NCPA - National Center for Policy Analysis


July 26, 2007

At the behest of the Association of Federal, State, County and Municipal Employees (AFSCME), the huge public employee union, House Democrats are pushing a provision of the farm bill that would effectively ban states from working with private companies to improve the administration of food stamp and welfare programs, says the Wall Street Journal.

For example, in Indiana:

  • The state joined with a group of companies, led by IBM to deliver welfare benefits more efficiently to those who qualify for them.
  • It aims to save $500 million over 10 years by moving some 1,400 government jobs to the private sector
  • Its contract with IBM specifically requires that all current employees be offered work on the new system (more than 99 percent chose the private sector).

But no effort to make government more accountable goes unpunished, says the Journal:

  • Under the House provision, Indiana would be forced to cancel the $1.16 billion 10-year deal with IBM, while taxpayers would have to shoulder the more than $100 million in additional costs to bring the operation back into the bureaucracy.
  • Worse, the money to make up the shortfall would likely come out of the same purse that's been funding an increasing number of child-welfare caseworkers -- which was another goal of reform.

Indiana won't be the only one to lose, says the Journal.  Democrats are also harming 21 other states that have privatized administration of their food stamp programs to some extent, and five more that are considering it.  Already, Governors from Minnesota, Florida, Texas, Washington, Connecticut and Rhode Island have objected to the provision.

Source: Editorial, "Union Doozy," Wall Street Journal, July 26, 2007.

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