House Passes Ryan Budget Bill - But Don't Panic

News of the Supreme Court challenge to the Affordable Care Act (ACA) has dominated headlines this week, overshadowing the release and subsequent passage of House Republicans’ budget on March 21. Often referred to as the “Ryan budget,” after House Budget Committee chairman (and the bill’s main author) Paul Ryan (R-WI), the budget would make massive changes to many health care programs, including cuts of more than $700 billion in Medicaid over the next decade.

These changes would include converting Medicaid to a block grant program. Medicaid, in its current form, guarantees all eligible Americans are guaranteed a spot in the program. The federal government covers nearly 60 percent of the cost (on average), and has an open-ended commitment to help states cover remaining costs. The government also requires states to cover certain groups of people, such as children. Nationally one in three children are enrolled in Medicaid, which is designed to provide essential health benefits to this population, from preventive care to medically necessary early interventions before conditions become serious and more costly.

Under a block grant model, this open-ended approach would end; instead, states would be provided with an annual lump sum, no more, no less, regardless of how many citizens apply for coverage. States would have more freedom to make benefits and eligibility decisions, but would be charged with covering costs beyond the annual federal allotment. With the number of people who rely on Medicaid on the rise and states still running budget shortfalls, this added expense would be difficult for states to bear, especially if the Supreme Court upholds the ACA, which would make 16 million more people eligible for Medicaid in 2014. More coverage for more people is a good thing, but traditionally, when states feel such a pinch, they pass these expenses onto patients and providers.

Many groups have expressed dissatisfaction with Ryan’s proposal, arguing that more than 60 percent of his proposed cuts come from spending targeted to the poor, including Pell Grants, the Supplemental Nutrition Assistance Program, Head Start, veteran’s benefits, and many others. Proponents, however, argue that such cuts are necessary to reduce the national debt, and that the proposed budget protects Defense programs.

Before we get too caught up in either side’s argument, it’s important to understand just how much spin and rhetoric is involved with these budget proposals. Current law requires the president to submit a budget proposal to Congress, which President Obama did on February 13.  Both houses of Congress then develop their own outline and, when they agree, send it to the president for signing. Thus, there is theoretical a balance of budget power and a cooperative process.

This year (like last year, and many years when we have divided government), House Republicans have produced their own budget, generally ignoring the president’s request. House Democrats for their part have also written their own budget that is more analogous to the president’s, but not being the party of power in the House, their proposals rarely make it past the committee stage. The Senate, on the other hand, hasn’t produced a budget blueprint since Obama took office, instead ceding control to the president. This has created a stalemate on Capitol Hill. To keep the government running, Congress has had to continue funding programs by continuing resolutions which fund government programs at the previous year’s levels. Last year, no agreement could be reached and the vast majority of government programs were level-funded by a continuing resolution that passed in mid-December.

Thus, Rep. Ryan’s budget is not a point-by-point blueprint for funding federal programs as much as it is a political statement, reflecting the fiscally conservative position that is dominant within the Republican party. The proposal is vague on some details about how cuts and increases will be achieved, and makes projections for dozens of years into the future (which, barring significant changes in the way our domestic programs work, would be extremely difficult to achieve.) It is widely acknowledged that very few, if any, proposals in the bill will become actual law during this congress. Although it has passed the Republican-controlled House, it will fail in the Democrat-controlled Senate, if it ever reaches the floor at all. The House Democrats’ plan will also not pass, and may not even be brought up for a vote.

Here’s where we remind you that it’s an election year. Both sides will argue their budget is right, fair, will reduce debt, and will do the most for the majority of Americans. What neither side will admit is that no budget will be signed into law prior to the 2012 election, and possibly not even then. Following the election, Congress will return for a “lame duck” session, when all spending decisions must be wrapped up to avoid a government shutdown (which hasn’t happened since 1996.) It’s possible (in fact probable) that Congress will pass another continuing resolution to fund government programs until the 113th Congress convenes next year. Any budget blueprint is, therefore, meant to allow a campaigning incumbent to tout the budget they support, knowing it won't become law.

That doesn't mean we can take the year off. Budget proposals are guideposts for what the next Congress is likely to do, and presidential candidate Mitt Romney has already signaled his support of the Ryan budget which, as previously mentioned, takes aim at Medicaid. As non-voters, children and their health care needs are easily overlooked unless advocates come together to champion policies that benefit them. Stay tuned as we continue to track the Medicaid debate and actions Congress does take this year on legislation that impacts children’s health. And don’t forget to Join our Speak Now for Kids campaign to help us champion children’s health.