February 2008 No. 7 Table of Contents IN’s presidential primary impact IN’s political $$ Too HIP to be square Bush’s FY09 budget - DOA Economic stimulus?

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IN’s presidential primary impact

Super Tuesday didn’t settle things. No presidential candidate has the nomination locked up. Counting the Feb. 12 “Potomac” primaries, Senator Obama has 30% of the 4,049 delegates for the Aug. 25-28 Democratic National Convention in Denver. Senator Clinton has 29%. Senator McCain has 34% of the 2,380 delegates going to the Sept. 1-4 Republican National Convention in Minneapolis-St. Paul and may be hard to beat. Edwards, Guliani, and Romney have stopped campaigning.

CNN notes that these counts include “superdelegates” who are leaning toward but not necessarily pledged to candidates, as the primary vote counts are. Superdelegates are governors, senators, members of national party committees, or other partisan leaders. So these % are estimates. Edwards and Romney have yet to release the delegates they won. Michigan and Florida were sanctioned for disobeying national Democratic rules and don’t have official primary delegates, but that remains to be seen.

Debates and fund-raising will continue. By Indiana’s May 6 primaries, it is likely that, with their winner-take-all primaries, Republicans will have their choice, but maybe not in the Democrats’ proportional allotment system. So, Indiana Democrats may have a chance to make a difference. We’ll see.

IRS warning. Nonprofits must continue to refrain from endorsing or opposing election candidates, else they could lose their tax-exempt status, the IRS reminds us. Even Web site links as well as voter guides and newsletters must be neutral.

IN’s political $$

As May and November elections near, you can expect politicians’ receptions to multiply. They’re out raising money, just as United Ways and other charities do…all the time. Though incumbents have dollars left over from previous campaigns, they all are seeking even more because the Statehouse, the General Assembly, Congress, and the White House are at stake. Counting only reportable $200+ contributions, presidential candidates had raised $1.6 Million from Hoosiers by the end of 2007. That total would fund any one of three-fourths of United Ways in our state, and the election season is only started. Wait until the legislature adjourns and Indiana’s congressional, statehouse, and General Assembly contests heat up. See www.indianacampaignfinance.com/INPublic/inHome.aspx to track the Indiana campaign dollars and donors.

Too HIP to be square

So many Hoosiers signed up for the new Healthy Indiana Plan (HIP) that the state has suspended the ads encouraging people to enroll. More than 21,000 have applied. The 44¢ per pack increase in cigarette tax funds the program along with leveraged federal dollars—about $400M per year. Some 550,000 Hoosiers could qualify, especially now that higher 2008 federal poverty guidelines are in effect.

So far, the state has processed only 30% of those who applied, and one-fifth of those processed were rejected because their incomes were too high or they were eligible for employer-sponsored plans. To date, less than 8% are conditionally or fully approved. Yet, the additional volume of applicants required the state to double its processing staff. The HIP:

• is for uninsured adults, aged 19-64 with incomes less than 200% of federal poverty lines
• gives $500 a year in free preventive health care (smoking cessation, mammograms, flu shots)
• requires participant contributions (ranging from 2% to 5% of gross household income) into $1,100 health savings account, also funded by the state and willing employers
• is for medical costs exceeding $1,100 benefits of at least $300,000 annually.

Lawmakers may try to revise some rules this session.

Hoosiers in every Indiana county applied for HIP. Family and Social Services Administration chief Mitch Roob reported to the legislature last week that:

• revenue from the new cigarette tax is 4% lower than 2007 projections
• physician reimbursement increased 25% due to bonuses to expand provider access and care
• employers and workers can purchase health insurance on a pre-tax basis
• children’s health insurance (S-CHIP) cannot expand to families with incomes over 250% of the poverty line (FPL) until 95% of eligible kids are enrolled—Indiana was set to go to 300% in 2008
• continuous eligibility for kids under age 3 was started last November
• expanded childhood immunizations required $4M more in vaccines
• income eligibility for pregnant women coverage rose from 150% to 200% of FPL.

For more details, go to www.in.gov/fssa/hip or contact IaUW’s Lucinda Nord.

Bush’s FY09 budget - DOA

Congressional incumbents aren’t likely to allow a vote on Bush’s last $3.1T budget package before Nov. 4. Advocacy groups and think tanks are already analyzing what’s wrong or right about it…from all directions. Here are the bare bones:

• the plan has 2012 balanced budget
• a sagging economy will likely raise the FY 08 federal deficit to more than Bush’s projected $410B, based on rosier forecasts than most others
• no estimated war costs after February 2009
• the Pentagon gets a $7B increase
• freeze on Medicare/Medicaid health provider payments and cuts to hospitals serving most uninsured
• the $48B surplus by 2012 depends on killing or cutting funding for 151 programs, e.g., $738M less for two home energy efficiency efforts for the poor, 27% less for 21st Century after-school $$, big social and community service block grant cuts
• a 5-year freeze on domestic programs funded each year, e.g., food programs for pregnant women and their children and many education programs
• no plans to safeguard middle class from alternative minimum taxes (ATM) aimed at the wealthy
• the national debt is now $9.2 Trillion, up 61% from 2001.

Expect a big debate on the budget through October.

Economic stimulus?

Bush signed the law Congress rushed through to spur the sagging US economy with consumer spending and businesses tax breaks. Here are the details:

• rebate checks will begin in May, based on 2007 tax returns due by April 15
• individuals get $600, couples $1,200, plus $300 per child
• individuals making up to $75,000 a year and couples up to $150,000 will get the full rebate, while those making more or too little to owe taxes will get less
• people paying no income taxes but who got at least $3,000 from Social Security or veterans’ disability benefits will get a $300 rebate
• temporarily raises the limit on FHA, Fannie Mae, and Freddie Mac loans to $829,750
• over 2 years, it grows the federal deficit $168B.

The National Governors Assn did not get their desired $6B in Medicaid changes and a flexible block grant to stimulate state economies. When Senate Democrats tried to add $14.5B in aid for the unemployed, $1B in heating assistance, and tax breaks for energy companies, Senate Republicans threatened a filibuster. The compromise emerged so lawmakers could get checks out in time to make a difference in the economy. Only time will tell.

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