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Federalism's Ugliest Fiscal Duckling (Medicaid) in the Vice-grip of Congressional Gridlock

Writer: Tom CochranTom Cochran

The flickering candle of bipartisanship - as exemplified by the House of Representatives-based Problem Solvers Caucus and the Regional Recovery Task Force and various ad hoc "gangs" in the Senate with their development of common ground state/local fiscal relief alternatives like the SMART Act - is guttering out as Christmas approaches with the new year's halt to many CARES act safety net programs coming a week later. And the vicious cycle of hyper-partisanship driving shortsighted fiscal policy posturing is deepening the darkness of what already promises to be a very bleak winter and spring.

As a piece by Reporter Bill Lucia in the (new to me) on-line federalism news platform Route Fifty, makes clear, Medicaid program cuts by states appear to be an inevitable result of the grid-lock over federal pandemic-related assistance to states and localities. Reporter Stephanie Armour writing in the Wall Street Journal covered similar ground on November 27 as she highlighted the pandemic economy-driven surge in program enrollment.


The perverse and tragic ironies of this movement by state toward cutting Medicaid programs in order to cover shortfalls in state tax and fee revenues DURING A 100-YEAR PANDEMIC WHICH IS DISPROPORTIONATLEY SICKENING AND KILLING THE POOR AND RACIAL ETHNIC MINORITIES (!), should not be lost on anyone: Black and Hispanic and Native American people are about 2.8 times as likely to die of Covid-19 than the general population.


That reductions in state Medicaid expenditures trigger automatic and reductions in federal Medicaid expenditures to those states (due to the federal/state match-funding financing structure of this ugliest duckling of fiscal federalism), thus multiplying the negative impact on the most vulnerable of their citizens is well-illustrated by a report from the Commonwealth Fund focused on state Medicaid programs for pregnant women and children: if a state cuts $1 of spending on the program, the total federal and state funding loss for Medicaid in fiscal 2021is $2.28 to $6.23 depending on the state, with the poorer per-capita income states and their Medicaid program beneficiaries taking the biggest negative impacts.


Is this the time to remind our Congressional and state legislative so-called "leaders" that 1 in 6 American children are living in poverty in the wealthiest nation in the world and that that poverty is concentrated most heavily in the states that have the lowest per capita incomes and doing themselves the most fiscal harm by cutting Medicaid expenditures? It has never been more clear that breaking vicious cycles in our political economy like these really can save lives.





 
 
 

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