🌊 The Battle for Medicaid

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By Max Frost

On Tuesday, President Trump gathered House Republicans for a closed-door meeting.

His message was simple: “Don’t f*** around with Medicaid.”

Will they listen?

Trump’s agenda is largely split in two halves: One to be done via the Executive Branch; one to be done through Congress. 

The latter part includes Trump’s taxing and spending plans. On the tax side, Trump wants to extend the tax cuts he enacted in 2017, eliminate taxes on tips and overtime, and provide extra tax relief to seniors and new parents, among other initiatives. On the spending side, he wants to cut spending on environmental programs enacted by Biden; make some DOGE cuts permanent; and tighten spending on and eligibility requirements for SNAP (food stamps). He is seeking to pass all these priorities in The One, Big, Beautiful Bill.

This plan will cost a lot of money: According to the Committee for a Responsible Federal Budget, a non-partisan research group, the proposal would boost the federal debt by $3.3T over the next decade. 

Many Republicans aren’t happy about this, particularly so-called “fiscal hawks” who say the debt is unsustainable and must be trimmed. But what to cut?

Fiscal hawks have a laundry list of items they want to cut, and none fits as well as Medicaid. 

The program, which provides low- or no-cost health care to lower-income Americans, has grown dramatically in the last decade. It now provides health insurance to 70M+ people, up from 52M in 2010, and consumes 13% of the federal budget, or ~$870B annually.

$870B is roughly the same as the defense budget, yet the conservative Republicans tend to be more skeptical of social than defense spending. They’re particularly hostile toward Medicaid, as it was dramatically expanded by President Obama and the Affordable Care Act (“Obamacare”). 

The fiscal hawks argue that the expansion of Medicaid has been a giveaway to insurance companies that has incentivized working-age men to stay home rather than seek full-time employment. They see cutting Medicaid spending as both lowering the deficit and reversing an “entitlement” that has expanded the size of the federal government. As Rep. Chip Roy (R-TX) – one of the leading fiscal hawks objecting to The One, Big, Beautiful Bill – has said, Medicaid is a “tax money laundering [scheme] allowing states to inflate healthcare prices & scam the federal government.”

Editor’s Note

Which side of this battle do you side with? Those of you who want to cut Medicaid, do you worry about the social impact? Those of you who want to save Medicaid, do you worry about the deficit? Let us know by replying to this email. 

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Thanks for reading. See you tomorrow.

—Max and Max