The Senate’s Budget Reconciliation Bill is Bad for Children and Families
By Juan Carlos Gomez
Families are already struggling with higher costs of living, and the Senate’s budget reconciliation bill will only increase the costs of health care, food, and everyday necessities. The bill’s text affirms that at its core, this is legislation that will drain money from the families with the lowest incomes in order to benefit the wealthy.
Millions Could Lose Health Care, Food Assistance, and Economic Stability
The bill would make the largest cuts to Medicaid and SNAP in history, dismantling the provisions of the Affordable Care Act (ACA) Marketplace that make it effective in providing affordable health coverage and many free health care services to millions. The proposed language in the Senate makes even deeper cuts to Medicaid and, in total, could cause up to 16 million people to become uninsured. These cuts will cause widespread harm and impact essential workers, like child care providers, who rely on Medicaid due to a lack of access to benefits and low-paying jobs. When Congress tried to repeal the ACA in 2017, they failed because it was deeply unpopular and people understood that weakening the Marketplace would leave millions without affordable health coverage.
Burdensome Work Requirements Are Cuts by Another Name
Additionally, the drastic cuts to SNAP could leave over 8 million people with little to no food assistance, harming our economy. Every dollar that goes to SNAP results in up to $1.80 in economic ripple effects that benefit farmers, grocery stores, truck drivers, payment processors, food manufacturers, and others as the funds circulate in the local economy. Less funding for SNAP means families are spending less, impacting more than 250,000 SNAP-authorized retailers nationwide.
The House-passed bill and Senate proposal would create the first mandate for states to implement work requirements in Medicaid programs and make existing SNAP work requirements even more burdensome. Decades of research show that work requirements don’t increase stable employment or economic security. Instead, they lead to large drops in program participation by creating complex, burdensome paperwork that eligible people often can’t navigate. This causes people to lose benefits not because they’re ineligible, but because the system becomes too difficult to access. These policies are especially harmful to people in low-wage jobs, caregivers, and those with health conditions, many of whom already face systemic barriers like discrimination, lack of child care, or unreliable transportation. Work requirements are simply cuts to life-saving programs under a different name.
Millions of Children and Families Will be Barred From Economic Supports
While the Senate bill increases the maximum Child Tax Credit (CTC) to $2,200 per child, it does not make the credit fully available to families with little to no earnings. Under the Senate bill, 17 million children will continue to be left out of receiving the full CTC. Additionally, families that do not have at least one parent with a Social Security number would be barred from accessing the CTC under the Senate bill. This would restrict access to the CTC for 2.6 million citizen children.
The bill would make the Earned Income Tax Credit (EITC) more difficult to claim for 17 million families with low to moderate incomes by adding a burdensome pre-certification requirement. This would create needless red tape and stress for families with children as they file to claim the EITC. Lawmakers have decreased funding and staffing for the IRS, meaning the agency will have less capacity to provide adequate customer support to parents as they navigate this new policy.
Attacks on Immigrant Communities Will Have Ripple Effects for All Families
Undocumented immigrants are already ineligible for the CTC, Medicaid, Medicare, Affordable Care Act coverage, and SNAP. This legislation bars immigrants who are primarily authorized for humanitarian reasons to be in the United States, like refugees, asylees, and domestic violence survivors, from accessing these programs; in some cases, even green card holders could be blocked. These policies will impact both adults and children: approximately 40 percent of individuals granted refugee status and asylum in FY23 were children.
On top of further limiting immigrant access to essential benefits, this legislation increases funding for mass deportation. Immigrants–including those with authorization–and U.S. citizens alike have been subject to immigration enforcement actions without due process. Over 5 million children have at least one undocumented parent they are at risk of being separated from, and 2.6 million citizen children in the U.S. have only an undocumented parent(s) and are at risk of being left with no one to care for them due to their parent’s detention or deportation. As the Trump Administration continues to strip immigrants of their legal statuses and eligibility for support, the number of children who are harmed by immigration enforcement will grow, the vast majority of whom are U.S. citizens. Fears of immigration enforcement will also cause a chilling effect even among immigrants who qualify for food and health insurance assistance. They will disenroll or not enroll in these lifesaving programs, impacting access for their children and their well-being.
Tax Breaks for the Wealthy Reduce Funding That Supports Children and Families
This bill centers wealthy families by offering tax breaks for the rich while cutting and eliminating essential programs that meet the needs of families. These significant tax breaks mean less revenue to support programs that families rely on and undermine their basic needs. Decisions about investments in programs will come with challenging tradeoffs and will, without a doubt, leave families and children, especially those with the lowest incomes, out to dry. Programs like child care, Head Start, and services for people with disabilities will suffer, and positive progress will be lost.
States and Our Health Care System Will Bear the Burden as Federal Government Withdraws Support
Children and families’ needs for health care and food do not go away just because the federal government chooses not to fund them. Instead, states and local governments–which already have strained budgets–will have to figure out how to implement new, burdensome provisions of the bill and deal with cuts to funding in order to support their residents by shifting costs from other important needs or forcing families off of Medicaid, SNAP, and other essential programs. This bill creates impossible situations for states, forcing them to make decisions about which basic needs they are able to support for the very same families.
As millions of people lose health insurance, the cost of uncompensated care skyrocket, causing tremendous strain on our health care system. This, in turn, could cause hospitals and health care centers to shutter services or close altogether. This will be especially devastating for rural communities where children and families already face barriers to accessible health care, and over 4 in 10 hospitals are already losing money.
The Budget Reconciliation Bill Sets Students, Workers, Children, and Families Up to Fail
Students Will Likely Experience Increased Financial Pressure
Education-related cuts include severe restrictions on federal student aid for students with low incomes at a time when many students already struggle with the increasing cost of pursuing a college degree. Nearly 4.4 million Pell Grant recipients would see their award amounts reduced, and new student loan borrowers would be forced to make larger payments even if they are unemployed or struggling to pay bills. These provisions will drive more borrowers into defaulting on their loans and, as a result, have their CTC and EITC refunds seized. For universities, these restrictions would compound through states being potentially forced to cut education spending to make up for the loss of federal funding for health care and other social services. Institutions would also be forced to no longer offer access to federal student loans, close certain academic programs, or shutter their campuses due to the bill requiring colleges to pay a percentage of unpaid debt.
Workers Face Pay Cuts, Weakened Unions, and Job Insecurity
Workers will see lower wages with rising costs, including for utilities, food, and other necessities in the household. With the continued attacks on unions, all workers face an increase in job security and risk their health and safety at the workplace. And while civil servants have already faced numerous challenges this year due to rounds of layoffs, this bill would cut take-home pay for new civil servants while undermining their workplace rights and limiting federal labor unions’ ability to protect their members.
On top of reducing take-home pay for civil workers, this bill also places a 10 percent tax on labor unions for solely existing in the workplace. Under this bill, it will be increasingly challenging for employees to contest unlawful dismissals or discrimination, and the financial repercussions will be considerably greater for workers aiming to maintain their rights. These changes will affect federal agencies’ ability to retain and recruit workers while placing additional financial burdens on federal workers, their families, and their children.
Young Children and Families Will Not Have Access to Necessary Child Care and Early Education Support
While a child care crisis persists in our country, this bill does nothing to support access to affordable and accessible child care for children and families. While the bill includes a number of tax incentives and credits related to child care, it does not address the true needs of children and families. In fact, even these tax provisions would not benefit families with low incomes, as they are targeted at employers, higher-income jobs, and families with tax liability. It puts no effort into making child care more affordable for the children and families who need it most or supporting the undervalued and underpaid child care workforce.
Resources on budget reconciliation:
- CLASP’s Defending Public Benefits: A Playbook for Policymakers
- Children Thrive Action Network’s Budget Reconciliation Brief
- CLASP’s Infographic: It’s a Cut to Medicaid No Matter What You Call It