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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Yes, there are pluses and minuses in this Administration.
The minuses, of course: The Iran imbroglio; this column’s Medicaid increase (allowing states to get the funds even when fraud is occurring-and what gets me the most, according to this column, mis-stating the increase and implying it’s a decrease.) Why is this fraud allowed to continue, I wonder? Incompetence, corruption, or because the Medicaid problem is just too complex to solve.
So why am I voting for Republicans (and would vote for President Trump if he were running)-because, look at the alternative parties and candidates! Moreover, Trump has been a very good President with, in my opinion, the Economy, the border, crime, foreign affairs (except for Iran) and especially recognizing China as, not merely a competitor, but as a vicious enemy.
We are fortunate that Trump took on the job. Just think, if Kamala Harris had won, we’d wouldn’t even know China was a problem. Perhaps, in her fourth year, we all would have been practicing Mandarin Chinese. Affordability would have been a problem because, due to climate change legislation, the supply of oil would have dropped. Even if there was no Iran war (and concomitant acceptance of their nuclear bomb policies) the price of gas and diesel would have risen.
And, under Kamala, Biden inflation would also have risen, I believe. I’d tell you how much but my neck doesn’t fall back that far. Look skyward, and you will get the idea.
The affordability problem is, in large part, due to the price of gas which is due to the hapless way the Iran war has been handled. Also, it should be remembered that the affordability problem erupted under Biden and his nose-bleeding inflationary spiral. Once prices rise they rarely go down,even when the rate of inflation, which Trump presided over, goes down.
Bryan: Core inflation doesn’t include changes in volatile prices like food and fuel. The Fed’s favorite measure of inflation is core inflation is the Personal Consumption Expenditure (PCE), which is up 3.3% for the last year ending in September. (That doesn’t include gas, up 34%; or fuel oil, up 74%.) In 2024, the core PCE inflation was up 2.9%, down from 5.3% in 2021 and 5.0% in 2022, thanks to the Fed’s belated raising of interest rates. Trump, of course, thinks high inflation should be fought with low interest rates.
Much post-pandemic inflation was due to an enormous imbalance between the supply of goods and labor created once people stopped staying inside due to the pandemic and started spending their (stimulus) savings. Inflation surged just as much in the EU, which couldn’t afford stimulus as in the US. The ARP certainly added fuel to our fire and the Fed (stocked with Trump-appointed inflation doves) acted far too late. Trump certainly would have asked for more stimulus in 2021 too. (He threaten to veto the budget passed in December of 2020 if Congress didn’t increase the stimulus.) Thanks to excess stimulus, GDP growth in 2021 was 6.2% and unemployment fell below 5%, but we paid too high a price in terms of inflation.
No one knows what Kamala would have done as president, but with both Houses in Congress in control of the Republicans, she probably couldn’t have increased spending dramatically, so our deficit would be lower without Trump’s tax cuts. Nor could she have passed major legislation as Biden did in his first two years. Capital spending on oil and gas fell 12% in 2025 and further this year, but spending can take 6-12 months (shale) to 1-3 years (conventional fields on land) to 5-10 years (off-shore) to effect production. She would have more influence in foreign affairs. Canada and Europe would still be allies. Putin might have given up and made peace in Ukraine by now. Our bunker busters probably wouldn’t have been dropped on Fordow, but the Israelis would keep it from operating. We wouldn’t be struggling to keep the Straits of Hormuz open and shield our troops and Gulf allies against the IRCG with internal opposition crushed. China countered Trump’s 145% tariff with a 125% tariff before Trump retreated to 30% and China to 10%. Our trade deficit with China for Jan-Aug of 2026 is 41% lower than the same period in 2024. Chinese assertiveness is up, their unfair trade practices haven’t changed, and their global trade surplus is up.
You left out the part about millions of illegal immigrants streaming into the country unfettered if Kamala had won
Growth does not cause inflation.
During Biden’s presidency, total inflation went up 21.4%. More than OECD Europe. And inflation is cumulative. We are still living with that 21.4%. Since Trump was sworn in in Jan 2025, total inflation is up an additional 5.7%. Prices rose almost twice as fast under Biden
The press, and the Democrats, have a problem that even a remedial Mathematics course wouldn’t be able to resolve for them.
Like most things done in DC the cuts are lagging. The main Medicaid cuts don’t kick in until FY 27.
And yet, spending on Medicaid remains higher than the Biden baseline for another four years after that. Only in Washington can this be called a cut.
We would have a lot more money if not for underwriting the work of BiBi & Mr Z.
How about the estimated 250 Billion/year for illegals ?
” Families” losing benefits.. translation: Illegal aliens.