In southwest Va., as more need help, aid organization has less to give

“Yes.”

Hancock studies the woman’s file. Outside the door, she can hear other voices in the waiting room, where the characters change but the conversation never does. The only topic that matters in Pulaski, a town of 9,000, is what has been lost: 3,000 textile jobs in the last decade, the Wal-Mart, the Main Street barbershop and all eight restaurants downtown. What remains are mostly vacated furniture factories with busted-out windows, churches, pawnshops and a food kitchen for the poor where Hancock herself eats lunch because it helps cut back on expenses. Only a year ago, the emergency assistance office routinely handed out $1,000 in vouchers each week. Now it has less than $1,000 total in its bank account until more donations come in.

(Laris Karklis/The Washington Post)

“I’m sorry,” Hancock says, finally. “But $35 is the best we can do.”

“We’re going to be out on the street,” the woman says.

“Let’s hope it doesn’t come to that,” Hancock says. “But we’re hurting, too.”

Twenty miles away, at a coffee shop in Blacksburg, Va., Hancock’s boss works on a math problem of her own. Terry Smusz, the executive director of New River Community Action, runs 11 poverty-assistance organizations in southwest Virginia on an annual budget of $7 million. Now she studies a pie chart illustrating the sources of her 2010 funding, three-quarters of which is in doubt. “All these pieces of the pie are just disappearing,” she says.

Fifteen percent of her budget is federal stimulus money, a one-time influx that will be spent by this summer.

Seven percent is state funding, which the Virginia General Assembly voted to cut by more than 60 percent a few weeks earlier.

Two percent is private donations, which have declined to record lows.

Forty-eight percent comes from the federal budget, all at stake as Democrats and Republicans make proposals to Congress that would drastically change how the country fights poverty.

For 30 years, the federal government has funded poverty-assistance programs through the Community Services Block Grant, which distributes money to individual states that divide their share among thousands of local organizations. The grant demands minimal federal oversight, and some politicians have long disparaged it as wasteful or inefficient. But never before has it been targeted like this.

“This is the hardest time we’ve ever had financially,” Smusz says. “Everyone is tightening up, which creates a huge trickledown effect.”

The trickledown began in January, when President Obama, confronted with a staggering $14 trillion in national debt, announced during his State of the Union address that his 2012 budget would include “cuts to things I care deeply about, for example community action programs in low-income neighborhoods.” A former community organizer in Chicago, Obama proposed eliminating the $700 million block grant program and replacing it with $350 million in competitive grants, meaning some programs would receive nothing as early as next year.

That news spread to a network of 1,065 community action agencies across the country, where directors said they would be forced to lay off employees, close job training centers and shutter homeless shelters if Obama’s budget cuts are approved by Congress later this year. In existence since 1964, the Community Action Partnership worked with more than 20 million people last year when a record 15 percent of Americans lived in poverty.