The Budget Politics of Being Poor

December 31, 2003

December 31, 2003The Budget Politics of Being Poor

Quietly and painfully, most states are choosing to crimp the health-care safety

net for their poorest and most politically defenseless residents. An ominous new

study shows that up to 1.6 million impoverished and working-poor Americans — at

least a third of them children — have been deliberately knocked from publicly

financed health care programs in the last two years. Officials in 34 states are

opting to slash Medicaid and poor children's health insurance coverage as a path

of least resistance to the balanced budgets mandated by law.

States have raised poverty standards beyond federal requirements, increased

bureaucratic delays and even shut down children's health programs entirely to

keep entitled poor people off the rolls. For each dollar thereby saved in the

state budget, statehouses are losing $4 to $7 in federal aid. Yet more such

counterproductive " economizing " can be expected next year, according to the

study, by the Center on Budget and Policy Priorities, a government watchdog

group.

During the 1990's boom, those who despaired of getting universal health

insurance through federal action looked to expanding state programs as the best

way to protect the working poor. But many of the same states that were

increasing health coverage were also cutting taxes. Unlike the feckless

tax-cutters in Congress, they cannot simply bury the resulting deficits in

future debt. Something had to give, and it turns out to be programs like the

hard-won gains in health insurance.

Things would be even worse except for the $20 billion in state emergency aid

that the Republican-led Congress was embarrassed into approving at the height of

the tax-cut frenzy this year. Since Congress is showing no signs of picking up

the slack when it comes to health coverage, it should vote at least a renewal of

this aid next year.

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