GOVERNMENT BY BUREAUCRACY

I’m not a political person. In fact, I have very little interest in politics.

But I do admire our political system. There appears to be no other system like it in the world. Even when tragic events occur, such as the assignation or impeachment of a political official, our system picks up the slack and carries-on. Our system is bigger than any one political official.

Our system is run by individuals who are elected by the people. Ultimately, so the theory goes, these individuals are answerable to us, since we elect them.

The problem is, most people are like me and don’t pay much attention to what our government is doing. We leave the management of our government to political parties. And I say “management,” because make no mistake; government is a business, the largest business going.

The government – federal, state, local – takes in trillions of dollars as revenue. Supposedly, it then spends that money for our benefit, as we (by majority rule) would want it doled out.

Or maybe not. Although I think that’s the theory behind our government – that we elect the officials who make the decisions and those officials decide to spend our money in a manner that we would prefer – that is not what happens.

In truth, much of our government is run by individuals in bureaucratic positions. People who we did not elect. In the highest levels, people who were appointed by people we elected.

Most of us don’t know their names. We couldn’t tell you what matters their department handles if you told us the title of their position. But these are the individuals who, on a day-to-day basis, are making monumental decisions regarding how our money is distributed.

Probably like you, I only hear about these people because in the course of my business I come across them. The circumstances of my life have me deal with them. It is only then that I have time to reflect on their actions.

For example, in my little world, I deal with the Medicaid program. The Medicaid program represents about 20% of the State’s budget, so it is no small program.

Medicaid is a federal and state program. Medicaid is a health insurance program. The various States voluntarily participate in the program. If a State chooses to participate in the program, it must agree to comply with federal law and will receive federal matching funds in exchange for its agreement to comply with federal law.

If you pay attention to that sort of thing, you’ll often hear politicians complaining about the Medicaid budget and how much money is being spent for Medicaid, how they think Medicaid benefits should be cut.

The truth of the matter is, government spending on the Medicaid program stimulates the economy greatly. It creates jobs – doctors, nurses, home health aides, nursing homes, assisted living residence, adult day care centers, durable medical equipment. You get the picture.

The revenues that Medicaid spending generates in the general economy greatly outweigh the cost to the government. Those business revenues are then taxed by the government and the government recoups some, if not all, of its money.

New Jersey, like all states, must comply with federal law if it is to receive federal funding for the Medicaid program. Seems simple, but its not.

One issue that I have encountered is particularly blatant. It concerns the purchase of annuities. Annuities are often purchased by one spouse to produce an income stream. Federal law says that annuities are not an asset but income. If the spouse who does not own the annuity enters a nursing home, the annuity should not be counted against him as an asset.

The bureaucrats who run New Jersey’s Medicaid program hate that law. In New Jersey’s courts, they claim ignorance of the federal law and represent that New Jersey’s law does comply with federal law.

It has always seemed incredible to me that the bureaucrats in New Jersey truly believe that story, and now I know they don’t.
The same bureaucrats who promulgated New Jersey’s policy on annuities and defend that policy in our courts recently joined as authors in a report of the National Association of Medicaid Directors. In that report, our very same bureaucrats whine about the federal treatment of annuities and freely discuss how various States have attempted to put in place ill-fated attempts to stop the use of annuities, in contravention of federal law.

Perhaps the bureaucrats didn’t think anyone other than themselves and sympathetic legislatures would read their report. Well, they were wrong.

This country is run by the people for the people. I think one of our most sacred documents says that. It is not a country run by bureaucracy. Even bureaucrats must comply with the law until such time as they have successfully petitioned the Legislature for a redress of what they perceive to be an error of judgment.