Not “It.” That’s the message of Chris Christie’s – and Congress’ – allegedly bold but deceptively cowardly proposals to tamp down government spending.
The issue came up last week when Christie, New Jersey’s Republican governor and an expected presidential candidate, gave a speech in New Hampshire on entitlement reform. While I’ve questioned Christie’s bona fides as a fiscal conservative, he deserves some kudos for being one of the few politicians on the national stage to venture near this third rail of American politics. Some of his ideas are worth considering and may actually find support on both sides of the aisle (changing how we calculate Social Security cost-of-living adjustments, for example).
But one Christie proposal is less a brave innovation than a craven gimmick to pass the buck to other politicians, a strategy Christie has honed over the years.
I’m referring to his proposal to cap federal spending on Medicaid – which Christie condemned as “the fastest-growing federal entitlement” – and leave it to the states to figure out how to reduce spending. Right now, the federal government covers a fixed share of each state’s overall costs for Medicaid, a program that, along with the Children’s Health Insurance Program, helps provide health care to nearly 70 million low-income Americans; Christie would instead limit each state to a fixed dollar amount per beneficiary.
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Proposals to either cap or block-grant federal funds for such safety-net programs have been kicked around since at least the 1970s. Ronald Reagan tried to convert Medicaid into block grants in 1981, and efforts since then have been similarly unsuccessful. But a few years ago, Rep. Paul Ryan (R-Wis.) championed the idea in a splashy budget proposal, and various versions of such spending caps have found renewed popularity among conservative leaders ever since. The budget plans recently passed by the House and Senate contain similar provisions to turn key safety-net programs into block grants to the states: The Senate plan converts much of Medicaid into two block grants, while the House’s includes block grants for both Medicaid and food stamps.
Such proposals are often lauded for imposing discipline on runaway costs, or else for encouraging “innovation” and “flexibility” in our prized “laboratories of democracy,” as they usually come with provisions to give states greater decision-making power. In a fact sheet, Christie promised that “all states will have increased freedom to tailor Medicaid programs to their citizens in the best-suited manner for their state.”
Sounds pretty fantastic, right? Except capping federal funding and giving states more control are likely to mean abandoning the needs of the poor or bankrupting the states, or both.
Limiting federal funding on Medicaid spending would indisputably accomplish one objective: Limiting federal funding on Medicaid spending. But that’s it. It won’t make the growing costs of the program magically disappear. It would just dump them onto someone else’s doorstep, in this case the states’, which are likely less equipped to deal with complex management and cost control given their smaller scale. State governments would either have to contribute more of their own funds or, more likely, institute deep cuts to poor beneficiaries and the providers that serve them. Medicaid already spends so little per beneficiary – about 27 percent less for children, and 20 percent less for adults, than private insurance does on similar patients – that further cuts would almost certainly cause providers to exit the program, reducing access to care.
But, hey, at least this new system wouldn’t force federal politicians to shoulder the blame for reducing health care for the poor. And they’d get to take credit for cutting the federal deficit in the process!
Proponents of federal per-capita caps or block grants often cite the 1996 welfare overhaul – which froze federal spending levels and gave more flexibility to the states – as a model. But it’s actually a cautionary tale. A recent report from the Center on Budget and Policy Priorities documents how the change led state-level politicians to cut services for the poor and redirect billions of dollars toward uses that the program was never intended to support, including plugging budget holes and cutting taxes.
The risks of making similar changes to Medicaid look greater, given how complicated and fractured the nation’s health-care system is. Capping federal spending on a gigantic safety-net program without actually making the hard choices necessary to reform it is just another less transparent form of kicking the can down the road.
Washington Post Writers Group