Agencies Bracing For Sharp Cuts

As the political landscape continues to shift under a re-elected and re-energized Bush administration, local Jewish agencies are bracing for what could be a sea change in government assistance to human services in an age of tax cuts and a surging federal deficit.
Federal funds and aid to states that allow local grants amount to about 50 percent of the billion dollars on which UJA-Federation depends to run its vast network of beneficiary agencies.
That means even if the government maintained spending at current levels, but declined to adjust for annual increases in operating costs of about 3 percent, the agencies would lose some $15 million per year. If a 2 percent cut were added, the loss would be $25 million annually.
“The impact of a large federal deficit will limit the amount of new funding available for health and human services initiatives,” said Ron Soloway, UJA-Federation’s vice director of governmental affairs.
Soloway said federal aid, for example, accounts for about 40 percent of funds spent on child welfare programs and 100 percent of subsidized housing programs.
“Almost every program one way or another has at its base federal dollars,” said Al Miller of the Federation Employment and Guidance Service. “When Congress allocates federal money it affects all programs.”
While charitable giving is on the rise on both the national and local levels, Soloway said it cannot make up the slack.
“Government has the core responsibility,” he said. “Philanthropy can’t raise the kind of money that would be lost by government cuts.”
It’s unclear how the outlook might have differed under an administration headed by Democratic presidential candidate John Kerry, who spoke about reversing tax cuts, but primarily to offset health-care costs. Social service groups, however, may have had less to worry about in an administration that did not envision even deeper tax cuts.
Some fear a scenario in which the deficit could rise to such a level that the government would declare a budgetary crisis and then cut back on Social Security, Medicare and Medicaid, long the sacred cows of spending.
“Homeland security and military spending will not be affected by the enormous deficit because President Bush has made it a priority,” said Karen Kraut, director of the tax education project of United for a Fair Economy, a nonpartisan, Boston-based group that opposes the Bush tax cuts. “The president has already floated some of his 2006 budget numbers which show severe cuts in housing vouchers and other domestic programs.”
While the cuts have reduced the tax rolls by some $197 billion, 34 states have reduced eligibility for publicly funded health insurance and 23 states have cut eligibility for child-care services, said Kraut. As states tighten their belts, human services programs “will be the biggest losers because their constituencies are not as strong” as lobbyists for public education or public safety.
“The concern is that if the federal government is not providing more funding for human services, the state certainly will not [do so], given its own very significant deficit, and so the result will be a very difficult budget year,” said Soloway.
William Rapfogel, executive director of the Metropolitan Council on Jewish Poverty, said action by Congress could soften the impact.
Met Council is one of the first in the nation to receive a controversial, so-called “compassion grant” — in this case $500,000 over three years — to enhance and strengthen the capacity of local grassroots groups under the president’s faith-based initiative program.
Opponents say the program weakens the wall between church and state and will be slanted toward Christian groups.
Met Council has received two personal donations from President Bush.
“We have managed to succeed in educating the president enough that he understands the issue of Jewish poverty,” Rapfogel said. “To achieve the same thing at the congressional level will ensure that we are able to participate in programs not [previously] available to the Jewish community.
“I believe what we have to do as a Jewish community across the country is go out and advocate like we never advocated before to ensure that people who are hungry, people who have needs for job training and housing in our community are a priority in Washington.”
Although both houses remain controlled by Republicans, Rapfogel noted that members of Congress of both parties represent poor districts that need continued public funding programs.
In New York, Russian immigrants could feel the pinch particularly hard. Federal money intended to aid refugees here is now drying up as the boom of immigrants that began in the 1980s is reduced to a trickle. A program by the federal Office of Refugee Resettlement to help older refugees obtain citizenship here was discontinued this year because the aid was applied to states with a larger share of refugees.
“Our program was funded by only one grant,” said Inna Stavisky, who runs an office of the Jewish Association for Services for the Aged that utilized the funds. She is now trying to stay open with private funds.
“We still have 400 open cases,” Stavisky said. “We don’t have anywhere to refer them.”
With only four employees serving some 5,000 clients since 1988, JASA’s Older Refugees Project was one of four agencies in the state that had benefited from the canceled program, geared toward refugees 60 and older.
Shrinking funds for resettlement programs and an overall shortage of social service funds could spell a one-two punch for Russian-speaking households that make up a large percentage of Jewish homes in the New York area living below the poverty line.
“It’s a terrible situation,” said Alec Brook-Krasny, executive director of the Council of Jewish Emigre Community Organizations. “We used to be one of the biggest refugee groups, but I guess there was a shift. There will obviously be a lack of funding for programs, but the need is still there.”