House GOP budget partially privatizes Medicare, slashes Medicaid - The Buffalo News

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House GOP budget partially privatizes Medicare, slashes Medicaid

WASHINGTON – Now that Senate Republicans have failed in their attempt to repeal and replace Obamacare and cut Medicaid, House Republicans are pushing a budget that aims to do all that and then some.

Their budget proposal partially privatizes Medicare and deeply cuts social programs such as food stamps.

While it is a nonbinding guide for future congressional action, the 125-page budget blueprint reads like a Republican wish list of spending and tax cuts.

Advocates for the poor say the spending plan would have a particularly dire effect in poverty-stricken cities such as Buffalo, given that it calls for $4.4 trillion in cuts over 10 years in Medicare, food stamps, unemployment insurance and other such social programs. Included in that are the cuts to Medicaid and other health care programs that supposedly died with the Republican health reform bill. But they  spring back to life in the House budget resolution, and that would cost New York upwards of $7 billion every year.

Those cuts would be tied to a Republican tax reform proposal that, in early proposals, eliminates the deduction for state and local taxes — one that's especially beneficial to New Yorkers, given the state's high tax rates.

Republicans insist, though, that it's best not to make too much out of the budget plan at this point. They note that the House has no plans to take up Medicare reform this year. Instead, that plan is included in the nonbinding budget resolution mainly so the federal budget will balance in 10 years.

The real power behind the budget resolution, they say, is in the legislative magic it would perform.  Under the arcane rules of the U.S. Congress, if lawmakers can pass a budget resolution, they can pass follow-up legislation such as tax reform under the "budget reconciliation" process. That means those bills can pass with a mere majority in the Senate – leaving Democrats without the power of a filibuster to stop it.

"I'm open to the budget. It does at least offer us a Plan A for getting to tax reform," said Rep. Tom Reed, a Republican from Corning who sits on the tax-writing Ways and Means Committee.

Congressman Tom Reed talks with his constituents during a town hall meeting at the Belfast Fire Hall in Belfast Saturday, July 15, 2017. (Mark Mulville/Buffalo News)

At the same time, Reed is by no means enamored of all the budget's details. Both he and Rep. Chris Collins of Clarence were among of 20 Republicans who signed a letter to House leadership, protesting how deep the proposed cuts are.

"There is significant concern with supporting a budget as aggressive as this is," Reed said.

Progressives, meantime, are aghast at the House GOP spending blueprint, saying it's a  reverse Robin Hood plan to take from the poor and give to the rich.

"It would cause pain to tens of millions of Americans, especially struggling families and others who have fallen on hard times, and would cut deeply into areas important to future economic growth, from education to basic scientific research," said Robert Greenstein, president of the Center on Budget and Policy Priorities, a left-leaning think tank. "It would do so while opening the door for tax cuts geared toward those who already are the most well off."

Perhaps most notably, the spending plan revives House Speaker Paul Ryan's plan to partially privatize Medicare over the next decade in hopes of saving $487 billion.

That would mean huge changes for areas such as metro Buffalo, which have unusually large populations of the elderly and near-elderly. Federal figures from earlier this year showed that 190,900 Erie County residents were on Medicare, and that figure would grow as the population ages.

In essence, the GOP plan – if enacted into law in follow-up legislation – would force seniors to choose between traditional Medicare, HMO-like Medicare Advantage plans and a host of new new options offered by private insurers.

Democrats have long dubbed Ryan's plan "the end of Medicare as we know it," but to hear Collins tell it, that's not true.

"The budget resolution allows folks to stay on traditional Medicare if they choose or consider other options like a managed-care program," he said.

But Rep. Brian Higgins, a Buffalo Democrat, said the changes Ryan proposes deeply cut Medicare funding while forcing seniors to face a baffling set of health care choices that in the end offer inferior coverage than what they get now.

"It's politically toxic," Higgins, also a Ways and Means Committee member, said of the GOP Medicare plan. "I can't believe they're bringing it back now."

There's a reason for its revival. Not only do Republicans want to restrain the growth of Medicare to make it more sustainable as the population ages; they also want the federal budget to balance within a decade and are looking for savings anywhere and everywhere to accomplish that.

The spending plan includes a big boost in defense spending, and to pay for that, the budget deeply cuts mandatory spending programs such as Medicaid and food stamps. That, too, would have a significant effect in Erie. The latest federal figures showed that 280,477 county residents were on Medicaid or some other federally backed health plan – which amounts to 30 percent of the county population. Those figures also show 149,690 Erie County residents on food stamps.

"Republicans are supportive of reining in waste, fraud and abuse when it comes to welfare programs while making sure the neediest among us continue to receive the support they need," Collins said.

The spending plan does not include the health bill amendment that Collins co-authored that would prevent the state from charging upstate and Long Island counties for a share of Medicaid costs. Collins said he would look for other ways to get that proposal into law.

Greenstein, the progressive budget analyst, said the social program cuts proposed in the Republican budget go way beyond eliminating waste, fraud and abuse.

"These cuts would make it harder for millions of Americans to afford food, housing, health care, and a college education," he said.

The GOP spending plan also cuts $458 billion over a decade in what's called discretionary spending. That's anything that isn't mandated by law or set by formula, and it includes a vast number of programs ranging from medical research to highway funding to housing programs.

The budget doesn't specify what those cuts should be, instead leaving it up to the House committees that authorize funding as well as the House Appropriations Committee – which draws up the legislation to actually set aside the money for federal programs – to decide.

For that reason, Collins said the budget should be regarded as "a messaging document," much like President Trump's proposed budget. He vowed to fight for programs important to Western New York, such as the Great Lakes Restoration Initiative and the Low Income Home Energy Assistance Program, in the appropriations process.

Higgins said, though, that the Republican spending plan sends the wrong message: that it could be open season on medical research funding that helps the Buffalo Niagara Medical Campus as well as a host of other programs that help people back in Buffalo.

"There's nothing in there for infrastructure – absolutely nothing," noted Higgins, who – like Trump – has advocated a big increase in investment in roads, bridges, airports and the like. "It's all just bad stuff."

For New Yorkers, that bad stuff could extend to the upcoming tax bill, given that early proposals suggest eliminating the state and local tax deduction, which allows state and local residents to write off thousands of dollars on their tax returns.

Reed said he would work to protect New Yorkers under the tax reform bill. He said it's possible that Congress can devise a bill with a high enough standard deduction that most homeowners wouldn't want to itemize any more, which would free them from worries about the loss of the state and local tax deduction.

Reed said he hoped some sort of budget resolution would pass to pave the way for tax reform, but he said Republicans should be open to a "Plan B," where they have to win some Democratic votes in the Senate to pass a simpler, fairer tax plan that eliminates protections for special interests.

Striking any kind of tax deal won't be easy, Reed added, noting that a tax reform package would be just about as complicated as the health bill that's caused such struggles in the Republican Congress.

 

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