Big Myths Used To Sell Food Stamp Block Grant

May 12, 2011

I might feel better about the House Republicans’ food stamp block grant if Congressman Paul Ryan, who wrote it, were up front about the motive. Not more supportive, mind you, but less concerned — and angry.

It’s clear that the food stamp block grant, like the Medicaid block grant, aims to slash federal safety net spending. Savings on food stamp benefits, plus state administrative support would total nearly 20% over the first 10 years.

The objective here is to pare back what we’ve come to view as our government’s mission — and to offset the revenues that will be lost by the proposed tax cut extensions and expansions.

But the budget plan doesn’t justify the food stamp program that way. It relies instead of three big myths.

The first is that the safety net is likely to become — if it hasn’t already — a “comfortable hammock that lulls able-bodied citizens into lives of complacency.”

Complacency? Ryan and his colleagues obviously haven’t taken a food stamp challenge recently — or tried to support themselves and their families on an income well below the federal poverty line.

The second myth is that participation in the food stamp program is increasing at a “relentless and unsustainable” rate because states get more federal funds when they enroll people.

But, as the Center on Budget and Policy Priorities shows, the recession accounts for most of the recent uptick in food stamp spending. Costs, as a share of the nation’s economic output, will fall as the job market improves — because that’s how most of our better safety net programs work.

The third myth is that the Temporary Assistance for Needy Families program has been a roaring success and thus should be the model for other safety net programs.

The “proof” cited by the budget plan, as by other proponents of this view, is that the “reforms” it initiated cut caseloads dramatically during the first five years, while poverty rates also fell.

Lots of factors account for both, including a strong economy that made it relatively easy for TANF parents to find work — though often not long-term work at living wages.

But TANF caseloads didn’t expand when the economy cooled in the early 2000s. And, as Legal Momentum reports, only 6.6% more poor adults and children were added to the rolls during the first 19 months of the Great Recession.

That’s not because TANF is so successfully lifting poor families out of poverty. It’s because states have incentives to minimize their caseloads — and the benefits they provide. One of the biggest is the declining value of the federal block grant itself.

They’d have this same incentive if they got a fixed, inadequate sum for their food stamp programs, as they would under the House budget plan.

The plan warns that “the poor and vulnerable will undoubtedly be hardest hit” if the federal government experiences a debt crisis due to runaway spending because the “only recourse will be severe, across-the-board cuts.”

Seems the House Republicans have decided to preempt these hypothetical future cuts by making severe, targeted cuts to safety net programs like food stamps now.


House Republicans Vote To End Food Stamp Program As We Know It

May 5, 2011

I remarked awhile ago that parts of the House Republican Study Committee’s global attack on “welfare” could make their way into legislation that had a better chance of passing.

And sure enough. The budget plan House Republicans have passed includes a provision that would convert SNAP (the food stamp program) into a block grant rather like Temporary Assistance for Needy Families.

Lest one doubt the motive, the plan projects savings totaling $127 billion over the first 10 years alone. The Center on Budget and Policy Priorities estimates losses to the District of Columbia and its food stamp-dependent households at $350 million.

I’ve written elsewhere about what the block grant could mean for households that depend on food stamps to keep food on the table.

Briefly, the block grant would put an inflexible constraint on spending, while presumably increasing flexibility on issues like participation criteria and benefits.

So Congress or states, at their discretion, could — and probably would have to — change eligibility standards so that people would have to be even poorer to qualify for food stamps and/or reduce monthly benefits so that they no longer had any basis in the costs of a nutritious diet.

We can see how the spending cap/flexibility model could play out by looking at states’ TANF programs.

According to a recent Legal Momentum review, only 40% of eligible families were enrolled in TANF in 2005, as compared to 84% in the last year of its non-block grant predecessor.

Cash benefits for a TANF family of three are less than 50% of the federal poverty line in every states and less than 30% in more than half. In all but two, they’re worth less in real-dollar value than when the program was created.

The food stamp block grant proposal has other radical implications.

It would end the long-standing principle that everyone (except some immigrants) whose income falls below the cut-off can get food stamps — and for as long as their income remains that low.

As with TANF, there would be new work requirements. But unlike TANF, there’d apparently be no federal funding within the program for client assessments, job training or the supportive services some recipients would need to meet the requirements, e.g., child care subsidies.

More importantly, food stamp benefits would be time-limited, just as TANF cash benefits are. After some number of years, people would be kicked out of the program, unless states chose to cover the full costs of the benefits themselves.

Would there by any exemptions — say, for people who are too young, too old or too disabled to work? For people who are working but still can’t afford to buy enough food for themselves or their families?

The budget plan doesn’t say. Doubtful the House members who voted for it — or even the drafters — have thought through such consequential details.

All they’re concerned about is cutting federal spending, except when it comes to the more than 50% of annual appropriations that go to the military.

But, like the RSC, the budget plan styles the food stamp block grant as the next step in “the historic bipartisan welfare reform” that gave us TANF.

Here’s hoping we’ve got no bipartisan support for this one — or lock-step support from Senate Republicans either.


How Congressman Ryan’s Radical Health Care Proposals Would Impact DC

April 12, 2011

Now the answer to a question I’ve been asking myself ever since I looked at Congressman Paul Ryan’s proposals for federal health care programs. What would they mean for the District of Columbia and its residents?

Families USA has just issued a report with state-by-state impact figures for each of the major health care parts of Ryan’s Fiscal Year 2012 budget resolution — his so-called Pathway to Prosperity.

Here’s what we learn.

Medicaid Block Grant. As you may recall, the Ryan plan would convert Medicaid to a block grant. Grants would be adjusted according to a formula that reflected neither rising health care costs nor the aging of the population. The latter is important because state Medicaid programs spend more for low-income seniors than for most other covered groups.

Under the block grant, the District’s existing program would lose $4.4 million next year. Losses would grow exponentially every year thereafter. For the entire first 10-year period, 2012-2021, they would total more than $3.4 billion.

Funding for Medicaid Expansion. Under the health care reform act, states must expand their Medicaid programs to include all people with incomes at or below 133% of the federal poverty line. The federal government will pay all the costs of the expansion for the first three years and most of the costs thereafter.

The Ryan plan would repeal both the expansion requirement and the related funding. Losses to the District by 2021 would reportedly total well over $1.2 billion.

“Reportedly” because Families USA assumed that the District would undertake the expansion in 2014, as the law requires. I understand it’s decided to move at least some eligible residents into Medicaid earlier. This might affect the estimate.

Tax Credits for Insurance Premiums. The health care reform act includes tax credits to help moderate-income families purchase health insurance in the exchanges that will be created. Credits will be available to families up to 400% of the federal poverty line.

The Ryan plan would repeal this provision also. District residents eligible for the tax credits would lose $37.4 million in 2014, the year they’d become available under the current law.

Here again, losses would dramatically escalate. During the 2012-21 period, they’d total close to $1.3 billion.

The health care reform act also provides tax credits for small businesses and some other incentives to encourage employers to provide health insurance. These too would be repealed under the Ryan plan.

Loss of all the tax credits, plus the loss of federal funding for expansion of Medicaid would mean that at least 46,600 District residents would have no health insurance 10 years from now.

Medicare Privatization. Under the Ryan plan, people now under 55 would be subject to an altogether different health insurance scheme when they reached Medicare eligibility age or became severely disabled before that.

Instead of enrolling in the fairly comprehensive, low-cost insurance plan we know as Medicare, they’d get the equivalent of a voucher to purchase health insurance in the private market. As I noted earlier, the value of the voucher would increase at a much lower rate than health care costs.

Families USA doesn’t provide state-by-state figures for the budget crunch that seniors and people too disabled to work would face. The Congressional Budget Office, however, did some preliminary national estimates.

According to these, typical 65 year olds enrolled in a private insurance plan similar to the current Medicare would pay 68% of their health insurance premiums and out-of-pocket costs in 2030. This is 43% more than what they’d pay under Medicare as it exists today.

And the total costs would be much greater because Medicare delivers more health care bang for the buck than private insurance plans.

Bottom Line. If the Ryan proposals for Medicaid, Medicare and health insurance tax credits were all adopted, the District and its residents would lose more than $6 billion in the first 10 years alone.

And for what? So that $4.2 trillion could be used to finance extended and expanded tax breaks that would make the wealthiest even wealthier.


Congressman Ryan’s Radical Attack On Our Health Care System

April 7, 2011

Republicans in Congress made a big deal of the fact that the health care reform legislation was more than 1,000 pages long. A large portion of those pages spelled out initiatives aimed at controlling health care costs.

Congressman Paul Ryan, Chairman of the House Budget Committee, has a simpler way of cutting federal health care spending. Just stop paying for the health care people need.

His just-released Fiscal Year 2012 budget resolution, The Pathway to Prosperity, would make two radical changes in our health care system.

It would convert Medicare from a health insurance program for seniors and severely disabled people to subsidies that would partially cover the costs of health insurance they purchase on the private market.

Ryan claims that his plan will unleash competition by letting patients choose the plan that delivers high-quality services for the lowest cost.

But, of course, that’s how a vast number of people get their health insurance now — not only the members of Congress Ryan mentions, but others who get their health insurance through their employers or purchase it on their own. Yet health care costs are spiraling.

So how will the Ryan plan save money? Pathway to Prosperity makes the conventional references to waste and abuse, but is otherwise judiciously vague.

But Ryan’s earlier Roadmap for America’s Future certainly wasn’t. Nor was the similar plan he developed in partnership with Alice Rivlin, former head of the Congressional Budget Office and the Office of Management and Budget.

Ryan would reduce federal Medicare spending by adjusting the value of the subsidies according to an inflation index that doesn’t reflect rising health care costs. This produces an even bigger crunch than Ryan-Rivlin.

So, as the Center on Budget and Policy Priorities explains, seniors and other beneficiaries would have to shoulder more and more of their health insurance costs or switch to plans that provide significantly less protection.

Ryan would also convert Medicaid from a genuine federal-state partnership into a block grant — a different type of cost shift, but with similar results.

The federal government now covers a certain percentage of states’ Medicaid costs — somewhere between half and three-quarters, depending on a state’s average per person income.

Under Ryan’s plan, states would get a fixed amount of money — the same in good times and bad, somewhat more over time, but considerably less than would be needed to accommodate rising health care costs and the aging of the population.

States would get enormous “flexibility” (favorite Republican word). They’d no longer have to enroll everyone whose income was low enough to fall below a standard threshold — or indeed, any threshold at all. Nor would they have to provide a specified minimum package of essential services.

Ryan claims that the block grant would eliminate incentives that have led states to expand coverage to people who aren’t “truly in need” — as if people who now qualify for Medicaid aren’t.

States would also, he says, gain freedom from unspecified restrictions that keep them from making their programs “smart” and “efficient.”

We’ve already seen what happens when states face budget pressures due to a combination of lower revenues and rising safety net costs. They look for savings in Medicaid, which accounts for a large percentage of those costs.

And they exercise what’s actually considerable flexibility to eliminate benefits federal rules don’t require — home care that keeps frail elderly people out of nursing homes, hearing aids and eyeglasses, preventive dental care, even life-saving organ transplants.

They make further cuts in reimbursement rates, effectively denying Medicaid participants health care because doctors won’t treat them.

They seek permission to drop people from the program — something they wouldn’t have to do under Ryan’s plan because it would repeal most of the health care reform act, which bars states from rolling back Medicaid coverage.

And recall, this is all happening under the current funding formula.

Ryan says that his plan for Medicaid would save $1 trillion over 10 years. Only one way that could happen. Less federal funding than under the current system — probably progressively less relative to need as time goes on.

States could in theory pick up the difference. But it’s more likely that most would ramp up the kinds of cost-cutting measures we’re seeing now — and go in for others we’re not seeing, thanks only to federal rules.

The Ryan plan may be a pathway to prosperity for the wealthiest, who would enjoy a further 10% cut in their income tax rate. But it’s a pathway to unnecessary pain, suffering and economic insecurity for the rest of us.

UPDATE: The Ryan plan is more generous to the very wealthy than I realized. The Wall Street Journal reports that it would not only cut the top income tax bracket, but eliminate the recently-enacted surtax on high earners’ investment income.


Follow

Get every new post delivered to your Inbox.

Join 176 other followers