Like prior versions, the latest version of the bill from Senators Bill Cassidy and Lindsey Graham to repeal and replace the Affordable Care Act (ACA) would cut federal funding for health coverage for the large majority of states over the next decade (see Table 1). And the cuts would grow dramatically in 2027, when the bill’s temporary block grant (which would replace the ACA’s Medicaid expansion and marketplace subsidies) would expire and its Medicaid per capita cap cuts would become increasingly severe. We estimate that in 2027 alone, the bill would cut federal health care funding by $298 billion relative to current law (see Figure 1), with the cuts affecting all states.
In fact, starting in 2027, Cassidy-Graham would likely be even more damaging than a straight repeal-without-replace bill because it would add large cuts to the rest of Medicaid — on top of eliminating the Medicaid expansion — by imposing a per capita cap on the entire program. The Congressional Budget Office (CBO) has previously estimated that the repeal-without-replace approach would ultimately leave 32 million more people uninsured.[1] Cassidy-Graham would presumably result in even deeper coverage losses than that in the second decade as the cuts due to the Medicaid per capita cap continue to deepen.
- Eliminate the ACA’s Medicaid expansion and ACA’s marketplace subsidies in 2020 and replace them with an inadequate block grant. Under our estimates, the block grant would provide about $239 billion less between 2020 and 2026 than projected federal spending for the Medicaid expansion and marketplace subsidies under current law, with the cut reaching $40 billion (16 percent) in 2026. The block grant would not adjust based on changes in states’ funding needs, and it could be spent on virtually any health care purpose, with no requirement to offer low- and moderate-income people coverage or financial assistance. And, as noted, the block grant would disappear altogether in 2027.
- The enormous cut in 2027 reflects two factors. First, the block grant would disappear in 2027. The bill’s sponsors have claimed that the rules that govern the budget reconciliation process, which allows the bill to pass the Senate with only 50 votes, necessitated that the proposed block grant be temporary. In reality, however, nothing in those rules prevents the bill from permanently funding its block grant. Furthermore, the expiration of the temporary block grant would create a funding cliff that Congress likely couldn’t afford to fill. Even if there were significant political support for extending the inadequate block grant in the future, budget rules would very likely require offsets for the hundreds of billions of dollars in increased federal spending needed for each additional year.[3]
White House Proposes $4.7 Trillion Budget for Fiscal 2020
Trump’s outline would sharply cut spending on safety-net programs
The Trump administration proposed a $4.7 trillion budget that would sharply reduce spending on safety-net programs, while effectively exempting the Pentagon from strict spending caps set to take effect in fiscal year 2020.
The president’s plan would widen the federal budget deficit to $1.1 trillion in the next fiscal year, which begins Oct. 1, and would propose to eliminate the deficit by 2034, in part by assuming the economy grows much faster than many independent forecasters expect.
The White House budget document proposed $2.7 trillion in spending cuts over the next decade, including $1.9 trillion in cuts to mandatory spending programs, a senior administration official said Monday. The official said the president’s budget proposes more spending cuts over the next 10 years than any administration in history.
The budget would reduce the overall level of nondefense spending by 5% next year below current federal spending caps, a nearly $30 billion reduction. The budget would increase military spending by 5%, to $750 billion from $716 billion in fiscal year 2019.
.. The budget proposes to cut $22 billion from safety-net programs next year—$327 billion over the next decade—and proposes new work requirements for recipients of food stamps, Medicaid and federal housing programs, the senior administration official said.
.. The budget assumes the extension of the individual- and estate-tax cuts slated to expire at the end of 2025, and it proposes repealing some tax incentives for alternative energy, including a tax credit for plug-in electric cars.It requests $8.6 billion for new barriers along the southern U.S. border, including $5 billion for the Department of Homeland Security and $3.6 billion for the Defense Department’s military-construction budget. The president’s blueprint would also provide additional funding to boost manpower at Immigration and Customs Enforcement and Customs and Border Protection, and it proposes policy changes to end so-called sanctuary cities.The plan would also increase investments in national defense, such as artificial intelligence and hypersonic weapons, and provide more than $80 billion for veterans health care, a 10% increase from fiscal year 2019, according to the White House budget office.
President Trump, Deal Maker? Not So Fast
His 17 months in office have in fact been an exercise in futility for the art-of-the-deal president.
- No deal on immigration.
- No deal on health care.
- No deal on gun control.
- No deal on spending cuts.
- No deal on Nafta.
- No deal on China trade.
- No deal on steel and aluminum imports.
- No deal on Middle East peace.
- No deal on the Qatar blockade.
- No deal on Syria.
- No deal on Russia.
- No deal on Iran.
- No deal on climate change.
- No deal on Pacific trade.
.. Even routine deals sometimes elude Mr. Trump, or he chooses to blow them up.
.. “Trump is an anarchist,” said Jack O’Donnell, a former president of the Trump Plaza Hotel and Casino, who became a sharp critic. “It was his approach in business, it is his approach as president. It does not take good negotiating skills to cause chaos. Will this ever lead to concessions? Maybe, but concessions to what? Not anything that resembles a deal. I just do not see him getting much done.”
.. I don’t think it’s that counterintuitive to say that playing hardball will lead to better trade deals eventually,” said Andy Surabian, a Republican strategist and former aide to Mr. Trump.
.. We’ll see what the final outcome is, but it’s already a success just to get them to the table.”
.. the major tax-cutting package that passed late last year. But even that was negotiated mainly by Republican lawmakers, who said Mr. Trump did not seem engaged in the details.
.. And as legislative challenges go, handing out tax cuts without paying for them is not exactly the hardest thing that politicians do.
.. In effect, the agreement with Mr. Kim is like a deal to sell parts of Trump Tower without settling on a price, date, inspection or financing. It is not nearly as advanced as agreements that President Bill Clinton and Mr. Bush made with North Korea, both of which ultimately collapsed.
.. But no modern president has sold himself on the promise of negotiating skills more than Mr. Trump has. He regularly boasts that deals will be “easy” and “quick” and the best ever.
.. He has pulled out of Mr. Obama’s Iran nuclear deal, Paris climate accord and Trans-Pacific Partnership, but promises to negotiate better versions of those deal have gone nowhere.
.. Mr. Trump set his sights on what he called “the ultimate deal,” meaning peace between the Israelis and Palestinians. He said it was “frankly maybe not as difficult as people have thought.” A year later, his team is only now preparing to release a plan.
.. “What the president seemingly fails to understand is that in foreign policy and in trade policy — unlike in real estate transactions — the parties are all repeat players,”
.. “The country you insult or seek undue advantage over today you will have to work with again tomorrow.”
.. Mr. Trump’s approach so far has been to make expansive demands and apply as much pressure as he can. He argues that crushing sanctions he imposed on North Korea forced Mr. Kim to meet. He now hopes to extract concessions from China, Canada and Europe after slapping punishing tariffs on them.
.. “Trump is a bilateral player, in part because that’s what he is used to from his building days, but also because he keeps himself the king, the decider, the strongman,” said Wendy Sherman, who was Mr. Obama’s lead negotiator on the Iran nuclear deal. “In the case of North Korea, however, he wouldn’t have gotten this far — which isn’t all that far — without the South Koreans or the Chinese.”
.. When he gave up on immigration on Friday, he blamed it on Senate Democrats, even though the immediate impasse was among House Republicans who do not need the other party to pass a bill.
.. “Republicans should stop wasting their time on Immigration until after we elect more Senators and Congressmen/women in November,”
.. It was in effect an acknowledgment by Mr. Trump that he cannot reach across the aisle and can only govern with Republicans.
.. the challenge on immigration is that the president has to grapple not just with Democrats but also with Republicans who do not share his philosophy on the issue.
.. Mr. O’Donnell, the former casino president, said Mr. Trump has always oversold his deal-making skills. The casino he managed, Mr. O’Donnell noted, brought in $100 million a year yet still went bankrupt.
.. “The fact is, Trump casinos should have been one of the greatest success stories in the history of casino gambling, but bad deal making caused him to lose all three properties,” he said.
Trump Doesn’t Give a Dam
The $1.5 trillion number is just made up; he’s only proposing federal spending of $200 billion, which is somehow supposed to magically induce a vastly bigger overall increase in infrastructure investment, mainly paid for either by state and local governments (which are not exactly rolling in cash, but whatever) or by the private sector.
.. And even the $200 billion is essentially fraudulent: The budget proposal announced the same day doesn’t just impose savage cuts on the poor, it includes sharp cuts for the Department of Transportation, the Department of Energy and other agencies that would be crucially involved in any real infrastructure plan. Realistically, Trump’s offer on infrastructure is this: nothing.
.. That’s not to say that the plan is completely vacuous. One section says that it would “authorize federal divestiture of assets that would be better managed by state, local or private entities.” Translation: We’re going to privatize whatever we can
.. Despite a modest rise in interest rates, the federal government can still borrow very cheaply: The interest rate on inflation-protected long-term bonds is still less than 1 percent, which is below realistic estimates of long-run economic growth, let alone the Trump administration’s fantasy numbers. So borrowing now to pay for essential infrastructure would still be good economics.
.. some Democrats feared that Trump really would go big on infrastructure, which might drive a wedge into their party and be highly popular besides.
.. An infrastructure program involving real money could be very lucrative for Trump cronies, or for that matter Trump himself. Yes, there are rules that are supposed to prevent that kind of profiteering, but does anyone think those rules would be enforced under current management?
.. Part of the answer is that in practice Trump always defers to Republican orthodoxy, and the modern G.O.P. hates any program that might show people that government can work and help people.
.. But I also suspect that Trump is afraid to try anything substantive. To do public investment successfully, you need leadership and advice from experts. And this administration doesn’t do expertise, in any field. Not only do experts have a nasty habit of telling you things you don’t want to hear, their loyalty is suspect: You never know when their professional ethics might kick in.
So the Trump administration probably couldn’t put together a real infrastructure plan even if it wanted to. And that’s why it didn’t.