Medicaid Reform Amid Soaring Federal Interest Costs: Jonathan Williams on NewsTalkSTL

As Washington wrestles with record-high debt amid ongoing budget negotiations, questions about the future of Medicaid funding have become a flashpoint on Capitol Hill among fiscal conservatives.

During a recent interview with NewsTalkSTL hosts Tim Jones and Chris Arps, ALEC President & Chief Economist Jonathan Williams warned that growing entitlement spending is one of the primary drivers of America’s $36 trillion debt crisis. While some on Capitol Hill have vowed to oppose any federal budget cuts to Medicaid, Williams said that ignoring the program’s structural issues would only worsen the nation’s fiscal outlook.

“We have to maybe take a step back and think about this long term,” Williams said. “There are several big drivers as to why we have $36 trillion plus in national debt now. The interest costs on our national debt are over $1 trillion this year—which is more than the entire Department of Defense and our military readiness across the globe.”

That debt burden, Williams argued, is no longer a distant concern.

“It’s an absolutely terrifying amount of money that we have now wrapped up on the national credit card,” he said. “We’ve got a huge problem—overspending generally.”

A key target for reform, he said, is Medicaid expansion under the Affordable Care Act.

“Medicaid expansion, Obamacare, and all of those pieces of that—it was a major driver of our major budget problems,” Williams said. “Not to mention the unfunded liabilities in those programs that rack up the debt far beyond what we see in the $36 trillion number.”

Williams noted that Medicaid has expanded beyond its intended purpose, arguing that expanding the program to cover able-bodied, working-age adults diverts resources away from the truly needy.

“Let’s make sure that if we’re going to fund Medicaid, we fund what Medicaid is supposed to fund—and that is people that are really, truly needy, not the expansion population that, unfortunately, Missouri and some other states expanded,” he said. “What it does is it depletes the Medicaid funding from the true need. It now covers working-age males who are able-bodied. There’s something very wrong about that.”

Williams suggested that long-term reform must include “a hard look” at the sustainability of such funding.

“This isn’t just about saving dollars,” Williams said. “When people are in the workforce, that’s actually a virtuous piece… that shared success and earned success my good friend Arthur Brooks talks about a lot. To have all these government programs incentivizing people to move in the wrong direction—I think there’s a big mistake that states and the federal government made in many cases.”

Despite political resistance, Williams emphasized the need for bipartisan courage.

“If we as a country are going to get serious about really addressing this issue that is now bleeding over into national security concerns, we must address some of the big drivers of the debt.”