I & I Editorial BoardWhen the Treasury Department released its final budget numbers for fiscal year 2026 on Friday, what little coverage there was focused on the deficit, which came in just a hair’s breadth short of $2 trillion.
But what the “news” media missed was the much bigger story the report told. Namely, that the ongoing claims about “massive” cuts to Medicaid are one big, pre-Ozempic-fat lie.
According to the latest “Monthly Treasury Statement,” revenues in FY 2026 came in at just over $5.4 trillion while spending was just under $7.4 trillion, leaving a deficit of $1.992 trillion.
News outlets such as CNN tried to blame Trump’s 2025 tax cuts, saying they are “starting to have an effect.” But revenue this year is up 3% over last year, which is ahead of GDP growth.
On the spending side, most news outlets focused on interest payments on the national debt. But that accounts for only $82 billion of the $385 billion spending increase this year. Where did the rest of it come from?
Most of it was in entitlements. Social Security spending was up $86 billion, Medicaid up $76 billion, veterans’ benefits up $39 billion. And, believe it or not, Medicaid.
Yes, Medicaid. You know, the program that Republicans allegedly “slashed” with “draconian” cuts that were going to cause untold horrors. Even now, the media are peddling the claim that Republicans cut Medicaid to the bone, causing hospitals to close and cost thousands of people their lives.
Now we know just how big a lie this is.
The latest Treasury report shows that Medicaid spending this year was up 8% compared with FY 2025. And last year’s spending was up 8% compared with FY 2024, all of which overlapped with Joe Biden’s last full year in office. Keep in mind that spending in Biden’s last year in office reflected massive increases he’d engineered allegedly to mitigate the economic effects of COVID.
The chart below shows how much money the federal government sent to the states in each month for the past three fiscal years.
In not one single month has Medicaid spending been lower than it was in Biden’s last full year in office. And this year, spending is higher than it was last year.
Even by Washington’s phony spending-cut math (which counts a reduction in a spending increase as a cut), these are giant-sized spending increases.
Want more evidence?
In June of Biden’s last year in office, the Congressional Budget Office issued a forecast for Medicaid spending for the next decade, which assumed that every provision in place that year would remain so in perpetuity.
In February of this year, the CBO issued its latest budget forecast for Medicaid, which included the alleged “massive” spending cuts contained in the One Big Beautiful Bill Act.
Incredible as it might seem, Medicaid spending is projected to be higher under Trump’s “draconian” budget cuts than under Biden through 2031.
It’s only after that, when spending forecasts become completely unreliable, that the spending lines cross the other direction.
And already, spending under Trump is exceeding the CBO’s forecast.
According to the Treasury report, federal Medicaid spending in FY 2026 was $723 billion – which is $15 billion higher than the CBO had projected just seven months ago.
The question the mainstream press should be asking the Trump administration is: Why is Medicaid spending still going up nearly four times the rate of inflation?
— Written by the I&I Editorial Board
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