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Alan Barber, (202) 293-5380 x 115
Though Congress leaves for its August recess this week, one of the
items sure to be on the agenda when it returns is how to deal with the
continuing collapse of the nation's housing market. A new study
from the Center for Economic and Policy Research (CEPR) examining
housing costs shows that market rents are far below ownership costs in
many parts of the nation.
The paper, "The Gains from Right to Rent,"
analyzes the costs of renting versus owning a house in several major
cities and finds that the Fair Market Rents in these metropolitan areas
is often much lower than the cost of ownership.
the gap between owning and renting is not that large," said Dean Baker,
Co-Director of CEPR and an author of the report. "Due to the enormous
run-up in house prices over the housing bubble years, however,
ownership costs now vastly exceed rental costs in many of the bubble
markets and homeowners in these markets have much to gain from having
the opportunity to remain in a home as a renter following a
looks at the costs of renting and owning before and after taxes in 16
metropolitan statistical areas (MSAs) and details substantial savings
gained from renting across all scenarios depicted. The various
scenarios consider the costs of mortgage payments, property taxes,
insurance and maintenance costs, and mortgage deductions. An appendix
is included that compares ownership and rental costs across 100 MSAs as
Under Right to Rent legislation,
Congress would temporarily alter foreclosure laws to let foreclosed
homeowners remain in their homes as renters for a substantial period of
time. This would save families from being kicked out of their homes and
would go far to stop the blight of foreclosures affecting many of our
communities. This plan requires no taxpayer dollars and no new
bureaucracy to implement.
"The loan modification plans put forth
so far aren't working," continued Baker. "They are unlikely to benefit
more than ten percent of homeowners facing foreclosure and are slow to
go into effect. Right to Rent, on the other hand, would benefit millions and could go into effect immediately."
The full report on homeownership and rental costs can be found here. More details on the Right to Rent plan can be found here.
The Center for Economic and Policy Research (CEPR) was established in 1999 to promote democratic debate on the most important economic and social issues that affect people's lives. In order for citizens to effectively exercise their voices in a democracy, they should be informed about the problems and choices that they face. CEPR is committed to presenting issues in an accurate and understandable manner, so that the public is better prepared to choose among the various policy options.(202) 293-5380
"We knew this was coming," wrote one policy expert. "But we still treat these burdens like they're unavoidable natural disasters."
With a green light from the federal government, states across the U.S. have thrown hundreds of thousands of low-income people off Medicaid in recent weeks—and many have lost coverage because they failed to navigate bureaucratic mazes, not because they were no longer eligible.
More than a dozen states, including Florida and other Republican-led states that have refused to expand Medicaid under the Affordable Care Act, have begun removing people from Medicaid as part of the "unwinding" of a pandemic-era federal policy that temporarily barred governments from kicking people off the program.
In a bipartisan deal late last year, Congress agreed to cut off the pandemic protections, giving states 12 months to redetermine who is eligible for the healthcare program that covers tens of millions of Americans.
The process differs in each state, but Medicaid enrollees are typically required to complete paperwork verifying their income, address, disability status, and other factors used to determine eligibility for the program.
While some states have undertaken public outreach campaigns to ensure Medicaid recipients understand what they need to do to continue receiving benefits, most enrollees across the country "were not aware that states are now permitted to resume disenrolling people from the Medicaid program," according to new survey data from the Kaiser Family Foundation (KFF).
As a result, The New York Timesreported Friday, "many people lost coverage for procedural reasons, such as when Medicaid recipients did not return paperwork to verify their eligibility or could not be located."
"The large number of terminations on procedural grounds suggests that many people may be losing their coverage even though they are still qualified for it," the newspaper added. "Many of those who have been dropped have been children."
Early data released by the state of Florida, for example, shows that more than 205,000 people in the state lost coverage for procedural reasons after April eligibility checks.
"We knew this was coming. But we still treat these burdens like they're unavoidable natural disasters," said Pamela Herd, a professor of public policy at Georgetown University. "We need to be much more explicit about these failures because we're making a choice to allow this."
Joan Alker, executive director of the Georgetown Center for Children and Families, said she is "very worried about Florida."
"We've heard the call center's overwhelmed, the notices are very confusing in Florida—they're very hard to understand," said Alker.
In a recent letter to Republican Gov. Ron DeSantis, a 2024 presidential candidate, more than 50 advocacy groups demanded a Medicaid redetermination pause, pointing to "reports of Floridians being disenrolled from Medicaid without having received notice" from the state's Department of Children and Families (DCF).
"One of these individuals is a 7-year-old boy in remission from Leukemia who is now unable to access follow-up—and potentially lifesaving—treatments," the groups wrote. "Families with children have been erroneously terminated, and parents are having trouble reaching the DCF call center for help with this process. Additionally, unclear notices and lack of information on how to appeal contribute to more confusion."
"We are deeply concerned about those with serious, acute, and chronic conditions who will continue to lose access to their lifesaving treatments during this time, along with people who risk substantial medical debt, or even bankruptcy, as a result of coverage loss," the groups added.
\u201cWhat if instead we just gave everyone health insurance coverage??!! \nhttps://t.co/hSOQKYU7JY\u201d— Ady Barkan (@Ady Barkan) 1685130002
The Times highlighted the situation in Arkansas, which is led by Republican Gov. Sarah Huckabee Sanders—a supporter of Medicaid work requirements and other attacks on the program. (Work requirements were briefly tried in Arkansas in 2018 and 2019, with disastrous consequences.)
"In Arkansas, more than 1.1 million people—over a third of the state's residents—were on Medicaid at the end of March ," the Times noted Friday. "In April, the first month that states could begin removing people from the program, about 73,000 people lost coverage, including about 27,000 children 17 and under."
An Arkansas law requires the state to complete its Medicaid eligibility reviews in six months instead of 12.
In a Wall Street Journalop-ed earlier this month, Sanders wrote that her state is booting people from Medicaid at "the fastest pace in the nation" and claimed those being removed are "ineligible participants" who are depriving resources from "those who need them"—ignoring evidence that many being stripped of coverage are technically still eligible.
The U.S. Health and Human Services Department has estimated that upwards of 15 million people nationwide could lose Medicaid coverage during the redetermination process.
"This is such an enormous policy failure—profoundly cruel and will contribute to furthering inequities," Dr. Cecília Tomori, a public health scholar at Johns Hopkins University, wrote Friday.
While some who lose Medicaid will be able to access insurance through an employer or the Affordable Care Act marketplaces, KFF found that more than four in ten people with Medicaid as their only source of healthcare "say they wouldn't know where to look for other coverage or would be uninsured" if they were removed from the program.
"This is about to happen to a lot of people," warned Larry Levitt, KFF's executive vice president for health policy.
The Times pointed to the case of 54-year-old Arizona resident Debra Miller, who "lost Medicaid coverage in April after her roughly $25,000 annual salary as a Burger King cook left her ineligible."
"Ms. Miller, a single mother with diabetes and hypothyroidism, worked with an insurance counselor at North Country HealthCare, a network of federally funded health clinics, to enroll in a marketplace plan with a roughly $70 monthly premium," the Times reported.
Miller told the newspaper that the new plan is a "struggle" both because of the new monthly payment and because it doesn't include the vision coverage she needs and now may not be able to afford.
The Congressional Budget Office estimated earlier this week that states' Medicaid eligibility checks will likely leave 6.2 million people without any insurance at all.
"The American people deserve to understand why you are supporting even more deficit-busting tax giveaways for giant corporations, while also cheerleading Republican demands to inflict painful, job-killing austerity on everyone else."
The Republican Party's debt-ceiling hostage scheme has benefited from the support of the United States' largest corporate lobbying organization, which has given its stamp of approval to the GOP's push for major federal spending cuts, punitive new work requirements for aid programs, and permitting changes sought by the fossil fuel industry.
While House Speaker Kevin McCarthy's (R-Calif.) office has reportedly not met with representatives of the U.S. Chamber of Commerce during the debt ceiling standoff, a representative of the powerful business group said earlier this week that such a meeting would be pointless given that the Chamber and the GOP are so closely aligned.
Neil Bradley, the Chamber's chief policy officer, toldPolitico earlier this week that a meeting with McCarthy would be a "cheerleading session."
"I see the relationship as respectful, so I'm not worried about wasting his time to come in and say, 'Look how much I agree with you,'" said Bradley, who previously served as McCarthy's deputy chief of staff.
In a letter to the Chamber's chief executive on Friday, a trio of Democratic senators led by Sen. Elizabeth Warren (D-Mass.) slammed Bradley's remarks and demanded to know "how the Chamber justifies supporting the Republican agenda of continued tax cuts for the wealthy, while cheerleading for threats to impose a default and austerity for everyone else."
"Instead of pressing the speaker to drop his radical demands and pass a clean debt limit increase, Bradley noted that the Chamber has pressed the White House to come to a bipartisan agreement with McCarthy," the letter reads. "Indeed, Bradley noted that the Chamber is aligned with House Republicans on their debt ceiling demands, including on spending caps, work requirements, and energy permitting."
Warren, joined by Sens. Sheldon Whitehouse (D-R.I.) and Ed Markey (D-Mass.), accused the Chamber of fully backing the GOP's "shameless hypocrisy" by lobbying for tax breaks that Republicans are expected to include in a tax cut package coming sometime next month.
"The American people deserve to understand why you are supporting even more deficit-busting tax giveaways for giant corporations, while also cheerleading Republican demands to inflict painful, job-killing austerity on everyone else in a pretense of 'fiscal responsibility,'" the senators wrote, demanding to know how much the Chamber has spent on tax-related lobbying this year and what discussions the group has had with Republicans on the House's tax-writing committee.
According to OpenSecrets, the Chamber has spent more than $19 million total on federal lobbying so far this year—the most of any organization. The Chamber says it has met with more than 150 Republican and Democratic lawmakers throughout the debt ceiling fight, which GOP Rep. Matt Gaetz (R-Fla.) publicly described as a hostage situation.
The Democratic senators' letter came as Treasury Secretary Janet Yellen warned that the federal government will run out of money to meet its obligations by June 5 if Congress does not raise the debt ceiling.
The Washington Postreported Friday that White House and GOP negotiators are "closing in on an agreement that would raise the debt ceiling by two years—a key priority of the Biden administration—while also essentially freezing government spending on domestic programs and slightly increasing funding for the military and veterans affairs."
When accounting for inflation, keeping non-military spending flat would mean potentially significant real-term cuts to key aid programs, from nutrition assistance to housing.
The Chamber has openly endorsed the GOP push for spending caps and warned President Joe Biden against using his 14th Amendment authority to unilaterally prevent a default, claiming such a move would be "as economically calamitous as a default."
On Friday, a top Treasury Department official said the White House will not invoke its 14th Amendment authority to continue paying the nation's bills if talks with the GOP collapse.
The treasury secretary's warning came as a Biden administration official said the president won't invoke the 14th Amendment in order to avoid a first-ever U.S. default.
U.S. Treasury Secretary Janet Yellen on Friday warned Congress that the United States government will run out of money to pay its bills on June 5 if lawmakers don't reach an agreement to raise the nation's debt ceiling.
"Based on the most recent available data, we now estimate that Treasury will have insufficient resources to satisfy the government's obligations if Congress has not raised or suspended the debt limit by June 5," Yellen wrote in a letter to House Speaker Kevin McCarthy (R-Calif.).
"We have learned from past debt limit impasses that waiting until the last minute to suspend or increase the debt limit can cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States," Yellen noted. "In fact, we have already seen Treasury's borrowing costs increase substantially for securities maturing in early June."
Earlier this month, Yellen said that the so-called "X-date"—the day on which the first-ever U.S. default will occur—could come as early as June 1.
"If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests," she stressed in Friday's letter.
\u201cJanet Yellen updates the X date\u2026 it is now next Monday, June 5.\n\nLetter to Congress:\u201d— Julie Tsirkin (@Julie Tsirkin) 1685132574
As The New York Timesnotes:
Ms. Yellen's letter comes as the White House and House Republicans have been racing to agree on a deal that would lift the nation's $31.4 trillion borrowing cap and prevent the United States from defaulting on its debt. The Treasury Department hit the debt limit on January 19 and has since been employing accounting maneuvers to ensure the United States can continue paying its bills on time...
On Friday, she detailed that the federal government is due to make more than $130 billion in scheduled payments during the first two days of June—including payments to veterans and Social Security and Medicare recipients—leaving the Treasury Department with "an extremely low level of resources"...
While negotiators have been in round-the-clock talks, no deal has been announced. Still, the contours of an agreement between the White House and Republicans are taking shape. That deal would raise the debt limit for two years while imposing strict caps on discretionary spending not related to the military or veterans for the same period.
Biden administration officials and congressional Democrats have accused Republicans of "hostage-taking" during the debt limit standoff, an allegation embraced by Rep. Matt Gaetz (R-Fla.) earlier this week.
Scores of Democratic lawmakers and progressive advocates have called on President Joe Biden to exercise his constitutional authority and invoke the 14th Amendment—which states in part that "the validity of the public debt of the United States... shall not be questioned."
However, Deputy Treasury Secretary Wally Adeyemo said Friday that Biden will not invoke the 14th Amendment.
"The 14th Amendment can't solve our challenges," Adeyemo asserted on CNN. "Now, ultimately, the only thing that can do that is Congress doing what it's done 78 other times, raising the debt limit."
"We don't have a Plan B that allows us to meet the commitments that we've made to our creditors, to our seniors, to our veterans, to the American people," Adeyemo added ominously.