This week we revealed details about our proposed Budget for Fiscal Year 2021, as a joint effort between the House Budget Committee Chairman Tom Price and Budget Committee ranking member John Yarmuth. It represents our vision of the opportunity-oriented agenda the American people deserve.
The areas of focus are all ones that desperately need reform, and Republicans agree with you that they should be on your minds at the polls.
First, our plan would restore the traditional Medicaid role for the states in providing low-income individuals and families with a guarantee of healthcare. America must be the beacon of the free market on health care. We believe the federal government has grown so large that it can no longer afford to provide the health care safety net for all Americans. We need to scale it back and cut the parts of the budget we can’t afford.
Second, by reforming the welfare system, we can focus our efforts on getting individuals out of poverty and into the workforce, saving states money and expanding opportunity. As the most urgent priority, we will immediately spend $610 billion on the Earned Income Tax Credit (EITC) and the Child Tax Credit. Additionally, by limiting the extent to which states can expand Medicaid, we can direct funds to needs identified by state officials.
Our budget not only provides a tax cut for taxpayers, but also saves billions by ending the tax giveaways to special interests. This will serve as a sign to states that the budget will not be saddled by mandates from Washington that will needlessly waste millions of taxpayer dollars. The states have been assured by the Trump Administration that any additional Medicaid funding provided by the federal government will not be used for expanded benefits.
In addition, the tax code must reflect the truth of the “free enterprise economy” the nation proudly champions. This means the reduction of tax rates across the board, and the elimination of special interest tax loopholes. The elimination of tax expenditures distort economic incentives by artificially increasing demand for certain items. Instead, tax expenditures should be restructured to serve a larger purpose to enhance economic growth. These investments in economic growth, job creation, and economic opportunity will yield billions in savings.
With these tax reform ideas in mind, we are committed to dealing with Obamacare, Medicaid, poverty, debt, and crime. Our vision for America would start with these four critical areas.
It is time to restore the traditional Medicaid role for the states in providing low-income individuals and families with a guarantee of healthcare.
The number of individuals on Medicaid has grown 25 percent under Obamacare, making the need for reform even more urgent. The number of beneficiaries is projected to continue to increase, so any reduction in the budget will require more rigorous oversight of our reform. But we have put forth a blueprint that can save billions, put families back to work, and keep the promise to provide healthcare.
The welfare system is broken and needs to be reformed.
While many states have expanded their Medicaid programs to serve more low-income individuals, the expansion has done nothing to improve their fiscal situation. Every state — including Massachusetts — has been forced to either cut services or raise taxes because their collections from Medicaid have failed to keep pace with the rapid growth of the program. States are at risk of paying double for certain benefits, and we will ensure that any funding increases in the future will be paid from our own budget.
The American people want to see results. The problem with Obamacare is that the health care market is essentially a free-for-all, with all the insurers effectively jockeying for the business of every individual who joins. This year, there are more than 11 million Americans who have chosen to pay the penalty to stay on Obamacare’s insurance exchange, rather than risk losing the coverage they were promised by the administration. Our budget acts as a mirror of the market, and could save everyone money by avoiding the wild swings in premiums and by dropping off the rolls of the uninsured and the underinsured.
Welfare is another area that could easily be reformed.
More than 1.2 million individuals are on FAFSA assistance, the Free Application for Federal Student Aid, which fails to take into account work-related income. By addressing this issue, we can restore the regularity of the application process and better integrate the supports necessary to help more Americans climb out of poverty.
Welfare reform is a moral imperative, and we need to rebuild our country’s middle class. It is our obligation to all Americans to tackle this problem and reinvigorate our economy. We will not only reduce the debt in future budgets, but we will improve the quality of life for those on the very bottom of the economic ladder.
As the American people participate in the budget debate, we hope you will join us in demanding that the budget become the center of conversation about what is wrong with our system