The Baucus Bill Spending Vortex

Dennis Smith / October 09, 2009

The House and Senate are clearly divided over how to pay for the massive new spending commitments the federal government is taking on.

Right now, House and Senate Democrats are meeting behind closed doors to figure out who they will tax and how much they can cut Medicare to meet what will be at least a $1 trillion commitment in new spending. Assuming for just the moment that they can make them match, Congress should look to the example of what Medicaid has done to state budgets.

Medicaid Mess. The commitment to Medicaid has become so large, it acts like a vortex, drawing everything else into itself. Congress should stop and take a good look at what happened to state budgets this past year. The extra federal matching rates for Medicaid came with strings attached—Medicaid eligibility could not be cut. But states still cut Medicaid providers. Medicaid was perhaps spared but that only meant cuts had to be found elsewhere to keep state budgets in balance. Medicaid was protected, but education, public health, mental health services, social services, child welfare programs, and public safety were cut. (more…)