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February 29, 2012 | By | Posted in Legislature

DPW Secretary: PA needs new direction on welfare spending

Democrats say ideology is driving Corbett administration’s reductions in cash assistance
 
By Eric Boehm | PA Independent
 
HARRISBURG — With 5.8 million residents in the workforce and 2.8 million receiving some type of help from the state, Secretary of Public Welfare Gary Alexander said Pennsylvania has to change course.

“This is not an ideology. This is a fiscal reality,” Alexander told the Senate Appropriations Committee during a budget hearing Tuesday morning.
 
 
The state Department of Public Welfare is taking a more aggressive approach toward getting “able-bodied” recipients to find jobs and take themselves off the state rolls, Alexander said. 
 
To that end, the department has eliminated cash-assistance payments while maintaining medical assistance, is pressing forward with a new jobs initiative for all recipients and is re-implementing an asset test for Pennsylvanians who get food stamps.
 
The state is planning to spend $11 billion on the department next year. When federal funds are included, that total climbs to $27 billion.
 
The department’s budget for the past decade has increased by an average of 10 percent from year to year, while the state’s economic growth has averaged about 3 percent. New reforms are aimed at bending the cost curve and keeping budget growth below 7 percent in future years,  Alexander said.
 
But lawmakers laid into the administration’s plans, decrying the elimination of the cash assistance program and the institution of a new asset test for people who receive food stamps. 
 
State Sen. Vincent Hughes, D-Philadelphia, said the department was being “penny-wise but pound foolish,” because cuts in assistance this year would increase costs in the future when current recipients end up in hospitals or jails.
 
“You’re putting a fragile community in a much more difficult situation, and then you’re ripping the safety net to shreds,” Hughes said. “We spend minutes talking about job creation with this administration, and we spend hours and days talking about all the cuts that you guys are making.” 
 
Job losses during the Great Recession were driving up the need for welfare programs, he said.
 
Alexander said the department was maintaining funding for medical assistance and Medicaid, which account for 80 percent of the Welfare Department’s spending, and looking for savings in the other 20 percent of the budget, which is the part mostly funded with state tax dollars.
 
State Sen. Shirley Kitchen, D-Philadelphia, said the department’s decision to end cash assistance would hurt “the poorest of the poor,” who cannot work or get to a job with regularity.
 
Recipients of cash assistance — of which there are 61,000, the department said — receive between $174 and $215 per week and are mostly adults without children.
 
In place of cash assistance, the department is hoping to get more welfare recipients back to work with a new jobs initiative. The department is partnering with the state Department of Labor and Industry to require welfare recipients at all levels to actively pursue work, if they are able to do so.
 
 
Alexander said the new initiative would include job training, active work searches or educational opportunities. The policy change would not affect recipients who already have a job.
 
State Sen. John Gordner, R-Columbia, said local career centers are reporting a 30 percent increase in usage in recent months, which he attributed to the administration’s new job initiative.
 
“That’s been the great side of the work requirements,” Gordner said. “More people are coming in the door to take advantage of the resources that are available to help them get a job.”
 
Pennsylvania's unemployment rate was 7.6 percent in December, the most recent month available. That's down from 8.3 percent in January 2011, but up from the low of 7.4 percent in May.
 
The department estimates that $150 million will be saved by the new initiative as people enter the workforce and leave the state rolls, but Democrats argue that those savings would be overshadowed by new costs in the department as it tries to cut down on fraud and abuse in the food stamp and cash-assistance programs. 
 
Kitchen criticized the department’s newly restored asset test for food stamp recipients, which will disqualify people from benefits if they have more than $2,000 in personal savings, excluding the values of houses, retirement savings and a first vehicle. 
 
 
“We were allowing individuals to come onto this program who had the ways and means to do something else,” Alexander said. “This program was founded in 1965 with the sole purpose of being a program of last resort.”
 
Casey Underhill, a mother of two from Cumberland County, said government has a role to play in providing benefits like food stamps for the poor, but there should be a limit on what people can receive.
 
Underhill shared these thoughts as she headed into Karns Quality Foods in LeMoyne to buy groceries for her family.
 
Another change by the department is random drug testing for recipients, which, Alexander said, would save millions of dollars not only by removing some people from the rolls, but by deterring others from even trying to get state assistance in the first place.
 
But there is still waste in the system, and that should be rooted out before cutting important programs, said state Sen. Pat Vance, R-Cumberland.
 
 
In total, more than 94,000 out-of-state transactions were made with Pennsylvania EBT cards in May 2010 alone, Wagner reported.
 
“That is ridiculous,” said Vance, referring to EBT transactions being made in Hawaii and other vacation destinations. “We need to make this a top priority.”
 
 
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