RSC Budget Reforms Entitlements, Fixes Healthcare System

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Posted by Tom Hebert on Thursday, May 2nd, 2019, 3:27 PM PERMALINK

The Republican Study Committee Budget,  “Preserving American Freedom,” contains numerous reforms that would reform our federal welfare system, stop Medicare and Social Security from becoming insolvent, and fix our broken healthcare system.

The budget, proposed by RSC Chairman Mike Johnson (R-La.) and RSC Budget and Spending Task Force Chairman Jim Banks (R-IN), provides a stark contrast to the House Democrats that didn’t even release a budget this year.

Fixing Welfare and Enabling Upward Mobility

By any objective measure, the federal government’s decades-long war on poverty has failed. President Lyndon Johnson’s Great Society programs have done very little to help people escape the vicious cycle of poverty. Since 1965 when these programs were created, the government has spent $27.8 trillion. Throwing money at the problem has clearly not worked, yet in many instances, the programs actively thwart the upward mobility necessary for individuals and families to break out of poverty.

The RSC budget contains numerous substantive changes to the welfare system in order to promote upward mobility. For example:

  • The RSC budget would strengthen federal welfare programs with work requirements that would help Americans move away from dependence and toward self-sufficiency.
  • The RSC budget includes important reforms that would modernize the Supplemental Nutrition Assistance Program (SNAP) for future recipients. The cost of SNAP is growing and its efficacy is dwindling. The RSC budget would distribute funds to states based on a formula that accounts for factors such as poverty and unemployment. States would then have the flexibility to administer their own programs at optimal efficiency and subject to several federal requirements. The budget would also implement asset tests for SNAP recipients to ensure the program is benefiting the truly needy.
  • The RSC budget contains a number of different reforms to the Temporary Assistance for Needy Families (TANF) program. The budget strengthens work requirements, requires states to actually use TANF funds for TANF instead of plugging holes in the state budget, and adopts Rep. Kevin Brady’s important Jobs for Success Act, which ATR has praised here.
     

Saving Social Security

Social Security is on a fast track to bankruptcy. According to a recent report by the Social Security Trustees, the Social Security Old-Age and Survivors Insurance (OASI) Trust Fund will be out of money by 2035. Upon depletion, recipients will face an automatic benefit cut of 25 percent that will only increase over time.

The RSC budget contains numerous reforms that would keep Social Security solvent for future generations. For example:

  • The budget gradually phases in an adjustment of the retirement age to reflect increased life expectancy. In order to protect the solvency of the program, the budget would increase the retirement age at three months per year until it hits 69 for those turning 62 in 2030. The budget will also link the normal and early retirement ages to life expectancy so the program does not fall off track in the future.
  • The budget would focus the Social Security cost of living adjustment (COLA) on beneficiaries who need it most.
  • The budget modernizes the formula Social Security uses to calculate retirement benefits so that low-income workers receive higher retirement benefits than they do in the current law.
  • The budget removes perverse incentives that discourage active seniors from remaining in the workforce as they collect benefits.
     

Reforming Medicare

Medicare is unsustainable in its current form as the population ages. More than 10,000 Americans reach retirement age every day which will add to the 60 million Americans currently covered. 

Modernizing Medicare for the benefit of future generations is key and the RSC budget contains numerous reforms. For example:

  • The RSC budget would transition all of Medicare to a flexible health insurance program that federal employees enjoy. According to CBO scoring, this new system would lower beneficiary premiums by 7 percent.
  • In order to ensure the solvency of the program for future generations, the budget gradually phases in a premium increase so that the contributions of senior citizens are equivalent to taxpayer contributions. The budget also adjusts the age of eligibility to bring the program in line with current life expectancy rates.
  • The budget improves patient freedom by allowing seniors enrolled in Medicare Parts A and B to contribute to Health Savings Accounts (HSAs). This budget also allows seniors to keep their Social Security benefits if they keep their private insurance and opt out of Part A.
     

Repealing Obamacare and Fixing Healthcare

For far too long, Washington bureaucrats have had undue influence on the healthcare system. The RSC budget contains numerous reforms that bring healthcare choices back to patients, states, and doctors, saving taxpayers $3 trillion over ten years. For example:

  • The RSC budget expands Health Savings Accounts (HSA) so that healthcare consumers have greater flexibility and better control over their healthcare spending.
  • By any measure, Obamacare has been disastrous for the American people. Premiums have doubled in the past six years and healthcare choices are dwindling for families all across the country. The RSC budget fully repeals Obamacare and all of its tax hikes on the American people. This would save $1.3 trillion in taxpayer money over the next decade, and return critical healthcare decisions to patients and their doctors.
  • The budget creates new block grants out of Medicaid and the Children’s Health Insurance Program (CHIP) in order to give states increased flexibility. The budget expands CHIP eligibility by removing the income floor so that states can help all children in low-income families. These new grants would allow states to cover the four core groups that Medicare is supposed to cover. A flex grant would also be available to subsidize the care of the remaining population.

Photo Credit: GotCredit

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