Despite all of this, Clinton knew from his time as governor of Arkansas that block granting and imposing excessive caps on and cuts to Medicaid—as the Republican leadership was proposing in 1995—would be devastating to the most vulnerable, and shift costs and risk to the states. As a result, he launched a full-court press to defend Medicaid, refusing to sacrifice the program in exchange for a win on Medicare. Indeed, it was an argument on Medicaid that was the triggering event in his decision to shutdown the government that year.
Today as the Trump administration and the Republican leadership are trying to provide cover for their harsh and unpopular Medicaid cuts to pay for tax cuts for the most well-off, they are using the fact that Clinton also had a per-capita-cap proposal as a means to suggest their proposal is less harsh, and even “bipartisan.” That is false.
First of all, the Clinton per-capita-cap was not proposed as a means to cut Medicaid and undermine its ability to provide affordable health care for millions of Americans, but rather as part of a strategy to counter and defeat the Gingrich-led effort to block grant and gut Medicaid to finance tax cuts. Clinton’s move was to insist on fully guaranteeing Medicaid’s entitlement status while also demonstrating a policy response to Medicaid’s high growth rates through a version of what he called a per-capita-cap that still allowed for a generous growth rate.
Indeed, this was so well understood during the government shutdown that every single Democratic senator—from Paul Wellstone to Ted Kennedy to Tom Harkin—signed a letter to the president praising his per-capita-cap proposal and noted the president’s commitment to “veto any budget not containing a fundamental guarantee to Medicaid for eligible Americans.”
Opposition to the Republican Medicaid policy was so strongly felt by Clinton that it was his refusal to bend on Medicaid on the evening of November 13, 1995, that was the triggering event in his decision to shut down the government. As senior policy aides to Clinton at that time, we can vouch for what happened in the cabinet room that night. Nevertheless, we will rely on the account reported by the Pulitzer Prize winning journalists David Maraniss and Michael Weisskopt in their book, Tell Newt to Shut Up, as to what when down after Dick Armey suggested Clinton’s criticisms of the Republican Medicaid and Medicare policies “had frightened his mother-in-law and her friends.” President Clinton responded:
“[L]et me tell you there are a lot of older women who are going to do pretty darn bad under your budget … I want to make one thing clear. I am not going to agree to your Medicaid package no matter what … If you want to pass your budget, you’re going to have to put somebody else in this chair. I don’t care what happens. I don’t care if it all comes down around me. I don’t care if I go to five percent in the polls. I am not going to sign your budget. It is wrong. It is wrong for the country.”
As the journalist Julie Rovner reported in her article “Medicaid divide drives US budget battle,” Clinton was committed to protecting Medicaid. In his December 9, 1995, radio address he said: "If the Republican cuts in Medicaid take effect, the blunt reality is that as many as four million children will simply be denied needed medical care. That is unacceptable in a country that cares about its children. And I will not permit it to happen.”