Falling-Out Among Thieves

The little guy you see peeping over the adult podium is California Governor Jerry "Moonbeam" Brown. He is trying to "grow in office." He just made a move as part of the attempt to balance California's out-of-control budget deficit. It won't sit well with Barack Obama and his fellow Democrats.

Now don't make the mistake of thinking that he's cutting funds for the high-speed trains to nowhere, or the budget of the watchmen hired to close the water spigots while protecting the Delta smelt. Nor is he trimming back on the drop-dead date for all of us to drive electric cars. Nope. He's requesting a 10% cut in Medicaid spending, which the Obamatrons are using to deflect attention from the massive debt Obamacare will cause. California has long been in the forefront of runaway spending on Medicaid (which is called "Medi-Cal" in California).

This puts the Obamacrats in a very difficult position. Brown is known as a liberal, pro-labor, pro-green, giveaway Democrat. Brown was also known for a very long time as being in the forefront of the health care reform movement. But both California and national Democrats are already singing the blues about Brown's proposed cuts. As you would expect, they are saying that the cuts would be devastating to California's most vulnerable residents (like illegal immigrants and generational welfare recipients).

California Representative Dennis Cardoza (D) is most concerned with reductions in funding for benefits for people with intellectual and developmental disabilities. Like Democratic legislators, for instance. In fact, Cardoza already wrote a heart-rending letter to the Director of CMS (the federal Medicare/Medicaid Services, which administers Medi-Cal), in which he cried "if the proposed cuts in the Medi-Cal rate go through, I am deeply concerned that providers of services for the disabled will have no option other than to close their facilities."

On June 27, Brown wrote a letter to the President that is just now coming to light. Says Brown: "California has enacted huge and extraordinarily painful spending cuts to clos eout multibllion-dollar budget gap. We did our part to reduce state and federal Medicaid spending by eliminating optional benefits, reducing provider payments and requiring beneficiary cost sharing." However, Brown also made sure to tip Obama to the political danger of tying his requested cuts to the debt-ceiling debates.

Brown cannot unilaterally cut Medi-Cal spending, since it must first be approved by state administrators and the federal government (Medicaid is largely state-funded, but receives joint funds from the feds). So far, the CMS director has been in sync with Brown, but California state and federal Democratic legislators are coming unglued. California has a $27 billion budget deficit which is by far the worst of any of the states. Norman Williams, a spokesman for the California Department of Healthcare Services said that Medi-Cal is the second highest expenditure in the state budget, and that cutting it must be part of the closing of the budget gap.

The proposed plan would include 10% reduction in Medi-Cal payments to hospitals, physicians, nursing facilities and other providers. Brown claims this would cut $623 million from the state budget in 2011-2012 alone. 7,000 residents would be affected, but for those 7,000 residents there are nearly 1,000 facilities to serve them. I'm having a little problem worrying that some of those facilities might have to close. Those fighting to stop the cuts say that as many as 150 facilities are likely to close. 150 out of 1,000. Sounds like there might be a recession and a bankrupt state behind the closures.

Jim Gomez, a lobbyist for the nursing-home-on-the-taxpayer-dime group California Association of Health Facilities says: "Many of the residents have been in the five or six bed homes for years with the same fellow patients and caregivers. Forcing them to move into larger regional centers or skilled nursing facilities, as some have proposed, would be a huge change in their life." I don't want to be a wet blanket, but many conscientious, hard-working taxpayers are now finding themselves out of work and out of their homes. It's tough all over. But at least the Medi-Cal patients have somewhere to go, even if it isn't what they're used to.

And now cometh the threats of litigation. Gomez's group has already filed a lawsuit and begun discovery in a case suing the state of California for its 2009 rate freeze, so if CMS approves the new cuts, Gomez says they might just add that to the pending case.

Despite himself, Brown has made a logical and necessary move. But that puts Obama in a position he despises--having to make an actual hard decision. Does he support a big-state liberal Democratic governor, or does he tell him to take a hike? Opponents of the plan say that giving California a free ticket to make large cuts in its Medi-Cal program would create an open season for other states to follow California's lead. That's a lot of government-dependent voters who might think twice about voting for Obama and the Democrats in the next election if their decades-long free ride is diluted. Brown has three years to recover from the backlash, Obama just a little more than a year. What to do, what to do.

I haven't had this much fun watching Democrats try to outmaneuver each other since Brown took on Bill Clinton for the presidential nomination.