House Republicans have adopted a new catchphrase — “federalism” — for their aggressive plans to reshape the nation’s antipoverty and welfare programs, plans that conservatives say will curb harmful federal overreach but that liberals fear will simply cut aid to the poor.
The House Republican budget introduced Tuesday features its biggest spending reductions through federalism, or the shifting of responsibility for health care and welfare programs from the federal level to state or local governments.
While those changes might be overshadowed by more politically-sensitive proposals, such as the GOP’s plan to transform Medicare, they account for almost half of the $5.5 trillion in spending cuts touted by House Republicans Tuesday.
Tom Price, the fiscally conservative doctor from Georgia, has said since before taking over the chairmanship of the House Budget Committee in January, that federalism would be a focus. He spelled that out in a USA Today op-ed about the budget published Tuesday morning.
“We respect the principle of federalism in our budget by realigning the relationship the federal government has with states and local communities,” Price wrote. “From health care to education, states should be empowered to create their own solutions, free of onerous Washington mandates.”
Introducing his budget in the Capitol Tuesday, Price called it a plan for an “opportunity economy, one that opens the door for people, not subject them to the dictates of Washington, D.C.”
The plan claims $2 trillion in savings from repealing Obamacare and “expanding choices and flexibility for individuals, families, businesses and states,” one major example of reducing Washington’s influence.
But the best example of federalism, said Budget Committee Vice Chairman Todd Rokita of Indiana, is the budget’s proposal for Medicaid, which is the largest anti-poverty program in the U.S.
The Medicaid health insurance program is currently administered jointly by the states and the federal government, an arrangement that Republicans claim incentivizes governors to try to shift costs to the federal government rather than make the program more efficient.
The budget creates “State Flexibility Funds” that give states more authority to shape Medicaid programs, but limits the growth of those funds over time.
Over 10 years, the budget would reduce Medicaid spending by $913 billion from $4.6 trillion currently projected.
That’s on top of the repeal of the Obamacare expansion of Medicaid to those up to 138 percent of the federal poverty level. Altogether, the Republican budget cuts Medicaid spending by $1.8 trillion over 10 years, according to an analysis by left-leaning Center for Budget and Policy Priorities, a Washington think tank.
The Medicaid changes would add “tens of millions of Americans to the ranks of the uninsured and underinsured,” the think tank said, noting an analysis by the Congressional Budget Office that found that such a plan would force states to pick up the slack or force cutbacks in the health insurance program.
By contrast, the GOP budget would reduce spending on Medicare, the health care program for senior citizens, by less than $150 billion on net.
It’s not just health care: The GOP budget would cut nearly $1.1 trillion with unspecified reductions in “other mandatory spending,” a budget category that includes means-tested welfare programs for which people receive benefits automatically if they demonstrate need.
That includes the Supplemental Nutrition Assistance Program, also known as food stamps. The GOP budget would cap spending on food stamps and give the money to the states to manage, starting in 2021.
A similar change included in the 2015 House GOP budget authored by then-chairman Paul Ryan of Wisconsin would have saved $125 billion over a slightly longer period.
Rep. Chris Van Hollen, the ranking Democrat on the Budget Committee, said Wednesday that most of the ideas described as federalism by Republicans were part of the “same-old, same-old” as the budgets proposed by Ryan. Those budgets were roundly condemned by Democrats and featured in negative campaign ads against Republicans.
“You can call anything reform, but what they’re doing here is simply a block grant that shrinks the amount of resources available to states,” Van Hollen said, noting a Congressional Budget Office analysis concluding that the policy would result in either states ponying up the difference or beneficiaries seeing their access to health care diminished.
Unlike the federal government, Van Hollen said, states cannot expand their budgets during a recession. “They’re essentially shredding that safety net,” the Maryland congressman said of Republicans. “They’re saying OK, here’s the amount we’re going to provide you, whatever state, for Medicaid, but it’s block-granted. But if the economy begins to go down, and more and more people need a safety net, too bad: You’re on your own.”
Rokita, who led the effort on the Medicaid piece of the proposal, defended it on the grounds that state control would make it better. It would allow state governments to define poverty, assess what kind of health care poor residents need and shape the delivery system for that care, he said.
He acknowledged, however, that the plan was not new. He explained that the term “federalism” was not a sales pitch, but rather “what we believe.”
“I don’t look at it as something new as much as I look at it as something consistent,” he said.
