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9/30 Torchbearer Weekly Policy Update

Thank you for letting us be your trusted source for local, state, and federal policy updates. Let’s dig in…

  • Why The Fed Went Big Last Week
  • Report Assesses Impact of Indiana’s Childcare Challenges for Employers, Workers
  • Braun Health Care Plan Builds Released
  • Indiana Lawmakers Consider New Legislative Ideas to Further Address K-12 Student Absences
  • Share the Torchbearer Newsletter with Your Network!
  • Important Dates

Let’s dive in.

Why The Fed Went Big Last Week

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First, there was the cutting, now the talking. Fresh comments from several top Fed officials shed new light on why the central bank went with a large rate cut last week and what that portends for the future.

Why it matters: The comments point to a conviction among Fed decision-makers that the economy is basically sound and that continued expansion is likely — but that signs of a deteriorating labor market over the last couple of months have gotten their attention.

  • That means they will probably shift to a more gradual pace of rate-cutting from here on out, while also standing ready to move more aggressively if their rosy outlook proves too optimistic.

State of play: There are two basic theories of the case for rate-cutting. One is simply that, with inflation now nearly down to the Fed's target, it is no longer necessary or appropriate to have rates set at elevated levels designed to crimp demand.

  • The second theory is that the labor market has been steadily worsening for months now, so the Fed needs to take action to prevent it from sliding further.
  • The latest round of Fedspeak suggests that the first story created the impetus to cut rates last week, while the second story is the reason they moved with an aggressive half-point cut.

What they're saying: "In my judgment, cutting the policy rate by 50 basis points last week was the right decision," Minneapolis Fed president Neel Kashkari wrote in an essay published this morning, that "reflects both the substantial progress we've made in lowering inflation and also the softening of the labor market."

  • "Inflation has fallen faster than I had expected, and the most recent data solidify my conviction that the US economy is indeed sustainably on the path back to price stability," said Atlanta Fed president Raphael Bostic in a speech this morning.
  • "On the employment side of the ledger, clearly the red-hot job growth coming out of the pandemic is cooling," Bostic added. "That said, the labor market is weakening but is not weak, slowing but not slow."

Of note: Even the official who formally dissented from last week's decision, governor Michelle Bowman, made clear in a statement released Friday afternoon that she agreed it was time to cut rates, but saw reason to move more cautiously.

The bottom line: Policymakers think the economy is basically holding up fine, which would mean more judicious quarter-point reductions from here. But if they're wrong, they're ready to react. (Axios)

Report Assesses Impact of Indiana’s Childcare Challenges for Employers, Workers

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According to a new report released by the Indiana Chamber of Commerce last week, childcare challenges cost Indiana’s economy $4.22 billion annually.

Why it matters:

  • Childcare issues lead to $1.17 billion in lost tax revenue annually.
  • 57% of parents missed work or class due to childcare problems, with 40% leaving the workforce.

By the numbers:

  • Childcare-related employee turnover and absenteeism cost Indiana employers $3.05 billion annually.
  • Indiana ranks 27th in labor force participation among U.S. states.

What they’re saying:

  • “Childcare access and affordability issues continue to hold back the Hoosier workforce and future economic growth for our state,” says Indiana Chamber President Vanessa Green Sinders.
  • “Hundreds of thousands of Hoosier children need high-quality early learning experiences to thrive in school and beyond,” says Maureen Weber, president of Early Learning Indiana.

The full report is available here. (Indiana Chamber)

Braun Health Care Plan Released

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Republican Gubernatorial candidate Mike Braun released a six-prong healthcare plan for Indiana late last week.

Why it matters:

  • Braun’s plan aims to lower healthcare costs and improve access.
  • His expertise as a business owner and federal legislator shapes the plan.

The big picture:

  • As with prior proposals, Braun’s plan is supported by research from the conservative Hoosiers for Opportunity, Prosperity & Enterprise (HOPE), Inc., a nonprofit arm of the campaign based in Terre Haute.
  • He contrasts sharply with Gov. Holcomb by taking a firm stance on several contentious issues - from the regulation of pharmacy benefit managers to prohibiting noncompete clauses for health care workers.

Details:

Indiana Lawmakers Consider New Legislative Ideas to Further Address K-12 Student Absences

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Indiana policymakers met last week during the Inteirm Study Committee on Education with a focus on reducing chronic absenteeism in K-12 schools.

Why it matters:

  • 17.8% of K-12 students were chronically absent in 2023-24, impacting education quality.
  • Chronic absenteeism can lead to lower performance and disruptive behaviors.

The big picture:

  • COVID-19 pandemic nearly doubled absenteeism rates, peaking at 21.1% in 2022.
  • Efforts include new laws and local initiatives, but challenges remain.

Details:

  • Indiana Department of Education’s new “Attendance Insights” dashboard aims to provide better data.
  • Schools like New Castle are employing attendance liaisons to improve student attendance. (Indiana Capital Chronicle)

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Important Dates:

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  • Probate Code Study Committee -- Tuesday, October 1 at 10am
  • Interim Study Committee on Courts and the Judiciary - Thursday, October 3 at 10am
  • Health Care Cost Oversight Task Force - Tuesday, October 8 at 1pm
  • Artificial Intelligence Task Force - Thursday, October 10 at 10am
  • CANCELLED: Code Revision Committee - Tuesday, October 15 at 10am
  • Interim Study Committee on Fiscal Policy - Tuesday, October 15 at 10am
  • Interim Study Committee on Government - Monday, October 21 at 1:30pm
  • State Fair Advisory Committee - Wednesday, October 23 at 1pm
  • Interim Study Committee on EnergyUtilities, and Telecommunications - Thursday, October 24 at 10am
  • Interim Study Committee on Pension Management Oversight — Monday, October 28 at 1pm
  • Organization Day - Tuesday, November 19