Amid all the national bickering over “Merry Christmas” or “Happy Holidays,” it’s clear that Scrooge is the favorite holiday figure for members of Congress.
Proposed congressional cuts in poverty programs could cut off more than 220,000 people from food stamps, impose new co- payments on Medicaid recipients, squeeze school lunch programs and reduce federal aid for child-support collections.
The proposed spending cuts would save $35 billion over five years under the Senate’s plan or $49 billion under a House plan. A conference committee will settle the issue.
(Meanwhile, of course, the House is proposing to continue tax cuts that primarily benefit the well-to-do, exacerbating the federal deficit even with spending cuts.)
No season is a good one, but winter obviously is a bad time to reduce basic services to poor people. Kathy White, project coordinator for Colorado Fiscal Policy Institute, says this is the time of year when people are struggling to pay heating bills and make ends meet. The cuts in food stamps could force some of the 200,000 households in Colorado now eligible for food assistance to rely on food pantries, which are struggling to keep basic necessities on their shelves.
There’s no question that the cost of Medicaid and other programs is soaring and that costs need to be examined. In Colorado, Medicaid is the second biggest budget item behind education, accounting for nearly a quarter of state spending, $3 billion in combined state and federal money.
But the proposed federal cuts are small potatoes and would reduce Medicaid spending growth by just 0.3 percent. And, shifting the financial burden to states is not the answer until they have developed their own plans to deal with the growing costs.
Some states are trying to take the initiative to transform Medicaid into a more market-based system in which private insurance companies would compete, hopefully lowering costs. Such a major change would need close study, although some observers suggest it’s the wave of the future.
Colorado lawmakers studied such an approach this summer but rejected it because it would have forced the state to agree to accept fewer federal Medicaid dollars. State lawmakers decided to try to lower costs through other methods, and the issue will be on the agenda for the 2006 legislative session.
The important and heartening development is that states are starting to look for Medicaid solutions, even as Congress can think of nothing more creative than cuts.
Florida and South Carolina are two of a handful of states starting to experiment with a comprehensive plan to lower Medicaid costs using the market-based approach. The plan has yet to be tested. But Colorado and other states are watching it closely. If it’s successful, it could provide a model for the rest of the nation.
