The Path to Prosperity, introduced by Congressman Paul Ryan (R-WI) has been at the epicenter of the 2012 budget debate. After passing the U.S. House of Representatives, this House Budget Resolution was struck down in the Senate. However, the plan remains very relevant today, as portions of the plan, particularly deep cuts to Medicaid and Medicare, are still being considered.
According to a recent poll by Kaiser, a majority of Americans say they are opposed to cuts to Medicare, Medicaid, and other programs that provide critical support to older adults and children. Cuts proposed by the House Budget Resolution would impact services for older adults and children dramatically. If the plan was enacted, federal spending would shrink to about 20 percent of Gross Domestic Product (GDP) by 2015 – this is the lowest level since 1951, a time when federal programs like Medicare and Medicaid didn’t even exist.
Generations United opposes these harmful cuts and urges Congress to balance the budget in a responsible way that doesn't do so on the backs of our nation's children, older adults, and other vulnerable groups. For these reasons, it is important for individuals of all ages to learn about the spending cuts proposed by the House Budget and advocate for shared sacrifice in any upcoming budget proposal.
Among others, the budget plan calls for the following cuts:
· $2.17 trillion in reductions from Medicaid and related health care programs.
· $350 billion from other mandatory programs serving low-income Americans. For instance, The Ryan Plan implies that federal funding for SNAP (the Supplemental Nutrition Assistance Program, commonly known as the food stamp program) would be substantially reduced.
· $400 billion in cuts in low-income discretionary programs. For example, The Ryan Plan identifies Pell Grants and low-income housing assistance as prime targets for substantial cuts.
In addition, the budget plan calls for the following harmful reforms:
Repealing the Affordable Care Act
Repealing the new health care law would remove access to affordable, high-quality, comprehensive health care coverage for children, youth, people with disabilities, families and older adults. Without this historic piece of legislation, insurance companies will go back to denying coverage to individuals with pre-existing conditions. Women may be charged more than men for insurance, simply because of their gender. And, families may continue to go without the affordable, quality care they deserved. Moreover, repealing the ACA would not lower health care costs. In fact, a recent report estimates that state governments will actually save $90 billion from 2014 to 2019 because of implementation of the ACA’s major reforms.
Converting Medicaid into a Block Grant
This proposal would cut Medicaid funding by $771 billion over the next ten years and convert it to a block grant. As a result, states would receive less money from the federal government to assist low-income individuals who are eligible, leaving states with inadequate funding. With less federal dollars to provide the same services, the block grant would ultimately force states to shift these costs onto the backs of providers and beneficiaries in the midst of tough economic times. This could increase costs and jeopardize the delivery of critical health care services for older adults receiving Medicaid benefits for long-term care and the more than 30 million children Medicaid serves.
Turning Medicare into a Voucher Program
The House Budget Resolution would turn Medicare into a voucher program in which older adults receive a limited amount to buy increasingly expensive private health insurance. If passed, the Congressional Budget Office estimated that older adults' out-of-pocket medical costs would rise twice as fast as currently projected. Recent polls show that the public is strongly opposed to cuts to Medicare, with many noting Medicare's important role in providing financial security in their retirement.
Converting The Supplemental Nutrition Assistance Program (SNAP) into a Block Grant
The House Budget Resolution would cut SNAP (formerly known as the food stamp program) by nearly 20 percent and convert the program into a block grant. By capping the amount of federal funding the program can receive, a block grant structure would eliminate SNAP’s ability to respond to rising need. For example, due to the economic downturn, the demand for SNAP benefits for all generations has increased. With a substantial loss in federal funding, it will be increasingly difficult for states to provide benefits to those eligible. Almost a third of SNAP beneficiaries are older adults or individuals with disabilities, and almost three-quarters of SNAP benefits are used by families with children.
For more in-depth information on the how the House Budget Resolution would impact children and older adults, please review the following resources from our partners:
Child Welfare League of America: What Does a Medicaid Block Grant Mean for Children in Child Welfare
Center on Budget & Policy Priorities:
Ryan Plan Specifies Spending Path That Would Nearly End Most of Government Other Than Social Security, Health Care, and Defense by 2050
Chairman Ryan Gets Nearly Two-Thirds of His Huge Budget Cuts From Programs for Lower-Income Americans
House-Passed Proposal to Block-Grant and Cut SNAP (Food Stamps) Rests on False Claims About Program Growth
This article is the second installment in Generations United’s Budget Blog Series.