House Budget Proposal Fails Poor and Low-Income People

Apr 04, 2014

By CLASP

This week, House Budget Committee Chairman Paul Ryan (R-WI) released his FY 2015 budget proposal. It is the fourth iteration of his so-called Path to Prosperity, and it recycles many of the same damaging cuts from years past.  What’s most troubling about this version is that the cuts go even deeper -- and that, according to the Center on Budget and Policy Priorities, at least 69 percent of those cuts would be programs intended for people who struggle to make ends meet.

Rep. Ryan proposes keeping the 2015 budget within the tight caps required by the Bipartisan Budget Act of December 2013, which set spending levels for FY14 and FY15.  However, the Ryan proposal doubles down in its vision for future spending cuts beyond FY 15 by proposing domestic discretionary levels below the draconian amounts imposed on spending by the sequester.  This implies sharp cuts to a vast range of government programs – child care, job training, roads, medical research, food safety, among others.  If any one of these programs gets spared a cut, then the others would get slashed even further.

And, despite the rhetoric about prosperity, the proposal achieves budget savings at the expense of low-income citizens. A true path to prosperity should focus on jobs, economic growth, and promoting opportunity – not on putting extra barriers in the way of people who are seeking to move up on the job, finish their education, and achieve economic security.

While the budget does not include specific allocations for most programs, The Path to Prosperity outlines cuts and policy proposals that would make several crucial programs less effective and harm the people they serve:

Pell Grants and Higher Education

Because a postsecondary credential or degree is critical for economic security – and with the costs of higher education continuing to climb – now is the time to be increasing postsecondary access among poor and low-income students.  However, The Path to Prosperity does just the opposite with its cuts that disproportionately impact low-income, working adult students, many of whom are parents and must work while attending college. This proposal would:

  • Slash funding for the Pell Grant program, restricting access for low-income students in future years;
  • Threaten completion for low-income, working students by cutting off their financial aid if they attend less than half-time; 
  • Restrict the purchasing power of the Pell Grant, putting college further out of reach for low-income students; and 
  • Reduce aid eligibility of all types—including Pell Grants, student loans, and other aid—for some students by modifying the formula for calculating student aid.

Read more in our earlier posting that focuses on the impact of Rep. Ryan’s proposal on Pell grants and higher education.

SNAP (Supplemental Nutrition Assistance Program – formerly food stamps)

Many of the proposed changes target SNAP, a key safety net program for working families as well as the unemployed, children, and the elderly.  The proposal largely reiterates bad ideas that failed to gain traction in previous legislative proposals, that fly in the face of research showing that the majority of SNAP recipients who can work already are doing so, and that exacerbate the struggles faced by many low-income individuals who do not have access to any other resources.

Specifically, the proposal envisions converting SNAP into a block grant program -- and cutting $125 billion over 10 years.    As we explained in last year’s response to Rep. Ryan’s proposal to block grant the SNAP and Medicaid programs, doing so would weaken the already fragile safety net because capped block grants prevent states from responding to increases in need, whether coming from population growth or unemployment.  The risk is clear when you look at how badly the TANF program – a capped block grant – responded to the recession, compared to SNAP.   During the recent deep recession, TANF caseloads rose much less than unemployment or SNAP benefits and in some states continued to decline.  In contrast, SNAP has been shown to be an effective program especially during times of need because of its ability to expand when the economy is bad and retract once the economy recovers.

Other SNAP proposals in the budget recycle harmful ideas about limiting eligibility under the guise of additional and more stringent work requirements and time limits for SNAP.

Medicaid

Like last year, Rep. Ryan again proposes to repeal the Affordable Care Act’s Medicaid expansion and turn Medicaid into a block grant. This would have a significant impact on millions of low-income individuals and families who cannot access health coverage. Adding together all the health-related provisions in the Ryan budget (Medicaid and the repeal of other parts of the ACA), the Center on Budget and Policy Priorities estimates that more than 40 million people would likely become uninsured as a result.  This would make it harder for them to access the care they need to be healthy and to succeed as workers and parents, as well as putting them at risk of financial disaster due to illness or accident.

Social Security Income (SSI) Benefits for Children

Vulnerable communities would be subject to further damage through proposals to cut $5 billion over 10 years from SSI benefits for children with disabilities by cutting benefits for families with more than one child with disabilities. SSI offsets some of the expenses related to a child’s disability and replaces some of the income lost when working parents reduce their hours or leave a job altogether to care for their disabled child.

What’s Next

A more sensible approach would be to address some of the underlying causes of poverty: jobs with pay that is too low to support a family, limited education and skills, health and mental health challenges that poor and low-income people face.  Instead, the Ryan proposal exacerbates the struggles of low-income families and risks pushing into deeper poverty those who are working hard just to make ends meet.  The safety net is a critical support that has helped millions of families during the recession and as the economy slowly recovers.  These resources should be strengthened, not cut.

The House Budget Committee rubber-stamped the Ryan budget on Tuesday, and the full House is expected to vote on it next week. Due to the passage of the Bipartisan Budget Act in December 2013, Congress does not need to pass a stand-alone budget resolution for this year, and the Senate will not adopt the Ryan proposal. However, the Ryan budget sets a dangerous and short-sighted template for future federal spending decisions. 

 

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