Reducing Flood Risks is Worth the Effort – and the Savings

Apr 1, 2014Melia Ungson

Programs aimed at cutting flood insurance premiums by reducing risk have their pluses and minuses, but the positives deserve strong consideration from local governments.

Programs aimed at cutting flood insurance premiums by reducing risk have their pluses and minuses, but the positives deserve strong consideration from local governments.

FEMA administers the National Flood Insurance Program (NFIP) to make flood insurance available to many communities, as most standard home and property insurance policies do not cover losses from floods. In 2012, Congress passed the Flood Insurance Reform Act of 2012, which called on FEMA to raise flood insurance rates so that they better reflect flood risk. This has spurred concerns about people’s ability to afford flood insurance and maintain property values.

One program that strives to help make flood insurance more affordable and encourage communities to reduce flood risk is the Community Rating System (CRS), which began in 1990. Communities that participate in CRS receive a discount on flood insurance premiums. The more a community does to reduce flood risk, the larger the premium reduction. According to FEMA, CRS has three main goals: to reduce flood damage to insurable property, to strengthen the insurance aspects of the NFIP, and to encourage a more comprehensive approach to floodplain management.

CRS is a points-based system, where 500 points is required for participation. A community can earn CRS points by taking on actions from an approved list. These activities are broken up into four main categories (public information, mapping and regulations, flood damage reduction, and flood preparedness), and include everything from disseminating brochures with flood hazard information to developing mapping information.

Based on the number of points accrued, communities are assigned to one of ten CRS classes. Class 10 is for those who are not participating or who have less than 500 points. Class 9 communities, with 500-999 points, receive a 5% reduction, and Class 1 communities, with 4,500 points or more, receive a 45% reduction. The increasing reductions create incentives for communities to expand flood protection activities.

Despite the benefits, CRS communities represent only about 5% of the communities in the NFIP. Most communities that participate in CRS fall between Class 5 and Class 9. In New England, most participating communities fall between Class 7 and Class 9. Improving class takes time and resources, but for a program that has been around for nearly 25 years, there are surprisingly few communities at the top classes. Roseville, California is the only Class 1 community, inspired to take on the CRS after devastating floods, and its 45% reduction saves residents an average of $792 per plan. Additionally, only three communities have achieved a Class 2 rating. Tulsa, Oklahoma, which has creeks that cause flooding, saves residents an average of $514 per plan. Unincorporated King County, Washington, which focused on preserving floodplain open space, saves residents an average of $586. And Pierce County, Washington, which focused on public information, saves residents an average of $550.

Beyond premium reductions, FEMA argues the program has other benefits. These include improving public safety and awareness, facilitating easier comparison and evaluation with a standardized classification system, providing technical assistance, and focusing on maintaining measures to reduce risk.

Indeed, CRS does have major benefits, not least of which is the reduced premium. With the incentive to reduce flood risk, the program balances recognizing the real risks and costs of living in areas with flooding dangers, and also trying to make those communities more prepared and resilient. Acquisition and relocation are incentivized through CRS with high point rewards, as is preserving hazardous flood areas as open space, though the bulk of the program’s actions focus on reducing risk in areas that will remain inhabited. Additionally, FEMA offers free training for local officials and makes emergency management specialists available to support CRS applications.

However, the very low number of NFIP communities that participate in CRS suggests that there are obstacles to applying for and maintaining CRS status. Despite Tulsa’s success in CRS, overall interest in the program has been declining in Oklahoma, as local officials weigh the benefits and costs of implementing CRS. A major issue is limited local capacity. Communities that are already struggling to stretch budgets and personnel may not be able to take on the additional work required by CRS to benefit residents living in flood zones. This may be particularly problematic in cases where the residents of flood zones are those who are struggling with the added costs of flood insurance and are most in need of the premium reduction. Since individual residents cannot take steps to gain points, the community must rely on local officials to prioritize CRS.

Furthermore, upgrading levels is difficult and takes time. King County, for instance, went from being Class 10 when the program started in 1990 to Class 9 in 1992. It then took 15 years to work up to Class 2. That long time horizon may be discouraging to getting communities to apply. A 5% discount may not seem like much in comparison to the time and work required for a class upgrade, so communities may postpone their participation until they accrue enough points for a larger reduction.

Lastly, the number of communities participating, and especially the number of communities in the top classes, suggests that there may be a gap between national standards and local capacity. Though the cost of implementing CRS varies, communities have reported costs ranging from $10,000 to $20,000 and above, largely for disseminating information and developing maps. Some communities may be hesitant to proceed too far along with CRS, as it poses restrictions on development, such as elevation requirements.

Despite the challenges, CRS is an important tool. While local communities may have limited capacity, FEMA, too, can only do so much to reduce risk in communities across the country. CRS empowers local officials to take action, while also putting money back into the hands of residents. The challenge is to make the case to local residents and officials that participation in CRS is worthwhile. It is a big commitment, with the application likely taking significant time and resources, and it is an ongoing commitment, as communities must demonstrate they are maintaining measures to reduce risk and inform the public. Yet many of those actions are valuable, and even doable with the resources offered by FEMA and other agencies. While CRS may fairly not be a top priority for many communities, it is worth serious consideration.

Melia Ungson is the Roosevelt Institute | Campus Network Senior Fellow for Energy and Environment.


Share This

Stiglitz: Why Inequality Matters and What Can Be Done About It

Apr 1, 2014Joseph Stiglitz

Roosevelt Institute Senior Fellow and Chief Economist Joseph Stiglitz will speak before the Senate Budget Committee today on the topic of "Opportunity, Mobility, and Inequality in Today's Economy." His prepared remarks are below. Click here to download all of the statements from the hearing.

Roosevelt Institute Senior Fellow and Chief Economist Joseph Stiglitz will speak before the Senate Budget Committee today on the topic of "Opportunity, Mobility, and Inequality in Today's Economy." His prepared remarks are below. Click here to download all of the statements from the hearing.

It is a great pleasure for me to discuss with you one of the critical issues facing our country, its growing inequality, the effect it is having on our economy, and the policies that we might undertake to alleviate it. America has achieved the distinction of becoming the country with the highest level of income inequality among the advanced countries. While there is no single number that can depict all aspects of society’s inequality, matters have become worse in every dimension: more money goes to the top (more than a fifth of all income goes to the top 1%), more people are in poverty at the bottom, and the middle class—long the core strength of our society—has seen its income stagnate. Median household income, adjusted for inflation, today is lower than it was in 1989, a quarter century ago.[1] An economy in which most citizens see no progress, year after year, is an economy that is failing to perform in the way it should. Indeed, there is a vicious circle: our high inequality is one of the major contributing factors to our weak economy and our low growth.

As disturbing as the data on the growing inequality in income are, those that describe the other dimensions of America’s inequality are even worse: inequalities in wealth are even greater than income, and there are marked inequalities in health, reflected in differences, for instance, in life expectancy. But perhaps the most invidious aspect of US inequality is the inequality of opportunity. America has become the advanced country not only with the highest level of inequality, but is among those with the least equality of opportunity—the statistics show that the American dream is a myth; that the life prospects of a young American are more dependent on the income and education of his parents than in other developed countries. We have betrayed one of our most fundamental values. And the result is that we are wasting our most valuable resource, our human resources: millions of those at the bottom are not able to live up to their potential.

This morning, I want to make eight observations concerning this inequality. The first is that this inequality is largely a result of policies—of what we do and don’t do. The laws of economics are universal: the fact that in some countries there is so much less inequality and so much more equality of opportunity, the fact that in some countries inequality is not increasing—it is actually decreasing—is not because they have different laws of economics. Every aspect of our economic, legal, and social frameworks helps shape our inequality: from our education system and how we finance it, to our health system, to our tax laws, to our laws governing bankruptcy, corporate governance, the functioning of our financial system, to our anti-trust laws. In virtually every domain, we have made decisions that help enrich the top at the expense of the rest.

The second observation is that much of the inequality at the top can’t be justified as “just deserts” for the large contributions that these individuals have made. If we look at those at the top, they are not those who have made the major innovations that have transformed our economy and society; they are not the discoverers of DNA, the laser, the transistor; not the brilliant individuals who made the discoveries without which we would not have had the modern computer. Disproportionately, they are those who have excelled in rent seeking, in wealth appropriation, in figuring out how to get a larger share of the nation’s pie, rather than enhancing the size of that pie. (Such rent seeking activity typically actually results in the size of the economic pie shrinking from what it otherwise would be.) Among the most notable of these are, of course, those in the financial sector, who made their wealth by market manipulation, by engaging in abusive credit card practices, predatory lending, moving money from the bottom and middle of the income pyramid to the top. So too, a monopolist makes his money by contracting output from what it otherwise would be, not by expanding it.

Thirdly, the idea that one shouldn’t worry about inequality because everyone will benefit as money trickles down, has been thoroughly discredited. In some ways, I wish it were true, for if it were, it would mean that the average American would be doing very well today, because we have thrown so much money at the top. But the statistics I gave a few minutes ago shows that it is not true: while the top has been doing very well, the rest has been stagnating.

Fourthly, this recession—while in no small measure caused by the financial sector which itself is responsible for so much of our inequality today—has in turn made inequality so much worse. 95% of the gains since the so-called recovery have gone to the top 1%.

Fifth, it is not the case that our economy needs this inequality to continue to grow. One of the popular misconceptions is that those at the top are the job creators; and giving more money to them will thus create more jobs. America is full of creative entrepreneurial people throughout the income distribution. What creates jobs is demand: when there is demand, America’s firms (especially if we can get our financial system to work in the way it should, providing credit to small and medium-sized enterprises) will create the jobs to satisfy that demand. And unfortunately, given our distorted tax system, for too many at the top, there are incentives to destroy jobs by moving them abroad. This growing inequality is in fact weakening demand—one of the reasons that inequality is bad for economic performance.

Sixth, we pay a high price for this inequality, in terms of our democracy and nature of our society. A divided society is different—it doesn't function as well. Our democracy is undermined, as economic inequality inevitably translates into political inequality. I describe in my book how the outcomes of America’s politics are increasingly better described as the result of a system not of one person one vote but of one dollar one vote. One of the prices we pay for the extremes to which inequality has grown and the nature of inequality in America—both inequality in outcomes and inequalities of opportunities—is that we have a weaker economy. Greater inequality leads to lower growth and more instability. These ideas now have become mainstream: even the IMF has embraced them. We used to think of there being a trade-off: we could achieve more equality, but only at the expense of giving up on overall economic performance. Now we realize that, especially given the extremes of inequality achieved in the US and the manner in which it is generated, greater equality and improved economic performance are complements.

This is especially true if we focus on appropriate measures of growth, focusing not on what is happening on average, or to those at the top, but how the economy is performing for the typical American, reflected for instance in median income. For too many—perhaps even a majority—the American economy has not been delivering. And if our economy is not delivering, it not only hurts our people, it undermines our position of leadership in the world: will other countries want to emulate an economic system in which most individuals’ incomes are simply stagnating?

We pay a price not only in terms of a weak economy today, but lower growth in the future. With nearly one in four American children growing up in poverty,[2] many of whom face a lack of access to adequate nutrition and education, the country’s long-term prospects are being put into jeopardy.

The seventh observation is that the weaknesses in our economy have important budgetary implications. The budget deficits of recent years are a result of our weak economy, not the other way around. If we had more robust growth, our budgetary situation would be far improved. That’s why investments in decreasing inequality and increasing equality of opportunity make sense not only for our economy, but for our budget. When we invest in our children, the asset side of our country’s balance sheet goes up, even more than the liability set: any business would see that its net worth is increased. In the long run, even looking narrowly on the liability side of the balance sheet, it will be improved, as these young people earn higher incomes and contribute more to the tax base.

The final observation I want to make is that the role of policy in creating inequality means there is a glimmer of hope. Policy created the problem, and it can help get us out of it. There are policies that could reduce the extremes of inequality and increase opportunity—enabling our country to live up to the values to which it aspires. There is no magic bullet, but there are a host of policies that would make a difference. In the last chapter of my book, The Price of Inequality, I outline 21 such policies, affecting both the distribution of income before taxes and transfers and after. We need to move more people out of poverty, strengthen the middle class, and curb the excesses at the top. Most of the policies are familiar: more support for education, including pre-school; increasing the minimum wage; strengthening the earned-income tax credit; giving more voice to workers in the workplace, including through unions; more effective enforcement of anti-discrimination laws; better corporate governance, to curb the abuses of CEO pay; better financial sector regulations, to curb not just market manipulation and excessive speculative activity, but also predatory lending and abusive credit card practices; better anti-trust laws, and better enforcement of the laws we have; and a fairer tax system—one that does not reward speculators or those that take advantage of off-shore tax havens with tax rates lower than honest Americans who work for a living. If we are to avoid the creation of a new plutocracy in the country, we have to retain a good system of inheritance and estate taxation, and ensure that it is effectively enforced. We need to make sure that everyone who has the potential to go to college can do so, no matter what the income of his parents—and to do so without undertaking crushing loans. We stand out among advanced countries not only in our level of inequality, but also on how we treat student loans in our bankruptcy loans. A rich person borrowing to buy a yacht can get a fresh start, and have his loans forgiven; not so for a poor student striving to get ahead. The special provisions for capital gains and dividends not only distort the economy, but, with the vast majority of the benefits going to the very top, increase inequality—at the same time that they impose enormous budgetary costs: $2 trillion dollars over the next ten years, according to the CBO.[3] While the elimination of the special provisions for capital gains and dividends is the most obvious reform in the tax code that would improve inequality and raise substantial amounts of revenues, there are many others that I discuss in the attached paper which I would like to submit for the record.

A final point is that we must be careful of how we measure our progress. If we use the wrong metrics, we will strive for the wrong things. Economic growth as measured by GDP is not enough—there is a growing global consensus that GDP does not provide a good measure of overall economic performance. What matters is whether growth is sustainable, and whether most citizens see their living standards rising year after year. This is the central message of the International Commission on the Measurement of Economic Performance and Social Progress, which I chaired. Since the beginning of the new millennium, our economy has clearly not been performing in either of these dimensions. But the problems in our economy have been manifest for longer. As I have emphasized, a key factor underlying America’s economic problems today is its growing inequality and the low level of opportunity.

In the past, when our country reached these extremes of inequality, at the end of the 19th century, in the gilded age, or in the Roaring 20s, it pulled back from the brink. It enacted policies and programs that provided hope that the American dream could return to being a reality.

We are now at one of these pivotal points in history. I hope we once again will make the right decisions. You and your committee, in the budget decisions that you will be making, play a vital role in setting the country in the right direction.

[1] For large segments of the American population, matters are even worse. The inflation adjusted median income of a male worker with only a high school degree has fallen by 47% from 1969 to 2009. For additional data sources and explanation of these trends, see my “Reforming Taxation to Promote Growth and Equity,” forthcoming as a Roosevelt institute working paper, which is submitted along with this written testimony. Inequality is discussed in even greater detail in my 2012 book, The Price of Inequality: How Today’s Divided Society Endangers Our Future, New York: W.W. Norton.

[3] See Congressional Budget Office, 2013, The Distribution of Major Tax Expenditures in the Individual Income Tax System, May, p.31, available at (accessed March 28, 2014). This figure includes the effects of the “step-up of basis at death” provision, which reduces the taxes that heirs pay on capital gains. Not including this provision, the ten-year budgetary cost of preferential treatment for capital gains and dividends is $1.34 trillion. 

Joseph Stiglitz is a Senior Fellow and Chief Economist for the Roosevelt Institute. He is a Nobel laureate in economics and University Professor at Columbia University.

Image via Thinkstock

Share This

Daily Digest - April 1: How to Ensure Equal Opportunity Internet Access

Apr 1, 2014Rachel Goldfarb

Click here to receive the Daily Digest via email.

Why the Government Should Provide Internet Access (Vox)

Ezra Klein interviews Roosevelt Institute Fellow Susan Crawford, who says that internet should be regulated as a utility, just like electricity and telephone service.

Click here to receive the Daily Digest via email.

Why the Government Should Provide Internet Access (Vox)

Ezra Klein interviews Roosevelt Institute Fellow Susan Crawford, who says that internet should be regulated as a utility, just like electricity and telephone service.

CHARTS: The Amazing Wealth Surge For The Top 0.1 Percent (TPM)

A new study from two UC Berkley economists shows how the most affluent Americans have surged in their share of the country's wealth in recent years, reports Sahil Kapur. This study stands out because others have primarily looked at income.

New York Doormen Assert Their Right to Live in the City Where They Work (The Atlantic Cities)

With a union contract expiring for the city's doormen, negotiators are tying in to Mayor DeBlasio's fight against income inequality. Meanwhile, as Sarah Goodyear reports, a new ad campaign highlights the heroics of doormen, such as delivering babies. 

$2.13 an Hour? Why The Tipped Minimum Wage Has to Go (The Nation)

Subminimum wage workers, primarily in the restaurant industry, are more likely to live in poverty or rely on food stamps, writes Michelle Chen. That's less true, however, in states with no tipped minimum wage.

The Faces of Food Stamps (Time)

A photo series by Jeff Reidel looks at the lives of SNAP recipients, from their jobs to their efforts to stretch their food dollars. Maya Rhodan speaks with Reidel and some of his subjects.

New on Next New Deal

The ACA in Threes: The Good, The Bad and the Ways to Make it Better

Roosevelt Institute Senior Fellow Richard Kirsch considers some of the successes, outrages, and must-repair glitches occurring over the course of the Affordable Care Act's first open enrollment period.

Higher Education Financing Needs a Better Deal Than This

Raul Gardea, the Roosevelt Institute | Campus Network Senior Fellow for Education, argues that the White House's latest plan for easing student debt doesn't go far enough in its reforms. Indeed, it makes some things worse.

Share This

The ACA in Threes: The Good, The Bad and the Ways to Make it Better

Mar 31, 2014Richard Kirsch

With the first open enrollment period ending today, consider some successes, outrages, and bug fixes for the Affordable Care Act (ACA). Roosevelt Institute Senior Fellow Richard Kirsch will debate implementation issues and the future of the ACA with the Heritage Foundation's Robert Moffit tonight at New York University. For more information, click here.

The Good: Three Big Successes of ACA:

With the first open enrollment period ending today, consider some successes, outrages, and bug fixes for the Affordable Care Act (ACA). Roosevelt Institute Senior Fellow Richard Kirsch will debate implementation issues and the future of the ACA with the Heritage Foundation's Robert Moffit tonight at New York University. For more information, click here.

The Good: Three Big Successes of ACA:

The Affordable Care Act is saving peoples lives: Already. Like Kathy Bentzoni, a Pennsylvania school bus driver, who dropped her old insurance because it was expensive and rejecting claims because of her pre-existing conditions. After getting ACA coverage at $55 a month, she was able to seek care: “They found my hemoglobin level was 5.7, and the normal is 14. I needed a transfusion. It was due to a rare blood disorder. Where would I be without Obamacare? ER, 3 units of blood, multiple tests in the hospital and a 5-day inpatient stay without insurance? Probably dead.” Kathy was not alone in that fear – studies show that tens of thousands of people each year die because they don’t have health coverage.

Medicaid enrollment is a bigger success than expected: Not only is Medicaid enrolling people who are eligible for the first time – 4.6 million of them – but almost another 2 million more are enrolling who were eligible before, but had not applied. In the big push to get people to sign up for the ACA, many people who have been eligible in the past applied for the first time.

Seniors on Medicare are saving money, getting better care: While most seniors don’t think that the ACA has anything to do with them, it does. Last year, 37 million people on Medicare – seniors and people with disabilities – received free preventive care. Since the law was enacted, 8 million people enrolled in Medicare have saved $10 billion on prescription drugs, as the prescription “donut hole’ closes. And for the first time in 30 years, hospital readmission rates for people on Medicare are coming down, because hospitals are now penalized for pushing people out before they are ready.

The Bad: Three Outrages Against the ACA

States that have refused to expand Medicaid: In an example of partisan politics killing people, Republicans in 24 states have refused to expand Medicaid, leaving 5 million people who would be eligible for coverage without any recourse.

Koch brothers campaign to discourage young people from signing up: In an example of billionaires killing people, the Koch brothers have funded tasteless ads and campus beer parties in an attempt to keep young people from signing up for insurance on the exchanges.

Republican lies about job loss and the ACA: One advantage of the ACA is that it gives people the freedom to leave their jobs or reduce their work hours, and still be able to get affordable coverage. When the Congressional Budget Office estimated that 2.3 million American workers would gain this freedom over the next 8 years, Republicans falsely claimed that it would cost jobs. If anything, it will create jobs for people who fill in for those who take advantage of their new freedom. I thought Republicans liked freedom.

The Ways to Make it Better: Three Big Fixes for the ACA:

Allow Medicare to operate in the exchanges: The best way to bring price competition and access to virtually ever doctor and hospital in the exchanges would be to have Medicare offer a plan (without age requirements) in every exchange. This is the easiest and most effective way to bring back the public option.

Base the employer mandate on a play or payroll tax: As I’ve explained here, the best way to get rid of the convoluted system of employers paying a penalty for employees who work more than 30 yours a week, would be to have employers who don’t provide coverage pay a percentage of payroll for health care, just like employers now do for Social Security.

Lower the premiums and out-of-pocket costs: While the ACA is providing affordable coverage for millions – and will offer lower premiums than 29 million people are paying now – they are still too high for many families. And the out-of-pocket costs in the cheaper plans are way too high. The subsidies should be increased for middle-income people – funded by progressive taxes – and the high-out-of-pocket plans ended. 

Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

Photo of President Obama signing the Affordable Care Act copyright George Miller, via Creative Commons license.

Share This

Higher Education Financing Needs a Better Deal Than This

Mar 31, 2014Raul Gardea

Bipartisan budget proposals seek to address the debt-burden on students, yet merely underscore the need for a drastic overhaul of post-secondary education financing.

Bipartisan budget proposals seek to address the debt-burden on students, yet merely underscore the need for a drastic overhaul of post-secondary education financing.

The White House’s latest proposal for easing student-debt is a noble but ultimately bankrupt effort, which misses the forest for the trees. The plan includes an expansion of income-based repayment (IBR), makes the American Opportunity Tax Credit permanent past the current 2017 cut off, and places a cap on loan forgiveness for public sector workers. Yet like most college affordability proposals that have come out of Washington, the current plan offers Band-Aid “reforms” that fail to cut to the heart of the structural problems in how we finance higher education. Instead of trying to fix the debt, the conversation should center on solving why students should need to take out such massive debt in the first place, a discussion few in Washington are eager to have.

A common critique of debt forgiveness is that such policies encourage students to take on a heavier financial burden and leads to schools hiking tuition to compensate. On paper, tuition deferral methods like IBR coupled with loan forgiveness are sound. This method shifts the costs from the individual to the taxpayer, as they should if we still value higher education as a public good. Currently, students who demonstrate need can enroll in “Public Sector Loan Forgiveness” (PSLF) which is an IBR plan that forgives debt after ten years of public sector or non-profit employment. The new proposal lifts the needs-based eligibility requirement to allow larger numbers of individuals to sign up, but places a $57,500 cap on forgiveness for public sector workers and requires payments for twenty-five years instead of ten for any amount over that.

Yet despite the White House’s claim that the proposal provides a “safeguard against raising tuition at high-cost institutions,” there is little reason to believe that will be the case. If the school has already been paid, and taxpayers will foot the bill in twenty-five years as the proposal stipulates, what incentive would there be for colleges to keep tuition low? Since schools have nothing at stake, it is likely that they will continue to increase tuition without regard for what happens to graduates. Students who may have considered serving their communities by pursuing careers as, say, public interest lawyers, relying on the promise of loan forgiveness after ten years are now having the rug pulled out from under them.  A quarter-century of indebtedness is simply absurd to imagine.

Republicans have also weighed in on higher education spending through their tax code reform proposals. They include repealing or consolidating various credits into a permanent American Opportunity Tax Credit, taxing PSLF, and repealing several tax breaks for students, among several other proposals. While this legislation will likely go nowhere as it is, several of these items could linger for a while and undoubtedly worm their way into more digestible, passable bills.

All this back and forth about restoring the promise of higher education hides the urgent need for a massive overhaul of the way the U.S. finances post-secondary education, something that Washington seems unwilling to do. Thinking back to the hopefulness of 2009 now seems like a lifetime ago. That year appeared to signal a turning point in history: a return to a strong, activist, solutions-oriented federal government. The 111th Congress was the most productive Congress in a generation. Certain sectors of the economy appear to be correcting course, with health care costs dropping and financial markets rising again. Yet the cost of a college education, an issue that President Obama is supposedly obsessed with, has continued to increase during this tenure. As his presidency winds down, it’s easy to feel like the window for passing any kind of comprehensive reform has shut. A large segment of our generation is chronically underemployed.  Students continue getting fleeced as the federal government hands out mortgages and lends to banks at lower interest rates. 41% of student loan holders are behind on their payments. Sen. Elizabeth Warren says government should not profit off the backs of students. As one of the few consistent voices advocating for this issue, she must get lonely.

Just as income inequality has become part of the national dialogue through grassroots efforts, reeling in higher education costs is something that requires broader strokes. Local efforts like the Kalamazoo Promise or San Francisco’s Kindergarten to College must be commended for expanding college access to students who might otherwise be shut out. But these programs assume higher education will remain exorbitantly expensive. Rather than trapping students in a debtor’s prison for twenty-five years, policymakers should be deep-diving into an audit of bloated university president and administrative pay, intercollegiate athletic subsidies, and educational outcomes per tuition dollar, among other things. During election years, the Obama White House tends to revisit its college affordability agenda, and this time is no different. But even without re-election to worry about, we have yet to see this administration truly go big on this issue. As campaign season heats up, access to an affordable higher education should be a bigger part of the conversation and indeed, must be a part of any serious policy agenda.

Raul Gardea is the Roosevelt Institute | Campus Network's Senior Fellow for Education.


Share This

The Contraceptive Mandate Finally Leads America Out of the Victorian Era

Mar 31, 2014Ellen CheslerAndrea Flynn

The Affordable Care Act demonstrates an affirmative, proactive step from government for women's access to reproductive health care, but conservatives are bent on moving backwards.

The Affordable Care Act demonstrates an affirmative, proactive step from government for women's access to reproductive health care, but conservatives are bent on moving backwards.

Contraception should be understood as a fundamental right of American women and a necessary foundation of human security. If that seems controversial, consider this: 99 percent of American women approve of birth control and the vast majority use it over many years of their lives. These women deserve and must continue to demand insurance coverage for the method of their choice, without qualification. That’s why the contraceptive mandate in the Affordable Care Act (ACA) is so important and potentially transformative. For the first time ever, all health insurance plans, whether paid for privately or with public subsidies, are required to cover all FDA approved contraceptives at no additional cost.

Family planning is essential to securing the health and rights of women, but it is also the foundation of sound economic and social policy. Tragically, however, U.S. subsidized family planning programs currently serve just over half of those in need.

The stakes are especially high for poor women, who cannot afford the high costs of the most reliable and desirable methods and experience much higher rates of early and unwanted pregnancy as a result. Single women in poverty head a growing percentage of U.S. households. In “Breaking the Cycle of Poverty: Expanding Access to Family Planning,” a new white paper released today by the Roosevelt Institute, we argue that addressing their needs, and opening up opportunities to them and their children, will require multiple policy interventions, but none can work if women are denied the right and the agency to make, and act on, well-informed decisions about their own bodies.

Decades of social science research demonstrate that access to reliable and affordable family planning methods promotes responsible decision-making and reduces unwanted pregnancy and abortion. It allows women to pursue educational and employment opportunities that strengthen their families and their communities. A majority of women who participated in a recent study by the Guttmacher Institute, for example, report that birth control enables them to support themselves financially, complete their education, and get or keep a job. Other recent studies also show that providing family planning services at no cost results in more effective contraceptive use, decreased rates of unintended pregnancy, and dramatic declines in abortion rates.

Many American conservatives, however, reject these claims. They blame single mothers for America’s rising tide of poverty and inequality, not the other way around. They insist that access to sexual and reproductive health information and services exacerbates social problems by promoting promiscuity and unintended pregnancy, when in fact, the exact opposite is true. They promote abstinence-education and marriage promotion programs that have been tried before and been discredited, because they simply do not work.

This conflict was front and center last week as the U.S. Supreme Court heard 90 riveting minutes of argument in Sebelius v Hobby Lobby Stores, Inc. and Conestoga Wood Specialties Corp. v Sebelius, a pair of cases brought by two privately held corporations owned by Christian conservatives. The owners claim that the ACA violates the religious freedom of employers forced to cover the costs of contraception. Much of the testimony turned on technical questions of whether corporations, as opposed to the individuals who own them, legitimately have rights to assert in this instance, and whether they may impose those rights on employees who don’t share their views. There were also important matters of scientific integrity at stake, with the plaintiffs claiming that Intrauterine Devices (IUDs) and morning-after pills constitute methods of abortion, despite overwhelming medical agreement and numerous reputable scientific studies showing that, like everyday birth control pills, they only act to prevent conception.

All but lost in the court’s conversation were larger concerns about the health and well-being of women and families – and of our society as a whole. The Supreme Court hearing comes in the wake of more than three years of persistent attacks by extreme conservative lawmakers who have already decimated publicly subsidized services in states across the country and left many low-income women without access to basic family planning and to other critical reproductive and maternal health care services.

As legal scholar and policy analyst Dorothy Roberts observed, “when access to health care is denied, it’s the most marginalized women in this country and around the world who suffer the most—women of color, poor and low-wage workers, lesbian and trans women, women with disabilities... And this case has far-reaching consequences for their equal rights. Birth control is good health care, period.”

Today, by government estimates, more than 27 million American women already benefit from the ACA’s contraceptive mandate, and 20 million more will enjoy expanded coverage when the law is fully implemented. Yet even by these optimistic assessments, many low-income women will continue to fall through insurance gaps, partly thanks to a 2012 Supreme Court ruling that enables states to opt-out of Medicaid expansion mandated by the ACA. More than 3.5 million – two-thirds of poor black and single mothers, and more than half of low-wage workers – will be left without insurance in those states.

Conservative opposition to contraception is not new. As we observe in our paper, the U.S. controversy over family planning dates back to Victorian-era laws that first defined contraception as obscene and outlawed its use. Those laws carried the name of Anthony Comstock, an evangelical Christian who led a nearly 50-year crusade to root out sin and rid the country of pornography, contraceptives, and other allegedly “vile” materials that he believed promoted immorality. Sound familiar?

It took nearly a century for the U.S. Supreme Court to reverse course and guarantee American women the right to use contraception under the constitutional doctrine of privacy first enunciated in 1965. The ACA promises us even more. It places an affirmative, positive obligation on government to provide women the resources to realize our rights. The question before us is simple: Do we turn back the clock and allow a new Comstockery to prevail, or do we move ahead into the 21st century by defending the full promise of the Affordable Care Act’s contraceptive mandate?

Read Ellen and Andrea's paper, "Breaking the Cycle of Poverty: Expanding Access to Family Planning," here.

Ellen Chesler is a Senior Fellow at the Roosevelt Institute and author of Woman of Valor: Margaret Sanger and the Birth Control Movement in America.

Andrea Flynn is a Fellow at the Roosevelt Institute. She researches and writes about access to reproductive health care in the United States. You can follow her on Twitter @dreaflynn.

Share This

Breaking the Cycle of Poverty: Expanding Access to Family Planning

Mar 31, 2014Ellen CheslerAndrea Flynn

Download the paper by Ellen Chesler and Andrea Flynn.

Download the paper by Ellen Chesler and Andrea Flynn.

Poverty shapes the lives of an increasing number of American women and their families and has many consequences, including high rates of unintended pregnancy. Conservatives, eager to further dismantle federal programs and defeat the new Affordable Care Act (ACA), have recently rekindled the idea that marriage promotion will reverse rising rates of poverty, unintended pregnancy, and single parenthood. To the contrary, addressing the root causes of poverty requires multiple interventions and far more generous government programs across a range of issues, particularly the expansion of reproductive health and family planning information, care, and services. This paper reviews the recent literature on women’s poverty and health and argues that accessible and high quality family planning services for poor women remain an essential component of poverty reduction. It also looks back at the history of policy debates over this question in the hope of finding a path toward renewed bi-partisan consensus.
Key Arguments:
  • Family planning is a fundamental right of women and the foundation of human security.
  • Single women in poverty head a growing percentage of U. S.  households. Addressing their needs requires multiple policy interventions, but none can work if women are denied the agency to make – and act on – well-informed reproductive health decisions.
  • U.S. subsidized family planning programs meet only 54 percent of national need. The ACA will help bridge the gap, although its promise is threatened by legal challenges to the contraceptive mandate. Women deserve insurance coverage for the contraceptive method of their choice, without qualification. 
  • Many low-income women will fall through insurance gaps. Every state should expand Medicaid. The federal government should lift Medicaid’s five-year eligibility requirement for documented immigrants and increase Title X funding to address increased demand for services.
  • We can learn from history. Research since the 1970 adoption of Title X illustrates that access to improved family planning methods promotes responsible decision-making and reduces unwanted pregnancy and abortion. By contrast, abstinence-until marriage and marriage promotion programs advanced by conservatives have failed and been discredited. 

Read "Breaking the Cycle of Poverty: Expanding Access to Family Planning," by Roosevelt Institute Senior Fellow Ellen Chesler and Fellow Andrea Flynn.

Share This

Daily Digest - March 31: Obamacare's Big Step Forward for Women

Mar 31, 2014Rachel Goldfarb

Click here to receive the Daily Digest via email.

The Contraceptive Mandate Finally Leads America Out of the Victorian Era (Next New Deal)

Click here to receive the Daily Digest via email.

The Contraceptive Mandate Finally Leads America Out of the Victorian Era (Next New Deal)

Roosevelt Institute Senior Fellow Ellen Chesler and Fellow Andrea Flynn applaud the Affordable Care Act's proactive steps on women's reproductive health care, which are also key to women's economic security.

  • Roosevelt Take: Read Ellen and Andrea's new white paper, "Breaking the Cycle of Poverty: Expanding Access to Family Planning," here.

Comcast's Power Unveiled, Courtesy of Apple (Bloomberg View)

Rumors of a new content deal between Comcast and Apple demonstrate just how much control the internet service providers could have over what media Americans can access, writes Roosevelt Institute Fellow Susan Crawford.

Private Charity Can't Replace Government Social Programs (LA Times)

Michael Hiltzik looks at "the voluntarism fantasy," as Roosevelt Institute Fellow Mike Konczal describes the idea that charity alone could replace the public safety net. Hiltzik agrees with Konczal: it's just not possible.

  • Roosevelt Take: Mike explains the origins and flaws of this fantasy in Democracy Journal.

The Minimum Wage Symposium: A Lot of Data and a Couple of Fights (The Stranger)

Anna Minard reports on the Income Inequality Symposium held in Seattle on Thursday, March 27. She quotes Roosevelt Institute Fellow Dorian Warren, who emphasized how income inequality leads to political inequality.

  • Roosevelt Take: Roosevelt Institute President and CEO Felicia Wong gave the closing remarks at the symposium.

Blueberry Lies: WSJ Spearheads Disingenuous Effort to Keep Exploiting Farm Workers (Salon)

While the Journal may claim a case of "hot goods," in which the Department of Labor seized goods produced in violation of labor law, is regulation run amok, it's a truly necessary enforcement tool, writes Catherine Ruckelshaus.

Interns Are Now Protected Against Sexual Harassment in NYC (ProPublica)

Blair Hickman reports that in response to the dismissal of an unpaid intern's sexual harassment claim against her boss, the New York City Council passed a law including interns in labor protections, regardless of pay.

Jobs and Skills and Zombies (NYT)

There is no skills gap in the U.S. job market, writes Paul Krugman, but this "zombie idea" keeps hanging around. By blaming unemployment on the workers, this creates a very real policy gap.

Share This

In Seattle, Calls for a Higher Minimum Wage are Calls for Democracy

Mar 28, 2014Felicia Wong

Roosevelt Institute President and CEO Felicia Wong spoke yesterday at the Income Inequality Symposium in Seattle, where she gave the closing remarks, calling on our memories of President Franklin D. Roosevelt and the New Deal to urge Seattle into action on raising the minimum wage. Her prepared remarks are below.

Roosevelt Institute President and CEO Felicia Wong spoke yesterday at the Income Inequality Symposium in Seattle, where she gave the closing remarks, calling on our memories of President Franklin D. Roosevelt and the New Deal to urge Seattle into action on raising the minimum wage. Her prepared remarks are below.

Thank you so much, Mayor Murray, David Rolf from SEIU 775NW, Howard Wright, and all of you who have served on the Mayor’s Task Force or spent so much of your time fighting for economic growth and economic justice.

Today – we feel like a nation at the crossroads, on the brink.  But let’s remember: we’ve been here before. The story is familiar. Poverty and income inequality are on the rise throughout the United States. Even if you’re fortunate enough to have a job, you’re struggling to make ends meet. Meanwhile, a select few do very, very well for themselves. The President, facing a critical midterm election, addresses the nation. Raise standards for workers, he says, and he calls for laws to raise the national minimum wage, too.

I’m talking about 1938, when the President was Franklin Delano Roosevelt. When FDR took office, there was no federal law guaranteeing a minimum wage for American workers – and in fact throughout the 1930s the President battled a recalcitrant and conservative Supreme Court, and conservative business establishment, on behalf of workers. In his 1938 address to Congress, FDR said such a law was long overdue. He said it was morally unacceptable and economically unsustainable for so many people in the United States to earn poverty wages. To quote Roosevelt: “Aside from the undoubted fact that the people thereby suffer great human hardship, they are unable to buy adequate food and shelter, to maintain health, or to buy their share of manufactured goods.”

That’s the key. FDR understood that the minimum wage was an issue for our hearts and for our wallets. Again and again, he returned to the point that businesses could not thrive unless workers did. Without workers, an economy cannot grow.

It was a tough fight, and FDR didn’t go it alone. He had what he called his Brains Trust -- lawmakers, academics, activists, and business leaders. Their job was to figure out economic policies under which everyone could prosper. FDR went to Congress with their proposals. The result: the Fair Labor Standards Act, a keystone of the New Deal, along with the Social Security Act. With the FLSA we got a federal minimum wage as well as the 40-hour workweek and standards for overtime pay. These underlie modern labor policy.  These are issues that are hotly debated even today.

As we’ve seen over the course of this day’s symposium, fixing our country’s inequality and wage problems will – once again – need the good ideas and expertise of a brain trust. We have been fortunate to hear from important partners such as Maud Daudon from the Chamber of Commerce, Saru Jayaraman from Restaurant Opportunities Center - United, and leaders from other cities such as Supervisor John Avalos from my hometown of San Francisco and Wilson Goode from Philadelphia.  Innovation is a team sport. FDR understood this, and so does Mayor Murray.

I work at the Roosevelt Institute in New York City.  And I am here today because Seattle is at the center of the nation’s most important fight.  

At Roosevelt, we think of ourselves as an ideas and leadership shop. I won’t claim that we ask ourselves “What Would FDR Do?” in every situation. But we certainly try to capture his spirit of innovation and collaboration in our work. We support public intellectuals like Dorian Warren, whom you’ve heard from today, and Mike Konczal, Joe Stiglitz, Annette Bernhardt, Richard Kirsch, and others. They plunge into all facets of the inequality problem – which President Obama has rightly called the defining problem of our time.  They envision solutions, including a new labor agenda for the 21st century.  This includes raising the minimum wage and providing paid sick leave, and also includes new standards for the right to organize, the enforcement of labor laws, and strategies to combat labor market segregation by race and gender.  At Roosevelt we also support some 10,000 undergraduates across the U.S. who dig in deep in their local communities – designing and fighting for policy solutions at the city level.

We at the Roosevelt Institute believe – as does everyone here – that we all do better when we all do better. But: wages have been backsliding for decades now. The typical American family makes less today than it did 25 years ago. I know we have heard a lot of statistics today, and they can seem overwhelming, but consider this for just a moment: 16 million children live in homes where their families are not sure where the next meal is coming from. Five years after the Great Recession officially ended, there are still three times as many Americans looking for work as there are job openings. And, as we’ve discussed today, new jobs aren’t good jobs.  The most recent BLS statistics forecast a low-wage trajectory through at least 2020.  Only one of the 20 occupations expected to add new jobs requires a college degree, and most of the kinds of jobs we will be creating offer low or moderate pay.

From FDR to President Obama to each and every one of us here today, whether right or left or center: we can all agree that no one should work a full-time job and worry about putting food on the table for their family.  

But this is not just about morality, not just about the “we should” and the “we shouldn’t.”  This is about economic fundamentals. When people can’t even buy groceries at the end of the month, they can’t do all of the things – go to a baseball game, go to dinner at a restaurant – that drive economic growth and make our towns and cities strong.

Now, consider the other half of the coin: times are not tough for everyone. In 2012 alone, the richest 1 percent of Americans took home more than 20 percent of all income – one of their biggest hauls since the Gilded Age. Corporate profits are at record levels, and corporations are sitting on huge cash reserves. Many will tell us that corporations and wealthy owners are the job creators, the engines of the economy.  Now, none of us begrudge real success. But the question is, if they’re doing so well, why isn’t the rest of the economy doing better?

And the answer is clear: As FDR once argued, the people – middle class, working families – are the real job creators. These aren’t just strangers, or statistics. I’m talking about our friends and family and co-workers. I’m talking about us. As more and more Americans struggle to keep up - businesses can’t function.  Companies need customers, people to spend money on those products and services. That’s why holding down wages is more than just unfair. It’s also bad economics.

Let me take a minute to tackle the arguments on the other side: that raising the minimum wage will cause unemployment, business flight, or higher prices.  But empirical research looking at decades of data – much of which we have heard today – shows that on balance raising wages has little or no negative employment effects, and in fact there is significant evidence to show that businesses – and cities and towns – flourish with higher wages, rather than lower.

This also should make sense to any of us who manage other people. Making decisions to pay employees enough so they aren’t stressed in the rest of their lives makes good business sense, and good common sense.

And, we are learning from very recent research.  I will cite just two important pieces.  The first is a massive study of 200 years of capital accumulation, incomes, and growth just published here in the United States.  The research suggests the problem is very big, and in fact lies in the structure of today’s entire global economy. Too much capital is concentrated in the hands of too few, and the global economy has gone awry.

The second piece is a recent IMF study of inequality and growth in hundreds of countries showing that many equality-enhancing redistributive policies – higher taxes, more public investment – can increase growth. Win-wins are possible.  

So these findings should give us courage. And should push us to act – because recalibrating the minimum wage is one very big step towards fixing the broken economic system and promoting growth in ways that will work for everyone.

Let me be clear: raising the minimum wage isn’t anti-democratic, isn’t anti-capitalist, isn’t anti-free market.  FDR saved capitalism from itself.  That is what you are trying to do here today.

It’s no surprise that we’re having this conversation in Seattle. Your city is a great hub of American business and social innovation. This city has brought to life trends and technologies, from Starbucks coffee to Excel spreadsheets, which revolutionize the way we live. And you in Seattle know that people are at the center of that innovation. Companies like Costco have built their business models on paying decent wages and benefits, retaining valued employees, and fostering strong communities.

It’s not a top-down, trickle-down proposition. Economies grow, as our friend Nick Hanauer said this morning, from the middle out.  You have seen it work in Seattle, and that’s why Seattle is the right incubator for the sound labor policies that will shape the American economy of the future.

By voting for a 15 dollar an hour wage floor, Seattle can move the entire region’s economy forward.  You can also set the trend for the whole country – in addition to possible federal legislation, at least eight states are considering minimum wage increases this year. You can show all of us how to build the kind of economy that grows, that is stable, and that spreads prosperity broadly.  It is a virtuous cycle.  

If adopted nationwide, the Economic Policy Institute estimates that the raise in the minimum wage proposed by President Obama could affect more than 28 million people and lift many of them out of poverty. 28 million people. At a time when the American Dream of opportunity for all is rapidly fading, those are 28 million reasons to support this proposal.

Beyond the potential economic impact, this policy would show what government can achieve when it responds to the needs of working families. As Justice Louis Brandeis once said, “We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both.” Individual companies, as great as they are, can’t do this alone.  Our fates are linked, and we have to act together.  By raising the minimum wage to fifteen-dollars-an-hour, Seattle can choose democracy and start to reverse the trends that have been crushing the middle class.

Let me close by urging the members of Seattle’s City Council to approve the 15 dollar an hour minimum wage. And as FDR told his own supporters, it is up to all of us to make them do it. A lot has changed about our country since the days of the New Deal, but one thing remains the same: Progress is possible when we commit to it and fight for it. Now is the time for us to decide what kind of economy, what kind of government, and what kind of future we want for ourselves. Now is the time for Seattle to lead the way. Thank you.

Felicia Wong is President and CEO of the Roosevelt Institute.


Share This

Insurance Pays for Health Care. Who’s Providing It?

Mar 28, 2014Rachel Goldfarb

Public funds for family planning services are essential to ensuring people have somewhere to access health care, not just the insurance to pay for it.

Public funds for family planning services are essential to ensuring people have somewhere to access health care, not just the insurance to pay for it.

As if somehow the case still needs to be made that family planning deserves federal funding (and apparently the case does need to be made), last week a panel of researchers, advocates, and family planning providers spoke at a Congressional briefing on the topic “The Publicly Funded Family Planning Network: An Essential Partner in the New Health Care Environment.” Among the panelists was Roosevelt Institute Fellow Andrea Flynn. She and the others explained how Title X, the only federally funded family planning program, fits into the health care landscape now so dramatically changed by the Affordable Care Act. On the heels of Flynn’s white paper on this topic, last Thursday’s panel marked the next step in Roosevelt’s approach to research and policy discussions – namely, to get ideas up and out to those, like the Congressional staffers who attended the briefing, that can convert them into action.

Some background: when Title X was signed into law in 1970, it was intended to ensure that more Americans had access to family planning services, including birth control, because of rising concerns about population growth and poverty. Title X funds patient services, staff salaries, infrastructure, and supplies at clinics across the country. The law had strong bipartisan support – Democrats worked alongside Congressman George H. W. Bush and President Richard Nixon to pass it. And it is pretty effective: according to Flynn, the program today provides care to 4.7 million individuals annually. From 1980 to 2000, Title X-funded clinics provided women with 54.4 million breast exams and 57.3 million Pap tests and prevented an estimated 20 million unintended pregnancies. It’s also cost effective: Flynn notes that in 2008 alone, services provided at Title X-supported clinics accounted for $3.4 billion in savings.

Opponents of federal family planning clinics argue that with full implementation of the Affordable Care Act, the need for funding will drop off. No, said Clare Coleman, President and CEO of the National Family Planning and Reproductive Health Association. Insurance, she pointed out, isn’t the same as access to care. Patients still need providers. Amanda Dennis of Ibis Reproductive Health, based in Cambridge, highlighted an Ibis study conducted after health care reform went into effect in Massachusetts, that found many women took their new insurance straight to Title X-funded clinics for family planning services. Patient numbers actually increased at these clinics and so did the number of insured patients. Women like the care they get at Title X clinics; having insurance doesn’t mean they want to switch providers.

The panel confirmed Flynn’s major conclusions on Title X: the Affordable Care Act doesn’t guarantee every American will be insured at all times, so there remains a need for publicly funded care providers. More federal funding for the Title X family planning network will be essential to ensure women can access reproductive health care. And Coleman drove home another invaluable point as we work on health care access: the Affordable Care Act creates a massive shift in the way many Americans actually go about getting their health care. As a child growing up with insurance, I had an annual physical that was scheduled months in advance, and my mom picked up our prescriptions at the pharmacy. Americans who grow up uninsured have a different experience. They go to public clinics, where they can expect long waits, and when they leave, they go with prescribed medication in hand, obtained at the on-site dispensary.

In other words, signing up for health insurance on won’t on its own teach anyone how to use insurance. That will take a generational shift. Besides which, you don’t get health care from your insurance – you get health care from your doctor, and cover the costs with insurance. That’s why Title X clinics must remain an option. Public funding for family planning does increase access to providers. Advocates: keep driving this point home to legislators!

Rachel Goldfarb is the Communications Associate at the Roosevelt Institute.


Share This