’s energy infrastructure.</p>
<p>Australia has some of the finest PV research on the planet and has been an inspiration to us all.</p>
</blockquote>
<h2>Where next for ARENA?</h2>
<p>ARENA’s role is to support a rapid transition to renewable energy. So what should it do with its reduced funding of A$800 million over the coming five years?</p>
<p>Given that energy use accounts for <a href="https://www.environment.gov.au/system/files/resources/f4bdfc0e-9a05-4c0b-bb04-e628ba4b12fd/files/australias-emissions-projections-2014-15.pdf">three-quarters</a> of Australia’s greenhouse gas emissions, with the electricity sector the biggest contributor, the fastest way to make deep cuts to emissions is to accelerate the introduction of renewable energy into the electricity system. This is the route successfully pioneered by the ACT government, which will <a href="http://www.environment.act.gov.au/energy/cleaner-energy/renewable-energy-target,-legislation-and-reporting">reach 100% renewable electricity by 2020</a>.</p>
<p>Other important energy goals will be to electrify road vehicles and trains, and to encourage the use of electric heat pumps in place of natural gas for building heating and hot water systems. </p>
<p>Reducing the emissions from other sectors such as shipping, aviation and high-temperature industries will be more difficult. But these sectors are less important in terms of overall emissions, and if we can push ahead with decarbonising electricity, transport and heating, that will give us more time to devise low-cost solutions for these remaining sectors.</p>
<p>It is important for ARENA to provide strong support at the grassroots level; help universities support undergraduate, postgraduate and postdoctoral training as well as research itself. These young people are the future of research, education, engineering and start-up companies.</p>
<p>Consistent grant support for new companies allows entrepreneurship to flourish, encouraging bright people in universities to commercialise their ideas. With the right backing, these people can often cycle back and forth through universities, completing a virtuous circle.</p>
<h2>Success stories</h2>
<p>Efficient silicon cells have been by far the greatest success story of Australian renewable energy research. With silicon cells now making up <a href="http://www.itrpv.net/.cm4all/iproc.php/ITRPV%20Seventh%20Edition%20Vers%202.pdf?cdp=a">95% of the worldwide solar market</a> and likely to dominate for at least the next decade, improving their efficiency still further should be a prime research focus. </p>
<p>ARENA’s new large-scale solar energy program <a href="http://arena.gov.au/media/historic-day-australian-solar-12-new-plants-get-support/">announced last week</a> represents an outstanding success: A$92 million of ARENA funding has leveraged A$1 billion of investment to construct 0.5 gigawatts of solar farm capacity in three states. Another A$100 million to bring the total capacity to 1GW would give this nascent industry a great start.</p>
<p>Solar PV and wind now constitute virtually all new generation capacity in Australia and half of new generation capacity worldwide. They are being installed at more than 100 times the rate of the other non-hydro renewables because of their lower cost, and are <a href="http://theconversation.com/wind-and-solar-pv-have-won-the-race-its-too-late-for-other-clean-energy-technologies-61503">growing much faster</a>. </p>
<p>Soon PV and wind will constitute more than half of annual generation in many states and regions, and so attention has to be paid to managing their variability. Options include detailed integration studies, demand management, mass storage (using both the 99% market leader <a href="http://theconversation.com/how-pushing-water-uphill-can-solve-our-renewable-energy-issues-28196">pumped hydro</a> and the newcomer, batteries), and high voltage powerlines to move energy between regions – all of which will benefit from ARENA support.</p>
<p>It is time for all politicians to recognise that the faster we move to renewable energy, the cheaper it will be to cut emissions and adapt to climate change. ARENA has an important role to play in a rapid and sustained shift to renewable energy – and we look forward to a doubling of ARENA funding before the next election.</p>
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<p><em>Andrew Blakers will be online from 9.30-10am AEST on Thursday September 15. Leave him a question in the comments below.</em></p><img src="https://counter.theconversation.com/content/65351/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrew Blakers works for the Australian National University, which receives research grants from ARENA.</span></em></p><p class="fine-print"><em><span>Richard Corkish is the chief operating officer for the Australian Centre for Advanced Photovoltaics, which is primarily funded by ARENA. </span></em></p>The Australian Renewable Energy Agency has survived, amid a groundswell of domestic and overseas support. Its budget has been chopped, but here’s how it can still drive the renewable energy revolution.Andrew Blakers, Professor of Engineering, Australian National UniversityRichard Corkish, Solar-photovoltaic researcher, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/646112016-08-30T20:14:16Z2016-08-30T20:14:16ZDear politicians, please don’t endanger world-leading solar research by cutting ARENA<p><em>The following is an open letter to parliamentarians from 190 members of Australia’s solar research community.</em></p>
<p><em>Dear Members of Australia’s 45th Parliament,</em></p>
<p>The federal government is <a href="https://theconversation.com/cutting-arena-would-devastate-clean-energy-research-64586">proposing</a> to strip the <a href="http://arena.gov.au/">Australian Renewable Energy Agency (ARENA)</a> of most of its funding, and with it its ability to make grants. This is an existential threat to renewable energy research, innovation and education in Australia.</p>
<p>We call upon all political parties to support the retention of ARENA.</p>
<p>The solar photovoltaic (PV) industry now provides <a href="https://theconversation.com/wind-and-solar-pv-have-won-the-race-its-too-late-for-other-clean-energy-technologies-61503">one quarter of all new generation capacity installed worldwide each year</a> and is growing at 20-30% per year. Together, PV and wind energy constitute <a href="https://theconversation.com/wind-and-solar-pv-have-won-the-race-its-too-late-for-other-clean-energy-technologies-61503">half of all new generation capacity installed worldwide</a>, and all new generation capacity installed in Australia. </p>
<p>A renewable energy revolution is in progress and Australia is currently at the forefront. However, debilitation of ARENA directly threatens our leadership position.</p>
<p>For 30 years there has been an Australian renewable energy funding agency in one form or another. This has led to phenomenal success in generation of technology and provision of education. The worldwide PV industry owes its existence in large measure to Australians who were supported by grants from government renewable energy agencies.</p>
<p>Billions of dollars of benefits have accrued to Australia in the form of dramatically reduced costs of PV systems, rapidly growing renewable energy business activity in Australia, reduced greenhouse gas emissions, royalties, shares and international student fees. For example, the Australian-developed <a href="http://scitation.aip.org/content/aip/journal/apl/55/13/10.1063/1.101596">PERC solar cell</a> has <a href="http://www.itrpv.net/Reports/Downloads/2016/">annual sales of $10 billion</a> and will soon dominate the worldwide solar industry.</p>
<p>If ARENA is debilitated then hundreds of people would lose their jobs within a year or two. In the longer term, Australia’s leadership in solar energy would vanish. This would be completely at odds with the government’s innovation agenda and its commitment at the Paris climate conference to double clean energy R&D by 2020 under the international Mission Innovation program, and with the ALP’s Climate Change Action Plan launched in 2015 at UNSW Australia, and reinforced by Opposition Leader Bill Shorten at ANU also in 2015.</p>
<p>Support for research and innovation at universities lies at the heart of accelerated growth of the renewable energy industry. It supports later-stage commercialisation directly through technology development. Additionally, university research groups underpin education and training of engineers and scientists.</p>
<p>Echoing the words of another prime minister of a decade ago, Malcolm Turnbull has described budget repair (in which cuts to ARENA are lumped) as a “fundamental moral challenge” because debt should not be passed onto our children and grandchildren. </p>
<p>How ironic if parliament fails to appreciate the many costs to future generations of failing to address climate change now with solutions such as renewable energy.</p>
<p><em>Yours sincerely,</em></p>
<p><em><strong>UNSW Australia:</strong> Benjamin Phua, Henner Kampwerth, Mark Keevers, Ziv Hameiri, Catherine Chan, Craig Johnson, Kyung Kim, Li Wang, Mark Silver, Trevor Young, Richard Corkish, Robert Patterson, Binesh Veettil, Christopher Whipp, Dirk Konig, Renate Egan, Bram Hoex, Joyce Ho, Simba Kuestler, Martin Green, David Payne, Robert Taylor, Shira Samocha, Supriya Pillai, Timothy Lee, Udo Romer, Belinda Lam, Natasha Hjerrild, Evatt Hawkes, David Jewkes, Thalia Arnott, Leslie Lay, Muriel Watt, Carlos Vargas, Nathan Thompson, Robert Dumbrell, Daniel Lambert, Nicholas Shaw, Nathan Chang, Anita Ho-Baillie, Ben Wilkensen, Ned Western, Yan Zhu, Lingfeng Wu, Stuart Wenham, Ran Chen, Thilini Ishwara, Steven Limpert, Rolando Vargas, Brett Hallam, Allen Barnett, Santosh Shrestha, Xiaowei Shen, Xiaojing Hao, Saratchandra Tejaswi, Fangzhao Gao, Zhongtian Li, Ivan Perez Wurfl, Qiangshan Ma, Alec Tan, Murad Tayebjee, Ya Zhou, Liam Parnell, Luke Marshall, Jack Colwell, Mable Fong, Alan Yee, Lawrence Soria, Kian Chin, Kamala Vairav, Nancy Sharopeam, Graeme Lennon, Zoe Hungedfold, Bernhard Vogal, Jill Lewis, Ya Zhou, Erny Tsao, Feng Qingge, Yin Li, Thorsten Trupke, Alison Wenham, Ashraf Uddin, Chang Yan, Kaiwen Sun, Yajie Jiang, Yuansim Liao, Marjorie Owens, Shujuan Huang, Sassan Vahdani, Jialiang Huang, Brianna Conrad, Zi Ouyang, Jae sun Yun, Alex Li, Kate Lindsay, Nitin Nampalli</em></p>
<p><em><strong>Australian National University:</strong> Andrew Blakers, Tom White, Marco Ernst, Fiona Beck, Jie Cui, Andres Cuevas, Erin Crisp, Chris Samondsett, Yimao Wan, Hemant Halmodi, Moshen Goodarzi, Sienpheng Phang, The Duong, Yiliang Wu, Xiao Fu, Kylie Catchpole, Chong Barngkin, Daniel Macdonald, Andrew Thompson, Josephine McKeon, Chang Sun, Kristen Anderson, Anyao Liu, Bin Lu, Matthew Staks, Bruce Condon, Jun Fpeng, Thomas Ratcliff, Hang Sio, Shakir Rahman, Judith Harvey, Klaus Weber, Ingrid Haedrich, Di Yan, Rowena Menkedow, Dale Grant, William Logie, Teck Kong Chong, Hieu Nguyen, Daniel Walte, Sachin Surve, Mark Savvnoeas, Harry Qian, N. Kaines, Nandi Wu</em></p>
<p><em><strong>Monash University:</strong> Yi-Bing Cheng, Yasmina Dkhissi, Niraj Lal, Jianfeng Lu, Liangcong Jiang, Shannon Bonke, Wei Li, Gaveshana Sepadage, Wemon Mao, Feng Li, Xiangfeng Lin, Udo Bach, Dison Hoogeveen, Iacopo Benesperi, Francsco Paglia, Bin Li, Jiansong Sun, Chanjie Wang, Chunkiu Ng, Maxime Fournier, Boex Tan, Kira Rundel, David Mayeuleg, Jacek Jasieniak, Rebeeca Milhuisen, Masrur Morshed, Kedar Deshmukh, Susaha Frier, Mathias Rothmann</em></p>
<p><em><strong>University of Melbourne:</strong> Ken Ghiggino, Roger Dargaville, Yann Robiou du Pont, Alex Nauels, Kate Dooley, Malte Meinshausen, Martin Wainstein</em></p>
<p><em><strong>UTS Institute for Sustainable Futures:</strong> Stuart White, Chris Dunstan, Ed Langham, Alison Atherton, Damien Giurco, Dani Alexander, Sven Teske, Nicky Ison, Jay Rutovitz</em></p>
<p><em><strong>Other:</strong> Alan Pears (RMIT), Rhett Evans (Solinno), Michelle McCann (PV Lab Australia), Keith McIntosh (PV Lighthouse)</em></p><img src="https://counter.theconversation.com/content/64611/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrew Blakers works for the Australian National University, which receives research funding from ARENA.</span></em></p><p class="fine-print"><em><span>Richard Corkish is chief operating officer of the Australian Centre for Advanced Photovoltaics, which receives funding from ARENA.</span></em></p>An open letter from 190 solar energy researchers in defence of the Australian Renewable Energy Agency, which has funded world-leading research.Andrew Blakers, Professor of Engineering, Australian National UniversityRichard Corkish, Solar-photovoltaic researcher, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/557232016-05-09T13:16:27Z2016-05-09T13:16:27ZSheffield is on a quest to be the fairest city of them all – here’s how it’s doing<figure><img src="https://images.theconversation.com/files/121704/original/image-20160509-20584-7vssi8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption"></span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/34517490@N00/7066042811/sizes/l">nicksarebi/flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p>Fairness has become one of the most important ideas in contemporary politics. It’s a concept leveraged by both sides of the political spectrum, to attack or support decisions about who gets what, and how – particularly when it comes to state support. </p>
<p>Most would agree that people should not have poorer health or fewer opportunities, simply because of where they live. Or that people who work hard should be able to earn enough to live on. Or that we should support those in our society who have experienced unprecedented difficulties in their lives, through no fault of their own. </p>
<p>In all of these examples, we can recognise the possibility that it could be us; that we could easily have found ourselves in this position, if it weren’t for a few quirks of fate. </p>
<h2>A sleight of hand</h2>
<p>But one of the great triumphs – or indeed, sleights of hand – of recent years has been the way that an educated, rich and articulate political elite have attacked the conditions of those with least, in the name of those with only a little. </p>
<p>There has been a kind of <a href="http://www.lrb.co.uk/v38/n04/james-meek/robin-hood-in-a-time-of-austerity">inversion of the Robin Hood principle</a>. Instead of a galvanising argument that those with excessive wealth should be taxed in the name of those with least, we now <a href="http://www.thesun.co.uk/sol/homepage/news/7117348/Benefits-cheat-single-mum-who-blew-40k-on-luxury-trips-busted-after-investigators-catch-partner-at-her-home-in-pyjamas.html">hear it said</a> that the residents of social housing, lone mothers, penniless migrants and those looking for work are people who we cannot afford to maintain. Or, worse, that such groups are somehow a drain on the livelihoods of <a href="http://www.thisismoney.co.uk/money/news/article-2215070/Are-contributor-burden-nations-finances--Squeezed-middle-increasingly-dependent-state.html">those who are working hard</a>. </p>
<p>This rhetoric has served a programme of austerity, which has enabled wealthy institutions and individuals to avoid much of the pain generated by the financial crisis, and – according to <a href="https://theconversation.com/fact-check-has-austerity-held-back-economic-growth-40578">top economists</a> – harmed the UK’s economic recovery. But there is good cause to believe that a less polarised vision could ensure that people are given equal opportunity to thrive, regardless of their circumstances. </p>
<h2>The fairest city</h2>
<p>This is the vision underpinning the <a href="https://sheffieldequality.wordpress.com/next-steps/fairness-commission/">Sheffield Fairness Commission</a> – which aims to make Sheffield the fairest city in the country. These blueprints offer some practical guidelines about what cities can actually do to promote social and economic fairness – particularly given that many policy “levers”, such as the level of social security benefits, cannot be operated from within the city. </p>
<p>With the help of 23 independent commissioners – who include councillors from all of the main political parties, as well as representatives from local groups including the voluntary sector, church, chamber of commerce and local press – the commission produced a <a href="https://www.sheffield.gov.uk/your-city-council/policy--performance/fairness-commission.html">report in 2013</a> which detailed 48 recommendations for action. It also put together a guide to help business owners, the local authority and even families make fair decisions. Since then, there has been an annual review of progress, to measure what the city has been able to achieve. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/121722/original/image-20160509-20605-1c10kip.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/121722/original/image-20160509-20605-1c10kip.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=438&fit=crop&dpr=1 600w, https://images.theconversation.com/files/121722/original/image-20160509-20605-1c10kip.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=438&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/121722/original/image-20160509-20605-1c10kip.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=438&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/121722/original/image-20160509-20605-1c10kip.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=550&fit=crop&dpr=1 754w, https://images.theconversation.com/files/121722/original/image-20160509-20605-1c10kip.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=550&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/121722/original/image-20160509-20605-1c10kip.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=550&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Responsible competition.</span>
<span class="attribution"><span class="source">Sheffield Money</span></span>
</figcaption>
</figure>
<p>Here’s what has been accomplished. Led by the city council, <a href="http://www.livingwage.org.uk/employers/region">several large employers</a> have <a href="http://www.bbc.co.uk/news/business-35837712">introduced a higher living wage</a> based on calculations by the Living Wage Foundation, and the Sheffield Chamber of Commerce has also encouraged small and medium-sized organisations to do so. Another recommendation, on fair access to credit, resulted in the creation of <a href="http://www.theguardian.com/money/2015/aug/08/sheffield-money-payday-loans-rates-poverty">Sheffield Money</a>, to compete with the unscrupulous and usurious payday lenders. </p>
<p>More recently, a fair employer charter was introduced, designed to ensure fair conditions of work as well as pay. Several large public and private organisations have already signed up to the charter, which focuses on promoting fair and flexible employment contracts. It encourages recruitment and employment practices that identify and support talent, value diversity and promote aspiration and social mobility. And it promotes the delivery of excellent working conditions, high ethical standards, positive health and well-being and training, development and reward opportunities.</p>
<p>The measures extend beyond business, too. Health funding has been redistributed from acute to primary and community care, and 20mph speed limits have been introduced to cut child injuries and deaths, and reduce air pollution. </p>
<p>These and other measures have not yet succeeded in reversing inequality. But they do seem to have played a role in <a href="https://www.sheffieldfirst.com/key-documents/state-of-sheffield.html">preventing it from getting worse</a> in many aspects of city life. All this has been achieved in the face of adverse national policies, which have removed massive resources from the city council. For instance, the cuts to housing, disability and job seekers’ benefits alone have removed £200m annually from the city. </p>
<p>The work of the commission goes to show that there are things which cities can do, which have a tangible impact on the lives of thousands of people. When city institutions can come together around an idea, it is possible to play down politically fractious relationships, and focus instead on what really matters: that our society is fundamentally a fair one. Whether or not such local initiatives to promote fairness can be extended nationally or even if they will survive the various devolution deals taking place are, for the moment, open questions.</p><img src="https://counter.theconversation.com/content/55723/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rowland Atkinson has received funding from the Economic and Social Research Council.</span></em></p><p class="fine-print"><em><span>Alan Walker receives funding from the ESRC and is a member of the Labour Party </span></em></p>Cities don’t have much control over national policies – but that doesn’t mean there’s nothing they can do.Rowland Atkinson, Chair in Inclusive Societies, University of SheffieldAlan Walker, Professor of Social Policy and Social Gerontology, University of SheffieldLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/549972016-02-29T11:33:00Z2016-02-29T11:33:00ZWhat Berkeley’s budget cuts tell us about America’s public universities<figure><img src="https://images.theconversation.com/files/113126/original/image-20160226-26701-7onagv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Can Berkeley stay Berkeley after budget cuts?</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/jacksonpe/281628977/in/photolist-qTqu2-5m3T8b-fzdNBo-qTqnA-pCNeH-5kYD56-pdeAo9-QUGrs-7TRqG4-5m3Tzo-9nJshe-R3xxH-fy6HqE-9DqwD-eV1wof-5m3WFu-R3xzg-dWGjdK-aFnBLd-4tvmwp-2j7J6-DeoriD-aFnBgE-569G7H-5kYGrM-5zxMnQ-9Dqyu-oz6CVg-aDTEnx-Ab2jVu-5eDgAz-jo9mx5-5kYDRV-fWDAy-R3xwk-56dSvb-fWE1M-5kYDD2-C373-569FYT-5kYDmD-7y2RRV-dUfgsZ-7cKcVJ-aFiNrx-dKvSpT-7cWhgX-4jA8Kh-i5xzF1-cVE4a">Peter Jackson</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span></figcaption></figure><p>The University of California at Berkeley <a href="https://www.insidehighered.com/news/2016/02/11/berkeley-announces-major-strategic-planning-process-address-long-term-budget-issues">recently announced</a> a financial restructuring due to mounting structural deficits, including a US$150 million shortfall in the current budget year. All areas of university’s operations – academic, administrative and athletic – will likely face spending cuts. </p>
<p>Higher education experts have begun to ask if Berkeley can stay Berkeley. From my perspective as a higher education researcher, the question is not just about the future of Berkeley, but about the financial constraints being faced by America’s public university sector. </p>
<p>Berkeley is America’s preeminent public research university. And its budget woes reflect the <a href="https://www.washingtonpost.com/news/grade-point/wp/2016/02/10/berkeley-is-facing-big-budget-trouble-painful-measures-ahead-for-nations-top-public-college/">long-term challenges</a> facing leading public institutions. Over the past few decades, most public research universities <a href="http://link.springer.com/chapter/10.1007/978-3-319-21512-9_4">have struggled</a> to keep up. </p>
<p>Analysis from the Delta Cost Project, which provides policy-relevent higher education research, shows that between 2003 and 2013, state support for public research universities <a href="http://www.deltacostproject.org/sites/default/files/products/15-4626%20Final01%20Delta%20Cost%20Project%20College%20Spending%2011131.406.P0.02.001%20....pdf">declined by 28 percent</a> on a per-student basis. </p>
<p>This loss of state funding is a major source of strain for public universities. But my research shows how leading private research universities gain an advantage in many other ways as well. </p>
<h2>Public-private divide</h2>
<p>Let’s first look at the institutional wealth divide between public and private research universities. </p>
<p>The <a href="https://www.aau.edu/about/default.aspx?id=58">Association of American Universities (AAU)</a> represents the nation’s top 34 public and 26 private research universities. In 2013 the average market <a href="http://www.nacubo.org/Documents/EndowmentFiles/2013NCSEPressReleaseFinal.pdf">value of endowments</a> held by private AAU universities was $7.1 billion, whereas the average endowment value held by public AAU universities was $2.6 billion. </p>
<p>Why do private research universities have much larger endowments?</p>
<p>Private universities have a <a href="http://www.nptrust.org/history-of-giving/timeline/1600s/">longer history</a> of cultivating private donors. Some of the earliest examples of philanthropic giving in the United States include gifts to Harvard University in the mid-17th century. A number of private universities, such as Carnegie Mellon University, were <a href="http://www.cmu.edu/about/history.html">later established</a> by philanthropic giving. </p>
<p>However, <a href="http://link.springer.com/chapter/10.1007/978-3-319-21512-9_9">my research</a> shows that since the 1970s, top private universities have also taken advantage of changes to the rules that govern financial management for nonprofit organizations. These changes have permitted the wealthiest institutions to invest aggressively and use the majority of capital gains to further grow their endowments. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/113127/original/image-20160226-26694-1hhx10t.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/113127/original/image-20160226-26694-1hhx10t.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=381&fit=crop&dpr=1 600w, https://images.theconversation.com/files/113127/original/image-20160226-26694-1hhx10t.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=381&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/113127/original/image-20160226-26694-1hhx10t.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=381&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/113127/original/image-20160226-26694-1hhx10t.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=479&fit=crop&dpr=1 754w, https://images.theconversation.com/files/113127/original/image-20160226-26694-1hhx10t.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=479&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/113127/original/image-20160226-26694-1hhx10t.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=479&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Existing rules have allowed the wealthiest universities to grow their endowments.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/69214385@N04/15346539542/in/photolist-po82xm-pTDUZg-p97fUJ-sja2pz-pa7sA5-ktNue3-4HfzMy-4HfzzW-69K2KX-QFtPt-QEiuJ-QFsgP-QEhPG-QFvYV-QFudv-QFvDH-QEk4S-jDTtG-QCkYH-4r4Y5p-QCmUx-px2qyV-jDRp8-jDQrb-7vX88m-jDQCv-jDTzf-dySA6a-jDPEu-jDRQY-jDRKz-jDSCz-jDPV9-mEpLt9-jDTk1-jDQf2-jDSgx-jDRVF-jDR3t-qzevrN-jDPsP-q4xdmq-jDTQD-jDSsm-jDP9E-jDRxW-jDPfA-jDTYy-jDU22-dyY1no">Don McCullough</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span>
</figcaption>
</figure>
<p>In addition, there are differences in the way research funds are allocated.</p>
<p>About 60 percent of academic research is supported by <a href="http://www.nsf.gov/statistics/2016/nsb20161/#/">grants</a> from the federal government. <a href="https://ncsesdata.nsf.gov/webcaspar/">Data</a> from the National Science Foundation show the AAU’s private universities in 2013 received an average of $423.7 million in federal research support per university. This compared to an average of $363.4 million per institution among AAU public universities. </p>
<p>Public research universities receive fewer grants because of the way scientific research is funded. Grants are typically awarded to individual professors rather than to universities directly.</p>
<p>Professor salaries are <a href="http://muse.jhu.edu/login?auth=0&type=summary&url=/journals/review_of_higher_education/v024/24.2alexander.html">significantly higher</a> at private universities. As a result, many professors who are successful at winning coveted research grants choose to work at private universities. </p>
<p>Even when the federal government made funds available for academic research as part of the spending package designed to jump-start the economy during the Great Recession, private universities were funded much more generously than public institutions. <a href="http://www.palgrave-journals.com/hep/journal/vaop/ncurrent/abs/hep201521a.html">My research</a> with <a href="https://www.coe.unt.edu/facultystaff-department/barrett-taylor">Barrett Taylor</a>, assistant professor at the University of North Texas, found that leading private universities were awarded nearly four times as much of these funds than were leading public universities on a per-student basis. </p>
<h2>Why does it matter?</h2>
<p>The competitiveness of public research universities matters because in an era of <a href="http://www.pewresearch.org/fact-tank/2013/12/05/u-s-income-inequality-on-rise-for-decades-is-now-highest-since-1928/">growing inequality</a> these are key points of access to a world-class education. </p>
<p><a href="http://www.aascu.org/policy/publications/policy-matters/TopTen2016.pdf">Public institutions face</a> mounting public accountability pressures that may not be as intense for private institutions. In addition, private universities are not obliged to provide access to a large number of students. <a href="https://nces.ed.gov/ipeds/">Federal data</a> from 2013 show that the average AAU public university enrolled over 37,600 students, whereas their private counterparts enrolled on average fewer than 17,500 students.</p>
<p>Private universities restrict enrollments through selective admissions. <a href="https://collegescorecard.ed.gov%5D">Federal data</a> show on average 50 percent of applicants to AAU public universities are admitted, compared with just 18 percent at private universities in the AAU. Moreover, while on average 26 percent of students at AAU public universities come from families with modest incomes, only 15 percent of students at AAU private universities come from families with modest means. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/113128/original/image-20160226-26687-1p29e95.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/113128/original/image-20160226-26687-1p29e95.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/113128/original/image-20160226-26687-1p29e95.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/113128/original/image-20160226-26687-1p29e95.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/113128/original/image-20160226-26687-1p29e95.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/113128/original/image-20160226-26687-1p29e95.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/113128/original/image-20160226-26687-1p29e95.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Why do we need public universities?</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/masstravel/7644952620/in/photolist-cDyo4W-cDynm7-8xeMTK-8xeNc4-8xhPPs-4FHcAi-8xeMLi-oV1cPA-8xhPCj-8xi7wj-8xi7sq-bYjJZA-8xhPES-4FMk7q-773LEv-nZGPfr-ejTzd-83962x-8ovzZM-c4scds-838YMR-ejTes-773G3H-otgexF-8rjXyJ-CXFNZz-83caBd-7S335j-ejUhF-Kp63f-ejU8d-8pAyMv-Kp3Kb-9Nvxqd-bBqZGr-8Los5T-ejUeA-8qtR7c-bXKhku-8xf6iX-8xeMTn-8xeNzH-cDyeRJ-cDyfem-bWvv4A-3cW3MB-8xi7xW-8xhP85-4FMjYU-4FH9fr">Massachusetts Office of Travel & Tourism</a>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<p>Differences in student body size translated to vastly different levels of resources. On average private AAU universities held $500,000 of endowment resources for every student enrolled, compared to an average of $65,000 per student at public AAU universities. The greater resources held by private universities allow them to provide students with a richer experience.</p>
<p>Private university enrollments are also much more heavily concentrated at the graduate level – 50 percent compared to 26 percent at public universities. This is important because <a href="http://www.hup.harvard.edu/catalog.php?isbn=9780674049710">graduate students spend</a> much of their time conducting research, which can improve the chances professors at private universities will win grants. </p>
<p>My research shows that as a result, in 2013 professors at private universities in the AAU enjoyed over <a href="https://www.academia.edu/22564123/Data_for_What_Berkeley_s_budget_cuts_tell_us_about_America_s_public_universities_">$60,000 more per capita</a> in federal research funding than did professors working at public AAU universities. </p>
<h2>We need public universities</h2>
<p>During the <a href="http://www.sup.org/books/title/?id=339">19th and 20th centuries</a>, public research universities led the way in expanding and developing what many consider to be the greatest system of higher education in the world. </p>
<p>The University of California was the model for great public universities, and Berkeley remains among America’s premier institutions. But budget cuts take a toll. Over the past 30 years, Berkeley and other public universities have found it difficult to compete with their private peers.</p>
<p>If these trends continue, many students in the United States may be denied an opportunity to experience education at a world-class university.</p><img src="https://counter.theconversation.com/content/54997/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Brendan Cantwell does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>State support for public research universities declined by 28 percent between 2003 and 2013. So, why does it matter?Brendan Cantwell, Assistant Professor of Higher, Adult, and Lifelong Education, Michigan State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/499352015-10-30T12:19:39Z2015-10-30T12:19:39ZHit hard or hardly hit? Here’s what the British public feels about austerity<figure><img src="https://images.theconversation.com/files/100323/original/image-20151030-16554-1rhkvgh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Under scrutiny. </span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/number10gov/17929308302/sizes/l">The Prime Minister's Office/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span></figcaption></figure><p>The British public’s perceptions of public services and spending cuts are shifting. My team at the Ipsos MORI Social Research Institute <a href="https://www.ipsos-mori.com/researchpublications/researcharchive/3644/Coming-to-terms-with-austerity.aspx">have updated</a> the questions we asked in <a href="https://www.ipsos-mori.com/researchpublications/researcharchive/3081/Public-at-tipping-point-on-attitude-towards-cuts-poll-shows">2012</a> and <a href="http://touchstoneblog.org.uk/wp-content/uploads/2013/10/BBC-Public-Services-Poll-Sept-2013_Summary.pdf">2013</a> – and at first glance, the public’s answers seem very worrying for the government.</p>
<p>So here’s the bad news: there has been a huge increase in concern about the future of the NHS: now, 55% expect health services to get worse over the next five years – the highest we’ve ever measured, nearly twice the level we encountered in the early 2000s.</p>
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<p>And this is reflected in views of individual health services: the proportions of people saying that GPs, hospitals and care for the elderly have got worse are all up, compared with two years ago.</p>
<p>This makes the NHS one of the biggest challenges which the government faces today. It almost always feels like the NHS is close to tipping into disaster, and the majority of the public <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/444783/NHS_tracker_acc.pdf">always agree</a> that it is in “crisis”. But the shifts we’ve noted should ring alarm bells. </p>
<p>The explanations for increased public nervousness will be varied, from direct experience of a more constrained service, to <a href="http://www.independent.co.uk/news/uk/politics/nhs-junior-doctor-contract-protest-parliament-square-october-a6675046.html">high-profile protests</a> by health professionals, to lower staff advocacy for the service and <a href="http://www.theguardian.com/society/2015/mar/19/nhs-deficit-crisis-bailout-warns-top-health-chief">press coverage</a> of the looming deficit. But it will also partly come from the government’s own actions in “<a href="http://www.ombudsman.org.uk/about-us/news-centre/press-releases/2015/ombudsmans-report-shines-a-light-on-human-cost-of-poor-public-service-in-the-nhs-in-england-and-uk-government-departments">shining a light</a>” on shortcomings. The very real funding gaps need to be filled somehow.</p>
<p>Perceptions of the police service have also taken a significant hit. Now, 39% of people think policing is worse than it was before. This is much higher than a couple of years ago when the figure was 28%. And again, people’s expectations of future change are the most negative that we’ve measured, so they think it will continue to get worse. </p>
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<p>There is significant and <a href="http://www.polfed.org/aboutus/181.aspx">sustained lobbying</a> to protect police numbers. But in fact, we have relatively little contact with the police, compared with other public services like the NHS. So, the link between outcomes – such as <a href="http://www.theguardian.com/uk-news/2015/aug/31/police-force-new-spending-cuts-22000-jobs">job cuts for officers</a> or <a href="http://www.bbc.co.uk/news/uk-30931732">falling crime rates</a> – and how we feel about the service is less clear. </p>
<h2>Holding steady</h2>
<p>But views of other services are holding up. It’s true that there are more negative attitudes towards changes in schooling in recent years – and a similar pattern for a whole range of local authority services. But just as many (and often more) people think these services have improved, rather than have become worse, in recent years.</p>
<p>Views of welfare cuts are also shifting away from the government – more people think they’ve gone too far and fewer think they have been necessary – but not decisively so. Still less than half of respondents think the cuts have gone too far and only 34% disagree that the cuts have been necessary.</p>
<p>But most telling – and encouraging for the government’s plan – is the fact that the population as a whole seem much less concerned about the cuts than they did before. There’s been a similar shift in concern about the future impact of cuts. These days, more than half are not concerned, while it was only a third back in 2012.</p>
<p>The standout finding is that 76% say they haven’t really been affected by the cuts themselves and four in ten say they haven’t been affected at all. This is a massive swing from 2012, when only 10% said they hadn’t been affected at all. </p>
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<p>So what accounts for this huge change, and why are we more worried about particular services, but less concerned about austerity measures on the whole?</p>
<p>Changing expectations about the progress of austerity are likely to be playing a part. We asked people what percentage of planned cuts to government spending had been made. In 2012, people said they thought we were 40% through the cuts. Now, they think we’ve only made 28% of planned cuts. But then it’s actually pretty much impossible to say whether these figures are correct or not, since the context and government plans keep shifting – so in that sense it’s an unfair question.</p>
<p>Even so, it is still a clear indication that many of us may be getting used to the idea of semi-permanent austerity. The government has convincingly set the narrative for the majority of the public that we need continuing cuts to balance the budget. </p>
<p>If that means services can do less, we have to live with that. And the impact of the cuts are concentrated within a relatively small proportion of the population. Most people just don’t have that much direct interaction with most services such as doctors and the police on a day-to-day basis – the obvious exceptions being the NHS and the education system. </p>
<p>And of course, more positively, a number of services like the NHS have <a href="http://www.kingsfund.org.uk/projects/new-gov/financial-control-and-productivity">found ways</a> to do more with less – or at least to focus on doing what’s really important.</p>
<h2>Good news for the government</h2>
<p>The government is likely to take a lot of courage from these findings into their <a href="https://www.gov.uk/government/news/spending-review-launched-by-chancellor">Comprehensive Spending Review</a> next month, which will set out where the next round of spending cuts will fall. </p>
<p>Then again we know from <a href="https://www.ipsos-mori.com/researchpublications/researcharchive/3614/EconomistIpsos-MORI-August-2015-Issues-Index.aspx">previous research</a> that tipping points on sensitive topics can come quickly. And another question on changes in spending shows that the public are likely to lay blame squarely with the government if we reach such a point.</p>
<p>We asked people how people thought spending in particular areas had changed in real terms over the past five years: that is, how much each had gone up or down. People think that the police have experienced the biggest drop in spending – down by 9%. In fact, the police budget has been cut by <a href="http://www.bbc.co.uk/news/uk-31771456">20% since 2011</a>. </p>
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<span class="attribution"><a class="source" href="http://www.slideshare.net/IpsosMORI/devolution-express?next_slideshow=1">Ipsos MORI</a>, <span class="license">Author provided</span></span>
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<p>But we’re generally very shaky on the facts of spending changes. We think that spending on pensions has decreased by 2% in the last five years, when it has actually increased by 13%. In contrast, we think education spending is up 1%, when it’s actually down 13%. Most distressingly for the government, we think health spending is down 3% when it’s up 4%.</p>
<p>As is often the case, perceptions do not reflect reality. But they do determine how people feel, and this has clear political consequences. For now, it seems that there’s more good news than bad news for the government.</p><img src="https://counter.theconversation.com/content/49935/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Bobby Duffy does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>We often get the facts wrong, but how we feel about austerity has serious consequences for the political class.Bobby Duffy, Managing Director, Ipsos MORI Social Research Institute, Visiting Senior Research Fellow, King's College LondonLicensed as Creative Commons – attribution, no derivatives.