The US House Budget Committee punted on a vote today to very literally take from people who are poor to give to the rich—a plan which, if successful, will do massive damage to the health and well-being of people, communities, and economies all across the country and in the District for decades to come. The plan gives a net of nearly $4 trillion in deficit-ballooning tax cuts heavily skewed to the wealthiest Americans over ten years, and partially pays for them with the biggest cuts ever made to federal funding for health and food assistance. The cost of the tax cuts are also partially offset by the elimination of an array of tax benefits that support health care and clean energy, among other tax changes. The proposals for Medicaid and the Supplemental Nutrition Assistance Program (SNAP) include stringent work requirements, penalties for serving immigrants with local funds, and “red tape” that would result in 1 in 6 DC residents, or more, losing benefits, just when need is growing. They would also do damage to DC’s local and regional economy.
If the bill is advanced out of the Budget Committee, which will likely mean more cuts to basic needs programs, it will then head to the Rules Committee and potentially to a full vote of the House.
New Eligibility Requirements and Cost Shifts Will Reduce Program Participation and Increase Hardship and Hunger in DC
The House Agriculture Committee approved a measure that would cut nearly $300 billion from SNAP.
- This could result in 15,000 people in DC, on average monthly, losing their food assistance entirely. It could affect 24,000 people, on an average monthly basis, in households where someone is at risk of losing some or all of their benefits, which reduces households’ overall ability to afford food. This is due to a new work requirement for non-disabled adults aged 55 to 64 without children and non-disabled adults ages 18 to 64 with children 6 and older.
- In addition to work requirements, the House is proposing to shift a minimum of 5 percent of the cost of providing SNAP benefits to states. The cost shift increases to as much as 25 percent depending on a state’s SNAP error rate, which is calculated as the rate of overpayment plus the rate of underpayment. This cost-shift to DC would range from $16 million to $79 million in fiscal year (FY) 2028, potentially causing thousands more to lose their assistance if DC cannot afford the new costs.
- In addition, the plan cuts in half federal funding for program administration, again foisting new costs onto states.
House Plan Erects New Barriers to Medicaid Coverage and Balloons Costs for the District
The House Energy and Commerce Committee proposed and advanced $715 billion in cuts from health care over the next decade, primarily by slashing Medicaid, and includes many harmful provisions.
- One provision would coerce states like DC to end their state-funded health programs for immigrants who are ineligible for Medicaid by imposing a penalty in the form of a reduced matching rate of 80 percent, down from 90 percent, for coverage of expansion populations under the Affordable Care Act. That means a 100 percent increase over what states currently spend on the expansion group. DC’s 10 percent share of the cost is about $93 million annually, which means this penalty would raise DC’s obligation by another $93 million.
- Another would apply harsh work requirements for expansion populations—largely non-disabled adults ages 19-64—if they aren’t working 80 hours per month and able to work through substantial “red tape” to document their work on a regular basis. The proposal requires redetermination of eligibility every six months. The Congressional Budget Office estimates nearly 14 million Americans will lose health coverage by 2034, and this could include up to 114,000 DC residents.
- In addition, the House plan prohibits increasing or creating new health care provider taxes, which states levy on providers to cover the local share of Medicaid costs. In essence, House Republicans are limiting state options for maintaining services and preventing loss of coverage.
Tax Cuts Are Heavily Skewed to the Wealthiest Americans
US House Republicans want to gut human needs programs to pay for a lavish tax package that would extend and exacerbate the highly exorbitant 2017 tax cuts that were already skewed to the rich.
- The plan gives an average tax cut of $90,000 to households with incomes over $1 million while the bottom 20 percent get a pitiful average tax cut of $90. However, the relatively meager tax cuts going to workers—like ending taxes on tips and overtime pay—are temporary, sunsetting halfway through the ten-year window and resulting in a tax increase for the bottom 20 percent in 2029 and thereafter.
- The tax cut plan excludes 17 million children in lower income families from an increase to the Child Tax Credit, including 38,000 children in DC, and cuts off completely 4.5 million citizen children by making children in families with mixed immigration status ineligible.
- Tax cuts prioritizing the wealthiest include an increased deduction for wealthy business owners, which costs as much as the Medicaid cuts, expansion of the already enormous estate tax deduction, and subsidization of private school vouchers. Some tax increases, like ending the personal and dependent exemptions permanently, eliminating tax credits that support health care and clean energy, and changes to the state and local tax deduction, offset the cost of the tax cuts, resulting in an
SNAP And Medicaid Support DC’s Economy, Particularly in Economic Downturns
Slashing basic human needs programs is damaging for children, families, and communities, and it also hurts DC’s businesses and local and regional economy.
Under current law, SNAP automatically expands with need during an economic downturn and generates in economic activity for every $1 spent in a weak economy. There are at least 416 local retailers in DC—for example, grocery chains and convenience stores—that rely on SNAP purchases to keep their businesses afloat, pay their employees, and keep prices affordable. They might struggle to stay open if SNAP is gutted.
Medicaid, which covers more than one-third of DC residents and nearly half of all births, is critical to communities experiencing hardship and the health care industry as a whole. As DC enters a local recession, the need for Medicaid coverage will grow, just as access to the program shrinks. And, community health centers, hospitals, and other kinds of providers that provide crucial health care in the District, the region, and, for some specialized providers, the country, would see their ability to provide care greatly diminished.
Atop of massive federal layoffs that are throwing the District into a local recession, the damage in DC would be enormous.
