7 Ways Trump's Administration Could Destroy Social Welfare in Arizona

Every day seems to bring another headline about a new nominee from President-elect Donald Trump, and with it, a renewed sense of horror among his critics — a climate-change denier at the Environmental Protection Agency; a retired neurosurgeon with no experience in government or management at Housing and Urban Development; the leader of a fast-food chain who doesn’t believe in minimum wage or workers’ rights at the Department of Labor; the former editor of the alt-right publication Breitbart as chief strategist.

The list goes on.

As Trump has been announcing his cabinet picks, New Times has been interviewing more than two dozen local political leaders and experts from a variety of fields to see what impact they believe the Trump administration will have on social welfare in Arizona.

Health care, education programs, affordable housing, behavioral health and substance abuse programs, services for people with disabilities, protection for the environment — all are funded heavily by federal dollars in a state the U.S. Census Bureau says has an above-average poverty rate, and a governor and legislature not much interested in helping children and those in need.

“If we do what we’ve historically done, we’ll … essentially remove the safety-net programs [for] our vulnerable citizens,” says Eric Meyer, outgoing minority whip for the Arizona House of Representatives.

The wealthiest among us will get tax cuts, if the pattern set by Governor Doug Ducey and the Republican leaders in the Arizona legislature continues.

“They’ve voted over and over again to cut funding for education and other services,” Meyer says, “and in the same stroke of a pen, give tax cuts to corporations or the wealthy.”

Under Trump, there will be social welfare crises throughout the country, but they’re going to be worse in Arizona, says U.S. Rep. Ruben Gallego (D-Ariz.), because if the federal government slashes funding, our leaders won’t pick up the slack like leaders in other states might.

“We have a very soulless state government, and they’re just itching to kick people off Medicaid and get rid of the Affordable Care Act. We are definitely going to feel it more than other states are,” he says.

Arizona’s political leadership has long championed a hard-right, fiscally conservative agenda, says local political consultant Bob Grossfeld. In the past, “the political support hasn’t been there or there’s been enough of an opposition to stop them. That’s all going to disappear now; that’s what’s going to make this different,” he says.

What seems most likely is that funding mechanisms for many federal social safety-net programs like Medicaid or special education will turn into block grants. Put simply, this means that instead of a state getting money to run programs based on the number of people who use it, they’ll get a set lump sum of cash and greater oversight.

Many Republicans have long loved block grants because they say states can run the programs better and cheaper. They’ve been proposed for all sorts of entitlement programs in the past, but the problem is, while block-granting might sound like a good idea, history has shown us that it tends to make social welfare problems worse.

“We’ll have a country that is not just divided the way we’ve seen, where half are voting this way, half the other way, but really divided in terms of everyday kinds of problems [and] whether there’s help for them or not,” says Grossfeld. “Some places there will be help, other places there won’t be. And I think we’re one of the places were there won’t be.”

What follows is a list of seven very real possibilities under the incoming administration and Congress that could rip huge holes in Arizona’s safety net.

1. A million disadvantaged kids in Arizona could go hungry after cuts to the School Lunch Program.

Social-welfare activists in Arizona are really concerned about whether low-income families will have reliable access to enough healthy and affordable food — a concept known as food security.

The Supplemental Nutrition Assistance Program (SNAP, formerly food stamps), the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), the Emergency Food Assistance Program — these are just some of the programs at risk under Trump and a Republican-dominated Congress, says Adrienne Udarbe, executive director of Pinnacle Prevention, a nonprofit group that works on issues of food security in Arizona.

But what worries her the most is what she sees coming down the pike for the National School Lunch Program, specifically how cuts to funding and changes in oversight will affect the 1,071,000 kids in Arizona who rely on it.

Enacted in 1946 and overseen by the U.S. Department of Agriculture, the program provides 30.3 million kids in 99,000 schools across the country with free or reduced-priced lunches. It costs about $12.6 billion in total, $286,549,505 of which went to schools in Arizona. (Arizona also received $95,883,666 this year to operate a school breakfast program.)

The federal government currently foots the entire bill for our school lunch program, so if something happens to compromise or weaken it at the federal level, more than 1 million kids could be in trouble, Udarbe says.

“In food-insecure households, this is often the only meal these kids are getting all day. That’s how important it is in terms of nourishing and feeding our children in Arizona.”

The proposal championed by most conservatives, and therefore most likely to take hold under Trump, is to block-grant the program so that instead of giving states money for the number of kids who need free or reduced lunch, the state will just get a lump sum of cash every year based on some formula that has yet to be spelled out.

This would be problematic for three reasons, Udarbe says.

First, block grants aren’t necessarily responsive to changes in the economy. Currently, a state can expand or contract its lunch program based on need — that is, the number of children from families with incomes at a certain percentage of the federal poverty level. But under a block grant, the amount of money is capped and rarely changes from year to year, so if there’s a big loss in employment or another recession, and more kids qualify for free lunch, the same amount of money just has to be stretched thinner.

The second problem is that the overall value of a block grant actually shrinks over time because it’s not tied to inflation or state population growth. The Congressional Budget Office tried to quantify what block-granting the lunch program would mean and found that by 2025, states could see the value of their grant drop by one-third.

And the final concern is that by block-granting a program, the federal government gives the state oversight of it. In the case of the school lunch program, this means that state leaders get to decide who is eligible and what sorts of foods the money can be spent on — the latter of which would mean scrapping the work First Lady Michelle Obama has done to make school lunches healthier, like helping to pass sodium limits and ensuring more meals contain whole grains and fresh fruit.

In other words, because unhealthy processed food is often cheaper, schools would have an incentive to save money by serving it.

“The immediate threat here in Arizona, if the state has more control over the program, is that our public leaders don’t have a history of making decisions with consideration for the most vulnerable, especially children. Look at how they’re already funding schools — imagine how school lunch would be,” Udarbe says.

She adds that there’s concern among food security experts that the Trump administration has plans to overturn the Community Eligibility Program, an Obama-era initiative that made it easier for schools to apply for the free and reduced school lunch and breakfast programs.

Cutting this program would affect 3.4 million students in more than 7,000 schools across the country, according to a report from the Center on Budget and Policy Priorities.

No one has quantified what this would mean for Arizona, except to say that it will mean schools have less money to spend on food because the administrative costs of running the program will be higher.

2. Thousands of poor people would get kicked off AHCCCS (Medicaid) permanently after Arizona is allowed to impose a five-year cap on eligibility.

When asked what we should all be concerned about in the next four years, every expert consulted by New Times mentioned Medicaid, the joint federal- and state-run health insurance program for low-income individuals and families.

Currently, the federal government helps pay for the program by giving states money based on the number of eligible participants — there is a wide range of people who can qualify for Medicaid, but generally it’s individuals and families at or below 138 percent of the federal poverty line, about two-fifths of which are children — but for two reasons, many worry about what will happen if the program’s funding becomes a block grant.

First, it’s unclear exactly how the funding would be calculated, but past proposals to block-grant Medicaid, like a bill introduced into Congress earlier this year that would have done it for three states, would have resulted in states getting less money in the long run, which obviously affects the services they provide.

The second concern has to do with oversight; namely, that the states will be almost totally in charge of determining eligibility for the program and ensuring people get the services they need. And in a state like Arizona, this would be bad news for people on Medicaid.

If Medicaid — which here is called the Arizona Health Care Cost Containment System, or AHCCCS, pronounced “access” — is block-granted, it all but guarantees that the state will implement a five-year lifetime cap on services.

Arizona’s leaders have never liked Medicaid, and in fact, we were the last state in the nation to adopt it. In the decades since, our legislators have repeatedly attempted to make it more difficult for people to qualify for AHCCCS and to receive services once they’re on it.

They’ve tried to implement strict work requirements and pass laws saying that non-emergency transportation costs aren’t covered, which would hurt poor and disabled people, as well as those who live in rural areas.

Yet the most infamous change happened last year when Governor Doug Ducey and the legislature tried to “modernize” AHCCCS by putting a five-year lifetime cap on assistance and selling it as “a bridge to independence” that would also conveniently save the taxpayers money.

AHCCCS currently serves about 1.7 million people, the majority of whom are children and the disabled, and after severe pushback from the press and public, Ducey clarified that this cap would only apply to the 350,000 “able-bodied adults” on the program. (An “able-bodied” adult, by the way, still makes $15,800 or less per year; $32,000 or less for a family of four.)

While other questions, like whether the cap would be retroactive, remain unanswered, and a great source of frustration to those trying to quantify the effects, what was clear was that the cap would result in more people going to the emergency room, as so often happens when people don’t have health insurance. Though it’s law that a hospital must treat any patient who comes in, one of two things often happens: Either the patients are bankrupted by an expensive bill they can’t pay, or the hospital raises the cost of medical services for everyone in order to cover the gaps.

What this means is that we end up paying more by not giving people Medicaid. This helps explain why the backlash against Ducey’s proposed cap was so fierce, though it’s important to note that the only reason AHCCCS actually isn’t capped today is because the federal government blocked Arizona’s plan to do so.

Arizona is one of 30 states with a special Medicaid waiver that allows us to propose experimental and pilot programs. An example of something you might find in one of these waivers is a plan to spend more money on specific job-training programs so that people on AHCCCS can find employment and get their health insurance elsewhere.

A five-year lifetime cap on AHCCCS was always going to be a hard sell to the Obama administration, but many fear that the Trump administration will be much more open to an idea like this. We’ll find out soon, because Governor Ducey is slated to make another waiver request in March, and it’s written into state law that he must ask for the five-year cap.

Losing health-care coverage doesn’t just mean a lack of medical care for a stomachache or other physical malady. Behavioral health care and substance-abuse treatment — often covered under AHCCCS — can be key components in protecting kids in low-income families.

“Even if it’s not automatically connected in peoples’ minds … all of the threats to Medicaid and Obamacare will dramatically affect child welfare because of behavioral health,” says Dana Naimark, CEO of the Children’s Action Alliance.

“Families will struggle to stay together and keep kids out of foster care, and families will struggle when kids return from foster care,” she adds.

Currently, the Arizona Department of Child Safety removes many children from their parents because of substance-abuse issues. In some cases, if a parent successfully undergoes treatment, the family can be reunited. But if there’s no treatment available, you can bet we’ll have even more children in the already overstretched foster-care system.

3. Arizona could end up with an even greater shortage of affordable housing.

It’s no secret that Arizona already faces an overwhelming shortage of affordable housing units, and under the next administration, many worry that it could get worse.

Not only will a lot of poor families have less money to put toward housing — after, say, being kicked off AHCCCS and having to foot their own medical bills — but there’s concern about cuts to the low-income housing tax credit, which is currently one of the biggest incentives states have to get developers to build the affordable housing they so desperately need.

Established in 1986, the program allows the federal government to give states millions of dollars worth of tax credits that they can give out to local developers who build or refurbish affordable housing units.

In 2016, the Arizona Department of Housing received about $160 million to give in low-income-housing tax credits, which the department says funded 782 units.

While it seems unlikely that Dr. Ben Carson, Trump’s nominee to head the Department of Housing and Urban Development, would do away with the entire tax-credit program — given that it’s often touted as the single most important tool in the fight for affordable housing — he might reduce the amount of money currently given to states to run the tax-credit program as a means of reining in federal spending.

The direct result of this would be fewer affordable housing units with a spiraling cascade of terrible results, says Darlene Newsom, CEO of UMOM New Day centers, a nonprofit based in Phoenix that works to prevent and end homelessness for women and families throughout Maricopa County.

“Arizona, in particular, doesn’t have a real strong safety net for families and for youth,” she adds, which means that more people and families will struggle to find housing, and could either end up homeless or living in dangerous conditions that are unfit for adults, let alone children.

And in the long run, this will place an even bigger burden on the state’s beleaguered child-welfare system, as more children are removed from their parents and placed in foster care for reasons that essentially stem from poverty. (To be clear, there are apartment buildings going up all over Phoenix, but most are luxury apartments that a lower-income family could never afford, and that will actually end up driving up the cost of real estate in general.)

Most of the cases called into the Department of Child Safety already have to do with what’s called “poverty-based neglect.” These are families who are homeless or live in squalor because they can’t afford to pay rent somewhere that’s not infested with bugs and has working utilities; these are moms who feel forced to leave their children with neglectful (or even abusive) neighbors because they work long hours at jobs that don’t pay enough for them to afford childcare.

“Any changes or elimination [to the tax-credit program] would devastate affordable housing as far as I can tell,” says Jay Young of the Southwest Fair Housing Coalition, a nonprofit based in Tucson. “Housing is the linchpin of well-being and the health of families and communities. All the things that might happen with HUD are just crucially important to the future.”

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Miriam is a staff writer at Phoenix New Times.
Contact: Miriam Wasser