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December 31, 2003
The 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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