Hey Grandpa, how about a little help?
A 5-year-old child born to a mother who has exceeded 48 months on cash assistance was being reared in destitution before the state yanked $5,000 in annual welfare benefits. A 75-year-old residing in a nursing home, meanwhile, receives $80,000 in Medicaid-funded care.
Not that future fiscal choices should favor the young at the expense of the old, but it’s clear that the current ones certainly favor the old over the young -- as if the young have any more say over their circumstance than the old do.
How Michigan spends its social welfare dollars should be defined not just by cost of the programs, but the point of having them in the first place. Current policy treats the state’s two most vulnerable populations -- children in deep poverty and the elderly who require daily assistance -- very, very differently.
Some 12,000 households and 24,000 children, through fresh state law and Snyder administration policy, have been removed from the cash assistance rolls. Most of the households had been awarded hardship extensions beyond the 60-month federal time limit, at state expense, because it was determined that the parent was unable to work or engage in job training. Or because the household was in a county with an unemployment rate of more than 10 percent.
While those households still receive in-kind benefits for food and housing, the last of the $480 checks are being cashed right now. Hereafter, the families will join the ranks of what social scientists call extreme poverty. According to a study by H. Luke Shaefer at the University of Michigan's Gerald R. Ford School of Public Policy, a fifth of families living in poverty nationwide, including some 2.8 million children, exist on $2 in income a day.
Michigan’s relaxed policy on time limits was in place from the start, when the end of welfare as we know it was launched into an improving Michigan economy about to produce a jobless rate below 4 percent. Now that the jobless rate is more than double that, latitude to extend benefits on a case-by-case basis has been greatly restricted.
Strict enforcement of time limits convinces legislators and bureaucrats that they’ve made the program less flawed by making it more orderly, accountable and, above all, finite. That conveniently ignores who the program is really for.
Childless adults living in poverty haven’t received a welfare check for 20 years. The qualification for cash assistance now depends entirely on the presence of children in the home. Since children are the critical element in the application for benefits, that makes them the prime beneficiaries. And, by residing in a household with no income, they become the biggest losers when the checks stop. Only about one-fourth of Michigan children living below the poverty line reside in households that receive cash assistance.
For all the talk of requiring parents to work, little is said about the fates of children who grow up in households where the parents aren't working. Presumably under the old program, caseworkers were able to differentiate between those parents who could work and those who couldn't. As if even that difference matters to the child.
Now let's compare these youngsters to another vulnerable population.
The $75 million saved by DHS in 2012 through welfare caseload reduction is a drop in the bucket compared to what Michigan spends for long-term care of the elderly -- care that critics say could be allocated in a much more efficient fashion.
According to a Thomson Reuters report last fall on state Medicaid spending, Michigan spends much more on nursing home care and much less on home- and community-based assistance than most other states.
In 2009, just 21 percent of long-term care dollars for the aged (about $426 million) was spent on services that enable an elderly person to stay in his home. More than 78 percent, nearly $1.6 billion, was spent on far more expensive care in nursing homes.
In Minnesota, by contrast, the percentages were 60 percent home care and 40 percent nursing homes.
AARP Michigan, which is advocating for a better balance, estimates the cost difference between community-based care and nursing home care at more than $57,000 per year per recipient. Apply Minnesota’s efficiencies to Michigan and the savings would be enormous -- more than enough to keep families with young children out of the despair of extreme poverty.
But the budget doesn’t work that way; it's guided by numbers, not principles. More sane fiscal policy would holistically assess what safety net services are needed; who needs them; how they can be delivered more efficiently, regardless of station in life; and how best to tailor them to the adversity being faced.
The aged who can no longer care for themselves are entitled to food, shelter and warmth. For a 5-year-old kid who didn’t choose in be in her precarious predicament either? Not so much.
Peter Luke was a Lansing correspondent for Booth Newspapers for nearly 25 years, writing a weekly column for most of that time with a concentration on budget, tax and economic development policy issues. He is a graduate of Central Michigan University.
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