Economics Below the Salt: Bad News, Better News

The two reports below warn of the ongoing destruction of essential government services. This information is especially relevant to those of us who live “below the salt,” a late medieval term for the 99 Percent. The first report describes the sequester's impacts on several vital programs. The second tells how a local transit authority – forced by anti-transit voters to radically downsize its operations – nevertheless managed to save a fraction of its weekend and nighttime bus service. Those who fear they might be potential victims are urged to contact the appropriate local agencies for more information.

 

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How Sequester's Sword Slashes Programs for Lower-Income People 

 

ASKING THE POLITICIANS who perpetrated the sequester to acknowledge the devastating wounds they've inflicted on the people of the United States is like investigating a murder in a bad neighborhood: nobody knows nuttin' – and what's more, nobody seems to give a damn.

The best you'll get out of the elected officials who wielded the sword of sequestration – the Congressmen and the president who collaborated to put the service-slashing scheme together and impose it on the nation – is a spin-doctored variant of what street cops and prosecutors used to call the “SODDI” defense: “some other dude did it.” The Democrats blame the Republicans who are busy blaming the Democrats, each trying to hide the fact both parties are equally guilty.

But the politicians' game of hot potato and its accompaniment of journalistic jeering is no help to the millions of lower-and-middle-income people who now wait in fear to learn how badly they'll be hurt.

 

So here's a summary of just a few of the sequester's real-world consequences.

 

The sequester sword inflicts a $3.7 billion gash  on the Department of Housing and Urban Development. According to one estimate,  at least 145,900 people are thus condemned to permanent homelessness. The members of least 417, 400 households will suffer other negative effects.

 

Part of the sequester-lacerated HUD budget is the housing-choice program more commonly known as Section Eight. It is a remnant of the many federal New Deal and Great Society programs that have been on bipartisan target lists since the Clinton Administration years, 1993-2001. (That's when the Democrats abandoned their longtime role as advocates for lower income people and joined with the Republicans in an ongoing campaign to shrink or eliminate social service expenditures.)

 

The money now routinely taken from all such services is typically diverted into various forms of so-called “corporate welfare” – taxpayer dollars doled out mostly to raise executive salaries and stockholder dividends at profit-making enterprises. Corporations that serve the world's largest and most expensive military establishment are especially favored by this upward redistribution of the nation's wealth.

 

But Section Eight – probably because of support from the powerful real estate industry – has somehow remained marginally functional despite decades of efforts to shut it down. Its vouchers provide access to privately owned, open-market housing. The associated subsidies ensure recipients' out-of-pocket expenditures for rent don't exceed 30 percent of their income.

 

Most of the applicants' needs are urgent. Many are disabled. Some are homeless or in danger of becoming so. But the sequester, by indiscriminately shrinking the Section Eight budget, imposes additional limits on the number of people it can serve.

 

Like other HUD programs, Section Eight is administered by local housing authorities. Sequestration's impact on the Tacoma Housing Authority, which serves a seaport city of about 200,000 persons, is typical.

 

Michael Mirra, THA's executive director, said the sequester downsized the group's $45 million annual budget by $2 million or 4 percent. It is, he acknowledged, a painful blow. But he and his colleagues, always attentive to political circumstances, had anticipated the cuts. Thus they reduced Section Eight expenditures accordingly, applying a policy Mirra describes as “thinning the soup, so we did not have to take any chairs away from the dinner table.”

 

Even so, the waiting list for Section Eight housing in Tacoma, already four or five years from application to approval, now becomes much longer.

 

Other local casualties of sequestration, Mirra said, include homeless college students and lower income people who were awaiting aid for first-time home purchases. The students were to have been participants in a new program that would have found them housing but was shut down by sequester's denial of funds.

 

Another cutback imposed by the sequester, this of $6.3 million,  has forced the nearby King County Housing Authority to suspend some of its Section Eight operations.

King County includes Seattle, which has its own housing authority. Excluding the people in Seattle, the county's population – that is, the number of persons potentially served by KCHA – is 1.3 million.

 

The sequester also slashes a number of education-related programs. These include work-study jobs and other forms of aid for college students as well as well as Head Start programs for pre-school children.

 

Though elderly and disabled people had been reassured Medicare was protected from sequestration, the reassurance may prove to have been misleading. Reimbursements to doctors, hospitals, health-insurance plans and drug companies are to be downsized by $2 billion over the next ten years. Whether these costs will be passed on to recipients is unknown at present, but the history of the health insurance business suggests they probably will be. An Associated Press analysis out of Washington D.C. says Medicare Advantage enrollees will be especially hard hit if the providers thus raise premiums, fees and prices.

 

Statewide, the sequester is hacking $1.05 million from nutrition assistance that provides meals for Washington seniors – some of whom would otherwise starve. It is the sort of cutback Rep. Alan Grayson says will kill people. Grayson, a Florida Democrat who is one of sequestration's few Congressional critics, calls it “a self-immolation,” adding it “will cause a lot of pain, a lot of hunger, a lot of disease, a lot of death.”

 

How severely will the shrunken funding wound Tacoma seniors? As of Friday, the relevant local officials didn't seem to know.

 

Nevertheless there's no doubt cuts similar to all those described above now afflict anyone who depends on federally funded programs. As is often the case, the circumstances in Washington state are a microcosm of what's happening throughout the nation.

Meanwhile Grayson is not the sequester's only outspoken adversary. U.S. Sen. Elizabeth Warren, the feisty Democrat from Massachusetts, has denounced it as “irresponsible” and “just plain stupid.”

But it remains to be seen whether Grayson, Warren and their few like-minded colleagues can convince the bipartisan House and Senate majorities to sheath their metaphorical swords and undo the real-world damage they've already done. 

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Transit Board Backs Down on (Some) Service Reductions 

 

PERHAPS IN RESPONSE to increasingly bitter criticism by advocacy groups for lower-income people, the Pierce Transit Board of Commissioners has effectively defied its anti-transit constituents and discarded an already approved plan to abolish all weekend and nighttime bus service. 

Or perhaps – as an inside source implied last week – it was just too embarrassing to too many powerful people to think of a city as big and economically significant as Tacoma without any weekend or night-time buses.

In any case, the service reduction that goes into effect in September will be on the order of 25 percent rather than the 34 percent mandated by the board in January. Revoking its January decision, the besieged agency now says it will retain minimal night and weekend service. 

Even in their new and slightly revised form, the cutbacks will further shrink already radically-diminished bus service for the approximately 600,000 people who live in Pierce Transit's 292-square-mile service district. The area includes the seaport city of Tacoma, population about 200,000, which plays a significant role in the global economy.

Pierce Transit's downsizing, by nearly 70 percent since 2009, is mandated by local voters who damn public transport as welfare, denounce its users as bums and condemn its unionized employees as parasites.

But for once the “human decency” meme that emerged in reaction to last November's vote against transit and transit-users seems to have been paramount amongst the commissioners' considerations. The agency thus reshuffled its budgetary tarot cards and came up with an additional $6.2 million – $5.5 million from maintenance funds – to maintain (very limited) weekend and night-time bus operations.

“The risk,” said Pierce Transit's Lars Erickson, “is that we may have (unforeseen) maintenance problems.” The board is willing to gamble, the publicist says, “because we understand the effects of cutting weekend and nighttime service.” 

Nevertheless, Tacoma and its surrounding suburbs will still suffer from what – for a municipality of its size and economic importance – is probably most inadequate public transport in the industrial world.

At least one board member, Derek Young, says he fears Pierce Transit is “in a death spiral,” with the ongoing service reductions resulting in revenue losses and enough additional political antagonism to eventually terminate the agency's operations. Some transit opponents have already admitted this is precisely their intent.

In this context, the Polly Anna spin Pierce Transit attempts to put on the cutbacks – “extensive system redesign project, robust public outreach since 2009” – seems especially ironic.

The initial downsizing of the agency's operations, in 2009, was due to Washington state's notoriously regressive tax structure.

As a consequence, the state's transit authorities are funded almost entirely by sales tax revenue, which slumped radically during the Bush-Obama recession and has remained low ever since. In response, Pierce Transit reduced service by eight percent. It re-routed several bus lines and shortened operating hours but otherwise preserved pre-recession schedules.

In 2011, hoping to restore these cuts and expand existing service to accommodate growing ridership, the commissioners asked voters to approve a sales-tax increase of .03 percent, three cents on a $10 purchase.

But the far-right majority that dominates the suburbs, energized as they were by the success of the Tea Party, launched a nasty campaign based on spurious claims that transit is not a civil necessity but rather a means of placating lower-income people, pampering minorities and funding the Democratic Party via the Amalgamated Transit Union.

The transit opponents also tried to portray the agency as an exceptionally glaring example of government spending run amok – a bureaucracy that squandered taxpayer dollars at every opportunity.

Efforts at rebuttal – for example telling the story of how insightful planning gave Pierce Transit the first natural-gas-powered buses on the planet and locked in fuel prices that in today's market are equivalent to buying diesel at 71 cents per gallon – were either ignored or shouted down.

Thus the agency's 2011 special-election ballot measure, though narrowly approved in Tacoma proper, was overwhelming defeated in the suburbs, which contain about two-thirds of the population of the Pierce Transit service area.

The directors resubmitted the three-cents-on-$10 tax-hike to the voters in 2012, hoping the progressive majority expected to turn out for the November general election would at last rescue the system.

As expected, the transit opponents' responded with the same hateful rhetoric they had employed the previous year. But they became even more stridently anti-union after the agency's bus drivers and other workers represented by ATU Local 587 voted to give up their 2011-2014 raises and cost-of-living increases in a last-ditch effort to help save bus service.

The second vote thus went the same way as the first.

While the voters within the Tacoma city limits again approved the tax hike, an overwhelming number of suburbanites again voted against it. And even the Tacoma outcome was gravely disappointing to transit supporters. An unprecedented two-percent under-vote – about 15,400 ballots cast by people who declined to vote on the transit measure – suggests the presence of a decisive anti-transit plurality even inside the city limits.

Hence the Pierce Transit board's unannounced but obvious decision to abandon – at least for the foreseeable future – any further ventures in electoral politics.

LB/4 March 2013

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