January 12, 2010 / 1:30 AM / 10 years ago

Schwarzenegger budget ax would fall heavily on poor

* California’s welfare-to-work program on chopping block

* Health programs for poor, elderly and disabled at risk

* At least 200,000 children could lose low-cost insurance

By Steve Gorman

LOS ANGELES, Jan 12 (Reuters) - The latest budget plan from California Governor Arnold Schwarzenegger would force 200,000 children off low-cost medical insurance, end in-home care for 350,000 infirm and elderly citizens and slash income assistance to hundreds of thousands more.

And that’s the best-case scenario under Schwarzenegger’s prescription for filling the state’s $19.9 billion deficit.

Refusing to consider broad tax hikes, he is relying mostly on $8.5 billion in reduced expenditures including drastic cuts to health and social spending that has long made California one of the leading U.S. states in providing help to the needy.

Schwarzenegger also is counting on the U.S. government contributing nearly $7 billion that he says is due California because of various federal mandates.

If federal money fails to materialize, the governor’s plan would trigger deeper cuts that would dismantle entire programs, including the state’s welfare-to-work system, CalWorks.

Enactment of the Republican governor’s proposal, with or without Washington’s cooperation, is far from certain given that leaders of the Democratic-controlled state legislature immediately rebuffed it as too harsh.

Even representatives of Schwarzenegger’s own government acknowledged the drastic scope of his proposed cuts, which the governor himself described as “draconian.”

“They are major reductions in health and human services in California, whether we get the federal funds or not,” said Amy Palmer, spokeswoman for the state agency overseeing many of the programs hardest hit. “If we don’t get the federal funds, the reductions ... are devastating.”

Critics say many such cuts ultimately would cost the state more money than they save, as when elderly patients forced out of adult day-care facilities end up in nursing homes.


“You’re blowing entire holes in the safety net,” said Kelly Brooks, an analyst for the California State Association of Counties, which lobbies on behalf of county governments that stand to bear much of the added burden from such cuts.

No one understands better than Anthony Arias, 25, who sought assistance from CalWorks in 2008 after he was laid off from his warehouse job in the midst of the recession.

Unable to find steady work, and sharing custody of his 3-year-old son, Arias had to drop out of community college east of Los Angeles as he slipped into a financial tailspin.

“It was getting bad to the point where there were days when I didn’t have food,” he recalled.

But with a monthly CalWorks check that helps pay his rent, and state-subsidized child support, Arias has since managed to complete training to become a barber — a more gainful vocation with flexible hours that will enable him to return to school to earn a degree as a paralegal assistant.

“There’s no way I would have been able to survive without the help of CalWorks,” he said.

Arias is just one of 1.3 million CalWorks beneficiaries — most of them children — who will see their monthly assistance checks cut by 16 percent under Schwarzenegger’s proposal, even if federal dollars sought by the governor arrive.

His plan also would immediately reduce CalWorks child-care payments and kick some 24,000 legal immigrants off the rolls.

Without extra federal money, CalWorks would be eliminated altogether, leaving California the only U.S. state no longer a part of transforming the nation’s welfare system into a program aimed at moving poor, jobless Americans into full employment.

Others programs on the chopping block include transitional housing for foster youth; low-cost Healthy Families medical insurance for needy children, the Medi-Cal healthcare plan for the poor, and a network of subsidized in-home care for the elderly and disabled.

At least 200,000 children are slated to lose eligibility for Healthy Families, with that number growing to 900,000 if the program is gutted entirely.

Nearly 90 percent of the 400,000 recipients of In-Home Support Services stand to lose care under Schwarzenegger’s best-case scenario, and state reimbursements to providers of those who remain would be slashed to minimum-wage levels. Otherwise, the program would be abolished, throwing 350,000 caregivers out of work.

For Medi-Cal, Schwarzenegger has proposed clamping new limits on health services while raising premiums and patient co-pays if he gets the extra federal money he wants. Medi-Cal for legal immigrants in the country less than five years would be eliminated, unless they were pregnant.

If additional federal funds fail to arrive, some 450,000 Medi-Cal recipients would be stripped of eligibility and most optional adult benefits, such as reimbursements for hearing aids and other medical equipment, would be scrapped.

Editing by Vicki Allen

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