When reading the headlines below, generated after President Trump released his budget blueprint for fiscal year 2018, it is normal to assume that government spending on Medicaid could shift from the current amount to a lesser sum…
- Donald Trump budget: $800 billion in Medicaid cuts – CNNPolitics.com
- Trump’s Budget Cuts Deeply Into Medicaid and Anti-Poverty Efforts – NYTimes
- Trump’s new budget proposal slashes safety-net programs like Medicaid… – Salon
Not so fast.
Office of Management and Budget director Mick Mulvaney recently stated: “There are no Medicaid cuts in the terms of what ordinary human beings would refer to as a cut. We are not spending less money one year than we spent before.”
So while the headlines are not false in terms of Washington’s math, they can be misleading. How should an ordinary human being interpret these headlines?
How does the Federal Government do Math?
Budgets proposed by the executive and legislative branches are reviewed by the Congressional Budget Office (CBO), a government agency that produces analysis of major legislation. Designed to be non-partisan, “[the] Speaker of the House of Representatives and the president pro tempore of the Senate jointly appoint the CBO Director, after considering recommendations from the two Budget Committees.” CBO
The CBO approaches its analysis through a 10-year budgeting time frame, with the following assumption: the yearly budget for congressionally authorized programs is set to increase each year with anticipated inflation, which creates the baseline that will automatically increase year-to-year.
Therefore, if anticipated inflation is 2 percent and Congress increases spending by 1 percent, you have a “cut” relative to the baseline but spending is still growing. In this example, spending increases this year compared to last year, but the CBO calls it a cut.
An explanation in the Office of Management and Budget Director Mulvaney’s words:
OMB Director Mick Mulvaney took to the White House press podium to give a readout of the president’s proposed budget, and offered a lesson on how Washington does math:
“In Washington, D.C., if you spent $100 last year on something…and we spend $100 on it this year on that same thing, in Washington people call that a cut…”
“In fact, I’ve seen several occasions where we spent $100 last year and $102 this year and many people will still call that a cut because the budget is hardwired by the Congressional Budget Office to go up every single year. And if the Congressional Budget Office says we spent $100 last year and we’re supposed to spend $106 this year, for a lot of people anything less than $107 is a cut. In fact, I’ve actually heard $106 referred to as a freeze because it simply stays in line with the Congressional Budget Office.”
Mulvaney then related this story to the question from the press about “cuts” to Medicaid: “So a couple of things about Medicaid… There are no Medicaid cuts in the terms of what ordinary human beings would refer to as a cut. We are not spending less money one year than we spent before.”
Why do we care about Washington’s unique math?
Headlines can pull on heartstrings and influence how constituents view the priorities of their representatives in Washington. This relationship in turn influences legislation and government spending. Reading behind the headlines is important for promoting quality legislation and tracking government activity. And if you aren’t keeping track of how the government is spending those taxpayer dollars, it is possible that your congressional representative isn’t either.
Resources:
- Check out FGA.org for more information on keeping government accountable.
- Read The Policy Circle brief on the U.S. House of Representatives and how it holds the power of the purse.
- Here are the numbers on Medicaid in the 2018 Budget proposal.
What Still Matters is provided by Kristin Jackson, who serves as policy editor for The Policy Circle. Kristin is a middle-of-America native with a decade of experience working on policy in our nation’s capitol.