
          More Cuts for the Poor
          By StaffStaff
          Vol. 9, No. 1, 1987, pp. 1-2
          
          Most attention to President Reagan's proposed 1987 budget has been
placed on the overall size of the budget and the record-breaking
deficits. But this budget is also important because it continues the
Reagan effort to cut programs that serve the poor.
          An analysis of the proposed budget by the Washington-based Center
on Budget and Policy Priorities (CBPP), says that one-third of the
$18.7 billion cuts would come from programs that aid poor people. The
proposed Reagan budget would cut Medicaid, student financial
assistance, low-income energy assistance, low-income housing, and
Indian health programs most severely. In addition, the proposed budget
proposes to eliminate another fourteen programs altogether including
Legal Services and the Community Services Block Grant. Legal Services
would be dropped immediately, Community Services funding would be
phased out over four years.
          "Winners" would be the departments of Defense,
State, Justice, and NASA. "Losers" would be
departments of Education, Housing and Urban Development, Interior,
Transportation, and Agriculture.
          According to the CBPP analysis, these shifts indicate a pattern in
which "agencies with military-related spending generally receive
sizable increases in their budget, while agencies that operate
domestic programs generally receive reductions."
          These cuts have come as the toll from sustained high unemployment
levels leaves large numbers of Americans, particularly among unskilled
or blue-collar workers, either without jobs or competing for a small
number of low-paying jobs.
          Typical are the experiences reported by an Auburn University
researcher who studied the small Black Belt community of Benton, Ala.,
following the closing of a textile plant there in 1985.
          The Dan River Mills cotton sheeting plant had begun operation in
1966, finding an instant work force among the poor in the area, many
of them displaced from newly mechanized farming; more than
three-

fourths of the Dan River workers were black. Then, in October
1985, with less than three months warning, the company laid off 246
employees, many of whom had worked at the plant for more than ten
years. The company blamed foreign competition for the shutdown.
          Researcher Mike Trend's surveys report that only 24 percent of the
laid-off workers found new jobs within two months. Only 46 percent had
found new jobs within nine months. Of those who were employed again,
40 percent described their new jobs as temporary, and the average
commuting distance was sixty miles a day.
          Though Trend's figures indicate that wages paid by Dan River at
Benton were generally much lower than wages paid for similar
industrial jobs in non-South states, the laid-off workers who got new
jobs typically took salary cuts of four to five dollars per hour.
          And the workers who took the greatest salary cuts and had the
hardest time finding new jobs were women and blacks. "Being white,
being male and being married were all associated with an increased
probability of becoming employed after the plant closing," said
Trend's report.
          Many of the former Dan River employees were unaware of or unable to
secure meaningful assistance from so-called safety net government
programs.
          Cutbacks during the Reagan years were initially justified as part
of a strategic effort to decrease the growth in federal spending and
eventually balance the budget. During the Reagan years, the deficit
has grown and the few reductions made have come disproportionately
from domestic aid programs that constitute a fraction of the total
budget.
          This particular combination of cuts grows out of a deeper Reagan
ideology about the role of government that has no real connection to
budget philosophy.
          That deeper ideology is revealed in another report from Washington
dealing with welfare and also reviewed by the CBPP. The report,
released by a special White House Task Force appointed by Reagan,
maintains that federal aid to the poor does not work, that federal
money now spent on the poor is inefficient (twice as much is spent as
is needed), that there should be a freeze on federal programs, and
that special pilot programs should be instituted at the state level to
explore alternative strategies for public assistance.
          The Welfare Task Force report, though prepared by persons with
access to the full range of government program data, amounts to a
restatement of long-standing Reagan views that federal government aid
programs ought to be terminated. Significantly, it does not address
the question in terms of federal deficits or show how such a cutback
would aid the movement to balance the budget.
          The CBPP analysis of the White House welfare report finds it
insufficient. The report fails to give proper weight to domestic aid
programs that do help the poor, and it "grossly overstated" the
inefficiency of the current dollars spent.
          The problem of helping the poor in America persists. Unemployment
is consistently high, the earning power of employed persons is
threatened, and there has been a "sharp increase over the past
decade in poverty among children."
          "What is needed," the Center on Budget and Policy Priorities
says, "is leadership in developing bipartisan consensus on
effective actions that we can take now." 
        