Two Ways of Curbing Spending

As the Hill reports today, Republicans in Congress are getting ready to reduce the deficit by making “tough choices” and hacking at programs for the politically powerless. (This despite the fact that discretionary spending cuts won’t make a dent in the deficit; repealing the Bush tax cuts is, needless to say, off the table.) On the other hand, as Sam Rosenfeld notes, the outcry over Katrina may shame them into restraint; already the Senate has dropped a plan to slash food stamps—which would, again, shave off a mere $500 million from an annual deficit that’s exceeding $400 billion. It’s like trimming a few blades of grass near the porch by hand when the yard is overrun by weeds, but no one seems to mind.

In all likelihood, the bulk of the cuts will come from Medicaid; a terrible idea considering that the health care program for the poor has been taking care of the ever-growing number of Americans losing their health insurance and sinking into poverty. The GOP is envisioning some $35 billion in cuts over the next five years, but the rather disgusting irony here, as a new study from the Center on Budget and Policy Priorities shows, is that it’s very, very easy to achieve these savings from the government health care programs merely by trimming some of the excess payments made to the managed care companies that run Medicare. Most of this excess is the famous “waste” we hear so much about. Of course, since PPOs and HMOs have their own set of lobbyists, and tend to make large campaign contributions, while Medicaid recipients have… desultory popular outrage… on their side, the choice here isn’t going to come as much of a surprise.