Economists say the GOP budget would destroy Medicaid and "disproportionately benefit the 1%"

Economists say that the House GOP’s budget proposal, which aims to combine a $4.5 trillion tax cut with roughly $2 trillion in spending cuts, will likely benefit the richest Americans while jeopardizing access to health care for the country's poor and rural populations.

In terms of top-line numbers, Republicans are hoping to pay for their gigantic tax cut by reducing spending by between $1.5 and $2 trillion, and they have put social services — Medicaid, specifically — in their crosshairs.

House Republican leadership has specifically asked the Energy and Commerce Committee to find $880 billion in cuts over the next ten years, while the GOP leaders have asked the Education and Workforce Committee and the Agriculture Committee to find $330 billion and $230 billion in cuts respectively. The Transportation and Infrastructure Committee has also been asked to find $10 billion in cuts.

Republicans have claimed that they don’t want to take benefits away from Americans but are also looking at work requirements for Medicaid, a policy designed to make it harder for people to enroll and stay enrolled in the program, and likely cuts to nutrition programs.

“If you add work requirements to Medicaid, it makes sense to people. It’s common sense,” Johnson told the Associated Press. “Little things like that make a big difference not only in the budgeting process but in the morale of the people. You know, work is good for you. You find dignity in work. And the people who are not doing that, we’re going to try to get their attention.”

Conservatives have long advocated for scaling back Medicaid under the guise of "reform." The Heritage Foundation in its Project 2025 blueprint for the Trump Administration advocated for deep cuts to the program. 

For example, Project 2025 advocated for "more robust eligibility determinations" and work requirements, which would push people off of Medicaid. It also advocated for the federal funding of Medicaid to be converted from a fixed percentage of a state's Medicaid costs to a fixed amount, untethered to a state's actual costs. The right-wing think tank also advocated for other policies, like lifetime caps on what a beneficiary could receive in Medicaid benefits and allowing states to eliminate mandatory benefits from Medicaid, meaning states could pick and choose what they did and did not want Medicaid to cover.

That long-standing goal informs the GOP budget proposal.

Dean Baker, an economist at the Center for Economic and Policy Research, a liberal think tank, told Salon that “it looks like they’re primarily targeting Medicaid and food stamps." To meet the numbers outlined in the GOP proposal, “you’re talking about cuts of around 20%” to Medicaid, in particular.

These cuts are meant to finance the GOP’s $4.5 trillion tax cut, which Baker said is mostly an extension of the tax cuts from Trump’s first term, which “hugely, disproportionately benefit the one percent.”

Baker said that there are a variety of ways the GOP could achieve such cuts, like simply pushing 20% of the roughly 79 million people on Medicaid off of the program, which would leave around 16 million without insurance. While the specifics of the proposal are not yet public, Baker said House Republicans could do this through a variety of methods, like raising eligibility requirements, imposing work requirements or making it so Medicaid doesn't cover specific treatments. For instance, Medicaid already has restrictions on dental care, and Congress could tighten restrictions like this even further. Republicans could also institute a per capita cap on federal funding for Medicaid.

“I can't recall a program ever being cut like this since most Republican presidents have been at least outwardly supportive of it,” Baker said. 

Allison Orris, a fellow at the Center on Budget and Policy Priorities, a progressive think tank, told Salon that even though Republicans claim they don’t want to hurt Medicaid enrollees, it is going to be impossible for them to meet their goals without doing so. Orris pointed out that most Medicaid recipients already work and that policies like work requirements are designed to just make enrolling harder for people by getting them caught up in bureaucratic red tape, while also likely denying access to those people who can't work due to disability.

“Any way you look at it it's impossible to come up with policies that would cut Medicaid that dramatically and wouldn't hurt people,” Orris said. “Even work requirements, which are at their root a way to cut people off of coverage, wouldn't save nearly $800 billion.”

Orris said that the sort of cuts Republicans are talking about would probably result in community health centers and rural hospitals shutting down as federal funding dries up. She also said that Republicans could implement a per capita cap on Medicaid spending, which would disproportionately affect states with lower populations.

“Whether it’s a combination of policies like reducing the level of financing states currently get to pay for Medicaid expansions or introducing a hard cap on per person spending, all of those would fundamentally change the way that Medicaid operates today and would result in people losing coverage,” Orris said. “You’re right to connect the very big number to very deep cuts.”

Orris added that the combination of coming cuts to Medicaid, alongside the likely cuts to the Supplemental Nutrition Assistance Program, would probably affect many of the same households.

Josh Bivens, chief economist at the Economic Policy Institute, a liberal think tank whose one-time chief economist, Jared Bernstein, was an advisor to President Joe Biden, told Salon that one catch in the GOP’s scheme is that — in order to do the full $4.5 trillion in tax cuts — the resolution says that they need to actually achieve $2 trillion in mandatory spending cuts.”

“This is widely seen as a sop to the anti-spending Freedom Caucus – but it’s not obviously enforceable in any way,” Bivens said. “That still obviously leaves lots of this deficit-financed, and, it also puts on Republican paper what opponents of TCJA extension have said all along: there is a pure, unambiguous trade-off between tax cuts disproportionately going to the rich and spending programs (Medicaid and others) that go to vulnerable families. This trade-off is written into the budget resolution.”