Trump to propose big cuts to safety-net in new budget, slashing Medicaid and opening door to other limits
By Damian Paletta
May 21 at 6:54 PM - The Washington Post
President Trumpfs first major budget proposal on
Tuesday will include massive cuts to Medicaid and call for changes to
anti-poverty programs that would give states new power to limit a range of
benefits, people familiar with the planning said, despite growing unease in
Congress about cutting the safety net.
For Medicaid, the state-federal program that provides
health care to low-income Americans, Trumpfs budget plan would follow through on
a bill passed by House Republicans to cut more than $800 billion over 10 years.
The Congressional Budget Office has estimated that this could cut off Medicaid
benefits for about 10 million people over the next decade.
The White House also will call for giving states more
flexibility to impose work requirements for people in different kinds of
anti-poverty programs, people familiar with the budget plan said, potentially
leading to a flood of changes in states led by conservative governors. Many
anti-poverty programs have elements that are run by both the states and federal
government, and a federal order allowing states to stiffen work requirements
gfor able-bodied Americansh could have a broad impact in terms of limiting who
can access anti-poverty payments — and for how long.
Numerous social-welfare programs grew after the
financial crisis, leading to complaints from many Republicans that more should
be done to shift people out of these programs and back into the workforce.
Shortly after he was sworn in, Trump said, gWe want to get our people off
welfare and back to work. . . . Itfs out of control.h
Trumpfs decision to include the Medicaid cuts is
significant because it shows he is rejecting calls from a number of Senate
Republicans not to reverse the expansion of Medicaid that President Barack Obama
achieved as part of the Affordable Care Act. The House has voted to cut the
Medicaid funding, but Senate Republicans have signaled they are likely to start
from scratch.
The proposed changes will be a central feature of
Trumpfs first comprehensive budget plan, which will be the most detailed look at
how he aims to change government spending and taxes over his presidency.
Although Trump and his aides have discussed their vision in broad brushes, this
will be the first time they attempt to put specific numbers on many aspects of
those plans, shedding light on which proposals they see making the biggest
difference in reshaping government. Congress must approve of most changes in the
plan before it is enacted into law.
Trump offered a streamlined version of the budget plan
in March, but it dealt only with the 30 percent of government spending that
is appropriated each year. In that budget, he sought a big increase in military
and border spending combined with major cuts to housing, environmental
protection, foreign aid, research and development.
But Tuesdayfs budget will be more significant, because
it will seek changes to entitlements — programs that are essentially on
autopilot and donft need annual authorization from Congress. The people
describing the proposals spoke on the condition of anonymity because the budget
had not been released publicly and the White House is closely guarding
details.
The proposed changes include the big cuts to Medicaid.
The White House also is expected to propose changes to the Supplemental
Nutrition Assistance Program, though precise details couldnft be learned. SNAP
is the modern version of food stamps, and it swelled following the financial
crisis as the Obama administration eased policies to make it easier for people
to qualify for benefits. As the economy has improved, enrollment in the program
hasnft changed as much as many had forecast.
An average of 44 million people received SNAP benefits
in 2016, down from a peak of 47 million in 2013. Just 28 million people received
the benefits in 2008.
SNAP could be one of numerous programs impacted by
changes in work requirements.
Josh Archambault, a senior fellow at the Foundation
for Government Accountability, a conservative think tank, said that giving
states the flexibility to impose work requirements could lead to a raft of
changes to programs ranging from Medicaid to public housing assistance.
gOne of the encouraging things about putting this in
the budget is that states will see if it works,h he said. gStates will try
it.h
SNAP already has a work requirement, which typically
cuts benefits for most able-bodied adults who donft have children. But states
were given more flexibility during the recent economic downturn to extend the
benefits for a longer period, something that split conservatives at the
time.
Michael Tanner, a welfare expert at the libertarian
Cato Institute, said the U.S. government spends between $680 billion and $800
billion a year on anti-poverty programs, and considering wholesale changes to
many of these initiatives is worthwhile, given questions about the effectiveness
of how the money is spent.
eWefre not seeing the type of gains we should be
seeing for all that spending, and that would suggest its time to reform the
system,h he said.
Many critics have said work requirements can include
blanket ultimatums that donft take into account someonefs age, physical or
cognitive ability, or limitations put in place by the local economy. Benefits
from these programs are often low, and hardly replace the income someone would
earn from a job. And critics of stricter work requirements also believe it could
pave the way for states to pursue even stricter restrictions, such as drug
tests, that courts have often rejected.
After The Washington Post reported some of the cuts
Sunday evening, Senate Minority Leader Charles E. Schumer (D-N.Y.) said Trump
was pulling gthe rug out from so many who need help.h
gThis budget continues to reveal President Trumpfs
true colors: His populist campaign rhetoric was just a Trojan horse to execute
long-held, hard-right policies that benefit the ultra wealthy at the expense of
the middle class,h he said.
The proposed changes to Medicaid and SNAP will be just
some of several anti-poverty programs that the White House will look to change.
In March, the White House signaled that it wanted to eliminate money for a range
of other programs that are funded each year by Congress. This included federal
funding for Habitat for Humanity, subsidized school lunches and the U.S.
Interagency Council on Homelessness, which coordinates the federal response to
homelessness across 19 federal agencies.
Leaked budget documents, obtained by the think tank
Third Way, suggested other ways the White House plans to change anti-poverty
funding. These documents show a change in the funding for Social Securityfs
Supplemental Security Income program, which provide cash benefits for the poor
and disabled. Itfs unclear, though, what those changes might look like. A White
House official said the Third Way document was out-of-date and would not comment
on specifics in their files.
Medicaid, SNAP and the SSI program are now classified
as gmandatoryh spending because they are funded each year without congressional
approval.
Trump has instructed his budget director, former South
Carolina congressman Mick Mulvaney, that he does not want cuts to Medicare and
Social Securityfs retirement program in this budget, Mulvaney recently said, but
the plan may call for changes to Social Security Disability Insurance, seeking
ideas for ways to move people who are able out of this program and back into the
workforce.
A key element of the budget plan will be the
assumption that huge tax cuts will result in an unprecedented level of economic
growth. Trump recently unveiled the broad principles of what he has said will be
the biggest in U.S. history, and Treasury Secretary Steven Mnuchin told a Senate
panel last week that these tax cuts would end up creating trillions of dollars
in new revenue, something budget experts from both parties have disputed.
The tax cuts would particularly benefit the wealthiest
Americans, as Trump has proposing cutting the estate tax, capital gains and
business tax rates.
gThe indications are strong this budget will feature
Robin-Hood-in-reverse policies in an unprecedented scale,h said Robert
Greenstein, president of the Center on Budget and Policy Priorities, a
left-leaning think tank.
The White House will use its presumed new revenue from
the tax cuts combined with broad spending cuts to claim that its changes would
eliminate the budget deficit over 10 years. The budget deficit is the gap
between government spending and tax revenue, and there has been a deficit in the
United States every year since the end of the Clinton administration.
But the Trump administration on Tuesday will say its
plan to cut spending, roll back regulations and cut taxes will bring the United
States back to economic growth levels that represent about 3 percent of gross
domestic product.
Mulvaney told the Federalist Society last week that
the economic growth is needed to balance the budget, because spending cuts alone
would be seen as too draconian.
gI think wefve trained people to be immune to the true
costs of government,h Mulvaney said. gPeople think government is cheaper than it
is because wefve allowed ourselves to borrow money for a long period of time and
not worry about paying it back.h
Combined, the tax cuts and spending cuts on
anti-poverty programs would signal a sharp reversal of Obamafs legacy by
pursuing big tax cuts for the wealthiest Americans, a large increase in military
spending and major changes to anti-poverty programs.
Its premise is that the creation of more wealth will
help all Americans succeed, and the Trump administration believes that some
anti-poverty programs have created a culture of dependency that prevents people
from re-entering the workforce.
White House budget proposals are a way for an
administration to spell out its priorities and goals, setting benchmarks for
Congress to work with as they decide how much spending to authorize. Trump has
an advantage working with two chambers of Congress controlled by his own party,
but even many Republicans have said they wonft back the severity of some of the
cuts he has proposed, particularly in the areas of foreign aid.
Ron Haskins, a senior fellow at the Brookings
Institution, who played a lead role in drafting the 1997 welfare changes in
Congress, said Trump will need to find new support from Republicans in Congress
if he is going to achieve the welfare-related overhauls hefs seeking.
gI donft think the Republicans on the Hill are going to
feel a strong compulsion to follow the president,h Haskins said. gThey are not
afraid of him.h
In addition to the myriad cuts, the budget will
include some new spending.
Beyond an increase in the military budget and new
money for border security, the White House is expected to call for $200 billion
for infrastructure projects and an additional $25 billion over 10 years for a
new program designed by Ivanka Trump that would create six weeks of parental
leave benefits.