Federal Budget Watch, Mar. 6
House Republicans are poised to roll back expanded Medicaid coverage under the ACA. We’ve got the latest intel, thanks to our colleagues at the Center on Budget and Policy Priorities. Let’s get started with this week’s Federal Budget Watch.
House Republicans and Republican Governors Crafting Health Proposals
House Republicans are crafting a legislative package to repeal and replace the Affordable Care Act (ACA) which is now expected to be marked up this week in the Energy & Commerce and Ways & Means Committees. It’s becoming increasingly apparent, based on press reports and other indications, that the House bill will effectively end the Medicaid expansion within a few years, and will shift significant costs to states in converting the program to a per capita cap or block grant.
As the Center on Budget and Policy Priorities wrote in their report, House Republican Proposals to Radically Overhaul Medicaid Would Shift Costs, Risks to States, the document shows that their starting point remains the ACA “repeal and delay” legislation that President Obama vetoed last year (with modifications) — a bill that would increase the number of uninsured by 32 million people, according to Congressional Budget Office (CBO) estimates. Moreover, the document shows that House Republicans intend to use ACA repeal legislation to fast track their longstanding proposal to convert Medicaid to a per capita cap or block grant. The full report details the enormous impact on states and beneficiaries and includes state-by-state data, showing that in 2019, Colorado’s federal dollars for the expansion group would be reduced by $631.6 million, increasing the state’s expenses by about the same amount.
Last Thursday, House Republicans unveiled to a few Republican members their new ACA repeal legislation. The Center’s newly released blog, House GOP Medicaid Provisions Would Cut Federal Medicaid Spending by $560 Billion Over Next Decade, discusses the impacts of ending the ACA’s enhanced federal funding for Medicaid expansion, which outlines, leaked discussion drafts. The blog reports that the House Republican health plan would shift an estimated $560 billion in Medicaid costs to the states over the next ten years, effectively ending the ACA’s Medicaid expansion for 11 million people.
Meanwhile, a number of Republican governors are also crafting a health plan that would cap federal funding for Medicaid, leaked documents show. The Center posted a blog from Aviva Aron-Dine Sunday that explains how this plan would require states to accept a per capita cap or a block grant in place of current federal funding for the ACA’s Medicaid expansion, and “allow states to opt for a per capita cap or block grant for other groups that Medicaid covers, including parents, children, pregnant women, seniors, and people with disabilities. The plan also proposes other damaging changes in Medicaid, such as letting states cap enrollment and deny coverage to eligible individuals.”
In addition, The Center explains why “a work requirement in Medicaid would penalize those least able to get and hold a job — while keeping others from improving their health and participating in the workforce,” in their blog, A Medicaid Work Requirement Would Block Poor Families From Care. Many conservatives in Congress and among the nation’s governors seek more flexibility in their Medicaid programs, such as the option to impose work requirements.
Finishing up FY 17 Appropriations
The current “continuing resolution” (CR) funding most appropriated or discretionary federal programs expires April 28, so Congress is turning its attention to trying to finish up the appropriations bills for the rest of this fiscal year. It’s unlikely that Congress will complete all of the individual appropriations bills, instead extending the CR for the rest of the fiscal year for most agencies. That said, bipartisan negotiations are underway in the Senate to see if they can work out some of the appropriations bills.
The President has signaled that he will submit a request for additional FY 17 defense spending, funding for greatly increased immigration enforcement and his wall along the border with Mexico. Conservatives may insist on offsetting cuts to pay for immigration enforcement and the wall, and there’s a risk that the cuts could come from nondefense discretionary programs.
President Trump’s FY 18 Budget Request Coming March 16
In his inaugural address to Congress last week, President Donald Trump promised to deliver a budget that would produce “one of the largest increases in national defense spending in American history.”
President Trump’s address focused fiscal priorities on rebuilding the military, improving care for veterans, and launching a $1 trillion infrastructure program. How to pay for it all won’t be made clear until the President submits his fiscal 2018 budget request, a preliminary outline of which is promised to Congress on March 16. While initial budgets submitted by Presidents in their first term often lack certain details, they typically cover all major policy areas. However, this one will reportedly only address discretionary spending, not entitlements, revenues, or deficits. Administration officials have said Trump’s proposal would boost planned defense spending next year by $54 billion and offset the cost with deep cuts to domestic and international discretionary programs.
In a new blog, Trump Plans Big Cut in Domestic Programs, The Center explains that “President Trump’s plans to raise defense funding by $54 billion in 2018 and cut non-defense discretionary (NDD) spending — which funds key priorities like education and job training, clean water, scientific and medical research, veterans’ medical care, and homeland security — by the same amount would lower NDD funding by 11 percent below this year’s level. The additional $54 billion cut would come on top of sequestration cuts that are already scheduled to take full effect in 2018 under the 2011 Budget Control Act.”
Moreover, the cuts in most NDD programs compared to 2017 will likely be significantly larger than 11 percent, as programs in some areas – such as veterans and border security – are expected to receive increases, requiring deeper cuts in other areas.
Tax Cuts
President Trump and Congressional Republican leaders continue to press for action in Congress this year on tax reform and tax cuts. When Congress takes up the Budget Resolution for FY18, these leaders reportedly will include reconciliation “instructions” in the plan to advance tax cuts in the very same procedural manner they are advancing the ACA repeal: a filibuster-proof measure that requires just 51 votes instead of the usual 60 votes. Trump, Speaker Ryan and others are pressing for deep tax cuts for the wealthy. Administration officials have called on Congress to complete action on a tax bill by August, though many observers think that is an unrealistic goal.
This legislation could also include harmful provisions affecting the EITC and the CTC in the name of “program integrity.”
