Skip the demagoguery; look at the facts on Medicaid, SNAP

The moment Washington passed the One Big Beautiful Bill Act, headlines blared that Congress had “slashed” Medicaid and food stamps and was, once again, “throwing grandma over the cliff.” That script is as tiring as it is dishonest.

Yes, there is plenty to criticize in the new law. Chief among the concerns is the trillions in additional red ink. However, the supposed health care and nutrition “cuts” are not the villains the professional outrage machine claims they are.

Start with the reality of what these programs look like today. Medicaid, originally designed as a narrow safety net for the poor and disabled, now enrolls 24% of the U.S. population, twice the number officially living in poverty. The Supplemental Nutrition Assistance Program covers 13% of Americans. Together, these programs cost federal taxpayers over $650 billion annually for Medicaid and $119 billion for SNAP. That price tag climbs automatically because benefit formulas are tied to inflation and the ever-increasing cost of medical care.

These reforms are overdue. Over the years, both programs have evolved into mechanisms for politicians to buy votes, extending benefits far beyond those truly needy. States eager for what they see as “free” federal dollars discovered that by expanding eligibility to able-bodied adults (or, in some cases, immigrants living here illegally), they could shift much of the bill to Washington. The cost-sharing formulas have become so convoluted that even governors struggle to determine the marginal cost of adding a single new enrollee. The incentives are backward, perverted and broken, and this legislation offers a modest attempt to fix them.

Critics argue that the projected savings (anywhere from $300 billion to $500 billion over 10 years) are cruel or coldhearted. These savings should be seen as a down payment on fiscal reality. Last year alone, the U.S. borrowed $10 trillion to meet its existing obligations. We are practically insolvent. The only reason we continue to function as a government is global lenders still trust us enough to buy our debt. That kind of trust doesn’t last forever, and it shouldn’t be the basis of long-term national strategy.

There is a more fundamental issue. Health care and nutrition assistance should not be federal programs in the first place. These are classic examples of responsibilities best handled at the state level. By converting Medicaid and SNAP into block grants to the states, we could end the perverse dynamic in which spending more means getting more federal dollars.

While the OBBBA makes a first attempt at reforming Medicaid and SNAP, it leaves the programs that pose the most significant long-term fiscal threat — Social Security and Medicare — untouched. Budget analysts agree that OBBBA will still add $3 trillion to $5 trillion in new debt once all the temporary provisions and creative accounting tricks are factored in. That means we are still pushing the burden onto future generations, sacrificing their prosperity for the political convenience of today.

The United States still has time to change course, but that window is closing fast.

Reforming Medicaid and SNAP is about preserving these programs for those who genuinely need them and returning responsibility to the states, where it belongs.

Washington took a timid first step. The rest of us should demand more. If we do not summon the courage to act soon, the reckoning will come anyway, only it will be imposed by creditors and lead to chaos rather than reason and reform.

This guest essay reflects the views of Les Rubin, founder and president of Main Street Economics. He wrote this for InsideSources.com.