Tuesday's Lesson: Bold State Leadership Needed More than Ever

Gridlock.  Slow fulfillment of promises of change in D.C.  A health care bill so compromised that even supporters are unhappy with many details. 

Frustration with D.C. seemed to be the clearest message from Massachusetts voters on Tuesday.

But what can we expect other than gridlock and resistance when a 59-seat super-majority in the U.S. Senate is insufficient to pass serious legislation?  Or when monied interests in D.C. buy off support to block serious reforms on financial regulations, health care and climate change legislation?

As we noted in our report Why States Matter, the filibuster allows as few as 3% of the total U.S. population to potentially elect representatives able to block the will of the other 97% of the population.  In practice, filibusters are put together with a hodgepodge of states representing larger minorities of the population, but when corporate special interests start with such a low threshold of votes needed to preserve the status quo, it's hardly surprising that federal inaction, diluted compromises and voter frustration is the norm. 

This is why bold, progressive leadership in the states matters. 

States Move National Policy:  Generally able to take action with a majority vote in their statehouses, states have always been where progressive policy moves forward.  And when multiple states act, it creates a wave of reform that can ultimately drive federal action despite the filibuster and minority resistance.

• The federal minimum wage was raised in 2007 only after states representing a majority of the population passed their own minimum wage increases.
• Health care reform is only being considered in D.C. because states across the country have expanded coverage in recent years and enacted insurance reforms like bans on preexisting conditions and medical loss rations -- provisions ultimately incorporated into federal bills.
• Serious federal movement on climate change only followed multiple states in the Northeast and West enacting their own cap-and-trade bills to reduce greenhouse gases.

Making the Progressive Case in the States:  Without the filibuster diluting every bill, states are also where voters can see progressive values embodied. 

The right-wing has long understood the power of messaging through state policy.  Whether on gay marriage, abortion, immigration, or anti-tax policy, the right-wing doesn't even bother having a federal agenda other than saying "no" to all reforms, but they deliver their message to their voters through state initiatives attacking abortion rights, banning gay marriage, scapegoating immigrants, and trying to slash state taxes. 

Progressives need to be equally bold in using state policy to make clear our values to voters.  By promoting and enacting progressive policy in the states, we can overcome the frustration people feel with D.C. due to compromises forced by the filibuster.  

PSN Taking Action:  It was for this reason that Progressive States Network was formed just over four years ago, because legislators and allied progressive organizations wanted to more effectively coordinate state efforts to move policy and messages across the states. 

• Our Shared Multi-State Agenda for 2010 reflects state leaders putting corporate accountability, green jobs, addressing the foreclosure crisis, cutting health care costs, election reform, and help for working parents on the public agenda.  
• By promoting a balanced approach of raising revenue to address the fiscal crisis, state leaders are moving job creation efforts and keeping teachers, nurses and police employed in our communities. 
• Programs like PSN's State Immigration Project directly confronts right-wing anti-immigrant messaging with a positive alternative message of integrating new immigrants into our communities.
• And PSN's work on a range of other issues, from broadband to workers' rights to privatization, helps progressive leaders continue to promote bold, innovative policy across the states.

In a time of extreme economic hardship, voters are looking for clear leadership.  And despite current discontent with D.C., the public is committed to progressive values.  They just need to see those values in action.

State leaders - both legislators and organizations - can address that hunger for leadership by moving progressive policies and messaging in the states. 

By promoting jobs, protecting families, and expanding accountability, state leaders will deliver the message that progressives will not be blocked from serving the needs of the public, however the right-wing manipulates the filibuster to impose gridlock in D.C.

Federal Officials Critical of Privatization Debacles in the States

In a meeting with Texas officials last week, Kevin Concannon, Under Secretary of Food, Nutrition, and Consumer Services at the United States Department of Agriculture (USDA), claimed that there had been a drastic reduction in the timeliness and accuracy of food stamp provisions in the state following the implementation of a privatized system.  In fact, Texas now has the worst performing food stamp program in the entire country.

Texas' Privatization Debacle:  In 2005, Texas granted Accenture a $899 million contract to operate the state's food stamp eligibility program.  However, the venture quickly turned sour, leaving thousands of people without benefits for which they were eligible, prolonging working families' food insecurity.  Other critical failures occurred, such as a massive computer crash that destroyed hundreds of the Texas Attorney General's records, including eight months of work and evidence in 81 Medicaid fraud cases.  Accenture had not backed up the files and did not inform Texas officials of issues that should have raised concern, such as lags in reporting and record retrieval failure.  Under Secretary Concannon finds that the failed privatization system resulted in "a five-year slide" in processing food stamp applicants.

Privatization hurts working families who have been hit hardest by the recession:  Under Secretary Concannon's comments mirror a letter he wrote in November 2009 to each state Supplemental Nutritional Assistance Program (SNAP) Commissioner to highlight the pitfalls of privatization and contracting-out social services.  In the letter, he urges states to be mindful of the economic crisis and the impact on families in need.  He further acknowledges the astronomical increase in case loads at a time when state resources are limited.  He also discourages states from contracting out the food stamp intake and application process to for-profit entities.  The letter concludes: "[t]hese (privatization) projects encountered severe problems in meeting critical performance standards and many eligible SNAP applicants have suffered as a result.  Based on the evidence, we do not regard these projects as successfully furthering the purpose of the Program.  We do not support the furtherance of such projects, and believe that they put public funds and our clientele at risk."

Vital public programs, such as Medicaid and food stamps, provide working families, who have been disproportionately affected by the downturn, with a lifeline during these tough economic times.  Efforts to privatize fail to save money, increase efficiency or manage caseloads, and most importantly, fail families that need assistance.  In order to provide protections to vulnerable residents and guarantee that families have appropriate support during a time of economic uncertainty, social service provision should be handled by the government rather than a private contractor.

Privatization hampers economic activity:  Under Secretary Concannon additionally reveals that Texas could be receiving $1 billion more in federal food stamp funds and serve over 650,000 additional applicants if it approved more applications of eligible Texans.  Currently, three million Texans receive food stamps, which is about 55 percent of all eligible for the program.  This is significantly lower than the national average of 67 percent.  Furthermore, Texas supermarkets are losing approximately $1 billion annually in food sales because of the problems with food stamp provision in the state.

Moody's Analytics analyzed the impact of federal investments in the states and found that every federal dollar spent on temporarily increasing food stamps creates $1.74 in economic activity.  Accordingly,  Texas' privatized system actually hampered private industry, market activity, and overall economic growth.

States are taking action: Much like Texas, Indiana initiated an overhaul of its welfare system and granted IBM a $1.34 billion contract to provide services in 2007.  Due to implementation errors, thousands of Hoosiers needing assistance were denied access despite qualifying for services from the state.  From the outset, several Indiana lawmakers and advocacy organizations called for an immediate halt to further privatization.

The system was so problematic that Indiana officials announced that they would be canceling the state's contract with IBM this past October.  Republican Gov. Mitch Daniels admitted that the privatization initiative was a "flawed concept that simply did not work out in practice."  He further cited lack of face-to-face contact and county-based case management, inefficiency of welfare call centers, high error rates, and poor timeliness as the major problems created by the privatized system.

To protect families and ensure that the most vulnerable state residents are receiving necessary services, Indiana Rep. Gail Riecken introduced HB 1003, a bill intended to prohibit the state from privatizing Medicaid and food stamps.  Assessing the issues with the privatized system, she stated, "[t]he system they created wasn’t saving the people of Indiana any money, and there were too many cases of lost documents, delays in determining eligibility and problems in actually getting assistance.  There is no point in allowing these kinds of mistakes to continue, and we should not tolerate any involvement by entities that have a spotty track record.”  The Indiana House Ways and Means Committee approved the bill last month.

As states grapple with the recession and search for the most appropriate methods to alleviate fiscal pressures, some lawmakers will likely propose privatization as an effective policy to garner a short-term infusion of capital.  However, as PSN has discussed in previous Dispatch reports, privatization is an unsustainable policy that comes at the expense of long-term community investments and sound budgeting.  Fortunately, at both the state federal level, there is a growing recognition that privatization often leads to inferior service provision, substantially higher costs, and lost transparency.