Statement by Deborah Weinstein, Executive Director, Coalition on Human Needs.

Those who support the massive cuts to basic needs programs in H.R. 1, the big and brutal budget bill that has just passed the Senate, have asserted that no one in need will lose benefits; that the bill is just targeting “waste, fraud, and abuse.”   

Proponents of this bill have not provided evidence that people making use of SNAP and Medicaid are doing so wastefully or fraudulently. What the bill does is deny health insurance and food to millions and burden states with more costs. Representatives should protect their constituents and their district’s health facilities by opposing this reckless legislation. 

There is waste, fraud, and abuse to be opposed here: it is rampant in the bill itself. While the House bill is also chock-full, in key respects the Senate-passed bill is even worse. The House should reject the rush to enact a bill before the entirely arbitrary July 4th deadline. The waste, fraud and abuse central to this legislation will inflict needless harm on our nation for a long time to come.   

H.R. 1’s abuses: the bill is laden with them. Health economists from the University of Pennsylvania estimate that the House bill’s health provisions will lead to 51,000 preventable deaths per year. The Senate bill would result in one million more people losing health insurance than the House counterpart, so this shocking estimate of deaths may be understated. 

The bill inflicts harms on the people who depend on Medicaid, the Affordable Care Act, Medicare, SNAP nutrition aid and child nutrition programs. It is abusive in its treatment of immigrants, supercharged with huge funding increases for ICE. The Senate’s bill would deny health insurance to nearly 17 million people, by its Medicaid and Affordable Care Act cuts and its failure to extend the expanded Premium Tax Credit for the ACA. It cuts Medicare, making premiums unaffordable for older people with low incomes by ending a subsidy for their premiums provided through Medicaid. It also denies Medicare to immigrants here legally, who paid Medicare taxes for a decade or more, and by law were promised they could receive Medicare benefits. This bill breaks this promise. Certain immigrants with legal status would also be denied Medicaid and SNAP, in an inhumane break from decades of U.S. policy. 

The Senate bill will result in the needless deprivation of nutritious food, another abuse. All SNAP beneficiaries (about 40 million) will see their benefits reduced over time. A huge, unprecedented change: most states will have to start paying between 5-15 percent of SNAP benefits, which now are fully paid by the federal government. States will have a difficult time covering this unexpected cost, and it is likely to result in many states reducing SNAP benefits or eligibility. In addition, about 5 million live in households where benefits will be reduced because a household member’s benefits will be terminated due to the work reporting requirement. When SNAP benefits are lost, children may also lose automatic eligibility for child nutrition programs. The Senate bill removes exemptions from SNAP’s harsh time limits for 270,000 veterans, people experiencing homelessness, and former foster youth. 

The bill is abusive in proclaiming that its Medicaid and SNAP rules changes are about promoting work, while in reality the rules are red tape roadblocks that deny people benefits because they cannot supply the documents required to prove their continuing eligibility. Those who assert that the Medicaid and SNAP work reporting rules couldn’t hurt people with disabilities or parents of young children are wrong – there is ample experience that people who really are exempt from such requirements cannot always get through to prove they are exempt. They may not receive notices or may not understand them. They may not have access to proof of disability, or of their work hours. They may try to ask questions via a call line, but not be able to reach staff, as demonstrated by UnidosUS when they tested call times and found that 45 percent of Spanish speakers had their calls disconnected before they could get through. Medicaid work rules tried in Arkansas were discontinued after it was clear that unexpectedly large numbers of eligible individuals were being terminated for not supplying the required documentation. When Medicaid documentation requirements were resumed after the pandemic public health emergency was ended, it was found that about two-thirds of disenrollments occurred for procedural (paperwork) reasons; many of those terminated were found shortly afterwards to be eligible.

Where is the waste? It is in the trillions of dollars of tax give-aways that are the real reasons for being of this legislation. These tax breaks overwhelmingly benefit those with the highest incomes. The Senate bill lavishes 69 percent of its net tax breaks to the richest fifth of taxpayers, while the poorest fifth gets just 1 percent, according to the Institute on Taxation and Economic Policy. ITEP finds that the net tax cuts going to the richest 1 percent next year ($114 billion) would exceed the amount going to the entire bottom 60 percent of taxpayers (about $85 billion). 

On the face of it, this is wasteful because it is handing huge amounts of money to people who need it the least. The Penn Wharton Budget Model’s analysis of the Senate bill shows that in 2027, people with incomes below $18,000 (the poorest quintile) lose $235, taking into account both tax cuts and the value of lost benefits, while people with incomes above $4.45 million (the top one-tenth of one percent) gain $290,485. 

The only argument for handing multi-millionaires whopping annual tax breaks is that this largesse is spread around the economy like fertilizer, spurring economic growth. But when we look at what happened after the 2017 Trump tax cuts – the ones they now wish to make permanent and expand – the evidence is clear that there was no economic boost. The rich got richer, but GDP rose only by a hair, consumer spending dropped, business investment declined markedly, and housing investment plummeted.

Despite the 2017 tax cuts’ lack of economic effectiveness, this new bill keeps them going, often permanently, and sometimes increasing them. The 2017 bill included a break for people who pay taxes on their businesses through their personal income tax, instead of the corporate tax. That overwhelmingly benefits the wealthy – the top 1% have gotten more than three-fifths of the benefit. The House bill increases their break – the Senate bill makes it permanent. The 2017 law exempted all but a fraction of a percent of estates from the estate tax. The Senate bill makes the gift to the richest estates even bigger – estates for couples are exempt if they’re below $30 million – now it’s $28 million, but if this giant break were allowed to expire, it would go down to $14 million. How much would this break for this tiny sliver of the wealthy cost? More than $200 billion. Amusingly (in a bitter sort of way), during overnight debate in the Senate, the majority voted down efforts to retain tax incentives for renewable energy projects, saying that “mature industries” shouldn’t get subsidies. But the bill before them includes $18 billion in new subsidies for the oil and gas industry. Tax experts spelunking in this bill will find plenty of examples of special interest breaks, plus general purpose excesses for multi-millionaires. According to Americans for Tax Fairness, billionaires’ income has leapt by $4.1 trillion since the 2017 tax law was adopted, now exceeding $7 trillion. They really don’t need more help. 

So – plenty of waste. How about fraud? That would be the fiction agreed to on the Senate floor that extending all those 2017 tax breaks doesn’t have to count in their budget calculations. Pretending those trillions will not increase the deficit means they can make most of the tax breaks permanent; otherwise they would have to find sources of revenue or cuts to pay for them, to stay within the budget rules and be able to pass this bill with only a simple majority.

It is also a fraud to assert that no one will be hurt by this legislation. Millions will be hurt directly by the loss of health insurance and nutrition assistance. Home energy costs will rise. The health care and nutrition cuts will reverberate in the economy, costing 1.2 million jobs. And thousands of people will die. 

The House of Representatives has the chance now to stop the reckless rush to enact a massive piece of legislation that is big and brutal, with costs that will be borne in every community. It is time to stop the real waste, fraud, and abuse.