Five Years Later, State Cuts to Assistance for Low-Income Seniors and People With Disabilities Remain in Place

One of California’s most important public supports for seniors and people with disabilities who struggle to make ends meet marks a dubious 5th anniversary this month. In November 2009, state policymakers put into effect the third in a rapid series of cuts to Supplemental Security Income/State Supplementary Payment (SSI/SSP) grants, which are funded with both federal (SSI) and state (SSP) dollars. These state cuts reduced the monthly SSP grant for couples from $568 in January 2009 to $396 by November of that same year. The monthly SSP grant for individuals fell from $233 at the outset of 2009 to $171 by November. Less than two years later — in July 2011 — state policymakers put in place an additional $15-per-month cut, dropping the SSP grant for individuals to $156 per month. (For an overview of these state cuts and their impact, see this recent CBP presentation.)

The SSP cuts in 2009 came as the Great Recession gripped California and state lawmakers looked for ways to reduce spending in the face of a two-year, $60 billion budget shortfall. Today, although the state’s economy and finances have been slowly recovering from the downturn, low-income Californians who rely on SSI/SSP cash assistance have been left behind. While the SSI portion of the grant has modestly increased in recent years due to federal cost-of-living adjustments (COLAs), the state’s SSP portion remains frozen at recession-era levels: $396 for couples and $156 for individuals, the minimum levels allowed by federal law. Why haven’t SSP grants gone up? Because — in addition to reducing SSP grants in 2009 — state policymakers eliminated the annual state COLA. As a result, the state’s portion has not been increased to reflect changes in California’s cost of living over the past several years.

Without a doubt, these budget cuts substantially lowered the state’s costs for SSI/SSP. In 2007-08, the year the Great Recession struck, the state spent about $3.8 billion on its share of SSI/SSP cash assistance (in 2014-15 dollars). Fast forward seven years: California will spend a projected $2.5 billion on SSI/SSP grants in the current fiscal year — more than one-third below the 2007-08 level. This substantial drop in state spending has occurred even as the number of Californians enrolled in SSI/SSP has increased, rising by 6 percent — to 1.3 million — since 2007-08.

But these state “savings” have come at a tremendous cost to low-income seniors and people with disabilities. SSI/SSP cash assistance once uniformly lifted recipients out of poverty, but no more: Today’s maximum grant for individuals equals just 90 percent of the federal poverty line, jeopardizing the ability of seniors and people with disabilities who rely on these grants to afford basic necessities such as food and housing. The value of SSI/SSP grants has fallen so sharply in recent years that the state’s SSP portion would have to increase by nearly $100 per month in order to bring the total grant for individuals up to the 2014 poverty line.

SSP-up-to-FPL-Chart

Five years ago, in the midst of a severe budget crisis, the state made a series of deep cuts to SSI/SSP grants. The question now — for state policymakers as well as the general public — is whether these reductions, which target some of California’s most vulnerable residents, should be temporary or permanent.

— Scott Graves