Reagan's Medicaid Solution

Statement by Susan Carelson, President of the Carleson Center for Public Policy following the press conference July 19, 2012 in support of Medicaid block grants:

“If Ronald Reagan were here today, he would heartily support the State Health Flexibility Act (HR 4160) because he cherished the genius of our constitutional system of limited government.  Reagan believed it is a financial as well as a moral imperative to target limited public resources to those most in need.

Washington has proven that it is not capable of prioritizing or spending responsibly – particularly in the welfare arena, where the combination of political and bureaucratic pressures to increase dependency has become utterly toxic.

In 1971,  California was heading toward bankruptcy because of out-of-control welfare spending, so Governor Reagan tapped Robert B. Carleson to design and implement the first-ever welfare reform  – and it worked. Fraud and waste were reduced so much that the state not only remained solvent but was able to afford the first welfare benefit increase in over 12 years to the state’s most needy.  Now, that’s compassionate governing!

Like our founding fathers, Reagan and Carleson  believed that government closest to the people governs best. The ultimate success of their philosophy was the historic Welfare Reform Act of 1996, which freed millions of Americans from the narcotic of dependency.

The key was repealing the entrenched system of sending federal matching money to the states and replacing it with a system of finite block grants appropriately titled the Temporary Assistance to Families with Dependent Children (TANF).  That reversed the destructive incentive for states to steadily increase their welfare rolls and spending and instead encouraged them to focus on those truly in need.  The rest is history.