Budget Accord?

The House Monday approved the conference agreement on a budget bill that carried out many of this Congress's threats to pull the safety net away from lower-income people in anticipation of tax cuts to come early next year favoring the rich.  See Robert Pear's New York Times story on Budget Accord.

Several of the Senate provisions for imposing tighter regulatory control on payments to pharmaceutical companies and health insurers were eliminated. In fact, new shields for the pharmaceutical industry have been inserted in the military bill, protecting them from even reckless conduct if they are producing vaccines in response to a delared pandemic.

Here are just a few items included in the House-approved budget agreement that purports to reduce the deficit by $39.7 billion over five years (without regard, of course, to the additional tax cuts that Bush and Republican leaders have said they intend to pass early next year).

• Student Loans.  Instead of moving federal money away from subsidies for lenders to real aid for needy students, the budget takes some of current funding out of the student aid program entirely. 
• Child Support Enforcement.  The cutback in enforcement funding was reduced, but still retained in the negotiated provisions.  As noted in prior postings, this is an instance of the federal government cutting its nose to spite its face--child support enforcement spending raises revenue well in excess of costs.  One assumes that the gimmick here is that the budget processes don't appropriately take account of the revenues raised in determining whether the cut in enforcement spending reduces or increases the deficit.  (That, of course, is similar to the reasons for the establishment of the lender-friendly guaranteed loan programs in place of student-friendly direct loans--the expense of the direct loans was dramatically overstated, because payments under the loans were disregarded!)
• Medicaid.  The most onerous provisions here allow states to charge premiums and higher co-payments for medicaid and to cut benefits provided to the poor and elderly.  Recipients of Medicaid can now be required to spend as much as 5% of their family's income on co-payments for medical care for the family.  Higher co-payments are intentionally designed to permit states to discourage emergency room and prescription drug use--i.e., to reduce health care for the poor.  Furthermore, persons who fail to make the increased premium payments can be taken off Medicaid coverage entirely; if they fail to make co-payments, then pharmacists can refuse to fill prescriptions or hospitals can deny services.

The states' governors have argued for this "flexibility" because of a need to cut costs. Representative Joe Barton (Republican of Texas and architect of the Medicaid provisions) claims that these provisions are needed to "encourage personal responsibility" among the poor!  Id.

The harsh truth is that this budget legislation makes a choice to add to the storehouses of the rich in place of providing universal health care for all Americans.  This provision is harshly uncomprehending of the state of many medicaid recipients living on a fixed income.  Increased payments for medical benefits, whether in the form of higher premiums or higher co-payments for services rendered, come at a cost of other basic human needs.

As an aside, consider the Wall Street Journal's Dec. 20, 2005 editorial "Sunshine for Medicaid"  in support of state programs (developed under Medicaid waivers) that purport to use insurers to cut health care costs.  One suspects that what will be cut is health care benefits for the needy.  This looks ominously like a Medicaid equivalent of the guaranteed student loan program--take a functioning government program, insert profit-making financial institutions as middlemen, and ultimately reduce the amount of funding actually going to the intended beneficiaries by letting the financial institutions keep a cut of the taxpayer dollars currently being spent directly on beneficiaries.  The Journal praises the idea as getting rid of the "long-term insurance substitute for the parents of middle-class baby boomers.  Something has to change, or taxes are going to keep rising [sic] everywhere."

• Welfare.  If a state cannot ensure that half of their welfare recipients are engaged in work or searching for work, federal funding can be halted. 

Imagine a state that has worked efficiently and earnestly to ensure that all people are moved off the welfare roles if they are able to work and if there is appropriate work available (and the necessary child care to make sense for work to be required of working parents).  But in that hypothetical state, as in any state, there will undoubtedly remain a core group of welfare recipients who are unable to hold down any kind of real job, whether because of mental or physical handicaps or otherwise.  What happens when the state so effectively reduces its welfare recipients that more than half are members of this core group?

All in all, this budget bill is as expected. Promoters of these provisions in Congress said that their goal  was to limit entitlement spending. It is a chilling example of the current Congressional majority's lack of compassion for the increasing proportion of American families that live below the poverty line and for the working poor who struggle to take care of themselves and their families on inadequate salaries at service jobs in industries like Wal-Mart that provide little or no benefits to most of their workforce.