Wednesday, March 25, 2015

Cut Until You Can't Bleed Anymore

The House GOP budget proposal is not only lunacy, but dangerous.  The Center on Budget and Policy Priorities have crunched the numbers and found that Republicans want a budget that cuts more than $3 trillion from programs for working and middle class over ten years, and the biggest victim would be health care:

  • More than $2.9 trillion in health care reductions for low- and moderate-income people. The plan would convert Medicaid and the Children’s Health Insurance Program into a single block grant with drastically reduced funding levels. It also would repeal the Affordable Care Act (ACA), including health reform’s subsidies to make coverage affordable for people with low or modest incomes and its Medicaid expansion. To date, the ACA coverage expansions have extended coverage to 16.4 million previously uninsured people and strengthened coverage for millions of others.
  • $125 billion in cuts to SNAP (formerly food stamps). The House plan block-grants SNAP starting in 2021 and cuts SNAP funds by $125 billion, or more than a third, over 2021 to 2025. States would be left to decide whose benefits to reduce or terminate, but cuts of this magnitude would end food assistance for millions of low-income families, cut benefits for millions of such households, or do some combination of the two, according to a new CBPP analysis.[3]
  • $159 billion[4] in cuts to tax credits for low- and modest-income working families. The House Budget Committee plan would allow critical provisions of the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) to expire at the end of 2017, which would increase the number of people in poverty by an estimated 1.8 million, including 1.0 million children — and deepen poverty for another 14.6 million people, including 6.7 million children, in 2018. The House plan would also allow the American Opportunity Tax Credit to expire at the end of 2017, which would cause millions of low- and moderate-income families to lose some or all of the tax credits they receive to help offset college costs.[5]
  • Roughly $300 billion in cuts in other mandatory (i.e. entitlement) programs serving low-income Americans, much of which is unspecified. Aside from the cuts in SNAP and refundable tax credits discussed above, the House plan cuts more than $550 billion from mandatory programs just in the education and income security categories of the budget. The Budget Committee provided few specifics here, but we conservatively estimate that about $300 billion would come from low-income programs in these areas. The Budget Committee made clear that the plan eliminates the mandatory portion of funding for Pell Grants, which help students from families with modest incomes afford college. The reduced Pell Grant funding would necessitate cuts in the program. Despite the fact that Pell Grants already cover a much lower share of college costs than they used to, the Budget Committee said its plan would freeze the maximum grant level for ten years, even as tuition and room and board costs continued to rise. Other mandatory programs in these areas that would also be candidates for significant cuts under this vague part of the plan include child nutrition programs, Supplemental Security Income (SSI) for the elderly and disabled poor, and possibly the underlying refundable portion of the EITC and the underlying low-income (or refundable) component of the Child Tax Credit (CTC). In calculating the size of the cuts in programs targeted on people of modest means, we assumed that low-income program (other than SNAP) would bear their proportionate share of the remaining $550 billion in cuts in mandatory programs that the budget plan makes in the education and income security categories.
  • About $160 billion, and maybe more, in cuts to low-income non-defense discretionary programs. On top of the significant cuts already enacted as a result of the BCA’s discretionary caps and sequestration, the House Budget Committee cuts non-defense discretionary programs about $970 billion[6] below their post-sequestration levels. About two-thirds of these cuts are located in portions of the budget that have little or no low-income programs, such as scientific research, natural resources, and transportation infrastructure. But the rest are essentially unspecified or occur in areas where low-income programs reside. Here, too, we make the conservative assumption that low-income programs would bear a proportionate share of the cuts, which is how we derive our estimate of $160 billion in reductions.

The Senate GOP version cuts slightly less from health care (only $2.5 trillion in cuts!) but would keep intact pretty much everything else as far as cuts.  These are brutal cuts too, and where would the $3 trillion in savings go?


Here's a hint: if you have to guess, you most likely won't see a dime of it.

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