CHA News Article

Trump Budget Proposal Significantly Cuts Medicaid, Other Safety Net Programs

Today, President Trump released his federal fiscal year (FFY) 2018 budget, titled “A New Foundation for American Greatness.” The annual budget proposal, which is a political blueprint rather than a legislative proposal, serves as a starting point for negotiations and as a messaging document for the President and his party. In general, Trump’s budget follows traditional conservative doctrine: lowering taxes, boosting defense spending and deeply cutting domestic spending. GOP lawmakers have already distanced themselves from key provisions in the President’s budget and clearly intend to write their own budget.

Of most significance to California’s hospitals, the plan does not cut the Medicare program but drastically cuts the Medicaid program. Much like the House-passed American Health Care Act (AHCA), the budget would make notable changes to Medicaid, including removing the program’s entitlement nature by shifting state payments to per capita payments or block grants beginning in FFY 2020. It would also cut Medicaid spending by $610 billion over 10 years and reduce spending for the Children’s Health Insurance Program (CHIP) by more than $5.8 billion in the same period. While it is important to note that President Trump’s budget does suggest the reauthorization of CHIP, these spending cuts will harm this important program.

The budget’s other health-related provisions would:

  • Make no change to states’ ability to use Medicaid provider taxes
  • Eliminate the Social Services Block Grant, saving $16.7 billion over a decade
  • Eliminate the Temporary Assistance for Needy Families Contingency Fund, saving $6 billion over a decade
  • Permit a $7.6 billion accounting expense to terminate the proposed Independent Payment Advisory Board
  • Establish medical malpractice protections, saving Medicare $31.4 billion and Medicaid $399 billion over 10 years
  • Double budget authority for Medicare hearings and appeals to $107 million

Overall, the President’s budget would eliminate the deficit by drastically cutting domestic programs by $1.7 trillion over 10 years. At the end of the decade, U.S. military spending would increase to nearly twice that of other domestic programs. Domestic discretionary spending would be capped at $429 billion per year, below 2004 levels, while military spending would rise to $722 billion. To meet its budget target, the White House makes the assumption of 3 percent economic growth – nearly double the 1.9 percent rate estimated by the nonpartisan Congressional Budget Office – to help offset its ambitious spending plans, which include $200 billion for new infrastructure projects as well as $19 billion for paid family leave.

Members of the California delegation who serve on the House and Senate Budget Committees are Reps. Tom McClintock, Barbara Lee, Robit Khanna and Salud Carbajal and Sen. Kamala Harris.