Rationing by Hassling


It’s the season for giving, but the legislature is already making some distinctly Scrooge-like sounds. Every two years we hear the same thing: welfare must be cut if we’re to balance the budget. The Aid to Dependent Children program, which gives cash assistance to single parents and their children, is always a popular target, since it is funded with state dollars. This time around a proposal has been floated to increase the penalty on parents who break the rules of the program, from a half sanction to a full sanction. That is, the portion of the monthly check allotted to the adult in the household would be withheld entirely, instead of partially. Anyone who sees this as the solution to a projected budget deficit of up to $12 billion is either extremely unfamiliar with the state budget, or out of touch with reality, or both. As an economist with the Center for Public Policy Priorities, the progressive Austin think-tank, explained at a recent press conference, we have 3 million poor people in this state, and about 80,000 adults who receive cash assistance. The screws are about as tight as they can get on that program, and there isn’t much money to be squeezed out of it.

What else will Uncle Scrooge go after? There’s always Medicaid, the health care program for poor people. But for every dollar we take out of that program, we lose $1.50 in federal funding. Another trial balloon floated by the new Republican majority in the House is to reduce the number of food stamp eligibility workers. This would certainly lower the food stamp rolls in Texas, which have already been drastically slashed by the two year limit on benefits imposed during the Clinton Administration. But would it help the state budget much? Probably not, since the food stamp program is 100 percent federally funded. More-over, that model of cost-saving, which advocates for low-income Texans call “rationing by hassling,” relies on a misguided strategy of raising barriers to delivery of services to people who need them. If someone meets the eligibility criteria for assistance, they should receive it. It should be the state’s job to seek out and sign up every one who qualifies for assistance. That’s the only way the state will redress, for example, its appalling status as the state with the highest percentage of uninsured children in the nation. Thanks to the diligent efforts of progressive Democrats in Washington and Austin, we now have the Children’s Health Insurance Program, which is beginning to fill that gap. But the program needs better outreach, so that the estimated 1.2 million remaining eligible children can be signed up. The lion’s share of funding for that program comes from the federal government, and the part that comes from the state is well spent. As numerous studies have shown, uninsured patients wind up in emergency rooms at public hospitals more often than not, where their care is much more expensive than preventive care would have been, and where cities and counties, already strapped for cash, pick up the bill.

The budget shortfall is not unique to Texas; nationwide, economists are calling it the worst crunch for states since World War II. It’s how Texas responds that matters. The Center for Public Policy Priorities reports that 23 states raised taxes in fiscal year 2003; thirteen of those had Republican governors. Does Rick Perry have the heart to do the same? Or will he balance his budget on the backs of the poor? Santa’s watching.