Trump budget plan adds costs, cuts for Michigan

Washington — States like Michigan could see major changes in programs such as Medicaid, welfare benefits and farm subsidies under President Donald Trump’s budget to be unveiled Tuesday.

The White House’s budget plan adopts the Medicaid cuts approved by House Republicans in their health care overhaul bill this month — roughly $800 billion over 10 years — in addition to other reforms for the health program for low-income Americans.

The Medicaid program covers 2.4 million low-income Michigan residents, including more than 650,000 enrolled in an expanded eligibility program created under former Democratic President Barack Obama’s signature health care law. Michigan officials have said the proposed cuts would likely trigger the end of Michigan’s expansion program at the latest by fiscal year 2020, which begins Oct. 1, 2019.

Gov. Rick Snyder’s administration has lobbied against ending the Medicaid expansion and argues that Michigan’s unique program could be a national model because it includes incentives for healthy behaviors and cost-sharing by recipients.

The health overhaul bill “does not ensure the resources necessary to make sure no one is left out and shifts significant new costs to states,” Snyder and Govs. John Kasich of Ohio, Brian Sandoval of Nevada and Asa Hutchinson of Arkansas wrote in a mid-March letter to congressional leaders.

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Trump’s budget proposal includes cutting $193 billion from food stamps over the next decade — a reduction of more than 25 percent — by tightening eligibility and adding more work requirements.

“We need folks to work,” Budget Director Mick Mulvaney told reporters at the White House. “If you’re on food stamps and able bodied, we need you to go to work. If you’re on disability insurance and you’re not supposed to be — you’re not truly disabled — we need you to go back to work.”

Nearly 737,000 households in Michigan were receiving food benefits through the Supplemental Nutrition Assistance Program, formerly known as food stamps, as of February. The benefits cost just over $2 billion last fiscal year, but the total doesn’t include other SNAP-related services such as nutrition education and employment training.

“We are no longer going to measure compassion by the number of programs or the number of people on those programs,” Mulvaney said. “We’re going to measure compassion and success by the number of people we help get off those programs and back in charge of their own lives.”

Mulvaney also proposes to phase in a cost-sharing program. States already pay about half of the administrative costs for SNAP, but the federal government wants them to take on more of the cost of the actual benefits for low-income individuals and families.

“We do this in a couple programs. We look to the states to help us,” Mulvaney said. “What we do is go to the states and say, ‘Look, we want you to have a little skin in the game and help us, because you know how to make the programs better.’ ”

The proposal comes as Snyder’s administration has warned that Michigan is already facing long-term budget pressures, including $2.1 billion in previously approved tax and fee cuts set to drain state coffers over the next three years.

Rep. Dan Kildee, a Flint Democrat, said Trump’s budget is “incredibly short-sighted and reckless.”

“With his budget, the president is essentially saying our way of life in Michigan doesn’t matter,” he said.

Mulvaney described the budget as putting the taxpayer first by eliminating programs that don’t work and reducing improper payments.

“The question we asked ourselves as we’re going line by line is, can I ask somebody — a family in Grand Rapids — to pay tax money to the government, so that I can do X?” he said.

“And if the answer is to help a vet who’s lost both limbs in an explosion in the Middle East, the answer is ‘yeah, I can do that.’ Without reservation. And my guess is they’d be happy to pay it.”

The answer changes if the program helps a fraction of those it means to and hasn’t been authorized by Congress for years, he added.

A budget table provided by the White House Monday also calls for reforming, rather than eliminating, the Essential Air Service, which subsidizes passenger flights to nine rural Michigan airports, among others around the country.

The administration proposes additional cuts to the federal crop insurance subsidy, which Michigan farmers have tapped starting in 2014 after frosts, drought or other weather-related events killed certain crops. The federal program pays a subsidy to reduce premiums charged to producers by insurers, and insures some of their losses.

Trump would invest $200 billion in an infrastructure plan that, with private partners investing, could leverage up to $1 trillion in construction projects, officials say. The Snyder administration has been lobbying the Trump administration to finance some of Michigan’s infrastructure priorities, including the construction of a new large navigation lock in Sault Ste. Marie.

It was unclear whether the Soo Locks modernization project would be affected by another administration proposal, which would reform financing for the inland waterways system as part of its initiative to reduce the deficit by more than $1 billion over 10 years. The waterways trust fund helps cover major rehabilitation costs and construction along the 12,000-mile system of inland waterways.

The Homeland Security budget calls for $1.6 billion for wall construction and $300 million for additional border patrol and immigration agents and staff. It would also hike immigration and customs user fees, and extend expiring fees at U.S. Customs & Border Protection agency.

The budget briefing did not go into detail about the proposed Environmental Protection Agency budget. There has been a bipartisan outcry from the Michigan delegation about the Trump budget outline in March that eliminated $300 million in annual funding for the Great Lakes Restoration Initiative, a cleanup program.

A new proposal would pay for six weeks of parental leave for newborns for both mothers and fathers, including adoptive parents.

mburke@detroitnews.com