Trump’s newly proposed budget eliminates all funding for Legal Services Corp. or “LSC.” This threat to cut legal aid funding is severely wrongheaded.
WHO WILL BE HURT
I’ve worked for two organizations funded through LSC. Both provided vital services for (to name a few) impoverished veterans, seniors, people with terminal illnesses, and people in rural areas with limited access to legal resources. It’s particularly important for domestic-violence victims: “Programs funded by LSC are the main source of legal assistance for women attempting to escape domestic violence.” This report summarizes well who benefits:
- Tenants facing wrongful eviction
- Homeowners facing foreclosure due to fraudulent schemes
- Women who are victims of domestic violence
- Veterans and military families struggling in civilian life
- Consumers bankrupted by predatory lenders
- Workers cheated out of wages or denied lawful benefits
- Children who need a stable home or special education
- Elderly whose economic security or health care is in jeopardy
- Disabled people denied opportunities
- Immigrants who work the lowest-wage jobs without benefits or contracts
- Communities devastated by natural disaster
The organizations LSC funds often struggled to find funding to help everybody in need. Private donations aren’t enough. Studies estimate “that a staggering 80 percent of serious legal needs of low-income people go unmet due to grossly insufficient funding and support. In fact, although some 60 million people who are poor or nearly poor are eligible for LSC-funded legal aid programs, only about one million clients seeking legal help annually are able to be served due to limited resources.”
Aside from moral concerns, providing legal services is a good investment. The money is “less than one-ten-thousandth of the federal budget.” And as the president of the American Bar Association observed: “More than 30 cost-benefit studies all show that legal aid delivers far more in benefits than it costs. If veterans become homeless, or disaster victims cannot rebuild, their costs to society are significantly more.”
Leaders of 150 major private law firms wrote an open letter warning that eliminating LSC “will not only imperil the ability of civil legal aid organization to serve Americans in need, it will also vastly diminish the private bar’s capacity to help these individuals.” They argue that the private pro bono activity facilitated through LSC funding “is exactly the kind of public-private partnership the government should encourage, not eliminate.” They also note that studies have shown that each dollar spent on legal aid returns six to ten-fold return “of quantifiable economic outcomes and savings.”
It’s worth taking a closer look at some of these studies.
This 2015 study found “33 Florida nonprofit civil legal aid organizations produced $600 million in economic impact with $83 million in total funding from sources including the Foundation, the Legal Services Corporation, local governments, donors and others in 2015.” A seven-fold return on investment. “One of the largest economic impacts of civil legal aid results from assistance in obtaining the federal benefits, child support, wages and unemployment compensation to which Florida residents are entitled, income that is in turn spent within Florida.” The legal-aid money also helped “ease the burden on Florida’s court system by helping people who are self-represented navigate the system and helping the public understand legal processes.” Additionally, legal aid saved money in other ways, including the following:
- $2.9 million in costs for emergency shelter were avoided for low-income families who, with the assistance of legal aid advocates, were able to avoid eviction or gain time to seek alternative housing;
- $50.6 million in foreclosure costs were avoided by low-income homeowners, lenders, neighbors and local governments;
- $6.9 million in costs associated with domestic violence were avoided
This 2011 study out of Pennsylvania concluded: “Legal Aid lacks the funds to meet all the need. As a result, the state’s economy loses tens of millions each year because unrepresented Pennsylvanians are unable to assert their right to obtain federal benefits, such as federal disability and federal Medicaid payments.” The study found that $53.6 million invested in legal aid yielded $594 million in income and savings for residents and communities, and supported 2,643 jobs. An eleven-fold return on investment!
This 2011 study found “a return of $6.71 for every single dollar invested in Iowa Legal Aid by sources within Iowa.” A big chunk of this came from “indirect benefits,” which included savings on two particular costs: “the costs that are avoided as a result of Iowa Legal Aid’s work to prevent homelessness, and the costs that are avoided as a result of Iowa Legal Aid’s work to reduce domestic violence.” As the study notes, “Homelessness and domestic violence carry tremendous costs; by reducing the incidence of each of these problems, Iowa Legal Aid provides huge savings for Iowa taxpayers.”
This 2013 study found over $11 in economic impacts for every $1 in legal-aid funding. The key findings were summarized as follows:
- Positive economic impact includes both immediate and long-term benefits, with over $64 million in direct financial benefits for Tennessee residents
- Legal aid reduces burdens on state budgets and local communities and helped save $42.6 million in community expenditures in the areas of emergency shelter, foreclosure and domestic violence
- Investments in legal aid produce positive economic effects for residents of all income levels
- Provided over $81 million in unique economic benefits for local communities across the state from federal dollars and the resulting economic multiplier effect
- Increasing funding and support for civil legal services should create additional benefits
Similar to the studies above, this study, conducted in 2011, found a five-fold return on investment for legal-aid funding. For funding of 139 million, it broke down the benefits as follows:
- $72.4 million in income benefits and cost savings directly received by low-income families.
- $2.8 million in cost savings for taxpayers.
- $61.3 million in economic impacts of federal dollars flowing into local economies as an outcome of legal aid’s representation of clients – dollars which support 850 jobs for working Virginians and provide income for businesses across the state.
- $2.5 million in state and local taxes paid by the individuals whose jobs are supported by the economic multiplier impact of federally-supported benefits won for clients by legal aid.
The study authors added:
Additional economic impacts are achieved every year that are difficult to quantify, but, based on the information presented in this report, they are no less real. These include savings for businesses and their investors from the loss in home property values occurring through mortgage foreclosures that legal aid can prevent. They include reimbursements to health care providers for the cost of emergency services they would have to write off without the Medicaid eligibility that low-income families obtain through legal aid. They include efficiencies in the courts that arise from legal aid’s representation of low-income people and presentation of workshops for self-represented litigants.
MORE REASONS THIS PROPOSAL IS A BAD IDEA
Many of Trump’s supporters will celebrate his “budget cutting” without having any idea what these programs do. It’s not just legal services for the poor Trump is proposing cutting. The whole budget seems targeted at hurting the poor: “Trump has unveiled a budget that would slash or abolish programs that have provided low-income Americans with help on virtually all fronts, including affordable housing, banking, weatherizing homes, job training, paying home heating oil bills, and obtaining legal counsel in civil matters.”
Trumpsters will argue these services are best left to the local level. But unfortunately, there is no way small communities or even many States can afford adequate services. The tax base is just too small. So the federal government really is the ideal entity to distribute funding. With legal services, it is actually done by giving grant money to local non profits. It’s the best of both worlds.
It’s not that legal aid is all that expensive. Legal aid attorneys make only a tiny fraction of the money they would make in private practice. And court costs and other legal fees, though they cost too much for many poor folk to afford, aren’t insanely high. But even an attorney making $35k or 40k a year is too much for the average municipality to carve out of a very limited budget to cover legal services for the poor. A small team of talented experts in legal issues affecting the poor would be impossible to fund. So a very very small portion of our federal tax dollars are distributed to local non-profits to cover the cost.
Chris Edwards at Cato Institute has written in support of the budget proposal, arguing that it is the first step in “negotiations” about a smaller federal government. But it is neither fair nor good policy to “negotiate” this way with basic support for the poor. When there is this type of turmoil with funding, these organizations have to waste time planning for the worst (how to lay off staff, how to close out client cases). Some of the same things happened during the shut down a few years ago. Trump isn’t just asking LSC to tighten its belt, he’s threatening to ax the whole organization.
This is governance by chaos, and it will hurt the poor.