Taken together, the proposed changes will make it more difficult for people to get healthcare, housing assistance, early childhood education and other minimal social benefits. They will fall especially painfully on the working poor. While President Clinton's 1996 welfare reform law rescinded the federal entitlement to cash assistance, the Bush proposals seek to end the social minimum wage.

One common thread of the Bush Administration's proposals is that they aim to turn federal entitlement programs into block grants. The idea of block-granting these programs, which began with Reagan's attacks on poverty programs and expanded with Clinton-era welfare reform, may sound like a technical change interesting only to policy wonks. But in reality, it is a way of quietly defunding social programs, slowly ending health coverage and rent supports for people who have them now. Just as the language of states' rights during the Jim Crow era was a way to disguise the demands of white segregationists, the language of block grants is a way of deflecting attention from the social costs of cutting back the welfare state.

The scariest proposals involve Medicaid. Right now, the program--which provides health coverage for about 48 million people--is administered by the states but jointly funded by the federal government and the states. Every dollar that a state spends on Medicaid is matched by some money from the federal government. In January, Health and Human Services Secretary Tommy Thompson proposed turning the program into block grants. If such a proposal became law, the federal government would give a fixed, capped amount to each state every year. Since there would be no built-in mechanism to increase federal spending should states' costs rise, this would be likely to erode funding in the long run. In addition, there would be no incentive to expand services (federal matching funds would be eliminated). Joan Alker, a senior research fellow at Georgetown University who focuses on healthcare, says, "If more people came on the rolls, if there was a new technology or drug, if there was an epidemic, states would be left holding the bag."

Under block grants, states might also get greater "flexibility" to determine benefit packages. They might even have the option to deliver services selectively for certain populations--to one part of the state, but not another. Currently, the Medicaid program is divided into two parts--"mandatory" recipients and "optional" recipients, and "mandatory" services and "optional" services. Mandatory recipients include pregnant women and children under 6 up to 133 percent of the poverty line, children under 19 below the poverty line, some low-income parents, children in foster care and elderly and disabled people on Supplemental Security Income (SSI). Mandatory services include hospital services, doctor's visits, nursing-home care, immunizations and lab services.

But a quarter of Medicaid recipients and the majority of elderly recipients are optional beneficiaries, meaning that the federal government does not require states to cover them. These include elderly and disabled people with incomes above the SSI limit (74 percent of poverty), working parents above mandatory income levels, pregnant women above 133 percent of poverty, and low-income children above the poverty line. Many services provided by Medicaid are optional as well--including prescription drugs (for anyone but children), home healthcare, vision and dental care. In a budget crisis, these would be the first ones to go if the federal government isn't funding them. Indeed, states have already started to cut "optional" populations off Medicaid. The people whose healthcare is threatened are marginal and poor. According to a report by Cindy Mann of Georgetown's Institute for Health Care Research and Policy, in 1998 the optional benefit population included 4.2 million children, 3.7 million working parents, 2.3 million elderly people and 1.5 million people with disabilities. Medicaid also covers a high proportion of nursing-home expenses. Denise Soffel, health policy analyst at New York's Community Service Society, says, "People aren't thinking about Granny in the nursing home using Medicaid dollars."

The Bush Administration's hopes for rapid Medicaid reform were stymied when members of the National Governors Association were unable to agree on a proposal endorsing block grants. But Congressional Republicans are still saying they will mark up a Medicaid reform proposal this year, and the Administration has not given up. "If they don't get it done this year, they will come back to it next year," says Melanie Nathanson of the Center on Budget and Policy Priorities (CBPP).

Other poverty programs, such as public housing, are also on the chopping block. The Bush Administration is contemplating a radical restructuring of the federal rent voucher program, under which low-income people pay one-third of their rent and the federal government makes up the rest. The voucher program is overwhelmingly used by working poor families, people with disabilities and elderly people, and helps several million people stave off homelessness each year. In New York City alone, about 100,000 people use housing vouchers, and there is a waiting list of 150,000.

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