Trump's budget slams N.J. more than most states on Medicaid

WASHINGTON -- President Donald Trump's proposed federal budget embraces the House Republicans' already-approved reductions to Medicaid, a cut that hurts New Jersey more than any other state.

Trump's $4.1 trillion spending plan for the 12 months beginning Oct. 1, to be released Tuesday, broke a campaign promise and included $839 billion in reductions that House Republicans made to the federal-state program for the poor, those with disabilities, and the elderly.

The Senate has yet to act on the House GOP's health care measure, which the Congressional Budget Office said would leave 24 million more Americans without insurance than under the Affordable Care Act it would repeal and replace.

Mick Mulvaney, director of the White House Office of Management and Budget, said the spending plan assumes the House Republican health care legislation will pass as written.

"It's better than the alternative, and the alternative right now is Obamacare," Mulvaney said at a budget briefing in the White House press room.

The Trump budget listed $610 billion in Medicaid cuts over 10 years and another $250 billion in savings from repealing and replacing the ACA, including savings from ending its Medicaid expansion.

States like New Jersey that expanded Medicaid no longer would get extra federal funding for new enrollees after 2019. If residents left the program after 2019, a common practice if they got a temporary job, and then needed Medicaid again, the state also wouldn't get the extra funding for the returnee.

The Medicaid cuts under the House GOP bill would hit New Jersey the hardest. On a per person basis, federal Medicaid funding would drop by 20.6 percent, more than any other state, according to the Urban Institute.

Gov. Chris Christie, a friend and supporter of Trump, said Monday that he hadn't spoken with the president, but acknowledged he was worried about the possible cuts. 

"Does a proposed $800 billion cut to Medicaid concern me? Yes, it does," he told reporters at the Statehouse. 

The GOP legislation capped Medicaid spending, ending an entitlement in which expenditures funded by the federal and state governments fluctuated depending on how many residents qualified for the program.

That would cost New Jersey $30 billion in federal funds over 10 years, according to New Jersey Policy Perspective, a progressive research group.

"These Medicaid cuts will be especially devastating in New Jersey because of its higher cost of living and larger number of people in desperate need of health care," said Ray Castro, NJPP's director of health policy.

"They will also hurt the state's economy - just when it is finally starting to recover from the recession - due to the loss of thousands of jobs, especially in the health industry."

Repealing the Affordable Care Act would cost New Jersey 86,000 jobs in 2019 in health care and other industries, according to the Commonwealth Fund, a research and advocacy group that focuses on health policy..

The budget cuts food stamps, officially the Supplemental Nutrition Assistance Program, and requires that able-bodied adults without children go to work. There were 810,000 New Jersey food stamp recipients in February, according to NJPP.

"That raises a very valid question: Are there folks on SNAP who shouldn't be?" he said.

For Americans with children, the budget proposes six weeks of paid family leave to new parents.

The budget calls for $1 trillion in public works spending, with $200 billion of that sum coming from the federal government. The figure, though, includes privately funded projects that already have gotten the go-ahead, such as the Keystone XL pipeline.

It remains to be seen if any of that $200 billion will go to help fund the Gateway Tunnels under the Hudson River. Trump's initial budget proposal cut off a key source of federal funding by making Gateway ineligible for the Federal Transit Administration's Capital Investment Program, also known as "New Starts."

Other elements of the budget also were released in March. Trump proposed spending $54 billion more for defense, $2.8 billion more on homeland security and increasing funding for veterans and border security. The money would come out of environmental protection, transportation and other domestic programs.

Mulvaney said the budget would balance in 10 years assuming 3 percent growth.

"Everything is keyed to getting us 3 percent," Mulvaney said. "You can never balance the budget at 1.9 percent."

The CBO projected just 1.8 percent growth during that time span and 1.9 percent over the next 30 years as the population gets older. During the previous 50 years, annual growth averaged 2.9 percent, the CBO said.

To spur economic growth, the Trump administration has proposed tax cuts primarily favoring wealthy Americans, including eliminating the tax on multimillion-dollar estates paid by just two of 1,000 taxpayers; lowering the top tax rate to 35 percent from 39.6 percent; ending the alternative minimum tax, which forced Trump to pay millions of dollars in additional taxes, according to his 2005 personal income tax return released by MSNBC; and shrinking the capital gains tax primarily paid by wealthier Americans.

The tax plan also would lower the corporate tax rate to 15 percent from 35 percent and extend that lower rate to limited liability corporations and other entities whose profits are reported on individual tax returns and primarily are used by wealthier taxpayers.

Previous tax cuts weighted toward the rich haven't had the impact that their supporters tout. After President George W. Bush reduced taxes in 2001, the economy grew at an average of 2.6 percent through 2007, according to the Center for Budget and Policy Priorities.

That was below the 3.7 percent annual growth achieved when President Bill Clinton raised taxes on high earners in 1993. By the end of Clinton's two terms in office, the budget was running a surplus.

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