Housing on the Precipice

By Jose Garcia, Policy Fellow, Wealth-Building Policy Project, NCLR

Home for GoodAs 2013 approaches, the clock most people are watching is not in Times Square but in Washington, DC, where the countdown to the fiscal cliff has begun.  Lawmakers face a self-imposed deadline of December 31 to figure out how to deal with tax hikes and spending cuts.  If an agreement is not reached, the Congressional Budget Office projects that it could cost the U.S. two million jobs next year.  This drastic job loss could hamper the housing recovery, and the timing could not be worse.

The U.S. is still reeling from a recession that drained more than $17 trillion in wealth from American families, disproportionately affecting low- and middle-income families and communities of color.  Hispanic families lost an alarming 66% of their household wealth.  Their ability to save and invest in their families, their communities, and our nation’s economy has been severely limited by high rates of unemployment, stagnant wages, and an increased cost of living.  Yet on the cusp of a new year, the U.S. is trying to balance the budget by putting the confidence of consumers and our few, hard-earned economic inroads at risk.  For Latino families, the fiscal cliff could mean a return to double-digit unemployment, affecting their ability to keep a roof over their heads.

If an agreement is not reached, the U.S. Department of Housing and Urban Development will suffer 8.2% in cuts to a number of programs, including $1.5 billion to tenant-based rental assistance and $4 million to its Housing Counseling Program.  For homeowners, fewer jobs could lead to a new wave of foreclosures as newly unemployed workers struggle to make mortgage payments.  Decreases to funding for housing counseling could further erode Latino home equity, as there will be less assistance available to help families save their homes.

Cuts to housing subsidies put at risk the housing of millions of families who rely on these subsidies to make ends meet.  For these renters, this assistance provides a way to cover the cost of basic living expenses and survive economic shocks from unplanned emergencies like car repairs.

The fiscal cliff also threatens to slow the momentum in the housing market, as nervous consumers may be less likely to purchase a new home.  Uncertain about tax hikes or job losses, prospective buyers may hold off on purchasing a home until they feel more secure about their economic prospects.  Fewer homebuyers could stall growth of the housing market, and from there the fiscal cliff could lead to an economic slump that may result in greater reliance on economic assistance.

As was evident during the last election, the issues that are important to Latinos can no longer be ignored.  Hispanic voters have rejected a strategy that would focus only on spending cuts.  Instead, Latinos want to see a balanced approach that raises revenue by requiring everyone to pay their fair share of taxes.  Like all Americans who are still recovering from a deep recession, Latinos are most concerned with rebuilding our nation’s economy.  Recent polls show that Latino voters overwhelmingly support strategic investments in education and infrastructure over cutting taxes as the best way to spur economic growth.  The fiscal cliff provides the U.S. with an opportunity to work toward a better future for all by helping our workforce acquire the skills needed in today’s market, and by taking care of the elderly who worked tirelessly to make the U.S. one of the most prosperous nations in the world.  This can all be accomplished while still balancing the budget and avoiding sequestrations.  We need to be smart about the budget challenges that our nation faces.  We cannot afford to put the housing of working families at risk just to keep giving tax breaks to rich individuals and corporations.

We’re Taking Our Concerns about the Fiscal Cliff Straight to the White House!

If you’ve been following us on Facebook, Twitter, YouTube, or our blog, you know that we’ve been doing lots of work on the so-called “fiscal cliff” that has been bandied about in the media over the past few weeks.

At NCLR, we’re especially proud to bring you a message from one person who had a seat at the table where these talks are happening.  This past Friday, Fernando Garavito joined Vice President Joe Biden and others to talk about the impact that the fiscal cliff will have on Latino families.  Fernando, who works for NCLR Affiliate CASA de Maryland, joined the lunch as a representative of the Latino community, along with others who represented people with disabilities, students, African Americans, and more.

Check out Fernando’s short story below and let us know what falling off the fiscal cliff will mean to your family.  Share your own story here or in the comments below.

Here are a few other stories we have received from our network:

Nancy: Taxes on the extremely wealthy should be returned to the levels they were during President Clinton’s administration. People making $250,000 or less should have their taxes kept low so that we do not fall back into a recession.

Wayne: The wealthy have had it easy for years not only because they don’t have financial problems like we of the middle class, but because they have a huge surplus of money to meet emergencies unlike we of the middle class. Since they have benefited most by the growing debt, it is only fair that they now “pay their dues”!

Linda: We have a 32 yr old daughter who is bi-polar and will never be able to hold a job. Her husband took her children and dropped her on our doorstep. Because of cuts, in the state she gets no legal help, no financial aid, and no medicaid. That means she is not able to get all the medication she needs and she can’t get a lawyer to fight her husband for it. We are struggling ourselves (my husband is a disabled veteran who is still job hunting 4 months after getting a Master’s in Social Work) and all we can do is give her a place to stay and food to eat. In two months we will have to start paying back student loans even though my husband has not found work. Any cuts will just make it harder.

Pulling the Plug on Job Training Undermines Our Global Competitiveness

By Catherine Singley, Senior Policy Analyst, Economic and Employment Policy Project, NCLR

Plenty of economists have warned about the negative effects that the so-called “fiscal cliff” would have on jobs. The Economic Policy Institute estimates that if Congress fails to act before the New Year, then employment losses will total 1.6 million jobs by the end of 2013 thanks to the expiration of the payroll tax cut, emergency unemployment insurance, and other measures.  Automatic cuts to federal programs, from education to health care to housing, would result in another 1.3 million jobs lost.  With our recovery still in its infancy, the last thing our country can afford is to willfully increase the ranks of the unemployed.  Latinos, who still face an unemployment rate of 10%, are rightfully anxious about how Congress is approaching these weighty decisions on taxes and the federal budget.

The fate of Latino workers is not just a Latino concern—it is an American concern.  According to the U.S. Bureau of Labor Statistics, 30% of the U.S. workforce will be Latino by 2050.  It is in our national interest to ensure that Latinos are able to fully participate in and contribute to our economic prosperity.

Labor force projections from the U.S. Bureau of Labor Statistics for 2018 and 2050
Source: Labor force projections from the U.S. Bureau of Labor Statistics for 2018 and 2050.

Yet the “fiscal cliff” also poses significant threats to Hispanics who are striving to reach their full potential as workers, taxpayers, and consumers.  Beyond the specter of fewer jobs, the automatic spending cuts known as sequestration would also devastate our country’s public workforce development system.  Under the Workforce Investment Act (WIA), federal grants give states the resources to educate and train adults, young people who are no longer in school, and workers transitioning out of dying industries.  The need for intensive adult education and vocational training is especially urgent in Latino communities.  By 2018—when Latinos will represent 18% of the American workforce—only 10% of U.S. jobs will be open to workers with less than a high school degree.  Yet today this is the maximum educational attainment of one-third of the Hispanic workforce.  WIA state grants currently serve 153,917 Latino adults and 38,351 Latino youth (about one-third of all youth served).  Cutting WIA funding would widen the education and skills gap that Latinos already face and threaten America’s future competitiveness in the global economy.

For more information about the stakes for Latinos in the federal budget debate, visit www.nclr.org/federalbudget.

Latinos Say No to Medicaid Cuts

By Jennifer Ng’andu, Director, Health and Civil Rights Policy Project, NCLR

With Congress knee-deep in efforts to reach a deal that will avert the fiscal cliff, decision-makers are eyeing health care as a place to cut overall costs.  That’s fair.  Health care spending is the gargantuan elephant in the room (you know, 17.9% of GDP, which is more than the entire economy of France and most other countries).  But in most of the recent discussions about saving money in health care, budget negotiators are focusing on quick fixes that help reach a magic number of cuts instead of making efficient changes that lower long-term spending, often without regard to how the cuts affect people.  This is a dangerous move that could put vulnerable communities—particularly working Latinos and their families—at risk.  And it could be the undoing of one of the most critical health care programs in America.

Medicaid is a health insurance lifeline for those without any other options for accessing affordable care.  For Latinos, who more often than not are denied offers of health insurance in the workplace, the role of the program is even more substantial.  In 2011, 14.5 million Latinos were covered through the program.  That’s more than one in four (27.6%) in the community.  In the same year, the program served as an even more critical resource for our children.  More than half (51.4%) of Latino children under 18 were on Medicaid or its sister program, the Children’s Health Insurance Program (CHIP).

The very last time Medicaid hit the chopping block, hundreds of Latinos wrote in to NCLR overnight to share how the program was making a difference in their lives every day.  Rigo from California’s testimonial was one that could be shared by many Latino families:

As the parent of two special needs teenage children since birth, and with no medical insurance from my employer, it is extremely important for us to keep our Medicaid insurance intact.  My family, and thousands of other families throughout this nation, cannot afford to lose our Medicaid coverage for our children. Continue reading

Latinos Are Watching How Elected Officials Respond to the Fiscal Cliff

By Janis Bowdler, Director, Wealth-Building Policy Project

NCLR hosted a national call today for leaders from the NCLR Affiliate Network, the NCLR Action Network, members of the press, and others engaged with the Hispanic community for a discussion on how to address the country’s budget challenges with a balanced approach that protects vulnerable families.  We were joined by Rep. Xavier Becerra (D–CA); Jason Furman, Assistant to the President for Economic Policy and Principal Deputy Director of the National Economic Council; and Julie Rodriguez, Associate Director of Latino Affairs and Immigration for the White House Office of Public Engagement.  In case you missed it, the call was recorded and is available at www.nclr.org/federalbudget.

According to the exit polls, more than 12 million Latinos cast their vote last month.  Like all Americans, Latino voters went to the polls with the economy on their minds.  The Hispanic community has spoken, and they overwhelmingly favor a fair, balanced, and shared approach to deficit reduction.  More than 700 people signed up for today’s call, which shows that our community’s deep civic participation is continuing.  Hispanic voters are watching carefully to see how federal policymakers address the so-called fiscal cliff in ongoing debates on the federal budget.

NCLR Affiliates on the call wanted to know if lawmakers and the Obama administration will raise taxes on working families or gut critical investments in students and workers.  For example, Dixon Slingerland, Executive Director of the Youth Policy Institute in Los Angeles, raised the issue of unemployment among Latino youth, which is over 20 percent nationwide.  He stressed the importance of providing services for Latino disconnected youth who are interested in returning to school or finding work.  Dixon made a strong case for policymakers to shift their focus to a major jobs package to address the persistent unemployment crisis.

Cynthia F. Figueroa, President and CEO of Congreso de Latinos Unidos, based in Philadelphia, pointed out that poverty and inequality have risen greatly over the last four years in our nation’s urban centers.  Parents are working multiple part-time jobs or low-paying full-time jobs to make ends meet.  In this economy, the Child Tax Credit and Earned Income Tax Credit have been lifelines to Latino families and children.  She pressed the White House to stand firm and not sacrifice these potent antipoverty tools.  Figueroa also highlighted the importance of investing in kids and maintaining important funding for education programs that our youth need.

Olivia Mendoza, Executive Director of the Colorado Latino Leadership, Advocacy & Research Organization in Denver, shared that one in four Latinos in Colorado and two-fifths of children statewide rely on Medicaid for vital health coverage.  It is no secret that Medicaid is a prime target for cuts.  She asked how the White House would protect the gains won through the Affordable Care Act.

Finally, Stephen Torsell, Executive Director of Homes on the Hill in Columbus, Ohio, called attention to the ongoing fight against foreclosures and vacant and abandoned properties in his state.  He asked how the administration aims to preserve funding for vital housing and financial coaching services such as the Department of Housing and Urban Development’s Housing Counseling Program, which has been to be one of the most effective ways of preventing unnecessary foreclosures.

NCLR appreciates the time that the White House staff took to respond to these questions and others by leaders serving Hispanic families.  We hope the administration and Congress take notice of the issues put on the table by those closest to the community.

Latinos sent President Obama back to the White House because of his commitment to fighting for working families.  The fiscal cliff is his first opportunity to act on those campaign promises.  We all agree that something must be done to lower the federal deficit.  However, it is wrong to ask working families to sacrifice education, health care, and their children’s well-being to give tax breaks to people and corporations that do not need them.  Smart investments in education, jobs, and housing will help hardworking families move up the economic ladder—and that will benefit us all.  This is our vision of a fair economy where prosperity is shared by everyone and the most vulnerable among us are protected.

We Can Avoid the “Fiscal Cliff” Without Turning Our Backs on Our Most Vulnerable

By Janet Murguía, President and CEO, NCLR

Janet_MurguiaLike most voters, Latinos cited jobs and the economy as their greatest concern in the days leading up to the election .  The pressing importance of these issues led to an historic turnout of Hispanic voters in the 2012 election and overwhelming support for President Obama’s reelection.  In the post-election period, Latinos are looking to our nation’s leadership to pursue policies that spur economic growth and keep us on the path to recovery.  That progress, however, will be in jeopardy if our nation falls off the dreaded fiscal cliff on January 2, 2013, the day that deep spending cuts automatically go into effect and middle-class tax cuts expire.  Most economists agree that if a compromise is not reached before then, we are more than likely to experience a double-dip recession, slower growth, and rising unemployment.

Latinos have a great deal at stake in the debate over the fiscal cliff.  Not only are Hispanics a growing share of the electorate that will continue to amplify its voice in the political process, they are an increasingly vital force in our economy.  Latino children make up almost one out of four students enrolled in America’s public schools.  And Hispanics will account for 80% of the growth in the workforce between now and 2050.   This means that investing in those future workers today will have an indelible impact on the strength and competiveness of our nation’s economy.

I recently attended a meeting with President Obama and my fellow national civil rights leaders to discuss the fiscal cliff.  We presented a unified message on behalf of those who work for minority communities:  we need to protect the most vulnerable among us in this process, and we should not raise taxes on working and middle-class families.  Balancing the budget on the backs of these people will only widen the opportunity gap that already exists.

Recent surveys show that Latinos support a balanced, fair, and shared approach to deficit reduction.  In an impreMedia/Latino Decisions poll , nearly half of Hispanic voters supported both revenue generation and targeted spending cuts.

The impact of the fiscal cliff would be felt immediately.  It is estimated that over two million Americans will lose unemployment benefits and the average middle-class family would see an increase of approximately $2,000 in taxes.  For Latinos, who face a higher unemployment rate (10%) than the national average, suffered disproportionately from the foreclosure crisis , and are especially vulnerable to the effects of the fiscal cliff, the struggle to stay afloat will become unbearable.

Latinos want the president to keep his commitment to fostering a fair economy.  That means we do not turn our backs on the sick and the hungry.  Rather, we must continue to nurture the social contract that has existed through the generations by making long-term investments that will shape a stable and growing economy.  Cutting those investments is near-sighted and will shortchange not only our community but the long-term prosperity of our entire nation.

Our nation has a long and proud history of fostering opportunities to join and maintain the ranks of the middle class.  We must maintain this tradition if we want to honor those core values that have helped pave opportunities for America’s Latinos.

Changes to CFPB Guidelines on Remittances Keep Responsible Providers in the Game

By Janis Bowdler, Director, Wealth-Building Policy Project, NCLR

One of the first moves by the newly minted Consumer Financial Protection Bureau (CFPB) was to issue a rule implementing new protections for money sent to loved ones abroad, known as remittances.  Americans wire billions of dollars annually.  Much of this business is done by immigrants, who are prey for hidden fees that drain hard-earned cash from those who can afford it least.  Consequently, one goal of the new rule is to spur new technology and infrastructure that will make remittances safer and cheaper to send.  Change is never easy, so I was not surprised when the new rule was met with deep opposition by some industry players.  Still, no one wants to see promising and responsible providers leave the market.

As we approach the deadline for implementation (currently set for February 2013), it has become clear that modest refinements could make it easier for responsible companies to comply with the rule and compete in the market without sacrificing critical protections for the consumer.  CFPB announced yesterday that it will issue draft adjustments for public comment next month.  Richard Cordray, Director of the CFPB, deserves credit for standing firm on safeguarding remittances while also ensuring a workable and responsible marketplace.

Before this provision became law in the Dodd-Frank Act, it was nearly impossible to compare costs between remittance providers.  The new law requires providers to disclose the exchange rate, fees, and the amount of funds that recipients can expect in their home currencies.  It’s this last figure that is the critical innovation.  Let me give you an example:  If you attempt to send $100 to Mexico, one provider may state that your family will receive $1,200 pesos while another may state that your family will receive $1,100 pesos.  For once, your choice has become obvious.  It may be difficult to evaluate the tradeoffs between fees and exchange rates, but knowing the final amount that your loved ones will receive allows for classic comparison shopping.

Other anticipated adjustments include:

  • Financial institutions, or senders, will not be held liable if a consumer provides a wrong account number.  Senders can only match numbers, not names, and therefore have no way to verify the identity of receivers.  They will still have to demonstrate that it is consumer error and will retain responsibility for investigating and recovering funds.
  • Senders will be responsible for published fees, and when such fees are unknowable, they will have to overestimate so that the consumer has the advantage.
  • Senders will have to account for the country federal tax, but not city or county taxes.  There are very few local taxes, and those that exist are extremely modest.

NCLR firmly stands behind the CFPB’s original proposed regulations as well as recent amendments that will encourage greater openness and accountability in the remittance market.  These rules will ensure that banks and other senders can continue to offer this very important product to Latinos.

Congress. Listen to Latinos: Raise Revenue and Reject Cuts to the Poor

By Janis Bowdler, Director, Wealth-Building Policy Project, NCLR

The 2012 presidential election debate centered on how best to jumpstart our economy and spur job creation.  The candidates campaigned on their opposing plans, drawing stark contrasts on fundamental economic issues such as taxes, health care, and the national debt.  Hispanic voters went to the polls in record numbers and with a clear message:  Grow the economy in a way that we all prosper.  In fact, more than half of Hispanic voters said the economy weighed heaviest on their mind as they cast their vote for President.

So we’re pleased to see the President kick off the debate on the so-called fiscal cliff by standing by his campaign pledge to reduce the deficit in a balanced way, including asking the wealthy to pay a little more so we can invest in the next generation.  In an election eve poll Hispanic voters expressed their overwhelming support for this approach.  When asked how we should go about reducing the deficit, 35 percent support raising taxes on the wealthy and 42 percent support a combination of revenue generation and spending cuts—and not on the backs of the poor.  Notably support remains high for revenue plus cuts across party lines.


Click to enlarge
Source: ImpreMedia/Latino Decisions 2012 Latino Election Eve Poll

Latinos have a lot at stake in how Congress opts to fix our budget woes.  Our community stands to be among the most affected by cuts to safety net programs and investments that would grow the economy, such as education and job training.  By 2020, three out of four workers joining the labor force will be Hispanic.  Our economy—and our retirees—will benefit from a productive, educated workforce.  Moreover, our community is younger than others, which means it will be Latino children stuck with debt from overspending today.

As they return to work next Tuesday, Congress would do well to listen to Hispanic voters and raise revenue and reject cuts that would put millions back in poverty.