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Bankrupting America: Spending Daily Update
“Thorny Questions” on Medicaid Expansion
The Washington Post reports that the Supreme Court’s ruling that states can opt out of Medicaid expansion “has raised some thorny questions about the practical and financial ramifications.” So what if some states do decide not to participate in the expansion? According to the article, the federal government could save money because “poor people who would otherwise have been newly eligible for coverage would no longer get it. But there’s a twist. … This subset of people might cost the government more than if they had gotten Medicaid, because the program is considered more efficient than private insurance. So, what would be the net effect on federal spending? It depends on which is larger: the savings on people with incomes below poverty — who wouldn’t get Medicaid or any other federal help with insurance — or the extra cost of providing subsidies for those with incomes at or above poverty. For now, no one has hard numbers.”
Senate Republicans Mull Working Group To Avoid Spending Cuts
The Hill reports, “Senate Republicans are floating the idea of establishing House-Senate working groups as a way to forge a compromise plan to avoid massive defense budget cuts in the coming year. … A group of 15 to 30 senators has been drafting sequestration alternatives behind closed doors for the past month, but those talks have largely remained on the Democrat-controlled Senate side. Bringing in House members via the working groups could hasten those informal Senate talks into a tangible, bipartisan solution that can be brought to the White House. But one top House Republican argues that lawmakers in the lower chamber have already come up with a solution, and all Senate Democrats have to do is call it up for a vote.”
WSJ Predicts More Bad News on the Economy
The Wall Street Journal is predicting more bad news on the economy. According to the article, Consumers Unlikely to Rekindle the Recovery, the WSJ reports, “Beneath the weak May and June numbers lies a deeper problem: The consumer recovery was never as robust as it first appeared. In May, the Commerce Department revised down its estimate of first-quarter spending growth to 2.7% from 2.9%. Last week, the figure was revised down yet again, to 2.5%. … What’s worse, the first quarter’s lackluster spending growth came despite a historically warm winter that likely gave at least a modest boost to restaurants and retailers. That boost has since reversed. … Economists had hoped that newly confident shoppers could offset weakness elsewhere in the economy; instead, the same factors slowing the rest of the economy—chief among them the turmoil in Europe and the resulting caution among businesses at home—ended up dragging down consumers, too.”
Is This What Congress Looks Like When It Works?
After Congress on Friday came together before recess to support the Highway Bill, The Washington Post writes, “This is what the most detested, divided, gridlocked Congress in recent memory looks like when it works. At one point in the past two weeks, lawmakers fought over the definition of a catfish. They fought over the question of when life begins. They fought about health-care legislation that passed two years ago and an immigration bill that failed 17 months ago. One day, Democrats staged a walkout of the House chamber. On another, a Republican held a committee hearing to study his committee hearings. And then — on the last afternoon of the last workday — they managed to complete the work that had been hanging in the balance the whole time. … That was accomplished with the last-minute appearance of a 596-page bill that several lawmakers hinted they had not read. ‘No wonder our approval rating is 10 percent. Nobody knows what we’re voting on,’ Sen. Rand Paul (R-Ky.) said Friday afternoon as a few dozen somber tourists looked down from the Senate gallery.”
“Doubts Greet Plan for a New Euro Zone Bank Regulator”
The New York Times reports on the new questions surrounding the plan for a new Euro Zone bank regulator: “Facing a bank crisis in Spain and the prospect of outbreaks in other major countries, European leaders have pledged to establish a new agency aimed at curbing problems afflicting lenders in the euro zone. Yet for now the proposal amounts to little more than a vague statement of intent, one that has prompted more questions than answers. Will the new regulator have the power to rein in risky practices and hold offending banks accountable, for example, and will it be willing to exercise that power? Or will it be weak and overly beholden to national political factors that have too often gotten in the way of making bank supervision effective in Europe? It is not a moot point, given that two rounds of stress tests by another Pan-European agency gave passing grades to most banks in countries that use the euro currency, including some that turned out to be deeply troubled and in need of bailouts, contributing to a crisis of confidence in Europe’s financial system.”
