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The House of Representatives just passed the long-promised COVID relief bill, but it’s got some little surprises that will come as a shock to Biden voters.
The giant $1.9 trillion COVID relief bill that Republicans slammed because only about 9% was actually related to COVID-19 has been passed. (Oh, and don’t worry, the “fact-checkers” in the corporate Media rated that 9% as false because they added in funding going to schools to “prevent and manage outbreaks.” Factoring in the assistance to schools, they say that the actual percentage is closer to 21%, which is sooo much better, right?)
Giving the “fact-checkers” the benefit of the doubt — which they really don’t deserve — passing a “COVID” bill with 79% of the funding having zero relation to COVID is bad enough, but the “unexpected consequences” may well be a “hold my beer” moment for Democrats.
CNBC reports that the massive COVID bill could trigger a $36 billion cut to Medicare and cause higher fees with student loans. The new funding cuts would take effect in 2022 and last for several years.
From the CNBC article:
The cuts may automatically increase fees on federal student loans, for example, according to the Office of Management and Budget.
Some doctors and hospitals may opt not to accept Medicare due to lower cost reimbursements from the federal government, according to budget experts. Providers may also try to pass extra costs to consumers.
The PAYGO (Pay As You Go) Budget rule requires that tax cuts and mandatory spending increases must be “offset” by tax hikes and cuts to mandatory spending in order to prevent massive deficits. This rule may further divide Democrats who have a very vocal and intransigent far-left wing that is pushing for Medicare-For-All and free college tuition.
The pandemic aid measure would raise the federal deficit by $1.9 trillion over a decade, according to a Congressional Budget Office memo issued Thursday by director Phillip Swagel.
As a result, Medicare funding would be trimmed by 4%, or $36 billion, starting next year, said Swagel. His estimates were in response to a question from House Minority Leader Kevin McCarthy, R-Calif.
The pandemic aid measure would raise the federal deficit by $1.9 trillion over a decade, according to a Congressional Budget Office memo issued Thursday by director Phillip Swagel.
As a result, Medicare funding would be trimmed by 4%, or $36 billion, starting next year, said Swagel. His estimates were in response to a question from House Minority Leader Kevin McCarthy, R-Calif.
The PAYGO rule to prevent ballooning deficits works this way — the budget deficit is tallied at the end of the year and averaged out in a five- or ten-year window, then the averages are canceled out by pulling back in other areas of the budget each year. The goal is to have the deficit impact of the budget be $0.
The cuts to Medicare are capped at 4%, but other programs don’t have limits. The only programs exempt from cuts are Social Security, Medicare, and Food Stamps.
This means, however, that sometimes the spending priorities of both sides can get slashed.
…PAYGO rules triggered an automatic 5.7% increase in loan fees this year, according to the Office of Management and Budget.
That helped counterbalance $1.2 trillion in spending from the American Taxpayer Relief Act of 2012. The fee increase corresponded with a 5.7% across-the-board reduction in nondefense mandatory programs.
Students may also find it more difficult to get loans if certain Department of Education programs receive less funding, Anderson said.
“There would be a lot less money to provide loan guarantees,” he said. “So a whole pile of students wouldn’t be able to get loans.”
Source: CNBC
Experts say that it’s unlikely that the impact of the bill will remain, however. The automatic cuts can be waived by lawmakers, but it would require Republican support, which is likely, since the cuts would also include GOP spending priorities like farm subsidies, defense, and border control.
It’s a great reminder that money doesn’t just appear because the government wills it — you have to be able to pay for the things that you’re promising, and if you prioritize spending in one area, you have to cut funding in another. It’s a balance, and yet the Democrats hardly ever mention that.
Besides, if they do decide to waive the cuts, where the heck is the money going to come from?
[EDITOR’S NOTE: An earlier version of this article stated that “Congress just passed the long-promised COVID relief bill…” which is incorrect. It was passed in the House of Representatives but not in the Senate. The author regrets the error.]
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