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Budget Cuts, Economic Inequality, Economy, Government, Government Programs, Government Spending, Health Care, Health Care Reform, Health Disparities, Health Insurance, Health Reform, Healthcare, Inequality, Obama, Obamacare, Politics, Poverty, Public Health, Public Policy, Social Justice, Society

Trickle-Down Disaster: Six Ways The GOP’s New Budget Proposal Will Hurt Americans

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This week, Congress will vote on the House and Senate Republican Budget Resolutions for Fiscal Year 2016. While all of the competing budget proposals seek to reduce the federal deficit — that is, the difference between the amount of money the government takes in and what it spends each year — there are striking differences in how that deficit reduction is accomplished.

The Republican budgets rely on the same failed trickle-down economics as in previous years, standing in stark contrast to the President’s FY 2016 budget, which focuses on strengthening the economy and the middle class. The Republican budgets would put economic growth at risk and would have real impacts on the middle class. And at the same time as they are voting on this harmful budget resolution, House Republicans are doubling down on their failed approach and moving to also repeal the estate tax, at a cost of hundreds of billions of dollars.

The Senate and House budgets are both attempts to balance the budget within ten years, which results in large-scale cuts, the vast majority of which affect programs for low-income people like Medicaid, Obamacare, food stamps, and more. The House budget also calls for a major change in how Medicare operates. The presidential budget, by contrast, tries to reduce but not eliminate the deficit, primarily by raising taxes, while also creating new benefit programs like universal pre-K and free community college for all.

Republicans’ priorities are clear: cutting taxes for the wealthiest 0.1 percent, while slashing funding for critical investments and services that benefit millions of Americans. According to the non-partisan Center on Budget and Policy Priorities, both Republican budget plans get two-thirds of their cuts from programs that serve middle- and low-income Americans, even though these programs constitute less than one-quarter of federal program costs. Not only is this a wildly imbalanced approach to budgeting — it also directly contradicts the expressed priorities of a majority of the U.S. population on every single major issue.

Americans across the country deserve to know the consequences of this approach, which the New York Times recently referred to as a “disaster.” For example, if the Republican budgets were to take effect, they would:

1. Cut Taxes for Millionaires and Raise Taxes for Working Families and Students

While claiming to prioritize fiscal responsibility, the Republican budgets would not ask the wealthy to contribute a single dollar to deficit reduction, and the House budget proposes to cut taxes for millionaires by an average of at least $50,000. Meanwhile, the Republican budgets do nothing to prevent tax increases averaging $1,100 for 12 million families and students paying for college and $900 for 16 million working families with children. By allowing crucial provisions of the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) for low- and modest-income working people to expire at the end of 2017, the GOP budgets would push more than 16 million people, including almost 8 million children, into or deeper into poverty.

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2. Eliminate Affordable Health Care

The Affordable Care Act (ACA) is working: After five years, more than 16 million people have gained coverage, resulting in a 35 percent drop in the uninsured rate — the largest reduction in nearly half a century. Yet, once again, the Republican budgets propose to repeal the Affordable Care Act’s coverage expansions, taking away health insurance from millions of people. In particular, the Republican budgets would eliminate coverage for 11.7 million Americans who have newly signed up for coverage or re-enrolled through the Marketplaces. Some of these individuals would become uninsured while others would end up with worse or less affordable coverage. Other major and immediate consequences of repealing the ACA include:

  • Depriving up to 130 million Americans with pre-existing conditions of the security of knowing they will still be able to buy affordable health coverage if they lose their jobs or otherwise lose their health insurance.
  • Denying millions of young adults up to age 26 the option to stay on their parents’ plans if they re-enroll in school or get a job without health coverage.

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3. Raise Health Care Costs for Seniors

The House budget would end Medicare as we know it, substituting guaranteed access to the traditional Medicare program with a voucher program, risking a death spiral in traditional Medicare. More than 5 million seniors and people with disabilities benefited from the closure of the Medicare Part D prescription drug donut hole in 2014 alone. Under the Republican plan to repeal the ACA, these seniors would likely have to pay more for needed medications in future years. And according to an analysis of Rep. Paul Ryan’s (R) plan to turn Medicare into a voucher program (which served as the model for the GOP’s proposal this year), getting the kind of coverage that Medicare provides today would require the typical senior to spend half of their Social Security benefit on Medicare the first year the plan goes into effect, and 90 percent of their Social Security benefit within 16 years.

4. Slash Investments in the Middle Class

Under the Republican budgets, both non-defense and defense base discretionary funding in 2016 would be at the lowest real levels in a decade (and even deeper cuts would be made starting in 2017). Compared to the President’s budget, if the Republican budgets were to take effect, these are just some of the impacts on Americans:

  • Head Start: 35,000 fewer children would have access to Head Start services, representing a permanently missed opportunity to help these children enter elementary school ready to succeed.
  • Teachers and Schools: States would receive $1.2 billion less funding for disadvantaged students, enough to fund 4,500 schools, 17,000 teachers and aides, and 1.9 million students.
  • Education for Children with Disabilities: States would receive $347 million less funding to provide educational opportunities for students with disabilities, an amount that could support up to 6,000 special education teachers, paraprofessionals, and other related staff.
  • Job Training and Skills: More than 2 million fewer Americans would receive job training and employment services.
  • Affordable Housing: States would receive approximately $2.1 billion less in federal funding, resulting in 133,000 fewer families receiving Housing Choice Vouchers, which enable very low-income families to afford decent, safe, and sanitary housing in the private market.
  • National Parks: Construction and renovation projects would be prevented or delayed at 125 national parks across the country, including: Denali, the Grand Canyon, and Yellowstone.

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5. “Balance the Budget” Only with Unspecified Gimmicks and Deep Cuts to Programs that Serve the Most Vulnerable and Help Expand Opportunity

On top of their cuts to middle-class investments and the ACA, the Republican budgets would cut:

  • Pell Grants: Republican reductions to Pell would reduce financial aid for the 8 million students who rely on it to afford college.
  • Medicaid: Republican proposals block grant Medicaid and cut Federal funding, by more than $900 billion over ten years in the case of the House. Medicaid currently insures almost 70 million Americans on average, including millions of children, seniors, and people with disabilities. The combination of the ACA repeal and the House Republican budget’s Medicaid cuts would more than double the number of uninsured Americans.
  • Supplemental Nutrition Assistance Program (SNAP): House Republican proposals to block grant and slash SNAP would cut nutrition aid to states by an estimated $125 billion over a five year period, jeopardizing nutrition assistance for the more than 46 million Americans who receive SNAP to help them put food on the table.

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6. Fail to Address our Crumbling Infrastructure

Republican budgets lack a real plan to address the looming expiration and insolvency of the Highway Trust Fund. Supported by the Highway Trust Fund, in FY 2014 the Federal Government obligated $39.5 billion to states through the Federal Aid Highways program for highway planning and construction and over $11.1 billion through Transit Formula Grants that support our Nation’s mass transit systems.

 

 

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