U.S. Rep. Darin LaHood is voicing full-throated support for the massive Republican tax and spending bill, despite past opposition to Medicaid cuts and concern over the mounting federal budget deficit.
Critics of the measure say it will grow the federal budget deficit by trillions of dollars. LaHood, a Republican, has based support for things like cuts to the Agency for International Development, scientific research and ag research on the idea the budget deficit is unsustainable, yet most estimates project the GOP megabill substantially worsens the deficit.
LaHood said he rejects the economic assumptions that created the estimate.
"The Congressional Budget Office that scores this bill, they predict there will be 1.8% growth over the next 10 years. I don't buy into that figure. We've never had that low of growth. We've always had somewhere between 2-3% growth," LaHood said Wednesday on WGLT's Sound Ideas.
The 2017 tax cuts passed during Donald Trump's first term did not pay for itself in economic and government revenue growth, according to the Brookings Institute.
Many of the provisions in the new bill make the first cuts permanent. Some fiscal conservatives have said there are not enough new pro-growth provisions in the big bill to pay for the tax cuts. LaHood disagreed.
“I think you got to fix the economy, and I think this bill goes a long way of doing that, in particularly if you look at the tax cuts that were made permanent in this bill, and how they affect the agriculture community and the business community, things like making 100% bonus depreciation permanent, The research and development tax credit, making that permanent, the 199A, making that permanent. There are the estate tax provisions that affect many of our family farmers, making those permanent. Those are, I think, an example of getting the economy back on track,” said LaHood.
Other provisions, he said, will lower the cost of energy.
He also responded to the critique that the 2017 measure and this year’s extension of those changes disproportionately benefit high earners and big business.
“If you go back to the 2017 Tax Cuts and Jobs Act, which I supported, I would argue that created the best economy in my lifetime ... over that period of time when it passed to right before COVID, we moved 6.5 million people out of poverty across the country. So, every economic level benefited,” said LaHood.
“We help a lot of working families. No tax on tips, no tax on overtime, no tax on car loans, no tax on Social Security for elderly folks,” said LaHood.
Even if LaHood’s positive economic assumptions prove true, the amount of the cuts ($5 trillion over 10 years) will not balance the budget.
“That's a record amount of cuts. Now, do I think we could have went further on that? Of course, but this, in the end, was a compromise,” said LaHood, who represents parts of Bloomington-Normal and Greater Peoria.
Medicaid
LaHood has said in the past he does not support deep cuts to Medicaid, yet he voted for the cuts included in this year’s bill — close to $1 trillion over a decade. He said it is arguable whether work requirements are cuts.
"We have 7 million unfilled jobs in the country. And so, we are transitioning people that are able-bodied adults off Medicaid into a job. That is a cut. We're cutting back on Medicaid. And that affects 4.8 million able-bodied adults," said LaHood.
64% of non-senior, non-disability people on Medicaid already have jobs, according to the Center on Budget and Policy Priorities. Opponents of the cuts have said the bill will make it too difficult for people to certify eligibility and then recertify when they change jobs, and that will prevent people who are eligible from receiving what they need.
“We're $37 trillion in debt. To think that we're not ever going to touch Medicaid, which has expanded by 50% since COVID, these are taxpayers that are on the hook for Medicaid. We got to figure out, how do we reduce our Medicaid population?” said LaHood. “This is a social safety net that the people that need it the most need to have, and that remains intact.”
He argued the bill used a "scalpel not a sledgehammer or a chainsaw approach" to Medicaid.
“If you are a young mother on Medicaid with dependents, your coverage is not going to be affected. If you have a child with developmentally disabilities, an adult or a young child, you're going to keep your Medicaid. If you're a senior citizen on a fixed income, you keep your money,” said LaHood.
The measure, though, ends non-emergency medical transport payments for Medicaid recipients who need to get to health appointments. It reduces payments for home health aides under Medicare.
LaHood praised ending Medicaid for undocumented immigrants. Critics of the bill have noted that will not save any federal dollars since state governments fund that section of the program and a federal penalty applies for states that continue to offer it.
Health advocates have said the cuts to Medicaid will not reduce health costs. They'll shift them to emergency rooms and uncompensated care for hospitals, and that the overall cost of insurance will rise as health providers raise their prices to make up for that uncompensated care, increasing the overall cost of health care.
“Again, we can't keep funding Medicaid at the rates that we're doing now, because we're $37 trillion in debt,” said LaHood.
He said that imbalance should be addressed by trying to improve the economy, curtailing inflation and interest rates, and helping small and medium-sized businesses.
“We're only going to grow the economy with the private sector flourishing, not government spending,” said LaHood.
SNAP food assistance
The GOP megabill substantially reduces food assistance [SNAP], and Medicaid work requirements are expected to remove other people from SNAP eligibility. The changes also for the first time require states to pay as part of the cost of nutrition assistance — up to 25%. States that have tight budgets may reduce participation or opt out, further reducing the number of SNAP recipients.
Many anti-hunger advocates say if fewer families qualify for SNAP, that'll have ripple effects for kids who previously automatically qualified for free school meals or summer food programs. With the federal government reducing efforts to deal with hunger others would have to pick up that slack.
“Since COVID, we've expanded SNAP in our nutrition programs by up to 50% more government spending. Now that the economy is getting back on track and we're out of the COVID window … we’ve got to put in place provisions that cut back on our spending, and SNAP is one of those,” said LaHood.
He again cited work requirements and jobs as the way forward.
“Our social safety net, it should be a trampoline and not a hammock," he said.
Agriculture
The bill increases agriculture support by nearly $57 billion over the next decade, most of that tied to enhancements in the farm safety net. It's not a full-on farm bill.
LaHood said he does not think separating SNAP and safety net and trade-promotion funding from the farm bill will complicate passage of a new farm bill by reducing the incentive to compromise.
“I hope not. If you look at the reason why we haven't been able to pass a farm bill over the last two years, it's because we haven't been able to come to agreement on the size of nutrition programs, SNAP,” said LaHood. “I take a more optimistic view that this should give us the opportunity now to pass a farm bill.”
Working-class support for GOP
In May, Republican Sen. Josh Hawley of Missouri said the megabill could represent the end of any chance of the Republican Party becoming a working-class party. He said GOP voters support social insurance programs and depend on them, and that the economy is increasingly unfriendly to working people and their families.
Hawley ended up voting for the bill, but the concern remains.
LaHood downplayed its importance, saying provisions that temporarily end taxes on tips, overtime, and car loans are working-class tax cuts.
“These go to barbers and hairdressers and waitresses and waiters and people that work manufacturing jobs and blue-collar jobs. They're the ones that are going to benefit from this,” said LaHood. “I should also mention helping seniors that are on Social Security and a fixed income that won't be taxed on that those are specific provisions that address working families in this country.”
Housing
LaHood also highlighted his sponsorship of an approved provision that addresses the housing shortage: an affordable housing tax credit first used in the Reagan administration and revived now. It gives a tax credit of 13-14% to developers of low income and affordable housing. Before inclusion in the bill, it was a separate provision that had attracted bipartisan support.
Construction costs, though, have risen sharply in the last few years, making affordable housing projects difficult to finance and build at an acceptable profit margin.
LaHood said the credit is a meaningful factor in lowering barriers to new construction.
“Absolutely it will allow them to build affordable housing,” said LaHood. “We anticipate this will create 12,000-15,000 new housing units in Illinois in the next two years. McLean County is really a poster child for that. Rivian, for instance, roughly 8,000 workers there. Some people have to drive 90 miles to get to Rivian because we don't have housing here,” said LaHood.
He said that estimate of new affordable construction comes from the Illinois Housing Development Authority.
The measure requires developers to maintain affordable rent rates for workforce housing for 15 years.
U.S. Senate
LaHood is considering a run for the U.S. Senate seat held by the retiring Democrat Dick Durbin. He said he will decide whether to enter the race by the August congressional break.
