Sep

The Baucus Budget Buster

How is your state’s budget? Most likely, there’s a big deficit. Since states don’t have the ability to print money the way the federal government does, that means we’re all facing cuts in services, tax increases, or both. What are the states going to do if the health plan proposed by Senator Max Baucus becomes law? The Wall Street Journal crunched the numbers and what they’ve found is that Max’s Mad Mandate will bust the budgets of all 50 states.

The more we inspect Max Baucus’s health-care bill, the worse it looks. Today’s howler: One reason it allegedly “pays for itself” over 10 years is because it would break all 50 state budgets by permanently expanding Medicaid, the joint state-federal program for the poor.

Democrats want to use Medicaid to cover everyone up to at least 133% of the federal poverty level, or about $30,000 for a family of four. Starting in 2014, Mr. Baucus plans to spend $287 billion through 2019—or about one-third of ObamaCare’s total spending—to add some 11 million new people to the Medicaid rolls.

About 59 million people are on Medicaid today—which means that a decade from now about a quarter of the total population would be on a program originally sold as help for low-income women, children and the disabled. State budgets would explode—by $37 billion, according to the Congressional Budget Office—because they would no longer be allowed to set eligibility in line with their own decisions about taxes and spending. This is the mother—and father and crazy uncle—of unfunded mandates.

This burden would arrive on the heels of an unprecedented state fiscal crisis. As of this month, some 48 states had shortfalls in their 2010 budgets totaling $168 billion—or 24% of total state budgets. The left-wing Center for Budget and Policy Priorities expects total state deficits in 2011 to rise to $180 billion. And this is counting the $87 billion Medicaid bailout in this year’s stimulus bill.

While falling revenues are in part to blame, Medicaid is a main culprit, even before caseloads began to surge as joblessness rose. The National Association of State Budget Officers notes that Medicaid spending is on average the second largest component in state budgets at 20.7%—exceeded only slightly by K-12 education (20.9%) and blowing out state universities (10.3%), transportation (8.1%) and prisons (3.4%).

The mandate doesn’t just hit state budgets. New York State passes a portion of the Medicaid mandate down to the counties. Here in Onondaga County we’re looking at a proposed 2.9% property tax increase, even though we pay some of the highest property taxes in the nation. If you think a 2.9% property tax hike is bad, wait until the number on Medicaid swells to unprecedented levels.

The only thing to keep states and counties from bearing the burden will be the federal government cranking up the printing press – again. But all that will do is prolong the agony and saddle our children with even more debt. It’s a vicious circle. The irony is that by pushing more Americans onto the Medicaid rolls, more physicians will stop treating Medicaid patients, leaving more Americans without health care.

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