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Over the past five years, federal spending has exploded. In 2019, Washington spent $4.5 trillion (20.9% of GDP). Today, that figure is closer to $7 trillion (23.3% of GDP). That surge,

driven by pandemic emergency spending and entitlement expansions, is projected to persist unless Congress takes action. Yet even the most modest restraint to just one of the major programs

driving this deficit, Medicaid, is triggering hysteria on Capitol Hill. Over the last decade, Medicaid growth has outpaced that of the other two largest federal entitlement programs: Social

Security and Medicare. Including state and federal funding, total Medicaid spending ($873 billion) will exceed national defense this year, and it will only continue to balloon over the

coming decade. Medicaid’s rapid growth can be traced, in part, to the program’s imbalanced financing structure. The core problem: The federal government finances up to $9 for every $1 states

spend. EXPLORE MORE That encourages states to expand the program recklessly while letting Washington foot the bill. The result: rampant fraud, spiraling costs and a system that rewards size

over need. ObamaCare exacerbated the issue by amplifying this imbalance. States receive a far higher federal “match rate” to cover newly eligible, able-bodied adults than they do for the

traditional Medicaid population — those who are poor, disabled, pregnant, or elderly. That means federal dollars flow _more _generously to those _least _in need. Meanwhile, states use

gimmicks like taxing providers (and then reimbursing them through higher state payments) to artificially inflate their reported spending and draw down even more federal funds without

actually contributing more of their own money. These perverse incentives explain why Medicaid’s size and cost have spiraled far beyond anything envisioned when the program was founded. GET

OPINIONS AND COMMENTARY FROM OUR COLUMNISTS Subscribe to our daily Post Opinion newsletter! THANKS FOR SIGNING UP! When Congress launched Medicaid in 1966, the financing burden was roughly

equal, with states covering half of the budgetary costs of the program. Today, states generally cover only a quarter (or less) of the costs of running the program. When Washington picks up

the tab, states lose incentives to spend wisely. Any serious reform effort must fix the incentives generated by the matching scheme at the heart of the Medicaid program. Despite attacks on

Republicans, they’re not planning to attempt _real_ Medicaid reform anytime soon. As Sen. Josh Hawley (R-Mo.) noted: “Just had a great talk with President [Donald] Trump about the Big,

Beautiful Bill. He said again, NO MEDICAID BENEFIT CUTS.” So much for being the party of fiscal responsibility. Even under the Republicans’ optimistic savings targets (and they are _very

optimistic_), Medicaid spending would still rise by _hundreds of billions_ over the next decade. The One Big Beautiful Bill aims to trim the rapid growth of federal Medicaid outlays from

about 4.5% per year to roughly 3%. Let’s be clear: That is not a spending cut. And it’s not austerity either. It’s barely the fiscal equivalent of easing off the accelerator as we hurtle

toward a debt cliff. As for those draconian “cuts” cited in headlines — like the CBO’s estimate that 10.3 million people could lose coverage? They assume states will drop beneficiaries en

masse rather than adjust budgets, improve eligibility oversight or game the system via creative financing gimmicks. If states care about coverage, nothing in the House bill stops them from

funding it themselves. Republicans should not be cowed by apocalyptic rhetoric. Course corrections today could prevent a much deeper fiscal reckoning tomorrow. Instead of debating whether

Medicaid should grow 4.5% or 3% per year, legislators should be asking: Why is this program growing faster than the economy? Why has it become untouchable? And how can we put this program on

a sustainable path? Until that conversation takes place in good faith, expect Washington to keep racking up debt like there’s no tomorrow. Americans deserve a sustainable safety net — not

one built on borrowed money and political cowardice. _Dominik Lett is a budget-policy analyst at the Cato Institute._