By: Dick Morris & Eileen McGann
Newsmax.com
11/20/2009
Anxious to avoid raising taxes too much to pay for their healthcare proposals, the Obama administration and its congressional allies hit on a great new idea: Make the states raise their taxes to fund the program instead.
Both the House and the Senate bills require that states cover a larger percentage of their people under Medicaid — a joint state and federally funded program. The idea was to force the states to raise their taxes to cover a big part of the healthcare bill for treating poor people.
Since the Feds simply can charge any increase in spending to their already overdrawn bank account, but the states have to balance their budgets, the increased state spending for Medicaid will cause sharp increases in state taxes.
And the governors will get the blame — not Obama and not Congress.
The House bill requires states to give Medicaid to those whose incomes are less than 150 percent of the poverty level while the Senate requires coverage up to 125 percent. For most states, this is a hefty increase.
In some states, such as New York, where Medicaid covers everyone making 150 percent of the poverty level already, there will not be any extra required spending.
But not so in California, which covers only 100 percent of the poverty level. Were the House bill to pass, the already fiscally beleaguered state would have to increase its Medicaid spending on poor people by 50 percent, at least an extra $2 billion a year — and perhaps more.
In many Southern states, the Medicaid program covers only a portion of those living below the poverty level. For these states, the requirement to cover all those in poverty and then 50 percent more will cause enormous increases in taxes. In Arkansas and Louisiana, where swing Sens. Mark Pryor, Blanche Lincoln, and Mary Landrieu come from, the cost could exceed $1 billion a year.
Unfunded mandates for state spending imposed from on high in Washington always have rankled governors. The senators and congressmen in Washington get the credit for spreading largesse but the governors in the states get the blame for the taxes that are needed to pay for it.
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