We can afford a trillion dollars in deficit-financed tax cuts. But “we don’t have any money” for children’s health care.
On the Senate floor last week, just hours before Republicans passed a $1 trillion tax cut, Democratic Sen. Sherrod Brown challenged Senate Finance Committee Chair Orrin Hatch: Why were Republicans about to pass tax cuts for corporations and business owners while the Children’s Health Insurance Program remains unextended?
Hatch reacted with fury. “Nobody believes more in the CHIP program than I,” he shot back. “I invented it. We’re gonna do CHIP. There’s no question about it in my mind, and it’s gotta be done the right way. The reason CHIP’s having trouble is we don’t have any money anymore.”
Then Hatch got himself into some trouble.
“I have a rough time wanting to spend billions and billions and trillions of trillions of dollars to help people who won’t help themselves, won’t lift a finger, and expect the federal government to do everything,” he said. “Unfortunately, the liberal philosophy has created millions of people that way, who believe everything they are or ever hope to be depend on the federal government rather than the opportunities that this great country grants them.”
Twitter erupted. “Orrin Hatch Seems To Think Children Helped by CHIP Are Lazy Takers,” a headline at the progressive website Daily Kos read.
If you read Hatch’s comments carefully, he really wasn’t saying that children are lazy. He’s saying that CHIP, for him, is an exception to the broader liberal agenda, which he believes costs too much and rewards those “who won’t help themselves, won’t lift a finger, and expect the federal government to do everything.”
But he was saying that there’s no money to extend CHIP, which would cost less than 1 percent of the cost of the tax cuts Hatch supports, because of spending on that broader social safety net. And that’s where his comments are truly revealing about the GOP’s priorities.
You can tell what a party really cares about by watching what they’re willing to pass, financing be damned. Republicans really care about tax cuts — and so they’ll overlook a $1.5 trillion hole in the federal deficit and promise that economic growth will cover it even when almost every independent analysis disagrees.
But when it comes to a program like CHIP, a policy founded with Republican support that literally provides health insurance for poor children, hard conversations about offsets must be had, even if they put the program’s future at risk. “We don’t have any money,” as Hatch said on the Senate floor. Republicans are demanding cuts to other health care programs as the price of extending CHIP.
“I believe Sen. Hatch wants to get CHIP done, but it clearly hasn’t risen to the top of the priority list,” Joan Alker, executive director of Georgetown University’s Center for Children and Families, told me. “What bears pointing out here is that this is a terrible way for the federal government to run a program! States have been left holding the bag and are wasting time and money. Families are being subjected to needless anxiety after a long year of anxiety about health care being taken away.”
But this is the price Hatch and other Republicans were willing to pay as they left the program unfunded for the past two months while rushing through the most significant rewriting of the nation’s tax code in a generation — a rewriting of the tax code that will mean a more than $1 trillion decrease in revenues over the next decade, and thus even less money to finance programs like CHIP.
Because that’s what their priority is.
Why children’s health insurance can’t pass but corporate tax cuts can
Hatch’s comments invited such a passionate, if somewhat overwrought and unfair, reaction because of the comically disproportionate sense of scale.
CHIP has been unfunded since the end of September. As of now, no children have been dropped off the rolls because states have enough money to keep the program running, though some will soon run out. But the situation is becoming dire. A few states, like Colorado, are already sending letters to families warning them that their coverage could soon be ended and they may have to buy insurance elsewhere.
About 9 million children are covered through CHIP. It would cost about $8 billion to fund it for the next five years, as Congress is proposing. It is overwhelmingly popular. This should be a layup for lawmakers.
But instead, it’s been stuck. This is partly because Republicans and Democrats have been fighting over how to pay for the extension. (A quick procedural note: Under the Senate rules, lawmakers should find a way to offset the CHIP funding. But it’s worth noting that Republicans, in their budget resolution, waived that rule for the tax bill.)
The GOP solution has been to cut health care elsewhere. The bill that the House passed last month would slash Obamacare’s public health fund by $10 billion, charge wealthier people on Medicare premiums, and reduce the grace period for Obamacare enrollees who miss their premium payments. The latter provision is projected by the left-leaning Center on Budget and Policy Priorities to lead to 700,000 people losing insurance.
So to keep CHIP funded, Republicans are willing to slash public health funding by billions of dollars and introduce a policy that could lead to hundreds of thousands of Americans dropping health coverage. And that’s if and when they eventually pass it, nearly three months after CHIP’s funding officially expired.
Contrast that with the tax bill.
The foundation of the Republican tax plan is a massive $1 trillion corporate tax cut that isn’t paid for at all. From the beginning, Republicans gave themselves space to add $1.5 trillion to the deficit in order to make the corporate tax cut even bigger.
Yet the party of fiscal conservatism had no qualms about supporting it. They simply placed their faith in unsubstantiated projections of economic growth to fill that hole — and if it does not, they are already talking about cutting spending for Medicare and Social Security to make up the difference.
“I’m totally confident this is a revenue-neutral bill. I think it’s going to be a revenue producer,” Senate Majority Leader Mitch McConnell said shortly after his party passed their bill, in defiance of almost every outside estimate.
That’s a sharp contrast to CHIP, where a mere $8 billion requires billion-dollar cuts to public health funding and the possibility that 700,000 people will lose their insurance because they failed to make one payment.
“Here we are, sitting with CHIP and they can’t get it done, and it’s a penny for offsets,” another CHIP advocate told me. “We could afford a corporate tax cut, while the answer for CHIP is, yeah, just wait a few more weeks.”
This is what Republicans really believe about the government
The real resonance of Hatch’s reply to Brown is how succinctly it summarizes the way Republicans understand public policy and the role of government.
“For decades now, we’re spending more than we have,” Hatch said.
Again, this was mere hours before he voted for a bill that is projected to blow a $1 trillion hole in the federal deficit, according to the official congressional scorekeepers.
But if you believe the government should be smaller, if you believe it should take less of businesses’ money even if the American public disagrees, and if you believe those tax cuts will trickle down to help the rest of us, this is an entirely consistent belief.
The free market, and the corporations that dominate it, deserves the tax break. But social programs are a more questionable investment. Yes, CHIP has helped millions of people, Hatch told Brown. “I happen to think CHIP has done a really good job of helping people who really needed the help,” he said.
But then he added the part that got him in trouble, that was misinterpreted as accusing millions of children of being lazy. “I have a rough time wanting to spend billions and billions and trillions of trillions of dollars to help people who won’t help themselves,” Hatch said. “Won’t lift a finger, and expect the federal government to do everything.”
It’s the deserving versus undeserving. The people who work hard — and the corporations that employ them — deserve a break. With the people who rely on federal benefits, we need to be a little more skeptical. It’s okay to pass a tax bill that increases the deficit, but if federal spending is out of control, we have to take a hard look at cutting Medicare, Medicaid, and Social Security. No matter what President Trump has promised before.
It pairs perfectly with what Sen. Chuck Grassley (R-IA) said over the weekend, defending the provision in the Republican tax bill that would roll back the estate tax on inherited wealth.
“I think not having the estate tax recognizes the people that are investing, as opposed to those that are just spending every darn penny they have, whether it’s on booze or women or movies,” Grassley told the Des Moines Register.
This is simply what Republicans believe. The government should be smaller, collecting fewer taxes and spending less on social welfare programs. The people who come out ahead deserve it. The people who might take the hit are suspect.
But that worldview, that understanding of the role of government, those priorities are what leaves a program covering 9 million children unfunded for three months.