“Who Are We Really Affecting With All These Cuts? It’s The Future”

August 29, 2013Danny Vinik Leave a comment

I spent yesterday morning at the Center for American Progress (CAP) where a panel discussed sequestration’s effects on the Head Start program and the thousands of kids harmed by cuts to it. The panel was moderated Christina Samuels from Education Week and included participants from CAP, the Head Start Program, the Office of Management and Budget (OMB) and the Center on Budget and Policy Priorities (CBPP).

Carmel Martin, the Executive Vice President for Policy at CAP, and Yasmina Vinci, the Executive Director of the National Head Start Association, kicked off the program by running through some of the numbers about sequestration’s harmful effects. More than 57,000 kids have lost access to Head Start, including 6,000 infants and toddlers and 51,000 3-4 year olds. Another 87,000 kids have fewer days to attend Head Start, with programs cutting an average of 15 days per child. Yet another 11,000 kids have shorter days (approx. 1.5 hours less each day). Head Start was allowed some flexibility in their cuts and they passed that flexibility on to individual programs. Thus, some programs decided to cut days altogether or eliminate transportation to and from the site while others laid off employees or kicked students out.

But that flexibility will end in 2014, when more scheduled cuts are due to take effect. Colleen Rathgeb, the Director of Policy at Head Start, warned that future cuts will harm children even more.

“These one-time fixes aren’t available in the future,” she said. “This is unsustainable.”

The sequester cut Head Start by 5.27% – equal to $405 million – and more is coming next year unless Congress finds a way to make a deal that undoes the law.

Yet, while the cuts have been steep, they have caused less damage than expected. In February, the White house predicted that 70,000 kids would be kicked out of the program. Fortunately, “only” 57,000 actually have been. Of course, that number will certainly grow next year if the cuts aren’t replaced. And while most of the panelists offered optimistic takes that Congress will find a way to undo the sequester, Michael Linden, the Managing Director for Economic Policy at CAP, offered a more negative view:

“It’s also important to note that while there’s a growing awareness among some policymakers that sequestration is bad, others are saying that it wasn’t as bad as expected to be,” he said. “They have to understand that sequestration is not the status quo.”

Martha Coven, the Associate Director for Education, Income Maintenance and Labor at OMB, emphasized that the Obama Administration does not support the sequester and is determined not just to undo those cuts, but to add additional funding for early childhood education.

“One thing to be very clear: the cuts to sequestration and Head Start in general were very much not part of the Administrations plan,” she said. “We’re very much trying to put ourselves on a path to reverse that. Moreover, our plan for early education is very much one of investment.”

Investment was a major theme throughout the discussion, with all of the panelists noting that funding for Head Start was not about the present, but was about the future. Head Start has a strong record of improving the quality of neighboring early childhood programs as well, said CBPP’s Sharon Parrott. In addition, states have trouble funding programs like these as they face different budget restrictions than the federal government does, Coven added. For that reason, it’s important for the federal government to fund Head Start and other such programs.

Yet, Congress is gridlocked and the federal government’s budget expires on September 30th. If it can’t reach a deal by then, the government shuts down. And any deal on a budget will have to figure out what to do with sequestration’s cuts. If Republicans and Democrats can’t come to an agreement and instead pass a continuing resolution that keeps the government funding at current levels, Head Start will have to start looking ahead to cuts it will have to make in 2014.

Linden summed up the dangers of the sequester’s effects on Head Start the best:

“Who are we really affecting with all these cuts? It’s the future.”

High Skilled Immigration From Mexico Increased After NAFTA

August 27, 2013Danny Vinik Leave a comment

That’s the finding from Woodrow Wilson Center COMEXI scholar Miguel Jimenez, who presented his summer-long research on labor market integration within the NAFTA region this morning. Jimenez has been working at the institute on migration patterns within the region before and after the 1994 free trade agreement took effect. Many of the findings were not particularly surprising, such as increased trade between the U.S. and Mexico or Mexicans rising as a share of the U.S. population. But a couple of things did stand out.

First, high skilled immigration in Mexico and Canada has dramatically increased since the signing of NAFTA, at the expense of the United Kingdom, Japan, France and other countries as Jimenez shows:In addition to Mexico and China, India’s percentage of high skilled immigrants admitted into the U.S. also rose, but Jimenez explained that this was not a result of NAFTA (which didn’t directly affect India), but due to India’s focus on graduating masters students in STEM subjects. South Korea saw a modest increase as well. Those four countries also saw their share of employee transfers into the U.S. on intra-company visas increase as well.

Second, Jimenez’s research confirms earlier predictions that the Great Recession would reduce not incentives for Mexicans to come from the United States. Worse, the percentage of Mexican immigrants coming to the U.S. on work-related visas has fallen dramatically, from a high of 16% in 2008 to less than half of that last year.

Jimenez saved his most surprising finding for last when he presented the percentage of skilled and unskilled workers admitted into the U.S. in 1996 and 2011:

Jimenez looked upon this as a sign that greater openness between the U.S. and Mexico, such as creating a visa exception like the U.S. has with Canada and Bermuda, could be beneficial for both nations.

“It’s worth thinking about how changing this would improve the relationship,” he said.

Nevertheless, Jimenez concluded his presentation with a simple, but positive summary of immigration flows in the NAFTA region: “the system works.”

Fiscal Cliff v2.0

August 27, 2013August 26, 2013Danny Vinik 1 Comment

Just a quick post with my thoughts on Treasury Secretary Jack Lew’s announcement today that by mid-October the U.S. will only be able to make payments with the cash it as each day. In other words, we’re hitting the debt ceiling a couple of months early. Kevin Drum posits that this means negotiations over the budget are going to be lumped in with the debt ceiling:

If mid-October really is the drop-dead date, it means that budget negotiations in late September and debt ceiling negotiations in early October pretty much run right into each other. It’s Fiscal Cliff v2.0.

I don’t quite know what this does to John Boehner’s fragile attempts to keep the lunatic wing of his party under control. Nothing good, probably. I’m also not sure what it does to President Obama’s promise not to negotiate over the debt ceiling. If all of this stuff get munged together, then everyone’s going to get mighty hazy mighty fast about what exactly is being negotiated.

The budget negotiations and debt ceiling running into each other will hurt President Obama and Democrats on both those issues. Raising the debt ceiling should be a technicality that no American would consider holding hostage. We know that House Republicans don’t believe that though. We also know that most Americans don’t follow politics closely and asking them to differentiate between Obama’s willingness to negotiate over the budget, but refusal to do so over the debt ceiling is difficult. Most aren’t going to understand the difference. and will expect Democrats and Republicans to compromise since there are two issues.

If the two were separate, Democrats could bargain with Republicans over the budget and come to a deal (or a continuing resolution). Then, a few months later, they could refuse to negotiate over the debt ceiling and explain to the public that this isn’t debatable. We don’t debate paying our bills. The two issues running into each other just muddies the water. That will allow Republicans to escape some blame on both topics and give the GOP more leverage in negotiations. It may even force the President to bargain over the debt ceiling (or do so subtly). Either way, Republican elites should be pleased with this outcome. It may make their party a bit harder to control during the process, as Drum points out, but the increased leverage they have over the President is a worthwhile tradeoff. As for Democrats, there’s nothing good about this at all. Get excited for Fiscal Cliff v2.0.