Block-Granters Condemn Social Services Block Grant Because It’s a Block Grant

April 14, 2016

The Social Services Block Grant is a case study in the perils of block-granting — and imperiled again by House Republicans for the same reasons they give for replicating its key features.

SSBG has provided states and the District of Columbia with predetermined portions of the total block grant since 1981, when it replaced a multi-purpose program that ensured them as much funding as the services they provided cost.

In exchange, they got a lot of flexibility. Basically, they could use SSBG funds for, as its name suggests, virtually any mix of social services so long as they met at least one of five general goals.

States must report, in a general way, how they plan to allocate their funds and, at the end of the year, how they actually have. That’s about it, except when committees or subcommittees in Congress decide to find out more — or to prove they can’t.

Funding for the block grant doesn’t altogether depend on choices Congress makes from year to year. It’s one of the so-called mandatory programs. But unlike some others, e.g., Medicaid, SNAP (the food stamp program), its funding doesn’t hinge on how much states need to cover benefits for everyone enrolled.

Congress instead appropriates funding up to a cap set by the law that authorizes spending on the program. The cap has remained $1.7 billion since 2001. The total SSBG gets is then parceled out according to a formula based on the relative size of each state’s population.

The real-dollar value of the total pie has dropped somewhat since 2010, the year before Congress passed the law requiring sequestration. Pieces of the pie have shrunk accordingly.

The block grant’s losses don’t stem entirely from sequestration, however, but rather from the fact that it’s a block grant.

On the one hand, it’s so very flexible that Congress felt free to tap it when it needed funds for something else — hence the current cap, which is less than two-thirds of what it got before the first tap.

On the other hand, Congress has made no adjustment to accommodate inflation, though that inevitably drives up service costs. Nor has it adjusted for population growth.

All these together have caused the block grant to lose a whopping 81% of its real-dollar value since created.

The Center on Budget and Policy Priorities, my source for the figure, focuses on the block grant aspect. The marked flexibility in SSBG seems equally important, especially in light of recent threats.

States and the District have used their block grant funds for many purposes. They’ve melded those funds with others — from their share of the Temporary Assistance for Needy Families block grant, more targeted federal grants and their own tax revenues.

We see, for example, that states tend to use a relatively large portion of their block grant funds for child care. They’ve got another block grant specifically for that, as well as TANF.

They use SSBG funds for child welfare services — prevention of abuse and neglect, interventions and foster care, when those won’t suffice. But the block grant isn’t the sole funding source.

Nor are children its only beneficiaries. Many states use some SSBG funds to protect vulnerable adults from abuse and neglect and to provide day care and/or home-delivered meals for seniors.

They may also get more targeted federal grants for these. And they may, as I mentioned, add some of their own funds.

The District, for one, has used SSBG funds to shore up its stressed homeless services program — here again, a melding with both a targeted federal grant and its own tax revenues.

In short, states and the District have taken advantage of the flexibility the block grant offers. And they’ve done so in ways that would make it extraordinarily difficult to show how the block grant funds, in and of themselves, made practical differences in the lives of people served.

Lead House Republicans have pounced on the flexibility we see here. They include now-Speaker Paul Ryan, who, as you may recall, would roll as many as eleven safety net programs into a single block grant.

His budget plans would have zeroed out SSBG and replaced it with nothing. The current House Budget Committee majority has used his plans as a blueprint for their own, including the latest. It too would eliminate the block grant — and for the same alleged reasons the Committee’s past reports cited.

A “duplicative” program, since other federal programs fund most of the same activities. The “wide discretion” states have in deciding how to spend the money. No evidence of effectiveness, i.e., outcomes achieved solely by their block grant spending.

And again, those programs that SSBG purportedly duplicates would get no funding to compensate states for the loss of their block grant shares. The Committee majority books the loss to them as savings — $17 billion over the usual 10-year window.

The loss would, of course, be ultimately borne by beneficiaries — “vulnerable kids and … adults,” as the Democratic minority says. The Republicans, it adds, have confirmed long-standing worries that block-granting sets programs up for a death sentence.

Well, as I’ve said before, the House budget plan won’t become the budget for the upcoming fiscal year. But it does show how block-granting programs makes them exceedingly vulnerable — if not to sudden death, then slow starvation.

And if it doesn’t show how hypocritical the calls for yet more state flexibility are, then I don’t know what can.

 

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House Budget Plan Endangers Health of Low-Income People

March 31, 2016

When I drafted my post on the House Budget Committee’s plan, I discovered that its impacts on affordable health care had too many interlocking parts to fit. So here, as promised, is a followup.

I’ve already mentioned the not-new plan to convert Medicaid to a block grant. But there is something new — a work requirement. State flexibility notwithstanding, able-bodied adults couldn’t qualify unless they were gainfully employed, actively seeking work or participating in a job training program.

Now, this may sound reasonable. But it isn’t — for three reasons. Two we’re already familiar with from the plight of able-bodied adults without dependents who will soon lose their SNAP (food stamp) benefits.

There aren’t enough jobs they can qualify for. There aren’t enough slots in training programs for all the jobless either. And states have no obligation to provide them. No evidence they’d have to for Medicaid — or get any funds for training, as they can with SNAP.

The third reason calls for a look beyond the block grant. The House budget plan would (surprise!) repeal the Affordable Care Act.

This would, among many things, deny a growing number of states and the District of Columbia the federal funds they counted on to cover a large share of the costs they incur because they expanded their Medicaid programs.

They’d lose a total of about $2.1 trillion over the upcoming 10 years. So it’s reasonable to expect they’d revert to their pre-ACA eligibility standards — or something much like. Basically, this would mean that the work requirement would apply to only very poor pregnant women and parents.

Studies of families in the Temporary Assistance for Needy Families program tell us that many of those parents face formidably high barriers to work — some that are also barriers to regular participation in a job training program. Seems they’d go hungry.

Many Medicaid recipients do work, however. Those with incomes at or above 100% of the federal poverty line could buy health insurance on an exchange — if the ACA were still intact. But without it, they’d have no subsidy to help pay the costs.

Other House committees have already passed bills within the framework of the Budget Committee’s attack on the ACA. So yet one more post to come on how key House Republicans would save money at the expense of their constituents’ health, the states they represent or both.

 


What’s New (and Not) in the House Budget Committee Plan

March 24, 2016

I feel sorry for progressive analysts and advocates whose main business is the federal budget and related issues because they again have to swat down pernicious proposals and misleading justifications.

I myself am tired of blogging on the retreads we see in the proposed House budget resolution — the immediate occasion of my pity and exasperation that I suspect is shared.

So what’s new? A few things that would devastate programs for low-income people, as well as some not new.

Vast Spending Cuts

The Washington Post has repeatedly reported that the House budget plan would cut spending by $30 billion over two years to offset what last year’s budget deal allows above the caps originally set for the upcoming fiscal year.

This is doubly misleading, though not, I think, intentionally. First off, the deal has already offset that $30 billion, though the savings reach the total over a longer period of time. Second, the plan would actually cut spending by $6.5 trillion during the next 10 years, the usual window for budget-related estimates.

The massive cut isn’t new. Nor the justification for it. The plan, like its recent predecessors aims to balance the federal budget, without raising more revenues.

It would, in fact, raise less than likely now because it would eliminate taxes on all profits corporations claim to earn overseas and the Alternative Minimum Tax collected from well-off individual filers who benefit from the lower capital gains tax rate, plus diverse deductions and credits.

Where the “Savings” Would Come From

The House Budget Committee finds roughly a sixth of its savings in discretionary programs, i.e., those that depend on annual appropriations. Most are subject to the caps, while only a few others are.

The plan provides for spending up to the somewhat higher caps agreed to for the upcoming fiscal year. But it doubles down in the years following, while boosting spending on defense even more than the budget tables show.

Spending on non-defense discretionary programs would fall by about $1 trillion below the current caps, according to a Center on Budget and Policy Priorities estimate.

These programs include a wide variety that serve low-income people’s immediate needs, e.g., affordable housing and child care, help with home heating bills. Others offer them or their children opportunities to improve their earnings prospects, e.g., job training, work-study for college students.

Most have already lost real-dollar value since the year before Congress passed the law that imposed the caps, as the Coalition on Human Needs shows.

A much bigger chunk of the savings would come from changes in mandatory programs, i.e., those the federal government must spend enough on to provide full benefits authorized by laws other than a budget.

What’s not new is a sketch of sorts for partially privatizing Medicare. Likewise proposals to convert Medicaid and SNAP (the food stamp program) to block grants.

The former would reduce federal spending by more than $1 trillion, the latter by $125 billion — nearly a third during the block grant’s first four years. Another $25 billion or so saved by not-new proposals House Republicans tried to get into the latest version of the Farm Bill.

The block-granting impacts are self-evident, as they’ve always been. Either states would have to use significantly more of their own funds to sustain the same benefits to the same groups now eligible or they’d have to cut benefits, deny them to some or a combination of both.

What’s sort of new is the re-branding. The undermined programs wouldn’t be block grants, but rather state flexibility funds, the more palatable term the House Budget Committee adopted last year.

I’ll have more to say about the Committee’s plans for healthcare programs because the not-new proposal to repeal the Affordable Care Act and a separate effort to undermine it pose broader threats than the block grant in and of itself.

I’ll just cut to the chase here in hopes of answering a question I’m guessing is on the minds of those of you still reading what seems the same old, same old with new numbers.

Why Worth a Worry

The House Budget Committee’s plan won’t develop into next year’s budget — or the many legislative changes needed to gut the mandatory programs. It may not even pass in the House because some of the Tea Partiers feel it doesn’t cut spending enough.

If it does pass, it won’t in the Senate, even if all Republicans there vote for it because they’d need at least six Democrats to join them. Lotsa luck there.

Yet I think the analysts and advocates I pity are right to not just shrug off the plan as a waste of their energies and time. Set aside, if we can, the upcoming elections.

When state flexibility funds, attacks on the ACA and other radical spending cuts resurface year after year, they become familiar in a way that doesn’t breed contempt. They gain a sort of tolerance — as negotiable perhaps or at least due the deference we generally accord debatable propositions.

Not saying all is right with all the programs the federal government funds. But the notion that it should leave the well-being of low-income and other disadvantaged Americans to the states they live in — and whatever those states can and choose to spend — seems to me fundamentally wrong.

This is not a notion that should cease to shock just because it’s teed up year after year, with new wrinkles and rhetorical flourishes.

All told, the House budget plan would cut spending on programs for low-income people by $3.5 trillion over the next 10 years — about 40% of what’s spent now or nearly one and a half times their share of non-defense spending.

And that should shock as much as the House Republican majority’s first budget plan — the ironically entitled Path to Prosperity — did.

 

 

 


What We Know (and Don’t) About Those Congressional Budget Plans

March 25, 2015

I feel I should say something about the Republican House and Senate budget plans, even if a bit late to the pile-on. They are, after all, frameworks for policies that would do grievous harm to people in poverty.

Not up front about this, however. They’re larded with deceptive rhetoric, silent on crucial details and dishonest about revenues. Fortunately, progressive experts have dug into the plans from various angles.

So we know, for example, that the plans purport to balance the budget within 10 years, but wouldn’t. They seem to only because both the House and Senate relied on dynamic scoring models built on the discredited notion that tax cuts will miraculously increase revenues.

That, in and of itself, is a good thing because actually achieving balance so soon would, at the very least, slow our prolonged economic recovery.

What’s not at all a good thing is that the plans move toward balance entirely through spending cuts — about $5.5 trillion in the more radically-right House plan, not much less in the Senate’s.

And defense would not only be held harmless, but actually get a boost, though it’s cleverly designed so as not to affect the budget balance calculation or seem to breach the spending caps set in the 2011 Budget Control Act.

We know the plans would achieve large savings by denying low and moderate-income people the affordable health care they have now. Both would, of course, repeal the Affordable Care Act, including the federal funding that has enabled willing states and the District of Columbia to expand their Medicaid programs.

They would convert what remains of Medicaid into a block grant — or in the case of the Senate, two block grants. The more forthcoming House plan commits to folding the Children’s Health Insurance Program in.

But you won’t find the term “block grant” anywhere in the plans. We’ve instead got the more marketable — and obscure — “State Flexibility Fund” or the equivalent.

Same difference. Though the plans don’t say how the budget would replace the federal matches that now cover more than half states’ Medicaid costs, they do say that savings would total hundreds of billions over the first 10 years — $400 billion in the Senate plan and an even more staggering $913 billion in the House plan.

We also know that the plans would achieve significant additional savings through changes in other mandatory programs, i.e., those that don’t depend on annual appropriations. That’s all we know from the budget figures in the plans.

But the prosy part of the House budget plan reveals that it — like all the plans Congressman Paul Ryan produced while chairing the Budget Committee — would convert SNAP (the food stamp program) to another block grant, a.k.a State Flexibility Fund.

That would cut spending on the program by an estimated $125 billion, beginning in 2021, the Center on Budget and Policy Priorities reports. States would have the flexibility to cope with the funding crunch.

If they made across-the-board benefits cuts, recipients would lose, on average, $55 a month, according to CBPP’s estimates. If they instead made certain categories of recipients ineligible, as many as 12 million people would lose their benefits altogether.

No cuts to Pell grants for low-income college students. But the House plan — again, the more forthcoming — supposedly “makes the program permanently sustainable.” Translated, this means a 10-year freeze on the maximum a student can receive — $5,775 a year.

Don’t suppose I need to say that this is far less than the average costs of attending college. Don’t need to say that these costs can be expected to rise, especially because most states are balancing their budgets in part by hiking tuition.

How the House and Senate Appropriations Committees will divvy up the rest of the savings remains to be seen. Both the House and Senate plans apparently preserve (for real) the cap on non-defense discretionary spending, i.e., for programs whose funding hinges on annual appropriations.

But when we look ahead, we find that these programs would lose many billions more than the caps allow — $759 billion in the House plan and at least $236 billion in the Senate plan.

Put these together with the specified and unspecified cuts in mandatory programs and we come up the trillions cited above because the plans cut only non-defense programs. CBPP figures that more than two-thirds of the money would come from those that serve low-income — and in some cases, moderate-income — people.

Well, these plans aren’t going to result in a final budget that the President will sign. They’re still profoundly worrisome. Because whatever he does sign — and he will sign something — will surely leave key programs for low-income people far short of the funds needed to give them a secure safety net and opportunities to better their financial circumstances.

Even the budget we have now falls short of needs.

 

 


House GOP Finds Savings in Program for Doubly Disadvantaged Children

June 21, 2012

Well, you’ve got to hand it to House Republicans. Takes guts to go after poor children with disabilities. But that’s apparently what they have in mind.

The budget resolution they recently passed would cut funding for the Supplemental Security Income program by $3.5 billion over the next 10 years. These savings would be achieved by reducing benefits to families with more than one child enrolled in SSI.

And adding insult to injury, the Budget Committee’s report falsely claims that advocates have, in the past, supported such a proposal.

Some Basic Facts and Figures

SSI provides modest cash benefits to low-income people who are elderly, blind or otherwise severely disabled. For adults this means, among other things, “unable to do any substantial gainful activity.”

Children, of course, can’t do substantial gainful activities — unless their parents find work for them as models or actors. So the SSI standard for them is different.

They must have “a medically determinable” physical or mental disability that “result[s] in marked and severe functional limitations.” Only disabilities expected to last at least a year or to be fatal count.

Children meeting this standard can receive SSI benefits only if their families have less than $3,000 in resources, except for certain specified assets, e.g., a car, a home, a burial plot.

Benefits are modest — a maximum of $698 a month this year. Most children get less.

The benefits partly offset the additional costs parents incur when their children are severely disabled, e.g., lost income because a parent has to stay home or work less to provide care, transportation to and from doctors and therapists, out-of-pocket expenses for aids, special foods and the like.

Note the “partly” here. A recent research review found that direct and indirect costs of raising disabled children averaged $10,830 — $3,440 less than the average income support SSI provides. And not all families included in the cost average had children with disabilities severe enough to qualify for SSI.

Not surprisingly then, more than a third of children with SSI benefits live in families below the poverty line. Many more live in families that experience material hardships, e.g., food insecurity, utility cut-offs, inability to keep up with the rent.

House Budget Committee Proposal

The House Budget Committee justifies the proposed SSI cut on the basis of the benefits model “typically” used by other “welfare” programs.

Some indeed, as its report says, provide benefits on a sliding scale. The scale often weights benefits toward the neediest.

But household size is sometimes a factor. For example, the maximum food stamp benefit for a family of four is less than four times the maximum benefit for a single individual.

This makes some sense, as we shoppers know. A gallon of milk costs less per ounce than a pint.

It’s absurd to think that a parent who has two or more children with disabilities could achieve some comparable economies of scale.

Last time I checked, pharmacies don’t give discounts if a parent fills prescriptions for more than one child. Nor do the day care centers that provide the intensive, specialized care that children with severe disabilities need.

Perhaps the House Budget majority thinks parents can achieve efficiencies — for example, rotate use of a wheelchair between two children with mobility impairments.

Set aside for a moment the effects on the kids. The idea itself implies that all disabled children in a family have identical needs. You don’t have to be an expert to know this is wrong, even when the children have disabilities with the same clinical name.

More likely, the Republican majority is going after SSI because it’s “welfare.” Not only that, but an entitlement — the worst kind of federal spending, if it aids low-income people.

False Claim of Support

What’s truly beyond the pale is the Committee’s claim that advocates have supported a sliding scale. To exemplify, it cites a remark Jonathan Stein made during a 1995 hearing.

Stein, General Counsel at Community Legal Services of Philadelphia, allowed as how there should be some sort of cap or sliding scale of benefits “for very large families” — this in response to a hypothetical about a family with eight disabled children.

To rope him and his organization into the current proposal is fundamentally — and knowingly — dishonest.

Maybe the best the Committee could do because it’s hard to justify the cut otherwise.

NOTE: I am deeply indebted to Rebecca Vallas, another attorney at CLS, for helping me get up to speed on this issue. What I’ve written reflects some of the many documents she shared and her answers to my many questions. The political analysis (and any errors) are entirely my own.


Why I’ve Little to Say About the Ryan-Republican Budget … But Say It Anyway

March 25, 2012

I feel I ought to write something about the Ryan-Republican budget plan. I’ve been advised to call it that because it represents the platform Republicans are running on.

I’ve  read the Path to PovertyProsperity twice now. Both times got infuriated, which usually gets my blogging juices flowing.

But I’m stuck for a fresh topic. So I’ll write about that because the reasons are telling.

Proposals Replicate Last Year’s

One reason it’s hard for me to figure out what to write is that the new budget plan is in many ways the same as last years — at least for the issues I cover.

As you’ve probably read, it does take a new tack on privatizing Medicare. But the end results would be the same — costs increasingly shifted to seniors, ultimately less health care — and death of the traditional Medicare option the plan supposedly preserves.

So far as safety net programs are concerned, the two the Path gives specifics about are basically rehashes of the 2011 Path proposals.

Change Medicaid from a cost-sharing program to a block grant. Link increases in federal funding to population growth and the overall inflation rate rather than to health care costs. And let states do whatever to cope with the cost crunch.

Well, I wrote about that last year.

The Center on Budget and Policy Priorities has updated figures, but the bottom line is still the same — many millions of low-income people without health insurance, fewer services and/or higher co-pays for those fortunate enough to still qualify.

Same deal for the food stamp program. Once again, the budget plan would convert it to a block grant, using the deeply-flawed Temporary Assistance for Needy Families program as a model.

There’d be new work requirements for participants — and time limits, even apparently for the nearly 30% of households that have income from work. Also apparently for those too young, too old or too disabled to work — well over half of all participants.

And again federal funding would be capped at a level far below projected costs.

But I’ve already written about this attack on the safety net too.

The only news is that the block grant would kick in one year later and cut federal spending by more — at least $133.5 billion over the first 10 years, rather than the $127 billion estimated last year.

Plan Lacks Specifics

The other reason I find it hard to write about the budget plan is that it’s egregiously short on specifics.

The food stamp program, for example, is lumped into a category called “other mandatory,” i.e., all programs that don’t depend on annual appropriations for funding, except for Social Security, Medicare, Medicaid and a couple of other health care programs.

Jim Horney, CBPP’s Vice President for Federal Fiscal Policy, tells us that the budget plan reflects $1.2 trillion less than projected spending for these programs under current policies.

So even if one accepts Congressman Ryan’s assumed savings in farm subsidies and the federal retirement plan, there’d still be $900 billion in savings unaccounted for.

Where would they come from? Subsidized school meals and/or other child nutrition programs? Supplemental Security Income for low-income elderly and disabled people? Unemployment insurance? TANF (again)?

All of the above?

The same question mark hangs over non-defense programs that depend on annual appropriations — education and job training, housing assistance, veterans benefits, food safety, law enforcement, highways and a whole lot more.

Funding for these programs would be cut $1.2 trillion more than under the caps Congress agreed to last August. Where would the ax fall? Or rather, how close to the ground — and when?

Drastic Changes Deserve Informed Debate

Speaking of the mandatory programs, Horney concludes that “it would be a real travesty” to pass a budget like the Ryan-Republican plan “without a full and honest debate about [the cuts] and without leveling with policymakers and the public what cuts the … budget envisions.”

I think the same is true for the so-called non-defense discretionary programs. True, it’s up to the House Appropriations Committee and its subcommitees to decide exactly how to apportion the cuts.

But we ought to be told straight out how the Ryan-Republican budget would transform our country — because it surely would.

A preliminary analysis by the Congressional Budget Office indicates that, by mid-century, there’d be virtually no funding left for anything except defense, Social Security, the major mandatory health care programs and interest on the debt.

The rest of the federal government would, as arch-conservative Grover Norquist wishes, have been shrunk so small it could be drowned in a bathtub.

Surely this merits more debate than the annual budget process allows — and a full, frank accounting to base it on.

UPDATE: After I posted this, I discovered that the House Budget Committee had published a report that essentially spells out the Fiscal Year 2013 plan in greater detail. It says that block granting the food stamp program would save $122.5 billion over the first 10 years.