USA Today: Labor moves to bar welfare privatization

[Omaha Steve]

http://www.usatoday.com/news/washington/2007-09-09-laborinside_N.htm

By Ken Dilanian, USA TODAY
WASHINGTON — In December, Indiana Gov. Mitch Daniels sidestepped opposition from unions and Democrats when he signed a deal outsourcing the administration of his state's welfare and food stamp programs to a consortium led by IBM. For organized labor, the fight didn't end there.

In December, Indiana Gov. Mitch Daniels sidestepped opposition from unions and Democrats when he signed a deal outsourcing the administration of his state's welfare and food stamp programs to a consortium led by IBM. For organized labor, the fight didn't end there.

The American Federation of State, County and Municipal Employees (AFSCME) approached its friends in Washington, where public records show it has spent $9.2 million since January 2005 on lobbying and campaign contributions targeting mostly Democrats.

Daniels, a Republican who was President Bush's budget director, argued the privatization would improve services and save state taxpayers up to $1 billion over a decade. The union and other groups said it would hurt beneficiaries.

In June, at the urging of AFSCME and other groups, Democrats on the House Agriculture Committee voted to place a provision in the farm bill barring states from outsourcing the administration of food stamp programs.

The measure would kill Indiana's contract, costing taxpayers $100 million on top of any savings the pact may have realized, according to Marcus Barlow, a spokesman for Indiana's Family and Social Services Administration.

FULL story at link.

[Mountainman]

1. How does adding a profit motive onto a government program save money?

The only way I know of is to pay the company the service is outsourced to to cut the number of recipients and pay them a bonus for each one.

Basically the money goes to another corporation and not to the people.