In this issue: cutting the government; putting more holes in the safety net; the fraying social fabric; investing in minority firms and philanthropy in the Trump era.
This week the Trump administration released its budget proposal to Congress and it is just as draconian as previously forecast. Trump administration official Mick Mulvaney tried to spin the proposal as compassion saying: "We’re no longer going to measure compassion by the number of programs or the number of people on those programs, but by the number of people we help get off of those programs." But Salon's Sophia Tesfaye reports that this measure fell flat even with Republicans on the Hill.
The budget is particularly distressing when it comes to poking holes in the safety net and otherwise taking a punishing approach to the poor under the guise of self-sufficency. For example, the Housing and Urban Development Secretary Ben Carson is underfire for saying "poverty to a large extent is a state of mind." But NPR's Maria Godoy and Allison Aubrey report that 55 percent of families on food stamps already have at least one family member working, but those wages aren't enough to live on:
As it turns out, many of the working poor who rely on SNAP benefits to get enough to eat are actually employed in the food industry. As we've reported, an analysis from University of California, Berkeley Labor Center found that 52 percent of fast-food workers are enrolled in, or have their families enrolled in, one or more public assistance programs such as SNAP, Medicaid or the Children's Health Insurance Program.
But the New York Times notes that the problem isn't food stamps--which amounts to just $1.40 per meal per person, its poverty:
President Trump’s budget plan would destroy the food stamp program, on the pretense that it discourages work. That’s nonsense, because most adult recipients either work or are unable to do so because of age or disability. A more plausible explanation is that cutting food stamps would help to offset the cost of huge tax cuts for the rich.
The budget would also reduce the food stamp program by making its strict requirements even stricter. For example, it would all but prohibit states from waiving a federal rule that generally cuts off unemployed childless adults after three months. The cutoff is supposed to prevent freeloading, but it mainly affects people who have low skills, arrest records, substance abuse problems or other impediments to employment. The budget would also make it harder for states to adjust the eligibility formula where rents or child care costs are high. And no matter how large a family is, the benefit calculation would be capped at six people.
TalkPoverty's Greg Kufman said, "Let’s be clear: the only thing new about this proposal is the scale of bad conservative ideas it features. Otherwise, it’s in line with a decades-old pursuit to cut Social Security, Medicaid, and other vital protections to bankroll handouts to their wealthy patrons." And a Kansas City Star editorial noted that these types of policies had been tried in the state but failed to produce any benefits, in fact it had the opposite impact:
[T]ax cuts were only one half of the Brownback experiment. Aided by conservatives in the Legislature, Kansas eviscerated the state’s social safety net: privatizing Medicaid, imposing new restrictions on welfare benefits, insisting on a tough food stamp work requirement.
Humiliating the poor seemed to be a particular focus. For a time, the state told welfare recipients they could withdraw only $25 at a time from an automated teller machine, a decision that prompted anger and derision across the nation before it was repealed.
Did it work? No. The number of people living in poverty in Kansas actually went up, the Census Bureau says, from 11.4 percent in 2013 to 14.2 percent in 2015. During the same period, the poverty rate in Missouri was cut almost in half.
The Atlantic's Ron Brownstein notes that budget cuts would hit some of Trumps supporters in places like the Rust Belt the hardest:
[B]ecause Trump extends his budget cuts so deeply and broadly through income-support programs, the reductions still inevitably reach many of the lower-income and less-educated whites that have emerged as the cornerstone of the modern Republican coalition. The large number of GOP-leaning voters who rely on programs Trump would retrench underscores the difficulty his party faces in reconciling their ideological drive to shrink government spending with the material needs of their increasingly working-class and older white supporters...White households whose most educated member held less than a four-year college degree represented the highest share of all households receiving SNAP benefits in Trump’s key states: 69 percent in Iowa, 57 percent in Ohio, 55 percent in Wisconsin, 52 percent in Michigan, and 50 percent in Pennsylvania. The numbers were comparable in heavily white and blue-collar states like West Virginia (85 percent), Maine (82 percent), Kentucky (74 percent), Montana (68 percent), Indiana (61 percent), Missouri (59 percent), Tennessee (56 percent), and Arkansas (55 percent).
Finally the Economist says the budget ignores what is truly ailing U.S. workers--the need for work:
[Disability] benefits are disproportionately high in rural counties that have lost jobs. In parts of America, disability insurance functions as a kind of unemployment insurance...To fix disability insurance, then, Mr Trump must pull off an impossible trick: he has to fix rural America. He has to provide better, cheaper health care, and public health programmes to prevent obesity and smoking. He has to provide jobs—to replace the poultry slaughterhouse and copper wire and fishing boat manufacturing plants that have left Van Buren County, for example. He could make it easier to move, or train for a job at a desk.
In the Atlantic, Annie Lowery looks at Rep. Mike Lee of Utah's attempt to study the social fabric the way economists studied GDP at a time of severe polarization:
An initiative he started this month addresses that imbalance. In a series of hearings and reports, his multi-year Social Capital Project is examining the decline in social cohesion and civic engagement in American life, and drawing legislators’ attention to it. Americans do less together than they did in the past, he said. They trust less. They participate less. And in some cases, they seemed to suffer for it...
The report touches on themes popularized in Putnam’s 2001 Bowling Alone and Murray’s 2013 Coming Apart: That Americans are becoming more isolated from people of different backgrounds, and that along with economic distance has come social disconnection. Lee’s report looks at changes in “associational life” since the 1970s, meaning how “the web of social relationships through which we pursue joint endeavors” has shifted. Couples are less likely to marry and are having children later in life, though they are spending no less time with their kids, it notes. Organized religion and unions have become far less central. Neighborhoods have stratified by income, with people spending less time with coworkers and neighbors.
Over at the Guardian, Yuval Noah Harari discusses why modern yawning inequality might fray the social fabric of society even further:
Globalisation has certainly benefited large segments of humanity, but there are signs of growing inequality both between and within societies. As some groups increasingly monopolise the fruits of globalisation, billions are left behind.
Even more ominously, as we enter the post-industrial world, the masses are becoming redundant. The best armies no longer rely on millions of ordinary recruits, but rather on a relatively small number of highly professional soldiers using very high-tech kit and autonomous drones, robots and cyber-worms. Already today, most people are militarily useless...Once the masses lose their economic importance and political power, the state loses at least some of the incentive to invest in their health, education and welfare. It’s very dangerous to be redundant. Your future depends on the goodwill of a small elite. Maybe there is goodwill for a few decades. But in a time of crisis – like climate catastrophe – it would be very tempting, and easy, to toss you overboard.
In the New Republic, Adam Gaffney looks at the inequality in dental services and what it means for the health of the poor:
Mary Otto’s heartrending and incisive book, Teeth, builds on her Washington Post story on Deamonte Driver, a black twelve-year-old from Maryland who “died of a toothache” in 2007. His life could have been saved, she wrote, if his family had insurance, or if they had not been stripped of Medicaid for a time when they were homeless, or if Maryland’s underfunded Medicaid program had provided adequate access to dentists. “By the time Deamonte’s own aching tooth got any attention,” Otto reported, “the bacteria from the abscess had spread to his brain.” Surgeries and no doubt much suffering followed, but it was too late.
Deamonte Driver’s death was the direct result of a system of commoditized dental care. Some 114 million people lack any sort of dental coverage in the United States, and about half of children on Medicaid did not receive a single dental service in 2012. We could implement a system of universal coverage that would make treatment available on the basis of health needs, not means. But we have not. As Otto traces the history of modern dentistry, from eighteenth-century surgical experiments to the founding of the first American school of dentistry in 1840, she explains how the United States instead developed a “carefully guarded, largely private system,” one that is “enormously difficult to reach for those without mobility or money.” The state of our teeth, she argues, reveals—and reinforces—deep inequalities in society.
Will global companies step up to the plate and invest in low-income countries at a time when U.S. aid is shrinking? TechnoServe's William Warshauer wrote this in the Guardian:
Increasingly, the private sector is fighting poverty abroad simply as a regular part of doing business. Corporations like Cargill, Unilever, Walmart and Nestle – not the first names one might associate with helping the poor – are nevertheless training and buying from millions of small farmers and entrepreneurs worldwide in an effort to strengthen supply chains and reduce costs through local sourcing. Working with a cash base larger than many countries’ GDPs, they can achieve the kind of scale and impact that can dwarf many development programs.
Meanwhile, Fast Company reports on efforts by the Knight Foundation to increase minority firm representation in its endowment investments:
Knight spotted the problem within its own investment portfolio in 2010 and has since shifted tactics to bring far more diverse firms into their fold. The report, Diversifying Investments, highlights how the group isn’t alone: There is serious systemic discrimination at play across the financial markets...Knight itself used to represent this problem: In 2010, diverse groups were appointed to manage just $7 million of its more than $2 billion endowment. Since recognizing the issue, the foundation has upped that share to $472 million or 23% of its total wealth.
That helps, but to make larger change more than just foundations will have to change behavior. On the mutual fund side, most endowment-backed organizations actually give a proportionately higher share to women or minority-owned money managers. It’s the same with public funds and high-net-worth individuals or family offices. While everyone could do better, the true giant tripping up change appears to be corporate clients” who have proportionately fewer investments in diverse-owned funds,” notes the report.
It looks like Blackrock and Vanguard are poised to pressure Exxon on climate reporting despite opposition from the board. Lee Manion meanwhile looks at the promise of "venture philanthropy" in the Pioneers Post that might be of interest. Over at Inside Philanthropy, Tate WIlliams looks at the way Nathan Cummings Foundation is changing in the Trump era:
NCF has decided to up the percentage of its assets that it pays out annually, in response to the election and resulting threats. President Sharon Alpert made the announcement in her latest “letter to the field,” and the foundation specified to IP that it will increase its payout rate from its usual 5.75 percent of its endowment (federal requirement is 5 percent) to 6.75 percent in 2017 and 2018. That might not seem huge, but based on the foundation’s assets of around $460 million in its latest tax filing, the difference could end up in the ballpark of $5 million more per year ...
In addition to the payout increase, NCF is making changes to internal processes, and generally working to be nimbler and more responsive along the way.
NCF, which currently has two main priorities of climate change and inequality, is a longtime progressive funder that’s been known to try and zig where others zag. They’ve had some conflicts, in fact, regarding where exactly to zig, judging from the leadership and strategy shakeups the foundation has endured in recent years.