The fiscal debate in Washington will soon focus more squarely on key safety net programs for the poor, such as Medicaid and SNAP (formerly called food stamps). Here’s why:
The debate of recent months has become a game of whack-a-mole. Private-sector budget hawks try to focus attention on the big steps needed to reduce the deficit, adhering to what’s known as the “Willie Sutton rule” – to do what Sutton said he did in robbing banks, which is to “go where the money is.” So, they push policymakers to raise taxes or reform fast-growing entitlements like Social Security and Medicare.
One by one, in whack-a-mole fashion, lawmakers reject these steps for ideological or political reasons. Republicans oppose tax hikes, both parties have steered clear of Social Security, and the Democrat’s win in this week’s House election in New York now makes significant Medicare cuts a non-starter for the foreseeable future.
What’s left?
Many deficit hawks suggest deep defense cuts, but lawmakers are split over the idea at a time when U.S. troops are stretched thin and Defense Secretary Robert Gates warns about the implications for U.S. national security.
Domestic discretionary spending will continue to face cuts, but this category is dominated by popular things like education, environmental protection, the FBI and other law enforcement, cancer and other research, food safety, and homeland security. Lawmakers will reach their political limits on how deeply to cut.
Safety net programs, however, are different. The poor who benefit from them have far less clout in Washington than the tens of millions of middle- and upper-income Americans who benefit from Social Security, Medicare, and the popular domestic discretionary programs listed above.
That brings us first to Medicaid, a federal-state program that provides health insurance for the poor.
Governors of both parties want more flexibility to cut their Medicaid programs, which are straining their cash-strapped state budgets. The many members of Congress who support state-level flexibility and are interested in controlling health care costs will now turn their attention from Medicare to Medicaid.
Next, they’ll move to the other safety net programs.
For an early indication of where the debate is headed, consider what happened in the Senate yesterday. When lawmakers debated a variety of budget plans, the one that received the most votes, 42, came from Senator Pat Toomey.
Toomey’s budget did not include the controversial provision of the House-passed budget to turn Medicare into a voucher program, which probably gave this week’s special election to the Democrat. Instead, it proposed even deeper cuts than the House budget in Medicaid and in funds for other low-income entitlements (e.g., SNAP for hungry families, Supplemental Security Income for poor senior citizens, and unemployment insurance for jobless Americans).
That’s a sign of things to come.
Lawrence J. Haas is former Communications Director to Vice President Gore and, before that, to the White House Office of Management and Budget. He's now a public affairs consultant who writes widely about foreign and domestic affairs, including fiscal policy.
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