Having passed their tax bill, top Republican leaders have already identified the next frontier for 2018: a push to enact sweeping budget cuts on programs the poorest Americans depend on.
House Speaker Paul Ryan and other top Republican leaders, fresh off a tax bill that is estimated to add at least $1 trillion to the national debt, are already sounding the alarm about an out-of-control deficit problem. Their targets for closing the gap include Social Security, Medicare, and food stamps.
“We're going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit,” Ryan said on a talk radio show. One of his top spending appropriators echoed the sentiment.
“If someone wants to get serious about debt, come talk to me about entitlements," Rep. Tom Cole (R-OK) told CNBC. "Tax cuts produce growth; entitlement spending doesn't.”
But entitlement reform, as Republicans have come to call slashing these programs, comes at a cost. Not every Republican is on board with touching nationally popular programs during an election year that is already shaping up to be favorable to Democrats.
Talk of putting entitlements next on the agenda has divided GOP ranks. Some are eager to make up for the deficit-busting tax cut. But President Trump has put red tape around their biggest federal spending program targets — Medicare and Social Security — and the prospect of touching the nation’s safety net during a midterm election year is proving too much a risk for others. For many, the answer is to just leave entitlements alone.
“We’re talking about Medicare, and that’s a pretty big bite in the middle of an election year,” Sen. Pat Roberts (R-KS) said. “I’m not saying no, but there are other things that could happen.”
After a massive tax cut, Republicans want to cut government spending
By every official analysis, the tax bill is expected to add at least $1 trillion to the national debt. Republicans have ignored the number, with the hope that their tax bill will lead to unprecedented economic growth. But now they’re eying ways to trim government spending, targeting everything from food stamps and Medicaid to Social Security and Medicare.
The idea is to “starve the beast,” Rep. Mark Sanford (R-SC) says. The tax bill, according to Sanford, is a “bet” to grow the economy. But the real deficit hawkishness comes with government spending.
“Will [the tax bill] help on the margin? Yes. Will it do as much as people advertise? Probably no,” Sanford said. “The real conundrum that we still have to deal with if you really care about debt and deficit is spending, and nobody is addressing that in town.”
It’s a line of messaging Republicans have escalated in the past weeks. Their tax bill doesn’t have the deficit problem; it’s the other stuff, they say.
“The reason CHIP is having trouble is because we don’t have money anymore,” Sen. Orrin Hatch (R-UT) famously said on the Senate floor, defending Congress’s delayed renewal of the Children’s Health Insurance Program, which has been expired since September due to disagreement on ways to offset the program’s cost.
Republicans are pointing to programs like Medicare, Medicaid, and Social Security.
“Frankly, it's the health care entitlements that are the big drivers of our debt, so we spend more time on the health care entitlements — because that's really where the problem lies, fiscally speaking,” Ryan said.
Ironically, the tax bill’s projected impact on the deficit automatically triggers a sequestration across some major mandatory spending programs, like Medicare, federal student loans, and agriculture subsidies, and even some funding for customs and border patrol, due to a 2010 deficit management pay-as-you-go law. But Republicans have already said they have plans to pass a law to bypass the sequester.
Instead, they want to address those programs on their own terms.
Entitlement programs are popular. Cutting them during an election year is not.
Republicans have been transparent about their vision for entitlements.
This year, the 2018 budget outline passed by both House and Senate Republicans proposed rolling back the federal welfare state in almost every regard, with $1.8 trillion in health care cuts, Vox’s Dylan Matthews explained:
All non-Medicare health programs would see a cut of $1.3 trillion, or nearly 30 percent, by 2027, according to the Center on Budget and Policy Priorities.
Medicare would be cut too, to the tune of $473 billion. There is $1 trillion over 10 years in mystery cuts to mandatory programs, cuts that would in practice almost certainly hurt programs for the poor.
But the politics of these cuts is much more difficult than the small-government rhetoric.
“These programs are incredibly popular, so if [Republicans] decide to go after them, they do it at their own peril,” Dan Adcock with the National Committee to Preserve Social Security and Medicare told Vox’s Ella Nilsen. “Whenever we go out and talk about these things, our vision on what happens with these programs is more popular than people who want to cut it.”
Republicans attempted sweeping Medicaid cuts earlier this year, and ultimately failed — which was largely attributed to robust advocacy efforts. It was a proposal to block-grant Medicaid that would ultimately cut more than $700 billion from the program over the next 10 years. It proved so unpopular that it was one of the leading reasons the Obamacare repeal effort tanked altogether.
Medicare and Social Security continue to stand along Medicaid as some of the most popular federal spending programs. Earlier this year, only 12 percent of Americans said they wanted Congress to decrease Medicaid spending, according to a poll from the Kaiser Family Foundation. A Pew study found only 10 percent of Republican-leaning Americans wanted to reduce funding for Social Security, and 15 percent wanted to decrease spending on Medicare.
The proposals to block-grant funding for these programs to the states, add work requirements, and reduce government spending “almost always means shifting costs onto Medicare patients,” David Lipschutz with the Center for Medicare Advocacy told Vox, adding that absent from this is conversation about lowering prescription drug prices, or “any meaningful reform on lowering costs.”
The programs are so popular that President Trump promised Medicare and Social Security would be untouched by his administration — a promise that a number of congressional Republicans aren’t so keen on keeping. And while Trump has reportedly been open to softening this promise, there’s been some indication that he too is aware of the political risks of cutting these programs. Reportedly, one GOP lawmaker said Trump told him that he’d be willing to touch Social Security and Medicare “on the first day of his second term,” according to National Review’s Ramesh Ponnuru.
The 2018 midterm elections are shaping up to be challenging for Republican lawmakers — especially in the House, where Democrats hope to overtake the majority. But the GOP’s tax cuts — which primarily benefits the wealthy and corporations — could easily be drowned out by what would certainly be a deluge of attacks against cutting the nation’s safety net.
“I don’t know how you can give the very wealthy tax relief and say to your senior citizens, we are going to cut your Medicare,” Rep. Walter Jones (R-NC) said. “You can’t do it — morally you can’t do it.”
Welfare? Infrastructure? Republicans don’t agree on what’s next.
Republican leaders are signaling a need for entitlement reform, but their messaging is breaking down among the ranks.
Those wary of Trump’s line around Social Security and Medicare — as well as their own constituencies that would be impacted by sweeping changes to core retirement and health care plans — are waffling on the idea.
Rep. Chris Collins (R-NY), known to be a close friend of Trump’s, emphasized “welfare reform” instead of entitlement reform more broadly, calling for work requirements to be instated for federal safety net programs.
Others, notably those in more politically vulnerable seats, are calling for a different focus altogether.
“I think the next thing we should do is focus on infrastructure,” Rep. Ryan Costello (R-PA) said, anticipating the White House’s long-awaited infrastructure plan, which Politico reported will be unveiled in January and is expected to call for upward of $200 billion in federal spending over the next decade. Costello is among a growing list of Republicans being targeted by Democratic attack ads tied to the tax bill.
Rep. John Faso (R-NY), another lawmaker on that list, made clear where he’d like to see the conversation go. “My preference would be infrastructure,” he said.