‘Five-Alarm Fire’: White House Slams GOP Budget Proposal

The White House
Reuters
By Yuval Rosenberg

Happy Monday! This could be a momentous week, as the Federal Reserve’s policymakers will meet Tuesday and Wednesday to decide whether to raise interest rates again or pause given the fresh concerns about some corners of the banking sector. House Republicans, meanwhile, are in Orlando this week for their annual issues conference, but GOP politics could once again be all about Donald Trump, as the former president reportedly faces indictment in New York over an alleged hush money payment to adult film star Stormy Daniels in 2016.

Here's what we’re watching while waiting for some shoes to drop.

‘Five-Alarm Fire’: White House Slams Freedom Caucus Budget Proposal

The White House on Monday launched what it says will be a week-long offensive slamming Republicans over what it calls a “draconian” budget plan proposed by the right-wing House Freedom Caucus.

House Republicans led by Speaker Kevin McCarthy have yet to roll out their official budget plan. Their blueprint has been delayed as the party reportedly struggles to find consensus on proposals to cut spending. But the White House is honing in on budget demands released this month by the House Freedom Caucus, which in part called for capping discretionary spending at fiscal year 2022 levels, requiring more than $130 billion in spending cuts, and then allowing spending to rise by just 1% a year.

President Joe Biden this month announced his own budget proposal, which calls for increased spending and nearly $3 trillion in deficit reduction over a decade, paid for by higher taxes on the wealthy and corporations. The White House argues that while Biden’s budget would lower costs for American households, the Freedom Caucus proposal would represent a “five alarm fire for families.”

“The extreme MAGA Republican House Freedom Caucus has made their priorities clear: imposing devastating cuts to public safety and increasing costs for working- and middle-class families, all to protect and extend tax breaks skewed to the wealthy and big corporations,” the White House said Monday. “Combined with other commitments extreme MAGA House Republicans have already made, the extreme Freedom Caucus proposal will be a disaster for families in at least five key ways: endangering public safety, raising costs for families, shipping manufacturing jobs overseas and undermining American workers, weakening national security, and hurting seniors.”

The White House is planning to focus on one of those areas each day this week, starting with crime and public safety today. The White House says the Freedom Caucus proposal would endanger public safety by eliminating funding for 11,000 FBI personnel and more than 2,000 Customs and Border Protection agents and officers while reducing support for local law enforcement agencies. Democrats also say that the Freedom Caucus plan would shut down 125 air traffic control towers across the country, undermining safety at a third of U.S. airports, and led to 11,000 fewer rail safety inspections.

Those administration attacks are based on analyses by federal agencies and the White House Office of Management and Budget estimating how a GOP proposal to cut spending back to fiscal year 2022 levels would affect various government programs. McCarthy reportedly agreed to such a plan in negotiations with holdout conservatives during his bid to become speaker. McCarthy and others in the party have since pledged to spare Social Security and Medicare as they push for concessions from the White House in exchange for raising the federal borrowing limit. Defense hawks in the GOP have also insisted that military spending not be cut.

With Republicans insisting on dramatic spending cuts, Rep. Rosa DeLauro (D-CT), the top Democrat on the House Appropriations Committee, requested in January that agency heads analyze how the GOP proposal could affect their programs. On Monday, she released the responses she received from 20 departments and agencies — you can find them here — and said that the letters show that the proposed cuts “would cause irreparable damage to our communities by gutting the programs every single American relies on.” DeLauro called the proposed spending cuts “unrealistic, unsustainable, and unconscionable.”

Among the other potential effects of spending cuts, according to Biden administration estimates highlighted by DeLauro:

* 640,000 families would lose access to rental assistance and more than 430,000 low-income families would be evicted from Section 8 housing;

* 1.2 million women, infants and children would lose the special nutrition assistance they receive;

* 200,000 children would lose access to Head Start, and 100,000 children would lose access to child care;

* Meals on Wheels would be cut for 1 million seniors.

House Freedom Caucus Chair Scott Perry (R-PA) dismissed the White House attacks as "smear and fear" in an interview with Fox News. "Somebody has to be reasonable here and talk about reining in this federal spending. And if it's not going to be the president, the Freedom Caucus is happy to do it," he said.

What’s next: The White House will keep hammering Republicans. McCarthy, meanwhile, complained on Sunday that President Joe Biden has not yet followed up on their last meeting over the debt limit. “I just saw the President on St. Patrick's Day, Friday,” the speaker told reporters. “I sat down with him and said, you said we'd meet again. Every day that passes, you put the economy in jeopardy. He just has to tell me when I can come. I'm sitting around waiting.” McCarthy emphasized that Republicans won’t raise taxes and won’t pass an increase in the debt limit without strings attached. “But everything else is up for negotiation," he said.

The White House reportedly has countered that any further discussions can’t start until House Republicans have produced a budget. In the meantime, a number of administration officials will go before Congress this week to testify about the president’s budget.

Health Care Spending Growth Continues to Slow, CBO Says

The Congressional Budget Office says the projections it made soon after the passage of the Affordable Care Act overestimated the level of federal mandatory spending on health care for the period 2010 to 2020, and such spending is expected to continue to come in below the agency’s 2010 projections for years to come (see the chart below).

Responding to an inquiry from Sen. Sheldon Whitehouse (D-RI), CBO Director Phillip Swagel said Friday that federal spending on programs including Medicare and Medicaid was 9% — or roughly $1.1 trillion – lower from 2010 to 2020 than projected in 2010. The lower-than-expected spending overall was largely the result of lower costs per beneficiary, Swagel said, driven in part by less spending on prescription drugs in Medicare and on long-term services and supports in Medicaid than originally estimated.

The growth rate for health care spending is slowing, Swagel added, citing a long-running trend. “The rate of growth in federal mandatory spending on health care per beneficiary has slowed sharply since 2005,” he wrote. “For example, Medicare spending per beneficiary grew at an average annual rate of 6.6 percent between 1987 and 2005, 3.1 percent between 2007 and 2012, and 2.2 percent between 2013 and 2019.”

As for why the spending in key areas was lower than expected, CBO analysts were unable to fully account for the results, but Swagel cited two factors that contributed to the trend: reduced spending on patients with cardiovascular disease and “decreases in the growth of Medicare’s payment rates, which are set through laws and regulations.”

Although Swagel provided no further detail, he cited his appearance before a Senate committee in 2020, where he explained that “[s]lower growth of Medicare payment rates has been a major factor contributing to the slowdown in the growth of Medicare spending in various ways. The ACA permanently reduced the annual payment updates in the Medicare fee-for-service (FFS) program for hospitals and other institutional providers by the projected growth in economywide productivity. … Those decreases in the growth of payment rates directly slowed the growth of Medicare spending by reducing the amount paid for each service.”

Still, although health care spending has been lower than projected in 2010, the U.S. continues to spend far more than its peers. “The United States spends a larger share of its gross domestic product (GDP) on health care than other advanced economies and performs worse on various measures of health outcomes than many of those same countries,” Swagel said. “In 2019, U.S. health expenditures were 17.6 percent of GDP, nearly 7 percentage points higher than the average of other comparably wealthy countries.”

The bottom line: Whatever the cause, slower growth in health care spending could help extend the lives of the Medicare trust funds and is good news for both federal and state government budgets.

Number of the Day: 1 Million

The IRS has answered 1 million more phone calls during the current tax season than it did in the same period last year, the Treasury Department said Friday. As Politico’s Benjamin Guggenheim reports, the IRS answered 3.98 million calls as of the week ending March 11, about 1 million more than the 2.96 million calls answered during the same period in 2022. Treasury Deputy Secretary Wally Adeyemo credited the extra funding of $80 billion over 10 years for the IRS included in the Inflation Reduction Act for the improved results. “[T]he IRS is providing significantly improved customer service on the phone, in-person, and online,” he said.

Millions of Rounds: Pentagon Updates List of Military Aid for Ukraine

The Department of Defense announced Monday that it will send another $350 million worth of military equipment and ammunition to Ukraine, including rockets, artillery shells, missiles, mortar rounds, mine clearing equipment, fuel tankers, patrol boats and spare parts.

The Pentagon also released an updated list of the arms and equipment sent to Ukraine so far as part of the “$33.2 billion in security assistance” provided by the Biden administration. The eye-opening roundup references some very large numbers, including:

* Over 1.5 million 155mm artillery rounds;

* Over 400,000 105mm artillery rounds;

* Over 58,000 other anti-armor systems and munitions;

* Over 8,500 Javelin anti-armor systems;

* Over 12,000 155mm rounds of Remote Anti-Armor Mine (RAAM) Systems;

* 100,000 rounds of 125mm tank ammunition;

* 45,000 152mm artillery rounds;

* 20,000 122mm artillery rounds;

* 50,000 122mm GRAD rockets;

* 109 Bradley Infantry Fighting Vehicles;

* 90 Stryker Armored Personnel Carriers;

* 300 M113 Armored Personnel Carriers;

* Over 2,000 High Mobility Multipurpose Wheeled Vehicles (HMMWVs);

* Over 150,000,000 rounds of small arms ammunition.

Quote of the Day

“It’s this really enormous financial bomb sitting out there that most people are just hoping won’t hit them.”

− Marc A. Cohen, co-director of the LeadingAge LTSS Center at the University of Massachusetts at Boston, in a Washington Post article on the crushingly high costs of senior care. “A wave of Americans has been reaching retirement age largely unprepared for the extraordinary costs of specialized care,” the Post’s Christopher Rowland writes. “These aging baby boomers — 73 million strong, the oldest of whom turn 77 this year — pose an unprecedented challenge to the U.S. economy, as individual families shoulder an increasingly ruinous financial burden with little help from stalemated policymakers in Washington.”

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