via: dickmorris.com

Anxious to avoid raising taxes too much to pay for their health care proposals, the Obama Administration and its Congressional allies hit on a great new idea: Make the states raise their taxes to fund the program instead.

Both the House and the Senate bills require that states cover a larger percentage of their people under Medicaid – a joint state and federally funded program. The idea was to force the state to raise their taxes to cover a big part of the health care bill for treating poor people. Since the Feds can simply charge any increase in spending to their already overdrawn bank account, but the states have to balance their budgets, the increased state spending for Medicaid will cause sharp increases in state taxes. And the Governors will get the blame, not Obama and not the Congress.

The House bill requires states to give Medicaid to those whose incomes are less than 150% of the poverty level while the Senate requires coverage up to 125%. For most states, this is a hefty increase.

In some states, like New York, where Medicaid covers everyone making 150% of the poverty level already, there will not be any extra required spending.

But not so in California, which only covers 100% of the poverty level. Were the House bill to pass, the already fiscally beleaguered state would have to increase its Medicaid spending on poor people by 50%, at least an extra $2 billion a year and perhaps more.

In many Southern states, the Medicaid program only covers a portion of those living below the poverty level. For these states, the requirement to cover all those in poverty and then 50% more will cause enormous increases in taxes. In Arkansas and Louisiana, where swing Senators Pryor, Lincoln, and Landrieu come from, the cost could exceed $1 billion for each state each year.

Unfunded mandates for state spending imposed from on high in Washington have always rankled governors. The Senators and Congressmen in Washington get the credit for spreading largesse but the Governors in the states get the blame for the taxes that are needed to pay for it.

Since Democrats currently control the vast majority of governorships, this process of making their own party members take the rap for raising taxes is politically self-destructive in the extreme. But Obama is so desperate to pass his health care legislation that he doesn’t care what havoc in his party he reaps in the process.

The question now is whether the governors of the fifty states, particularly the Democrats, are going to sit idly by and let their budgets be destroyed by the health care bill.

When the Republicans in Congress insisted on tacking big cuts in aid to legal immigrant benefits for disability and other areas onto the welfare reform bill, it was the Republican governors who forced them to repeal the pernicious cuts the very next year. They did not want to have to raise taxes to make up for the withdrawal of federal funding.

Now the Democratic governors face the same situation. If Obamacare passes with its expansion of Medicaid benefits – but with no federal funding of the extra spending – it is these Democrats and their legislatures that will have to bite the bullet and pass new taxes to pay for it.

Since states are already facing mammoth financial problems as a result of dwindling revenues and swelling expenditures in the recession, these additional burdens could be politically fatal. Unless Democratic governors want to avoid the fate of one of their late brethren, former Governor Jon Corzine of New Jersey, whose political career was ended in a blaze of new taxes, they might want to call their buddies in Congress and ask them to lay off the unfunded mandates, particularly during this recession.



Filed under dickmorris.com


  1. Arnold Schwarzenegger said the other day”we need more immigrants to come and do the work that needs to be done”!That is one of the problems now there aren’t enough jobs to go around now! What the h-ll is his problem?, aw wait a minute, he is married to a liberal & he is the governor of the most liberal state in the U.S.!We need to stage another rally in Washington & go up to the steps of congress & be there when they go in to work!!Then we can let them know we don’t want their corrupt as- to take over our great H.C. system, it might a little tweaking but why do you think foreign dignitaries come to the U.S. to get their health took care of? WE cant let them steal our rights like they want to WE THE PEOPLE need to stand up & fight them liberals!!

  2. Gale Teschendorf


    Take a chill pill. The US was built on immigration. The current mess is in part caused by the government guarantees on home mortgages to those that could not afford them.

    I say allow 1,500,000 more legal immigrants per year instead of the mass amnesty programs every 10 years or so. Also, shrink the federal government to the minimum, we have too few politicians yielding too much power. Let Massachusetts force everyone to get health insurance and see what happens. Let the states be examples for all the other states, counties for other counties… Then the good programs should get adopted and the bad should get dropped.

  3. Kate

    Now I am all riled up and need to vent! It would make sense to me to close our borders about now. UNLIMITED Immigration is a huge part of this countries problems…..Americans are starving and we this government keeps shelling out OUR money in social services to Immigrants both LEGAL AND ILLEGAL this is a huge stress on our cities and our states who provide housing and medical care etc…for these people. Our schools are over crowded and we need more police officers.

    Washington is stuck on the number 12 million illegals in our country for a year now…..I’ve read reports that there are over 22 million illegals in the country now….are they trying to keep it a secret? Just look around you! And tens of thousands of these illegals are from mid eastern countries….how many are would be terrorists?

    If Washington would just stop immigration and stop wasting the taxpayer money as they do in earmarks we could pay off the national debt. Fire the damn czars for a start and demand our money back from Pelosi’s mice! We don’t need the Obama Channel or the 18 million dollar website filled with inaccurate information. This costs us money….and frankly I am sick of seeing Obama’s lying face on my TV.

  4. Kate

    I can’t understand what is going on in Washington. They don’t hear us or they just don’t want to. WHERE DO THEY THINK WE ARE GETTING ALL OF THIS MONEY FOR TAXES? People are out of work and losing their homes….do they want the rest of those still holding on to follow into poverty? Where will they get their tax monies then? I live in PA and my state tax just went up….my property taxes and my school tax just went up….now I have to worry about my insurance premiums and taxes on my health care…fines and jail time IF I don’t have insurance. In February our light bills will go up 30% and all of this BS about health care is causing Rx prices to soar. Cap and Trade and Amnesty and now a WAR TAX…..when will it all end and when will they realize that WE DON’T HAVE THE MONEY….AMERICA IS BROKE! Right now all we are worried about are our jobs. And they said Sarah Palin was not qualified to be in the White House….BUT THESE BOZOS ARE? GOD BLESS AMERICA BECAUSE WE NEED IT!

  5. Gale Teschendorf

    Dear Dick,

    You said “Were the House bill to pass, the already fiscally beleaguered state would have to increase its Medicaid spending on poor people by 50%, at least an extra $2 billion a year and perhaps more.”

    According to the 2008 census data there were 39,829,000 people living in poverty and 67,918,000 below 150% of the poverty level. That is more than a 70% increase in people to be covered, not 50%. Will the states be required to add more services to those already offered?

    How many more people will be pushed into poverty because of Obamacare? Jobs will be lost due to the burden on employers. State taxes will reduce spendable incomes.

    50%, 70%, maybe over 100%. Your title is spot on. OBAMACARE = BIG STATE TAX HIKES

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