WATCH OUT! THE “BUYER BEWARE FOR 2016” SEASON HAS ALREADY STARTED

…GOP’s Paul Ryan brought “Block Grants” out of the shadows.

Conservatives love “Trickle-Down economics” & “Block Grants”, but neither work in the real world.

OK, as we start moving into the 2016 presidential elections, it’s becoming time for my “Buyer Beware” columns.  Based on all the Republicans that are throwing their hats into the ring for the nation’s top spot, those of you that follow me will be reading these types of articles between now and November 2016.

This particular “beware” item is about a favorite GOP approach for dealing with federal spending called their infamous “Block Grants”.

“Block Grants” are a fancy way of saying “spending caps”.  These became very vogue in the 2012 election when the Republican VP candidate, who had been the House Budget Chairman, came up with a ridiculous budget that had Block Grants on almost every social program.  Rep. Paul Ryan (R-Wis.) had championed this idea in his splashy, but not-workable budget proposal.  Various versions of such spending caps have now found renewed popularity among the GOP’s candidates and conservative leaders.

In this particular case, Republican candidates such as Chris Christie, Rand Paul, Ted Cruz and Scott Walker, to name a few, have all mentioned using some version of spending cuts or caps for dealing with Medicare, Medicaid, Food Stamps, and a host of other financial items that the most vulnerable of American citizens depend on.

What the average voter usually doesn’t understand is that using Block Grants as a way to control spending is like saying to everyone that is on Social Security, Medicare or Medicaid, “You have earned, and we will pay for your support, $XXXX.00 per month.  But if the block grant runs out early because more people signed up than we had expected, your payments will eventually stop and you won’t receive any more payments until January of the next year.”  None of the current Republican candidates has an answer for what to do if this scenario were to be the situation. 

 

At least in Chris Christie’s case, he now wants to phase in a higher age to be eligible for Social Security.  But his answer to some of the other social programs is guess what?  Yep, it’s for more “Block Grants”.

These are the same idiots that are still trying to sell “trickle-down” economics, which has proven over and over since the turn of the previous century to be nothing but a bogus concept.  Now they are trying to cut government spending using unfounded concepts like “Block Grants” for the nation’s social programs.  Setting these types of restrictions may work for a family budget, but you can’t compare using a family budget for running a democratic government.

For years the conservatives have tried to sell the concept of, “If my company and my family have to live on budgets, so can the US government.”  Unfortunately, it’s not as simple as that. 

It must be understood, that both corporations and single family finances are somewhat like a dictatorship and its spending.  What the head of household, or the CEO of the company (or a dictator) says, is the final word.  The financing that is coming into these types of operations is usually a set amount of income.  But a democratic government has the options of increasing income by raising taxes, or borrowing from other nations or a host of other options. 

Budgets for governments are supposed to be flexible and are for the benefit of supporting its citizens and may need to be adjusted to fit the needs of the people.  Spending caps and “Block Grants” will only work in very limited areas within a nation’s government.  And for sure, using these for dealing with those individuals that are on fixed incomes like retirees, welfare recipients, disabled citizens or veterans, spending caps just don’t work.

As an example: Limiting federal funding [i.e. a Block Grant] on Medicaid spending would accomplish only one objective: It would limit federal funding on Medicaid spending. Period!

 

Limiting funding won’t make the growing costs of any program magically disappear. It just moves them onto someone else’s doorstep.  And in this case, that would be on to each of the nation’s states.  And the states are less likely equipped to deal with the management and cost control required, given their much smaller scale.

The state governments would then either have to contribute more of their own funds, (which are probably already limited) or, more than likely, they would need to make deeper cuts to their beneficiaries and the providers that serve them.

It must be noted that Medicaid already spends less per beneficiary: about 27% less for children, and 20% less for adults, than private insurance does on similar patients.  Therefore, further cuts would almost certainly cause the private providers to exit the programs.  This just further reduces access to the needed medical care.

So, to you conservatives, what’s the point? 

Capping federal spending on a gigantic safety-net program like Medicaid, without actually making the necessary changes to reform it is just another form of kicking the can down the road.

But all these conservative candidates will never take the time to explain just how their “Block Grant” programs would actually work in the real world.

As the old saying goes, “If their solution sounds too good to be true…it probably is!”

Don’t let them try to sell you on their bogus spending caps and trickle-down programs. As I had said, it’s again time for Buyer Beware!

Copyright G.Ater  2015