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Feb. 6, 2003, 8:14PM

Bush seeks stiffer aid rules for poor

Proposals would divert needy from applying, critics warn

By ROBERT PEAR
New York Times

WASHINGTON -- President Bush's budget proposes new eligibility requirements that would make it more difficult for low-income families to obtain a range of government benefits, from tax credits to school lunches.

Arguing that much of the federal money intended for poor people is diverted through error and fraud, the administration wants to require families to supply more proof of their income and living arrangements before they can qualify for aid.

Critics, including some local officials, said the extra steps would deter eligible poor people from applying for assistance.

The Bush budget would also replace one of the largest federal housing programs with a block grant to states, which could re-direct some of the money away from working poor people in cities. The president said he wanted to shift money and responsibility for this and other social welfare programs, including Medicaid, to the states.

About half of the 28 million children in the National School Lunch Program receive free meals because they come from low-income families. But John Rice, a spokesman for the federal Food and Nutrition Service, said the government had found that the number of students certified for free meals was about 25 percent higher than the number who appeared to be eligible, according to Census Bureau data.

The Bush administration wants to require families to produce evidence of their income, like pay stubs or tax returns, to get free school lunches. Now, parents report their own income, and a small sample is checked by school officials.

When the government tested these tougher requirements in eight school districts last year, there was a 20 percent decline in the number of children approved for free lunches.

Many federal, state and local programs use school lunch data to decide who gets billions of dollars in assistance like subsidized child care and health care.

In one of the pilot projects, at Oak Park and River Forest High School near Chicago, the number of children approved for free lunches dropped 50 percent. At the public schools in Morenci, Ariz., the number dropped 36 percent.

In some cases, said Diana Gonzalez-Sumpter, the food service director in Morenci, parents had made honest mistakes. A few families, she said, had deliberately understated their income.

Gonzalez-Sumpter said she supported the verification rules because she had "strong feelings about the stewardship of public funds." But she said the requirements deterred some eligible people, including immigrants, from applying for benefits to which they were entitled.

The Bush proposal could impose time-consuming new duties on school employees in large school districts.

"It would be a nightmare for us," said Nadine L. Mann, director of operations for the child nutrition programs in East Baton Rouge Parish, La., which serves 44,000 lunches a day to students.

Barry D. Sackin, vice president of the American School Food Service Association, whose members run school feeding programs, said, "The president's proposal would turn us into accountants and auditors and take us away from what we should be doing: serving nutritious meals to children."

The Treasury Department is equally determined to crack down on what it says are erroneous payments under the earned-income tax credit program, one of the nation's biggest anti-poverty programs.

Currently, the government estimates, $9.3 billion of the $30 billion paid out each year in tax credits to low-income working families may be a result of fraud or honest errors. In 1999, the Treasury says, 27 percent to 32 percent of claims were paid in error.

Bush is asking Congress for $100 million and 650 new employees to identify potentially erroneous claims in advance, before money is paid out.



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