Republicans in both chambers of Congress have been laying out various demands that they want in return for raising the nation’s debt ceiling, even though failure to raise the debt ceiling would have widespread negative consequences for both the U.S. and the world economy (which many in the Republican leadership have admitted). Republicans have demanded everything from amorphous spending cuts and caps to corporate income tax cuts and reductions in Social Security.
2012 Republican presidential hopeful Newt Gingrich was on CNBC last night, laying out his own ideas for what the GOP should hold out for when it comes to the debt ceiling. He suggested that Republicans should not vote to raise the debt ceiling unless Medicaid is converted into a block grant system:
If I was looking at one big decision for the debt ceiling, I would put on there block granting Medicaid. If we sent Medicaid back to the states — its the second biggest health entitlement after Medicare — we clearly don’t know how to run it at a federal level, they’re averaging over ten percent of the money going to crooks in New York State under the federal-run Medicaid. If we would send it back to the fifty states, allow them to try to develop new and better approaches, that would be a large enough change that it would justify a vote for the debt ceiling. But I would not vote for the debt ceiling without a very very significant change in the trajectory of spending.
It’s worth noting that Gingrich seems to think that whatever is the hot Republican priority of the moment should be attached to the debt ceiling. Back in March, he said “Republicans should attach the full repeal of ObamaCare to the debt ceiling increase bill and pass it immediately.”
As my colleague Igor Volsky noted, turning Medicaid into a block grant system would basically destroy it. Under such a plan, states would be forced into “capping enrollment, cutting eligibility, limiting mandatory benefits and lowering provider reimbursements.” Currently, two-thirds of Medicaid’s costs go towards care for seniors and people with disabilities.
A new Washington Post-ABC News poll released this morning shows that 69 percent of Americans oppose cutting Medicaid to reduce the deficit. 52 percent of Americans strongly oppose such cuts. But Gingrich wants Republicans to threaten the credit-worthiness of the United States and the stability of the global economy in order to force these widely unpopular and destructive cuts through.