WASHINGTON — Alabama’s senators are throwing their full support behind President Donald Trump’s big bill of tax and spending cuts as the Senate has continued to work on the sweeping legislation.
Republican Sens. Katie Britt and Tommy Tuberville have become strong defenders of the massive legislation to fulfill Trump’s legislative agenda. Democrats, advocates in Alabama and even some Republicans aren’t as optimistic about the bill, warning against the potential negative impacts to health care and food aid.
When Alabama Daily News asked Britt and Tuberville about their main reasons for supporting the bill, both pointed to the $150 billion allocated for boosting defense spending and additional funds for the border.
“The resources we need to make sure that our warfighters, (are) the best, trained, equipped and ready across the planet, unleashing American energy, which we know is not only good to drive down prices in America, but also it helps us from a national security perspective, which is critically important, and we’ve seen that crystallize over the last two weeks in a significant way,” Britt said.
Striking a similar tone, Tuberville said, “we need to plus up the military for the simple fact that we’ve spent billions of untold dollars just because of Ukraine and Israel.”
The pair also said the extension of the 2017 tax cut was motivation for them to support the so-called “big, beautiful bill.” It also adds new tax breaks to fulfill Trump’s campaign promises of no tax on tips and no tax on overtime.
On average, Alabama families would see a $2,192 increase in their taxes if the 2017 breaks were not extended in the bill, according to the Tax Foundation, a right-leaning think tank.
A child tax credit would also be permanently increased to $2,200 under the Senate plan, but would require a parent to have a Social Security number to obtain the credit. The expansion of child care tax credits made it into the Senate’s version of the bill with intense lobbying from Britt, such as enhancements to the child and dependent care tax credit and the dependent care assistance program.
“That is something that I hear about from top to bottom of the state,” Britt told ADN. “I hear it from people, I hear it from businesses, large and small, that we have got to do something to help hard-working parents, and so really, really proud to have made such significant strides in that area.”
SNAP
The Senate’s plan for the big bill makes significant changes to the Supplemental Nutrition Assistance Program to help cover the costs of $4.5 trillion in tax cuts. More than 750,000 Alabamians rely on SNAP to help cover the costs of food.
Senate Republicans’ plan to partially shift the costs of SNAP benefits to states based on payment error rates would potentially be one of the biggest impacts felt in Alabama. Error rates measure the accuracy of a state’s eligibility and benefit determinations. The U.S. Department of Agriculture released the states’ rates for fiscal year 2024 on Monday, in which Alabama’s error rate sits at 8.32%. That’s an increase from the state’s rate of about 7% in fiscal year 2023. The total number includes over and underpayments.
Using the 2024 rate, Alabama would be responsible for 10% of the benefit costs, which would cost the state about $172 million a year, according to the Center on Budget and Policy Priorities, a left-leaning think tank.
The cost-share model would not take effect until fiscal year 2028. The plan allows states to choose either their payment error rate from fiscal year 2025 or fiscal year 2026 to determine how much they will pay for the benefits in FY 28. States could have to pay up to 15%, but those with payment error rates below 6% would not have to pay for the benefit costs. The federal government has fully covered the costs of SNAP benefits since the program began.
Britt and Tuberville are backing the cost-share plan. Britt said it will encourage states to have more “skin in the game” while at the same time ensuring the program can be sustainable so hungry children and families can get the food they need this year and in the decades to come.
“We’ve got three years to get those error rates correct, and I have no doubt that Alabama will get it down…that we need to in order to not have any additional cost,” she told ADN.
Tuberville, who is running for governor, previously expressed some concerns with Alabama having to pick up the tab for some of SNAP.
But on Monday, Tuberville told Alabama Daily News he’s supportive of the plan even if “it will cost us a little bit of money statewide” if the state does not lower its payment error rate to below 6%.
Tuberville and Britt also said that Alabama taxpayers shouldn’t be footing the bill for other states’ SNAP programs that have higher payment error rates.
The federal government and state government have split the administrative costs of SNAP 50-50, but the bill also would make states responsible for an additional 25% of those costs, which would cost an estimated $35 million annually in Alabama.
Medicaid
Britt and Tuberville are also standing behind the bill’s changes to Medicaid and health care programs despite estimates that thousands of Alabamians could lose their healthcare under the massive bill.
Nearly 170,000 Alabamians could lose health care access due to the expiration of the Affordable Care Act enhanced premium tax credits, according to Democrats on the Joint Economic Committee. Roughly 42,000 Alabamians could lose health care coverage due to the Medicaid cuts in the bill, according to the same report.
However, since Alabama hasn’t expanded Medicaid, the pair of senators contend the state is in a strong spot to handle the bill’s changes.
The provider tax provision, which hospitals use to boost federal Medicaid payments, is frozen under the Senate plan for non-expansion states like Alabama, while the cap on the tax gradually decreases for expansion states, putting Alabama in a better position, Britt said.
“We don’t have to deal with the state-directed payment portion, and other people do,” she told ADN. Alabama does not use state-directed payments to distribute Medicaid.
Tuberville said the Medicaid changes will “hardly” affect Alabama because it’s a non-expansion state. He remains adamant that he believes the Medicaid provisions are “not cuts” but instead are “reform.”
“We’re trying to make everybody responsible,” Tuberville told ADN. “The problem is (we’re) 37 trillion in debt. We can’t continue to go that direction, and a lot of it is entitlements, and that’s the reason you’re seeing the Medicaid part that is being really, really looked at hard.”
However, Alabama hospital leaders have warned that any number of people in the state who lose health care through Medicaid cuts or the expiration of ACA tax credits, would be harmful especially for rural hospitals. They have also warned against a provision in the bill that strips away an incentive for states to expand Medicaid in the future.
“Democrats had years to make permanent President Biden’s increased Affordable Care Act premium tax credits, which they set to expire in 2025,” Britt said in a statement to Alabama Daily News. “Now, at a politically opportune time, they’re blaming Republicans for their actions. The Senate’s reconciliation bill would restore ACA credits to levels imposed under President Obama.”
Britt said Alabama was in a “strong spot” when it comes to keeping the state’s rural hospitals open. She referred to Senate Republicans adding a provision in the bill, a rural hospital fund, for $25 billion to be distributed evenly to states to help offset any challenges they may face from other parts of the bill.
“We are clearly making structural reforms to Medicaid to make sure that the program lasts, and I think that the way that we have fought, particularly in the Senate…what Sen. Tuberville and I tried to do was make sure that Alabama was in the strongest place possible,” Britt told ADN.
But state advocates aren’t as convinced that Alabama is in a good position to deal with the health care implications of the bill.
“Medicaid dollars are for services and resources we all use, and cuts to Medicaid are going to result in increased health care costs for all of us and longer wait times if we can even get in,” Rhonda Mann, executive director of VOICES for Alabama’s Children, said during a press conference at the State House last week.