Trump Budget Gets Three-Fifths of Its Cuts From Programs for Low- and Moderate-Income People
Slashes These Programs by Unprecedented $2.5 Trillion

MAY 30, 2017
BY ISAAC SHAPIRO RICHARD KOGAN CHLOE CHO

President Trump’s 2018 budget contains the largest dollar cuts to programs for low- and moderate-income people proposed by any President’s budget in the modern era, reflecting a strikingly imbalanced approach to reducing the deficit or offsetting the cost of its proposed tax cuts. The plan would cut these programs by an estimated $2.5 trillion over the next decade. About three-fifths (59 percent) of the budget’s cuts would come from these programs that help low- and moderate-income families afford the basics or improve their upward mobility.

Three-Fifths of Cuts in Trump Budget Come in Low- and Moderate-Income Programs

Altogether, the budget proposes $4.3 trillion in non-defense cuts through 2027. This means its $2.5 trillion in cuts to programs assisting low- and moderate-income people would constitute about 59 percent of the total non-defense cuts (see Figure 1), even though these programs account for just 29 percent of non-defense spending and just 24 percent of total program spending. No other modern President (including President Reagan when he proposed deep cuts to low-income programs in his first budget) has proposed a budget with cuts of this magnitude to programs assisting struggling families, even if the cuts are adjusted for inflation or measured as a percent of the economy.

The proposed reductions to low- and moderate-income programs would increase the number of uninsured by substantially more than 23 million; significantly undermine the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps), which now provides basic food aid to more than 40 million low-income Americans; and dramatically reduce job training and education aid, which are essential to helping people move out of poverty by securing decent jobs. Specifically, the budget includes:

$1.9 trillion in health care cuts. The budget embraces the House bill’s approach to “repeal and replace” the Affordable Care Act (ACA) that would take health insurance away from 23 million people of modest means, raise out-of-pocket health costs for millions more, and substantially weaken key protections for people with pre-existing conditions. It then proposes additional Medicaid cuts on top of that. In combination, the cuts would total $1.9 trillion over the next decade, with the vast majority of these cuts occurring to Medicaid and the rest occurring to subsidies that help people with modest incomes afford insurance. Specifically, the House bill’s Medicaid cuts and the new Medicaid cuts added in the budget would reduce federal Medicaid spending by $1.6 trillion from 2018 through 2027,[1] cutting Medicaid by nearly half (47 percent) in 2027.

$400 billion in cuts to discretionary programs for low- and moderate-income people. In 2018 alone, the budget would slice discretionary (annually appropriated) programs focused on people with limited means by 15 percent. It, for example, would cut major job training grants by 40 percent, even though many workers need to upgrade their skills to succeed in today’s rapidly changing economy; eliminate housing vouchers for more than 250,000 lower-income households, denying aid that helps them pay the rent and avoid homelessness; and end the Low Income Home Energy Assistance Program, which helps poor households pay their heating bills. The budget would then continue to cut overall funding for non-defense discretionary programs more deeply in each subsequent year, producing a cut of 41 percent by 2027 (relative to today’s levels), after adjusting for inflation. Funding cuts this severe would eviscerate this already hard-hit category of programs and reduce spending on discretionary programs that help struggling Americans by an estimated $400 billion over the next decade.

$193 billion in SNAP cuts. The budget would cut federal SNAP funding by more than one-quarter through a combination of eligibility and benefit cuts and a massive cost shift to states — both of which would affect millions of low-income households. It would require states to pay for 25 percent of SNAP benefits by 2023, a cost shift of approximately $116 billion over ten years, and allow states to cut SNAP benefits to ease the new state costs. This approach runs contrary to the four decades of typically bipartisan support for SNAP, in which it has operated as a program with national eligibility and benefit standards to address the wide disparities in hunger and poverty — and fiscal capacity — across the states. Under the Trump proposal, low-income children, families, seniors, and people with disabilities would no longer be guaranteed access to a basic diet regardless of where they live.