Recovery Plan Making Huge Difference for Economy and Working Families

Recovery Plan Making Huge Difference for Economy and Working Families

Thursday, July 16, 2009


PSN Event at NCSL Legislative Summit in Philadelphia

This Monday, July 20th -- the day before the National Conference of State Legislatures' Legislative Summit officially begins -- Progressive States Network will be hosting an afternoon event and reception for progressive legislators and organization allies.

The event will take place on the 10th floor of the Hilton Garden Inn Philadelphia Center City, located adjacent to the Pennsylvania Convention Center, at 1100 Arch Street.  The afternoon will consist of three timely sessions to discuss transparency and equity in the Federal Recovery Plan and opportunities for state-federal collaboration.

The afternoon session will be followed by a cocktail reception sponsored by PSN and allies, during which legislators can network with each other and with advocates whose priorities are of interest to them. 

To learn more and RSVP, visit  There is no cost to attend, but space is limited.  For more information, contact Marisol Thomer, PSN Outreach Coordinator, at 212-680-3116 x108 or

If you cannot join us on Monday, we welcome you to visit us Tuesday - Thursday at booth #406 in the exhibit hall.



Recovery Plan Making Huge Difference for Economy and Working Families

Opponents of the federal recovery bill are now already rushing to declare the plan a failure, despite most economists believing that any stimulus was always expected to take time to reverse an economic crisis driven by years of unregulated financial excess and of misguided D.C. fiscal policies.  As a Wall Street Journal report detailed, a survey of 51 economists found that that "53% of respondents said [the recovery plan] has provided somewhat of a boost but that the larger effect is still to come."

Debunking Attacks on Stimulus:  But what is clear is that the recovery plan has already helped the economy avoid an even larger catastrophic tailspin by helping states avoid mass layoffs and allowing them to plan for job creation programs that will bear fruit over the next year.  The Center on Budget and Policy Priorities (CBPP) outlines in Correcting Five Myths About the Stimulus Bill why the critics of the stimulus are ignoring reality and just trying to score political points:

  • Economist Mark Zandi of Moody’s has estimated that without the stimulus plan "real GDP would have declined nearly 6% in the second quarter" rather than the 3% decline that is now estimated happened.  Paul Krugman goes further and argues that without the stimulus plan, "we would have had a full Great Depression experience...Deficits, in other words, saved the world."
  • From the beginning, it was recognized that stimulus money would be spent over two to three years to help sustain long-term economic recovery.  Because economics predict a longer recesssion than normal, Congressional Budget Office head Douglas Elmendorf stated the goal of extended support for the economy; "a fiscal stimulus that ends before the economy has started to regain its footing runs the risk of exacerbating economic weakness when the stimulus ends.”
  • $140 billion for states in support of Medicaid and education sharply reduced the $350 billion budget shortfall states are facing in the next two years, allowing them to avoid laying off teachers, nurses and public safety staff in ways that would only increase unemployment across the country. 

As the Government Accountability Office highlighted in a just released report, states, beyond filling existing budget gaps with stimulus stabilization funds, are required to give priority to projects that can be completed within 3 years and are pursuing projects such as road maintenance and repairs that can deliver job boosts as quickly as possible.

Providing Relief for States and Working Families:  Federal aid, in fact, arrived just in time for states to close 30-40% of state budget shortfalls, according to this report by CBPP.  The report highlights state-by-state the crucial state programs employing people across the country saved from the budget axe because of the recovery plan.

Other reports highlight how the stimulus plan has helped revive summer youth job programs across the country, offsetting massive youth unemployment in the private sector, allowed community colleges to continue providing crucial retraining programs for laid-off workers, expanded weatherization assistance programs to help low-income families reduce energy bills, and provided billions in food support through the food stamps program for those in immediate need.

There are reasonable concerns that economic equity and tracking of the funds would be improved by greater transparency in what states and especially private contractors are doing with the funds.  And given that the economic downturn is far worse than was projected when the recovery plan was first designed, quite a few economists are now arguing for another stimulus.

But none of those broader concerns detract from the critical importance of February's recovery plan for states and working families during the present economic crisis.

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Extending Coverage by Keeping Youth on their Parents Health Care Plan

Young adults between the ages of 19 and 29 represent one of the largest and fastest-growing segments of the U.S. population without health care coverage.  In an effort to ensure that all Americans are insured a growing number of states have enacted legislation to allow children to stay on their parents' health insurance plans well into adulthood.

Youth at Risk of Being Uninsured: Young adults represented over 13 million of the approximately 45.7 million Americans under 65 years of age living without health insurance in 2007, according to the latest available census data.  That amounts to approximately 30 percent of 19 through 29 year olds being uninsured.  According to a report by the Commonwealth Fund, "[b]y far, the young adults most at risk of lacking [health care] coverage are those from low income households."  The report's data also found that Hispanic and black young adults were at greater risk of being uninsured than whites. Specifically, 36% of blacks and 53% of Hispanics between the ages of 19-29 lacked health care insurance, compared to 23% of whites. 

Most children receive health care insurance either through their parent’s or guardian’s policy or a public health plan.  This coverage generally expires when an individual graduates high school or college or at the age of 19.  Once dropped from their parent’s policy or from a public program it is often difficult for young adults' to secure their own health insurance, either because of ordinary transitions, their employment status, or for monetary reasons.  Purchasing private insurance is often not an option since the average monthly premium for young adults is an estimated $400 to $500 per month - too pricey for many young people, especially when an estimated 40% of uninsured young adults live in households with incomes below the federal poverty level.

States Take Action:  In response to the growing problems of uninsured young adults, states have passed laws that require health insurers to allow children to stay on their parents' health insurance plans for a longer period of time.  According to NCSL, 34 states now have laws that expand dependent health insurance coverage and State Net reports  that 17 states considered such legislation in 2009. Three states-- Idaho,Pennsylvania and Nebraska-- enacted such legislation.  A half dozen similar bills are still pending either for this year or rolling over into 2010.  New Hampshire, "which already allows young adults to stay on their parents' policy up to age 26," has sent a bill (SB 115) to Gov. John Lynch (D)  that would "allow low-income adults up to the same age buy into the state's Healthy Kids program for approximately $200 a month." 

Limits to Laws Requiring Coverage on Parents' Plans: The majority of states which have extended the age of which children can remain on their parents' plans place certain restrictions on the health care coverage, such as requiring the adult child to be unmarried, and in all but a few states "coverage can only be extended to adult children who have no kids of their own."  

According to Laura Tobler, a health care policy analyst with NCSL, states find these laws attractive because they increase access to health coverage at no real extra cost to the state.  However, she cautions that these bills are not a solution for the rising cost of health care, especially since no enacted measure to date requires employers to carry an employee's adult dependents on the company policy and that the laws generally apply only to employer-provided group plans.


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Low-Income Voters Added to the Voting Rolls through Improved NVRA Implementation

Perhaps the most impressive recent success story in expanding political participation has been the dramatic turnaround in public agency voter registrations in some states.  With the prodding of Demos, Project Vote, and others under the umbrella of the NVRA Project, several states have reinvigorated compliance with this federal law that requires that certain state agencies offer voter registration to the individuals they serve.  The most well known agencies are motor vehicle departments, but public assistance agencies are also included and it is them that can have the most impact on bringing low-income and marginalized citizens into the political process.

When states have decided to prioritize compliance with the federal law, improvements have been startling.  The most recent success story, according to a new NVRA Project report, is Missouri.  Less than a year ago the state was registering less than 8000 voters a year at its public assistance agencies, since it was ordered to fully comply with the federal law registrations have reached 100,000 in eight months.  This kind of change has happened in other states like North Carolina on a voluntary basis when advocates approached them.  In Missouri it took legal action.

After a strong success in Missouri, Demos, Project Vote and other partners are pursuing a legal remedy over the lack of compliance of two other states - Indiana and New Mexico.  Since the laws requirements are clear, it is only a matter of time before these states are fulfilling their duties to register their most vulnerable and powerless citizens.  Of course, legal action is only pursued when states refuse to comply.  Colorado, California, and New Jersey have also been notified that they are not in compliance, and hopefully they will look at the track record of success and choose to join that movement instead of dragging their feet.

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Research Roundup

Nine years of job growth wiped out - Employment numbers reported by the Bureau of Labor Statistics show that the last year and a half has seen 6.5 million jobs lost -- meaning the country is now 838,000 jobs below the number in February 2001, according to the Economic Policy Institute.  This comes on top of collapsing wage growth, expanding part-time work, and drops in aggregate weekly hours worked.

States and the Stimulus: Are they using it to create jobs and 21st century transportation? - This Smart Growth America evaluates how different states have used stimulus funds during its first 120 days, finding some have used the funds to save energy through road and bridge repairs and making longer-term investments in public transportation, while others have just added new roads while ignoring better options.

Millions of workers will benefit from minimum wage increase - This resource page by the Economic Policy Institute highlights their research showing that the federal minimum wage increase going into effect on July 24th will generate an additional $5.5 billion in consumer spending over the next 12 months.  However, because so many states already have higher state minimum wage rates, the effective average minimum wage around the country will rise from $7.46 to $7.71 around the country.

Hunger Doesn’t Take a Vacation: Summer Nutrition Status Report - This Food Research and Action Center report report finds that summer food programs not only help to prevent hunger, but combat childhood obesity and summer learning loss.  The report details participation rates in each state and policies to improve participation.

Costly and Dangerous Treatments Weigh Down Health Care - Inefficiencies and waste account for up to $700 billion of health care spending annually -- potentially one-third of all treatments -- according to this report by the Center for American Progress.  Fixing this problem means better research on the most cost-effective treatment, changing compensation systems for providers to discourage unnecessary procures, and more health information technology deployed.

Credit crisis and desperate borrowers:

Please email us leads on good research at


Recovery Plan Making Huge Difference for Economy and Working Families

Center on Budget and Policy Priorities - Correcting Five Myths About the Stimulus Bill
Center on Budget and Policy Priorities - Federal Fiscal Relief Is Working As Intended
Media Matters for America - Media still ignoring economists to declare stimulus has failed
Government Accountability Office - Recovery Act: States’ and Localities’ Current and Planned Uses of Funds While Facing Fiscal Stresses
Progressive States Network - Assuring Accountability and Equity in Recovery Spending
Center for Political and Economic Research - Economists Who Make the Third Stimulus Honor Roll

Extending Coverage by Keeping Youth on their Parents Health Care Plan

State Net - More states helping young adults keep health coverage 
Commonwealth Fund - Rite of Passage?  Why Young Adults Become Uninsured and How New Policies Can Help, 2008 Update
Testimony--Young and Vulnerable: The Growing Problem of Uninsured Young Adults and How New Policies Can Help 
Rutgers University Center For State Health Policy - State Policies Expanding Dependent Coverage to Young Adults in Private Health Insurance Plans 
Kaiser Health News - Expanding Health Insurance Options For Young Adults 

Low-Income Voters Added to the Voting Rolls through Improved NVRA Implementation

NVRA Project
Demos & Project Vote
Project Vote - Registering Low-Income Voter through Public Assistance Agencies in Missouri
Demos - Unequal Access: Neglecting the NVRA, 1995-2007


The Stateside Dispatch is written and edited by:

Nathan Newman, Executive Director
Caroline Fan, Immigration and Workers' Rights Policy Specialist
Julie Schwartz, Broadband and Economic Development Policy Specialist
Christian Smith-Socaris, Election Reform Policy Specialist
Adam Thompson, Health Care Policy Specialist
Julie Bero, Executive Administrator and Outreach Associate
Austin Guest, Communications Specialist
Mike Maiorini, Online Technology Manager
Marisol Thomer, Outreach Coordinator

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