In the past week two discussions were taking place across the two houses of Congress that could dramatically effect budgets, entitlements and policies.
In comments made at his regular press briefing, Speaker Paul Ryan (R-WS) made clear that he intends to use the budget reconciliation to adopt his conservative agenda if Donald Trump is President and he retains control of the House (comments made before the weekend revelations). At the press conference Ryan was quoted as saying “this is our plan for 2017 (Better Way)…Much of this you can do through budget reconciliation. This is our game plan.” The Ryan Better Way plan would change a number of programs and entitlements such as the Medicaid and Supplement Nutrition Assistance Program (SNAP-formerly food stamps) and suggests converting some programs into block grants
While that was the discussion by the House Speaker, at approximately the same time a group of freshman Republican senators including Senator David Perdue (R-GA), Senator Steve Daines (R-MT) and Senator James Lankford (RE-OK) were proposing some dramatic changes to both the appropriations process and how we deal with key entitlements.
Speaking to reporters, Senator Perdue suggested that the three biggest entitlements of Social Security, Medicare and Medicaid should be taken off of “autopilot” as he described it and instead be reauthorized every year or every other year. He says all mandatory programs should be examined on a regular basis.
Mandatory programs are generally programs with funding written into the law but are not all individual entitlements like Social Security, Medicare and Medicaid. These three programs are entitlements because if an individual qualifies for benefits under the program rules the individual is entitled to benefits. Social Security is somewhat different since it has its own trust fund that is supplied by the payroll tax and benefits are based on an individual’s earnings history. Medicare is something of a hybrid since it includes a trust fund to pay for hospital coverage with doctor’s coverage covered partially by a trust fund paid for by premiums while the rest comes from general fund federal tax dollars. Medicaid, although an individual entitlement is totally funded by federal tax revenue as well as a match of state funds.
Senator Perdue, along with his freshmen colleagues, proposes that there be four large bills or categories of spending. One bill would be defense, military, veterans and foreign affairs spending. A second bill would include Medicare, Medicaid and other health related domestic programs. The third would include Social Security, retirement related programs and a fourth bill would be everything else. Each spending bill would be at approximately a trillion each.
Perdue said the proposal is born out of discussions with his fellow freshman Republican senators, he said “This is not a rogue effort, this is playing within the lines.” He also said that his proposal is the result of conversations with Senate Majority Leader Mitch McConnell (R-KY), Senate Budget Committee Chair Mike Enzi (R-WY), and House Budget Committee Chair Congressman Tom Price (R-GA).
Foster Care and Adoption Assistance (found in Title IV-E of the Social Security Act) are also entitlements but there is some debate on whether eligibility is tied to state claims or individual eligibility. The entitlement nature has protected both funding sources from across-the-board budget cuts and an anemic appropriations process that has resulted in child welfare spending cuts over this decade. Despite the entitlement nature, the IV-E programs, funded at approximately $8 billion, are a fraction of what the other three entitlements total. They are currently well over $1.6 trillion for the three programs.
Mandatory programs also include some other categories of spending. Some programs are written into the law and do not get reauthorized. The Chaffee Independent Living (Title IV-E) program is one such example, funded at $140 million a year it is not reauthorized. SSBG is funded at $1.7 billion and is not reauthorized but that has not protected it from several cuts over the past twenty years when it was set at $2.8 billion. Finally, there are mandatory programs such as the $16.5 billion TANF block grant which is supposed to be reauthorized on a regular basis but instead it has been given a number of short term extensions over the past twenty years ranging from a full five-year reauthorization in 2006 to several extensions lasting from a few months to a year at a time. TANF like SSBG is considered an entitlement to the states.
The two strategies by Ryan and the senators could be married in some way that would drastically change the size and function of programs. The Ryan reconciliation strategy could assist in some of the Senate proposals. A budget reconciliation would preempt any senate filibuster and require a fast-track vote on budget cuts and changes to entitlements. In recent history the reconciliation process was used to convert AFDC into the TANF block grant, it was used to adopt the President George W Bush tax cuts in 2001 and 2003 and it was used in 2010 to create the Affordable Care Act. The Republicans did use reconciliation to repeal the ACA in 2015 with cuts to planned parenthood. That was vetoed by President Obama but under a Trump Presidency there would presumably be coordination between the White House and Congress.