In the wake of House Republicans’ May passage of the American Health Care Act, a proposal that would throw 23 million more people off their health care coverage in order to pay for fat tax cuts for several thousand wealthy people, many pinned their hopes on the Senate, where moderating forces, they hoped, might prevail over the harsh austerity measures offered by the House.
Almost two months later, those hopes were dashed when Senate Republicans released their own health-care bill. Senate Majority Leader Mitch McConnell kept the main policy goal of the AHCA intact: paying for massive tax cuts for the wealthy with deep health-care cuts for the poor.
The Senate version, as expected, retains the House’s Affordable Care Act tax cuts, which by 2025 will save millionaires nearly $55,000 each year. To put a finer point on it, the richest 400 households in the country would receive tax cuts worth $33 billion between 2019 and 2028. For some perspective, that’s about the same as the combined cost of maintaining Medicaid expansion in Alaska, Arkansas, Nevada, and West Virginia, according to a Center for Budget and Policy Priorities report.
In a clear sign that the bill is merely a vessel for lobbing more big money to folks at the tip-top, the “Better Care Reconciliation Act” as its dubbed, eliminates an Affordable Care Act (ACA) capital-gains tax retroactively.
That provision means that wealthy households with certain levels of investment income would be able to claw back capital gains taxes they’ve paid since the beginning of the year. It’s a sly move that would not incentivize the wealthy to invest more, which is how the GOP sells their tax cuts; it would simply put more money in their pockets.
Both the House and Senate versions call to eliminate the ACA’s Medicaid expansion, though the Senate bill calls to extend the phase-out period. However, the Senate bill includes even steeper cuts to Medicaid funds over the long term, putting at risk the low-income health-care program’s very existence.
The bill also turns the ACA’s coverage subsidies into tax credits and lowers the income threshold, making it harder for middle-income Americans to afford market rate coverage. Meanwhile, the coverage that they’re currently paying for would no longer include “essential health benefits,” such as mental-health treatment, certain types of hospital stays, and maternity care. The Senate plan also retains the House’s provision that reinstates lifetime limits on health care, a devastating prospect for people living with chronic diseases. On top of that, the Senate version defunds Planned Parenthood and puts restrictions on subsidies for insurance plans that cover abortions.
In short, the Senate wants to make it harder for low-income people and people with disabilities to access quality health care while also blocking millions more Americans from gaining expanded Medicaid coverage. They want to make it harder for average Americans to afford health care coverage; and if they can afford it, those plans are likely to be much skimpier and more expensive.
But at least by plundering the ACA, the Senate will have found the money to pay for steep tax rate cuts for corporations and the wealthy that they expect to propose in the weeks ahead.
Tax Cuts for the rich. Deregulation for the powerful. Wage suppression for everyone else. These are the tenets of trickle-down economics, the conservatives’ age-old strategy for advantaging the interests of the rich and powerful over those of the middle class and poor. The articles in Trickle-Downers are devoted, first, to exposing and refuting these lies, but equally, to reminding Americans that these claims aren’t made because they are true. Rather, they are made because they are the most effective way elites have found to bully, confuse and intimidate middle- and working-class voters. Trickle-down claims are not real economics. They are negotiating strategies. Here at the Prospect, we hope to help you win that negotiation.