SHELTERING THE VULNERABLE

Los Angeles Times: The 1999 death of a mentally ill street wanderer made news again last week when an independent audit concluded that Kevin Evans died because sheriff's deputies went overboard in restraining him in Los Angeles County's Twin Towers jail. Evans, a 33-year-old African American who also suffered from cerebral palsy, had cycled between the county jails, where he repeatedly landed on nuisance changes, and the streets of Lancaster, where he lived when homeless shelters turned him out. His story is a particularly shameful example of a woefully neglected urban problem: the lack of housing for the nation's mentally ill indigents.
The core federal program for providing mentally ill people with places to live and social support is called Shelter Plus Care. A House subcommittee earlier this year decided not to renew a penny of its $100 million in annual funding. If the decision holds, it will guarantee more Kevin Evans cases, more shame for local officials.
Some Republicans in Congress and the Bush administration have said the program's cost-effectiveness is unproven. That's simply not true. A five-year study released earlier this year by the University of Pennsylvania found that providing housing and treatment cost taxpayers only "slightly more than leaving (the people served) to fend for themselves."
Peer counseling: Shelter Plus Care helps the chronically mentally ill find housing, requiring them to pay 30 percent of any income in rent and providing the rest. It also works with other federal programs created by the McKinney-Vento Homeless Assistance Act of 1987 to provide job training, peer counseling and other supportive services. These programs, managed by the Department of Housing and Urban Development, cost the government $1.2 billion a year.
Earlier this year, HUD Secretary Mel Martinez said he would refocus the agency on its "core mission: the development of housing" and move supportive services out of HUD and over to Health and Human Services. That idea sounds sensible. But Health and Human Services staffers say the agency is already overstretched in dealing with the ailing public health system and the new bioterrorist threat. Besides, the McKinney Act was meant to unite, not scatter, homeless services. The Bush administration did seek $100 million to renew Shelter Plus Care in 2002, but Martinez has yet to publicly pressure House leaders to restore the money in the final bill. He should.
This moment, when the world is watching to see what the United States really stands for, is not the time to send even more of our most vulnerable citizens off to live on the streets.
ARGENTINA ON THE ROCKS
Washington Post: The economic jitters following the terrorist attacks are reaching abroad: Japan, Turkey and Brazil, three countries that had been wobbly before, are more so now. Even more affected is Argentina, which flirted with default earlier this year until the International Monetary Fund came to its rescue. A combination of slower world growth, more risk-averse investors and troubled domestic politics again has raised the prospect of default. And this time there may be little that the IMF can do about it.
Argentina is likely to default because investors think it likely to default: Their skepticism has pushed interest rates sky-high, making it hard for the government to meet its service payments. To free up money to pay creditors, the government has resorted to a tough austerity program, which has driven the economy into recession and made the problem nastier. This week an election reduced the chances that Argentina will continue to tighten its belt. The opposition, which has criticized austerity, took control of both chambers of Congress.
Back in the summer, it seemed just possible that a big IMF loan would convince investors that default was not in the cards; interest rates might therefore have fallen, loosening the policy vise around the government. But the IMF package did not work, perhaps because it wasn't big enough to turn confidence around, perhaps because it was delayed by a reluctant U.S. Treasury or perhaps because the shock of Sept. 11 knocked investor confidence down again. It seems unlikely that another IMF rescue would upend investor psychology so soon after the last one failed to do the trick. Argentina is therefore likely to tell its international creditors that they won't be paid. Indeed, it already is doing that with domestic lenders whose arms can be twisted.
Now what? What happens next is hard to say -- which is precisely why Argentina has tried so long to avoid defaulting. In the Latin American debt crises of the past, defaulting countries lost access to international capital for some years, then bounced back when a new group of investors appeared with no apparent sense of history. This time around, an Argentine default may be both messier and less serious. It will be messier because the lenders are bondholders not banks, and bondholders are too numerous to gather into one room to negotiate a debt restructuring. It may be less serious, on the other hand, because investors appear to differentiate between emerging markets more than in the past. One Latin American default will not necessarily convince markets that others are imminent. But that's a hope more than a promise.