Finding Out What Fiscal Armageddon Means

Armageddon could be worse.

“We’re not literally talking about the end of the world,” Joe Mathews joked with the audience at the California Endowment.

But, short of the end of the world, California is in dire budget straits, finally facing the “Armageddon cuts” that Governor Arnold Schwarzenegger has evoked for five years. Cuts proposed by the governor would hit health and human services, which account for about 30% of the state budget, Mathews said. The governor has proposed eliminating CalWorks, which strives to take Californians from welfare to jobs; eliminating Health Families, a children’s health insurance program; and cutting MediCal and aid programs for the elderly and disabled. An Assembly conference committee budget proposal, though it didn’t pass, also asked for fairly severe cuts in some of those programs.

Mathews joined journalist Marta Russell, Mike Herald of the Western Center on Law & Poverty, Michelle Wolf, a parent of disabled child, Gloria Rodriguez, president and CEO of the Community Clinic Association of Los Angeles County, and State Senator Gil Cedillo to discuss the human costs of the Armageddon cuts.

The state of the state budget

fiscalarmageddon_discussion1For the past 18 months, the California legislature has struggled to resolve the budget crisis, passing two stop-gap measures last summer and this February, Herald noted. While the two measures did solve $39 to 40 billion of the state’s revenue problems, much remains to be done, and the global economy isn’t helping. “These are obviously very complex and difficult problems,” Herald said. “Politics is in the middle of all that, which of course makes things so much simpler.”

The recently proposed conference committee budget, Herald said, was the first time his organization had supported a budget with cuts for low-income people. “This was an honest and fair attempt to bridge the gap,” he said, with “shared sacrifice for everybody.” But the budget didn’t pass the state Senate. Two days after that, Herald said, State Controller John Chiang began issuing IOUs to about 35,000 Californians, the first time the state has used IOUs since 1992. And more bad news could be on the way as the budget process goes on.

Cutting CalWorks

CalWorks, Herald said, serves 1.3 million people, a million of them children. The program began under, Herald joked, “that great liberal welfare reformer” Pete Wilson, who proposed protecting the children of non-working parents. Schwarzenegger has proposed taking families off CalWorks if they have been on the program for over 24 months. “Under the current policy we punish parents,” Herald fiscalarmageddon_reception1 said, “but we make sure there’s a roof over kids’ heads. That is what the governor is proposing to take away.” Those who go off the program might enter into communal living situations — which can help families rise out of poverty, or trap them in more difficult or violent circumstances — move into homeless shelters, or even live on the streets. Up to 78% of those in the program would no longer qualify for aid.

From homes to nursing homes

Russell noted that cuts to the In-Home Supportive Services Program would impact 380,000 recipients, based on a new cut-off point for those who receive care. Cutting care would ultimately cost Californians more, Russell said, because nursing homes, which are significantly more expensive, are the only alternative for many in the program.

fiscalarmageddon_reception4“For some the cuts will be life-threatening, and others, who may be forced against their will into nursing homes, have participated in this program precisely because it has kept them out of nursing homes,” she said. The latter group were assisted by a 1999 Supreme Court ruling that said individuals were entitled to receive care within the least restrictive setting. “We want disabled people in communities. We don’t want them shut up in institutions,” Russell said. She also noted that the cuts would impact her personally, as a recipient of aid from the program: she would likely have to reduce her community service work because doing household chores would take up so much of her energy. And wage cuts for service providers would make it harder for her to find care.

Wolf, too, receives aid in the program for her teenage son, who has cerebral palsy. “Because of the services we’ve received,” she said, “he’s really a quite active participant in the community.” Wolf said with the cuts, she would have to work more hours, so would be able to spend less time with her son, and less time with her husband. “It’s not a whole lot of money, it’s a few hundred dollars a month, but it makes a big difference,” she said. Like Russell, Wolf noted that putting program beneficiaries into institution sets back California’s long-standing leadership in bringing the disabled into communities.

From clinics to ERs

Rodriguez noted some of the cuts to healthcare that have already hit. As of July 1, MediCal recipients lost adult dental benefits, podiatry, psychology, and optomology, even though MediCal recipients have a high rate of diabetes and need those types of care acutely. Now, she said, the legislature is considering eliminating the Healthy fiscalarmageddon_reception3 Families program in the worst case scenario, or cutting 30% of its funding. If the program ends, she said, 230,000 children in Los Angeles alone will no longer have insurance, meaning no immunizations or school physicals, or treatment for flu strains. Clinics, she said, would lose hours, reduce services, or even close up shop, meaning more people would have to turn to emergency rooms, already burdened with long wait times. While her member clinics haven’t yet closed, Rodriguez said they are considering contingency planning and laying off staff.

Elderly care

Supplemental Security Income and State Supplementary Payment programs were also set to be cut. Russell noted that this would be the fifth time in 12 months that the grants have been cut, dipping from $907 for individuals to $850 a month (cuts are deeper for married couples), which is meant to cover every expense, including utilities, food, and rent. “Forget about any extras,” Herald said, “or God forbid you have co-pays and a lot of prescriptions.” Less than one percent of those receiving SSI/SSP aid have income from earnings, he added.

California context

fiscalarmageddon_reception2Cedillo commented on the broader context of the cuts, and the nature of the debate in Sacramento, calling it “Orwellian” to term rollbacks “reform.” “It’s the product of 30 to 35 years of ideological creep,” he said. “What we see is a very pronounced hostility to government and the desire to unravel it, to unravel the social safety net, and to unravel the traditional role of government.” California remains one of the largest economies in the world, Cedillo noted, and he credited the “great visionaries” who led the state decades ago, building the social safety net, infrastructure, and education. Rodriguez noted during Q&A that it is part of the culture of the U.S. not to provide government healthcare. And Herald added that the federal government also handed welfare to the states, while making it difficult for the states to exercise any real authority.

Cedillo also criticized California’s government structure in particular. Proposition 13 is the common scapegoat, he noted, but the two-third majority requirement for budget bills is a bigger roadblock. He also cited term limits as a major problem. “We are constructing with term limits a government of the people. We are removing people who have skill and talent and institutional knowledge and replacing them with people who have the ability to leave their professions for two, for, six, maybe 10 years,” he said.

Still, the panelists noted, California remains a particularly generous state today. Mathews added that when proposing cuts, the governor seems primarily concerned with bringing California’s social services into line with those of other states. And at least there’s some relief in sight: Herald predicted that something quite like the conference committee package will be accepted soon.

Watch the video here.

See more photos here.

*Photos by Sarah Rivera.

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