The following article by Melissa Boteach and Rachel West was posted on the Center for American Progress website January 27, 2017:
President Donald Trump campaigned on a promise to protect Social Security, Medicare, and Medicaid; as late as this past week, he promised “insurance for everybody.” But days later, he reneged on that promise, coming out in support of a Medicaid block grant, which is code for massive cuts to Medicaid that would strip millions of seniors, children, people with disabilities, and working families of health care coverage while shifting the costs onto the states. In total, the Medicaid plan that President Trump’s nominee for secretary of health and human services championed as chair of the House Budget Committee is estimated to cut $1 trillion from Medicaid over 10 years and kick up to 20 million people off their health coverage.
Despite President Trump’s promise that under his administration, “nobody is going to be dying in the streets,” analysis by The New England Journal of Medicine showed that when Medicaid was expanded under the Affordable Care Act, for every 455 people who gained coverage, one life was saved per year. This analysis makes it clear that access to health insurance saves lives and that block grants that will cause millions of people to lose health insurance are likely to cause thousands to die prematurely. Beyond premature death, families would suffer financial strain and poorer health. Seniors would lose access to nursing homes or supports that enable them to age in place. And kids would lose access to early screening and preventive care that helps them grow up healthy and strong.
Why would President Trump break a promise to protect Medicaid and instead support such draconian cuts? The answer is simple: Slashing Medicaid to the tune of $1 trillion over 10 years is part of the plan to pay for his tax cuts for millionaires. According to the Tax Policy Center, under Trump’s tax plan, the top 0.1 percent of households—those with incomes of more than $3.7 million per year, including the majority of his Cabinet appointees—would receive an average tax cut of nearly $1.1 million. According to Center for American Progress analysis of Tax Policy Center findings, tax cuts for this group alone would cost $1.5 trillion over 10 years, one-and-a-half times the cost of maintaining health care coverage for up to 20 million people.
President Trump may have campaigned as the head of “a worker’s party,” but his tax and health plans reveal that he would leave millions of families without health care coverage to give an average tax cut of more than $1 million per household to the wealthy few.
We estimate the 10-year effects of President Trump’s tax plan based on an October 2016 analysis by the nonpartisan Tax Policy Center, or TPC. TPC found that the top 0.1 percent of the “expanded cash income” distribution—that is, tax units with annual income greater than about $3.7 million—would receive 24.2 percent of the benefits from Trump’s tax plan in calendar year 2017. According to TPC’s analysis, the share of benefits flowing to the richest households will increase over time, with nearly one-quarter—24.5 percent—going to the top 0.1 percent by 2025. To ensure that our 10-year estimate is conservative, we nonetheless assume that in the intervening years for which we do not have distributional analysis—2018 through 2024—the 0.1 percent’s share stays fixed at its 2017 level, only increasing to 24.5 percent in 2025 and 2026. We apply these shares to TPC’s annual estimates of the revenue loss from Trump’s tax plan—which grows from $314 billion in 2017 to $724 billion in 2026—to arrive at a total 10-year windfall to the 0.1 percent of $1.5 trillion.
This is not the only possible approach to estimating 10-year benefits based on TPC’s analysis and should be considered an approximation. However, two other reasonable approaches to using TPC’s results yield similar—but slightly larger—benefits for the richest households, increasing confidence that this is a conservative estimate. The first of these approaches involves applying the top 0.1 percent’s annual shares, as described above, to the total annual reduction in federal taxes across all tax units, linearly extrapolating this tax reduction between 2017 and 2025. The second approach involves applying the average of the top 0.1 percent’s shares in 2017 and 2025 to the 10-year total revenue effect of the plan.