President Trump unveiled his 2020 fiscal year budget yesterday, proposing to spend a record $4.75 trillion to run the country. The budget proposal is not much more than a wish list from The White House about its priorities and how it would like to see Congress allocate funds for the next fiscal year, which starts Oct. 1.
There are several areas of the budget that are relevant to the credit and collection industry. Among them are:
- Medicare payments to hospitals for unpaid bills and uncompensated care would be reduced by $136 billion during the next 10 years under the proposed budget. About $98 billion of that total would come from uncompensated care and the remaining $38 billion from reductions in bad debt payments. “For most institutional provider types, Medicare currently reimburses 65% of bad debts resulting from beneficiaries’ non-payment of deductibles and coinsurance. Effective FY 2020, this proposal reduces Medicare reimbursement of bad debt from 65% to 25% over three years.”
- The president’s budget once again proposes subjecting the Consumer Financial Protection Bureau to the Congressional appropriations process, instead of allowing it to continue to be funded through the Federal Reserve. The restructuring of the CFPB’s budgeting process has been proposed by Republicans repeatedly since the agency was created in 2011 and has never gained any traction.
- President Trump is proposing the CFPB receive a budget of $636 million during the 2020 fiscal year, which is $103 million more than what CFPB Director Kathy Kraninger had requested in her budget proposal. The budget did not say how President Trump would want the CFPB to spend the extra money, but it did reference how it would like to see the agency restructured: “The Budget proposes legislation to restructure the CFPB. Restructuring is required to ensure appropriate congressional oversight and to refocus CFPB’s efforts on enforcing the law. The Budget proposes to limit CFPB’s mandatory funding in 2019 to allow for an efficient transition period and bring a newly streamlined agency into the regular discretionary appropriations process beginning in 2020.”