The new budget battles

The new budget battles

For most of the past decade, the annual budget debate in Baton Rouge had a familiar ring: The state faced massive shortfalls, which meant the biggest decisions concerned which items to cut and whether to raise revenue or raid dedicated funds. This year, Louisiana has up to $300 million in additional revenue to spend, which means programs are being spared from cuts. But as The AP’s Melinda Deslatte reports, there still isn’t enough money to fill every need, and new battles are emerging over which education programs should be funded.

Early childhood education advocates are asking for $86 million annually to help children from birth to 3 years old with early learning assistance. K-12 public school leaders and teacher unions want money for pay raises, with proposals starting at around $100 million a year and growing from there. Higher education officials requested a $172 million increase for public colleges for items such as need-based student aid and faculty pay raises. Even under the most optimistic of budget expectations, with as much as $300 million in new general state tax revenue projected to be available next year, there’s not enough money to cover all the wants across state government.

 

On Medicare for All
As Democratic presidential candidates promise to build on the progress of the Affordable Care Act, a coalition of health insurers, pharmaceutical companies and other health care providers is gearing up to fight against “Medicare for All” proposals. The Advocate’s Mark Ballard writes that he recently learned from personal experience that the popular government program is at least as good as the employer-sponsored private health insurance his family has long used:

In the interest of full disclosure, I underwent a Road to Damascus moment about “Medicare for All” on New Year’s Day when my wife was forced onto the government program. Like about three-quarters of the 155 million Americans with employer-sponsored coverage, my family joined those who polled “generally well satisfied” with our “insurance partner.” When my wife contracted ALS, however, most of our health care conversations turned to what she needed to survive and what wasn’t covered by her employer-supported policy. To my surprise, Medicare, along with a supplemental private policy, covers pretty much everything at a premium cost that is about the same as the employer-supplemented policy.

 

The trade deficit is exploding
One of Donald Trump’s core campaign promises was that he would reduce America’s manufacturing trade deficit by imposing tariffs on foreign goods entering the country. Data released this morning shows that strategy to be a failure. The merchandise trade deficit hit a record $891.2 billion in 2018, the largest in American history, with nearly half of that amount represented by America’s deficit with China. As The Washington Post’s David J. Lynch reports, the reason has less to do with tariffs than with a strong American dollar that makes imports cheaper and U.S. goods more expensive.

Economists say the trade deficit is swelling because of broad economic forces, including a chronic shortfall in national savings that was exacerbated by last year’s $1.5 trillion corporate and personal income tax cut. As cash-flush businesses and consumers increased their spending, purchases of imported goods rose while the overvalued dollar weighed on exports. “Macroeconomics end up ruling. You can’t wish it away. You can’t tariff it away,” said William Reinsch, a former Commerce Department official now at the Center for Strategic and International Studies.

 As for Trump’s tariffs, multiple studies have shown that they are not pouring money into the U.S. treasury, as the president claims, but rather act as a tax on American consumers. The hardest-hit are people in Republican-leaning areas of the country.

That study also found that workers in Republican-leaning counties, especially in farm states, suffered the greatest losses from tariffs that U.S. trading partners imposed in retaliation for the president’s actions. … The study also found sizable costs relative to any expected benefits. If the tariffs led to the creation of 35,000 new manufacturing jobs — equal to all the steel and aluminum jobs lost in the past decade — they would cost $195,000 per job, the study found.

 

The fight against fraud
Louisiana’s Medicaid program has grown considerably in recent years, and that’s mostly a good thing. Using an influx of federal funds, the state has added 502,000 low-income adults to its health care rolls – meaning they are no longer dependent on the charity hospital system when they get sick or injured. Critics of Medicaid expansion have described the program as a magnet for fraud and abuse. Louisiana Health Secretary Rebekah Gee responds in a letter to The Advocate, pointing out that the state’s new computer system for managing Medicaid cases gives the state a more accurate tool for identifying people who qualified for Medicaid when they enrolled, but who have since begun earning more than the program allows.

Fighting fraud, waste and abuse in the program has to go hand in hand to ensure that our tax dollars that fund Medicaid only go to those in need. That’s where Louisiana’s new Medicaid eligibility system plays a vital role. In fact, Louisiana’s new system checks wage data more frequently to ensure that Medicaid coverage goes only to those who qualify. We are no longer relying upon the outdated system used by previous administrations, but now have a better, more efficient, powerful tool for processing applications and eliminating waste, fraud and abuse. … Recently, Louisiana Medicaid sent 37,000 notices to recipients who, in our first wage data check, appear to make too much money to qualify for Medicaid. It is important that they respond to our letters with further information as they will need to prove that they are eligible for Medicaid or their coverage will end March 31. Those who are not eligible because they make too much to qualify can sign up for coverage on healthcare.gov or through their employer.

 

Number of the Day
$891.2 billionU.S. trade deficit in manufactured goods in 2018 – a record. (Source: Commerce Department via The Washington Post)