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.