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True, inflation will reduce the effective size of either increase to some extent. And population growth could increase demand for Medicaid and other social programs, although population growth in the U.S. is the slowest it's been in nearly a century.
Either way, the Medicaid budget is going to grow. But under Trump's proposal, it would grow more slowly. This is how Democrats and the media can scream about supposedly savage "cuts" to the program.
The same goes for Medicare. Under the current baseline, Medicare would grow from $593 billion to $1.19 trillion. Under the Trump budget, it would grow to only (!) $1.16 trillion.
Or take non-defense discretionary programs. Those are the expenditures for just about everything else the federal government does, from environmental protection to bridge construction. Unlike entitlement programs, whose spending is formula-driven (until Congress changes the formulas, anyway) spending on discretionary programs is set each year by the appropriations process.
The growth of entitlement spending has squeezed discretionary spending mercilessly. In 1965, so-called mandatory spending consumed just under 27 percent of the federal budget. Discretionary spending got 65.8 percent, and interest on the debt made up the rest. Today, the spending figures have almost reversed. Mandatory spending makes up almost two-thirds of the federal budget and discretionary spending less than 32 percent.
If current trends continue, by 2044 Medicare, Medicaid, Social Security, and interest on the debt will consume 100 percent of federal revenue. Everything else will be financed with debt—and debt will reach 150 percent of GDP. That's roughly where Greece stood five years ago.
Discretionary spending falls into two buckets: defense and non-defense. In 1965, defense made up 43 percent of the federal budget. Now it makes up only about 16 percent. Don't let that fool you into thinking defense spending has shrunk, though. In 1980, Pentagon spending stood at $143 billion. Adjusted for inflation, that's $446 billion in today's dollars. Baseline defense spending for next year is $600 billion.
Under the current baseline, non-defense discretionary spending is going to grow, too. Over the next decade, it is slated to rise from $624 billion to $739 billion. Under Trump's proposed budget, though, it would shrink to $429 billion. Now that's an actual, honest-to-God budget cut.
So far we have been talking about what will happen, or what might happen. We still haven't reached the question of what should happen.
For instance: Should we want more people going on Medicaid? As Shikha Dalmia laid out in brutal detail back in February, Medicaid is "arguably the civilized world's worst health insurance program." It costs roughly $7,000 per recipient, and people with Medicaid often have health outcomes no better than people who have no health coverage at all. One third of doctors no longer will accept new Medicaid patients—and the system's costs continue to soar.
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