Here & Now

Budget Fight Continues over Medicaid

Frederica Freyberg:
A first look tonight at how state Republican budget-writers are throwing over Governor Tony Evers’ $83 billion two-year budget, including his major priority items like expanded Medicaid and scaling back the tax credit for manufacturers. But there’s plenty more the co-chairs of the Legislative Joint Finance Committee want to pitch. Republican Representative Amy Loudenbeck of Clinton is the committee vice chair. She joins us from Janesville. And representative, thanks very much for being here.

Amy Loudenbeck:
Thank you for having me.

Frederica Freyberg:
So as we’ve stated, Republicans will work off current law instead of using Governor Evers’ budget. Why the total overhaul?

Amy Loudenbeck:
Well, from a process standpoint, it will be a little different than the committee has operated in the past, but you in the end, we’ll have a balanced budget. We will consider some of the items that the governor had proposed. The policy items, likely not, but it’ll be more of an additive process. We’re going to build up from our base instead of working down from the items that he had proposed. In general, I think where we’ll end up is somewhere in the middle of where we are at now. And his budget — but I do think that the consensus in our caucus is that it’s too large of an increase for us to afford. It’s a $2 billion deficit almost at the end of two years, structurally, and we need to trim it back a little.

Frederica Freyberg:
In terms of the expanded Medicaid, the latest Marquette Law School poll as you know showed 70% respondents in Wisconsin favor expanding Medicaid but the majority wants to buck public opinion on this?

Amy Loudenbeck:
Well as we know, just a few weeks ago, and I think it’s been since the poll came out, we know that on a federal level, Medicare will be insolvent by 2026. So we already know that the obligations the federal government has taken on are too large. We want to not contribute to that overcommitment that we believe the federal government has made. We think there are options for individuals between 100 and 138% of the federal poverty level to obtain private insurance with very low or no deductibles at a very modest price. And we’d rather keep those folks in the private market where we think they get better care. We think the reimbursement rates are better for the providers. And we’re happy to have that conversation, but the question to accept the expansion, I think the appreciation of the amount of federal debt that that program could leave us on the hook for in the future is a risk that I hope that we can bring to the public and so there is an understanding of why we’re doing what we’re doing.

Frederica Freyberg:
So when you say there are better options for people between 100% and 138% of the poverty level, you mean Obamacare, basically, people being in the marketplace with the federal subsidies that accrue to the Affordable Care Act?

Amy Loudenbeck:
Correct. So there are options available for anyone that is not covered under the partial expansion that we already accepted to cover 100% of — adults up to 100% of federal poverty and children up to 300%. So the adult population that I’m talking about, yes, they have other options to be in the exchange. We have a robust provider network in federally-qualified healthcare centers. And we also have our safety net clinics, our charity clinics, volunteer health provider clinics around the state that we feel provide adequate care. We don’t have an access to coverage issue in Wisconsin. We’ve got a lot of people that are covered.

Frederica Freyberg:
Are you among those who is in favor of eliminating the Affordable Care Act, though?

Amy Loudenbeck:
Well, I understand the question, but we have to deal with the reality that we have now. And right now, as I said, we are investing in the healthcare stabilization plan which also uses federal dollars. We are going to direct people to the care that makes the most sense for them. We’re willing to put more dollars into assisting people and to either getting into the exchange or looking at other options. But the obligation of Medicare up to 100% of federal poverty level was a commitment that we made several years ago and has really made a difference in providing coverage to people. But taking that expansion, we have looked at other states that have taken that expansion and now they’re seeing the reimbursement rates go down to 90%. And they’re struggling to figure out how they’re going to honor the obligations they made. We don’t want to be in that position.

Frederica Freyberg:
As for other items that Republicans budget writers want to pitch, the cap on the income tax credit for manufacturers in Evers’ budget. His provision though would increase tax revenue by more than $500 million. Why do you want to maintain that tax credit even in the midst of this robust economy?

Amy Loudenbeck:
Well, we appreciate that there is a dollar figure attached in tax collections and there’s spending attached to that so we’re going to have to reconcile that in our process. However, for me especially in a border area, we have seen significant investment that has been spurred because of that tax credit. We have seen companies move over the state line from Illinois into Wisconsin because we have the M & A tax credit available. So we don’t want to — I don’t want to see the loss in economic activity that that tax credit has provided in my district. And so I think that reducing that cap — or putting in that cap would potentially impact some of the positive activity we’ve seen here.

Frederica Freyberg:
Just very briefly with only about 15 seconds left, the one thing I didn’t see on the list for elimination was an increase in the gas tax. So the majority budget writers expect to be able to work with that?

Amy Loudenbeck:
I still think everything is on the table as far as transportation is concerned. And that is — I mean, it’s certainly not a non-fiscal policy item. That is an item that would bear out in the transportation budget because we are looking at how we can fund transportation within the segregated transportation fund so it’s affordable, equitable, sustainable and adequate for future transportation needs in Wisconsin.

Frederica Freyberg:
All right. We need to leave it there but obviously more discussion on this state budget as the weeks and months go on. Representative Amy Loudenbeck, thanks very much.

Amy Loudenbeck:
My pleasure. Thank you.

Frederica Freyberg:
We turn now to a Democrat on the Joint Finance Committee, Senator Jon Erpenbach. Thanks very much for being here.

Jon Erpenbach:
Sure.

Frederica Freyberg:
What’s your initial reaction for Republican co-chairs’ decision to essentially gut the governor’s budget and work off current law instead?

Jon Erpenbach:
Well, it’s not surprising but it’s frustrating. People elected a Democrat governor and they elected a Republican majority in the Legislature and the message is really simple. Everybody work together. Play nice, get along, work together. And Governor Evers proposed in his state budget some great ideas to move Wisconsin forward. Investing in the right areas of K-12 education and so on but most importantly taking the Medicaid expansion, which generates another over a billion dollars in federal funding and other programs that are desperately in need of money throughout the state of Wisconsin in the area of health, but it’s frustrating. You know, not even giving the governor’s Medicaid expansion a chance, for example, when we had the four hearings around the state, that was the number one issue we heard about. Nobody showed up to say, “Don’t take the expansion.” Everybody showed up and said, “Take the expansion.” Counties want it. County governments want it. And the idea that we’re leaving, you know, our money sitting out in Washington, D.C. because the Republicans are being stubborn, that’s really frustrating.

Frederica Freyberg:
And yet Representative Loudenbeck with whom we just spoke said that the majority feels that it’s a risky premise to take the expansion because new reporting is suggesting that the Medicare Trust Fund will be insolvent within seven years and the feds don’t have the money.

Jon Erpenbach:
Well, 36 other states don’t believe that. They’ve all taken the expansion whether it’s Democrat states or Republican states. They’ve taken the expansion. Medicaid expansion by the way is derived out of savings through the Affordable Care Act. When Governor Walker was governor, their first argument was, “Well, we don’t know if the money is going to be there.” The money has been there year after year after year and more states are taking it yet Wisconsin, the Republican majority, is choosing to leave our tax dollars out in Washington, D.C. where we can get it back here, expand the BadgerCare program, cover somebody making, you know, $8.10 an hour with low cost healthcare and help them economically try and move up the ladder. So to me, it’s really frustrating that they’re not even giving it its due.

Frederica Freyberg:
Do you believe it’s an ideolog–

Jon Erpenbach:
I believe it’s — I’m not even going to go down that road but I know what you’re trying to say. The history on this is simple. Scott Walker was running for president. He didn’t want to take any federal money from President Obama. Broadband, high-speed rail, Medicaid expansion so on and so forth. To me, it’s not so much that, because if they really truly believe that it’s a handout, then increase the minimum wage, which they’re not going to do. So not only are they going to deny healthcare coverage for the poorest of the poor here in the state of Wisconsin, you’re also not getting an increase in minimum wage. So I’m not buying that. It’s hard to pick yourself up by the bootstraps when we aren’t providing just the basic necessities in life for low income people in order to make their lot in life better.

Frederica Freyberg:
Meanwhile, Governor Evers says he’s going to, “fight like hell to get Medicaid expanded,” but if the majority isn’t having it, there’s no real fight, is there?

Jon Erpenbach:
Oh, yeah. There absolutely is a fight. He’s the governor, for crying out loud. He’s the governor, and governors tend to get what they want, but at the same time, the Republican majority has to realize that they don’t control the whole show at the capitol anymore. It is their job to work with Governor Evers and Governor Evers has made it very clear from day one that his door is open. That if you do not like what he’s proposing in order to move the state forward, what are your ideas rather than battle it out in press releases and tweets. Let’s sit down and talk about it. So his door is open.

Frederica Freyberg:
Of all the other provisions in the Governor’s budget, the Republicans would through overboard like capping the manufacturing tax credit or freezing voucher school slots or legalizing medical marijuana, which are Democrats most unhappy about?

Jon Erpenbach:
It’s not a matter of being unhappy about it. Some of them I understand because it gets down to philosophical issues and I get that. But at the same time, when we have a responsibility as a state government to help out the neediest here in the state of Wisconsin and give them better opportunities, open up economic doors, so on and so forth. And they’re not even giving them Medicaid expansion or minimum wage increase the time of day that it deserves, to me that’s real frustrating.

Frederica Freyberg:
It appears that the majority is not eliminating a gas tax from the executive budget.

Jon Erpenbach:
Right.

Frederica Freyberg:
What kind of compromise do you expect there is to be had on transportation funding?

Jon Erpenbach:
Well obviously there’s going to be a compromise simply because they left it in there. Same thing with K-12 funding, they pretty much left that alone as it stands right now, though there’s probably going to be some changes in that coming. Our roads need to be fixed. We don’t have the money to fix them. We also need to expand in certain areas of the state of Wisconsin. We don’t have the money do that either. County roads are struggling. Town roads are struggling. So what Governor Evers has done is the responsible thing to do and that is to basically tax those who use the roads the most. And if you’re going to buy gasoline and use roads a lot, you’re going to be paying for them. Again, it sets up a short-term way to deal with a problem that we have within our transportation budget. And these are roads all over the state. All over the state that need to be fixed. And the Republicans have tried to borrow their way out of this for the past eight years and that’s not going to work anymore. So what Governor Evers has proposed is the gas tax increase but it also brings down the debt service a little bit too. So not only is our debt going the right way because of this, but we’re also putting money in transportation, which will stay in transportation and help fix the roads.

Frederica Freyberg:
Some heavy lifting ahead. Senator Erpenbach, thanks very much.

Jon Erpenbach:
Sure.