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Clinton-GOP Budget Agreement To Offer $135 Billion Tax Cut While Slashing Medicaid, Domestic Program Spending

'Robbing Peter to pay Paul' deal affects Medicaid, AIDS programs

May 2, 1997

WASHINGTON, DC - While details remain to be ironed out in the emerging budget deal between the White House and GOP congressional leaders, AIDS Action Council asserts that what has been agreed upon - severe cuts in Medicaid and domestic spending to offset $135 billion in tax cuts - could devastate programs vital to tens of thousands of people with HIV/AIDS.

"This budget agreement embodies a `robbing Peter to pay Paul' approach that will set back our nation's fight against AIDS and is clearly counter to what the American public believes the federal government should be doing about AIDS, " said Daniel Zingale, AIDS Action Council's executive director.

Public opinion polls have consistently shown that attempts to cut Medicaid or AIDS program spending would meet with strong opposition from the American public. A recent American Viewpoint nationwide survey commissioned by AIDS Action Council confirmed public support for the Medicaid program as an AIDS care safety-net, with almost 70 percent of Americans supporting getting AIDS drug therapies into the hands of people with HIV/AIDS through Medicaid.

"Slashing Medicaid funding and domestic discretionary spending, which may well include cuts in AIDS program funding, to pay for tax cuts means losing ground in the fight against this epidemic. These cuts make little sense at a time when the federal investment in AIDS has yielded promising medical breakthroughs and a decline in AIDS deaths, " Zingale said.

The emerging five-year balanced budget accord cuts $24 billion in federal Medicaid funding. These cuts would be achieved through a per-person federal spending cap imposed on all Medicaid recipients and cuts in payments to hospitals that serve a large number of low-income people, including people with AIDS. According to the Kaiser Family Foundation, over 53 percent of adults and 90 percent of children with AIDS rely upon Medicaid for access to new AIDS drug therapies and state-of-the-art care.

AIDS Action Council has long opposed a Medicaid "per capita cap. " With significant numbers of people with AIDS exceeding the per capita cap because of the high costs associated with their care, most states - especially those with the highest incidence of AIDS cases - will struggle with financing AIDS services which were previously federally-funded through Medicaid.

The National Governors' Association, which today reiterated its opposition to a Medicaid per capita cap, testified before Congress last month that "...the cost shift associated with a federal cap would present states with a number of bad alternatives... choose between cutting back on payment rates to providers, eliminating optional benefits [including prescription drugs] provided to recipients, ending coverage for optional beneficiaries [including people with AIDS, who qualify for Medicaid under the optional "medically needy " category], or coming up with additional funds to absorb 100 percent of the cost of services. " Zingale predicted that the latter possibility is highly improbable in a time of budgetary retrenchment, emphasizing that people with AIDS could ill-afford the remaining alternatives.

Zingale cited as equally alarming, the proposed $68 billion cut in domestic discretionary spending. The majority of AIDS-specific programs fall under this category, including the Ryan White CARE Act, HIV prevention at the Centers for Disease Control and Prevention (CDC), AIDS research at the National Institutes of Health (NIH), and AIDS housing through the Housing Opportunities for People with AIDS (HOPWA) program. Zingale explained that any cuts in these programs, many of which he said are already straining to provide services, would devastate people with HIV/AIDS.

"These programs care for people affected by HIV/AIDS, prevent HIV infections, lead to life-saving scientific advancements, and provide stable homes for so many people with HIV/AIDS and their families, " Zingale said. "Why would we jeopardize these programs to achieve $135 billion in tax cuts? Nothing justifies these types of spending cuts. "

"AIDS Action Council urges President Clinton and Congress to retreat from their strategy to offer tax cuts by sacrificing programs that are important to so many people with HIV/AIDS, " Zingale said. "We will work with the Clinton administration and with Congress to ensure that any budget agreement reached does not turn a time of hope in our community into a time of despair. 'Savings' outlined on paper must never be allowed to exact a human toll in lives that are devastated or lost. "

For more information, contact:

Contact: José Zuñiga, AIDS Action
(202) 986-1300 Ext. 3042

AIDS Action Council
1875 Connecticut Avenue NW #700
Washington DC 20009
202-986-1300, extension 3053
202-986-1345 (fax)
202-332-9614 (tty)

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This article was provided by AIDS Action Council.
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