WASHINGTON — House Republicans on Wednesday unveiled a broad outline of their plans for the federal budget, using cuts to social programs to help pay for trillions of dollars in tax cuts.
The budget outline indicates Republicans are planning $4.5 trillion in tax cuts over ten years. Spending cuts would offset part of that cost, but only part, so that meeting the blueprint’s goals would add trillions of dollars to the country’s deficit.
The document doesn’t specify exactly what programs to cut. But analysts say the clear implication is that Republicans are looking for deep reductions in programs like Medicaid and the Supplemental Nutrition Assistance Program, both of which serve low-income Americans, given the GOP ruling out cuts to Medicare or Social Security.
House Speaker Mike Johnson (R-La.) on Tuesday said Republicans could save “a huge amount of money” by rooting out fraud in those programs. He also said that a major goal was to goad more Americans into the workforce by cutting benefits to the unemployed.
“Work is good for you. You find dignity in work. And the people that are not doing that, we’re going to try to get their attention,” Johnson said at a press conference Tuesday. “So everyone needs to take a deep sigh of relief and understand that we’re not going to harm any Americans with this. What we’re doing is the right thing by the people.”
But the cuts the new budget document envisions would likely require savings well beyond what adding work requirements or eliminating fraud would generate. At the same time, the GOP budget document envisions a much higher budget deficit, because the proposed spending reductions wouldn’t come close to offsetting the tax cuts.
Rep. Brendan Boyle (D-Pa.), the top Democrat on the budget committee, said their proposal “slashes critical programs that millions of hardworking Americans rely on, all while adding trillions of dollars to the deficit to bankroll massive giveaways for giant corporations and billionaires like Elon Musk.”
Republicans have openly acknowledged that despite their furious opposition to big budget deficits, they themselves are making no effort to fully offset the cost of their tax cuts. Instead, they have said their proposed changes would boost the economy so much that tax receipts from increased business activity will make up the difference.
“When we spend under reconciliation, we don’t have to offset it,” Sen. Lindsey Graham (R-S.C.), the chairman of the Senate Budget Committee, told reporters on Wednesday of the GOP’s plan.
One respected budget expert has said Republicans are using “fantasy math.”
The new House budget blueprint is in the form of a resolution that Republicans plan to mark up this week, kicking off the start of a lengthy congressional process for setting spending priorities. Eventually the entire House will have to vote on a resolution, and then negotiate with the Senate over whatever that chamber produces.
Senate Republicans are pushing forward with their own slimmer budget plan that would first enact border security, defense and energy policy, and tackle tax cuts later on. The party is still not on the same page about which path to take, and Trump hasn’t indicated which strategy he’d prefer, either.
Finding consensus won’t be easy, especially in the House, where Republicans can lose only one Republican vote and still pass legislation without Democratic support. There’s also a sharp disagreement between House Republicans who want to cut even more deeply, and those who worry the cuts in the document already go too far.
Medicaid In The Crosshairs
It’s not clear where those cuts are supposed to be, because the budget document simply has instructions for various committees to find enough savings to hit fixed targets. But there are some clues.
The document instructs the House Energy and Commerce committee to find $880 billion in ten-year savings. Analysts and liberal advocates told HuffPost that is a huge tell, because Energy and Commerce has jurisdiction over Medicaid, the federal-state program that pays medical bills for more than 70 million low-income Americans.
And Medicaid has been in the Republican crosshairs for decades.
Republicans have talked openly about trying to cut Medicaid by introducing “work requirements,” under which Medicaid beneficiaries would have to demonstrate they are employed or are seeking employment, or had a valid reason not to do so.
In reality, the majority of Medicaid beneficiaries already work, or cannot because they’re disabled or are caring for another person, among other reasons.
Past attempts to attach work requirements to Medicaid ended up reducing Medicaid rolls substantially, producing the sorts of savings that Republicans would like to see. But studies have later found that work requirements frequently took coverage away from people who qualified for coverage and simply couldn’t make their way through the reporting requirements.
Still, the magnitude of those savings means that Republicans might try to do more than impose work requirements.
Republicans could for example try to introduce a “per capita cap” or some other mechanism that would limit federal spending on the program going forward, effectively ending the open-ended funding commitment Washington now makes to the states. Republicans could also roll back several reforms designed to make enrollment simpler, especially for children.
“Cuts of the magnitude required of the Energy and Commerce Committee leave little doubt that the Budget Resolution sets the stage for deep cuts to Medicaid,” Allison Orris, a senior fellow at the left-leaning Center on Budget and Policy Priorities, told HuffPost. “This is not a budget that protects Medicaid enrollees.”
Another possibility would be to scale back or eliminate federal funding for the Affordable Care Act’s expansion of Medicaid, or find some other way of cutting from the health insurance program known as Obamacare, which Republicans tried to repeal outright during Trump’s first term.
“While there’s not going to be an ACA repeal debate, or it at least won’t be called that, these federal health spending reductions could approach or even exceed what Republicans attempted in the 2017 repeal effort, Larry Levitt, executive vice president at the health care research organization KFF, told HuffPost.
Any of these options could lead to substantially less federal spending – and substantially fewer people with health insurance.
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“The magnitude of these health cuts is on a similar scale to Republicans’ previous attempts to ‘repeal and replace’ the ACA,” said Anthony Wright, executive director of the liberal advocacy group Families USA. “But this time it is even more clear that it is repeal without any replacement, leaving many Americans uninsured, living sicker and dying younger and one emergency from financial ruin.”