Potential Medicare cuts loom due to Trump's tax legislation, according to the Congressional Budget Office's forecast.
The Congressional Budget Office (CBO) has issued a warning that President Trump's tax and spending law could lead to automatic Medicare cuts totaling up to $491 billion between 2027 and 2034 if Congress does not take action 13. The law, which is projected to increase the federal deficit by approximately $3.4 trillion over the next decade, triggers these cuts due to a 2010 law that mandates across-the-board reductions to many federal programs when legislation increases the federal deficit.
While the law does not directly cut Medicare funding, the deficit it creates sets off these automatic cuts. Over the years, previous Congresses have intervened to prevent such cuts, but bipartisan cooperation would be necessary again to do so.
The CBO's analysis highlights several potential impacts:
- About 100,000 people who have paid Social Security taxes for 10 or more years could become newly ineligible for Medicare under the law’s changes.
- Changes that halt streamlined Medicaid and Medicare Savings Program enrollment would cause about 400,000 people to become uninsured.
- Hospitals, especially those in rural areas, which are already facing Medicaid funding cuts, could be further strained by cuts to Medicare funding 52.
Republicans who supported the law had pledged not to cut Medicare, but the indirect effect of increasing the federal deficit complicates this promise. Democrats have criticized the law for pushing these potential cuts onto Medicare, Medicaid, and other social safety net programs 2.
However, Republicans have been critical of the CBO's analysis of the tax and spending law. In contrast, the nonpartisan Congressional Budget Office reported that the law could trigger cuts to Medicare 6.
It's important to note that the tax cuts in the Republican law are intended to spur economic growth. Furthermore, the law includes $50 billion in funding for rural hospitals 7.
In the past, Congress has acted to mitigate cuts to Medicare and other programs 8. As the deadline for action approaches, it remains to be seen whether Congress will take steps to prevent these potential Medicare cuts.
- The CBO's warning about President Trump's tax and spending law reveals a possible $491 billion worth of Medicare cuts between 2027 and 2034 if no action is taken by Congress 13.
- Democrats have criticized the law for indirectly pushing potential Medicare cuts onto other social safety net programs 2.
- Hospitals, particularly those in rural areas, which are already faced with Medicaid funding cuts, could be further strained by cuts to Medicare funding 52.
- Republicans, despite pledging not to cut Medicare, could face challenges in upholding this promise due to the indirect effect of increasing the federal deficit 6.
