Trump tries to fix deficit caused by tax cuts by cutting billions from children’s health care

This is Trump's response to a deficit he exploded with massive corporate tax cuts.

US President Donald Trump waves as he enters the White House after arriving on the South Lawn by Marine One, on May 4, 2018 in Washington, DC. (Photo by Michael Reynolds-Pool/Getty Images)
US President Donald Trump waves as he enters the White House after arriving on the South Lawn by Marine One, on May 4, 2018 in Washington, DC. (Photo by Michael Reynolds-Pool/Getty Images)

The Trump administration is set to ask Congress to claw back $15 billion in federal spending. If passed, it would be the largest “rescission” package passed in American history.

Nearly half of the cuts — roughly $7 billion — would come from the Children’s Health Insurance Program (CHIP), a program many low-income families depend on for coverage. The White House claims the cuts will not have an impact on the program, which currently has an enrollment of about 9 million.

The administration, however, doesn’t appear to believe their own talking point. Notably absent from White House Press Secretary Sarah Huckabee Sanders’ explainer on the rescission package is any mention of the CHIP cuts.

Once the White House requests the cuts, Congress will have 45 days to act before it expires. During that time, the funding is automatically frozen. The package only requires a simple majority to pass.


Office of Management and Budget Director Mick Mulvaney appeared on Fox & Friends Tuesday morning to offer his full-throated defense of the cuts, including those targeting children’s health.

“The CHIP program is not allowed to spend that money, it would be illegal. I am not making that up,” Mulvaney said. “Spending is not authorized. It would be illegal for them to write that check.”

While Mulvaney is correct that the authorization has expired, the money previously has been repurposed, on a bipartisan basis, to programs that benefit children.

According to Georgetown University’s Center for Children and Families, the rescission package cuts funds for two CHIP accounts: $5.1 billion authorized in 2015 to bolster reimbursements to states for children’s health care costs, and another $1.9 billion from a contingency fund created in order to prevent states from running out of money.

“Congress is aware of this, and over the last several years, they have come to bipartisan agreements about how to reallocate this budget authority to allow for investments in other programs that serve children,” Georgetown CCF writes. “Rescinding these funds is unlikely to impact states’ CHIP programs immediately, but it violates that bipartisan agreement in Congress to manage these funds in ways that continue to help low income children and families.”


The Trump administration sees the rescission package as a way to show they are tough on government spending by targeting some unspent funds that haven’t been spent, like $800 million from the Center for Medicare & Medicaid Innovation program, $107 million from funding for Hurricane Sandy relief, money that was allocated for the Ebola outbreak, and a number of grants.

The package is also a way to quell conservative fears of a ballooning deficit, which has only been exacerbated by the $1.3 trillion dollar spending bill President Donald Trump signed last month.

Some experts have called the package a “PR stunt.” That’s because the $15 billion in rescission cuts only represent 0.9 percent of the $1.6 trillion dollars in spending Trump has approved since November alone. The rescissions package doesn’t even address the $1.3 trillion dollar omnibus spending bill Trump was so reluctant to sign. Instead, funding for domestic programs appropriated years ago will be targeted. Because of this, the deficit likely won’t be impacted.

“It’s not a large spending cut, and it’s not going to offset the damage done earlier this year,” Marc Goldwein, senior policy director for the Committee for a Responsible Federal Budget, told the Washington Post.

The GOP tax bill has also played a significant role in getting the deficit to its current state. It is estimated to have added at least $1.3 trillion to the deficit over 10 years and largely benefits major corporations.

Senate minority leader Chuck Schumer addressed the tax bill on Twitter writing, “Let’s be honest about this: @POTUS & the GOP are looking to tear apart CHIP, hurting middle-class families & low-income children, to appease the most conservative special interests & feel better about blowing up the deficit to give the wealthy & biggest corps huge tax break.”

Shortly after the GOP tax bill was passed in December, many Democrats and experts on the economy warned that Republicans would blow up the deficit with corporate tax cuts, later using it as an excuse to slash social safety net programs.