Build Back Better or Build Back “Badder”?

Currently, there are more job openings available than there are people to fill them. Nationally, there are 10.4 million unfilled job openings and 7.4 unemployed workers. In Alaska, monthly job openings are not data that is collected, but the most recent seasonally adjusted unemployment rate is 6.1 percent (October 2021), compared to 6.5 percent a year ago (October 2020), while unemployment pre-pandemic (January 2020) was five percent. Clearly, while Alaska is slowly rebuilding, it has not yet recovered from the pandemic. Unfortunately, federal lawmakers might just make things worse with the Build Back Better bill (BBB).   

The BBB bill is a massive spending spree by federal lawmakers that has the potential to completely stall and even reverse the little economic growth that Alaska has made in 2021. While this “human infrastructure” bill provides for a wide variety of programs, there are two main aspects of the bill that could cause major economic damage: Medicaid and child care. 

One very large aspect of the BBB that would affect Alaskans and Alaska state spending is a new Medicaid maintenance of effort (MOE) provision. The MOE would do two things: one, it would force Alaska to permanently keep current enrollees on Medicaid, even if enrollees become ineligible for Medicaid, and two, it would bar Alaska from rolling back current Medicaid expansion, regardless of how expensive it becomes for the state. This means that Alaska would be financially on the hook for able-bodied adults who can work and should no longer be eligible for Medicaid, which will balloon Alaska’s already bloated Medicaid program. The second part of the MOE would force Alaska to pay a fine if the state attempts to roll back Medicaid expansion due to the ballooning costs. In addition to increasing the burden on state spending, this Medicaid MOE will result in even higher health care costs for Alaskans, as increased Medicaid enrollment influences costs in the state. 

A second aspect of the BBB that would affect Alaskans is a new child care entitlement program. While support for families is important, a one-size-fits-all government-run child care program will not do that. The new entitlement program would pay for 100 percent of child care costs for families making less than the state’s median income ($101,575 in Alaska) by providing subsidies to providers, while families that make up to two and a half times the state’s median (over $200,000) would only pay up to seven percent of their income toward child care. This program sounds nice, but unfortunately, federal money always comes with expensive strings attached. There are burdensome requirements for child care providers to receive the new subsidies, which would end up raising the cost of child care and would prevent the majority of providers (particularly faith-based and in-home providers) from qualifying for the subsidies. The end result of the new child care entitlement program in the BBB would be to raise the cost of child care and reduce families’ access to providers, thus hurting the very people the program intends to help.  

The title of this massive federal spending spree is Build Back Better, meaning that the intention is to build back America better than it was before the pandemic. Unfortunately, a more accurate name would be Build Back “Badder” (or Build Back Worse to be grammatically correct). The BBB bill would increase health care costs and child care costs in Alaska and require even more state spending. Higher costs and more state spending is not what Alaska, or this nation, needs to build back after the pandemic, particularly as we also deal with the effects of rising inflation. The federal government instead needs to stop the federal overreach and perhaps receive a refresher on the principles of federalism. The Build Back Better bill will not build Alaska back better.