Steve Bannon, one of Donald Trump‘s staunchest allies, has advised the president to avoid cutting Medicaid, but the Republicans‘ proposed budget slashes could make it difficult for the president to avoid taking aim at the popular benefit.
While Trump has pledged not to make any changes to Medicaid, the new budget, which has passed in the House, calls for $880 billion in cuts from the House Energy and Commerce Committee, which oversees Medicaid, along with other health programs.
Why It Matters
More than 72 million Americans rely on Medicaid coverage. It is often considered a third-rail issue for politicians because of its extreme popularity. The government-health run program offers coverage for low-income families as well as seniors and people living with disabilities. Trump has vowed that Medicaid and Medicare would be safe from cuts.
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What To Know
House Republicans approved a budget proposal February 25 that calls for $880 billion in cuts by the House Energy and Commerce Committee.
The budget proposal arrives as Republicans want to slash $2 trillion from the federal budget over the next decade. That would allow them to extend key provisions of the 2017 Tax Cuts and Jobs Act, which would cost nearly $5 trillion.
The proposed budget has led to a number of Democrats and even some conservatives to warn about what could happen if Trump approves cuts to Medicaid.
“Medicaid, you got to be careful, because a lot of MAGA’s on Medicaid. I’m telling you, if you don’t think so, you are dead wrong,” Bannon, who is a prominent conservative figure and was the chief White House strategist during Trump’s first term, said on his War Room podcast. “Medicaid is going to be a complicated one. Just can’t take a meat ax to it, although I would love to.”
Senate Minority Leader Chuck Schumer, a New York Democrat, introduced an amendment to prevent Medicaid from being cut by Republicans to pass their tax cuts.
“This amendment is very simple: it allows no billionaires to have any tax cuts if a single dollar of Medicaid funding is cut,” Schumer said in a statement.
Schumer proposed the amendment weeks before he joined Republicans in voting to approve a continuing resolution to allow the government to be funded through September and avoid a shutdown. Schumer has faced backlash from Democrats, including some pushing for him to step down from his leadership role.
What People Are Saying
Brendan Boyle, the Democratic ranking member of the House Budget Committee, in a statement: “This analysis from the nonpartisan CBO confirms what we’ve been saying all along: Republicans are lying about their budget. Their plan would force the largest Medicaid cuts in American history—all to pay for more tax giveaways to billionaires. This is a complete betrayal of the middle class, and Democrats will keep fighting to stop them.”
Republican House Speaker Mike Johnson told CNN before the CBO analysis was published: “The White House has made a commitment. The president said over and over and over, ‘We’re not going to touch Social Security, Medicare or Medicaid.’ We’ve made the same commitment. Now that said, what we are going to do is go into those programs and carve out the fraud, waste and abuse, and find efficiencies.”
Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: “President Trump said multiple times during the campaign trail and reaffirmed through a White House online press release he has no plans to cut the benefits those who receive Social Security, Medicare or Medicaid receive, and this makes sense as a large part of his supporter base are beneficiaries of one of these three programs. However, recent Republican proposals do have cuts to all three, though the extent to which those cuts would affect the actual amounts they receive remains to be seen.”
Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, told Newsweek: “It does seem like Medicaid cuts are likely under the Trump administration’s proposed budget. While they haven’t explicitly said ‘we’re cutting Medicaid,’ the $880 billion reduction in federal spending they’re endorsing would be nearly impossible to achieve without affecting major programs like this one.
“The impact would be pretty significant. Rural communities might lose health care providers entirely if funding gaps become too severe. And when people lose insurance coverage, those costs often shift to employers and other insurance consumers. And guess what happens next? Rising premiums across the board for all of us.”
Kevin Thompson, a finance expert and the founder and CEO of 9i Capital Group, told Newsweek: “Trump isn’t likely to cut Medicaid. Here’s the deal—our system operates on checks and balances. For him to cut Medicaid or any major program, he’d need more than just Republican support. Even though Republicans control the House, Senate and White House, getting something like Medicaid cuts through requires overcoming the Senate filibuster. That means securing at least 60 votes, which would require some Democrats to cross the aisle. So, while it sounds simple on the surface, it’s way more difficult than people think.”
Effie Carlson, CEO of Watershed Health, told Newsweek: “The current proposals would reduce federal funding to the states, which would force the states to limit eligibility, cut benefits and impose out-of-pocket costs. While none of that sounds bad at a high level, what it means is fewer vaccinations, reduced access to care, and longer wait times. When recipients cannot get timely care, they are more likely to need or seek higher-cost services, like ER, which acts in conflict to the goal of the overall savings.”
What Trump Has Said
Despite Trump’s claims that Medicaid will continue to be funded at its current levels, the Congressional Budget Office (CBO) found that even if Energy and Commerce cuts every program except Medicaid, Medicare and CHIP, they’d be able to save only $135 billion, far below the Republicans’ stated $880 billion goal.
In an interview with Fox News‘ Maria Bartiromo on Sunday Morning Futures this month, Trump doubled down, saying, “I’m not going to touch Social Security, Medicare, Medicaid.
“We’re going to get fraud out of there…everybody wants us to get the fraud out…we’re going to have tremendous growth.”
It is possible that there could be other changes to get spending down within the program as some Republicans have pushed for Medicaid work requirements as one solution. That would mean recipients of the government-run health program must engage in community activities, like work or volunteering, or otherwise show proof of their employment or job searching.
According to health research firm KFF, most Medicaid recipients are already working or face substantial barriers to work, including disabilities.
What Happens Next
Beene said the administration might not actively support cuts to Medicaid benefits, but there could be extra steps added to qualifying, including work requirements.
“Ultimately, something has to give,” Beene said. “These are expensive programs, and the potential extension of the current tax plan is also costly. In order to keep both these programs and tax cuts, you have to find a way to limit those benefits, and if it’s not through cuts in funding, it could be through increased requirements.”
There also potentially could be caps on lifetime benefits introduced or reduced coverage for certain services.
“If Medicaid somehow escapes the chopping block [which seems unlikely], other programs like SNAP benefits, school lunches, student loans and public health initiatives would likely face deeper cuts to make up the difference,” Ryan said.
“The budget appears designed to fund extended tax cuts for wealthy individuals and increase defense spending. With no appetite by them to negotiate, that doesn’t leave much room elsewhere.”
