​In this episode of the Let People Prosper Show, Rick Graber, president and CEO of the Bradley Foundation, shares insights into the Foundation’s work promoting free-market principles, individual liberty, and a strong civil society. Graber reflects on the impact of his diverse career, the importance of philanthropy in fostering these values, and his optimism for America’s future rooted in its unique opportunities.

Please share and rate the Let People Prosper Show wherever you get your podcasts, visit vanceginn.com for more insights, and subscribe to my newsletter for show notes at vanceginn.substack.com.

(0:00) – Introduction to the Bradley Foundation and Mission
(4:53) – Rick Graber’s Career Journey and Mentorship
(10:01) – Role of Free Markets and Individual Liberty
(14:51) – Staying True to Founding Principles
(20:03) – Philanthropy’s Role in Society
(25:11) – Addressing Immigration and Trade
(30:00) – Celebrating American Opportunity and Civil Society

Originally published at Real Clear Policy.

​Elon Musk and Vivek Ramaswamy recently published the legal background, justification, and their plans for the Trump-created temporary, non-governmental DOGE, Department of Government Efficiency. They have numerous ideas of how to clean up what the military calls a “target-rich environment” of federal sloth, waste, inefficiency, corruption, and demonstrably illegal activities by the administrative or “deep” state.    

Start with Medicaid. It is highly dollar inefficient, spending too much while getting too little value – timely access to medical care – wasting billions of taxpayer dollars.

In 2023, CMS (Centers for Medicare and Medicaid Services) in Washington spent more than $860 billion running a program it is legally prohibited from running. When regulated by Washington, Medicaid is ILLEGAL!

Section 1801 of the Amendment to the Social Security Acts of 1965 that created Medicaid reads as follows. Note the Section’s title and Congress’ explicit prohibitions.

SEC. 1801. PROHIBITION AGAINST ANY FEDERAL INTERFERENCE
“Nothing in this title [the law] shall be construed to authorize any Federal officer or employee to exercise any supervision or control over the practice of medicine or the manner in which medical services are provided, or over the selection, tenure, or compensation of any officer or employee of any institution, agency, or person providing health services; or to exercise any supervision or control over the administration or operation of any such institution, agency, or person.”

Despite the specific intent of the law, over decades, CMS (Centers for Medicare and Medicaid Services) has taken control of eligibility standards, benefits, i.e., medical care provided, and the payments allowed. Washington applied a one-size-fits-all approach for Medicaid enrollees in every state program.

If the DOGE wants to cut nearly one trillion dollars from the federal budget, and  simultaneously improve (!) access to medical care, follow the Medicaid law as written. 

The Affordable Care Act is a good example of over-regulation of Medicaid by Washington, but there were dozens of others. Most annual OBRAs (Omnibus Budget Reconciliation Acts) since 1975 have contained some section that increased Medicaid benefits, expanded eligibility, or reduced payments.

A program originally intended for less than four million “Old-age, Survivors, and Disab[led]" Americans, exploded by December 2022 to include 92.3 million enrollees. The federal government gave 27.6 percent of the U.S. population no-charge-to-consumer Medicaid coverage paid by taxpayers. The already exorbitant cost of this program will increase even further because California and Oregon have added illegal immigrants to their Medicaid rolls.  

Musk and Ramaswamy intend the DOGE to use three approaches to improve federal efficiency: regulatory rescissions (canceling regulations), administrative reductions (“reductions in force”), and cost savings, such as radical simplification and rigorous auditing of government procurement. They utilize all three approaches when implementing Section 1801. As prescribed by law, stop federal interference in state Medicaid programs other than providing block grants. Eligibility, benefits, payments to insurance companies as well as to providers should be decided by the states, not the federal government. Reports on medical and financial results of Medicaid programs should go to respective state legislatures, not Washington.

Discontinue the FMAP (Federal Medical Assistance Percentage) formula which incentivizes spending and discourages saving. Currently, the more a state spends on its Medicaid program, the more taxpayer funds it receives from Washington. Make federal funding a negotiated, fixed amount. Washington can then budget for a known quantity, not a variable dependent on states’ budgeting. With block grants, states will operate their programs as they know best, adding whatever state funds are necessary to support their medically vulnerable residents.   

In their Wall Street Journal blueprint for improving government efficiency, Musk and Ramaswamy wrote, “we will focus particularly on driving change through executive action based on existing legislation rather than by passing new laws.” They could have been (and hopefully were) writing about Section 1801. Activating the legal prohibition against “any federal interference” with state-controlled Medicaid programs is precisely what needs to be done to cut billions in costs and at the same time save American lives.

All current federal regulations that control state Medicaid programs would be rescinded. The current CMS/Medicaid actuaries and accountants, administrators, bureaucrats, compliance officers, enforcement agents, oversight inspectors, and rule and regulation writers would be gradually transitioned into the private sector. This very large reduction in force would save taxpayers billions in wasteful, illegal federal spending.
​
By following the Medicaid law as written, DOGE can rein in an out-of-control federal bureaucracy. The 47th President can use Section 1801 to drain the Medicaid portion of the swamp.

​In this Let People Prosper Show episode, I welcome back Dr. Alex Salter for his fourth appearance. He is the Georgie G. Snyder Associate Professor of Economics in the Rawls College of Business at Texas Tech University and the Comparative Economics Research Fellow at TTU's Free Market Institute. We explore the economic landscape following the recent presidential election and dive into the challenges of fiscal responsibility facing Congress, the influence of the Federal Reserve in managing inflation, and the Biden administration's impact on the cost of living. We also discuss how economic policy shapes national prosperity, emphasizing the need for growth-oriented reforms, ethical considerations, and accountability in monetary policy. Join us for a critical look at how pro-growth policies can create a brighter economic future for Americans.

Originally published at Texans for Fiscal Responsibility. 

States across the country are rethinking tax reform to stay competitive for residents and businesses. Many are exploring ways to phase out personal income, business franchise, and property taxes to attract workers, foster economic growth, and ensure property rights. But doing so requires careful planning to ensure stability and fiscal responsibility.

One of the most important decisions in this process is choosing the right mechanism to trigger tax cuts. 

Two common approaches are revenue triggers and surplus triggers. While both have their merits, surplus triggers are far more reliable and sustainable. They base tax cuts on actual fiscal surpluses rather than optimistic revenue projections and address the core problem of government: spending.

Why Spending Limits and Surplus Triggers Make Sense

Tax reform doesn’t happen in isolation—it needs to be part of a broader strategy to limit government growth and promote fiscal discipline. This is where spending limits come into play. A spending limit ties annual increases in government spending to measurable factors like population growth and inflation. By keeping spending under control, surpluses naturally occur when revenues grow faster than the spending limit, creating the perfect opportunity for meaningful tax cuts.

Here’s why a surplus trigger, paired with a spending limit, is the best approach for phasing out taxes:

1. Stability Over Speculation

Revenue triggers rely on meeting specific revenue targets before tax cuts are implemented. While this sounds straightforward, it assumes continuous economic growth—a risky gamble. If revenues fall short due to economic downturns or other factors, tax cuts may be delayed or reversed, creating uncertainty for taxpayers and businesses.

Surplus triggers, on the other hand, only initiate tax cuts when there are genuine excess funds at the end of the year. This approach ensures that tax relief is stable, reliable, and based on real financial health rather than speculation.

2. Encouraging Fiscal Discipline

A surplus trigger works hand-in-hand with a spending limit, which naturally generates surpluses by controlling government expansion. This ensures that tax cuts are backed by actual savings, not temporary windfalls. Revenue triggers, by contrast, don’t address the root cause of fiscal instability—unrestrained spending. Without limits, even rising revenues can be outpaced by unchecked spending growth, leaving little room for tax relief.

By focusing on spending, surplus triggers encourage long-term fiscal discipline, making tax reform sustainable.

3. Reducing the Risk of Tax Reversals

Revenue-triggered tax cuts can be politically fragile. If revenue growth slows, lawmakers may feel pressured to raise taxes again, undermining the entire reform effort. Surplus triggers avoid this problem by tying tax reductions to actual fiscal conditions. This ensures that cuts are less likely to be reversed, providing certainty for taxpayers and businesses alike.

How Surplus Triggers Work in Practice

A surplus trigger takes the revenue collected above the spending limit at the end of each fiscal year and allocates it toward specific priorities. Here’s a practical example of how this can work:

90% of the surplus is directed to a Tax Relief Fund to reduce the income tax rate gradually over time. This fund can also act as a buffer to cover limited spending needs, if necessary. Any leftover funds can go toward paying down debt, further strengthening the state’s financial health.
The remaining 10% (or less) is left in the general fund or a rainy day fund for unforeseen revenue shortfalls due to a recession, natural disaster, or other reasons. But the focus during those shortfalls should be reducing spending so more money remains for tax relief when people tend to be hurting the most.
By splitting surplus funds between tax relief and rainy day funds, states can provide immediate benefits while laying the groundwork for future prosperity.

Flexible, Sustainable Tax Reform

Unlike revenue triggers, surplus triggers don’t lock states into rigid tax cut schedules. Instead, they allow flexibility to adjust the pace of tax reductions based on actual surpluses. This makes a complete phase-out of the income tax achievable within a reasonable timeframe, such as a decade, while ensuring that essential services and fiscal stability are preserved.

When combined with a spending limit, surplus-triggered tax relief delivers significant economic benefits. Lower income taxes increase disposable income for families, encourage consumer spending, and attract businesses looking for a more favorable tax environment. Over time, the resulting economic growth broadens the tax base, generating additional revenue from sales and property taxes to offset the reduced reliance on income taxes.

Research shows that phased tax relief can drive billions in economic growth and create thousands of new jobs. It’s a strategy that not only improves the fiscal health of the state but also enhances the quality of life for residents.

The Bottom Line

Surplus triggers, paired with a spending limit, offer a sustainable and disciplined path to meaningful tax reform. They provide a reliable framework for reducing and eventually eliminating personal income taxes, ensuring that tax cuts are based on real fiscal health rather than speculative revenue growth. By focusing on spending restraint, states can achieve tax reform that is both responsible and transformative, paving the way for economic growth and competitiveness for years to come.

The choice is clear: surplus triggers are the smarter, more stable way to deliver lasting tax relief and fiscal stability.