Tuesday, July 18, 2017
With Healthcare 3.0 Dead, GOP Turns to Budget
President Donald Trump says let Obamacare fail.
As Senate Majority Leader Mitch McConnell (R-Kentucky) admitted defeat on a half-baked outline for healthcare reform his own party rejects, and with little chance of winning even highly touted repeal of the Affordable Care Act with a two-year window for replacement legislation, Republicans in the House of Representatives returned Tuesday, July 18, to draconian budget cuts for federal spending in the next decade to accompany deregulation and other proposals by President Donald J. Trump’s administration. The Congressional Budget Office has already declared the stated GOP objectives unobtainable, even though they ignore some of the White House notions.
Republican Senators Shelley Moore Capito (W.Va.) and Susan Collins (Maine) said on Tuesday that they would not support moving forward on McConnell’s plan to repeal Obamacare now with a two-year window for replacement. The Republican Senate majority is widely divided, with some supporting stronger and better coverage, paid for by broader-based revenues from tax restructuring, while some insist on no-frills coverage with more responsibility thrown onto states while reducing the federal tax burden to pay for it. Having already tried and failed to overturn the program for more than eight years with nothing to put in its place, prospects of doing that now, even with a Republican majority in Congress and a Republican president remain out of reach.
The CBO projected that the sweeping spending reductions on anti-poverty programs, housing, environmental protection and other cuts proposed by the White House would still not be enough to eliminate the deficit by 2027. By then, the office says, there would still be a $720 billion deficit under the White House's plan, rather than the surplus proponents have claimed would result from revenue growth. The Washington Post says the difference represents a gap of more than $700 billion in just one year between the CBO assessment and White House projections. Even if House and Senate Republicans agreed to back Trump’s cuts, they would meet universal opposition from Democrats. And while the budget measure could be adopted with a simple majority, using only Republican votes, a separate funding bill needs 60 votes in a Senate where the GOP holds 52 seats out of 100.
Even apart from the cuts in Medicaid spending proposed under failed House and Senate attempts to redraw healthcare legislation, the Trump Administration’s budget cuts would mean major reductions in spending for Medicaid and the Children’s Health Insurance Program, as well as cuts in subsidies to the states to conduct those programs, also cutting the number of people who qualify for them. The budget seeks to cut the Supplemental Nutrition Assistance Program (SNAP), which provides food stamps, by $190 billion and the Temporary Assistance for Needy Families block grants by $15.6 billion. It also proposes $40 billion in savings by barring undocumented immigrants from collecting the child care tax credit or the earned-income tax credit. It would also cut $72 billion from the budget for Social Security disability recipients.
Despite optimism voiced by some Republican representatives, the budget as submitted is considered unlikely to get very far, even if it gets out of committee. This is primarily because the White House scheme includes an unlikely estimate for revenue growth from “economic feedback” that have been touted as yielding $2 trillion more than otherwise forecast in revenue growth. To make that happen, the economy would need to grow at least 3 percent annually – a pace most economists say is unrealistic. Trump himself had previously boasted of a 4 percent GDP growth prospect. More pragmatic estimates refute both possibilities.
Congress turns to huge cuts in the federal budget, reported by the Washington Post here. https://www.washingtonpost.com/politics/house-gop-unveils-budget-plan-that-attaches-major-spending-cuts-to-coming-tax-reform-bill/2017/07/18/6e68b679-c63a-4dd1-a3da-e191636946ad_story.html?utm_term=.7ebf14527122 And amplified by The New York Times report on failure of the GOP healthcare plan here.
House-proposed budget cuts largely ignore Administration plans to gut social programs, Bloomberg reports.
GOP Senate opponents of plans to repeal Obamacare and work on replacement over two years effectively kill McConnell’s “grand plan,” The Hill reports.
Key spending cuts proposed are listed here.
The Congressional Budget Office scoring of House budget proposals is here.
Most realistic GDP growth estimates, including the widely respected Federal Reserve Bank of Atlanta’s “GDP Now, “predict growth of less than 2 percent over the next decade, The New York Times reports.
Posted by Ron Rhodes at 1:09 PM