Tag Archives: spending

The Purpose of Medicaid

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State Medicaid programs were created for the explicit purpose of providing health insurance coverage for State citizens on the lower rungs of that State’s economic ladder. The Federal government transfers Federal funds—the tax remittances of all of us citizens regardless of the State of which we might also be citizens—to support those Medicaid programs.

In California’s case, Federal transfers in support of Medi-Cal, that State’s Medicaid program, comprise more than 69% of the program. That amounts to 71.4 billion of our tax dollars.

Now the Progressive-Democrat governor of California, Gavin Newsom, wants Medi-Cal to pay the rent for the State’s homeless.

Newsom has proposed using federal healthcare funds to cover at least six months of rent for homeless California residents and those close to losing their homes.

The foolishness is spreading; California is not the only State pulling this stunt.

California is modeling the program off of similar programs in Oregon and Arizona that have been previously approved by the federal government.

Oregon gets 76%—$8.5 billion—of its Medicaid program covered by the Feds, and Arizona gets more than 80%—$14.3 billion—of its Medicaid funding from the Feds.

Newsom argues—and he’s actually serious—that this will save money in the long run because the State (as JtN cited him)

will not have to pay as much for these people’s expenses in hospitals, nursing homes and prisons.

This is a cynical non sequitur. Nursing homes and prisons aren’t centered on medical care, for all that medical care is a small part of those…services. Those services’ costs also are already factored into their budgets. Too, hospitals aren’t residences—and their medical service costs also are already factored into their budgets, including in part from California’s existing Medi-Cal.

Maybe it’s time to stop sending the Medicaid-related tax remittances of citizens of other States to these States.

Debt Limits and Spending

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The Congressional Budget Office is out with its projection for our nation’s economic future.

As for the much-discussed federal debt, the nearby chart shows how fast it has grown in the last several years. Debt held by the public—the kind we have to pay back to creditors like the Chinese and Japanese based on contracts—is now 97% of the economy, and will soon rise to 100% and keep going to 118.2% in 2033. How high can it go before creditors stop lending? No one knows, but it will be ugly if they do.

Here is that nearby chart:

This illustrates the tight relationship between spending and debt limits, and why future spending cuts must be part of negotiations related to raising today’s debt ceiling limit. It’s barely possible to see any effect from the 2011 debt limit increase that was agreed in exchange for some “freezing” of Federal spending levels, a pseudo-freeze that in the end ended rather quickly.

There need to be real reductions in Federal spending, not just a reduction in spending growth or even a pretend freeze. There’s plenty of room in welfare spending, for instance, for cutting. Furthermore, all Federal spending is discretionary, the bad habit of calling some spending mandatory notwithstanding. Finally, to put a legitimate floor under spending (which doesn’t contradict the forgoing because it’s a floor not a mandatedly ever-increasing level), there’s a Constitutional requirement to spend adequately on national defense and debt repayment.

In the end, too, tax rate cuts, leaving more money in the hands of private economy actors—us average Americans and our businesses—leads to increases in Federal revenues. This has been empirically demonstrated by every tax rate cut since President John Fitzgerald Kennedy’s reduction of the top rate from the neighborhood of 90% to the region of 70%.

Federal spending cuts coupled with Federal tax rate cuts—they’re win-win for our economy and our nation, if only the Progressive-Democratic Party politicians in Congress and the White House would get out of the way.

Debt Ceiling “Negotiating”

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In a Wall Street Journal op-ed centered on ways to “save” Social Security and Medicare, Progressive Policy Institute‘s Director of the Center for Funding America’s Future, Ben Ritz, opened with this bit for his lede:

The Biden administration has sensibly rejected attempts by some far-right Republicans to hold the full faith and credit of the US hostage in exchange for spending cuts. The administration now must show it will be open to good-faith budget negotiations after the impasse over the federal debt limit is resolved.

Leave it to a Left-winger to say, once again, “Trust us.”

No. Debt limits are reached and need lifting because of prior spending excesses.  And continued spending excesses because there follow no “good faith” budget negotiations from the political Left after the impasses. The current debt-ceiling is no exception.

It is the Progressive-Democratic Party politicians, from the White House on into both houses of Congress, who are holding our nation’s credit-worthiness and our economy as a whole hostage against their demand to continue their profligate spending.

The debt ceiling cannot be lifted, sensibly, without being paired with actual spending cuts (not reduced rates of increase) as part of the package so as to obviate future need to raise the limit once again.

If the Progressive-Democrats were serious about our credit-worthiness and our economy, they’d get out of the way of serious negotiations.

Mistaken?

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In a Fox News article centered on Congressman Chip Roy’s (D, TX) proposed legislation that would bar Federal funds from going to schools that teach critical race theory (the foolishness doesn’t deserve capitalization), Cato Institute’s Colleen Hroncich had this in objecting to Roy’s proposal:

For starters, the federal government has no constitutional role in education[.]

Plainly, the Federal government does have a role, Constitutional or otherwise, in education—hence the existence of those federal funds to schools that Roy’s proposal would block.

Alternatively, Hroncich is correct, and all Federal funds transfers to schools should stop.

Federal Debt Ceiling

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The Progressive-Democratic Party says they’ll refuse to negotiate on raising the debt ceiling. Not at all. Those politicians are looking to hold our nation’s weal and our national security hostage against their demand to spend, spend, spend.

Republican Party politicians—at least those in the House and some of them in the Senate—insist that the debt ceiling can’t be raised without agreement on spending cuts in the next and subsequent budgets: not agreement to talk about cuts, but actual, specific cuts.

These Leftist politicians insist that the debt ceiling is solely about current bills that must be paid and that future spending questions—cuts or otherwise—are separate questions and must be negotiated separately. This is badly mistaken.

Today’s debt ceiling problem is the result of past failures to cut spending: failures to agree to do more than just talk about cuts and, where cuts actually were agreed, failures to honor those agreements. The next budget’s spending will impact the next debt ceiling and create pressure to raise the ceiling again. Failure to accept, or even to recognize, the relationship between a debt ceiling and budgeting just leads to functionally automatic debt ceiling raises and so functionally automatic debt increases.

Current debt ceilings and future spendings are inextricably intertwined. The Republicans in the House need to stand tall and not allow any debt ceiling increase without agreement to specific, measurable cuts (not reductions in increases) in future budgets’ spending on specific programs. Senate Republicans need to find backbone and stand tall on this pairing, also.

Progressive-Democrat refusal to negotiate on this puts our nation’s debt crisis squarely on their backs, and no place else. Their refusal to negotiate is just their demand to continue spending us average Americans‘ money in ever increasing amounts, their demand to drive our nation ever more deeply into debt—demands born of the irrational concept that money can be created out of the æther with no economic consequence.