Tuesday, August 14, 2012

Medicaid: The Most Fiscally And Economically Destructive Part of Romney-Ryan

Admittedly this has become hard to say now that there are at least three, if not four, such versions.  There were at least two Ryan budget plans, if not three, with the earlier one(s) more radical than the one passed by the House this year, and there is the much vaguer Romney plan, which is now supposedly ruling in the case of Medicare: do nothing for ten years (including repeal the Medicare savings part of ACA, which the Ryan plans agree with), and then, maybe, go to some sort of Ryanesque voucher/premium support plan. 

Of course, they both support tax cuts for the rich and tax increases of some sort for the poorer, although things are fuzzier on details in the Romney version than in the Ryan versions.  However, they are also both stunningly vague on the tax expenditure savings or loophole/deductions that they intend to remove that are supposed to magically raise revenues somewhere down the road (along with, of course, in typical supply-side fantasyland, all that extra growth the tax cuts for the rich are supposed to generate).

However, the part of the Ryan plans that is most potentially destructive both fiscally and economically, which I do not see repudiated by the Romney version, even if it is less clearly stated, is neither of the above, is what it/they do to Medicaid.  This is to fix the amount sent to the states and then send it to the states as a block grant.  While the voucher version of Medicare sticks extra costs directly on elderly recipients, this sticks the rising cost of medical care for the poor on the states.  We have already seen such rising costs for the state shares rising dramatically over past years and wreaking havoc on state budgets around the country.  This will make it worse, and as seen by the response of many states led by GOP governors, they are unwilling to extend Medicaid as asked for in the ACA, arguably the largest source of expansion of coverage for health care of uninsured Americans of any part of the ACA.

Furthermore, in terms of the overall economic impact, during the last two years the hardest hit sector of the US economy in terms of employment loss has been state and local governments, still laying off people at a rate of 9,000 workers per month as of the latest report.  Throwing the responsibility for covering Medicaid  even more fully onto the states is simply going to aggravate this already severe problem.  It is fiscal/economic lunacy.

As it is, the federal government should be assuming full responsibility for Medicaid, rather than shoving it more heavily onto the overburdened state and local governments.  Obama is not supporting this, which should be done simply without any conditions to even the playing floor across states.  As it is, there have been some rumbles by a few in Congress about a possible trade: feds take over Medicaid while states take over transportation and education, which almost balance out currently.  I am not in favor of that either, but it would be superior to either the status quo, and certainly far superior to the nonsense that one finds on Romney-Ryan, or at least some versions of it.


Post a Comment