As House and Senate lawmakers open another phase of negotiations over a $1.5 trillion federal tax overhaul, some Republicans are emboldened about pursuing new cuts to the system of health care entitlements.
U.S. Sen. David Perdue said Monday that lawmakers should “absolutely” seek changes to the Medicaid and Medicare programs to help maximize the impact of the tax cuts. He echoed other Republican officials who have suggested a push for more spending cuts should be in the works.
“We’ve got to get at the spiraling costs of health care,” Perdue said. “We have to make it sustainable long-term.”
His remarks came days after the Senate approved a measure that would transform the nation’s tax code by cutting individual rates and reducing the corporate tax rate from 35 percent to 20 percent beginning in 2019.
The House adopted its own version of the tax overhaul in November, and negotiators will soon begin to hash out differences between the two measures. President Donald Trump has said he hopes to sign a final proposal into law by Christmas.
The prospect of cuts is still in flux. Seema Verma, who heads the U.S. Health and Human Services Department’s Centers for Medicare and Medicaid Services, said Monday during a stop in Atlanta that she’s not involved in any discussions about a potential budget overhaul.
“The president is clear about his commitment to these programs,” Verma said. “He’s been very clear that he wants to continue to protect the Medicare program and make sure that recipients have access to high-quality care. That’s how we are operating.”
Democrats are bracing for a fight, calling Republicans hypocritical for backing a measure that the nonpartisan congressional Joint Committee on Taxation projected will increase the deficit by $1 trillion over 10 years.
U.S. Rep. John Lewis, D-Atlanta, said Republicans seem “determined to secure a quick political win that will devastate every corner of our country and generations yet unborn.”
“It is as if the Republican members of the 115th Congress forgot about real people and the true impact of our actions,” Lewis said. “This bill will decide whether people can keep a roof over their heads, heat in their homes, food on the table, care for their loved ones, continue their studies — and for some, it will mean the difference between life and death.”
‘Back in play’
Republican leaders have long suggested that the tax cuts may be partly balanced by new cuts in spending. U.S. House Speaker Paul Ryan said he wants his party to spend next year focusing on cutting spending on federal programs. And Trump said changes to the welfare system will take place “very shortly after taxes.”
The system of health and social welfare entitlements is a big target for conservative lawmakers. The Congressional Budget Office estimates that spending on Social Security, Medicaid and Medicare will combine to cost nearly $29 trillion through 2027.
Democrats worry that the GOP will leverage the higher deficits created in part by the tax cuts to cut federal spending on entitlements, despite Trump’s promises on the campaign trail that there would be “no cuts” to the Social Security, Medicare or Medicaid programs.
It led U.S. Sen. Bernie Sanders of Vermont to press Republicans last week on the Senate floor to promise they wouldn’t pursue cuts to Medicare and Social Security. One Republican, U.S. Sen. Pat Toomey of Pennsylvania, said there was “no secret plan” to do so.
In Atlanta on Monday, Perdue said cutting spending for the Medicaid expansion under the Affordable Care Act is one of several steps that would rein in the deficit. He singled out California for what he said were ballooning requests to Washington for the expansion of its Medicaid program.
“What you have now is an open-ended entitlement where a governor can decide how much the federal government is going to send to their state,” he said in remarks to reporters after an address to the Georgia Public Policy Foundation.
Verma, who held a briefing with local health care officials that was closed to the public, has pushed a separate policy that could result in sweeping changes to the Medicaid program. She announced in November that the Trump administration would be open to work requirements and community engagement for low-income people who receive Medicaid benefits.
That led to a wave of criticism from Democrats and health officials. Jason Helgerson, New York’s Medicaid administrator, called her remarks “absolutely awful” and pointed to a Kaiser Family Foundation analysis in February that showed about 60 percent of Medicaid recipients work and nearly 80 percent belong to a family where at least one member is working.
Verma on Monday said the policy is designed to “help those individuals that are capable to gain self-sufficiency” and that it would be flexible. But she said the Medicaid system is too strained now by able-bodied people who rely on the program that she’s open to new proposals from Georgia and other states.
“There’s a lot of innovation and creativity from the local level. We feel like our job is to support states,” she said. “We’re open to all kinds of different waivers. Our challenge now is trying to be as supportive as possible.”
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