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It’s budget day!
President Trump on Tuesday released his fiscal 2018 budget, which includes reductions in projected spending for the Department of Health and Human Services.

A few highlights from the HHS portion of the budget:

  • The document assumes Republicans will be successful in passing a bill to repeal and replace Obamacare along the lines of the House-passed bill.
  • It projects a reduction in Medicaid spending of $610 billion after the program is switched by states to a block grant or per-capita cap formula in 2020. This is in addition to the $880 billion that would be slashed after passage of a repeal and replace bill for Obamacare and it represents most of the $665 billion in claimed mandatory spending savings from HHS.
  • It creates a $500 million block grant to combat childhood obesity, and opioid treatment will continue to be funded, including medication that helps people with addictions.
  • It cuts $1.3 billion from the Centers for Disease Control and Prevention and $6 billion from the National Institutes of Health.

How OMB Director Mick Mulvaney explained the additional $610 billion in projected Medicaid spending cuts: “We assume the Affordable Health Care Act that passed out of the House passes. That has some Medicaid changes into it. We wrap that into our budget proposals. We go another half a step further and ratchet down some of the growth rates that are assumed in the AHCA. So if you assume growth rates – I can't remember what the exact measure is – it’s a CPI-plus measure. We take a measure that we think is closer to what the actual growth rates look like.”

Trump budget does not tackle Medicare, and exit poll data gives us a clue: One of the reasons that the Trump budget ends up making big cuts to projected spending for less controversial government entities such as as the CDC and NIH is that he followed through on a campaign pledge and barely touches Medicare — either in the short run or longer term. Overhauling Medicare by transitioning the program into one in which the government provides subsidies to seniors to choose among plans had been a part of every Republican-endorsed budget proposal dating to 2011. But Trump campaigned against making big changes to entitlement programs for the elderly, and his budget keeps that pledge. One needn’t look beyond the exit poll data from the 2016 election for a clue as to why he’s protecting Medicare. On a national basis, Trump lost voters under 44 years old by 14 points. But he won near retirees (50-64 year olds) by 8 points and those over 65 by 7 points. Those two groups made up 46 percent of the overall electorate and helped put him over the top in key states. It’s unsurprising, then, that Trump is reluctant to touch the program. But given that spending on Medicare is projected to approach $9 trillion over the next decade, it’s also clear why Trump was forced to make steeper cuts elsewhere to meet deficit reduction goals.

GOP senators say Trump’s budget isn’t going anywhere: Sen. Cory Gardner of Colorado hinted at the fate of Trump’s budget released today. “I think it will be met with the same support of the previous president’s budgets,” he told the Washington Examiner. When asked whether that means the budget is dead on arrival, Gardner responded that “you can look at the votes. It will have the same acceptance.” Added Sen. Bill Cassidy of Louisiana: “I don’t think the president’s budget is going anywhere.” Reporters then asked what signal the president’s budget cuts send to the American people. “It is no signal of mine,” he responded. Other senators took aim at some of Trump’s steepest cuts. Sen. Lindsey Graham, R-S.C., added that the National Institutes of Health is “a national treasure.” Trump would cut more than $1 billion from NIH next year.

Ryan and McConnell: House and Senate will write our own budgets. Though Republican congressional leaders were broadly positive about Trump’s approach to the budget, they also kept some distance by noting that both chambers would be writing their own budgets. House Speaker Paul Ryan said, “Clearly Congress will take [Trump’s] budget, and then work on our own budget, which is the case every single year. But at least we have common objectives — grow the the economy, balance the budget.” And Senate Majority Leader Mitch McConnell praised several elements of the Trump budget, adding, “they’ll serve as guideposts for Chairman [Mike] Enzi and the rest of the Budget Committee as they move forward on this matter.” Given that a number of centrist Senate Republicans already think that the House-passed healthcare bill goes too far in reducing projected Medicaid spending, it’s unlikely they’ll hop on board Trump’s plan that would slow the rate of growth even further. Trump’s cuts to NIH and CDC funding already have been greeted with resistance by a number of Republicans. But expect the House GOP, at least, to go further on Medicare and reiterate the chamber’s support for a premium support model.

Schumer: Trump budget is a fantasy comic book villain using a sledgehammer while dreaming on a rainbow … or something: Senate Minority Leader Chuck Schumer spared no analogies when assailing Trump’s budget on the Senate floor Tuesday morning. "In short, the Trump budget takes a sledgehammer to the middle class and the working poor, lavishes tax breaks on the wealthy and imagines all of the deficit problems away with fantasy math. The Trump budget exists somewhere over the rainbow where the dreams of Mick Mulvaney, Paul Ryan, and the Koch brothers really do come true. Of course, these dreams are a nightmare for the average working American."  He said, "When you add it all up, Mr. President, the Trump budget is comic-book-villain bad; and just like comic books, it relies on a fantasy to make all the numbers work. It’s the kind of budget you might expect from someone who is openly rooting for a government shutdown. Haven’t we heard the president say that?"

Pelosi blasts “bogus budget”: “I think this budget is based on bogus predictions about the economy,” House Minority Leader Nancy Pelosi said Tuesday at the Peter G. Peterson Foundation Fiscal Summit. “I think it is not factual or evidence based … I don’t know what chance it has in the Congress.”

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Controls on drug pricing missing from Trump’s budget: The president has said that the pharmaceutical industry is “getting away with murder” and previously suggested he would allow Medicare to negotiate drug prices. The provision, however, is missing from his budget. Former President Barack Obama had included Medicare drug price negotiation policy in his past budgets, but didn’t push for it during the passage of his signature healthcare law as part of a deal to gain support from the drug industry.

But Zika and Ebola funding is in: President Trump’s budget cuts a lot of programs, but it added an item that public health experts have asked for: a national emergency fund. The fund would be used to fight major pandemics or outbreaks such as Zika or Ebola. It also means that the CDC can avoid Congress for funding for specific outbreaks. That may not be a bad thing seeing as how it took Congress months to appropriate billions for the Zika fight last year.

Trump throws an FDA Hail Mary: President Trump’s budget proposal calls for a last-minute renegotiation of the Food and Drug Administration’s user fee agreement with the industry.

But it is way, way too late to go back to the table. Senate and House panels already have advanced the legislation to reauthorize the programs, in which drug and device makers pay the FDA for each new application and the agency uses that money to hire new people and speed up approvals. Sen. Lamar Alexander, R-Tenn., already told the Trump administration that it was too late to renegotiate the user fee deal, according to Politico. User fee programs need to be reauthorized every five years, and the FDA and the industry have been negotiating the latest deal for more than a year. But Trump is asking for an additional $1 billion in user fees in exchange for federal funding cuts. Which at this point appears very, very doubtful.

The user fee program has to be reauthorized by the end of September, but lawmakers are pushing to reauthorize it by July to prevent the FDA from sending layoff notices to workers funded by the fees.

White House leaves drug office alone: The White House buckled to major congressional pressure and restored more than $300 million in funding to fight drug abuse. Trump’s budget released Tuesday does not cut the funding of the Office of the National Drug Control Policy. An earlier budget proposal that leaked toyed with cutting more than $300 million for the office, with the proposal saying that it was duplicative. That proposal was, shall we say, pretty unpopular in Congress, which just passed major legislation to combat the opioid abuse epidemic.

HHS accidently posted Trump’s budget prematurely: The Department of Health and Human Services on Monday afternoon accidentally posted President Trump's proposed budget for the agency, a day before it was set to go live. Several reporters caught the document and questioned whether it was real before it was removed from the agency's website.

California’s single payer price tag: $400 billion. That’s a massive amount for a state whose general fund budget totals $125 billion. The state would seek various waivers to help pay for the program, through Obamacare provisions and Medicaid, but also would require a 15 percent payroll tax to raise enough money, according to an analysis.

Some senators want to fund insurer subsidies: Some Republican senators want to appropriate insurer subsidies under Obamacare because of reluctance from Trump to do so. But they are meeting resistance in the House. “There is obviously resistance to it,” said Sen. Ron Johnson, R-Wis., on Monday. Sen. Susan Collins, R-Maine, also told reporters that the House isn’t open to appropriating Obamacare’s cost-sharing reduction reimbursements, which pay back insurers for reducing co-pays for low-income Obamacare customers. House members are against a short-term fix. “Short-term band-aids are not the solution here,” said Rep. Tom MacArthur, R-N.J. “The system is imploding and we need long-term answers.”

MacArthur knows the Senate’s healthcare pains: If anybody knows the difficulty of the task the Senate faces on Obamacare repeal, it is Rep. Tom MacArthur, R-N.J. The centrist lawmaker worked with the conservative House Freedom Caucus to engineer an amendment that lured the roughly two dozen lawmakers to support the American Health Care Act this month. MacArthur told the Washington Examiner Monday that he is in contact with senators who are working to get the bill passed in the upper chamber. “I am optimistic they are not going to start from scratch, and will work with the framework that we send,” MacArthur said. He does concede they will probably make some adjustments around the bill’s tax credits for lowering insurance or Medicaid. MacArthur then stated the obvious on the Senate’s work, which has been bogged down with rifts over Medicaid growth and whether to keep Obamacare’s individual mandate temporarily. “This isn’t easy. We have to balance how to protect the vulnerable and bring costs down at the same time,” he said.

Does Obamacare defund Planned Parenthood? Planned Parenthood has been a long supporter of Obamacare, but now the healthcare law has contributed to clinic closures in Colorado. According to a Times-Call report, the clinics are losing money because they are billing Medicaid instead of patients. “We supported (the ACA) because we love the idea of more people having health insurance and increasing access to the critical services that they need, but a lot of our patients were self-pay,” said Whitney Phillips, spokeswoman for Planned Parenthood of the Rocky Mountains. “They would come in and get a pap smear and pay out of pocket. Under the ACA, a lot of patients were given the opportunity to be on Medicaid. Again, that’s wonderful, but it meant that rather than bill them directly, we had to bill Medicaid. And Medicaid reimburses at a very low rate.” Planned Parenthood has pushed for Medicaid expansion in other states and has signed up uninsured patients for coverage both through Medicaid and through subsidized private health plans on the exchanges. The abortion and women’s health provider faces a defunding threat for a year under a GOP bill that would repeal and replace Obamacare.

RUNDOWN 

RealClearHealth Costs and the pre-existing conditions pledge
Washington Post
Obamacare was supposed to make CHIP obsolete
Kaiser Health News
GOP health bill could undercut some coverage in job-based insurance
Associated Press
Catholics challenge St. Louis “abortion sanctuary” law
Axios
Funding insurer subsidies isn’t going to be easy for Congress
Bloomberg
Trump budget contains little on drug prices despite tough talk
Albuquerque Journal
New Mexico insurers can file “Trump rates” in addition to regular rates
The Hill
Sanders: Trump’s Medicaid plan is “just cruel”
FDA
Commissioner Scott Gottlieb outlines actions agency will take on combating opioids



Calendar

TUESDAY | MAY 23

Peter G. Peterson Foundation Fiscal Summit on “Rising Debt in a Changing Economy.” Livestream.

House Energy and Commerce committee hearing on “U.S. Public Health Response to the Zika Virus: Continuing Challenges.” Began 10 a.m. Details.

Geneva. World Health Organization to elect new director-general.

2:30 p.m. Panel on “Improving Healthcare to Deliver Better Quality Care at Lower Cost” with former HHS Secretary Sylvia Burwell, AEI’s James Capretta and Ariadne Labs Executive Director Atul Gawande. Peter G. Peterson Foundation Fiscal Summit on “Rising Debt in a Changing Economy.” Livestream.

WEDNESDAY | MAY 24

8:15 a.m. AJAX. 1011 4th Street NW. Axios interview with House Speaker Paul Ryan.

9:30 a.m. 1334 Longworth. House Budget Committee hearing on the president’s fiscal 2018 budget.
Details.

11 a.m. Kaiser Permanente Center for Total Health. 700 2nd St NE. Council of Accountable Physician Practices and the American Cancer Society to hold a press briefing on the “The State of Cancer Care Today.” Will include experts from the Biden Foundation and the CDC, as well as Dr. John Fleming, deputy assistant secretary for health technology at HHS.
Details.

1 p.m. 2007 Rayburn. House Appropriations Committee budget hearing on Indian Health Service.
Details.

1: 30 p.m. Alliance for Health Reform webinar on “Where Medicaid Stands: From the AHCA to State Waivers.”
Details.

2 p.m. 1100 Longworth. Hearing on the president’s proposed fiscal 2018 budget with Treasury Secretary Steven Mnuchin.
Details.

3:30 p.m. 215 House Visitor Center. Roundtable Discussion on “Protecting Critical Community Development Programs,” hosted by Reps. Maxine Waters, D-Calif., Dan Kildee, D-Mich, and Emanuel Cleaver, D-Mo. Discussion will focus on Trump administration’s proposed elimination of the Community Development Block Grant and HOME Investment Partnerships programs.

6 p.m. National Press Club. 529 14th St. NW. Documentary premier and discussion of “Your Health: A Sacred Matter.” Details.

CBO report on the American Health Care Act expected.

THURSDAY | MAY 25

9:45 a.m. 608 Dirksen. House Budget Committee hearing on the president’s fiscal 2018 budget with OMB Director Mick Mulvaney. Details.

10 a.m. 2362-A Rayburn. House Appropriations Committee budget hearing on the Food and Drug Administration with FDA Commissioner Scott Gottlieb. Details.