Ten Questionable Federal Gov’t Expenditures Greater Than Trump’s Border Wall

By Jeff Poor

Many of President Donald Trump’s critics are grappling with the reality the U.S. government will actually build the much-ballyhooed border wall Trump had pledged to repeatedly during his campaign.

However, those critics are still arguing the money put toward the project would be a waste.

The main question now is how the government will pay for it, to which Trump had said throughout the 2016 presidential campaign that Mexico would be responsible for the project’s financing.

On Thursday, Senate Majority Leader Mitch McConnell estimated the cost would be between $12-15 billion. Similarly, House Speaker Paul Ryan had put the price tag at between $8-14 billion.

Assuming the cost is on the high end of those estimates at $15 billion, the total cost of the border wall would constitute nearly 0.4 percent of the federal government’s $3.8 trillion FY 2015 budget.

While there are many other big ticket items on the federal budget, many of them dwarf the cost of a U.S.-Mexico border wall. Here are a few:

1) The War on Poverty: On the 50th anniversary of the so-called War on Poverty in 2014, the Heritage Foundation’s Robert Rector estimated taxpayers have footed a $22 trillion bill for the effort.

As Rector also points out, however, is that in that 50-year timespan, the poverty rate was the same that was when President Lyndon B. Johnson began the “war on poverty.”

Lyndon Baines Johnson, Harry Truman,

“The U.S. Census Bureau has just released its annual poverty report,” Rector wrote. “The report claims that in 2013, 14.5 percent of Americans were poor. Remarkably, that’s almost the same poverty rate as in 1967, three years after the War on Poverty started.”

In case you were wondering, the cost of this ongoing war would be enough to foot the bill for 1,466 border walls.

2) The Lockheed Martin F-35 Stealth Fighter Jet Project: According to Reuters, the cost to build the fighter jet program is estimated to be $379 billion, which would be roughly the cost of 25 border walls.

F35-Jet_Reuters

Back in December in a tweet, Trump criticized the costs of the project, which have been plagued with problems and cost overruns, and said he was asking Lockheed Martin competitor Boeing to price out a similar project.

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Early on, some anticipated that throughout the lifespan of the F-35, the federal government could spent up to $1 trillion overall in building the fighter jet and for its maintenance.

3) A Day and a Half of Running the Federal Government: The federal budget is currently around $3.8 trillion. If you take there are 365 days in a year, 24 hours in a day and 60 minutes in an hour, that comes to a total of 525,600 minutes per year. Divide that $3.8 trillion by 525,600 and you will find the U.S. government spends about $7.2 million per minute.

AP Photo

At $7.2 million per minute, that is $432 million per hour and nearly $10.4 billion a day.  With the wall at a cost of $15 billion, that would be roughly a day and a half of operating the federal government as a whole.

4) Medicare, Medicaid Improper Payments: A 2015 Government Accountability Office report estimated in 2014 the federal government made $59.9 billion in improper Medicare payments and $17.5 billion in improper Medicaid payments for a grand total of $76.4 billion, or roughly the cost of five border walls.

AP Photo/Bradly C. Bower

That same report found that when the $76.4 billion figure was combined with 122 programs, including the EITC, that number in FY 2014 comes out to $124.7 billion in improper federal government payment, which was up from $105.8 billion a year earlier.

5) Maintenance of Vacant and Unused Properties: The federal government reportedly spent $25 billion annually in 2009 on maintaining vacant and unused building.

The figure was cited in a 2009 Heritage Foundation report, which was calculated by then-Senate Oversight Subcommittee chairman Sen. Tom Coburn (R-OK):

Unused Federal Property:

  • $25 billion wasted per year in unused federal property. (At $21 per square foot occupancy cost, 1.186 billion square feet of excess space)
  • Federal buildings worth tens of billions of dollars sit empty around the country. The Office of Management and Budget (OMB) has set a goal of reducing the inventory of all real property by 5%, or $15 billion, by 2009. Based on this goal, it appears that OMB considers this amount– at the very least—to be excess.
  • DoD spends $3-4Billion on maintenance of unused buildings each year.

The figures have been revised downward over the year, to $8 billion in 2013 and to $1.7 billion in 2016. However, the cumulative amount over the past decade would have been more than enough to finance a border wall.

6) The Littoral Combat Ship Program: The U.S. Navy’s controversial Littoral Combat Ship program comes in with a price tag of $29 billion.

The project, which includes ship prototypes built in Mobile, AL and Marinette, WI, has been fraught with problems and targeted for those problems and cost overruns on a bipartisan basis by the ranking members of the Senate Armed Services Committee, chairman Sen. John McCain (R-AZ) and ranking Democrat Sen. Jack Reed (D-RI).

Lockheed Martin via Getty Images

“Until these actions are taken, we will have significant concerns about supporting the procurement of additional LCSs,” McCain and Reed wrote to Navy officials last fall in a letter according to Bloomberg News.

7) Earned Income Tax Credit Program Improper Payments: The Earned Income Tax Credit (EITC) is regarded by its critics as nothing more than wealth transfer program that exists under the guise of eliminating poverty.

According to the Brookings and Urban Institutes’ Tax Policy Center, in 2015 the ETIC provided an estimated $69 billion in benefits to 28 million recipients.

However, as the Washington Examiner’s Byron York pointed out, the Treasury Inspector General for Tax Administration stated, “The IRS estimates that 23.8 percent ($15.6 billion) of EITC payments were issued improperly in Fiscal Year 2015.”

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At $15.6 billion, that is roughly the cost of the border wall.

8) U.S. Postal Service: Even though the postal service generates revenue by charging for certain services, it still loses money that is absorbed by the taxpayer.

The U.S. Postal Service has fallen on hard times given more efficient means of communication have replaced the need for the agency’s first-class mail.

Mail US Postal (Justin Sullivan / Getty)

For FY 2012 alone, the USPS lost $15.9 billion. Although they have shrunk over the last four years, the agency has continued to post losses, including $3.9 billion in 2013, $5.5 billion in 2014, $5.1 billion in 2015 and $5.6 billion in 2016 for a grand total of $36 billion since 2012.

The USPS also enjoys a federal government-imposed monopoly on access to mailboxes and is exempt from local regulations and taxes that its privatized competitors do not enjoy.

9) NASA: Even though the last U.S. manned space flight was in 2011, NASA still has an annual budget of $18.5 billion.

A sizable chunk of that budget is dedicated to the agency’s Earth sciences division estimated at $2 billion, which has been at the forefront of climate change research.

NASA vowed to award up to three $30,000 prizes for the most promising in-suit waste management systems

However, a recent Guardian article by Oliver Milman anticipates funding on climate change to stripped and rededicated to deep space exploration under President Trump.

For the time being, NASA has been reliant upon the Russians to send U.S. astronauts to the International Space Station, which came at a $457.9 million cost in 2014.

10)  Farm Subsidies: According to Chris Edwards of the Cato Institute, the federal government through the Department of Agriculture spends at least $25 billion on farm subsidies.

“The particular amount each year depends on the market prices of crops and other factors,” Edwards wrote last October for DownsizingGovernment.org, a project of the Cato Institute. “Most agricultural subsidies go to farmers of a handful of major crops, including wheat, corn, soybeans, rice, and cotton. Roughly a million farmers and landowners receive federal subsidies, but the payments are heavily tilted toward the largest producers.”

USDA127

To Edwards’ point, farm subsidies often go to those not necessarily of financial assistance from the government. Among those receiving those subsidies according to a 2015 Economist magazine piece are Walmart heirs Alice, Jim and Rob Walton, rockers Jon Bon Jovi and Bruce Springsteen and CNN founder Ted Turner.

Bernie Sanders Won’t Call Donald Trump A Legitimate President

142

The Illuminati is getting desperate. All of their previous attempts to stop Donald Trump have failed & they are now resorting to “delegitimizing” the highest respected office in world history. This is everyday becoming more alarming.
Matthew Oldfield

He said Russian Hacking, Drink Up.
ThePureVeritas

fuck off bernie
Ultrajamz

What a little cry baby, the cuck would have considered hillary legit? She cheated him..
toddjon stevenson

Go live in Venezuela you chump😎 See you back here tomorrow with your tail between your legs Okay it’s now racist to doubt Obama’s birthplace…. because he’s black ofcourse Barry Soetoro or Obama’s birth certificate was first doubted by Hillary The Don finished it…. by getting the forged one to be produced, he finished it
Jrion

Bernie actually asking Trump to send out a tweet, that’s just fucking hilarious.

McConnell and Ryan Who GREENLIT Obama’s Omnibus Now Threatening to Reject Trump’s Plan

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BY AMY MORENO

Remember when Ryan and McConnell passed that insane Omnibus bill worth over $1 trillion dollars and greenlit every single thing on Obama’s wish list?

Well, now, he and Senate Majority Leader McConnell are threatening to block Trump’s spending plan.

The bill included funding for Obama’s controversial amnesty program and Obamacare.

So, now these two dopes are going to get “tough?”

Unreal.

From Bloomberg:

In the afterglow of Donald Trump’s unexpected triumph, Republicans exulted over what they could accomplish with control of both chambers of Congress and the White House.

But behind the public show of unity, a stark difference looms. House Speaker Paul Ryan is a fiscal hawk who wants to couple tax cuts with deep spending cuts. Trump catapulted himself into the presidency talking about tax cuts too, but he also is proposing a multibillion-dollar infrastructure plan and has vowed to protect entitlement programs like Social Security and Medicare.

Such gaps went unmentioned when Trump met with Ryan and Senate Majority Leader Mitch McConnell last week. But ultimately, one side will have to bend, whether Trump ends up moderating his spending and tax-cut plans, or congressional fiscal hawks relent on their opposition to new spending.

The signs of a looming clash are already there. One day after meeting with Trump, McConnell poured cold water on Trump’s spending plans, telling reporters that a government stimulus wasn’t going to help the economy.

“A government spending program is not likely to solve the fundamental problem of growth,” he said Friday.

But Trump mentioned only one policy proposal during his victory speech last week: his infrastructure plan.

“We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals. We’re going to rebuild our infrastructure, which will become, by the way, second to none,” he said. “And we will put millions of our people to work as we rebuild it.”

Such a plan may be too much for congressional Republicans to swallow, and Ryan and McConnell haven’t backed it.

But House Majority Leader Kevin McCarthy of California showed some softening on the issue Monday, telling reporters that an infrastructure bill can be “a priority” and “a bipartisan issue.” He said there can be ways to pay for it, though he didn’t provide specifics.

“Infrastructure in America is lagging far behind,” McCarthy said, noting that Congress passed a highway bill this year for the first time in more than a decade.

Anthony Scaramucci, an economic adviser named to Trump’s 16-member transition executive committee, cited the president-elect’s $1 trillion infrastructure plan, saying it would be financed by “historically cheap debt” and private-public partnerships.

“We can close the wealth gap in America by replacing emergency-level interest rates with fiscal stimulus,” Scaramucci, the founder of the investment firm SkyBridge Capital, wrote in an op-ed in the Financial Times last week.

Ryan and House Republicans have spent the past six years enforcing strict budget caps aimed at holding down the federal debt. Republicans even took the government to the brink of default in a battle over raising the debt limit.

“As we move from campaigning to governing, something will have to give since cutting taxes without major spending cuts will make our already unsustainable debt situation even worse,” says Maya MacGuineas, president of the non-partisan Committee for a Responsible Federal Budget in Washington.

Obama on pace to increase the debt by $2.4 trillion this year

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BY SIMON BLACK

OK, this is pretty nuts.

According to data released by the Treasury Department yesterday, the US national debt has soared by a whopping $294 billion since the start of the 2017 fiscal year, just 45 days ago.

That’s an annualized increase of 13%.

So if they keep up this pace, the national debt will increase by $2.4 trillion this fiscal year, surpassing $21 trillion by next September.

It’s hard to believe how rapidly the debt is growing; debt growth is far outpacing the growth of the US economy… and there’s no way to pretend that this is good news.

That doesn’t stop leading economists from trying.

Nobel Laureate Paul Krugman says “debt is good” because the US economy has grown so much over the last 200 years despite not having been debt-free since 1835.

This kind of logic is astonishing.

Aside from a few anomalies like World War II and the American Civil War, debt levels over most of early American history were low.

100 years ago in 1916, US debt was about $3.6 billion; as a percentage of GDP (i.e. the size of the US economy), that was about 7%.

Today’s debt of $19,867,119,032,053.28 is actually bigger than the entire US economy at over 106% of GDP.

Yet in Krugman’s view, the fact that America prospered a century ago when the debt was 7% of GDP means that the nation will continue to prosper with a debt at 106% of GDP.

Amazingly enough, Krugman has been awarded our society’s most esteemed prize for intellectual achievement. It boggles the mind.

To be fair, there is such a thing as “good debt” versus “bad debt”, and it’s not difficult to distinguish between the two.

If you can borrow money at 5% in order to make a safe investment that has a 25% return, for example, that may very well qualify as “good debt”.

If you borrow money at 5%… or even 1%… and then squander the borrowed funds on useless trinkets, that’s clearly “bad debt”.

In 1803, the startup US government negotiated the Louisiana Purchase from France, a real estate acquisition that doubled the size of the US.

It was the mother of all distress sales. France was desperate for cash, and the administration of Thomas Jefferson negotiated a price that valued the land at around $15 million.

Adjusted for inflation to 2016 dollars, Thomas Jefferson paid about 40 cents per acre to acquire the land that comprises fifteen states and has generated trillions in economic activity.

Naturally the US government had to borrow money that year to conclude the Louisiana Purchase with France, so the national debt increased slightly in 1804.

But when you consider the extraordinary economic benefit of that purchase, it clearly qualifies as “good debt”.

Fast-forward to our modern era and we see that the debt is increasing by more than a trillion dollars each year.

What are the good citizens of the United States receiving in exchange for taking on so much debt?

It’s not like the government bought up half of Mexico or colonized Mars.

No, instead they wasted $2 billion on the Obamacare website, most of which went to a company whose top executive just happens to be an old friend of Michelle Obama.

Today, the US government has to borrow money just to pay interest on the money it’s already borrowed. This is almost the textbook definition of bad debt…

In fact, the government now spends nearly all of its tax revenue just on mandatory entitlement programs like Social Security and Medicare, plus interest on the debt.

The real kicker is that Social Security and Medicare are massively underfunded and quickly running out of cash… so they’ll both require a major bailout (i.e. MORE debt).

Interest payments, meanwhile, total hundreds of billions of dollars each year even though interest rates are at record lows.

Today the government pays less than 2% interest on its debt.

Ten years ago in 2006, the average interest rate on US debt was over 5%.

Back then 5% was considered incredibly low compared to the higher interest rates of the 1980s and 1990s.

But today, 5% would bankrupt the US government. It’s pitiful.

So unless interest rates stay at these record lows forever (or perhaps go negative), the government’s interest payments are going to explode.

Debt… particularly bad debt… is an absolute killer.

Excess debt has been responsible for bringing down some of the largest companies in the world. It bankrupts individuals.

And excess debt has caused the decline of some of the largest superpowers in the history of the world.

There are a lot of people, led by their cheerleader Paul Krugman, who outright ignore this problem and pretend that the US government can continue expanding its debt forever without ever suffering a single consequence.

And I know there are a lot of people keeping their fingers crossed hoping that a new administration will steer the ship in the right direction.

Look, I’m all for hope and optimism.

But it’s important to stay rational. These problems aren’t going away.

And you won’t be worse off for having a Plan B that provides solid protection from the consequences of these obvious trends.

Do you have a Plan B?

If you live, work, bank, invest, own a business, and hold your assets all in just one country, you are putting all of your eggs in one basket.

You’re making a high-stakes bet that everything is going to be ok in that one country — forever.

All it would take is for the economy to tank, a natural disaster to hit, or the political system to go into turmoil and you could lose everything—your money, your assets, and possibly even your freedom.

Luckily, there are a number of simple, logical steps you can take to protect yourself from these obvious risks:

Morici: The Wheels Are Coming Off Obamacare

BY PETER MORICI

Obamacare is becoming a nightmare. Health insurance premiums will jump an average of 22 percent in 2017, and federal spending to assist moderate income families is spinning out of control.
For Democrats, the answers are simple—raise taxes on the wealthy to further subsidize a failing system—or force a single payer system—which can dictate prices to service providers and compel their participation—onto reluctant Americans.

For conservative Republicans, the issue is more vexing. Merely repealing the law is not enough, because that would hardly return America to a free market.

Even before the Affordable Care Act, federal and state governments were paying nearly half of the nation’s health care bills.

At one extreme, Medicare and Medicaid reimbursement rates for doctors are tightly controlled and too low to sustain their practices. Many limit the number of patients they take from these programs, and the elderly and poor often face difficulty finding a primary care physician.

Well-off retirees can join concierge services, which charge high annual fees for access to primary care doctors, while the less affluent are left to scramble.

At the other extreme, the legislation establishing Medicare prescription coverage does not permit the government to negotiate prices. Pharmaceutical companies can set whatever prices they like knowing the elderly will simply send the bill to Uncle Sam.

Concierge services have generalized from the elderly to the entire adult care marketplace and created a two-tier system of access to physicians, while  reimbursements are setting drug prices arbitrarily high for everyone.

The basic premise of the ACA was to enroll nearly every working age American in large employer-sponsored insurance or policies sold on government run websites to create competition that would lower costs, but it has not worked out.

At HealthCare.gov, families often pay $500, $1000 or more a month for policies imposing high deductibles and co-pays and with quite limited provider networks. Many have lost access to family doctors, encountered limited out-of-state-coverage when they travel and are generally excluded from using higher cost providers where they live.

The latter can be life threatening. As of the end of 2015, for example, none of the policies offered access to New York included the Memorial Sloan Kettering Cancer Center.

Problems are particularly acute in areas where the number of specialists are limited, and hospitals and group practices are monopolized enough to resist negotiating much on price with insurance companies.

Insurance companies are taking big losses, resulting in the large premium increases noted above—or leaving the website markets across the country. At least 650 of counties nationwide will have only one company offering policies next year.

Many folks won’t feel the full brunt of rate increases, as the federal government is obligated to subsidize premiums for low and middle income families, but the Congressional Budget Office estimates the ACA will cost $8.9 trillion over ten years.

We simply cannot go back to what existed before. Private plans lost in the upheaval cannot be easily reestablished. Simple electoral calculus requires that millions of Americans now receiving subsidies continue to receive assistance purchasing health insurance. However, Americans should not be coerced into buying substandard policies at a government store, and costs must be lowered.

The German system of private insurance, like Obamacare, requires virtually everyone to have coverage, but costs are more tightly controlled. For example, regulators price new drugs according to how much they improve treatment over existing medicines.

Such government interference in pricing is an anathema to conservative Republicans like Paul Ryan, but the incongruity of Medicare paying whatever prices drug companies choose to set is wholly unrealistic.

Japan, Germany and other northern European countries spend about 11 percent of GDP on health care whereas the United States spends 17 percent.

In the end, if the Republicans want to avoid a single payer system that subjects most Americans to a choice between moribund and arbitrary service akin to that offered by the Post Office and IRS, then they will have to explore with the new president regulating prices inside a private marketplace.

Effective leaders work with the world as they find it, not as they think it should be.

Peter Morici is an economist and business professor at the University of Maryland, and a national columnist. He tweets @pmorici1

HERE’S A LIST OF OBAMA ADMIN OFFICIALS WHO USED ALTERNATE E-MAILS TO CONDUCT GOVERNMENT BUSINESS

Agencies include EPA, IRS, HHS and more…

Kerry Picket | Daily CallerSEPTEMBER 26, 2016

The Obama administration from the top down managed to operate around the eyes of the public often by using pseudonyms when communicating with one another online.

Although President Barack Obama previously claimed to CBS he only found out about Hillary Clinton’s private e-mail server through news reports, Politico reported Friday that an FBI news dump shows he communicated with Clinton on her private server using a fake name.

The idea of using a fake name to communicate through e-mail is not an unusual one to Obama administration appointees. Clinton and even her daughter Chelsea obscured their names when communicating with one another. Chelsea went by the alias “Diane Reynolds” when talking to her mother over e-mail the night of the attack in Benghazi.

According to CBS News, Clinton, instead of using her formal state.gov email address, used the email HRod17@clintonemail.com or would sign off as “Gert” or “Gertie” to her friend Betsy Ebeling in Chicago. Another e-mail address she used was hdr22@clintonemail.com.

A “Richard Windsor” appeared to be an official at the EPA. The individual had an official epa.gov e-mail address, but it was later discovered through FOIA requests and public records that Windsor.Richard@epa.gov not only did not exist, but the e-mail address belonged to EPA Administrator Lisa Jackson.

“I don’t know any other agency that does this,” said Anne Weismann, chief counsel of the watchdog group Citizens for Responsibility and Ethics in Washington, which called upon the EPA’s inspector general to investigate the matter in 2012.

It did not stop at just the EPA. Health and Human Services Secretary Kathleen Sebelius, among other appointees, used secret e-mail accounts to conduct business, the Associated Press reported.

In June 2013, the AP asked for HHS’s unpublished secret email accounts from the agency, which the department initially resisted.
“The Health and Human Services Department initially turned over to the AP the email addresses for roughly 240 appointees — except none of the email accounts for Sebelius, even one for her already published on its website. After the AP objected, it turned over three of Sebelius’ email addresses, including a secret one. It asked the AP not to publish the address, which it said she used to conduct day-to-day business at the department,” the AP reported. “Most of the 240 political appointees at HHS appeared to be using only public government accounts.”

Eventually, the AP published Sebelius’s secret email — KGS2(at)hhs.gov — “over the government’s objections because the secretary is a high-ranking civil servant who oversees not only major agencies like the Centers for Medicare and Medicaid Services but also the implementation of Obama’s signature health care law. Her public email address is Kathleen.Sebelius(at)hhs.gov.”

The AP notes that “at least two other senior HHS officials — including Donald Berwick, former head of the Centers for Medicare and Medicaid Services, and Gary Cohen, a deputy administrator in charge of implementing health insurance reform — also had secret government email addresses.”

The Internal Revenue Service disclosed last year that Lois Lerner, the IRS official at the center of the agency’s targeting of conservative organizations controversy, also had a private e-mail account she may have used for government business.

Lerner’s second e-mail, discovered by the D.C. watchdog group Judicial Watch, is registered to the name “Toby Miles.”

“It is simply astonishing that years after this scandal erupted we are learning about an account Lois Lerner used that evidently hadn’t been searched,” Tom Fitton said in a statement to The Washington Times.

The use of a non-public pseudonym for e-mail communication within a government agency was done by address for Seth D. Harris when he was the acting labor secretary.

Did anybody at the Justice Department hold administration officials accountable for the use of such alternate emails? Unfortunately, the task would have been difficult for Attorney General Eric Holder who had two secret aliases — Lew Alcindor and Kareem Abdul Jabar, — to communicate through email at DOJ.

Read more: http://dailycaller.com/2016/09/25/heres-a-list-of-obama-admin-officials-who-used-alternate-e-mails-to-conduct-government-business/#ixzz4LP9FIGjz

Read more: http://dailycaller.com/2016/09/25/heres-a-list-of-obama-admin-officials-who-used-alternate-e-mails-to-conduct-government-business/#ixzz4LP9FIgIP

The Medicaid Ticking Time Bomb – A Budget-Gobbling Fiscal Disaster

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BY DANIEL MITCHELL

The burden of government spending is already excessive. But the numbers will get worse with the passage of time if policy is left on autopilot.

The main culprits are the so-called mandatory programs. Entitlements such as Social Security, Medicare, Food Stamps, and Obamacare that automatically dispense money to various constituencies are consuming an ever-larger chunk of the economy’s output.

And if you want to be even more specific, the fastest-growing entitlement program is Medicaid, which was originally supposed to be a very small program to subsidize health care for poor people but has now metastasized into a budget-gobbling fiscal disaster. Arguably, it’s the entitlement program most in need of reform.

So how big is the problem? Enormous if you look at the numbers from the National Association of State Budget Officers.

“States increased their spending in fiscal year 2015 by the biggest margin in more than 20 years, but most of the increase was thanks to huge leaps in Medicaid spending under the first full year of the Affordable Care Act (ACA). Spending increased last fiscal year, which ended on June 30 for most states, by 7.8 percent, according to new estimates from the National Association of State Budget Officers (NASBO). It’s the biggest boost since 1992 and was thanks to a 15.1 percent increase in Medicaid spending, much of that paid for via federal Medicaid funds. Illinois, Michigan, Kentucky, Nevada and Oregon saw more than 30 percent increases in federal funding because they expanded Medicaid under the ACA. But 2015 was also a year where states were putting up more of their own money again.”
Here’s the chart showing which outlay categories grew the fastest.

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The article points out that spending is outpacing revenue.

“On average, state revenues aren’t keeping pace with spending; NASBO estimates General Fund revenues will increase by just 3.8 percent.”
Though the real problem is that spending is expanding faster than the private sector, which is the opposite of what is called for by my Golden Rule.

One of the reasons Medicaid grows so fast is that the program is split between Washington and the states, which both picking up a share of the cost. This may sound reasonable, but it creates a very perverse incentive structure since politicians at both levels can vote to expand the spending burden while only having to provide part of the cost.

The National Center for Policy Analysis explains how this system produces bad decisions.

“Medicaid has a horrible financing mechanism: Federal transfers to states are not based on the number of poor people, or any other reasonable calculation. Instead, they depend on the amount of its own taxpayers’ money a state spends. Traditionally, when California spent $1 on Medi-Cal, the federal government kicked in $1. … So, state politicians hike taxes and spending on their own citizens in order to get as much funding as possible from people in other states (via the feds). Hospitals and Medicaid MCOs maximize this by agreeing to a state tax on themselves, which the state uses to ratchet up the federal funding. After multiplication, the money goes right back to these providers. … Stopping this wild spending growth requires fundamental reform to Medicaid’s financing. Congressional Republicans have proposed ‘block grants,’ whereby states would get federal Medicaid transfers based on their population of poor residents, not how much they gouge out of their own people.”