Audit D.C. Notes: Medicaid, Rest Stops, Galbraith, Etc.

The Center on Budget and Policy Priorities previews the upcoming congressional debate over whether to extend the federal support for state Medicaid programs that was part of last year’s recovery legislation.

Failure to do so would lead to deeper state budget cuts that cost substantial numbers of jobs, as well as to what the evidence increasingly suggests would be severe cuts in the Medicaid program in many states that would cast hundreds of thousands, and perhaps millions, of low-income Americans into the ranks of the uninsured.

See what you think.

The New York Times takes a look at Arizona’s budget gap, the largest in the U.S. when measured as a percentage of its overall budget, and the radical step taken in response: the state’s transportation department closed 13 of the state’s 18 highway rest stops. It’s not been a popular move:

“Why don’t they charge a quarter or something?’” said Connie Lucas, who lives in Pine, Ariz., about a two-and-a-half-hour drive from here. “There was one rest stop between here and Phoenix, and we really needed it.”

James K. Galbraithcheered here before for calling out the press for failing to report on the crimes associated with the financial crisis—is speaking out, in The Nation, in defense of deficits.

[T]he deficit phobia of Wall Street, the press, some economists and practically all politicians is one of the deepest dangers that we face. It’s not just the old and the sick who are threatened; we all are. To cut current deficits without first rebuilding the economic engine of the private credit system is a sure path to stagnation, to a double-dip recession—even to a second Great Depression. To focus obsessively on cutting future deficits is also a path that will obstruct, not assist, what we need to do to re-establish strong growth and high employment.

Dean Baker points out that the Times did too much he said-she said (though it’s mostly he said) in its coverage of the $15 billion jobs bill moving through Congress. One House member estimates the measure could create a million jobs. Another lyrically calls it “a no-jobs bill…a faux-jobs bill…a snow-jobs bill.”

As a practical matter, the incentive in the bill, which is primarily the 6.2 percent employer side of the Social Security tax, is unlikely to be large enough to have much effect on hiring. Even in the current weak economy, employers hire close to 4 million workers a month offsetting the departure of roughly the same number of workers. Most of these new hires would qualify for the credit, which means that the bulk of the $15 billion is likely to go to firms for hiring that they would have done in any case.

Readers are not likely to have the time or background to evaluate competing assertions about a bill’s impact. The NYT reporter should.


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Dean Starkman Dean Starkman runs The Audit, CJR's business section, and is the author of The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.