Dems, GOP Fight Over Federal Spending for the Poor

Congress left for the Thanksgiving holiday last week without finishing some overdue work on two budget bills that would simultaneously cut spending and cut taxes.

The House-passed version of the spending-cuts bill would trim billions of dollars from programs aimed at the poor. Included are Medicaid, food stamps and child support programs.

Republicans say the cuts are needed to reduce the massive federal deficit. But they also say that the programs don't work as well as they should.

For all the arguing over the measure, the cuts in programs for the poor are, in fact, relatively small. The Medicaid reductions, for example, would slow the rate of growth in the program only by about a third of a percentage point.

Still, Democrats have decried the efforts, not so much for their size, but for Republicans' choice of which programs to target and why.

"We're seeing the Republicans cutting programs that help those who have too little, so that in a couple of weeks they can give huge tax breaks to people at the top," says Sen. Patty Murray (D-WA).

Republicans, however, say they're targeting programs for the poor mainly because that's where the money is.

"Virtually all of these programs have seen massive increases over the past several years and it's not unreasonable to slow the growth of spending," said Rep. Jeff Flake (R-AZ).

"And that's all we're doing here. So-called cuts are hardly that. We ought to go a lot deeper, frankly," said Flake, a member of the Republican Study Committee, a group of fiscal and social conservatives that unveiled a plan in September calling for nearly four times as large a bite out of federal spending as the House approved last week.

Conservatives are taking aim at programs for the poor for ideological reasons, too. Michael Tanner, director of health and welfare studies for the libertarian CATO Institute, says Medicaid is a perfect example of how programs for the poor don't work.

"Like all welfare programs, it tends to discourage people from leaving dependence on government and moving into the workforce," he says. "It actually squeezes out private health insurance and makes people more dependent on government."

And while Democrats point to New Orleans in the aftermath of Hurricane Katrina as a reason the federal government should increase aid for the poor, Tanner says it demonstrates exactly the opposite.

"In the last five years, we have spent some $10 billion on antipoverty programs in New Orleans," he notes. "Welfare spending went up for New Orleans every year during the Bush administration. Yet at the end of the day we clearly saw that there was a huge underclass and widespread poverty in the city. Clearly whatever we're doing now isn't working."

Liberal analysts say that logic is flawed. It's not how much the federal government spends on the poor, says Robert Greenstein, executive director of the Center on Budget and Policy Priorities. Rather, it's how little the states spend.

In Louisiana, for example, parents qualify for Medicaid coverage only if they earn less than $174 dollars a month — which is far below where the federal government draws the poverty line.

"What we had in Louisiana, Alabama and Mississippi were the weakest safety nets in the United States," Greenstein says. "One of the reasons those people were so poor was because governmental assistance was so extraordinarily limited in those states."

Greenstein says there is little question that most government programs for the poor do work, and work well.

"There are reams of evidence showing that programs like food stamps have had an extraordinarily beneficial effect in improving the nutrition of the poor," he says. "In the case of Medicaid, you can look at measure after measure in health care access, health care treatment, various sorts of things among the poorest people in the country, and it is significantly better than it was before Medicaid."

At this point, though, it's not clear how much stomach the Republican Congress actually has for cutting programs for the poor.

The Republican House last week passed the bill to trim Medicaid and Food Stamp spending by just two votes. And House members unexpectedly rejected a separate spending bill for the Department of Health and Human Services, largely because it cut programs for the poor too deeply for many moderate Republicans. Both those bills — along with a tax cut measure — will be back on the table when Congress returns in December.

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