CRFB.org

CRFB.org

President Trump’s FY 2018 “Skinny Budget” Proposal

1

CRFB.org

FY 2018 Defense Hikes Paid For With Non-Defense Cuts

2

CRFB.org

Non-Defense Reductions Would Affect Most Agencies

3

CRFB.org

Most of the Budget Remains Missing

4

CRFB.org

The American Health Care Act

5

CRFB.org

Budgetary Effects of the AHCA

Source: CRFB calculations based on CBO AHCA score.

Billions of Dollars

Net Cost ofCoverageProvisionsRepeal ACA Subsidies

-$673B

Repeal Mandate Penalties$210B

-$337B

Medicaid Savings-$880B

Repeal ACA Taxes$575B

Other/Interactions-$111B

Promote Coverage$542B

-$2,000

-$1,500

-$1,000

-$500

$0

$500

$1,000

$1,500

$2,000Savings Costs Total Deficit Impact

$1.33T

-$1.66T

6

CRFB.orgSource: CRFB calculations based on CBO AHCA score

Provision 2017-2026 Cost/Savings (-)Reduce Individual Mandate Penalty to $0 $171 billionReduce Employer Mandate Penalty to $0 $38 billionSubtotal, End Mandate Penalties $210 billion

Repeal ACA Premium and Cost-Sharing Subsidies in 2020 -$673 billionReduce ACA Medicaid Match to Base Medicaid Rate for “Expansion” Beneficiaries and Establish Per-Capita Caps -$880 billion

Other Reductions -$41 billionCoverage Interactions -$70 billionSubtotal, Reduce Spending and Tax Subsidies -$1.66 trillion

Establish Flat Age-Adjusted Health Care Tax Credits in 2020 $361 billionEstablish Patient and State Stability Fund $80 billionRepeal Disproportionate Share Hospital Payment Cuts (Medicare & Medicaid) $74 billion

Expand Health Savings Accounts $19 billionOther Costs $8 billionSubtotal, Increase Spending and Tax Subsidies $542 billion

Repeal ACA 3.8% Net Investment Income Tax (NIIT) $158 billionRepeal ACA Health Insurer Tax $145 billionRepeal ACA Medicare Hospital Insurance 0.9% Surtax $117 billionDelay ACA “Cadillac Tax” Start Date from 2020 to 2025 $49 billionRepeal Most Other ACA Tax Increases $106 billionSubtotal, Repeal ACA Taxes $575 billion

Total Deficit Impact (Conventional Scoring) -$337 billion

7

CRFB.org

Change in Coverage Under AHCA

8

-7M

-3M

-14M

-24M-30

-25

-20

-15

-10

-5

0

5

Employer Non-Group/Exchange Medicaid Insured

Millions of People in 2026

Source: CBO. Note: non-group includes Basic Health Plan.

CRFB.org

Federal Reserve Raises Interest Rates:What does that mean for the debt?

9

CRFB.org

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

1996 1999 2002 2005 2008 2011 2014 2017 2020 2023 2026

Projected

10-Year Treasury Yield

3-MonthTreasury Yield

Percent Yield

Historic and Projected Interest Rates

Source: CBO January 2017 Baseline, Federal Reserve10

CRFB.org

$229 $223 $241$270

$295$332

$380

$435

$492

$550

$604

$657

$714

$768

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Billions of Dollars

Net Interest in the CBO Baseline

Source: CBO January 2017 Baseline, CRFB Calculations11