The federal government’s largess
The states rely on the federal government for 1 out of every 3 dollars they spend. States are rightly worried that the new “super committee” established by the debt ceiling deal in Congress will be looking at these monies to reduce spending. I thought it would be useful to look at the federal budget and get a sense of the size and composition of these expenditures.
I got a large table of data from the Government Printing Office (GPO) that shows the Congressionally authorized grants to the states. About half these monies are administered by states and flow through their budgets (see especially Medicaid and education funding) and the balance are distributed as federal programs. Here are the main programs administered by the states in this pie chart. Federal unemployment assistance is not included in this area of the budget.
Medicaid has always been the biggest cash transfer program to the states. It requires matching funds from state and county governments. Although it escaped mandatory reductions in the first phase of deficit reduction it’s the area that has governors and legislators most concerned. Medicaid is the poor cousin to other health insurance programs and it generally pays the lowest reimbursement rates. Some creative thinking is needed for this widely used health insurance program.
The other interesting observation I had looking at these numbers was the comparison of spending on special education to career and vocational training. Spending on special ed was over five times higher than spending on job training. I’m not advocating reducing special education but we must commit more resources to training unemployed Americans for higher skilled jobs.
Dig into the data a little. Where we spend our treasure is a big factor in America’s future. There will be less federal largess. Let’s spend it wisely.
(Federal budget via GPO. Data in $ millions)