Medicaid Scam Delays Budget Deal
Author: Greg Valliere
February 27, 2025
ONE OF OUR PET PEEVES IN WASHINGTON is that Congress — and the media — rant about spending cuts, when actually most spending bills simply slow the rate of increase. That isn’t a cut.
THIS PRACTICE IS ESPECIALLY EGREGIOUS CURRENTLY as a budget battle looms, with the Senate refusing to agree with this week’s House-passed spending package because it “cuts” Medicaid spending. Actually, it rises by 2 percent.
WE HIGHLY RECOMMEND reading the lead editorial in this morning’s Wall Street Journal, which sets the record straight on Medicaid spending.
“Medicaid spending is out-pacing even Social Security and Medicare,” the editorial states. Medicaid outlays have increased 207% since 2008 and 51% since 2019.
“Medicaid spending as a share of federal outlays rose to 10% from 7% between 2007 and 2023, while the share of Social Security and Medicaid remained stable,” the Journal says.
PERHAPS MORE OUTRAGEOUS IS THAT “Medicaid was established to help the needy—poor children, pregnant women, the elderly and disabled. Democrats have since expanded it by degrees into a far broader entitlement for able-bodied, working-age adults with lower incomes.”
CALIFORNIA SPENDS FEDERAL Medicaid dollars on “activity stipends” for art and music lessons for children and club sports. Oregon is tapping Medicaid to pay for cooking classes, air conditioners and mini-refrigerators. Some Republican states have joined this all-you-can-spend Medicaid buffet, the Journal states.
NO ONE IS SUGGESTING that Medicare benefits should be cut, but Medicaid is another story. Republicans in the House want to slow the rate of growth in Medicaid, but some GOP members think this sounds harsh, even though the program has been growing dramatically for purposes unrelated to health care. The increases have been particularly steep in New York and California.
A GROUP OF HARD-LINE SPENDING HAWKS, mostly in the House, is demanding real cuts in this and other spending — including huge new tax reductions that the country may not be able to afford.
THE HOUSE VOTE EARLIER THIS WEEK was a fake-out. House Speaker Mike Johnson probably doesn’t have the votes when his bill lands in the Senate. A sure sign of gridlock: some members of Congress are talking about the same old option — a continuing resolution, deferring the budget bills into the summer.
WHAT ABOUT ELON MUSK’S spending cuts? They will slow the rate of increase; perhaps annual deficits could fall from $2 trillion a year to $1 trillion. With the economy growing by 2 percent, that’s nothing to brag about; even a modest recession could drive red ink back over $2 trillion.
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