The Bait-and-Switch President

Once untouchable, Medicaid is now in Republican crosshairs

Credit: Getty Images

A popular metaphor in American politics warns members of Congress to keep away from long-cherished entitlement programs: Social Security, Medicare, and Medicaid. They’ve been known since the 1980s as the “third rail” of politics — touch them and you’re dead. If you don’t travel by subway or know much about antique trains, the third rail is the one that carries electricity. Steer clear or risk your political life, or so it was thought before Trump and his clan in Congress came to power. Now, despite past promises from Trump, all bets are off.

Trump said time and again on the campaign trail to trust him, entitlements were safe. After he was elected, he promised to “love and cherish” Medicaid. As recently as February 18, he reiterated that pledge to Sean Hannity on Fox “News.” “It’s going to be strengthened but won’t be touched. Medicare, Medicaid, none of that stuff is going to be touched.”

On social media a day later, Trump reversed himself, endorsing the Republican House budget plan that included a directive for the Energy and Commerce Committee to find $880 million in cuts. Most or all of those cuts are likely to come from Medicaid. “The House Resolution implements my FULL America First Agenda,” Trump wrote on Truth Social.

But Trump can’t have it both ways. Enabled by his MAGA brethren in Congress, the new administration is looking for $1.5 trillion in savings over the next decade to fund tax cuts for corporations and the wealthiest Americans. According to the nonpartisan Congressional Budget Office, this cannot be accomplished unless cuts are made to entitlement programs, specifically Medicaid, at least to start.

Medicaid is designed specifically to help Americans most in need — who also have the least political clout. The program provides health insurance to more than 72 million poor and disabled Americans. That’s one in five people. Eighty percent of poor children (and 39% of all American children) get insurance through Medicaid. It also provides coverage for 63% of nursing home residents and 41% of adults with disabilities and pays for 41% of all births.

Under the current system, the federal government and state governments share the cost of coverage, though the federal government shoulders considerably more of the costs than the states. Any federal cuts will mean states will either have to reduce coverage or raise taxes to make up the budget shortfall.

A brief aside: The most economically disadvantaged Americans live disproportionately in red states. Mississippi, Louisiana, Alabama, and Texas have the highest poverty rates in the country. So any cuts to Medicaid will affect these deep red states the most.

Medicaid and Medicare, which provides insurance for seniors, were passed by Congress and signed into law by President Lyndon Johnson in 1965. The combination of a rapidly aging population — in 1900 there were 3 million Americans over 65; by 1963 there were 17.5 million — and an insurance industry unable or unwilling to provide coverage for illness-prone populations made the programs a legislative necessity.

Providing this coverage is not cheap. Together the programs account for almost half of the federal budget. Though remember, a good portion of funding comes directly from American workers in the form of payroll taxes — that’s the FICA deduction on your paystub.

Medicaid may be expensive, but it is also very popular. More than half the population participates in or has a relative who benefits from Medicaid. KFF, a nonpartisan health research firm, found that 75% of Americans believe it is an important program. Only 17% support cutting it, and 82% want it left alone or funding increased.

These numbers are not lost on Democrats, who were able to flip 41 seats in the 2018 midterm elections to take control of Congress. They did it by running on one main issue: Republican efforts to overturn the very popular Affordable Care Act, also known as Obamacare.

Meanwhile, exactly what Trump has in mind for Social Security is unclear. He’s been all over the lot about that program, which is also very popular.

Trump’s entitlement two-step has become the president’s governing norm. He imposes tariffs and the next day issues a 30-day reprieve. He lets Elon Musk fire essential workers, then scrambles to rehire them days later. He promised to bring down egg prices on “Day 1,” then shares an article on social media titled “Shut Up About Egg Prices.”

His flip-flopping economic policies — the word “policies” might be an overreach — have made the markets quake and tumble. Less than two months into Trump’s term, he declined to rule out a recession in an interview on Sunday. “I hate to predict things like that,” he said.

That news sent all three stock market indexes into a nosedive for the second week in a row. The Dow lost 890 points on Monday. Presumably, he had done the interview to ease fears. It didn’t work. When asked about the dropping Dow, Trump said, “You can’t really watch the stock market.” You can’t, or you don’t want to?

And then he went off on a tangent applauding the economic policy of a communist dictatorship. “If you look at China, they have a hundred-year perspective. We have a quarter. We go by quarters. And you can’t go by that. You have to do what’s right. What we’re doing is, we’re building a tremendous foundation for the future.”

In the meantime, many Americans are hurting. They can’t afford the rising price of groceries. Millions could lose health insurance. Social Security may be next. Trump’s reaction? “There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America.” Really? America is the richest nation in the world. How much more money do the already-wealthy need? And is lowering taxes for the rich at the expense of the poor and disadvantaged really good for the country — short- and long-term?

To support my team’s efforts to protect our democracy through the power of independent journalism, please consider joining as a paid subscriber. It keeps Steady sustainable and accessible for all. Thank you.

No matter how you subscribe, I thank you for reading.

Stay Steady,
Dan