The past couple of years have been tough ones for many governors and legislatures. Dozens of states have had to deal with their largest fiscal deficits in decades, responding either by raising taxes in the midst of a recession or enacting sudden, often poorly targeted cuts. Was their fiscal exposure to the economic downturn a product of their own poor choices when times were good? Certainly. But the federal government made things worse through unwise mandates and perverse incentives, particularly in the burgeoning Medicaid program.
Now, after all this, Democrats moving their health-care legislation through Congress are pushing another expansion of Medicaid. State officials are pushing back, reports the Washington Post:
The legislation the Senate Finance Committee is expected to approve this week calls for the biggest expansion of Medicaid since its creation in 1965. Under the Senate bill and a similar House proposal, a patchwork state-federal insurance program targeted mainly at children, pregnant women and disabled people would effectively become a Medicare for the poor, a health-care safety net for all people with an annual income below $14,404.
Whether Medicaid can absorb a huge influx of beneficiaries is a matter of grave concern to many governors, who have cut low-income health benefits — along with school funding, prison construction, state jobs and just about everything else — to cope with the most severe economic downturn in decades.
“I can’t think of a worse time for this bill to be coming,” said Tennessee Gov. Phil Bredesen (D), a member of the National Governors Association’s health-care task force. “I’d love to see it happen. But nobody’s going to put their state into bankruptcy or their education system in the tank for it.”
Don’t cry too hard for state politicians. They are often just as willing as their federal counterparts to design legislation in such a way that they get the credit for a new program and someone else down the line gets the blame for raising the taxes to pay for it. Still, this is a major vulnerability. Opponents of Obamacare should point it out loudly and often in the coming days. Dan Henninger, Michael Cannon, and the American Legislative Exchange Council offer more background on the issue.