How Not to Balance the Federal Budget

President Obama and Vice President Biden continue to meet with top congressional leaders including Republicans John Boehner and Eric Cantor and Democrats Harry Reid and Nancy Pelosi to hammer out a framework for deficit reduction that could very well include deep cuts to entitlement programs. So far, there’s no deal.

At the president’s first ever Twitter town-hall meeting last week, he said “everything is on the table,” including Medicaid, in order to address the nation’s trillion-plus deficit.

Obama’s plan proposes a cut of $100 billion to Medicaid while House Republicans led by Rep. Paul Ryan want to turn Medicaid into a federal block grant program that experts say would eventually shift more costs to states and patients.

Although congressional Democrats remain opposed to any plan to convert Medicaid into a block grant program, that doesn't necessarily mean they would vote against cuts to the program as part of a broader deficit-reduction package.

Pennsylvania’s Medicaid program insures more than 2.2 million individuals, with 1.1 million of those being children. While approximately one-half of enrollees are children, they account for less than one-fifth of Pennsylvania’s total expenditures for Medicaid. By far the majority of spending (more than two-thirds) is used for services required by individuals who are elderly or disabled, including many individuals in nursing facilities. 

With the debate raging on the soaring cost of Medicaid to the states and federal government, a new study published last week by the National Bureau of Economic Research shows how health insurance for low-income people can make a dramatic difference in their lives. For example, people on Medicaid were more likely to see a doctor, use prescription drugs and get their cholesterol checked. Women were more likely to get mammograms.

It’s an important study in that it confirms that insured people – including children – are likelier to see a doctor and stay healthier than uninsured people. And of course, uncompensated care costs our communities far more than what it costs to insure someone in the first place.

While’s there no argument that we must get our nation’s fiscal house in order, we must not strip away protections that are proven to keep children and families healthier and save us money in the long run.

Pennsylvania Partnerships for Children supports a balanced approach to deficit reduction – this means we believe increased revenues must be part of any deficit reduction package and any long-term budget enforcement mechanism. Furthermore, in order to protect low-income Americans and children, we oppose any spending caps on entitlement programs, including Medicaid.

It’s imperative, for the health and welfare of our most vulnerable citizens, that key entitlement programs that protect low-income Americans be exempt from deficit reduction.

Joan L. Benso is president and CEO, PA Partnerships for Children