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Out-of-control government spending is the most pressing issue of our day. The Coalition to Reduce Spending is dedicated to advocating for reducing federal spending and balancing the budget. Continuing to live beyond our means will only jeopardize our country's future prosperity and security.
News

Average Health Insurance Premiums Doubled Since 2013

The Department of Health and Human Services released a report today that shows premiums have doubled for individual health insurance plans since 2013.

The study specifically looked at the increase in cost from 2013, and suggests that the rise in premiums can be linked to Affordable Care Act regulations and mandates, which were to be fully implemented by 2013. Since then, all 39 states using the Healthcare.gov exchange saw an increase in premiums.

HHS National Spokesperson, Alleigh Marré, stated that Americans are now paying, “$3,000 more for health insurance per year,” and that “The status quo is unsustainable.”

Average monthly premiums increased from $232 to $476 over this time frame. This cost eats into an extra 10% of the monthly budget for a family on the poverty line (5 person household: $24,600 annually), and that 10% only represents the increase over the past 4 years in healthcare costs.

This report shows clearly that the status quo in healthcare is statistically leading to higher costs for average Americans across the country and is not sustainable. Concerned patients should keep on eye on their premiums in the years to come and push for better solutions for everyone.

 

Trump Administration Releases Budget Proposal with $3.6 Trillion in Cuts

On Tuesday, President Trump released his 62-page budget proposal. The document, titled “A new Foundation for American Greatness,” projects that debt would be cut to $18.6 trillion over the decade — largely based on assuming 3% economic growth — but also on $3.6 trillion in cuts to the federal government over the next decade.

Of those cuts, $1.5 trillion would come from non-defense discretionary programs, while $1.4 trillion would come from cuts to Medicaid and other health-related programs. There is no funding for Planned Parenthood included.

For fiscal year 2018, Trump has requested $4.094 trillion, including a $54 billion increase in Pentagon and national security spending for the next fiscal year. That spike does not set a trend for the subsequent nine years, although further increases could occur as the Pentagon determines specific funding priorities moving forward.

Mick Mulvaney, director of the Office of Management and Budget (OMB), said that the $1.5 trillion in cuts to non-defense discretionary spending would be a result of their “2-Penny Plan,” which would cut non-defense discretionary spending by 2% every year.

That is, all spending that Congress votes to approve on a yearly basis (except funding for the military) would be cut by 2%, every year, for the next ten years. Overall, the budget would leave the proportion of defense to non-defense discretionary spending higher than its been in 40 years.

In 2018, non-defense discretionary would be cut by $54 billion. Programs expected to face drastic cuts include the State Department, the EPA, and the Department of Agriculture. The budget does not specifically state where these savings would come from. Instead, Mulvaney implied that savings would arise from tightening program eligibility, adding work requirements, and shifting funding responsibilities to the states.

Cuts to Medicaid, which total $839 billion, reflect the proposal’s assumption that the American Health Care Act, which narrowly passed the House earlier this month, will eventually become law.

A significant amount of those cuts,  $192 billion over the 10 year window, would come from  the Supplemental Nutrition Assistance Program (SNAP). SNAP had 44 million beneficiaries in 2016. This proposal would include language requiring States to pick up a portion of the program’s costs.

Mulvaney said that the budget, “is focused on protecting taxpayer money and cutting spending on programs that are ineffective or encourage people not to work.” These reforms could further shrink a program whose enrollment has fallen in recent years.

The proposal projects balance despite not touching Social Security or Medicare spending. Mulvaney reiterated President Trump’s campaign promise in the administration’s “skinny budget” reveal back in March, but said he was “surprised” they could find a way to balance without entitlement reform.

Meanwhile, $19 billion would be included for a new program championed by Ivanka Trump, which would provide 6 weeks of paid leave for new parents, and another $2.6 billion has been reserved for border security improvements, and $1.6 billion to begin work on a wall along the Mexican border.

On face value, this budget seems like mostly good news, but fiscal conservatives are right to be skeptical about some of its projections. The proposal relies on some questionable assumptions and does not include the full range of fiscal reform needed to truly reach a sustainable future. Overall, we should be encouraged to see a wide range of cuts — but push for the many promised cuts to become reality as legislators move forward.

The High Cost of Outdated Crime Policy

Note: This piece was originally posted at the Institute to Reduce Spending.

On Friday, Attorney General Jeff Sessions announced that he had sent a memo to all federal prosecutors on changing the directives of charging and sentencing policy. Sessions instructed his employees to “charge and pursue the most serious, readily provable offense” and that they must also “disclose to the sentencing court all facts that impact the sentencing guidelines or mandatory minimum sentences.” This is a reversal of the previous administration’s push to moderate the criminal justice system, especially on drug policy.

 

This policy shift comes at a time when more than a third of drug offenders in federal prison had either minimal criminal history or none at all—the lowest out of all criminal history categories. Drug trafficking offenses account for more than 2/3 of the charges that are subject to mandatory minimum sentences.

 

Representative Justin Amash (R-MI) tweeted that the new policy is unjust, ineffective and costly. In the other chamber, Senator Rand Paul (R-KY) also criticized Sessions in a press release.

 

Beyond political questions, fiscal conservatives of all stripes are right to be paying close attention to new policies on criminal justice. $51 billion is spent on the war on drugs every year, which added up to 1.5 million arrests in 2015, of which over 80% were for sole possession of drugs, rather than distribution. In other words, the taxpayers pay a high price for policies that largely target nonviolent criminals.

 

There will always be a range of opinions on criminal justice policy in the United States, but costs will continue to mount if the status quo is maintained. That’s why leaders across the aisle have supported smart reforms in recent years, which have the potential to modernize the system and save serious money – an agenda that both Democrats and Republicans can get behind.

CRS signs AFFIRM Act Coalition Letter

Today, the Coalition to Reduce Spending was proud to join a nonpartisan group of organizations urging Congress to reform one of the most wasteful aspects of the Farm Bill program: Crop insurance.

Introduced by Representatives Ron Kind (D-WI) and Jim Sensenbrenner (R-WI) in the House, and Senators Jeff Flake (R-AZ) and Jeanne Shaheen (D-NH) in the Senate, the AFFIRM Act places strong, sensible taxpayer protections on our nation’s unaccountable and expensive federal crop insurance program.

With the demise of direct payments, crop insurance is now the largest, most important support for farms. Unfortunately, the program’s expansion puts the taxpayer at risk and distorts agriculture markets. Currently, the federal government subsidizes crop insurance premiums by 62% on average, regardless of whether the farm is a small, family operation or a multi-million dollar agribusiness. Premium support payments are unlimited, resulting in a handful of farms receiving over $1 million in federal support while 80% of farms receive $5,000 or less. Subsidizing farms regardless of size or income skews the playing field toward large agri-business, driving up land costs and encouraging those with the means to over-insure and lock in high revenues.

Read the full letter here.

Jonathan Bydlak in Reason: Don’t forget spending cuts

Making his debut this week in Reason, CRS founder and president Jonathan Bydlak points out that Congress seems on the verge of making a serious mistake as they push for changes to the tax code — forgetting the reason we’re taxed so much to begin with.

The one-page outline for President Trump’s long-awaited plan… reads like a wish list for conservatives: Corporate tax rates slashed, the top income tax bracket lowered, an Obamacare tax on investments repealed. For all the talk of how the rich stand to gain, the plan doubles the standard income tax deduction helping a majority of Trump’s working class base.

But there’s a problem with this plan, a problem that has long plagued reformers in the two controlling parties: The failure to put a stop to the spending that necessitates higher taxes.

Read the rest, including some commonsense suggestions for cuts, here.

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