Bulletin: House budget proposes repeal of an incredibly effective law

My online dictionary defines “mantra” as a “group of words believed by some to have psychological and spiritual power.”

The Republican assertion that “Obamacare is not working” fits this definition perfectly. You’ll find it, among other places, on Page 16 of the budget resolution released Tuesday by the GOP-controlled House Budget Committee.

There the magic power of the incantation is designed to justify repealing the Affordable Care Act in its entirety, a central goal of the budget resolution. The Republicans should hope that the magic is strong, because the mantra will have to do battle with hard facts and figures that flatly contradict it.

Nor is it the only mantra in the budget plan that swears at reality. They claim to be “promoting policies that will actually help the middle class”; but it takes aim at Social Security and Medicare, which are the strongest programs we have to safeguard the resources of the middle class.

Let’s compare assertion and reality.

Affordable Care Act: The budget resolution says the act subjects “individuals, families and businesses” to “undue harm.” The truth is, however, that since the start of the first open enrollment period in October 2014, the uninsured rate in the United States has fallen by more than a third, to 13.2% from 20.3%.

The decline in uninsured individuals and families has been especially sharp among African Americans, for whom it has gone from to 13.2% from 22.4%, and Latinos, for whom it has fallen to 29.5% from 41.8%. (See accompanying table.)

Medicaid: The budget plan specifically takes aim at the ACA’s Medicaid expansion, a crucial factor in the decline of the uninsured rate in the states that accepted it. Instead, it proposes to give states unrestricted funds to grant “flexibility to states so the program can better serve those who it is intended to benefit.”

The sleight of hand here is that Medicaid expansion was already rendered voluntary by the Supreme Court in 2012. We know the result: States that were already failing to provide adequately for their low-income residents fell further behind. (See accompanying map.)

In states that proceeded with the expansion, which the federal government funds at 100% through 2016 then phases down to a permanent 90% by 2020, the burden on hospitals of uncompensated care costs has been significantly reduced. By bringing insurance to millions of Americans, the ACA reduced uncompensated care generally in many states, but as the accompanying graphic shows, the effect is especially pronounced in Medicaid expansion states.

Medicare: The budget resolution claims to “end the over $700 billion Obamacare raid on Medicare.” This appears to be untrue. In the first place, there is no “raid” on Medicare; the ACA aims to reduce the growth rate of Medicare costs going forward, to the tune of some $700 billion over 10 years. In recent years, Republican budget proposals advanced by former House Budget Committee Chairman Paul D. Ryan, R-Wisc.--including the platform of the 2012 Romney/Ryan presidential ticket--incorporated the same estimate. The new plan appears to do the same.

Social Security: The budget plan endorses an enormously destructive GOP policy to block a near-term fix to Social Security’s disability program, which faces the exhaustion of its reserve as early as next year. As we’ve reported, at that point disability payments would have to be cut by roughly 20%.

On Jan. 6, the first day of the new congressional session, House Republicans passed a rule blocking the routine reallocation of payroll tax revenue from the retirement fund to disability to cover the shortfall. The party insists on enacting a full-scale “fix” to Social Security first. Conservatives aim to “fix” Social Security the way one would “fix” a cat; their desire is to cut benefits, period.

The budget resolution defines reallocation as “raiding of the Social Security retirement program to bailout another, currently unsustainable program.” As we’ve reported, it’s nothing of the sort. The reallocation is endorsed by the Social Security Administration and leading advocates for the program because it would have minimal effect on the old age program while staving off huge cuts in disability benefits. Disability, moreover, is not “unsustainable”: the demographic and economic factors that drove a sharp increase in its caseload in recent years have all peaked, and caseloads are coming down--a trend the GOP refuses to acknowledge.

The GOP budget also signs on to a cut in disability benefits also embraced, shamefully, by President Obama in his own budget plan and by congressional Democrats. This proposal would cut off disability benefits for anyone also collecting unemployment. The GOP budget calls this “a loophole” that allows “double-dipping.”

It’s not. The “reform” arises from the misunderstanding that disability pay and unemployment compensation are two sides of the same coin, so that receiving one should disqualify you from the other. That’s not how the programs are designed. Social Security disability is supposed to be a bridge to full employment. Its benefits aren’t intended as a substitute for wages, but as a supplement.

This proposal is a perfect example of a policy that would have virtually no visible effect on government finances but devastating impact on the target families. The White House estimated the savings at $3.2 billion over 10 years. That’s less than seven thousandths of a percent of projected federal spending in the same period. But it could mean a reduction of more than 50% in the income of recipients, based on the average monthly disability benefit of about $1,165 and the average unemployment check of $1,200. Put them together, and they sum to just about the poverty level income for a family of five.

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