With Aug. 2 now only days away, the grown-ups in Washington are starting to engage in serious discussions toward a resolution of the debt-ceiling imbroglio.
That means matters could get a tad personal. Real reductions in federal spending, you must understand, will either harm or inconvenience real people.
For example, I refer to:
• People poor and disabled who are on Medicaid.
• More broadly, those paying state-level taxes to match potentially reduced federal disbursements for Medicaid.
• More specifically, state-level politicians trying to balance a state budget as more and more people go on Medicaid and as the federal government tries to save money on its part of Medicaid and as Tea Party people contradict themselves by standing up to preserve reimbursement rates to doctors that compose the primary drain on Medicaid.
Here’s where we appear to be: Senate Majority Leader Harry Reid and Minority Mitch McConnell, realizing that defaulting on debt is a perilous economic prospect for the nation and a perilous political problem for their parties and incumbency, and realizing that the Tea Party insurgents in the House cannot be counted on for reason, have expedited a compromise that would start in the Senate.
These are the elements: McConnell’s notion to let the debt ceiling go unattended other than to allow President Obama to raise it unilaterally would provide the foundation. Reid would go along with maybe $1.5 trillion in 10-year budget cuts as generally agreed to by the eventually blown-up bipartisan talks led by Vice President Joe Biden.
Entitlement spending would be delegated to a bipartisan commission.
Some of the specifics may emanate from the Gang of Five, meaning those three Democratic senators and two Republican ones for whom our U.S. Sen. Mark Pryor has been leading cheers.
Medicaid, now matched according to state poverty-level population, would be converted — or might be converted through this commission — to a “blended rate” of federal matching that would be different for existing Medicaid patients, for children and for new patients brought in by Medicaid expansion in the new health care reform law.
A state like Arkansas, where our Medicaid dollar gets matched by three federal ones, would have much at stake in the designing of this “blend.”
The White House is quietly encouraging the Reid-McConnell talks.
Meantime, there is talk of pandering to the Tea Party radicals in the unwieldy House by letting them pursue referral of a balanced-budget amendment to the Constitution.
Ratification would take years. If enacted, such an amendment would amount to the same abdication of political responsibility to make wise and responsible cuts in spending as has been evident in the debt-ceiling debate.
All of this bears on work under way by the Beebe administration to try to get a long-term grasp on rising state Medicaid spending. The idea is to move away from simple fee-for-service reimbursements to doctors and hospitals and toward “bundling” of medical services by which “episodes,” or medical conditions, would command a general price. Tea Party people tend not to like this idea. They prefer to cut services to the needy rather than reimbursements to doctors and hospitals.
A leader in this resistance is a freshman Republican senator, Missy Irvin of Mountain View, whose husband is a doctor. As I said in the beginning, real spending reduction can get a tad personal.