Proposed federal budgets reflect a president’s policy priorities, setting the agenda for what the president wants to achieve.
President Trump released his budget proposal this week to a chorus of criticism. House Democrats labeled the spending plan “toxic” and said it was dead on arrival, requiring big changes to win approval. Many members of Congress raised concerns about the impact on a skyrocketing deficit in the budget.
Trump detractors are already starting to point to his budget as evidence that he is ready to break campaign promises.
TRUMP’S TELL-ALL BUDGET – THREE BIG LINES IN THE SAND SEPARATE THE PRESIDENT FROM THE PROGRESSIVES
In 2015 presidential candidate Trump promised he would not cut Medicare, Medicaid or Social Security. In 2016 the candidate promised to eliminate the national debt over his potential eight years in the White House.
But now President Trump will have a hard time making the argument that he has fulfilled these campaign pledges, based in part on what is in his proposed budget.
According to the White House’s own assumptions, Trump’s budget would increase the deficit to over $1 trillion in the next two federal fiscal years. At the same time, the budget outlines a plan to cut roughly $1 trillion over the next decade from Medicare, Medicaid and Social Security.
Furthermore, Trump’s budget calls for almost $18 billion in cuts to the Food Stamp program,
The budget proposal shows that the president’s priority isn’t to protect the most vulnerable among us.
While there is little doubt that Trump will be hammered by attacks that he has abandoned his campaign promises, I care less about the political impact and more about the impact some of the proposals could have on Americans who need our help the most,
I acknowledge that any legislative proposal – and budgets in particular – are complicated and nuanced. As a former state senator, I have a decade of experience dealing with state budgeting as well as how state and federal funding interface.
So I’m not just criticizing Trump’s budget as a Democrat with a partisan ax to grind. Rather, I’m looking at the proposal through a practical policy lens.
I focused my analysis on three main issues: Medicare provider cuts, Medicaid block grants, and uniform work requirements for Medicaid and SNAP.
The Trump budget estimates an $845 billion reduction in Medicare spending over the next 10 years. While some of those savings will be derived from plans like targeting fraud and waste, roughly 85 percent will come from cuts to health care providers.
Why is this important? Because if hospitals and doctors are not getting paid enough they will likely not serve as many Medicare beneficiaries, in turn reducing access to health care services.
I have always been a proponent of value-based reimbursement and payment reform that incentivizes improving health outcomes while reducing costs. But we must be careful not to make Medicare reimbursements so low that providers no longer can afford to take on Medicare patients.
The White House budget calls for turning Medicaid into a block grant program, allocating money directly to each state based on population. Medicaid is currently funded by both state and federal dollars, with the federal government picking up more of the cost for the Medicaid expansion population.
For states that have chosen to expand Medicaid, health coverage is offered to newly eligible individuals – mostly single, childless adults who are working and poor.
Block granting federal funds to states to administer the Medicaid program is not a new concept. Those who advocate for giving a lump sum of money directly to states argue that state government can better manage the low-income health coverage program than the folks back in Washington.
As a former state legislator, I generally agree with the premise that states are better at serving their citizens because they better understand their specific needs. However, block-granting Medicaid functionally will not work.
Medicaid is supposed to be a safety net program. When the economy hits a downturn, as it did during the last major recession, Medicaid enrollment often increases. If a state has only one lump sum to fund Medicaid, it will not have enough flexibility within its own budget to support a fluctuation of Medicaid beneficiaries.
Under the current state-federal funding model, states can tap into what is referred to as the Federal Medical Assistance Program, or FMAP. FMAP is calculated and allocated based on a state’s per capita income, not raw population.
The lower the per capita income, the higher FMAP allocation. This is a critical feature of the state-federal Medicaid program.
I saw its impact firsthand as I was in office in Ohio during the last recession. Unemployment and, subsequently, Medicaid enrollment skyrocketed.
There is no way Ohio could have funded the entire Medicaid bill. There would not be enough cuts or tax increases that could have sustained the program.
If we didn’t have FMAP payments, we would have had to essentially cease the Medicaid program. Block granting Medicaid creates the risk that people will go without health coverage once the initial block grant runs out or if there is a sudden economic downturn.
As I previously mentioned, part of the argument to support Medicaid block grants is to empower states to have more flexibility over program design. Why do I bring this up again?
Because, under Trump’s budget plan, he proposes uniform work requirements across all states for Medicaid and for Food Stamps (officially now called the Supplemental Nutrition Assistance Program, or SNAP). That would mean less – not more – flexibility for states to develop their own plans.
States already have the ability to impose work requirements on Medicaid through applying for and receiving approval for a waiver from the Center for Medicare and Medicaid Services (CMS). Forcing states to adopt a one-size-fits-all approach to work requirements hamstrings their ability to tailor their program eligibility to fit the specific dynamics of each individual state.
Sixteen states, including my home state of Ohio, have now applied to CMS to implement Medicaid work requirements. Seven states have had their plans approved, and are in varying stages of implementation.
Nationwide, roughly 60 percent of those currently on Medicaid already work. Of those who don’t, about 60 percent are disabled or taking care of a loved one,
In states like Arkansas where Medicaid work requirements have been adopted, thousands of current beneficiaries have lost coverage due to laborious reporting requirements that may be costly to implement and hard to follow.
Because the aim of the Medicaid program is to provide access to coverage to low-income individuals, some states like Kentucky have been successfully sued to stop the implementation of work requirements.
So far, Medicaid work requirements have not proven to be successful in actually getting people to work. At the same time, the policy is causing people to lose health coverage. I call that a losing proposition.
SNAP (formerly Food Stamps)
We often hear policymakers say it is important for those who receive assistance to have some “skin in the game” in order to give beneficiaries personal responsibility rather than just taking from the public coffers.
Some see work requirements as that “skin in the game.” Right now, work requirements already exist for SNAP but vary from state to state. If someone is not working, benefits will be suspended for a minimum amount of time prescribed by federal law.
However, some states have imposed more stringent suspension policies. States facing economic hardship have the option to apply to the federal government to waive the work requirement for counties that have higher than average unemployment rates. The waiver option makes sure people don’t go without food just because there are few jobs in their area.
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Creating a federal uniform standard, much like what I described in the context of Medicaid, will hamper individual states’ ability to meet the unique needs of their citizens. Furthermore, sending a box of food to SNAP recipients rather than allowing them to choose for themselves, as proposed in Trump’s budget, sounds a bit like rationing to me.
I hope that members of Congress take a long, hard look at the proposals the president has advanced and consult with state and local officials as they make these important policy decisions. Nothing should be done to curtail the states’ ability to care for those who need it the most.
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