The Legal Services Corporation (LSC), formed in 1974 with bipartisan Congressional support and the endorsement of the Nixon Administration, was created to ensure that all Americans have access to a lawyer and the justice system for civil legal issues regardless of their ability to pay. The LSC provides funding to independent local legal services programs through a competitive grant process.

The Corporation currently funds 137 local programs (with approximately 900 offices) serving every county, state and Congressional District in the United States and its territories. These local programs provide direct services to approximately one million constituents who struggle to get by on incomes below or near the poverty line as established by the Department of Health and Human Services. LSC clients include the working poor, veterans, family farmers and people with disabilities. Family law matters (including domestic violence and child custody) and housing issues are the largest categories of cases handled by LSC-funded programs.

Many beneficiaries of LSC funding were formerly middle-class, who became poor because of the breakup of their family, unemployment, illness, age, or disaster. A 2005 study showed that 74 percent of legal aid clients have been women, most of them mothers with children. Many victims of the September 11 terrorist attacks have received assistance from LSC-funded programs, including family members of victims in need of help with social security survivor benefits, landlord/tenant issues, child custody and guardianship issues, emergency public assistance and many other matters. In 2005, LSC-funded programs in the Gulf Coast were overwhelmed, as already under funded programs try to help existing clients and newly eligible clients who lost their jobs and/or their homes. Today, significant numbers of low-income families find themselves in need of legal aid to prevent homelessness resulting from foreclosures on sub-prime mortgages. In addition to affecting low-income home owners, the foreclosures are also forcing low-income renters from their homes.

LSC has been operating since 1980 without a renewed authorization. It continues to exist by virtue of its annual appropriation. Beginning in 1995, LSC became the victim of a vocal minority in Congress vowing to eliminate the program. LSC supporters in Congress and around the country have been working since then to first preserve the Corporation, and now to restore funding. Efforts by ABA and state/local bar leaders over the years have been instrumental in taking steps to restore LSC funding, which was severely slashed in FY 1996 from $415 million to $278 million. Thanks to strong bipartisan support, the FY 2008 Senate-passed CJS bill provided LSC with $390 million and the House-passed CJS bill gave LSC $377 million, much-needed $41.4 million and $28.4 million increases, respectively, over the $348.6 million enacted for FY 2007. However, the year-end FY 2008 consolidated appropriations act reduced LSC's funding back to $350.5 million, a mere $1.9 million increase. LSC would have needed a $7.3 million increase (to $355.9 million) just to keep up with inflation. The FY 2008 funding is $64.5 million less than the $415 million appropriated in FY 1995, which would be about $576 million in today's dollars.

Today, while LSC enjoys bipartisan support, securing adequate funding remains a challenge due to the escalating budget deficit. At the same time, the number of people living in poverty in the United States has increased by 5.74%. More than 50 million Americans are eligible for federally funded legal assistance -- an all-time high. Every year, tens of thousands of eligible persons with major legal problems are turned away because of the local programs' lack of resources.(See Justice Gap Below)

(For more information, see FY 2008 Appropriations Background)

Despite strong bipartisan support in Congress and around the country, the Administration submitted its FY 2009 budget request and, for the third year in a row, proposed cutting LSC funding back to $311 million. Such a cut would have a devastating effect on already financially strapped local legal aid programs.

The Legal Services Corporation is one of the few government-funded entities allowed to submit its own budget proposal directly to Congress. On February 1, 2008, the bipartisan LSC Board of Directors urged Congress to provide a significant funding increase for LSC to $471.4 million, $120.9 million more than the amount provided for FY 08.

On April 02, 2008, the House Appropriations Subcommittee on Commerce, Justice and Science held a public hearing on LSC's funding. Congressman Alan Mollohan (D-WV) chairs the subcommittee. LSC Board Chair Frank Strickland and President Helaine Barnett testified on behalf of the Corporation.

The Senate Appropriations Subcommittee on Commerce, Justice, Science and Related Agencies (CJS), led by Chairwoman Barbara Mikulski (D-MD) and Ranking Member Richard Shelby (R-AL), did not hold any hearings related to LSC funding.

ABA Day in Washington, April 15-17, 2008, once again organized bar leaders to educate their Members of Congress about the need for increased funding for LSC. More than 350 ABA and state/local bar leaders participated in this year's program and urged Congress to support the LSC Board's request for $471.4 million.

Both the House and Senate Appropriations Committees in June 2008 marked up their respective bills that fund LSC. Both Committees provided LSC with a $40 million increase, recommending $390 million for FY 2009. Prior to the mark-ups, ABA President William H. Neukom wrote the House and Senate Subcommittees in support of the bipartisan LSC Board’s requested $471 million, as a modest step toward closing the “justice gap.” President Neukom’s letter included two important attachments which further demonstrated nonpartisan, national support for providing more adequate funding for LSC: a first-of- its-kind letter signed by all 50 state bar association presidents (plus D.C., Puerto Rico and the U.S. Virgin Islands) urging Congress to increase LSC funding to at least $400 million; and the annual letter circulated by Senators Edward Kennedy (D-MA) and Gordon Smith (R-OR) supporting increased funding for LSC. This year’s letter was signed by 55 Senators, with additional Senators sending personal letters to the Subcommittee.

No further action was taken; instead, Congress delayed finalization of most FY 2009 appropriations bills until a new Congress and Administration are in place. A Continuing Resolution (CR) was enacted on 9/30/08 that keeps most federal programs, including LSC, at FY 2008 funding levels until at least 3/6/09. As a result, LSC will continue at its current level of $350.49 million until the new Congress addresses funding issues early next year.

In addition to the annual appropriations, the recently enacted Housing and Economic Recovery Act of 2008 provides $30 million for legal counseling for low-income homeowners and renters affected by the mortgage foreclosure crisis.

Board of Directors/Management

The LSC is governed by an 11-person bipartisan Board of Directors, nominated by the President and confirmed by the Senate. The full Senate Committee on Health, Education, Labor and Pensions (Help) is responsible for confirming nominees to this Board. The ABA pursuant to longstanding procedures conducts an evaluation of the nominees' qualifications and commitment to the program and submits its views to the Senate.

Helaine Barnett, formerly the Attorney-in-Charge of civil legal services for the Legal Aid Society of New York City, has served as LSC's President since January 2004. Richard "Kirt" West served as LSC's independent Inspector General, from September 2004 until he resigned his position in August 2007. In February 2008, the Board announced the appointment of Jeffrey E. Schanz as the Corporation's new Inspector General, effective March 3, 2008. Schanz previously served for 17 years with the United States Department of Justice (DOJ) as Director of the Office of Policy and Planning, Audit Division, Office of the Inspector General.

One seat on the LSC Board of Directors has remained vacant for almost two years. Currently five Republicans and five Democrats sit on the 11-member Board. The White House can, but is not expected to, nominate one additional nominee to replace a Republican board member who passed away in 2006.

Oversight

The House Judiciary Committee (Subcommittee on Administrative and Commercial Law) and the Senate Committee on Health, Education, Labor and Pensions (HELP) are responsible for authorization and oversight of LSC.

To date, neither the House Judiciary Committee nor the Senate HELP Committees have held any oversight hearings.

On May 22, 2008, Senator Ben Cardin (D-MD), working with Judiciary Committee Chairman Patrick Leahy (D-VT), convened a Senate Judiciary Committee hearing to document the growing “justice gap” in America. Witnesses included representatives from the Legal Services Corporation, the American Bar Association, the National Legal Aid and Defender Association, and others. The Honorable Lora J. Livingston testified on behalf of the ABA; Governmental Affairs Office Director Tom Susman submitted additional material for the record.

The hearing record, testimony and webcast are posted on the Senate Judiciary Committee hearing website.

The Legal Services Corporation on October 17, 2005 released the results of its year-long study "Documenting the Justice Gap in America."

The study documents that one in every two individuals who qualify for and actually seek assistance from LSC-funded programs are turned away because of a lack of resources. This 50 percent denial of service figure does not include the number of individuals who are eligible but do not seek assistance for whatever reason.

The study also verifies that at least 80 percent of the legal needs of the poor are not addressed. This figure highlights the much broader, unmet legal need that includes services provided by legal aid and private lawyers, whether pro bono or private attorneys charging full or reduced fees. This result was based on a review of the recent state studies, which support the often-quoted ABA study completed in 1994. Since the ABA completed its study in the early 90s, the unmet need has remained the same and even increased. Although private and state funding has increased, federal funding has declined, and the number of individuals eligible for assistance has increased as poverty has increased. These reports have been verified by more recently by multiple State-sponsored "legal needs" studies.

• The need for legal services for poor Americans has never been greater; over 80% of the civil legal needs of the poor are not being met.
• LSC is a fundamentally conservative program, one that facilitates the peaceful resolution of disputes and reinforces respect for the rule of law. More than 90 percent of the cases are resolved without litigation.
• LSC was "reformed" by Congress in 1996. The Corporation is vigorously enforcing the restrictions passed by Congress and is working aggressively to ensure all programs that receive federal funds comply with all existing laws.

The ABA supports a strong, federally funded, community controlled program to provide legal aid for the poor. The ABA favors substantial private bar involvement in the delivery of legal services and actively encourages pro bono participation by individual attorneys, law firms, and corporate general counsels.

November 13, 2008