So the leaders of a bunch of civic, policy and religious organizations -- you know, the ones no one in the White House pays attention to because they're a bunch of do-gooder whiners and they'll have to vote for Democrats, anyway -- are asking
June 28, 2011

So the leaders of a bunch of civic, policy and religious organizations -- you know, the ones no one in the White House pays attention to because they're a bunch of do-gooder whiners and they'll have to vote for Democrats, anyway -- are asking the administration and Congressional leaders to please stop hurting poor people with their budget cuts:

Washington, D.C. –– At a critical juncture in the deficit reduction talks, the leaders of prominent national religious, civil rights, charitable, economic research, and low-income advocacy organizations are calling on Executive and Congressional leadership to honor the precedent set by previous deficit reduction negotiations that have reduced the deficit without increasing poverty.

In a letter to policymakers involved in deficit reduction talks, these groups noted the precedent of bipartisan budgets that reduce both poverty and the deficit, stating:

"...all deficit reduction packages enacted in the 1990s reduced poverty and helped the disadvantaged even as they shrank deficits. In addition, every automatic budget cut mechanism of the past quarter-century has exempted core low-income assistance programs from any automatic across-the-board cuts triggered when budget targets or fiscal restraint rules were missed or violated. The 1985 and 1987 Gramm-Rudman-Hollings laws, the 1990 Budget Enforcement Act, the 1993 deficit reduction package, the 1997 Balanced Budget Act, and the 2010 pay-as-you-go law all exempted core low-income programs from automatic cuts."

Now where did they get that idea? From the Center on Budget and Policy Priorities, a look at the administration's proposal to cut Medicaid funding in order to appease the imaginary deficit gods:

An Obama Administration proposal that’s on the table for budget negotiators would reduce federal Medicaid expenditures by reducing the federal share of Medicaid and CHIP costs, shifting costs to states and likely prompting states to cut payments to health care providers and to scale back the health services that Medicaid covers for low-income children, parents, people with disabilities, and/or senior citizens (including those in nursing homes).

Reductions in provider payments would likely exacerbate the problem that Medicaid beneficiaries already face regarding access to physician care, particularly from specialists.

The proposal would replace the various matching rates at which the federal government reimburses states for their costs in insuring people through Medicaid and CHIP with a single “blended rate” for each state. A state’s blended rate would be set at a level that provided the state with less federal funding than under current law, thereby saving the federal government money.

The blended-rate concept has two significant weaknesses.

First, it would essentially shift costs to states, rather than constrain them. The proposal produces little administrative-cost or other efficiency savings, as explained below. States, which face their own budget problems, likely would compensate for the reduction in federal funding by scaling back the services that Medicaid and CHIP (the Children’s Health Insurance Program) cover, cutting payment rates to health care providers, or both. Some Medicaid beneficiaries already have limited access to physician care, particularly from specialists, due largely to Medicaid’s already-low reimbursement rates. The shift in costs to states under the blended-rate proposal would make that problem worse.

In English, the administration is proposing spending changes that, while not bad in themselves, make it very likely that states will slash their Medicaid programs, probably by making it almost impossible to qualify and, if you do qualify, you'll be covered for very little. While the White House may not be doing it directly, their decisions will make those state cuts inevitable.

Now, as I said when I interviewed former White House economist Jared Bernstein at Netroots Nation, if the White House economic policies are aimed at controlling the growth of health care costs, how will cutting Medicaid (the backbone of the Affordable Care Act) accomplish that? This is a colossal mess.

Not to mention, of course, all the people who will continue to die from inadequate care and whose families will make the not unreasonable conclusion that the acclaimed healthcare coverage legislation is now "business as usual" under a different name.

Them that's got shall get, them that's not shall lose...

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