The simplest way for the federal government to restrain Medicaid would be to end the current system of matching state spending and replace this with block grants, which would give the states an incentive to focus on cost-control.

ECONOMIST: America's budget deficit

Putting sensible programs in place now that would restrain spending growth over time is much better than the cold-turkey approach at year end.

FORBES: Gradually Curbing Spending Beats Cold-Turkey Option