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Thursday, July 31, 2014

Concern for the Poor or Pandering for Votes?

Paul Ryan has been talking a lot lately about concern for the poor. What he wants to do is to get Congress to consolidate federal food stamps with 10 of the government’s other, large- and small-scale anti-poverty efforts into a single, super-sized block grant called the “Opportunity Grant." However, the states will be under no obligation to operate any of the programs. Instead, they will have the right to choose to operate whatever they want, perhaps something other than one of the 11 original programs, as long as Washington approves the plan. Some of the programs included, are: food stamps (SNAP), nursing care, childcare aid, the Community Development Block Grant (CDBG), public housing assistance, low-income energy assistance and cash welfare.

We are reminded by Paul Waldman of the Washington Post that this sounds reasonable until you start to think about how it would play out. In practice, it’s likely that the states most eager to sign on would be precisely those that aren’t too happy about the ways the federal government provides benefits now. The devil would be in the details; what if a state decided to take its entire block grant and devote it to giving lectures to poor people on why they should get married? There could be a lot of needs going unmet while states implement their ideologically-driven visions of how poverty ought to be addressed.”

He reaches the following conclusion: ‘Ryan’s previous budgets have relied an awful lot on slashing benefits to poor people. But this time, he promises that his proposal doesn’t cut benefits, but merely reorganizes them. Some parts of the proposal might be worthwhile. But it’s hard to avoid the conclusion that it’s still driven by the longstanding conservative desire to limit the help we give to the poor. “

E. J. Dionne of the Huffington Post comments: “Ryan insists his plan would hold funding for these programs constant, not cut them. But it’s more complicated than that. Conservatives have long advocated block-granting of poverty programs, always with the justification that states will better deliver assistance to poor Americans if they aren’t hamstrung by requirements from Washington. But there’s little evidence that block granting accomplishes anything other than making it easier for these programs to be cut in future years or simply whittled away by inflation. As Jared Bernstein points out, Temporary Assistance to Needy Families (TANF), which we used to call “welfare,” was block-granted in 1996 and has since then seen its value slashed by 30 percent in inflation-adjusted terms.”

It’s a bit scary to contemplate what will happen if the Radical Right actually does take control of both Houses of Congress and begins to dismantle the social safety net as they prefer to call it. Under the guise of putting social programs closer to the people (i.e. under the aegis of the states) what they will have done is quite clear to any who would take the time to understand their motives:

1) Reduce the deficit by slowly squeezing the federal-to-state block grants to a mere shadow of former strength

The Claim: the federal government currently spends about $800 billion on social welfare programs like food stamps and housing assistance. Mr. Ryan said that total spending would remain the same, and that his plan would not add to the deficit. “It is important to note that this is not a budget-cutting exercise — this is a reform proposal,” his policy discussion draft said. “This proposal seeks to create the space and flexibility necessary for local, state and federal government to add value without making judgments about the right level of spending.” 

The Reality: Ryan’s previous budget proposals have always contained policy statements that focused on deficit reduction, and this would be no different. His 2015 budget blueprint, released less than four months ago, called for $137 billion in cuts over the next decade from the federal food stamp program (now known as the Supplemental Nutrition Assistance Program or SNAP). A cut of that size—nearly a fifth of SNAP’s current budget—would mean millions of low-income Americans would lose at least some, if not all, of their benefits. Here’s how the same thing would occur under Opportunity Grants:

First, there would be the savings from those states who will not accept an Opportunity Grant any more than they would accept the ACA expansion of Medicaid. Second, inflation will reduce the value of the block grants. Third, arbitrary cuts to state grants in the future decade will occur as they have in other block grant scenarios (TANF, for instance). Fourth, state plus private agency administrative costs taken out of the block grants will reduce the amounts actually available for programs and services, and Fifth, certain states will opt to use their block grant for other programs. Thus, Ryan’s deficit reduction plan will become reality as the food stamp program and others suffer major de-funding.

2) Privatize the administration of the block grant programs.

The Claim: Reuters reports that private agencies will get in on the block grants as private providers and as “neutral” evaluators of success. “If a state opted into the pilot program, it would have low-income residents meet with case managers who would create an “opportunity plan” offering both financial advice and coordinating the provisions of the several different programs they need. The residents would sign contracts with these case managers that would offer incentives to reach financial security and sanctions if they do not. A neutral agency would evaluate each provider’s success at moving poor Americans out of poverty.”

The Reality: Ryan’s Plan would allow charities, community groups and even for-profit firms to compete with government for this anti-poverty” federal money.” Eventually this would shift the role of government largely to approving applications and vetting vendor agencies. It might even eventually replace any state government involvement beyond receiving reports and distributing money to provider agencies. "There wouldn't just be a federal agency or a state agency," said Ryan, chairman of the House of Representatives Budget Committee. Instead, they could choose from a list of certified providers. We're talking non-profits, or for-profits, or even community groups unique to your neighborhood."

States may end up as mere conduits of funds to these private providers, keeping just enough of the block grants to administer a vetting process and an oversight function. This is privatization, pure and simple. Those states that try to keep program functions for themselves are going to face private agency evaluators who may want to see more of that “state money” going to a few more private providers. A bad evaluation of a state program could end up reducing a state's share of the “Opportunity Grant” but increasing the share available to private agencies. 

One more private influence might show up, as we are reminded by the Center for Budget & Policy Priorities: “in some cases, more powerful state and local political forces may seek to corral more of the funding. For example, many state and local officials likely would try to shift part of the former SNAP benefit dollars to CDBG-type 'development' proposals that politically powerful local developers (who often make large campaign contributions) often favor."

And, as to the “squeezing-down” of the poverty programs, just remember that administrative costs for private agency providers will be at least triple that of state costs because they will likely need all new staff for the programs they oversee; leaving less money for actual programs and services. 

3) Put restrictions in place that sound reasonable but that lead to less funding

The Claim: Illustrating his plan in a speech at the American Enterprise Institute, Ryan said "a 24-year-old single mother of two with a high school education and dreams of one day being a teacher could go to a local social services provider for help. Instead of applying for food stamps, housing vouchers and welfare checks, she would meet with a case manager and draft an "opportunity plan" to achieve her goals, targeting money where it is needed most, such as transportation or child-care costs.” (Source: Center for Budget & Policy Priorities)

The Reality: The CBPP comments: she would have to sign a contract and meet certain benchmarks for success, such as learning new skills or seeking work. Failure would mean a cut in aid while exceeding expectations would earn her a bonus. There would be a time limit on assistance, and Ryan said the plan would need to show strong evidence of positive outcomes and poverty reduction, arguing such data is lacking in current programs.”

What we have here is a typical Republican basis for showing that people in poverty must be restricted, controlled, guided, and disciplined by a higher authority. There is no sense of any worth, potential, responsibility or self-discipline. Ryan’s plan would also require “accountability” from those receiving assistance, in the form of time-limited benefits and work requirements.
"This is a hallmark of the Republican approach to poverty programs, in which poor people have to jump through hoops to demonstrate their moral worth to get benefits. “Accountability” is something that is required of poor people, and only poor people. Farmers who get government subsidies don’t have to be “accountable.” Nor do government contractors who waste huge amounts of taxpayer money. Only the poor are forced to pee in a cup or account for their time or endure a hundred other petty humiliations, so we can be sure that if they get any government assistance they have proven themselves to be morally upstanding enough to deserve help.” (Source: the Washington Post)

That 24-year-old mother seeking help in Ryan’s example must have a plan which becomes a restrictive contract. The very existence of such an individualized plan is an invitation to providers to reduce the number of services required, or to provide inadequate benefit amounts to those who haven’t proven themselves worthy. An individualized Plan for people in any case is only good if it is their personal plan and not someone’s imposed plan. If it was truly personal and if one of the services provided as an option consisted of a Mentor to give personal advice and counsel, not evaluation, such a personal goal plan might be acceptable as an option for someone who feels comfortable with such guidance.   

Interesting isn’t it, that wealthy individuals and corporations have no such contracts, plans, time limits or restrictions imposed on them when they extract millions and billions of dollars from our tax system (from our tax dollars) with the freedom to use it for bonuses for their top management or for some other nefarious scheme?

To confirm and summarize my own comments, I have chosen to end this piece with some statements from the President of the Center on Budget & Policy Priorities, since Mr. Greenstein’s conclusions are well-stated and well-researched.

“This new “Opportunity Grant” would operate initially in an unspecified number of states... would likely increase poverty and hardship, and is therefore ill-advised, for several reasons:

While Chairman Ryan describes the proposal as maintaining the same overall funding as the current system for each participating state, that would be a practical impossibility. His proposal would convert the nation’s basic food assistance safety net — (SNAP), formerly known as food stamps — from an entitlement that responds automatically to increased need... (to) fixed funding... (that) cannot respond in the same way... when need rises, such as in recessions.

All ten programs other than SNAP that would merge into the block grant serve only small percentages of those eligible, and federal funding for them (other than low-income rental assistance programs) is comparatively modest....this means that if some people receive more services under the proposal, as Chairman Ryan envisions, those services will likely be paid for by cutting assistance that helps poor families put food on the table or a roof over their head. Some of the service programs to which funds would likely be shifted have higher administrative costs than programs like SNAP and rental vouchers, so less would remain for basic assistance to needy families.

While Chairman Ryan says he’s driven by evidence and research, his plan would jeopardize basic nutrition assistance for poor children, which research has shown is highly effective not only in reducing child malnutrition, but also in improving children’s long-term prospects. A path-breaking recent study examined what occurred after food stamps gradually expanded nationwide in the late 1960s and early 1970s. It found that poor children with access to food stamps in early childhood (and whose mothers had access during pregnancy) had an 18-percentage-point higher high school graduation rate — and were less likely as adults to have stunted growth or heart disease or to be obese.... the Ryan plan would jeopardize these crucial gains. SNAP’s entitlement nature lies at the heart of this success.

Total funding to assist low-income families — from federal, state, and local levels combined — likely would decline, because the block grant would afford state and local officials tantalizing opportunities to use some block grant funds to replace state and local funds now going for similar services. Chairman Ryan says that the federal block grant funds would have to be used for the poor. But that wouldn’t prevent states and localities from substituting some of these funds for existing state and local funds that they now use for some of the same purposes.

History clearly shows that when policymakers combine a number of programs into a block grant, federal funding typically declines over time, often dramatically. That has occurred in most broad-based block grants of recent decades.... policymakers find it virtually impossible to identify a specific level of needed federal funding... As a result, the broad block grant often becomes easy to squeeze in the competition for federal budget dollars.

(For all the reasons)... noted here, the Ryan Opportunity Grant proposal would likely make conditions for America’s poor families and children worse overall rather than better.”