Republicans are fleecing America — and stripping Medicaid, too

Choosing where our tax dollars are spent shows which people and places we value.

By Heather Boushey

America’s federal budget is a moral document. By choosing where our tax dollars are spent, our national budget shows which people and places we value. Are working class Americans worth supporting in times of need? Are rural areas worth receiving federal funds? President Donald Trump and his friends say “no.”

In just 42 days, the Trump administration has ravaged the strong economy it inherited. Consumer sentiment? Down. Inflation expectations? Up. Leading us to just last week, when congressional Republicans took the first of many planned steps to put their values into action, giving us a budget that doles out trillions to the richest Americans and biggest corporations while the rest of us pay for it, giving us diddly-squat.

In fact, diddly-squat is more than most Americans will get from the Republican budget. While the richest among us will see their incomes rise by about $314,000 and American corporations will be able to avoid paying about $900 billion in taxes, middle class Americans will see higher prices across everyday needs, and their local communities will lose essential funding for schools and hospitals.

Take Medicaid, the program that provides 72 million Americans with access to health care. It’s likely that if the Republican budget becomes law, slashing Medicaid will likely become necessary to make the numbers work. That will force millions to lose access to health care—including nearly half of all children who live in rural communities. These cuts will make it harder for local hospitals to make their budgets, and many rural hospitals will close. Those that remain open will likely have to raise prices. So, even if you’re not on Medicaid, your costs will go up.

Actions speak louder than words. Trump knows that Medicaid is popular, so earlier this year he promised that Medicare and Medicaid weren’t going to be touched. In fact, he said he would “love and cherish” them. But now, his budget is gutting Medicaid. Why? Because he and his uber-rich friends are living in a bubble that the majority of the country just isn’t.

Simply put, they get the arithmetic wrong. We could afford health care if we didn’t give huge tax cuts to the very wealthy. Case in point: Trump’s tax cuts for the wealthy total more than $4 trillion (with a “t”); Medicaid cuts are expected at $880 billion (with a “b”). These essential services aren’t just a line-item in a couple-hundred-page government document. They’re making sure your athletic child can get a bone re-set, that your pregnant wife has access to life-saving OB-GYN services, and that your diabetic father has affordable insulin.

Some Republicans know better. House Speaker Mike Johnson and Nevada Gov. Joe Lombardo have spoken out against the cuts to Medicaid. Rep. Rob Bresnahan of Pennsylvania said that “if a bill is put in front of me that guts the benefits my neighbors rely on, I will not vote for it.”

Make no mistake: This robbing-Peter-to-pay-folks-like-Elon Musk threatens our economy in other ways as well. The Republican budget will give so much money to the richest Americans and the biggest corporations that it will increase the national debt by $4 trillion over the next decade.

Trump and his Republican colleagues are doubling down on what they know is failed trickle-down economics. In 2017, they put in place what Trump called the largest tax cuts in U.S. history for the richest Americans and biggest corporations. Trump told the American people that this would deliver a growth rate of four to six percent and that household income would rise by $4,000. These things did not happen.

Trump’s budget is trickle-down economics in action—and we know that doesn’t work. There is a large body of evidence showing that tax cuts for the rich don’t lead to stronger growth and don’t lead to better wages, and especially not for the 80 percent of workers who are not professionals or managers. Turns out, when you give tax cuts to the rich, the rich get richer, but no one else does and the economy doesn’t grow any faster.

Moreover, research has documented that children with access to Medicaid and nutrition and pre-school programs did better in school, got better jobs, and were less likely to be involved in the criminal justice system. With more tax revenue from higher wages and less crime and criminal justice spending, the social programs can (at least in part) pay for themselves. That’s middle-out economics in action.

Combined with the gross mismanagement of the economy happening across the Trump administration, the Republican strategy will likely lead to higher interest rates, which means that when you go to take out a loan, you’ll pay more. So, don’t even think about buying a home—the Republican budget will make getting a mortgage more expensive (on top of making groceries more costly since Musk’s Department of Government Efficiency fired the folks in charge of keeping the nation’s chickens healthy).

As I documented in my book “Unbound,” inequality systemically constricts growth. On the other hand, investing in America fosters growth. Over President Joe Biden’s four years, the economy grew by 3.2 percent and investment in new manufacturing facilities more than doubled—both far faster than after Trump’s tax cuts for the rich. And that growth was shared: Even after accounting for inflation, wages grew, and grew faster for low- and moderately paid workers than the already-highly paid.

Trump’s and the Republicans’ budget plan is bad news for the American people and bad news for the U.S. economy, which Trump is already undermining through the harm and chaos of his economic policies. Giving more money to those who already have it feeds greed but doesn’t foster growth. Their values are clear: More for me but none for thee.

Heather Boushey served on President Joe Biden's Council of Economic Advisers and was chief economist for the Invest in America Cabinet at the White House.

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