There’s usually plenty in the farm bill to complain about — subsidies come to mind. However, this year is extra special. A provision was tucked into bill that would prohibit states from privatizing some welfare services, such as the distribution of food stamps. If it passes it would dismantle a massive modernization program in Indiana, which by most measures was the worst in the nation. The paper intensive process often led to multiple trips and a lack of consistency that drove error rates to unacceptable levels-leading to $100 million in misspent funds each year. Under the contract with IBM will make systematic changes and upgrades quickly. This will bring about better, more accurate services to customers, faster, at massive savings (some estimates put it at $100 million a year). Indiana FSSA Secretary Mitch Roob wrote about the project and its importance in our recent Innovators in Action (see page 24). According to the Wall Street Journal the move will also harm “21 other states that have privatized administration of their food stamp programs to some extent, and five more that are considering it. Already, Governors from Minnesota, Florida, Texas, Washington, Connecticut and Rhode Island have objected to the provision.” Several amendments to the bill have been offered up – including one by Texas Congressman Pete Sessions that would have provided waivers to the ban. It failed on a party line vote. Seems likely that the WSJ was right – this is more about union memberships than delivering services. Its true that the Indiana modernization led to fewer AFSCME members, however, despite AFSCME’s predictions the employees are winners too (assuming that working for the private sector isn’t evil). With more than 99% of them transferring to the private partner, at equal pay and benefits, employees are now able to focus on helping those who need help rather than pushing paper. All is not lost, yet. The Senate still has to take up the bill and Sen. Lugar has suggested he’d work to remove the provision. Further, while the President has threatened a veto, its because of other language in the bill and not the anti-privatization measure.
Geoffrey Segal is the director of privatization and government reform at Reason Foundation, a nonprofit think tank advancing free minds and free markets. He is also editor of Reason's Privatization Watch.