Q: Does the budget cut benefits for low-income families?
A: The President’s policies have slowed the recovery and brought us closer to a debt crisis that would hurt the poor the first and the worst. By contrast, House Republicans plan to repair the safety net. Spending on these programs would continue to grow, but states would have greater flexibility to tailor them to their people’s needs.
Q: How will this budget affect the disabled and people in nursing homes?
A: Freeing states from one-size-fits-all federal mandates will allow them to better allocate Medicaid dollars for their most vulnerable citizens. Rather than micromanage Medicaid from Washington, states will have the flexibility to ensure that the disabled and those in nursing homes receive the quality care they deserve. Elected leaders close to the people can better take care of these priorities than a federal government thousands of miles away.
Q: How would this budget affect other assistance programs such as food stamps?
A: The Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) is a good case study in how aid programs are in need of reform. Spending on SNAP has quadrupled in the past decade. It’s grown in good times and bad, because of the open-ended nature of the program. States get more money if they enroll more people. This setup encourages waste, fraud, and abuse. This budget fixes the flawed incentive structure that poorly provides assistance to those in need. By capping open-ended federal subsidies and allowing states to develop innovative approaches to delivering aid, the budget’s gradual reforms encourage states to reduce rolls and help recipients find work. The budget also calls for time limits and work requirements like the reforms that helped reduce poverty nationwide in the mid-1990s.
Q: If recipients of aid are being required to find work, shouldn’t the government be doing a better job at helping them reach the first rung on the ladder of opportunity?
A: Yes. This budget reforms our job-training programs to improve outcomes across the board. It calls for the consolidation of duplicative federal job-training programs into a streamlined workforcedevelopment system. That system will have fewer funding streams and provide accountable, targeted career-scholarship programs. Instead of wasting money on duplicative administrative bureaucracy, this budget calls for job-training programs to be better coordinated with each other—and with the Pell program—to maximize every dollar for those who need it.
As for Pell, Congressional Democrats and the President have pushed Pell Grant spending to unsustainable rates. There is growing evidence that this new spending is simply enabling a rapid rise in tuition costs—college costs have risen at twice the rate of inflation and shot up by over 8 percent last year. This budget brings Pell spending under control and makes sure aid helps the truly needy, not university administrators. At the same time, the proposed reforms ensure that we maintain the current maximum Pell award ($5,645) throughout the ten years of the budget.
Medicare and Medicaid FAQs
Q: Why do you cut Medicaid?
A: We strengthen Medicaid. The House Republican budget gives states the flexibility and resources to tailor a Medicaid program that meets their people’s needs.
Today, Medicaid has the same flaws that cash welfare had before we reformed it in 1996. The federal government provides an open-ended match to what the states spend on Medicaid, which gives them a perverse incentive to spend as much money as possible. The federal government pays an average of 57 cents of every dollar spent on Medicaid. Expanding Medicaid coverage during boom years can be tempting for state governments since they pay less than half the cost. Conversely, to restrain Medicaid’s growth, states that cancel a dollar’s worth of coverage save only 43 cents. Moreover, states lack the flexibility to achieve savings, though many governors have asked for a new approach. One-size-fits-all federal mandates limit innovation, and many times the only way states are able to save money is to cut payments to medical providers. Many doctors are refusing to treat Medicaid patients, because states have reduced their reimbursements below what it costs to treat them.
Q: How would repealing the new health-care law affect Medicaid?
A: The health-care law would force millions of Americans into a Medicaid system that is fundamentally broken. That would explode costs for the federal government and state governments alike. The best way forward is to follow the reforms in the House Republican budget, not expand a broken program. Repealing the new law and replacing it with true, patient-centered reforms will better serve Medicaid patients, while helping federal and state budgets.
Q: I’ve heard people say that this plan “ends” Medicare. Is that true?
A: No. This budget protects and strengthens Medicare. The non-partisan Congressional Budget Office says that without reforms, Medicare will go bankrupt just as current seniors are in the heart of their retirements. Our plan contains bipartisan solutions to strengthen Medicare by offering guaranteed coverage options to future seniors, regardless of pre-existing conditions or health history.
Q: You’ve put forward your solution. How would others solve this problem?
A: The President’s health-care law makes drastic changes to Medicare, but those changes make matters worse. The President’s health-care overhaul created an unaccountable board of 15 unelected bureaucrats to cut Medicare in ways that would deny care to current seniors. See here for a complete contrast between the President’s approach and our approach when it comes to Medicare.
Q: Didn’t the President’s health-care law improve Medicare’s solvency?
A: No. The President’s health-care law raided Medicare to fund an open-ended health-care entitlement. Advocates of the President’s health-care law claimed that the law both improved Medicare’s solvency and paid for the new entitlement at the same time. This claim is contradictory. Medicare’s chief actuary testified before the House Budget Committee that the Medicare savings had been doublecounted.
The House Republican budget stops the raid on Medicare and ensures that any current-law Medicare savings are devoted to saving Medicare. It is crucial that policymakers ensure Medicare’s solvency into the next decade if we want to protect the current arrangements of those in or near retirement.
Q: What does your budget do to address the 2023 insolvency of the Medicare Hospital Insurance (Part A) trust fund?
A: The House Republican budget produces near-term savings over the next ten years by proposing curbs on abusive and frivolous lawsuits. Medical lawsuits and excessive verdicts increase health-care costs and result in reduced access to care. When mistakes happen, patients have a right to fair representation and fair compensation. But the current tort-litigation system too often serves the interests of lawyers while driving up costs.
This budget also advances a bipartisan proposal to further means-test premiums in Medicare Parts B and D for high-income seniors, similar to the President’s proposal in his fiscal year 2013 budget. This reform does not go into effect until 2020. These common-sense reforms to subsidize the wealthy less will not cause disruptions to seniors’ current arrangements.
Q: Will I lose my guaranteed health care through Medicare, and instead have to rely on a voucher?
A: No. The changes in the House Republican budget will not affect those in or near retirement in any way. When younger workers become eligible for the Medicare program, they will be able to choose the kind of coverage that best suits their needs from a list of plans—including traditional Medicare. These plans will be guaranteed to offer coverage to all beneficiaries regardless of pre-existing conditions. Medicare would then provide a payment to subsidize the cost of the plan. This is not a voucher. It is a payment that goes to whatever plan recipients choose. The program would operate in a similar manner as the health insurance that Members of Congress receive and Medicare’s prescription drug benefit program, which are also not “vouchers.” Former Clinton Budget Director Alice Rivlin has made it clear that premium support would not be vouchers with the following statement in testimony before the House Ways and Means Committee: “premium support as we define it is definitely not a voucher.”
Q: Does this budget reinstate the so-called Medicare “donut hole”?
A: This budget repeals the Democrats’ health-care law, including provisions that increase prescription drug prices for everyone. In fact, the CBO confirmed that the law’s new requirements will drive up health-care costs, at odds with claims made by its proponents. In a letter to Chairman Ryan last fall, CBO stated that “[the] increase in prices would make federal costs for Medicare’s drug benefit and the costs faced by some beneficiaries higher than they would be in the absence of those provisions,” and that “the premiums of drug plans will increase along with the increase in net drug prices, so the premiums paid by beneficiaries will increase slightly.” Like the rest of this costly new entitlement, provisions that increase prescription-drug prices should be repealed.
The real threat to seniors’ health care is the fact that Medicare is going bankrupt. The current trajectory of government spending on health care is unsustainable. As noted above, without changes, according to CBO, the Medicare program collapses in 2023. Comparing any plan to save Medicare with the status quo means comparing real solutions to a false reality. This budget protects Medicare for current seniors by averting any disruptions and saves the program for future generations by providing a personalized Medicare program—like the one members of Congress now enjoy—with more support for low-income beneficiaries and those with higher health costs and reduced subsidies for high-income beneficiaries.
Q: What about the Medicare “Doc Fix” that our nation’s physicians have been promised will be implemented so they can continue serving seniors?
A: The House Republican budget recommends a ten-year “Doc Fix” in the form of a deficit-neutral reserve fund. Washington must stop spending money it doesn’t have, and this proposal will ensure Medicare physicians do not experience sharp reductions in their reimbursement rates—protecting seniors’ access to critical care—without adding to the nation’s debt.
Q: Will your proposed changes affect those older than 55 in the years ahead?
A: Our budget ensures no changes for those in or near retirement. The reforms begin in the year 2024, which today means no changes for those 55 and above. It is critical that we come together now with a real solution to protect and strengthen Medicare. Remember: Obamacare broke the Medicare promise for seniors. It cuts benefits for current seniors and ensures a bankrupt program for the next generation.
Q: Do you keep January’s tax hikes?
A: The House Republican budget’s revenues assumptions are consistent with current law. But rather than rely on a broken, unfair tax code, this budget advances a framework for fundamental tax reform to create jobs and increase wages. Democrats are now asking for more tax hikes. They want to take more from families so they can spend more in Washington. The President already got the revenue he asked for. Balancing the budget requires we tackle the real problem: out-of-control spending.
Q: How do the tax proposals in this budget compare to those put forward by President Obama’s bipartisan Fiscal Commission?
A: Our principles are the same as theirs: Lower rates to promote growth. Broaden the base to increase fairness. But unlike the commission, we don’t let government’s share of the economy rise to a record high of 21 percent. Instead, we keep government’s take much closer to its historical average. Washington can’t solve its spending problems by taking more money from families. They have to write a budget. Washington should do the same. By returning government to its proper role, this budget brings spending in line with taxes—not the other way around.
Q: Won’t this budget hurt homeowners and charitable giving by removing the mortgage-interest and charitable-contribution tax deductions?
A: The House Republican budget doesn’t address tax deductions. The Ways and Means Committee will ultimately make that decision. It will continue an open dialogue that this committee began last year. This budget advances a framework for pro-growth tax reform, as Ways and Means continues to build a consensus on how to simplify the tax code while encouraging job creation.
Q: Does this budget include special tax breaks for oil companies?
A: No. In fact, it does the opposite. This budget calls for fundamental tax reform that closes the loopholes that distort economic activity. It does call for an increase in safe, environmentally responsible domestic-energy exploration. But it includes no subsidies to promote this goal. Expanding American energy production would actually increase revenues collected from energy companies, while at the same time lowering gas prices and creating jobs in America.
Q: Does this budget include special tax breaks for moving jobs overseas?
A: No. In fact, this budget calls for comprehensive tax reform that would remove the barriers that discourage companies from investing profits they’ve made overseas in new jobs here at home. By lowering the world’s highest corporate tax rate and moving to a “territorial” tax system that doesn’t tax income earned abroad twice, this budget would promote more job creation in this country.