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May 9, 2018

Trump wants to take back $7B in unused CHIP funds

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    President Trump on Tuesday sent to Congress a proposal to eliminate $15.4 billion in unused federal funding, including $7 billion in unused CHIP funds.

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    Proposal details

    The proposal would use the so-called rescissions process to cut $15.4 billion in federal funding that was allocated in previous fiscal years (FYs), but was not spent. According to the Associated Press, rescissions used to occur regularly in Congress, but the process has not been used since former President Bill Clinton's administration. Trump's request marks the largest one-time rescission package ever requested by a president, Modern Healthcare reports.

    The proposal calls for Congress to eliminate $7 billion in CHIP unspent funding that was appropriated in previous FYs, including more than $5 billion in unspent funds from FY 2017. The remaining $2 billion would be cut from a contingency fund that states can use if they enroll more CHIP beneficiaries than they had expected, senior Trump administration officials said Monday. A White House analysis concluded that no states are likely to need the extra funds, Modern Healthcare reports.

    The proposal also would eliminate $800 million in unspent funds for CMS' Center for Medicare and Medicaid Innovation (CMMI). Administration officials said the cut would not affect CMMI because it will not be able to spend the funds before its next $10 billion appropriation takes effect.

    In addition, the proposal would eliminate $252 million in unspent funds that were allocated in FY 2015 to respond to the Ebola outbreak that occurred from 2014 to 2016.

    According to the AP, the proposal would not "have much practical impact" on the programs for which unused funds would be eliminated. However, the proposal would "take away leftover funding that could be used to pay for spending elsewhere in the budget," the AP reports.

    Next steps

    According to Modern Healthcare, House Republican aides and administration staff have said GOP House lawmakers support the proposal. Under the Constitution, legislation to enact the cuts would have to originate in the House. The House Appropriations Committee is expected to draft the legislation and attempt to advance it to the House floor for consideration.

    It is unclear whether the proposal would have enough support to pass through the Senate, Modern Healthcare reports. A spokesperson for Senate Majority Leader Mitch McConnell (R-Ky.) said the senator likely will not comment on the proposal until he has "received it and reviewed it."

    According to Modern Healthcare, Congress can act on the proposal within 45 days of receiving it. During that time, the funds targeted in the proposal will be frozen. Lawmakers are permitted to approve more or less than the amount requested in the proposal. If they do not act within 45 days, the rescissions will not take effect, and the funds are unfrozen. According to the Wall Street Journal, Congress can use an expedited process to consider the proposal, which would allow the House and Senate to advance the measure by a simple majority vote.

    The White House plans to send Congress several other rescission packages, including one targeting the $1.3 trillion spending bill Congress passed and Trump signed into law in March, Modern Healthcare reports.


    White House Office of Management and Budget Director Mick Mulvaney called the proposal "an obvious step toward reducing unnecessary spending and protecting the American taxpayer."

    But Democratic lawmakers criticized the proposal, saying the CHIP contingency funds should be protected.

    Senate Minority Leader Chuck Schumer (D-N.Y.) said, "Trump and Republicans in Congress are looking to tear apart the bipartisan [CHIP], hurting middle-class families and low-income children, to appease the most conservative special interests and feel better about blowing up the deficit to give the wealthiest few and biggest corporations huge tax breaks."

    Sen. Ron Wyden (D-Ore.), the ranking member on the Senate Finance Committee, lambasted the White House for making CHIP "the first target in a political charade."

    However, Sen. Patrick Leahy (D-Vt.), the ranking member on the Senate Appropriations Committee, offered a more measured response, saying he understood that the proposal targeted unspent funds. "I've got to see it, then we will sit down to discuss," he said (Peterson, Wall Street Journal, 5/7; AP/ABC News, 5/8; Luthi, Modern Healthcare, 5/7; Cowan/Mason, Reuters, 5/7; Vought, White House op-ed, 5/8).

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