President Trump unveiled his $4.1 trillion federal budget this week for fiscal year (FY) 2018, and it proposes significant cuts to Medicaid and the National Institutes of Health (NIH). The document, “A New Foundation for American Greatness,” calls for an increase of 4.6 percent in defense spending ($25.4 billion more a year); a 6.8 percent increase in funding for the Department of Homeland Security, including $2.6 billion in new border security funding to help pay for a border wall; and a 5.8 percent increase for the Department of Veterans Affairs.
According to American Health Line, to offset these spending increases, the proposed budget would reduce federal Medicaid spending by $610 billion over 10 years, on top of the $839 billion in Medicaid spending reductions called for under the House-approved American Health Care Act (AHCA). Those cuts would amount to a 47-percent total reduction in federal Medicaid spending over a decade. The proposal also calls for changing Medicaid into a block grant program or implementing per capita caps on federal Medicaid spending, and it calls for moving all Medicaid beneficiaries to the new system, a shift from the AHCA’s approach, which would prevent states from moving the elderly or individuals with disabilities into the new system.
The administration proposal also reduces funding for NIH by $5.8 billion in FY 2018, which would result in an estimated 1,946 fewer grants. The proposed budget includes a $575 million reduction in funding for the National Heart, Lung, and Blood Institute (NHLBI), which houses the National Center on Sleep Disorders Research (NCSDR). In addition, it would eliminate the Fogarty International Center and provide $272 million for a new National Institute for Research on Safety and Quality, which would replace the Agency for Healthcare Research and Quality. Other cuts to NIH would include: The National Cancer Institute by $1 billion; the National Institute of Allergy and Infectious Diseases by $840 million; and the National Institute of Diabetes and Digestive and Kidney Diseases by $355 million.
It is important to note that the defense increases and spending cuts in the President’s budget proposal have a long road to travel to become a reality. The main purpose of a budget request is to formally lay out the administration’s stance on fiscal policy. It details specific policy changes the administration wants, how much those changes will affect spending and tax revenue over the next 10 years, and how individual agencies will be affected along the way.
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