WASHINGTON—Congressional Republicans are crowing that the budget blueprint the House and Senate agreed to Thursday night proves they are governing effectively and pursuing fiscal responsibility by cutting spending by more than $5 trillion over a decade and repealing the Affordable Care Act.
But many healthcare experts warn that the spending cuts, if enacted, would do severe harm to Medicare, Medicaid and health coverage gains made under the Affordable Care Act. “We're going to take the historic progress that we've made on covering the uninsured and not only reverse it, but go backward,” said Edwin Park, vice president for health policy at the left-leaning Center on Budget and Policy Priorities.
The House passed the budget resolution on Thursday night by a 226-197 margin. All Democrats and 14 Republicans voted against it. The Senate is expected to pass it on partisan lines next week. For now, Republicans dropped or at least downplayed their controversial proposals to overhaul Medicare and Medicaid. And they were vague about how they would achieve their big spending reductions.
“America needs real growth, and that means real pro-growth policies to fix the tax code, expand American energy production and solve our spending problem,” House Speaker John Boehner said at a news conference Thursday. “All of those things are in this balanced budget.”
But the significant promised in the GOP blueprint are unlikely to be enacted. That's because the budget is as much a political manifesto heading into the 2016 elections as a concrete policy proposal. Congressional Republicans, ultimately, will have to pass spending bills for fiscal 2016 that will be signed by President Barack Obama, and he almost certainly will not agree to many of the GOP proposals.
Independent budget watchers say there are big gaps and leaps of faith in the Republican budgeting. “There's a remarkable disconnect between what the budget claims to do and what it actually does,” said Ed Lorenzen, senior policy adviser at the nonpartisan Committee for a Responsible Federal Budget, a budget hawk group. “When the dust settles and everything is said and done, the net effect will be to increase spending.”
“Just having a budget resolution doesn't mean much,” added Joshua Gordon, policy director for the Concord Coalition, another nonpartisan group that seeks to reduce the federal deficit. “It's basically for messaging, not for serious attempts at fiscal reform or cutting spending.”
Healthcare experts will be closely watching the budget reconciliation process. The budget resolution includes instructions to use reconciliation to repeal the Affordable Care Act. That process is attractive to Republicans because it's a way to prevent Senate Democrats to filibuster the legislation. Under reconciliation, a simple majority of senators can bill the legislation.
But any attempt to repeal the healthcare reform law is certain to be vetoed, and Republicans lack large enough majorities in the House and Senate for an override. That means their ACA repeal will largely be a political statement, teeing up healthcare reform as a 2016 election issue.
That dynamic could change, of course, if the U.S. Supreme Court in King v. Burwell strikes down premium subsidies in nearly three dozen states. If that happens, Republicans could use the reconciliation process to pass some type of limited extension of the subsidies combined with a repeal of major ACA features such as the individual mandate and minimum benefits requirements. Then they could say they had taken action to prevent millions of Americans from losing their subsidies and coverage. A ruling in the case is expected by the end of June.
The budget resolution steps back from some of the controversial Medicare and Medicaid restructuring proposals championed by House Ways & Means Committee chairman Paul Ryan (R-Wis.). The House initially included language embracing a move toward turning Medicare into a defined contribution rather than a defined benefit program. Under the premium support model, starting in 2024 beneficiaries would receive a fixed sum to purchase either private or public coverage through a new Medicare exchange. But the final budget resolution makes no mention of this politically explosive proposal.
Also missing from the budget resolution is any mention of the budget sequestration cuts, which have reduced Medicare reimbursements by 2% since being enacted in 2013 and have caused financial stress for providers.
Gordon, whose group favors Medicare restructuring, downplayed the significance of dropping the premium support proposal, pointing out that enacting such a policy change would require separate legislation anyway. “Having that in the budget resolution is more of rhetorical beacon,” he said.
In addition, House Republicans had proposed transforming Medicaid into a capped state block grant program, which they call “state flexibility funds." They would have cut federal Medicaid spending by nearly $1 trillion over 10 years. But the final budget resolution merely calls for “increasing state flexibility” in the program. Park estimates that it will cut Medicaid spending by roughly $500 billion over the next decade, but that figure doesn't include eliminating the ACA's Medicaid expansion.
The budget resolution also calls for offsetting the full $200 billion cost of last month's legislation reforming the Medicare physician-payment system and extending the Children's Health Insurance Program. That legislation cleared both chambers by broad, bipartisan majorities. But some conservatives were angry that only about a third of the package was offset by corresponding spending cuts.
The language in the budget resolution is designed to address those concerns. But it doesn't provide any details on exactly where the additional funding will come from.
“That is semantics,” Lorenzen said.
