Going Down With No Backbone

The thing we've been waiting for is happening. As Seattle City Council prepares for the delivery of Mayor Nickels' big fat gift to for-profit housing developers in the form of an expansion of the Multi-Family Tax Exemption, the economy is contracting, and with it, the capacity to deliver the services that are most needed when budgets go south. This morning's Seattle Post-Intelligencer reports a projected $70 million shortfall on the King County side.

County Executive Ron Sims has asked department directors to prepare 2009 budget proposals that would cut spending by 8.6 percent from a sustaining level of services to close that gap.

In response, several elected officials from the county's criminal justice agencies -- Prosecutor Dan Satterberg, Sheriff Sue Rahr and judges of the district and superior courts -- called a joint news conference June 5 to sound the theme of "Public Safety in Peril," making alarming predictions about the effects of the proposed cuts. The criminal justice agencies' budgets, which account for 70 percent of the $650 million general services total this year, are presented by Sims to the County Council for approval -- but Satterberg, a Republican, and Rahr and the judges, who run as nonpartisan candidates, are independently elected and operate from their own power bases apart from Sims, a Seattle Democrat who is the county's highest-ranking elected official.

The article goes on to describe how the budget process will, despite denials on both sides, become politicized by the upcoming race for the King County Executive position. The Public Safety in Peril frame offers a taste of what is to come. As the criminal justice system eats the county budget alive, a new downtown jail is proposed at a cost of $110 million for construction and $19 million annually to operate. It doesn't take a Norm Stamper to see that this is the wrong direction, and we can count on the politics of fear to drive at least one side of this debate.

Meanwhile, the State picture is looking equally grim. The Washington State Center on Budget and Policy Priorities notes that, in the face of a projected $2 billion deficit, the legislature needs to look more realistically to the revenue side of the picture to sustain current levels of services. Even these, as anyone who understands how broken things are will sadly confirm, are nowhere near adequate to the need.

The continuing projection of a significant deficit is a matter of public concern and a deliberate conversation about how to close the gap should begin in earnest. It is important to note, the problem is not one of spending; current budget figures are largely in line with past budgets as a share of the economy (see figure above). Instead, changes to our revenue structure must be part of the discussion.

Earth to Olympia: Grow some fucking balls and start taxing the rich. Race to the bottom corporate welfare and weak-kneed anti-taxation policies that favor the most affluent are an unsustainable politics.

Washington State is far from alone in this. The Center on Budget and Policy Priorities reports that 29 states face a total shortfall of at least $48 billion for 2009. As Washington State isn't even on their list, this projection surely underestimates the scope of the crisis. While there's an excellent discussion of the complexities of various alternatives at their website, I'll put it in layman's terms: We're screwed, and we're going down, big time.

Looking at the Seattle picture, I'm reminded of a line from Joan Baez' anthem to an asshole:

You who are so good with words
And at keeping things vague

Meaning this: Seattle, like everywhere else, is heading toward ugly recession, but recent Office of Finance analyses project mostly blue skies. The June Economic Update admits only to this:

Sales, B&O, and REET taxes are particularly sensitive to recessions (see table) as they are good representations of economic activity. Inflation adjusted sales tax receipts declined on average 6.5% in the first year of the last four recessions. B&O receipts suffered similar fates. If we are in recession the NBER likely won’t identify it until late summer. By then Seattle’s tax receipts should provide some guidance as to where we are and where we’re going.

Meanwhile, if anyone's driving, they're not saying. Compared to last April's economic report to the City Council, which projects a mere 30% probability of recession, this most tentative of admissions to bad news comes 0ff as downright alarmist. But even this, if one scrolls all the way to the last line, foretells budget cuts to come.

So, why are we giving tax breaks away to rich developers so they can create housing at prices that exceed what the market already delivers without the aid of public subsidy? Getting re-elected takes money I guess. Especially when one lacks a backbone.

Where We're Going To

A friend who lives near Astoria, Oregon sent an email yesterday asking how spontaneous I felt. "If you get in your car by 1," she said, "you'll be here around 4:30 and can BBQ with me and my neighbors in this great garden. There's a creek just behind the garden and we can walk to the beach." I felt spontaneous. I girled up the twins with dresses and clean hair and we drove. The beach near her house was spectacular. You could see Haystack a few miles down the coast, jutting up out of the water like some sort of a forbidden island.

As we drove through the neighborhood, she pointed out some of the large, beautiful, and seasonally occupied homes owned by the wealthy while she described the hard scrabble existence of many locals. It was an apt metaphor for an economy where the top 5% bask in excess while most of us work harder and with less result just to stay even.

A recent state-by-state report by the nonpartisan Center on Budget and Policy Priorities on the acceleration of income inequality confirms what anyone can see.

Low- and middle-income families have reaped few gains since the late 1990s, despite the recent years of economic prosperity. Average incomes actually fell by 2.5% for those in the bottom fifth of the income scale and rose by just 1.3% for those in the middle fifth. Meanwhile, incomes climbed 9% for those in the top fifth.

“Before the recent downturn hit, our economy was generating solid income gains. The problem was that high levels of inequality meant these gains failed to reach middle- and low-income families, whose living standards stagnated or even declined,” said Jared Bernstein, senior economist at the Economic Policy Institute and co-author of the report. “As we head into an economic downturn, these families are ill-prepared to weather the storm.” ...

Within the top fifth, the lion’s share of the income growth of the past two decades went to those at the very top. In the 11 states large enough to permit this calculation, the incomes of the top 5 percent of families rose by more than $90,000 on average. This is greater than the income growth of the top fifth of families as a whole in these states — and dwarfs the income growth among the bottom fifth of families in these states. The average income of the richest 5 percent of families is now more than 12 times that of the poorest families.

Since the 90's in Washington State, average income for the bottom quintile fell by 4.2%, while the top quintile's income grew by 11.8%. Income growth for the middle is stagnant.

Measured over the last two decades the gap is even more striking. While incomes rose for the bottom fifth by 5.5%, they rose for the top fifth by an incredible 41.3%. These numbers are adjusted for inflation and do not include capital gains income. The real picture, then, is even more extreme, especially when you look at incomes for the upper range of the top 5%, which are growing faster than anyone's.

These are just statistics. Where you see the real damage is in places like Astoria, where prime real estate gets snatched up as an investment/amenity for the rich while locals struggle with the resulting inflation. Or Seattle, where a downtown condo boom has sparked a war on the visible poor in this once liberal city.

My friend was right about the drive. It took about three and a half hours to get there. Going home, I wasn't so lucky. I took a wrong turn in Astoria and wound up driving to Seattle by way of Portland. At around 2:30 a.m., a major accident on I-5 near Tacoma brought all five lanes to a standstill for more than half an hour. Rich and poor alike sat in their cars, watching a sea of flashing lights as one ambulance after another crept by in the breakdown lane.

As a State Trooper finally waved us through the single lane that eventually opened, I pondered the accident as overly-stretched metaphor for the middle-class. Here we are, bystanders on a road that seems to have no exit. Unspeakable horror looms. The girls slept in the backseat, unaware of what was ahead. And meanwhile, there we all sat, resigned and stuck in place, not going anywhere ourselves.

Target Weak Claims, Not Weak Clients

The Center for Budget and Policy Priorities has released several reports this year that show what most of us already know. As communities mobilize to end homelessness, the remarkable gains that are being made through concerted local efforts are being undermined by federal policy that actually decreased HUD funding by $3.3 billion between 2004 and 2006. Further cuts are likely this year.

While McKinney-Vento funding grew by $70 million between 2002 and 2006, these increases are dwarfed by the cuts to HUD and other programs that affect low-income people.

These cutbacks have affected nearly every low-income housing assistance program important to state and local plans to end homelessness. CDBG, HOME, and public housing have been hit the hardest, with their funding declining by 20 percent, 16 percent, and 11 percent, respectively, from 2004 to 2006. Yet the Housing Choice Voucher Program and most other HUD programs have suffered losses as well. The result has been a noticeable reduction in housing assistance resources available to local communities, including the loss of more than 150,000 housing vouchers since 2004.

It gets worse. These cuts come at a time when funding must actually increase to effectively level fund existing program. The federal government simply can’t shovel money to the rich through tax breaks and pork, wage the most expensive war in US history, and mitigate the fallout from capitalism run amok all at the same time. Something has to give, and unless people push back hard, it’s not going to be the giveaways to the wealthy.

Yet things are far from hopeless. The resources are there to take care of human needs if we can re-assess the priorities that drive national policy.

Meeting the housing needs of low-income families in the face of the long-term fiscal problems the nation faces will be a challenging task. Doing so will require placing all of the budget — including tax cuts, special-interest tax breaks, and various spending programs that are protected by powerful constituencies — on the table, and reaching bipartisan agreement on a balanced mix of reductions in projected spending and increases in revenues. Doing so also will require adherence to a principle espoused by David Stockman, President Reagan’s first budget director, in the 1980s: Mr. Stockman said that when seeking to reduce the deficit, policymakers should go after “weak claims” that have been made on the federal Treasury, including weak claims made by powerful interests and constituencies, rather than politically “weak clients.” Those who are weak politically include the low-income families assisted by the federal housing programs.

This should not be news to anyone. Absent a grassroots movement to push for more progressive tax policy and greater corporate responsibility, efforts to end homelessness will ultimately shrivel up and die under the onslaught of greater inequality and the diminished federal capacity to mitigate the wreckage.

Presently, more than three federal dollars go the the middle class and affluent in the form of housing-related tax breaks for every one dollar that goes to low-income housing. This trend is likely to be exacerbated in coming years as the feds scramble to pump up the housing market in response to the unraveling of the mortgage industry.

For the full reports, see CUTS IN FEDERAL HOUSING ASSISTANCE ARE UNDERMINING COMMUNITY PLANS TO END HOMELESSNESS, and THE EFFECTS OF THE FEDERAL BUDGET SQUEEZE ON LOW-INCOME HOUSING ASSISTANCE at the Center on Budget and Policy Priorities.

Charity Kicks Justice's Ass: Rich Throw Party

Tonight I was poking around at the Center on Budget and Policy Priorities' website looking for some decent poverty trend data. They've done a pretty thorough job of chewing over the 2006 census info and a few other things, and the news isn't great.

• In 2006, both the number and the percentage of Americans who are uninsured hit their highest levels since 1999, the first year for which comparable data are available, with 2.2 million more Americans — and 600,000 more children — joining the ranks of the uninsured in 2006.
• While median income rose modestly (by 0.7 percent, or $356) for households in general, this merely brought median income back to where it stood in the 2001 recession year. In addition, median income for working-age households — those headed by someone under 65 — remained more than $1,300 below where it stood when the recession hit bottom.
• New Commerce Department data shows that the share of national income going to wages and salaries in 2006 was at its lowest level on record, with data going back to 1929. The share of national income captured by corporate profits, in contrast, was at its highest level on record.
• Other new data shows that income concentration, which increased in 2003 and rose sharply in 2004, jumped again in 2005. The share of pre-tax income in the nation that goes to the top 1 percent of households increased from 17.8 percent in 2004 to 19.3 percent in 2005. Only four times since World War II has the percentage of income received by the top 1 percent risen this much in a single year (in percentage point terms). One of those four times was 2004.
• In the belaboring the obvious department, detailed new tax data shows that the federal tax system has become much less progressive over the past several decades, particularly during the Reagan and Bush administrations. Over the same several decades, pre-tax income inequality has grown as well. Thus, during a period in which economic forces have been generating increased pre-tax inequality, changes in the tax system have exacerbated rather than mitigated the widening of the income gap.

But hey, no need to worry. Americans are getting involved! According to The Corporation for National and Community Service,

Americans over the age of 16 are volunteering at historically high rates, with 61.2 million giving their time in 2006 to help others by mentoring students, beautifying neighborhoods, restoring homes after disasters, and much, much more. Although the adult volunteer rate for 2006, 26.7%, was down slightly from the 28.8% recorded from 2003-2005, a greater percentage of Americans adults are volunteering today than at any other time in the past 30 years.

And we have reason to be especially proud, because Seattle, despite our rapidly increasing income inequality and all of it's consequences for our city, is number five in the nation in volunteering, lagging only behind Austin, TX, Omaha, NE, Salt Lake City, UT, and, in the number one spot, the home of Mary Tyler Moore, Minneapolis, MN.

Also, the United States Interagency Council on Homelessness has found the next best thing to Ten Year Plans to End Homelessness, and it's Project Connect, a corporate friendly volunteer fest that brings resources and homeless people together to show what can happen when people roll up their sleeves and get to work. Their website now highlights a recent Project Connect in Springfield, MA, attended, of course, by Mr. Philip Mangano, and just look at these outcomes:

• 5 veterans were housed

• 351 applications for Section 8 and public housing were completed

• 141 people received housing counseling

• 76 Massachusetts IDs issued (paid for by the corporate donations)

• 76 birth certificates ordered (paid for by the corporate donations)

• 250 bus tickets issued

• 70 dental screenings

• 21 medical examinations, with 43 follow-up medical appointments made

• 131 chair massages

• 41 foot washes

• 60 haircuts

• 50 pairs of eyeglasses ordered

• 29 Social Security/SSI applications

• 49 MassHealth/Commonwealth Care applications

• 29 veterans benefits applications

• 229 employment & training contacts

• 90 people received legal advice

• 150 people received consumer information and advice

• 21 people received immigration advice

• 65 people made phone calls

• 55 children cared for at the on-site child care center

• 600 children's books given away

And some people say we don't have homelessness on the run!

Maybe it's just me, but it seems like the more volunteerism and charity we have, the further we get away from a vision of what social justice looks like, and the more we become a society of haves and have-nots where people are too afraid, tired, hopeless, bought off, or just plain stupid to fight for anything more to the point. Charity makes the radical inequality we've grown accustomed to a bit easier to swallow, because we get to show we care.

The Explainer

This from the National Alliance to End Homelessness website. It's from their fact sheet series The Explainer. I can't find where I got this again, but you can get it here.

Isn't it great how Bush is the Decider and NAEH is The Explainer?

The factsheet shows how if you look hard enough, the federal government is spending more on homelessness than it first seems, but they're still not doing jack on housing, even though that's all they ever talk about.

But then The Center on Budget and Policy Priorities offers this less than promising summary of the President's budget, and it's long-term impact on domestic discretionary spending. Note that the largest cuts are in community development and job training.

It looks like The Explainers still have some explaining to do.