Randy Hicks on taking a bottom-up strategy to state policy reform | Overton Window Podcast

Randy Hicks on taking a bottom-up strategy to state policy reform | Overton Window Podcast

by | Mar 29, 2022

Randy Hicks on taking a bottom-up strategy to state policy reform | Overton Window Podcast

GCO’s CEO, Randy Hicks speaks with fellow think tank podcast, The Overton Window

Below is an excerpt from the Mackinac Center in Michigan. The Mackinac Center recently invited GCO’s CEO, Randy Hicks to discuss GCO’s take on State Policy Reform on their regular podcast,  The Overton Window.

Like many public policy advocates, the people at the Georgia Center for Opportunity research and write about public policy. What makes them different is that they try to bridge the gap between people working at the community level and the people working on state policy. I spoke with their president and CEO Randy Hicks about this for the Overton Window podcast.

 

“One of the things that sets us apart is that we actually spend a lot of time in the community working on those who we believe could be or are most affected by various public policies that we’re interested in,” Hicks says.

The dynamics between working on state policy and working at the community level are different, and state politics is not very conducive to collaboration.

 

Inflation’s Growing Problem: A warning shot for Congress

Inflation’s Growing Problem: A warning shot for Congress

by | Aug 16, 2021

Inflation’s Growing Problem: A warning shot for Congress

poor child in America inflation

The inflation rate in July—as measured by the seasonally-adjusted Consumer Price Index (CPI)—abated somewhat from June’s rate, increasing at 0.5% instead of 0.9%. But don’t cheer too much yet.

This is known by economists as disinflation, not deflation. The rate came down, but prices are still continuing to climb.

Annualized, the monthly inflation rates calculate to 5.8% for July and 11.4% for June. Both rates continue to exceed the Federal Reserve’s target of 2% annual inflation. Of course, as I discussed in this blog, the Fed’s 2% target rate is too high and compromises Congress’s original goal of promoting purchasing power that would benefit everyone.

Prices are Ratcheting Upwards

When the CPI inflation rate is viewed by its increase from the same month of the prior year, the trend is not good. 

Although the increase over the prior year held steady for July, prices were also increasing last year. That is, prices are still 5.3% higher than a year ago when prices were also increasing. The problem is compounding, and prices are ratcheting upwards.

Inflation not a problem?

Perhaps not surprisingly but definitely unfortunately, the Fed’s economists appear to have been caught off guard. When Fed Chairman Jerome Powell testified before Congress last month, he admitted as much as inflation has spiked higher than they anticipated. However, he still maintained that the inflation is based on temporary factors that will abate with time.

Mr. Powell’s comments may have been just for the inflation rate, and he may be overly optimistic. In the meantime, we must brace ourselves for an increase in the price level. 

To think that the price level may come down is probably unrealistic. That has not happened ever since we gave the Fed the responsibility to maintain purchasing power in 1946 that was dumbed down in 1978 to the weaker goal of “reasonable price stability.” Of course, this policy change happened during the complete failure of federal policymakers in both the Fed and Congress when the nation was suffering from double-digit inflation combined with stagnant economic growth.

Why does promoting purchasing power matter? 

Inflation hurts practically everyone. If your wages do not keep up, your purchasing power is eroding. 

This is truest for those in poverty, low-income families, and low-skilled labor. They will slip further behind, making income disparity worse and possibly causing Congress and state governments to spend more on safety-net programs that will only fuel inflation higher when Congress funds the increases with even more debt.

Businesses—who need predictability to make good entrepreneurial decisions—generally will also suffer, slowing down economic activity. 

Workers will have a harder time keeping up with rising prices and will demand higher wages, only fueling inflation further.  

More Cautious Approach to Government Spending is Needed

A likely major cause of the climbing price level is all the governmental debt-based spending to address the pandemic. Further debt-based spending will not ameliorate the problem but exacerbate it. 

Congress needs to exercise more restraint and caution now as it considers the expansive spending bills that appear likely to pass. It is very likely that they are setting up the nation for unpleasant economic times, hurting the poorest among us the worst. The growth in the Consumer Price Index is an omen for Congress to take a step back and trim those bills.

 

Poverty Agenda 2021 | 5 policy prescriptions to reduce poverty in Georgia

Poverty Agenda 2021 | 5 policy prescriptions to reduce poverty in Georgia

by | Jan 6, 2021

Poverty Agenda 2021 | 5 policy prescriptions to reduce poverty in Georgia

As the Georgia Legislature reconvenes next week, the Georgia Center for Opportunity (GCO) is calling on lawmakers to make poverty-fighting measures one of their top goals. Along these lines, GCO has released the following 5 recommendations to reduce poverty in Georgia and expand economic mobility:

Civil Asset Forfeiture

GCO produced a report (PDF download) examining Georgia’s civil asset forfeiture procedures. Civil asset forfeiture laws allow for an arrested person’s property to be seized, sold, and the proceeds used for law enforcement purposes, even if a person is not convicted of a crime. Our report makes several recommendations to improve transparency and accountability in this program. GCO will seek to have our recommendations passed into law.

Occupational Licensing

Following up on legislation passed last year benefiting spouses of our brave military personnel, GCO will support legislation to allow many other people who move to Georgia and hold an occupation license to immediately be granted a provisional license. This will allow these new Georgians to immediately go to work and support their families.

Criminal Justice Reform

GCO will support legislation that seeks to remove suspending the driver’s license of a person late on their child support payments. We approach this topic with sensitivity, knowing these payments are meant to support children, but losing a driver’s license impacts the debtor’s ability to work—and thus the ability to pay. There are better ways to hold people accountable for past due child support.

Education Scholarship Accounts

GCO has long supported empowering parents by creating Education Scholarship Accounts (ESAs). We will support such legislation again this year. ESAs take the state portions of a child’s education funds and allow parents to seek other educational pathways for their child. This is especially important in the time of COVID-19, where face-to-face instruction is limited but still extremely important to a child’s development.

Special Needs Scholarship Program

Last year, GCO championed legislation to fix a loophole in Georgia’s Special Needs Scholarship Program that has been keeping thousands of otherwise eligible children out of the program. The legislation passed the Georgia Senate, but was sidelined when the pandemic hit our state. We will work to see this legislation pass both Legislative Chambers and be signed successfully by Governor Kemp this year.

The GCO team will keep you updated throughout the session as we work on these priorities. Keep up with us on Facebook or Twitter for regular updates and be sure to join us for Get Buzz’d a live update on Facebook from our VP of Policy, Buzz Brockway. Buzz shares his insight into how policies will impact your everyday life.

The Pandemic Doubles the Food Stamp Program Part 1

The Pandemic Doubles the Food Stamp Program Part 1

by | Dec 6, 2020

The Pandemic Doubles the Food Stamp Program

Part 1

By Erik Randolph

The monthly spending for food stamp benefits in Georgia nearly doubled since before the start of the pandemic. Surprisingly, only 45.3 percent of the increased spending is due to increased participation. The remaining 54.7 percent is due to enhanced benefits.

Congress Makes a New Food Stamp Rule

On March 18th, the U.S. Senate passed H.R. 6201 that the U.S. House of Representative passed just four days prior. President Donald J. Trump signed the bill that same day, making the Families First Coronavirus Response Act (P.L. 116-127) the second federal law to address the looming pandemic. 

The food stamp provisions in the law suspended work and work-training requirements and allowed states to request waivers to give recipients the maximum allotment for the Supplemental Nutrition Assistance Program (SNAP), the official name of the food stamp program. 

Along with all other states, Georgia requested and received a pandemic-SNAP waiver—P-SNAP for short. P-SNAP lasts as long as there is a declared health emergency by the Secretary of Health and Human Services, and the waivers are renewed on a monthly basis.

Here is what it means in practice: Currently, all households of the same size receive the exact same food stamp allotment. An eligible single mom with one child receives $374 a month in food stamp benefits, the same amount as every other eligible two-person household in Georgia, no matter what income the household earns. It does not matter if the single mom has no income or makes $22,400 annually, which is just below the gross income limit. She still receives $374 each month in benefits. 

Likewise, an eligible four-person household currently receives $680 each month no matter if the household has no income or $34,000 in income, which is also just below the gross income limit.

During normal times, DFCS calculates net income of the household by subtracting several deductions and allowances from a household’s gross income. Then, to determine the amount of the benefit, DFCS subtracts 30 percent of the calculated net income from the maximum allotment. 

Benefits and Costs 

The number of Georgia households participating in the food stamp program was 626,808 in February 2020. As of September, that total was 905,949 households—a 44.5 percent increase. The number of persons participating increased from 1,342,624 to 1,862,486 for a 38.7 percent increase. 

The regular issuance of food stamp benefits followed the increase in household participation. It increased from $163,247,601 to $236,170,166—a 44.7 percent increase. Although the average fluctuated as much as $10.58 on a month-to-month basis, the average household benefit was $260.44 in February compared to $260.69 in September, which are almost identical. 

However, P-SNAP enhanced the size of the payments to the participants. When combined with the regular issuance, the total benefits in September were $324,169,118 for a 98.6 percent increase, increasing the average household benefit to $357.82. Note that these numbers do not include $100,385,379 for free and reduced price school lunches in September that were funneled through the Electronic Benefit Transfer cards that are used to issue the food stamp benefits. 

Pandemic doubles food stamps image (2)

Was this the Best Way to Do it?

Note that Congress did not allow the states to expand the number of participants beyond the normal eligibility criteria for the program. The P-SNAP benefits of $581,085,040 spent since March were spent on those who would have normally qualified for the benefits.

Consequently, the households who benefited the most from the extra funding were those households with the higher incomes just under the eligibility limits. My next blog will show in greater detail how P-SNAP caused the welfare cliff to jump in magnitude.

In the meantime, if you have an opinion on whether this was a fair way to allocate extra funding for food stamps, be sure to let us know in the comments below.

 

Check Out Part 2
Erik Randolph is Director of Research at the Georgia Center for Opportunity. This blog reflects his opinion and not necessarily that of the Georgia Center for Opportunity.