Health Law Daily Trump’s proposed rescission of CHIP funds draws ire from Democrats
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Wednesday, May 9, 2018

Trump’s proposed rescission of CHIP funds draws ire from Democrats

By Sheila Lynch-Afryl, J.D., M.A.

President Donald Trump proposed to rescind $5.1 billion in funding to the Children’s Health Insurance Program (CHIP) as part of a package attempting to cut $15.4 billion total in federal spending. The package would also rescind $1.9 billion in funding for fiscal year (FY) 2018 for the Children's Health Insurance Program Contingency Fund, which provides payments to states that have higher than expected enrollment. The rescissions were proposed pursuant to Sec. 1012 of the Congressional Budget and Impoundment Control Act of 1974 (P.L. 93-344).

The rescission package states that the $5.1 billion was made available by the Medicare Access and CHIP Reauthorization Act of 2015 (P.L. 114-10) to supplement the 2017 CHIP appropriation for states; this includes $3.1 billion in unobligated balances available on October 1, 2017, and $2 billion in recoveries as of May 7, 2018. Authority to obligate these funds to states expired on September 30, 2017, and "the remaining funding is no longer needed." The rescission would have no effect on outlays, according to the package, and enacting the rescission would not have a programmatic impact. In addition, there was $2.4 billion available to the contingency fund as of March 23, 2018, and CMS does not currently anticipate that any states will require a payment from the fund during FY 2018.

In a statement, Senate Minority Leader Chuck Schumer (D-N.Y.) said, "President Trump and Republicans in Congress are looking to tear apart the bipartisan Children’s Health Insurance Program (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." Senate Republicans, however, seem to be warming to the rescissions package.

Trump also proposed to rescind $800 million that was made available for FYs 2011 to 2019 to fund the Center for Medicare and Medicaid Innovation, created pursuant to Sec. 3021 of the Patient Protection and Affordable Care Act (P.L. 111-148), because the "funds are in excess of amounts needed to carry out the Innovation Center's planned activities in FYs 2018 and 2019, and the Innovation Center will receive a new mandatory appropriation in FY 2020."

In announcing the package, Trump noted that the national debt is more than $21 trillion and the deficit could reach $1 trillion next year. He urged Congress to support the rescissions: "Unless the federal government as a whole commits to cutting spending and letting the economy grow, bloated deficits and outrageous levels of debt will haunt future generations." Under the Congressional Budget Act, if Congress does not act within 45 days of the proposal, the proposal expires.

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