By The Herald Editorial Board
As disruptive and damaging as Elon Musk and his chainsaw-like hacks at federal workers and spending have been, congressional Republicans are moving ahead — with more stealth and savvy than Musk — to adopt far more consequential cuts to vital and popular “safety net” programs, in order to make room in the federal budget for an extension of federal tax cuts that otherwise would expire at the end of the year.
Among notable anti-poverty programs being considered for potentially deep cuts are the Supplemental Nutrition and Assistance Program, popularly known as food stamps, and Temporary Assistance for Needy Families. But causing the greatest concern have been the hungry eyes cast upon Medicaid, the program supported jointly by federal and state governments that provides health coverage for low-income individuals, children and families.
Medicaid provides health care services for more than 72 million people across the nation, about 1 in 4 of us. Among those who qualify for care are the low-income elderly, those with disabilities and about half of all children. In Washington state, Medicaid, through the state’s Apple Health program, serves more than 1.8 million people — about a fifth of the state’s population — including 47 percent of children, 1 in 6 adults. 3 in 5 nursing home residents and 3 in 8 people with disabilities.
Among the promises made leading up to the 2024 election, Donald Trump and Republicans pledged to extend most of the tax cuts they adopted in 2017 as the Tax Cuts and Jobs Act. But extending those tax cuts — as proposed in a budget outline approved in a tight party-line vote last month — calls for a reduction of $4.5 trillion in revenue that those taxes would have generated over the next 10 years, but only partially paid for with $2 trillion in proposed cuts to federal spending.
What Republicans adopted last month tasked one House committee, the Energy and Commerce Committee, to find some $880 billion in savings over the next 10 years from the programs in its purview — among them Medicaid, Medicare and the Children’s Heath Insurance Program — of about $1.3 trillion total.
Last week, however, the Congressional Budget Office, the nonpartisan federal agency that advises Congress, concluded that meeting that target won’t be possible without cuts to Medicaid, Medicare or CHIP. And with promises already made by President Trump to leave Medicare and Social Security alone, that leaves Medicaid and the related CHIP as likely targets.
“Their plan would force the largest Medicaid cuts in American history; all to pay for more tax giveaways to billionaires,” concluded Rep. Brendan Boyle, D-Pa., ranking member on the House budget committee.
Deep cuts to Medicaid, devastating to individuals and families, would in turn hit state hospitals hard, said the Washington State Hospital Association in a statement last week. Because hospitals rely on Medicaid funds to sustain services, significant cuts to Apple Health funding would result in funding losses for health care services and possibly even the closure of some hospitals, the statement said, with rural hospitals likely hit the hardest because they serve a larger share of Apple Health patients.
And Washington state — already scrambling to fill a $6 billion gap between revenue and current spending trends in the next two-year state budget — can’t easily pick up the slack if the federal government significantly reduces its Medicaid matching funds. And that “slack” could be monumental, with the federal government providing $12.5 billion in Medicaid funding to Washington state in fiscal year 2023.
If support is cut only to the federal program that allowed states to expand Medicaid under the Affordable Care Act, Washington could be on the hook for $2.8 billion to maintain coverage for about 647,000 residents, the Washington State Standard reported.
Asked about those possible federal cuts to Medicaid, state Sen. June Robinson, D-Everett, chief budget writer for the chamber, said Thursday that the state has little information available to it to plan a response.
“If Congress makes decisions that result in cuts to Medicaid, we do not, as a state, have the ability to backfill those,” she said. “We will need to adjust. Without knowing what they are, I can’t speculate what our path forward might be, but it certainly is not one that I look forward to having to navigate.”
Republicans, among them House Speaker Mike Johnson, R-La., have insisted that eliminating waste, fraud and abuse and adding a work requirement for Medicaid recipients would achieve much of the reductions in spending they seek.
Such work requirement programs have been attempted in two states: Georgia and Arkansas. But, those pilot programs aren’t promising. Bloomberg Opinion columnist Mary Ellen Klas reported last week, that Arkansas’ experiment lasted only eight months before it was thrown out by a federal judge, and research after found that more than 95 percent of those enrolled met the work requirement before it was adopted or should have been exempt. Georgia’s program is ongoing, but of $40 million spent by the state on the program last year, only 10 percent went to recipients, with the rest funding consultants and vendors.
Adding a work requirement’s administrative oversight adds the bureaucratic waste that cost-cutters pledged to eliminate, as nationally, 92 percent of able-bodied Medicaid enrollees work full or part-time, are in school or are caregivers, reports KFF, the health research nonprofit.
And don’t count on the tax cuts to make up for what many Americans would lose in health care coverage and other benefits, writes William Gale, co-director of the Urban-Brookings Tax Policy Center and a senior economist for President George H.W. Bush.
A review of the proposed tax cuts extension would deliver only 1.7 percent of the benefits to the bottom 20 percent of households by income; about $130 a year, compared to about 65 percent of the benefits going to the top 20 percent and more than 23 percent to the top 1 percent of households, who would see an average benefit of $70,000 annually.
Pairing the tax cuts for upper income Americans and losses in benefits for those most in need, the overall impact is poor for the all but the top 40 percent, Gale writes: “In the bottom two income quintiles, more than 99 percent of households would be worse off, facing an average annual tax increase of $1,515. Even in the middle fifth, 76 percent of households would be worse off.”
Considering the impact to low-income Americans — children; seniors in nursing homes and those scraping by to stay in their own homes; those with disabilities; and the hospitals and medical providers serving all — the waste, fraud and abuse that some are diligently looking for appears centered squarely in an extension of tax cuts for the wealthiest Americans.
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