For Immediate Release
Tuesday, July 15, 1997
Statement by AFSCME President Gerald W. McEntee on House Budget Amendment Encouraging States to Privatize Welfare
Washington, DC —House leaders today introduced an amendment to the budget package that would encourage states to privatize welfare services by giving them each a $5 million incentive to do so. AFSCME President Gerald W. McEntee had this to say:
"It isn’t enough that states have the option to privatize parts of their welfare systems -- now House leaders want to give a $5 million bonus to every state that turns over Food Stamps and Medicaid operations to companies like the multi-million dollar defense contractor Lockheed Martin -- the same company that charged the government hundreds of dollars for toilet seats and hammers.
"The $5 million bonus to states is an outrageous attempt by House leaders to get around requirements that provisions in the budget bill have a clear financial impact. There are rules to the game, but House leaders are spending millions of of taxpayers’ dollars to get around the rules.
"It’s as if House leaders are holding a Fire Sale, offering cash-back incentives to companies that are already snapping up state welfare contracts on the cheap. It’s ludicrous. This action not only threatens our nation’s public safety net, but it poses a huge cost to taxpayers -- as much as $250 million dollars.
"The public was outraged when private multi-million dollar companies like Lockheed charged the government hundreds of dollars for toilet seats and hammers, and they know the same abuses are all too likely if these companies take over the administration of these vital programs. Taxpayers should be outraged by this proposal, which would not only allow these companies to charge the government millions of dollars in cost over-runs, but would actually encourage states to sacrifice government services to corporate interests.
"Publicly funded benefits programs require public accountability. Private companies are accountable only to their shareholders -- not to the public. These companies should not be granted any discretionary functions, such as determining eligibility for the Food Stamp and Medicaid programs. Lacking any accountability to the public, we're very concerned that this move will open the door to widespread political patronage, fraud, corruption and influence peddling. Scandals have already arisen where states and local governments have contracted out these programs.
"AFSCME is committed to working with the administration and with Congress to make the new welfare law more fair and humane for everyone, but we're determined to combat the negative consequences of this budget proposal. We believe this proposal would result in bad public policy."
