A Reconsideration of Tax Expenditure Analysis

Source: Joint Committee on Taxation

This document, prepared by the staff of the Joint Committee on Taxation, reconsiders the utility of the JCT Staff’s current implementation of tax expenditure analysis. Tax expenditure analysis can and should serve as an effective and neutral analytical tool for policymakers in their consideration of individual tax proposals or larger tax reforms. Its efficacy has been undercut substantially, however, by the depth and breadth of the criticisms leveled against it. Tax expenditure analysis no longer provides policymakers with credible insights into the equity, efficiency, and ease of administration issues raised by a new proposal or by present law, because the premise of the analysis (the validity of the “normal” tax base) is not universally accepted. Driven off track by seemingly endless debates about what should and should not be included in the “normal” tax base, tax expenditure analysis today does not advance either of the two goals that inspired its original proponents: clarifying the aggregate size and application of government expenditures, and improving the Internal Revenue Code. The JCT Staff therefore has begun a project to rethink how best to articulate the principles of tax expenditure analysis, in order to improve the doctrine’s utility to policymakers, reemphasize its neutrality, and address the concerns raised by many commentators.

This pamphlet introduces a new paradigm for classifying tax provisions as tax expenditures. Our revised classification divides the universe of such provisions into two main categories: tax expenditures that can be identified by reference to the general rules of the existing Internal Revenue Code (not, as is the current practice, by reference to a hypothetical “normal” tax), which we label “Tax Subsidies,” and a new category that we have termed “Tax-Induced Structural Distortions.” The two categories together cover much the same ground as does the current definition of tax expenditures, and in some cases extend the application of the concept further. The revised approach does so, however, without relying on a hypothetical “normal” tax to determine what constitutes a tax expenditure, and without holding up that “normal” tax as an implicit criticism of present law. The result should be a more principled and neutral approach to the issues.

Full report (PDF; 367 KB)

Medicaid Managed Care for Children in Child Welfare

Source: Center for Health Care Strategies, Inc.

Children in the child welfare system have an extremely high prevalence of physical and behavioral health problems. This issue brief examines the complex physical and behavioral health care needs and associated costs for children in child welfare and outlines critical opportunities and challenges within Medicaid to better manage care for this high-risk, high-cost population.

Full Document (PDF; 147 KB)

Evaluating the Potential for a Recession in 2008

Source: Congressional Research Service (via OpenCRS)

The U.S. economy has faced some bad news lately. The housing boom has come to an abrupt halt, and housing sales and house building have been falling at double digit rates. Problems in housing markets have spread to financial markets, causing a “liquidity crunch” in August 2007, and calm has not been restored since. Financial institutions have written off large losses because of falling asset values, particularly for mortgage-backed securities. Commodity prices have been rising, and the price of crude oil has recently topped $120 per barrel. While each of these factors might not be enough to cause a recession in isolation, their cumulative effect could be great enough to push the economy into recession. In light of this news, it is perhaps unsurprising that consumer confidence is at a five-year low. In response to these events, Congress has enacted an economic stimulus package (P.L. 110-185) and the Federal Reserve has aggressively cut interest rates and lent directly to the financial system to spur economic growth.

Despite these actions, a recent survey of private sector forecasters put the chance of a recession in 2008 at 60%. A look at the available data suggests that economic growth has slowed considerably, but it is too soon to tell if the economy has entered a recession. Typically, the NBER does not announce that the economy has entered a recession until the recession is well under way, for good reason. Recessions are defined as prolonged and sustained declines in economic activity, so by definition, a persistent downturn cannot be identified until it has persisted.

Any decline in economic activity at this point is only nascent. Growth was slow in the last two quarters for which data are available, but remained positive. During the onset of the liquidity crunch, economic growth was an unusually high 4.9% in the third quarter of 2007. Employment declined slightly in the first four months of 2008. The same forecasters who believe there is a one in two chance of recession also predict that growth will average 1.4% in 2008. Given the lags between policy changes and their effects on the economy, the economy has not yet felt the full impact of the stimulus package and the Federal Reserve’s actions.

Full Report (PDF; 152 KB)

Covering Uninsured Children in the State Children’s Health Insurance Program

Source: Congressional Budget Office (Testimony)
SCHIP has significantly reduced the number of low-income children who lack health insurance. According to the Congressional Budget Office’s (CBO’s) estimates, the portion of children in families with income between 100 percent and 200 percent of the poverty level who were uninsured fell by about 25 percent between 1996 (the year before SCHIP was enacted) and 2006. In contrast, the rate of uninsurance among higher-income children remained relatively stable during that period. The difference probably reflects the impact of the SCHIP program.

The states’ outreach efforts and simplified enrollment processes for SCHIP appear to have also increased the share of eligible children who participate in Medicaid–and contributed to a decline in the percentage of children living below the poverty level who are uninsured.

The enrollment of children in public coverage as a result of SCHIP has not led to a one-for-one reduction in the number of low-income children who are uninsured, however. Almost any increase in government spending or tax expenditures intended to expand health insurance coverage will displace private coverage to some degree. In the specific case of SCHIP, the program provides a source of coverage that is less expensive to enrollees and often provides a broader range of benefits than alternative coverage. As a result, the program displaces–or “crowds out”–private coverage to some extent. On the basis of a review of available research, CBO has concluded that for every 100 children who gain public coverage as a result of SCHIP, there is a corresponding reduction in private coverage of between 25 and 50 children.

CBO’s analysis of the Children’s Health Insurance Program Reauthorization Act of 2007, as passed by the House of Representatives, suggested that the legislation would result in 5.8 million children gaining coverage under Medicaid or SCHIP in 2012. Of that increase, CBO estimated, 3.8 million children would otherwise have been uninsured, and 2.0 million children would otherwise have had private coverage. In other words, about one-third of the children who would be newly covered under SCHIP and Medicaid would otherwise have had private coverage. That crowd-out rate is probably about as low as feasible for a voluntary program to increase coverage among children, given the size of the proposed expansion. (Policies to reduce the rate below that level would most likely also reduce the number of children enrolled in the program who would otherwise be uninsured.)

Emergency Response Guidebook 2008

Source: Pipeline and Hazardous Materials Safety Administration (U.S. Department of Transportation)

The Emergency Response Guidebook (ERG2008) was developed jointly by the US Department of Transportation, Transport Canada, and the Secretariat of Communications and Transportation of Mexico (SCT) for use by firefighters, police, and other emergency services personnel who may be the first to arrive at the scene of a transportation incident involving a hazardous material. It is primarily a guide to aid first responders in (1) quickly identifying the specific or generic classification of the material(s) involved in the incident, and (2) protecting themselves and the general public during this initial response phase of the incident. The ERG is updated every three to four years to accommodate new products and technology. The next version is scheduled for 2012.

DOT’s goal is to place one ERG2008 in each emergency service vehicle, nationwide, through distribution to state and local public safety authorities. To date, nearly eleven million copies have been distributed without charge to the emergency response community.

Full Version (PDF; 2.6 MB)

The States and Their Community Colleges

Source: Rockefeller Institute of Government

From press release (PDF; 32 KB):
A new Rockefeller Institute of Government study has found that the utilization of two-year community colleges varies widely among the states, from a high of 47 percent of higher education students attending community colleges in Wyoming to a low of less than 8 percent in Vermont.

According to the new analysis, the first of its kind comparing utilization rates in the 50 states, the national average of community college utilization is 27.7 percent of higher-education enrollees. The study examined data from 2000 to 2005.

Full report (PDF; 292 KB)

Enduring Mental Health Morbidity and Social Function Impairment in World Trade Center Rescue, Recovery and Cleanup Workers: The Psychological Dimension of an Environmental Health Disaster

Source: Environmental Health Perspectives

Workers’ service in 9/11 recovery operations is associated with chronic impairment of mental health and social functioning. Psychological distress and psychopathology in WTC workers greatly exceed population norms. Surveillance and treatment programs continue to be needed.

Full text (526 KB)

Prosecuting Sexual Violence in Correctional Settings: Examining Prosecutors’ Perceptions

Source: American University, WCL Research Paper (via SSRN)

From the abstract:
The Prison Rape Elimination Act of 2003 (PREA) is the first piece of federal legislation, which expressly and exclusively addresses sexual abuse of persons in custody. Notwithstanding passage of the Act, there is clear belief, echoed by correctional leaders, that prosecutors are reluctant at best, and unwilling at worst, to prosecute cases of sexual violence in correctional settings. In order to gather information on prosecutor interest in and capacity to prosecute these cases, the National Institute of Corrections Project on Addressing Prison Rape at the Washington College of Law the (the NIC/WCL Project) collected data from state and federal prosecutors.

This article draws on that research and data to examine the perception that prosecutors are unwilling to prosecute cases of sexual violence in custody, discusses barriers to prosecution identified by prosecutors regarding investigating and prosecuting allegations of sexual abuse of persons under correctional supervision, and recommends tools to overcome those barriers.

Child Abuse and Neglect Fatalities: Statistics and Interventions

Source: Child Welfare Information Gateway

From the factsheet:
Despite the efforts of the child protection system, child maltreatment fatalities remain a serious problem. Although the untimely deaths of children due to illness and accidents have been closely monitored, deaths that result from physical assault or severe neglect can be more difficult to track because the perpetrators, usually parents, are less likely to be forthcoming about the circumstances. Intervention strategies targeted at solving this problem face complex challenges.

Public Health Impacts of Climate Change in California: Report No. 1: Heat-Related Illness and Mortality

Source: Public Health Institute

Climate change is a major cross-cutting public health issue that will significantly increase disease burden in California. Some health impacts will be direct, such as injuries that occur during floods, and others will arise from ecological shifts and environmental degradation, such as emergent infectious diseases or exacerbation of chronic respiratory diseases due to air pollution. In this report, we focus on heat-related illness and mortality.

The public health risks associated with extreme heat events vary across California’s communities, and among the individuals within communities. Vulnerabilities and capacities change over time. To ensure the state’s public health infrastructure has the capacity to withstand the challenges to health posed by climate change and heat, it is essential to know which communities or populations are most vulnerable and then identify strategies and resources to diminish their risk. Advance planning and intervention will be central in order to prevent illness and death.

Full report (PDF; 4.3 MB)