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In the Name of Protecting Children, the Poor, and the States, the Ryan Budget Does the Opposite

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"Actions speaker louder than words but not nearly as often." -- Mark Twain

House Budget Committee Chairman Paul Ryan released his fiscal year 2015 budget proposal last week, but the rhetoric in the document and out of the Committee often seem at odds with the budget choices that are being made. The result is that it has left many in the children's advocacy community confused, disappointed, and upset.

On the one hand, in the House Budget Committee's recent report on the "war on poverty," Chairman Ryan highlights the problem that 21.8 percent of our nation's children are living below the poverty line and he notes how important education is in reducing poverty. As the report says, "Without a job, it is difficult to get out of poverty. And without education, it is difficult to find a job. The lack of affordable education - and of effective training programs - hinders skill formation, which is critical to social mobility."

On this point, the children's community wholeheartedly agrees. As University of Chicago professor and Nobel Laureate James Heckman writes, "Everyone knows that education boosts productivity and enlarges opportunities, so it is natural that proposals for reducing inequality emphasize effective education for all. But these proposals are too timid. They ignore a powerful body of research in the economics of human development that tells us which skills matter for producing successful lives."

Clearly, as Dr. Heckman has found, the logical conclusion to reducing poverty and improving our economy for the long-term is for the nation to invest in quality education from early childhood through elementary and secondary education and college, right?

Well, apparently not to the House Budget Committee. In the Committee's fiscal year 2015 budget resolution, rather than making investments in education and our children's future, the Ryan budget instead proposes billions of dollars in cuts to educational programs, including cuts to early education programs like Head Start, child care, funding for public education, and student loans.

As for Medicaid, it provides health coverage to over 30 million low-income children across the country, including a disproportionate number of children with disabilities and special health care needs. In last year's budget proposal, the House Budget Committee argued that Medicaid needs reform because the program currently provides "below-market reimbursement rates" to doctors that leave "beneficiaries with fewer provider choices and reduced access to care."

Once again, if health care providers are being underfunded, the clear solution would be to increase provider payment rates, just as was done successfully in Alabama, Michigan, South Carolina, Tennessee, Virginia, and Washington to dramatically increase the access to dental care for children in Medicaid.

Instead, the Budget Committee's proposed solution to "below-market reimbursement rates" is to cut $732 billion out of Medicaid and also to eliminate the added funding in the Affordable Care Act set aside to improving physician payments in Medicaid. Although inconceivable, the report argues that states would somehow miraculously devise an improved Medicaid program despite a cut of $732 billion over 10 years, or 26 percent by 2023, to the program simply because the funding would be delivered in the form of a block grant. Of course, with over one-quarter of the funding slashed, the consequence would be some form of health care rationing rather than increased provider payment rates.

As Dr. Aaron E. Carroll says, "... don't be fooled into thinking that if we somehow took less money and handed it over to states in the form of 'block grants' that they could somehow magically cover the same number of people and increase reimbursement to physicians."

In fact, just to maintain current services, the Congressional Budget Office (CBO) previously explained that hundreds of billons of dollars in federal cuts would leave states with rather awful choices. CBO explains:

...the magnitude of the reduction in spending relative to such spending in the other scenarios means that states would need to increase their spending on these programs, make considerable cutbacks in them, or both. Cutbacks might involve reduced eligibility for Medicaid and CHIP, coverage of fewer services, lower payments to providers, or increased cost-sharing by beneficiaries - all of which would reduce access to care.

Yet, somehow the allure of a block grant and the idea of "state flexibility" seem to fool people. As a result, in addition to Chairman Ryan, there are governors that clamor for block grants, such as Governors Rick Perry of Texas, Bobby Jindal of Louisiana, Rick Scott of Florida, Chris Christie of New Jersey, and Gary Herbert of Utah. This is despite the fact that such a proposal would be a fiscal wreck for high-growth states or states often hit by natural disasters.

And for children specifically, such a budget would result in a man-made disaster. As the late Republican Senator John Chafee said in opposition to a Medicaid block grant proposal from House Speaker Newt Gingrich in 1995:

As states are forced to ration finite resources under a block grant, governors and legislators would be forced to choose among three very compelling groups of beneficiaries.

Who are they? Children, the elderly, and the disabled. They are the groups that primarily they would have to choose amongst. Unfortunately, I suspect that children would be the ones that would lose out.

Even worse, beyond the Medicaid block grant proposal, the Ryan budget would also effectively repeal the Children's Health Insurance Program (CHIP) and fold whatever is left of its shell into the significantly cut Medicaid block grant. This is despite the fact that CHIP has been a bipartisan effort that successfully cut the uninsured rate for children in half since its inception in 1997. The fact is that Senator Chafee would be doubly outraged. To repeat Senator Chafee's words, "I suspect that children would be the ones that would lose out."

Compounding the education and health care cuts facing the poor, children, and states in education and health care, the House Budget Committee also proposes to block grant and slash the Supplemental Nutrition Assistance Program (SNAP) or food stamps by $125 billion over just five years -- between 2019 and 2024. Again, such cuts would harm the poor and children.

But in this case, even the semblance of giving states "flexibility" is gone. In fact, the SNAP block grant is coupled with the imposition of new federal requirements upon states related to "work incentives" and new limits on state flexibility in determining eligibility in SNAP. The budget proposal would also eliminate flexibility that states have sought in the Temporary Assistance to Needy Families (TANF) block grant with respect to work requirements.

States interested in the allure of block grants should also recognize that the Social Services Block Grant (SSBG), which was initially proposed by President Ronald Reagan and enacted in 1981, is terminated in the House Budget Committee proposal because it provides too much state flexibility. As the proposal to eliminate SSBG reads, "States are given wide discretion to determine how to spend this money and are not required to demonstrate the outcomes of this spending, so there is not evidence of effectiveness."

Surprisingly, the goals of SSBG are exactly the type of thing that the House Budget Committee professes to support. In fact, the five goals are:

• achieving or maintaining economic self-support to prevent, reduce, or eliminate dependency;
• achieving or maintaining self-sufficiency, including reduction or prevention of dependency;
• preventing or remedying neglect, abuse, or exploitation of children and adults unable to protect their own interests, or preserving, rehabilitating, or reuniting families;
• preventing or reducing inappropriate institutional care by providing for community-based care, home-based care, or other forms of less intensive care; and
• securing referral or admission for institutional care when other forms of care are not appropriate, or providing services to individuals in institutions.

Thus, despite some rhetoric to the contrary, the House budget proposal is not really about addressing poverty, improving education, improving Medicaid payment rates, or helping states at all. Instead, it slashes the federal budget by disproportionately cutting funding for the poor, children, and the states, and nobody should be fooled in thinking otherwise.

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