Friday, November 18, 2005

This Is "Major?"

The House of Representatives passed a budget containing some "cuts" yesterday. Get ready for the media and the Democrats to wail and moan about the size of the cuts, and the pain they'll cause.

The bill, passed 217-215 after a 25-minute-long roll call, makes modest but politically painful cuts across an array of programs for the poor, students and farmers.


The broader budget bill would slice almost $50 billion from the deficit by the end of the decade by curbing rapidly growing benefit programs such as Medicaid, food stamps and student loan subsidies. Republicans said reining in such programs whose costs spiral upward each year automatically is the first step to restoring fiscal discipline.

$50 billion by the end of the decade? That's a whole $10 billion in reduction annually, in a currently nearly $14 trillion dollar annual economy, and out of $2.5 trillion in annual government expenditures. "Major?" I think not. Meanwhile, I suspect these are not so much "cuts" as reductions in the rate of growth.

One of the problems with the Medicaid program, in particular, is the eligibility abuse that I see. In Massachusetts there are organizations and networks set up to find ways to sign up people who shouldn't be eligible at all. If they can't get them on regular Medicaid they'll find a way to call them "disabled." Policing that abuse is politically unwise, because it amounts to making someone "uninsured." The only way to limit that type of abuse is to control the amount of money available in the program.

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