House Republicans are moving with a budget reconciliation bill that makes deep cuts to Medicaid and SNAP to pay for tax cuts to the ultra rich.
One charts sums up the impact of the reconciliation bill. The cuts to Medicaid, the Affordable Care Act, and SNAP total a bit more than 1.1 trillion over ten years.. And that is equal to the tax cuts for people with incomes above $500,000.
The Bill Undermines Health Care and Food Security Nationwide While Cutting Taxes Mostly for the Rich
Medicaid is and SNAP are on the chopping block.
Nationwide, at least 13.7 million people could see their health coverage taken away under the House Republicans’ budget plan attack on both Medicaid and the ACA. In addition, many of the 42 million people who participate in SNAP could lose help affording groceries.
The budget bills passed by the House Energy and Commerce, Agriculture, and Ways and Means Committees include
- at least $625 billion and up to $715 billion cuts to Medicaid through work requirements for people who receive coverage through the Medicaid expansion, various other red tape requirements that will reduce coverage, and restrictions on how Pennsylvania and other states raise money to pay for Medicaid, among other changes. In addition, it does renew expanded subsidies for health care on the exchange are not renewed.
- roughly $300 billion in cuts to SNAP through harsh work requirements for parents of school-aged children and older adults, as well as a requirement that states, for the first time in the 50-year history of the program, pay for a share of food benefits.
- a tax plan that would increase deficits by $3.8 trillion over ten years, providing an average tax cut of $65,000 for people with incomes in the top 1%, while doing little for low- and moderate-income families.
House Republicans’ bill would harm Pennsylvanians Who Need Health Care
Medicaid helps children develop into healthy adults and helps adults stay healthy. About 72 million people in the US and 3 million in Pennsylvania receive health coverage through Medicaid. It pays for two in five births in our state. It is the nation’s largest payer of behavioral health services, which include mental health and substance use disorder treatment. Sixty percent of long-term care services, either at home or in nursing facilities, in Pennsylvania are covered by Medicaid.
However, 831,000 Pennsylvanians who gained coverage through Medicaid expansion might lose it again if House Republicans enact the work requirements, and other provisions that create more red tape for recipients that would make it impossible for them to keep their inrsurance.
Pennsylvania would see Given the experience of similar programs in other states is that 380,000 people will lose Medicaid in Pennsylvania our state if this legislation is adopted. Others will would see their benefits cut.
, which could take away coverage from children, seniors, and people with disabilities. Even if people keep their coverage, they might not be able to afford even basic medical treatment due to a plan to impose co-pays.
Coverage losses, benefit cuts, and reduced provider reimbursement rates mean that parents would not be able to afford life-saving medications, older adults wouldn’t be able to pay for treatment to manage chronic conditions like cardiovascular disease and liver disease, and people working low-paid jobs wouldn’t be able to get care for acute illnesses.
The bill also fails to extend the premium tax credit enhancements, which make premiums for coverage through the ACA marketplaces more affordable. Without these enhancements, premium costs will skyrocket on the state health care marketplace, leading to as many as 168,000 people losing their ACA market place health insurance in our state.
House Republicans’ bill would harm Pennsylvanians Who Would Go Hungry Without SNAP
These challenges to Pennsylvanians’ health would be compounded by the cuts to SNAP. With grocery prices going up year after year—and forecasted to rise even further—401,000 Pennsylvanians could see their food assistance benefits cut or taken away entirely under the House Republicans’ plan to expand work requirements to apply to older adults and parents of school-aged kids and the steep new costs to states.
Taking away benefits from parents would harm children, too. Kids wouldn’t get enough to eat, and their health and school performance would suffer.
The House Republicans’ plan to shift SNAP costs to the states could force Pennsylvania and other states to pay a minimum of 5% and up to 25% of SNAP benefits. This would put a $212 million burden on our state budget at a minimum and possibly up to $1 billion, which would be impossible for the state to meet when our budget is very tight. States would also face a much higher cost to administer the SNAP program. Pennsylvania lawmakers would be forced to choose between taking away benefits, reducing eligibility, raising taxes, or cutting funding for other state programs, such as K–12 education, and repairing our roads and bridges.
The bill could even end SNAP entirely in some parts of the country for states that decide the new funding mandate is impossible to meet and opt out of the program entirely. If Pennsylvania were to end SNAP, two million people could see their benefits taken away, including working people with low-paying jobs, people with serious health conditions and disabilities, veterans, and others. They would face severe hunger and health consequences under this worst-case scenario.
Reckless tax cuts for the wealthy would increase deficits
House Republicans are advancing their budget bill with roughly $1.5 trillion in cuts to safety net programs to pay for tax cuts that disproportionately benefit the wealthy. But even with the dismantling of federal funding for food assistance and health care, the current plan would still increase deficits by $3.8 trillion over ten years.
On the other hand, working families with low incomes in Pennsylvania would see next to no benefits of the tax cut provisions.
- While the bill temporarily expands the maximum Child Tax Credit to $2,500, up to 20 million children in working families wouldn’t get the full credit because their families’ incomes are too low.
- In addition, millions of people would see tax increases if tariffs are enacted. The tariffs would likely erase a large portion of forthcoming tax cuts for low-income households.
- These tax cuts, like those Trump and the Republican enacted in 2017 will not increase investment or economic growth. Indeed, higher deficits, combined with the tariffs, could lead to stagflation.
The Reconciliation Bill Hurts all of US
Medicaid and SNAP are safety net programs for people who are having temporary difficulties.
While 3 million Pennsylvanians benefit from Medicaid and 2 million from SNAP at any one time, people move off and one these programs all the time. People who have lost a job, or become ill, or have to work less to cope with new responsibilities taking of children or elderly relatives, take advantage of these programs for a time. And then when their circumstances change and they again work at job paying a higher wage and giving them health insurance, they leave them.
The result is that the number of people who benefit from Medicaid and SNAP over ten years is more than double or triple the number who do so at one time—perhaps as many as 6 million for Medicaid and 4 million for SNAP.
And, if we are lucky, as many us 60% of us are going to need Medicaid to help pay for an assisted living residence, nursing home, or in-home care when we are elderly.
Medicaid and SNAP Are Critical to Ensuring that Health Care Facilities and Grocery Stores Survive.
Research shows that tax cuts for the wealthy don’t “trickle down.” Instead, the dramatic cuts to federal funding for basic needs programs would be felt far beyond the households who see their benefits taken away.
- Medicaid is an important source of revenue for hospitals in rural areas because it reduces uncompensated care rates. Rural hospitals, in places such as Elk and Tioga counties, could shut down, leaving nurses, doctors, and support workers without jobs.
- SNAP has an economic multiplier effect, generating $1.54 in economic activity for every $1.00 spent in a weak economy. The 10,451 local grocery chains and convenience stores that rely on SNAP purchases to keep their businesses afloat, pay their employees, and keep prices affordable might struggle to stay open.
- One in four small business owners count on food assistance through SNAP or health care coverage through Medicaid in Pennsylvania. Without help affording groceries and health care, many entrepreneurs could be forced to close up shop.
State governments also rely on federal support, and Pennsylvania receives more than $46 billion annually in federal funding. If the reconciliation bill the state cannot possibly make up for the funding it would lose for Medicaid and SNAP without making deep cuts elsewhere in the budget, to K-12 education, to roads and bridges, and to public safety.
The House reconciliation bill is a disaster for working people and the middle class and a huge reward to the very rich which will not help the rest of us.
For more details and context on the issues considered in this press release, consult the following policy briefs prepared by the Pennsylvania Policy Center. While written before the House committees acted—and thus including policy ideas discarded this week—most of the policy changes discussed above are considered in these policy briefs.
The Trump-Republican Threat to Fair Taxes and Fiscal Integrity