Medicaid – The Defense Killer

 

I’ve written recently on the adverse impact of Medicaid on our states (Medicaid – The State Killer). Now it seems it is having an even more alarming impact on the defense of our nation.

At a time when tensions are higher than ever with North Korea, the importance of a strong defense could not be clearer. But although the intent of President Trump is to strengthen our military and our missile defense, the drain on our federal budget by Medicaid is significant.

Senator John McCain (R – AZ) is a strong advocate for military spending since his days as a Navy pilot shot down in Vietnam who spent years as a prisoner-of-war. Yet McCain recently voted against the Senate’s bill to reform ObamaCare that would have dramatically reined in future Medicaid spending. Never has a military hawk’s vote had a more negative impact on the military.

The Wall Street Journal recently called McCain to task for his vote in an editorial. Although Trump has promised to increase military spending, McCain has criticized his defense budget because he believes the increased spending is not enough.

The reality is that the structure of federal spending has changed dramatically since the days of President Reagan in the 1980’s when huge increase in defense spending contributed to the demise of the Soviet Union. Increases in entitlement spending including Medicaid, Medicare, and Social Security have increased from 25% in the 1960’s, to 42% in the 1980’s, to an all time high of 60% today. That leaves much less for the military, whose portion of the budget has dropped from more than 25% in the 1980’s to about 15% today.

As Medicaid spending increases, defense spending decreases. This trend has been getting worse in the last eight years as seen in the graphic below:

This pattern was deliberate by the Obama administration and Trump is trying to reverse the trend. But the key to a reversal is the reform of entitlements and Medicaid is a great place to start. Even though the Senate bill would not have cut a single dollar from current spending, the dramatic ratcheting down of future spending would have given us some control over the budget, allowing for greater increase in defense spending. The Senate bill McCain blocked would have saved as much as $772 billion over 10 years. That would buy a lot of defense!

With the heated rhetoric going back and forth between us and North Korea and nuclear missiles pointed at our shores, not to mention growing conflicts in the Middle East and the War with ISIS, it is imperative that we have a strong military. The key to that initiative is controlling our healthcare spending. It’s time for the grown-ups in Congress to put aside their local concerns and do what’s right for the country. A nuclear war with North Korea makes those concerns pale in comparison.

 

(My last post, Lowering the Cost of Health Insurance Premiums was very popular. For those of you who would like to learn more, here is a link to Senator Ron Johnson’s CNN interview.)

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