WHEN THE congressional authorizing committees have marked up legislation to conform with the budget resolutions voted on last month, the Budget committees in each house will package the various bills into an omnibus reconciliation measure for a floor vote. Current planning in the Senate calls for the floor action over with as quickly as possible so that members can turn their attention to the more congenial task of voting tax cuts for their constituents. Debate on the unprecedented budget-cutting package will be limited to 20 hours, and procedures are being devised to make sure that no floor amendments result in deviations from the budget totals agreed to last month.
Under these conditions it will be next to impossible to modify the handiwork of the various committees without broad agreement among the Senate leadership.This extraordinary measure of discipline is probably what it takes to accomplish the significant revisions in the nation's social programs implied by the budget resolutions. But there will be some changes buried within the massive packages that deserve a more general airing than has been possible in the rush of the reconciliation process. One of these is the decision of the Finance Committee, which completed its budget work more than a month ago, reducing federal sharing in costs of the Medicaid program.
Unable to accept the administration's proposed cap on federal Medicaid matching -- a provision with serious effect on the great majority of states -- the Finance Committee voted for a less stringent limit. To make up the lost savings, it decided to reduce the minimum rate of federal sharing from the present 50 percent to 40 percent, a proposal that would restrict about $680 million in losses to 12 states and the District of Columbia. The great bulk of the loss would be sustained by the District of Columbia and seven states -- only one of which is represented on the Finance Committee. This is a plan that, in normal times, would never see the light of day.
This unfair result arises from the peculiarities of the Medicaid cost-sharing formula. The formula's origins are buried in the ancient history of federal welfare formulas, but its net effect is grossly to exaggerate the importance of small differences in per capita income (itself an unreliable measure of medical need), and by so doing greatly benefit states with large rural populations. No student of Senate history will need to question how this came about, but the simple fact is that the formula is anachronistic and unfair and ought to be modified. Until now this unfairness has been blunted by the rule that no state receive less than a 50 percent share in its Medicaid costs, a limit that the Finance Committee would now reduce to 40 percent and thereby unload a mammoth loss on a handful of states, many of whom are already in dire fiscal straits.
The administration's proposed cap on Medicaid is, in itself, heavy-handed and inefficient way to try to control the program's costs -- one that is far more likely to hurt poor people than to curb the soaring costs of hospitals and nursing homes. But if the terms of the budget process are such that no better alternative is available, the Senate should vote to retain the present Medicaid formula and accept the administrative's cap so that losses are spread more fairly among all the states.