The Numbers for Don’t Line Up Without Inflicting Pain On People
However the pending rumble in the Washington jungle works out in a promised sit-down next week over the looming debt danger, it’s seems certain a lot of people are going to be hurt by cuts in health and social services.
By now, we all understand that we’re on the sidelines watching an extreme partisan showdown that is as much about immediate politics as it claims to be about the relative future economic safety of the country. House Speaker Kevin McCarthy has put all his political chips on a bad bet to leverage big social service spending cuts that President Joe Biden wants to resist as blackmail for getting congressional approval to pay bills that already have been incurred.
Ostensibly, both believe that the total U.S. debt must go on a diet, even while assuring national growth, jobs, defense, and maintaining a social vulnerability net of some kind and keeping Social Security intact.
Of course, apart from the idea that the debt ceiling issue looks backward at spending while McCarthy and his extreme Republican base say they want to look forward, the numbers for all this don’t line up without inflicting pain on people. Even without hard study, it is apparent that health benefits for veterans and the poor will be on the chopping block along with money for Head Start, child-care, housing aid, food stamps and, of course, anything that sounds like an investment in climate damage control.
Overall, the House measure that squeaked through last week by two votes would require resetting federal spending to 2022 levels, capping the next budgets at 1% growth, and forcing reductions or expanded work requirements in a wide variety of programs.
At the same time, Biden and team look equally resistant to reality in trying to stare down McCarthy in this budgetary game of chicken.
Start With Reality, Please
The sad reality here is that the politics are trumping even the spending numbers.
As CNN noted, “Even if Biden were willing to negotiate, there’s no guarantee McCarthy could pass any compromise that did not involve the president’s utter capitulation. And if the California Republican tried to pass a less confrontational bill to shield the economy with the support of some Democrats, he could be ousted by his conference.”
Biden is seeking to look like an adult handling childish complaints by the most extreme Republicans, but in a now-announced re-election campaign, is facing reckoning about his power as much as any spending issue.
The obvious outcome is that Republicans back off the specific question to pass a “clean” increase in the debt ceiling in return for agreement to participate in the next budget cycle. But that would require a lot more work with McCarthy’s own caucus as well as a negotiating strategy that makes sense. It is too easy for Republicans to throw rocks from the sidelines – even as the threat against the country’s overall economy grows more real.
And it would require trust, rationality, and cooperation – all things in short supply in our capital.
What Are the Effects?
Instead of raising taxes, of course, we should expect that will be some kind of spending cuts. For sure, they will hurt some more than others.
As an example, the Republicans have targeted Medicaid. But rather than address the spending overall, they are going after eligibility for the program by requiring expanded work requirements.
The Associated Press looked at the proposals and concluded that more than a half million of the poorest Americans could be left without health insurance if the Republican plan proceeds.
Republicans want able-bodied adults aged 19 to 55 who don’t have children or other dependents to be required to work, train for a job, or perform community service to stay on Medicaid. Democrats have strongly opposed the Medicaid work requirement provision, saying it won’t incentivize people to get a job and will drive up the number of uninsured in the country.
More importantly, more than 60% of the current 84 million Medicaid recipients do meet those work requirements, and most of the rest are disabled or between jobs. The Congressional Budget Office estimates 15 million would be subject to the requirement, though the Health and Human Services Department says twice as many would be affected. The estimates are that the requirements might save $109 billion a year by dropping 600,000 from the rolls now – and eventually pushing more people to state programs.
In any case, millions will lose health insurance – and it won’t appreciably provide the kind of spending cuts that Republicans want. Apart from the requirements themselves, there will be the usual mix-ups over lost paperwork or people who simply don’t fill out the eligibility papers.
The rules for Medicaid enrollment were waived for the pandemic years but kicked in again in April – another sign that the Republican plan lacks sufficient investigation to withstand review.
The time is short – Treasury Secretary Janet Yellen now sets June 1 as the day the country starts running out of money. We deserve better governance than we’ve seen to date in this standoff.
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