NJ Spotlight

For NJ's Poor, The Fiscal Cliff Means Living Even Closer To The Edge

Sequestration could make it more difficult for the state's most vulnerable residents to meet basic needs like food and shelter

NJ Spotlight — Wednesday, December 19, 2012

By Hank Kalet

Thousands of New Jersey's poorest residents could find themselves choosing between food and other necessities if budget cuts mandated by the federal Budget Control Act are allowed to go into effect January 1.

Numerous programs providing food, housing, and emergency shelter to the poor will be hit by sequestration, the automatic 8.4 percent cut included in the Budget Control Act, unless the White House and Congress can agree on new budgetary rules by the end of the year.

Of particular concern to advocates for the poor are Section 8 housing vouchers and WIC, the federal nutrition program for women, infants and children. They say that those programs are unlikely to be saved as part of a legislative bargain, and fear other programs like the Earned Income Tax Credit, food stamps and Medicaid could end up being cut as well.

"In New Jersey, we've already gone through this and been fighting this on the state level with all of these budget cuts," said Ann Vardeman, an organizer with New Jersey Citizen Action, which works on behalf of low-income and working-class New Jerseyans. More people are sliding into poverty and more people are having a harder time climbing out."

According to a report issued by Sen. Tom Harkin (D-Iowa) in July that focused on cuts to the departments of Labor, Health and Human Services, Education and their related agencies, New jersey stands to lose about $113 million in funding in those areas alone.

The Budget Control Act was a compromise passed by Congress in August 2011, ending a stalemate over whether to increase the federal debt limit. The bill set caps that would cut federal spending by $1 trillion between 2012 and 2021 and created a joint committee charged with cutting the federal budget deficit by an additional $1.2 trillion.

The Joint Select Committee on Deficit Reduction — known as the Supercommittee — reached an impasse in November 2011 and did not agree to cuts. That means automatic cuts, known as sequestration, will be triggered in January unless Congress and the president can agree to an alternative

The across-the-board cuts include 8.4 percent in most nondefense discretionary programs, 7.5 percent in defense, 8 percent in mandatory programs other than Medicare, and 2 percent in Medicare provider payments.

Both parties have raised concerns that the tax increases called for under the budget act — an end to the payroll tax holiday and the so-called Bush tax cuts — could stall economic growth. Republicans also have expressed concern about defense cuts and have called for changes in Social Security, Medicare, and Medicaid. Neither party has focused much attention on the cuts to the social safety net about which advocates for the poor are concerned.

Cutting Low-Income Programs

Cuts to low-income programs would include $10.4 million for the Low Income Home Energy Assistance Program; $1.4 million in Community Services Block Grants, which would mean that 24,668 fewer low-income people could be served; and $1.7 million for senior nutrition programs, including congregate and home-delivered meals. In addition, the Campaign for Housing and Community Development Funding, estimates that a minimum of $8.5 million could be cut from housing assistance in New Jersey, which would affect about 10,000 households.

Tonya Bryan, executive director of the NJ Coalition to End Homelessness, said the potential cuts in Section 8 rental subsidies and money for construction of new affordable housing would leave an already vulnerable population even more vulnerable.

"All of his affects homelessness because you have to have housing if you are going to combat homelessness," she said. "If there is no funding to build housing, you have homelessness. If there is no money to provide vouchers for people to rent, then those people could become vulnerable. These programs are very crucial across the state."

Mary Gay Abbott-Young, director of the Trenton Rescue Mission, said she already is starting to see an increase in the number of people seeking shelter — and that is before the cuts take effect.

"I think people have used every dollar they can get their hands on to shelter in place and now they don't have it," she said.

"We are beginning to see an increase in the number of new cases coming into the shelter. We already see the effects of the economy in general and I think we fail to sound the alarm often enough."

Diane Riley of the Community Food Bank of New Jersey in Hillside, which helps stock local pantries around the state, said the budget cuts are coming at a time when most emergency food agencies — and more generally, organizations that help the poor — are stretched beyond capacity. And each cut, whether it is to housing, food, or utility supports, has a ripple effect.

Juggling Resources

When housing subsidies are cut, she said, low-income people are forced to shift money from food or other expenses. The same goes for utilities, transportation, and food. Most low-income people have to juggle their limited resources, paying for what they can when they can.

"They already are making tough choices, whether to pay rent, go eat, or get their medications," she said. "When you cut something like this, you are cutting into their decision-making. They are going to have to figure out another way to eat."

These are the same kind of decisions being made by "middle-class, employed" people. The difference is, however, that low-income people do not have room to absorb increased costs or a loss of income.

"They don't have that extra $20 to pay for gas and they have to rob from somewhere else, they have to cheat their own budget," Abbott-Young said. "At some point you can't do that any more."

Adele LaTourette, director of New Jersey Anti-Hunger Coalition, said the cuts to programs for the poor have to be looked at globally with an understanding as to how they "interlock."

"Any cut that impacts programs that assist people in need are going to have an impact on hunger," she said. "It all translates back, whether housing is cut or it is a decrease in your paycheck."

Many expenses are fixed, like rent and utilities, but the food budget is fluid, LaTourette said. "It is a place where people are not demanding X amount from you."

Hungry in New Jersey

So, low-income people do without or they go to the emergency food pantry, LaTourette said. Pantries and soup kitchens have seen "exponential increases over a number of years" because of the downturn and have most recently been affected by Hurricane Sandy.

"At this point," she said, "it is not really an emergency food system, but a sustainable food system. It is creaking under the load it has been forced to bear. Any more people pushed into the emergency food system is a real problem."

Riley agreed.

"Anything that hurts their ability to put food on the table means more people come to food banks," Riley said.

The three food programs likely to have the greatest impact in New Jersey, advocates say, are the Special Supplemental Nutrition Program for Women, Infants and Children, known as WIC, which provides nutrition and educational service, food programs for seniors like Meals on Wheels, and the commodities program.

The proposed cuts in the WIC program could affect 13,800 individuals in New Jersey, all of whom are women, infants and children, while cuts in the commodity program likely would mean an increase in costs for transportation and distribution for places like the Community Food Bank, meaning that each dollar spent by the food bank and local pantries would not go as far as it has in the past.

"They can't do without," Riley said of WIC clients. "It is the most important time to feed people. You don't want to cheat young women and children. Not a smart move" because it could have health and education ramifications long term.

"When we talk about cuts in housing or utility assistance or any kind of cut in programs that supplement income, it will potentially mean cuts in the food budget," LaTourette said. "They are doing the same thing we are, only their budget is a lot tighter. There is no shimmy room there."

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