I did some rewriting on this specific commentary and added two charts from one other commentary (on the backside). The purpose being to offer graphical depiction of the affect of the Tax Cuts and Jobs Act (TCJA) and who it benefited essentially the most. You possibly can see (for no matter purpose) why the Republican Occasion is pushing for this and taking it from Medicaid. You too can marvel why much less rich Republicans making far lower than the key beneficiaries should not up in arms. The charts are very telling amongst Park’s verbiage.
Edwin Park has been writing concerning the many conservative and Congressional Republican plans and proposals to make draconian cuts to Medicaid. A number of distinguished plans are focused in the Venture 2025 (Republican Research Committee fiscal yr 2025 [RSC] price range) and the fiscal yr 2025 Home GOP price range. The plan is to cap and deeply lower federal Medicaid funding by way of block grants and/or per capita caps.
Because the writer has written, they sign for radically restructuring Medicaid, in addition to making different damaging Medicaid cuts, could be a really excessive precedence. That’s if there’s a second time period of the Trump Administration and if Congressional Republicans win majorities within the Home and Senate in 2025.
There’s one other essential purpose why Medicaid would seemingly be a main goal for draconian cuts subsequent yr underneath that election final result. The expiration of lots of the “Trump tax cuts” enacted by the Tax Cuts and Jobs Act (TCJA) in 2017.
Because the Heart on Price range and Coverage Priorities (CBPP), CEPR, and different organizations will level out, the TCJA cuts had been closely skewed to the high-income households (Determine 1) and companies, with the highest 5 % of households receiving 40 % (Determine 3) of the person tax cuts. Included had been greater than half of the company and different tax cuts in 2018.
Whereas the company tax cuts had been largely made everlasting, the person revenue and property tax cuts had been short-term and expire on the finish of tax yr 2025. Based mostly on Congressional Price range Workplace (CBO) estimates, each CBPP and the Heart for American Progress anticipate that making the expiring particular person and property tax TCJA tax cuts everlasting would price roughly $4 trillion over the subsequent ten years. Notably, the RSC price range and the Home GOP price range decision, in addition to the GOP platform, all suggest to make the expiring TCJA tax cuts everlasting.
Why is that this essential for Medicaid? It’s due to the foundations associated to price range reconciliation. As CBPP explains, price range reconciliation payments should not topic to the filibuster within the Senate and thus have been used to advance main spending and income priorities when one social gathering controls each Congress and the White Home. For instance, throughout the Trump Administration, reconciliation was utilized in 2017 for each the failed effort to repeal and exchange the Inexpensive Care Act and for efficiently enacting the TCJA. Price range reconciliation can be utilized to extend the deficit throughout the price range window, as was the case with the TCJA. However as CBPP states, the “Byrd Rule,” which applies to price range reconciliation, can successfully bar any provision that “raises deficits in any year after the period covered by the reconciliation instructions unless other provisions included in the same title of the bill fully offset those ‘outside-the-window’ costs….” (A Byrd Rule violation raised in a degree of order by a Senator will be waived however solely with a three-fifths vote.) That’s the reason the company tax cuts might be made everlasting however not the person revenue and property tax cuts.
To make as a lot of the expiring TCJA tax cuts everlasting as doable with out including to the deficits in future many years — and thus keep away from a Byrd Rule violation — would require a reconciliation invoice that features huge obligatory spending cuts that offset the price of making the Trump tax cuts everlasting. Medicaid would clearly be a prime goal for such spending cuts, even when it is extremely uncertain {that a} second time period of a Trump Administration would maintain to statements that it might not additionally lower Medicare. That is one essential purpose why the RSC price range would slash Medicaid, CHIP and the Inexpensive Care Act’s market subsidies by $4.5 trillion over ten years and the Home GOP price range decision would lower Medicaid by $2.2. trillion over the subsequent decade — though as famous above, radically restructuring Medicaid and making different deeply damaging Medicaid cuts is clearly a excessive precedence for conservatives and Congressional GOP leaders in and of itself. Because of this, the end result of this fall’s elections will decide whether or not Medicaid faces an existential menace in 2025, with the danger considerably magnified by the pending expiration of the TCJA tax cuts on the finish of subsequent yr.
The 2017 Trump Tax Legislation Was Skewed to the Wealthy, Costly, and Didn’t Ship on Its Guarantees, Heart on Price range and Coverage Priorities
