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Pa. welfare chief wields $400 million ax

| Thursday, July 7, 2011

HARRISBURG -- Department of Public Welfare Secretary Gary D. Alexander is on a hunt.

His agency needs to cut $400 million in costs, and legislators gave him broad -- some say unprecedented -- power to do so.

"The biggest challenge is getting it done in an expedited manner," Alexander, 42, the former secretary of Rhode Island's human services agency, told the Tribune-Review on Wednesday.

Republican Gov. Tom Corbett tapped Alexander in January to head the agency, which oversees about $27 billion in federal and state spending.

Republicans long have complained about "fraud, waste and abuse" at the agency. But people receiving benefits could find them curtailed or eliminated, or could face higher co-payments. About 2.3 million low-income Pennsylvanians receive Medicaid health insurance. As of May, records show 287,113 Pennsylvanians receive cash assistance, and 1.7 million individuals, or 834,761 households, receive SNAP benefits, formerly known as food stamps.

Legislation approved last week requires the department "to dramatically increase child care co-payments, cut Medicaid benefits, change the rules for welfare-to-work programs to eliminate training and educational programs, and reduce eligibility for benefits," said Richard P. Weishaupt, senior attorney for Community Legal Services in Philadelphia. The law makes no provision for legislative oversight, nor opportunity for public comment, he said.

Alexander said the public will be included and informed. Yet he can make changes without legislative approval or OK from the Independent Regulatory Review Commission, which typically holds hearings and examines state rules. Some changes might require federal approval, he said.

The Special Allowance program that provides cash assistance to welfare recipients seeking employment "certainly will be modified," Alexander said. A 2009 state audit found 45 percent of that program's payments were unjustified, though he said he does not know how it might have changed since then.

The bill defined some cuts -- for example, authorizing a co-pay for Medicaid coverage for disabled children when their families earn too much to qualify for federal Supplemental Security Income benefits.

Lawmakers clearly have "a sense of urgency" about cutting welfare costs, Alexander said. They gave him one year to identify savings.

Some Democrats warn the law gives Alexander unprecedented power.

"I think the thing that bothers me the most is the Legislature has abandoned a portion of its power to a non-elected official," said Rep. Joe Markosek of Monroeville, ranking Democrat on the House Appropriations Committee. "We've given the secretary ... unprecedented discretion."

Alexander believes the General Assembly and former Democratic Gov. Ed Rendell in 2005 set precedent by giving then-Secretary Estelle Richman similar discretion. Rendell urged her to cut $500 million in Medicaid, the health insurance program for low-income people. The agency axed about $350 million.

"At that time, they were more specific," Markosek argued. "And that agreement was among all four (legislative political) caucuses. This is something that was done by the Republican caucuses in the House and Senate.

"Nobody's for waste," he said. "Every legislator wants to cut out fraud and abuse. But they have embellished the number, and they are going to have to cut vital services to do that."

According to Markosek's staff, about $250 million of the $400 million in suggested cuts are unspecified in any detail.

Democratic Auditor General Jack Wagner said yesterday that his audits of the agency show it could save $400 million. Without knowing details, Wagner, a former senator, said he could not determine whether lawmakers gave Alexander too much power.

"It's not as if we've made him king of the department for the next year," said House Republican Policy Chairman Dave Reed of Indiana County, who has spearheaded welfare reforms.

Although the Legislature hoped to identify savings for the current budget, it also wants to restore public confidence in the system -- by making sure the truly needy get benefits and those "taking advantage of it are kicked off," Reed said.

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