History is littered with moments where one side could claim a victory or the other side could declare the opposite. Very often they involve conflicts of some sort, and very often no one has won at all. And also very often during these conflicts are people who were never involved in the conflict to begin with, but very often are the real ones who have lost.
Block grants as they apply to federal programs are one such conflict and an interesting reminder on why Paul Ryan's budget and the plan for not just Medicare but also Medicaid and a slew of other programs would be so disastrous as to be damn near ethically bankrupt on a part of a government intended to care for its citizens.
Join after the fold for more, and lets take a way back machine to 1996
What happened in 1996 you ask?
Welfare reform. More specifically in detail President Clinton signed into law a bipartisan bill called the Personal Responsibility and Work Opportunity Reconciliation Act. It was a wide sweeping law that changed much of the Federal Welfare program and was heralded as the bill that would fix our 'welfare queen' problem. Despite that never being a problem to begin with. That's a topic for another diary, lets stay focused on the reform and its results.
Before this bill a federal program often worked by matching state dollars with grants. A state would qualify for a grant if it met certain conditions in the use of previous funds or some policy requirement of the grant. This is how the US now has a near universal minimum drinking age of 21, the Department of Transportation has it as a requirement for specific road and transportation grants to states. In short, a state would apply for a grant based on the intended use or previous use and then administer that grant money according to the grant rules and its own policy decisions in that state.
In the case of welfare, this money would be given in the form of cash payments to participants. These cash payments went to families with children whose parents had recently been disabled, out of work, or in a lot of instances mothers with fathers who had abandoned the family. The federal portion of the payment had started near 80% since the programs inception and was gradually dipping until it was reformed. Right now in the form of block grants it stands at around 50% and continues to decline as states reduce their state participation of various programs.
With reform the program was dramatically overhauled. Instead of matching funds in the form of a direct grant their place was now taken by block grants. The different being that instead of say Indiana putting up 30 million to get a matched 2 for 1 at 60 million, the Federal program would now just give a flat 40 million no matter what the participation of the state was. These fixed amounts are given to a state for the state to administer.
Another thing the reform did was to eliminate much of the federal regulations and requirements given to states for eligibility. It allowed the state to craft its own eligibility levels and requirements. The legislation was crafted in a way that because of varied participation amounts and no matching requirement from the state it allows states to divert their portion (no longer required) from that block grant into other areas governance, very often having nothing to do with family assistance. The amounts allowed to divert are upwards of 44% at times and vary from state to state.
As the NY Times article points out, when the recession hit states were allowed to take their block grant money divert it to shore up lagging state budgets. The effect as the article points out had dramatic effect on people, particularly poor single mothers. Add to that the time limit of five years reform includes, also allowed to be lowered by states, and we saw dramatic hits to poor people in the last 20 years.
Unfortunately both sides who championed welfare reform called it a victory. The number of Americans on welfare dropped from 12.6 million to 4.2 million by 2009. It was heralded as a success of reform, mostly based on those numbers. The thinking was that because less people are on the program we must be lifting them out of poverty right?
No, the reform was a total disaster as the article above points out. Just because less people are using the program does not mean their lives are improved. Very often, to increase allowances in grant diversion, states would manipulate their welfare numbers by increasing eligibility requirements and/or lowering the time allowed on the program. This would then reduce their total participation numbers allowing them to report successes because the reform was written to include success being measured by lowering the number of participants on the rolls.
Its hard to even follow the logic in this thinking.
We are going to reduce the amount of funds, raise the bar to participation and now because we've eliminated people participating those people who cannot get welfare are now better off and there is less poor people.
Insanity I know. And there is a direct correlation between poverty rates and welfare. When the recession hit those at the lower income brackets were hit the hardest. Very often many of those participate in programs like TANF on a temporary basis because of recessions and dips in the economy. They join the program when things are down, and it floats them to the next upsurge where they come off the rolls. However, because of the way states are allowed to handle TANF funds we saw an increase in poverty rates in 2008 from 12% or so to a rate of 15% in 2010.
And now Paul Ryan and the republicans want to transform another program in the same way. Paul Ryan's Plan for Prosperity, a joke if I ever heard one, calls for morphing the Medicaid program into a block grant style program. Governors of states are calling on this program to be implemented as well, saying they need more flexibility in how medicaid dollars are spent.
Right...flexible spending using block grant money, I wonder why they would want that!?
You can kinda of see the end game here by now I hope, but I will spell it out in detail for everyone that might miss it.
Medicaid is a program for low income families and those with disabilities who lack access to medical resources required to treat their health needs. It serves the poor and needy who lack those health or money resources, especially families in poverty or near it. Participation by states is entirely voluntary however to get these funds states are required to match dollars to some degree and follow federal guidelines in specific areas of the use of these funds. Sounds familiar right?
Essentially if turned into a block grant program, states would with almost certainty utilize the block grant dollars and divert those funds to items unrelated to the intent of the program. They would divert billions of dollars intended to care for the health of low income, poor, and disabled people. Those receiving medicaid right now would have a chance of loosing it as the creator of requirements for the program would almost with certainty be placed into the sole hands of the states where as now there is some federal input regarding dollar amounts and locations spent.
We could even get such draconian things like time limits effectively cutting you off from care. Or even more drastic states could turn into the same style program Paul Ryan has for Medicare and throw you to the wolves in the private market.
Whatever the outcome, it is very clear that Paul Ryan wants nothing more than to make the poor poorer and the rich richer. This is Paul Ryan's plan, and Mitt Romney's plan. Indeed it is the plan of the entire republican party.
They don't want the glass full, they damn sure don't want it half empty, and they are more than willing to take your glass away and let you die of thirst.