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The Guardian
14 hours ago
- Business
- The Guardian
Trump's ‘big, beautiful' bill is built on falsehoods about low-income families
As they race to deliver Donald Trump's 'big, beautiful' tax bill, Republicans in Congress are using familiar tropes to justify massive cuts to the safety net that will leave millions of low-income children and families without healthcare or sufficient food. The programs, they argue, are rife with waste, fraud and abuse, and the people who use them just aren't working hard enough. So work requirements are necessary to force the obviously lazy 'able-bodied' people to get to work. Here's the reality check: a majority of those receiving this aid who can work are already working. More than 70% of working-age people who receive nutrition benefits or Medicaid, the health insurance program for low-income children and adults that covers one in five Americans, are already working, according to the Government Accountability Office. Those who aren't working, research shows, are mostly ill, disabled, caring for a family member, or in school. Take the story of Ruaa Sabek. When the Covid pandemic hit in 2020, she and her husband worked at a fast-food restaurant in Philadelphia. Both their hours were cut, but they didn't qualify for unemployment benefits because they remained employed. With two young children at home, their carefully managed budget began to crumble under rising prices and reduced incomes. What saved them wasn't extraordinary luck or family wealth. It was the streamlined and expanded government support programs that turned what economists predicted would be a financial apocalypse into a springboard toward financial stability for some families. One analysis of Medicaid work requirements by KKF, a health policy research organization, found that most working people with low enough incomes to qualify for Medicaid typically work for small companies or in sectors, like agriculture, that don't offer employer-sponsored health insurance, or the rates are unaffordable. In other words, their jobs don't pay them enough to afford basics, don't offer benefits, and they have no other choice but Medicaid. There's no doubt that safety net programs like Medicaid could be improved. They're rife not so much with waste, fraud and abuse, as conservative lawmakers say – though there is some – but confusing red tape; disincentives to upward mobility, because benefits cut off sharply as soon as incomes start to rise; and cumbersome, punitive rules designed to dissuade people from applying for benefits in the first place. Fueling the Republican drive to slash public benefits is a long-held belief among many conservatives that the reason most people live in poverty is because they don't work, or don't work hard enough, and are instead lazing about, dependent on government largesse, and robbing Americans of their hard-earned tax dollars. That view features prominently in Project 2025, the playbook for the Trump administration authored by the conservative Heritage Foundation. The foreword reads: 'Low-income communities are drowning in addiction and government dependence.' And it was clearly on display in recent House congressional hearings on how to slash $1.5 trillion from the federal budget in order to pay for extending Trump's 2017 tax cuts. 'That little gravy train is getting ready to run out,' one Republican lawmaker said of federal safety net programs like Medicaid and food and nutrition aid for people living in poverty. 'The spigot is getting ready to be turned off.' The billionaire Elon Musk, charged with cutting federal spending, has even posted a meme calling people who rely on federal spending the 'Parasite Class'. Here's another reality check: Three in 10 Americans, more than 99 million people, rely on some form of federal aid to live. That includes nearly half of all children in the United States. Another 52 million households, 41% of all US households, make too much to qualify for public safety net benefits but still not enough to survive. Nearly 40% of Americans would struggle to cover a $400 emergency expense. There is a problem with making policy decisions based on the unfounded belief that poverty is about people with bad moral character making bad choices, or on debunked racial tropes of undeserving 'welfare queens.' (In fact, white people make up the largest group receiving public food and healthcare aid.) Shaping policy around false stereotypes, rather than the complex reality, prevents policymakers from working together on real solutions. In fact, if you talk to people living in poverty, what they say they want tracks nearly exactly with what Project 2025 aims to foster: 'empowering individuals to achieve economic independence.' 'If I earn good money, I'm not going to be looking for benefits. I'll take care of my bills,' said Blessing Aghayedo, a licensed practical nurse in Minnesota. Instead, she earns barely more than the federal minimum wage, which has been stuck at $7.25 an hour since 2009. In the Sabeks' case during the pandemic, expanded Medicaid and enhanced nutrition benefits helped weather health emergencies and soaring grocery prices. Rental assistance prevented them from losing their housing when they fell behind on payments. Stimulus checks and the expanded monthly child tax credit provided crucial cash that covered essential expenses like milk, diapers, children's clothing, utility bills, and car repairs when they needed a new transmission. Perhaps most significantly, public subsidies for childcare and the Head Start program reduced their childcare expenses from an overwhelming $1,300 per month to $120, enabling Ruaa Sabek to continue working part time and enroll in a banking training program. 'I feel like, 'Oh my God, peace of mind,'' she said of the breathing room the public benefits gave her and her family. As a result, she landed a full-time position in 2023 as a personal banker that pays $45,000 annually with benefits – a dramatic improvement from her previous part-time $12-an-hour cashier job with irregular hours and no benefits. The family is now thriving without public assistance, aligning with decades of research. 'You can't actually figure out how to get to flourishing until you're in a stable and secure situation,' said Megan Curran, director of policy at the Center on Poverty and Society Policy at Columbia. Research shows that when families have a stable foundation, they are healthier and live longer. Adults are more likely to keep working, and children are more likely to stay in school, graduate, get better jobs, and pay taxes as adults. Even babies' brain development is improved. And the stability pays for itself: the Child Tax Credit, for instance, returns $10 for every $1 spent every year. The United States remains the only wealthy country with no national paid maternity leave, yet the return on investment for paid family leave is 20:1. For childcare, it's 8:1. Meanwhile, rather than saving taxpayers a ton of money, as Musk promised, slashing safety-net support ignores the real problem that keeps families from economic independence: 44% of the workforce in the United States, the wealthiest country on earth as measured by GDP, is low-wage, a share far higher than in many economic peer countries. Squeezing families already struggling financially could increase the share of those already waking up hungry, homeless, or worried they soon might be. The United States already has one of the highest rates of child poverty among wealthy countries. The National Academies of Sciences, Engineering and Medicine estimates that high poverty rate costs as much as $1tn a year in lost adult productivity, increased crime and poor health. If lawmakers are serious about adding work requirements for safety net programs, then ensuring families have access to affordable childcare is critical. Compared with other advanced economies, the United States invests the least in childcare. That means childcare costs are second only to mortgage or rent for most families who have to pay out of pocket. And federal childcare subsidies for low-income parents come nowhere close to covering those eligible. The lack of affordable childcare sent Kiarica Schields, a college-educated hospice nurse and single parent in Georgia, spiraling into a cycle of joblessness, eviction, instability, and poverty. 'Childcare. That's my issue,' she said. Trump has said he wants families to have more children. Yet surveys show that young people aren't having children, or having as many as they'd like, because they can't afford childcare. Kel, a divorced parent of four, wants lawmakers to think of public benefits for families like hers as a short-term investment with long-term benefits. Kel, who asked not to use her last name, fled an abusive marriage, struggles to pay bills, though she works as much as she can, and relies on Medicaid for life-saving physical and mental health treatments for her and her children. 'Lifting me and people like me up will have a cascading effect on so many lives in a positive way,' she said. 'We will give back to our communities tenfold, a hundredfold. It's worth that investment in us. We're a really good investment.' Brigid Schulte is the director of New America's work-family justice program, Better Life Lab, a Pulitzer Prize winning journalist, and the author of Over Work: Transforming the Daily Grind in the Quest for a Better Life and the New York Times bestselling Overwhelmed: Work, Love and Play when No One has the Time. Haley Swenson is a research and writing fellow for the Better Life Lab
CBS News
02-06-2025
- Business
- CBS News
Budget bill would add trillions to U.S. debt and increase inequality, Nobel laureate economists say
Trump "one, big beautiful bill" holdout Sen. Rand Paul says "the math doesn't really add up" Six Nobel laureate economists said a massive budget bill passed by House lawmakers last month and backed by President Trump would weaken key safety-net programs while greatly lifting the federal debt. The tax and spending package, which Republicans have dubbed the "one big beautiful bill," would hurt millions of Americans by slashing Medicaid and food stamps, the economists wrote in a June 2 letter on behalf of the Economic Policy Institute, a left-leaning think tank. "Even with the safety net cuts, the House bill leads to public debt rising by over $3 trillion in coming years (and over $5 trillion over the next decade if provisions are made permanent rather than phasing out)," the economists state. "The higher debt and deficits will put noticeable upward pressure on both inflation and interest rates in coming years." The authors of the letter are Daron Acemoglu, Peter Diamond and Simon Johnson of MIT; Oliver Hart of Harvard University; Joseph Stiglitz of Columbia University; and Paul Krugman of City University of New York. Including interest, the House bill would boost the nation's debt by $3.1 trillion, according to the Committee for a Responsible Federal Budget, an advocacy group focused on fiscal policy. The nation's rising deficit — the gap between annual government spending and revenue — and growing federal debt have sounded alarms on Wall Street, roiling financial markets and raising questions about the country's long-term financial stability. The Trump administration describes the budget package as a "once-in-a-generation opportunity" to cut government spending and drive economic growth. Senate hurdles The Senate is expected to take up the bill this week, and its fate is uncertain amid strong opposition from Democrats and concerns by some Republicans. "One of the things this 'big and beautiful bill' is, is, it's a vehicle for increasing spending for the military and for the border," Sen. Rand Paul, a Republican from Kentucky, said Sunday on "Face the Nation with Margaret Brennan." Paul is among a small group of Senate Republicans who have expressed opposition to the bill. "It's about $320 billion in new spending. To put that in perspective, that's more than all the DOGE cuts that we have found so far," he added, referring to reductions in government spending advanced by Elon Musk's Department of Government Efficiency. "So, the increase in spending put into this bill exceeds the DOGE cuts." Raising inequality? The six economists who penned the letter criticizing the Republican bill also said that large tax cuts under the legislation, combined with the hits to Medicaid and food stamps, would increase inequality. "The combination of cuts to key safety net programs like Medicaid and SNAP and tax cuts disproportionately benefiting higher-income households means that the House budget constitutes an extremely large upward redistribution of income," they said. Mr. Trump has said the proposed tax cuts, which would extend reductions passed under his 2017 Tax Cuts and Jobs Act, would boost workers and incentivize investment in domestic manufacturing. The White House Council of Economic Advisers claims that the Trump administration's policies, which include steep import tariffs on major U.S. trading partners, will supercharge growth and shrink the deficit. contributed to this report.
CNN
23-05-2025
- Business
- CNN
Millions could lose food assistance under GOP's ‘big, beautiful bill,' CBO says
Millions of low-income Americans, including families with children, could lose their food stamp benefits under House Republicans' newly passed tax and spending cuts package, according to a Congressional Budget Office analysis released Thursday. Others could see smaller monthly assistance. The analysis is the latest to show the impact of the historic cuts to the nation's safety net programs contained in the package, which aims to fulfill President Donald Trump's agenda. The legislation would provide trillions of dollars in tax cuts while slashing federal support for food stamps and Medicaid to help offset the cost. The package, however, is expected to undergo multiple changes in the Senate, where some lawmakers have already expressed concerns about the safety net provisions. As written, the bill would reduce federal spending on the Supplemental Nutrition Assistance Program, known as SNAP, the official name for food stamps, by roughly $286 billion over the next decade, according to the CBO analysis, which was requested by Sen. Amy Klobuchar and Rep. Angie Craig, ranking members of the Senate and House agriculture committees, respectively. House Republicans have said the measures are intended to 'restore integrity' to the program, which provides aid to roughly 42 million Americans. Among the most consequential and controversial provisions are expanding the program's existing work requirements to many older Americans, and, for the first time, to many parents. Also, states would have less flexibility in waiving these requirements during tough economic times. These measures would strip roughly 3.2 million people of their food stamp benefits in an average month over the next decade, CBO estimates. This includes 800,000 people who live with children ages 7 and older. States would have to share in the cost of the benefits for the first time, shouldering between 5% and 25% of the cost depending on their payment error rate. State responses would vary, but some 'would modify benefits or eligibility and possibly leave the program altogether because of the increased costs,' CBO projects. The provision would lead states to reduce or eliminate food stamp benefits for about 1.3 million people in an average month over the decade, CBO estimates. Also, subsidies for child nutrition programs would decrease for about 420,000 children during that period. Other measures in the bill, including capping annual increases in benefits, would also reduce monthly assistance. And a provision tightening eligibility for noncitizens would leave between 120,000 and 250,000 people without aid. CBO noted that the coverage loss projections are for each set of provisions individually and do not account for overlap in the people who could be affected. Its analysis does not provide an overall figure for how many people would lose access to food stamps. The House bill also calls for introducing the first-ever work requirement to Medicaid, which could leave millions of low-income Americans without health coverage, according to experts.
CNN
21-05-2025
- Business
- CNN
House GOP lawmakers are proposing $1 trillion in cuts to Medicaid and food stamps. Here's who could be impacted
House Republicans are pushing to slash nearly $1 trillion from two of the nation's bedrock safety net programs, Medicaid and food stamps, as part of their sweeping package aimed at enacting President Donald Trump's agenda. If the legislation is approved, millions of Americans could lose access to these benefits as a result of a historic pullback in federal support. Trump has repeatedly vowed not to touch Medicaid, while GOP lawmakers insist that their proposals would largely affect adults who could – and should, in their view – be employed. But the actual impact would likely hit a far broader range of Americans, including some of the most vulnerable people the GOP has promised repeatedly to protect, experts say. They include children, people with disabilities and senior citizens. A sizeable share of the US population depends on these programs. More than 71 million people are enrolled in Medicaid, and roughly 42 million Americans receive food stamps, according to the federal agencies that oversee them. Hospitals would also feel the financial fallout of the Medicaid cutbacks, which could prompt some to raise their rates for those with job-based insurance and others to close their doors. States would have to shoulder more of the costs of operating these programs, which could force them to make some tough decisions. Among their options could be slashing enrollment, benefits and provider rates in Medicaid or pulling back on residents' access to food stamps. They might also shift spending from other state-supported programs such as education and infrastructure or hike taxes. In addition, grocery store owners are warning that cuts to the Supplemental Nutrition Assistance Program, or SNAP, as food stamps are formally known, could harm local economies and cost jobs. 'We've never in history experienced coverage cuts of this size, and that makes it really difficult to predict how states, providers and patients will respond,' said Alice Burns, an associate director of Program on Medicaid and the Uninsured at KFF, a nonpartisan health policy think tank. 'For the past 50 years, there have been these incremental increases in the availability and access to health care and health insurance coverage. So moving backwards and taking coverage away … This isn't something we've seen before.' What proposals actually make it to the House floor for a vote remain to be seen since conservative and moderate factions of the caucus are currently battling to make changes to the provisions – and more alterations are expected in the Senate before a final bill is enacted into law. The House GOP package would reduce federal support for Medicaid by nearly $700 billion over a decade, according to an updated Congressional Budget Office analysis released on Tuesday. (CBO has yet to release a final analysis of the full legislation.) The proposals would strip Medicaid coverage from more than 10 million people over 10 years, though some are expected to find health insurance elsewhere, such as through their jobs or the Affordable Care Act exchanges, according to an earlier CBO analysis released last week. Overall, an additional 7.6 million Americans are projected to be uninsured in 2034 because of the Medicaid provisions. (Democrats have released a CBO analysis showing even greater potential coverage losses, but that also takes into account the Affordable Care Act provisions in the package and the expiration of the enhanced Obamacare premium subsidies at the end of this lawmakers did not extend those more generous subsidies in this legislation.) The package's most consequential provision is instituting work requirements in Medicaid, a longtime GOP goal. For the first time in Medicaid's 60-year history, certain recipients ages 19 to 64 would be required to work at least 80 hours a month to retain their benefits. They could also meet the mandate by engaging in community service, attending school or participating in a work program. The requirement would not apply to parents, pregnant women, medically frail individuals and those with substance-abuse disorders, among others. It would take effect in 2029, though conservative lawmakers are hoping to push up the start date. However, many people who already are working or who qualify for exemptions could wind up losing their coverage, experts say. That's because they may get caught up in the red tape of regularly reporting their work hours or applying for an exemption. For instance, the mandate could affect low-income people with chronic conditions that make it hard to work if they are enrolled through Medicaid expansion, not the disability pathway. These folks would have to apply for an exemption and prove they are too frail to hold a job. Caregivers and students could also get bogged down in the procedural requirements and wind up kicked out of the program. 'We expect that millions of adults will lose coverage under work requirements, including many who are working, who are looking for a job, who are unable to work because of a health condition or disability or who are meeting some other qualifying activity, but just don't successfully report it because they just have difficulty dealing with the bureaucracy of the new work reporting system,' said Michael Karpman, a principal research associate at the Urban Institute, a think tank. Hospitals and nursing homes could also take a financial hit because the legislation would limit states' ability to levy taxes on health care providers. States often use this revenue to boost provider rates and fund health-related initiatives, among other but one state levy at least one type of provider tax, which some Republicans claim is a scheme by states to get more federal matching funds. Also, with more people expected to be uninsured, hospitals could see their uncompensated care costs rise. While states have typically helped cover the added expense, they may not be in a position to do so if they are receiving less federal funding for Medicaid, Burns said. These budget strains could prompt some hospitals and nursing homes to curtail services, increase rates for other patients or, in the worst case scenario, shut down. The impact may fall even more heavily on providers in rural areas and low-income communities. 'These hospitals, which already operate on thin margins, cannot absorb such losses without reducing services or closing their doors altogether,' Bruce Siegel, CEO of America's Essential Hospitals, a trade group for hospitals that treat many uninsured or lower-income patients, said in a statement. The bill could also hurt those who qualify for both Medicare and Medicaid, the latter of which helps cover their Medicare premiums and out-of-pocket costs, as well as pay for long-term care. One of the provisions would postpone the implementation of a Biden administration rule aimed at streamlining Medicaid eligibility and enrollment until 2035. Such a delay could make it harder for people to enroll in the program and renew their coverage. Some 2.3 million people could lose their Medicaid coverage from this provision, according to a CBO estimate sent to Democratic leaders. They would include senior citizens, people with disabilities and children, in addition to adults, Burns said. More broadly, states would have to decide how to cope with the loss of hundreds of billions of federal dollars. Medicaid is the largest single source of federal funding for state budgets, and the second largest expenditure for states, behind K-12 a reduction in federal support will be felt, especially in states that are already facing budget shortfalls. (Unlike the federal government, nearly all states must approve balanced budgets.) How state lawmakers handle the loss will vary. They might pull back on optional benefits, such as dental care, physical therapy and home and community-based services, which help keep senior citizens and people with disabilities out of nursing homes. One unpalatable option: If states decide to fill the gap by raising taxes, they would need to hike state levies by 4% overall, with the increases ranging from 1% in Kansas and Wyoming to 11% in Louisiana, according to KFF. Under the GOP package, more food stamp recipients would have to work to qualify for benefits. Currently, adults ages 18 to 54 without dependent children can only receive food stamps for three months over a 36-month period unless they work 20 hours a week or are eligible for an exemption. The legislation would extend the work requirement to those ages 55 to 64, as well as to parents of children between the ages of 7 and 18. Plus it would curtail states' ability to receive work requirement waivers in difficult economic times, limiting them only to counties with unemployment rates above 10%. The bill would also require states to pay for a portion of the benefit costs – at least 5% – for the first time, starting in fiscal year 2028. States with higher payment error rates would have to shoulder more of the burden – as much as 25% of the costs for those with error rates of at least 10%. Plus, states would have to pick up 75% of the administrative costs, rather than 50%. The work requirements could put 11 million people at risk of losing their nutrition assistance, said Ty Jones Cox, vice president for food assistance for the left-leaning Center on Budget and Policy Priorities. That includes 4 million children who live in families that could see reduced aid if their parents no longer qualify. And as with Medicaid, states will have to decide how to handle the federal funding loss. Some may try to limit enrollment or even exit the program since it's not mandatory that states participate in food stamps. 'They have more incentive to want to make it harder for people to get food assistance because they're on the hook to pay for the benefit and they're worried about their error rate,' Cox said. Grocery store owners are also sounding the alarm, highlighting that food stamp recipients plow their benefits back into the local economy. Food stamps funding supports about 388,000 jobs and more than $20 billion in wages, and results in more than $4.5 billion in state and federal tax revenue, according to the National Grocers Association, which represents independent grocers. 'SNAP is not just food assistance for families — it's an economic engine that bolsters jobs on Main Street,' Stephanie Johnson, the association's group vice president for government relations, said in a statement. 'This data confirms what independent grocers see every day: SNAP dollars circulate directly through local businesses, helping to pay local wages, keep shelves stocked, and support essential services in communities nationwide.'
