by Arthur Purves, Fairfax Co Taxpayer Alliance president, 01/03/2018
High Occupancy Toll lanes are Virginia's latest way of raising taxes, ostensibly for transportation. They should be called Medicaid Lanes instead, because the taxes that could have paid for transportation were siphoned off by Medicaid, the state's fastest growing budget item. Between FY2008 and FY2017, Virginia Medicaid spending grew about 70% compared to population growth of 7% and 12% inflation, from about $5.6 billion to $10 billion.
The federal government has also cut infrastructure spending to pay for entitlements. According to the Pew Research Center, fifty years ago the federal government spent $3 on roads, education, and research for every $1 spent on entitlements. Today it spends $5 on entitlements for every $1 spent on those items. Currently the federal budget is about $4 trillion, of which about $2.5 trillion is for entitlements and $300 billion for interest on the debt. Social Security, Medicare, and Medicaid cost about $2 trillion. Defense spending is about $800 billion. All other government agencies cost another $400 billion. Annual deficits are about $500 billion.
Entitlements dominate the state and federal budgets because half a century ago Republicans surrendered to the Democrats on two key issues. First, they surrendered to Social Security and Medicare, which today are massive transfers of wealth from the Millennials, who can't get a good job, to the most affluent demographic, which are the retiring baby boomers. How ironic that Millenials vote for Democrat policies that transfer their wealth to the baby boomers. Second, Republicans surrendered when the Supreme Court banned the Ten Commandments from public schools. Now today, 40% of births are out-of-wedlock and paid for by Medicaid.
President Trump has exposed Republican hypocrisy. Republicans campaigned against Obamacare and then did not repeal it. We saw the same hypocrisy in Virginia when in 2013 a Republican governor and the General Assembly raised taxes for transportation rather than cut entitlements. Even with the recent federal tax "reform", Republicans increased the deficit rather than cut spending.
Virginia Democrats are renewing the push for Medicaid expansion. Wouldn't it be better to reduce poverty with better jobs and to reduce medical costs? Medicaid expansion however does the opposite. Medicaid expansion will divert $1.5 billion, enough for 30,000 $50K jobs to government, and Medicaid, along with Medicare, drives up medical costs. Since the advent of Medicare and Medicaid in the 1960s, medical inflation has almost doubled. There's no "free" money to adequately fund Medicaid waivers or nursing homes or doctors' fees, but there is free money to expand government. Medicaid expansion is not about helping the poor; they will remain poor. It is only about growing government.