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West Virginia’s billionaire governor is waging a war on anti-poverty programs

President Donald Trump shakes hands with West Virginia Governor Jim Justice, who announced during the rally he would switch parties from Democrat to Republican, August 3, 2017. (CREDIT: SAUL LOEB/AFP/Getty Images)

Months after rejecting a Kentucky-style work requirement for Medicaid in West Virginia, Gov. Jim Justice (R) now seems to be moving in the opposite direction — with assistance from the conservative Foundation for Government Accountability (FGA), an American Legislative Exchange Council (ALEC) ally and an affiliate of the Koch-funded State Policy Network.

The apparent switch is nothing new for Justice, who made a leap into politics when he ran for governor of West Virginia as a Democrat in 2016. Nine months after winning, Justice — the richest man in West Virginia and the state’s only billionaire — announced at a Trump rally that he was switching to the Republican party.

Today, Justice’s Department of Health and Human Resources (DHHR) is pushing a series of bureaucratic barriers to public assistance, including: three-month time limits for unemployed and part-time workers receiving food assistance (SNAP); a $2,250 limit on cash and assets that would penalize families receiving food assistance for modest savings; and a hefty contract for a private corporation to determine the assets of every member of a recipient family.

DHHR has already awarded Optum with a contract of $300 million over 10 years to verify eligibility for Temporary Assistance (income assistance for families with children), food assistance, Medicaid, and other programs — even as a bill that would create such a system is still under consideration in the state legislature. That legislation would incentivize the corporation to kick people off of these programs — requiring it to demonstrate greater savings than the cost of the contract in the first year. (A spokesperson for DHHR confirmed the 10-year contract with Optum worth more than $308 million, but denied that there is a savings requirement. The spokesperson said the state will “save approximately $55 million over 10 years while reducing its existing system cost.”)

The DHHR’s own study suggests that strict time limits on food assistance for people who are unemployed or underemployed is flawed. Its pilot project in nine counties with the best local economies in the state terminated SNAP for more than 5,400 jobless people. The agency’s nearly 14,000 job referrals led to just 259 people gaining employment. According to the DHHR, “Our best data does not suggest that the program has had a significant impact on the employment figures for the [targeted] population in the 9 counties.”

That didn’t come as a surprise to the West Virginia Center on Budget and Policy (WVCBP), which noted that the people most affected by the time limits tend to be “very poor and most have a high school education or less.” Unemployed and part-time workers terminated due to the limit typically have barriers to employment such as “a lack of transportation or driver’s license, mental or physical limitation, felony conviction, or were recently dismissed from a job.”

What the pilot project did have a significant impact on was federal dollars leaving the state to the tune of $13 million due to reduced SNAP caseloads, and an increased demand for assistance at local food banks and pantries that the providers couldn’t keep pace with.

“There was a 30 percent rise in meals served during the study,” said Seth DiStefano, policy outreach coordinator at the WVCBP. “You can see the exact point that people were thrown off SNAP — by July 2016 people had to be turned away by our churches, food banks, and missions. There is no reason to think it will do anything but get worse if we expand this policy.”

DiStefano also said that struggling local economies in the state can ill-afford to lose SNAP spending, which creates approximately $1.70 in economic activity for every $1 in SNAP spending, according to Moody’s Analytics.

“There are parts of West Virginia that are experiencing Great Depression-like levels of economic struggle,” said DiStefano. “SNAP dollars are literally keeping stores open.”

Supporters of policies like these typically argue that they free people from dependence and crack down on fraudThose arguments are consistent with FGA talking points, and the organization appears in DHHR’s materials that promote the new proposals.

The FGA has been behind past stigmatizing efforts like mandatory drug-testing for parents receiving Temporary Assistance in Florida. Studies showed that there was no greater incident of drug use for people who receive benefits than the general public — and a lower rate compared to all Floridians — so the court struck it down as an illegal search and seizure. In Illinois, the FGA pushed for creating a Medicaid eligibility verification system run by a private contractor that, it said, would crack down on fraud.  

But the state found that more than 80 percent of cancelled Medicaid cases were simply due to people not responding to new demands for paperwork “in the very tight frame written into the law”, according to a 2016 study in the Journal of Health Politics, Policy and Law. Such findings are not surprising, considering the housing instability and other barriers faced by Medicaid patients that make timely paperwork difficult. Nearly all of the people who lost their coverage ended up qualifying and re-enrolling. Indeed, researchers found that the number of cases referred for fraud investigation was “negligible…despite rhetoric to the contrary.”  

More recently, the FGA was behind a new law in Mississippi that outsourced eligibility-verification for SNAP, Medicaid and Temporary Assistance, allowing people only 10 days to give written responses on technical information like liquid assets, utility bills, loans, child-support payments, child-care costs, employee pay stubs, and other sources of income and expenses. And the Center on Budget and Policy Priorities wrote of the FGA’s “deeply flawed analysis” behind FGA’s claim that punitive changes in parents’ eligibility for Temporary Assistance in Kansas have helped those families thrive.

As Peter Germanis, a conservative who has worked on public assistance in both the Reagan and H.W. Bush White House, as well as the Heritage Foundation, said in an email, “FGA is a real danger to policymaking — their studies are seriously flawed methodologically and reflect no understanding of how various work requirements and other policies have been implemented. Yet some politicians seem to believe them.”

At a recent legislative hearing, the DHHR cited the FGA in its materials. The hearing was packed with opponents of these proposals, standing-room only. The FGA, in contrast, has no grassroots support in the state, a reality that could come back to haunt elected officials who support its agenda.

“All of these are just bureaucratic weapons aimed at people who are struggling,” said DiStefano.  “West Virginians take seriously how we treat our neighbors, and this absolutely moves us in the wrong direction.”

Greg Kaufmann is the editor-in-chief of TalkPoverty.org and a senior fellow at the Center for American Progress. (ThinkProgress is editorially independent of CAP).