Trump’s Budget Request: A devastating assault on ordinary Americans

May 23, 2017

Washington, DC, May 23, 2017—President Trump today released the administration’s fiscal year 2018 (FY18) federal budget request, which proposes to make cruel and devastating cuts to programs that support children, families, and individuals of modest means, slash investments in America’s future, and destabilize state and local budgets—which would in turn precipitate a next round of deep cuts to basic services. The request claims to balance the budget in 10 years by slashing $1.7 trillion from virtually every program that helps reduce poverty and support ordinary working Americans—Medicaid and CHIP, nutrition assistance, the Temporary Assistance for Needy Families (TANF) block grant, support for people with disabilities, and the Earned Income Tax Credit (EITC) – on top of $54 billion in 2018 cuts to domestic programs already previewed in the so-called “skinny budget” two months ago. Even worse, the purpose of these cuts is to fund tax cuts for wealthy Americans and corporations—completely backwards priorities. Moreover, the claim to balance the budget depends on unrealistically optimistic assumptions about growth—which are even less likely to come true with sharply downsized investments in America’s future.

Cruel cuts would have devastating effects

The budget proposes to dismantle affordable health care coverage for millions of Americans – children, parents, workers, seniors, and people with disabilities of all ages—and slash and transform Medicaid.  Breaking a campaign promise to leave Medicaid untouched, the budget proposal goes well beyond the deep cuts to Medicaid included in the Republicans’ American Health Care Act (AHCA), cutting an additional $610 billion from Medicaid on top of the already deep cuts proposed by the AHCA. It also would cut funding from the Children’s Health Insurance Program (CHIP) and allow states to cut benefits, cap coverage, or create a waiting list for help. With almost half of children getting their health care today from Medicaid or CHIP, this proposal is truly awful.

The full effect of the AHCA, which passed the U.S. House of Representatives by the narrowest of margins earlier this month, will be revealed tomorrow when the independent Congressional Budget Office (CBO) issues its “score” of the dire consequences of the final version of the bill. The cumulative impact of these cuts and the additional damage proposed by the Trump budget would be devastating—not only damaging today to tens of millions of Americans but also counter-productive for America’s future.  Research shows that children who get health coverage through Medicaid early in life enjoy better health throughout their lives and also do better in school and at work. Adults who benefit from the Affordable Care Act’s expansion of Medicaid are able to get treatment for health problems, including mental health and substance abuse, and as a result are able to work more, according to a recent study from Ohio.

The budget targets not only Americans’ health but also their ability to put food on the table, proposing to cut the Supplemental Nutrition Assistance Program (SNAP) by $191 billion over 10 years. SNAP has long been a lifeline for low-income working families, seniors, children, disabled Americans, and individuals struggling to make ends meet, lifting 4.6 million people out of poverty in 2015. Among other cuts, this proposal would turn the clock back decades, to the time before we had a national anti-hunger program, requiring for the first time that states pay for a portion of SNAP benefits—an average of 25 percent of total costs by 2023—and allowing them to lower benefit levels. This would fundamentally undercut SNAP’s critical role in providing a nutritional “floor” to all people, regardless of the state they live in, and would reduce its effectiveness in supporting the economy during recessions.

The budget slashes or eliminates a wide range of other crucial programs that help stabilize low-income families. For example, it eliminates assistance for low-income families and seniors to pay heating and cooling bills. It takes the Child Tax Credit (CTC) away from children living with immigrant, tax-paying parents who file their taxes using an Individual Taxpayer Identification Number (ITIN)—a group of about 5 million children, the vast majority of whom are U.S. citizens. And it would cut the TANF block grant by 10 percent for all states—and more for some—on top of a 30 percent reduction in the block grant as a result of inflation since its enactment 20 years ago, sharply reducing state resources to help low-income families avoid destitution. For low-wage workers, the budget also targets their success on the job, by restricting the Department of Labor’s ability to enforce laws that keep workers safe, ensure they are paid fairly, and prevent discrimination. It would eliminate the Office of Federal Contract Compliance Programs, which monitors federal contractors to ensure they abide by antidiscrimination and pay equity laws and promotes equal employment opportunity, and it fails to invest in the shrinking enforcement budgets of important worker protection programs that safeguard workers from wage and hour violations and unsafe workplaces.

Short-sighted cuts in investment, counter to our national interest

These disinvestments are truly short-sighted, as they harm vital programs that strengthen our nation’s future by helping today’s children, youth, and adults get a secure start in life, get an education, and move up on the job through postsecondary education and job training. The president’s budget request flies in the face of research evidence that shows the benefits of public investments in low-income families and workers—after-school programs, postsecondary education and skills training for youth and adults, and basic supports like health, nutrition, and housing all playing a crucial role.

For low-income students pursuing postsecondary education, the budget is a perfect storm of cuts – making it far harder for students to complete the education they need to move up on the job.  The budget proposal would slash funding for the Work-Study program by almost 50 percent, eliminating employment for more than 300,000 low-income students working their way through college, about 25 percent of whom have an income below $12,000. The budget would also remove $3.9 billion from the Pell Grant budget, threatening to destabilize the program, which already covers less than 30 percent of the average cost of college attendance. The maximum Pell Grant amount is proposed to be frozen at $5,920, which would end the past five years of automatic inflation adjustments. The budget also proposes to eliminate Supplemental Educational Opportunity Grants, which helps cover college costs for more than 1.6 million students with greatest need each year; abolish subsidized student loans, which prevent interest from accruing on college loans for low- and moderate-income students while they are in school; and end loan forgiveness for students who go into lower-paying public service careers.

More broadly, the budget drastically shrinks investment in the skills that workers need to advance at every point, from youth to adulthood. It proposes severe cuts to adult basic education and literacy programs, career and technical education programs in high school and college, and workforce training for low-income youth and adults through the Workforce Innovation and Opportunity Act, which passed Congress in 2014 with overwhelming bipartisan support. It also proposes to completely eliminate the Senior Community Service Employment Program’s valuable subsidized job opportunities that give low-income unemployed Americans who are just a few years from retirement age a chance to earn wages and serve in their communities. And for parents seeking to make ends meet, the budget would eliminate the 21st Century Community Learning Centers, harming more than one million low-income children and parents who rely on these critical before-school, after-school, and summer programs.

In all these areas and others that are part of the “domestic discretionary budget” (targeted for $54 billion in cuts) the proposed cuts are even more damaging than they appear, because they come after years of declining funding as a result of the "sequester" caps on spending that have cut many programs by 20 percent or more in real terms over the past seven years. Thus, the base that Trump proposes to slash is already greatly insufficient to meet the needs. For example, the 39 percent cut in workforce training programs shrinks a base that is already about 19 percent less than in 2010, adjusting for inflation.

Trump’s budget proposal also wastes money in all the wrong places, seeking to criminalize communities of color, with harmful spending proposals that reverse progress—much of it bipartisan—on criminal justice reforms and further expand immigration enforcement measures that terrorize immigrant communities. The budget proposal reinforces dangerous campaign rhetoric that is now being enacted by Attorney General Jeff Sessions’ regressive positions on law enforcement. The budget calls for $1.6 billion to build a needless and costly border wall as well as additional resources to hire more enforcement agents and expand immigrant detention, threatening to tear parents away from their children. Furthermore, the budget proposes to redirect $888 million to fund this administration’s immigration enforcement and violent crime reduction priorities, which means wasteful spending on more law enforcement instead of what the evidence supports and many governors and mayors are seeking:  community-based prevention, mentoring strategies, and reentry services. The move is even more damaging in the context of a whole host of counter-productive decisions by the administration—none of them based on the evidence—on private prison outsourcing, smart policing, local and state jurisdiction support, and sentencing and prison education reform. Taken together, these cuts and policies threaten the safety, security, and economic stability of low-income communities, immigrant communities, and communities of color.

The “sleeper” issue: significant damage to states and cities

Finally, the budget reflects a historic withdrawal by the federal government from its traditional commitment to state and local governments. Reductions of hundreds of billions of dollars in the federal commitment to Medicaid, SNAP, and other programs threaten to destabilize state and local budgets across the country.  In turn, because states are required to balance their budgets, blasting an enormous hole in their budgets would force them to make a next round of cuts to their core areas of investment, including K-12 education, higher education, and health. 

Any governor or state legislator who had been thinking that a per capita cap or block grant was a good deal should take warning from this budget proposal. The proposed cuts to Medicaid, beyond what is already proposed in the AHCA—as well as the cuts to TANF—illustrate that once funding levels are divorced from the actual costs of providing services, it is immediately tempting for federal policymakers to generate additional "savings" by simply ratcheting down the federal contribution. The proposed elimination of the Social Services Block Grant, the Community Services Block Grant, and the Community Development Block Grant illustrate how block grants can be targeted for cuts or elimination because federal policymakers can simply lower numbers in a spreadsheet, forcing state and local governments to make the actual cuts to services.

Parental leave proposal offers little to low-income families

In the midst of this grim context for working families, the budget attempts to throw them a small bone with a plan to offer six weeks of paid parental leave to care for a new child. In reality, though, this proposed program would do very little for low-income families. If states set wage replacement comparable to the unemployment insurance (UI) rates, that would leave many low-income workers unable to make ends meet while on leave and therefore unlikely to use the program. And it essentially pits unemployed workers and families that need paid leave against one another by cutting funds from the already-fragile UI system to pay for this new program. Addressing working families’ urgent need for leave requires a more comprehensive policy that covers not only parents, but also workers who are family caregivers and need medical leave for themselves, and includes a dedicated financing source; the Family and Medical Insurance Leave (FAMILY) Act, already introduced in Congress, fits the bill.

Where next?

From here, Congress will begin setting the spending levels for annually appropriated programs like child care, education, and training, as well as considering longer-term budgetary changes for mandatory programs like SNAP and Medicaid. In addition, Congress will debate changes to the tax laws that bring in the revenue used to fund the federal budget. Should Congress choose to start from the president’s budget proposal, it would also have to break a previous bipartisan “parity” agreement to provide equal levels of additional funds for defense and non-defense. But it would be unconscionable for Congress to use this devastating and unprecedented budget request as the starting point for the process of determining funding for the next year.

Instead, CLASP urges the House and Senate to reject the proposals in Trump’s budget. Congress should protect and support the core structure of highly effective federal programs such as Medicaid and the Affordable Care Act, SNAP, and the EITC, along with the crucial enforcement roles that protect low-wage workers; expand currently underfunded federal investments for programs and services that support low-income children, youth, families and individuals; and reverse the administration’s call for reckless and counter-productive spending on incarceration and on tax cuts for the wealthiest. Our nation’s future depends on it. 

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The Center for Law and Social Policy (CLASP) is a national, nonpartisan, anti-poverty organization advancing policy solutions that work for low-income people. With nearly 50 years of trusted expertise, a deeply knowledgeable staff, and a commitment to practical yet visionary approaches to opportunity for all, CLASP lifts up the voices of poor and low-income children, families, and individuals, equips advocates with strategies that work, and helps public officials put good ideas into practice. The organization’s solutions directly address the barriers that individuals and families face because of race, ethnicity, and immigration status, in addition to low income. For more information, visit www.clasp.org and follow @CLASP_DC. 

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