ReportWire

Tag: taxes and taxation

  • States have been on a tax-cutting spree, but revenues are now weakening | CNN Politics

    States have been on a tax-cutting spree, but revenues are now weakening | CNN Politics

    [ad_1]



    CNN
     — 

    Fueled by surging revenues, states have been slashing taxes for individuals and businesses for the past three years.

    But the party is expected to come to an end in the coming fiscal year, which started on Saturday in 46 states. Revenue is projected to decline by 0.7% in fiscal 2024, based on forecasts used in governors’ budgets, after an estimated 0.3% dip this fiscal year, according to a recently released National Association of State Budget Officers survey.

    This reversal comes after double-digit percentage increases for the prior two fiscal years. It reflects the impact of slower economic growth, a weaker stock market and a slew of recent tax cuts.

    Some 25 states have cut individual income tax rates since 2021, according to the right-leaning Tax Foundation. This includes 22 states that reduced their top marginal rates.

    “Most states are viewing tax reform and relief as a chance to, first and foremost, return some of their excess revenue to taxpayers, but to also do that in a way that is simultaneously improving the structure of their tax cuts and make it more conducive to long-term economic growth,” said Katherine Loughead, senior policy analyst at the foundation.

    States are also seeking to make themselves more attractive to business investment, as well as to remote and traditional workers, she continued.

    In 2023 alone, at least eight states approved rate reductions, according to the Tax Foundation. Arkansas, for instance, is trimming its top individual income tax rate to 4.7%, retroactive to January 1, after reducing it from 5.5% to 4.9% last year.

    Likewise, Montana lawmakers approved deepening cuts enacted in 2021. Starting in 2024, the top marginal income tax rate will be 5.9%, instead of 6.5% as originally planned. It was 6.9% in 2021.

    In addition, previously scheduled or triggered income tax rate reductions took effect this year in Arizona, Idaho, Iowa, Missouri and North Carolina, as well as for interest and dividend income in New Hampshire, according to the Tax Foundation.

    Aside from individual income tax cuts, states have also lowered the levies on purchases and for businesses over the past three years. Two states cut sales tax rates, while 13 reduced corporate income tax rates and others made additional tax changes that benefited companies.

    In 2023, Nebraska and Utah adopted corporate income tax rate reductions. The former will phase down its top rate to 3.99% in 2027, accelerating an earlier law’s timetable. If fully implemented as planned, Nebraska will slash its top marginal corporate income tax rate nearly in half over six years, according to the Tax Foundation.

    Utah also further reduced its corporate income tax rate to 4.65%, retroactive to January 1. A law passed last year had cut it to 4.85% for 2022, down from 4.95%.

    The tax cuts, along with stock market declines and the shaky economy, have taken their toll on states’ revenues, however.

    State tax revenue fell in 37 states, after adjusting for inflation, between July 2022 and May 2023, according to Lucy Dadayan, principal research associate at the nonpartisan Tax Policy Center. Some 19 states saw declines before taking inflation into account.

    Revenue dropped nearly 12% over the period on an inflation-adjusted basis. All major sources of revenue – personal income, sales and corporate income taxes – declined, though the extent varies widely by state and source. Individual income taxes were the weakest, plummeting more than 22%.

    States are in trouble, though there won’t be an immediate crisis, she said. Much depends on factors that remain unknown, such as whether the nation will fall into a recession or whether states will face natural disasters.

    The robust revenue of recent years was “artificially boosted” by federal Covid-19 pandemic relief funds and the strong stock market in 2021, she said.

    “We knew this is temporary,” Dadayan said. “It would have been better if the states wouldn’t jump and do tax cuts and be more cautious.”

    Still, revenues in fiscal 2023 are coming in stronger than initially expected. The current estimates are outperforming earlier forecasts by 6.5%, according to the National Association of State Budget Officers. Most states have also built up big reserves in their rainy day funds in recent years.

    Whether states will continue cutting taxes in the coming fiscal year will depend on what happens with revenues.

    “A lot of states have done what they can already,” Loughead said. “They will continue to look at how revenues come in and how the rates measure up. If they still are experiencing strong surpluses, I do think they might tweak those rates down even more.”

    [ad_2]

    Source link

  • Fixing Social Security involves hard choices | CNN Politics

    Fixing Social Security involves hard choices | CNN Politics

    [ad_1]



    CNN
     — 

    There’s a reason why politicians have long shied away from addressing Social Security’s massive financial problems. The commonly proposed solutions involve cutting benefits or raising taxes, which would spark an outcry from a range of powerful constituents, including senior citizens and the business community.

    The situation, however, is only growing more critical. The combined Social Security trust funds are projected to run dry in 2034, according to the latest annual report from the entitlement program’s trustees that was released last week. At that time, the funds’ reserves will be depleted, and the program’s continuing income will only cover 80% of benefits owed.

    The estimate is one year earlier than the trustees projected last year.

    About 66 million Americans received Social Security benefits in 2022. It’s a vital lifeline for many of them. Some 42% of elderly women and 37% of elderly men rely on the monthly payments for at least half their income, according to the Social Security Administration.

    Though congressional Republicans’ drive to cut spending amid debt ceiling negotiations this year has prompted renewed interest in the entitlement’s finances, little is likely to happen, experts say. The insolvency date is still too far in the future.

    The last time Congress enacted a major overhaul, in 1983, Social Security was only months away from being able to pay full benefits. At that time, Democratic lawmakers who controlled the House agreed with Senate Republicans and then-GOP President Ronald Reagan to increase payroll taxes and gradually raise the full retirement age from 65 to 67, among other reforms.

    While President Joe Biden has promised to strengthen Social Security and defend it from any cuts by Republicans, he has yet to lay out a concrete vision for protecting the program. It was not included in his annual budget proposal this year, though he did suggest a financial fix for Medicare, which is facing its own solvency issues.

    Asked about the president’s plan, the White House said that the budget “clearly states his principles for strengthening Social Security.”

    “He looks forward to working with Congress to responsibly strengthen Social Security by ensuring that high-income individuals pay their fair share, without increasing taxes on anyone making less than $400,000,” said Robyn Patterson, assistant press secretary at the White House.

    A multitude of proposals have been floated over the years to address Social Security’s shortfall, many of which have multiple measures.

    Several options focus on saving the entitlement program money, though left-leaning advocates and senior citizen groups are quick to point out that these moves are actually benefit cuts that they would strenuously oppose.

    One common proposal is raising the retirement age. Currently, Americans can start collecting Social Security benefits at 62, though doing so would reduce their lifetime payments by as much as 30%.

    The full retirement age, which had been 65 for much of the program’s existence, is slowly rising to 67 for Americans born in 1960 or later.

    Some policymakers advocate for raising the full retirement age to 70 for future retirees, bringing it more in line with changes in life expectancy. That would mean those retiring earlier than that would get smaller monthly checks than under current law.

    Doing so could wipe out about a third of the Social Security trust fund’s 75-year deficit.

    Last year, the conservative Republican Study Committee released a budget plan that called for raising the full retirement age for future retirees at a rate of three months per year until it is increased to 70 for those born in 1978. It would then link the retirement age to future increases in life expectancy, as well as adjust the number of working years included in benefit calculations to 40 years, up from 35 years.

    Other options include reducing benefits for higher-income Americans, which was also included in the Republican Study Committee’s budget plan.

    New retirees’ Social Security benefits are one-third higher today than they were for folks who retired 20 years ago, even after accounting for inflation, according to Andrew Biggs, senior fellow at the right-leaning American Enterprise Institute. Plus, the maximum Social Security benefit in the US is two to three times higher than the maximum retirement benefit in Canada, the United Kingdom, Australia and New Zealand.

    Biggs supports placing a cap on the maximum benefit that the highest-earning retirees can receive. The maximum benefit this year is about $43,000 and will rise to $59,000 by 2050, he said. Though such a cap would only solve about 10% to 15% of the long-term solvency gap, Biggs argues it’s one step, and it only affects those who he says don’t depend on the benefits.

    “We’re going way, way beyond a pure safety net program,” Biggs said at a recent webinar hosted by the Committee for a Responsible Federal Budget, a government watchdog group. “Here we’re looking at a retirement program for middle income and upper income people.”

    Other suggestions that have been floated include changing the formulas that determine the benefits Americans get upon retirement or the annual cost-of-living adjustment retirees receive to slow the growth of payments.

    The main way to bring more money into the Social Security system is to increase the amount of payroll taxes collected.

    A proposal popular among Democrats and left-leaning experts is to lift the wage cap so that higher-income earners have to shell out more in payroll taxes.

    The Social Security tax rate of 6.2% is levied on both employers and employees, for a total rate of 12.4%. However, in 2023, it’s only applied to annual wages of up to $160,200. (By contrast, Medicare’s 2.9% total payroll tax rate is applied to all wages, and higher-income Americans are subject to an additional 0.9% Medicare tax.)

    When payroll taxes for Social Security were first collected in 1937, about 92% of earnings from jobs covered by the program were subject to the payroll tax, according to the Congressional Budget Office. By 2020, that figure had fallen to about 83% as income inequality has increased.

    Several congressional Democrats have floated proposals to raise the amount of wages subject to the payroll tax. Rep. John Larson of Connecticut wants to apply the payroll tax to wages above $400,000, which he says would extend the program’s solvency by nine years.

    Vermont Sen. Bernie Sanders, an independent, and Massachusetts Sen. Elizabeth Warren, a Democrat, introduced a bill earlier this year that would make multiple changes to Social Security, including subjecting all income above $250,000 to the payroll tax and applying it to investment and business income. They say their reforms would extend the entitlement’s solvency for 75 years.

    But changing the wage cap could also alter the fundamental design of Social Security, in which retirees’ benefits are tied to the amount of taxes they paid into the system while working.

    For instance, the proposal from Sanders and Warren would not credit the additional taxed earnings toward benefits. That would increase the beneficial impact on solvency but would also raise resistance among some advocates who believe the link between taxes and benefits should be maintained.

    Another option is raising the payroll tax rate. Increasing it to a total of 16% would just about assure 75 years of solvency, said Marc Goldwein, senior policy director for the Committee for a Responsible Federal Budget.

    Most lawmakers, however, would not find that type of tax hike very palatable, particularly not Republicans who control the House.

    While experts disagree on the best way to address Social Security’s shortfall, one thing they are generally united on is that waiting will only result in having to employ harsher solutions. But that isn’t spurring elected officials to action.

    “Nobody’s acting as if that’s something they’ve got to take seriously,” Biggs said. “So I’ll just be honest and say I’m worried about how this thing plays out.”

    [ad_2]

    Source link

  • Tax prep companies shared private taxpayer data with Google and Meta for years, congressional probe finds | CNN Business

    Tax prep companies shared private taxpayer data with Google and Meta for years, congressional probe finds | CNN Business

    [ad_1]



    CNN
     — 

    Some of America’s largest tax-prep companies have spent years sharing Americans’ sensitive financial data with tech titans including Meta and Google in a potential violation of federal law — data that in some cases was misused for targeted advertising, according to a seven-month congressional investigation.

    The report highlights what legal experts described to CNN as a “five-alarm fire” for taxpayer privacy that could lead to government and private lawsuits, criminal penalties or perhaps even a “mortal blow” for some industry giants involved in the probe including TaxSlayer, H&R Block and TaxAct.

    Using visitor tracking technology embedded on their websites, the three tax-prep companies allegedly sent tens of millions of Americans’ personal information to the tech industry without consent or appropriate disclosures, according to the congressional report reviewed by CNN.

    Beyond ordinary personal data such as people’s names, phone numbers and email addresses, the list of information shared also included taxpayer data — details about people’s filing status, adjusted gross income, the size of their tax refunds and even information about the buttons and text fields they clicked on while filling out their tax forms, which could reveal what tax breaks they may have claimed or which government programs they use, according to the report.

    The report, which drew on congressional interviews and written testimony from Meta, Google and the tax-prep companies, also found that every taxpayer who used TaxAct’s IRS Free File service while the tracking was enabled would have had their information shared with the tech companies. Some of the tax-prep companies still do not know whether the data they shared continues to be held by the tech platforms, the report said.

    “On a scale from one to 10, this is a 15,” said David Vladeck, a law professor at Georgetown University and a former consumer protection chief at the Federal Trade Commission, the country’s top privacy watchdog. “This is as great as any privacy breach that I’ve seen other than exploiting kids. This is a five-alarm fire, if what we know about this so far is true.”

    It is also an example, Vladeck said, of why the United States needs federal legislation guaranteeing every American a basic right to data privacy — an issue that has languished in Congress for years despite electronic data becoming an ever-larger part of the global economy.

    The congressional findings represent the latest claims of wrongdoing to hit the embattled tax-prep industry after a report last year by the investigative journalism outlet The Markup highlighted the tracking practice.

    Wednesday’s bombshell report adds to those earlier revelations by identifying a previously unreported category of data that was allegedly being collected and shared: the webpage titles in online tax software that can reveal what tax forms users have accessed, said an aide to Democratic Sen. Elizabeth Warren, who helped lead the congressional probe. For example, taxpayers who entered information about their college savings contributions or rental income may have done so on webpages bearing titles reflecting that information, which would then have been shared with the tech companies, the aide said.

    During the probe, Meta told investigators it used the taxpayer data it received to target third-party ads to users of its platform and to train its artificial intelligence algorithms, the report said. The Warren aide told CNN it was unclear whether Meta knew it was inappropriately using taxpayer data at the time. A Meta spokesperson said the company instructs its partners not to use its tools to share sensitive information and that Meta’s systems are “designed to filter out potentially sensitive data it is able to detect.”

    The technology behind the data collection, known as a tracking pixel, is commonly used across the entire internet. A small snippet of code that website owners can insert onto their sites, tracking pixels gather information that can help companies, including but not limited to Meta and Google, understand the behavior or interests of website visitors.

    Because of the tracking technology used by TaxAct, TaxSlayer and H&R Block, “every single taxpayer who used their websites to file their taxes could have had at least some of their data shared,” the report said.

    The tax-prep companies at the center of the investigation told lawmakers the collected data had been scrambled to help protect privacy, according to the report. But the report also said some of the tax-prep firms themselves were not fully aware of how much information was being exposed to the tech platforms, and the report cited past FTC research concluding that even “anonymized” data can be easily reverse-engineered to identify a person.

    The pixels’ use in a taxpayer context resulted in the “reckless” sharing of legally protected data that could put taxpayers at risk, according to the report by Warren and her Democratic colleagues Sens. Ron Wyden; Richard Blumenthal; Tammy Duckworth; and Sheldon Whitehouse; Sen. Bernie Sanders, an independent who caucuses with Democrats; and Democratic Rep. Katie Porter.

    The FTC, the Internal Revenue Service, the Justice Department and the Treasury Inspector General for Tax Administration “should fully investigate this matter and prosecute any company or individuals who violated the law,” the lawmakers wrote in a letter dated Tuesday to the agencies and obtained by CNN. The FTC and DOJ declined to comment; the IRS and TIGTA didn’t immediately respond to a request for comment.

    In a statement, H&R Block said it takes client privacy “very seriously, and we have taken steps to prevent the sharing of information via pixels.” Wednesday’s report said H&R Block had testified to using the tracking technology for “at least a couple of years.”

    TaxAct and TaxSlayer didn’t immediately respond to a request for comment. The report said TaxAct had been using Meta’s tools since 2018 and Google’s since about 2014, while TaxSlayer began using Meta’s tools in 2018 and Google’s in 2011. The investigation found that all three tax-prep companies had discontinued their use of Meta’s pixel after The Markup’s report last November.

    Intuit, the maker of TurboTax, received an initial inquiry letter from the lawmakers in December but was not a focus of Wednesday’s report because the company did not use tracking pixels to the same extent, the investigation found.

    Tax preparation firms have faced mounting scrutiny in recent years amid reports that many have turned to data harvesting as a business model and that the largest among them have spent millions lobbying against legislation that could make it easier for Americans to file their tax returns. An IRS report this year found that 72% of Americans would be interested in using a free, electronic tax filing service if it were provided by the agency as an alternative to private online filing services. The IRS plans to launch a pilot version of that service to a limited number of taxpayers in the 2024 tax filing season.

    Google told CNN it prohibits business customers from uploading to its platform sensitive data that could be traced back to a person.

    “We have strict policies and technical features that prohibit Google Analytics customers from collecting data that could be used to identify an individual,” a Google spokesperson said. “Site owners — not Google — are in control of what information they collect and must inform their users of how it will be used. Additionally, Google has strict policies against advertising to people based on sensitive information.”

    Wednesday’s report focuses more heavily on Meta’s use of taxpayer data, the Warren aide told CNN, because Google did not appear to have used the information for its own commercial purposes as overtly as Meta and the investigation was unable to fully determine whether Google may have used the data for other applications.

    The allegations could nevertheless create extensive legal risk for both the tech companies as well as the tax-preparation firms, according to tax and privacy legal experts.

    The tax-prep companies could face billions in fines under US tax law if the federal government decides to sue, said Steven Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center. In addition, the US government could seek criminal penalties.

    “The scope of ‘taxpayer information’ is broad by design,” Rosenthal said, adding that tax-prep companies can be sued for “knowingly” or “recklessly” leaking that information. “The companies shouldn’t be sharing it in a way that some third party could obtain it.”

    Theoretically, he said, the tax code also affords individual taxpayers the right to file private lawsuits against the tax-prep companies. But most if not all of those firms require customers to submit to mandatory arbitration that could realistically make bringing a private claim more challenging, said the Warren aide.

    Apart from the tax code, both the tech giants as well as the tax-prep firms could also face civil liability from the FTC — which can police data breaches and hold companies accountable for their commitments to user privacy — and potentially from state governments that have their own privacy laws on the books, said Vladeck.

    Depending on the strength of the allegations, the tax-prep companies could quickly be forced into a binding settlement, said a former FTC official who requested anonymity in order to speak more freely.

    “If the facts are really strong, these companies would probably rather settle than go to court. This is very embarrassing,” the former official said. “It could be a mortal blow to the tax prep companies.”

    [ad_2]

    Source link

  • Britain’s ‘profound economic crisis’ gives Rishi Sunak only unpleasant choices | CNN Business

    Britain’s ‘profound economic crisis’ gives Rishi Sunak only unpleasant choices | CNN Business

    [ad_1]


    London
    CNN Business
     — 

    Rishi Sunak, Britain’s third prime minister in seven weeks, took office on Tuesday with a pledge to fix the “mistakes” of predecessor Liz Truss and tackle a “profound economic crisis.”

    The task won’t be an easy one, he acknowledged.

    “This will mean difficult decisions to come,” Sunak said in his first speech from No. 10 Downing Street.

    The United Kingdom was already sliding towards a recession when Truss took office in September, as soaring energy bills ate into spending. Now, Sunak has another headache: He must restore the government’s credibility with investors after Truss’ unfunded tax cuts sparked a bond market revolt, forcing the Bank of England to intervene to prevent a financial meltdown. Borrowing costs, including mortgage rates, shot higher.

    Accomplishing this goal will require delivering a detailed plan to put public finances on a more sustainable path. (A government watchdog warned in July that without major action, debt could reach 320% of the UK’s gross domestic product in 50 years.)

    The problem? There’s little appetite for government spending cuts after years of austerity in the wake of the 2008 global financial crisis. Plus, failing to help households deal with surging living costs could prove politically devastating and further weigh on the economy.

    “It’s not a particularly pleasant economic hand to be dealt [as] a new prime minister,” said Ben Zaranko, a senior research economist at the Institute for Fiscal Studies.

    Finance minister Jeremy Hunt got the ball rolling last week when he reversed £32 billion ($37 billion) in tax cuts that formed the bedrock of Truss’ plan to boost growth.

    Yet Sunak and Hunt — who will stay in his job — still need to find between £30 billion and £40 billion in savings to bring down public debt as a share of the economy in the next five years, according to calculations by IFS, an influential think tank.

    “It is going to be tough,” Hunt said in a tweet. “But protecting the vulnerable — and people’s jobs, mortgages and bills — will be at the front of our minds as we work to restore stability, confidence and long-term growth.”

    Sunak and Hunt won’t have the option of going light on the details. If investors don’t buy into their plan and borrowing costs shoot up again, getting the situation under control would only become trickier, as interest payments on government debt rise.

    “If markets don’t [see] the plans as credible, then filling the fiscal hole could become even harder,” said Ruth Gregory, senior UK economist at Capital Economics.

    One area Sunak may be tempted to tap is the social welfare budget. Questions have swirled about whether the Conservative government may try to avoid boosting state benefits in line with inflation, as is customary. (American recipients of Social Security will receive the biggest cost-of-living adjustment in more than four decades next year.)

    Most UK working-age benefits would typically go up by 10.1% next April based on inflation data. But there’s speculation the increase could be linked instead to average earnings, which are growing at a much slower rate than inflation. That could save £7 billion ($8 billion) in 2023-24, according to IFS.

    Such a move would prove controversial, however — especially since benefits have not kept up with rampant inflation in 2022.

    “I would like to see if we could find a way to increase benefits by inflation, but what I will say is that trade-offs are involved,” former Conservative cabinet minister Sajid Javid told ITV this week.

    A more palatable option, at least for households, would be extracting more taxes from corporations.

    Hunt has already said that corporate taxes will rise from 19% to 25% next spring. The Financial Times has reported that Hunt could also target earnings from oil and gas companies by extending a windfall tax on profits.

    In an interview with the BBC earlier this month, Hunt said he was “not against the principle” of windfall taxes and that “nothing is off the table.” Higher taxes on the financial sector are also under consideration, according to the Financial Times.

    Industry groups are already circling the wagons. Banking trade association UK Finance said its members already pay “a higher rate of taxation overall than any other sector,” and urged the government not to “risk the competitiveness of the UK’s banking and finance industry.”

    Sunak could also walk back Truss’ commitment to boosting defense spending to 3% of the economy by 2030, though that carries its own political risks given Russia’s war in Ukraine. Other countries in the region, such as Germany, have said they will ramp up military investments, and the United Kingdom may be loath to fall behind, Zaranko said.

    Investors and economists expect that the government will announce a mixture of tax increases and spending cuts shortly. Hunt is due to reveal his plans in greater depth on October 31.g

    “Despite the fiscal U-turns, the government will still need to show a fiscally credible path next week in the budget to balance the books,” Sonali Punhani, an economist at Credit Suisse, said in a note to clients this week.

    That could exacerbate the country’s downturn. The Bank of England has projected that the United Kingdom is already in a recession, and a gauge of business activity in October slumped to its lowest level in 21 months.

    “We are seeing quite a dramatic shift in the fiscal outlook from being much looser than we expected just a few weeks ago to being much tighter than we expected,” Gregory of Capital Economics said. “I think the risk is that the recession is deeper or longer than we expect.”

    A weaker economy would present its own complications.

    No one wants to repeat the errors of the brief Truss era, when her gamble that unfunded tax cuts would jumpstart growth backfired spectacularly.

    But business groups are warning that completely abandoning the objective of boosting Britain’s anemic economic growth would create problems, too.

    The austerity of the 2010s produced “very low growth, zero productivity and low investment,” Tony Danker, head of the Confederation of British Industry, told the BBC on Tuesday.

    “The country could end up in a similar doom loop where all you have to do is keep coming back every year to find more tax rises and more spending cuts, because you’ve got no growth.”

    [ad_2]

    Source link

  • The crisis pregnancy center next door: How taxpayer money intended for poor families is funding a growing anti-abortion movement | CNN

    The crisis pregnancy center next door: How taxpayer money intended for poor families is funding a growing anti-abortion movement | CNN

    [ad_1]



    CNN
     — 

    A few blocks from the Ohio State University campus in Columbus, America’s battle over abortion is playing out under one roof.

    On one side of a squat single-story office building, a Planned Parenthood clinic offers reproductive health care and refers patients for abortions. Next door is a branch of Pregnancy Decision Health Center, a crisis pregnancy center that offers counseling and support for pregnant women – but also works to dissuade them from terminating their pregnancies and has been accused of promoting misinformation about abortion.

    Of the two neighboring organizations, only Planned Parenthood provides medical services such as Pap smears, birth control and STD treatments.

    But the crisis pregnancy center is the one receiving money from the state government. Ohio has funneled nearly $14 million in taxpayer funds to the center and others like it over the last decade, according to government records – even as state leaders have cut funding that previously went to Planned Parenthood for programs such as breast and cervical cancer screenings. 

    Ohio isn’t alone. More than a dozen states devote some of their budget to funding crisis pregnancy centers, a CNN review found. About half of those states distribute federal money intended to help needy families to the centers.

    Some of the organizations that receive money have been accused of spreading abortion misinformation or using the funds to advocate anti-abortion causes instead of helping women. 

    “Public dollars should go to promoting public health,” said Ashley Underwood, the director of Equity Forward, an abortion rights advocacy group. Crisis pregnancy centers, she said, “solely exist to deter people from getting abortion services.”

    Since the US Supreme Court overturned Roe v. Wade this summer, a wave of abortion restrictions has swept the country, leaving millions of women with easier access to crisis pregnancy centers than abortion care. Crisis pregnancy centers far outnumbered abortion clinics across the US even before the court’s ruling, and anti-abortion groups are now planning to expand. 

    Pregnancy center leaders and their state government allies say the organizations deserve taxpayer funds because they provide pregnant women with resources like free diapers and ultrasounds. But some of the centers also lie to women about the safety and potential risks of abortion, according to multiple studies, abortion rights activists, and women who have been to the centers. 

    That kind of deception isn’t typical in any other area of health care, said Dr. Amy Addante, an Illinois OB-GYN who performs abortions and has been a vocal critic of crisis pregnancy centers.

    “The purpose of these centers is to try to stop someone from having an abortion,” said Addante. “I cannot think of any other medical decision or any other aspect of health care where there is a group of individuals whose only intent is to stop you from receiving that health care.”

    Big open windows invite patients and passersby into the waiting room at the Pregnancy Decision Health Center (PDHC). With velvety green chairs, leafy plants, and a coffee station that greets visitors as they come in the door, the crisis pregnancy center could pass for an upscale dental office or spa.

    Outside, PDHC’s sign towers over the neighboring Planned Parenthood, literally casting a shadow over the clinic’s entrance. Inside, the contrast is even starker: Planned Parenthood’s waiting room looks run-down – old chairs crowd the small space, faded informational posters cover the walls, and daylight is blocked by signage on the windows and mirrored doors meant to protect patients’ privacy.

    Multiple times a week, patients looking for Planned Parenthood mistakenly walk through PDHC’s doors, according to a Planned Parenthood clinician, Jennifer, who asked CNN not to use her last name out of security concerns. Some patients have told Planned Parenthood that PDHC employees told them abortion wasn’t safe or said PDHC tried to delay them and make them late for their Planned Parenthood appointments.

    Lillian Williams is the vice president of health services of Planned Parenthood of Greater Ohio.

    “They’ve provided an array of misinformation, whether it’s about abortion care or even about contraceptive services,” said Lillian Williams, the vice president of health services of Planned Parenthood of Greater Ohio.

    Ayla Krueger, a 23-year-old Columbus resident, visited PDHC earlier this month with a friend who was seeking an STD test. She said that during their hour-and-a-half visit, an employee claimed that condoms were only 50% effective, the spread of STDs could only be prevented if people followed “God’s plan” of avoiding sex before marriage, and that if a woman who has an STD gets an abortion, “your STDs travel up your cervix into your organs and could kill you.”

    “I was dumbfounded,” Krueger said of the encounter. “My heart was breaking, thinking about girls who don’t understand what they’re walking into there… and possibly getting coerced.”

    Experts said that the center’s rhetoric was not medically accurate. “We do worry about ascending infections in abortions and pregnancy, but the risk is really, really low,” said Dr. Jonas Swartz, an OB-GYN and professor at Duke University Medical Center. “Crisis pregnancy centers regularly overstate the risk of abortions and this is just one example of that.”

    The center also offers “abortion pill reversal,” according to its website, annual reports and pamphlets at the office. Abortion reversal is a medically dubious, unproven treatment that purports to undo a medication abortion but has been denounced by medical groups and found to be dangerous by researchers. A clinical trial that attempted to study abortion reversal was halted prematurely in 2019 when several participants suffered hemorrhaging.

    Kathy Scanlon, PDHC’s president, declined an interview request and didn’t respond to CNN’s questions about Krueger’s allegations or abortion pill reversal.

    “Every woman deserves care and compassion when facing an unexpected pregnancy,” Scanlon wrote in an email, adding that the center provides “practical pregnancy care and support ranging from free pregnancy tests and ultrasounds to parenting education classes and much-needed baby items” such as diapers and car seats.

    Anti-abortion signs sit on a table during the Ohio March for Life in Columbus.

    Research has found that crisis pregnancy centers commonly disseminate misinformation. A study released last year by The Alliance, an abortion rights advocacy group, found that almost two-thirds of crisis pregnancy centers in nine states promoted false or biased information about abortion on their websites. That included false claims that abortions increased the risk of cancer or infertility.  More than a third of clinics also advertised that they offered abortion pill reversal – and state-funded clinics were more likely than privately-funded ones to offer the unproven procedure and less likely to offer prenatal care, according to the study. 

    Similarly, a 2012 academic study of crisis pregnancy centers in North Carolina found that 86% of centers promoted false or misleading medical information on their websites. 

    Crisis pregnancy center leaders say they are working to help women. Peggy Hartshorn, who founded the Columbus center and is now the chair of Heartbeat International, one of the largest global networks of crisis pregnancy centers, said the allegations that the groups spread misinformation are “a false narrative.”

    She said that the information her centers provide to clients is “very well-researched, medically referenced – we document everything with multiple sources.”

    “Deep down in their hearts, women do not want to have abortion,” Hartshorn said. “Pregnancy centers are good for America, they really are.”

    In Ohio, a new six-week abortion ban that went into effect after the Supreme Court decision, is currently on hold amid court battles. The Planned Parenthood clinic near Ohio State University doesn’t perform abortions – it refers patients to a Planned Parenthood surgical center on the other side of town that does.

    The waiting room in the Planned Parenthood near campus.

    That facility, too, has a state-funded crisis pregnancy center operating across the street. On a recent afternoon, a handful of protesters lined the clinic’s fence with signs depicting bloody fetuses and shouted “you are already a mother” and “abortion is murder” whenever a patient came within earshot. One protester – wearing a reflective vest and holding a clipboard, similar to Planned Parenthood volunteers – tried to direct patients away from the abortion clinic and to the crisis pregnancy center across the street. The center told CNN the protesters weren’t affiliated with their organization.

    It’s not rare for pregnancy centers to operate near abortion clinics. More than 100 pregnancy centers around the country are located within 200 meters of an abortion clinic or Planned Parenthood location, according to a CNN analysis. Some – in states like Delaware, Indiana and Michigan – are next door to clinics. 

    Abortion rights advocates say the intention is to mislead women and block them from accessing abortion.  

    “The purpose of co-locating near a legitimate provider is to intercept someone seeking legitimate health care and divert them into walking through their doors instead,” said Tara Murtha, the co-author of a report about pregnancy centers and a spokesperson for the Women’s Law Project. “It’s basically an obstacle course and a systemic barrier to abortion care.”

    Despite the groups’ apparent spreading of misinformation, at least 18 states have funded crisis pregnancy centers with taxpayer money, according to a CNN review of government records and statements from state agencies. The largest is Texas, which has sent more than $200 million to the groups over the last decade. 

    More than a half-dozen states bankroll crisis pregnancy centers at least partly with funds from Temporary Assistance to Needy Families (TANF), a federal welfare program. Those federal funds are sent to states as a block grant, which gives state officials wide latitude in how to spend it, including on programs like “alternatives to abortion” grants for crisis pregnancy centers. 

    Research has shown that a smaller percentage of poor families are now receiving cash assistance from the TANF program than in previous decades.

    While about 68% of families with children in poverty received cash assistance through TANF in 1996, when the program was created, that percentage declined to just 21% by 2020, according to a study by the Center on Budget and Policy Priorities, a nonpartisan think tank. The percentage was even lower in some of the GOP-dominated states that use TANF funding to support crisis pregnancy centers, such as Texas and Louisiana.

    “When you look at successes in reducing poverty by strengthening the safety net, cash assistance is the most effective way to help families,” said Aditi Shrivastava, who co-authored the study. “We are seeing states spend less of their money directly on cash assistance, and we don’t think that is what the program should be doing.”

    In the wake of the Supreme Court overturning Roe v. Wade, some states are piloting new efforts to fund crisis pregnancy centers. Lawmakers in Arkansas and Iowa approved state funding for such groups for the first time this year.

    The states have argued that crisis pregnancy centers deserve taxpayer funding because they provide services to pregnant women in need. 

    “If we are going to be the most pro-life state in the union, we have to be prepared when those mothers come to a facility and they need help,” Arkansas state Rep. Robin Lundstrum said at a legislative hearing about the state’s new program earlier this year.

    In Columbus, Pregnancy Decision Health Center is receiving more than $528,000 from the state government in the current fiscal year, according to government records. All of that comes from federal TANF funds. The funding amounts for about a fourth of the center’s total revenue, while the rest comes from private donations, according to the group’s most recent tax records available.

    People participate in the Ohio March for Life.

    Despite the large amounts of money, there’s little oversight of how the taxpayer dollars are being used. 

    Many of the appropriations are written into spending bills passed by GOP-dominated state legislatures. Pennsylvania, for example, has sent more than $70 million over the last decade to crisis pregnancy centers through Real Alternatives, an anti-abortion group that distributes state funding to crisis pregnancy centers. 

    A 2017 report by the state auditor general found that Real Alternatives used hundreds of thousands of dollars of the money it received from Pennsylvania “to fund its activities in other states,” in what the auditor said was an example of the group “siphoning funds intended to benefit Pennsylvania women.” Real Alternatives denied the allegations in a statement, saying that they had “no basis in fact or law.”

    Michigan, which had contracted with Real Alternatives to distribute funding for crisis pregnancy centers, canceled its contract after Gov. Gretchen Whitmer vetoed the funding for it in 2019. In a letter about the veto, Whitmer thanked a watchdog group that had issued a report accusing the organization of only helping a fraction of the pregnant women it had agreed to support.

    Real Alternatives, which also receives TANF money from Indiana, said the Michigan report was “riddled with inaccuracies, distortions, half-truths and defamatory statements.”

    A bill in the Ohio legislature that would have required crisis pregnancy centers receiving state funding to provide their clients with only medically accurate information died in committee in multiple recent legislative sessions. The state’s GOP legislative leaders did not respond to requests for comment.

    Meanwhile, some of the same red states that have bankrolled crisis pregnancy centers have stripped funding from Planned Parenthood. In Ohio, for example, the group never received state funding for abortions, but for years it received money for other services like cancer screenings, STD prevention and treatment, and sex education for teens.

    In 2016, however, Ohio lawmakers banned the state from funding any organization that performs abortions, and the law went into effect after it was upheld by a federal appeals court in 2019. That meant that Planned Parenthood affiliates in Ohio lost about $600,000 a year in state funding, and led to the cancellation of some of their non-abortion health programs.

    While Planned Parenthood does receive some additional reimbursements through Ohio’s Medicaid program for providing non-abortion health care to people on Medicaid plans, it no longer receives state grants.

    Planned Parenthood also lost additional federal funding under Title X, a program that funds birth control and reproductive health services, under a Trump administration rule. But the organization started receiving that money again this year after the Biden administration reversed the rule.

    Maria Gallo, a sexual and reproductive health epidemiologist at Ohio State University, said that state funding for crisis pregnancy centers shows how conservative lawmakers prioritize anti-abortion rhetoric over medical care for women.

    “It’s dangerous in part because they are legitimizing (crisis pregnancy centers),” Gallo said. “They are legitimizing that as a source of medical care when they’re not licensed medical facilities.”

    Crisis pregnancy centers drastically outnumber abortion clinics in the United States. There were 790 abortion clinics operating in 2021, compared with about 2,600 crisis pregnancy centers, according to a database compiled by Reproaction, an abortion-rights group.

    That disparity is only likely to grow in the wake of the Supreme Court decision. Hartshorn, the chair of Heartbeat International, said the organization has created an online training program to help people open new pregnancy centers, especially in places without existing ones.

    “We need more people, we need more places, and we need more paths to pregnancy health,” Hartshorn said.

    Thank you notes are displayed in the Planned Parenthood in Columbus.

    A study by the National Center for Responsive Philanthropy found that the groups have taken in more and more money in recent years: They received over $1 billion in revenue in 2019, the most recent year data was available, compared to about $771 million in 2015. 

    Several women who went to state-funded crisis pregnancy centers told CNN they felt misled and manipulated by the groups, and disturbed that they were getting taxpayer money.

    Last year, a woman who asked to be identified by her middle name, Eve, had just lost her job when she suspected she might be pregnant. She and her boyfriend went to Women’s Care Center in Columbus after finding the group on Google. Money was tight, and she chose the center – which is receiving more than $700,000 from the state of Ohio in the current fiscal year – because it promised free pregnancy testing. 

    Eve’s test was positive, and she asked the staff about an abortion. She said they handed her a pamphlet that warned her the procedure could cause infertility – though abortion doesn’t typically affect a person’s ability to become pregnant in the future. For three hours, Eve said the staff pressured her to carry the pregnancy to term.

    “It became very clear that they were against abortion really quickly,” said Eve, who left the center feeling upset and later got an abortion. The center didn’t respond to questions about Eve’s visit but said in an email they are “absolutely committed to accuracy, excellence and transparency in all we do.”

    One day, Eve said she hopes to have kids. But at the time, she didn’t feel financially or emotionally stable enough to have a baby.

    “Nobody wants to make a decision to have an abortion,” Eve said. “And they made me feel really guilty and bad about it.”

    [ad_2]

    Source link