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News & Observer - NC's Social Net Fraying Amid Shutdown

October 15, 2013
In The News

By Rob Christensen
RALEIGH — Twice in the space of a week North Carolina became the first state to cut programs for low-income families, and on Tuesday officials said more of the state’s most vulnerable citizens could be put at risk if the federal shutdown continues.

Counties across North Carolina are facing difficult choices including the loss of money for subsidized child care, for feeding and nutrition programs for babies and their mothers, for child protection programs, and for money to pay social workers, officials said.

“There are kids who are losing their child care today in counties,” said Sherry Bradsher, deputy secretary of the Department of Health and Human Services.

But as state officials blamed Washington for the fraying social safety net, Democrats questioned why North Carolina has been so quick to cut off access to federal dollars.

On Monday, the Department of Health and Human Services directed county agencies to stop processing new applications for the Temporary Assistance for Needy Families, formerly known as welfare. Last week, it ended new enrollments for a nutrition program for new mothers and babies – a move it reversed two days later

“We are concerned that the decision to suspend the TANF program may reflect a disturbing trend, and urge you again to reverse course,” Democratic Reps. David Price of Chapel Hill and G.K. Butterfield of Wilson wrote in a letter to Republican Gov. Pat McCrory.

The congressmen said the federal government has guaranteed reimbursement, “which is apparently good enough for 49 other states.”

In an interview Tuesday, Bradsher laid out the administration’s efforts to keep the safety net patched after the loss of federal funds – including behind-the-scenes negotiations with infant formula companies, the U.S. Department of Agriculture, a bank that handles food vouchers, and the state budget office.

N.C. at a disadvantage

Bradsher said each state’s TANF program is configured differently, so it is hard to compare states.

North Carolina was at a disadvantage in the TANF program, she said, because it lost $36 million in supplementary federal TANF funds two years ago during federal budget-cutting that would have served as a cushion during this shutdown.

Bradsher portrayed the decision to no longer take applications for the TANF program as part of a difficult choice in setting priorities. The program affected is called Work First – a successor to welfare. Welfare reform has shrunk the programs to only 20,709 North Carolina residents in the TANF program – 6,948 parents of dependent children and 13,761 children who live with someone other than a parent.

Only about $56 million of the $350 million that the state receives in annual TANF funding goes to Work First. As the number of welfare recipients declined, the state reinvested its money into other programs to help the poor – child care subsidies, child protective services, foster care, adolescent parenting programs, and training social workers.

“We had to determine of all the services using TANF dollars, how did these line up, if you will, in terms of health and safety because we don’t know how long this shutdown is going to last,” Bradsher said.

Bradsher said it was decided that mandated programs such as child protective services and foster care, and adult protective services and guardianship, should take precedence for TANF money.

But even so, federally subsidized child care for low-income families is facing cutbacks. The state spends $26 million per month on child care stipends, which allow low-income parents to go to work.

Although officials said they could not estimate how many low-income parents have lost their child care subsidies, officials said that as many as 72,000 North Carolina children could be affected if the government shutdown continues.

Counties may cut back

“There will be quite a few counties that won’t be able to sustain care for children,” Bradsher said.

Among the counties considering immediate cutbacks to child care are Lee and Edgecombe, according to Alexandra Sirota, director of the N.C. Budget and Tax Center, which advocates for more spending for the disadvantaged.

There will also likely be furloughs of social workers who are paid with federal funds. State officials said those decisions are being made by counties, and they had no count on how many workers already had been furloughed.

Last week, North Carolina became the first state to suspend the Women, Infants, and Children program that provides nutrition for pregnant women and their babies. Two days later, the Department of Health and Human Services reversed course after consultation with state budget director Art Pope.

State officials were concerned that the vouchers issued by WIC would bounce because of a lack of money. They received an additional $5 million in contingency money from the U.S. Department of Agriculture to keep the program operating but were turned down by USDA for an additional $1.5 million.

WIC program resumes

But the state resumed the WIC program after the state budget office gave DHHS flexibility to advance money to the program. DHHS also received from Nestle, a company that makes baby formula, an advance on some rebates that the company offers.

“That gave our budget folks the assurances that they needed to say we can can cover it with state dollars until those rebates get here,” Bradsher said. But that does not guarantee the money will be there for WIC if the shutdown continues into November, she said.

Sirota said she was heartened by the McCrory administration’s decision on WIC, which she said would help 200,000 women and children.

“Certainly the federal shutdown is creating havoc across the country,” Sirota said. “But North Carolina has the funds and can make the investment as a stopgap until the federal government reopens. It should be doing that on a range of issues – not just for women and children.”