Senate Republicans matched their House counterparts Wednesday by releasing a budget blueprint that eliminates deficit spending in a decade and repeals the Affordable Care Act.
But the Senate's plan doesn't fully embrace controversial House proposals to overhaul Medicare and Medicaid. Instead, the Senate offers less detailed prescriptions for how it would go about culling costs from the healthcare coverage programs for the poor and elderly.
The Senate blueprint, unveiled by Sen. Mike Enzi (R-Wyo.), chair of the Budget Committee, would reduce anticipated spending under current law by $5.1 trillion through 2025. The bulk of those savings come from cutting healthcare programs.
“Today, we begin the monumental task of confronting our nation's chronic overspending and exploding debt, which threatens each and every American," Enzi said in a statement. "Make no mistake, our fiscal outlook is grim and has been ignored for far too long."
The Senate anticipates saving $2.1 trillion by eliminating the coverage provisions of the Affordable Care Act. That includes repealing the law's expansion of Medicaid eligibility to households with incomes up to 138% of the federal poverty level and jettisoning the subsidies available to low- and middle-income households to buy private plans through state and federal exchanges.
The Senate budget also includes an additional $400 billion in reductions to Medicaid spending over a decade and $430 billion in savings from changes to Medicare benefits. The average annual growth in spending on Medicare slows from 6.4% under current law to 5.5% under the GOP proposal, with those increases largely driven by an aging population. The average yearly increases in Medicaid spending drop from 5.6% to 4.2% under the Republican budget blueprint.
Medicare cuts are arguably the one area where there is some common ground between President Barack Obama and congressional Republicans. The president's budget proposal puts forth $400 billion in reduced Medicare spending by 2025.
The release of the House and Senate budget proposals are merely the start of the congressional budgeting process. The difficult part will come when legislators have to fill in the specific details about where exactly they want to reduce spending. A presidential veto almost certainly looms for anything resembling the current proposals.
Henry Aaron, a senior fellow at the left-leaning Brookings Institution, is skeptical about the ability of Republicans to pass a budget, even with full control of Congress. “Trying to find common ground within the Republican party may not be as hard as finding common ground between Republicans and Democrats, but it's right up there,” he said.
The Senate didn't explicitly embrace controversial provisions for overhauling Medicare and Medicaid that are part of the House blueprint released on Tuesday.
The House wants to shift Medicare toward a premium support model, in which beneficiaries would select plans through an exchange, although it's not proposing to implement that change until 2024. The House also wants to turn the current Medicaid program into “State Flexibility Funds”—essentially block grants—with far greater leeway for states on how they spend those dollars.
But the Senate was less specific about how it wants to overhaul the programs. The budget plan says that it would "modernize Medicaid based on the successful model of the Children's Health Insurance Program," and promises more flexibility for states. On Medicare, it vows to increase the solvency of the Medicare trust fund by five years, but leaves the details for achieving that goal up to legislative committees.
Christopher Condeluci, principal at CC Law & Policy and a former top GOP Senate Money Committee staffer, said the Senate's decision not to include the House proposals shouldn't necessarily be taken as a sign that they're opposed to them. Instead, it's more of a stylistic difference between the two chambers. “The Senate is going to be a little more conservative when it comes to what's included in their budget,” Condeluci said.
Both chambers do call for repealing the Affordable Care Act through the budget reconciliation process. That's particularly attractive in the Senate because reconciliation only requires 51 votes for passage, instead of the 60 votes typically needed for passing legislation. The Senate's budget resolution calls on the two committee's with principal authority over healthcare issues, Money and Health, Education, Labor & Pensions, to lead that effort.
Condeluci, however, is skeptical about the ability to fully repeal the law through reconciliation. That's because some key provisions don't have a fiscal impact and therefore likely can't be addressed through that process. “What you're left with is almost some Swiss cheese, maybe with big holes,” he said.
But Condeluci is bullish on the prospect of using reconciliation if the U.S. Supreme Court opts to strike down subsidies in the King v. Burwell case, which challenges the legitimacy of subsidies in states that haven't established their own exchanges. A ruling on the case is expected by the end of June.
Condeluci believes reconciliation would offer Republicans an opportunity to offer a targeted response to assist the millions of individuals faced with losing financial assistance.
“I think it makes more sense from a policy perspective and political perspective,” Condeluci said.
But Aaron is skeptical about the ability of Republicans to coalesce around a replacement for the Affordable Care Act, whether prompted by the Supreme Court or otherwise. He points out that the alternatives floated by Republicans so far appear to contain many of the elements of the law they've spent years demonizing.
"They say repeal it, but then they put back large chunks of it," Aaron said. "When it comes to repeal, they don't walk the walk."