David Michael Miller
With little regard for those who would be affected most, Wisconsin lawmakers quickly and carelessly passed a set of bills that make sweeping changes in public assistance programs that provide critical support for low-income families. These bills will hurt thousands of children in families who are struggling to climb out of poverty and into self-sufficiency.
While Gov. Scott Walker has declared his 10 special session bills to be “welfare reform,” the truth is that the bills will do nothing to improve the welfare of children, families, and communities. Quite the opposite. These policy changes will increase the number of children and families that are hungry, homeless, and uninsured by creating barriers to participating in safety net programs.
In the mid-1990s, Wisconsin became a national trendsetter in welfare reform when state lawmakers blew up the old cash benefit system for low-income families. However, Gov. Tommy Thompson and the Legislature followed up by creating BadgerCare and the child care subsidy program, in order to help people who were removed from welfare make it in the workforce.
Twenty years later, almost no one receives cash assistance anymore, so politicians who want to score points by being tough on “welfare” are actually impeding access to work supports like BadgerCare and child care subsidies. They are justifying the bills on the basis that they will increase the number of workers, but these changes are likely to have the opposite effect because they obstruct access to work supports and fail to address the real problems that make it difficult for many low-income Wisconsinites to maintain steady employment.
As legislators rushed to approve the governor’s bills just a few weeks after their introduction, the majority party ignored the fact that similar changes have been tried elsewhere with very negative effects. For example, one of the bills requires adults with income below the poverty level to use Medicaid accounts similar to Health Savings Accounts (HSAs). HSAs are designed primarily for high-income earners to cover the costs of their high-deductible health insurance plans. But the two states, Indiana and Arkansas, that have forced adults making less than $12,140 per year to pay copays and deductibles have shown that this path is an expensive recipe for disaster.
From 2015-2017, Indiana dropped 25,000 people from its Medicaid plan for failing to make HSA payments, and only about half of them found another source of coverage. And after Arkansas implemented an HSA requirement, officials decided it was a failed experiment and ended it, saving the state $6 million per year in reduced spending for Medicaid administration.
The bill requiring HSAs to be part of Medicaid is not the only change that will be expensive for Wisconsin to implement. According to estimates produced by state agencies, the special session bills will have a combined price tag of nearly $90 million during the first year of implementation. Despite their very sizeable costs, only two of the 10 bills were referred to the Joint Finance Committee, which is supposed to review all bills with significant impacts on the state budget.
In their rush to pass these bills, legislators and the governor failed to consider more effective ways to use that $90 million. Instead of picking on our state’s most vulnerable and shaming those who experience poverty, Wisconsin lawmakers should invest in policies that will expand the workforce and also support families.
The following policy changes would do far more to increase Wisconsin’s workforce:
• Stop suspending driver’s licenses for low-income people who are unable to pay fines, if those fines are unrelated to driving.
• Make childless adults eligible for the state Earned Income Tax Credit, so low-wage jobs aren’t a poverty trap.
• Undo the long erosion of funding for the child care subsidy program by substantially increasing its funding and creating more flexibility in the program, so it serves parents with erratic work schedules.
• Increase the minimum wage.
Weakening Wisconsin’s safety net programs, while turning a blind eye to the real impediments to work, will exacerbate the growing economic divide in our state. That gap is particularly jarring for Wisconsinites of color, who face large barriers to success and some of the most alarming economic inequities in the nation.
State lawmakers need to ensure that all Wisconsin residents have the ability to succeed, and there’s no reason why policymakers shouldn’t be able to build a bipartisan, common sense agenda that removes barriers to work while also protecting or strengthening safety net programs. To help make that happen we need to insist that all of the so-called reforms are carefully evaluated and are adjusted if or when they create more barriers to work.
Most importantly, we must insist that state policymakers reach out to struggling families to learn what they truly need to help them climb out of poverty, rather than continuing to demonize them as a way of scoring political points.
Ken Taylor is the executive director of Kids Forward, an advocacy organization for children and families.
