What the debt bill would mean for health programs
Illustration: Sarah Grillo/Axios
The House-passed debt limit bill would cut and cap federal spending — and that could have big consequences for health care, from medical research to opioid treatment.
Why it matters: The debt limit bill isn't going to become law. But House Republicans are likely to insist on at least some spending concessions from President Biden and the Democrats now that they've passed a bill — so it's worth looking at the impact of what they proposed.
- Many HHS programs depend on discretionary spending, and the growth caps passed by the House would force some tough service reductions.
Between the lines: There's a lot we don't know yet because House Republicans haven't spelled out specifics beyond the big-picture goal: return discretionary spending to fiscal 2022 levels and cap annual growth at 1% for the next decade.
- So the Biden administration has tried to fill the vacuum with its own estimates — which of course are intended to raise alarms about worst-case scenarios.
Zoom in: Capping federal spending at fiscal 2022 levels for next year would mean the NIH would give 5,000 fewer grants, HHS Secretary Xavier Becerra wrote in a March letter to Appropriations Committee ranking member Rosa DeLauro.
- Indian Health Service outpatient admissions could decrease by nearly 1.6 million, and more than 29,000 people would lose spots in opioid use disorder treatment, among other cuts, Becerra added.
- HHS subagencies like the CDC, NIH and HRSA that rely heavily on discretionary funds would bear the brunt of the cuts.
- Medicare and Medicaid are primarily funded through mandatory spending, which wouldn’t be subject to caps.
The other side: Maya MacGuineas, president of the Committee for a Responsible Federal Budget, called the cuts “reasonable.”
- “Unfettered appropriations have grown 37 percent since 2017, outpacing both inflation and economic growth,” she said in a statement.
- “Cutting spending back to the 2022 level is aggressive but reasonable, so long as lawmakers consider every part of the defense and nondefense discretionary budget for savings.”
Where it stands: But Republicans are generally loath to cut defense spending, which has led the White House to project that a 22% cut would be needed to the rest of the budget if defense is shielded.
- “We don't know how these cuts would be allocated, but it would be hard to expect that an agency like HHS would not take a substantial share,” said David Reich, senior fellow at the Center on Budget and Policy Priorities and a former Democratic staffer for the House Appropriations Committee.
- When it's time to write individual appropriations bills, Republicans will likely deal with the Labor-HHS bill last and "in a way that that bill is very short on funding," said James Dyer, a senior adviser at Baker Donelson and a former GOP staff director for the House Appropriations Committee.
- "Traditionally, House Republicans trot Labor-H out knowing it doesn't have enough money, but believing that at the end of the exercise, the Senate will put more money back into Labor-H and be able to balance the books," Dyer told Axios.
Reality check: Even though these specific cuts won't become law, it's possible at least some cuts make it across the finish line if Biden can't sustain his position that he won't negotiate over the debt limit.
- “If these or some other caps are enacted into law, cuts are going to come somewhere. HHS is a priority but so are a lot of other agencies,” Reich said.
What they’re saying: Patient groups have raised alarm about potential cuts to medical research.
- “We will lose progress, risk losing talented scientific expertise and risk losing U.S. leadership in the cancer research space, if grant funding is curtailed,” the president of the American Cancer Society's Cancer Action Network, Lisa Lacasse, said in a news release.
Flashback: Congress has capped federal spending before. In 2011, for example, Congress limited discretionary spending as part of a deal to raise the debt limit.
- Lawmakers gradually increased funding above the capped levels over the next several years, acknowledging that the spending limits couldn’t meet national needs.
The big picture: One advantage for Republicans in passing the debt bill this week is that they did not yet need to spell out exactly how the cuts would take effect.
- Scott Lilly, a former Democratic House Appropriations staff director who's now at the University of Texas, said in his experience “members wanted to take credit for cuts in the aggregate that they would never think of voting [for] if they were reduced to specifics.”
