Government red tape and American flag as a metaphor for political and administration inefficiency.
Deregulation has been a cornerstone of the Republican brand for decades. And the Trump Administration vows to cut government red tape wherever it finds it. Yet, House Republicans would use their just-passed budget bill to create reams of paperwork explicitly intended to block low- and moderate income households or immigrants from government assistance to which they are legally entitled.
Just as progressives have used environmental regulation to halt development they don’t like, President Trump and his allies on Capitol Hill are creating new bureaucratic hurdles to prevent families from tapping government benefits. And they are doing it just when Democrats are rethinking their historic love of paperwork.
More Paperwork
The House budget, which its sponsors call the One Big Beautiful Bill Act, would use piles of red tape to block legally entitled people from receiving health insurance through Medicaid and the Affordable Care Act, cash benefits through the Earned Income Tax Credit, and food assistance through the SNAP (food stamp) program.
Not only would the changes force applicants to fill out more forms, they would require more government workers to read all that paper. This directly conflicts with the efforts by Trump’s Department of Government Efficiency (DOGE) to fire hundreds of thousands of federal workers.
Hill Republicans don’t have the votes to repeal these programs, but they can cut millions of people from their rolls by choking them with paperwork.
Losing Benefits
The Congressional Budget Office estimates that more than 500,000 people would lose ACA marketplace health insurance because of this added red tape. Another 1.3 million would lose food stamps in any given month. 700,000, including many family caregivers, would lose Medicaid because they’d have to prove their eligibility twice a year instead of annually. Reversing a Biden-era rule to simplify the Medicaid application process would leave another 600,000 uninsured.
Supporters say all this extra paperwork will prevent waste, fraud and abuse. But this mostly is a canard.
In Medicaid, for example, nearly all “waste” is due to improper payments to providers and insurance companies, according to an analysis by the research organization KFF. Separately, Georgetown University estimates the improper payment rate at about 5 percent.
Beneficiary fraud, where people intentionally claim they are eligible for Medicaid or a specific benefit when they know they are not, is just a small fraction of the overall improper payment rate.
While the extra paperwork may prevent some beneficiary fraud, much of the price will be paid by families who lose benefits only because they failed to file a government form on time.
Making Enrollment Harder
For example, after years of trying and failing to repeal the ACA, House Republicans found a different way to hamstring the program: use paperwork to make it harder to apply for the insurance.
They’d narrow the ACA’s annual enrollment period from 90 days to 45 days. And they’d require people to go through the entire enrollment process every year, in contrast to employer-sponsored insurance that automatically renews.
Instead enrolling online with a few clicks, consumers would now have to manually add information. And to receive premium subsidies or reductions in cost sharing, they’d have to verify their income, immigration status, health coverage status, and place of residence with documentation.
Currently, most of this information is automatically matched with existing government data. For example, the IRS can use its records to confirm an applicant is eligible to claim premium subsidies, which are structured as tax credits. Yet, the House would require applicants to produce more paperwork.
A similar burden would be imposed for other tax breaks. For the first time, families would have to “pre-certify” children are eligible for the EITC. More than 17 million families would have to file paperwork on more than 29 million children.
While the paperwork may uncover some who are ineligible for the credit, the added requirement inevitably will discourage many qualified families from claiming the assistance and delay credits for others while their paperwork being reviewed by IRS staff. That’s what happened when this was tried two decades ago.
Work Reporting Requirements
Then there are the work requirements, which the bill would expand for SNAP, or food stamps, and mandate for Medicaid. About 80 percent of the adults subject to work requirements do, in fact, work. But many do so irregularly and frequently change jobs, and collecting and filing the needed paperwork won’t be easy. Many who technically qualify still will be kicked off the rolls simply for failing to manage the red tape.
The requirement could be an even bigger challenge for those claiming an exemption because they are family caregivers. How will they prove that?
John Arnold, co-CEO of the foundation Arnold Ventures, puts it this way: “The policy of work requirements is really a policy of work reporting requirements. This is nuanced distinction but very important. Inevitably, people who are engaged in work will lose healthcare coverage because they failed to properly document or report that activity.”
Role Reversal
Curiously, just as Republicans are falling in love with regulation and red tape to achieve their policy goals, Democrats increasingly are attracted to a deregulation movement that’s been labelled the Abundance agenda.
Supporters argue that Democrats and progressives have choked the economy through overregulation. A favorite example is how rules in cities such as San Franscisco make it difficult to build housing, leading to shortages for low- and moderate-income people.
It is a fascinating role reversal. While some Democrats are looking to lighten the bureaucratic load, Trump and his congressional allies see it as an effective way to achieve their goal of barring low- and middle-income households from accessing government assistance.