House Republicans unveiled a budget on Tuesday that, in addition to repealing Obamacare, reprises many of the safety net cuts Rep. Paul Ryan (R-Wis.) proposed in previous years.
In his budget blueprint, Rep. Tom Price (R-Ga.), who took over for Ryan as chairman of the House Budget Committee this year, seeks to balance federal spending over 10 years by cutting assistance to the poor while boosting the defense budget.
“Whether we are talking about food stamps, housing assistance or education benefits — all are made more difficult when Washington forgets the limits of its own understanding and power,” Price’s outline says. “When that happens, social and safety net programs stop being a bridge to a more secure future and rather become a barrier to success.”
Block Grants & Budget Cuts
Price’s budget would cut food stamps and Medicaid in two ways. As Ryan unsuccessfully proposed in previous years’ budgets, the proposal released Tuesday would turn funding for Medicaid and the Supplemental Nutrition Assistance Program, informally known as food stamps, into “block grants.” Both Price and Ryan modeled their proposals on the welfare reform of the 1990s, which used block-grant funding to prevent federal spending on the Temporary Assistance for Needy Families program — the program most closely associated with the term “welfare” — from rising beyond a fixed amount. As Think Progress explained:
Currently, Medicaid and SNAP are cost-sharing partnerships between states and the federal government. If need and enrollment increase for these programs — say, during a severe financial crisis where more families struggle to afford food and need food stamps to get by — then the government shares that increased cost. If these programs were to be block-granted, on the other hand, it would mean the federal government would give states a fixed amount of money to pay for them that wouldn’t change even if demand changed. In return, states are promised more flexibility in how they implement the programs.
Because of block-granting, TANF spending has stayed flat even as millions more Americans fell into poverty and would previously have been eligible for benefits. Food stamp spending, meanwhile, increased to $78 billion last year, thanks largely to the Great Recession throwing millions of people out of work after 2007. The House GOP’s budget would prevent SNAP spending from increasing to meet demand, and leave it up to states to decide which people are and aren’t eligible for benefits. Currently, food stamps are available to anyone poor enough to qualify, which amounts to 46 million people (although for adults without children, eligibility is limited to three months unless certain criteria are met). Under the new budget plan, if there’s suddenly a rough year and more people are in need than usual, the states would just be left to deal with the shortfall on their own.
As Think Progress pointed out, other programs (besides TANF) that have been block-granted in the past have faced dire consequences:
[A]s past experience with block granting shows, the poor will suffer if these programs are reformed this way…
Of the 11 major programs created with block grants in recent decades, eight have shrunk. Some of the declines are severe: Title 1 funding, or Education for the Disadvantaged, has fallen 115 percent since it was created, while the Social Services Block Grant has fallen 87 percent and the Community Development Block Grant, Home Investment Partnership Program, and the Training and Employment Services Block Grants have all seen declines around 60 percent.
In addition to block-granting, the second way in which the Price proposal cuts SNAP and Medicaid is through numerical reductions in both programs’ budgets. Though the budget summary doesn’t specify exactly how much to cut food stamps, it calls for $165 billion less in mandatory spending outside of health and retirement programs — a category in which SNAP is the largest program — over the next 10 years. Ryan’s budget last year called for SNAP cuts of $137 billion, or 18 percent. The new plan also goes much farther than the food stamp cuts contained in a farm bill Congress approved last year.
Continued Attacks on Health Care
The House GOP’s budget plan also goes after Medicare, the public health insurance program for the elderly. Like Ryan’s plan, the new proposal would privatize Medicare and transform it into a voucher-based program that subsidizes purchases of private health insurance. Under that system, there would no longer be a guarantee that senior citizens would have health care, because privatizing the program shifts the cost burden to the open market, where profits of the insurance companies are required or else those companies go out of business. Private insurance companies also don’t have to insure anyone if they don’t want to. Just because a senior is holding a voucher from the government does not mean an insurance company will actually sell them a policy. The number of uninsured seniors in America would almost certainly skyrocket under a private Medicare system, while the insurance companies that do offer plans to the elderly would likely do so at a very high price.
In addition, the GOP blueprint calls for the complete repeal of Obamacare, even though health care reform has extended coverage to 16 million Americans who previously lacked insurance. With last month’s House vote, this will be the 57th time Congressional Republicans have tried to repeal the health care law. Besides taking health insurance away from millions of newly-insured Americans, repealing the Affordable Care Act would also undo its remarkable economic effects, reverse improvements in the health care system, and pave the way for higher-cost, lower-quality care.
While the proposed budget seeks to slash funding for and/or completely dismantle every major public health care program in the country, it also seeks to undo recently imposed limits on military spending. According to Politico, the plan would “dramatically boost defense funding by using a contingency fund for war spending.”
By designating $94 billion as emergency spending under Overseas Contingency Operations, House Republicans don’t have to count that money under the defense spending limits set in the 2011 law, called the Budget Control Act
Rep. Chris Van Hollen (D-Md.), the top Democrat on the House Budget Committee, blasted Price’s proposal on Tuesday.
“It does nothing to boost the paychecks of working Americans and makes it harder to buy a home,” Van Hollen said, referring to the proposal’s call to privatize government-backed mortgage companies. “Students will see deep education cuts and college will be less affordable. And this budget takes away the tools that allow people to climb the ladder of opportunity.” (The GOP’s budget plan would also slash funding for Pell Grants. Those grants are designed to help make college affordable for low and middle-income families).
On the impact of privatizing Medicare, Van Hollen warned: “Seniors on Medicare will immediately pay more for preventive health services, and those with high prescription drug costs will see prices skyrocket. It will mean the end of the current Medicare guarantee, and millions of seniors in nursing homes will be especially hurt by the irresponsible cuts to Medicaid.”
Even if Congress approves the proposal, its policy changes would not immediately become law; instead, the congressional committees overseeing various aspects of federal spending would begin the process of trying to meet the budget’s spending targets. The Republican Senate will be an obstacle to the House budget, however, since GOP senators are moving forward with their own blueprint that does not similarly eliminate the military spending caps. And even if House and Senate Republicans eventually do agree, there is the additional obstacle of President Barack Obama’s certain veto of any legislation that undoes his signature policy accomplishment, the Affordable Care Act.