David Hoppe

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:: Palin and privatizing

The mess at FSSA

By David Hoppe

There's been a lot of speculation about why Sarah Palin has decided to resign as governor of Alaska. Is it because she wants to position herself to run for president in 2012? Some have suggested she wants to preempt local ethics investigations. Or maybe she simply wants to spend more time with her family.

In her farewell speech on July 3, Palin said (again and again), "no more politics as usual."

But then she also quoted a saying she said was stuck to her parents' refrigerator: "Don't explain: your friends don't need it and your enemies won't believe you anyway."

It's taken me awhile, but I think I know what Sarah Palin's up to. The light bulb finally went off last week while I was watching the local news. That's when I realized that Palin, like so many other Republicans, is finding inspiration in the policies and leadership of Indiana's governor, Mitch Daniels.

Suddenly the method behind Palin's madness was clear: She wasn't merely resigning her post. She was privatizing.herself!

With a book deal already in hand and speculation rampant about her potential as a talkshow host, Palin must have looked ahead to the remaining years of her first term - opening a new prison here, presiding over an oil spill there - as a long night of deferred profitability.

"Some Alaskans don't mind wasting public dollars and state time. I do," said Palin. "I cannot stand here as your Governor and allow millions upon millions of our dollars to go to waste just so I can hold the title of Governor."

And losing out on what could be a once-in-a-lifetime opportunity to become the female Rush Limbaugh - well, that would really be a waste.

Fighting waste has been a hallmark of Daniels' administration here in Indiana. The main weapon in this fight has been privatization - the idea that private businesses can do anything government does, only cheaper and better. Daniels made a big splash - a cannonball, really - by privatizing the Indiana Toll Road during his first term. In this instance, a costly state asset was leased to a foreign firm. The cost to drivers on the toll road has gone up and maintenance, so far, has shown no real improvement. But the state received an upfront windfall in cash for its transportation budget.

Emboldened by this, Daniels next turned his attention to the Indiana Family and Social Services Administration (FSSA), the agency that tries to help the state's poorest citizens. Through the administration of food stamps and Medicaid, FSSA is the last resort for food and medical care for approximately one million Hoosiers.

These people and the words "business opportunity" don't exactly go together. That's why, traditionally, government (i.e. the rest of us) has stepped in to provide for these folks' welfare. This is what is sometimes called the "civilized" thing to do.

It also might explain why only two businesses showed interest in the job - IBM and a company called Accenture. Accenture had already tried privatizing welfare in Texas; the results weren't pretty.

So Indiana went with IBM, a company Mitch Daniels' handpicked head of FSSA, Mitch Roob, had business ties with in a previous life.

That private companies weren't exactly fighting for this business and that the state official in charge of the deal had a potential conflict-of-interest might have set off alarm bells in circles where the role of government is respected. Not here.

And so Indiana paid IBM $1.16 billion to manage FSSA for ten years. This, said Daniels, would save the state $500 million.

That FSSA was in need of reform was not in dispute. That many Hoosiers who needed help weren't getting it, while others were gaming the system was acknowledged. Was there waste? You bet.

But, like Sarah Palin saying that resigning her elected office is less wasteful to Alaskans than serving out her term, the two Mitchs - Daniels and Roob - privatized FSSA as if this was the only alternative to bankrupting the system. Rather than undertake the hard work of making FSSA better, they cut a deal and put IBM in charge.

The trouble is IBM is making things worse. Last week, Anne Murphy, who succeeded Mitch Roob as head of FSSA in January, told the Star that IBM is mishandling almost 20 percent of food stamp cases. Prior to IBM's arrival that percentage was closer to four percent. This means a lot of people are going hungry. Apparently no one even knows how many people may not be getting the Medicaid they need.

Murphy, to her credit, has told IBM they have until September to make things right or Indiana could cancel the contract. Government, in other words, has a role after all. This might seem like politics as usual to privateers like Daniels and Palin, but it's life-saving news to the people who have to live with them.