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Trump Is Rescinding $7 Billion in Children’s Health Insurance. Should You Be Worried?

| May 9, 2018

The Trump administration is playing doctor with CHIP money.

The Trump administration is playing doctor with CHIP money. (Nikki McLeod)

President Donald Trump wants to employ a rarely used budget maneuver called “rescission” to eliminate $15 billion in federal spending, including $7 billion from the popular Children’s Health Insurance Program (CHIP).


Administration officials insist the cuts wouldn’t negatively affect any programs — rather, they would merely return money into the Treasury that Congress appropriated but is no longer needed.

In a statement on the White House blog, Russ Vought, the deputy director of the Office of Management and Budget, said the administration strongly supports the CHIP program. “Rescinding these funds will have no impact on the program,” Vought wrote. “At some point Congress will likely ‘rescind’ those funds as a budget gimmick to offset new spending elsewhere, as it did on the recently passed omnibus. Instead Congress should rescind the money now.”

But child health advocates are wary, particularly since the proposal comes a few months after Congress let funding authorization for CHIP lapse, which forced states to request millions in emergency contingency funds to keep children covered.

CHIP, which covers 9 million children from low-income families that earn too much to qualify for Medicaid, is mostly federally funded. But states operate the program within federal guidelines.

As budget hawks and children’s advocates dispute the effect of the plan, here are some takeaways on the Trump proposal.

What Are Rescissions?

Since the 1970s, presidents have had the power to take back money from federal programs previously appropriated by Congress — if Congress approves. That budget tool is not regularly used. The last president to seek and get approval for one was President Bill Clinton.

Once the president recommends a rescission, Congress has 45 days to approve the request. It needs only a majority vote in each chamber to pass.

If it isn’t approved, the rescission does not take effect.

The president can recommend such cuts only with funds that Congress appropriates. Mandatory programs, such as Medicaid and Medicare, are not subject to rescissions.

Will Cutting $7 Billion From CHIP Really Have No Impact On The Program?

That’s hard to say.

There is $7 billion at stake. The administration says $5 billion can no longer be spent because the period for it to be sent to states has expired. The other $2 billion is being taken from a federal contingency fund for CHIP. That money is to be used only if they face a budget shortfall. The economy is improving, and the administration is betting demand for CHIP will wane, leaving little need for the contingency fund.

“Anytime you cut spending, there is going to be some effect, said Marc Goldwein, senior vice president of the nonpartisan Committee for a Responsible Federal Budget. “But in terms of CHIP, it’s likely close to be zero — these are tiny cuts.”

Still, child health advocates, who endured months of uncertainty about whether Congress would restore federal funding to CHIP in 2017, are worried.

“I think the cut to the contingency fund is particularly troubling,” said Bruce Lesley, president of First Focus, an advocacy group.

Why Is President Trump Using This Budgetary Maneuver?

After signing a $1.3 billion spending bill in March, the president came under pressure from conservatives in Congress to cut the federal deficit. It is projected to hit nearly $1 trillion next year.

One strategy, according to these conservatives, is to rescind money that has not been spent to keep lawmakers from tapping those funds to pay for other programs.

Should Parents Of Kids On CHIP Be Worried?

Yes, if Congress goes along with the cuts, said David Super, a law professor at Georgetown University. But political analysts suggest that’s not likely to happen since some Republican senators have already spoken out against the move. With Republicans holding a 51- 49 majority in the Senate — and Sen. John McCain (R-Ariz.) battling brain cancer back home — the president likely would need all Republicans in the Senate to pass a rescission.

“This is pure political theater, ugly theater,” Super said.

He notes the administration is telling conservatives the cuts will reduce the deficit. But in media calls, senior administration officials said the cuts won’t have any programmatic effects.

“If the money would not have been spent, there are no savings,” Super said. “Any rescission of money that would not be spent, by definition, cannot reduce the deficit.”

Other programs targeted for cuts include relief funds for Hurricane Sandy, which struck in October 2012, and money allocated to respond to a possible outbreak of the deadly Ebola virus.

Super noted health advocates should be most worried about the $800 million in rescissions identified by the administration to the Center for Medicare and Medicaid Innovation. This program was created by the 2010 Affordable Care Act to find ways to make health programs work more efficiently — and save money.

–Phil Galewitz, Kaiser Health News

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12 Responses for “Trump Is Rescinding $7 Billion in Children’s Health Insurance. Should You Be Worried?”

  1. Trumpster says:

    Trump doesn’t understand that money he thinks he saves can’t be used for high heels and more plastic surgery for his Communist Escort or his criminal daughter!

  2. Pogo says:

    @Trumpster

    I completely agree, but hasten to add: trump IS the Republican party. Voting for any Republican is a vote for trump. The best Republican is no better at all than trump.The worst of all worlds: a world wide arms race, a new Ebola outbreak, oil prices climbing, and an ignorant and senile sociopath steering the ship.

    How’s the price of gas, groceries, housing and health care for you doing? Just wait til the new health insurance rates kick you. Just wait til the Middle East, India, and a host of other places go off the tracks and explode.

    Thank crooked trump and the Republican party.

  3. Brandon says:

    I am a conservative…
    I have a daughter that is disabled.
    We fight rot our daughters rights All The Time.
    It is the State of Florida that decides where Federal funding goes and and unfortunately, for my daughter Very Little If those funds go to her.

  4. Edith Campins says:

    And how much area his trips to Mar A Lago costing the taxpayers? Not to mention Carson’s $31,000 table and the $43,000 phone booth for Pruittthe billions for a useless wall and on and on….

  5. layla says:

    Does anybody here realize these are UNUSED funds? If the money wasn’t spent, what is your problem with removing it from the federal budget? Or would you prefer it be left there for some congressman to grab for his personal use, like paying off harassment complaints with taxpayer money?

    We have become one giant cookie jar to the world.

  6. r&r says:

    Bravo Layla.

  7. tulip says:

    These may be “unused funds” but rest assured the politicians spend it on what they want. Why not use these “unused” or excess funds on more children that need help. There are plenty of them out there that could use it, and don’t et it. Maybe use it for the mental health issues they claim to care about?

    Neither Trump nor Scott have ANY compassion or understanding of “regular people”. All they care about is their own wants. It always seems that when there is a budget cut, the ones that need it most, or the projects that need it most, get cut, while the rich politicians and their cronies thrive. on high pensions, the best medical care and other assorted benefits with their middle finger to the rest.

  8. Sherry says:

    “CHIP, which covers 9 million children from low-income families that earn too much to qualify for Medicaid, is mostly federally funded. But states operate the program within federal guidelines”.

    Why are these funds UNUSED, in the Republican controlled state of Florida? This from an October issue of the Orlando Sentinel:

    Florida has $359 million carried over from the prior year it can use for the program, but a report from a commission set up to analyze CHIP and Medicaid says Florida will run out of funding for the program sometime in January if it isn’t reauthorized.

    Health care access advocates say CHIP is vital for many families who aren’t poor enough for Medicaid but not wealthy enough for essential care for their children. Some CHIP plans also provide coverage for dental or other preventative care not offered under many private plans but can help prevent more expensive health problems later in life.

    “If our kids can’t go to school regularly because they’re sick or if they can’t participate fully … that stunts their development and really holds back our state,” said Scott Darius, executive director for Florida Voices for Health, a health care access advocacy group.

    Those with incomes between 133 percent and 200 percent of the federal poverty level, or from about $32,000 to $48,000 for a family of four, are eligible. About 8.4 million children in the U.S. receive care through the program, including about 375,000 in Florida as of 2016, according to federal data.

    Enrollees in the state’s CHIP program, known in Florida as KidCare, are required to pay monthly premiums of $15 or $20. KidCare administrators recently extended the deadline for October’s premium from Oct. 1 to Oct. 31 because of Hurricane Irma.

    KidCare records show there were 28,356 Central Florida enrollees as of Sept. 1, including 14,022 in Orange County.

  9. Daniel Floyd says:

    Please show me where in the constitution it says that the federal government is responsible to take care of your children?

  10. Richard says:

    Perhaps people who are on the Left should spend more time and energy advocating for needy children versus focusing on collusion, obstruction, smear campaigns, lies, fake news, impeachment and unseating the POTUS. Then Florida’s share of the 7 Billion dollars would go to a good use for these well deserved children.

  11. kevin says:

    BeBest

  12. Chris A Pickett says:

    The reason the money was unspent is that the amount of people on aid dropped after Obama’s reign was over. The government has been operating on a CR budget(continuing resolution), That means they disperse the same amount of funds as the previous year regardless of if it is needed. Normally when funds are left over at the end of the year, agencies go on a spending spree because if they don’t use those funds they will not get them the following year. It’s called “use it or lose it” That is how taxpayer money is wasted. While a government employee I seen crazy end of year spending and many times the purchased stuff goes straight in the garbage. That is the facts. Facts trump Feelings.

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