Arbitrary Cuts
Saturday, April 30, 2005; Page A18

ONE OF THE STRIKING aspects of the budget deal Congress passed on Thursday night is its treatment of entitlements. Among other things, the agreement calls on Congress to partly fund $106 billion in tax cuts by finding some $35 billion in entitlement savings through 2010, most notably $10 billion in savings from Medicaid, the program that provides health care to the poor and increasing numbers of the elderly.

What is truly worrying about this gesture is not its size: Even this Medicaid "cut" is actually a reduction in rate of growth, and it's not a very big one at that. Although $10 billion sounds like a lot, in practice it would amount to some $3 billion out of a $260 billion budget in 2010, or just over 1 percent. But the underlying question remains whether the federal government intends to reduce health care for poor people and shift more costs to the states or to undertake a more serious reform of the program.