Let’s Give Our Children a More Certain Future This Holiday Season

By Janet Murguía, President and CEO of NCLR, and Bruce Lesley, President of First Focus

The New Year usually symbolizes an opportunity for new beginnings and growth, but American households face a very different reality in 2013. On January 2, the fiscal cliff will leave many families with $2,000 less to put food on the table, or even a roof over their children’s heads, unless Congress comes to a budget agreement this month.

The fiscal cliff’s automatic, across-the-board budget cuts come at a time when children and their families are already struggling. Kids are facing the highest levels of poverty since the Great Depression, and Latino children are faring the worst: about 1-in-3 Hispanic kids live in poverty today. If sequestration goes into effect, federal funding for kids will be cut by an additional $6.4 billion in Fiscal Year 2013.

Children represent the largest constituency of Americans who would be impacted by the fiscal cliff at 30 percent of the U.S. population. And Latino children now make up nearly 1-in-4 children under the age of 18, and are critically important to our nation’s future. An analysis from NCLR (National Council of La Raza) highlights what sequestration means for our kids:

  • 96,000 children will not be served by Head Start, including 34,000 Latino kids
  • 80,000 children will not receive the Child Care Development Block Grant, including 16,000 Hispanic children
  • 1.8 million low-income public school students will not receive extra reading and math help because of cuts to Title I. The 37 percent of Latino kids who attend high-poverty schools could be affected by these cuts.

We saw from the recent presidential election that Latinos, as a voting bloc, highly favor greater investment in all our children. At 10 percent of the electorate and over 12 million voters, the historic turnout of Hispanic voters is a critical factor in urging politicians to take action for kids. A nationwide election eve poll released by Lake Research Partners on behalf of First Focus Campaign for Children (FFCC) shows overwhelming support from Latino voters for a wide range of federal investments in America’s children at levels higher than voters of all demographics and political affiliations.

The damage sequestration would mean to kids is simply unacceptable to Hispanic voters and the public at-large that broadly supports raising revenue and oppose budget cuts that impact kids. Latino children are one of the fastest growing segments of kids in school. Cutting programs that contribute to their development and ensure they are prepared to meet the requisites of a future labor market would not only hurt their personal future success but undercut the strength and competitiveness of the nation’s economy. This is not lost on Hispanic voters who consistently list education and children’s issues at the top of their priority list.

In another poll conducted by Public Opinion Strategies on behalf of FFCC, the majority of American voters disapprove of Congress making budget cuts to an array of children’s programs, including: education (75-24%), the Children’s Health Insurance Program (74-17%), Medicaid (73-27%), child abuse and neglect (66-33%), the Child Tax Credit and Earned Income Tax Credit (63-34%), student loans and financial aid for college students (59-40%), Head Start (59-40%), and child care (54-44%).

Despite the popularity of investing in America’s next generation, discretionary spending on children has declined by about $2 billion since 2010. Children have borne a disproportionate share of the spending reduction to combat the federal deficit. In fact, the share of federal spending going to kids fell six percent in the past year.

The budget and impending sequestration clearly do not align with our children’s needs, and what voters want. Kids and their families deserve better. Let’s hold our lawmakers accountable. Contact your representative and tell them to keep kids off the table.

As Fiscal Cliff Draws Nearer, There Is No Time For a Plan B

By Janis Bowdler, Director, Wealth-Building Policy Project

This New Year’s, many Americans across the country will have quite a bit weighing on their minds at a time when they are supposed to be clinking champagne glasses and making their resolutions for 2013.  In less than two weeks, our country will go over the fiscal cliff, resulting in a tax hike for millions of Americans and severe funding cuts to education, health care, and housing programs, to name a few.  That is unless Congress and the Obama administration can reach a deal on the federal budget.

For a brief moment earlier this week, it appeared that both sides were willing to compromise.

But that glimmer of hope was fleeting, and it seems negotiations are at a standstill.  Republican leadership is now pushing “Plan B,” which the House will vote on tonight at 6:00 p.m.

Simply put, “Plan B” is bad for Hispanic families.  It fails to meet NCLR’s principles for a fairer federal budget.  The plan further reduces tax liability for those at the top while pushing working families toward poverty.

The wealthiest would be the big winners should this plan pass.  Under “Plan B,” millionaires would get an estimated $50,000 tax cut, while 25 million middle class families making less than $250,000 a year would see their income taxes increase by an average of $1,000 apiece.  And,millions would lose access to the Child Tax Credit, as well as the Earned Income Tax Credit, which are valuable tools that help prevent many Latinos from falling below the poverty line.

All of this while also allowing the sequester to move forward, gutting critical investments in education, jobs, and housing.  For example, in many poor districts, where federal funding covers a substantial portion of their budgets, for every $1 million that a school district receives in federal funding, sequestration will take away $82,000.  For districts with disproportionately large Hispanic and Black populations, that loss could have devastating effects.

“Plan B” is not a viable option for Latinos or this country.  Thankfully, President Obama has already issued a veto threat.  However, that does not mean both sides should stop trying to reach an agreement.  We strongly urge House Speaker Boehner and President Obama to put America’s working and middle-class families ahead of politics.  We need a fair approach to deficit reduction where everyone pays their share.

We must end this stalemate.  Far too much is at stake for the American people.  Nobody wins if we go over the fiscal cliff, and the clock is almost up.

We’re a Unified Voice for Communities

By Jesus Altamirano, Regional Field Coordinator, Colorado

Not much can keep our Affiliates down when they band together.

Our Colorado Affiliates know this well. Recently, NCLR Affiliates El Comite de Longmont, Scholar-to-Leader Academy, GOAL Academy, and Mi Casa Resource Center, descended on Denver to speak to U.S. Senators Mark Udall (D) and Michael Bennet (D) about the impact of the impending debt crisis, the so called “fiscal cliff.” Like NCLR, our Colorado Affiliates are concerned about the effects extreme cuts would mean to the millions of American Latino families who rely on vital social services and they expressed just that to their senators.

Kudos to our Colorado Affiliates for being champions for communities! Check out some photos of their advocacy below and then tell us what the impending fiscal cliff crisis could mean to you.

Colorado advocates in their meeting Colorado advocates outside the meeting Colorado advocates in their meeting

The Federal Housing Administration: Unsung Hero of the Housing Market

By Jose A. Garcia, Policy Fellow, Wealth-Building Policy Project

The Federal Housing Agency (FHA) is one of the unsung heroes of the housing market.  Despite helping to save the housing market following the mortgage crisis in 2007, the FHA is continuously attacked, erroneously, for its commitment to provide mortgage liquidity in times of need and encourage lending to low income households.

American Enterprise Institute (AEI) recently released a report on the riskiness of the Federal Housing Administration’s (FHA) lending practices.  The report conflates and confounds data to reach misleading conclusions and recommends unnecessary changes.  FHA’s current financial challenges are overwhelming due to loans insured between 2007 and early 2010 as well as a single loan product:  seller-financed mortgages.  However, its losses are not due to creditworthy borrowers with lower credit scores and lower down payments, and AEI would do well to remember that correlation is not causation.  Furthermore, FHA no longer insures seller-financed loans.

If that is not enough for you, let’s look into this further.  For decades, lenders have been able to successfully provide reliable and sustainable mortgage products to low income communities across the country that are profitable for the markets and fair to vulnerable borrowers. A decade long study conducted by UNC Center for Community Capital of 46,000 low-income homeowners found that of those who received traditional 30-year, fixed-rate mortgages with a small down payment, 95% of homeowners were paying their mortgages. UNC’s study shows that correctly structured home loans to low-income households perform quite well, leading to sustainable homeownership and sound business opportunities for lenders.

For many low- and middle-income American households and communities of color, the FHA is a critical part of the mortgage lending repertoire to access homeownership.  By insuring loans made by private lenders—even during severe economic downturns—the FHA provides stability to the housing market and access to credit.  This was never truer than after the recent housing crisis, when credit became difficult to access and many lenders turned to the FHA.  Now the 78-year-old agency may need help to continue its good work, and if it does, American taxpayers should lend a hand.  Doing so benefits not only families looking to purchase their first home but the economy at large.

The FHA helped hold down the fort as the housing market reeled from the aftermath of bad loans and Wall Street greed.  Based on an analysis by Moody’s analytics, the agency’s actions in 2011 alone helped prevent housing prices from decreasing an additional 25% and from a 40% decrease in the sales of new and existing homes, saving three million jobs and half a trillion dollars in economic output.  By stepping in, the FHA rescued tens of thousands of middle-class families from losing their home equity and, in many instances, their homes.  The agency did this by backing a larger share of mortgage originations as private investors fled the housing market.  At the peak of the housing bubble,  FHA insured one-third of loans made in 2009, compared to 5% before the alarms rang in 2006.

Despite the important role that the FHA played in keeping the housing market from total economic collapse, Edward Pinto from AEI stated that, “This paper reports on a comprehensive study that shows the FHA is engaging in practices resulting in a high proportion of low- and moderate-income families losing their homes.”  Fiscal projections point to a shortfall between what the FHA needs to cover all its claims over the next 30 years and how much it has on hand.  FHA’s possible shortfall was not caused by lending to low- and middle-income households but rather due to maintaining liquidity in the housing market.  The shortfall does not mean a definitive need for taxpayer monies to cover it—it will be months before we know that for sure.

The FHA has already addressed unsustainable programs that contributed to its trouble.  Its seller-financed down payment assistance program, which called for the originator to cover the down payment, often resulted in originators inflating the purchase price of a home in order to do so.  This in turn led to financially unstable loans, especially during the recession, that resulted from the subprime debacle.  Congress banned the program from FHA insurance in 2008, after FHA had tried to eliminate the program for years.

While the seller-financed down payment program did not work, most FHA products do.  Low- and middle-income borrowers and communities of color have benefited from sustainable and profitable mortgage loans insured by the FHA.  The FHA provides a necessary service that the conventional market does not provide.  However, by pointing fingers at the FHA, critics are undermining the ability of an agency that has been critical in keeping the mortgage market accessible and affordable, providing sustainable pathways to homeownership for millions of Americans.

Now It’s Personal: Viewing the Fiscal Cliff from the Perspective of Youth

By Mario Enríquez, Líderes Associate, NCLR

The fiscal cliff has been a hot topic in recent weeks.  From the TV screen to endless posts on our newsfeeds, we can see that the fiscal cliff will not be good for anyone, especially youth.  As a young person you may ask yourself, “What is the fiscal cliff and how exactly does it affect me?”  Some might say, “Why should I care about this?”  The reason is simple:  Out of all the demographic groups in this country, young people will feel the impact of the fiscal cliff the longest, not only now but for decades to come.  Yes, many of us may not earn enough right now to potentially lose $2,000 in taxes, but we should consider how this will affect us down the road.

Failing to avert the fiscal cliff will only exacerbate the already deep hole we are digging for ourselves with our national student debt and our unemployment rate.  As a member of the Millennial Generation, I have seen my friends struggle to find a job that fits their career goals. Black and Latino youth, who are the fast-growing segments of our young people, are suffering unemployment rates of 23% and 18% respectively.”  These rates are much too high, and we cannot bear the burden of inaction from Congress.

We grew up believing in the notion of the American Dream, that if we work hard we can succeed and prosper in America.  We have aimed to achieve this dream for ourselves, for our families, and for our communities.  We know the value of hard work and are ready to join the workforce in our respective fields.  Young people across this country should not have to worry about massive student debt.  We need to start holding the Obama administration and Congress accountable to ensure that we, too, have a fair shot at pursuing the American Dream.

I ask you to think about your personal situation and what life would be like if you didn’t have opportunities to succeed.  What would that mean for you?  We are the leaders of today and tomorrow, and I know that if we stand our ground and make our voices heard, Congress will listen.  We need to start taking action not just for ourselves but also for our families who we fight for every single day.  Let’s get out there and show the power we have as rising leaders in this country!

Fiscal Cliff Will Add to Texas Education Budget Woes

By José Ibarra,Texas Field Organizer and Capacity-Building Strategist, NCLR

For Texas, a state that experienced a $27 billion shortfall during the last legislative session and cut $5.4 billion from the state education budget, going over the fiscal cliff will add yet another problem to an already contentious issue.  Of the education funds slashed in 2011, $1.4 billion was cut from grants and discretionary spending that largely impacted full-day pre-k, parent engagement, bilingual, after-school, credit recovery, and dropout prevention programs—all of which are largely attended by students from disadvantaged backgrounds, including many Latinos.

Should lawmakers in Washington, DC fail to resolve the fiscal cliff, the Texas budget will fall short by more than $1 billion.  Over half that amount will come out of an already taxed education budget in a state where 62% of the student population is composed of racial or ethnic minorities.

A further cut of slightly more than $1 billion could translate into further job and program losses, including the firing of 1,400 teaching and educational support jobs.  This would come on top of 25,000 layoffs for teachers and support staff in 2011 and 2012, despite an increase of approximately 332,000 students in the last four years.  Most of the service cuts will come from Title I grants and special needs programs, which already operate on limited funds and affect underprivileged students.

The bottom line is that Texas cannot afford additional financial strains, especially with regard to the education budget that already saw drastic cuts in 2011 and prompted six lawsuits in state courts surrounding school finance.  It is our obligation to urge federal lawmakers to resolve the fiscal cliff and prevent further cuts to the programs and services that affect the well-being of our children, our state, our economy, and our country.

Why All Mamis Should Make Their Voices Heard on the Fiscal Cliff

By Liany Elba Arroyo, Associate Director, Education and Children’s Policy Project, NCLR

Mamis, think the fiscal cliff isn’t a big deal?  Think again!

The fiscal cliff is approaching rapidly and negotiations between Congress and the White House appear to be going nowhere.  It seems like falling off the cliff is inevitable.  What isn’t inevitable, however, is the damage that this will cause to the economy, our communities, and our schools.

The fiscal cliff refers to the expiration of Bush-era tax cuts and the start of new budget cuts required by the Budget Control Act of 2011 through a process known as sequestration.  How this will affect the economy has been front-page news, but what is talked about less is what happens to our education system on January 2, when the budget cuts go into effect.  For our most vulnerable children, particularly the more than 17 million Latino children in this country, the stakes are high.

While our education system is funded primarily by local property taxes, federal funds account for 8% of all education spending.  However, poor districts receive additional funding from the federal government that they count on to keep schools open, teachers in the classroom, and assistance available to the neediest students.  For some districts, federal funding covers a substantial portion of their budgets.  For example, a recent analysis found that federal funds make up more than 15% of the school budgets in Los Angeles, Miami, and Philadelphia and more than 20% of the budgets in Chicago and Milwaukee.

What does this all mean?  After the fiscal cliff, for every $1 million that a school district receives in federal funding, sequestration will take away $82,000.  For districts with disproportionately large Latino and Black populations, that loss could have devastating effects.  The programs that stand to lose most are those created to help these children compete.  For example:

  • 1.8 million fewer children will be served by Title I, which helps the poorest students.
  • 145,180 children will lose access to before- or after-school programs.
  • 10,899 fewer educators will be available to support special needs students.
  • 26,949 fewer infants and toddlers will receive early intervention services.

Latino children have so much at stake during this debate.  They are 23% of all public school students.  Thirty-seven percent of all Latino children attend the nation’s poorest schools.  Over one-third of all students served by Title I are Latino.  If we fall off the fiscal cliff, our children will suffer the consequences of our inaction.  As the mamis of our future leaders, we must inform ourselves and act to ensure that Congress and the Obama administration make the right decisions.  Our children are depending on us.

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.

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.