Cato Podcast The Good, The Bad and the Beautiful
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Jul 24, 2025 Michael Cannon, Director of Health Policy Studies at Cato, and Dominik Lett, Budget Policy Analyst, dive into the complexities of a monumental piece of legislation affecting Medicaid and federal debt. They unpack the financial fog surrounding the bill, questioning if it really costs $3.4 trillion or $6 trillion. The conversation highlights how spending cuts are delayed while tax benefits are prioritized, revealing the political maneuvers behind the scenes. They also scrutinize the implications of Medicaid changes and their potential burden on the federal budget.
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Bill's True Cost and Timing
- The bill adds $3.4 trillion to the deficit but could cost up to $6 trillion considering interest and macro effects.
- It frontloads tax giveaways while pushing spending cuts into later years, increasing future fiscal risk.
Medicaid Growth vs. Cuts Reality
- Medicaid spending is growing, not actually cut; growth will slow but still rise each year.
- The program's scale is huge and wasteful; slowing growth yields $1 trillion savings but lobbies portray it as draconian cuts.
Baseline Scoring Gimmicks
- The scoring baseline for fiscal impact blends current law and current policy, obscuring true cost.
- This tactic avoids political accountability and undermines Senate budget rules, worsening long-term debt risks.