To Rescue the States, Let’s Federalize Medicaid

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This morning California released its estimate of how badly the COVID-19 pandemic is going to blow a hole in its budget:

California’s government faces a $54.3-billion budget deficit through next summer according to an analysis released Thursday by advisors to Gov. Gavin Newsom, the deepest projected fiscal hole in state history.

….Newsom’s budget team forecasts a $41.2-billion drop in tax revenues compared to their estimates from just four months ago….Expenses are also projected to skyrocket. The fiscal report released Thursday assumes some $13 billion in higher state costs due to the pandemic.

You can expect to hear 50 different versions of this story before long. The California budget is a little over $200 billion, which means the shortfall is about 25 percent of the total. My guess is that this estimate will rise over time, perhaps ending at about 35 percent or so. Total state and local spending across the country comes to roughly $2 trillion, so if California turns out to be average it means a total shortfall across the nation of about $650 billion.

So that’s roughly our target in the next coronavirus rescue bill: approximately $650 billion in aid to state and local governments. Which makes this a perfect opportunity to do something we should have done long ago: federalize Medicaid. There’s never been a good reason that states should share this cost, which will probably come to at least $250 billion this year and next thanks to a surge in coronavirus spending. And since federalizing Medicaid would be a permanent reduction in state spending, no other bailout would be necessary. It would amount to $750 billion over three years, more than enough to cover this year’s shortfall. A 2-3 year bridge loan is all that would be necessary.

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WHO DOESN’T LOVE A POSITIVE STORY—OR TWO?

“Great journalism really does make a difference in this world: it can even save kids.”

That’s what a civil rights lawyer wrote to Julia Lurie, the day after her major investigation into a psychiatric hospital chain that uses foster children as “cash cows” published, letting her know he was using her findings that same day in a hearing to keep a child out of one of the facilities we investigated.

That’s awesome. As is the fact that Julia, who spent a full year reporting this challenging story, promptly heard from a Senate committee that will use her work in their own investigation of Universal Health Services. There’s no doubt her revelations will continue to have a big impact in the months and years to come.

Like another story about Mother Jones’ real-world impact.

This one, a multiyear investigation, published in 2021, exposed conditions in sugar work camps in the Dominican Republic owned by Central Romana—the conglomerate behind brands like C&H and Domino, whose product ends up in our Hershey bars and other sweets. A year ago, the Biden administration banned sugar imports from Central Romana. And just recently, we learned of a previously undisclosed investigation from the Department of Homeland Security, looking into working conditions at Central Romana. How big of a deal is this?

“This could be the first time a corporation would be held criminally liable for forced labor in their own supply chains,” according to a retired special agent we talked to.

Wow.

And it is only because Mother Jones is funded primarily by donations from readers that we can mount ambitious, yearlong—or more—investigations like these two stories that are making waves.

About that: It’s unfathomably hard in the news business right now, and we came up about $28,000 short during our recent fall fundraising campaign. We simply have to make that up soon to avoid falling further behind than can be made up for, or needing to somehow trim $1 million from our budget, like happened last year.

If you can, please support the reporting you get from Mother Jones—that exists to make a difference, not a profit—with a donation of any amount today. We need more donations than normal to come in from this specific blurb to help close our funding gap before it gets any bigger.

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