A DECADE AGO, the U. S. was fighting two strangely contradictory wars: the war in Viet Nam and the war on poverty. While we waged battles abroad and anti-war demonstrations at home, there was also another struggle going on, the struggle to end unemployment and hunger in America. "Action" was the battle cry in those days, and there was plenty of it — in neighborhoods, in government offices and on college campuses. The ideas and programs coming out of those encounters were new and promising. There was money to fund them and confidence that they would work.

But like Viet Nam, the war on poverty satisfied neither its hawks nor its doves. Faced with galloping inflation and a stagnating economy, it promised more than it could deliver, and in the 1970's (like Viet Nam), it was quickly swept under the rug. "The war on poverty is in disrepute," says Arthur F. Quern, former director of the Illinois Department of Public Aid and present chief of government operations in the Thompson administration. He adds, however, "I think that is too casual a conclusion. A lot of programs worked. They improved the standard of living and reduced the level of poverty. Manpower training programs, day care programs, programs for the elderly and for alcoholism and drug abuse did have an impact. There is a human equation here to be worked out. Is what is coming out worth the cost?"

And "cost" is the four-letter word you hear these days: both the rising cost of services because of inflation, and the hidden cost of deficit spending. In the Thompson administration and everywhere else, it's the economists who are calling the shots: meting out the money for social service programs according to revenue projections, inflation rates, income growth — holding the line on something here to add a little more over there, fine-tuning agency budgets to the highest points on the probability curves. The question is not what the state can give but what it can afford. "Inflation is a gut issue. Any way that we can cut costs, control costs or reduce costs and multiply the number of people that can be served — that's of interest to us," says Quern.

This, of course, is fiscal conservatism, and it's hard to take when needs as well as prices are skyrocketing. According to Chet June of the Legal Assistance Foundation (LAF is a federally funded advocacy agency for the poor.), the problem is that Republicans overbudget and Democrats underbudget. "Gov. Thompson," he says, "has way overbudgeted." In the last three years, June says, the caseload for Aid to Families with Dependent Children (AFDC) has gone down. The fiscal 1977 surplus of $40 million from AFDC was used to pay Medicaid. In fiscal 1978, the surplus was again about $40 million; in 1979 it was $52 million. The Thompson administration returned it to general funds — an example of overbudgeting. But between October 1974 and October 1979, June continues, the cost-of-living has increased 35 percent. In the same period public aid recipients on fixed AFDC and General Assistance grants got only a 10 percent cost-of-living increase.

Quern asserts readily that his eye is on the budget. "I think the worst thing you can do is isolate human services from fiscal concerns," he says. "Right now [November 15], the state has 15 days of working capital. That's a pretty decent amount. It protects us from sudden shifts." And, he notes, the predictions are for recession, more unemployment and continuing inflation. "We don't want our finances misread. We don't want to spend away our future. It's going to be tough."

But what about people who depend on state aid or need social services? Are they being abandoned by middle-class taxpayers who feel the inflation crunch? "Poor people are taxpayers too," Quern replies. "You can't pose one group against the other. My reading of the unhappiness about taxation is that it's a reaction to the level of government intrusion in people's lives as much as it is to the level of taxation. People are raising questions about the size of government, the involvement of government. These [questions] include waste, inefficiency, fraud and abuse. This is not a major rejection of the need for social services. People are willing to pay their fair share of taxes."

Quern came to Illinois back in 1977 when newly elected Gov. James R. Thompson appointed him head of IDPA. Things were not going well in the state's social service agencies. ("If you think Public Aid is bad now, you should have seen it then," says June.) In the wake of the 1974 recession, the state's general fund balance was dangerously low, and social service programs were in jeopardy — partly because Illinois was getting only $60 to $70 million of its full entitlement of $130 million in Title XX Social Security funds. Acrimony added to the confusion. As stories have it, the head of the Department of Children and Family Services (DCFS) was not talking to the head of IDPA, and memos between departments were sometimes so "vile and vituperative" they had to be squelched.

Thompson demanded that all agency heads get along with each other — or else, and he gave them an immediate, high priority job: retrieve the Title XX funds. "That specific exercise did a great deal towards helping all of us cooperate," says Quern.

Illinois now gets its full entitlement from Title XX and also recovered the funds the Walker administration didn't ask for. Another healthy development

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2/January 1980/Illinois Issues

The state of the State

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Illinois social services: a perspective

in Quern's mind, is the change in the way the Title XX "donated" funds are distributed. Under this program states or local nonprofit agencies can receive 75 cents in federal funds for every 25 cents they put up for social service programs. Since last year, private and community agencies have been putting up the 25 percent, and IDPA simply channels the money to the agencies. This means decisions are being made on the local level as to which programs should be supported, says Quern. It also means the state has gotten more funding for local programs — without having to put up the matching funds. More fiscal conservatism. (Now that Illinois is at the top of its Title XX entitlement, it too will be feeling the pinch of federal fiscal conservatism. What the state gets from Title XX is essentially a flat grant, which with inflation will be worth less and less every year. The prospects for the 1980's include intense competition among local agencies for Title XX funds.)

According to Quern, two structures became important in the Thompson administration because of that initial concern with federal funding. One of these was the human services sub-cabinet composed of directors and assistant directors of the principal social service agencies. It had been in operation during the Walker administration, and "the Bonniwell Report" on reorganization, written during those years, is generally dubious about the effectiveness of subcabinets. Under Gov. Thompson, however, the subcabinet has worked, and what will come in terms of social services reorganization is a question yet to be answered, though Thompson has already said there will be a legislative proposal this spring to reorganize the Department of Public Health (IDPH).

The second key structure, in Quern's view, is the Purchase Care Rate Review Board. This board includes representatives from 14 social services agencies including IDPA, IDPH, DCFS, Mental Health and Developmental Disabilities (DMHDD) and, significantly, the Bureau of the Budget (BOB). It's job is to review and debate competing requests for rate increases from different agencies for such things as day care, foster care and nursing home care — and to make recommendations to the governor. Once again the initial concern was budgetary: to get the BOB people involved in decisions and to end the wide variations in rates paid by different agencies to pay for the same services. But Quern says the best thing about the board is that it "forces each agency to think of the other agencies' problems."

At the end of two-and-a-half years, the basic pattern is in place: tight fiscal control, more coordination between agencies, and a crackdown on fraud and abuse. The aim is not just to keep costs down but to keep public confidence up.

Within this context, however, the state has taken some initiatives. There is a new Department of Rahabilitative Services (DORS) which is making Illinois a leader in providing comprehensive services for handicapped — including housing, employment, education, transportation and recreation. Funded mostly by the federal Department of Health, Education and Welfare (HEW), DORS is getting $3 million in general revenue funds to provide in-home care that would help keep disabled people out of institutions. A similar program backed by $9 million in state funds is going to the Department on Aging. It's a sound idea, says Quern, and Thompson supports it. However, the program is being watched carefully. One theory is that it will not keep anyone out of nursing homes (thus cutting the state's soaring Medicaid expenses) but will instead address the needs of a whole new population.

Take another example. The child abuse program in DCFS got more money and also some expanded authority under the new child abuse act which gives specialized caseworkers authority to take children into protective custody when it looks like they are in danger and expands the legal definition of an abusive caretaker to include persons living in the child's home who are not legally related as parents. But what about foster care v. adoption? Present federal programs tend to keep children in foster care by paying medical bills for foster children but not for adopted ones. Is there a way DCFS can solve that without subsidizing families who don't need the help?

Is daycare a program to help women get off welfare and into the workforce, or is it a child development program? We have a new mental health code and a new nursing home code — both including advocacy for patients. But what good does that do if county and nonprofit nursing homes are going broke? Or if discharged mental patients have no decent place to live in their own communities? Everywhere there is bitter and controversial debate over unlimited needs and limited resources. And says Quern, "There is the concern of the poor in various communities, whether they be rural or urban, that they just don't have a voice."

What happens to human services in the 1980's will depend to a great degree on Congress and HEW. Quern does not foresee much in the way of changes in fundamental income support. Most observers believe the debate will be between those who want federal standards for state welfare programs and increased federal funding v. costcutters who would like states to get block grats from the feds with no strings attached. Pending administrative reforms could help urban states like Illinois cut their error rates. Hospital costs and funding for Social Security and private pension systems will loom large in the 1980's because of demographic changes. And there may be more relief through earned income tax credits to low-income workers who are now being pushed back into poverty because of inflation.

Meanwhile, the states will be kept busy catching up with shifting federal regulations and constantly fishing for funds. Continuity is a problem. "You have one eye on the

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programs and the funding and one eye on what is appropriate for your clients," says Cleo Anderson, interagency coordinator for DORS. "You try to keep two or three steps ahead. . . . It's kind of like a game of chess," he explains. By monitoring legislation and figuring out in advance what's going to happen, programs can be maintained. And if an agency has several sources of funding, the chances of maintaining continuity are much better. Now that Title XX monies are at their peak, Anderson says, program planners are looking at Title XIX which offers 50 percent matching funds for medical programs and doesn't have a ceiling.

One HEW official, however, sees possibilities for creative action by the states. Florida and 11 other states are suing HEW over the structure mandated by Congress to provide rehabilitation services for the handicapped. (DORS was created in Illinois to carry out this mandate.) Florida wants to pool rehabilitation with other programs — like Social Security, transportation for the elderly, mental health, welfare and employment — and place them in one-stop service centers in low-income neighborhoods. Private agencies might share the offices too.

The upper echelon at HEW favors eliminating federal requirements for creating a new agency every time a new program comes into existence. The problem is "the iron triangle" of the middle-level bureaucracy at HEW, the national lobby groups for various social service professions, and Congress. If the states are ready to take on this formidable triangle, they might be able to deliver more services to more people at less cost.

The bottom line for social issues of the 1980's, however, lies far deeper than money and programs. One problem is unemployment: the waste of human energy. One healthy change, according to Quern, is the shift both in IDPA and in CETA (Comprehensive Employment Training Act) programs away from temporary subsidized jobs into efforts to locate jobs for welfare recipients in the private sector. Two successful IDPA programs are the Welfare Reform Demonstration Project, which works with women on AFDC, and the General Assistance Job Placement Program in Chicago. Both programs involve a lot of cooperative effort among IDPA staff, their clients and potential employers and training programs.

Illinois businesses have pioneered in the effort to hire and train hard-to-employ persons, and they have been successful, says the State Chamber of Commerce's Illinois 2000 report. The report argues convincingly that the private sector could do more if it is given the chance.

But Illinois 2000 also notes the slow growth in new manufacturing jobs which give untrained workers an opportunity to learn and earn their way up. The fastest growing sector is service jobs. But the service sector has a top layer of highly paid professional positions and a vast bottom layer of low paying "deadend" jobs. The job problem is not just a matter of getting people off welfare.

Energy will be the pervasive problem of the 1980's. At the Capital Conference on blacks and minorities in the 1980's held this September, participants were in disagreement on nuclear power plants, oil companies and deregulation. But there was one thing they were sure of: more "welfarization" is not the answer. "That's the last straw," snapped Rep. Wyvetter E. Younge (D., East St. Louis). "It's a tacit admission to keep the poor where they are." Band-aid approaches like the new Energy Crisis Assistance Program (which is trying to prevent hardship this winter by helping low-income families pay their heating bills) are not the long-range answer. The energy crisis, says Younge, is an opportunity to alleviate poverty and unemployment by getting people into the new labor force that will be needed to develop alternative energy sources. The government should finance job training programs, Younge believes. "We're all moving to a poverty level unless we change our economic decisionmaking," she added.

Quern began his career in social services back in the early 1970's as an assistant to New York Gov. Nelson Rockefeller. " [Rockefeller] was governor during a period when finances were not so much of a problem." Says Quern, "He believed in trying to deal with problems directly. So it was fun to work in that climate and for that guy."

"Fun is a hard word these days," he admits. "Jobs in the public eye are grueling jobs. It's controversial. It's never totally satisfying. But it helps people. We take a look at the problems — what can we do about this?"

But now Quern is no longer head of IDPA. He is in charge of managing the governor's office, developing and directing programs and maintaining liaison not only in social services but for all the governor's agencies plus outside interests, too.

His approach to government seems to be: define the problem and find the right people to solve it. It is a low-key, direct approach to public administration, and it may be one of the reasons Quern has won a fair amount of respect at all levels of social services administration from HEW officials to seasoned veterans in the state system. Even people from LAF, who spend a great deal of their time suing IDPA, concede that under Quern the agency has been more willing to talk things over.

How does Quern see his present job in the Thompson administration? "A good administration in my mind, includes a group of idea hunters, people who are going out and looking for ideas. You never know where you are going to find them. You should be ready to talk to almost anybody who reasonably wants to talk, who really does want to help you solve your problems. Nobody can embody all the wisdom necessary to deal with the issues government addresses today. The people who give you advice may not be happy with what you do with it. And that's one of the drawbacks, but I think it's a risk worth taking."

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