No one knows, though some programs are fatter than others
For state and local officials across the nation, Oct. 1 is Dday: this is when $35 billion in budget cuts passed by Congress last July go into effect. Figuring out just who will be hurt-and how badly-by the slashes remains a baffling task for many states. Congress has yet to agree on exactly how much will be trimmed from specific programs, and the Administration so far has offered only sketchy guidelines on how the funds must be spent.
One key question is just how harshly the poor will be squeezed, and once again no one knows. In defense of the budget cuts, supporters argue that many federally funded entitlement programs, which began as experiments in helping the needy, have become a burden on taxpayers, since the dramatic growth of these programs over the past few years cannot be attributed only to inflation and rising unemployment. Federal outlays for Medicaid, for example, have risen 15% annually for the past five years to keep up with ballooning health-care costs. The food-stamp program swelled from 16 million recipients in 1978 to 21.1 million in 1980, after Congress struck down the rule that people must purchase their stamps. Some officials view the cuts as a chance to pare administrative costs as well as marginally effective programs. Says Democratic State Representative Francine Panehal of Ohio: "It's a golden opportunity to get rid of programs that were worthless and prop up those that really work."
A rundown of major programs and how states are planning to cope with cuts:
Medicaid. Federal funding for health-care programs will be sliced by 3%, or $500 million, in fiscal 1982. In Missouri, officials have cut back on the number of prescriptions a person can obtain, set standard reimbursement rates for various medical operations, and refused to pay for weekend hospital admissions except in emergencies. Faced with a $51 million shortfall, Illinois is requiring welfare recipients to chip in a dollar for every doctor visit or pharmacy order. Explains Budget Director Robert Mandeville: "This will cause folks to think twice." 1982, this program will be cut by $1.1 billion. Nearly all states will be forced to either clip or eliminate completely the benefits for 7% of all recipients. Some states are seeking ways to make up the shortfall by cutting overhead; officials of the Pennsylvania department of public welfare, for instance, discovered that the new, simplified regulations will allow them to get rid of a computer-run management system. Estimated saving: $4.3 million. Many officials, however, find it cruelly ironic that the new AFDC regulations of the pro-family Reagan Administration discourage marriage. Under the new regulations, for example, a poor man who marries a poor woman with children will forfeit nearly all benefits. Says California Assemblywoman Maxine Waters: "I'm telling anyone who will listen that there's no point in getting married if you're both poor and have kids."