Welfare Reform Bill Breezes Through The State Duma

The State Duma on August 3 approved a Kremlin-supported bill in its second reading that would replace Soviet-vintage social benefits — to such groups as pensioners, war veterans, the disabled, and Chernobyl cleanup workers — with cash payments. The lower parliamentary chamber is expected to hold a third and final reading of the bill on August 5, but its passage is assured. It will be sent to the upper parliamentary chamber, the Federation Council, for consideration on August 8, but there, too, its passage is virtually certain. Indeed, a senior Federation Council adviser told the Moscow Times that senators had been warned they would lose their seats if they voted against the measure and that regional governors had been told that if they want to be re-elected they should not speak out against the bill. In its present form, the bill, which has had more than 1,000 amendments attached to it, would, starting in January 2005, provided a basic cash payment of 450 rubles (roughly $15) toward local train fares, medication, and sanatorium stays, along with other benefits payments ranging between 650 rubles and 1,550 rubles. As of January 2006, recipients would be asked to choose between the 450-ruble cash payment and a package of free medicine and free commuter train rides. Disabled war veterans would receive a monthly payment equal to $70 (MosNews, August 3; Moscow Times, August 4).

The bill was approved in its second reading by a vote of 304 to 120, with almost the entire Duma faction of the pro-Kremlin United Russia party and over a third of the deputies from Vladimir Zhirinovsky’s Liberal Democratic Party of Russia (LDPR) voting for it. The Communist Party of the Russian Federation (KPRF), the left-nationalist Rodina (Motherland), and most of the Duma’s independent deputies voted against it. While the bill’s supporters argue that it is necessary to cut excess government spending and that the existing benefits do not help large numbers of needy recipients — such as those who live in rural areas and thus have little access to public transportation — its opponents argue, among other things, that the cash payments will be eaten away by inflation (Newsru.com, Associated Press, August 3).

Critics also point out that while the benefits for vulnerable social groups are being tinkered with for the sake of budgetary streamlining, salaries and benefits for top government officials remain sacrosanct. Indeed, President Vladimir Putin this past April signed a decree raising the salaries of federal ministers by 4.9 times to nearly 90,000 rubles (about $3,150) per month, excluding bonuses. The salaries of the president and prime minister were set at 146,000 rubles ($5,100) and 117,000 rubles ($4,000) per month, respectively. Lower level government officials also received large salary increases (RosBusinessConsulting, April 16; Moscow Times, April 19)

The Grani.ru website noted that on top of their salaries, senior government officials –including the president, members of the Kremlin administration, government ministers, presidential envoys to the federal districts, and members of the State Duma and Federation Council — also receive free transportation, medical services, and housing. The website added that only “very principled or lazy” officials live on their official salaries — an apparent reference to the corruption which by all accounts continues to permeate the state bureaucracy (Grani.ru, August 3).

Independent State Duma deputy Oksana Dimitrieva said the “experiment ” of replacing benefits with cash payments should first have been tried out on the Duma’s deputies. “Having performed the experiment on ourselves, it would have become very clear what realistically can be replaced by monetary compensation and what cannot,” she explained. “If we had perfected the mechanism on ourselves, then it would have become clearer how to act in regard to veterans and invalids” (Nezavisimaya gazeta, August 4). Meanwhile, Rodina leader Dmitry Rogozin urged that the benefits for former President Boris Yeltsin currently mandated by law be replaced by cash payments. The LDPR’s Alexei Mitrofanov also said that Yeltsin’s benefits should be reviewed, and suggested that United Russia deputies be provided with bulletproof vests, given the unpopularity of the bill on social benefits. None of these proposals, however, were adopted (Rossiiskaya gazeta, August 4).

In addition to opposition to the bill inside the Duma, demonstrations protesting the measure have been held across Russia, including one in Moscow on July 29, in which several thousand pensioners, veterans, disabled people, and Chernobyl cleanup workers participated (Moscow Times, July 30). As the Duma was debating the bill on August 3, several dozen young members of the Yabloko party and an equal-sized group of elderly Communist supporters held separate demonstrations in Moscow (Newsru.com, August 3). Andrei Babushkin, chairman of the “For Civil Rights” committee, told protesters, “The cancellation of benefits is a deliberate policy of social genocide aimed at increasing domestic migration, worsening relations between the center and the regions, increasing mortality and corruption. The passage of such . . . social legislation is the state’s repudiation of its obligations to the people” (Yabloko.ru, August 3). On August 2, a group of demonstrators belonging to Eduard Limonov’s National Bolshevik Party protested the bill by breaking into the Health Ministry and trying to barricade themselves inside. The protestors were arrested (Itar-Tass, August 2).