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Debt Deal Worries Greenwich Official

GREENWICH, Conn. – More Greenwich residents will be seeking help from the town, but cuts in the debt-ceiling deal reached by Congress will mean programs for the needy will have less money, a Greenwich official says.

"I'm worried. I think anyone working on a local level is worried," said Dr. Alan Barry, commissioner of Greenwich's Department of Social Services . "We'll have more residents seeking help from us with an even more limited budget."

Last year, 309 residents received a total of $213,065 -- about $700 a person -- from the federal Low-Income Home Energy Assistance Program. "It prevents people from being evicted or having their heat go off, but then we work with them on long-term solutions," said Barry. "That program is slated to be cut in half. You can see the trickle-down effect. There will be more and more demand on local government, because that's where people we're very concerned."

Connecticut Gov. Dannel Malloy says massive cuts by 2013 to vital Connecticut programs and services in the debt-ceiling deal will have a "devastating" long-term impact on the state's poorest and most vulnerable residents, and on the already fragile state economy.

Malloy said he is worried most about federal aid for Medicaid, the health insurance program for the poor that, with $9.3 billion budgeted over the next two years, is Connecticut's largest single expense. While Malloy and other state officials said Connecticut will receive about the same amount of money for Medicaid over the next two years, he added cuts could "be devastating in post-2013."

Officials in the state's Department of Social Services say they are worried too.

"Medicaid is the biggest expense in Connecticut and any measure that might cut Medicaid revenue is going to be a complex problem," said Kathleen Kabara, spokeswoman for the state Department of Social Services. "But until we get absolute dollar amounts it is not possible to begin the process of deciding where cuts will need to be made. ... The agency's first concern is always to best preserve core, direct services and to protect the most vulnerable populations."

Connecticut's Medicaid coverage includes health insurance for the disabled and nursing home costs for the elderly.

Though the deal will likely exempt Medicaid from rate increases, Medicare could be impacted as part of the commission's decisions, as well as Social Security and food stamps. U.S. Rep. Jim Himes said while it wasn't the deal he wanted, he voted in favor to avoid a "catastrophic first-ever default by our government."

"The Republicans control the House of Representatives and Tea Party Republicans were willing to push this country over the financial cliff for political motives," the 4th District Democrat said. "But this fight is far from over," Himes said, adding he has requested being named to the Congressional panel that will decide where most of the cuts are made.

Connecticut State Comptroller Kevin Lembo said the state's finances could be hurt even sooner than 2013 if federal funding to states is cut because of the debt-ceiling bill.

Lembo states in his August report to Malloy that while Connecticut's projected General Fund surplus reached $158.9 million for Fiscal 2011, the surplus heavily depends on federal funds.

Last year's surplus, Lembo said, relied on $739.6 million in federal stimulus funds, which the state will not receive this year.

"We reached this surplus using a federal lifeline that has disappeared," said Lembo. "Dollars we depend on year after year could suddenly disappear if federal spending cutbacks result in drastic funding cuts to Connecticut. One year's federal stimulus money could become another year's devastating federal cutbacks."

Meanwhile, Greenwich's social services department is shifting funds from administration to programs like Low-Income Home Energy Assistance. The department has not yet sought additional funding from the town.

"We're hiring a case worker to work with chronically ill clients, rather than hiring administrative types and we're spreading responsibility around rather than replacing an administrative staff member who retired," Barry said.

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