Conflicting messages and inconvenient facts about the shutdown

As the federal government shutdown nears the end of its third full week, Democrats and Republicans on Capitol Hill are reportedly no closer to an agreement, or even the appearance of an agreement, on reopening the government. The House-passed continuing resolution to fund the government received 55 votes in the US Senate, with all Republicans and three Democrats voting in favor, but the 60 votes needed to break the Democratic deadlock remain elusive.

At the heart of the controversy that has precipitated this shutdown is disagreement over whether to extend temporarily boosted taxpayer subsidies for Obamacare, Medicaid and Medicare that Democrats enacted in 2021 when they controlled the White House, House and Senate. Senate Minority Leader Chuck Schumer (DN.Y.) and other Senate Democrats argue that extending the temporarily enhanced Medicaid transfer payments and Obamacare subsidies enacted by the Biden administration is a popular cause, so much so that voters will reward Democrats for shutting down the government, or at least not hold against them. That argument faces an uphill battle based on a New York Times/Sienna poll published days before the shutdown began, which found 59% of independents believe Democrats should not have shut down the federal government. The same is true for nearly half (43%) of Democrats surveyed.

Meanwhile, the unified message coming from Republicans is that Democrats would rather shut down the federal government than end enhanced subsidies that are too expensive for taxpayers, exacerbate rising health care costs, and some of which flow to people living in the country illegally. But Sen. Schumer and his fellow Democrats don’t seem to be on the same page as Republicans, because in rebutting that last point, Schumer and congressional Democrats are contradicting each other.

Take Rep. Jim McGovern (D-Mass.), who like Schumer is claiming that illegal immigrants do not receive taxpayer-subsidized health insurance, as congressional Republicans and the White House claim. Congressman McGovern will have to deal with this controversy with his Democratic colleague, Ro Khanna (D-Calif.), who admitted during an interview Fox Business that illegal immigrants receive taxpayer-subsidized health insurance; However, Khanna defended this by arguing that “the amount of money that actually goes to undocumented people is so small.”

Colleagues in Congress aren’t the only Democrats who have pushed back against Schumer and company’s claims. In fact, top Democratic governors have recently provided even more visible acknowledgments of the fact that US taxpayers subsidize health insurance for illegal immigrants. Congressional Democrats who voted to shut down the federal government should know this, as many of them reside in a blue state where the governor is a fellow Democrat who recently eliminated Medicaid eligibility for illegal immigrants.

In May, for example, Gov. Gavin Newsom (Calif.) signed a new state budget that reduced but did not completely eliminate Medicaid eligibility for illegal immigrants. “In signing the budget, Mr. Newsom backtracked on his earlier promise to insure all low-income residents, regardless of their immigration status. New York Times was mentioned in June. “But it came as the state faced a $12 billion shortfall, in part because of large cost overruns in the state’s insurance plan for undocumented immigrants, and it would be politically difficult to cut programs for citizens without reducing benefits for undocumented immigrants.”

Newsom isn’t the only blue-state governor to cut taxpayer-funded health insurance for illegal immigrants this year. In May, Minnesota lawmakers and Gov. Tim Walz (D-Minn.) approved a new state budget that ends Medicaid eligibility for adult illegal immigrants at the end of 2025. Children living in Minnesota illegally will remain eligible for the state’s Medicaid program. NBC News is described the move as “essentially reversing one of the signature policies Walz secured during a landmark 2023 legislative session when Democrats had full control of state government.”

Meanwhile, another 2028 presidential candidate, Illinois Gov. JB Pritzker (D), also removed illegal immigrants from Medicaid rolls this year as part of the new state budget he signed into law in May. “Specifically, Pritzker’s new budget proposal would cut health benefits for immigrant adults (HBIA),” Federation for American Immigration Reform (FAIR) he explained in a blog post.

“HBIA, introduced in 2021, provided health care coverage to low-income adults, regardless of immigration status, ages 42 to 64 who were ineligible for Medicaid because of their immigration status,” FAIR added. “The program is now scheduled to expire on July 1, 2025. Illinois has a similar program for seniors 65 and older called Health Benefits for Elderly Immigrants (HBIS), but that program is not being cut at this time.”

The ability to replace federal transfers

“That’s a lie,” Senator Schumer remarked about the White House’s claim that continuing taxpayer-subsidized health insurance for illegal immigrants is more important to Democrats than funding the government. “Not one federal dollar goes to provide health insurance to undocumented immigrants,” Schumer added in a statement posted to X less than six hours before the government shutdown took effect, adding “NOT ONE PENNY.”

The key factor missing from Schumer’s criticism is Vice President JD Vance he wrote in response, is that “money is fungible.” That, Vance added, is “the reason that the Dem[s] and the media lie that health care doesn’t go to illegals is so absurd.” Vance expanded on his point further:

“Consider, for example, two state Medicaid programs–Ohio and New York. New York gives Medicaid to illegals and Ohio doesn’t,” Vance added. “When the government gives New York billions of dollars for Medicaid, that frees up state money in New York that can then be spent on illegals.”

“Furthermore, because medical services are in limited supply, when an illegal accesses health care, it increases costs for everyone,” the Vice President continued. “So New Yorkers are paying a higher price for medical services, and the federal government is subsidizing those higher prices.”

In addition to the exchangeability of government dollars, Niklas Kleinworth, senior fellow at the Paragon Institute, points out that “some states have taken welfare gambling a step further by using legalized Medicaid money laundering programs to fund health care programs for illegals.”

“California did just that by taxing insurers to help run the Medicaid program and then using those funds to achieve a higher federal match on Medicaid,” Kleinworth added. “The state then uses those additional funds to pay the insurers for their contribution, and then pockets the rest for things like the health care program for illegals.”

Polls showing most people oppose shutting down the current government, combined with the fact that three Senate Democrats already voted with Republicans to keep the government open, put Schumer and his fellow Democrats in a weak position from the start. Despite the relative lack of media coverage this government shutdown is receiving, Senator Schumer’s insistence that the conflict can only end when Republicans and Democrats agree on changes to the US health care system is a position that will become increasingly untenable as time goes on.