The federal budgeting process has been off the rails for many years. That is one reason why our country is now $36 trillion in debt, and counting. The federal budget should be enacted piecemeal, with separate votes on its various components. Instead, the custom now is to wrap everything together in a single, “must pass” bill that allows for amendment only around the edges. If anyone thought the Trump administration would plot a significantly better course, the “big beautiful bill” dashes those hopes, at least for now.
That said, it is certainly a good thing that the bill narrowly passed the House this morning. It extends the first term Trump tax cuts; absent that action, there would have been a horrific tax increase that would have devastated the economy and millions of families. (That is the main reason why the Democrats were so anxious to defeat the bill.) This is the New York Times’s top-line summary of the legislation, with my comments:
The legislation would slash taxes, providing the biggest savings to the wealthy…
Because the “wealthy” pay the large majority of taxes.
…and steer more money to the military and immigration enforcement…
Excellent. These are the federal government’s core functions.
…while cutting health, nutrition, education and clean energy programs to cover part of the cost.
Fantastic. Those programs should have been cut more, and all “green” energy programs should be discontinued.
To win votes for passage, Republican leaders accelerated the implementation of work requirements in the Medicaid program and the repeal of clean energy tax credits under the Inflation Reduction Act, among other changes.
That’s great, but it only scratches the surface of what needs to be done with regard to both Medicaid and Medicare. Many conservatives are unhappy because the bill, however beautiful in other respects, does not address the grotesque federal deficit. That is inevitable, since it does nothing about Medicare and nowhere near enough about Medicaid, which together amount to $1.7 trillion annually in federal spending.
The cost of those programs is rising at around 8% annually, which is unsustainable. Both programs are riddled with fraud. I don’t think anyone knows how much they legitimately would cost if the fraud were rooted out; I have seen Medicare fraud estimated at more than $100 billion annually, and Medicaid is probably worse.
But fraud isn’t the most fundamental problem. The real issue is that the entire concept of an “entitlement” is misbegotten. It simply isn’t sustainable to offer more or less unlimited amounts of money to anyone who meets specified criteria. The consequences are obvious: many millions will line up for the money, and companies will focus their development of products and services on things that will be funded, more or less infinitely, by the federal government.
In my opinion, the only way to get the federal budget under control, and thus salvage America’s long-term future, is to repeal Medicare and Medicaid as they currently exist. My first choice would be for the federal government to get out of the health care business entirely. But, failing that, Congress should appropriate an amount of money–much less than is now being spent–for each of those programs, and divide the money among the states. It would then be up to the states to decide how they want to administer the programs–who should be eligible, what the benefits should be, and how much of their own money they want to contribute. This fundamental change would bring about fiscal responsibility, since the states can’t print money. They have to balance their budgets. Thus, the current distortion of government spending in the direction of health care could be corrected.
At the moment, of course, there is zero appetite in Washington for doing anything of the sort. Donald Trump, who has never been a budget hawk, told House Republicans, “Don’t f*** around with Medicaid.” Let alone Medicare! Most Republicans are terrified of the attacks that would come from the Left if they cut Medicaid significantly. And no one is talking about doing anything about Medicare.
As long as that situation obtains, there is no hope of serious change, and the best we can do is to try to cut down on the massive fraud that afflicts federal health care programs. Even that, which the Trump administration is willing to do, draws howls of outrage from the Democrats.
So, is the big bill beautiful? No. But it is as good as can be expected under the circumstances, and it avoids a catastrophic tax increase. More drama awaits in the Senate, on which we will report.
