Congress is targeting trillions in cuts. Wisconsin lawmakers disagree on impacts to next state budget.

As the U.S. House of Representatives looks to create a budget that could dramatically reshape the ferederal government, Wisconsin lawmakers are crafting the next two-year state budget.

The House plans to cut $2 trillion in federal spending, $880 billion of which could come from programs including Medicaid.

Current state budget includes $28B in federal funds

Wisconsin gets a lot of money from the federal government. The current two-year, $98.7 billion state budget was bolstered by more than $28 billion dollars in federal aid.

According to a memo from the nonpartisan Legislative Fiscal Bureau, nearly 61 percent of federal monies coming to the state in this budget, around $17 billion dollars, have gone to the Department of Health Services.

Coming in at a distant second is the Universities of Wisconsin, which got around $3.3 billion, which works out to around 12 percent of all federal funds appropriated in the budget.

In the current two-year budget, most federal funds directed to the health services department — around $15.3 billion — went toward medical assistance programs, which includes things like Medicaid coverage for low-income children and adults and those with disabilities.

These programs reimburse hospitals, doctors, mental health providers, dentists, nursing homes, assisted living centers and home health care programs.

US House calls for $2T in cuts to federal aid over 10 years

Last week,  Republicans in the U.S. House of Representatives passed a resolution setting a framework for the next federal budget. It calls for $4.5 trillion in tax cuts over the next decade, cutting overall spending by $2 trillion and directs the House Energy and Commerce Committee, which oversees spending on programs like Medicaid and Medicare, to find $880 billion in savings.

The move set off alarm bells for Democrats like Wisconsin U.S. Sen. Tammy Baldwin, who held a virtual town hall with constituents Thursday. She said she was concerned about the prospect of Medicaid cuts, but the House vote made it “much more real.”

Tammy Baldwin, Ron Johnson get earful from constituents during virtual town halls

“So, 72 million Americans rely on Medicaid for their health care, and that includes almost a third of all children, many children and adults with disabilities get their health care and sometimes transportation to health care paid for by Medicaid,” Baldwin said.

During another virtual town hall hours later, a constituent told Republican U.S. Sen. Ron Johnson that her daughter relies on Medicaid to pay for expensive epilepsy medication and asked whether Wisconsin might have to make up the difference if federal funds are cut.

Johnson said Medicaid was designed to help people like the caller’s daughter but the program has become too expensive since the Affordable Care Act, known as Obamacare, was passed in 2010. He said its call for states to expand Medicaid to cover adults who earn up to 138 percent of the federal poverty level “threatens the solvency” of the program and the nation.

“I mean, it’s one of the reasons I was opposed to Obamacare,” Johnson said. “We’re going to make single, working age, childless adults… We’re going to make them dependent on government and put at risk people like your daughter. So that’s what we need to fix.”

Democrats call for expanding Medicaid; Republicans say it’s a bad idea with federal uncertainty

For more than a decade, Democrats in the state Legislature have called for expanding Medicaid and criticized their Republican colleagues for not letting it happen.

Gov. Tony Evers, a Democrat, has included the expansion in his proposed 2025-2027 state budget. Republican leaders in the Assembly and Senate have said much of Evers’ budget is a nonstarter.

During a Thursday press conference, Wisconsin Assembly Speaker Robin Vos, R-Rochester, and Wisconsin Senate President Mary Felzkowsky, R-Tomahawk, appeared alongside Will Flanders, a researcher for the conservative Wisconsin Institute for Law and Liberty to push back against Democrats’ call for Medicaid expansion.

Vos told reporters that “Wisconsin has made the right decision by not expanding Medicaid” and said the state expanded coverage on its own while maintaining funding ever since.

“Wisconsin has done a good thing in light of what’s happening with the federal government right now,” Vos said. “You can be a Democrat or Republican, but everyone has to recognize the long term fiscal stability for our nation is at risk because of the massive deficit that’s been run up under both Republicans and Democrats. Somebody has to finally fix it, and every program is going to have to change if we’re going to do it.”

Evers budget set aside $500M to cover potential loss of federal funds

During his biennial budget address to the Legislature, Evers once again called for expanding Wisconsin’s Medicaid program but he also said he was leaving about $500 million “in the state’s checking account” to gird against potential cuts at the federal level. 

“With irresponsible decisions in Washington every day hurting people in Wisconsin, we will need to have state resources readily available to respond to basic and emergency situations alike,” Evers said. “So, as the Legislature deliberates my proposal, I urge you to take seriously the disastrous consequences federal decisions will have on Wisconsinites and our state — and plan accordingly.”

Assembly Minority Leader, Greta Neubauer, D-Racine, lauded the governor’s backstop during a budget roundtable hosted by the Wisconsin Counties Association, Tuesday. She said she’s also counting on the state’s congressional delegation to push back against potential Medicaid cuts led by GOP House members.

“We know that the state cannot actually take over the cost of providing Medicaid to people in Wisconsin, elderly folks, people with disabilities and a significant number of children, births,” Neubauer said.

Senate Majority Leader Devin LeMahieu, R-Oostburg, was not concerned and said increasing the reliance on the federal government “puts us in more jeopardy if things change at the federal level.”

“So, us not having expanded Medicaid makes us more secure if things change in D.C.,” LeMahieu said.

The federal budget resolution and how federal lawmakers will make the targeted reductions leave a lot of unanswered questions as Wisconsin builds out its own finances for the next two years. U.S. House committees have until March 27 to report how they’ll achieve the $2 trillion in savings.