Burn the Playbook

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They Made the Safety Net Pay for the Tax Cut

By Michael Starr Hopkins

The bill did not hide the trade. It buried it in tables and trusted everybody to get tired.

KFF says the enacted reconciliation law cuts federal Medicaid spending by $911 billion over ten years. CBPP says average incomes for the bottom 10 percent fall by $1,200 a year, or 3.1 percent, while average incomes for the top 10 percent rise by $13,600, or 2.7 percent.

That is not deficit discipline. That is a payer swap: care for poor people, disabled people, nursing-home residents, kids, rural hospitals, and state budgets got put on the table so tax relief could keep flowing upward.

Source label: KFF estimate of the enacted Medicaid cut and CBPP estimate of the SNAP cut.

The Number

The number to keep in your head is $911 billion. KFF says that is the federal Medicaid spending cut in the enacted reconciliation package after accounting for CBO interactions.

KFF also says the law would increase the number of uninsured people by 10 million, and that more than 10.3 million people are likely to lose Medicaid because the final enacted cuts are larger than the earlier version CBO modeled.

Who Pays

Medicaid is not a Beltway abstraction. It is the doctor visit for a kid, the aide who helps somebody bathe, the rural hospital trying not to close, and the nursing-home bed a family cannot afford alone.

The bill moved money away from that system while extending tax cuts tilted upward. CBPP says the top 10 percent gain income while the bottom 10 percent lose income. Somebody else's safety net got turned into somebody else's tax relief.

The Poll They Ignored

KFF found Medicaid favorability at 83 percent overall, including 74 percent among Republicans. That matters because the cut is not happening because the program is hated. It is happening because the people writing the law think the public will not follow the paperwork all the way down.

Source label: KFF Health Tracking Poll on public views of Medicaid and the reconciliation law.

The State Squeeze

Federal cuts do not stay in Washington. They land in statehouses, county hospitals, nursing homes, clinics, and family budgets. KFF says the federal reductions vary by state, with Louisiana, Illinois, Nevada, and Oregon facing cuts of 19 percent or more over the period.

That means the fight does not end when Congress passes the bill. It moves to state budgets, where officials decide whether to replace some money, cut eligibility, squeeze providers, or let people lose care.

Between The Lines

The word they want is offset. Do not give it to them. Say what happened.

The nursing-home bill went up so the estate-tax bill could come down. The Medicaid card got lighter so the donor class could keep more. The paperwork calls it budget math. The arithmetic calls it a payer swap.

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Sources

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