Congressional Republicans have suggested that Medicaid could make up much of the savings needed to offset the cost of renewing Trump’s tax cut. The GOP has only a slender House majority, and many of its members are reluctant to cut benefits for existing enrollees. But the growth rate of Medicaid spending is so rapid, that merely slowing the ability of states to unilaterally expand the program would generate enormous savings.
The highest priority for the newly-elected Republican Congress is to renew major provisions from the 2017 Tax Cuts and Jobs Act, which are soon to expire. House Republicans have proposed $4.5 trillion of tax cuts in a budget blueprint, towards which they have set a target of $2 trillion in spending cuts over 10 years. The House Energy and Commerce Committee has been tasked with finding $800 billion of the reduction in spending. House Democratic leader Hakeem Jeffries suggested this would mean “slashing and burning things like Medicaid to the ground.”
But even if such a “cut” were entirely concentrated on Medicaid, it would only partially diminish the increase in the program’s spending over a 10-year period. Instead of rising from $656 billion in 2025 to $1,025 billion in 2025, the annual cost of Medicaid to federal taxpayers would increase only to $845 billion. That is to say, the program’s growth rate would be reduced from roughly 4.5 percent per year to 2.2 percent — just above the target rate of inflation.
Continue reading the entire piece here at the Washington Reporter
______________________
Chris Pope is a senior fellow at the Manhattan Institute. Follow him on Twitter here.
Photo by krisanpong detraphiphat / Getty Images