Social programs lose, businesses win in talks

Bruce Smith/AP Photo
South Carolina state Sen. Hugh Leatherman, R-Florence, questions a speaker during a Thursday, Sept. 9, 2010 legislative hearing in Charleston, S.C., on rail access to a new $525 million state port.

COLUMBIA --- During debate on a $6 billion state spending plan Wednesday, state Sen. Kevin Bryant assailed the state's health care program for the poor, disabled and elderly as a "Mercedes" program that has become a handout instead of a helping hand.


Senators nixed restoring monthly benefits cut from welfare-to-work programs, slashed at least six weeks of unemployment pay from the existing 26-week benefit and complained about growing federal food stamp spending. All of that played out as they agreed to a $100 million bailout for businesses that have lamented higher unemployment taxes.

Advocates for the poor say the GOP-dominated state Legislature is not looking out for the downtrodden while offering businesses a tax bailout.

After South Carolina gave businesses a decade of tax breaks on unemployment insurance, the state ran out of trust fund money to cover the unemployment checks when the recession hit, said Sue Berkowitz, the executive director of the South Carolina Appleseed Legal Justice Center.

The state has $972 million in federal loans to repay. Businesses that laid off or fired workers in the recession complain that their tab for repaying the loans is too high.

"They had 10 years of not paying into the system what was needed," Berkowitz said. "Now we're taking away from the most vulnerable people so that their rates go down."

THE STATE BOARD OF ECONOMIC ADVISORS on Thursday reported corporate income tax collections are up 85 percent during the first nine months of the fiscal year compared with same period last year.

That $81 million increase was a sizable chunk of the $210 million that the board said legislators could add to the state budget. Senators already agreed to put $100 million of that into the unemployment tax bailout.

That would leave $110 million that could be used to restore money cut from Medicaid and welfare-to-work programs in the fiscal year that begins July 1.

In February, the state Department of Social Services cut welfare-to-work payments for an average mother of two from $270 monthly to $216. People getting the checks must work at least part time or be in a training program to qualify for payments that already were among the nation's lowest.

Last month, Senate budget writers said the agency should put extra money, if available, into increasing the monthly checks. That proposal was changed to give Social Services flexibility to use the money in any of its programs.

Earlier this year, the Department of Health and Human Services eliminated or reduced a variety of Medicaid services, including adult dental and vision services, the number of shoes diabetics can receive and home health care visits. The proposed budget calls for the program to cut $125 million from reimbursements to doctors and hospitals, and it now requires all Medicaid patients to use generic drugs if they are available and don't cause bad reactions.

Senate Finance Committee Chairman Hugh Leatherman said he'd like to put some of the $110 million surplus into those programs or public schools, but said he thinks it's better to bank the extra money instead of touching off a floor fight for the cash.

BERKOWITZ ARGUES THE STATE could put the extra cash into Medicaid programs and draw down a three-to-one match and even reduce payment reductions to physicians and hospitals that threaten to make them more reluctant to see Medicaid patients.

But senators want to spend less on Medicaid.

"We're allocating too much money to an entitlement program that we can't sustain," state Sen. Tom Davis, a Beaufort Republican, said during the Senate budget debate Thursday. "Medicaid is an entitlement hole that we have to stop digging."

Republicans playing to tea party interests run a risk criticizing social welfare programs, said Winthrop University political scientist Scott Huffmon.

The recession and its slow recovery mean more Republican voters or GOP-leaning independents have had to turn to social welfare programs, making it a bit more risky for Republicans to deride them, Huffmon said.

Joel Sawyer, the Republican party's executive director, said fundamental political philosophies are in play.

"The left wants to keep people dependent on government and the right wants to create wealth and prosperity through bringing employment opportunities to people," Sawyer said. Even GOP voters who have had to turn to social safety net programs get that and would rather have jobs than handouts, he argued.

STATE DEMOCRATIC PARTY Chairman Dick Harpootlian said the Republican-led budget punishes people in need of health care and unemployment benefits.

"When Republicans think about charity, they think about helping those that don't need it," Harpootlian said.

He said he sees no sense in giving businesses an unemployment tax break and not putting surplus money into Medicaid to earn the federal match. Harpootlian said the federal money could head off Medicaid provider rate cuts that rural hospitals claim will prompt layoffs or shutdowns.



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