Governors Agree to Overhaul of Federal Poverty Programs

By Shafroth, Frank | Nation's Cities Weekly, February 12, 1996 | Go to article overview

Governors Agree to Overhaul of Federal Poverty Programs


Shafroth, Frank, Nation's Cities Weekly


The nation's governors voted unanimously to endorse bipartisan proposals to rewrite the federal Medicaid and welfare programs, potentially paving the way to re-open deficit reduction talks between the White House and GOP. The proposals, adopted at the National Governors' Association annual Washington meeting, would provide for block granting the largest federal entitlement programs that serve the nation's poorest families in cities, but would retain guarantees or entitlements to medical service for many categories of the poorest children and citizens in communities.

President Clinton, Senate Majority Leader Bob Dole (R-Kans.), and Speaker of the House Newt Gingrich (R-Ga.) praised the governors' bipartisan proposals as steps in the right direction. The gubernatorial proposals would appear to address two of the most difficult issues that have obstructed agreement between the White House and Congress on a balanced budget.

NLC President Greg Lashutka welcomed the efforts of the governors to help pun the nation together, achieve a consensus about getting the federal government back to work, and accepting the task of making tough choices:

"Just as we committed to making the hard decision together as Republicans, Democrats, and Independents, necessary to achieve a balanced budget; I am pleased the nation's governors have joined us in spirit in telling the Congress and President to put aside the partisan bickering and get on with the job. We look forward to working with the governors to spell out the details to ensure they address the roles and responsibilities of our cities and towns, and to joining with the governors to bring the Congress and President on board."

For the nation's cities, the potential consequences of the proposals could be far reaching and could lead to permanent changes in the future shape and role of local governments.

At risk is as much as $100 billion in federal assistance to states and local governments over the next seven years. Some of the cuts could fall in the current budget year; others could radically alter the role and responsibility of the three levels of government - potentially imposing significant, new unfunded liabilities and responsibilities on local governments.

Proposed federal changes could lead to significant changes in state budget priorities. Federal changes could shift the responsibility for the care and nutrition of millions of children to local governments, but with. substantially reduced resources.

Where the emerging Medicaid and welfare plans would make the most significant changes in the federal role would be in altering the federal government's social contract with low income families in cities and towns.

The plans would provide for sweeping changes, forever altering federal responsibility for the health and welfare of the nation's poorest families. But the governors' plans make no mention of the roles and responsibilities of local governments.

NGA Proposals

Medicaid: Medicaid is the federal health care program that guarantees or entitles every poor American access to medical treatment and nursing home care.

The governors' proposal would provide for block granting federal Medicaid dollars to each state, but retain a guarantee of Medicaid for certain groups of poor people in cities and provide an assurance of additional federal funds to meet economic downturns or migration of eligible citizens into a stow. The proposal would ensure coverage for hospital services, nursing home care, family planning services and other medical benefits for these guaranteed eligible citizens in cities. The proposal would give states "complete flexibility in defining the amount, scope, and duration of services." The proposal does not resolve the difficult issues of treatment for immigrants, legal or illegal.

In all, the proposal takes some middle ground between Congressional goals and Administration plans.

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Governors Agree to Overhaul of Federal Poverty Programs
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