Recent federal budget proposals would shift significant costs, explicitly or implicitly, to states and localities by targeting health care,
The Trump Budget:
We have just seen the Trump blunder with tariffs but now we wait to see his angle with domestic spending and tax policies. We all saw his spending cuts memo which showed us how the Trump administration is looking at directing the spending cuts he wants to accomplish and to no one’s surprise (at least it shouldn’t be) he aims at cutting social programs that helps those in need. Reducing federal spending to social programs would place the weight of these programs on states that are simply not able to financially maintain these programs. as you can see from the Center for Budget and Policy Priorities article, states rely on a large ortion of federal funds to operate needed social services. Without these funds our low and middle class communities will experience "lost health coverage, less money for groceries, weakened access to a quality public education, and other harms."
Here in New York 40% of the 2024 State budget is dependent on federal funds. Specifically, that adds up to $94,517 of federal funds that New York State received last year and was able to include in its annual budget of $243,867. This is not a negligible amount, the state would not be able to make up the difference. Cuts would have to be made and many of these programs are social spending programs that would be cut.
The CBPP article delineates the draconian effects to the common welfare based on Trump and Musk's fiscal priorities. It is important to keep in mind that Elon Musk is now directing the Department of Government Efficiency (DOGE). This department is expected to make further spending cuts to federal programs from what Trump is already proposing. The CBPP article goes over the following effects of these spending cuts.
Deep Medicaid cuts that would shift costs to states and likely result in millions of people losing coverage.
Cuts in annually appropriated non-defense spending, including public education.
Cuts to food assistance (SNAP) and other federal assistance programs.
Premium spikes for people in marketplace health plans.
Shifting disaster response costs to states.
Withholding federal funds from states through “impoundment.”
New budget cuts recommended by the Department of Government Efficiency
It is worth reading to understand the repercussion of each cut to the social fabric of our community. We should also unpack the term "impoundment" in the 6th bullet point. The use of the word "impound" refers to the deliberate decision by the President to not spend funds that Congress has provided in legislation. It is breach of executive power to underestimate congressional authority. "impounding" has never been recognized by the courts although a process was created whereby the President can have congress review certain legislation based on his recommendation. It seems however that the current administration is exploring the use of this in sidelining budget items approved by Congress. This would further the draconian financial agenda that Trump/Musk proposes.
The notion that the Impoundment Control Act of 1974 is what restricts presidential authority to impound funds enacted by law is contrary to
The loss of SNAP and basic food assistance would devastate millions of working americans (15.7 million to be exact) who rely on these programs to supplement their low paying wages. These social programs help close the gap for both low-income wage earners and those who lost their jobs or are going through a financial crisis. Social service agencies like our own Catholic Charities has been able to refer people in crisis to receive SNAP and other programs in order to help them during a crisis. The loss of this program would be absolutely devastating to the people we serve.
In the same way, the proposals that are floating in the House are also looking at reducing healthcare access to millions of Americans. The CBPP graph below shows the various proposals under consideration by House Republicans with the result being the same, the loss of health care coverage and increasing costs for millions of Americans.
These are just two crucial social programs that are threatened by the emerging Trump/Musk budget proposals. And for what? in order to promote the Tax Cuts and Jobs Act Bill (TCJA). Reintroducing the TCJA would cut taxes (enormous loss of federal revenue) in return for financial benefits to wealthy households and corporations. The expectation here is that a bill like TCJA will create the rational to further undermine social programs and especially Social Security. The question is, should we prioritize federal investments that would make Social Security solvent or should we direct those investment towards the wealthy? The Brookings Institute suggest the former.
Choosing to keep Social Security on solid ground versus making the TCJA provisions permanent would have several advantages. First, it would avoid cuts to Social Security benefits, which 42% of retirees depend on for at least half of their income. It would also be progressive relative to extending the TCJA, which would cut taxes by more than $70,000 per household for those in the top 1% of the income distribution, compared to just $130 on average for households in the bottom 20%.
Revenues that would go to making the TCJA tax cuts permanent could be used to make Social Security solvent for at least the next 75 years.
So the solvency of Social Security is at risk if Trump/Musk pursue the TCJA, but that is just the tip of the iceberg. The CBPP also confirms that the top 5% of the wealthy will receive 49% of the tax credit.
But the effects of the TCJA go beyond offering relatively little for households with low or middle incomes and reducing both Social Security and Medicare. TCJA will add trillions in debt requiring a budget that cuts other social spending (mentioned above) and this in turn will worsen already existing racial inequities.
It is obvious that Trump/Musk do not value social spending and it may be that neither of them understand the value of promoting the general welfare (evidently ignoring it in the Constitution). Sadly, they do not have anyone joining the administration who might help them place value on these policies and this will not bode well for American who rely on these programs and have nobody representing them. The sad truth is that even if Trump/Musk only have four years to financially destroy these programs the repercussions we face will hurt us years after they are gone.
