The Graham-Cassidy bill to repeal the Affordable Care Act and refashion the nation’s health care spending into a system of block grants to the states and per-capita, Medicaid spending caps might be dead for now.
But that doesn’t mean the ideology that propelled it also has died. The ideology that favors transforming large federal programs into block grants that states can spend largely as they please is alive and well.
On Monday, during the only Senate hearing to take place on the Graham-Cassidy health care bill, Republicans made clear they still favor this approach. GOP senators on the Finance Committee and the expert witnesses they chose to bolster their case spoke repeatedly of the promise of “increased flexibility” through block grants and the potential for state-based innovation.
“If this bill is successful, some states will do a terrific job in developing really innovative solutions to provide great-quality care,” former Pennsylvania Sen. Rick Santorum, who was involved in drafting the Graham-Cassidy bill, said Monday, hours before Maine Sen. Susan Collins came out against the legislation, sealing its fate.
(States would somehow provide great-quality care even as, according to the Congressional Budget Office, Graham-Cassidy proposed to slice $1 trillion from states’ Medicaid funding over the next decade.)
Santorum also extolled the virtues of one of the largest block grant transformations to date: the 1996 Personal Responsibility and Work Opportunity Reconciliation Act, which transformed the nation’s Aid to Dependent Families with Children welfare program into a system of block grants the federal government issues to states each year and that states have wide latitude to spend largely as they see fit.
“Just in Maine recently, Gov. [Paul] LePage finally reformed welfare in that state. It took them 20 years to do it, but again, very strong results,” Santorum said. “There may be a lag effect in some states. There may be some inequity. But it creates competition. And it creates the opportunity for states that learn from the innovation of other states.”
Indeed, the number of Maine families receiving cash benefits through Temporary Assistance for Needy Families, or TANF, has dropped 66 percent since May 2012, when a five-year lifetime cap on benefits took effect. LePage has touted the steep drop in the number of people receiving assistance. But to which “very strong results” was Santorum referring?
Was it the reality that two-thirds of people who lost benefits as a result of the five-year cap still didn’t have work three years after the cap took effect? Or could it have been that the third who did have work were earning below poverty-level wages?
Could Santorum have been referring to the LePage administration’s failure to even stay within the loose bounds of TANF law when it came to spending the state’s $78.1 million annual block grant? Or could he have been referring to the administration’s use of the annual block grant on a variety of existing state programs in order to generate budget savings, even as administration officials denied to legislators that that’s what they were actually doing?
As all of this happened, the proportion of Maine children growing up in extreme poverty was rising, even as it mostly held steady nationally. Could that have been one of the “very strong results” Santorum was touting?
Fortunately, Republicans’ attempt to transform yet another federal program into a system of block grants has failed, for now. But the “strong results” Santorum touted are alive and well with TANF: States today spend just half of the TANF funding they receive on the program’s core purposes — financial assistance for low-income families, child care and activities that help adults work — and the funding reaches just 23 percent of families with kids nationwide who live in poverty, down from 68 percent in 1996.
Graham-Cassidy proponents were right to use TANF as an example of what could happen by transforming a federal program into a system of block grants. But the “very strong results” they champion actually paint a picture of a federal program that has become unaccountable and unresponsive to people’s needs, with people’s well-being wholly dependent on the whims of state politics.