Kick the Can

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This… definitely falls into the category of arcane-yet-important budget stuff, but Health Affairs has a new study out on the ways in which various states dealt with their fiscal crises during Bush’s first term. The short answer: not very well. Most state legislatures, not surprisingly, were reluctant to treat the shortfalls as long-term crises, so they refrained from raising taxes or taking other difficult and politically unpopular measures to shore up their deficits. Rather, they just kicked the can down the road, either by borrowing money from other funds—New York’s legislature drew out money from its welfare fund; California from the transportation kitty—or by making “one-time” cuts in state health programs, such as Medicaid and S-CHiP, by, for instance, making it more difficult for residents to qualify, or by raising co-payments.

The problem with all this is that these moves weren’t just “one-time” cuts necessary to weather the fiscal crises: Since 2004, tax revenues have finally been increasing again, but most states still haven’t solved their long-term budget problems, and can’t use the additional funds to expand Medicaid again. As the study puts it: “the damage that the recent recession did to Medicaid may take years to repair.” That means less health care for everyone, despite the fact that we’re in the middle of an economic boom, supposedly. The lesson here, it seems, is that the Bush administration’s first-term reluctance to send federal relief down to the states during the recession—a measure many economists had advocated, and the federal government didn’t get around to doing until 2003—has created problems that persist to this day. Even more crucially, though, someone needs to point out that state legislatures can’t get away with pretending to take “one-time emergency actions” to deal with budget crunches.

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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily crazy—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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