Programs for Poor Were Target for Cuts in '91

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Many states responded to their severe fiscal problems in 1991 by making deep cuts in programs for the poor, a new report contends.

Programs providing Aid to Families with Dependent Children, general cash assistance for destitute adults, and emergency help for people with special needs suffered their biggest reductions in a decade, charges the report, which was released by the Washington-based Center on Budget and Policy Priorities and the Center for the Study of the States in Albany, N.Y.

Unlike the cutbacks ordered by federal lawmakers in the early 1980's, which focused largely on programs for the working poor, the current round of state-mandated reductions has fallen most heavily on people with little or no other income--those whom the report describes as "the poorest of the poor."

Noting the 25 percent cut in A.F.D.c. benefits proposed last month by Gov. Pete Wilson of California, the report also warns that further reductions may lie ahead in 1992, given the continuing weakness of the economy.

"It is entirely possible that poor households will be hit again in 1992--and hit substantially in a number of states," the study suggests.

But such reductions were and are not inevitable, the report argues.

While conceding that states faced a difficult budgetary situation last year, the authors of the report maintain that lawmakers could have pursued other strategies-notably, raising taxes on the wealthy--rather than put so much of the budget-balancing burden on programs for the poor, which take up only about 5 percent of state spending nationwide.

Falling Further Behind

The report, which was based on surveys of state agencies, found that states:

  • Allowed A.F.D.C. benefits, which have fallen substantially in purchasing power over the past two decades, to decline even further in value. Only 11 states raised benefits at a rate equal to or above inflation, while 9 states cut the actual dollar amounts of benefits.
  • Made stringent cuts in general-assistance programs, which go to childless, non-elderly adults. The most dramatic change came in Michigan, which terminated a program that had been aiding 82,000 people; over all, 14 of the 30 states with such programs ordered reductions.
  • Also targeted emergency cash aid for families in crisis and A.F.n.C. special-needs assistance, such as the Massachusetts program that helps welfare children buy warm clothes for school. Nine states cut emergency assistance, while five scaled back their special-needs programs.
  • Compiled a "mixed" record on Medicaid, with 11 states expanding eligibility and 20 states providing additional services, in particular prenatal coverage.

On the other hand, cutbacks or elimination of general-assistance and other programs will result many people losing eligibility for the federal-state health program for the poor.

Vol. 11, Issue 16, Page 32

Published in Print: January 8, 1992, as Programs for Poor Were Target for Cuts in '91
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