America's 'Welfare State' Still Exists — It Migrated to the US Military

Long in retreat in the US, the welfare state found a haven in an unlikely place – the military, where it thrived for decades

While US cities declare bankruptcy and the numbers of homeless increase, the US military has unlimited amounts of
cash to waste on aircraft like the F35 — A half trillion dollar piece of garbage that can't even out perform aircraft a generation older.

By Jennifer Mittelstadt
Over the past four decades in the United States, as the country has slashed its welfare state and employers gutted traditional job benefits, growing numbers of people, especially from the working class, grasped for a new safety net – the military. Everyone recognises that the US armed forces have become a global colossus. But few know that, along with bases and bombs, the US military constructed its own massive welfare state. In the waning decades of the 20th century, with US prosperity in decline, more than 10 million active‑duty personnel and their tens of millions of family members turned to the military for economic and social security.

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The military welfare state is hidden in plain sight, its welfare function camouflaged by its war-making auspices. Only the richest Americans could hope to access a more systematic welfare network. Military social welfare features a web of near-universal coverage for soldiers and their families – housing, healthcare, childcare, family counselling, legal assistance, education benefits, and more. The programmes constitute a multi-billion-dollar-per-year safety net, at times accounting for nearly 50 per cent of the Department of Defense budget (DoD). Their real costs spread over several divisions of the defence budget creating a system so vast that the DoD acknowledged it could not accurately reckon its total expense.

Most Americans would not imagine that the military welfare state has anything to do with them. After all, in the era since the end of the draft and the advent of the all-volunteer force, military service has become the province of the few: just 0.5 per cent of Americans now serve in the armed forces.

But the history of the military welfare state tells us a great deal about citizenship and welfare. Its rise correlated with and, in some instances, caused the decline of the civilian welfare state, creating a diverging and unequal set of entitlements. And the recent transformation of the military welfare state – a massive privatisation and outsourcing – signals an even more dangerous future for the civilian welfare state.

The US military has always performed social welfare of some kind or another. Over its long history, it provided daily support to its conscripts – food, shelter, clothing and medical care – and more elaborate benefits such as homes, family support and clubs for the career force and officers. The military also rewarded citizen conscripts for their faithful service during wartime. During the Revolutionary War, the Continental Army offered veterans land or a cash bounty. After the Civil War, the military offered veterans pensions. And after the Second World War, millions of former service personnel were guaranteed unprecedented education, training and housing subsidies.

Military leaders embarked on a new and more ambitious social welfare programme after 1973. That year, President Richard Nixon and Congress ended the draft and mandated an all-volunteer force. Military leaders could no longer force citizens to join – they had to convince them. And one of their most vital tools was social welfare benefits.

Unlike European countries that provided nearly universal social welfare to all citizens, the US had only a patchwork social welfare system consisting of various public and private safety nets. Military leaders stepped into the gaps between them. They decided, in the words of the army motto, ‘to take care of their own’. They expanded the benefits traditionally reserved for the relatively few members of the career force and officers to every single member of the volunteer force and his or her family.

This post-1973 military welfare state played a different role in US life than most earlier types of military welfare. For one, military welfare no longer served as a reward for the services of citizen soldiers. Instead, it sustained the volunteer force: it lured new recruits, supported them while on duty, and convinced them to re‑enlist.

The military welfare state post-1973 never stimulated social welfare for the populace: quite the opposite

More importantly, earlier versions of military welfare catalysed broader social welfare programmes for the US populace. Civil War pensions pioneered federal retirement and disability payments, and paved the way for civilian retirement pensions. Veterans’ healthcare after the First World War created the first model of government health provision. And the Second World War-era GI Bill vaulted millions of former civilian draftees and their families into the middle class, legitimising government support for education and housing for all Americans.

The modern military welfare state of the post-1973 era never stimulated social welfare for the populace. Quite the opposite. As a smaller number and narrower cross-section of Americans volunteered for military service in the late 20th century, the divide between the military and civilians grew. So, too, did the divide between the new military welfare state and the existing civilian one. From the 1970s to the early ’90s, while many civilian welfare programmes contracted, public and private unions declined, and employers cut private employment benefits, the military expanded its welfare functions.

How did this happen?

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Privatization Fail in Wisconsin: Social Services Were Outsourced to a Global Corporation — It Stole Millions

By Jonas Persson and Mary Bottari
Based in Virginia but with offices all over the world, Maximus Inc. rakes in more than $1 billion a year from U.S. states and governments outsourcing social service and administrative functions. Wisconsin and the privatizing giant have a long and very troubled history, but breaking up, it seems, is hard to do.

Between 1997 and 2001, the Wisconsin Department of Workforce Development awarded Maximus three contracts to administer the newly created Wisconsin Works (W-2) program for $107 million. W-2 provides employment counseling and cash assistance for families living below the poverty line. There is no entitlement to assistance; it must be earned through “work participation and personal responsibility.”

While the struggling Wisconsin families kept their part of the responsibility bargain, Maximus did not. In 2000, it transpired that the company had improperly billed the state hundreds of thousands of dollars for expenses that had nothing to do with W-2, including “social functions and entertainment.” In the end, Maximus was forced to pay back $500,000. As a show of “good faith,” it also wrote a check for a further $500,000.

Whether it was the show of good faith or its impressive history of maximizing profits is impossible to say, but in 2004 Wisconsin once again contracted Maximus, this time as a “revenue-maximization consultant.” The company was charged with helping the Department of Health Services prepare and file Medicaid claims to extract more money in federal reimbursement. The $3.4 million dollar contract – footed by Wisconsin taxpayers – ran until 2009. And initially, things seemed to be going fine. Perhaps the appropriation of $500,000 some years earlier was just a bad day in the office for Maximus?

When the contract expired, DHS continued filing in accordance with the “best practices” developed by the company. In 2013, these practices caught the eyes of the inspector general for the U.S. Department of Health and Human Services, who found that they did not comply with federal requirements. Out of $41 million claimed for residential care services between 2004 and 2006, $39 million was deemed “unallowable" by the federal government. That translates into $19 out of every $20 and the feds are demanding Wisconsin pay back $23 million. Chances are that this number will increase by a magnitude when the claims made after 2006 get the fine-tooth-comb treatment.

W-2 and Medicaid consultancy are not the only services that have been outsourced to Maximus in Wisconsin. After spending more than $114,000 on lobbying the legislature on bills related to the “W-2 budget allocation process,” Maximus was awarded a renewed six-year contract with the Wisconsin Department of Children and Families worth some $21 million in 2011. Once again, Maximus was charged with deciding whether cases (this time children placed in foster care) met the criteria for federal reimbursement.

Indeed, Maximus has experience providing this type of service. In July 2007, Maximus paid $30 million to the federal government to settle criminal charges related to falsifying foster care claims. "Even after Maximus was paid $30 million for false claims in the DC foster care system, Wisconsin went ahead and signed a contract with the firm for the same type of service. States are failing to learn from each other's experiences or in Wisconsin's case, even their own," said Shar Habibi an expert on privatization at the nonprofit resource center In the Public Interest.

But in some states, citizens are stepping up and speaking out. In neighboring Illinois, a Maximus outsourcing experiment came to a sudden halt in December 2013. Facing a shortage of staff, the Department of Healthcare and Family Services had contracted Maximus to deal with a backlog of Medicaid cases up for re-determination. An investigation of the redetermination data found that Maximus’s work was sloppy and had high error rates, as opposed to the work carried out by state employees. The case went to arbitration, and during the proceedings, a state employees union showed that Illinois could save $18 million by hiring more staff to make up for the shortfall, instead of using a contractor. The independent arbitrator issued an order canceling the $77 million dollar contract with Maximus.

In Wisconsin, on the other hand, things are not as straightforward. The foster care contract is still in effect, and Maximus continues to provide W-2 services, with an office in Milwaukee.

How does the firm get states to look the other way? Maximus ladles on the campaign contributions and lobbying dollars, contributing $5,000 toward Governor Scott Walker's recall election campaign. Maximus also paid $100,000 a year for exclusive access to Republican governors through the Republican Governors Public Policy Committee, a secretive group recently exposed by Citizens for Responsibility and Ethics in Washington and the New York Times.

In a recent tweet, the state's W-2 program urged job applicants to “Check Check & Double Check your resume.” Good advice indeed.

Perhaps some résumé-checking would not be amiss the next time Wisconsin officials evaluate a Maximus bid.

________________
For references and more examples of outsourcing run amok, please see CMD's new report Pay to Prey: Governors Facilitate the Predatory Outsourcing of America's Public Services and follow the conversation at #OutsourcingAmerica.

Reprinted with permission from PRWatch.

The War On Women: The Newly Invisible And Undeserving Poor In America

15% of the U.S. population receive food stamp benefits. (Source USDA)

By Ruth Rosen
The U.S. Congress is fighting over how much to cut food assistance to needy families. Everyone knows that women and their children are the poorest people in America, but strangely, the faces of women have disappeared from the debate and have been absorbed into abstract “needy families.”

While the rest of the world debates America’s role in the Middle East or its use of drones in Pakistan and Afghanistan, the U.S. Congress is debating just how drastically it should cut food assistance to the 47 million Americans - one out of seven people -  who suffer from “food insecurity,” the popular euphemism for those who go hungry.

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The U.S. Government began giving food stamps to the poor during the Great Depression.  Even when I was a student in the 1960’s, I received food stamps while unemployed during the summers.  That concern for the hungry, however, has evaporated. The Republicans - dominated by Tea Party policies - are transforming the United States into a far less compassionate and more mean-spirited society.

The need is great. Since the Great Recession of 2008, the food stamp programme - now called SNAP (Supplemental Nutrition Assistance Program), has doubled from $38 billion in 2008 to $78 billion in the last year. During 2012, 65 million Americans used SNAP for at least one a month, which means that one out of every five Americans became part of the swelling rolls of “needy families,” most of whom are women and children.

Democrats defend the new debit card program, which can only be used to purchase food, as feeding needy Americans at a time of high unemployment and great poverty. Republicans, for their part, argue that the programme is rife with fraud, that its recipients (who are mostly single mothers) are lazy and shiftless, and that we must make drastic cuts to reduce government spending. Their most Dickensian argument is that if you feed the poor, they won’t want to work.

But as the New York Times economic columnist Paul Krugman has repeatedly pointed out, welfare entitlements, including the food debit card, are not only good for families; they also good for the economy.  People who receive such help spend the money immediately. Single mother hold down multiple jobs at minimum wages to keep their family together. The debit card allows them to go shopping and to buy needed groceries. Such entitlements boost spending and the economy, rather than depleting it.

Despite these arguments, the cuts have already begun. On November 1, 2013, Congress cut nearly five billion dollars from SNAP and Republicans now want to cut another $40 billion dollars. The stalemate has resulted in the failure of Congress to pass the farm bill, which provides SNAP subsidies to farms, mostly of which are large agricultural corporations.

Meanwhile, poverty grows, the stock market zooms to new heights, the wealth of the 1% increases, and corporate executives continue to get tax exemptions for business entertainment expenses, which allow corporations to deduct 50% of these costs from their annual taxes.

In all this discussion, the real face of poverty - single mothers - has strangely disappeared. Welfare policy in America has always favored mothers and children. In a country that values self-sufficiency and glorifies individualism, Americans have viewed men - except war veterans - as capable of caring for themselves, or part of the undeserving poor. Women, by contrast, were always viewed as mothers with dependents, people to be cared for and protected precisely because they are vulnerable and raise the next generation.

As I read dozens of think tank and government reports, and newspaper stories however, I am surprised to notice that even strong opponents of the cuts describe SNAP’s recipients as children, teenagers, seniors or the disabled. Why have single mothers disappeared from such accounts about the poor?  There are plenty of “needy families,” “households,” and “poor Americans,” but the real face of poverty and the actual recipients of food assistance are single mothers, whose faces have been absorbed by the more abstract language of “poor Americans” and “needy households.”

Even the strongest opponents of these cuts don’t focus on women or mothers. Instead they publicize pinched-faced children - a better poster image - staring hungrily at food they cannot eat. Or, they discuss the public health impact these cuts may have on children. According to most reports, even from the Agriculture Department, “children and teenagers” make up almost half of the recipients of food assistance. But they don’t mention the mothers who receive this assistance in order to feed those children and teenagers. From the stories about food stamps, you’d think that only children, teenagers, the elderly and the disabled have gone hungry.

The words “women” or even “mothers” rarely appear. In a powerful column against the cuts, the liberal and compassionate  New York Times columnist Nicholas Kristof, for example, argued that “two-thirds of recipients are children, elderly or disabled” and warned his readers about the long-range impact of malnourished children. He, too, never mentioned women, who are the main adult recipients of the SNAP program and who feed those children, elderly or disabled. Nor did he point out that those who apply for such assistance are the mothers and women who seek to nourish these children. It’s as though women are simply vehicles - not persons - in the reproduction process of the human race.

Yet the reality tells a different story. In 2010, for example, 42 percent of single mothers relied on SNAP; and in rural areas, the rate often rose as high as one half of all single mothers. What’s missing from this picture - on both sides - is the real faces of hunger, which is not “needy” families, or “poor Americans", but single mothers with “food insecurity” for themselves and their families.

According to the Center for Budget Priorities, women are twice as likely to use food stamps as anyone else in the population. They are the ones who apply for the SNAP debit card, go shopping, takes buses for hours to find discounted food supplies, and try to stretch their food to last throughout the month for their children, teenagers and, less often, husbands. They are the pregnant women with older children whose infants are born malnourished, and the “Americans” who, at the end of the month, make hasty runs to relatives, food banks and even join other dumpster divers.

When journalists do focus on the women who are recipients of food assistance, they discover a nightmare hiding in plain sight.  These women are either unemployed, under-employed or service workers who don’t earn enough to feed themselves and their families. By the end of the month, they and their children frequently often skip meals or eat one meal a day until the next month’s SNAP assistant arrives

So why have women disappeared from a fierce national debate over who deserves food assistance? I’m not actually sure. Perhaps it is because so many adult women, like men, now work in the labour force and are viewed as individuals who should take care of themselves. Perhaps it is because Republicans find women’s appetite, as opposed to that of children, an embarrassment, hinting of sexual desire. Perhaps it is because this is part of the Republican war on women’s reproductive freedom: a single mother with children is somehow guilty of bringing on her own poverty.

Whatever the reason, the rhetoric does not match the reality. Once in while, the media publishes or broadcasts a “human interest” story that gives poor women a face” “It is late October,” one reporter begins, “so Adrianne Flowers is out of money to buy food for her family. Feeding five kids is expensive, and the roughly $600 in food stamps she gets from the federal government never lasts the whole month. "I'm barely making it," said the 31-year-old Washington, D.C., resident and single mother.” End of story. On to weather and the sports.

For the most part, however, poor women remain invisible, even as the mothers who feed the children, teenagers, elderly and disable who live with them. They do not elicit compassion. If anything, they are ignored or regarded with contempt.

Whatever the reason, Americans are having a national debate about poor and needy Americans without addressing the very group whose poverty is the greatest. The result is that we are turning poor, single mothers, who are 85% of all single parents, into a newly invisible and undeserving group of recipients.

Republicans may view single mothers as sinful parasites who don’t deserve food assistance. But behind every hungry child, teenager and elderly person is a hungry mother who is exhausted from trying to keep her family together. Women who receive food assistance are neither invisible nor undeserving. They are working-class heroes who work hard -often at several minimal wage jobs - to keep their families nourished and together.

Reprinted with permission from openDemocracy.