Blog, In the News

2016-12-02 | Jennifer Ralston, Alliance For Strong Families and Communities

Shortly before the 2016 presidential election, President-elect Trump released a document promising what he will do in the first 100 days after taking office. His Contract with the American Voter  lays out the overarching policies and programs he would like to advance, with little detail, but it does allow us to glean what the next Administration will focus on and what these priorities mean for the nonprofit human service sector and for the communities that we serve.

His plan is divided into two parts; the first, and most detailed is titled, “Six measures to clean up the corruption and special interest in Washington, D.C.” The last section of his plan, only addressed as “broader legislative matters,” aims to address issues of health, education, and safety. This is the part the Alliance has analyzed to initially determine how these promises stand up to the goals and values of our sector in the areas of population health and well-being, educational success, and economic opportunity. As more detailed proposals become available, we will continue to analyze the possible implications on our sector and the communities we serve.

Population Health and Well-being:

One of the features of the contract is the complete repeal of the Affordable Care Act (ACA), without a program to take its place at the time of repeal. If the ACA is repealed without an immediate replacement, then once a new health program is developed, it cannot be paid for with the savings from repealing the ACA. This could pose a serious challenge to human services entitlement programs, as they are likely targets to help pay for a new health program.

If all provisions of the ACA are repealed, Medicaid expansion would roll back and private subsidies would end; changes that would almost certainly sky rocket the rate of uninsured. In the last six years, the number of uninsured families living around the poverty line fell by almost 50 percent. Those gains would be reversed, and more than 20 million people, many of them just above the poverty line, would lose access to health care.[1] Even less sweeping changes to ACA could have harmful consequences for the many human service programs authorized by this legislation, as the ACA contains many more legislative items than just healthcare. One example is the Maternal Infant and the Early Childhood Home Visiting program (MIECHV), an evidence-based program shown to reduce infant and child abuse, neglect, and fatalities. It is a program that connects newer parents to resources and provides them with tools essential to good parenting and self-care.

Eliminating the ACA or the Medicaid expansions that it provides, could have devastating effects on families, since the largest population of Medicaid recipients is children and [lack of health insurance is one of the leading causes of personal bankruptcy]. The Children’s Health Insurance Program (CHIP) serves just 8 million children, while 37 million children receive their health insurance through Medicaid, thus any Medicaid reduction would disproportionately affect children.

Educational Success:

President-elect Trump has long been an advocate of school choice, ending common core testing, and reducing the federal government’s role in education, even so far as to say that he would eliminate the Federal Department of Education. In his Contract with the American Voter, he proposes the School Choice and Education Opportunity Act, which essentially allows for local school districts to approve public charter school applications, determine the standards of excellence, and allow parents to choose the school that is the best fit for their child. There are the obvious benefits of opening the doors to a higher performing school to a student living in an area where their school – funded by local property taxes – lacks the supports and advantages of schools in more affluent areas. Using school choice as the only solution, however, does not give all children the opportunity to receive an excellent education. It also fails to address the root issue of property taxes funding education and creating the lack of equity we see in schools today.

Additionally, federal Title I funds, part of the Every Student Succeeds Act (ESSA) currently provide monetary assistance to schools in low-income areas, funds individual pupils and not the school itself. Therefore, if a student leaves a designated Title I school to attend the school of their choice, that per-pupil dollar amount follows them to their new, likely more advantaged school, and removes money from an already struggling school. This portability of funds further deepens the divide between schools available to those in lower and higher income communities, while only helping a small portion of those living in lower achieving school districts.

There are other options to improve schools, not necessarily in place of school choice entirely, but certainly to complement. The Community School model is a proven method to educational success. They are hubs where educators and community partners work together, embracing the notion that local communities know their students best. Community schools build on the assets of schools and their communities, including institutions and individuals–and forge partnerships to support and enhance student learning and development.[2] Encouraging all schools to take a more holistic approach and dig deeper ties to the existing community is an approach that can reach all students.

In addition to increasing school choice, President-elect Trump promised to end Common Core testing. How far his administration can go with this proposal or with Title I portability is a question. The bi-partisan Every Student Succeeds Act (ESSA), passed earlier this year, was very careful in limiting the power of the Secretary of Education. According to Education Week, “The law says, very explicitly that the secretary can’t tell states they must adopt—or steer clear of—a particular set of standards, including the common core. And the incoming secretary won’t be able to use federal grants or promises of flexibility to force or entice states to pick a particular state test, use certain interventions to improve their lowest-performing schools, measure student growth in a particular way, or choose a certain method for evaluating teachers.”[3]

“ESSA also makes it very difficult, if not impossible, for the secretary to make changes to the formula for doling out about $15 billion a year in Title I money, which helps school districts cover the cost of educating disadvantaged kids. That means if Mr. Trump is planning to use Title I to fulfill a campaign pledge of a $20 billion school choice program, he’ll have to go through Congress, where such a proposal could have a tough time clearing procedural hurdles in the Senate,” according to Education Week.

Outside of President-elect Trump’s contract, he has mentioned wanting to eliminate the federal Department of Education. This is somewhat possible, but likely to result in block granting many federal education programs. However, what is of real concern are the declarations of the Trump transition team to prioritize reducing programmatic funding and scope to the Office of Civil Rights (OCR) and Promise Neighborhoods. Both of these programs work to ensure equity in our schools and communities. Whether or not the OCR is significantly reduced, it will be imperative for our sector and community leaders to take an active role in ensuring the civil rights of our students are honored and equity in education is the standard.

Economic Opportunity:
President-elect Trump promises to address the rising costs of childcare and eldercare and its impact on families and the economy. To see childcare assistance on a President-elect’s priority list is a step forward for working families. His proposal would allow Americans to deduct childcare and eldercare from their taxes, incentivize employers to provide on-site childcare services and create tax-free dependent care savings accounts for both young and elderly dependents, with matching contributions for low-income families.

Of note, a tax deduction reduces a filer’s taxable income, while a credit reduces the amount of taxes a filer owes. Many lower-income families would not be able to receive a benefit from a deduction at all. If a family does not earn enough to incur income tax liability, it will receive no benefit from a tax deduction. In fact, the more you earn (the more tax liability you have), the more you benefit from this type of credit.

In order to take advantage of a tax deduction, even considering Trump’s matching contributions for low-income families, you would need to fill out an itemized tax deduction, something lower income families are less likely to do or know that is an option.[4]

In order for this promise to be more equitable, the child care deduction could be turned into a refundable credit, allowing all working families to be eligible and reap their entitled benefits.

Challenges and Opportunities for the Nonprofit Human Service Sector:
The Contract with the American Voter does not directly offer promises to the charitable sector, but much of the promises the document lays out will have an impact on the operations of, and potentially the scope of, nonprofit human service providers. President-elect Trump’s promises of building infrastructure, reducing taxes on middle class, increasing military spending, and increasing police training, without increasing revenues will likely either  lead to either increasing the national deficit or cutting discretionary funding, which funds much of  human service programs.

Savings for big spending projects could also come from mandatory spending, where programs such as Medicare and Medicaid could become vulnerable. Although Mr. Trump campaigned on promises to protect these programs, other Republican leaders have indicated an interest in moving to vouchers for Medicare and dramatically cutting Medicaid spending.[5] There is also the possibility that programs such as the SNAP (formerly food stamps) and Medicaid could be turned into block grants similarly to how the Temporary Assistance for Needy Families (TANF) program operates. TANF has not seen a funding increase in the 20 years of its existence, due to the block grant structure, so savings from converting other safety-net programs into block grants is feasible. Additionally, block grants give states extraordinary flexibility in spending the money, only having to justify the spending to, typically, very general goals set forth by the federal government. While the flexibility can be useful to states, block grants can result in reduced funding and wide-ranging parameters for spending the money make the funding streams vulnerable to redirection in order to balance state budgets.

However, decreasing spending to the nonprofit human service and charitable sectors is not something American voters want to see. In fact, according to a recent poll conducted by Independent Sector, voters overwhelming support and trust the charitable sector as an integral part of our economy.

Specifically, the research found that a strong majority of voters (78 percent) support a bigger role for the charitable sector in working with the federal government to produce more effective and efficient solutions to problems, and seventy percent of voters are more likely to vote for a candidate who support policies that help the charitable sector become more involved in government policy making.[6] This underscores the critical opportunity for the nonprofit human service sector to show the importance of how the supports and services we provide supports desired results and to advocate for necessary funding with the support of the public.

The threat of funding being cut for the nonprofit human service sector also signals concerns for friction within the sector, as organizations compete from a limited pool of resources. Capitalizing on this potential friction could be a tactic from those who want to see funding cut for human services. By focusing on our individual missions, whether that be food security or child welfare, we weaken our overall advocacy impact. It will be very important in the coming years for the entire sector to remain a strong cohesive force, advocating for integrated and holistic approaches to achieving well-being for all.

Trump’s tax reform promises, so far, could potentially reduce the amount of individual giving to nonprofits in three ways. His proposal reduces marginal tax rates and increases the after-tax cost of charitable giving. It also raises the standard deduction to $15,000 ($30,000 for couples), thereby sharply reducing the number of taxpayers who would itemize. People who stop itemizing can no longer deduct their charitable contributions and thus lose the tax break. Lastly, he proposed a cap on itemized deductions at $100,000 for singles and $200,000 for joint filers. While the effects are indirect, the Tax Policy Center estimates that Trump’s plan would reduce individual giving by 4.5 percent to 9 percent, or between $13.5 billion and $26.1 billion in 2017.[7]

However, since the Presidential election, charitable giving has been on the rise, especially to organizations protecting equity, civil rights, and the environment. In fact, this past Giving Tuesday on November 29^th, broke records in the amount of donations that poured in. Initial results showed double-digit growth, according to the Nonprofit Marketing Guide. Public sentiment does seem to be in favor of the trust in the charitable community to help solve social and environmental issues. Whether this trend of giving would maintain its record growth under the proposed Trump tax promises, is yet to be determined.

There are opportunities within the Contract with the American Voter. Trump proposes a requirement that for every new federal regulation, two existing regulations must be eliminated. While this proposal, if enacted, will need careful oversight to ensure regulations promoting equity, safety, and effectiveness are not dismantled, this presents a time for the human service sector to identify regulations that significantly impede our ability to deliver programs and services.

This is also a time for our sector to point out what is missing from Trump’s initial promises and work to get these missing pieces in place. For example, focusing more on preventative services in health, well-being, criminal justice, and family well-being are proven to be more effective and cost saving. Educating the next Administration on the power of prevention and the creation of systems of care will help our sector better advocate for these types of policies.

This is also a time to inform the next Administration on how far we have come in understanding how brain architecture is built, and just how much life experiences impact the development of the brain. We know that adverse experiences can lead to poor physical and mental health, addiction, crime, and less success in school and career. This scientific data should be infused into all policy, with the hopes of reducing the root causes of many of our social problems and the amount of money trying to fix those problems, after they have caused serious damage.

What is clear is that we need to prepare to operate differently. With potential cuts in funding, or the threat of safety-net programs being turned into block grants, we need to demonstrate the success and power of our programs on the many lives they touch. We need to show the data and the results. We need to engage local leaders in seeing first-hand the impact that our programs are having. We need to articulate what the impact that less funding would have on the people we serve, the economy, and the over-all safety and well-being of communities. This is a time for our sector to remain strong, connected, and move forward in creating opportunity and innovation.

[1] http://www.theatlantic.com/business/archive/2016/11/things-are-about-to-get-much-worse-for-poor-americans/507143/

[2] Coalition for Community Schools

[3] http://blogs.edweek.org/edweek/campaign-k-12/2016/11/thanks_to_essa_trump_cant_get_.html?r=1931867624&cmp=eml-enl-et-news2-RMb

[4] https://nwlc.org/wp-content/uploads/2016/08/Child-Care-Deductions-Favor-High-Income-Families.pdf

[5] http://www.epi.org/blog/big-gap-between-trumps-promises-middle-class-and-his-policies/?mc_cid=1940336c42&mc_eid=74651324c4

[6] https://www.independentsector.org/polling

[7] http://www.taxpolicycenter.org/taxvox/both-clinton-and-trump-would-reduce-tax-incentives-charitable-giving