In the search for a transportation funding solution, an old idea is getting new play: hand responsibility for Medicaid fully to the federal government, freeing up state resources to take on education and infrastructure.
The proposal dates back to at least 1980, when Tennessee's Republican Gov. Lamar Alexander reportedly proposed to President Ronald Reagan a Medicaid-for-education "grand swap." Reagan supported the idea, but it never went anywhere. Now a senator, Alexander revived his push in May. And Washington Post columnist Robert Samuelson recently proposed adding transportation funding to the mix.
"Slightly modified, the switch still works," he wrote. "In 2012, states will spend about $200 billion on Medicaid. Against that, federal aid to states for schools and training totals $105 billion and construction grants (mostly for highways and transit systems) amount to $96 billion," Samuelson argued, citing a recent report on state budgets penned by former Federal Reserve chairman Paul Volcker and former New York Lt. Gov. Richard Ravitch.
It's an idea that shows bipartisan promise: Alexander still backs it, as does Samuelson, and The New Republic's Timothy Noah offered up his support, too.
As we saw in Atlanta this week, even a one-cent tax increase with bipartisan and business backing couldn't get enough voter support. Is a shuffling of resources, and not new taxes, the right solution? What do you think? Could a "grand swap" work? Or is the risk of devolution too strong? (Maybe the federal government could retain some role in projects of regional or national significance?) Is this solution too blunt or just right?