GOP Ready Plan to Gut Medicaid to 'Pay for Tax Cuts for Billionaires'

Defenders of Medicaid are sounding the alarm over plans by the Republican Party—led by President Donald Trump and House Speaker Mike Johnson—to eviscerate the nation's healthcare system used by low-income individuals and families, warning that the attack would jeopardize healthcare for tens of millions of the poorest Americans as part of an effort to give the wealthiest individuals and corporations massive tax breaks.

Internal divisions within the House GOP caucus have hinged on the overall size of cuts to federal spending in their yet-to-be-released budget blueprint, with competing proposals ranging from $1.25 trillion in cuts up to $2.5 trillion. Of that overall number, hundreds of billions in Medicaid cuts may come in the form of block grants to states, caps on per capita costs, and work requirements.

"For months," wrote Paul Heideman on Monday in Jacobin, "Republicans have said that their budget will cut spending in order to pay for making permanent Trump's tax cuts for the rich, which are set to expire this year."

One of the key targets of their austerity plan, he notes, is Medicaid, which Republicans, as reported by Politico on Tuesday, believe they can cut by an estimated $800 billion or more over the next decade.

"They are cutting healthcare to pay for tax cuts for billionaires."

Echoing the call of other progressive voices, Heideman argues that opponents should seize on the tensions within the GOP—where right-wing hardliners are openly calling for cuts while those in more swing districts have expressed increasing anxiety about what happens politically if they take the axe to a program that is resoundingly popular with voters.

CNNreporting on Monday about the behind-the-scenes maneuvering within the caucus quoted one unnamed Republican lawmaker who said that some members want "to cut to the bone" when in it comes to Medicaid and other programs. While the lawmaker said they were "willing to cut a lot" from the federal budget, "if you cut the essential stuff that affects people every day, you will lose the majority in two years. I can guarantee it.”

Meanwhile, Politico offered more evidence that Trump and House Republicans are still not on the same page:

GOP leaders told senior Republicans in a series of private meetings Monday that Trump wasn’t yet on board with the major Medicaid cuts it would take to secure up to an additional $800 billion in savings, according to three people familiar with the conversations who, like the others, were granted anonymity to describe the private talks.

Johnson and senior Republicans are wary of pursuing the Medicaid reforms only for Trump to publicly bash the move. GOP leaders indicated in private meetings Monday that "they need to work with Trump" on the Medicaid issue before proceeding, according to one of the people.

As Heideman notes, one can't fully understand the attacks on Medicaid—which could boot tens of millions of people out of the program—without recognizing the GOP's parallel strategy for massive tax giveaways for the rich and corporations:

Republicans are hoping to extend the tax cuts passed in Donald Trump's first term. These tax cuts, which were the only substantial legislative accomplishment of Trump's first term, were massively skewed toward the rich. The average household in the top 1 percent of income earners received about $60,000, while the average of the bottom 80 percent of households received only $762.

All of this largesse for the rich was expensive; estimates are it will cost the government nearly $2 trillion over ten years. Because of this, a number of Republicans in Congress insist that any extension of the tax cut must be accompanied by spending cuts to prevent it from adding massively to the deficit. With a razor-thin majority in the House, these deficit hawks could sink any attempt by Trump and the GOP leadership to ram the cuts through in spite of their impact on the deficit. Finding a way to substantially cut Medicaid spending has thus become central to the larger GOP budget plan.

On Tuesday, the Center on Budget and Policy Priorities (CBPP) detailed how one Republican approach to cutting Medicaid—a federal spending freeze that would cap per capita costs—would drastically increase financial pressure on the state programs that administer Medicaid programs.

"If federal funding drops sharply," warned Elizabeth Zhang, a CBPP research assistant, "states would be forced to scale back Medicaid by cutting people from the program, slashing benefits for remaining enrollees, reducing payments to hospitals and physicians—or a combination of all three. This would harm Medicaid enrollees across the program."

Pushing back against the proposed assault on a program that serves over 80 million people each year, all 47 members of the Senate Democratic Caucus on Monday sent a letter to Majority Leader John Thune (R-S.D.) saying he and his Republican colleagues should "reject proposals that use Medicaid as a piggy bank for partisan priorities and continue to defend the importance of this vital program." According to the letter:

Republicans are proposing cuts to the Medicaid program from hundreds of billions to multiple trillions of dollars. Cuts to Medicaid through drastically changing the program's financing structure or imposing additional barriers to coverage are dangerous to the millions of people who rely on the program. These proposals will also force states to make difficult decisions that will result in millions getting kicked off their coverage and providers struggling to keep their practices open. States simply cannot absorb these massive funding cuts without hurting children, seniors, people with disabilities, tribal populations, patients with chronic illnesses, and many other Americans who rely on Medicaid.

"The American people should be assured," the letter concluded, "that Medicaid will be protected."

Last week, as Common Dreamsreported, a separate CBPP report estimated that a GOP proposal to institute work requirements for Medicaid recipients could result in 36 million people being axed from the life-saving program. Predictions such as this could be why, as Politico noted, "Trump and his team are worried those cuts will invite political blowback."

The problem for progressives is that Republicans have discovered that while cuts to Medicaid are demonstrably unpopular with the voting public, the implementation of so-called "work requirements" has received more traction in opinion polls. As such, GOP leaders, including House Majority Leader Rep. Steve Scalise (R-La.), may believe they have a new way to trick people into helping them undermine or destroy the program.

This is why Heideman argues it is key for Medicaid defenders to be adamant in their opposition and clear in their messaging when it comes to work requirements or other deceptive messaging about Republican intentions.

Work requirements for Medicaid, Heideman argues, should be called exactly what they are: cuts. As he explains:

During the first Trump administration, states were granted waivers to institute work requirements. Only Arkansas actually implemented the policy, and the results are instructive. About a quarter of Medicaid recipients subject to the requirement (about 18,000 people) lost coverage while the waiver was in effect. Yet the requirement produced zero effect on employment. People kicked off Medicaid were no more likely to have jobs than they were while they were on it.

The reason for this is simple. Most people on Medicaid are already working. Among those that aren’t, most are either disabled, taking care of a family member, or going to school. There simply aren’t that many people on Medicaid who could go get a job, even if their health care is cut off. Moreover, work requirements often lead to people who technically shouldn’t be removed from the program being kicked off because they haven’t supplied the proper paperwork establishing their employment. Work requirements do nothing to make people work more. They simply kick people off the rolls.

Larry Levitt, executive vice president for health policy at Kaiser Family Foundation, pointed out last week that "92% of Medicaid adult enrollees are working, or are not working due to caregiving, an illness or disability, or school attendance."

So while Speaker Johnson and other Republican leaders have tried to say they are not proposing cuts to Medicaid in their pending budget blueprint, informed critics are pointing out that this a blatant falsehood.

Heideman says that the battle to defend the program is important in its own right but also has broader political implications.

"Defeating Medicaid cuts is an urgent priority over the coming months," he argues. "It's an opportunity to reestablish the popularity of the welfare state as a principle of American politics and to hand Trump and the GOP a much-needed defeat. Because of the GOP's disarray, it also has the potential to hamstring the party's only substantive legislative priority. Finally, this kind of work can provide some balance and ability for longer-term coordination amid the daily outrage that the administration is committing. The Left should not let this opportunity slip by."