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Democrats face a ticking time bomb in the form of increased state taxes if Medicaid coverage is expanded. If either the House or Senate bills are signed into law, states will face what I've called the 'mother of all unfunded mandates':
About 59 million people are on Medicaid today, which means that a decade from now about a quarter of the total population would be on a program originally sold as help for low-income women, children and the disabled. State budgets would explode, by $37 billion, according to the Congressional Budget Office, because they would no longer be allowed to set eligibility in line with their own decisions about taxes and spending. This is the mother, and father and crazy uncle -- of unfunded mandates.
Dick Morris' article tells a more complete story of what's likely to happen:
The House bill requires states to give Medicaid to those whose incomes are less than 150 percent of the poverty level, while the Senate will settle for only 125 percent. For most states, this is a hefty increase.
In some states, like New York, where Medicaid covers everyone making 150 percent of the poverty level already, there will not be any extra required spending.
But not so in California, which only covers 100 percent of the poverty level. Were the House bill to pass, the already fiscally beleaguered state would have to increase its Medicaid spending on poor people by 50 percent, at least an extra $2 billion a year and perhaps more.
In many Southern states, the Medicaid program only covers a portion of those living below the poverty level. For these states, the requirement to cover all those in poverty and then 50 percent more will cause enormous increases in taxes. In Arkansas and Louisiana, where swing-Senators Pryor, Lincoln and Landrieu come from, the cost could exceed $1 billion for each state each year.
This, along with the bills' major tax increases, should be highlighted by every blogger and TEA Party activist who cares about fiscal sanity. People, including governors and state legislators, already hate unfunded mandates. The minute people hear that they'll get this expense dumped in their laps, they'll be furious.
Since Democrats currently control the vast majority of governorships, this process of making their own party members take the rap for raising taxes is politically self-destructive in the extreme. But Obama is so desperate to pass his health care legislation that he doesn't care what havoc in his party he reaps in the process.
The question now is whether the governors of the 50 states, particularly the Democrats, are going to sit idly by and let their budgets be destroyed by the health care bill.
Since self-preservation is a politician's strongest impulse, my bet is that they won't sit idly by if they're essentially asked to sacrifice their political careers for a bill that's getting paltry approval/disapproval ratings:
Just 38% of voters now favor the health care plan proposed by President Obama and congressional Democrats. That's the lowest level of support measured for the plan in nearly two dozen tracking polls conducted since June.
The latest Rasmussen Reports national telephone survey finds that 56% now oppose the plan.
Those numbers will drop the minute John Q. Public finds out more about the states' obligations under Obamacare. That's been the trend with health care legislation from the outset. That trend isn't likely to change now, especially with price tags in the hundreds of millions of dollars for small states and billions of dollars in a state like California.
It's likely, too, that conservatives will highlight the fact that DC Democrats haven't stopped their free-spending ways; they're just passing the buck to states. In this game, Obama, Pelosi and Reid mandate the spending, governors and legislators get stuck playing the villain. I can't imagine governors or state legislators like the sound of that.
The final question left to be answered is whether the Democrats' ticking time bomb goes off before the bill is signed or after. I won't be surprised if it goes before.
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