8 Ways the House Republicans’ Budget Will Harm Working Families to Pay for Millionaire Tax Cuts
8 Ways the House Republicans’ Budget Will Harm Working Families to Pay for Millionaire Tax Cuts
House Republicans’ budget proposal is yet another Trojan horse to give tax cuts to the wealthy, while slashing programs everyday Americans rely on.
When President Donald Trump rolled out a budget that would cut Medicaid in half, slash programs for people with disabilities, make it harder to pay for college, and decimate civil rights enforcement—all while advocating huge tax cuts for the wealthy and corporations—even some congressional Republicans declared the Trump budget to be “dead on arrival.” But if the Trump budget were ever dead, it has been brought back to life. The recently released budget from House Republican leaders revives the worst parts of the Trump budget.
A congressional budget resolution—such as the House of Representatives’ budget—does not become law as is. But the House’s budget still matters, for two primary reasons. First, it sets an overall spending level for the coming fiscal year, 2018, that is too low to support core investments in American families and communities. Second, it paves the way for congressional Republicans to fast-track deep cuts to a wide range of programs that everyday Americans rely on, while funneling huge tax cuts to the wealthy—all without a single Democratic vote.
Here are eight ways the House budget will harm workers and families while helping the rich get richer.
State and congressional district data
A Trojan horse to give tax cuts to the wealthy
The House budget is designed to cuts taxes for the wealthy and corporations on the backs of working families. The tax plan released in 2016 as the centerpiece of House Speaker Paul Ryan’s (R-WI) “A Better Way” agenda would have given away trillions of dollars in tax cuts, a staggering 99.6 percent of which would go to the top 1 percent of income earners in 2025. President Trump’s tax plan, which is similarly skewed to benefit the wealthiest Americans, would cost even more—at least $3.5 trillion and as much as $7.8 trillion—according to the nonpartisan Tax Policy Center.
The House budget calls for tax reform that is broadly consistent with the “Better Way” and Trump tax plans—cutting top tax rates and corporate taxes and moving to a territorial tax system in which U.S. multinational corporations pay no U.S. taxes on their overseas profits. Notably, under the House budget, tax cut legislation must be deficit neutral but not revenue neutral—meaning that tax cuts can be paid for with cuts to programs such as Medicare or safety net programs. The House budget sets the stage for fast-tracking these tax cuts through a process known as budget reconciliation. Because reconciliation is not subject to filibusters in the Senate, this would allow congressional Republicans to send to the president’s desk massive tax cuts for the wealthy and corporations—paid for by deep cuts to programs that serve everyday Americans—without a single Democratic vote.
The reconciliation instructions also enable Congress to make further cuts to the programs that help Americans afford a basic standard of living. The budget instructs congressional committees to cut at least $203 billion over 10 years from programs in their purview, which could include Medicare, Medicaid, disability programs, and nutrition assistance. The only good news is that budget rules prohibit cutting Social Security using the budget reconciliation process, which includes Social Security Disability Insurance. But the House budget would let Congress cut many other vital programs without a single Democratic vote.
In addition to budget reconciliation, the House budget also sets the stage for significant cuts to programs such as affordable housing and environmental protection by cutting nondefense discretionary spending below the levels that would be imposed by sequestration. Congress funds discretionary programs each year in appropriations bills, and the domestic and international affairs programs included in the nondefense budget would already face harsh cuts if sequestration is allowed to take effect. While the House budget cuts to nondefense discretionary programs are not as harsh as the ones in the Trump budget, it would be a huge mistake to allow the outrageous cuts in the Trump budget to reframe the boundaries of an acceptable budget and to distract from the fact that the nondefense spending cap must be increased above sequestration levels. If the cap is not increased, there will not be enough funds to provide anything close to a reasonable allocation for programs that invest in the economy and ensure a basic standard of living.
Deeply cuts Medicaid, Medicare, and women’s health
The House budget would cut funding for Medicare by $487 billion over 10 years and cut Medicaid and other health care programs by $1.5 trillion over the same period. By ending the traditional Medicaid financing guarantee and replacing it with a per capita cap or block grant model in which federal funding is capped on a per-person or per-state basis, the budget would significantly shrink Medicaid and leave millions fewer people covered by the program.
The House budget includes the Medicaid per capita cap and block grant proposals from the House’s American Health Care Act (AHCA), but it also makes additional cuts to Medicaid beyond those included in the House and Senate repeal bills. The Senate’s Better Care Reconciliation Act (BCRA), in the latest form that has been scored by the Congressional Budget Office (CBO), would cut $772 billion from Medicaid over 10 years and leave 15 million fewer people covered by Medicaid in 2026. These cuts would become even more extreme in the second decade, since the BCRA increases the severity of its Medicaid cuts in 2025. Overall, the BCRA would result in 22 million people losing coverage over 10 years, according to the most recent CBO score. These estimates, including a breakdown of the Medicaid and private insurance coverage losses, are available for all states and congressional districts here.
Furthermore, the House’s budget proposes a mandatory work requirement for Medicaid coverage, alongside other harmful changes to eligibility, benefits, and cost-sharing in Medicaid. Work requirements in Medicaid would not create jobs or make it easier for beneficiaries to find employment; rather, they would make it harder for struggling families to get back on their feet by taking away their health coverage.
These cuts would be nothing short of devastating for the millions of people who depend on Medicaid for essential health coverage and services, including children, seniors, low-income individuals, and people with disabilities. In particular, women—including teenage girls who are at least 15 years old—accounted for 19.4 million of those enrolled in Medicaid in 2011 and would be disproportionately affected by cuts to the program. Currently, Medicaid covers about half of all births in the country. Additionally, the program has been instrumental in ensuring that low-income women and women of color, who are disproportionately likely to be covered by Medicaid, have access to a host of reproductive health services, including family planning, screening for breast and cervical cancer, and testing and treatment for sexually transmitted infections. Medicaid has also helped ensure access to maternity care for women at increased risk for poor maternal health outcomes. Any effort to withhold Medicaid reimbursements from Planned Parenthood—or other measures to defund women’s health services—would compound the impact of these cuts and have a devastating effect on women seeking access to services from this trusted health care provider.
In addition, the House budget would transform Medicare from a system in which seniors are guaranteed certain levels of coverage to a premium support system in which seniors would have capped amounts of funding to purchase either a private plan or traditional Medicare. Since the value of these premium support payments would likely fail to keep pace with the growth in health costs, this would significantly shift costs to seniors over time.
Slashes education and training and kicks jobless workers while they’re down
The House budget would make a 25 percent cut to programs within the category of education, training, employment, and social services. While the House budget provides little detail about how it would affect specific education and training programs, what is known is that its cuts are nearly as dramatic as the 28 percent cut to these programs presented in the Trump budget. To carry out their budget, the House would thus either need to implement the vast majority of education and training cuts in the Trump budget or cut some of these programs even more deeply than the Trump budget proposes in order to avoid cuts elsewhere. Examples of the draconian education cuts in Trump’s budget include eliminating critical funding for school districts and teachers through the Supporting Effective Instruction State Grants program and zeroing out the 21st Century Community Learning Centers program that provides after-school and summer learning for 1.8 million students nationwide.
The House budget would also make it harder for millions of students and families to afford college and would force them to turn to accumulating ever-higher levels of debt. Like the Trump budget, an appropriations bill that has already been drafted to comply with this budget would freeze the maximum Pell Grant award—a grant that provides low-income students with funding to afford college—at its current level of $5,920. If tuition trends continue and the Pell Grant remains frozen at its current award, the maximum Pell Grant would cover just 23 percent of tuition by 2026, down from 30 percent today. Click here for a state breakdown of how a Pell Grant freeze would affect college affordability.
In addition, the spending bill written under this budget would slash $3.3 billion from the Pell Grant’s surplus—a rainy day fund that can cover future cost increases. The budget also references additional cuts that ensure that “grants go to students with the most need” and that “students complete school in a timely manner.” Though the exact terms of what this means are not clear, this will likely translate to eligibility reductions or other restrictions that make it harder for students to get Pell Grants.
Other parts of the budget could be bad news for student loan borrowers. The budget contains instructions for the Education and Workforce Committee to save $20 billion through reconciliation. And language in the budget blueprint suggests that student loan programs may be a target for these savings. The blueprint calls for streamlining the number of repayment and loan options students face. While making federal loan options simpler is a valuable goal, these principles are typically used to justify making student loans more expensive for borrowers. For example, the Trump budget proposed to “streamline” federal loans by cutting $143 billion over 10 years through targeting loans that do not accumulate interest while students are in school, public-servant loan forgiveness, and repayment options where borrowers pay based on their income.
These changes would have the greatest impact on the most vulnerable students. Today, students from low- and middle-income families and students of color need to borrow more frequently and graduate with significantly higher debt than wealthier students. These students are particularly vulnerable to cuts to Pell Grants. For example, in 2012, 61 percent of black students and 50 percent of Latino students relied on Pell Grants to attend college compared with 38 percent of white students. Congress should focus on protecting and expanding student aid, not cutting it.
Similar to the Trump budget, the House budget explicitly calls for eliminating so-called duplicative job training programs just three years after nearly every member of Congress voted to pass the bipartisan Workforce Innovation and Opportunity Act (WIOA), legislation that modernized and streamlined the nation’s workforce development system. WIOA already eliminated 15 programs and elevated best practices such as apprenticeship programs, industry-led sector partnerships, and career pathways. The House Budget Committee does not specify which programs would be on the chopping block.
Recent Center for American Progress analysis demonstrates that cuts to workforce development programs would be devastating for workers. For example, CAP estimates that under the Trump budget, cuts to the WIOA could result in 5.5 million workers losing access to critical employment and training services such as job search assistance, job training, and career development. Workers would likely fare similarly under the House budget and would find themselves with fewer avenues to access programs that help them find work.
Adding insult to injury, rather than helping workers obtain the skills they need to get ahead, the House budget would kick struggling workers while they’re down by taking nutrition assistance and Medicaid away from unemployed and underemployed workers, no matter how hard they may be looking for work. Research shows that far from helping struggling individuals successfully get back into the labor market, taking away someone’s food, shelter, or health insurance actually makes it harder for them to find and keep a job.
Meanwhile, the budget’s deep cuts to Medicaid and nutrition assistance wouldn’t just undermine basic living standards—they would also kill jobs. Every $1 billion dollars in spending on the Supplemental Nutrition Assistance Program (SNAP), for example, enables more than 13,000 Americans to find or keep their jobs each year, according to a 2012 study, and each dollar spent on the program’s benefits generates additional economic activity of about $1.20 to $1.80 in local communities. Similarly, Medicaid accounts for more than 1 in 6 dollars spent on health care—and helps support millions of jobs at hospitals and other medical service providers. By slashing SNAP and Medicaid while simultaneously introducing work requirements into these programs, the House budget would thus kill jobs at the same time as it would pull the rug out from under unemployed and underemployed workers.
Cuts Social Security for people with disabilities
President Trump’s budget broke his promise to not cut Social Security, and the House budget doubles down on this betrayal, proposing $4 billion in cuts to Social Security benefits over the next decade. The budget targets Social Security Disability Insurance (SSDI). Specifically, the budget proposes preventing unemployed workers with disabilities from receiving both the SSDI and unemployment insurance benefits they have earned. This proposal would reduce economic security for workers with disabilities who have lost a job through no fault of their own, as well as their families.
Though the House budget does not specifically propose cutting Supplemental Security Income (SSI), a program that helps older or disabled individuals with very little income meet basic living standards, it is still at risk. The budget instructs policy makers to cut at least $203 billion over the next ten years from a variety of programs—cuts that are likely to include SSI. Cutting SSI would be especially harmful to people living in rural areas, who have higher rates of disability. Click here for a breakdown of people with disabilities by Congressional district.
Secretary of the Treasury Steven Mnuchin further walked back President Trump’s promise to not cut Social Security recently, telling Congress that changing the program is “within your prerogative.” If Congress passes Social Security cuts, President Trump may sign those into law. While SSDI cannot be cut via reconciliation, the reconciliation instructions in the House budget would enable Congress to cut SSI without any Democratic votes.
Makes deep cuts to affordable housing programs
The House budget fails to keep pace with rising housing needs and would force deeper cuts to critical affordable housing programs in the years to come. With a reduction in the overall amount of nondefense discretionary spending, appropriators have underfunded rental assistance, homelessness prevention, affordable housing development, and funds that address health and safety hazards in public housing. For instance, housing advocates estimate that this budget would lead to 140,000 fewer housing choice vouchers next year. At a time when Congress should be spending more to meet the growing need, appropriators have their hands tied and will be under enormous pressure to spend less over the next decade.
About 20.2 million renting households are cost-burdened, meaning that they spend more than 30 percent of their monthly pay on rent. For 10.4 million renting households, housing costs absorb more than 50 percent of their income, thus leaving very few financial resources for nonshelter necessities. Click here for a breakdown of cost-burdened households by congressional district.
Slashes nutrition assistance for workers and families
The Supplemental Nutrition Assistance Program provides modest but critical food assistance that helps millions of families put food on the table. Nearly 9 in 10 SNAP recipients live in households where one or more members are disabled, elderly, or a child. (See how many households SNAP helped in your Congressional District last year here.) SNAP benefits are already quite low, averaging just $1.39 per person per meal, and 4 in 5 families can’t stretch them beyond the first two weeks of the month.
Nonetheless, like the Trump budget—which proposed axing SNAP by a staggering 29 percent, or $193 billion, over the coming decade—the House budget would essentially end the program as we know it. As in House budgets in years past, the fiscal year 2018 budget proposal would slash SNAP, likely by converting its funding into a block grant under the pretext of providing greater flexibility to states. A block-grant structure would cap SNAP’s funding at insufficient levels, forcing benefit cuts and hampering the program’s ability to respond to families’ basic needs—particularly during recessions, when the share of families who struggle to put food on the table tends to rise steeply. And as noted above, House Republicans also followed Trump’s lead in making SNAP time limits for unemployed and underemployed workers even harsher under the guise of work requirements. Rather than investing in jobs and raising wages, this budget proposes taking food away from families struggling to find work.
Cuts core infrastructure funding that would leave the nation’s highway and public transportation systems to crumble
The proposed House budget also calls for the immediate elimination of the Transportation Investment Generating Economic Recovery (TIGER) Discretionary Grant program as well as a significant reduction in funding for Amtrak, placing long-distance routes in jeopardy. The budget would also reduce and then eliminate the New Starts program, which provides funds for local public transit projects, once current grant agreements have been completed.
Additionally, the House budget calls for cutting the Transportation budget function by one-quarter over 10 years, which is roughly the same amount as President Trump’s fiscal year 2018 budget. The administration achieved this by calling for major cuts to core highway and transit formula programs funded out of the Highway Trust Fund. If the House chooses to take the same approach, CAP estimates that more than 250,000 jobs could be eliminated by 2027. A state breakdown of these funding cuts and job losses is available here.
Finally, the CBO confirmed that President Trump’s FY 2018 budget cuts roughly a dollar of infrastructure spending for every dollar set aside for an ill-defined initiative focused mostly on providing tax cuts to wealthy Wall Street equity investors, as opposed to funding real projects. The House budget could not even muster this level of effort. Instead, the House budget simply authorizes a deficit-neutral reserve account for infrastructure on the off chance that the House takes the issue up later. Sadly, this budget shows that Republicans are more focused on showering the rich with tax cuts and taking health care away from tens of millions of Americans than on making productive investments that will help to grow our economy for decades to come.
Undermines environmental protections that keep our air and water clean
The House budget resolution cuts nearly 28 percent from environment and natural resources programs, which include the work of the Environmental Protection Agency (EPA). The House budget follows in the footsteps of the Trump budget, which cuts environment and natural resources programs by 27 percent over the next decade. While the House budget does not detail how much each program would be cut, the result would likely be similar to the Trump budget, which proposed slashing the EPA budget by 31 percent.
The EPA serves a vital role as the nation’s top environmental watchdog. By gutting the agency budget, the House of Representatives and President Trump are trying to make it easier for bad actors to pump more pollution into our air and water. As air quality worsens, the nearly 22 million Americans with asthma will suffer (state breakdown available here). These budget cuts will also slow the cleanup of some of the worst toxic waste sites around the country, which are littered in nearly every congressional district.
Cuts to the environment and natural resources budget function also would likely damage the National Park Service, which oversees national parks and recreation areas visited by millions of Americans every year. The outdoor economy—which depends on clean air, clean water, and America’s unique natural heritage—generates $887 billion in consumer spending each year and supports 7.6 million jobs.
The House budget resolution also cuts $43 billion over 10 years from energy programs—only slightly less draconian than the Trump budget’s $64 billion cut to these programs. The House budget explicitly calls for “significantly reducing” funding for the commercialization and deployment of the advanced energy technologies, which will put the United States at a competitive disadvantage to countries such as China. Similarly, the Trump budget proposed cutting energy efficiency and renewable energy research and development funding by 69 percent, which would slow the momentum of the clean energy economy—home to the fastest-growing professions in the United States.
The Trump budget was never truly dead on arrival. One lawmaker who did not call the budget “dead on arrival” was Speaker of the House Paul Ryan, who said that President Trump shared “common objectives” with Congress. The House budget reveals how true this is. The common objective of President Trump and Speaker Ryan is to pass huge tax cuts for the wealthy that are paid for by slashing programs that create good jobs and maintain basic living standards for everyone else. And the House budget would enable President Trump and Congress to turn this agenda into the law of the land without needing any Democratic votes.
Harry Stein is the director of fiscal policy at the Center for American Progress. Rebecca Vallas is the managing director of the Poverty to Prosperity Program at the Center. Thomas Huelskoetter is a research associate on the Health team, and Jamila Taylor is a senior fellow for the Women’s Health and Rights Program at the Center. Neil Campbell is the director of innovation for the K-12 Education Policy team, and Angela Hanks is the associate director for workforce development policy at the Center. Katherine Gallagher Robbins is director of family policy for the Poverty to Prosperity Program. Michela Zonta is a policy analyst for Housing Policy, and Sarah Edelman is director of Housing Policy at the Center. Rachel West is an associate director of the Poverty to Prosperity Program. Kevin DeGood is director of infrastructure at the Center, and Alison Cassady is director of domestic energy and environment policy on the Center’s Energy and Environment Policy team. Seth Hanlon is a senior fellow at the Center. Antoinette Flores is a policy analyst on the Postsecondary Education team at the Center. Andrew Schwartz is a research associate on the Economic Policy team at the Center.
The positions of American Progress, and our policy experts, are independent, and the findings and conclusions presented are those of American Progress alone. A full list of supporters is available here. American Progress would like to acknowledge the many generous supporters who make our work possible.