Read it and weep: The US national debt now sits at an almost unfathomable $37 trillion. If you run the numbers, it is easy to understand how impossible – or at best improbable – it will be to extricate ourselves from the colossal hole the central state has dug over decades. No less than 75% of the massive federal budget is devoted to so-called mandatory spending on entitlement programs, such as Medicaid and interest payments, while another 13% is dedicated to national defense and is virtually mandatory. This means that only 12% – less than $900 million out of the current $6.8 trillion annual budget – is subject to congressional discretion.
Even if all of that $900 million is sliced off, which, of course, will never happen, we would still be nowhere near reaching a balanced budget or reversing the ominously ticking debt clock. This means one thing above all else: Reforming Social Security, Medicare, Medicaid, or all three programs represents the only pathway back to fiscal sanity.
But as President George W. Bush discovered when he tried and failed to reform Social Security in 2005, entitlements are rightly called the “third rail of politics.” Touch them, and you will die. And now, Republican attempts to remove millions of ineligible recipients from the Medicaid rolls and to add work requirements for able-bodied beneficiaries in their Big Beautiful Bill (BBB) have provided the Democratic Party with its ripest issue since Donald Trump arrived back in the White House.
Republican Gut Check
After passing the House by a single vote, the Trump-inspired BBB has now become a political football in the Senate. At least six Republicans are threatening to vote it down, absent consequential changes, even after the House scaled back its original Medicaid component. Prominent among the naysayers are Sens. Josh Hawley (R-MO) and Jerry Moran (R-KS), who, despite being rock-ribbed conservatives, are balking at the Medicaid revisions because a significant percentage of their constituents are among the more than 70 million low-income Americans enrolled in the program.
But beyond internal opposition is the fact that Democratic politicians and their handmaidens in big media, looking for anything on which they can hang their hat these days, are engaging in easy and predictable demagoguery about one of their favorite programs. They are reading from the usual script about conservatives savaging the poor. In fact, Medicaid has become the overwhelmingly dominant theme of left-wing attack ads nowadays.
The juiciest source for Democratic fearmongering is the work requirement embedded in the bill for Medicaid recipients. How dare they require the poor to sing for their supper? Legacy media is having a field day with the issue. The New York Times has headlined stories “Medicaid Work Requirements Are Cruel and Pointless” and “Republicans Will Use Paperwork to Kick Americans Off Health Care.” And Washington’s most famous left-wing newspaper weighs in with, “GOP’s scaled-back Medicaid plan still threatens coverage for millions.”
But who are those millions? According to Rep. Brett Guthrie (R-KY), the Congressional Budget Office (CBO) reports that they are ineligible individuals. The CBO estimates that, of these recipients, 1.4 million are illegal immigrants, 1.2 million no longer qualify for eligibility, and 1.6 million are enrolled in two state Medicaid programs at the same time. CBO also works off the assumption that there are 4.8 million able-bodied adults without dependents who would rather lose Medicaid coverage than choose to work.
Nevertheless, Trump and the GOP are treading carefully on this issue. “The President wants to preserve and protect Medicaid for the Americans who this program was intended for,” White House Press Secretary Karoline Leavitt said at a recent press briefing. “We want to see able-bodied Americans at least working 20 hours per week, whether that’s part-time or full-time, whether that’s even looking for work or volunteering for 20 hours a week, if they are receiving Medicaid.”
Republicans are facing a gut check. Will they hold fast to Medicaid reform, which is only the first of many vital steps needed to rein in out-of-control entitlements to bring the budget into balance? Or will they be spooked by the steep price they might have to pay for daring to touch this third rail of politics? Logic is often overwhelmed by emotion in government, where policy inevitably runs into politics.
Hawley laid bare that very problem, declaring that his own party’s proposed reforms to Medicaid are “both morally wrong and politically suicidal.” So, let’s get this straight: Suddenly, this conservative who famously favors smaller government and less federal spending is dripping with compassion for millions of Medicaid recipients who are either ineligible or will refuse to work 20 hours a week in return for their benefits?
The Medicaid Trap
Because federal and state governments share the burden of funding Medicaid, it has always been ripe for expansion. The national government picks up at least half of the tab, and often more, so there are built-in incentives for states to keep expanding the program and opposing federal cutbacks. Obamacare, aka the Affordable Care Act, drove the program to a whole new level by offering states 100% federal funding for three years, and 90% thereafter for able-bodied adults without children. Unsurprisingly, 40 states, including many controlled by Republicans, took advantage of the opportunity. Federal spending on Medicaid is now a runaway train, set to be 33% higher next year than in 2019 – even with the reforms in the BBB.
The ultimate judgment of this entitlement reform will be made by midterm voters. With Democratic officeholders certain to advance a narrative that Republicans are cold and heartless, will everyday Americans approve of lower taxes – including no taxes on tips, overtime, and Social Security, as stipulated in the BBB – in return for tightening up Medicaid?
As is their wont, the Democratic Party has railed against “cuts” to this welfare program – when, in reality, the BBB only reduces Medicaid’s rate of growth. It calls these reforms unnecessary and cruel. This is hardly surprising since those on the left have rarely seen an expensive welfare program they don’t wholeheartedly embrace, no matter the consequent spiraling debt passed on to future generations. With midterm elections on the horizon for more than 240 Republicans in Congress, will the GOP, especially those rogue senators, back down in the face of rank demagoguery? Or will they hold their ground? The answer will say much about their political backbone.
